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inequality

Stalled productivity, stagnant economy: Chronic stress amid impaired growth

Christopher Colford's picture

Call it “secular stagnation,” or the disappointing “New Mediocre,” or the baffling “New Normal” – or even the back-from-the-brink “contained depression.” Whatever label you put on today’s chronic economic doldrums, it’s clear that a slow-growth stall is afflicting many nation’s economies – and, seven years into a lackluster recovery from the global financial crisis, some fragile economies seem to be lapsing into another slump.

As policymakers struggle to find a plausible prescription for jump-starting growth, a tug-of-war is under way between techno-utopians and techno-dystopians. It’s a struggle between optimists who foresee a world of abundance thanks to innovations like robot-driven industries, and pessimists who anticipate a cash-deprived world where displaced ex-workers have few or no means of earning an income.

To add a bracing dose of academic rigor to the tech-focused tug-of-war, along comes a data-focused realist who adds a welcome if sobering historical perspective to the debate. Robert J. Gordon, a macroeconomist and economic historian at Northwestern University, takes a longue durée perspective of technology’s impact on growth, wealth and incomes.

Gordon’s blunt-spoken viewpoint has caused a sensation since his newest book, “The Rise and Fall of American Growth,” was launched at this winter’s meetings of the American Economic Association. His analysis injects a new urgency into policymakers’ debates about how (or even whether) today’s growth rate can be strengthened.

When Gordon speaks at the World Bank on Thursday, March 31 – at 11 a.m. in J B1-080, as part of the Macrofiscal Seminar Series – economy-watchers can look forward to hearing some ideas that challenge the orthodoxies of recent macroeconomic thinking. His topic – “Secular Stagnation on the Supply Side: Slow Growth in U. S. Productivity and Potential Output” – seems likely to spark some new thinking among techno-utopians and techo-dystopians alike.

To watch Gordon’s speech live via Webex – at 11 a.m. on Thursday, March 31 – click here. To dial in to listen to the audio, dial (in the United States and Canada) 1-650-479-3207, using the passcode 735 669 472. For those telephoning from outside the United States and Canada, the appropriate numbers can be found on this page.

Weekly wire: The global forum

Roxanne Bauer's picture

World of NewsThese are some of the views and reports relevant to our readers that caught our attention this week.

UNDP
This paper suggests that reform-minded public officials can improve development results by using citizen engagement in a variety of ways: to elicit information and ideas, support public service improvements, defend the public interest from ‘capture’ and clientelism, strengthen the legitimacy of the state in the eyes of citizens and bolster accountability and governance in the public sector.  Based on analysis of five case studies exploring recent citizen engagement initiatives in different parts of the world this paper posits that there are no blueprints for the design and implementation of such initiatives or standardised and replicable tools. Instead it suggests that successful and sustainable citizen engagement is ideally developed through “a process of confrontation, accommodation, trial and error in which participants discover what works and gain a sense of self-confidence and empowerment”.
 
The Guardian
As a reporter in the Bosnian war, in 1993 I went to Belgrade to visit Vuk Drašković, the Serb nationalist politician and writer who was then leading the mass opposition against the Slobodan Milošević regime. Drašković had drawn liberal as well as ultra-nationalist support in Serbia for his cause. As I was leaving his office, one of Drašković’s young aides pressed a folded bit of paper into my hand. It turned out to be blank except for a date: 1453 – the year Orthodox Constantinople fell to the Muslim Ottomans. Friends of mine who had worked in the former Yugoslavia during the Croatian and Bosnian wars had similar experiences in Zagreb and Sarajevo, though the dates in question were different. It seemed as if the “sores of history”, as the Irish writer Hubert Butler once called them, remained unhealed more than half a millennium later – at least in the desperate, degraded atmosphere of that time and place. And yet, while alert to the possibility that history can be abused, as it unquestionably was in the Balkans in the 1990s, most decent people still endorse George Santayana’s celebrated dictum: “Those who cannot remember the past are condemned to repeat it.” 
 

