LTD Editors's blog
Written in the wake of the World Bank Group's two recently adopted overarching goals — ending extreme poverty by 2030 and promoting shared prosperity — Kaushik Basu's new working paper examines the longstanding debate on growth, redistribution, and poverty. Basu analyzes past poverty trends on poverty and sheds new light on an old debate.
Jun Rentschler's new paper presents empirical evidence of the profound and long-term damage from adverse natural events on poverty. The paper discusses detrimental long-term consequences for the income and welfare of the poor and the presence of poverty traps that result from damages to productive assets, health, and education.
'A 12-Step Program for Fuel Subsidy-aholics' by Eric Morris on Freakonomics lays out ideas for how to limit or eliminate such subsidies, drawing on research by the IMF and others.
In a Project Syndicate piece titled 'South Africa breaks out', Joe Stiglitz explains why several important emerging market countries are not fans of either the transatlantic or Pacific investment pacts now being negotiated.
A New Pew Research Report finds Despite Challenges, Africans Are Optimistic about the Future. Indeed, the survey actually shows that, when it come to the economic Outlook, respondents were more positive in Africa than Europe or Middle East.
Bureaucratic reform is a priority of donor organizations, including the World Bank, but is notoriously difficult to implement. In many countries, politicians have little interest in the basic financial and personnel management systems that are essential to political oversight of bureaucratic performance. A new paper by Cesi Cruz and Philip Keefer presents a new perspective on the political economy of bureaucracy. Politicians in some countries belong to parties that are organized to allow party members to act collectively to limit leader shirking. This is particularly the case with programmatic parties. Such politicians have stronger incentives to pursue public policies that require a well-functioning public administration. Novel evidence offers robust support for this argument. From a sample of 439 World Bank public sector reform loans in 109 countries, the paper finds that public sector reforms are more likely to succeed in countries with programmatic political parties. Read the entire paper here.
Matthew Bishop of The Economist, describes the concept of Development Impact Bonds (DIBs). The idea is that a delivery agent (an NGO, for example) figures out how to make a measureable improvement in some social problem, someone (usually government, perhaps philanthropy) agrees to pay for that outcome if it is achieved, and investors provide financing that pays for the intervention. Learn more on the Philanthrocapitalism Blog.
Globalization has benefited an emerging “global middle class,” mainly people in places such as China, India, Indonesia, and Brazil, along with the world’s top 1 percent, said Branko Milanovic at a recent Policy Research Talk. But people at the very bottom of the income ladder, as well as the lower-middle class of rich countries, lost out.
In an article published by The Economist today, World Bank researcher Berk Ozler contends that conditional cash transfers work better when the problems individuals face go beyond mere shortage of cash. If families do not appreciate the real value of education, for instance, or if part of the benefit of doing something comes when everyone does it (vaccination is a case in point), people left to themselves may not spend enough on education or health. CCTs help to overcome that.
- weekly round up
Simon J Evenett and Douglas Irwin debate on the future and prospects of globalization in the latest edition of the Economist Debates.
In 'The Gap Between Schooling and Education' on the NYT Economix blog, Annie Lowrey interviews CGD's Lant Pritchett about his new book, "The Gap Between Schooling and Education."
The WSJ's 'At Work' blog carries an interview by Rachel Feintzeig with Manoj Bhargava, a CEO who dropped out of Princeton and lived like a monk in India for 12 years before making it big.
Joe Stiglitz has a piece titled 'Inequality is a Choice' on the NYT's opinionator blog.
In today's NYT opinionator blog, Joe Stiglitz writes about inequality and the research of Branko Milanovic, World Bank lead economist and inequality expert. In his post, Stiglitz draws from Milanovic's research on long range inequality trends to ponder who the winners and losers of globalization have been and how the most recent worldwide financial crisis affected both the level of global inequality and the relative importance of differences in mean country income vs. nationally based inequalities. His post explores whether we envisage a situation where income inequality continues, by and large, to increase within nations, but, spurred by the high growth of China and India, decreases globally. Stiglitz also ponders the hollowing-out of traditional middle classes in rich countries.
As the World Bank Group-IMF Annual Meetings unfold, the two organizations have been buzzing with activity - a lot of which has revolved around themes discussed on Let's Talk Development in the past few months.
Most visibly, President Jim Yong Kim has laid out his vision for the future of the World Bank Group. Kim has given over this week numerous speeches and views on the two goals of ending extreme poverty and promoting shared prosperity, including a stated target of reducing extreme poverty to 9% by 2020. See Kim, UNDP Administrator Helen Clark, South Africa Finance Minister Pravin Gordhan, Chief Economist Kaushik Basu and the IDB's Santiago Levy discuss their thoughts in a panel titled 'From Poverty to Shared Prosperity.'