We’ve all been there. Leafing through a magazine, or on the subway, glancing up at the billboards, and then a moment of painful awareness as our eyes meet those of a starving child. Limbs grotesquely proportioned, belly distended, the image is accompanied by a request for help. For some small sum of money you too can save a life. Again you see the image… and reach for your phone. You text CHILD or SAVE or LIFE to the relevant organization. Then, conscience temporarily assuaged, you encounter a sinking feeling as you remember you’ve seen this before. How exactly will your donation help the child? What purpose do these images really serve?
Growing up in a tropical country, one of us (Alfredo) was acutely aware of mosquito-borne diseases such as dengue and malaria. For many years now, vector-control strategies were—and still are—promoted by government- and school-led campaigns to limit the spread of these diseases. Consequently, it is somewhat alarming to know that diseases spread by mosquitoes remain an enormous challenge facing large parts of the developing and even developed world, particularly sub-Saharan Africa. It is perhaps less surprising that our shared interest in the health sector has resulted in a joint paper on assessing the overall quality of the health care system via compliance with established treatment guidelines.
Scan the United Nations’ 17 Sustainable Development Goals (SDGs). You’ll see inclusive growth, clean water and greater equality, among other objectives. But you won’t see this: Giving people access to savings accounts, loans, insurance and other financial services.
Rationale and Goals
The World Development Report (WDR) 2017 seeks to shed light on how a better understanding of governance can bring about more effective policy interventions to achieve sustainable improvements in development outcomes.
The Report makes three main arguments. First, it illustrates how for policies to achieve development outcomes, institutions must perform three key functions: enable credible commitment, enhance coordination, and induce cooperation. Thus, laws and institutional forms matter only to the extent that they are able to generate these functions to induce the behavior of actors necessary to implement desired policies.
If you have been listening lately to Robert ‘Bob’ Gordon, an economics professor at Northwestern University, he will tell you that the days of great inventions are over. This in turn, has led to a significant slowdown in total factor productivity – a measure that economists use to measure innovation and technical progress. Falling productivity is one of the main reasons for growth shortfall in advanced economies like the United States.
Eager to know more about this seemingly worrisome and pessimistic thesis, which has attracted a lot of attention among economists and the media, we invited Gordon to give a talk at the World Bank.
Microfinance institutions aim to serve customers ill-served by traditional commercial banks and thus the associated business model is challenging by definition. And yet the industry has achieved impressive scale reaching 211 million customers globally in 2013. Paradoxically, recent evidence suggests that the benefits of microcredit to borrowers may be modest. For example, six prominent randomized controlled trials found small impacts of access to microcredit on the incomes and consumption levels of marginal borrowers, though the studies found some “potentially important” (though modest) impacts on “occupational choice, business scale, consumption choice, female decision power, and improved risk management.” (Banerjee et al., 2015, p. 14).
South Africa’s social assistance system – through a comprehensive set of cash transfers -- covers nearly 16 million people. This is a big improvement from 1994, when cash transfers reached fewer than three million beneficiaries and suffered from discrimination and weak administration.
Estimates suggest that cash transfers in South Africa raise market incomes of the poor by a factor of 10, far greater than in other middle-income countries, including Brazil - often celebrated for its successful social assistance. Access to safety nets contributed to reducing poverty and inequality and had positive development impacts on health, schooling, and labor supply.
The categorisation of countries into relevant international benchmark indices affects the allocation of capital across borders. The reallocation of countries from one index to another affects not only capital flows into and out of that country, but also the countries it shares indices with. This column explains the channels through which international equity and bond market indices affect asset allocations, capital flows, and asset prices across countries. An understanding of these channels is important in preventing a widening share of capital flows being impacted by benchmark effects.
Energy prices play a key role in the determination of food prices. The post-2006 boom of food prices was partly driven by higher energy costs, and the weakness in energy prices since 2014 is expected to hold food commodity prices down in the future as well.
I’ve suggested recently that although high economic growth in recent decades has greatly improved average life expectancy, infant mortality, and other leading indicators policymakers and development practitioners were still worried about the sustainability of these trends and whether people in developing countries would eventually enjoy the high standards of living of high-income countries. This, against the background of a planet under increasing stress, particularly as a result of climate change. In this blog, I explore some of the actions needed to sustain our global economy.