How to help communities protect their lands

Rachael Knight's picture
Kenya Land Alliance facilitates a meeting
with the community of Chara, in Tana
River county

The scale of the global land grab is staggering. While international actors have made excellent progress establishing complaint boards, issuing principles for responsible investment, and securing commitments from multi­national corporations, these protections do not chart a clear course of action that communities can follow to protect their lands and natural resources before an investor arrives seeking land. 

The problem is that once an investor arrives to “consult with” a community, it may be too late.  After a deal has been made in capital city conference rooms or in clandestine meetings between chiefs and company representatives, communities are forced on the defensive. At this point, all they can do is try to mitigate the negative impacts of investors' plans rather than assertively proclaiming their legal rights, demanding that the investor abide by FPIC principles, and then choosing whether to reject the investment or accept it on terms that ensure that the community benefits and prospers.

Meanwhile, many of the “investors” grabbing land are national or local elites unaccountable to international  institutions  –  the cousin of the President or the nephew  of the Minister – who operate with complete impunity, protected by powerful connections to government, the judiciary and the police. Such individuals do not answer to shareholders or complaint boards, and are not the least bit concerned with principles of corporate social responsibility. If a community’s land claims  are unrecognized or undocumented – and if the community’s leadership is weak or corrupt – the easier it is for these elites to manipulate their power to claim what land they want.

To have a fighting chance against elites’ bad­faith actions, communities must proactively take steps to know and enforce their rights, prevent their leaders from transacting land without community approval, and seek legal recognition of their land claims.  And they must do so before elites and investors arrive. 

Is it harder for children from poor families in rural China to attain education?

Yan Sun's picture
China has achieved unparalleled success in economic growth and poverty reduction since initiating market reform in 1978. But in recent decades, increasing inequality has become a central policy issue (Figure 1), and the goal of ‘harmonious development’ has become a focus of Chinese policy makers. It remains a challenge for China to share its prosperity more equitably.
 
Figure 1: Poverty and inequality in rural China

Weekly wire: The global forum

Roxanne Bauer's picture

World of NewsThese are some of the views and reports relevant to our readers that caught our attention this week.

Poverty is Sexist 2016 Report
ONE Campaign
Last year ONE released its first “Poverty is Sexist” report, aimed at pressuring leaders to put girls and women at the heart of key policies and decisions. The report demonstrated two truths: 1. That poverty and gender inequality go hand-in-hand. Being born in a poor country and being born female amount to a double whammy for girls and women: they are significantly worse off than their counterparts in richer countries, and in every sphere they are hit harder by poverty than men. 2. Investments targeted towards girls and women pay dividends in lifting everyone out of poverty more quickly, and are essential in the overall fight to end extreme poverty everywhere. 2015 saw the world debate and decide the Sustainable Development Goals (SDGs), the Addis Ababa Action Agenda and a climate deal at COP 21 in Paris. This year, leaders have the opportunity to turn these aspirations into results.
 
Practice Note: Young People's Participation in Peacebuilding
UNDP
Throughout the world, more than 600 million young people live in fragile and conflict-affected contexts today.  They are among the most affected by the multiple and often interlinked forms of violence – from political violence and criminal gangs to organized crime and terrorist attacks that plague their countries and communities, bearing enormous and long-lasting human, social and economic costs. Over the past decade, the involvement of some young people – particularly young men, but also increasingly young women – in violence and extremist groups has led some to paint youth generally as a threat to global security and stability. But research shows that youth who participate actively in violence are a minority, while the majority of youth – despite the injustices, deprivations and abuse they can confront daily, particularly in conflict contexts – are not violent and do not participate in violence. Moreover, a growing body of evidence suggests that young women and men can and do play active roles as agents of positive and constructive change.
 

Weekly wire: The global forum

Roxanne Bauer's picture

World of NewsThese are some of the views and reports relevant to our readers that caught our attention this week.

