Women's group. Kenya. Photo: © Curt Carnemark / World Bank
The economics book that has launched a thousand blog posts, Thomas Piketty’s Capital in the Twenty-First Country, tells a grand story of inequality past and present. One would expect that a book on global inequality would have much to say about development. However, the book has limited relevance for the developing world, and the empirical data he marshals for developing countries is weak.
Piketty’s central story is that convergence in the developed world and slower population growth will leave us with a permanently modest economic growth rate (g). Coupled with a constant return to wealth (r), concentration of capital ownership, and high rates of savings among the wealthy, the low g leads to rising wealth inequality over a longish run—something like the second half of the 20th century.
A low-g future for the developed world is a mostly uncontroversial assumption. (He assumes future GDP per capita growth of 1.2 percent for the U.S.) But Piketty draws conclusions for the world as a whole, and we are a long way from global convergence. As Branko Milanovic noted in his review, catch-up growth could fend off Piketty’s inequality dystopia for some time.
It is well known that transit-oriented development, or ToD, is a high-value complement to mass transit development. Compact, mixed-use, high density development around key mass transit stations can have the dual benefits of creating a ridership base that enhances the economic and financial viability of the mass transit investment and compounding the accessibility benefits a mass transit system can bring to a city’s residents. This is not to mention the intrinsic value in creating vibrant social gathering places for communities at strategic locations.
- transport integration
- mutlimodal transport
- transport planning
- urban planning
- land use
- transport policy
- transit-oriented development
- Urban Development
- Public Sector and Governance
- Law and Regulation
- Latin America & Caribbean
- East Asia and Pacific
- United States
- South Africa
- Hong Kong SAR, China
The ODI is a 10 minute train ride from my home, so I’m easily tempted out of my lair for the occasional lunchtime meeting. Last week it was the launch of ‘Democracy Works: The Democratic Alternative from the South’, a paper on the three ‘rapidly developing democracies’ of Brazil, India and South Africa, co-authored by the Legatum Institute and South Africa’s Centre for Development and Enterprise (not ODI, who merely hosted the launch). I was underwhelmed.
Which is a shame, because the topic is great – China’s rise and the West’s economic implosion are undermining arguments for democratic and open systems around the world. The report quotes Jacob Zuma: “the economic crisis facing countries in the West has put a question mark on the paradigm and approaches which a few years ago were celebrated as dogma to be worshipped.”
And that is precisely one of the main topics that we discussed at the International Transport Forum in Leipzig during a session on Integrating Transport Networks for Sustainable Growth and Development. The panel also included Morocco’s Vice-Minister of Transport; the Head of Transport from the Latin America Development Bank (CAF), and the CEO and Chairman of the Management Board of Deutsche Bahn AG.
The first unexpected development happened when the moderator showed up with a fifteen-minute delay, having been trapped… in a Deutsche Bahn train stopped on the tracks between Berlin and Leipzig following an unfortunate encounter between a bulldozer and a catenary cable. To be fair, the incident had little to do with the quality of the railway service and was quickly resolved. That is what resilient transport is about.
Beside the great Lake Kivu, beneath the shadow of an enormous volcano, the Rwanda-DRC border divides the neighboring cities of Gisenyi and Goma. As the day begins, the predominant impression is one of movement, as people walk in either direction through the customs checkpoint, carrying giant bunches of green banana, stacks of nesting plastic chairs, anything that is tradable. They form an unbroken stream of humanity crossing to and fro, the tall border signboards towering overhead.
Climate change is a threat to global development and to poverty alleviation. And yet, reducing greenhouse gas emissions is proving difficult because all players in an economy contribute to the problem. To make a difference, we must reduce our emissions in a coordinated manner.
This is no easy task. So where do we go from here?
One approach involves pricing the “externalities” that are contributing to climate change. Pricing externalities into the costs of production is nothing new. A classic textbook example is the paper mill that sits upstream from a fishing village.
Discharge from the mill pollutes the river, diminishing the fishermen’s catch. The mill freely uses the water of the river in its production of paper, but does not pay for the damage of the negative externality that it causes. To remedy the situation, regulations can be put in place to stop waste from going into the river – or the mill can pay a fine equivalent to the loss of the fishermen’s revenue.
The latter is an example of an externality priced into the cost of production. The same can be done to combat climate change.
In this case, carbon emissions are the externality that must be priced. Doing so provides a cost-effective and efficient means to drive down greenhouse gas emissions as the cost of such pollution goes up.
Photo courtesty Creative Commons
For those of us who have been impacted by the death of loved ones due to the negative health consequences of smoking, the recent announcement by Larry Merlo, the CEO of the U.S. pharmacy chain CVS, to stop selling tobacco products in the chain’s 7,600 stores, was a ray of hope and a step toward a future when public health concerns trump short-term profit motives.