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The way out of poverty and corruption is paved with good governance

Sri Mulyani Indrawati's picture

Woman speaks to World Bank MD and COO Sri Mulyani Indrawati in the Nyabithu District of Rwanda. © Simone D. McCourtie/World Bank

For the first time in history, the number of people living in extreme poverty has fallen below 10%. The world has never been as ambitious about development as it is today. After adopting the Sustainable Development Goals and signing the Paris climate deal at the end of 2015, the global community is now looking into the best and most effective ways of reaching these milestones. In this five-part series I will discuss what the World Bank Group is doing and what we are planning to do in key areas that are critical for ending poverty by 2030: good governance, gender equality, conflict and fragility, creating jobs, and, finally, preventing and adapting to climate change.

Twenty years ago, the World Bank took up the fight against corruption as an integral part of reducing poverty, hunger, and disease. The decision was groundbreaking then and remains valid today. Corruption diverts resources from the poor to the rich, leads to a culture of bribes, and distorts public expenditures, deterring foreign investors and hampering economic growth.

Disruptive innovations and new business models: The role of competition policy advocacy

Anabel Gonzalez's picture

Despite the persistent low-growth environment, the benefits of the digital era are within our grasp to help reignite the growth engine.

Digital trade is the fastest-growing component of trade, and 4.4 billion people globally are yet to come online. In the first quarter of 2015 and in major U.S. cities, an average of 46 percent of all total paid car rides were through Uber. In Kenya, the digital payment system creates additional income for more than 80,000 small business owners. The Chinese e-commerce sector has created 10 million jobs. The Internet of Things, self-driving cars and 3-D printing have now arrived as part of the so-called Fourth Industrial Revolution.
These benefits will materialize faster if competitive dynamics allow and drive innovation. Disruptive innovation has a great potential to shake up markets, increase productivity and bring benefits to consumers. And yet, if there are government-imposed rules that close markets and unjustifiably protect incumbents from such competing new solutions, these benefits do not materialize. Cities around the world have blocked Uber from offering services. The debate on President Obama’s Executive Order to boost competition has centered around a pending decision by the communications regulator on whether to open the market for TV cable set-top boxes to allow for competition.
Conscious of such challenges, forward-looking competition authorities around the world are advocating several measures that will allow consumers and businesses to benefit from disruptive innovations and new business models. A new World Bank Group publication on competition advocacy tools highlights examples of successful initiatives to promote pro-competitive regulatory reform in markets subject to disruptive innovations.

Visuals matter: Public goods and effective design

Claudio Mendonca's picture

From time to time, everyone encounters sleek products whose form seems to eclipse their function—an image-heavy website that fails to provide basic information, or a shiny gadget with an all-too-brief usable life. Many of us are occasionally guilty of creating such products, but we also shouldn’t underestimate the importance of design, especially when trying to reach a general audience with an initiative or service.

Chart: 1 in 3 Companies Constrained by Corruption

Tariq Khokhar's picture

Interviews with managers and business owners in more than 130,000 firms across 135 economies found that 1 in 3 companies identify corruption as a major constraint to operating their establishments. Almost a fifth of firms are expected to give gifts to public officials in order to "get things done.” Read more about the World Bank Group's Enterprise Surveys.

A Call for Global Action against Corruption

Stephen Zimmermann's picture

Supreme Court of Canada“Corruption is a significant obstacle to international development. It undermines confidence in public institutions, diverts funds from those who are in great need of financial support, and violates business integrity. Corruption often transcends borders. In order to tackle this global problem, worldwide cooperation is needed. When international financial organizations, such as the World Bank Group, share information gathered from informants across the world with the law enforcement agencies of member states, they help achieve what neither could do on their own.”
This statement was made not by someone from within the World Bank Group, underscoring the value of the Bank’s work in the fight against corruption. It is the opening passage of a decision by the Supreme Court of Canada issued on April 29, 2016 in the World Bank v. Wallace.  By endorsing the integrity efforts of international organizations while upholding the privileges and immunities of the World Bank, the Court’s decision serves as a reminder that better results in the fight against corruption can be achieved when all the actors in the global fight come together in their respective roles.  The investigation and prosecution that led to this decision stand as a clear example of the power we can harness when we work together. They also illustrate the challenges of aggressively fighting corruption while simultaneously pursuing a development agenda focused on ending poverty.

In 2011, the World Bank’s Integrity Vice-Presidency learned that representatives of SNC-Lavalin were planning to bribe officials of the Government of Bangladesh to obtain a contract related to the construction of a bridge over the Padma River.  The World Bank had already agreed to provide more than one billion dollars in financing for this project that was projected to be among the most significant and impactful development projects in the region.  As INT’s investigation unfolded, it voluntarily shared information of its findings initially with the Royal Canadian Mounted Police (RCMP) and subsequently with the Bangladeshi Anti-Corruption Commission. 

African countries come together to address gaps in managing digital information for open government

Anne Thurston's picture
While 85 percent of participating OGP countries have digitized their public records, only 16 percent are storing them in secure, professionally managed digital repositories.

