Outreach Report

Outreach
DEVELOPMENT
P U T T I N G K N O W L E D G E T O W O R K F O R D E V E L O P M E N T APRIL 2011
aBout thiS iSSue
Mary McNeil Founding Editor editorial Board SwaMiNathaN S. aiyar Economic Times of India New Delhi India Michael coheN New School University New York USA Paul collier Oxford University Oxford UK JohN GaGe Partner, Kleiner Perkins JoSePh K. iNGraM President, The North-South Institute Canada KwaMe KariKari Executive Director, Media Foundation for West Africa Accra Ghana Vira NaNiVSKa Director, International Centre for Policy Studies Kiev Ukraine PePi PatroN Catholic University Lima Peru J. roBert S. Prichard Governor, Canadian Unity Council rafael raNGel SoStMaNN Monterrey Tech University System Monterrey Mexico Development OUTREACH is published three times a year by the World Bank Institute and reflects issues arising from the World Banks many learning programs. Articles are solicited that offer a range of viewpoints from a variety of authors worldwide and do not represent official positions of the World Bank or the views of its management. JoS-MaNuel BaSSat Executive Editor JohN P. didier Senior Editor JuNKo Saito Managing Editor Moira ratchford Publication Design World Bank Institute Sanjay Pradhan, Vice President The World Bank 1818 H Street NW Washington, DC 20433, USA www.worldbank.org/wbi www.worldbank.org/devoutreach ISSN 1020-797X 2011 The World Bank Institute This magazine is printed on recycled paper, with vegetable-based inks.
ome assert that development has been a clear success. others may argue that it has failed. Some say that it has reduced poverty levels, but that the global number of poor has grown; or that it has raised incomes but increased inequality. and the debate goes on. the fact is that development is a complex business. and it takes time. it means integrating the multiple dynamic systems of economics, finance, politics and culture, and shaping policies that crisscross and sometimes collide. add to this recipe the ambiguities of human behavior, brittle ecological endowments, and random acts of nature, and the task of development becomes even more daunting. Globalization has generated enormous opportunities but at the same time created countless new challenges. Policymaking is hard. Growth is fragile. But we continue to learn. we know that policies must not be imposed topdown, but rather gently shaped to fit each countrys need. we have seen that economic elites and academics do not have a monopoly on truth and that directives are not discoursenor do they constitute a consensus. that people matter and that they must feature in the development debate as citizens, not subjects. that people who are living their own social and economic realities often know a great deal about how to make them better. their knowledge and experience are to be valued and applied and, thanks to current technology, can usefully be shared across borders. creativity and innovation are keys to economic productivity. the best ideas often come from unexpected sources, and trading knowledge and ideas can lead to socioeconomic transformations. we know too that young people are the future and that their education will help unleash the transformative power of knowledgebut not without jobs to put that knowledge to work. we have learned that markets are, well, markets and not magic. institutions, both public and private, have roles to play in organizing people and resources to achieve equitable results with efficiency and integrity. we know also that there are many things we dont know: how often have we disavowed the magic bullet? But the point is to keep learning. this issue of Development Outreach offers some current thinking on development policymaking as we attempt to clear new pathways to growth, equity, and human dignity.
Jos-Manuel Bassat executive editor
VOLUME THIRTEEN
NUMBER ONE
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GUEST EDITORIAL PathwayS to deVeloPMeNt: what we know and dont know Raj Nallari froM the BloGoSPhere Development 3.0 by Shantayanan Devarajan aS a Matter of fact... 16 things you didnt Know about africa iN the NewS Interview with John Quiggin, author of Zombie Economics what if were Not NoNGoVerNMeNtal orGaNizatioNS (NGoS)? the opportunities ahead for international development NGos Dr. Kent Glenzer deMyStifyiNG SucceSS: the new structural economics approach Justin Yifu Lin BeiJiNG coNSeNSuS or waShiNGtoN coNSeNSuS: what explains chinas economic success? Yang Yao educatioN for educatioN . . . or for SKillS? Eric A. Hanushek why areNt childreN learNiNG? Abhijit V. Banerjee and Esther Duflo technology and labor Productivity Dale Jorgenson and Khuong Vu
46 50 54 59 65 70 77 4 82 4 86 4 92
citieS oN the Prowl Tim Campbell the GreeNiNG of deVeloPMeNt Carlo Carraro and Emanuele Massetti iNduStrializatioN aNd the laNd acquiSitioN coNuNdruM Pranab Bardhan the PoliticS of deVeloPMeNt Brian Levy ParticiPatory deVeloPMeNt recoNSidered Ghazala Mansuri and Vijayendra Rao ParticiPatioN MaKeS a differeNce: But not always how and where we might expect John Gaventa deMoGraPhicS aNd deVeloPMeNt Policy by David E. Bloom and David Canning deVeloPMeNt with a huMaN face by Archbishop Njongonkulu Ndungane SouNdiNG Board BooKShelf
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DEVELOPMENT OUTREACH
PATHWAYS TO DEVELOPMENT What We Know and Dont Know

By raJ Nallari
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SPecial rePortS
I T S N O T O N LY A B O U T G R O W T H .
evelopment is about improving peoples lives through economic, social, political,
We now know that early consultation with stakeholders and involving beneficiaries in implementation are central to successful policymaking as the contributors to this magazines Sounding Board feature have asserted. In a recent speech, World Bank president Robert Zoellick advocated a new approach to development economics and indeed to development lending itself, one that is more cooperative and experience-based while less restricted to elites. In our interview on his book, Zombie Economics, John Quiggin questions the relevance of some longstanding economic beliefs sorely called into question after the crises of recent years. He proposes some new directions for the 21st century. And do we need a Development 3.0 as Shanta Devarajan suggests, where communication technologies enable civil society to engage in monitoring and correcting government failures? have sustained their growth for twenty years or more because of frequent shocks, redistributive conflicts, and difficulty in sustaining reform efforts over time. The number of people in developing countries who live in absolute poverty (less than $1 a day) dropped from 40 percent of the population in 1981 to 18 percent in 2004 (Ferreira and Ravallion 2008). The largest reductions have been in China and India, countries with high growth rates; the smallest in the countries of Sub-Saharan Africa. But inequality has been on the rise worldwide (Ferreira and Ravallion 2008; and Firebaugh and Goesling 2007). Clearly, the benefits of development have not yet reached the neediest.
and technological change. It is a transformation that certainly requires incomes to grow but it is also about reducing poverty and inequality, building individual skills, having access to social services, and raising the quality of life. And economic growth and development both depend on distributive politicshow society deals with vested interests and social conflicts. New priorities are emerging as development economics reviews its track record over the 20th century.
MarKetS VerSuS State: a falSe dichotoMy

oVer the PaSt SeVeral decadeS, economic theories have espoused various systems of resource allocation, ranging from free market to state intervention and centrally-planned systems. The collapse of the Soviet Union and various crises in other state-controlled economies in the 1990s prompted development thinkers to return to the Washington Consensus with its policies of economic liberalization, privatization, and macroeconomic stabilization programs. This yielded mixed results and considerable controversy. A number of countries, however, had successfully applied mixed models of government
MiXed reSultS
SiXty yearS of development experience tells us that the pathways to development are varied, guided by different visions, different strategies, and different definitions of progress. If sustained growth is the measure, then progress has also been mixed. Between 1990 and 2008, the developing economies have grown nearly twice as fast on average as the developed countries. But over the past six decades, only a dozen countries
intervention in otherwise fundamentally market-based systems of resource allocation. Yifu Lin in his essay proposes an alternative pathway to economic development, describing a proactive role for the state in promoting selected industrial policiesa role that complements market mechanisms and compensates for negative externalities. Yao Yangs article attributes Chinas recent success to its embrace of certain features of the Washington Consensus reinforced by constant experimentation. Is there a synthesis of Washington Consensus and Beijing Consensus that could serve as a model for a given set of developing countries?
Key SucceSS factorS
we KNow that the upper middle- and high-income countries have grown mainly because they have become more productive. Most researchers believe that sustained long-term growth is a function of the quantity and quality of the factors of production (labor, capital, land, energy) all of which contribute to total factor productivity (TFP). Successful developers have, to varying degrees, emphasized five objectives in their pursuit of growth, with a view to increasing total factor productivity: creating a learning economy that values skills, ideas and technology, and lays the foundations for domestic innovation. This includes the schooling and vocational training systems, tertiary education, research by universities and public institutes and by domestic and foreign businesses, and the harnessing of digital
information using state-of-the-art information and communication technology (ICT). The important research findings of Dale Jorgenson and Kuong Vu show that labor productivity can be enhanced by investing in human capital and ICT. In this context, Eric Hanusheks essay argues that improving the quality of education is a priority that requires not only qualified teachers, but also a combination of local autonomy for setting teacher salaries, combined with accountability through testing by a central agency. Abhijit Banerjees and Esther Duflos work with randomized trials describes a complex education system of interconnected incentives, behaviors, and choices involving parents, teachers, and students. Stimulating entrepreneurship and organizational efficiency. Where entrepreneurship is weak, innovation and technology adoption is slow. Entrepreneurship must be complemented by strong managerial skills to keep the businesses going and to make the best use of existing as well as frontier technologies. Promoting competition and openness. Trade openness (as opposed to protectionism) is associated with
higher growth and the adoption of new technologies. Public ownership, procurement rules, local regulations and standards, labor market rules affecting entry and exit of firms, and financial market constraints, can dampen competition if they are not carefully designed or controlled. Regional integration is enhanced by open borders and regional transport networks but the cost of doing business is a constraint. Building effective institutions. In complex modern economies, governments must craft an institutional infrastructure to implement their long-term strategies. Institutions, such as the legal system or governance mechanisms in the public and private sectors, need to consider the interests of both labor and the business community (Bhagwati 2010), and to strengthen the administrative capabilities of the state to formulate and implement policies and service delivery programs. Pranab Bardhans essay, for example, emphasizes the need for creating land markets as a means of transferring land from lower-productivity farming to the higher-productivity manufacturing and services sectors, especially in densely populated countries such as
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India and China. At the same time, he highlights the need for fair treatment and involvement of the displaced farmers. M anaging urban systems that take advantage of agglomeration economies and positive spillover effects to other parts of the economy. Development relies increasingly on the urban sector which is much more productive and innovative than the primary or rural sector. Urban populations will continue to grow and urban gross domestic product (GDP) already accounts for between 60 and 80 percent of total GDP. Industry gravitates to urban centers and there has been a correlation between urbanization and development (Polese 2005). But, over the
past twenty years, research shows that the composition of industrial production and the size of cities are interrelated and can raise productivity through agglomeration and scale economies. Tim Campbells essay describes the search for and exchange of knowledge and innovative ideas that goes on among fastgrowing cities in the North and the South.
...aNd other coNSideratioNS

loNG-terM SuStaiNaBle Growth and development also depends on other factors. For example, population growth is negatively correlated to per capita income levels and its growth across
countries. One of the main challenges is to productively employ working-age people. To do so requires public policies that invest in health, education, and labor thereby promoting more rapid economic growth (see the article by Bloom and Canning). In contrast, the growth of aging-populations that is occurring in many countries places a burden on public budgets and curtails productivity. What are the best social safety nets for the elderly and the vulnerable? Energy is another factor that affects sustainable green growth. Carraro and Massetti in their essay show that higher growth creates higher per capita energy consumption, which if unchecked could lead to higher carbon emissions and global warming. To reduce carbon emissions to zero over the
next two decades, research and development spending on new technologies will have to increase fivefold, which in turn requires carbon pricing and perhaps some government funding to support research. Although we know a great deal about the role of public budgets and finance in development, we cant seem to avoid periodic fiscal and financial crises. There are many questions that still need to be answered: What are the limits to globalizationthat is, the free movement of capital, labor, goods and services across countries? What is the optimal regulation of finance? Of utilities? How does one manage economic booms and busts? What is the policy for affordable housing?
uNderStaNdiNG the SocioPolitical laNdScaPe

eVery Growth and development policy has an economic and social dimension as well as a political dimension. As Daron Acemoglu (2010) observes: There is increasing recognition that institutional and political economy factors are central to economic development. Many problems of development result from barriers to the adoption of new technologies, lack of property rights over land, labor and businesses, and policies distorting prices and incentives. Typically policymakers introduce or maintain such policies to remain in power or to enrich themselves, or because politically powerful elites oppose the entry of rivals, the introduction of new technologies, or improvements in the property rights of their workers or competitors. Affluent individuals or groups, private firms, or oligarchs attempt to cap-
ture the state, that is, to shape the laws, public policies, rules, and regulations to their own advantage. This shaping may be done by private firms, rich elites, ethnic groups, or the military. In countries where the state is highly captured, all or most institutions may be affected: parliament, political parties, the executive including ministries and public enterprises, judicial courts, and key bureaucracies Kent Glenzers essay underscores the need to accelerate development through international development NGOs (IDNGOs), as well as through social entrepreneurs, philanthropists, and corporate social responsibility. Levys essay on the intersection of politics and institutions speaks to the need to tailor policy interventions to the sociopolitical context, moving away from best practice to best fit. Mansuri and Rao assess participatory approaches to development and find that decentralization of resources and more authority to local governments can lead to experimentation and innovation and, under the right conditions, improve the welfare of the many and not only the few. In response, John Gaventas piece argues that participation takes many forms and that we need to think more broadly about what makes it work, where, and why. Finally, Archbishop Njongonkulu Ndungane appeals for a steady focus on the most important development objective: promoting the common good, building a just world fit for all the inhabitants of our planet. The pathways to development are narrow and winding and all too often blocked by political obstacles. Successful development depends not only on good policies but also on domes-
tic political dynamics that under ideal circumstances should be highly supportive or at least neutral. This issue of Development Outreach highlights some of the current research on a few of the key issues that will shape the future of development. Raj Nallari is Manager of the Growth and Competitiveness Practice at the World Bank Institute. references Acemoglu, Daron. 2010. Theory, General Equilibrium, Political Economy and Empirics in Development Economics. Journal of Economic Perspectives. Forthcoming. Baghwati, Jagdish. 2010. Running in Place on Trade. Project Syndicate 7/20/2010: http://www.project-syndicate.org/. Ferreira, Francisco H.G., and Martin Ravallion. 2008. Global Poverty and Inequality: A Review of the Evidence. World Bank Policy Research Working Paper 4623. Washington, DC: World Bank. Firebaugh, Glenn, and Brian Goesling. 2007. Globalization and Global Inequalities: Recent Trends. In The Blackwell Companion to Globalization, ed. Ritzer, George, Malden, MA: Blackwell Publishing. Polese, Mario. 2005. Cities and National Economic Growth: A Reappraisal. Urban Studies 42(8): 14291451.
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froM the BloGoSPhere
DEVELOPMENT 3.0
excerpted from the africa can...end Poverty Blog http://blogs.worldbank.org/africacan By Shantayanan devarajan
gave a lunch talk at a recent conference of civil society and technology people organized by the Tech@State folks at the U.S. State Department. I thought Id share it more widely. in the old daysthat is, the 1950s and 1960sdevelopment was about correcting market failures. Influenced by the big push theories of economists like Rosenstein-Rodan, post-war Keynesian economics and the apparent success of the Soviet Union, policymakers in developing countries saw the role of government as providing public goods (bridges, roads and ports), addressing externalities (protecting infant industries) and redistributing income to poor people (by, for instance, keeping food prices low). Donors supported these countries by financing some of the public goodsa bridge, say. Knowledge assistance consisted of helping to identify the market failure, and then designing the optimal bridge. the incentives of poor-country politicians and rich-country donors were aligned. Politicians could take credit for correcting market failuresgovernment was doing what it was supposed to dowhile donors could make sure their money was well-spent. thiS waS deVeloPMeNt 1.0. Starting in the 1970s, it became clear that these government interventions were not delivering the intended results. Protected industries were so insulated from world markets that they never produced efficiently (the Morogoro shoe factory in Tanzania never exported a single pair of shoes). Roads were built but not maintained to the point that they were not passable. Low food prices led to food shortages and increased poverty in rural areas. In correcting market failures, we created a set of government failures: well-intentioned interventions that fail to deliver the intended results.
to rescue these economies from distress, donors made their financial assistance conditional on governments reversing these policies. the previously harmonious relationship began to fray. Politicians resistedmostly because their friends and family were benefiting from the distorted policiesand complied halfheartedlyoften blaming the donors when things went awry. and knowledge assistance focused on estimating the costs of the previous interventions (as if the only thing standing in the way was the politicians lack of knowledge about these costs). you MiGht call thiS deVeloPMeNt 2.0. today, although many of the egregious distortions have been removed, we find ourselves still faced with government failures, but in a more insidious form that directly hurts poor people. Many of the failures are in infrastructure, education, and healththe sacred cows of government intervention. Correcting them invites the criticism that we are trying to undermine government, harking back to the days of conditionality. A classic example is water tariffs. Subsidized or free water leads to water scarcity. Politicians, who control the utilities through these subsidies, ensure that the scarce water goes to neighborhoods where their clients live. Poor people meanwhile have to pay 5 to 16 times the meter rate to buy water from vendors. But no politician can run on a platform of raising water tariffs (even if it will help the poor) and hope to get elected. Other examples include absenteeism of teachers in public primary schools25 percent in India, 27 percent in Uganda. Or the leakage of public funds in healththat reaches a staggering 99 percent in Chad. these government failures do not happen by accident. rather, they arise from two kinds of imperfections in the public sector (much like market failures arise from imperfections in the private sector). When they dont use market incentives, governments have difficulties in monitoring and enforcing performance by frontline service providers. the result is absentee teachers, clinics without drugs, impassable roads.
...why dont donors (including the World Bank) use technology to have the beneficiaries monitor and supervise development projects?
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A second, more pervasive imperfection is in the political system. even in democracies where the median voter is poor, politicians who advocate anti-poor policies (such as some of the government interventions above) continue to get elected. one reason is that politicians are able to control the flow of information to the electorate, convincing them to vote for policies that are, in fact, not in their interest. in the water tariff example, politicians run on a platform of maintaining free waterand get re-elected. In this situation of government failure, the traditional instruments of financial and knowledge assistance are not very effective. Politicians will resist conditionality, and refuse the financial assistance if it could lead to electoral defeat. Providing financial assistance without conditionality makes it easier to continue with distorted policies. Reports about the costs of distortions are of little value (not to say irritating) to the politician who is the cause of the distortions. Even if he is not the causeand is instead a reform championthen by definition he already knows the costs. The reports are still of little value. So what can we do? Our understanding of government failure has coincided with two other developments. One is the rise of civil societys voice in public discourse. The second is the technology revolution in poor countries. Theres a message here. Can we use technology and the voice of civil society to address these government failures? rather than imposing conditions, we can empower poor people to monitor service providers. with some 80 percent of africans having access to a cell phone, it is not difficult to have parents (or the students themselves) send an SMS message if the teacher is not in school, or there are no drugs in the clinic or the purported road maintenance program is not happening. this could do more for helping governments and donors get value for money than all the fiduciary controls we put in place. While we are at it, why dont donors (including the World Bank) use technology to have the beneficiaries monitor and supervise development projects? We can also use technology to alleviate the information problem. Rather than writing reports on the costs of distortions (and whispering them in the Finance Ministers ear), we could disseminate these resultsin digestible formto poor people through their cell phones. Get the information out about who benefits from infrastructure subsidies, which districts have the highest teacher absentee rate, etc. This is information about poor peoples daily lives; they should be the first to receive it. As better informed voters, they may then start voting for politicians who advocate in their interest. Going further, why not prepare these reports in collaboration with poor people? After all, the analysis is about them.
each year, the world Bank produces a world development report. while there is an extensive consultation process with the draft, the report is essentially written by a core team of Bank staff. why not produce the report like wikipedia, and invite the whole world to write it? as one of my colleagues put it then it will be the worlds development report. aNd a fittiNG SyMBol of deVeloPMeNt 3.0. Shantayanan Devarajan is the Chief Economist of the World Banks Africa Region.
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aS a Matter of fact...
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THINGS YOU DIDNT KNOW

total trade as a percentage of gross domestic product (GdP) is the highest in SeychelleS: 283.4 percent and lowest in 37.5 percent.
the largest population in Sub-Saharan africa (SSa) is 151.3 million in NiGeria. the smallest is 0.1 million (100,000) in SeychelleS.
ceNtral africa rePuBlic:
in two thirds of SSa countries,

