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December 2011

Global Economic Crisis and the Remittance-Unemployment Riddle

Jason Gagnon's picture

As a consequence of the global economic crisis, 2009 marked a hiccup in the trend of increasing remittance flows to developing countries. In most parts of the world, the growth rate of remittances was indeed negative. But what is striking is that there was an inverse relationship between remittances and unemployment. In other words, the greater the drop in remittances, the higher was the increase in the unemployment rate. In Moldova, for instance, remittances decreased by 36% in 2009, while the unemployment rate increased by 61%. By contrast, in Fiji, remittances increased by 24% and unemployment dropped by 7%.

The scatter plot below illustrates the relationship between changes in remittances and changes in unemployment, both measured as the annual growth rate (in percentage) between 2008 and 2009, for 29 developing countries. The x-axis represents changes in remittances and the y-axis the change in unemployment. The figure shows a negative correlation between the two variables.

All the things we don’t know about development

Jordan Z. Schwartz's picture

Luchar contra pobreza con tecnología

Confucius and JFK have one thing in common: They both produced pithy quotes about the importance of recognizing ignorance as the first step in gaining wisdom. Let’s trust their insight for a moment and presuppose that there are more things about economic development that we don’t know than we do know.

It seems that, after 50 years of the development business, economists are starting to realize the significance of this ignorance. We still build models that estimate the probability of particular outcomes and simulate entire economies to find out how a policy change or investment might wind its way through a complex market.

World Development Indicators database updated

World Bank Data Team's picture

Updates to external debt, Doing Business, and more

The World Development Indicators database was updated on December 15, 2011. The update features new external debt data, Doing Business and Enterprise Surveys indicators, immunization and tuberculosis series, and revised national accounts, balance of payments, monetary and government finance indicators, and education statistics. Emissions and energy-related data, including twenty new indicators, have been updated to coincide with the release of The Little Data Book on Climate Change. Most indicators are updated for 2010.

#10: Placing a Value on Social Media

Johanna Martinsson's picture

Our Top Ten Blog Posts by Readership in 2011

Orginally published on January 19, 2011

Lately, there has been a great deal of debate about the $500 million investment by financial giant, Goldman Sachs, and a Russian investor in the social networking site Facebook.  Sachs justified their investment by saying the company is worth $50 billion dollars.  Many financial analysts think this high dollar amount is ludicrous and unjustifiable because Facebook has not yet generated a great deal of profit.  However, the question many people are debating, and have been debating for some time, is: what is the true value of social media?

Mentoring Local Organizations - Here’s How!

Jennifer Lentfer's picture

Mentoring has become a very important means for social entrepreneurs to gain skills from an experienced entrepreneur. It has become one of the most effective ways to build an organization's capacity. Mentor's can give advice, encouragement and leverage their contacts to help an organization grow. Jennifer Lentfer offers some practical guidelines for developing an effective mentor relationship.


Stronger, more sustainable community-based organizations can contribute to a more effective and participatory civil society response to the needs of vulnerable people in the developing world.

Donors can support organizations even at the beginning stages of organizational development with an intent to leave groups stronger than when they first entered into partnership. Different types of capacity building activities such as mentoring relationships and exchange visits between organizations can offer the most relevant and supportive technical assistance through sharing on-the-ground experience among organizations at all levels of organizational development.

The Afghan Entrepreneurs – complex context, high contacts!

Entrepreneurship is a new ball game in the Afghan context. While some foreign-educated Afghans, especially the post 2000 generation who are endowed with international networks, local contacts and modern communication skills do maximize gains from entrepreneurial ventures, the overwhelming majority of the Afghan entrepreneurs fail to sustain their ventures. The most recurrent reason for the demise of entrepreneurship is that Afghan entrepreneurs fail to learn lessons from failed ventures. Most entrepreneurial ventures in the Afghan context are not stemmed from instinct or built in light of informed decision; rather they are imitations of the profitable trend. Whatever venture has proved to pay dividends, a plethora of the so-called entrepreneurs have jumped to replicate that. Such a scenario may perfectly represent a competitive environment; nonetheless, it also is recognizant of an environment that lacks sophistication and innovation.

Quote of the Week: Václav Havel

Anne-Katrin Arnold's picture

"Without a global revolution in the sphere of human consciousness, nothing will change for the better in the sphere of our Being as humans, and the catastrophe toward which this world is headed, whether it be ecological, social, demographic or a general breakdown of civilization, will be unavoidable. If we are no longer threatened by world war or by the danger that the absurd mountains of accumulated nuclear weapons might blow up the world, this does not mean that we have definitively won. We are in fact far from definite victory.

We are still a long way from that 'family of man;' in fact, we seem to be receding from the ideal rather than drawing closer to it. Interests of all kinds: personal, selfish, state, national, group and, if you like, company interests still considerably outweigh genuinely common and global interests. We are still under the sway of the destructive and thoroughly vain belief that man is the pinnacle of creation, and not just a part of it, and that therefore everything is permitted. There are still many who say they are concerned not for themselves but for the cause, while they are demonstrably out for themselves and not for the cause at all. We are still destroying the planet that was entrusted to us, and its environment. We still close our eyes to the growing social, ethnic and cultural conflicts in the world. From time to time we say that the anonymous megamachinery we have created for ourselves no longer serves us but rather has enslaved us, yet we still fail to do anything about it.

What Do We Know about the Impact of Tax Reforms on Private Sector Development?

Miriam Bruhn's picture

I recently conducted a literature review on the impact of tax reforms on private sector development as part of the Investment Climate Impact Project.1 My goal was to take stock of what is currently known about the impact of reforms that the World Bank is supporting in this area and to identify the gaps in knowledge that we ought to fill by conducting more impact evaluations. While tax reforms can have a broad range of effects in the economy, the focus here was on private sector outcomes only, as measured by investment, tax evasion by formal firms, formal firm creation, and firms’ economic performance.

It turns out that most papers in this area study the impact of changing tax rates. Both cross-country and micro-level  studies suggest that lowering tax rates can increase investment, reduce tax evasion, promote formal firm creation and ultimately lead to an increase in firms’ sales and GDP growth overall. However, lowering tax rates also has important implications for government revenue and it is thus often difficult to balance the trade-offs between various goals of public policy.


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