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How far can you push inclusion policies if the incentives don’t align? New evidence from an audit study in Mexico

Rafael Keenan Mazer's picture

Financial inclusion initiatives are proliferating rapidly through domestic and global efforts like the Alliance for Financial Inclusion’s “Maya Declarations.” These efforts are materializing in regulatory improvements in issues ranging from mobile banking—allowing ever more innovation, to consumer protection to access to finance for SMEs. There regulations, however, may only prove effective if they take into account the incentives that providers and sales staff have to shroud prices and adjust their behavior to undermine transparency initiatives.

To assess the quality of information provided by sales staff and the suitability of the financial products offered the World Bank, CGAP and CONDUSEF (Mexico’s Financial Consumer Protection Agency) conducted an audit study of savings and credit products for low-income consumers. (The full results have been released in a working paper and accompanying policy note and infographic with key highlights) The research team trained low-income consumers in peri-urban Mexico City and Cuernavaca to visit a range of financial institutions, seeking consumers loans and savings product. By varying the shopper’s scripts along the debt to income, purpose for the savings, and whether they were “experienced” or “inexperienced” shoppers, the study revealed important insights.

Sugar-Sweetened Beverages and Snack Taxes: All Eyes on Mexico (and Hungary)

María Eugenia Bonilla-Chacín's picture
Teresa at her home store, where she sells candies amongst her other wares.

en espanol

A few years ago, authors Peter Menzel and Faith D’Aluisio published “Hungry Planet,” a fascinating book with pictures of what families eat around the world.  The picture from Mexico was revealing.  If you take a brief look, it seems a quite healthy diet, varied and containing lots of fruits and vegetables.  But if you look more closely, you will notice a dozen 2-liter bottles of soft drinks and about two dozen beer bottles at the back of the picture. In addition, in front of two children, there’s a table with sweet breads and other high-calorie snacks.

Connecting Europe’s underserved communities to broadband

Roger Burks's picture
The benefits of broadband Internet are well-documented: for each 10-percent increase in penetration, a country’s gross domestic product (GDP) can increase by as much as 1.5 percent. In addition, broadband Internet brings citizens access to new job opportunities, health services and possibilities for digital engagement with their government.
 
Broadband Internet can help bring jobs
to underserved areas, boosting
economic prospects.
However, citizens of the European Union (EU) who live in rural and economically disadvantaged areas have little access to broadband Internet, and therefore miss out on the wide range of opportunities it offers. Today, only 18 percent of rural households in Europe have access to these services.
 
As a result of these gaps and challenges, the European Commission is partnering with the World Bank and others on a new “Connected Communities” initiative. This large-scale project will connect towns and cities to broadband partnerships and operators, offering critical advice and specific business models to finally bring fast Internet to underserved communities.

​Aid, Growth and Causality

LTD Editors's picture

Last week's Free Exchange blog, run by The Economist, has a post titled 'Aid to the Rescue'.  The piece cites a recent paper by Sebastian Galiani, Stephen Knack, Colin Xu and Ben Zou, which attempts to gauge the effects of aid on growth. Pondering whether it pays for donors to contribute 0.7% of national income toward development assistance, the piece goes on to explain the complexities of establishing causality when analyzing the pay offs from aid.  

A Step Toward Formalization: The Charter for Cross-Border Traders

Carmine Soprano's picture

Women carrying firewood to sell at a local market in Kaduna, Nigeria. Photo - ©IFPRI/Ian Masias.If you are woman in Sub-Saharan Africa and you live and work in a rural area, you are probably a trader. You are likely to be carrying a variety of goods across the border several times per day or week, and to rely on that as a major source of income to your household. You’re probably facing high duties, complex procedures, and corrupted officials at the border – the latter, in some cases, might want to harass you before they let you go through.  You may not be able to read or understand what duties apply to the goods you are trading. In this scenario, what is your incentive to go through the formal border post?

It’s probably easier, cheaper, and faster to cross the border informally.

Why is it so much Harder to Talk about Politics than about Policies?

Duncan Green's picture

I’ve been running into some resistance recently in writing about politics, and some interesting patterns are starting to emerge.