only one or two products are responsible for 75 percent or more of the countrys total exports.
caPe Verde receives the highest net official development assistance (oda) per capita: $438.20. NiGeria receives the lowest: $9.50.
the percentage of parliamentary seats held by women is highest in rwaNda with 56.3 percent, and lowest in So toM aNd PrNciPe with 1.8 percent.
only 5.7 percent of births in ethioPia are attended by skilled personnel compared to 98.4 percent in MauritiuS.
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youth literacy (ages 15-24) is highest in GaBoN at 97 percent and lowest in the highest connection charge for a business phone is $366.60 in BeNiN. the lowest is in GhaNa at $0.70.
BurKiNa faSo
at 39.3 percent.
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ABOUT
in South africa there are 924 mobile phones per 1000 people. in eritrea there are 22 per 1000 people.
AFRICA
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in cte diVoire it takes 16.6 days on average to clear customs on direct exports, compared with 3.8 days in GaBoN. imports, on the other hand, take 31.4 days to clear customs in the rePuBlic of coNGo, compared to 4.4 days in leSotho.
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the percentage of firms that indentify corruption as a major constraint to doing business was highest in cte diVoire at 75.0 percent, while the lowest is in GhaNa with 9.9 percent.
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in chad, 37 percent of children who start first grade make it to the fifth grade, versus 99 percent in MauritiuS.
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in Sierra leoNe 272 out of every 1,000 children die before the age of five. in SeychelleS, the number is 13 per 1,000.
in SoMalia, 29 percent of the population has access to a safe source of water. in MauritiuS, access is 100 percent.
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in Sierra leoNe, 3 persons per 1,000 are internet users. in SeychelleS, where there were 212 computers per 1,000 people for the period 2005-2007, 371 in every 1,000 people are internet users.
South africa
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has the highest carbon dioxide emissions: 414,649 metric tons, while coMoroS has the lowest: 88 metric tons.
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Source: African Development Indicators, World Bank, 2010.
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iN the NewS
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John quiggin is an australian economist and professor at the university of queensland. he has also held academic positions at the australian National university and James cook university. Best known for his work on utility theory, quiggin is among the top 500 economists in the world according to ideaS/rePec. quiggin authors an australian blog, and is a regular contributor to crooked timber. he also writes a fortnightly column in the australian financial review.
Q: You argue in Zombie Economics that certain long-held economic beliefs no longer apply, and that they have in fact contributed to the recent crises, but they nevertheless are still walking around like zombies. While many would agree with you, others may feel that the zombies still serve us well and should be kept alive. What would you say to these advocates? A: At this point it is necessary to compare the experience of the Keynesian social-democratic period, from the 1940s to the 1970s, with that of the market liberal period, the 1970s to the 2000s. Both applied models that seemed to work for an extended time and both also ended in crisis. In the postwar golden age, the experience of the leading economies was very different from today: full employment was sustained for decades on end, social equality was greater than at any time before or since, and economic growth rates were higher than at any time before or since. But the Keynesian-social democratic period ended in the crisis of the 1970s, indicating that the model was not perfect. Now that the market liberal model has also produced a systemic crisis, any reasonable comparison would suggest that the market liberal model has not served us wellexcept for the very wealthy. It is true that, during this period, developing countries such as China and India have done very well. But the same was true during the postwar boom for Japan, Southern Europe, and many other countries that were poor in 1945; and they used a wide range of economic models. Q: Could simply killing the zombies and replacing them with alternative economic theories for the 21st century prevent another crisis? If so, what would you call this new economics? A: This crisis differs from the Great Depression, when Keynes presented the General Theory, and from the stagflation of the late 60s and early 70s, when Milton Friedman offered both a convincing analysis and a plausible alternative. In this case, there is no ready-made solution. In Zombie Economics, I make a number of suggestions regarding the way forward, including the use of realistic rather than idealized models of individual behavior, attention to historical evidence, and a focus on real-world relevance even
at the expense of theoretical rigor. But these suggestions do not amount to an alternative economics. Perhaps what is most important is humility instead of hubris. That is, given the spectacular failure of the theories and policy approaches that were dominant for the past thirty years, economists should be more willing to admit fallibility and more open to new ideas. Q: There are many factors other than economic theories and policies that affect peoples lives: for example, good and bad political and corporate governance including corruption, access to technology, and environmental quality, to name a few. What is the role of economics in this broader context? A: Economics has something to say about all these issues. But economists need to be more open to insights from other social sciences, and more willing to admit that social sciences, including economics, are shaped by history (more like evolutionary biology) rather than being purely deductive (like pure physics). Q: You mention the need for realism (vs. rigor), equity (vs. efficiency), humility (vs. hubris). What are your thoughts on the role of development organizations including the World Bank in shaping the future of development by adopting these qualities? And do they have a role to play in putting the zombies to rest? A: As regards development, the biggest lesson is probably the importance of equity. The experience of the last 30 years, particularly in the U.S., shows that it is possible to produce reasonably strong growth in measured GDP while not generating a sustained improvement in living standards for much of the population. So, it is evident that GDP growth alone is not a reliable measure of economic performance, and that it is necessary to look at such variables as the change in median household income and in the income of the poorest deciles of the population. Zombie Economics: How Dead Ideas Still Walk Among Us. John quiggin. New Jersey: Princeton university Press. 2010.
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WHAT IF WERE
NONGOVERNMENTAL ORGANIzATIONS (NGOS)

The Opportunities Ahead for International Development NGOs
By dr. KeNt GleNzer
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NOT
oxfam and other members of tcktcktck, an alliance of 250 NGos, showed support to Kyoto with a photo booth where delegates were asked to pose together with Kyoto.
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SPecial rePortS
nternational development NGOs (IDNGOs)* have both flourished and been objects of cogent critique over the past twenty years.
The populations and budgets of IDNGOs continue to grow even as concerns about accountability, quality, and cost persist. Meanwhile, major inroads have been made on reducing poverty, driven not by official development assistance (ODA) but by market forces. This economic growth comes with widening inequality, civil strife, and ...escalating discrimination and persecution of members of vulnerable groupsoften racial, religious or ethnic minorities, but also women, members of indigenous communities, children, persons with disabilities, and other vulnerable groups that lack the political power in their societies to defend their own interests.1
This conjuncture of contradictory trends puts IDNGOs in an odd position. On the one hand, our long-stated poverty mission is being stripped away. Developing country governments are putting stricter rules in place to control their activities, and Southern partners are more vocal about IDNGO inefficiencies and patronizing procedures. On the other, a new generation of actors is on the risesocial entrepreneurs, philanthropreneurs, social venture capitalistsand taking aim at spaces long monopolized by IDNGOs. This is a classic learning moment, a moment in which we can re-imagine the NGO sector. To do this, we must capitalize on four opportunities.
oPPortuNity 1: PuSh BacK at NarrowiNG defiNitioNS of SucceSS

if the 1980s can be categorized as the NGO decade, the 2000s may well come to be known as the intervention epoch of randomized controlled trials. Spurred by dismal results from four decades of post-independence development projects, provoked by the desire for efficiency and scale, and catalyzed by the Center for Global Developments report Why Wont We Ever Learn: Improving Lives Through Impact Evaluation, major international donors have turned to increasingly narrower technical interventions amenable to experimental designs, quantification, and attributable causal pathways. Their laudable goal is to uncover more ef-
ficient policy-relevant technical fixes that developing world governments can massively scale up. But these narrow fixes institutionalize blindness to the realities of power, supporting only those programmes claiming to deliver easily measurable results rather than to support transformative processes of positive and sustainable changes in peoples livesmany development practitioners cynically comply with the performance measurement demands, often with a nod and a wink from a sympathetic bureaucrat equally despairing of what is now required. The methods demanded of us to be more accountable are actually having the effect of our becoming ever less responsible for seriously enquiring of ourselves how we can most usefully contribute to transformative social change and be held accountable for our actions in that respect.2 This new concern with proving narrow relationships between interventions and outcomesmisleadingly labeled impact by manydeploys certain forms of social science rigor to alleviate povertys symptoms. IDNGOs need to both support this shift and push back at it. There is an important niche for approaches like randomized controlled trials, but IDNGOs should cede the narrow, technical, X causes Y world to others. We should push, more strongly, for a new social marketand additional resourcesthat focuses not on symptoms but on root causes of inequality and injustice, on context, and on comparative cases of structural change. This entails strategiz-
The views expressed in this article are the authors and do not reflect Oxfam Americas organizational policies or official perspectives. *IDNGO, while still a fuzzy category, specifies more closely the population of international NGOs that this article is interested in; that is, those that engage in development programs and projects in developing countries, either directly or through local partners.
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ing, investing, and acting within longterm time frames. Such work calls for 10 to 15 year investmentsor more in specific sites, with refutable theories of change, and deep understanding of context. IDNGOs need to enlist social scientists, historians, and other unusual disciplines to measure such changes.
oPPortuNity 2: MultileVel coalitioNS that BridGe well-KNowN differeNceS

focuSiNG oN root cauSeS of poverty and injustice means that IDNGOs need to build mission-driven, multilevel coalitions that act at community, national, and international levels simultaneously. Such strategies combine technical interventions that address symptoms in the short term with policy advocacy, constituency building, and opinion shaping over a decade or more. But this requires IDNGOs to unlearn and relearn a few things. We have to unlearn the fixation on attribution perpetuated by symptom-focused projectsbecause no single IDNGO can do this kind of work alone. We have to unlearn, also, ways of communicating achievements and obstacles to boards and other important stakeholders. And we have to learn that fostering social transformation requires a multiplicity of skills over time, a variety of financial resources, and more egalitarian relationships between international and local NGOs. Yet this is difficult: Coalitions are essential to civil society organizations seeking to influence events beyond the ordinary scope of small, economically limited, locally-based actors. But building trust and understanding across gaps of wealth, power and cul-
ture does not come easily to civil society leaders, who are more accustomed to influencing those who share their values, aspirations and expectations. Learning to build bridges across major social, political and economic differences is pivotal to gaining that influence. 3 The most central change is to ask not what does my organization do and how do I prove it to my stakeholders? but rather, with whom do we need to join forces and resources and how, together, will we tell our impact story? This approach flies in the face of 2000s accountability discourseand emerging procedures from watchdog organizations like Charity Navigatorwhich focuses on the effectiveness of individual agencies.
oPPortuNity 3: Structurally reiNVeNt dowNward aNd lateral accouNtaBility

coalitioNS that StaNd the test of time and that achieve results beyond the grasp of any one member require trust. They require a safe space for critical discussions of performance. And they require honesty. Unfortunately, project and competitive bidding modalities instrumentalize collaborations between us, making the creation of such trust and honesty more difficult. IDNGOs need to take advantage of the current conjuncturereduction in global poverty combined with radical increases in inequality and human rights abusesto advocate for changes in the ways projects are developed and implemented, ways we have all known about for two decades but which always get marginalized. But more interestingly: we need to promote entirely new ways of measur-
ing relationships between partners, and between partners and poor people. One of the most promising of these is Keystone Accountabilitys work on constituency voice. Borrowing from J.D. Power and Associates, Keystone adapts customer satisfaction methodologies from the private sector and deploys them among collaborating partners and eventually, we in Oxfam America hope, between partners and the poor. The goal is to build an objective and comparative database against which organizations can benchmark themselves, and which equips partners and the poor with information about whom they are working with. The constituency voice approach deliberately takes the power to define success out of IDNGO hands, injects anonymity into mutual performance reviews; and treats trust, honesty, and coalition effectiveness as accomplishments over time, as learning processes. Making such methodologies a requirementlike generally accepted accounting principlesfor all donor and IDNGO efforts would result in a structural transformation that no amount of good intentions will ever achieve. 4
oPPortuNity 4: aNSwer the queStioN, what if we areNt NGoS?

NGos teNd to Stay in a very small room of the international resource mansion, a room called ODA. In 2007, ODA totaled around $103 billion, while private capital flows to developing countries
iNterNatioNal deVeloPMeNt NGoS continued on page 31
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DEMYSTIFYING SUCCESS
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The New Structural Economics Approach

By JuStiN yifu liN
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SPecial rePortS
A N E L U S I V E Q U E S T.
t took a Scottish moral philosopher with no training in economics to set the course of modern economics and
we haVe aN iMPortaNt clue: prior to the 18th century, it took about 1,400 years for the Western world to double its income. In the 19th century, the same process took about 70 years, and only 35 years in the 20th century. That dramatic acceleration in growth rates came about with the transformation of agrarian economies into modern industrialized societies. This intriguing trend has led us to recognize that continuous structural change prompted by industrialization, technological innovation, and industrial upgrading and diversification are essential features of rapid, sustained growth. The pace of structural transformation and the rapid growth path followed by a small number of countries such as Brazil, Chile, China, India, Korea, Malaysia, Mauritius, Singapore, or Vietnam have been impressive. In those nine countries, several hundred million people have been lifted out of poverty in the space of one generation. On the other hand, the apparent inability of many other countries to escape the poverty trap is puzzling. These lower-income countries are home to more than onesixth of humanitythey count as the bottom billion, a term coined by Oxford economist Paul Collier. The mystery of diverging country performances, especially during the second half of the twentieth century, persists. the GloBal criSiS has fundamentally undermined our faith in free markets, and revived the belief that both the government and the private sector play important roles in successful economies. We now have a unique opportunity to rethink economic developmentand economic theory and practice in generaland to reassess how the government and the private sector can shape the industrialization process.1 To do so, we need to understand why and how some countries have been able to succeed where others have failed. The lessons of history, theory, and practice can all help us understand the ingredients of economic success.
what the clueS tell uS
a loSS of faith
challenge researchers to answer what is arguably the most fundamental question in public policy, namely: what is the recipe for growth, job creation, and poverty reduction?
how did they Get there?

iN the PoSt-world war ii era, only thirteen economies have achieved an average annual growth rate of seven percent or higher for 25 years or more. The Growth Commission, headed by Nobel Laureate Michael Spence, found that the most important common feature of these 13 economies is that they were able to tap into the potential advantage of backwardnessthat they imported what the rest of the world knew and exported what it wanted (World Bank 2008, p. 22). Lessons from these success stories can help other developing countries that are currently struggling to eradicate poverty and narrow the income gap (Lin and Monga 2010a).
Indeed, since Adam Smith offered his theory of wealth creation in 1776, economists have behaved like detectives in mystery novels, imagining theories, exploring hypotheses, examining facts, tracking evidence, and following leads. They have had some successes and many disappointments. Most progress has been made in identifying systemic differences in institutions and policies between high-growth and low-growth countries. But what really works in policy making remains left to conjecture. In fact, more than 200 years after Smiths seminal work, economic growth is still a mystery to many, and an elusive quest to othersto quote Elhanan Helpman and William Easterly.
22
the adVaNtaGe of BacKwardNeSS

the firSt leSSoN is that continuous technological innovation is key to sustained economic growth in any economy (Lin 1995). And this is where developing countries may have the advantage of backwardness (Gerschenkron 1962). In advanced high-income countries, technological innovation and industrial upgrading require indigenous inventions supported by costly and risky research and development (R&D), as their technologies and industries are leading global development. Moreover, the institutional innovation required to foster the development of new technologies often entails a costly trial-anderror, evolutionary process. In the process of upgrading or diversifying into a new sector, a developing country can borrow technology and the supporting social and economic institutions from advanced countries. In doing so, it has the potential of reducing the costs and risks of innovation and growing at an annual rate several times that of high-income countries. To tap that potential, the countrys industrial development needs to be consistent with its comparative advantages so as to be competitive in both domestic and international markets. A wellfunctioning market system is a precondition since the market will ensure that prices reflect the relative scarcity of the factors of production (land, labor, and capital), which in turn guides firms into industries that are consistent with the countrys comparative advantages. The country will grow fast, produce a large surplus (profits), accumulate capital rapidly, and quickly upgrade its endowment structure and industries.
a MarKet-PluS SolutioN
at the SaMe tiMe, a smooth industrial and technological upgrading process requires simultaneous improvements in soft infrastructure such as educational, financial, and legal institutions, and in hard infrastructure such as telecommunications and transportation. These improvements will enable firms to reduce their transaction costs and become the lowest-cost producers (Harrison and Rodriguez-Clare 2009). But no single firm can afford to take on all these infrastructure initiatives; and spontaneous self-coordination among many firms to meet these challenges is unrealistic. The task requires collective action, or at least coordination, between infrastructure service providers and industrial firms. In fact, the government itself must initiate or proactively coordinate these changes. In addition, industrial upgrading and diversification requires that certain firms act as first movers. If they fail, they bear all the costs of their decisions; if they succeed, they are usually followed into the marketplace by competitors, and quickly lose the economic rents and rewards that they expected as first movers. Because of the above asymmetry in the expected cost and gain for the first movers and the information externality created by them, the government must provide incentives to encourage them.
the New Structural ecoNoMicS

aS we re-eXaMiNe sustainable growth strategies for developing countries after the global crisis, we need to pay special attention to structural change
and its corollary, industrial upgrading and diversification. The new structural economics (Lin 2010) proposes a framework that complements earlier approaches. It takes the following principles into consideration: firSt, an economys structure of factor endowments (the relative abundance of the factors of production) changes as it moves from one level of development to another. Therefore, its optimal industrial structure will also be different at different levels of development, requiring a corresponding level and mix of hard and soft infrastructure to support its operations and transactions. For example, the United States had to update its financial and legal system when it evolved from an agrarian economy to an industrialized one in the 18th century. The dynamics of hard and soft infrastructure was even more notable in the 19th century when railroads were built to accommodate the needs of increasingly large firms, and sophisticated new regulations had to be adopted to guide interstate commerce. SecoNd , each level of economic development is a point on a continuum from low-income agrarian to high-income industrialized, not a dichotomy of two stages: poor versus rich or developing versus industrialized. This is why industrial and infrastructure upgrading targets in developing countries should not necessarily be the same as those of high-income countries. third, at each level of development, the market is the main mechanism for allocating resources. However, history and economic theory suggest that although markets are in-
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dispensable in allocating resources to the most productive sectors and industries, government interventionthrough the provision of information, coordination of infrastructure improvements, and compensation for externalitiesis equally indispensable in helping economies move from one level of development to another. This upgrading entails large externalities that affect firms transaction costs and returns to capital investment. Thus, the market is necessary but not sufficient, and the government needs to play an active role. The evidence that suggests the benefits of government involvement may not be enough to validate an idea that has long been mired in controversy. Many economists who believe that government intervention is indispensable for structural transformation may still oppose a proactive public sector role in industrial upgrading and diversification. The main reason for their opposition is the lack of a framework for industrial policy making. But we can derive some guiding principles by drawing on the theories of comparative advantage and the advantage of backwardness, and by analyzing some industrial successes and failures.
fiNdiNG a Pathway
the New Structural ecoNoMicS approach suggests a user-friendly six-step framework to help policy makers identify and facilitate growth paths (Lin and Monga 2010b): firSt, identify those tradable goods and services that have existed for a period of about 20 years in dynami-
cally growing countries that have similar endowment structures but with a per capita income that is about double their own. SecoNd, among the industries on that list, identify those that have attracted domestic private firms and try to pinpoint: any obstacles that may be preventing them from upgrading the quality of their products, or any barriers that may be discouraging other private firms from entering. This could be done using valuechain analysis or the Growth Diagnostic Framework suggested by Hausmann, Rodrik, and Velasco (2008). The government can then implement policies to remove the constraints at home, and carry out randomized controlled experiments to test their effectiveness in eliminating the constraints before scaling those policies up to the national level. third, some of the identified industries may be new to domestic firms. The government could encourage firms in the higher-income countries identified in the first step to invest in these industries, since those firms have the incentive of relocating their production to the lowerincome country so as to reduce labor costs. The government could also set up incubation programs to assist the entry of private domestic firms into these industries.2 fourth, unexpected opportunities for developing countries may arise from their unique endowment and from technological breakthroughs around the world. Developing country governments should there-
fore pay close attention to successful discoveries and engagement in new business niches by private domestic enterprises and provide support to scale up those industries. fifth, in countries with poor infrastructure and unfriendly business environments, special economic zones or industrial parks can help overcome barriers to firm entry and foreign investment. These can create preferential environments which most governments, because of budget and capacity constraints, are unable to implement for the economy as a whole in a reasonable timeframe. Industrial clusters could also be encouraged. SiXth, the government can compensate pioneer firms through timelimited tax incentives, cofinancing of investments, or access to foreign exchange. To avoid rent seeking and the risk of political capture, these incentives should be limited both in time and in financial cost, and should not be in the form of monopoly rent, high tariffs, or other distortions. Policy makers in all developing countries could take this approach to help their economies follow their comparative advantages, tap into the potential advantage of backwardness, and achieve dynamic and sustained growth. Justin yifu lin is world Bank chief economist and Senior Vice President, development economics.
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references Akerlof, G. A. and R. J. Schiller. 2009. Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism. Princeton, N. J.: Princeton University Press. Basu, K.. 2011 [forthcoming]. Beyond the Invisible Hand: Groundwork for a New Economics. Princeton, N.J.: Princeton University Press. Gerschenkron, A. 1962. Economic Backwardness in Historical Perspective, a book of essays. Cambridge, Mass.: Belknap Press of Harvard University Press. Harrison, A. and A. Rodrguez-Clare. 2010. Trade, Foreign Investment, and Industrial Policy for Developing Countries, in D. Rodrik, ed. Handbook of Economic Growth, Vol. 4. Hausmann, R., D. Rodrik, and A. Velasco. 2008. Growth Diagnostics, in N. Serra and J.E. Stiglitz, eds. The Washington Consensus Reconsidered: Towards a New Global Governance. New York: Oxford University Press, pp. 324354. Krugman, P. 2009. How Did Economists Get it so Wrong? New York Times Magazine, September 2. Lin, J.Y. 2010. New Structural Economics: A Framework for Rethinking Development. Policy Research Working Paper no. 5197. Washington D.C.: World Bank. Lin, J. Y. 1995. The Needham Puzzle: Why the Industrial Revolution Did Not Originate in China. Economic Development and Cultural Change, 41, (2), 26992.
Lin, J. Y., and C. Monga. 2010a. Growth Identification and Facilitation: The Role of the State in the Dynamics of Structural Change. Policy Research Working Paper no. 5313. Washington D.C.: World Bank. Lin, J. Y., and C. Monga. 2010b. The Growth Report and New Structural Economics. Policy Research Working Paper no. 5336. Washington D.C.: World Bank. Katz, J. 2006, Salmon Farming in Chile, in V. Chandra ed. Technology, Adaptation, and Exports: How Some Developing Countries Got It Right. Washington, D.C.: World Bank, pp. 193-223. Monga, C. 2009. Post-Macroeconomics: Reflections on the Crisis and Strategic Directions Ahead. Policy Research Working Paper no. 4986. Washington D.C.: World Bank. Rhee, Y.W. 1990. The Catalyst Model of Development: Lessons from Bangladeshs Success with Garment Exports. World Development, Vol. 18, No.2, pp. 333346. Stiglitz, J. 2009. Freefall: America, Free Markets, and the Sinking of the World Economy. New York: W. W. Norton & Co. World Bank. 2008. The Growth Report: Strategies for Sustained Growth and Inclusive Development. Washington, D.C.: World Bank.
endnotes
1 Stiglitz (2009), Akerlof and Schiller
(2009), and Krugman (2009) have questioned some of the fundamental tenets of mainstream economics, most notably the assumption that competitive markets are sufficient to create strong business incentives, and wealth creation, and to ensure efficient outcomes. Monga (2009) and Basu (2011) suggest that economics move beyond the boundaries of methodological individualism because all economic systems rely on social norms and beliefs.
2 Bangladeshs vibrant garment industry
is an example of a new industry starting from foreign direct investmentin this case, Daiwoo, a Korean manufacturer, in the 1970s. After a few years, enough knowledge transfer had taken place and the direct investment became a sort of incubation. Local garment plants mushroomed in Bangladesh, and most of them can be traced back to that first Korean firm (Rhee 1990). Chiles successful salmon industry is an example of incubation by the government. Fundacin Chile, a public sector firm, set up the first commercial salmon-farming operation in the country in 1974 and demonstrated that salmon farming could be successful in Chile. This industry expanded rapidly to the private sector and in size and complexity after the 1980s (Katz 2006).
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BEIJING CONSENSUS OR WASHINGTON CONSENSUS
What Explains Chinas Economic Success?

