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?
Following the launch of the World Development Report (WDR) 2014, Risk and Opportunity: Managing Risk for Development, various team members have been traveling to different countries to present its findings. I recently joined other team members in a visit to Morocco, Egypt, Ethiopia, and South Africa, with a stop in the middle in London and Oxford.
One thing that struck me was how relevant the topic of risk management is for many countries. The importance of risk management seemed immediately apparent to many participants in our discussions. Indeed, many participants gave examples of risk management measures that have been practiced in their cultures for generations (such as storing grain in African villages), or linked messages in our Report to common sayings – for example, as Professor Awad from the American University in Cairo told us, our message on the importance of saving in good times for the bad times has a direct parallel in the old Arabic adage, “to keep a white coin for a black day”.
My experiences with field work thus far have been nothing if not adventurous. I seem to attract broken glass – a rock the size of a small coconut crashing through my 3rd floor window in Zanzibar, for instance, or the windows of my taxi being broken with baseball bats by an armed mob in Mali. Just the other day, my boss and I came within inches of dying in a fiery plane crash – we were on our way back to the main island of Zanzibar from Pemba island in a tiny 12-seater Soviet-era plane, and were just about to land in a strong crosswind when the engine on my side failed. We managed to land, somehow, and taxied to a stop right there on the runway to wait for a vehicle (ironically, it ended up being an ambulance) to take us to the terminal.
In a new book released Monday, the World Bank's Africa Region convincingly argued for "Securing Africa's Land for Shared Prosperity" by recording land rights for both individuals and groups. That’s mainly because at a time when vastly-increased commodity demand has led to a series of widely publicized “land grabs” and urban expansion, the potential benefits from securing rights have greatly increased in several ways.
First, equity and efficiency. Poor and traditionally disadvantaged people, including women, have the least access to land rights, so securing their rights can provide them with access to a key productive resource. Also, if land rights are secured, land users will be more likely to invest in land improvement and modern technology to improve the efficiency of land use.
This year’s report card on where the world, the regions, and the developing countries are with regard to attaining the various Millennium Development Goals (MDGs), shows quite a diverse picture. As the Global Monitoring Report 2013 points out, progress toward the MDGs has not been universal and there are many poor countries that are still very far away from the targets where we want them to be by 2015.
If we take a look at progress towards attainment of the MDGs, we can conclude that four out of 21 targets have been met by 2010, well ahead of the 2015 deadline. Note that even though there are 8 Goals, there are 21 targets and about 56 indicators through which the world tries to monitor their progress.
Madame Ngetsi wanted to start a business in the Democratic Republic of Congo. What was her first step was in making her dreams a reality? Did she go to a bank for a loan, a notary to formalize her documentation, or the company registry to register her company? In fact, her first stop was to go to her husband to get legal permission to start her business. By law, Madame Ngetsi has to have written legal permission to register a business, formalize a document, open a bank account, and register land—a requirement that doesn’t apply to her husband.
I never thought I would descend to being the kind of person who read budget speeches for pleasure. I was therefore alarmed when, en route from Washington to Johannesburg, via Dakar last month, I found myself reaching out to Finance Minister Pravin Gordhan's Budget Speech that he had just delivered to the South African parliament. Worse, I soon found myself reading it with pleasure. The pleasure came from two sources: the eminent sensibility of the speech, and comfort from the realization that the problems we contend with, wherever we are, are fundamentally similar. South Africa is wrestling with keeping its fiscal deficit under control, its flagging growth rate up and yawning inequities in check. Musing about these problems I dozed off. When I woke up the cabin was dark. Curious about who was going to Dakar I looked around. Of the passengers in my cabin, around 30 percent were Black, 70 percent were White, and 80 percent were watching The Best Exotic Marigold Hotel.
In Sierra Leone's rainy season, the Sewa River, feared by many locals for its powerful currents, floods over its banks separating entire villages from basic services. Konta health clinic in Kenema district operates near the shores of the Sewa, and during the six-month rainy season, five of Konta’s 17 dependent villages cannot access the clinic. If women in those villages give birth during the rains, they entrust care to traditional birth attendants; if children fall ill, they turn to traditional medicine, stockpiled drugs, and, often, prayer. As one woman explained during a recent community meeting in Konta, these are the only options, even if the all-too-frequent consequence is death. Hearing her account, it’s difficult not to feel a strong sense of injustice, even in an incredibly resource-constrained country like Sierra Leone. But is there a role for the law in remedying this situation?
This post was originally published in Voxeu.org.
Services have long been the main source of growth in rich countries. We argue that services are now the main source of growth in poor countries as well. We present evidence that services may provide the easiest and fastest route out of poverty for many poor countries.
For more than 200 years, it was argued that economic development and growth was associated with growth of the labour-intensive manufacturing sector (Baumol 1967, Kaldor 1966, UNIDO 2009). Services were considered as menial, low-skilled, and low-innovation (McCredie and Bubner 2010). But today, services can be among the most dynamic sectors in an economy. The policy question is whether this is true even in poor countries.