Firstly, when I sent round a draft piece on the politics and policies of national redistribution (i.e. when you look at the countries who have reduced inequality, what did they do and what were the politics that led to them doing it?) the subtext from a number of commentators in the countries concerned was ‘love the policies, but could you not talk about the politics please?’

They felt that talking about politics and political players (whether leaders or movements), especially in a positive way (Government of X has done brilliantly on Y), could be politically compromising or just felt anxious about being seen as naive, or being denounced by the radicals. Oppositionalism (all politicians are venal, all leaders betray, any progress is purely a grudging response to overwhelming public pressure from below) seems much easier (see right). If politics is mentioned at all, it’s just through the cop-out of lamenting the lack of political will (which all too often means telling politicians to do things that will get them chucked out of power or shot, and then condemning them when they refuse).

A Tale of Two Competitive Cities: What Patterns Are Emerging So Far?

Megha Mukim's picture
What do the cities of Bucaramanga and Coimbatore have in common and what have they done differently to enable fast-paced private sector development? As noted in a blog post earlier this year, the World Bank Group is pursuing a Competitive Cities Knowledge Base (CCKB) project, looking at how metropolitan economies can create jobs and ensure prosperity for their residents. The first two case studies – Bucaramanga, in Colombia’s Santander Department, and Coimbatore, in India’s State of Tamil Nadu – were carried out between April and June 2014.

In Latin America, Hard Hats and Tools are no longer only for Men

Maria Margarita Nunez's picture

Women that have joined road maintenance has increased significantly.

While driving around rural areas of Puno in Peru, Caaguazú in Paraguay or Granada in Nicaragua, do not be surprised to see women lifting rocks from the roads and using shovels and picks alongside men.  In fact, in the past 15 years, the number of women that have joined organizations in charge of routine road maintenance in Latin America has increased significantly and with this their life conditions have improved dramatically.

African Faith Leaders Raise and Mobilize a Prophetic Voice Around Sustainable Development.

Adam Russell Taylor's picture

On July 1-2nd I had the privilege of attending and speaking at a Summit composed of over a hundred faith leaders from across the continent of Africa under the theme of Enhancing Faith Communities’ Engagement on the post 2015 Development Agenda in the Context of the Rising Africa. The Summit was organized under the auspices of the African Interfaith Initiative on Post-2015 Development Agenda, a coalition of faith communities and their leaders across Africa with technical support from the United Nations Millennium Campaign (UNMC) and other development partners. Participants included representatives of the African Council of Religious Leaders, Symposium of Episcopal Conferences of Africa and Madagascar; All Africa Council of Churches; Organization of African Instituted Churches; Hindu Council of Africa; Council of Anglican Provinces of Africa; Union of Muslim Councils of Central, Eastern and Southern Africa; the Spiritual Assembly of the Baha’i; the Association of the Evangelicals of Africa; Fellowship of Christian Councils and Churches in the Great Lakes and Horn of Africa; and Arigatou International, Nairobi, among many others. 
 
I was impressed by the breadth of participation representing the religious diversity across the African continent. While leaders came into the Summit with varying levels of familiarity and engagement with the post 2015 agenda, the Summit played an indispensable role in equipping them with salient information and in uniting them around a shared vision and platform. Leaders lamented that Africa wasn’t properly consulted during the drafting of the existing MDG’s and resolved to be much more vocal and active in influencing the post 2015 goals.   
 

In Aspen, Bringing Climate & Energy Policy Back from Partisanship

Rachel Kyte's picture
 National Renewable Energy Laboratory engineer Tim Wendelin tests techniques for solar energy storage at a testing facility in Colorado. Dennis Schroeder / NREL
Photo: National Renewable Energy Laboratory engineer Tim Wendelin tests solar energy storage techniques at a facility in Colorado. Dennis Schroeder / NREL


In the rarified atmosphere of Aspen, Colorado, last week, I attended the 11th American Renewable Energy Day Summit. Over the years, the event has grown into a fascinating brainstorming and networking event bringing U.S. domestic and international figures in the renewable energy business together – financiers, technology entrepreneurs, government officials, activists, and scientists from across the energy challenges and opportunities.
 
We talked about international climate negotiations and renewable energy progress in China and India, but the strongest focus was on the challenges and great potential for U.S. innovation and how to bring climate change and energy policy back from partisanship.


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