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By yaNG yao
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SPecial rePortS
hinas remarkable economic growth is often attributed to strong government intervention that
VariatioNS oN a theMe
iN JoShua raMoS original formulation published in 2004 by the U.K.s Foreign Policy Centre, the BC is defined by three principles, none of which necessarily requires strong government intervention: institutional innovation, equitable and sustainable development, and self-determination. Over the last 30 years, the Chinese economy has moved progressively toward the market doctrines of neoclassical economics as summarized by John Williamson in his formulation of the WC. These include: prudent fiscal policy, economic openness, privatization, market liberalization, and the protection of private property. China has been extremely cautious in maintaining a balanced budget and keeping inflation in check. Programs aimed purely at redistributing economic resources have been few, and transfers from the central government to the provinces have generally been dominated by infrastructure investment. The country is the worlds second largest recipient of foreign direct investment after the United States; and more than 80 percent of Chinas state-owned enterprises have been privatized or transformed into publicly listed companies.
can mobilize large amounts of resources to clear any bottleneck to growth or institutional change. This approach is often referred to as the Beijing Consensus (BC) as compared to the Washington Consensus (WC): the former being a model of authoritarianism and heavy state involvement in the economy, the latter a model of neoliberal and market-oriented doctrines. But these characterizations are inaccurate.
change and policy reform, whereas developing countries are usually characterized by rigid institutions that impede the function of the market. A big-bang approach to reforms is usually politically impractical or prohibitively costly. Chinas gradual one-step-at-a-time approach has been more successful. So if there is a Beijing Consensus it refers to the way China shaped its institutional and policy reforms to make the Washington Consensus work in the Chinese context.
the BeSt May Be the eNeMy of the Good

the chiNeSe eXPerieNce has yielded a number of lessons for other developing countries. firSt, institutional efficacy is more important than institutional purity. The recent development economics literature points to the importance of institutions for economic growth. But institutions are effective only if they provide the right incentives to align the personal interests of economic and social agents with the interests of society at large. In this case, first-best institutions may be ineffective because they often require drastic changes in the incentive structure which may be detrimental to and alienate the major stakeholders. Admittedly, adaptation which implies compromises with political and social realities, can result in lower efficiency. This may simply be the cost of success. Adaptation properly applied can motivate the stakeholders to buy into the reform, which is a key success factor.
BiG BaNG or eVolutioN?

whatS uNique is the way China has applied the WC. Implementing the WC requires substantial institutional
28
workers assemble solar-powered vehicles in weifang. designed and manufactured by a chinese company, the vehicle can run 120 to 150 kilometers under normal driving conditions on a full charge with speeds of up to 48 kilometers per hour. it has attracted its first batch of export orders from countries including Germany, the united States, and Norway.
whatS iN it for Me?

But chiNa alSo offerS many examples of institutional adaptation that improved efficiency. the township and village enterprise (tVe) played a key role in chinas industrialization in the 1980s. TVEs were nominally owned by local governments but in effect managed by private entrepreneurs. So although their ownership structures were unclear, they did offer strong incentives to both entrepreneurs and local officials to improve economic efficiency. They helped entrepreneurs circumvent the adverse political constraints at the time and generated local government tax revenues and economic growth. the dual-track price system implemented between 1985 and 1994 is another example. This system assigned two prices to a single good, one for planned quotas and the other for market transactions. In this case the efficiency
losses came in the form of corruption: because the planned prices were much lower than the market prices, the officials who controlled the quotas could take advantage of the price differential to make money (arbitrage). However, the system provided powerful incentives for state-owned enterprise (SOE) managers to produce more output for the market while protecting weak SOEs from failing in the face of market competition. This was important to win support for reform from the larger part of the society. In addition, the system prevented hyperinflation which was plaguing other transition economies.
the carrot or the SticK

SecoNd, government officials need to be motivated. The role of government in economic development was highlighted in the World Banks influential 1993 report The East Asian Miracle and echoed in its
recent 2008 Growth Report. Although both explored how government can usefully take action to remove bottlenecks to economic growth, they spent little time on how to motivate government officials to take those actions. In China, government officials are motivated in two ways. First, promotion of government officials is strongly based on merit, especially their contributions to economic growth. This is quite different from performance evaluation based on accountability, which requires government officials to follow preset rules or be punished. Although this kind of negative incentive exists in China, positive incentives for innovation and performance leading to economic growth are more prevalent. So far, the positive effects of this system have outweighed the negatives. Second, public servants benefit directly from economic growth: those in more prosperous regions enjoy much higher salaries than
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those in less developed regions, different government departments can offer different levels of income and welfare, with departments that are directly involved in managing economic activities enjoying better treatment, and some provinces provide bonuses to officials in subnational governments for generating more tax revenue. Politically, many of those practices are regarded as extra-legal. In China they are considered practical ways of harnessing the inevitable forces of human nature. Fiscal decentralization, too, has helped motivate subnational government officials. As one of the most fiscally decentralized countries in the world, Chinas subnational government revenue accounts for 45 percent of total government revenue and subnational spending accounts for 77 percent of total government spending. Decentralization turns local government officials into strong stakeholders in local economic growth. In addition, fiscal decentralization has created a constructive competition for resources among local governments, inducing them to improve services, local infrastructure, and other aspects of the business environment.
less pressure from powerful interest groups. The primary interest is in promoting long-run economic growth which helps ensure better incomes for society as a whole.
society, the government must take a stand and address challenges from the less favored. Pareto-improving reforms make it easier to mobilize broad public support.
a hoPeful future
iN deScriBiNG eaSt aSiaS growth experience, political scientists have proposed the concepts of autonomous states or developmental states, where the state plays a role in macroeconomic planning. But they are strong concepts because they require that the state have certain intrinsic qualities. Ultimately, they lay the burden on having visionary and committed leaders. The Chinese experience has taken a different approach. It treats the government as made up of of rational individuals who need to be motivated to work for the common good of society. Based on this belief, a wide range of institutional arrangements have been established to incentivize government officials to behave as if they were disinterested when they face conflicts of interests in society. Although Chinas application of the Washington Consensus may be country specific, it contains a key principle that others can learn from: namely, a volitional pragmatism featuring constant experimentation with a defined objective to improve on the status quo. Nothing is taken as permanent or perfect: the future is always envisioned as better than today and incentives are crafted to make that vision a reality. Yang Yao is a Professor and Director of the China Center for Economic Research at Peking University in the Peoples Republic of China.
When reforms drastically change the distribution of wealth or power in society, the government must take a stand and address challenges from the less favored.
reduciNG elite caPture

third, insulation from special interests. Government officials should be immune to conflicts of interests and pressure from special interest groups which in many developing countries often derail institutional and policy reforms. Because Chinese society has been relatively equal, the government faces
Another strategy has been to search for so-called Pareto-improving reforms: when no one is made worse off and at least one person is made better off. When reforms drastically change the distribution of wealth or power in
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iNterNatioNal deVeloPMeNt NGoS continued from page 19
totaled around $325 billion5 and remittances $240 billion.6 These last two figures are likely underestimates. At best IDNGOs tend to compete for far less than 10 percent of all capital flows that affect poverty, inequality, and injustice in developing countries. We need to think more deeply about the other 90 percent. Corporate social responsibility is a low-leverage approach. We need to think differently, and bigger. For example, more consistently influencing the basic rules of Wall Street might pay huge dividends. So too might helping multinational corporations understand how their supply chain and local policies can benefit poorer and more marginalized populations. Influencing governments to unrig rules, regulate capital flows that can severely impact the poorest, and be more transparent about private sector contracts and distribution of profits are all things that merit greater attention. And we need to probe for counterintuitive hybrids: is there a cross between a hedge fund and a social justice organi-
zation, and if so, what is it? Where is the intersection between trading commodity futures and social justice? Can nonprofits help for-profitsthemselves working under restrictive and terribly short-term metricsfind new ways to reach the poor that is good for growth, and good for equality, such as helping to test low-margin products like crop or weather index insurance for SubSaharan farmers? Working with international capital, and understanding capital markets, are not standard core competencies among IDNGOs. They probably need to become so. Dr. Kent Glenzer is Oxfam Americas Director of Learning, Evaluation, and Accountability. He can be reached at [email protected]. endnotes
Universitys Hauser Center blog. http://hausercenter.org/iha/2010/10/11/ the-big-push-back/.

3 L. David Brown and Jonathan Fox.
Transnational Civil Society Coalitions and the World Bank: Lessons From Project and Policy Influence Campaigns. The Hauser Center for Nonprofit Organizations and The Kennedy School of Government. Harvard University, October 2000. Working Paper No. 3.
4 See www.keystoneaccountability.org.uk. 5 Hudson Institute. Executive Summary:
A Comprehensive Guide to the Sources and Magnitude of Global Giving to the Developing World. The Index of Global Philanthropy and Remittances 2010. Center for Global Prosperity. Washington, D.C.
6 Dilip Ratha, Sanket Mohapatra, K. M.
1 Bureau of Democracy, Human Rights,
and Labor. 2009 Human Rights Report: Introduction. U.S. Department of State. http://www.state.gov/g/drl/rls/hrrpt/2009/ frontmatter/135936.htm.
2 Rosalind Eyben. The Big Push Back!
Vijayalakshmi, Zhimei Xu. Migration and Development Brief 3. Development Prospects Group, Migration and Remittances Team, November 29, 2007. Washington, D.C.: World Bank.
Posted on 11 October 2010 on Harvard
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EDUCATION FOR EDUCATION...
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SPecial rePortS
OR FOR SKILLS?
By eric a. haNuSheK
creasing learning (Hanushek 2008). The problem is that these programs are directed solely at school attendance with no consideration of what goes on in the schools. On the other hand, when a school program emphasizes achievement, such as Kenyas scholarship program for girls (Kremer, Miguel, and Thornton 2009) which has the right incentives in place, learning does increase. Programs that emphasize education for all while ignoring the quality dimension do not serve the underlying purposes that motivate them (UNESCO 2005).
ountries in the developing world were led to believe that education would put them
SKillS VerSuS Seat tiMe

iNVeStiNG iN huMaN caPital is good policy, but execution has often been faulty. Too frequently, students have spent time in schools, but have not learned what their counterparts in developed countries learned. As a result, they have not become competitive in the world economy. Take Peru: 60 percent of students get at least nine years of schooling, yet only 20 percent of these reach the basic skill level of developed countries. Or Ghana, where 37 percent of students get at least nine years of schooling, but only one in seven of these reach the basic skill level of developed countries.1 It turns out that it is the skills that count. National growth rates are closely linked to achievement, and only if additional years of schooling lead to higher achievement will those years be productive. Most policy makers cannot conceive of education without achievement. After all, schooling is about learning, and more schooling must lead to some improvementthis is just common sense, they say.
on the path to becoming modern economiesand they responded enthusiastically. Education for All was a powerful message that has led to a veritable transformation of schooling throughout the world.
SuPPlyiNG quality
while deMaNd-Side approaches are important, there is no doubt that the supply of high quality schools is the main constraint: indeed, demand-side policies are unlikely to work if schools do not provide the right kinds of learning experiences. Formulating policies that ensure high-quality schools has been difficult. A policy makers first instinct is often to expand resources: reducing class sizes, increasing the qualifications of teachers, providing additional administrative support, and generally sending more funds to schools. But research from both developed and developing countries has consistently shown that resource policies, by themselves, are unlikely to lead to the desired achievement outcomes. Perhaps surprisingly, resource constraints
School attainment (the years of schooling completed by individuals) expanded dramatically. But many countries did not reap the promised rewards of economic success. While this has puzzled many, and has led to skepticism about the role of human capital development, the solution to the puzzle is evident. School attainment frequently expanded without a commensurate increase in achievement or cognitive skills, leading to unsatisfactory economic outcomes. Ensuring that schooling enhances cognitive skills will require different policies and institutions.
deMaNdiNG quality
there iS, howeVer, mounting evidence to the contrary. High-quality studies of demand-side programs including fee reductions for students, conditional cash transfers, and school nutrition programs show that these initiatives tend to increase school attendance and attainment without in-
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SPecial rePortS
are not the most significant challenge facing schools.
itS aBout the teacher

the MoSt coNSiSteNt reSearch finding is that teacher effectiveness is the main determinant of high achievement. This finding may not in itself be particularly surprising; more instructive, however, is that effective teachers are not always the most experienced, the better trained, the more educated, or the better paid. In fact, it has been impossible to identify the characteristics of good teachersthose who produce large learning gains in their students. Because the characteristics of good teaching are not well-described, it is impossible to identify and regulate the skills and approaches that make for a good
teacher. This finding is important, because a common school improvement is to require more qualified teachers. But without a solid understanding of the teacher attributes, experience, or training that lead to better performance in the classroom, it is impossible to set qualification standards for effective teachers.
autoNoMy, accouNtaBility, aNd choice

the alterNatiVe to reGulatioN is to create incentives that will induce schools to seek out effective teachers and programs. Incentives, here, means providing rewards (either extrinsic or intrinsic) for better achievement or, conversely, punishment for poor achievement.2 Specifically, institutional policies that establish test-based
fiGure 1: autoNoMy coMBiNed with accouNtaBility iNcreaSeS achieVeMeNt

Math PerforMaNce 80
70 60 50 40 30 20 10 0
76.2 55.5 ceNtral eXaMS
23.7 No yes
yes 0.0 No
School autoNoMy oVer teacher SalarieS Note: Performance relative to least effective policy (that is, school autonomy without central exams). Source: hanushek and woessmann (2011), based on woessmann (2005).
accountability, that introduce school choice and competition, and that provide for local autonomy in decision making have been found to enhance student outcomes. Over the last two decades, many countries have introduced accountability into their schools. The most celebrated are the league tables in the U.K. and the federal legislation under No Child Left Behind in the United States. Other countries have also started assessing student performance as a basis for rewarding and penalizing schools. Early evaluation of these programs points to their positive impacts on student achievement. These kinds of accountability policies can also be used to provide learning incentives for students. In the previously mentioned Kenyan scholarship program, students responded to rewards: achievement rose when they were promised a grant for further schooling if they scored well on tests. Similarly, Bishop (2006)) shows that promotion and graduation standards for students can directly influence performance. Giving parents and students choices about which school to attend can provide another set of incentives: as parents select schools that provide better learning opportunities, they put pressure on the other schools that do not attract large numbers of students. Clearly, the power of choice depends on the range of opportunities available, and having a healthy and competitive market is important. Further, because the value of these incentives depends on parents systematically choosing high-quality schools, a good system of student testing and accountability will provide information on which to base their selection.
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Establishing autonomy of decision making at the school level is important because local decision makers know the specific schooling challenges that they face and the local capacity to respond to these challenges. At the same time, local decision making must give priority to achievement, otherwise local schools might simply pursue policies that make life more comfortable for school personnel, for instance. Here, again, accountability policies must feature prominently. For example, the figure shows that letting local schools set salaries actually lowers achievement if there is no central testing, while the combination of local salary autonomy and accountability yields very large gains in student performance. Schools can provide the essential cognitive skills that lead to a countrys long-run economic growth, but simply providing more resources without paying attention to incentives is unlikely to lead to better performance. Eric A. Hanushek is the Paul and Jean Hanna Senior Fellow in the Hoover Institution at Stanford University and a member of the Koret Task Force on K12 Education.
references Bishop, John H. 2006. Drinking from the Fountain of Knowledge: Student Incentive to Study and LearnExternalities, Information Problems, and Peer Pressure. In Handbook of the Economics of Education, edited by Eric A. Hanushek and Finis Welch. Amsterdam: North Holland: 909944. Hanushek, Eric A. 2008. Incentives for Efficiency and Equity in the School System. Perspektiven der Wirtschaftspolitik 9, Special Issue: 527. Hanushek, Eric A., and Ludger Woessmann. 2011. The Economics of International Differences in Educational Achievement. In Handbook of the Economics of Education, Vol. 3, edited by Eric A. Hanushek, Stephen Machin, and Ludger Woessmann. Amsterdam: North Holland: 89200. Hanushek, Eric A., and Ludger Woessmann. 2008. The Role of Cognitive Skills in Economic Development. Journal of Economic Literature 46, no. 3 (September): 607668. Kremer, Michael, Edward Miguel, and Rebecca Thornton. 2009. Incentives to Learn. Review of Economics and Statistics 91, no. 3 (August): 437456. UNESCO. 2005. Education for All: The Quality Imperative, EFA Global Monitoring Report. Paris: UNESCO. Woessmann, Ludger. 2005. The Effect Heterogeneity of Central Examinations: Evidence from TIMSS, TIMSS-Repeat and PISA. Education Economics 13, no. 2 (June): 143169. endnotes
1 See Hanushek and Woessmann (2008)
for the underlying discussion of the role of cognitive skills and for discussion of skill levels in developing countries.
2 The international evidence comes largely
from developed countries but does include some developing countries that have participated in international testing; see Hanushek and Woessmann (2011).
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36
WHY
By aBhiJit V. BaNerJee aNd eSther duflo
ARENT CHILDREN LEARNING?
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SPecial rePortS
W
(UNESCO 2009).
e are five years away from 2015, the year when the
Whats keeping children from learning? Or to reverse the question, what enables them to learn? In this article, we offer a reading of the recent evidence, primarily but not exclusively from randomized trials, that, we hope, contributes to an answer.
colleagues. Overall, teachers spend less than half the time they are supposed to be teaching actually doing so (Chaudhury et al. 2006).
iNceNtiVeS helP
there iS Not eNouGh PreSSure on teachers to teach. When such pressure is brought to bear, they do teach more, and students test scores improve, suggesting that students can indeed be taught (something teachers often question), and that teachers know how to teach (something education experts, who tend to insist on the need for training, sometimes doubt). A randomized evaluation in nonformal schools in Rajasthan, India found that linking teacher compensation to attendance, by verifying attendance with objective impersonal means (such as photos taken with tamper-proof date and time stamps), was effective. Teacher absences fell by half, from 42 percent to 21 percent. And, students learned more: test scores rose by 0.16 standard deviations, and children were 50 percent more likely to pass the exam allowing them to join formal schools (Duflo et al. 2010a). Another evaluation in India found that basing teacher pay on student performance was highly effective at improving student learning (Muralidharan and Sundararaman 2009). In Kenya, teachers hired on short contracts, under supervision by the school committee, were much more likely to be present then regular teachers, and their students had higher test scores than those of regular teachers, even though the contract teachers had no prior teaching experience (Duflo et al. 2010b).
the firSt SteP iS ShowiNG uP

eNSuriNG that childreN have access to schools and actually spend time there does matter. The data clearly show that children who spend more time in school have better life outcomes (for example, Duflo 2001, Spohr 2003). The trouble is that while being enrolled is obviously a necessary condition for this, there are many reasons why enrollment by itself may not translate into much more effective schooling. The school year in India is only about 140 days, and each school day often lasts only 3 hours. By contrast, children in most OECD countries spend between 180 and 200 days in school, with longer school days of 6 to 8 hours.
Millennium Development Goal of universal education is supposed to be achieved, and the school attendance numbers do look good. In many parts of both East and West Africa, and almost all of South Asia, school enrollment has grown rapidly, with primary school enrollment now exceeding 90 percent in many areas
...aNd teachiNG
MoreoVer, being in the classroom is less useful if the teacher is not there. In 2002 and 2003, the World Absenteeism Survey of six countries, led by the World Bank, concluded that in Bangladesh, Ecuador, India, Indonesia, Peru and Uganda, teachers miss one day of work out of five on average, and the ratio is even higher (one in four) in India and Uganda. Their data from India also find that teachers who are in school do not necessarily teachthey read the newspaper, drink tea, or chat with their
So why areNt we celeBratiNG? The problem is that the children are in school, but they are not learning. In India, for example, nearly 60 percent of children in grade 4 cannot read a simple story at grade 2 level, and 76 percent cannot do simple division (Pratham 2005). In neighboring Pakistan, 80 percent of children in grade 3 cannot read a grade 1 paragraph (Andrabi et al. 2009). In Kenya, 27 percent of grade 5 children cannot read even a simple paragraph (Uwezo 2010).
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PriVate SchoolS do Better, But Not By a huGe MarGiN

aNother way to looK at incentives is to compare children in private schools with children in government schools. In Colombia, students who won a lottery for a private school voucher were 15 percent more likely than losers to attend private school, and scored significantly higher on a standardized test (Angrist et al. 2002). In Pakistan, students in private schools increase average achievement by 0.25 standard deviations each year, compared to students in public school. Self-selection is obviously an issue here, but Sonalde Desai and others try to deal with it by comparing siblings in India who belong to the same family. They found that, compared to their siblings in public schools, primary school age children attending private school
score 0.31 standard deviations higher in reading and 0.22 standard deviations higher in arithmetic. This likely remains an overestimate of the impact of private school in India, if parents send the most able children to private school or if they provide them with other additional inputs. The net effect of private school is thus not that much higher than the effect of improving incentives in the NGO (nongovernmental organization) schools in Rajasthan. Indeed, part of the effect of private school may be due to the fact that private school teachers attend school more often: using the effect of teacher attendance estimated from the Rajasthan study combined with the estimate from the World Banks study on absenteeism that private school teachers in India are 8 percentage points less likely to be absent than public school teachers in the same
village, it is possible to account for roughly half to a third of the estimated overall gain in test scores from private schooling just by virtue of the fact that private school teachers are more likely to be at work. The rest may be the result of teacher effort while in school, or better pedagogy.
But iNceNtiVeS are oNly Part of the Story

