Development is about big systemic changes, complex tradeoffs, political choices and how the fruits of growth are channeled for the greater good. It is also about broadening opportunities – a goal that if neglected can result in frustrated citizens and tumult as we have seen in the North Africa and Middle East.
These were some of the many messages I took away from the ABCDE conference just held in Paris.
The parallel session on “Evaluating cash transfers – Latin American and African Experiences” at the ABCDDE 2011 centred on the evaluation of social protection programs that distribute cash to the poor, a topic that has been widely discussed by members of the Poverty Reduction, Equity and Growth Network (PEGNet) which organised the session. In accordance with PEGNet’s focus on fostering the exchange between academics and practitioners, the session brought together experts from both spheres. All the speakers were PEGNet members and one was a winner of the PEGNet Best Practice Award for effective cooperation between research and practice.
Experiences from cash transfer programs in Uruguay and Ghana were presented by Andrea Vigorito (Universidad de la Republica, Uruguay) and Robert Osei (ISSER, University of Ghana). In the third presentation the research perspective was confronted with views from development practice by Eva Terberger (KfW Development Bank). Her presentation and the following discussion clearly showed how, in particular in the field impact evaluation, researchers in development economics and policy makers can learn from each other and how large the potential for cooperation is.
(Parallel Session 16 at the ABCDE, Paris)
Gender equality has not been achieved yet, and progress comes at a different pace across countries and across different dimensions of gender equality. In some domains, as childcare, access to some occupations and sectors, and dimensions of agency, change has been limited or negligible. Even in the domains where improvements have been widespread, as in education, the change has not reached all groups within a population or occurred at the same pace across countries.
Why improvements have come so quickly in some domains while there has been little change in others? One possible explanation that has been recently receiving much attention among the academic community is gender roles, which are in turn the result of differences in biological responsibilities and in preferences between men and women, but also of social norms.
Day two of the 2011 ABCDE conference has just finished and so far, the conference has given me a lot to think about. There seems a growing consensus that high levels of inequality are not conducive to sustained growth and development. At the Development Centre we go beyond this, arguing that societies that are growing rapidly and undergoing significant structural changes could see their growth trajectories compromised unless they put in place policies to help manage the process.
What is less clear is what policies should be employed, and in what order. Given the extensive changes that many countries are experiencing, focusing on inequality or poverty reduction is not enough. Rapid economic growth may be instrumental to reducing poverty, but if large parts of the population get absorbed into the informal sector for example, then these “non-poor” will remain very vulnerable over time.
(Summary of parallel session 10 at the ABCDE, Paris)
This session involved the presentation of three papers. The first looked at the importance of high food prices for poverty in developing countries. The second looked at the optimal policies for an individual country using trade policies to insulate its market from price volatility in the world market. And, the third considered the implications of the policies actually undertaken by developing countries.
The first paper presentation showed that high food prices raise poverty substantially, implying that policy makers in developing countries are right to be concerned. The second showed that—for individual countries—an appropriate response to high food prices appears to be use of export restrictions in exporting countries or reductions in import barriers in importing countries. The third showed that most countries actually respond in this way, but that these actions are collectively ineffective in reducing the volatility of domestic prices. What appears to be needed is to identify policies that can more effectively deal with the problem of food price volatility.
‘Social protection for inclusive development’ is a timely topic. The G20 ‘Seoul Development Consensus (2010)’, identified growth with resilience as a key pillar. Furthermore, the recent prevailing uncertainty (economic, political and environmental) reinforces the needs for measures, such as social protection, to both safeguard as well as promote development. More broadly, a consensus is emerging that social protection is an important instrument in supporting progress towards inclusive growth and the Millennium Development Goals (MDGs), especially in those situations (covariate shocks, imperfect markets) where remittances and other private safety nets might be insufficient (see Nyarko).
The session Social protection for inclusive growth (based on contributions to the European Report on Development 2010) reviews new generation programmes, emphasising reasons for success and failure. It highlights the features which make social protection possible, affordable and feasible even in low-income countries. Evidence presented shows that social protection programmes can mitigate risks and reduce chronic poverty and vulnerability without producing significant distortions or disincentives (Klasen on South Africa). Besides South Africa and the well known cases of Brazil, Mexico, other recent programmes have been effective in reducing poverty and inequality (cf Table 1 and ERD 2010 for evidence).
Recent years have seen growing attention to inequality of opportunity and how processes of economic development are shaped by, and in turn shape, such inequalities. One strand of research has been concerned with the development of methods to quantify the extent of inequality of opportunity as well as the impact of interventions and policies on such inequalities. I am organizing a parallel session on May 30 as part of the ABCDE conference that will present three studies that aim to substantially extend this measurement agenda.
A paper by Dirk van der Gaer will describe recent research that proposes a methodology to evaluate social projects from an equality of opportunity perspective. The approach looks at the effect of a social program on the distribution of outcomes conditional on morally irrelevant characteristics (such as education level and indigenous background). The methodology is applied to evaluate the effects of Mexico’s opportunidades program on children’s health outcomes.
Skills affect individual and firm productivity as well as countries’ prospects for sustained and faster economic growth. Yet evidence exists that many employers are concerned about skills constraints (see figure below); and that in many countries, unemployment and underemployment among educated youth are a problem.