What the World Bank Does Not Understand About “Doing Business”

World Bank Doing Business

In its 10-year history, the World Bank’s Doing Business Report has achieved enormous influence. The annual study, one of the flagship knowledge products of the World Bank, is the leading tool to judge the business environments of developing countries, generating huge coverage in the media every year. Several countries—such as Rwanda—have used it as a guide to design reform programs. For its part, the Bank has advised over 80 countries on reforms to regulations measured in the DB. Its influence stretches even to academia, with over 1,000 articles being published in peer-reviewed journals using data in the index.

But does it focus on the most important issues for companies in less developed countries?

Based on my own almost 20 years of experience doing business in places such as Nigeria, Turkey, and China, the answer is no. Continue reading

Stuart Hall – The danger of anonymity for rape defendants

When the UK’s coalition government came to power, Conservatives and Liberal Democrats promised that they would increase ‘fairness in the justice system’ by providing defendants in rape cases with anonymity. This had been Lib Dem policy since 2006, while the coalition’s Justice Minister, Crispin Blunt, had supported anonymity while a Conservative backbencher.

Subsequently, however, Blunt was forced to drop the proposal after a MoJ report found a lack of evidence on the likely impact on convictions. According to the minister:

Evidence is lacking in a number of key areas, in particular, whether the inability to publicise a person’s identity will prevent further witnesses to a known offence from coming forward, or further unknown offences by the same person from coming to light.

Today’s conviction of veteran BBC broadcaster, Stuart Hall, for 14 counts of indecent assault on young girls demonstrates this was the right decision. Hall was also accused of rape (the charge remains on file), so would have been able to keep his name away from the media.

But we now have testimony from one victim, assaulted by Hall when she was 17, that she only came forward because she heard that he was being investigated.

After the Jimmy Saville case came out, I said to family I wouldn’t be at all surprised if Stuart Hall would be next and, within three weeks, it was coming out…

Hearing it on the radio I said to my husband: “What do I do? What do you think’s best?” My husband has known for thirty-six years what happened. When I heard it on the radio, I then got in touch with the local police.

Independent statements from victims who did not know each other was vital to building a case against Hall after so many years had passed. Anonymity would have stopped that happening. While terrible for the innocent, those accused of sex offences must continue to be named.

Update: An opinion poll published today reveals strong support for anonymity:

Three out of four people believe that people accused of rape and other sexual assaults should have their identities protected until they are convicted.

A ComRes survey for The Independent found strong public support for the controversial view expressed by Maura McGowan, chairman of the Bar Council, who argued that suspects in sex cases should enjoy the same right to anonymity as defendants.

In this case, 76% of the public, and the head of the Bar Council, are wrong.

Post-2015: is there any point?

This month, the UN High-level Panel on the Post-2015 Development Agenda moves in to the home straight, with its report due to be submitted to the Secretary-General on the 1st of June. So is it going to amount to anything? Well, Duncan Green certainly isn’t holding his breath:

The post-2015 discussion typifies the kind of ‘magical thinking’ that abounds in aid circles, in which well-intentioned developmentistas debate how the world should be improved. These discussions and the mountains of policy papers, blogs etc that accompany them, are often based on what I call ‘If I ruled the World’ (IRW) thinking. IRW, then I would do X, Y, Z – Rights for (disenfranchised group of your choice)! More Infrastructure! Better Data! Jobs!

Owen Barder, for his part, observed a month ago that “it would simplify my twitter timeline if people would tweet things they think should NOT be a central plank of the post 2015 framework”.

And it is indeed becoming increasingly apparent that in NGOs, UN agencies, foundations and, yes, governments all around the world, a coterie of aid industry hacks is having a lovely time playing ‘fantasy development goals’ without feeling any particular pressure to consider what exactly is supposed to happen as a result of a glossy new set of targets.

This irks Duncan, who observes acidly: “What, after all, is the point of the post-2015 process, beyond creating (another) international forum for debating development?”

