Syndicate content

Data Lab Link Roundup: Dat goes Beta, visualizing machine learning, a clinical trial simulator, the Hadleyverse, and a standard deviation puzzle

Tariq Khokhar's picture


Here are some things that caught our attention last week:

Arab world needs a new deal on energy to end the black outs

Charles Cormier's picture
Skyline of Dubai with high voltage power supply lines - Philip Lange l Shutterstock.com

When I started working in the Middle East and North Africa region two years ago, the surprising thing I discovered is that although the region is known as an energy powerhouse – it produces 30% of the world's oil, has 41% of the known gas reserves, and hydrocarbons are its most important export - the countries in the region barely meet domestic demand for electricity, partly due to a chronic shortage of gas.

Macroeconomic policy coordination and central bank independence after the crisis

Biagio Bossone's picture

Breaking the ‘taboo’?

Following the seminal work by Kydland and Prescott (1977) and the vast literature that ensued, [1] central bank independence has become an established, rock solid truth in the theory and practice of monetary policy. A concrete case about the negative consequences of less-than-full central bank independence was recently discussed by Wyplosz (2015), with specific reference to the ECB. However, no discussion has taken place in a long time within academic and policy circles about cases where central bank independence might be called into question, not even after the deep reconsideration of optimal macroeconomic policy prompted by the global crisis.

In fact, the crisis has offered an important opportunity to discuss if and under what circumstances, and rules, central bank independence might be temporarily revoked or suspended, so that the central bank and government would coordinate their action for the purpose of achieving some specific priority macroeconomic objective. Regrettably, this debate has not happened thus far. In summarizing the conclusions of last April’s IMF conference on ‘Rethinking Macro Policy’, Blanchard (2015) noted that there was general consensus among participants “that central banks should retain full independence with respect to traditional monetary policy”.[2]

Clean air as a poverty reduction priority

Ernesto Sanchez-Triana's picture
​Many parts of the development community have long embraced the following narrative: When nations are young and poor, they are willing to sacrifice natural resources—dirtying their water and their air—to promote economic growth and meet their population’s basic needs. Then, once these nations achieve a certain level of wealth, they become less concerned with accumulating material goods and more concerned with quality-of-life issues, and only at that point are they willing to spend money—or sacrifice growth—for benefits like clean air.

However, a recent resolution by the World Health Organization's (WHO) governing body shows that this narrative is beginning to change. 

Quote of the Week: Janan Ganesh

Sina Odugbemi's picture

Office workers"Another word for 'profession' is 'ghetto'.  People who work in the same field develop their own codes and slang.  They sleep and socialise with each other.  Without intending to, they seal off their world from uncomprehending outsiders."

- Janan Ganesh, a political columnist for the Financial Times. Previously, he was a political correspondent for The Economist. He appears weekly on BBC1's Sunday Politics television show and wrote a biography of George Osborne, the UK chancellor

Yunus to youth: Create your own future

Robert Hawkins's picture


“What are you waiting for?  Get out there and create your future”.  This conveys the spirit of Mohammed Yunus’ lecture last week at the World Bank. His messages on social business and entrepreneurship raised a number of questions as to how we think about education, skills, employment and the future prospects of youth in the world.

Blog post of the month: The printed book will never die

Gonzalo Castro de la Mata's picture

Each month People, Spaces, Deliberation shares the blog post that generated the most interest and discussion. In July 2015, the featured blog post is "The printed book will never die" by Gonzalo Castro de la Mata, Chairman of the Inspection Panel at the World Bank.

British Library reading room When will the printed book die? Some think that its replacement by electronic media is imminent and promote this view using arguments that are both romantic and utopic: a new society where massive amounts of information can be accessed instantaneously and free, and with reduced environmental damage because of a decrease in the use of paper.

Although neither argument can stand serious analysis, there is no question that the electronic book is rapidly gaining in popularity. Most major “brick and mortar” bookstores have gone out of business, and today Amazon sells more electronic books than printed ones. There is also an explosion of blogs related to every imaginable (and unimaginable) topic, and there is no question that electronic media have some advantages over certain printed media such as newspapers and magazines.

For success and sustainability, seek broad social ‘well-being’; Good governance promotes a ‘virtuous cycle’ of growth

Christopher Colford's picture

Beyond the cold calculus of GDP and TFP and FDI, development is about promoting strong societies as well as propelling powerful economies. But how can we measure societies’ progress toward success? Some may try to calculate “Gross National Happiness” as a yardstick, and some may envision “getting to Denmark” as the ideal end-of-history destiny of development – but are there patterns that reveal how societies can flourish?

Two recent Washington seminars suggest that – by pursuing innovation and inclusion, and by focusing on broad-scale social “well-being” – policymakers can define realistic paths toward development success.

The methodologies used by Harvard economist Philippe Aghion at an International Monetary Fund forum and by former World Bank strategist Enrique Rueda-Sabater at a Center for Global Development discussion may have been different, but their conclusions were in harmony: Societies thrive – in a sustainable way – when inclusion and innovation help expand the circle of opportunity, and when strong governance standards lead to sound civic decision-making.

Taken together, the two seminars’ insights should help inform policymakers’ debate about the Sustainable Development Goals, which are due to be approved in September at the opening of the United Nations General Assembly.

