The Sunday Business section of the New York Times prominently featured an image of a huge vault overflowing with bits and bytes. It was a story about the Bank’s Open Data initiative and claimed that datasets and information will ultimately become more valuable than Bank lending. It’s a powerful idea and one that sounds similar to the knowledge bank articulated by Jim Wolfensohn nearly ten years ago. But there is an important distinction between the two. This is not about the World Bank as the central repository of knowledge sharing its knowledge and wisdom with clients from the South. Instead, it’s about “democratizing development economics” in that it levels the playing field on knowledge creation and dissemination and opens the development paradigm to participation from researchers and practitioners, software developers and students, from north and south.
‘Gender Equality’ is a concept that's finally entering the mainstream. It connotes equal rights to education, to vote, to work, to have access to finance, and other basic entitlements for both men and women. Unfortunately, while some equality milestones have been reached, in many cases attainment is a distant goal. Take the case of ‘Justice’. “In many countries of the world the rule of law still rules women out,” says the latest UN Report ‘Progress of the Worlds Women – In Pursuit of Justice’. The report, released today, highlights women’s access to justice systems in almost every country in the world. It focuses on issues such as number of seats held by women in their country’s parliament, laws against domestic violence, and so on. “The Paradox confronted by the report is that despite the recent and rapid expansion of women’s legal entitlements, what is written in the statute books does not always translate into real progress on equality and justice on the ground,” says Claire Provost in a post on the Guardian’s Poverty Matters blog. The report also has a wealth of data; see the interactive map here.
If the nation which has bestowed to the civilization such giants as Tchaikovsky and Shostakovich, Tolstoy and Bulgakov could manage its economy as splendidly and robustly as its culture, Russia would be doing just great! Unfortunately, it’s not the case. The resource curse is affecting the economy in a negative way and even more seriously than certain counterproductive habits and mental inertia from the old times of statist, centrally planned economy.
I’m afraid there is not much time left for Russia. If it wants to catch up with the advanced world – and become a true member of the G8 group of developed countries – it must use wisely for investment in restructuring and diversification of its economy the windfall revenue from exploitation of vast natural resources. Otherwise, the process of deindustrialization without offsetting by the nowadays service sector will continue and this great country – with huge potential for fast, durable, and sustainable development – will miss the chance to become one of the leaders of world economy. This decade will decide the fate of Russia for the whole 21st century. And the time runs fast.
Recently, economists began proposing the strategy for industrial development in low-income countries. But there are few explicit recommendations as to what role governments should play in fostering industrialization. Related question is whether we can draw useful lessons from successful experience of industrial development in East Asia for other regions, such as sub-Saharan Africa (SSA).
The paper entitled “A Cluster-Based Industrial Development Policy for Low-Income Countries” (Policy Research Working Paper 5703) proposes an industrial policy consisting of four pillars of recommendations based on roughly 20 case studies of industrial clusters in Asia and sub-Saharan Africa.
Given the urgent need for policymakers in Europe and other advanced economies to tackle current debt challenges, there is a frantic scramble for suitable policy tools that will help resolve the Greek conundrum.
One policy tool – a form of debt restructuring known as ‘financial repression’ that focuses on establishing a tighter relationship between government and the financial industry by setting caps on interest rates and regulating cross-border money flows – has largely been overlooked. The Petersen Insitute’s Carmen Reinhart recently delivered a
Many economists have argued that emerging economies were “resilient” to the global crisis of 2008-09. However, they are often not very precise about what they mean by resilience. In a recent paper (Didier, Hevia, and Schmukler, 2011), we dig deeper on how emerging countries fared during the global crisis and to what extent they were indeed resilient.
