Monday’s announcement of the 2017 Nobel Prize for economics, to Richard Thaler, for his groundbreaking work incorporating psychology into economic theory, was a victory not only for the University of Chicago Professor and co-author of Nudge: Improving Decisions about Health, Wealth, and Happiness, but for behaviorally-informed policy worldwide.
In a recent exhibition at the American Museum of Natural History in New York City, “Dinosaurs Among Us,” paleontologists use prehistoric fossil records of bones, feathers, and nests to show that some dinosaurs did not go extinct but, rather, evolved into the creatures we see today. The links they trace show how avian dinosaurs (ones that fly) evolved into modern-day birds. Paleontologists argue that avian-dinosaurs’ swift aerial mobility played a key role in determining their survival while their land-based relatives failed to thrive. Flight enabled them to relocate and adapt to drastically changing environments—a skill that their land-based relatives lacked.
Figure 1. Paleontologists argue that avian-dinosaurs (left) adapted to the changing environment quickly and evolved into birds (right).
One of the most storied topics in agricultural economics, dating back to Chayanov’s work on Russian peasants published nearly a century ago, is the inverse relationship between scale (in terms of farm or plot size) and (land) productivity - commonly known as the IR.
Non-energy prices rose modestly. Agriculture prices climbed a little over 1 percent, led by strong upturns in most edible oils and wheat.
The outlier to the trend of increases, beverage prices, fell 1 percent due to weakness in coffee prices. Fertilizer prices surged over 6 percent, led by a 16 percent jump in Urea.
The 2018 World Development Report (WDR), Learning to Realize Education’s Promise, launched this week. While it draws on research and collective experience—both from within and outside the World Bank—it also draws on the personal experience of the team members, including the two of us. What inspires the focus on learning for all is that we both have seen the possibilities of widely shared learning, but we’ve also seen what happens when those possibilities aren’t fulfilled.
Equality of opportunity is a popular policy objective around the world. It is deeply embodied in the American Dream and has resonated with politicians ranging from Margaret Thatcher to Nelson Mandela. It is also connected to the World Bank’s goal of shared prosperity; individuals with low opportunities should have a chance of growing and prospering in life.
Who doesn’t enjoy an afternoon at the movies? Yet sometimes a cinema screening can be more than just fun. An experiment in Uganda demonstrates how an inspiring, relatable figure in a movie can actually help students to pass their math exams.
We all benefit from role models, whether it’s in school, work, or our personal life. A role model shows us how we can be more or achieve more. In Madagascar, a role model (in this case, an “educated person with high income, who grew up in the local school district”) sharing her life story at a school significantly increased students’ test performance. (Notably, the effect only materialized when the role model had come from a poor background, not when she came from a well-off background.) In Uganda, women who work in male-dominated sectors – and subsequently make much more money – point to the importance of role models in showing them they can succeed.
We know that fiscal policy can be harnessed to reduce inequality in low- and middle-income countries, but until now, we knew less about its ability to reduce poverty. Our recent volume looks at the revenue and spending of governments across eight low and middle income countries (Armenia, Ethiopia, Georgia, Indonesia, Jordan, Russia, South Africa and Sri Lanka), and it reveals that fiscal systems, while nearly always reducing inequality, can often worsen poverty.
Researchers in development often hope that their research can ultimately influence policy. But getting from research results to policymaker persuasion is an ongoing struggle. Yesterday I heard insights on this point from Dasmine Kennedy of Jamaica’s Ministry of Education as well as Albert Motivans from Equal Measures 2030. (I also gave my two cents.)
There are many views about how a country develops. Some view institutions as the key determinant, while others emphasize the fundamental importance of human capital. Still others highlight the importance of infrastructure, while the World Bank and other international organizations have argued for improving the overall business environment in which firms operate. Finally, a recent strand of literature has emphasized the importance of agglomeration economies as a source of long-term growth. What, however, are the relative explanatory power of these alternative, though not necessarily-mutually exclusive, views? And are their effects specific to the context such as the level of development, the sector in which a firm operates, firm size and age? Answering these questions is important because governments only have limited resources to deal with key challenges. If there are bottlenecks to a country’s development, it is important to diagnose these to provide a sounder basis for policy.