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Inequality of opportunity and economic growth: A cross-country analysis

LTD Editors's picture

Income differences arise from many sources. While some kinds of inequality, caused by effort differences, might be associated with faster economic growth, other kinds, arising from unequal opportunities for investment, might be detrimental to economic progress.  A new World Bank study by Francisco H. G. Ferreira, Christoph Lakner, Maria Ana Lugo, and Berk Özler uses two new metadata sets, consisting of 118 household surveys and 134 Demographic and Health Surveys, to revisit the question of whether inequality is associated with economic growth and, in particular, to examine whether inequality of opportunity -- driven by circumstances at birth -- has a negative effect on subsequent growth. The results are suggestive but not robust: while overall income inequality is generally negatively associated with growth in the household survey sample, the study finds no evidence that this is due to the component associated with unequal opportunities.

Ending Extreme Poverty In Our Generation

Kate Dooley's picture

It sounds impossible.  Unthinkable.  A world free from extreme poverty.  A world in which no child is born to die, no child goes to bed hungry, every child lives a life free from violence and abuse and has quality health care, nutrition and learns in school. This has long been Save the Children’s vision but could now be a shared global vision, and by 2030 perhaps, a reality.

On  May 30, 2013, a special panel of world leaders handed in their recommendations to the United Nations (UN) Secretary General on the future of global sustainable development and they, too, believe this can be our reality.

Reconciling the two “sciences of delivery”

Adam Wagstaff's picture

Last week on Let’s Talk Development, I asked what the term “science of delivery” (SOD) means. I suggested that SOD is about moving from thinking about “what to deliver” to “how to deliver”.  We know, for example, the interventions that cut child mortality (bednets, vaccinations, breastfeeding, etc.) but these interventions reach too few children, and the trick is to get them delivered to more. Much of the Bank’s analytic work, policy dialogue and lending work has focused precisely on how to reform policies and programs to ensure the interventions that are needed to improve development outcomes actually reach people. Much of this work merits the term “science” – it makes use of an explicit “theory of change” in the form of a results framework that reflects the latest social science, and builds on rigorous empirical evidence that compares actual outcomes with an explicit and plausible counterfactual.

So what exactly is the “science of delivery”?

Adam Wagstaff's picture

The World Bank’s president, Jim Kim, has now made two major speeches outlining his vision for the institution – one at the Annual Meetings the other at Georgetown University on April 2 ahead of the upcoming Spring Meetings.

Several themes are emerging. Two are easy to grasp and likely to resonate strongly with Bank staff and stakeholders: “ending poverty” and “boosting shared prosperity”. For years the Bank has seen fighting poverty as its mission. It has made major contributions in the areas of measuring and monitoring poverty – Bank staff have authored many of the world’s most-cited publications with poverty in the title. The Bank’s work at the country level has always had a strong anti-poverty focus. “Ending” poverty – rather than merely “fighting” it – is a natural next step. The idea of “boosting shared prosperity” also resonates. While economic growth is still seen as the principal driver of poverty-reduction, the goal has always been pro-poor growth – a concept that links naturally to the idea of “shared prosperity”.

Should inequality be reflected in the new international development goals?

Adam Wagstaff's picture

The last few months have been a busy time for inequality. And over the last few days the poor thing got busier still. Inequality is now dancing on two stages. It must be really quite dizzy.

We need an inequality goal. No we don’t. Yes we do

One of the two stages is the post-2015 development goals. At some point, someone seems to have decided that reducing inequality needs to be an explicit commitment in the post-2105 goals. The UN System Task Team on the Post-2015 UN Development Agenda wrote a report on inequality and argued that “addressing inequalities is in everyone’s best interest.” Another report by Claire Melamed of Britain’s Overseas Development Institute argued that “equity, or inequality, needs to be somehow integrated into any new framework.” Last week a group of 90 academics wrote an open letter to the High Level Panel on the Post 2015 Development Agenda demanding that inequality be put at the heart of any new framework.

Universal Health Coverage and the post-2015 development goal agenda. And Mrs Gauri

Adam Wagstaff's picture

In a recent blogpost I asked whether Universal Health Coverage (UHC) is old wine in a new bottle, and if so whether that’s so bad.

I argued that UHC is ultimately about making sure that “everyone – whether rich or poor – gets the care they need without suffering undue financial hardship as a result.” I suggested UHC embraces three important concepts:

• equity: linking care to need, not to ability pay;
• financial protection: making sure that people's use of needed care doesn't leave their family in poverty; and
• quality of care: making sure providers make the right diagnosis, and prescribe a treatment that's appropriate and affordable.

A Sketch of a Ministerial Meeting on Universal Health Coverage

Adam Wagstaff's picture

I had been warned—I found it hard to believe—that WHO ministerial meetings can be rather dull affairs of little consequence. Ministers typically take it in turn to read their prepared speeches; their fellow ministers appear to be listening attentively through their headsets but some, it seems, have been known to zap through the simultaneous translation channels in search of lighter entertainment. Speeches aren’t played over the loudspeakers for fear of waking jetlagged ministers from their afternoon naps. WHO is a very considerate organization: it likes to make sure that while on its premises visitors reach “a state of complete physical, mental and social well-being.”

Well I’m happy to report that last week’s ministerial meeting on Universal Health Coverage (UHC)—held in Geneva on February 18-19, jointly organized by WHO and the World Bank, and attended by delegates from all over the world (see map)—didn’t fit the stereotype.

Universal health coverage: Old wine in a new bottle? If so, is that so bad?

Adam Wagstaff's picture

It's easy to see how the concept of universal health coverage (UHC) became so elusive.

At the start, the idea must have seemed straightforward enough. Lots of countries "covered" only part of their population, and several were making efforts to expand coverage to "uncovered" populations. China, for example, started out on this process in 2003, trying to expand coverage to the rural population that lost coverage when the old rural cooperative medical scheme collapsed following the de-collectivization of agriculture in 1978.

Some thoughts on human development, equal opportunity, and universal coverage

Adam Wagstaff's picture

I was asked recently to advise on some ongoing work on human development, equal opportunities, and universal coverage. The work was building on previous work undertaken by the World Bank in its Latin America and the Caribbean (LAC) region that had developed a new index known as the Human Opportunity Index (HOI).

The core idea underlying the HOI isn’t new. The argument is that inequalities are inequitable insofar as they’re the result of circumstances beyond the individual’s control (inequality in opportunity), but not if they reflect factors that are within the individual’s control. The object of the exercise is to separate empirically the two.