iN the 2000s, Pratham, a large NGO in India, trained balsakhis (childrens friends) to provide remedial education to the lowest performing 3rd and 4th graders in Vadodara and Mumbai municipal schools. Balsakhis were mostly local high school girls with a weeks training who were paid a relatively low salary of 1,000 Rupees per month, ($62.50, at purchasing power parity).
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The primary focus was to teach basic literacy and numeracy skills to students who were lagging behind. After one year, these students test scores were a very large 0.6 standard deviations higher than those of similarly low achieving children in comparison schools (Banerjee et al. 2007), and students initially at the bottom of the class scored a whole standard deviation higher in the program schools. Another evaluation of a Pratham program measured the results of a volunteer teacher program in Jaunpur, India, where school attendance is only 50 percent. More than 60 percent of the children aged 7 to14 could not read and understand a simple, first-grade level story. Pratham recruited and trained local volunteers in 65 randomly selected villages to conduct evening camps for two months. The volunteers typically had a high school education and received only a week of training, but the children benefited from these camps. A year later, children who initially could not read anything were 60 percentage points more likely to decipher letters than children in comparison schools. Those who initially could already decipher letters were 26 percentage points more likely to be able to read and understand a story (Banerjee et al. 2010). In another program, in Bihar, India, government schoolteachers received special training from Pratham to conduct summer school, focusing on basic skills. Participating children showed large learning gains. On average, they tested 0.2 standard deviations higher than children in the comparison groupcomparable to the private school effecteven though the summer school program lasted only four weeks and less than one in five children
participated in the program, so the effect on those who did would have to be five times larger or about one standard deviation(JPAL, 2009). A fourth study, also with Pratham, shows that even children who have mastered the basics can benefit from these types of programs though the effect may be smaller. In Bihar, India, another supplemental education program was targeted at all children, including those who could already read. Pratham provided educational materials and trained volunteers to use them. The evaluation suggests that children who were taught by these volunteers saw large gains as well (0.15 standard deviations in math and 0.16 in language for children in grades 3 to 5) [JPAL 2009]. However, when Pratham trained government school teachers in these techniques, rather than volunteers, and the teachers were asked by the government to use these techniques during the regular school year, we see no evidence of similar gains.
read) attended the evening remedial sessions. With the summer schools, the corresponding number was 18 percent.
educatioN aS a lottery
we ProPoSe a Very SiMPle theory to account for all of this, which we call the education-as-lottery hypothesis. Surveys of parental aspirations suggest that the average semieducated or uneducated parent sees education mainly as a way to secure a government or other salaried job. For this reason, they think that education is only worthwhile if their child can get through the gatekeeping public exams that restrict access to these kinds of jobs. All the evidence suggests that they are probably wrong. That is, while the evidence suggest that the return to an extra year of education in developing countries is more or less constant, parents believe that the returns are concentrated at the higher levels of education: in Morocco for example, parents believe that each year of primary education increases a boys earning by 5 percent, but each year of secondary education by 15 percent. The pattern was even more extreme for girls: parents believed each year of primary education was worth almost nothing, 0.4 percent. But each year of secondary education was perceived to increase earnings 17 percent. As a result they believe that education is much more of a lottery than it really is. Several implications follow from this hypothesis: Given the winner-take-all nature of education, it is very important to identify the child who has the best chance of being a winner as early as possible and putting all the resources behind him or her.
itS PuzzliNG
firSt, MaNy of theSe GaiNS seem large relative to the gains from private school. Why dont the private schools adopt Pratham-style pedagogical techniques to improve their performance, since it takes only a weeks training? Second, why do government school teachers use the Pratham techniques during the summer, but not during the school year? Third, why did parents and children not respond more enthusiastically to the offer of Prathams remarkably effective remedial programs? In Jaunpur only 8 percent of the children (13 percent of those who could not
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This is the child who gets sent to private schools, and we often see parents referring to her as the only smart child in the family. In Pakistan, children perceived by their parents as more intelligent are four times more likely to be enrolled in private schools (Andrabi et al. 2009, p. 100). In Burkina Faso, a study found that adolescents were more likely to be enrolled in school when they scored high on a test of intelligence, but they were less likely to be enrolled in school when their siblings had scored high. The result is that many children (perhaps a majority) get a signal from their parents relatively early in their lives (the private school/public school choice, for example, often happens at the primary school level) that they are likely to be unsuited to education. It is no wonder that after this, many of them are mostly going through the motions in school, waiting for when they can drop out. This would explain why, for example, child attendance rates in India are 70 percent, worse even than teacher attendance (ASER 2005).
This tendency to pick winners early and focus on them would explain why parents are not very excited by remedial education. If their child needs remedial education, they feel, he is probably beyond help. Because parents are focused on the lottery, it is no surprise that the education system gets designed to reflect those preferences. Since the bet is on the highest performing children, the focus in class is always to cover the whole syllabus even if the average child is totally lost. Think of those fourth graders who cannot read but get geography and history and science thrown at them. The whole system conspires against them on thisIndias Right to Education Bill makes finishing the syllabus a legal requirement. In Kenya, providing additional textbooks benefited only those students who were already at the top of their class since the textbooks were far too advanced to be useful to the rest of the children (Glewwe et al. 2007). This explains why teachers do not use the Pratham techniques in class, since
those techniques focus on helping the average child master the basic concept better and distract from finishing the syllabus. On the other hand, during summer school, they were there explicitly to help the children to catch up and therefore willing to do what Pratham suggested. What is true for government schools is probably even more so for private schools, which depend for their existence on pleasing the parents. Why would we expect them to use techniques that are meant for the average child?
the eVideNce for our hyPotheSiS?

a Study By traNG NGuyeN is highly consistent with this view. She finds that in Madagascar some parents considerably overestimate the return to education and some substantially underestimate it, though on average they get it about right. However, they dramatically overestimate (by a factor of two) the chance that those who graduate
42
from school will get a government job, making education more of a lottery (Nguyen, 2008). Nguyen also finds that when parents who underestimate the returns are given information about actual returns to education, their children perform much better: their test scores improved by 0.37 standard deviations. An earlier study by Jensen also finds that in the Dominican Republic giving students information about the returns to education reduced the chance of dropping out (Jensen, 2010b). More recently, a randomized evaluation in three Northern States in India (also by Jensen) found that once parents became aware of the high-paying jobs available to educated young women through a recruitment drive for call centers, they were more likely to keep their daughters in school. In other words, this convinced them that investing in their daughters was a better lottery ticket than they thought (Jensen 2010a). On the other hand, interestingly, this study also found that in response to the drive parents reduced educational investment for boys they wanted to keep with them on the farm, and they increased the education of boys they wanted to send to the city. A more indirect but compelling piece of evidence comes from a randomized evaluation of a tracking program in Kenyan government schools. Extra teachers were hired, and classes were split to allow for smaller class sizes. Some randomly selected classes were divided into a more advanced and a less advanced class based on the childrens performance, while other classes were split at randomwhat is sometimes called tracking. Children in the tracked classrooms (both those in the advanced and the less advanced class) learned more than children
in classes that were split without tracking, and these gains persisted even one year after the program ended and all the students were put back in the same class (Duflo et al. forthcoming). The children in the less advanced tracked classes benefitted presumably from the fact that, although the teacher was probably still teaching to the top of the (new) class, they were now nearer the top.
what doeS thiS MeaN for educatioN Policy?

a ProPer aNSwer to this question goes beyond the scope of this article. A few remarks however seem warranted. First, there is now huge pressure all over the world to hire more teachers, but if we are right, just cutting class size without changing pedagogy will not work. This is indeed what was found in India in the 1990s (Banerjee et al. 2005), and also in Kenya more recently (Duflo et al. 2010b). Second, because the long-term incentives are distorted by the assumption of a lottery, creating short-term rewards for educational success are all the more important. A program in Kenya that offered girls who scored in the top 15 percent of an exam a scholarship for the next year worth about twenty dollars, not only got the girls to do much better but also put pressure on the teachers to work harder (to help the girls), which meant that boys did better too, even though there was no scholarship for them (Kremer et al. forthcoming). A computer-based teaching program that rewards successful learning by allowing kids to play games, should also work well in this environment, because, apart from everything else, it is a way to create short-term incentives. This is in fact what was found in Vadodara,
where a program that allowed pairs of children to play math learning games for two hours a week generated gains of 0.39 standard deviations, and those gains were obtained at all levels of the distribution of test scores (Banerjee et al. 2007). The ultimate solution, however, has to involve a wholesale attitude shift by everyone in the system from parents to educators. The good news is that if this shift takes place, very large gains can follow. Abhijit V. Banerjee is the Ford Foundation International Professor of Economics at the Massachusetts Institute of Technology (MIT). Esther Duflo is the Abdul Latif Jameel Professor of Poverty Alleviation and Development Economics at MIT. Both authors are founders and directors of the Abdul Latif Jameel Poverty Action Lab (J-PAL) at MIT. references Andrabi, Tahir, Jishnu Das, Asim Khwaja, Tara Vishwanath, and Tristan Zajonc. 2009. Pakistan Learning and Educational Achievement in Punjab Schools (LEAPS): Insights to Inform the Education Policy Debate. Washington, D.C.: The World Bank. Angrist, Joshua, Eric Bettinger, Erik Bloom, Elizabeth King, and Michael Kremer. 2002. Vouchers for Private Schooling in Colombia: Evidence from a Randomized Natural Experiment. The American Economic Review, December: 15351558. Banerjee, Abhijit, Rukmini Banerji, Esther Duflo, Rachel Glennerster, and Stuti Khemani. 2010. Pitfalls of Participatory Programs: Evidence from a randomized evaluation in education in India. American Economic Journal: Economic Policy 2 (1): 130.
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Banerjee, Abhijit, Shawn Cole, Esther Duflo, and Leigh Linden. 2007. Remedying Education: Evidence from Two Randomized Experiments in India. Quarterly Journal of Economics 122(3):12351264. Banerjee, Abhijit, Suraj Jacob and Michael Kremer, with Jenny Lanjouw and Peter Lanjouw. 2005. Moving to Universal Education: Costs and Trade offs (mimeo). Cambridge, MA: Massachusetts Institute of Technology. Chaudhury, Nazmul, Jeffrey Hammer, Michael Kremer, Karthik Muralidharan, and F. Halsey Rogers. 2006.Missing in Action: Teacher and Health Worker Absence in Developing Countries. Journal of Economic Perspectives 20(1): 91116. Chou, Shin-Yi, Liu, Jin-Tan, Grossman, Michael and Ted Joyce. 2010. Parental Education and Child Health: Evidence from a Natural Experiment in Taiwan. American Economics Journal: Applied Economics 2(1):3361. Desai, Sonalde, Amaresh Dubey, Reeve Vanneman and Rukmini Banerji. 2009. Private Schooling in India: A New Landscape. India Policy Forum Vol. 5: 158. Suman Bery, Barry Bosworth and Arvind Panagariya, eds. New Delhi: Sage. Duflo, Esther, Pascaline Dupas, and Michael Kremer (forthcoming). Peer Effects, Teacher Incentives, and the Impact of Tracking: Evidence from a Randomized Evaluation in Kenya. American Economic Review. See also NBER Working Paper. W14475. Cambridge, MA: National Bureau of Economic Research. Duflo, Esther, Pascaline Dupas and Michael Kremer. 2010. Pupil-Teacher
Ratio, Teacher Management and Education Quality (mimeo). Cambridge, MA: Massachusetts Institute of Technology. Duflo, Esther, Rema Hanna, and Stephen P. Ryan. 2010. Incentives Work: Getting Teachers to Come to School (mimeo). Cambridge, MA: Harvard University and Massachusetts Institute of Technology. Duflo, Esther. 2001. Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment. American Economic Review 91(4): 795813. Glewwe, Paul, Michael Kremer, and Sylvie Moulin. 2007. Many Children Left Behind? Textbooks and Test Scores in Kenya. NBER Working Paper. No. 13300. Cambridge, MA: National Bureau of Economic Research. J-PAL South Asia. 2009. Evaluation of Prathams Read India: July 2009 Report to Bihar Government. www.povertyactionlab.org/south-asia. Jensen, Robert. 2010a. Economic Opportunities and Gender Differences in Human Capital: Experimental Evidence for India. NBER Working Paper. W16021. Cambridge, MA: National Bureau of Economic Research. . 2010b. The (Perceived) Returns to Education and the Demand for Schooling. The Quarterly Journal of Economics 125(2): 515548. Kremer, Michael, Edward Miguel, and Rebecca Thornton. Incentives to Learn (forthcoming). Review of Economics and Statistics. Cambridge, MA: Massachusetts Institute of Technology Press.
Muralidharan, Karthik and Venkatesh Sundararaman. 2009. Teacher Performance Pay: Experimental Evidence from India. NBER Working Paper 15323. Cambridge, MA: National Bureau of Economic Research. Nguyen, Trang. 2008. Information, Role Models and Perceived Returns to Education: Experimental Evidence from Madagascar. MIT Working Paper. Cambridge, MA: Massachusetts Institute of Technology. OECD (Organisation for Economic Cooperation and Development). Key Indicators on Development. www.oecd.org/document/5 5/0,3746,en_2649_37455_46349815_1_1 _1_37455,00.html. Pratham Annual Status of Education Report. 2005. Final edition. scripts.mit.edu/~varun_ag/readinggroup/ images/1/14/ASER.pdf. Spohr, Chris. 2003. Formal Schooling and Workforce Participation in a Rapidly Developing Economy: Evidence from Compulsory Junior High School in Taiwan. Journal of Development Economics 70(2): 291327. UNESCO (United Nations Educational, Scientific, and Cultural Organization). 2009. EFA Global Monitoring Report: Overcoming Inequality: Why Governance Matters. www.unesco.org/new/en/ education/themes/leading-theinternational-agenda/efareport/ reports/2009-governance. Uwezo. 2010. Are Our Children Learning? Annual Learning Assessment, Kenya 2010. http://www.uwezo.net.
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techNoloGy aNd laBor ProductiVity

worldwide, labor has become nearly twice as productive over the last 20 years and even more so in the developing countries, with asia in the lead. labor productivity is critical to economic success; and productivity growth has three main sources: caPital deePeNiNG: the increase in capital per worker, with ict particularly important. capital deepening requires improving the business environment to enhance investors confidence and make investment opportunities more attractive. Growth iN laBor quality: the increase in the proportion of workers with high levels of education and experience, and total factor ProductiVity (tfP) Growth: reorganizing production processes using more and better technology and management. Policies to boost productivity growth must be strategic and must foster simultaneous improvements in all three areas. this means: investing in human capital and improving technology for better access to information, making education more accessible and affordable, and investing in ict as a strategy of choice for boosting economic growth and competitiveness.
how ict Policy coNtriButeS to laBor ProductiVity

coNtriButeS to PolicieS
ict iNfraStructure, especially broadband such as internet access coMPetitioN aNd reGulatioN to improve quality and reduce costs of ict products and services e-GoVerNMeNt for transparency, efficiency, and effectiveness. for example, e-procurement. ProMote ict-eNaBled SerViceS aNd coNteNt deVeloPMeNt to foster ict use across sectors, organizations, and households for better decision making* ProMote ict-eNaBled SerViceS aNd coNteNt deVeloPMeNt to foster technology diffusion to business* ict for educatioN such as online courses and other distance learning educatioN for it deVeloPMeNt aNd MaiNteNaNce
caPital deePeNiNG +++ +++ ++ ++
laBor quality + + + ++
tfP Growth + ++ ++ ++
++ + ++
+ +++ ++
+++ +
Note: Most of the policy options are adapted from oecd (2008). the authors use the + sign to express their own judgment of the expected effect of each policy option: + + + = strong effect + + = significant effect + = some effect
Source: dale Jorgenson and Khuong Vu (2010). Potential Growth of the world economy. Journal of Policy Modeling, 32: 615631. * Government ict policy should follow market principles and encourage the participation of the private sector as much as possible. enhancing the benefits that users can reap from ictenabled services and products is more effective than providing them with subsidies.
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CITIES
By tiM caMPBell
46
ON THE PROWL
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SPecial rePortS
ities in the modern world are beginning to share some features with the city-states
est cities on the planet travel often, on the order of thousands of study visits annually, and they visit a wide range of host cities which are selected carefully, so that visitors can acquire valuable knowledge to speed up improvements back home.
They have to make an attractive place for global talent and to deliver wellconnected and efficiently functioning infrastructure.
why do they Go?

But alSo, city leaders go because they have short terms of office and they know that learning from others is cheaper and less risky than pursuing untested ideas that may end up in false starts. Good practices from successful cities offer shortcuts. Cape Town and Buenos Aires drew on the waterfront renewal experience of Baltimore and London. Da Nang took lessons from Japan in conversion and regulation of urban land. Regional centers in Rajastan in the north of India are following lessons of infrastructure expansion and business readiness that their peer cities developed in central and southern India. Amman, Jordan is studying the many experiments in decentralized governance from other parts of the world, even outside the Middle East. City-to-city exchange was ranked by survey takers as by far the most effective way to learn. Visitors can actually see how things work.
Not oNly for the rich

a SurVey of 50 larGe citieS around the world revealed that cities visit repeatedly and continuously every year, often more than 10 times per year. They tend to choose visit partners that are like themselves, the rich tend to visit the rich, Stockholm visits London, London visits New York. But the poorcities like Ho Chi Minh City, Vietnam; Dakar, Senegal; and Tabriz, Iranvisit rich and poor in equal shares. And though visitors often select similar-sized hosts, even the megacities more frequently visit their cousins in the one to five million population range than their sister megacities. Perhaps something about that moderate city size enables newcomers to get their arms around the whole thing in a short time.
of millennia past. Now, as then, cities are important, even critical, to economic development. Unlike the walled cities that harbored flourishing trade in medieval Europe, today, cities by the thousands all around the world are looking outward in search not of silk and spices, but rather sources of finance, global talent, and most of all, good ideas. But the search for knowledge isnt always easy.
SMart citieS
they Go BecauSe in a globalized economy, cities need to work harder to make a living. They no longer have the protections of trade regimes and the comforts of regional isolation. In todays world, money moves fast, even faster than trade deals, and cities have learned that they must keep up with their principal competitorsother cities. If they want those inward investments, cities must strive to be on top of their game.
what do they learN?

half of the citieS taking part in the survey were reformers (by their own reckoning, they have made many significant reforms), and they have distinct interests compared to other cities. Reformers showed most interest in transport and know-how in fostering local economic development. The search for transport solutions reflects the well-known spread
a few weeKS aGo, my colleague Neal Peirce chided the short-sighted carping of voters who see in mayoral travel only junkets, even if they are for purposes of study. My recent research for a forthcoming book shows that the 500 larg-
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Bus rapid transit (Brt) system in curitiba, Brazil.
of Curitibas bus rapid transit (BRT) system to other cities in Brazil, then to Bogota, Colombia, and on to Mexico City. Currently BRT is reaching Asia. It is also why dozens of other cities, Portland is a good example, visit Amsterdam and Copenhagen: visitors see demonstrated in those northern European cities the power of integrating all forms of movement walking, bicycles, automobiles, busses, and tramsinto a single transit system. The nonreformers in the survey are those that had made few or no reforms. Their priorities were spread more or less evenly across a spectrum of topics, including finance, urban planning, urban renewal, and basic utilities. Perhaps the reformers feel they had this ground already covered. Both reformers and nonreformers are concerned with the big and growing question for all cities on the planet: how to govern sprawling metropolitan areas. Cities on the prowl for answers to the metro puzzle are unlikely to return home fully satisfied.
research has also discovered individual styles in the way cities handle new knowledge. Trust and a learning environment seem to be the main ingredients in the alchemy of internal processing that is needed in a city to adapt knowledge successfully to local circumstances. Seattles Trade Development Alliance (TDA) has developed this understanding and internalized the practice of relationship building into its study tours. The TDA involves a range of business, government, and independent leaders in each and every mission. Over nearly 20 years of missions and many repeat participants, the TDA has achieved a measurable degree of bonding among its civic leadership.
shared values. With the right climate, civic leaders are able to reach consensus, and their reactions and policy initiatives have greater coherence and are achieved more speedily. Our research shows that the prowling of cities is continuous, it is growing, and the arrangements for visits are becoming more sophisticated, with many nongovernmental organizations (NGOs) popping up to help match cities up, much like a dating service matches couples. A wise policy environment and enlightened public support could help cities create the right conditions for innovation, even while they are on the prowl. Tim Campbell is Chairman of the Urban Age Institute in Washington, D.C. This article is adapted from the authors new book Beyond Smart CitiesHow Cities Network, Learn, and Innovate, forthcoming in January 2012 from Earthscan Publications, Ltd. See related papers and articles at www.urbanage.org.
truSt aMoNG PeerS

leaderS iNterViewed in a half dozen cities over the past 18 months also point to trust and bonding. These are the key elements in adapting imported knowledge to solve problems. Even though they may not know it, smart cities create comfort zones of informal, internal networks of trust. One management guru calls this zone the ba, a climate conducive to exchange of
Great idea! Now what?

acquiriNG New KNowledGe is only half the battle. How the knowledge is validated and applied to problems back home is a whole other drama. Our
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SPecial rePortS
THE GREENING OF DEVELOPMENT

