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Stiglitz on Milanovic and inequality

LTD Editors's picture

In today's NYT opinionator blog, Joe Stiglitz writes about inequality and the research of Branko Milanovic, World Bank lead economist and inequality expert. In his post, Stiglitz draws from Milanovic's research on long range inequality trends to ponder who the winners and losers of globalization have been and how the most recent worldwide financial crisis affected both the level of global inequality and the relative importance of differences in mean country income vs. nationally based inequalities. His post explores whether we envisage a situation where income inequality continues, by and large, to increase within nations, but, spurred by the high growth of China and India, decreases globally. Stiglitz also ponders the hollowing-out of traditional middle classes in rich countries.

Running a Horse Race Among Institutions for Investment

Jamus Lim's picture

The variation in investment among developing countries is truly remarkable. Over the course of the 30-year period between 1980--2010---a period of relative calm in the global economy that is often referred to as the "Great Moderation"[*]---the investment rate in developing countries ranged from a whopping 90 percent (Armenia in 1990) to a dismal 1 percent (Liberia in 2003). This variability is more than twice that of variance in economic growth---a topic that has preoccupied many more generations of researchers---and much of this variability stems from the developing world.

Friday Roundup: From Poverty to Prosperity, Risk & Opportunity, MDGs Beyond 2015 & World Bank-IMF 2013 Annual Meetings

LTD Editors's picture

As the World Bank Group-IMF Annual Meetings unfold, the two organizations have been buzzing with activity - a lot of which has revolved around themes discussed on Let's Talk Development in the past few months.

Most visibly, President Jim Yong Kim has laid out his vision for the future of the World Bank Group.  Kim has given over this week numerous speeches and views on the two goals of ending extreme poverty and promoting shared prosperity, including a stated target of reducing extreme poverty to 9% by 2020.  See Kim, UNDP Administrator Helen Clark, South Africa Finance Minister Pravin Gordhan, Chief Economist Kaushik Basu and the IDB's Santiago Levy discuss their thoughts in a panel titled 'From Poverty to Shared Prosperity.'

The Growth Agenda: Centrality of Structural Reforms

Zia Qureshi's picture

Much of the G20’s agenda following the global financial crisis has been focused on crisis response—on short-term crisis management and recovery. In the aftermath of a major crisis, economic stabilization of course is the first order of business. And the G20 has done reasonably well in that respect. But economic stabilization alone will not restore strong and sustained growth, as global growth faces deeper structural challenges.

In advanced economies, some of the structural weaknesses have accumulated over time, such as the labor market rigidities in Europe, the deficiencies in tax and expenditure structures and associated fiscal problems in a broad range of advanced economies, including the US, and the challenges arising from ageing populations. The global financial crisis has added to these challenges by causing supply-side disruptions that lower potential growth, including the destruction of capital stock, financial sector dislocations, and increases in structural unemployment—as well as adding to the fiscal woes. Challenges also arise from a changing pattern of competitiveness and comparative advantage as emerging economies increasingly penetrate global production and trade. So future growth in advanced economies will require not just supporting a recovery of demand but also a reallocation of resources to new sources of growth—new products, new services, new jobs.

The inside story of WDR 2014, Risk and Opportunity: Managing Risk for Development

Norman Loayza's picture

The King of Egypt dreamt that seven strong and healthy cows were eaten by seven scrawny and ugly ones. Then, he dreamt that seven hearty ears of corn were replaced with seven scorched and damaged corncobs. He didn’t know what to make of these dreams and asked his advisors to interpret them. No one could. From his cell in prison, Joseph learned of the King’s dreams and interpreted their meaning: Seven years of abundance would be followed by seven years of drought in the land of Egypt. The years of famine would be so abysmal that they would erase the memory of the plentiful years. Joseph advised the King to prepare, using the bounty of the good harvest to withstand the calamity of the times to come. The King followed Joseph’s advice and saved the people of Egypt from hunger and disaster.     

This story presents in a nutshell the message that we wanted the World Development Report 2014 (WDR 2014) to convey: In the face of an uncertain world, preparation in good times is essential for resilience in bad times and for prosperity always.

Bali Holds the Key to Progress on International Trade

John Wilson's picture

Bali, Indonesia has become the epicenter of critical new action on international trade. Between now and the end of 2013, the resort island in the Pacific will host two major international meetings where the focus will be on thinking differently about how the international community approaches trade policy.  The focus, as our World Bank colleagues have urged in the past,  will be on trade along global supply chains.

In December, the 9th WTO Ministerial Conference will convene in Bali.  Expectations run high for a new agreement on trade facilitation.  This agreement would concentrate not on traditional tariff barriers to trade, but rather on issues that have a particularly strong impact on supply chain performance – issues like customs modernization, streamlining import and export procedures, and regulatory transparency.  Addressing these issues can dramatically reduce the costs associated with trade in goods and services and boost international trade.  In fact, our World Bank research  shows tremendous potential returns on aid to trade facilitation – returns of $697 in increased trade for every $1 of aid to trade policy and regulatory reform.

Long term impacts of household electrification in rural India

Dominique Van De Walle's picture

It is estimated that 1.3 billion people in 2009 were still without electricity. Many rural households in the developing world continue to cook with wood and biomass (mainly dung), and spend a lot of time collecting and preparing fuel for domestic use. Across the world, these time (and resulting health) burdens are thought to be higher for women and the children under their care. 

One popular argument is that by relieving time burdens spent in collecting and preparing fuel, household electricity results in rural women engaging in market-based work — judged to be a good thing since women’s empowerment has been linked to having one’s own income.  In fact, a number of studies show that the introduction of household electrical appliances accounts for a large share of the increase in married American women’s labor force participation in the 20th century. For the developing world, a recent paper by Taryn Dinkelman finds similar and large effects on female employment (and not on male employment) for South Africa, which are attributed to the use of electric stoves and other time saving appliances. 

Why risk management for development organizations is important

Magda Stepanyan's picture

The following post is a part of a series that discusses 'managing risk for development,' the theme of the World Bank’s upcoming World Development Report 2014.

There are three fundamental challenges in mainstream risk management for development organisations: a culture of blame, lack of adaptive capacity on the part of development organisations and the lack of a shared concept of risk management.

Quite often the manifestation of risks is associated with failure, which subsequently leads to blame. This in turn hinders proactive risk-taking behavior among development organisations and limits their performance. Often we forget that only by failing can we learn to succeed. At the same time, there are also failures that are unnecessary and avoidable if risks are systematically taken into account. Failing to prevent recurrent crises, for example, is unjustified. Recurring drought and hunger are not typical of the Horn of Africa as a geographical region. They are signs of continuing failure on the part of local governments and the international community to address the risks of drought and hunger, which then results in recurrent crises.

Friday round up: Fighting extremism, Peru and health care, latest climate report, the Palma inequality measure, and Laos in space

LTD Editors's picture

Malaysia's Prime Minister is interviewed in New York earlier this week by Fareed Zakaria, explaining the Global Movement of Moderates that he set up to counter extremist ideology.

In "The BRICs Paradox: A Healthy Economy and Bad health Care," Eduardo Gomez writes in The Atlantic on how Peru is growing robustly yet still faltering in terms of health system reforms.

In the NYT's Dot Earth blog, Andrew Revkin describes how the IPCC's fifth report clarifies humanity's choices.

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