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The Growth Agenda: Centrality of Structural Reforms

Zia Qureshi's picture

Much of the G20’s agenda following the global financial crisis has been focused on crisis response—on short-term crisis management and recovery. In the aftermath of a major crisis, economic stabilization of course is the first order of business. And the G20 has done reasonably well in that respect. But economic stabilization alone will not restore strong and sustained growth, as global growth faces deeper structural challenges.

In advanced economies, some of the structural weaknesses have accumulated over time, such as the labor market rigidities in Europe, the deficiencies in tax and expenditure structures and associated fiscal problems in a broad range of advanced economies, including the US, and the challenges arising from ageing populations. The global financial crisis has added to these challenges by causing supply-side disruptions that lower potential growth, including the destruction of capital stock, financial sector dislocations, and increases in structural unemployment—as well as adding to the fiscal woes. Challenges also arise from a changing pattern of competitiveness and comparative advantage as emerging economies increasingly penetrate global production and trade. So future growth in advanced economies will require not just supporting a recovery of demand but also a reallocation of resources to new sources of growth—new products, new services, new jobs.

The inside story of WDR 2014, Risk and Opportunity: Managing Risk for Development

Norman Loayza's picture

The King of Egypt dreamt that seven strong and healthy cows were eaten by seven scrawny and ugly ones. Then, he dreamt that seven hearty ears of corn were replaced with seven scorched and damaged corncobs. He didn’t know what to make of these dreams and asked his advisors to interpret them. No one could. From his cell in prison, Joseph learned of the King’s dreams and interpreted their meaning: Seven years of abundance would be followed by seven years of drought in the land of Egypt. The years of famine would be so abysmal that they would erase the memory of the plentiful years. Joseph advised the King to prepare, using the bounty of the good harvest to withstand the calamity of the times to come. The King followed Joseph’s advice and saved the people of Egypt from hunger and disaster.     

This story presents in a nutshell the message that we wanted the World Development Report 2014 (WDR 2014) to convey: In the face of an uncertain world, preparation in good times is essential for resilience in bad times and for prosperity always.

Bali Holds the Key to Progress on International Trade

John Wilson's picture

Bali, Indonesia has become the epicenter of critical new action on international trade. Between now and the end of 2013, the resort island in the Pacific will host two major international meetings where the focus will be on thinking differently about how the international community approaches trade policy.  The focus, as our World Bank colleagues have urged in the past,  will be on trade along global supply chains.

In December, the 9th WTO Ministerial Conference will convene in Bali.  Expectations run high for a new agreement on trade facilitation.  This agreement would concentrate not on traditional tariff barriers to trade, but rather on issues that have a particularly strong impact on supply chain performance – issues like customs modernization, streamlining import and export procedures, and regulatory transparency.  Addressing these issues can dramatically reduce the costs associated with trade in goods and services and boost international trade.  In fact, our World Bank research  shows tremendous potential returns on aid to trade facilitation – returns of $697 in increased trade for every $1 of aid to trade policy and regulatory reform.

Long term impacts of household electrification in rural India

Dominique Van De Walle's picture

It is estimated that 1.3 billion people in 2009 were still without electricity. Many rural households in the developing world continue to cook with wood and biomass (mainly dung), and spend a lot of time collecting and preparing fuel for domestic use. Across the world, these time (and resulting health) burdens are thought to be higher for women and the children under their care. 

One popular argument is that by relieving time burdens spent in collecting and preparing fuel, household electricity results in rural women engaging in market-based work — judged to be a good thing since women’s empowerment has been linked to having one’s own income.  In fact, a number of studies show that the introduction of household electrical appliances accounts for a large share of the increase in married American women’s labor force participation in the 20th century. For the developing world, a recent paper by Taryn Dinkelman finds similar and large effects on female employment (and not on male employment) for South Africa, which are attributed to the use of electric stoves and other time saving appliances. 

Why risk management for development organizations is important

Magda Stepanyan's picture

The following post is a part of a series that discusses 'managing risk for development,' the theme of the World Bank’s upcoming World Development Report 2014.

There are three fundamental challenges in mainstream risk management for development organisations: a culture of blame, lack of adaptive capacity on the part of development organisations and the lack of a shared concept of risk management.

Quite often the manifestation of risks is associated with failure, which subsequently leads to blame. This in turn hinders proactive risk-taking behavior among development organisations and limits their performance. Often we forget that only by failing can we learn to succeed. At the same time, there are also failures that are unnecessary and avoidable if risks are systematically taken into account. Failing to prevent recurrent crises, for example, is unjustified. Recurring drought and hunger are not typical of the Horn of Africa as a geographical region. They are signs of continuing failure on the part of local governments and the international community to address the risks of drought and hunger, which then results in recurrent crises.

Friday round up: Fighting extremism, Peru and health care, latest climate report, the Palma inequality measure, and Laos in space

LTD Editors's picture

Malaysia's Prime Minister is interviewed in New York earlier this week by Fareed Zakaria, explaining the Global Movement of Moderates that he set up to counter extremist ideology.

In "The BRICs Paradox: A Healthy Economy and Bad health Care," Eduardo Gomez writes in The Atlantic on how Peru is growing robustly yet still faltering in terms of health system reforms.

In the NYT's Dot Earth blog, Andrew Revkin describes how the IPCC's fifth report clarifies humanity's choices.

Is “Half Empty” Good News for Women’s Rights?

Mary Hallward-Driemeier's picture

Over the past 50 years, there has been tremendous progress in improving women's legal rights. Indeed, half of the gaps in women's legal rights to property and equal legal capacity were closed during the period 1960 to 2010 in 100 developed and developing countries, according to two new studies highlighted in the Women, Business and the Law 2014 report, launched on September 24. The challenge now is that some sticky areas persist where laws haven't changed or have even regressed. Tackling these remaining gaps is crucial given that strengthening women's legal rights goes hand in hand with better economic opportunities, health, and education — on top of being an inherent right — points made forcefully in the op.ed. by Sri Mulyani Idrawati, Managing Director of the World Bank.

Getting to Zero in the fight against extreme poverty

Lisa Horner's picture

We could be the generation that puts an end to extreme poverty. This is a bold claim that often prompts raised eyebrows and murmurs of disbelief. But it is an idea that Save the Children, The World Bank, and others have been reiterating as we engage with the international process to define a new  framework to replace the Millennium Development Goals (MDGs) – a set of concrete human development targets that have united global efforts to fight poverty since 2002, and are set to expire in 2015. 

But while ending extreme poverty is, of course, a laudable vision, is it a feasible proposition?  Could we really be the generation that achieves it, finishing the job that the MDGs started?