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Friday Roundup: Intergenerational Mobility; Trade and Poverty; India’s Trading Partners, and UHC

LTD Editors's picture

Gary Solon’s work on “Intergenerational Income Mobility in the United States,” not only questioned the previously existing consensus of highly mobile American households, but also concluded that the correlation between a father’s earnings and his son’s might be at least 0.4 or higher. Years after his work, new studies have been emerging and suggest that the 0.4 correlation might be a bit too optimistic. In this vein, how can we tackle the issue of  inter-generational social immobility? The Free Exchange blog has enlisted Miles Corak, Gregory Clark, and World Bank’s Francisco Ferreira to comment on the field. Read the summary and expert remarks here.

There is often talk about how trade harms the poor, especially in closed economies. However, evidence suggests otherwise. In a recent World Bank Policy Research Working Paper, Raju Jan Singh and Maelan Le Goff find that, trade does tend to reduce poverty, in specific settings. Read Raju’s blog post to know more.

Poverty, inequality, and the local natural resource curse

Norman Loayza's picture

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.

Urbanization is good for rural poverty (at least in India)

Massimiliano Calì's picture

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).

G20 gets under way on red letter day

Kaushik Basu's picture

As Russia begins hosting the G20, I thought readers might be interested in my Reuters interview earlier this week making the case for proactive monetary and fiscal policy coordination. There has been a lot of talk of currency wars. I believe that what we are witnessing now are best described as currency skirmishes. The trouble is that a skirmish can easily segue into a war. That is what makes it imperative for nations to have conversations and coordination on monetary and fiscal policies. Skilled interventions are needed on multiple fronts, from managing government debt levels to financing long-term investment in developing countries. My hope is that leaders in Moscow will be attentive to these and might also turn their minds to interventions for the poor, whether they live in far corners of Russia’s great expanse, the townships of South Africa, the favelas of Brazil or the rural hinterlands of China and India.

Does the WTO have any effect over trade policy, especially for emerging economies?

Chad P Bown's picture

The Great Recession has brought renewed interest to the question of how trade policy responds to economic shocks, especially in the face of trade agreements like the WTO. New research that examines new import restrictions through the lens of a particularly important class of trade policies – the temporary trade barriers (TTBs) of antidumping, safeguards, and countervailing duties - finds that emerging-economy trade policy has become more responsive to economic shocks under the WTO. The integration of emerging economies into the multilateral trading system since the 1980s – resulting in lower applied border tariffs and some binding WTO tariff commitments – has resulted in a heightened responsiveness of these other trade policies to economic shocks. In a number of ways, business cycles and real exchange rate movements, for example, affect application of new import restrictions by emerging economies much like they do for high-income economies.

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.

Friday Roundup: Currency wars, Microfinance, Future Orientation Index, Remittances

LTD Editors's picture

Currency wars actually have some redeeming impact, argues Matthew O’Brien in The Atlantic. Read it here.

A lively debate is under way on David Roodman’s Microfinance Open Book Blog.


According to the “Future Orientation Index” created by academics from University College London (UCL) and Warwick University, the number of searches on Google for ‘future’ are an indication of a nation’s -- or its citizen’s -- forward thinking. By analyzing more than 45 billion Google queries, the index ranks Germany as the most forward thinking nation in 2012. If you are curious about others, take a look here

Targets and Measures, Poverty and Sharing

Kaushik Basu's picture

In his latest Annual Letter, Bill Gates points to the power of measurement. Change, he reminds us, is often incremental; and so, unless we have a good yardstick, it is difficult to know if the small move we made was in the right direction. Not surprisingly, in the world of technology, new ways to measure energy creation and a micrometer able to gauge miniscule distances, played a vital role in promoting progress. Gates is right in stressing this and that is the reason why even in social and economic ventures, it is important to develop measures that track how we are doing.

Interestingly, the publication of Gates’ letter coincides with the ongoing initiative within the World Bank Group to define targets and measures of well-being that the Bank as a multilateral agency will promote and pursue. We hope to soon be in a position to place our measures and targets in public space. This blog is meant to give readers a flavor of the issues involved and to welcome their suggestions.

Let me begin by advising readers that, when reading Bill Gates, it is important to keep in mind that there is more to learn from successful people’s lives than lines. Gates’ Annual Letter on measurement is an important take away, but we must not forget what his life amply demonstrates--that to focus solely on measurement is to risk missing out on some essential features of life which may be nebulous and not quite measureable but nonetheless important.

Friday Roundup: Climate Change, China, Cash Transfers & Bill's Letter

LTD Editors's picture

With warnings on the effects of climate change becoming starker with every passing day, good news came in the form of a story that the world's biggest seed banks are getting funding to help protect and develop new varieties of seeds resistant to climate change and other threats.

More sobering was a post by the World Bank's Phil Hay about Mozambique's recent devastating floods and public sector measures to help the country recover.

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.

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