Some central questions in international development are how to measure progress, make sound cross-country comparisons, and build the case for political and economic reforms. Multilateral institutions such as the World Bank play the role of repositories of credible, accessible, and up-to-date information that serves as an international benchmark for progress. Access to information is the basis for evidence-based policymaking and can serve as a catalyst for necessary reforms.
The World Bank recently convened a conference to present research around its Doing Business index at my alma mater Georgetown University. The keynote speaker, Tim Besley of the London School of Economics, discussed the importance of World Bank data that is publicly available and internationally recognized as a reliable source of evidence-based policymaking.
The Doing Business Survey focuses on two main sets of indicators: regulations and legal institutions. The regulation indicators are the number of procedures, time, and cost involved in starting a business, to obtain a construction permit, getting access to electricity, registering property, paying taxes, and the ability to trade across international borders.
Armed security at a Walmart store in Costa Rica, (Photo: La Nacion)
Security is a fact of life that many of us in the developed world take for granted. I feel fairly confident that I can go about my life on a daily basis with nearly zero contact with crime or violence. Thanks to that security, I feel confident enough to shop, go out to eat, and generally spend time outside of my home and workplace, adding to the local economy. Thanks to this security, my city is growing and developing and life is generally getting better for most people, despite the recent economic recession. Imagine if that were not the case.
At the second level of Maslow’s Hierarchy of Needs lies safety – the security of body, employment, resources, morality, family, health and property. Intuitively we know that our basic needs must be met before we can endeavor to improve our self, our livelihood, our families, or our communities. Without the feeling of safety, people are less able to act freely in a market – to buy products, start businesses, or invest – limiting a country’s potential for development.
It is with this logic that a recent United Nations Human Development Report argues in favor of increasing measures in citizen security in the Latin America region. In this region more than 100,000 homicides are registered per year. The World Health Organization considers these levels epidemic and they are much higher than most other regions of the world today. The report’s authors state, “The level of insecurity many experience impedes human development.”
At the recent World Economic Forum summit in Davos, Switzerland, global inequality was identified as a “top global risk.”
Economic inequality has been a growing concern in recent years. The huge gap between the “haves” and the “have-nots” is clearly illustrated by a recent Oxfam report which show that the 85 wealthiest individuals in the world own half of the global wealth. Inequality was also on the top of the World Economic Forum agenda in Davos, Switzerland earlier this year.
There are many reasons to be alarmed by these statistics, but perhaps most importantly we should understand that behind the figures are real people from all walks of life who lack the opportunities to advance their lives and improve their communities. It is also important to remember that the private sector plays a vital role in providing solutions to economic inequality.
At a recent Brookings event “Promoting Shared Societies,” a distinguished panel of experts shared their thoughts on the implications of growing global inequality and the Millennium Development Goals.
We live in a globalized world where goods and services are traded across international borders and consumers are able to purchase products with components produced in several countries. What is the role then of international trade in development?
Economists such as Adam Smith and David Ricardo articulated the economic advantage of free trade, which was primarily driven by the idea of “comparative advantage.” A country with a comparative advantage can produce certain goods and services more efficiently and cheaply than others. In terms of international trade, countries with comparative advantage will export goods and services they can produce more efficiently, while importing those they produce relatively less efficiently.
Amid the lingering effects of the global financial crisis, there has been an ongoing debate regarding the strategy behind international aid. The question is whether to continue with traditional projects that seek to alleviate poverty through the provision of basic human needs such as health care, education, and food security, or to refocus efforts on building the capacity of local governance thereby making developing countries capable of addressing these issues on their own. While this debate has been around for at least two decades, current budgetary constraints in donor countries have brought the conversation back into focus.
Speaking in terms of policy, there has long been consensus on the fact that better governance leads to more vigorous economic growth. Regardless of rhetoric, however, donor agencies have continued to channel the majority of their resources toward areas like infrastructure, agricultural development, and education. This must change if the development community wants to meet its goals.
On a panel at the Center for Strategic International Studies, Executive Director of the Center for International Private Enterprise (CIPE) John Sullivan joined three other discussants – including a World Bank VP and U.S. Ambassador – to talk about the nexus between governance and growth. The panelists unanimously agreed that governance, specifically democratic governance, is a crucial element of moving developing countries off of foreign aid. Good governance is an enabler that allows developing countries to better utilize donor funding and develop sustainable, local solutions to challenges.
Not counted: Nigeria’s GDP model is based on the year 1990. (Photo: Wayan Vota)
In 2014, one small policy tweak will grow Nigeria’s economy by 40 percent, causing it to overtake South Africa as the largest in the region. A similar change in Ghana caused that country’s economy to grow 60 percent, while in Guinea-Bissau and Gambia the economy doubled in size. Even the United States increased its output by 3.6 percent using the same technique. What happened?
GDP rebasing. Simply put, these countries are all changing the way they measure their Gross Domestic Product — the sum total of all economic activity in a country in a given year — to better reflect what’s really happening the economy.
When Nigeria’s rebasing is complete, it won’t mean the country is actually producing 40 percent more goods and services. Living standards won’t jump by 40 percent — the government will just be counting more accurately. But it’s still hugely important.
by Laura Boyette and Teodora Mihaylova
How effective is the current global development agenda? What needs to be done differently going forward? How can we set goals that are more attainable and sustainable?
In 2000, at the dawn of a new millennium, the United Nations laid out an ambitious global development agenda known as the Millennium Development Goals (MDGs), which seeks to resolve some of the most pressing international challenges of our time: eradicating extreme poverty and hunger, achieving universal primary education, promoting gender equality, improving maternal health, reducing child mortality and promoting environmental sustainability, among others. Happily, the world has made some exciting progress toward achieving these goals.
The MDGs will expire on December 31, 2015 and a new set of principles will replace them. In order to face these new challenges, the United Nations once again created a panel to debate the needs that face our world post-2015. In May of 2013, the panel released their report.
At a recent talk at Georgetown University, Chair of the Center for American Progress John Podesta argued that five fundamental shifts have taken place since the inception of the current standards in 2000.