By carlo carraro aNd eMaNuele MaSSetti
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Solar energy is used to light a village shop in Sri Lanka.
N O G R O W T H W I T H O U T E N E R G Y.
conomic development increases the demand for energy. This is true for
es as the world seeks to gain access to energy sources, achieve energy security, and arrive at solutions to the inevitable negative environmental consequences: especially global warming, which will increase if the amount of carbon dioxide emissions per unit of energy (the carbon intensity of energy) does not decline sharply.
gently needs to be reversed. The fight against global warming will require no less than a revolution in how we use energy (energy efficiency) and in our mix of energy sources (reducing the carbon intensity of energy).
creatiNG New toolS...

oNly a Shift to climate-friendly technologies, prompted by the right incentives, will change the relationship between emissions and economic prosperity. Several recent studies show that although better energy efficiency would at first lead to cheap emissions reduction, the carbon intensity of energy must eventually fall to nearly zero if the goal is to cut total emissions by 80 percent or more. In particular, the power sector would have to adopt an optimal mix of carbon-free electricity generation technologies: wind, photovoltaic, nuclear, and coal power plants with carbon capture and storagein different proportions according to technical feasibility and political constraints. Electric cars and second generation biofuels are the most attractive options to reduce emissions in the transport sector (Bosetti et al 2009).
countries at all income levels, although as economic growth progresses, the demand tends to increase more in the low- and middle-income countries than in high-income ones. But energy remains a key ingredient for economic growth at all stages of development.
what aBout the eNViroNMeNt?

we See Very little differeNce between the carbon content of energy in high-income and low- and middleincome countries. The carbon intensity of energy has decreased on average by only 0.5 percent per year in high income countries, and remained stable in low- and middle-income countries until the recent rapid expansion of coal burning power plants in emerging economies. So that, overall, there was a global increase between 1998 and 2005. Economic models confirm that without the right policies the current trend will likely persist. Figure 2 shows past and future trends of carbon emissions in relation to different stages of economic development. (EMF22 2009; Clarke et al 2009). A middle-of-the-road projection shows that total primary energy supply will increase by 80 percent by 2050, and CO2 emissions per capita will rise to five times higher than the targets set at the G8 Summit in LAquila in 2009. So the historic pattern that links emissions to economic development ur-
with 5.4 BillioN PeoPle living in lowand middle-income countriesout of a global population of 6.5 billionenergy demand will very likely continue to grow at a fast pace for many years to come. Figure 1 shows how energy use and gross domestic product (GDP) per capita were related, in different groups of countries, from 1960 until 2005. This large increase in energy consumption will pose immense challeng-
...aNd PayiNG for theM

our StudieS haVe ShowN that we need to invent new tools to remedy the global warming problem, otherwise the cost of stabilizing emissions at safe levels will
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be extremely high. Carbon taxes or capand-trade systems can help by putting a price on the damage that emissions cause to society, thereby discouraging emissions and making alternative energy sources relatively more economically attractive. We believe the price of carbon should be uniform in all sectors and countries so that emissions are reduced and not simply relocated; credible in the long-term in order to trigger a change of expectations and investments in the present since investments in the energy sector are typically long term and highly dependent on expectations about future prices and policy scenarios; and consistent over time to trigger the right expectations.
SuBSidiziNG a Greater Good

iN SoMe caSeS, subsidies may need to complement carbon taxes or cap-and-
trade programs. Large-scale projects in the energy sector are costly and might require a partnership among several governments. Public sector support may also be needed to finance projects with social returns that are higher than monetary returns or when uncertainties on the return to investments might not be resolved by price signals. In these cases, governments will have to support research and development (R&D). An easy solution for financing R&D subsidies would be to use revenues from carbon taxes or from auctioning emissions permits. Recent estimates show that in the early years, about 75 percent of carbon revenues would be enough to cover all additional expenditure in clean energy R&D by OECD economies. In later years, the share would decline to a modest 5 percent, mainly because the carbon price will increase substantially over time as a result of the increasing stringency of the greenhouse gas (GHG)
stabilisation target (Bastianin, Favero and Massetti 2010). There is concern that expanding investment in energy R&D will crowd out R&D investments in other sectors. We believe that these concerns are justified in the very short run, but in the long term we expect that it will adjust as a larger supply of scientists and laboratories will be attracted into the R&D market (Carraro, Massetti and Nicita 2009).
ShootiNG for the MooN

the traNSitioN to a high level of R&D investments in clean energy needs to be fast. Our estimates show that to drive the cost of GHG mitigation down to a minimum level, R&D spending would have to jump from 0.02 percent of global GDP to about 0.12 percent within a few years. This fast expansion of R&D spending is challenging not from a financial point of view but because of the speed of the transition to a new equilibrium. An enormous but not unprecedented effort is needed. In the 1960s, for example, the NASA Apollo Space Program used US$ 98 billion over 13 years (around US$ 7.5 billion per year). Investment at the peak of the program was 0.4 percent of national GDP. Only this level of commitment can win the global warming challenge.
fiGure 1: ecoNoMic deVeloPMeNt aNd eNerGy uSe at the GloBal leVel

6,000 energy use per capita (kg of oil equivalent) 5,000 4,000 3,000 2,000 1,000 0 0 5,000 1,0000 15,000 20,000 25,000 30,000 GdP per capita1960-2005 (constant 2000 uS$) Note: historical data from the world Bank. energy use (kilograms of oil equivalent per capita). high-income economies are those in which 2008 gross national income (GNi) per capita was $11,906 or more. GdP per capita, market exchange rates, constant 2000 uS$.
world high income low & Middle income
1979
No free luNch
the reSearch fiNdiNGS presented in this article clearly show that economic growth and energy consumption are tightly intertwined: higher affluence
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fiGure 2: carBoN iNteNSity of eNerGy index, Base 1975

1.3 index of carbon intensity of energy (base 2005) 1.2 1.1 1.0 0.9 0.8 0
1960 1964 1968 1972 1976 world 1980 1984 1988 1992 1996 2000 2004 high income low & Middle income
Policy Division of the EuroMediterranean Centre for Climate Change, with financial support from the Italian Ministry of the Environment and the European Commissionfunded PASHMINA project. references Bastianin, A., A. Favero and E. Massetti. 2010. Investments and Financial Flows Induced by Climate Mitigation Policies. FEEM Working Paper no. 13.
Note: authors calculations from world Bank development indicators. high-income economies are those in which 2008 GNi per capita was $11,906 or more.
levels are generally characterized by higher per capita energy consumption. Meeting the growing needs of large developing countries for cheap and secure energy sources is in itself a daunting task. But the real challenge is to minimize the negative environmental effects that doubling energy consumption will cause, particularly global warming. Only large-scale technological change can de-link emissions and economic prosperity. Our analysis shows that R&D spending in new energy technologies should increase at least five-fold in the next two decades if we want to drive energy emissions to zero. A credible, long-term, consistent carbon price appears to be the best tool to move investments toward clean energy research; but in certain circumstances governments may need to step in and support research with public funds. In the face
of tight public budgets, policy makers would only need to use a fraction of the carbon taxes or revenues from the auctioning of emissions permits to finance innovation. Carlo Carraro is Professor of Environmental Economics and President of the Universit Ca Foscari Venezia. He is also Chairman of the Scientific Advisory Board of the Fondazione Eni Enrico Mattei. Emanuele Massetti is Senior Researcher at the Fondazione Eni Enrico Mattei and at the Euro-Mediterranean Centre for Climate Change ([email protected]). This article is based on research being carried out by the Sustainable Development Programme at the Fondazione Eni Enrico Mattei and by the Climate Impacts and
Bosetti, V., C. Carraro, E. Massetti, A. Sgobbi and M. Tavoni. 2009. Optimal Energy Investment and R&D Strategies to Stabilise Greenhouse Gas Atmospheric Concentrations. Resource and Energy Economics, 31(2): 123137. Carraro, C., E. Massetti and L. Nicita. 2009. How Does Climate Policy Affect Technical Change? An Analysis of the Direction and Pace of Technical Progress in a ClimateEconomy Model. The Energy Journal, Special Issue. Climate Change Policies After 2012, October 2009, 30 (Special Issue 2): 738. Clarke, L., J. Edmonds, V. Krey, R. Richels, S. Rose and M. Tavoni. 2009. International Climate Policy Architectures: Overview of the EMF 22 International Scenarios. Energy Economics, 31(2): 6481. EMF 22. 2009. Energy Modeling Forum 22: Climate Change Control Scenarios. Stanford University. http://emf.stanford. edu/research/emf22/.
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INDUSTRIA
AND THE LAND ACQUISITION CONUNDRUM
By PraNaB BardhaN
54
LIzATION
he development economics literature cites several barriers to
industrialization: low savings, weak domestic demand or export prospects, lack of access to credit, marketing, infrastructure, an educated labor force, or technological support structures, excessive government controls, coordination failures, and so on.
uNtil receNtly, few development economists believed that acquiring enough land to start factories (or to build the infrastructure to support them) presented much of a problem. But particularly in densely populated areas, this has now become a major bone of contention between farmers and those who need land for commercial and industrial uses and for mining, or when the state tries to acquire the land on their behalf. In high-growth densely populated countries like China and India this has quickly become a politically explosive issue, sometimes leading to social unrest and violence.
fore, transferring land to those alternative uses could generate a large surplus, from which the new users could amply compensate the farmers while retaining much of the surplus for themselves. Theoretically this seems like a win-win situation. So why is it so contentious in reality?
the wolf at the door

iN Part, because farmers in poor countries are often suspicious of the intermediaries involved in land transactionscommercial developers and their touts, or government officials who may apply eminent domain laws to requisition the land, are suspected of grabbing much of the surplus. The history of poor countries is filled with examples of forcible dispossession with little compensation, reneged promises of resettlement, and defrauding by middlemen and contractors. In China
More thaN ecoNoMicS

thiS May Be SurPriSiNG since in countries like China and India agricultural productivity is so much lower than that of manufacturing, mining, and much of the service sector. There-
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this issue is heightened by the fact that farmers have no land ownership rights, only user rights, and so they are much more vulnerable to arbitrary decisions made by local officials in collusion with commercial developers.
ProtectiNG a way of life

SoMe farMerS also worry about damage to the local environment resulting from the mines, dams, and polluting factoriesdamage from which the market price of land will not compensate them. In educationally backward communities the farmers fear that their children will not be qualified for the newly created jobs that will be filled mainly by outsiders. They do not want to let go of the only secure asset they havetheir landin exchange for a lump-sum cash compensation which is not only inadequate, but will soon be frittered away; and their banking habits and facilities are often too underdeveloped for them to make prudent investments. There are also cultural ties to ancestral land and to a pristine way of life based on it, which they know will be spoiled by the dislocations and uncertainties generated by the new commercialization of the area driven mainly by outsiders.
low productivity and poverty consigns these farmers to a life of misery. As the famous British economist Joan Robinson once quipped: what is worse than being exploited is not to be exploited at all. One way to escape the low-productivity trap of traditional agriculture is to produce new high-value laborintensive farm products such as fruits, vegetables, and livestock products. But these require large investments in cold storage, refrigerated transport, retail marketing chains, and so forth which in turn require large amounts of capital from outsiders. Surveys in India have shown that the overwhelming majority of farmers children want to leave agriculture, since a growing population is causing productivity per person to decline. While development has become a dirty word among many activists, there is no general alternative; but the processes can be made more inclusive and the outcomes of development can be made more humane.
this is much cleaner than the messy political process where all kinds of thirdparty interests stick their fingers in the pie. But this market process can also be unfair and costly. Its unfair to the farmers, because the numerous uncoordinated small sellers are no match for the bargaining power of large corporate buyers, and they often face intimidation and strong-arm tactics by the land mafia who will try preemptive buying. For the corporate buyer, the transaction costs of dealing with thousands of small sellers (particularly in densely populated areas) are large, even apart from the hold-up problem referred to earlier. So the state has to be fully involved in the transfer process, but its usual high-handed or corrupt tendencies should be held in check by stronger political accountability mechanisms at the local level.
Show Me the MoNey

oNe of the MaiN ProBleMS of land acquisition by the state in China and India is inadequate compensation. In India, under the old Land Acquisition Act of 1894, compensation is based on some multiple of the recent value of the land. But everyone knows that the land value will in the near future increase many times, and the seller will not benefit from this appreciation, whereas neighbors or fellow villagers whose land is not being acquired will. One solution is for the state to offer sellers a two-part compensation package: a minimum lump sum related to the recent average market value of the agricultural land, and an annuity (a monthly pension as it were for the farmers retirement) from
the leSSer of two eVilS

So aSSuMiNG that some amount of land has to be acquired for nonagricultural and commercial use, how can the poor benefit most from the transfer? Those who are against state acquisition of land often believe the process should be left to the market, with the state intervening only when recalcitrant farmers in contiguous plots hold up the land transfer that has been agreed by a large number of willing sellers to a buyer looking for a compact land unit. They say that the intervention of the state prevents farmers from getting the fair market price they might through bargaining with the buyers. They think
whatS worSe thaN BeiNG eXPloited...

iN reSPoNSe, NGOs (nongovernmental organizations) and environmental activists often organize resistance movements among the farmers. But in their romantic activist ardor they often forget that the centuries-old status quo of
56
farm land bordering iron and steel giant iSKors Vanderbijl Park refinery in South africa.
a trust fund where some shares of the new company are vested. This fund will collect shares from all the companies in the country that buy land, so that risk is pooled and the fund cannot be brought down by any single project failure. The fund should be independently and professionally managed, like pension funds in many countries. For poor farmers, a stream of annuity payments is much better than one-off cash payments which, as we have mentioned, are often frittered away. Given the large productivity gap between the agricultural and nonagricultural use of land, a reasonable annuity may not drain much of the revenue surplus from the new land use, at least not in the long run. In projects where the land is acquired mainly for public infrastructure, a betterment levy on nearby land may be contributed to the trust fund. In the case of mining projects, the mining rights should be auctioned in a transparently competitive bidding process, and the proceeds also deposited in this trust fund.
The state should also provide training and skill-formation programs for those giving up their landjust promising them jobs in the new projects, irrespective of qualifications, as is sometimes proposed, is unfair to the employers and inefficient for the economy. It is also imperative for the state to arrange compensation schemes and welfare payments for the other, often poorer, stakeholders like sharecroppers and landless wage workers, who are usually bypassed by the market process.
...aNd the watchdoG

wheN GoVerNMeNt officialS are involved in land transactions the scope for arbitrary decision making and corruption is large, and the land issue can turn into a political football among rival political parties. Therefore, the whole process of land transfer, including administering compensation and annuities
and resettlement has to be handed over to an independent quasi-judicial authority or regulatory commission. This agency needs to be insulated from the day-to-day political process but subject to periodic legislative review. The commission would regularly hold local hearings where all parties can present their cases and grievances. Although land acquisition is a sticky issue on the path to economic development, there are ways of adequately compensating the farmers and peasants, and involving them in a broadbased participatory process so that the transfer is voluntary and relatively friction-free. Pranab Bardhan is Professor of Economics at the University of California, Berkeley.
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58
THE POLITICS OF DEVELOPMENT

By BriaN leVy
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he numerous tectonic shifts that have shaken the foundations of the development
paradigm over the last halfcentury have had far-reaching implications for development policy formulation and implementation. In the 1980s, we recognized the limitations of investment finance as the path to poverty reduction, which then led to a focus on policy reform. Acknowledging the limits of policy reform, we moved on, first, to building institutions and, more recently, to the role of politics. The implications for development policy making are profoundand only partly
Institutions are the formal and informal rules of the game within which development takes place. So a decade ago we began to think that the answer was good governance institutions. We thought that institutional reform was akin to engineering. Because the institutional characteristics of capable and accountable states are well known (see Box), we thought that the challenge was straightforward: to redesign all facets of the governance system because strengthening each part was necessary for the performance of the whole. A chain, went the reigning metaphor, is only as strong as its weakest link. This became the best-practice approach to governance reform.
BeSt Practice, or wiShful thiNKiNG?

But PoliticS MaKeS the equation considerably more complex. Achieving best-practice means working backwards from a predefined end state. But politicsincluding stakeholders and their power, incentives, skill, and capacity to organizegets in the way and inevitably shapes the dynamics of reform. A countrys economic, social, and political institutions cannot be re-engineered from scratch. A country starts from where it is, and evolves through search and learning. Changes in one part of the system call for adaptations in other parts, in an ongoing process. Effective policy making works with rather than against a countrys grain as it nudges forward this often nonlinear process. Moving away from the best-practices model requires a different way of thinking about policy formulation and implementation. The reality is that many countries lack the institutions and capacities to implement otherwise desirable policies; or the policies may threaten the leaders power or the political stability. So the craft of policy making is about finding entry points that are feasible and that advance the development agenda, at least to some degree.
SoMe characteriSticS of traNSPareNt aNd accouNtaBle StateS

predictable decision making and implementation oversight mechanisms that guard against arbitrariness and ensure accountability in how resources are used public officials committed to social goals, including the efficient provision of public services a political process that is broadly viewed as legitimate the protection of property rights.
how to do ita traJectorieS aPProach

SiMPly SayiNG that the answer is country-specific is not very helpful. For economic policy reform, Hausman, Rodrik and Velascos (2006) binding constraints
understood.
60
framework can help. For governance reform, we offer a new trajectories approach typology (Levy and Fukuyama 2010). This approach distinguishes between two sharply contrasting paths to good governance and growth, based on a countrys experiences and current socioeconomic position. Within each of these trajectories, countries can be in the early, middle, or later stages of developing sophisticated institutions and organizations. (North, Wallis and Weingast 2009) Knowing where a country fits in this model can shed light on how to approach reforms. The table summarizes the two trajectories and presents their political features, governance challenges, and principal governance risks. We can see that the governance risks and challenges are very different in each.
litical and economic institutions. But failure is at least as likely as success: if a dominant party promotes only its own narrow interests; or when personalized leadership becomes increasingly self-seeking and predatory. Many examples exist, such as the former Zaire and the Philippines during the Marcos era.
the coMPetitiVe clieNteliSt traJectory

iN the alterNatiVe PatterN, the competitive clientelist trajectory, elite groups compete for power through elections. Where public institutions are already strongnormally in middle- and highincome countrieselections can be organized around different visions of suitable public programs (platforms). But where public institutions are weak, elites may, in return for continuing support, promise to direct public resources to favored clients rather than commit to governing for the public good.
(Keefer and Khemani 2005). Bangladesh, Albania, and Zambia and, historically, Mexico (Haber and others 2003) demonstrate that competition and clientelism can attract private investment. But sustaining forward momentum is a high wire act: decision making is constantly contested; and narrow interestseeking and even individual corruption are ubiquitous. Conflict continually threatens to spiral out of control. But as long as the momentum of continuing growth can be sustained, an expanding private sector, middle class and civil society will continue to reshape interests, incentives, and alliances, thereby feeding a groundswell for further rounds of institutional improvement.
aliGNiNG actioN with reforM SPace

