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From Behavioral Economics to Behavioral Design

Martin Kanz's picture

This week’s FPD Chief Economist Talk featured Sendhil Mullainathan, Professor of Economics at Harvard University and co-founder of Ideas42, a non-profit that  uses insights from behavioral economics to inform the design of products, innovations and policies. Sendhil is well known as one of the leading thinkers in behavioral economics and much of his research has focused on topics at the intersection of psychology and development economics, ranging from corruption in the allocation of drivers’ licenses to the role of psychology in the take-up of micro-finance and consumer loans — all very important issues that matter for what we do at the Bank and so Sendhil’s talk provided great food for thought!

Localizing Development: Our Journey

Ghazala Mansuri's picture

While we began a big research project on localized development some 5 years ago and ultimately produced a report that’s launching this week, our journey really began in our twenties. We each spent several years working with low income neighborhoods and community based initiatives in Pakistan and India, respectively.As such, the idea that citizens, particularly those most disadvantaged in their societies, should have a say in decisions that affect their lives and their opportunities has been and remains central to our vision of development as well as our research. We have observed how individuals are transformed when given the chance to speak out against corruption and discrimination at village meetings. We have seen women empowered by the opportunity to form self-help groups and start small businesses. We know from direct experience that without real participation development can neither be effective nor pro-poor.

The Future of Driving and Finding the Right Incentives for Behavior Change

Julie Babinard's picture

What would blogs be good for if it were not for their intent on steering a bit of controversy?
So here it is… I do not believe that behavior change interventions can effect lasting change in people’s travel patterns unless real choices are available to them within the local context.

For Mindanao in the Philippines, no other path but peace

Dave Llorito's picture

"After four decades, peace is within reach. Let's grasp it with both hands and never let go," said Malaysian Prime Minister Datuk Seri Najib Tun Razak, during the signing of the Framework Agreement between the Philippine government and the Moro Islamic Liberation Front on October 15, 2012.

Weeks after that historic event, these words from the Malaysian Prime Minister continue to reverberate in my mind. For I grew up in Mindanao, right at Ground Zero of this decades-old tragic drama that has claimed tens of thousands of lives.

The 24 Hours of Climate Reality Is about to Begin

Charles Cormier's picture

Teacher and students at a cyclone shelter in rural Bangladesh, 2011. Stephan Bachenheimer / World Bank
Photo: A teacher and school class stand at a cyclone shelter in rural Bangladesh. Stephan Bachenheimer/World Bank

Al Gore’s Climate Reality Project launches its “24 hours of Reality: Dirty Weather Report” today. It’s a global online multimedia event that seeks to demonstrate how climate change is manifesting itself around the world, showcasing countries, communities and individuals leading through innovative solutions.

West Bank and Gaza: knowledge as a pathway for dignity

Angelica Thumala's picture

        World Bank | Arne Hoel

Similar to their peers around the world, young Palestinians do equate schooling with the prospect of getting good jobs. But what is most striking is that education has become a source of self-worth and social recognition. In the words of one young man from Old City in Hebron, “When you have a degree you have your respect wherever you go.”

Some Pitfalls in Global Investing

Sergio Schmukler's picture

Since the 1990s, a large part of world savings have gone to institutional investors that manage those funds by investing around the world. Given this accumulation of resources in professional and sophisticated asset managers, one might expect to see significant international diversification accompanying this process. Yet, to date, little evidence exists on how institutional investors allocate their portfolios globally, and what effect their investment practices have on investors, firms, and policymakers.

In a new paper and VoxEU column, we argue that global funds (those that invest anywhere in the world) are not very well diversified, hold a very limited number of stocks (around 100), and seem to leave behind significant unexploited gains from international diversification. Thus, global funds might not constitute the optimal portfolio for individual investors. Moreover, there are significant challenges to the prospects for broad international diversification. To the extent that global funds continue expanding relative to the more specialized funds (those that invest in specific asset classes and regions), the forgone diversification gains could be significant, and the cost to investors, firms, and countries might be large as well, posing significant challenges to policymakers.

India's New Middle Classes - Friends of Progress or Apolitical Mall-Rats?

Duncan Green's picture

One of the topics that kept coming up during my recent trip with Oxfam India was the role of the rising middle classes. We had a great debate with Aseem Prakash from Jindal University, who is in the middle of a paper on this (I’ll link when it’s published). According to Aseem, different definitions yield numbers for India’s middle classes ranging from 5 million ($10-$20 per day) to 214 million ($2-$4 a day). What’s not disputed, however, is that the numbers are rising rapidly as India’s economy continues to boom.

Behind the numbers are some increasingly complex dynamics, as a new commercial middle class, including rising numbers of so-called ‘lower caste’ entrepreneurs, joins the post-independence middle class of mainly dominant-caste government technocrats who placed their faith in the power of the state to lead India’s rise.


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