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Poverty

Seven ways to think like a 21st-century economist

Phil Hay's picture

Having just published her new book called Doughnut Economics, Kate Raworth —a senior visiting research associate with Oxford University's Environmental Change Institute—is touring the world, appealing to people to break their global worship of growth; redesign money and finance; and to create economies that are regenerative and redistributive, and serve the interests of people worldwide, not just Audi drivers.    

As Raworth readies her slides for the presentation, it feels like more ritualistic torture is on the way for devotees of economics.  Scorned and roughed up for not warning beforehand about the 2008/9 financial crisis, and then lumped in with the backlash against "experts" in the recent UK Brexit vote, economists are being force-fed humility these days. Perhaps it's just a market correction towards the real calling for economists which John Maynard Keynes once envisaged as, "If economists could manage to get themselves thought of as humble, competent people on a level with dentists, that would be splendid."

Kate Raworth's flier for the May 11 event at the World Bank, promised that her game-changing analysis and inspiration for a new generation of economics thinkers will be "simple, playful, and eloquent."

Raworth starts off with her trademark pitch that "economics is the mother tongue of public policy" but when confronted with climate change, inequality, and the other arresting challenges of our present age, its hallowed ideas are centuries out of date and need to be junked. She uses the image of a doughnut to chart social and planetary boundaries consistent with achieving the SDGs and to depict where the "sweet spot" of progressive human prosperity lies. Threats to social justice and the planet's future lie outside the doughnut ring in pulsating red beams.

Charting a new path to income convergence

Margaret McMillan's picture

Developing countries made considerable gains during the 2000s, resulting in a large reduction in extreme poverty and a significant expansion of the middle class. More recently that progress has slowed—and the prognosis is for more of the same, given an environment of lackluster global trade, a lack of jobs coupled with skills mismatches, greater income inequality, unprecedented population aging in richer countries, and youth bulges in the poorer ones. As a result, developing countries are unlikely to close the development gap anytime soon.

eMBeDding behavioral insights in development projects – an update

Renos Vakis's picture

Also available in: Español, Français中文

People think fast and often automatically, respond strongly to social incentives, and use mental models or specific worldviews to interpret information and perceptions. So, shouldn’t we be taking into account their thinking and behaviors while designing policies? 

Unequal opportunity, unequal growth

Roy Van der Weide's picture

Inequality can be both good and bad for growth, depending on what inequality and whose growth. Unequal societies may be holding back one segment of the population while helping another. Similarly, high levels of inequality may be due to a variety of factors; some good, some bad for growth.

Big data is all around. How do we harness it to drive the change we need?

Andrew Steer's picture
Today’s technological revolution is generating a wealth of social and environmental data. Every day, the world produces a staggering 2.5 quintillion bytes of new data.
 
Our ability to collect and process complex information has the potential to transform how we manage our environmental footprint. But creating information and actually using it to drive change that benefits both people and the planet are two very different things.
 

Falling inequality: A Brazilian whodunnit

Francisco Ferreira's picture

Long one of the world’s most unequal countries, Brazil surprised pundits by recording a massive reduction in household income inequality in the last couple of decades. Between 1995 and 2012, the country’s Gini coefficient for household incomes fell by seven points, from 0.59 to 0.52. (For comparison, all of the inequality increase in the United States between 1967 and 2011 amounted to eight Gini points – according to this study.)

Trade has been a global force for less poverty and higher incomes

Ana Revenga's picture

In the ongoing debate about the benefits of trade, we must not lose sight of a vital fact. Trade and global integration have raised incomes across the world, while dramatically cutting poverty and global inequality. 

Within some countries, trade has contributed to rising inequality, but that unfortunate result ultimately reflects the need for stronger safety nets and better social and labor programs, not trade protection.

Making growth inclusive: Challenges and opportunities

Vinaya Swaroop's picture
Many advanced economies are experiencing rising income inequality which has raised questions about the benefits of globalization.  Given the growing backlash against perceived job losses associated with the free movement of goods and people particularly in the US and Europe, economists and other development practitioners are renewing their efforts in making economic growth more inclusive and have focused their attention on how to share prosperity equitably.

A review of How China Escaped the Poverty Trap by Yuen Yuen Ang

Yongmei Zhou's picture

We chose to highlight this book for the World Development Report (WDR) 2017 Seminar Series as its focus on institutional functions rather than forms and on adaptation resonates strongly with the upcoming WDR 2017.

The first takeaway of the book, that a poor country can harness the institutions they have and get development going is a liberating message. Nations don’t have to be stuck in the “poor economies and weak institutions” trap.  This provocative message challenges our prevailing practice of assessing a country’s institutions by their distance from the global best practice and ranking them on international league tables. Yuen Yuen’s work, in contrast, highlights the possibility of using existing institutions to generate inclusive growth and further impetus for institutional evolution.

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