SuStaiNiNG forward MoMeNtuM and avoiding the ever-present risks of reversal depend on prevailing political
the doMiNaNt State traJectory

iN thiS traJectory, coordination among elites is relatively straightforward. Rulers base their claim to legitimacy on an implicit promise that their decisions will serve the broader longrun public interest. If they are successful, development will generate an increasingly sophisticated economy and a wealthier, more empowered citizenry which in turn leads to rising pressure to create institutions that can support the increasing economic and political competition. Examples include the East Asian tigers, Ethiopia, Tunisia, and others. The Republic of Korea, for example, has gone from poor to richand from closed to openalong this trajectory. How? Rapid growth produced a strong private sector and a strong middle class that demanded more sophisticated and responsive po-
taBle: GoVerNaNce StructureS aNd the StaGeS of deVeloPMeNt traJectory doMiNaNt State
Structural featureS how the distribution of state power is organized how government makes decisions froNtier GoVerNaNce challeNGeS PriNciPal GoVerNaNce riSKS couNtry eXaMPleS a dominant party or leader coordinated across government units how to evolve toward a more competitive polity and economy dominance becomes increasingly self-serving and predatory
coMPetitiVe clieNteliSM
competitive among parties Just enough governance muddling through how to strengthen the capacity of state institutions institutional decay
Mozambique, ethiopia, Bangladesh, Kenya, uganda, Vietnam, tunisia, zambia, albania, india, republic of Korea Mauritius, costa rica
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and institutional factors. The best approach is to find ways of working with the grain. The figure shows a number of engagement options, ranging from being more modest in policy reform options, to small-g initiatives that enhance accountability at a micro-level, to farreaching big-G governance reforms. Their feasibility depends on the space for reform.
zones rather than systemwide trade liberalization is an approach taken by Korea, Taiwan, Mauritius, and many others.
SMALL-g reforMS
eVeN where Political leaderS may not be accountable for delivering results, there may nonetheless be opportunities for small-g initiatives such as creating strong, unambiguous incentives for stakeholders to foster participation in and oversight of the provision of public services. Examples include parental participation in schools; community oversight of local health clinics or road maintenance projects; coalitions of businesses and middle-class users of urban water, electricity, and other utility services seeking agreements with utility providers on how to improve services; and the independent oversight of public procurement practices. In the short run, small-g initiatives can yield significant benefits. To give just one example: A Ugandan communitybased monitoring project that provided residents in each of fifty communities with comparative information on how their village fared in the area of child
JuSt eNouGh Policy reforM

a firSt-BeSt policy proposal presupposes a government with the ability and will to pursue the public good. But this is often not the case because (as in some examples of the dominant state capacity trajectory) leaders have narrower goals, or perhaps because (as in the competitive clientelist trajectory) coalitions succeed in blocking certain options. So we would choose policy options that do not confront directly the interests of powerful existing stakeholders who want to sustain the status quo. Though such options are generally not the best, they can achieve short-term gains, and potentially lay the groundwork for more far-reaching reforms down the road. Promotion of export processing
mortalityand that spelled out all the health services to which each village was entitledbrought about a 33 percent overall reduction in child deaths in the space of a single year (Bjorkmann and Svensson 2009). Viewed from a longerrun perspective, the potential impact may be broader still. Initiatives such as these give people voice in their dealings with government officials, thereby encouraging the shift from subject to citizen.
orcheStratioN
ORCHESTRATING stakeholders for policy reform focuses on upstream rather than downstream processes. In contrast to approaches that work around incumbent stakeholders, the aim here is to pull those who have a stake in reform, and other advocates of change, into the discussion to build momentum for more far-reaching reform initiatives. Multistakeholder engagement is more likely in the open environment of the competitive clientelist setting than in the dominant state capacity alternative although, even in the latter, reformist leaders sometimes encourage stakeholder orchestration as a way of in-
fiGure: the SPectruM of reforM SPace
incremental approaches adapting design given existing reform space
transformational approaches seeking to expand reform space
feasible policy reform
Small-g governance reforms
orchestrate stakeholders for policy change
Big-G governance reforms
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child sleeping in makeshift quarters, Ghana.
ducing more conservative officials to embrace reform. The Philippine procurement law was reformed by building a broad coalition of champions from civil society, church and youth groups, and the private sector.
economic development can set in motion deep-seated socioeconomic changes that will, in time, create the kinds of with-the-grain pressures for better performance and enhanced accountability which will create an upward spiral, virtuous circle of change. Brian Levy is Head of the secretariat responsible for implementing the World Bank Groups Governance and Anti-Corruption Strategy. references Bjorkmann, Martina and Jakob Svensson. 2009. Power to the People: Evidence from a Randomized Field Experiment on Community-Based Monitoring in Uganda. Quarterly Journal of Economics 124, May: 73569. Haber, Stephen, Armando Razo, and Noel Maurer. 2003. The Politics of Property Rights. New York: Cambridge University Press.
Hausman, Ricardo, Dani Rodrik, and Andres Velasco. 2006. Getting the Diagnosis Right: A New Approach to Economic Reform. Finance and Development, March, pp. 1215. Keefer, Philip, and Stuti Khemani. 2005. Democracy, Public Expenditures and the Poor: Understanding Political Incentives for Providing Public Service. World Bank Research Observer. Vol. 20, no. 1, pp. 127. Levy, Brian and Francis Fukuyama. 2010. Development Strategies: Integrating Governance and Growth. World Bank Policy Research Working Paper no. 5196. Washington D.C.: World Bank. North, Douglass C., John Wallis, and Barry Weingast. 2009. Violence and Social Orders. New York: Cambridge University Press.
BIG-G reforMS
So what aBout the most ambitious end of the spectrum: big-G governance reform to strengthen national institutions that hold government to account such as elected legislatures, the judiciary, centralized auditing authorities, ombudsmen, a free and vigorous media, and the like? In the early stages of development, leaders are unlikely to accept big-G institutions that will limit their discretionary powers. It may be that this conflicts with their legitimizing claim that they will use their unlimited power to pursue national development goals single-mindedly, or perhaps for more venal reasons. Results have been uneven. More hopeful however for big-G institutions is that sustained
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By Ghazala MaNSuri aNd ViJayeNdra rao

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ver the last two decades development policy has touted civic
Over the last decade, the World Bank alone has allocated over $50 billion dollars to local participatory projects, and other multilateral agencies and bilateral donors have together allocated a great deal more, although specific numbers are hard to come by.
participation as a magic bullet for solving problems at the local levelfrom improving livelihoods, to selecting beneficiaries for public programs, providing housing after earthquakes and floods, or improving village infrastructure. The thinking is that involving village or urban civic communities in decision making will improve accountability, reduce inequality, and ultimately alleviate poverty.
the Search for Voice aNd accouNtaBility

the two MaiN wayS of fostering local participation are: community based development efforts and the decentralization of resources and authority to local governments. Community Based Development supports efforts to bring villages, urban neighborhoods, or other household groupings into the process of managing development resources without relying on formally constituted local governments. Designs for this type of aid can range from community-based targetingin which communities select the project beneficiariesto community-driven development, where beneficiaries are involved to varying degrees in project design and management. Advocates for community development believe that it enhances the capacity for collective action, builds social capital, and strengthens the ability of the poor to have control over decisions that affect their lives. Consequently, it is claimed that community development improves the capacity of beneficiaries to hold local governments accountable thereby empowering the poor, improving the delivery of public services, and increasing access to credit and livelihood opportunities. Decentralization refers to efforts to create village and municipal govern-
ments, and strengthen them on both the demand and supply sides. On the demand side, decentralization strengthens citizens participation in local government by, for example, instituting regular elections, improving access to information, and fostering mechanisms for deliberative decision making. On the supply side, it is believed to enhance the ability of local governments to provide services by increasing their financial resources, strengthening the capacity of local officials, and streamlining and rationalizing their administrative functions.
diSilluSioNMeNt with ParticiPatioN

uNfortuNately, policy decisions on local participatory development have historically been driven by fads, rather than analysis. Passionate advocates spark a wave of interest followed, after a few years, by disillusionment which gives ammunition to centralizers who engineer a sharp reversal. In time, the negative fallout from centralization invigorates the climate for local participation. There have been, at least, two such waves after World War II and, if current trends continue, we may be in the early stages of another centralizing shift. Advocates, and the vicissitudes of fashion, are perhaps unavoidable, but they need to be supplemented if not surmounted by a better informed and analytically grounded debate.
Note: This article draws heavily on Localizing Development: Does Participation Work by Ghazala Mansuri and Vijayendra Rao, forthcoming from the World Bank in 2011.
a tarNiShed SilVer Bullet

ideally, local development policy should be determined by a thought-
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ful, and contextually sensitive, diagnosis of the interrelationship between civil society, markets and government. In particular, it should be informed by an understanding of civil society. Much of the current policy literature, particularly at the local level, seems to ride on the assumption that solutions to market and government failures lie with civic groupssuch as village communities, urban neighborhood associations, credit groups, or producers cooperatives. Rarely, is much thought given to the possibility of a civil society failurethat effectively organizing groups of people to act in a way that solves market and government failures is itself subject to problems of coordination, asymmetric information, and pervasive inequitywith attendant problems of capture, free-riding and low capacity. Civil society failure can be broadly thought of as a situation where collective participation operates in such a manner that it results in a net reduction in social welfare. This could happen because of a groups inability to act collectively. Or collective action could occur in a well-coordinated but dysfunctional manner that reduces the welfare of the average citizen: think of an organized fringe group that uses terror and violence to further its extremist ends at high social cost.
resources for private gain, when a community is unable to devise equitable and efficient rules for the management of common property, or when group interests degenerate into persistent intergroup violence. Bridging failures occur when citizens are unable to organize themselves to correct for market and government failures that have a direct bearing on their lives: for example, a communitys inability to hold service providers and local officials accountable for the quality of public services or resource allocation decisions.
MaNy ShaPeS aNd SizeS

thiNKiNG aBout development policy as taking place at the intersection of market, government and civil society failures, helps determine when civic participation may or may not be the best solution. The answers depend heavily on the socioeconomic context since interactions between civil society, markets, and governments are fundamentally conditioned by social structures and histories that vary from community to community, even within a country or region. A policy that works in one village may fail miserably in another. And, perhaps ironically, effective collective action is influenced by a cooperative infrastructure that is provided by a strong state. It is not at all clear that strong governments are created by the presence of a strong civil society. Rather, it is a chicken-and-egg problem that does not lend itself to easy answers. Similarly, while empowering civic groups may often lead to good outcomes, it is not true that civic empowerment is superior, in every instance, to a purely market-based development
strategy, or a strategy that strengthens the role of central bureaucrats. So the decision about whether, when, and how to promote local participation should be made with an understanding of the tradeoffs involved in moving decision making to local communitiesin a particular country or region of a country, and at a particular time. This leads to some key questions: What makes participation work or fail? Do large sums of money for community groups empower the poor, or enrich the elites? How can we reduce civic inequality and elite capture? How can we strengthen the capacity for collective action and build social capital? While reliable information on many of these questions is still quite thin, some broad patterns are emerging.
whatS the eVideNce?

deceNtralized PoVerty reduction programs have been only marginally more successful at targeting beneficiaries than centrally managed ones, and there is little evidence that they reduce poverty significantly. However, local public goods such as roads and drinking water facilities provided through participatory mechanisms are often of better quality, and public services, such as schools and community health centers function better. The outcomes vary enormously, however, with the more unequal, poorer, less literate, and more remote communities generally faring much worse. Note that these are precisely the circumstances in which we might expect significant civil society failures.
BoNdiNG aNd BridGiNG

Such failureS can be broadly classified into bonding failures and bridging failures. Bonding failures are internal to the group and have less to do with the state or markets: for instance, when the elite within a village capture public
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Nonetheless, there appears to be some intrinsic value to participation: people are generally happier when consulted, which may attest to the transformative role of participation. We can conclude little about this, as yet, since most studies measure change in collective capacity quite poorly. The evidence we do have, shows that participation has little effect on the exercise of voice or on community organized collective action outside the participatory proj-
ect. Instead, some evidence points to a decline in collective activities outside the needs of the project.
the NewS iS Not all Bad

thiS iS Not to Say that there are no instances of success, far from it. However, successful cases tend to bring together a set of conditions, whether through deliberate and thoughtful policy and
design or simple good fortune, that are not the norm for most participatory development projects. Often these are cases where community capacity, as measured by education levels and management experience, for example, is high, inequality and absolute poverty levels are low and government functions reasonably well. This is hardly surprising. In most developing countries, lower tiers of government have much less administrative or monitoring capac-
community at Shreeshitalacom lower Secondary School in Kaski, Nepal.
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ity and communities most in need of development programs are also likely to be the least advantaged in terms of resources and capacity. Inequalities of wealth and power are also likely to be more salient at the local level. Theory suggests that decentralizing resource allocation under such conditions can reduce resource use efficiency, exacerbate horizontal inequities, and increase rent-seeking by the locally powerful.
ProGraMS fail BecauSe...
Capture and corruption by local elites is commonplace, whether participatory projects operate within or outside the ambit of local governments. Cookie-cutter rules like community cofinancing are made into central tenets of participation. Community willingness to contribute to projects has long been seen as evidence of the value that the poor place on specific public goods and services, as well as a signal of sustainability. Most decentralized programs also require local cofinancing, whether through user fees and project contributions or budget allocations by local governments. This has little basis in evidence, however. What little evidence we do have, suggests instead that cofinancing can reduce coverage of the poorest, particularly when individuals or communities need to self-select into the program, or when eligibility thresholds are also decentralized. The proportionally greater financial burden placed on poorer localities, communities, and individuals can also serve to exacerbate horizontal inequities, in
so far as otherwise equally poor individuals or communities get lower levels of benefits simply because they reside in poorer areas. Communities often have little capacity to ensure bottom up accountability. Local government officials often have less experience than the center with managing resources, and tend to have weaker administrative capacity; and not surprisingly, poorer areas also tend to have weaker local governments. Community participation projects require more documentation and adherence to rules imposed from the outside. These can be challenging for communities with low literacy levels. They require the ability to evaluate budgets and monitor the actions of local elites, service providers and political agents, all of whom have a far greater capacity to conceal information or to coerce compliance. One could argue that the design of participatory programs makes at least some elite involvement, if not elite dominance, inevitable. Donor funded participatory projects also come with best practice designs, accompanied by unrealistic timelines and cookie cutter metrics of success, which often serve only to reduce accountability and stifle innovation and experimentation. These problems are greater when project implementers are also weak, operate outside the ambit of government oversight, and face little political competition at the local level. In such cases, dependence on donor funds makes implementing agencies upwardly accountable to their financiers rather than downwardly accountable to the communities they serve. This can also
lead to some communities being overserved to the neglect of others since short timelines induce implementers to funnel resources to communities which have already been organized, have better capacity, are located more conveniently, and so forth.
ProGraMS Succeed BecauSe...

So wheN doeS localizing development work? The evidence suggests that decentralized outcomes are most propoor when: Mechanisms for downward accountability have been well thought out and have teeth. There is a strong center capable of setting eligibility criteria, building local capacity, as needed, and effectively monitoring local resource allocation decisions. Projects emerge from local experimentation and innovation rather than best practice implants. Efforts are made to activate civic society by creating incentives, such as audits and performance-based rewards, or by building the communitys capacity to observe and sanction through the provision of information or training, particularly where inequities are entrenched. Ghazala Mansuri and Vijayendra Rao are Lead Economists in the World Banks Poverty Reduction and Equity and Development Economics Groups.
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PARTICIPATION MAKES A DIFFERENCE

But not always how and where we might expect
By JohN GaVeNta
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indian grassroots activists, village councillors, farmers, and agriculture unionists from 18 of indias 27 states take part in a right to food campaign as they shout slogans during a protest in New delhi on November 25, 2010. Protesters demanded that the government live up to its promise of guaranteeing food security.
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SPecial rePortS
n their article: Participatory Development Revisited, Ghazala Mansuri and Vijayendra Rao
where doeS ParticiPatioN occur?

we aGree. But while the Mansuri and Rao article offers some important caveats and insights into understanding participation in certain settings, we need to be careful about drawing conclusions from these too broadly. Their article focuses on only two arenas of local participation: donor-driven community-based development efforts and the decentralization of resources and authority to local governments. While these may be important, they are by no means the only ways in which people participate in their own development. In fact, they may be the avenues that are most subject to the kinds of participation failures that the article discusses. Community-based development efforts, particularly the kinds that the World Bank and others have been supporting, are often large-scale, created from above, and based on a form of participation mediated by local elites. And decentralisation in and of itself may or may not be participatoryit all depends on the enabling policies and legal frameworks that are in place, and whether they include participation as a legal right, or simply as an invitation for consultation which can be dismissed or ignored at will.
outline the high hopes for participation over the last two decades, yet conclude that participatory development has become a tarnished silver bulletperhaps another in a long series of development fads that promise more than they deliver. The article doesnt throw out the idea of participation altogether, but argues for a more thoughtful analysis of the interrelationships between civil society, markets, and government to help us understand how and in what conditions participation can best make a difference. The authors argue that we need to take into account civil society failure, as well as the limitations of purely market or government-based approaches.
2010). Drawing from 100 case studies of citizen engagement in twenty countries, this research argues that people dont engage only in invited forums of participation created by authorities from above. In most places, they also act for themselves in myriad other ways through their own local community development associations, neighborhood or self-help groups, through social movements and campaigns to get their voices heard, or through informal as well as formal mechanisms for monitoring and holding officials to account.
SoMe hoPeful reSultS

theSe Broader SPaceS for participation provide a slightly differentand less pessimisticpicture than do donor or state-created programs or processes. Analyzing over 800 outcomes of participation, the IDS study points to largely positive results in four broad areas, each of which is essential for development.
forMiNG Better citizeNS aNd PracticeS

firSt, engagement is important because it helps form better citizens: people who are aware of their rights to participate in the first place, and are more confident of their ability to do so. Second, it also builds more effective participation practices: people can learn the civic skills, form the relationships and networks, and build the organizations needed to make their voices heard. Both of thesemore aware and more effective citizensare necessary, yet often overlooked, building blocks of effective participation and for delivering change more broadly.
toP dowN or BottoM uP?

reSearch by the Development Research Centre on Citizenship, Participation and Accountability at the Institute for Development Studies (IDS) at the University of Sussex yields a somewhat broader view of where and how participation happens (Gaventa and Barrett
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deliVeriNG reSultS aNd ShaPiNG New cultureS

third, the study points to dozens of examples of participation contributing to development results, for example, in improved health, water, sanitation, or education. There are also many examples of how participation contributes to strengthening governance by improving cultures and frameworks for accountability, or better implementation of national and international commitments to human rights. Finally, the studies show that participation can contribute to more pluralistic and inclusive societies, bringing new voices and issues into the public arena.
responsive. Greater citizen engagement might simply be met by bureaucratic brick walls, failure to implement policy decisions and, in many cases, reprisals, including violence against those who challenged the status quo.
what to looK for

theSe StudieS demonstrate that participation is no panacea. But under some conditions it can make a positive difference. Both the IDS and the Mansuri and Rao studies suggest that the challenge is to gain a more nuanced and sophisticated understanding of the factors that can lead to failure or success. The IDS study points to several of these factors, with important implications for donors, policy makers, and practitioners alike: Participation is not limited to spaces and through avenues created from above by donors or governments. In fact grassroots associations as well as broader social movements outside of these arenas are important sources of positive change. And, for building accountable and responsive governments, the results are most positive when multiple strategies for engagement are present simultaneously. Donors might be well advised to figure out in any given context how citizens do participate in their own ways and spaces, and then build links with and support for these, rather than simply creating new participatory mechanisms and inviting citizens in. Invited forms of participation in local governance or large-scale donor programs work best where
howeVer...
But JuSt aS Mansuri and Rao found in their work, this study also warns that participation is not always used for purely benevolent or benign purposes. Although 75 percent of the participation effects cited in the IDS study were positive, the other 25 percent were more negative. These include a sense of disempowerment arising from meaningless, tokenistic, or manipulated participation; the use of new skills and alliances for corrupt or questionable ends; and elite capture of the participatory process.
a two-way Street
SiGNificaNtly, many of the negative examples had less to do with citizens failure to participate, than with governments reluctance or inability to be
several other conditions exist. These include the presence of: strong champions inside the government who open the doors for civic participation, organized groups of citizens that can help articulate the collective voice and help monitor the process, and well-designed processes for deliberation and decision making that bring the two together. These processes also appear to work better when legal frameworks give participants an explicit right to participate, not just an invitation to do so, and when there is an acknowledged need for resources to be allocated or decisions to be made. Active, aware, and effective citizens who can help deliver development and governance gains do not emerge automatically. Yet unless they are in place, new spaces for participation, especially those created from above, will simply be filled with the same elite voices. Building awareness, skills, organizations, and networks that enable more inclusive and empowered forms of participation takes time; but these are critical for longer-term success, and should be recognized, and measured, as intermediate outcomes of broader change. Empowered participation faces the risk of reprisal, especially when citizens may be challenging powerful established interests. This may take the form of violenceas seen recently in several well-publicized cases of reprisal against citizens in India who were using the new Right to Information laws to demand
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Survivors of 1984s union carbide disaster in Bhopal hold placards as they gather outside the indian Prime Ministers office to file a right to information (rti) petition in New delhi on May 4, 2010. they filed the rti to get access to all documents concerning the Nuclear civil liability Bill. Government figures put the death toll at 3,500 within the first three days but independent data by the state-run indian council of Medical research (icMr) puts the figure at between 8,000 and 10,000 for the same period.
transparency and expose corruption. But they can also take more subtle forms, including using development resources (such as land, housing, benefits, or jobs) as political clubs to silence dissent. Donors and policy makers who encourage participation must also be willing to help protect and strengthen the space for citizens who do exercise their voice, and to support the other enabling conditions for citizen engagement to occur.
SeeiNG the foreSt for the treeS

after More thaN two decades of work in international development circles to promote greater citizen participation, lets not lose sight of its potentials as we
also become more aware of its limitations and risks in various settings. There is abundant evidence to show that participation can make a difference, but often in ways and in places that are not donor-created. The challenge now is for donors and development institutions to take a broader and longer-term view of what participation is about, develop a better understanding of the conditions under which it makes a difference, and be willing to support those whose participation may raise uncomfortable truths, even when these challenge the status quo. John Gaventa is a Professor and Research Fellow in the Institute for Development Studies (IDS) at the University of Sussex, where he is a member of the Participation, Power, and Social Change team and Director of the Development
Research Centre on Citizenship, Participation, and Accountability. reference Gaventa, John and Gregory Barrett. 2010. So What Difference Does it Make? Mapping the Outcomes of Citizen Engagement. IDS Working Paper 347. http://www.ntd.co.uk/idsbookshop/details. asp?id=119.
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Schoolchildren in Bhutan.
DEMOGRAPHICS AND DEVELOPMENT POLICY

By daVid e. BlooM aNd daVid caNNiNG
y late 2011 there will be more than 7 billion people in the world, with 8 billion in 2025 and 9 billion before 2050. New technologies and institutions, and a lot of hard work have enabled us to avoid widespread Malthusian misery. Global income per capita has increased 150 percent since 1960, outpacing the growth of population. But we cannot be sure that incomes will continue to grow. One major difference is that now the world has a much larger population to support and, more notably, nearly all of the population increase that is projected in the coming decades will occur in the most politically, socially, and economically fragile countries.
Fortunately, important insights into this demographic challenge have emerged in the past 10 years. Most important is that the rate of population growth is not the only demographic variable with consequences for economic growth and development: the age structure of the population is also fundamentally important. need to have as many children to reach their goals for family size, which naturally moderate as development proceeds.
the deMoGraPhic diVideNd

at firSt, the baby boom tends to lower the measured rate of economic growth because children need to be fed, clothed, housed, educated, and otherwise cared forall of which require resources that must be diverted from other uses such as research and development (R&D), infrastructure development, and physical capital accumulation. But eventually (after 15 to 20 years) the large boom cohorts reach the prime ages for working and saving, and the per capita productive capacity of the economy expands. When this happens, the country has an opportunity to grow rapidlyresulting in what we call the demographic dividend. The demographic dividend is a composite of accounting and behavioral forces. The accounting forces involve: the swelling of the potential labor force as the baby boomers reach working age, and
the deMoGraPhic traNSitioN

PoPulatioN Growth has taken place as part of a broader phenomenon known as the demographic transitionthe transition that almost all countries make from high fertility and mortality to low fertility and mortality. Not counting net migration (which has been inconsequential for most countries), populations grow because death rates tend to decline before birth rates. But there is more to this story: death rates decline disproportionately among infants and children, which gives rise to a baby boom. This is not the usual kind of baby boom in which more babies are born; rather, it is one in which more babies survive and mature into children and adults. Eventually the baby boom ends when parents realize that they do not
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SPecial rePortS
fiGure 1: reGioNS aBout to eNter the deMoGraPhic dowNSwiNG