On April 22 and April 29, 2016 representatives from Cote d’Ivoire, Ghana, Kenya, Liberia, Malawi, Sierre Leone, South Africa, and Tanzania came together in a virtual South-South Knowledge exchange hosted by the World Bank in collaboration with the Open Government Partnership to discuss an issue of mounting concern: managing records and information to support open government.  These countries – committed to the goal of open government, and a number with new right to information laws and open data initiatives - were motivated by increasing recognition that their commitments to make information open cannot be fully realized until they increase their capacity to manage records and information, especially the growing amount of information in digital form. 

The essentials of a manufacturing ecosystem

Aref Adamali's picture

Value addition through manufacturing has been a major focus of economic policymakers across the world, and at times with remarkable success, most famously in East Asia. Initial ‘Asian miracles’ in places like South Korea have since been eclipsed by the meteoric rise of manufacturing in China, which has grown its exports in manufactures by 18 percent a year over the past 10 years, compared to a global average of 7 percent (ITC Trade Map data).

'Flying geese'
Most countries generally seemed to follow a basic pattern, initially establishing manufacturing credentials in light manufacturing, such as in textile and apparel, but then in time moving on from such products to higher-value-added and more complex products. As they moved on and up, they opened space for other countries to move into the initial entry products, following the so-called ‘flying geese’ model of division of labor.

There have been noticeable absences though, with not all regions having moved into manufacturing. This is partially the case with Central and South America, but most strikingly with Sub-Saharan Africa.  
What can be done to support countries in their quest to deepen their manufacturing sectors, and extract the jobs and technological development that this can offer? How can they develop the kinds of deep and comprehensive manufacturing ecosystems that have enabled China to maintain investment despite fast-rising labor costs?

Innovative procurement practices help dairy sector in India

Shanker Lal's picture
Milk collection center - India. Photo: National Dairy Development Board

India is the world’s largest producer as well as consumer of milk and milk products. India nevertheless faces a shortage of milk and milk products due to increasing demand from the fast growing middle class in the country.

The National Dairy Plan Phase I (NDP-I), a Central Sector Scheme of the Government of India, which is supported by National Dairy Support Project (NDSP), aim to increase milk productivity and market access for milk producers, which are both necessary to meet the growing demand for milk. NDP-I is being implemented with a total investment of about US$350 Million, out of which the Bank has extended a Credit of US$219 Million through the NDSP.

The National Dairy Development Board (NDDB) is the main implementing agency for the NDP-I. At the decentralized level, NDP-I is being implemented by about 150 end‐implementing agencies (EIAs) scattered over the country. 

The Project involves some innovative procurement practices and improvements in upstream milk supply chain, which are described below:

Of tigers and elephants: The rise of cities in Asia

Judy Baker's picture
Rush hour traffic in Mumbai, India. Photo: Adam Cohn/Flickr
Over the next decade and a half the world will add a staggering 1.1 billion people to its towns and cities. About one half of this urbanization will happen in the regions of East and South Asia.
If history is any guide, this growth in urban population will provide tremendous opportunities for increasing prosperity and livability. One can look at the successes of a few Asian cities such as Tokyo, Seoul, and Singapore to demonstrate how, with the assistance of good policies, urbanization and economic development go hand-in-hand. More generally, no major country has ever reached middle-income status without also experiencing substantial urbanization.
Yet cities can grow in different ways that will affect their competitiveness, livability, and sustainability. The more successful cities of Asia have been effective at creating opportunities, increasing productivity, fostering innovation, providing efficient and affordable services for residents, and enhancing public spaces to create vibrant and attractive places to live. But many, many, more cities have neglected fundamental investments in critical infrastructure and basic services, and have mismanaged land, environmental and social policies. This has resulted in traffic congestion, sprawl, slums, pollution, and crime.
Among the many complexities of urban development that have contributed to success, two critical factors stand out – investing in strategic urban planning, and in good urban governance.

How advocacy strategies can help boost competition and transform markets

Tanja Goodwin's picture

Many of the World Bank Group’s client countries face a difficult challenge – and the White House recently put this issue at the top of the agenda, too: How can policymakers increase competition to support continued growth of the economy? In a global low-growth environment, developing and advanced economies alike are looking for new ways to boost productivity and innovation. A global panel of Ministers agreed at a recent Spring Meetings event that market competition is pivotal in finding a solution.

When firms collude to fix prices or divide markets, thus harming consumers and reducing competitiveness in their sector and the broader economy, independent competition authorities can fine and therefore deter such illegal conduct. When governments set up rules that reinforce the market power of a dominant firm or that allow such illegal conduct, then competition authorities can rarely demand that those rules be changed – even though the effects on prices, service quality or the availability of products can be just as severe. If champions of competition seek to promote more pro-competition government interventions in markets, they must rely on competition advocacy.

Last Thursday in Singapore, Klaus Tilmes, Director of the Trade and Competitiveness (T&C) Global Practice of the World Bank Group, and Andreas Mundt, Chair of the International Competition Network (ICN), presented awards to the winners of the 2015-2016 Competition Advocacy Contest – a joint WBG and ICN initiative – at the ICN Annual Conference.

new World Bank Group publicationlaunched by T&C on April 15, showcases the results of the 2014-2015 Competition Advocacy Contest, sharing the lessons that have been learned about effective advocacy and discussing innovative ways of adapting to new competition challenges. Previous rounds of the contest have shown how the notable impact of competition advocacy can change mindsets.

Our newest publication highlights the tools that competition authorities have developed to overcome the practical challenges, political-economy constraints and emerging trends that affect competition advocacy.