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September 2013

Are you financially literate or financially capable?

Siegfried Zottel's picture


‘Imagine you have a lot of mangoes on your farm and your neighbor has lots of tomatoes. You make a bargain and he says he will give you three tomatoes for every mango you give him. If you give him fourteen mangoes, how many tomatoes do you expect him to give back to you?’

This question, amongst others, has been asked in the 2009 and 2011 Kenya FinAccess surveys. If you got the answer to this question right (see end of the blog for the correct answer), congratulations! It may be an indication that you are financially literate. Or would you rather be financially capable? ‘Financial Literacy’ and ‘Financial Capability’ are two terms many have heard about and usually they are used interchangeably. However, in a recent World Bank publication, which tries to ‘Make Sense of Financial Capability Surveys around the World’, the authors (Perotti, Zottel, Iarossi, and Bolaji-Adio) reviewed key approaches to measure financial literacy and capability. In doing so, they identified Financial Literacy to be often associated with financial knowledge.

Why I blog

Shanta Devarajan's picture
Also available in: Français
IN049S07 World Bank
 

I blog for a simple reason: Poor people are poor because markets fail them, and governments fail them.  When markets fail—for instance by underproviding public goods such as swamp drainage or aerial spraying of locusts—governments have been known to step in, provide the public good, and take credit for it.  But when government fails—when public school teachers are absent from the classroom, or government doctors provide no service in the public clinic (to encourage patients to use the fee-paying private clinic), or transport costs are inflated because of a trucking monopoly that is tied to the ruling party—it is not clear who will correct the problem.  For these government failures are the result of politically powerful interests’ capturing the system at the expense of the poor.  Leaders who try to correct these failures risk losing the next election.
 

Ascending the CSO Engagement Continuum IV – Institutional Partnerships

John Garrison's picture

As can be expected, this last step on the civil society engagement continuum has been the most difficult for the World Bank to achieve over the years.  This is because institutional partnerships necessarily involve common goals, shared decision making, and even long term relations.  While there are a number of examples of Bank – CSO partnerships in the areas of education, health, and environment, many of these are still ad hoc and pilot in nature.  Nonetheless, as the latest edition of the World Bank–Civil Society Engagement Review of Fiscal Years 2010–12 shows, this period represented a watershed in terms of promoting institutional partnerships by providing CSOs with a seat at the decision making table in several funding mechanisms.

During the past three years, the Bank did enter into new partnerships with CSOs on number of fronts.   In the area of access to information and open data, for instance, the Bank held joint training workshops on geo-mapping and collaborated on data collection on several programs such as Open Aid Partnership (see photo). In the environmental area, the Bank launched the Global Partnership for Oceans (GPO) in 2012 which includes more than 100 governments, CSOs, and business partners. To date, some 27 CSOs are supporting the initiative, including Conservation International, the Environmental Defense Fund, and World Wildlife Fund.  The Bank also established partnerships with Foundations in a number of areas such as health and education, support to fragile states, and gender mainstreaming.

Who is blogging in Future Development?

Tina Taheri's picture

Today we launch FUTURE DEVELOPMENT – Economics to End Poverty and as Shanta mentions our goal is to generate an evidence based debate that will, we hope, contribute towards making governments more accountable to poor people. 

We are grateful to the many friends and colleagues who will be joining us in this effort. Here is the initial list:

The Science of Infrastructure Service Delivery

Jordan Schwartz's picture

The cool thing about working in infrastructure is everyone knows your business.
 
We’ve all paid bills, lost power during storms, and worried about the quality of the water we’re about to drink. We’ve all been on a dead phone line sputtering, “Hello?  Hello?” having just confessed, “I love you,” to a disconnected piece of plastic. 
 
And if we in the professional world care about these basic services that are so fundamental to our lives, we know their reliable and affordable delivery is even more crucial for the poor. When a long wait for a new phone connection means no link to the outside world, no power means no study, and tainted water means sick children, then utility services are the difference between stagnation and growth, poverty and opportunity.
                      
Everyone knows when services work and when they don’t. But infrastructure economists have long struggled to understand why some utilities work well and others don’t. Is there a package of reforms that will get us more connections, higher levels of efficiency, better quality service and cheaper rates?

