While homicide rates in most parts of the world fell by as much as 50 percent in the 2000s, Latin America was the only region where lethal violence actually increased during that period. This finding is puzzling as most Latin American countries experienced sustained economic growth in the 2000s as well as witnessed overall improvements in terms of poverty, inequality and other social outcomes. Is it possible that better economic conditions lead to reduced crime is a mistaken perception?
Last week's Free Exchange blog, run by The Economist, has a post titled 'Aid to the Rescue'. The piece cites a recent paper by Sebastian Galiani, Stephen Knack, Colin Xu and Ben Zou, which attempts to gauge the effects of aid on growth. Pondering whether it pays for donors to contribute 0.7% of national income toward development assistance, the piece goes on to explain the complexities of establishing causality when analyzing the pay offs from aid.
The quest for development effectiveness has been a learning process, both conceptually and empirically. One of the important outcomes of the process has been the emphasis on the notion that sustainable economic growth must be a precondition for poverty reduction. Structural fiscal policies which aim to shape the supply side of the economy to generate growth and structural transformation are critical. They complement private investment through the provision of public goods such as public infrastructure or the education of the workforce. But the question still remains: will public investment in infrastructure be sufficient for unleashing faster economic growth in Sub-Saharan Africa?
The literature on growth convergence and divergence is vast and deep. Some have argued that divergence is persistent. Lant Pritchett in his paper, “Divergence, Big Time” has argued that backwardness appeared to carry severe disadvantages that generated long-term divergence between growth in per capita incomes of developing countries compared to rich countries. Others have found evidence in favor of convergence. Arvind Subramanian, in his paper, “The hyperglobalization of Trade and its Future”, has argued in favor of convergence, since the number of developing countries experiencing catch-up has more than trebled (from 21 to 75 countries) and the rate of average catch-up has doubled from 1.5 percent per year to over 3 percent. However, what has been overlooked in this debate is the role that agriculture, manufacturing and services have played in growth convergence/divergence. Which of these sectors have played a bigger role in growth convergence?
The WTO will soon initiate its 500th formal dispute, and discussions of such international litigation are now a media mainstay. Last Thursday, for example, the WTO’s Appellate Body released its latest ruling, upholding most of a set of legal challenges to China’s use of export restrictions on “rare earth” materials, a set of intermediate inputs important for green technologies such as wind turbines, batteries for gas-electric hybrid cars, etc. Other recent examples of formal WTO litigation in the news include the EU’s challenge to Russia’s import restrictions on vans, the US’s challenge to Chinese barriers to autos, and Canada’s and Norway’s challenges to an EU ban on trade in seal products.
US-Africa Summit garners over $17b in pledges and calls for a deeper economic relationship.
In a New York Times article, Eduardo Porter writes about curbing population growth as a way to reduce carbon emissions.
Economic growth may be the best way to overcome poverty and reduce social ailments, says The Economist.
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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 - 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.
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.
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.