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Public Sector and Governance

How do we achieve sustained growth? Through human capital, and East Asia and the Pacific proves it

Michael Crawford's picture
Students at Beijing Bayi High School in China. Photo: World Bank


In 1950, the average working-age person in the world had  almost three years of education, but in East Asia and Pacific (EAP), the  average person had less than half that amount. Around this time, countries in  the EAP  region put themselves on a path that focused on growth  driven by human capital. They made significant and steady investments in  schooling to close the educational attainment gap with the rest of the world. While  improving their school systems, they also put their human capital to work in  labor markets. As a result, economic growth has been stellar: for four decades  EAP has grown at roughly twice the pace of the global average. What is more, no  slowdown is in sight for rising prosperity.

High economic growth and strong human capital accumulation  are deeply intertwined. In a recent paper, Daron Acemoglu and David Autor explore  the way skills and labor markets interact: Human capital is the central  determinant of economic growth and is the main—and very likely the only—means  to achieve shared growth when technology is changing quickly and raising the  demand for skills. Skills promote productivity and growth, but if there are not  enough skilled workers, growth soon chokes off. If, by contrast, skills are abundant and  average skill-levels keep rising, technological change can drive productivity  and growth without stoking inequality.

Bank supports launch of certificate course on contractual dispute resolution in India

Shanker Lal's picture
Powerlines in Mumbai. Photo: Simone D. McCourtie / World Bank


India is the fastest-growing major economy in the world with significant Government investments in infrastructure. According to estimates by WTO and OECD, as quoted in a report from the United Nations Office on Drugs and Crime, India: Probity in Public Procurement, the estimated public procurement in India is between 20 and 30 percent of GDP. 

This translates to Indian government agencies issuing contracts worth an estimated US$ 419 billion to US$ 628 billion each year for various aspects of infrastructure projects. Ideally, in contractual agreements no disputes would arise and both sides would benefit from the outcome. However, unexpected events occur and many contracts end in dispute. Contractual legal disputes devoid project benefits to the public as time and resources are spent in expensive arbitration and litigation. As a result, India’s development goals are impacted.

World Bank challenges and opportunity in fragile states

Sharon Felzer's picture

The fragile and conflict situations in which the World Bank Group supports development programs are seen as a top and increasingly urgent strategic priority for the institution and donors, and the Bank Group is increasing attention and focus there (note the WBG’s paper “The Forward Look”). The statistics related to fragile situations are staggering. Two billion people live in countries where development outcomes are affected by fragility, conflict and violence. Nearly fifty percent of the global poor is predicted to be living in fragile and conflict affected situations by 2030. Terrorism incidents have increased and forced displacement is a global crisis.

The WBG pays close attention to what its key stakeholders in client countries think about development and the work of the Bank through its Country Opinion Survey program - a mandated survey effort that assesses the views of influential across the Bank’s client countries annually (40+ countries/year on three year cycles). By keeping ‘ears to the ground’ it can understand what the institution’s key stakeholders think about their own development situations, the Bank’s work within this context, and how the Bank can increase its value in these increasingly difficult and complicated situations. The data below reflects opinions from more than one thousand opinion leaders in FCV countries.

Best practices in governments making the most of their external advisers

James Harris's picture



Editor's Note: This article originally appeared in 
Project Finance International. A version is reprinted here with their permission.

“How can we as government make the best use of our external advisers?” This is a question we often hear as regular advisers to host governments, or from multilateral or other agencies supporting governments, on the procurement of much needed energy and infrastructure—especially in emerging markets.

Thankfully, this question now comes up more often at the earlier end of the project procurement, rather than near the end. 

Empowering a New Generation of Female Entrepreneurs in Afghanistan

Mabruk Kabir's picture
Photo Credit: Mabruk Kabir / World Bank

Fatima brimmed with optimism. The 19-year-old recently established a poultry enterprise with the support of a micro-grant, and was thrilled at the prospect of financial independence.

“After my family moved from Pakistan, I had few options for work,” she said from her home in the Paghman district in the outskirts of Kabul. “The grant not only allowed me to start my own poultry business, but let me work from my own home.”

With over half the population under the age of 15, Afghanistan stands on the cusp of a demographic dividend. To reach their full potential, Afghanistan’s youth need to be engaged in meaningful work – enabling young people to support themselves, but also contribute to the prosperity of their families and communities.

Judging it smart, Azerbaijan’s courts go digital

Tako Kobakhidze's picture
Baku


















I was back in Baku recently, after a 9 year gap, and guess what I recognized first? Yes, those famous pounding winds – immortalized in the city’s ancient Persian name of Bādkube – or “city of winds”. But as I went about rediscovering this thriving city along the Caspian Sea, I soon realized that I would also be witness to “winds of change”.