This is what the NGOs like to call ‘good challenge’, and this is the right moment to be asking it. The post-2015 agenda needs (more development jargon incoming) a theory of influence. So here for what they’re worth are five possible (and not mutually exclusive) answers to his question. Continue reading

Wow (updated x2)

UK Secretary of State for International Development Justine Greening in a speech today:

“South Africa has made enormous progress over the past two decades, to the extent that it is now the region’s economic powerhouse and Britain’s biggest trading partner in Africa. We are proud of the work the UK has done in partnership with the South African government, helping the country’s transition from apartheid to a flourishing, growing democracy.

“I have agreed with my South African counterparts that South Africa is now in a position to fund its own development. It is right that our relationship changes to one of mutual co-operation and trade, one that is focused on delivering benefits for the people of Britain and South Africa as well as for Africa as a whole.”

Media release from South African Department for International Relations and Cooperation, a few hours later:

UK unilateral decision to terminate Official Development Aid to SA

The South African government has noted with regret the unilateral announcement by the government of the United Kingdom regarding the termination of the Official Development Aid to South Africa as from the year 2015.

This is such a major decision with far reaching implications on the projects that are currently running and it is tantamount to redefining our relationship.

Ordinarily, the UK government should have informed the government of South Africa through official diplomatic channels of their intentions and allowed for proper consultations to take place, and the modalities of the announcement agreed on. We have a SA/UK Bilateral Forum which is scheduled for some time this year and the review of the SA/UK strategy which includes the ODA, would take place there and decisions about how to move forward were expected to be discussed in that forum.

This unilateral announcement no doubt will affect how our bilateral relations going forward will be conducted.

What the hell happened?

Update: the Guardian has this from a DFID press officer:

Today’s announcement comes after months of discussions with the South African government. DfID ministers and senior officials have met with the South African government on many occasions to discuss our decision.

An observation: this looks like a retreat from the original wording of Greening’s speech: calling it “our decision” sounds rather different (read: unilateral) from Greening’s argument that she and her South African counterparts had “agreed” that SA was now in a position to fund its own development.

Update 2: Foreign Secretary William Hague has now entered the fray, intoning magisterially that “I am not going to fling accusations” while making clear – in the same sentence, no less – that the whole kerfuffle is the result of “bureaucratic confusion, perhaps on the South African side”. But here’s the key quote:

“We don’t continue to give aid to countries that are raising their incomes, that have growing economies.”

Surely this bold new doctrine rules out most – or possibly even all – of the countries that DFID spends money on? I love policy made up on the hoof. It’s always such fun.

The future of global poverty: What if there were multiple horizons for aid post-2015?

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A Brookings paper out this week (here) does something a set of papers have sought to do recently – that is make projections about the future of global poverty.

These kind of papers have significant policy implications because it is only by understanding both the future scale and anticipated locations of poverty that properly informed debates can be had on the scale and objectives of future international aid. And of course the whole post-2015 debate is mushrooming (see the latest here).

In a new paper, we, meaning Peter Edward and myself, add to the debate by looking across a wide range of scenarios and methods to see the level of uncertainty and bias built in to these kind of forecasts.

We have three conclusions across a range of scenarios and approaches that somewhat tally with the Brookings paper but with some quite important differences.

First, ending extreme poverty is plausible but the level of uncertainty is enormous.

Across a wide range of scenarios, using different assumptions and methods, we find that it is plausible that $1.25 and $2 global poverty will reduce substantially by 2030. However this is by no means certain.

Different methods of calculating and forecasting poverty numbers give very different results as do an approach which takes account of changes in inequality.

Uncertainties over future, and even current, poverty levels are especially high for India and China (where half of the world’s poor people currently live).

While it is likely that poverty in those countries will reduce dramatically by 2030 it is difficult to have much certainty over just how large those reductions will be. Because of these uncertainties it is possible to conceive, under different growth scenarios and different assumptions about future inequality, that $2 poverty could be eradicated in India and China by 2030 or that it could be at or above current levels.