2.50 ratio, working-age to non-working-age population 2.25 2.00 1.75 1.50 1.25 1.00 1950 1975 2000 2025 2050
figure 2 shows where the ratio is still risingin all developing regions other than eastern asia. these areas could still benefit significantly from a demographic dividend. But collecting this dividend is not automatic. demography is not destiny. data source: uN, world Population Prospects: the 2008 revision.
fiGure 2: reGioNS oN the deMoGraPhic uPSwiNG

2.50 ratio, working-age to non-working-age population 2.25 2.00 1.75 1.50 1.25 1.00 1950 1975 2000 2025 2050
the fact that the working ages coincide with the prime years for savings. These factors are key to the accumulation of physical and human capital and technological innovation. The behavioral forces consist of: societys reallocation of resources from investing in children to investing in physical capital, job training, technological progress, and stronger institutions, the rise in womens participation in the workforce that naturally comes with a decline in fertility, and the boost to savings that occurs because the incentive to save for longer periods of retirement increases as people live longer. Recent analyses have shown that population growth and age structure are important drivers of economic growth (measured by income per capita). Indeed, as much as one-third of East Asias economic miracle was due to demographic change. Similarly, the 1980 legalization of birth control in Ireland sparked a decrease in fertility that spurred rapid economic growth. By contrast, the sluggish pace of fertility decline in most of Sub-Saharan Africa contributed to that regions decadeslong economic struggle.
the aGe coMPoSitioN

what doeS thiS MeaN for development policy making? Since different countries are at different phases in the demographic cycle, the age distribution of their populations varies. As the demographic transition proceeds and the baby boom cohort reaches working age in a given country, the ratio of working-
where a country stands in the transition will determine the kinds of policies and initiatives it can most usefully undertake to help bring about a demographic dividend. for example, some countries could catalyze the demographic transition by taking steps to lower infant and child mortalitycrucial precursors of fertility declinethrough the expansion of childhood immunization and the provision of safe water and sanitation. others might encourage a voluntary reduction of fertility, perhaps through efforts to broaden access to primary and reproductive health services, and to girls education. data source: uN, world Population Prospects: the 2008 revision.
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fiGure 3: iNdiaS fertility rate fell Steadily, chiNaS PreciPitouSly

7 children per woman 6 5 4 3 2 1 1950 1975 china 2000 india 2025 2050
differences in fertility, infant and child mortality rates, and life expectancy have combined to give china and india very different ratios of working-age population to dependent population (figure 4). Beginning around 1980, chinas ratio rose very rapidly and has now reached its peak, with nearly 2.6 working-age people per dependent. indias peak, which is likely to be lower than chinas, is projected to occur around 2035. these patterns suggest that china has already had its opportunity to capture a demographic dividend, while much of indias opportunity lies ahead. to the extent that india can speed up fertility decline, especially in states where fertility is still high, it stands to reap a more sizable dividend in the coming years. data source: uN, world Population Prospects: the 2008 revision.
fiGure 4: deMoGraPhic traNSitioNS out of PhaSechiNa leadS iNdia By aBout 25 yearS

3.00 ratio of working-age to non-working-age population 2.50 2.00 1.50 1.00 1950
education is important in determining whether a country benefits economically from the demographic transition. india has created a very well educated but relatively small set of people who have stimulated the economy, particularly the information technology sector. But huge numbers of young indians, particularly in poor, populous states such as Bihar and uttar Pradesh, do not have the education needed to participate productively in the twenty-first century economy. china, by contrast, has long promoted education for a much broader segment of the population, and its workforce is therefore highly productive. india can benefit by devoting considerably more effort to increasing access to quality education, and to workforce training.
1975 china
2000 india
2025
2050
data source: uN, world Population Prospects: the 2008 revision.
age people to dependents (both young and old), changes dramatically. Figures 1 and 2 show how this ratio has changed and is projected to change across the world. Using the UN Population Divisions medium-fertility scenario, Figure 1shows that the ratio is about to fall in Eastern Asia and the more developed regions, which means that the opportunity to reap a demographic dividend
has already reached its peak. Where a country stands in the transition will determine the kinds of policies and initiatives it can most usefully undertake to help bring about a demographic dividend. For example, some countries could catalyze the demographic transition by taking steps to lower infant and child mortalitycrucial precursors of fertility declinethrough the expan-
sion of childhood immunization and the provision of safe water and sanitation. Others might encourage a voluntary reduction of fertility, perhaps through efforts to broaden access to primary and reproductive health services, and to girls education.
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Policy MaKerS oN the deMoGraPhic diVideNd

Nigerias Ngozi okonjo-iweala, managing director of the world Bank, has said that one of the greatest untapped growth drivers in Nigerias economy is our youth population,adding that the public and private sectors should invest in human capital, labor supply, and savings to secure the demographic dividend. these help to create a knowledgebased economy. Policies should be directed toward getting the demographic dividend.
the Policy eNViroNMeNt

ecoNoMic Growth does not automatically accelerate as fertility declines and the working-age share of a population increases. Taking advantage of a demographic opportunity depends on a conducive policy environment. Good governance matters, as do solid macroeconomic management, a carefully designed trade policy, efficient infrastructure, well-functioning financial and labor markets, and above all, effective investments in health, education, and training.
indian Prime Minister Manmohan Singh: looking ahead, we enjoy a demographic dividend in terms of a growing working-age population in a world that is aging rapidly.
healthy aNd educated PeoPle

Better health MeaNS that students learn more quickly, workers produce more effectively, foreign investors are more likely to be attracted, and savings rise. Expanded access to better quality educationat the primary, secondary, and tertiary levelsare also key to high worker productivity, especially in the rising number of jobs that demand upto-date skills and a high degree of flexibility. Increased education also tends to lead to lower fertility rates, which frees up women to engage in the paid labor force. In the absence of enabling policies, a potential demographic dividend can become, instead, a demographic drag. For example, a country that has large numbers of young or middle-age workers who are unemployed or underemployed is at risk of social and political instability. And even without such instability, a large nonproductive segment of the population is an economic drag on those who are working.
former Mexican President Vicente fox: i also want to tell you that today we have a very potent arm with which to overcome inequalities and marginalization. that arm is what we have called the demographic dividend. it is crucial, truly crucial, that we take full advantage of it. otherwise, we will have lost a great opportunity. as others have said before me, education and employment are the ways to take advantage of the demographic dividend. the sustainability of our social and economic development depends, in large measure, on our response to this opportunity.
Nandan Nilekani, former ceo of indias infosys and now chairperson of the unique identification authority of india: [the] demographic dividend could well become a demographic disaster if we do not make the right investments. we have this beautiful opportunity; let us not mess [it up].
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children in Gansu Province, china. an older workforce, it is mainly up to public policy makers to take strategic and politically feasible decisions on retirement age, immigration policy, and related issues. Creating an economic environment in which the working-age population is productively employed is a difficult though essential goal in itself. But changing demographics provides an extra spur for adopting the kinds of economic, health, education, and labor policies that can lead to more rapid economic growth. David E. Bloom is Professor of Economics and Demography and David Canning is Professor of Economics and International Health at the Harvard School of Public Health. Bibliography Birdsall, Nancy, Allen C. Kelley, and Steven W. Sinding, eds. 2001. Population Matters: Demographic Change, Economic Growth, and Poverty in the Developing World. Oxford: Oxford University Press. Bloom, David E., and David Canning. 2008. Global Demographic Change: Dimensions and Economic Significance. Population and Development Review, vol. 33, 1751. New York. Bloom, David E., and David Canning. 2006. Booms, Busts, and Echoes, Finance & Development, September, vol. 43, no. 3, 813. Washington, D.C. Bloom, David E., David Canning, and Jaypee Sevilla. 2003. The Demographic Dividend: A New Perspective on the Economic Consequences of Population Change. Santa Monica, California: RAND, MR1274. Lee, Ronald, and Andrew Mason. 2006. What Is the Demographic Dividend? Finance & Development, September. vol. 43, no. 3, 1617. Washington, D.C. United Nations. 2009. World Population Prospects: The 2008 Revision. UN Department of Economic and Social Affairs, Population Division. http://esa. un.org/UNPP/.
iNdia aNd chiNa diVerGeNt Policy SceNarioS

coMPariNG iNdia with chiNa highlights the effect of differing past policies and the need for specific policies that fit with a countrys progress through the demographic cycle. Chinas emphasis beginning in the 1970s on lowering its birthrate has resulted in a total fertility rate of 1.8 children per womanand a rapidly aging population that will need care and support. Indias efforts to slow population growth were, most of the time, less intrusive, but they also led to a less precipitous decline in fertility (2.7 today). Figure 3 illustrates the dramatic difference between the two countries in the pace of fertility decline. The biggest unanswered question is that of population aging, which is occurring in both developed and developing countries. Although many have warned that an older population spells economic doom, other analysts suggest that it is not an insurmountable problem provided it is well managed. Although the private sector can help by adjusting business practices to adapt to
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DEVELOPMENT WITH A HUMAN FACE

By archBiShoP NJoNGoNKulu NduNGaNe
he goal of development must be to enable people to enjoy their potential to
respect, accorded through justice for both individuals and the communities to which they belong, are as indispensable to full humanity as the material necessities of life. Commitment to these values has shaped me ever since. They are reflected in what the ancient philosophers referred to as the common good. This is the fully-rounded well-being of a society and all its members, the promotion of which, in conditions of peace and security, has long been seen as the primary task of every nation. In todays globalised world, it should be equally central in all our international decision making, and not only in those forums concerned with development issues. The Universal Declaration of Human Rights puts flesh on this concept. Its opening words affirm that the recognition of the inherent dignity and of the equal and inalienable rights of all members of the human family is the foundation of freedom, justice and peace in the world. Article 25, albeit in the outdated language of its day, describes the complementary material necessities of life: Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control. Though not technically binding, the Declaration is now widely regarded as a part of customary international law, and its provisions, encompassing every essential area of human life, should be seen as constituting an obligation for all countries, in both domestic and foreign policy and practice. If this commitment were taken seriously by our international institutions, whether or not they primarily address human rights issues, half the worlds population would no longer be dehumanized through lack of one or more of
be fully human. Though it may sound strange, I learned what it means to be truly human when I was a political prisoner on Robben Island in the early 1960s.
SoMehow, that unimaginable brutality, far outside the norms of civilized society, convinced me that dignity and
these fundamentals of life. In all sectors, whether finance, trade, climate, shipping, labor, telecommunications, and others, the human dimension ought to remain centre stage in all policy making, and in every organization, no matter what its main focus is. It will not suffice to concentrate solely on political expediency, technical efficiency, economic advantage or any other instrumental question, while failing to give adequate consideration to their human impact on individuals especially those with the least voice and the greatest vulnerability. When it comes to development policies in particular, putting human realities
centre stage should be automatic. The pressing need for this came home to me in the late 1990s when, soon after becoming Archbishop, I served as a commissioner for the South African national poverty hearings. It was emotionally and physically draining to listen as people spoke with dignity about their dire plight. I saw the face of poverty in the eyes of far too many men, women, children, the elderly, and people with disabilities. Their message was Archbishop, take our voices to the corridors of power, and say for us: We do not want hand-outs. We have brains. We have hands. Give us the capacity to eke out our own existence.
They were entirely right to make this plea, not only on grounds of justice and dignity, but in terms of making aid work, as shown by Nobel laureate economist Amartya Sen. Development programs are most effective and sustainable when intended recipients are fully includedrespected, heard, involved in every stage from inception and planning to delivery, and when adequate attention is paid to the realities on the ground. Taking this lesson to heart led me to set up the NGO, African Monitor, which I now head. We are an independent pan-continental body, which brings new African voices, especially
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those of the neediest, to the development agenda. It also helps monitor how well the development commitments by donors or by our own governments are actually being met and how well they are achieving a positive and lasting impact in the grassroots communities they are designed to help. African Monitors theme for the next three years is Unlocking the African moment. Putting the human dimension and the specific circumstances of individuals and communities at the heart of development helps us marry development theories with the very diverse realities that people face on the ground. Theorydriven, top-down, one-size-fits-all policy making, too often fails to bring lasting benefits, as we have seen in the past. Access to information policies such as the one being implemented by the World Bank will enable citizens to track results and improve aid effectiveness. New models are also increasingly evident: for example, supposedly unorthodox methods have led to sustained poverty reduction and growth in Vietnam, Indonesia, Brazil, Singapore, and, of course, China. Regardless of what measures one uses (and notwithstanding serious problems in other areas), China has experienced the most dramatic poverty reduction in recorded history over the last 20-30 years. The lessons are clear: development policies, including the MDGs, need to be designed contextually, within practical frameworks that are value-driven, circumstance-specific, and sustainable. Governments must work hand in hand with their people, with meaningful dialogue as an essential part of the full panoply of all that good governance implies Bringing the corrective balance of human realities and contextual groundedness into all our policy making is
essential for our planets long-term well-being, without which humanity will not survive. The fact is that we live in a world of finite resources and potential, although for too long the economic systems of the developed world have operated as if it were not so with catastrophic consequences for us all. Human-focused economics (to say nothing of Christian tradition) argues that creation can well supply enough for our needs, though certainly not for our greed, if we are ready to be faithful stewards not only for today, but also for tomorrow. In our policy formulations we must cater for present requirements without destroying the prospects of future generations. This means questions of land ownership and use, energy, along with food security, must be responsibly addressed. Environmental concerns, particularly climate change, also cannot be ignored, as if we can mortgage today to tomorrow. The interdependence of humanity applies not only to the contemporary globalized world, but to our children and our childrens children. All this is not the task of governments alone. The private sector must shoulder its responsibilities. Yet it has a right to expect that national and international regulation will create an environment in which good business ethics are promoted, and where entrepreneurship and risk are rightly rewarded, though not at the cost of exploitation of the poorest and weakest. Current policies that exacerbate the inequalities between rich and poor, across most nations of the world, and between regions of the planet, are dangerously destabilizingin economic terms, in social terms, and in human terms. We can and must do better, and
giving a human face to our policy making will help us avoid such pitfalls, attractive though they may be to those with power and influence when viewed in the short term. How then shall we live? is perhaps the ultimate question of human existence, and the only answer with integrity lies in promoting the common good, building a just world fit for all the inhabitants of our planet. We must never forget the human face in our sociopolitical and economic endeavors. And when it comes to development policies, alongside all the statistics of hunger and need, and the totals of dollars spent, we must remember that what matters most is that the neediest individuals urgently find tangible, sustainable solutions. Though this is often the hardest thing to quantify, it is the only thing that truly counts. I wrote earlier of the norms of civilized society. Samuel Johnson put it this way: A decent provision for the poor is the true test of civilisation. My conclusion and my challenge is this: we must cease measuring progress primarily through the condition of our economies and the strength of our currencies, and instead concentrate on how well our planet feeds its hungry, cares for its sick, houses its homeless, educates its children, employs its adults, and supports its elderly and vulnerable. Only when we achieve this can humanity dare claim to be truly civilized. Archbishop Njongonkulu Ndungane is Head of African Monitor, a pan-African nonprofit organization that monitors development funding, delivery, and impact and helps bring African voices to the development agenda.
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85 Mother and child in Mozambique.
SouNdiNG Board
Share your views.

What is the m o st im p o r ta n t fe a t u re [ key s u cce s s fa ctor ]
nya Namago Annie der , al Gen p Officer Princi pment dren, Develo , Chil and ender y of G ment, r lop Minist y Deve mmunit and Co e Malawi featur rtant opment t impo s evel The mo ke a d ip ill ma wnersh that w d is o succee ocess pr policy . The uld policy nt sho of the elopme o cy dev ng int i , taki of pol the tative sul of all be con oots needs grassr t the ng the accoun ill ncludi , i cess w people is pro has ty. Th policy majori ople at the the pe ure th ds of ens e nee l push wil sed th , they addres result since , as a ation and t. lement t in i ts imp for i nteres e an i av they h fails olicy of en a p a lack st oft Mo re is h as se the t, suc becau itmen ces l comm resour ca uate politi policy inadeq ting on. A alloca entati ot implem does n en it or its f people ail wh the so f may al eds of the ne e. o serv ddress a nded t s inte it i
Rahul Sur Chief, Conduct and Discipline Unit, Office of the Special Representative of the Secretary-General, UN Stabilization Mission in Haiti (MINUSTAH) 2006-2009.
My experience in Haiti brought home the fundamental importance of capacity for any policy to succeed. In my travels, when I asked why mountain after mountain lay denuded, they replied that the trees had been cut for fuel.
When further asked why electric plants could not supply the power, the reason given was that there were few engineers to maintain them. This lack of skills was mirrored in every profession essential for development. The weakness in each generated its own vicious cycle and malevolent externalities. I think that without skilled people essential for implementation, a policy irrespective of how elegantly conceived is not much better than squiggles on a paper. All successes in development policy ultimately flow from this lodestone.
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AMi OlubuNMi DiPO-SAl , laRen Consulting CEO, owo university, Obafemi Awol Nigeria the key success in my experience, is the a development policy factor for lementation. imp political will for world, although in my part of the influence social policies that could ly basis, formulated on a dai change are fraught with is the implementation k of commitment. lip service and lac ely fail where the A policy would sur not of the citizens are perspectives participation con E A Cered. lack of D E V E L O P M E N T O U T R sid H of ownership and would lead to lack commitment.
SouNdiNG Board
What works, what doesnt?

