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Governance

Vigorous ideas for ‘Powering Up Growth’ through energetic policy reforms

Christopher Colford's picture
In an era of chronically slow economic growth, what steps can policymakers take to help jump-start productivity, spur employment and build long-term wealth? Recognizing that the private sector must create about 90 percent of the economy’s future jobs, which policy reforms can most effectively encourage private-sector investment?

Questions like those – focusing on the private sector as the principal driver of growth, with deft public policy as an indispensable catalyst – inspired a dialogue among some of the developing world’s most experienced policymakers at a major forum, “Powering Up Growth: Ideas for Beating the Slowdown,” during the recent Spring Meetings of the World Bank Group and the International Monetary Fund. All four government Ministers on the panel – from both commodity-exporting and  -importing countries – voiced a sense of urgency, describing their efforts to attract private investment to spur job creation, amid a global economy that seems destined for prolonged weakness.

Before the policymakers ascended the Preston Auditorium stage, sobering updates had arrived from the Bank and the Fund: The Bank’s latest forecast for global growth has been lowered from 2.9 percent to 2.5 percent – with the caveat that this latest forecast is subject to further downside risks. That downward revision is in parallel with the Fund’s similar projection, which sees global growth this year in the neighborhood of just 3 percent.

Policymakers worldwide are eager to explore any option to try to lay the foundation for an eventual return to a long-term economic expansion. It was clear that the panelists in the “Powering Up Growth” event – which was convened by Jan Walliser, the Vice President for the Bank Group’s practice group on Equitable Growth, Finance and Institutions (EFI) and organized by the Global Practice for Macroeconomics and Fiscal Management (MFM) – were focused on long-term structural changes that can energize the private sector’s ability to drive growth.
 
Powering Up Growth: Ideas for Beating the Slowdown


The panelists – from Bolivia, Pakistan, Angola and Ukraine – represented countries from different regions and at various levels of economic development, but they shared a determination to jump-start growth through reforms that will strengthen the private sector’s long-term confidence. The Ministers, at times, seemed to envision opportunities, not just for short-term structural adjustment of their priorities or medium-term structural reform of their policy farmeworks, but for far-reaching structural transformation of their economies and societies.

Drones for better roads: Pointers from the Philippines

Kai Kaiser's picture
Local leaders have turned to OpenStreetMaps (OSM), and use targeted drone tracking to document road needs and investment progress.  Photo: Kai Kaiser

Amazon is promising to deliver goods with drones. Seeing these prospective innovations in airborne delivery, we’ll be forgiven for thinking that bad roads will increasingly be secondary concerns.

But the reality is that “last mile” road access will continue to be a major and costly development challenge for years to come. “Last mile" access refers to road to final destinations, whether communities, crops, markets, schools or clinics. These are typically provincial, city-municipal and barangay (village) roads in the Philippines.

Often the responsibility of local governments, these roads determine the ease and cost by which people and goods can get to final destinations. Communities across the globe face poor road access, depriving them of economic and social opportunities, whether bringing produce to markets, getting kids to school, or mothers to clinics. Billions of dollars continue to be spent on last mile road access, but often with very poor results.

Can drone technology make a difference?

Panama Papers underscore need for fair tax systems

Sri Mulyani Indrawati's picture

High-rises and hotel buildings in Panama City, Panama. © Gerardo Pesantez/World Bank

The so-called “Panama Papers” scandal reminds us that concealing wealth and avoiding tax payments is neither uncommon nor — in many cases — illegal. But the embarrassing leak exposes something else: The public trust is breached when companies, the rich and the powerful can hide their money without breaking the law. If this breach is left unaddressed, those who aren’t rich enough to hide money will be less willing to pay and contribute to the social contract in which taxes are exchanged for quality services.

As finance minister in my home country of Indonesia, I saw firsthand how a weak tax system eroded public trust and enabled crony capitalism. Shadow markets arose for highly subsidized fuel, family connections secured jobs, and bribes helped public servants beef up their salaries. Tax avoidance among the elites was common and the country couldn’t mobilize the resources we needed to build infrastructure, create jobs, and fight poverty.

On digital revolution, skills and the future of communications

Tako Kobakhidze's picture

WDR2016

We find ourselves in the midst of the greatest information and communications revolution in human history. I’m not the author of this phrase, but I fully agree with it. This particular sentence made me read the entire overview of the World Development Report 2016: Digital Dividends.

I have always been wondering what does the Digital Revolution actually mean. Who, but the Co-Director of the report could have answered my question best?! Yes, I had the opportunity to interview Uwe Deichmann last week in Tbilisi. He visited Georgia as part of the ‘road-show’ to present this work of the World Bank Group team to the government, business, academia, students, and other interested audience attending the Business Forum: Innovation and Digital Economy.

