There was widespread admiration in my Twitter stream yesterday for an article by World Bank Senior Economist Jishnu Das slamming The Economist for its support for making cash transfers to the poor conditional. I am less convinced by it.
Jishnu finds it ‘ridiculous’ that the Economist could reach the conclusion that conditional transfers are attractive based on the following evidence:
School enrolment among families that got conditional grants rose by 41% on average in the various programmes; the increase among those that got unconditional grants was only 23%. If conditions were implicit or soft (eg, if recipients were simply encouraged to take children to school), enrolment merely rose by 25%. The big difference came when conditions were tough (eg, if school attendance was mandatory): that boosted enrolment by 60%, a big bang for the relatively few bucks involved.
As he sees it, without conditions, parents are able to take better account of their own priorities, favouring nutrition or healthcare over education, or simply spending the money on beer so they can relax after a long day at work.
Any imposition of conditions suggests that donors know better than parents and is an example of the ‘purely elitist’ mind-set that bedevils development. “Has our hubris really taken us that far?” he asks, despairingly. “What happened to respect for the poor?” (more…)
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. (more…)
As the competition for president of the World Bank approaches its final stages, it is worth considering what changes ought to be brought in by the new person. One area in need of reform is the Bank’s system of country classifications. Although Robert Zoellick pushed the World Bank to open its much-prized treasure chest of data to the public during his five-year term as president, he did little to reform how the World Bank conceptualized that data. Changing how countries are classified would have a wide impact on the whole development community.
For instance, look at all the discussion in development policy circles about the sharp reduction in the number of low-income countries in recent years. Some believe this news should be trumpeted as a policy success. For others, the reduction suggests that there is a “New Bottom Billion” of poor people living in middle-income countries, forcing a change in donor focus. For yet another group, it indicates that foreign aid as a concept should be updated to blend more loans with grant money.
But has all that much changed? Does the World Bank country classifications accurately identify the countries in need of outside assistance? (more…)
The 2012 World Development Report has a stat that the World Bank is mighty proud of. I’ll let Bank President, Robert Zoellick tell the story:
Imagine if a city of almost four million people disappeared every year. A Los Angeles, Johannesburg, Yokohama. It would be hard to miss.
Yet it goes largely unnoticed that almost four million girls and women “go missing” each year in developing countries.
It’s a shocking statistic. For comparison, AIDS and TB each kill around 1.7 million people a year – malaria a million. So why are so many women missing? What’s happening to them? And what does the Bank want to do about it?
Burrow into the report and the total drops a bit – to 3.882 million. A third of the ‘missing’ are from China, 30% from Sub-Saharan Africa, and 22% from India. The two big rising powers and the countries of the world’s poorest region clearly have some questions to answer.
The initial analysis follows a well-trodden path. According to the Bank, the largest group, 37%, are ‘missing at birth’. This is largely a problem for China and India (95% of missing baby girls). Many parents in these countries want sons rather than daughters, and are prepared to use ultrasound and abortion to make sure they get them.
It’s when we move onto infant mortality that the WDR gets into trouble. 617,000 of the missing (16% of the total) are girls who die before the age of 5, it reports. These girls die in much larger numbers than their brothers because they are neglected by their parents and are starved of healthcare by the prejudiced societies into which they have the misfortune to be born. Right?
Well no, not at all, as it happens.
As the spotlight shifts from the UN General Assembly and world leaders converge on Pittsburgh for the G20, there’s been much debate about the prospects for success and the competing agendas of member countries.
– The core negotiations seem set to finalise agreement over a “framework for balanced and sustainable growth” – particularly critical from US and Chinese perspectives – that seeks to give the IMF a greater reporting role in policing global imbalances. The FT’s Money Supply blog offers a sceptical comparison of the leaked draft agreement with the IMF’s current role.
– As to the Europeans: Gordon Brown seems to be adopting a broader focus, calling in an NYT op-ed for “a new system of governance” to form the “next common economic goal”. (He also announced that UK Business Minister Shriti Vadera would be going on secondment to the South Korean government to help develop proposals on global financial architecture ahead of their G20 presidency next year.) For Angela Merkel, the “most important subject” is financial regulation; she argues that “we must not search for substitute issues”; and for Sarkozy too, the top priorities look to be bankers’ bonuses and agreement over capital requirements for banks.
– Trade and protectionism are sure to form another important aspect of negotiations, particularly for China and India. VoxEU takes an interesting look at trends in world trade since the November 2008 Washington Summit, highlighting how G20 states’ oft-proclaimed commitment against protectionism has been broken by member governments approximately once every three days since last year’s commitments. “No other statistic”, Simon Evenett argues, “better demonstrates the paucity of global leadership on contemporary protectionism”.
– Robert Zoellick, President of the World Bank, calls for the summit to focus on the world’s developing economies, highlighting the positive contribution they can make to the health of the global economy. Pittsburgh, he argues, can mark the advent of a more “responsible globalisation” founded on “multiple poles of growth”. Brazilian President, Luiz Inácio Lula da Silva, meanwhile, presents his take on the G20 grouping in the LA Times.
– Around the think tanks, finally: Brookings has an in-depth report focusing on some of the broader implications of the G20 agenda, from the protectionism issue to African and Latin American perspectives, as well as assessing the G20’s approach to climate change. The Carnegie Endowment, meanwhile, has an interesting take on Saudi Arabia’s approach to the summit, given its increasing exposure to instability in the financial markets and vulnerability to shifts in oil and food prices.
Elsewhere, Chatham House has analysis of some of the key short-term economic indicators, as well as long-term GDP forecasts – arguing that it is still to early too be coordinating exit strategies. The Canadian-based Centre for International Governance Innovation, meanwhile, takes a comprehensive look at some of the challenges facing the G20 as a forum for global economic governance, with contributions from policymakers and academics alike.