Volatility and growth: How can fiscal policy boost equitable growth in Argentina?

Volatility hurts growth, especially in low-income and emerging countries that are even more vulnerable to external shocks, which implies more risk and lower stability. The role of fiscal policies thus is not only to boost growth, but to cater for sustainable and equitable growth; especially for the poor who are the most vulnerable to market volatility.

“What can fiscal policy do to boost equitable growth in Argentina?”

Jimena Zúñiga, Marcelo Capello, Inés Butler and Néstor Grión from the IERAL of the Mediterranean Foundation attempt to provide an answer to this question in their research “A cycle-adjusted fiscal rule for sustainable and more equitable growth in Argentina”, which Jimena presented at the GDN 14th Annual Conference. In order to do this, they first define the main binding constraints to growth in Argentina, then they investigate which fiscal reform strategy is the most suitable to specifically tackle these constraints. They argue that for a reform strategy to be effective in Argentina, it must be inclusive; involving all levels of governmental sectors, and designed to stabilize key macroeconomic variables.

The proposed model is a cycle-adjusted fiscal rule, which is found to be effective in reducing Argentina’s macroeconomic volatility. In turn, this will result in long-term growth and an increase in welfare of the poor families. In the video below, Jimena Zúñiga explains the main pillars of this research and also briefly highlights the main findings and their potential impact on promoting sustainable and equitable growth in Argentina.

Jimena Zúñiga, IERAL of the Mediterranean Foundation

Read this Paper: A cycle-adjusted fiscal rule for sustainable and more equitable growth in Argentina

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Understanding inclusive growth: Effective policies for more inclusive societies

By definition, inclusive growth entails the equitable allocation of resources in order to generate benefits that can be incurred by all sectors of the society, thus alleviating poverty and inequality. However, is inclusive growth necessarily pro-poor? And does it ensure reducing the troubles of the most disadvantaged while benefiting everyone? There is yet no clear coherent measure to combine all the dimensions of inclusive growth that involves how the elements of inclusiveness relate to each other and ultimately how they can collectively induce growth.

Rafael Ranieri from the Ministry of Planning, Budget and Management, Brazil presented a paper titled “Inclusive growth: Building up a concept” at the GDN 14th Annual Conference. He tackled the state of the debate on the concepts of inclusive growth and pro-poor growth; highlighting distinctive features of the concept of inclusive growth and contributing to the design of more effective policies through addressing the main issues that can take it further. He argues that, unlike pro-poor growth concepts, inclusive growth is not limited to income outcomes but is rather concerned with the process of growth. In other words, people must actively participate in the growth process for it to be inclusive.

Greater clarity about the meaning of inclusive growth is important to determining clearer policy objectives and thus to designing more effective policies to create more inclusive societies. In their paper, Ranieri and Raquel A. Ramos from the Centre d’Economie de Paris Nord, France emphasize that actual manifestation of inclusion in public policy make a country more resilient to change in the long term, taking into consideration the distinct nature of national concerns and social forces in each country.

                Rafael Ranieri, Ministry of Planning, Budget and Management, Brazil

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InfoLady: Empowering rural women at their door steps

Lack of access to information and government transparency are major blocks in the road of development and poverty alleviation in almost all emerging economies of the world. Women, especially in rural areas where accessibility to information is more acute, are impeded with poverty, illiteracy and disempowerment, which binds their ability to support themselves and their families.

Nadia Shams, Senior Assistant Director at Dnet, Bangladesh, presents her project; the “InfoLady” model. This model is specifically tailored to provide assistance to thousands of rural female entrepreneurs through a variety of door step services. The InfoLadies are currently operating in 19 districts in Bangladesh; with a a service package designed by Dnet, consisting of 80 different services under eight different categories, which include health, family planning, agriculture, employment, finance, marketing advice, legal and ICT.

InfoLadies also spread awareness for 6 different groups, namely farmers, labor, elderly, women, children, and adolescent girls. In addition to providing the InfoLadies with the necessary equipment, being associated with a local organization or NGO helps the InfoLadies to strengthen their customer base in the community through creating reputation credibility.

The InfoLady model is currently being scaled up nationally in Bangladesh and has great potential of being replicated in other countries as well; through adjusting it according to country-specific dimensions including the market, culture, infrastructure… etc.  Dnet plans to have 12,000 InfoLadies operating throughout Bangladesh by year 2017.

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“Climate Change and Economic Development in Africa”, socioeconomic and climate scenarios in the African continent

Climate change and economic development in Africa are pressing issues within the African continent. Although Africa is pressurized by problems of poverty alleviation and health issues, yet lately climate change and economic development became a major concern. While African countries have lower overall and per capita global warming emissions on the planet, they are also likely to suffer from the consequences of climate change. Droughts, famine, desertification, and population displacement are the impacts of such a rising danger within the continent. In the context of high levels of poverty and malnutrition, the priority for many African countries is increasing access to energy services and improving the economic welfare of their people. The African Economic Research Consortium’s (AERC) is organizing its Biannual Research Workshop addressing the topic of “climate change and economic development”. The event is scheduled on Sunday June 2, 2013 at the Mount Meru Hotel, Arusha, Tanzania.

AERC has embarked upon an initiative of an interactive live webcast for the workshop allowing the audience to follow the proceedings on the plenary session. The live web cast is available directly from: http://aercafricaevents.org/ba1-2013/livestream/.The videos will also be made available on the YouTube link on the website as the meeting progresses. For updates through Twitter, the AERC twitter handle is @AERCAFRICA and through the RSS link available on the website.