In the paper, we show that while growth in emerging economies did not go to negative terrain during 2009, the collapses in GDP were similar to, or even larger than, those in advanced countries (Figures 1 and 2). The extent of the collapse was linked to that of the recovery – the more countries fell the more they recovered (Figure 3). However, there is significant heterogeneity among emerging economies, with Eastern Europe and Central Asia faring the worst. Low-income countries did relatively better, probably due to their lower degree of trade and financial openness (Figure 4). One piece of good news from the crisis is that merging economies recovered well, growing sooner at an even higher rate than before the crisis. Another innovation in emerging economies is that, as opposed to the past, they were able to use a larger set of policy tools.
With Nong Zhu
Migrant workers have been contributing to one-sixth of China’s GDP growth since the mid 1980s. The impact of rural migrants’ contribution is best seen in cities during the Chinese New Year, when they return to reunite with their families, leaving behind a massive urban labor shortage. This happens every year despite urban families and restaurant owners offering high bonuses.
There is a consensus that migration has contributed to increased rural income, but views differ on its impact on rural inequality. My view is that rural households with higher incomes are not more likely than poorer households to participate in migration or benefit disproportionately from it. Adding to my recent blog in People Move, I would like to discuss the reasons behind this.
With sluggish growth in advanced economies, much investment money is heading south to more favorable climates. And while capital flows can provide greater opportunities for emerging and developing economies to pursue economic development and growth, capital inflows can also pose some serious policy challenges for macroeconomic management and financial sector supervision. Recently, large capital inflows in some middle-income countries have placed undue upward pressure on their currencies, adversely affecting macroeconomic and financial system stability as well as export competitiveness in a number of these countries. Furthermore, the pro-cyclical nature of global capital flows to emerging and developing economics can serve to aggravate these risks.
The English cartoonist Ashleigh Brilliant once offered the following piece of advice to strategists of all sorts who are concerned with their reputation: “To be sure of hitting the target, shoot first, and call whatever you hit the target…” With little time and fewer resources than elsewhere to battle the burning issues of poverty, insecurity and sociopolitical instability, economists and policymakers in developing countries may not be in the position to benefit from such cynical wisdom. Rather than listening to Ashleigh Brilliant, they should always keep in mind the constraints they face and the urgency of the situation in poor countries, and reflect on the maxim that recommends to “always aim before shooting.
A policy and research domain where there is a serious deficit of strategic thinking and prioritization is that of evaluation, which is traditionally defined as the systematic assessment of the worth or merit of some project, program or policy. The importance of evaluation cannot be underestimated: first, in a world where ideas compete constantly for funding, it is essential to ensure that value for money is at the core of public policy. Second, only by assessing the pertinence and efficiency of development initiatives can we get a full picture of their outcomes, and ensure accountability. Third and perhaps even more importantly, evaluation helps define the criteria for decision-making on new initiatives, and chart the course of future action. It highlights what works and what does not. It is therefore not surprising that evaluation has become a hot area of research and policy.
With a view to assessing the practical implications of the Growth Identification and Facilitation framework (GIFF) (*for more on this, see the bottom of this post) in a concrete country case, Justin Yifu Lin and I are preparing a draft paper applying the framework to Nigeria. The paper (which is expected to be published shortly) identifies as appropriate comparator countries for Nigeria: China, Vietnam, India and Indonesia. The key sectors that are identified by the paper are TV receivers, motorcycles and motor vehicle parts, fertilizers, tires, vegetable oil, meat, meat products and poultry, leather, palm oil and rice, telecommunications, wholesale and retail and construction. Our key recommendation for Nigeria is to address power shortages in a targeted manner through Independent Power Plants located in industrial zones, as well as create other enabling conditions, e.g. through subsidized access to finance and promotion of research and development (agriculture). In the area of trade policy, the government could pre-commit to reducing tariffs over a period of years and at the same time to creating a set of enabling conditions that would obviate the need for tariff protection. That way, significant incentives would be in place for the private sector to lobby the relevant government agencies to keep up their commitment to addressing these constraints. Before finalizing the paper, I visited Nigeria to meet with a range of industries that had been identified by the paper as possible target sectors and better understanding their business prospects and constraints, as well as meet with senior government officials to gauge their reaction to the proposed framework.