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Inequality of opportunity: the new motherhood and apple pie?

Adam Wagstaff's picture

On the face of it, questioning the usefulness of “inequality of opportunity” seems about as wrongheaded as questioning the merits of family vacations, Thanksgiving or dessert trolleys. What’s not to like about it? Well, as we argue in a recent World Bank working paper, the idea is not quite as useful as it might at first glance appear, and is in fact rather dangerous. But turned upside down, it might yet be useful.

A simple idea – let’s see some numbers

The idea behind inequality of opportunity is simple yet powerful. Not all inequality is bad. The bad bit of inequality (‘inequality of opportunity’) is the part that emerges because of factors over which we have no control (our 'circumstances'). By contrast inequality that emerges because of our different choices and efforts (holding constant our circumstances) is fine, and to be encouraged.

Do Cash Transfer Programs Lower Child Labor?

Do cash transfer programs - social protection programs that provide income to poor households often on the condition that children in these households attend school - lower child labor? Answering this question is important for a variety of reasons. Child labor is widely prevalent. According to the latest estimates of the International Labour Organization, about 10% of the children aged 5 to 14 worldwide are engaged in economic activities, often despite national child labor regulation prohibiting their involvement in work. Participation in child labor is often feared to affect children's ability to learn in school, to affect their health both in the short and long-run, and to result in negative externalities. And, while cash transfer programs are currently operated by many countries around the world and many of them target populations with high child labor prevalence rates, in theory their effect on child labor is ambiguous.

Were the poor left behind by the health MDGs?

Adam Wagstaff's picture

Thanks to Thomas Piketty, we’ve heard a lot this year about rising inequality. And with just over a year to go before the MDG ‘window’ closes, we’ve also heard a lot about the ‘post-2015 agenda’. In a paper with Leander Buisman that just came out in the World Bank Research Observer, we bring these two themes together and ask: “Were the poor left behind by the health MDGs?” Influenced perhaps by all the talk of rising income inequality, there are certainly plenty of pessimistic folks out there who think that health inequalities, too, are on the rise; that the better off are likely to have seen much faster improvements in MDG indicators than the poor.

The Infrastructure Opportunity

Jonathan Woetzel's picture

Under-investment in infrastructure can cripple lives. Across the world, 1.3 billion people have no access to electricity, 2.5 billion do not have adequate sanitation, and a further 2.5 billion rely on the traditional use of biomass for cooking. Building adequate infrastructure is a vital tool of social development. But it is also a crucial underpinning of economic growth. McKinsey estimates that the world needs to invest $57 trillion in infrastructure between 2013 and 2030 simply to keep up with projected global GDP growth. That’s more than the total estimated value of the infrastructure already on the ground today.

Friday Roundup: Human Development Report, LinkedIn Economic Confidence Outlook, Inequality, and Jason Furman

LTD Editors's picture

The 2014 edition of the Human Development Report was released yesterday. The latest report focuses on promoting people’s choices and protecting human development achievements. 

LinkedIn’s Economic Confidence Outlook predicts scattered optimism for the future of the global economy.  The survey, conducted in the first quarter of 2014, of more than 14,000 senior business leaders on LinkedIn in 16 different countries around the world is designed to gauge leaders’ confidence level in the global economy and their country. 

Making Development Edutaining

Swati Mishra's picture

Development is not easy; making it sustainable, even more difficult. Take for example road traffic rules. We can build better roads and install traffic lights, but cannot guarantee adherence to traffic rules. Even with laws in place, people may be more willing to pay fines than stop at a red light or wear seat belts. How do you make people value their own lives or their betterment? To succeed, we have to motivate people rather than just educate them.

Jason Furman speaks on inclusive growth in the US

Vamsee Kanchi's picture

Jason Furman, appointed by President Barack Obama as the Chairman of the Council of Economic Affairs, spoke yesterday at the World Bank about inclusive growth in the US. Furman said that average income for the bottom 90% grew strongly across all OECD countries starting in the 1950s, but has flattened in the US since the ‘70s. Furthermore, Furman added that capital income contributes more to overall inequality towards the upper end of the American income distribution.

Furman also pointed out that starting in 2000, labor share in US income started falling, largely because of globalization.

Internet or Toilets?

Uwe Deichmann's picture

The following post is the first in a series exploring 'internet for development,' the theme of the World Bank's upcoming World Development Report 2016.

Why should we invest in internet access in developing countries when there are more important problems like providing clean toilets? That was one of the questions posed to Vint Cerf following his recent presentation on Emerging Internet Trends that will Shape the Global Economy here at the World Bank. Vint is one of the “Fathers of the Internet”. In the 1970s he was part of a small team that developed the protocols and standards that guide the open, global communication system that we all rely on every day. Today he is Google’s Chief Internet Evangelist and a preeminent thinker about the current state and future of the internet.

Vint’s presentation was the second seminar organized by the World Development Report 2016 (WDR): Internet for Development. This World Development Report (WDR) will look at the impact of the internet – in a broad sense – on businesses, people and governments. And it will evaluate policies in the information and communication technology (ICT) sector and in complementary sectors that will help countries receive the highest social and economic returns from those investments. In his wide-ranging talk and in a meeting with the WDR team, Vint touched on all of those issues. Here are a few of his thoughts.

Welfare dynamics measurement: Two definitions of a vulnerability line and their empirical application

LTD Editors's picture

Little research currently exists on a vulnerability line that distinguishes the poor population from the population that is not poor but that still faces significant risk of falling back into poverty. A new World Bank policy research working paper by Hai-Anh H. Dang and Peter F. Lanjouw attempts to fill this gap by proposing vulnerability lines that can be straightforwardly estimated with panel or cross-sectional household survey data, in rich- and poor-country settings. These vulnerability lines offer a means to broaden traditional poverty analysis and can also assist with the identification of the middle class or resilient population groups. Empirical illustrations are provided using panel data from the United States (Panel Study of Income Dynamics) and Vietnam (Vietnam Household Living Standards Survey) for the period 2004-2008 and cross-sectional data from India (National Sample Survey) for the period 2004-2009. The estimation results indicate that in Vietnam and India during this time period, the population living in poverty and the middle class have been falling and expanding, respectively, while the opposite has been occurring in the United States.

Foreign aid and volatility of natural resource revenues in low-income countries

Anton Dobronogov's picture

An abundance of natural resources is both an opportunity and a challenge for developing countries. A number of resource-rich, low-income countries receive amounts of foreign aid that are similar to or larger than their actual or potential revenues from natural resources. A new policy research working paper by Octave Keutiben and me develops a growth model to look at some ways in which the donors may help governments of such countries to use their resource revenues productively and minimize the magnitude of risks created by resource rents. The paper’s key conclusion is that making aid countercyclical helps to achieve higher economic growth, and so does conditioning disbursements on enhancement of public capital.