When I heard the news last autumn that 15-year-old Malala Yousafzai of Pakistan had been shot simply for standing up for her right as a girl to get an education, I was horrified.
It also reminded me how lucky I was.
When I was offered a rare scholarship to study abroad, it wasn’t acceptable for me, as a young married Indonesian woman, to live apart from my husband. My mother laid out two options: Either he would join me, which meant giving up his job, or I had to decline the offer.
I know it was her way to advocate for my husband to support me, which he did without hesitation. We both went to the United States to complete our master’s degrees. I combined it with a doctorate in economics, and we had our first child, a daughter, while we both were graduate students.
The recent political unrest and violence occurring across the world have revived an old question, one that is so straightforward that it rarely gets a straightforward and convincing answer: Does democracy fuel or quench violence? For decades, sociologists, historians, political scientists, criminologists, and economists have hypothesized numerous associations, predicting just about any result.
Let’s focus on democracy’s relationship with crime. Democracies have been predicted to fuel crime (conflict theory); decrease crime (civilization theory); initially raise and then decrease crime (modernization perspective); have no impact at all (null hypothesis); or have an unpredictable impact depending on the development of their political institutions (comparative advantage theory).
In a recently published paper, I argue that the many existing explanations relating crime and democracy suffer from what I describe as an “identification” problem. The different explanations are not necessarily exclusionary in terms of their determinants, mechanisms, and predictions, which makes testing those explanations a rather difficult business. Furthermore, predictions are imprecise. This is unsurprising when dealing with concepts as fluid as democratization, political transitions, and democratic maturity. Arguments talk vaguely of early and late stages and of short or medium terms to describe the processes’ dynamics. The result is a broad range of predictions consistent with various hypotheses simultaneously.
Lamay, Peru — In this Andean town outside Cuzco, I traveled with Peru's First Lady Nadine Heredia to the San Luis Gonzaga primary school. This school, and many others in the area, have had poor learning outcomes. But I was impressed by the government's and the school's commitment to improve, which will be critical in the efforts to reduce inequality and boost shared prosperity in Peru. Watch this video from a second-grade classroom to learn more.
Imagine you are a leader of an African country and your entire government budget for the year is $1.2 billion.
That same year, an investor sells 51 percent of their stake in a huge iron ore mine in your country for $2.5 billion — more than double your annual government budget.
And imagine having ordered a review into mining licenses granted by previous regimes and knowing that the investor who made the $2.5 billion sale had been granted a mining license in your country for free.
It's what happened in Guinea. It's a story I heard Guinea's president, Alpha Condé tell the G8's trade, transparency and taxation conference in London. And it's a story I thought well worth sharing at the UN Security Council's meeting on fragile states and natural resources last week.
As an economist dealing with energy efficiency on a daily basis, I have studied and written about its benefits for several countries. But it was not until recently that I got around to looking into it at home.
It all started with my work with the World Bank’s energy efficiency agenda, particularly after the G8 Forum asked the Bank in 2006 to prepare a “Clean Energy Investment Framework”. Soon thereafter, we supported a series of low carbon country case studies in India, South Africa, Brazil, Mexico, and China. A number of clear messages were delivered to us, including: “our priority is economic growth and poverty reduction”.
So how were we to get the best of both worlds – a reduction in the trajectory of greenhouse gas emissions (like carbon dioxide) and continued economic growth?
LONDON -- I'm just back from the G8 meeting in Northern Ireland, and under the leadership of Prime Minister David Cameron, we focused on some critical but often overlooked elements on how the world can end extreme poverty in a generation: taxes, trade, and transparency. Watch the video to see why I feel so strongly about this.
Sovereign difficulties have divided financial markets in the Euro area, thereby increasing differences in bank lending rates across countries. Policy makers in both Brussels and Frankfurt are concerned about an uneven transmission of policy interest rate cuts by the European Central Bank (ECB) to bank lending rates across the region.
Based on this situation, a key question stands out: is the link between official, market, and retail interest rates broken?
When markets are functioning properly, interest rates on loans follow the policy rate in a uniform way across countries (granted with some lag). But, in the context of the ongoing crisis, markets became somewhat irresponsive – resulting in ECB rate cuts being unevenly passed on to borrowers across Euro-area countries. This uneven distribution has meant that those countries facing greater financial difficulties had to endure tougher financing conditions than those facing fewer difficulties – as exemplified when comparing Spanish and Italian retail rates to the much-lower French and German ones.
So far, the economic literature has been relatively robust in arguing that government bond yields or credit default swaps (CDSs), given their stability, do not exert much influence on the way banks set their interest rates for their clients. However, the crisis has shown that because of the interconnectedness of central bank and sovereign balance sheets, developments in sovereign markets affect retail interest rates.
How has this played out in the EU11 countries? Have retail interest rate decreased in those countries where central banks reduced their policy rates? Or, was this a reaction on downward movement of CDSs?
Figure 1. Interest rates on new lending to enterprises (in Percent) and CDS spreads (in basis points) in selected EU11 countries
Businesses create jobs and spur growth. But businesses can do more. As competitive pressures increase and as resources around the world become harder to sustain, foresighted businesses have started to adopt new, collaborative and open private sector practices that accomplish two goals at once: improve the bottom line and increase development impact.
The reason businesses do this? Not because of old do-gooding principles, but because solving development issues around the value chain becomes a crucial part of doing business through crowd-sourcing innovations, reducing cost and managing risk.
But the questions are, how can practices that benefit both the bottom line AND development, be scaled up? Can we encourage mass-adoption of the sustainable approaches that IFC has been promoting for years? How do we mainstream that which Michael Porter has called “Creating Shared Value”? How do we go from a few smart companies to millions adopting open and collaborative practices?
To begin answering these questions, the World Bank Institute is launching the “Open and Collaborative Private Sector” initiative. This will complement efforts that others at the World Bank and elsewhere have been advancing on Open Aid, Open Data and Open Government.
The problem with the World Bank’s 20th anniversary in Kyrgyzstan last November was that everybody else’s party had happened already.
There has been a blur of speeches, gala concerts, jazz bands, canapés, toasts and traditional performances as one embassy after another feted twenty years of partnership with the Kyrgyz Republic. The same guests, speeches, and – truth be told - probably the same canapés.
We had to do something different. So, as we celebrated the last 20 years of our work in Kyrgyzstan (which have been quite good), we toasted the next 20 years as well.
Just six months ago, in the previous South East Europe Regular Economic Report (SEE RER) covering the six Western Balkan countries of Albania, Bosnia and Herzegovina, Kosovo, FYR Macedonia, Montenegro, and Serbia (SEE6), we looked at the double-dip recession in this region, and structural policies needed for recovery.
Now, we are happy to report that recovery is, indeed, under way in each of these countries. In 2013, the SEE6 region is projected to grow 1.7 percent, thus ending the double-dip recession of 2012. Electricity, agriculture, and even some exports are helping with this rebound of output. Kosovo is leading the pack with a growth rate of 3.1 percent, with Serbia (which accounts for nearly half of the region’s GDP) expected to grow by 2 percent on the heels of increased FDI, exports, and a return to normal agricultural crops. (In 2012, by contrast, agricultural output in Serbia dropped 20 percent on account of a severe drought). Albania, FYR Macedonia, and Montenegro are all expected to grow by between 1.2-1.6 percent. Rounding out this group is Bosnia and Herzegovina – with expected growth of 0.5 percent.
So, are things finally looking up in the Balkans? Not exactly.
Figure 1: SEE6 Unemployment Rates, 2012
Source: LFS data and ILO. Kosovo’s tentative data suggest unemployment as high as 35 percent.