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Research Network on Inequality and Poverty

Combating poverty and inequality is on the top of priorities for many development organizations. This is why the Latin American and Caribbean Economic Association (LACEA), the Inter-American Development Bank and the World Bank came together to launch their joint initiative “Network on Inequality and Poverty”. The objective of the initiative is to advance the state of knowledge and expertise regarding the causes and consequences of poverty, inequality, and social exclusion, as well as the whole range of policies, institutions and social structures that influence their dynamics, and finally the impact of public action.

As every year, an NIP meeting took place prior to the LACEA Annual Conference, on October 31st. Discussions were held on women’s participation in the labor market, the impact of fields of specialization on the man/woman’s position in the labor market and the possible correlation between a woman’s participation in the labor market and her earning.

According to Jaime Ruiz Tagle, Universidad de Chile, men and women interact based on the values they grew up on and the roles they see for each other. A conservative woman will commit to do her utmost in the household, participate in the labor market for shorter hours, and therefore will participate with less income in the household.

In this video, Virginia Robano, George Washington University, questions the possible correlation between working as a part-time and earnings. Educated females have the choice of working part-time or full time. According to her, two females with similar high education characteristics may opt for different options, which affects their respective earnings.

Hugo Rolando Ñopo, Inter-American Development Bank, explains that the decision men and women make regarding their respective fields of specialization affects their income once they join the labor market. The differences we see in the labor market are usually marked according to the decisions men and women make when choosing their field of specialization. In his view, one area that could be worked on today is the gender stereotyping in the labor market when it comes to skills and expertise.

Urbanization and development – highlights from the conference

What is the relationship between urbanization and development? how do cities as new frontier zones affect the development processes? are cities engines of growth or poverty? how are violence dynamics produced in the relationship between cities and youth? what are the inter-linkages between urbanization and poverty? How can international migration improve the situation in cities and slums? How should cities react to criminality and environmental issues?

All these questions were addressed at the GDN 13th Annual Global Conference, which took place on June 16-18 in Budapest, Hungary. According to Gerardo della Paolera – GDN President – this year’s conference was particularly important as it opens the door for the next GDN Global Research Project.

Watch highlights from the Conference:

Gerardo della Paolera – GDN President

Ramona Angelescu Naqvi- Sr. Political Scientist/Director, Program Management

Read and watch more about the conference

How much do we really know about the relationship between urbanization and poverty?

In the fourth plenary session of the 2012 GDN Annual Conference, focusing on urbanization and poverty, we took one step closer to seeing the inter-linkages between the two. It quickly became obvious that it is very hard to get a handle on urbanization without addressing poverty.

Plenary session 4 'Urbanization and poverty' - Photo credits http://www.vegeldaniel.com

Plenary session 4 ‘Urbanization and poverty’ – Photo credits http://www.vegeldaniel.com

Chaired by Gabor Kezdi, Professor and Head of Department of Economics, with the Central European University, the session discussed the interplay between these two notions, to better understand how to create maximum impact for the developing and undeveloped worlds.

Robert Buckley (New School of Research, USA) was the first speaker. He magnified themes related to urbanization and development and pondered whether cities were becoming Malthusian. Still optimistic about the market, Buckley argued that it is mainly a public policy issue, characterized by speculation.

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Awards and Medals Competition: Recognizing innovative ideas

Launched in 2000 with the support of the Government of Japan, the Global Development Awards and Medals Competition aims to recognize innovative ideas and to encourage talented young researchers. This year, 21 finalists had the opportunity to presented their papers and projects on urbanization and development during the 2012 GDN Annual Conference. Interesting discussions emerged throughout the conference’s parallel sessions where researchers presented their innovative work.

GDN Awards and Medals winners

GDN Awards and Medals winners

Elite capture in urban society: Evidence from Indonesia

Scholars argue that potential gains of community-driven development (CDD) approach in poverty program are large as it may result in a sustained poverty reduction. However, recent literature show that community’s involvement promoted by this approach might increase the risk of elite capture towards the program’s benefit.

During the GDN’s 13th Annual Conference, Rivayami Darmawan (Georg-August-Universität, Göttingen, Germany) presented a paper that looks at urban poverty projects in Indonesia and see the effect of elite capture on urban societies.

Urbanization: Making sense of its various externalities

On Day 2 of the GDN’s 13th Annual Conference, the third plenary session on “urban externalities, contagious disease, congestion, and crime,” discussed that very issue of the ramifications of urbanization, which is expressed very differently in various parts of the world.

George Mavrotas, Chief Economist with the Global Development Network and chair of the session, began by discussing the urban phenomenon, and its externalities, with an emphasis on what can go wrong, and how to ameliorate it. The speakers soon followed suit, starting with Teresa Caldeira, Professor of City and Regional Planning, at the University of California, Berkeley.

An anthropologist by training, Caldeira has conducted extensive research on changes in urban culture in Sao Paolo, Brazil, and how patterns of urban violence change frequently, producing new dynamics of violence, evident in the relationship between youth and city.

Leaving your mark on the city

A series of new urban practices in Sao Poalo began taking shape, protesting profound social inequality, where young frustrated males are the agents of that change, seeking visibility and expression in the city through what is referred to as imprinting, or graffiti, and through the rise of motor boys, largely lower-income courier boys, that crisscross the metropolis.

Also referred to as “Pixacao” in the local language, this new form of expression is seen as a mode of intervention by young men occupying and recreating the public space.

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