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Buying Votes versus Supplying Public Services

Stuti Khemani's picture

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.

The Real Winners and Losers of Globalization

Branko Milanovic's picture

It is generally thought that two groups are the big winners of the past two decades of globalization: the very rich, and the middle classes of emerging market economies.

The statistical evidence for this has been cobbled together from a number of disparate sources. The evidence includes high GDP growth in emerging market economies, strong income gains recorded for those at the top of the income pyramid in the United States and other advanced economies, as well as what seems to be the emergence of “a global middle class” and casual observations of the rising affluence of Chinese and Indians.

Should we care equally about poor people wherever they may live?

Martin Ravallion's picture

Not so long ago, those countries designated as “low-income countries” (LICs) in the World Bank’s World Development Indicators accounted for the bulk of the world’s poor, such as by the $1.25 a day standard. Today many very poor people live instead in what are called “middle-income countries” (MICs).  The change seems dramatic. Almost all (94%) of those below $1.25 a day in 1990 lived in LICs. By 2008 the proportion was down to 26%, with the rest in MICs. Andy Sumner attracted much attention to this aspect of how the global profile of poverty has changed in his paper “Where do the Poor Live?.” Amanda Glassman, Denizhan Duran and Sumner dub this emergence of large poverty counts in MICs as the “new bottom billion.”

There has been much discussion about the implications of this change for overseas development assistance (ODA) and development policy more broadly. In particular, there have been calls for concentrating ODA on the LICs, assuming that the MICs can now look after their own poor.

But we need to look more closely at this “LIC-MIC” distinction, to understand why we have seen this change in the global poverty profile, and what relevance it might have for development policy.

Jobs Center Stage: The WDR 2013

Martin Rama's picture

When my team and I started working on the World Development Report 2013, slightly more than a year ago, we were puzzled. We had been asked to write about jobs, and there was no doubt that they were a major concern around the world.  Events such as the global crisis or the Arab spring had put jobs center stage.  In developing countries, finding employment opportunities for massive numbers of youth entering the labor force was urgent.  Middle-income countries were struggling to move up the value-added ladder in production and to extend the coverage of social protection.  Technology and globalization were changing the nature of work worldwide.  In all cases, jobs were at stake.  And they were clearly one of the main preoccupations of policy makers everywhere.

Inequality of What?

Francisco Ferreira's picture

More than ten years ago Ronald Inglehart, of the University of Michigan, and his team at the World Values Survey asked thousands of respondents around the world to rate their views, on a scale of 1 to 10, on whether they felt inequality in their countries should go up or down.  The way they phrased the question was that 1 corresponded to full agreement with the statement that “incomes should be made more equal”, whereas 10 stood for “we need larger income differences as incentives for individual effort”.

Monitoring Inequality

Martin Ravallion's picture

Inequality is getting more attention in efforts to monitor development progress. Alongside established measures of poverty and human development there have been calls for monitoring inequality. How should this be done?

We focus here on just one aspect of inequality, though an important aspect, namely the inequality of consumption or income. This is about “inequality of results” not “inequality of opportunities,” which may be more important but is much harder to measure. And there are other dimensions of inequality that matter, such as inequality in access to health and education services.  But this is the obvious place to start.

Three Kids in a Garage

Aleem Walji's picture

Last week, I participated in GE’s global conference, ‘Disrupt or Be Disrupted’. The theme of the event was simple. As barriers to entry fall in nearly every industry, no company is safe or immune from being disrupted in a fundamental way. It’s no longer uncommon that industry leaders lose their edge in months, and wither to irrelevance in record time. Unless corporates have the courage to embrace and empower their ‘creatives’ they don’t stand a chance in sustaining their competitive advantage.

Caste Disadvantage, or Gender and Urban bias? Educational Mobility in Post-reform India

Forhad Shilpi's picture

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?

Contradictions in Global Poverty Numbers?

Martin Ravallion's picture

In an article on a Brookings website, Laurence Chandy and Homi Kharas chide the World Bank for three so-called “contradictions” in its global poverty numbers, including the Bank’s latest update.  Let me look more closely at these “contradictions” in turn.

First, Chandy and Kharas chide the Bank’s team for assuming that North Korea has the same poverty rate as China. I wish Chandy and Kharas good luck in trying to measure poverty in a place like North Korea, with almost no credible data of any sort to work with. I could offer a guess that 80% of North Korea’s population is poor today—roughly the same as China before it embarked on its reform effort in 1978. This would add slightly less than 1 percentage point to our estimate of the “$1.25 a day” poverty rate for East Asia in 2008.

Migration to cities can equalize household income in rural China

Xubei Luo's picture

With Nong Zhu

Migrant workers have been contributing to one-sixth of China’s GDP growth since the mid 1980s. The impact of rural migrants’ contribution is best seen in cities during the Chinese New Year, when they return to reunite with their families, leaving behind a massive urban labor shortage. This happens every year despite urban families and restaurant owners offering high bonuses.

There is a consensus that migration has contributed to increased rural income, but views differ on its impact on rural inequality. My view is that rural households with higher incomes are not more likely than poorer households to participate in migration or benefit disproportionately from it. Adding to my recent blog in People Move, I would like to discuss the reasons behind this.