Twenty-five years ago, I lived in a fishing village, Tanji, on the coast of The Gambia. The village came alive before sunrise: if you got up early, you could see the brightly colored "pirogues" pushing out to sea, with six or seven brave young men sailing their precarious wooden dugout canoes. This was no mean feat. The Atlantic was unforgiving and sometimes treacherous.
I worked with the fishermen as part of a European Union fisheries project and, with time, we became friends. We spoke Mandinka, drank atyre, and shared our struggles and hopes. They told me how over the years catches had declined dramatically, forcing them to sail farther and farther out; how the trawlers were creeping closer to the shore, often mangling their fragile nets.
Law and Regulation
From time to time, countries experience rapid economic growth without a significant decline in poverty. India’s GDP growth rate accelerated in the 1990s and 2000s, but poverty continued to fall at the same pace as before, about one percentage point a year. Despite 6-7 percent GDP growth, Tanzania and Zambia saw only a mild decline in the poverty rate. In the first decade of the 21st century, Egypt’s GDP grew at 5-7 percent a year, but the proportion of people living on $5 a day—and therefore vulnerable to falling into poverty—stagnated at 85 percent.
In light of this evidence, the World Bank has set as its goals the elimination of extreme poverty and promotion of shared prosperity. While the focus on poverty and distribution as targets is appropriate, the public actions required to achieve these goals are not very different from those required to achieve rapid economic growth. This is not trickle-down economics. Nor does it negate the need for redistributive transfers. Rather, it is due to the fact that economic growth is typically constrained by policies and institutions that have been captured by the non-poor (sometimes called the rich), who have greater political power. Public actions that relax these constraints, therefore, will both accelerate growth and transfer rents from the rich to the poor.
Some examples illustrate the point.
While we have not been significantly involved with such services thus far, a recently appointed mobility secretary in a big Latin American city has asked us for support on developing an approach to the shared taxi industry, as part of a "Smart Mobility" strategy for the city. In that context, we wanted to start a conversation on optimal strategies for cities to be able to welcome and foster such innovations, while still capitalizing on the opportunity to create value for its citizens.
Photo Credit: Mauricio Santana – Women’s Forum 2014
The question was posed at this year’s Women’s Forum Brazil held in São Paulo, Brazil, on May 26 and 27. In a country bustling with the World Cup and gearing up for presidential elections, "Vibrant Growth for All" was a fitting topic. As more than 500 women and men involved in politics, business, civil society and academia from all regions of Brazil, countries of Latin America, the United States and Europe gathered together, women’s full participation in the economy and society was center stage in the discussions. The setting was quite appropriate: Women have made great strides and have increasingly taken the stage in the country. And starting from the top – the country’s President – and in all sectors of society and the economy, women are present and continue to take on leading positions, with many good examples present at the plenary room and throughout the two-day event.
Kicking off with an impassioned plea for the release of the abducted Nigerian schoolgirls and the keynote address given by Minister of State of Public Policies for Women Eleonora Menicucci, focusing on the achievement of economic autonomy for women in Brazil and initiatives to end violence against women such as the “Eu Ligo” campaign (with the double meaning in English: “I call / I care”), the forum throughout was indeed a vibrant event.
The plenary sessions and panels that followed were brilliantly composed of high-level women in leadership positions from Brazilian and international companies, small and medium-size enterprises (SMEs) and of government and civil society, including the CEO of Boeing Brazil, the CEO of Brazilian Tam Airlines, the CEO of the Women’s Forum for the Economy and Society, and the Clinton Global Initiative Director for Women and Girls, to shed light on topics such as business and human rights, marriage, machismo, and social investment in women, incentivizing leadership and talent, among others.
Why do labor regulations matter and should they protect workers or jobs, especially in developing countries? Carmen Pagés — Chief of the Labor Markets and Social Security Unit at the Inter-American Development Bank (IDB) — tells the JKP that labor regulations matter for jobs and productivity, including which types of jobs get created (formal or informal) and in which sectors.
Merely eight days after being sworn in, the newly elected Indian Minister for Rural Development, Mr. Gopinath Munde, died in a tragic car crash. While the nation grieves at the passing of an immensely popular and celebrated leader, politicians and the public got a reality check on the seriousness of the road safety epidemic prevalent in the country today.
The irony of the event was that a day before the incident, both authors of this post met with the Joint Secretary and Executive Officers of the Ministry of Rural Development to discuss improvements to road safety under the existing World Bank-funded Rural Roads project. This news is a stark reminder for the government and the Bank alike that a lot remains to be accomplished if we are to achieve a sustainable reduction in road deaths in India.
The Minister’s death added to the alarming list of fatalities that make India’s roads among the most dangerous in the world. Official statistics say around 140,000 people in the country die of such preventable crashes every year and health reports suggest even more. Simply put, 10% of the world’s road deaths take place on India’s roads – which account for less than 3% of the world’s vehicles! In light of those figures, India urgently needs to take comprehensive action to make its roads safer.
As governments debate labor market regulations — a highly controversial topic, sometimes for ideological reasons — it is vital to base decisions on empirical evidence. Thus, a welcome addition to the debate is the work of Gordon Betcherman — a Professor in the School of International Development and Global Studies, University of Ottawa — who contends that the key challenge for policy makers is to avoid the extremes of over- and under-regulation.
Labor regulations are important to protect workers and create good jobs, though many critics contend that such policies undercut job creation. The best ways design and implement them may remain a source of debate, but research in the World Bank's 2013 World Development Report on Jobs shows that these regulations don't have much impact on employment, and can even prevent worker abuse and inadequate working conditions.
As the job market in the Middle East and North Africa (MENA) region becomes increasingly global and competitive, young people with varying degrees of training and education find themselves struggling to find work. With half its population of 355 million under the age of 25, MENA has the second youngest regional population in the world after sub-Saharan Africa. If this social, economic, and academic malaise continues, a high proportion of the MENA region’s youth will be unable to leave home, get married, and develop independent lives.