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Of globalization’s promises and perils

Swati Mishra's picture

As a student in 2003, I had an opportunity to interview a social activist about food security in India. Among other things, she blamed globalization for the slow demise of the local food industry. She went a step further and labeled globalization as depriving people (small scale farmers and workers) of their livelihoods. Her solution for India to become a leader in the food industry was by staying local, small, and forming cooperatives rather than fostering large agribusiness. This was quite a contrasting view at a time when India was starting to see benefits from its economic liberalization. In retrospect, I was interviewing someone who was ahead of a trend where activists were increasingly wary about the downsides of globalization and its impact on development.

Since then, globalization has sped up and contentious debates over who ultimately benefits have grown. And just as finance ministers from various countries were converging on Washington to discuss vital issues like extreme poverty, global macroeconomic prospects, jobs creation, and inclusive growth, revisiting globalization seemed germane to tackling development challenges.

Aid allocation: Should equally poor countries be treated equally?

Paolo Verme's picture

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.

Fuel charges in international aviation and shipping: How high; how; and why?

Jon Strand's picture

International aviation and maritime transport account for about 5% of global carbon emissions. It may increase to more than 10% by 2030. Even so, these sectors were excluded from the Kyoto protocol. Aviation and shipping enjoy substantial tax privileges, by paying no excise taxes, turnover taxes, nor VAT. Shipping also enjoys extremely low corporate tax rates. This has lead to growing emissions and low tax revenue generation from the sectors, while the sectors enjoy more advantages than other comparable economic activity. This situation stems in large measure from these sectors’ international status: they do not naturally belong to any one particular country. Nor are they part of any; international agreements that limit taxation in aviation or extreme tax competition in shipping. 

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.

Setting Smart Goals to Ensure Success on the MDGs

Mark Suzman's picture

There are about 1,000 days to go before the deadline to achieve the current Millennium Development Goals (MDGs) expires in December 2015.  The clock is ticking, both to maximize progress on the existing goals and targets, and to ensure that the next set of goals sustain and push forward the successes that the current MDGs have generated.

While there are  wide variations within and between countries, it’s clear that remarkable overall progress has been made in the last 15 years on the MDGs. The gains in health have been especially significant, as a recent op-ed in the Lancet co-authored by the World Bank’s Keith Hansen and others points out.  The decline in child deaths from almost 12 million a year in 1990 to fewer than 7 million in 2011 is just one example of how a clear, compelling, measurable goal can motivate shared action toward a specific outcome. 

Going through the hoops with the support of the financial system: The Story of Jan Sarkis

Martin Melecky'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.

A composite story based on prevailing business practices

In January 1990 after the Velvet Revolution, Jan Sarkis, the son of a Greek immigrant in rural Czech Republic, decides to start a business to produce bottled juices. To obtain needed machinery and funds for working capital (fruits, containers, bottles, etc.), Jan takes credit from a local bank. He had heard from the locals that the region used to experience periodic floods. Although Jan hasn’t experienced any himself, he still buys flood insurance from a reputable insurance company.  In the 90s, rural Czech Republic was prone to thefts and burglary. So, Jan decides to protect his savings by depositing them in a bank. Good times settle in Czekia, and Jan’s business and the country begin to boom.

Protecting the vulnerable during crisis and disaster: Part II Ethiopia’s Productive Safety Net Program

Matt Hobson'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.

Despite more than 19 episodes of severe food shortage in Ethiopia since 1895, it was the dramatic images of famines in 1972 and 1984 which came to the world’s attention and (wrongly) made Ethiopia synonymous with drought and famine. Despite consistent food shortages in Ethiopia for decades, it only became clear in the run-up to the 2002/3 drought that, while the humanitarian system appeared to be saving lives, it was proving to be ineffective in saving livelihoods and managing risks effectively. In essence, rural Ethiopians had faced chronic food insecurity for decades, but were receiving ‘treatment’ for transitory food insecurity. In part as a result of this misdiagnosis, rural Ethiopians were becoming increasingly less resilient to drought and were unable to manage risks effectively. This realization prompted the birth of the Productive Safety Net Programme (PSNP).

Empowering Women by Making Legal Rights Work -- A Winning Idea

Mary Hallward-Driemeier's picture

Madame Ngetsi wanted to start a business in the Democratic Republic of Congo.  What was her first step was in making her dreams a reality? Did she go to a bank for a loan, a notary to formalize her documentation, or the company registry to register her company? In fact, her first stop was to go to her husband to get legal permission to start her business. By law, Madame Ngetsi has to have written legal permission to register a business, formalize a document, open a bank account, and register land—a requirement that doesn’t apply to her husband.

Insights from Botswana’s Mogae & Kaushik Basu: Land Matters

Merrell Tuck-Primdahl's picture

Whether talking about nomadic bush men and staking out communities based the location of watering holes or the disparate quality of land management in India, former President of Botswana Festus Mogae and World Bank Chief Economist Kaushik Basu provided sharp insights on the complex interplay of land, development and poverty yesterday afternoon at the opening of the World Bank Land and Poverty Conference.