Second, don’t get too hung up on fragile states (at least not as the OECD defines them) because global poverty may well not be concentrated in such countries in the future – at least it is not a given.

Depending on what happens to inequality much of world poverty could still be in Middle Income Countries (MICs) but better still maybe it’s time to dump such aggregate classifications by income and fragility (both conflate so many different types of countries it raises questions about their usefulness).

If we take the groupings for a moment, currently most poverty is in middle income countries (MICs) and even when China and India are removed from the picture poverty is still more or less evenly divided between MICs and low income countries (LICs). Even with those two countries excluded the forecast poverty reductions in the remaining MICs are not so large, nor so certain, as to justify in themselves the view that poverty in the future will be a matter for LICs primarily.

In fact, once recategorisations are taken into account it seems that poverty outside India and China will remain roughly evenly distributed across MICs and LICs in 2030.

And looking to other possible classifications it may be that the World Bank’s shorter list of ‘fragile situations’ that emphasizes conflict/post-conflict countries is more useful but even then the UN’s widely used Least Developed Countries (LDCs) categorization might be just as useful or more so.

Further, we find certain kinds of method produce a bias towards moving global poverty into fragile states simply by the approach taken.

Third, it is startling just how much difference changes in national inequality could make – suggesting support for greater attention to this is the key implication of all these future projections.

Forecasts of global poverty are very sensitive to assumptions about inequality. In one scenario, we found that the difference between poverty estimated on current inequality trends versus a hypothetical return to ‘best ever’ inequality for every country could be an extra billion $2 poor people in 2030.

Taking a different scenario  – one of optimistic economic growth, $2 poverty could fall from around 2 billion today to 600m by 2030 – if every country returned to ‘best ever’ inequality.

However, if recent trends in inequality continue it could rise there could be an additional 400m $2 poor in 2030 compared to today.

In sum, despite all these uncertainties there is benefit in using the available data to attempt to estimate global poverty in the future.

What actually matters is recognizing the uncertainty and bias and taking the time to look across a wide range of scenarios, approaches and assumptions for commonalities in future projections and then to be informed by that rather than the next set of poverty projections.

“Within this Famine Pit lieth the unknown dead.”

faminepitlong

At this year’s G8 summit in Loch Erne, Northern Ireland,  world leaders will meet to tackle the causes of global hunger. Sometimes the answer is right beside us. Close to the summit venue, in the grounds of a village church in Ardess, Fermanagh, a stone tribute reads simply “Within this Famine Pit lieth the unknown dead.” Perhaps the leaders should visit. Perhaps, too, they could consider the lessons of that history so they are not condemned to repeat it. Here are just a few:

  1. What is at stake is literally a matter of life and death. The million people who died in the Irish Famine in the Nineteenth Century, or the two million children dying every year from malnutrition globally in 2013, need to be remembered. They should be in leader’s minds when they ask themselves if something is “too difficult” or “will need more time”.
  2. Hunger is what happens when politicians fail. As the British Government acknowledged a century and a half after the Irish Famine,  “those who governed in London at the time failed their people.” As Mo Ibrahim says, “When a child dies of hunger it is first and foremost a responsibility of government.” 
  3. To tackle hunger, politicians need to be bold – in Nineteenth Century Ireland landgrabs by powerful land owners exacerbated poverty and conflict. Now, in developing countries, land the size of London is being bought and sold every six days, and the people living on the land sometimes don’t find out it’s been sold till the bulldozers turn up. It will take courage to take it on such a big issue. But if it’s not taken on now it will only get worse.
  4. Everyone will remember what the politicians do about it. For generations to come people will remember them. Will another apology need to be issued by future leaders for those who failed on hunger in Fermanagh in June 2013? Or will there instead be a celebration of those who that month started us on the road to Hunger Zero?
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