Corruption Perceptions Index 
Transparency International 
2015 showed that people working together can succeed in fighting corruption. Although corruption is still rife globally, more countries improved their scores in 2015 than declined. Five of the 10 most corrupt countries also rank among the 10 least peaceful places in the world. Northern Europe emerges well in the index – it’s home to four of the top five countries. But just because a country has a clean public sector at home, doesn’t mean it isn’t linked to corruption elsewhere.
 
An Economy For the 1%
Oxfam
The global inequality crisis is reaching new extremes. The richest 1% now have more wealth than the rest of the world combined. Power and privilege is being used to skew the economic system to increase the gap between the richest and the rest. A global network of tax havens further enables the richest individuals to hide $7.6 trillion. The fight against poverty will not be won until the inequality crisis is tackled.

Deliberation and Development: Rethinking the Role of Voice and Collective Action in Unequal Societies

Roxanne Bauer's picture

Deliberation and Development book coverIf you’re interested in advancing sustainable development for the world’s poor, pause a moment to reflect on these two quotes:

“the very understanding of development has dramatically shifted, from a narrow focus on economic transformation (summarized by either growth rates or industrialization) to a more holistic view.” (pg. 4)

“Effective state structures have always depended on deliberative spaces that include both key actors within the state apparatus and powerful private interlocutors. In the 21st century, deliberation has become even more crucial, because the state faces a set of tasks that require bringing in deliberation in a way that goes well beyond established traditions.” (pg.51)

These ideas come from a new book, Deliberation and Development: Rethinking the Role of Voice and Collective Action in Unequal Societies, available in the World Bank’s Open Knowledge Repository. The book marries two fields that rarely intersect: deliberative democracy and development studies. The study of deliberation emerged as a critical area of study over the past two decades while the field of development has seen growing interest in community-led development and participation premised on the ability of groups to arrive at decisions and manage resources via a process of discussion and debate. Despite the growing interest in both fields, however, they have rarely engaged with one another– until now.

Patrick Heller and Vijayendra Rao edited the book, with essays from leading professors and economists working in the fields of international studies, sociology, and political science. 

Resource Inequality and Ethnic Conflict in Africa: New Evidence Using Rainfall Data - Guest post by Andrea Guariso

The majority of civil conflicts that took place in Africa since the end of World War II were fought along ethnic lines (Wimmer et al., 2009). Among all the different causes that have been discussed by academics and policy makers, economic inequality has possibly been the most controversial one (Cramer, 2005).

Spike Lee’s ‘Chi-Raq’: The Maestro Handles Complexity Adroitly

Sina Odugbemi's picture

Chi-Raq movie billDifficult social problems are fiendishly difficult to communicate. For, these are issues about which experts disagree and citizen-voters, too. The causes are unclear, the solutions are unclear, and then there is the ideological deadweight that tends to drag meaningful debate and discussion all the way down to seedy depths. Above all, public debate on complex social problems also leads to framing battles: you frame the discussion to privilege the ‘solution’ you want. So, for instance: what do we do about homelessness in our cities? If you don’t want public funds spent on it, you frame it as an individual responsibility issue. You argue that the homeless need to pull themselves up by the straps of their dirty sneakers. If you want public funds spent on the problem, you frame the issue as a structural challenge. You ask for a focus on unemployment, targeted welfare schemes, improved care for the mentally ill and so on.

Chi-Raq’, Spike Lee’s new movie, tackles a horrendously difficult problem: the horrific and persistent gang violence in inner cities in the United States of America (and, by implication, several such places across the globe). His setting is the South Side of Chicago. The title of the movie is a play on Chicago and Iraq. The movie opens with these stunning statistics: while American deaths in the Iraq War between 2003 and 2011 came to 4,424, between 2001 and 2015 there were 7,356 homicides in Chicago. Think about that for a second: 7,356 homicides.


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