Public transport is an important mode of transport, especially for low-income populations. Cities, however, struggle to provide public transport services for fares that are both affordable and financially sustainable. Since meeting both goals is quite difficult, transport systems either end up relying on high levels of subsidies or charging transit fares that are too expensive for the city’s poor.
To tackle this challenge, the World Bank in 2013 supported the city authorities of Bogotá, Colombia, in designing a pro-poor transport subsidy scheme that would help low-income populations have access to more affordable public transport. In Bogotá fares for its new public transit system are set higher -closer to cost-recovery levels-, than in other cities that provide greater public subsidies to their operators. Despite having more sustainable fares, Bogotá risks excluding people from its transport services—in fact, households in the poorest areas of the city spend a greater percentage of their income on transport, between 16% to 27%, compared to a maximum of 4% in areas that are relatively richer.
There has obviously been a large increase in the number of rigorous impact evaluations taking place of World Bank projects over the past decade, including increasing use of randomized experiments. But one comment/complaint of a number of operational staff and government policymakers is still that “randomized experiments take too much time”. In order to avoid repeating myself so often in responding to this, I thought I’d provide some responses on this point here.
It is widely known that, compared to other continents, poverty rates are particularly high in Africa. Somewhat less appreciated is that inequality within countries also tends to be high. “Poverty in a Rising Africa,” the latest World Bank Africa poverty report, shows for example that seven out of the world’s 10 most unequal countries are African, with the country Gini indexes ranging from 0.31 (Niger) to 0.63 (South Africa) (with zero implying perfect equality and one, perfect inequality).
However, not only the level of inequality matters, but also the reasons behind it. Unequal outcomes may result from both differences in opportunities as well as differences in effort. There is also growing evidence and consensus that it is especially the former, which is pernicious for development. Rewards by effort may incentivize people. Yet, when welfare mainly differs because of differences at birth (such as gender, ethnicity, or parental background) or, more generally, because of factors beyond the individual control, it tends to be especially detrimental for economic growth and social harmony.
After the Arab Spring, Egypt’s health sector went through a shaky transition as seven consecutive Egyptian Ministers of Health struggled to make the sector live up to the revolution’s ideal of a health sector that would serve to uphold human dignity and social justice. Pre-revolution reforms to the sector had focused on expanding access to essential services in family health and to health insurance coverage. The political environment and the sector’s limited capacity had not, however, made it possible for these pilot schemes to be scaled up properly, with a pro-poor focus.
Here’s a simple example: Imagine you’re working on a complicated jigsaw puzzle without using the picture on the box top as a guide. How successful do you think you’ll be? After some trial and error, you’d probably give in to frustration, bring out the box top, and make easier work of the puzzle.
What if the puzzle you were trying to solve was to end extreme global poverty? How would you put the pieces together?
But what exactly is a city?
Chandan Deuskar's blog explores exactly this question. There's currently no standard definition of an "urban area" or "urban population" - each country relies on its own definition and collects data accodringly. This is an important area of data to improve - the Sustainable Development Goals include many indicators and targets explicity concerning cities and new standards and approaches such as using satellite imagery may provide more accurate data and definitions.
Malaysia is already a very competitive country. Today it ranks 18 out of 189 economies in the World Bank Group’s Doing Business Index. Yet, its ambition is to become more competitive. And it wants to overtake some countries on the way up. Malaysia has long recognized that a concerted cross-ministerial and public-private collaboration is needed to do just that.
Malaysia’s Special Task Force to Facilitate Business (PEMUDAH), was established in 2007 to improve the ease of doing business in Malaysia. Testament to its success was Malaysia’s surge to 6th position in the 2014 Doing Business, up from 12th place in 2013 and 18th in 2012, placing it in the same league as Singapore, Hong Kong, and the United States. But since then, Malaysia has been challenged to keep up with the rapid pace of business reforms across the globe.
“If we actually look at the few countries that have achieved smart, innovation-led growth, you’ve had this massive government involvement. How can we square that with the whole austerity discourse?”
-Mariana Mazzucato, an economist and author of The Entrepreneurial State: debunking public vs. private sector myths, which was featured on the 2013 books of the year lists of the Financial Times and Forbes. She is also the RM Phillips Professor in the Economics of Innovation at the University of Sussex, SPRU. She has also blogged for the World Bank in the past.