Reflections on development and governance
Offers succinct commentary on topical issues that cut across both rich and poor countries. Entails critical insights on poverty, inequality, health, macro-policies and many more
Chris Dillow, perhaps the most erudite and lucid blogger on economic issues in the UK, was asked in a 2005 interview: Why do you blog?
His response: I’m arrogant enough to think I’ve got something worth saying, and stupid enough to think anyone cares.[1]
[1] http://normblog.typepad.com/normblog/2005/11/the_normblog_pr_1.html
It is useful to go ‘inside’ an organization in order to understand its external manifestations. The World Bank, which is now 70 years old, is, as we all know, a pivotal player in global development both through its lending operations and, more importantly, through its role as a chief conduit of ideas – some good, some bad – that animate both the theory and practice of development.
Devesh Kapur[1] is my ‘go to’ author when reading about the internal architecture of the World Bank. He must have been deeply disappointed at the news that World Bank President Jim Yong Kim has just been re-appointed for a second term.[2] He has condemned Kim as ‘among the worst Presidents in World Bank history’. The World Bank Staff Association agrees with him when it notes that ‘…our annual Employee Engagement Survey has, for two years running, made it painfully clear that the World Bank Group is experiencing a crisis of leadership.’[3]
There were no alternative candidates, despite efforts by Nigeria and Colombia to propose one. Kim’s re-appointment, Kapur would argue, is the product of a deeply flawed selection process.
Who should bear the burden of blame for such a sorry affair? Of course, the US ‘…has been particularly brazen in subverting the nomination process’ – which is business as usual given that the US has long held the view that it is entitled to nominate a US national as the President of the World Bank. But, as Kapur argues, is the US the only culpable actor in this case? After all, other donor countries are also equally brazen about their perceived entitlements. Think of the Europeans – and the French in particular – when it comes to the selection of the Managing Director of the IMF, or the Japanese when selecting someone to head the ADB. Some members of the BRICS (Brazil, Russia, India, China, South Africa) themselves are carving out their own self-serving terrain, whether it is ‘striking side deals to ensure generous lending’ from the World Bank or trying to build alternative sources of financial support to the developing world through the Asian Infrastructure Investment Bank. In this world of mutually reinforcing regional interests, the developing world might find that it lacks a champion that can voice itsr aspirations and make the selection of a future President of the World Bank a truly merit-based and open process.
[1] (https://casi.sas.upenn.edu/about/people/devesh)
[2] (http://www.bloomberg.com/news/articles/2016-09-27/world-bank-appoints-president-jim-yong-kim-for-second-term
[3] http://online.wsj.com/media/WBGSALETTER.pdf
In September 2015, the UN General Assembly established the Sustainable Development Goals (SDGs). The SDGS specify 17 universal goals, 169 targets and 230 indicators (critics worry about the unwieldy list). The SDGs replace the Millennium Development Goals (MDGs) which expired in September 2015. Health is a core part of the SDGs.
Lancet has recently (21 September, 2016) published a baseline analysis of 33 health-related indicators.
Click to access PIIS0140-6736(16)31467-2.pdf
All the indices are scaled from 0 (worst observed value for 1990-2015) to 100 (best observed value for the same period). In 2015, the median value of the overall health-related SDG index was 59.3 ranging from 85.5 (Iceland) to 20.4 (Central African Republic). There is also good news globally. The value of the health-related SDG index has increased by approximately eight points between 1990 and 2015.
As expected, wealthy nations are healthy nations. However, as the Lancet study notes, ‘…some patterns emerged contrary to what might have been expected’. The United States is ranked 28th, and below Greece, a nation struggling to cope with externally imposed anti-austerity measures. The unsatisfactory US ranking might be attributed to poor performance in maternal mortality, alcohol consumption and mortality due to interpersonal violence, self-harm, suicide and unintentional poisoning.
What the Lancet study does not highlight is the conspicuous case of Botswana. Often lauded as a development success story, and featuring prominently in Daron Acemoglu and James Robinson’s monumental study on ‘Why nations fail’ (www.amazon.com/Why-Nations-Fail-Origins-Prosperity/dp/0307719227), Botswana is a resource-rich, upper-middle income country. It is one of the very few countries in Sub Saharan Africa with such an income status. In terms of the overall health-related SDG, Botswana is ranked 133 and lies below low-income Timor-Leste. At least from a health perspective, Botswana still has a long way to go.
Financial inclusion – the process via which the ‘unbanked’ are integrated into the formal financial system – is a laudable goal. The G20 has signed up to it as have many central banks in the developing world. Multiple studies have shown that it can be effective way of reducing poverty
However, as with all good ideas, sometimes a conspicuous gap can emerge between aspiration and implementation. In India, the current government announced a new financial inclusion plan (‘Jan Dhan’) which promised basic bank accounts for all Indians.
A close friend and former ILO colleague drew my attention to a report in The Economist (September 17, 2016) which turns out to be a cautionary tale about how a highly publicized poverty reduction scheme can become a public relations exercise …except that it seems to have become a public relations embarrassment or a ‘one rupee trick’ as The Indian Express dubbed it.
Apparently, many bank managers used their own money (1 Indian rupee or about 20 Australian cents) to open accounts and reduce the share of ‘zero balance’ bank accounts. Not surprisingly, the share of ‘zero bank accounts’ fell sharply causing the Indian government to proclaim that its financial inclusion plan was a success. One hopes that this embarrassing episode will not tarnish the role of financial inclusion as an important anti-poverty initiative.
I co-authored a paper in 2010 on the ‘Great Recession’ with Dr. Sher Verick (now Deputy Director, ILO, Delhi) which was released as a discussion paper by IZA http://ftp.iza.org/dp4934.pdf.
It became the second most downloaded paper in the history of IZA http://www.iza.org/en/webcontent/publications/papers/topdownloads
Now, the Social Science Research Network (SSRN) advises me that the 2010 paper is in the ‘top ten download’ list. Macroeconomics: Monetary & Fiscal Policies eJournal Top Ten.
Reflections on development and governance 