Do migrants respond to differences in access to public goods and services in addition to income prospects of potential destinations? This issue is important in developing countries where provision of basic public goods affects not only income prospects but also quality of life. And in these countries, provision of public goods tends to vary widely across areas. In a Tiebout (1956) sorting model, such disparity in the provision of public goods such as roads, electricity, schools, hospitals, etc. should induce people to "vote with their feet" and to migrate to areas with better access to these infrastructures and services.
Revised excerpts from the 16th JRD Tata lecture, delivered in New Delhi, 19 August 2013.
This is a difficult time for the Indian economy. Growth has slowed, with industry shrinking over the last two successive months, wholesale price inflation has risen to 5.8%, and the rupee has been losing value sharply. There is reason to be upset about this and to demand more from policy makers. Yet, as I argue in this lecture, this is not India's biggest problem. The nation's biggest challenge at this critical juncture is a moral and an ethical one. This, for India, is a moment of moral churning. Skullduggery and corruption, cutting across party lines, have been rampant, eating into the moral fabric of the nation, leaving ordinary people befuddled and in despair. This is breeding a corrosive cynicism, leading people to believe that maybe this is the only way to be, that petty corruption and harassment is simply the new normal, whereby we should complain when we are left out of the gravy train and merrily join in if and when we get a foothold on that train. Yes, the economy has not done well over the last year or two. But once we look beyond the proximate causes we will realize that one important factor for the economy not doing well is the corrosion of values like trust and trustworthiness and their concomitant, poor governance.
In the last five years, higher food prices have provoked government interventions in agricultural markets across the globe, often in the name of protecting the poor. But do higher food prices actually hurt the rural poor?
The economic liberalization during the last couple of decades led to impressive economic growth and poverty reduction in many developing countries. This period has also witnessed worsening of income inequality and widening of spatial disparity (World Development Report (2009); Kanbur and Venables (2005); Kim (2008)). There is considerable worry among policy makers about the extent to which this rise in spatial inequality is due to increasing disparity in opportunities in terms of provision of basic infrastructure and services. The recent growth and poverty reduction experience places Bangladesh as an exception to this trend of increasing spatial inequality. Bangladesh made significant strides in poverty reduction between 2000 and 2010 with incidence of poverty falling from 48.9 percent to 31.5 percent. During the same period, the incidence of poverty declined more than proportionately in traditionally poorer regions, reducing welfare gaps across regions. There is also no evidence of significant change in overall inequality over the same period. What made spatial disparity in Bangladesh to decline while its economic growth accelerated substantially? What were the sources of decline in spatial disparity in welfare?
In the policy discussions related to hunger, malnutrition, poverty and wellbeing, calorie intake is often the focus. Increasingly, however, micronutrient malnutrition appears to be a critical problem in many developing countries. Women and children are most vulnerable to micronutrient malnutrition due to their elevated micronutrient requirements for reproduction and growth. According to some estimates, nearly three billion people (including 56% of the pregnant and 44% of the nonpregnant women) suffer from iron deficiency anemia (IDA), and one-third of the world's population suffer from zinc deficiency. Twenty percent of the maternal deaths in Africa and Asia are due to IDA. One in every three preschool-aged children in the developing countries is malnourished. Undernutrition, coupled with infectious diseases, accounts for an estimated 3.5 million deaths annually. At levels of malnutrition found in South Asia, approximately 5% of GNP is lost each year due to debilitating effects of iron, vitamin A, and iodine deficiencies alone.
“People want to work, not fight,” said Nadir Ali, a male shopkeeper in Kabul, Afghanistan, in one of the discussion groups of the Moving out of Poverty: Rising from the Ashes of Conflict report. For many, like Nadir, work is a crucial part of their existence. However, in many parts of the world conflicts and violence prevent citizens from working as they destroy communities, institutions, infrastructure and human capital. Not surprisingly, they represent a major challenge to job creation, as highlighted by the 2011 World Development Report (WDR) and the forthcoming 2013 WDR.
South Asia has experienced high levels of conflict over the past decade. More than 58,000 people were killed in armed conflict worldwide in 2009; at least a third of them were in South Asia.1 Ongoing conflicts in the region include the conflicts in Afghanistan and Pakistan, insurgent movements in India’s northeastern regions, and the violent activities of left-leaning groups in the eastern and central parts of India. Nepal and Sri Lanka are recovering from long-lasting civil wars. In a recent paper prepared for South Asia’s first regional flagship report "More and Better Jobs," we examine the key challenges to job creation in conflict-affected environments, using household and firm level surveys from South Asian countries.
The role of the Indian government in helping foster the success of India’s IT industry is a point I disagree with Kalpana Kochhar about. Kalpana, World Bank regional Chief Economist for South Asia, posted a comment disagreeing with my views on the subject on ‘Africa Can Reduce Poverty’. Following is my counterpoint to her:
India experienced sustained economic growth for more than two decades following the economic liberalization in 1991. While economic growth reduced poverty significantly, it was also associated with an increase in inequality. Jean Dreze and Amartya Sen (2011) argue that Indian economic reform has been “unprecedented success” in terms of economic growth, but an “extraordinary failure” when it comes to improvements in the living standard of general population and social indicators. The contrasting news reports on billion dollar house (Mukesh Ambani’s house at Mumbai) and farmers’ suicides have brought the issue of income inequality to the spotlight for many people. Does the increase in inequality in post-reform India reflect deep-seated inequality of opportunity or efficient incentive structure in a market oriented economy?
Taking high-quality affordable primary care to the rural poor with the help of handheld computers, telemedicine, and P4P.
In our first post in this series, we showed how illness in India causes financial hardship and leaves Indians—especially poor ones—with limited access to affordable good-quality health care that can actually make them better. In our last post, we outlined the Aarogyasri scheme—a novel government-sponsored health insurance program in the state of Andhra Pradesh that has the potential not just to reduce financial impoverishment but also raise quality standards in hospital care. In this post, we discuss an innovative private-sector approach to delivering and financing primary health care in rural Andhra Pradesh.
More than health insurance for the poor
In our last post, we showed how illness in India causes financial hardship and leaves Indians—especially poor ones—with limited access to affordable good-quality health care that can actually make them better. In this post, we outline a novel government-sponsored health insurance program in the state of Andhra Pradesh (AP)—a program that has the potential not just to reduce financial impoverishment but also raise quality standards in hospital care.
a) “Actors”, and their rights and responsibilities
Initiated by the then chief minister of AP, the medical doctor YSR Reddy, the Rajiv Aarogyasri scheme started in 2007 and is targeted at the below-poverty line (BPL) population. The scheme focuses on life-saving procedures that aren’t covered elsewhere in India’s patchwork of health programs, for which treatment protocols are available, and for which specialist doctors and equipment are required. Currently 938 tertiary care procedures are covered. The scheme revolves around five key “actors”, one unique to Aarogyasri and all with interesting rights and responsibilities.