Indeed, so much had changed here since my last visit. Most visibly, the urban skyline is now speckled with construction cranes, reflecting a city busy growing upward – its physical outline seeming to transform before my eyes. But infrastructure is just one aspect of Baku’s modern story. Beyond the hectic expansion of concrete and metal, I was also able to observe exciting changes in technology and innovation that are helping to transform an integral part of this city’s life – its judicial services!

WDR 2017 does not disappoint: Four implications for work in development

Rachel M. Gisselquist's picture

As a political scientist specializing in the comparative politics of development, including particular attention to issues of governance and democracy, I have followed this year’s World Development Report with special interest. I have not been alone. WDRs usually attract attention, but this year’s report seems to have attracted more than most. Several constituencies have pushed for some time for a WDR on the topics addressed in this report, and there thus was a lot riding on it in terms of hopes and expectations for a strong statement on governance.

The source of well-prepared projects

Christophe Dossarps's picture


Photo Credit: Flickr user n8agrin

Seven years ago I began working in the infrastructure field, and it has been truly remarkable to witness so much knowledge and so many incredible bright minds dedicated to the cause of providing sustainable and inclusive infrastructures globally, really!
 
During this time, I have realized how crucial project preparation is even though in the scheme of things it seems like a minute phase of a very long infrastructure life cycle. In fact, I compare the project preparation phase to the “cornerstone concept,” defined as the first stone set in the construction of a masonry foundation, important since all other stones will be set in reference to this stone, thus determining the position of the entire structure.
 
In other words, if a project is well-prepared, well designed, well-thought of, it is more likely to flow better across the infrastructure life cycle and provide the desired services to the population, and vice versa.

Private sector engagement is key to success on gender equity

Anabel Gonzalez's picture

Photo: Visual News Associates / The World Bank

As we celebrate International Women’s Day, if there is one concept to keep in mind above all others, it’s that gender equity is vital 24-7-365, and not just as a once-a-year observance.

You have heard the argument before and you will hear it again: Economies cannot reach their full potential if half the population is systematically blocked from full participation. This fundamental idea motivates the World Bank Group as it redoubles its efforts to address gaps in gender equality.

Our deepening work to close key gender gaps shows that the issues go far beyond economic inequity. Barriers to women’s full economic participation also impose moral, emotional and at times even physical costs.

We see this in the laws that prevent wives from making autonomous decisions about their careers. We see it in instances of violence against women in the workplace. We see this when harassment occurs at rural border crossings where women traders can encounter threats, and worse, from border guards.

In developing and developed countries alike, women face obstacles to starting and managing a business, to accessing finance, to earning equal pay for equal work, and to owning land or other assets. Many countries maintain laws and regulations that advantage men while discriminating against women, often relegating them to the status of a legal minor.

As Emeritus Professor Linda Scott of Oxford University’s Saïd Business School told us recently, “Women are economically disadvantaged in every country on the planet” and “women’s economic exclusion imposes a significant drag on world economies and societies.”

A key part of the Bank Group’s gender effort revolves around the importance of leveraging the private sector to ensure that reform goes beyond policy statements and creates real economic benefits for women and men. The Bank Group’s Trade & Competitiveness Global Practice (T&C) has developed an approach to gender equity that focuses on expanding market opportunities, enabling private initiative, and developing dynamic economies.

The work we are doing recognizes the entrenched nature of the obstacles to fuller economic empowerment for women. Achieving results at scale will require sustained commitment. But we also understand the importance of realizing near-term progress to catalyze change, and we recognize how interventions in particular countries can show the way forward elsewhere.

The concept is simple: Good results generate more good results.

How can developing countries make the most of the digital revolution?

Nagy K. Hanna's picture

Also available in: French

Digital technologies have been transforming the global economy. Yet many countries have yet to experience the full developmental benefits of digital technologies, such as inclusive and sustainable growth, improved governance, and responsive service delivery. Given the magnitude of change in competitive advantage that digital technologies can confer on adopters, the risks of slow or poor adoption of these innovations can be dire for industries, governments, individuals, and nations. So, how can policy makers successfully harness the digital revolution for development? This is the motivation behind my new publication: Mastering Digital Transformation (Emerald, 2016).

From my long experience in development assistance, I saw how information poverty in its many forms has led to policy planning and management without facts, disconnected enterprises, inefficient markets, poor service delivery, disempowerment, corruption, and more. The ongoing ICT revolution has been long ignored in development thinking and practice. Development practitioners and ICT specialists remain disconnected. I studied the experiences of countries pursuing digital transformation, and captured key lessons and takeaways in several books.

Digital transformation is not a technological fix, a blueprint plan, a one-off event, or a one-size-fits-all strategy. Rather, it is a social learning process, sustained over time, involving diverse stakeholders. Its ultimate objective is to harness the global digital revolution to meet a country’s specific socio-economic priorities. This process is a marathon, not a sprint. It is driven by vision, leadership, innovation, learning, and partnerships among government, business, and civil society.

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