After the Second World War, advanced economies began an ambitious process toward capital account liberalization, which prioritized the liberalization of trade, the maintenance of fixed exchange rates, and a commitment to current account convertibility.
Does transparency lead to development? Not necessarily. At least not when it comes to the oil, gas, and mining sectors. Transparency is important but far from sufficient to improve livelihoods. An ongoing discussion among practitioners on the Governance of Extractive Industries (GOXI) platform reveals a lack of clear answers to this question.
One widely-accepted political economy research finding is that informed citizens receive greater benefits from government transfer programs. The evidence for the impact of information comes from particular contexts—disaster relief in India and welfare payments in the USA during the Great Depression. Do other contexts yield similar results? New research on the distribution of anti-malaria bed nets in Benin suggests: “No.” Instead, local health officials charged more informed households for bed nets that they could have given them for free.
The Benin context differs in three ways. First, the policy is not the distribution of cash, but of health benefits. Households’ access to information then influences not only their knowledge of government programs to distribute such benefits, but also the value they place on them.
Second, the political context also differs. In younger democracies, like Benin’s, citizens are more likely to confront additional obstacles, besides a lack of information, in their efforts to extract promised benefits from government.
Quite often the popular press carries stories that compare happiness or life satisfaction across nations (for example see last October’s story: Denmark is Happiest Country). Regular readers of this blog will recognize these reports as summaries of research on subjective well-being (SWB) and would be somewhat skeptical of SWB comparisons across populations with very different characteristics and cultures. Why?
This is a question many World Bank stakeholders – civil society, government, private sector representatives – have been debating in recent years. The questions is even more timely now that the Bank is considering establishing a new global Partnership for Social Accountability geared to supporting civil society capacity to engage with governments to improve development effectiveness. It comes in response to a speech Mr. Zoellick gave in April 2011 on the need to scale up relations with civil society in the wake of the Arab Spring and growth of civil society worldwide.
The genius of capitalism is also its peril: Adaptable and self-correcting over time, capitalism’s wealth-generating machinery constantly adjusts to meet the changing demands of the marketplace and the law. Yet society can pay a drastic price for that adaptability: Wrenching change occurs at history’s critical transition-points, as the machinery abruptly shifts gears.
As the economy struggles to recover after its latest trauma, 2008’s bursting of the credit bubble, a timely and incisive new book – “Power Inc.: The Epic Rivalry Between Big Business and Government, and the Reckoning That Lies Ahead” – offers a deep historical perspective on today’s transition toward some new, still-evolving variant of capitalism. Author David Rothkopf, the Editor-at-Large of Foreign Policy magazine, explored capitalism’s dynamism and dangers as a panel of scholars helped launch the book last week at a Washington think tank.
The term ‘political economy’ has become an increasingly popular part of the vernacular at the World Bank and other development agencies. In parallel, interest in the political economy aspects of development has also seen a resurgence in academia, within both economics and political science departments, and even in leading business programs.
While banks, homeowners and a few governments in the US and Europe are "de-leveraging," the buzzword in the aid business is "leveraging"--using scarce aid resources to crowd-in other resources, such as tax revenues and private capital flows. The reason is simple: aid resources are limited (partly due to the economic slowdown in donor countries from their de-leveraging) but development needs are great, so using aid money to stimulate tax revenues or guarantee private investors' risk could square the circle.
But we don’t just want to increase the amount of resources available: we want to make sure those resources are spent on activities that reduce poverty. This suggests a different way of thinking of leveraging.
Urbanists are quick to champion the benefits of cities and how they drive economic growth, education, health improvements, and if built and managed well are the best way to achieve ‘sustainable development.’ But rarely do we talk about how cities nurture and encourage love, not to mention great parties, rock and roll, and all those passionate sporting events.
Cities don’t make love possible, but they sure do make it easier. Cities are all about connections, opportunities and logistical challenges. Take Valentine’s Day and the ‘average guy’ in the US. He will spend about $168 this year to celebrate, and woo, his love (women spend about half that). Over the last six weeks about 700 million fresh cut flowers passed through Miami International to be processed at one of the 23 chilled warehouses within five miles of the airport. Making sure no pests or contraband were brought in with the flowers required several thousand US Customs and Agriculture officers working round the clock.