Aghion, at an IMF seminar (sponsored by its Low-Income Countries Strategy Unit) on June 30, approached the topic of “Making Growth Inclusive” by imagining “how to enhance productivity growth while promoting social mobility.” Presenting data from a recent paper on “Innovation and Top-Income Inequality,” which he recently co-authored with an all-star team of economists, Aghion outlined the way that income and wealth inequality have drastically soared in developed countries since the mid-1970s – analyzing trends that by now are sadly familiar to the squeezed middle class, as calculated in the esteemed work of Thomas Piketty, “Capital in the Twenty-First Century.”

Building on that data, Aghion took the inequality-and-inclusion logic several steps further. He lamented the way that “skill-biased technological change” has (in the absence of policy safeguards) provoked societies to stratify along the lines of wealth, income, education and connections. Yet “creative destruction” is inevitable in “a Schumpeterian world,” reasoned Aghion: A significant factor expanding the wealth gap is the same process of continuous economic renewal that helps economies advance. “There is a big [economic] premium to being a superstar innovator,” he asserted, noting that “you can become rich by innovating” – and thus “innovation is a big part of top-1-percent income inequality.”



Philippe Aghion

“Creative destruction is good for social mobility” and broader inclusion, in the long run, because it causes a steady procession of “new innovators to replace old incumbents.” The effect of each wave of innovation is fleeting, especially in a hyperspeed economy: “You get temporary ‘rents’ when you innovate. You don’t get them forever,” because the relentless Schumpeterian process will eventually cause yesterday’s innovators to become, in turn, tomorrow’s has-beens.

The darker danger of entrenched inequality occurs, said Aghion, when incumbent interests use their political power to lobby for the protection of their advantages – whether by pleading for tax-code favors, seeking government-imposed barriers to the entry of new competitors, or purchasing influence with pliant politicians through campaign donations. (In an aside on U.S. politics, Aghion pointed to his paper’s data linking a state’s representation on the congressional Appropriations Committees with its amount of federal favors – a shrewd quantification of the pork-barrel compulsions of Capitol Hill.)

Because innovation promotes social mobility and thus greater inclusiveness, Aghion contended that “innovation is a good guy; lobbying is a bad guy.” So “if you’re for inclusive growth, then you will be against lobbying and [the creation of] entry barriers.”

Focusing simply on present-day inequality is less informative than focusing on social mobility, he asserted. There’s nothing wrong with an economy that bestows ample financial rewards upon genuine innovators who create new products and processes. There is, however, something deeply wrong – and economically growth-inhibiting – with governments that allow no-longer-innovative incumbents to use their political connections to suppress potential competitors.

The IMF panel’s respondents amplified Aghion’s analysis. World Bank economist Daniel Lederman noted that it would be wise to use “the lexicon of ‘inequality of opportunity’,” because some degree of wealth inequality is inevitable (and perhaps even desirable) when individuals’ talent and effort are rewarded with rising incomes. IMF economist Benedict Clements – deploring the “great degree of disparity in ‘equality of opportunity’ ” that now prevails in advanced economies, including the United States – noted that there need be “no conflict between equity and efficiency if you design your policies right.”

Getting policies right – by upholding strong standards of governance – was also one of the underlying themes at a July 21 seminar at the Center for Global Development led by Rueda-Sabater, who is now a senior advisor to the Boston Consulting Group and a visiting fellow among CGD’s strong lineup of scholars. Rueda-Sabater is well remembered at the World Bank for leading a research team’s detailed “scenario planninganalyses that, in 2009, discerned the contours of three possible scenarios for the world in the year 2020.

Presenting a recent BCG report, “Why Well-Being Should Drive Growth Strategies,” Rueda-Sabater outlined an imaginative BCG diagnostic tool: the “Sustainable Economic Development Assessment” (SEDA), which measures the relative well-being of 149 countries by gauging their success in converting wealth into well-being – that is to say, in effectively translating their potential into tangible progress.


 

Senegal shifts its thinking: Context is everything

Oumar Diallo's picture
Editor's note: this is the second in a two-part series. Click here to read the first part, "Senegal shifts its thinking: Rural water delivery moves to private operators."
 
Photo: flickr/Julien Harnels

In the rural water sector in Senegal, as with many parts of the world that have experienced tremendous changes, context is everything. Rarely does one single act spur a shift at the government level; many elements combine to prompt a change in approach.

The PPP team in Senegal was privileged to be able to develop a brand-new system for rural water delivery in Senegal (see previous post here), but our activity was just one contributing factor in a much larger national and even international effort. The political context in Senegal, along with sustained attention to the Millennium Development Goals (MDGs), created the right atmosphere for this PPP.   
 
Here are five important elements that came together to make Senegal’s paradigm-shifting PPP possible:
  1. Government officials’ forward-thinking views. Coming up with an original plan for the delivery of rural water depended on zoning changes. Our group’s internal study showed that dividing the country into three zones would make it possible to cluster services. Government’s willingness to consider clustering pipe systems across 14 regions was critical, because it made support from the private sector a viable option.

How to improve social enterprises so they can scale? eLearning

Alexandra Endara's picture

Earlier this year, we launched our eLearning course for social enterprises in January with a second installment in May. Social enterprises from across the globe – from places we didn’t even think we could reach – applied. So we began to wonder, who are these social enterprises? What are their models? What do they need most to reach the most marginalized populations? So I sat down with Charles Njemo Batumani and Arun Kumar Das, two social entrepreneurs who finished the first installment of our eLearning course in January to see what they’ve done, where they see their enterprises going and why eLearning was a way for them to improve their social enterprise. Charles is building affordable housing for low and middle income earners in Limbe, Cameroon while Arun is developing a natural plant product to combat malnutrition in Odisha, India.


Pages