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Culture and Development

Financial Reform and Fiscal Discipline

Eliana Cardoso's picture

It was in 1714 that Bernard de Mandeville defended his view of the economic world in a long poem with pretensions to uncovering the moral basis of modern society – The Fable of the Bees: Private Vices, Public Benefits. According to him, industrialists, businessmen and politicians are like pimps, quacks, pickpockets and forgers: tireless professionals who, through their cunning, use the work of others for their own purposes. Mandeville claims that it matters little if every trade and place is tainted by trickery and every profession, by chicanery. What does matter is that everyone, whether saint or sinner, contributes to producing the comforts progress provides, by looking after their own interests.

But you and I believe that where people live off ill-gotten gains the community will suffer and, thus, we reject the poem’s cynical view of the world. Yet, the lesson of The Fable of the Bees (that civilization advances in the measure that individuals seek to satisfy their needs and desires) is still alive and kicking.

Do Cities Matter?

Ejaz Ghani's picture

It is a paradox that India which is among the most densely populated countries in the world, is also among the least urbanized. The figure below compares urbanization rates with income for more than 100 countries. It shows that an increase in urbanization rate is positively associated with real per capita income. This is the iron law of development—i.e., growth is associated with the reallocation of labor and capital away from traditional (rural) sectors to modern (urban) sectors. Spatial transformations that give rise to urbanization accelerate growth because households and firms benefit from scale economies, mobility, and specialization. Increased urbanization contributes to growth, job creation and poverty reduction. This can indeed become a virtuous circle.

How Can Sri Lanka take Advantage of its Demographic Dividend?

Susrutha Goonasekera's picture

Much has been said about Sri Lanka’s uniqueness among developing countries; no one can deny that the oldest population pyramid outside of wealthy countries.

The demographic transition implies an aging of the population, but before old-age dependency becomes an issue, there is an intermediate period of a demographic dividend when a larger proportion of the population will be at the prime working age. The success to managing the long-term age-dependency effects of the demographic transition is to use this intermediate period of demographic dividend to conserve resources for future use and to plan for a more cost-effective strategy to deal with the future age burden. This will allow older people to live a happy productive life.

The challenge is to develop a strategic approach that takes advantage of the demographic dividend period both in terms of making strategic decisions for future cost-effectiveness and save resources for future use.

How to Make a Billion Dollars Work

Parmesh Shah's picture

Large-scale public services and expenditure, especially those specifically designed for the poor, are vulnerable to leakages. Whether it is access to quality health care or education, clean water or entitlements under a development scheme; the poor face many barriers in accessing the public services and programs that are intended for them.

Social accountability interventions aggregate citizen voice and strengthen their capacity to directly demand greater accountability and responsiveness from public officials and service providers. Such interventions include the use of tools such as community scorecards, citizen report cards and social audits.

In 2007, three social accountability interventions were introduced in India in public programs on a pilot basis, representing budgets that run into the billions of dollars. With social accountability as the common denominator, three different states with three different service delivery contexts have been able to precipitate a series of impacts in just one year.

The Poor and the Middle Class

Eliana Cardoso's picture

Start counting the poor in India and you are bound to get into controversy. In “A Comparative Perspective on Poverty Reduction in Brazil, China and India,” Martin Ravallion (October 2009) calculates that 42% of the population in India in 2005 lived in households with income per person below US$1.25 a day (converted using purchasing power parity exchange rates for consumption in 2005). But he finds only 20% of the population under the US$1.25 poverty line when using a different method as a sensitivity test. The difference is huge. One number is twice the other and corresponds to two hundred million people (more than the whole population of Brazil!).

Ravallion repeats the exercise and finds that in Brazil, in 2005, the population who lived in households with income per person below US$1.25 a day (converted using purchasing power parity exchange rates for consumption in 2005) is 8%. When using the alternative sensitivity test method, it is 10%. Compared to India, the difference is small (2% of the population) between the two measures.

I suspect that instead of trying to calculate the number of people with less than US$ 1.25 a day, policies for poverty reduction should focus on the bottom quintile of the population: the 20% poorest group in the country.

One of my reasons is that inequality matters. Think of poverty as a relationship.

Integrating the Two South Asias

Ejaz Ghani's picture

Regional Cooperation can be the key instrument to promote increased market integration in South Asia through greater flow of goods, services, capital, and ideas. This is appropriate for a region which is the least integrated region in the world, although many countries share analogous cultures and histories, as well as a passion for cricket and curry.

It is also very timely given the global downturn and the slowdown in global trade. Increased regional trade could more than compensate for the potential loss in global trade. It is estimated that increased intra-regional trade could add two percentage points to South Asia's GDP growth. This could raise South Asia's real GDP growth from 6% to 8% in 2010. Unlike fiscal stimulus, increased market integration and regional trade could add to GDP growth, without increasing public debt. It is the most efficient and cost effective instrument for South Asia to cope with the global downturn.