th a t w il l m a ke a d eve l op m e n t p ol i c y s u cce e d or fai l?
ibrahim Makram Director, Evangelical Organization for Social Services, Egypt Development policymaking is a means of achieving common benefits that have been agreed upon by the citizens and the governments or the private sector. This agreement provides a foundation for official decisionmaking by government authorities and the relevant institutions. in the development context, public policies can be defined as a series of interrelated choices, actions, and results. Successful policies require community participation in identifying the most important issues, designing proposals, providing feedback, clarifying their expectations, and identifying the expected results. Participatory approaches depend on the availability of accurate information, direct communication and public dialogue with the citizens using various mechanisms for public and individual communication to help them understand the policy and its implications. The cultural, economic, legal, social, and political contexts should all be taken into account when designing policies. Civil society can play an important role in raising public awareness of citizens rights and responsibilities, empowering citizens, and overseeing the policymaking process. (continued on next page) The experiences of countries in the region can help identify the kind of roles played by civil society.
Obstacles incl ude: * lack of trust, shortage of in formation, * limited democr atic practice s, * increasing co nflicts, * a lack of coor dination betw een the three (the governme sectors nt, the privat e sector and society), and the civil lack of awaren ess regarding benefits that the public the policy wi ll yield.
Linus M. Nthigai Programs Manager Policy and Development, Evangelical Alliance of Kenya, East Africa
A develo pment po licy will succeed the exte to nt that it active ly involv stakehol es all ders, in corporat es gender uses scie issues, ntific re search as its basi incorpor s, ates disa ster prep aredness builds th , and e knowle dge and technica of policy l capaci makers, ty civil so ciety le the poli aders, an cys bene d ficiarie s, on is are rele sues that vant to the poli cys succ Developm ess. ent poli cy that fails to how loca understa l power nd dynamics shape po outcomes licy , that re flects li ttle unde of the ke rstandin y consti g tuents th at either contest, hold, or are ex cluded fr om power, fails to and that clarify the oppo rtunitie therein s and ri or fails sks to incorp orate di mitigati saster on strate gies, isP R I L 2 0 1 1 A likely 87 to fail.
SouNdiNG Board
Dr. Thant Zin Consultant/Advisor lic Health (Freelance), Pub Myanmar and Development,
VAlERiA ENRiquEz Researcher, Transparency and Accountability FuNDAR, Center for Analysis and Research
wth. only economic gro Development is not process whereby It is a holistic are reduced and vulnerabilities within s are increased capacitie ernal assistance societies. Ext speeding up the is important for but peoples pment momentum, develo set their own (empowerment) to capacity values, ed on their own priorities bas mselves will be the and to organize determinants of the most important nt. developme ation rt the transform It is time to sta wn approach -do from a one-way top ance, to a to external assist program onal development multidimensi mary lding as the pri with capacity bui lude building inc focus. This would ial, anizational, soc intellectual, org market, tural, material, political, cul acity, and not and financial cap packaged technical ply a set of pre sim determined ions targeting pre intervent outcomes.
In my opinion, the key to making a development policy succeed is territorialsation. By this I mean that it is crucial that policy formulation take into account every aspect of the area where it will be carried out, especially the people who will be affected. It is therefore imperative that communities participate from the planning phase, have complete and accessible information, relevant training, access to accountability mechanisms, and the means for ongoing monitoring and evaluation throughout the entire process. Policies keep failing because the approach to planning and implementation doesnt change to reflect experience. Inertia can be very strong, even after repeated defects have been identified; and evaluation often tends to be more of a requirement to comply than a real mechanism to identify and correct problems and improve policy effectiveness.
d justified, an appropriate, cies can be ew, Poli point of vi a technical r -based from evidence a stakeholde ked against are not chec but if they ive advocacy a comprehens embedded in alysis and an policy eally, the ll fail. id oach they wi appr ysis that ess of anal such a proc of results from e interests identifies th nership and used creates ow sts can be These intere akeholders. different st supporting ntives for nerate ince tively to ge cy. crea on the poli and action plementation the im
Dr. Habib benzian Managing Director, The Health bureau ltd, Global Health Consultants, united Kingdom
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Melania Mujutywa Chief Economist, Ministry of Economic Planning and Investment Promotion, Zimbabwe Development policies bring change and the first requirement is for change in the national mindset and for commitment to the task. There is also a need for stakeholder buy-in and for national institutions capable of implementation ed and monitoring. This should be combin with enhanced accountability on the part of all stakeholders, and alignment of the development policy, as well as all other development programs, with the aspirations and long-term vision of the country. e Most development policies fail becaus they normally follow an emergency situation, for example, to solve an economic crisis facing the country. As a such, programs are normally set up in hurry and policy implementers are unable to manage them. Policies normally fail because of policy reversals. From my experiences policymakers are impatient and do not wait for the adjustment process to be es completed and the fruits of the polici to be realized. Taking a piecemeal approach to economic policy development (partial implementation) is also a major cause of failure. Development plans often set unrealistic targets that cannot be adequately funded because most people do not earn enough to save or invest. Furthermore, ed development policies are often affect by volatile political environments which prevent sustained implementation.
Dr. Oluwat oyin O. To gun, MD, MPH Research Physician, Viral Dise ases Programme, Medical Re search Co uncil (UK) Unit , The Gambia --West Af rica With the advent of the Millen Developmen nium t Goals (M DGs), we perhaps th have seen e most in tensive in global co ternationa mmitment l to eradic and improv ating pove ing liveli rty hoods, an greater em d with phasis pl aced on de policymaki velopment ng and pa rtnerships developed between (donor) co untries an developing d countries. For develo ping and least-deve countries, loped the most important will make factor th a developm at ent policy is the ex succeed tent of co untry owne conceptual rship, fr ization th om rough impl While stro ementation ng assist . anceboth and financ technical ialis ne eded from partners, developmen how a coun t try takes of the de ownership velopment policymaki will stro ng proces ngly infl s uence whet policy su her the cceeds or fails. A challenge, major and thus a priority operationa area for l research and policy is the fe asibility analysis, of countr of develo y ownershi pment poli p cymaking context of in the high-level s of dono r aid.
ara Milwida M. Guev ident, Pres dation, Synergeia Foun Philippines
h and listen to be in tune wit businesses need ure that . They have to ens to their market y produce services that the the products and preferences to the needs and market are responsive . Knowledge of the of their customers t consumers ping products tha is key to develo makers . likewise, Policy will like and buy ket. ten to their mar also need to lis -driven es that are demand Development polici sive to the evant, and respon are seen as rel es. needs of communiti the ally the poor, are The people, especi kinds information on the best source of l answer measures that wil of programs and their own y are able to set their needs. The that they ne the services priorities, defi icies that e feedback on pol need, and provid that do not work. work and those n policies policy failure whe Technocrats risk and research. ducts of theory are merely pro ly to as to listen intent Their first job is erstand how possible and und many sectors as they feel.
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arimana Sophie Havy or, rundi Direct ciation bu omists Asso / Women Econ ACORD
ed, and answers a ne ds when it s of the licy succee omic demand t po cal or econ ltiple A developmen cial, politi s reflect mu the so ment studie responds to plementation needs assess when the countable im community; there are ac ; and when perspectives in place. ve mechanisms policies ha Development makers at akeholders. with st and decision Consultation . in the of leaders with donors e business connivance help local long been th ke place to ls, often in ve decade ess would ta different le licies. The vocacy proc an ad ement the po best cases, populations nd and impl understa areness that stakeholders icipatory th it an aw ries of part s brought wi out their of the 1990 result, a se too much ab ate; as a icip out worrying should part oduced, with intr methods were s. effectivenes en built on ccessful wh been more su ons, and licies have ed populati po terests the affect Development different in periences of e ex te verse, had the real-lif would initia ing quite di p tions be g ethnic grou these popula extinguishin Africa one g aimed at licies. in in these po ination seen as bein cc ildrens va ich would be urs about ch a policy, wh group! Rumo her ethnic anot . ed this view often reflect ndi in the licy in buru antations riculture po h coffee pl essed an ag tn to establis rvisors i myself wi ltural supe populations ing ous agricu to 1980s requir The overzeal planted next regions. all to be in certain her crop at low any ot would not al e coffee. plants th stributing one eir days di ey came back uld spend th ors wo e but when th The supervis en during th l support. ev g technica dried out, and providin s micro plants had e the region s later, th ffee ven was that or two week reality, co e reason gi y season! Th nanas ffee. but in rain rable to co ared with ba unfavo ght utility comp climate was ding the ni are of its were unaw , were spen owners who rasites s they knew inging in pa e other crop ants, or br or any of th le day! r on the pl ts in a sing ing hot wate pour e young plan destroyed th which
Needs as sessment s with mu perspect ltiple ives. Ne eds asse to guide ssment st the impl udies ementati should be on of po multidis licies ciplinar the view y and in s of the clude target gr institut oups and ions. Th ey would from bein also bene g carrie fit d out by scholars respecte , by deve d lopment who have practiti hands-on oners experien CSOs with ce, and alternat by ive pers Thus, th pectives e policy . would be multidim nefit from ensional a perspect the key ive incl actors. uding its true has been that ther great pr e ogress in respect this because of the re communic volution ations. in it is al of the ro so becaus le and ca e pacity of society, civil and a co ncern fo of divers r the in e commun clusion ities wh about gr ich came adually as polici being co es were nceived and impl environm emented ents domi in nated by civil co politica nflicts-l and somethin 15 years g inconc ago! eivable Finally, a develo pment po better wh licy succ en it is eeds supporte manageme d by nt and im plementa in which tion mech the bene anisms ficiaries and when are invo their kn lved, owledge valued. and know -how is
(Transla ted by Au riane Mortreui l)
SYED HARIR SHAH l Institute or, Internationa Executive Direct istan k Management, Pak for Disaster Ris
ic, should be holist pment policies helm Successful develo sitting at the friendly. Those on the sive, and user ies comprehen tand the realit , pment must unders marginalization of policy develo dition, culture, tra people with respect to ground capacities of the y as well as the icy makers must and vulnerabilit Development pol agencies. that reflect and implementing ged approaches ron onal and multip and use multidimensi icy initiative; aspect of the pol the people and tanding of all ve an unders designed to ser with be developed and icy development, policies should approaches to pol -up down, will e versa. Bottom not vic port from the top technocratic sup of the take ownership professional and es. If the people ici l. t successful pol suppor way for it to fai ion, there is no policy intervent
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Kedar Khadka Director, Good Governance Project, Pro Public, Convener: National Coalition against Corruption (NCaC), Vice-President: National Election Observation Committee (NEOC), Vice-President: Human Rights Home
Failures of overall governance and inefficiency in public service delivery are endemic characteristics of Nepal. Nevertheless, after ten years of armed insurgency, a window of opportunity for peace and reconciliation in Nepal opened up in November 2006 with the signing of the comprehensive peace agreement. Now the country has been struggling to draft a new constitution, through a Constituent Assembly, by April 2010. In this type of situation it is very difficult to identify what would make a policy succeed. I have noted that in recent years, development science has been reluctant to proclaim any single factor that contributes to making development a success. However, a deeper consultative process using tools to promote accountability and transparency, such as public hearings, public audits, citizen scorecards, and community scorecards, would help develop more realistic development policies. Also, the policymaking process has to begin with citizens themselves who have to be involved. Nothing will change unless people get involved. Public discourse is also vital in shaping development policy because the public requires time to digest anything new that will affect them. People also require time to conceptualize and decide on suitable approaches. In my almost 15 years of experience as an advocate for good governance in Nepal, I have realized that citizens are never the problem but always the solution. So, I would strongly urge policy makers to be inclusive and listen to different political points of views rather than imposing their own views.
governance, I As a proponent of good experience is the best believe that practitioner teacher. As a development l, d-world country like Nepa from a thir makers usually I have seen that policy eciate the importance of do not appr conception including citizens in the new policy initiative. stage of a be filled with Policies should neither one be copied as is from jargon nor her, or they will fail. place to anot rtunities People must be given oppo en and analyze, and to to read, list discussion test their opinions in ic rs. Having said that, publ with othe in itself, discourse is not an end a means of ensuring but rather esentation ownership by a larger repr of citizens. understand Policymakers should also for discourse is essential that public zens for new policies. preparing citi nd the vision Citizens need to understa es of the policy as well and objectiv also need to as the facts, but they they require and what express what ders must they value most. Stakehol od and provided enough be understo ing criteria room to be engaged. Sett h to measure success against whic with resultsalso goes hand in hand ng. Finally, monitoring based monitori and useful for tools should be simple ld be progress--and they shou measuring intensively applied.
To my mind the most important features in making a developmen t policy succeed ar e committe d collective action by stakeholde rs, along with sufficient human and financial resources. These should be corruption free if the po licy is to yield results. Without th ese features a policy will most often fail .
John Nag ella Chairper son, Ass ociation Rivers a for nd Coast al-Ecosy Conserva stems tion, in dia
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BooKShelf
JuSt GiVe MoNey to the Poor the development revolution from the Global South
by Joseph Hanlon, Armando Barrientos, and David Hulme
of the population transform the lives of recipients. Countries from Mexico to South Africa to Indonesia are giving money directly to the poor and discovering that they use it wiselyto send their children to school, to start a business and to feed their families. Directly challenging an aid industry that thrives on complexity and mystification, with highly paid consultants designing ever more complicated projects, Just Give Money to the Poor offers the elegant southern alternativebypass governments and NGOs and let the poor decide how to use their money. Stressing that cash transfers are not charity or a safety net, the authors draw an outline of effective practices that work precisely because they are regular, guaranteed and fair. This book, the first to report on this quiet revolution in an accessible way, is essential reading for policymakers, students of international development and anyone yearning for an alternative to traditional poverty-alleviation methods.
Kumarian Press December 2010 $24.95
Amid all the complicated economic theories about the causes and solutions to poverty, one idea is so basic it seems radical: just give money to the poor. Despite its skeptics, researchers have found again and again that cash transfers given to significant portions
coPiNG with factS a Skeptics Guide to the Problem of development

by Adam Fforde
great differences of opinion. It is no surprise then, that students and practitioners confronting the mass of competing assertions about development truths become confused and frustrated. Coping with Facts offers guidance for the perplexed through a penetrating critique of development studies literature. Rather than presenting a general examination of modern development practice, Fforde develops coping strategies that help readers evaluate the contending solutions to problems of development. Fforde cements his analysis with detailed case studies of development projects in Southeast Asia, especially Vietnam where he spent over 10 years. Those eager to chart a constructive career in development theory and practice as well as students looking for an introduction to this vast field will want this book as a navigational aid for their journey.
Kumarian Press March 2009 $23.95
A key assumption in development literature, Adam Fforde argues, is that development is a predictable process with knowable solutions. As a result, the literature is characterized by a combination of great certainty and
doiNG Good or doiNG Better: development Policies in a Globalizing world

Edited by Monique Kremer, Peter van Lieshout, and Robert Went
What drives development? What new issues have arisen due to globalization? And what kind of policies contribute to development in a rapidly changing world? The studies in Doing Good or Doing Better analyze the different development strategies employed on various continents, address current challenges, and argue that a new approachone different from the European and American modelsis necessary in a globalizing, interdependent world.
Amsterdam University Press September 2010 $42.50
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Source: world BaNK iNfoShoP
| www.worldbank.org/infoshop
traditioNal KNowledGe iN Policy aNd Practice approaches to development and human well-being
Edited by Suneetha M. Subramanian and Balakrishna Pisupati
education and governance. However, in todays world, TK is increasingly underrepresented or under-utilized. Further, while the applicability of TK to human and environmental welfare is well-recognized, collated information on how TK contributes to different sectors is not easily accessible. This book focuses on the relevance of TK to key environment- and development-related sectors, discusses the current debates within each of these sectors and presents suggestions as to how TK can be effectively integrated with conventional science and policy. A valuable resource to researchers, academics and policymakers, Traditional Knowledge in Policy and Practice provides a comprehensive overview of TK, and its links and contributions to social, economic, environmental, ethical, and political issues.
United Nations University Press November 2010 $38.00
Traditional knowledge (TK) has contributed immensely to shaping development and human wellbeing. Its influence spans a variety of sectors, including agriculture, health,
decoNStructiNG deVeloPMeNt diScourSe Buzzwords and fuzzwords

Edited by Andrea Cornwall, Deborah Eade
language matter to those who are doing development? Surely, there are more urgent things to do than sit around mulling over semantics? But language does matter. Whether emptied of their original meaning, essentially vacuous, or hotly contested, the language of development not only shapes our imagined worlds, but also justifies interventions in real peoples lives. If development buzzwords conceal ideological differences or sloppy thinking, then the process of constructive deconstruction make it possible to re-examine what have become catch-all terms like civil society and poverty reduction, or bland aidagency terms such as partnership or empowerment. Such engagement is far more than a matter of playing word games. The reflections included here raise major questions about how we think about development itself.
Practical Action January 2011 $29.50
Writing from diverse locations, the contributors to this volume examine some of the key terms in current development discourse. Why should
deliVeriNG aid differeNtly: lesson from the field

Edited by Wolfgang Fengler and Homi Kharas
We live in a new reality of aid. Gone is the traditional bilateral relationship, the old-fashioned mode of delivering aid, and the perception of the third world as a homogenous block of poor countries in the south. Delivering Aid Differently describes the new realities of a $200 billion aid industry that has overtaken this traditional model of development assistance. As the title suggests, aid must now be delivered differently. Here, case study authors consider the results of aid in their own countries, highlighting field-based lessons on how aid works on the ground, while focusing on problems in current aid delivery and on promising approaches to resolving these problems.
Brookings Institution Press November 2010 $28.95
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BooKShelf
WORLD BANK PUBLICATIONS

the day after toMorrow a handbook on the future of economic Policy in the developing world
edited by Otaviano Canuto and Marcelo M. Giugale
Poverty Reduction and Economic Management Networkan epicenter of the professionto report what they see on the horizon of their technical disciplines and of their geographic areas of specialization. The disconcerting but exciting search for a new intellectual compact has begun. To help guide the discussion, The Day after Tomorrow: A Handbook on the Future of Economic Policy in the Developing World puts forth four key messages:
graduate into something akin to "newly developed." Africa will eventually join that group. Others, like Eastern Europe, have a legacy of problems to address before such a transition. While some regions will do better than others, and some technical areas will be clearer than others, there is no question that the horizon of economic policy for developing countries is promisingrisky, yes, but promising. The rebalancing of global growth toward, at the very least, a multiplicity of engines, will give the developing world a new relevance.
The World Bank September 2010 $35.00
The 2008-09 global financial crisis shook the ground under the conventional wisdom that had guided mainstream development economics. Much of what had been held as true for decades is now open to reexamination from what the role of governments should be in markets to which countries will be the engines of the worlds economy, from what people need to leave poverty to what businesses need to stay competitive. Development economists look into the future. They do not just ask how things work today, but how a new policy, program, or project would make them work tomorrow. They view the world and history as a learning processpast and present are inputs into thinking about what is coming. It is that appetite for a vision of the future that led the authors of The Day after Tomorrow: A Handbook on the Future of Economic Policy in the Developing World to invite some 40 development economists, most of them from the World Banks
While the developed world gets its house in order, and macroeconomics and finance achieve a new consensus, developing countries will become a (perhaps the) growth engine for the world. Faster technological learning and more South-South integration will fuel that engine. Governments in developing countries will be betterthey may even begin to earn the trust of their people. A new, smarter generation of social policy will bring the end of poverty within reach, but the attainment of equality is another matter. Many regions of the developing world will break out of their "developing" status and will
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| www.worldbank.org/infoshop
the Great receSSioN aNd deVeloPiNG couNtrieS economic impact and Growth Prospects
Edited by Mustapha K. Nabli
of developing economies to such external shocks? Which institutional arrangements and policy frameworks would allow them to respond most quickly and effectively? What role is there for international policy coordination and for emerging economies? The Great Recession and Developing Countries delves into 10 country case studies that explore growth during the precrisis boom, the effects of the crisis, policy responses, and recovery. Looking beyond the crisis, the volume undertakes projections of mediumterm growth and explores the possible impact of the global crisis. The use of a common methodology in preparing the case studies facilitates crosscountry comparisons and helps draw some useful lessons as well as identify areas where more study is needed. Although the case studies do not constitute a statistically representative global sample, they illustrate a broad range of experiences in the wake of the Great Recessioncovering Brazil, China, Ethiopia, India, Malaysia, Mexico, the Philippines, Poland, Turkey, and Vietnamand give insights on how developing countries can best prepare and respond to such crises. A synthesis chapter establishes the overall framework, provides a summary of the global crisis and its effects on the countries studied, and draws lessons from the 10 country studies. This book will be of particular interest to development practitioners,policy makers, and academics.
The World Bank December 2010 $35.00
The 200809 financial crisis, which originated in the United States and rapidly spread to the rest of world, resulting in the most severe and intense Great Recession since World War II, has posed new challenges for international policy coordination and the management of national economies. Questions are being raised about globalization, which has been a powerful engine of economic growth over the past three decades but exposes countries to more volatility and increases risk. What policies and reforms increase the resilience
deVeloPMeNt outreach Photo creditSaPril 2011

Arne Hoel/The World Bank: pp. 2-3, 10-11, 32, 35, 37-38, 39, 40, 42, 54-55, 75. Cover illustration: Debra Naylor/Naylor Design p. 1 and pp. 46-47: Curt Carnemark/World Bank p. 5: Helene Cyr/Design Pics/Newscom p. 6: Frans Lemmens/Lonely Planet/Newscom p. 8, keyboard banner: Natalia Siverina p. 9: Photo illustration by Moira Ratchford. Photos used include cellphone: Naomi Hasegawa, mouse: Feng Yu, laptop: Natalia Siverina, billboard: rfwil p. 12: imago stock&people/Newscom pp. 14-15: Ron and Joe Art Parts p. 16: Ainhoa Goma/Oxfam p. 17: John Quiggin p. 20: MARTIN BERNETTI/AFP/Getty Images/ Newscom p. 26: Curt Carnemark/World Bank p. 29: Sun Baoshu/Xinhua/Photoshot/Newscom p. 31: Steve Harris/World Bank p. 40: John Isaac/World Bank p. 42: Curt Carnemark/World Bank p. 45: Masaru Goto/World Bank p. 49: x99/ZUMA Press/Newscom p. 50: Dominic Sansoni/World Bank p. 50, top banner: Curt Carnemark/World Bank p. 57: John Hogg/World Bank p. 58: Mano Strauch/The World Bank p. 63: Curt Carnemark/World Bank p. 64: Mano Strauch/The World Bank p. 68: Simone D. McCourtie/World Bank p. 70: RAVEENDRAN/AFP/Getty Images/Newscom p. 74: PRAKASH SINGH/AFP/Getty Images/ Newscom p. 76: Curt Carnemark/World Bank p. 80: Ngozi Okonjo-Iweala: Simone D. McCourtie/ World Bank, Manmohan Singh: STR/AFP/Getty Images/Newscom, Vicente Fox: Paco Campos/ EFE/Newscom, Nandan Nilekani: STR/AFP/GETTY IMAGES/Newscom p. 81: The World Bank p. 83: Archbishop Njongonkulu Ndungane p. 85: Design Pics/Newscom p. 87, cork banner: zoomstudio p. 92, book-page banner: Stockbyte
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What is the purpose of the publication?

What is the purpose of the publication?

What topics does it cover?

What topics does it cover?

Outreach

aBout thiS iSSue

Jos-Manuel Bassat executive editor

PATHWAYS TO DEVELOPMENT What We Know and Dont Know

MarKetS VerSuS State: a falSe dichotoMy

Key SucceSS factorS

...aNd other coNSideratioNS

uNderStaNdiNG the SocioPolitical laNdScaPe

froM the BloGoSPhere

THINGS YOU DIDNT KNOW

ceNtral africa rePuBlic:

in two thirds of SSa countries,

Source: African Development Indicators, World Bank, 2010.

NONGOVERNMENTAL ORGANIzATIONS (NGOS)

oPPortuNity 1: PuSh BacK at NarrowiNG defiNitioNS of SucceSS

oPPortuNity 2: MultileVel coalitioNS that BridGe well-KNowN differeNceS

oPPortuNity 3: Structurally reiNVeNt dowNward aNd lateral accouNtaBility

oPPortuNity 4: aNSwer the queStioN, what if we areNt NGoS?

iNterNatioNal deVeloPMeNt NGoS continued on page 31

The New Structural Economics Approach

what the clueS tell uS

how did they Get there?

the adVaNtaGe of BacKwardNeSS

the New Structural ecoNoMicS

BEIJING CONSENSUS OR WASHINGTON CONSENSUS

What Explains Chinas Economic Success?

the BeSt May Be the eNeMy of the Good

BiG BaNG or eVolutioN?

whatS iN it for Me?

the carrot or the SticK

reduciNG elite caPture

iNterNatioNal deVeloPMeNt NGoS continued from page 19

Universitys Hauser Center blog. http://hausercenter.org/iha/2010/10/11/ the-big-push-back/.

1 Bureau of Democracy, Human Rights,

Posted on 11 October 2010 on Harvard

EDUCATION FOR EDUCATION...

SKillS VerSuS Seat tiMe

are not the most significant challenge facing schools.

itS aBout the teacher

autoNoMy, accouNtaBility, aNd choice

fiGure 1: autoNoMy coMBiNed with accouNtaBility iNcreaSeS achieVeMeNt

76.2 55.5 ceNtral eXaMS

By aBhiJit V. BaNerJee aNd eSther duflo

ARENT CHILDREN LEARNING?

the firSt SteP iS ShowiNG uP

PriVate SchoolS do Better, But Not By a huGe MarGiN

But iNceNtiVeS are oNly Part of the Story

the eVideNce for our hyPotheSiS?

what doeS thiS MeaN for educatioN Policy?

techNoloGy aNd laBor ProductiVity

how ict Policy coNtriButeS to laBor ProductiVity

caPital deePeNiNG +++ +++ ++ ++

why do they Go?

Not oNly for the rich

what do they learN?

Bus rapid transit (Brt) system in curitiba, Brazil.