Closing the Education Gap in Pakistan: Researcher Interview

Aliza Marcus's picture
Filling the Education Gap in Pakistan


In Pakistan, one-third of primary school age children are not in school, and girls fare worse than boys – 37% of girls of primary school age are not in school, compared with 27% of boys*. Children living in remote parts of the country often have even fewer opportunities to get an education.
 
In Sindh province, on Pakistan’s southeastern border, government officials and World Bank experts crafted an innovative education program twinning public subsidies with private entrepreneurs to bring schools to poor villages where none existed. The goal of the program, which is ongoing, is to help all children have the chance to get not only an education, but a good one.

Worth the wait in Zanzibar

Raka Banerjee's picture

My experiences with field work thus far have been nothing if not adventurous. I seem to attract broken glass – a rock the size of a small coconut crashing through my 3rd floor window in Zanzibar, for instance, or the windows of my taxi being broken with baseball bats by an armed mob in Mali. Just the other day, my boss and I came within inches of dying in a fiery plane crash – we were on our way back to the main island of Zanzibar from Pemba island in a tiny 12-seater Soviet-era plane, and were just about to land in a strong crosswind when the engine on my side failed.  We managed to land, somehow, and taxied to a stop right there on the runway to wait for a vehicle (ironically, it ended up being an ambulance) to take us to the terminal.

Prospects Daily: Stocks Surge on Summers’ Withdrawal…U.S. Industrial Production Climbs…India’s Inflation Accelerates

Global Macroeconomics Team's picture

Financial MarketsEuropean stocks extended their gains on Monday, after reaching a 5-year high last week, as Lawrence Summers’ withdrawal from the Federal Chairman race eased the risk of an early end of U.S. monetary stimulus. The benchmark Stoxx Europe 600 Index rose 0.7% to the highest level since June 2008 as the German DAX index rallied 1.3% to a record high level.

Celebrating Success, Ongoing Challenges, and Opportunities that face the Montreal Protocol

Karin Shepardson's picture

New air conditioning units manufactured in a factory.

Today (September 16) is International Ozone Day. This day offers the international community the opportunity to laud the achievements of the Montreal Protocol on Substances that Deplete the Ozone Layer. Since 1987, the Protocol has worked to reduce the production and consumption of ozone-depleting substances (ODS), man-made industrial chemicals that damage the earth’s ozone layer.

Yet, as has become clear over the past few years, International Ozone Day is about more than just successful ozone layer protection. Given that many substances that deplete the ozone layer also have global warming potential (GWP), the transition to the use of substances with lower or no GWP has contributed important climate co-benefits over the years. As a result, the Protocol’s agenda has increasingly focused on cross-cutting themes linked with climate mitigation and energy efficiency. From both ozone and climate perspectives, the Protocol is widely recognized as a success.

The World Bank–China Montreal Protocol partnership is a testament to this success. Over the past two decades, it has phased-out more than 219,000 tons of ozone depleting substances from sectors as varied as refrigeration, air-conditioning, foam manufacturing, aerosol production, and fire extinguishing. Since these substances have GWP, the phase-out also avoided the equivalent of 885 million tons of carbon dioxide (CO2) or having the effect of taking 184 million cars off the roads.

Quote of the Week: Julia Gillard

Sina Odugbemi's picture

"Losing power is felt physically, emotionally, in waves of sensation, in moments of acute distress. I know now that there are the odd moments of relief as the stress ekes away and the hard weight that felt like it was sitting uncomfortably between your shoulder blades slips off. It actually takes you some time to work out what your neck and shoulders are supposed to feel like.
 
I know too that you can feel you are fine but then suddenly someone’s words of comfort, or finding a memento at the back of the cupboard as you pack up, or even cracking jokes about old times, can bring forth a pain that hits you like a fist, pain so strong you feel it in your guts, your nerve endings.”
 

Julia Gillard, former Prime Minister of Australia who served from 2010-2013
As quoted in The Guardian, September 13, 2013, Julia Gillard: Losing power 'hits you like a fist' - exclusive


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