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Latin America & Caribbean

Cycling Backwards to Policy Victory

Willy McCourt's picture

Nick Manning’s two recent blogs (here and here) raise an important issue. On the one hand, people interested in development have big ambitions. We want not just more, but dramatically more people to be educated, healthy and prosperous, to name only three good things. If we are lucky enough to have some influence over governments and development agencies, we might be tempted to work from the top down to get what we want, turning those ambitions into public policies and programs, and rolling them out by the yard like so much cheap office carpet. 
 
But on the other hand, the same human values that make us want those things make many of us sympathize with the bottom-up tradition that takes individual humans or small communities as its starting point. We know how a state planning juggernaut led to the terrible famines in the Soviet Union in the 30s and China in the late 50s.  We know the horrors that followed Year Zero in Cambodia.  Schumacher’s Small is Beautiful and James Scott’s Seeing Like A State are touchstone texts.  Likewise, some of us have an instinctive preference for ‘searchers’ over ‘planners’, ‘positive deviance’ and ‘problem-driven iterative adaptation’.

Better Public Sector Projects Which Don't Matter?

Nick Manning's picture

SDM-IN-042 World Bank In last week’s post, I asked whether Governance and Public Sector Management (GPSM) projects are having much large scale impact. It is tempting to reduce this to the question of why don’t development projects which focus on this work more often (although their track record is perhaps not as limited as some reviews of donor assistance might suggest). From this starting point, recent thinking suggests that donor rigidity and project designs which fix the visible form without improving the underlying public management function are the problem.   
 
The remedy, as set out most prominently in “Problem Driven Iterative Adaptation” and in the World Bank’s own Public Sector Management Approach, suggests that we should focus on the de facto rather than the de jure and adapt the nature of our support as project implementation unrolls. Problem-driven iterative adaptation (PDIA) approaches are referred to in recent reforms of Ministries of Finance in the Caribbean and reform approaches in Mozambique and in Burundi. Bank interventions in Sierra Leone and in Punjab have been cited as examples of this approach in practice.

Growth Without Apology

Shanta Devarajan's picture

 Chhor Sokunthea / World BankFrom 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.

Development Assistance in Governance and Public Sector Management: Does It Ever Make a Big Difference?

Nick Manning's picture

Mother and boy being attended to by Health Education nurse

Are there examples of large scale development achievements which are likely attributable to development assistance? At the least there is the Marshall Plan (1948-1952), the “Green Revolution,” and global health programs which largely eradicated smallpox. At the country level, Korea, Taiwan, and Botswana are often cited as aid success stories with remarkable economic progress following significant aid infusions. So the summary answer is probably (and the answer might be more affirmative if we addressed the perennial problem of poor data collection). But if we apply the additional filter of “what did this have to do with assistance concerning governance and public sector management?” the answer is, at best, maybe.

Taking the example of the major public health advances supported by donors, advances in the measurement of health impacts in the early 2000s led to major costs savings and efficiencies in HIV/AIDS and malaria programs, the Global Polio Eradication Initiative had clear impact, the annual Human Development Reports have charted some truly outstanding areas of progress and there has been some, halting, progress towards attainment of the Millennium Development Goals.  However, it seems that few of these gains seem have deep roots in the improved performance of governments. Development assistance seems able to trigger improvements through standalone arrangements outside of the public sector and through logistical efforts to move material (pumps, vaccinations, and medical supplies). It does not seem to be so good at large scale governance and public sector management (GPSM) improvements.

What Does Piketty’s Capital Mean for Developing Countries?

Gabriel Demombynes's picture

The economics book that has launched a thousand blog posts, Thomas Piketty’s Capital in the Twenty-First Country, tells a grand story of inequality past and present. One would expect that a book on global inequality would have much to say about development. However, the book has limited relevance for the developing world, and the empirical data he marshals for developing countries is weak.

Piketty’s central story is that convergence in the developed world and slower population growth will leave us with a permanently modest economic growth rate (g). Coupled with a constant return to wealth (r), concentration of capital ownership, and high rates of savings among the wealthy, the low g leads to rising wealth inequality over a longish run—something like the second half of the 20th century.

A low-g future for the developed world is a mostly uncontroversial assumption. (He assumes future GDP per capita growth of 1.2 percent for the U.S.) But Piketty draws conclusions for the world as a whole, and we are a long way from global convergence. As Branko Milanovic noted in his review, catch-up growth could fend off Piketty’s inequality dystopia for some time.
 

