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Global income distribution: From the fall of the Berlin Wall to the Great Recession

Christoph Lakner's picture

The period between the fall of the Berlin Wall and the Great Recession saw probably the most profound reshuffle of individual incomes on the global scale since the Industrial Revolution. This was driven by high growth rates of populous and formerly poor or very poor countries like China, Indonesia, and India; and, on the other hand, by the stagnation or decline of incomes in sub-Saharan Africa and post-communist countries as well as among poorer segments of the population in rich countries.

​Friday Roundup: Tackling Inequality, Ushahidi on crisis data, Technology and Africa, Gates on Sachs, and ABCDE sign up

LTD Editors's picture

Ana Revenga, soon to be the head of the Bank's Poverty Global Practice, blogs on the importance of starting early when tackling inequality and also links to a new user-friendly inequality dashboard.

From his days as an MIT professor, to his stint as World Bank Chief Economist, #2 at the IMF, and head of Israel's central bank, Stan Fischer is a towering figure in economics circles. He's just been appointed by Fed Chairwoman Janet Yellen to be her deputy. Read Dylan Matthew's profile of Stan here.

Of report downloads and impact: Tales of a trending working paper

Merrell Tuck-Primdahl's picture

A recent Policy Research Working Paper “Which World Bank Reports are Widely Read?” garnered a flurry of online coverage over the past week and a half.

Unfortunately, several reports misunderstood the paper’s conclusions. As fellow blogger David Evans pointed out yesterday, a few Tweets and stories implied that most Bank reports are not being used at all. That’s clearly not true. In fact, people across the world downloaded World Bank reports millions of times over the past two years. It is true, however, that certain technical, country-specific, and sector-specific reports (the only ones studied by the working paper) are much less widely read, or were not downloaded via the Documents and Reports database that the authors analyzed. Even if not downloaded, these reports were certainly delivered to the clients who commissioned them, and were often emailed to others, or disseminated the old-fashioned way by printing and hand distribution -- a common practice in many parts of the developing world where we work and where internet access is limited.

If I live long, will we prosper?

Harun Onder's picture

Thankfully, we enjoy longer lives than any generation before us. We also have fewer siblings, on average. All of these things add to our quality of life – we have more time to have fun, and we get more attention from mom. But are these changes, which are good for each of us, also good for all of us?

When people live longer and have fewer babies, the average age of the population increases. According to UN calculations, the world’s median age – currently about 29 – is 7 years higher than it was in 1970. 

Urbanization as opportunity

LTD Editors's picture

Urbanization deserves urgent attention from policy makers, academics, entrepreneurs, and social reformers of all stripes. Nothing else will create as many opportunities for social and economic progress. The urbanization project began roughly 1,000 years after the transition from the Pleistocene to the milder and more stable Holocene interglacial. In 2010, the urban population in developing countries stood at 2.5 billion. The most important citywide projects -- successes like New York and Shenzhen -- show even more clearly how influential human intention can be. The developing world can accommodate the urban population growth and declining urban density in many ways. One is to have a threefold increase in the average population of its existing cities and a six fold increase in their average built-out area. Another, which will leave the built-out area of existing cities unchanged, will be to develop 625 new cities of 10 million people -- 500 new cities to accommodate the net increase in the urban population and another 125 to accommodate the 1.25 billion people who will have to leave existing cities as average density falls by half.

Risks and Opportunities of Participation in Global Value Chains

Xubei Luo's picture

Since the first industrial revolution, waves of technological improvement have changed the boundary of production and redefined the role of the state. The information and communication technology revolution has not only increased productivity, but has also reinterpreted the function of time and distance—billions of activities are now linked with “one-click,” and new transactions become possible with “just-in-time” delivery. If the technological revolution has made participation in Global Value Chains (GVCs) somewhat inevitable, it has also accentuated both the risks and opportunities associated with this involvement. On the one hand, participation in GVCs creates new opportunities for profits and expands the market horizon; but on the other hand, it exposes the enterprise sector to risks previously shielded by market boundaries and geographic distances, while increasing the scale of information asymmetry.

Is it time we shifted our attention and research to the informal sector’s firm size?

Mohammad Amin's picture

Looking at the literature on informality, one thing that stands out is the small size of the informal firms. In fact, firm-size is one of the criteria used by ILO and individual researchers to draw the line between formal and informal firms. Many informal firms, however defined, are operated by the owner herself or himself and without any other employees, with few having more than five employees.

The effect of aid on growth: Evidence from a quasi-experiment

LTD Editors's picture

The literature on aid and growth has not found a convincing instrumental variable to identify the causal effects of aid. A new World Bank policy research working paper exploits an instrumental variable based on the fact that since 1987, eligibility for aid from the International Development Association (IDA) has been based partly on whether or not a country is below a certain threshold of per capita income. The paper finds evidence that other donors tend to reinforce rather than compensate for reductions in IDA aid following threshold crossings. Overall, aid as a share of gross national income (GNI) drops about 59 percent on average after countries cross the threshold. Focusing on the 35 countries that have crossed the income threshold from below between 1987 and 2010, a positive, statistically significant, and economically sizable effect of aid on growth is found. A one percentage point increase in the aid to GNI ratio from the sample mean raises annual real per capita growth in gross domestic product by approximately 0.35 percentage points. The analysis shows that the main channel through which aid promotes growth is by increasing physical investment.

Saving Lives with a Bucket of Yellow Paint

Sana Rafiq's picture

The following post is a part of a series that discusses 'mind and mindsets,' the theme of the World Bank’s upcoming World Development Report 2015.

If you had to guess, what would you say is the leading cause of unnatural deaths in Mumbai, one of India’s largest cities? Fire? Car wrecks? Suicide? In fact, the number one cause of unnatural deaths in Mumbai is railway track accidents.
According to India Railroad, in Mumbai, 10 people die everyday crossing the railway tracks. This amounts to more than 3,500 people a year, only in Mumbai. In fact, 15,000 people are killed every year while crossing rail tracks in India. But what causes these accidents? Is it because the individuals don’t know when the train is coming? Do they have poor visibility?