Bang for the Buck, Changing Attitudes Toward People with Disabilities

Susan Hirshberg's picture

"Just like the Other Kids" could reach 300,000 first and second graders this year.

We like to think that our value added is our strong intellect and analytical skills combined with the ability to provide additional resources to tackle development issues. But for South Asia’s efforts in disability, it has sometimes been the smallest amounts of money and the least ‘Bank-like’ activities that have been creating the greatest awareness on the subject. I wanted to highlight some of the very exciting initiatives that we have been working on marking the International Day of Persons with Disabilities today. Three such activities have been the development of a children’s book on inclusion in Pakistan, coverage by an Indian newspaper of a one-page analysis of Bollywood’s depiction of disability in films in the report Disability in India: from Commitment to Actions, and a Small Grants Award Ceremony in Sri Lanka.

“Just like the Other Kids” is a book by young people between the ages of 12 to 18 with and without disabilities financed for $22,000 by the South Asia Youth Innovation Fund and the Pakistan Small Grants Program. Its intent is to introduce first and second graders to characters with disabilities in a friendly, inclusive way. Three out of five of the characters have a disability, but all the characters have strong abilities (and some weaknesses).

Mister 100%

Mark Ellery's picture

As a policy target, there is little doubt that it is desirable that government should ensure services for all. Breaking this down to a simple target of 100% access to a service, some local governments are showing that ensuring services for all is achievable, when they deploy their social and legal authority to leverage existing service providers to ensure a basic service for all and then increase the quality of the service (i.e. 100% by 100%).

In the remote North West Corner of Bangladesh in the poor and monga (hunger) prone District of Kurrigram there is a remote yet remarkable upazila called Rajarhat. Rajarhat was the first upazila (subdistrict) in the country to be declared Open Defecation Free (i.e. 100% sanitation) in 2004. In the light of the Government’s target of education for all, the Rajarhat upazila (subdistrict) is now seeking to be the first upazila in the country to achieve universal enrollment (i.e. 100% of children turning 6 are enrolled in school).

To understand this phenomena we visited one of the Union Parishads (UP) (Council) called Omar Majid and spent some time with the UP Chairman Khanbaker Abdul Hakim. This Union Parishad claims to have achieved:

100% sanitation (achieved in 2004) sustained through ward task forces, hygiene education and public latrines with MGSK and WaterAid.
100% registration at birth (achieved in 2007) and subsequently introduced as a pre-requisite for the enrollment of children in school.

Did You Kill Somebody Tonight?

Eliana Cardoso's picture

“Did you kill somebody tonight?” Durga Pokkherel asks the police officer while in police custody in Nepal, after hearing terrified screams. As told in her memoir, Shadow over Shangri-la, the police officer replies: “You always imagine something big. He is not killed. As a routine treatment he was enclosed in a sack and beaten. But he would not speak a word, so some other police friends put a couple pins in his fingers. That is all.”

The dialogue took place in late 1990s, when both Maoists and the state committed human rights abuses in Nepal, a country on the top of the world, where caste, ethnicity, gender status and regional disparities have largely determined inequality. Social exclusion fostered state fragility, a Maoist rebellion, and a civil war that lasted for ten years (1996-2006).

After an unpopular royal coup in February 2005, the international community put pressure on the government to accept international monitoring under the UN Office of the High Commissioner for Human Rights. The monitoring created the space for peaceful political protest and, in April 2006, the King restored Parliament. Civil war came to an end with elections and the declaration of the Federal Republic of Nepal in May 2008.

An Inclusive Approach to Safeguarding the Basic Needs of the Poor

Mark Ellery's picture

If it were possible to separate public services into a public good aspect and a private good aspect, then government could probably ensure better outcomes for the poor by focusing primarily on the public good aspect.

A public good is both non-rival (the consumption of a unit does not reduce the units available for others) and non-excludable (it is not possible to include some while excluding others from this good). For example an illiteracy free community is a pure public good that demonstrates both non excludable and non rival qualities. It is non-excludable as it is not possible to exclude someone from the benefits of an illiteracy free jurisdiction while including others; and non-rival as one person consuming an illiteracy free jurisdiction does not reduce the stores for others. The private good have both rival and excludable characteristics (the consumption of a unit reduces the availability for others and it is possible to include some while excluding others during consumption). Alternatively a school is a private good - it is rival (there are only a certain number of children you can fit in a classroom) and excludable (you can be excluded if you do not meet certain socio-economic standards).

Assuming that all public services have rival and non-rival, excludable and non-excludable characteristics, it should be conceptually possible to separate the public good aspect and the private good aspect.