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What Drives the Development of the Insurance Sector?

Erik Feyen's picture

The insurance sector can play a critical role in financial and economic development in various ways. The sector helps pool risk and reduces the impact of large losses on firms and households—with a beneficial impact on output, investment, innovation, and competition. As financial intermediaries with long investment horizons, life insurance companies can contribute to the provision of long-term finance and more effective risk management. Moreover, the insurance sector can also improve the efficiency of other segments of the financial sector, such as banking and bond markets, by enhancing the value of collateral through property insurance and reducing losses at default through credit guarantees and enhancements.

Indeed, a growing literature finds that there is a causal relationship between insurance sector development and economic growth. However, there have been few studies that conduct look at what drives the development of the insurance sector. Of the literature that does exist, most focuses on the growth of the life sector as measured by life insurance premiums.

Grafting, Not Transplanting, Global Good Practices

Antonio Lambino's picture

What relevance, if any, does the 2008 Obama campaign have in the political processes of developing countries?  How, if at all, can modern media production techniques used by global leaders, like the BBC, be made useful to their counterparts in poor countries?  There are obvious limits to transplanting knowledge and practices from one place to another, given all the differences.  However, when it comes to insights regarding the potential influence of political communication on individual and social behavior, it is also possible to graft some of what’s been learned globally to homegrown ways of doing things.  But those who know these environments best should do the grafting.

Weekly Wire: the Global Forum

Kalliope Kokolis's picture

These are some of the views and reports relevant to our readers that caught our attention this week.

Berkman Center for Internet and Society
Harnessing technology for social good

"Last month the Ford Foundation hosted the Wired for Change conference ("Inspiring Technology for Social Good"), and a pack of Berkman Center folks, friends, and family were in New York for the event. Ford has posted full videos of all of the sessions, and more, on the Ford Foundation website and Vimeo and YouTube channels."

FDI is a global force, but is it a force for good?

Over the past decade foreign direct investment (FDI) has become a major force in developing and transition economies. In 2010 the volume of FDI to developing and transition economies for the first time exceeded the FDI to rich economies. In a speech on Democratizing Development Economics delivered at Georgetown University last September, World Bank President Robert Zoellick pointed out that “In the 2000s, Foreign Direct Investment (FDI) inflows were the single biggest source of capital for developing countries and a critical input for technology transfer in developing country firms.”

Figure 1: Comparison of Outbound FDI vs. Official Development Assistance (ODA) from Development Assistance Committee (DAC) countries in 2009 (US$ billions)

Source: OECD, UNCTAD

Can randomized control trials reduce poverty?

Shanta Devarajan's picture

If you give milk to schoolchildren and they perform well in school, how do you know it’s because of the milk, or because the children were high achievers anyway, or went to better schools? 

By randomly choosing the children who receive the milk, and comparing the outcomes of this “treatment group” with a “control group” (those that didn’t receive milk), we can get a more accurate measure of the program’s impact than if we were to simply compare the children’s performance before and after they drank milk. 

Three 'tribes' within development can work together

Robin Mearns's picture

Social protection, disaster risk reduction, and climate change adaptation – how do they relate to one another? Are they still largely separate communities of practice or ‘tribes’ within development or humanitarian contexts? Are there signs that they are beginning to work together to help us deal with the increasingly risky and uncertain world in which we live – one in which life comes at you fast?

 

The devastating earthquake and tsunami in northeast Japan have reminded us just how precarious people’s lives and well-being can be, even in the world’s richest countries. But in the world’s poorest countries and communities, the threat of drought, floods and other climate risks looms large in everyday life, and is a major reason why many people are held back from transforming their livelihoods and permanently escaping poverty.

 

Rehabilitating degraded lands by water  harvesting in Lemo Woreda, Ethiopia. Picture by Cecilia Costella

Last week in Addis Ababa, 120 people from 24 countries gathered in UNECA’s historic Africa Hall – an architecturally significant symbol of African independence and optimism – to learn from each other how best to make social protection work for pro-poor disaster risk reduction and climate change adaptation. Ethiopia was the ideal venue for this international workshop. One in three people in Ethiopia lives in poverty, largely dependent on rain-fed agriculture for a living, and is highly susceptible to droughts, floods and other climate vagaries.

 

As the President of Ethiopia, H.E. Girma W/ Giorgis, remarked in his welcome address, Ethiopia is also proud to be breaking new ground in social protection for climate risk management through the flagship Productive Safety Nets Project (PSNP). In his video message to the workshop, the World Bank’s Special Envoy for Climate Change, Andrew Steer, applauded Ethiopia for its part in being a “pioneer in the revolution that is under way in social protection programs for the poor”. Ethiopia also displays global leadership in the ongoing climate change negotiations under the UN Framework Convention on Climate Change. As Andrew Steer observed, just as the Government of South Africa is determined that the Durban Conference of the Parties (COP) in December this year be seen as “Africa’s COP – just like the World Cup”, the agenda discussed in this workshop was very much “Africa’s agenda, and the agenda of all vulnerable countries everywhere”.

The Approaching Boom for Sultans of Spin

Sina Odugbemi's picture

As the Arab Spring struggles not to return to winter - sometimes with a little help from powerful friends -- I came across this fascinating thought concerning one of the likely but entirely unintended consequences of the emerging political reality in North Africa and the Middle East. In a piece contributed to TIME Magazine, the articulate and insightful blogger, Issandr El Amrani, [I recommend his blog: the Arabist] wrote:

 

In these countries where leaders were long used to sycophantic interviews, they now face combative interviewers out to make a reputation for themselves. It will be a while before spin doctors come in to teach the politicians to stay on-message  ---in the meantime, they are walking the tightrope without a net.

Macro-Disasters

Otaviano Canuto's picture

Earlier this month, Japan experienced one of the worst natural disasters in its history, an earthquake and subsequent tsunami that claimed the lives of thousands of people and drastically changed the lives of countless more. Sadly, this tragedy is another in a string of natural disasters that have occurred over the past few years, such as the earthquakes in Haiti and Chile, wildfires in Russia, and floods in Pakistan, West Africa, Sri Lanka, Brazil, and Australia.

People change the destiny of nations

People change the destiny of nationsThe Arab world is all too often in the headlines for geo-political tensions and cross border conflicts. Today it is in the grip of a peoples' uprising that is demanding change in political regimes, respect for citizens' rights, governance and quality of life. 

The breadth and force of this peoples' voice has caught the world and the most politically astute of analysts by surprise. The Jasmine Revolution in Tunisia lent confidence in turn to regime change in Egypt, the largest population in the region. These events have been further motivation across the Middle East and North Africa.


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