Public knowledge about India's ambitious Employment Guarantee Scheme is low in one of India's poorest states, Bihar, where participation is also unusually low. Is the solution simply to tell people their rights? Or does their lack of knowledge reflect deeper problems of poor people's agency and an unresponsive supply side?
Food price spikes, price insulation, and poverty
This paper looks into the impact of changes in restrictions on staple foods trade during the 2008 food price crisis on global food prices and also analyzes the impact of such insulating behavior on poverty in various developing countries and globally.
The recently launched report by the High Level Panel on the post-2015 Development Agenda puts forward that the post-2015 agenda needs to be driven by five big, transformative shifts. The first one it highlights is that the new agenda should leave no one behind. It states that:
“We should ensure that no person – regardless of ethnicity, gender, geography, disability, race or other status – is denied universal human rights and basic economic opportunities. We should design goals that focus on reaching excluded groups.”
Clearly, the world will have to pay particular attention to slum-dwellers, who are left behind in many areas of development and in the current Millennium Development Goals (MDGs).
Donor countries are routinely confronted with the problem of how to allocate the aid budget. The debate on aid allocation has called for various types of indicators including institutional capacities and governance but in the practice of aid allocation a multitude of factors, such as strategic geopolitical interests, budget constraints and internal political considerations, still play an important role in most countries. However, if we focus on welfare indicators and on current practices of aid allocation, there are two monetary indicators that have gained prominence over the last few decades: GDP per capita and the poverty rate. GDP per capita is a natural choice of an indicator that is well understood and widely available. The poverty rate is a more recent choice explained by the new status that poverty acquired as a development objective. For a combination of events such as the fall of the Berlin wall in 1989, the publication of the World Development Report on poverty in 1990 and the establishment of the Millennium Development Goals in 2000, multilateral organizations have increasingly adopted poverty reduction as the overarching development goal. This new focus on poverty and the increased availability of expenditure surveys worldwide have also enabled the use of poverty measures to rank countries and allocate aid.
Poverty is indisputably central to the World Bank as we sharpen our mission, but inequality matters too, and we underplay or ignore it at our peril. When this message comes from eminent economist and Nobel laureate Joe Stiglitz, Bank staff and the general public tend to sit up and take notice.
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.
The extent to which local communities benefit from commodity booms has been subject to wide but inconclusive investigations. This paper draws from a new district-level database to investigate the local impact on socioeconomic outcomes of mining activity in Peru, which grew almost twentyfold in the last two decades. The authors find evidence that producing districts have better average living standards than otherwise similar districts: larger household consumption, lower poverty rate, and higher literacy. However, the positive impacts from mining decrease significantly with administrative and geographic distance from the mine, while district-level consumption inequality increases in all districts belonging to a producing province. The inequalizing impact of mining activity, both across and within districts, may explain part of the current social discontent with mining activities in the country, even despite its enormous revenues.
Read the working paper to know more.
Driven by the rapid growth of urban population in developing countries, the world had become more urban than rural by 2007. This trend is expected to continue in the years ahead. Almost all of the future growth in the world population will be concentrated in the urban areas of developing countries. The United Nations projects that developing countries will almost double their urban population by 2050, adding a further 2.4 billion urban dwellers (figure 1).
There is one simple answer to the “what-will-it-take-to-end-poverty” question: it will take courageous politicians who actually implement the policies we already know are needed. Politicians, even the well-intentioned ones, are too often unable to implement good policies, because bad policies are needed for their political survival. For example, vote-buying, the direct exchange of “gifts” or money for political support during elections is widespread in many developing countries. For the first time, new research provides direct empirical evidence that where vote-buying practices are more prevalent, governments invest less in pro-poor services.