It’s time to boost public financial management in the Caribbean

Samia Msadek's picture
School children in Kingston, Jamaica. Strong public financial management affects all facets of government spending, including education. Photo credit: UN Photo/Milton Grant 

Finance ministers, auditors-general, and leaders of professional accounting organizations are meeting Tuesday in Nassau to discuss a topic that is often hidden from view, but is critical to quality of life in the Caribbean: Capacity and standards in public financial management.

How governments manage taxes, borrowing and spending is essential to economic growth, to poverty-reduction, and to ensuring that the region’s poorest can improve their lives. It is a core function of accountability in government. Improvements in this area could increase the health of small and medium-sized enterprises, create jobs, and bring in additional government revenues to spend on essential public services. Residents of Caribbean nations: this strategic dialogue will be about how the government manages your money.

Expect no lines in front of the digital counters

Gina Martinez's picture
See high resolution here.

While countries around the world reap the benefits of an expanding digital environment, development challenges persist, adversely impacting low-income countries from achieving that same rate of growth.
 
The 2016 World Development Report (PDF) recently highlighted these findings in addition to three factors that contribute to a government’s responsiveness towards these digital changes.
 
According to the report, public services tend to be more amenable to improvements through digital technologies if the proposed system allows for fluid feedback, a replicable development process, and an outcome that can be easily measured and identified.
 
Here are five public services improved through digital technologies in five countries:

The ‘decentralisation agenda’ must succeed

Suvojit Chattopadhyay's picture

MoroccoDuncan Green’s blog hosted a post by LSE’s Jean-Paul Faguet titled: Is Decentralisation good for Development? Faguet has edited a book by the same name that you can find here. This is a subject very close to my heart, and I believe in decentralisation as a value, just as I believe in democracy. It is often a work in progress, but it is a project worth persisting with, an ideal worth pursuing. Faguet’s research (at least, my interpretation of his work) therefore, really speaks to me. In this post, he makes several interesting and compelling points. For instance:

On the advantage of competitive politics generated by decentralised systems:

Imagine you live in a centralized country, a hurricane is coming, and the government is inept. To whom can you turn? No one – you’re sunk. In a decentralized country, ineptitude in regional government implies nothing about the ability of local government. And even if both regional and local governments are inept, central government is independently constituted, probably run by a different party, and may be able to help. Indeed, the very fact of multiple government levels in a democracy generates a competitive dynamic in which candidates and parties use the far greater number of platforms to outdo each other by showing competence, and project themselves hierarchically upwards.  In a centralized system, by contrast, there is only really one – very big – prize, and not much of a training ground on which to prepare.

It’s all about inclusion, but how?

Alina Rocha Menocal's picture



Inclusion
is the new buzzword in international development. From promoting citizen empowerment to fostering pathways out of fragility, it is all about political processes that are more inclusive and representative‎.

The newly adopted Sustainable Development Goals are perhaps the most ambitious articulation of this consensus, with Goal 16 in particular calling for building more “effective, accountable and inclusive institutions at all levels”.

And there are good reasons for this call-out. Two findings from research that I undertook for a paper I wrote recently on Political Settlements and the Politics of Inclusion are particularly striking in highlighting the centrality of inclusion:

Enhancing government accountability can improve service delivery in Buenos Aires

Daniel Nogueira-Budny's picture

Also available in: Español

Young students in rural areas of Argentina. Photo: Nahuel Berger / World Bank


Public schools in the Province of Buenos Aires generally provide school books and other learning materials to students free of charge. This is important, as the poorest 40 percent of Argentina’s population relies disproportionately upon public services such as education. But, what happens when schools cannot purchase books for students?
 
Fixed expenditures, including personnel costs, generally leave limited space for other quality-enhancing education expenditures, such as school books and training materials. Faced with an unexpected pressure on such fixed expenditures in 2013, some schools were suddenly forced to cut down significantly on teacher training materials and other educational resources generally provided free of charge. As a result, a number of parents were suddenly forced to decide between purchasing learning materials for their children’s education, or paying bills.

Does transparency hobble effective governance?

Sina Odugbemi's picture

A remarkable debate on transparency and open government took place on March 15, 2016 at the Reynolds Journalism Institute and the Truman School of Public Affairs at the University of Missouri, Missouri, USA.  The issue was: Is American Government too open? Professor Bruce E. Cain of Stanford University argued that “Yes, American Government Is Too Open”, and Professor Charles Lewis of American University, Washington DC, argued that “No, American Government is Not Too Open”. You can watch the debate here.

It is a rich and illuminating exchange, and one that the two professors somehow manage to keep civil. I watched the debate online but in what follows I draw from the written commentary submitted by both professors, and I try to focus on the universally applicable points that each one made.


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