ست استراتيجيات لمكافحة الفساد

Augusto Lopez-Claros's picture
Also available in: English

بعد أن تعرفنا على بعض الطرق التي يضر بها الفساد النسيج الاجتماعي والمؤسسي لبلد (e)ما، ننتقل إلى خيارات الإصلاح المتاحة أمام الحكومات للحد من الفساد والتخفيف من آثاره. وتوصي روز أكرمان (1998) باستراتيجية ذات شقين تهدف إلى زيادة فوائد الأمانة ورفع تكاليف الفساد، وهي عبارة عن مزيج معقول من الثواب والعقاب باعتبارهما القوة الدافعة للإصلاح. هذا موضوع كبير. ونناقش فيما يلي ستة نُهج تُكمل بعضها بعضاً.

The Tyranny of Aid Critics

Shanta Devarajan's picture

Charles Kindleberger (h/t Gerry Helleiner) asserted that all reviewers can be counted on to say three things about a book: “It isn’t new. It isn’t true. And I would have said it differently.”  Notwithstanding their internal contradictions, these statements summarize my thoughts on Bill Easterly’s latest book, The Tyranny of Experts.

It isn’t new. The main point of the book is that the rights of the poor have been systematically undermined, directly by governments, especially authoritarian ones; and indirectly by “experts”, who either prescribe technical solutions that ignore poor people’s ability to come up with their own solutions, or provide legitimacy to these autocratic regimes so that they continue to suppress the poor.  Bill illustrates this point with three historical examples—China between the world wars, Africa at independence, and Colombia in the 1950s—where a combination of western (in some cases, colonial) interests and local elites conspired to keep the large majority of poor people poor for a long time.  The analytical backdrop to these three case studies is the “debate”—a debate that never took place—between two Nobel-prize-winning economists: Gunnar Myrdal, who advocated government intervention to improve the lot of the poor; and Friedrich Hayek, who believed in protecting the individual rights of the poor as a means of their escaping poverty.

Six Strategies to Fight Corruption

Augusto Lopez-Claros's picture
Also available in: العربية

Having looked at some of the ways in which corruption damages the social and institutional fabric of a country, we now turn to reform options open to governments to reduce corruption and mitigate its effects. Rose-Ackerman (1998) recommends a two-pronged strategy aimed at increasing the benefits of being honest and the costs of being corrupt, a sensible combination of reward and punishment as the driving force of reforms. This is a vast subject. We discuss below six complementary approaches.

Statistical Earthquakes

Homi Kharas's picture

The New ICP Data and the Global Economic Landscape

The new report of the International Comparison Program published last week promises to invigorate debate about the global economic landscape. In some areas, the report challenges conventional wisdom. In other areas, it reinforces the narrative.

The headline change according to The Economist is the rise of China to potentially become the largest economy in the world by the end of 2014. According to Angus Maddison, the United States’ economy became the largest in the world in 1872, and has remained the largest ever since. The new estimates suggest that China’s economy was less than 14% smaller than that of the US in 2011. Given that the Chinese economy is growing more than 5 percentage points faster than the US (7 percent versus 2 percent), it should overtake the US this year. This is considerably earlier than what most analysts had forecast. It will mark the first time in history that the largest economy in the world ranks so poorly in per capita terms. (China stands at a mere 99th place on this ranking.)

Rights and Welfare Economics

Shanta Devarajan's picture

ML028S19 World Bank Some 135 countries have constitutional provisions for free and nondiscriminatory education for all. Seventy-three countries guarantee the right to medical services. And 41 countries have either enshrined the right to water in their constitutions or have framed the right in national legislation.  All of these actions are aimed at protecting the rights of poor people. 

Yet, it is poor people who are losing out on access to these services.  In Mali, whereas almost everyone has access to a primary school, and 67 percent from the richest quintile complete primary school, only 23 percent from the poorest quintile do.  The percentage completing higher levels of education is in the single digits. In rural India, in the period since the Right to Education act was passed, student learning outcomes in public schools have been declining.  Equatorial Guinea, with a per-capita income of $20,000, has a child mortality rate of 118 per 1,000 births, comparable to that of Togo with a much lower per-capita income.  As a result of intermittent (or nonexistent) water supply through networks, poor people in South Asia and Africa have to buy water from vendors at 5-16 times the meter rate.

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