New Economist

New book: 'Rescuing the World Bank'

Are the World Bank's shortcomings exaggerated or potentially fatal? If potentially fatal, can this critical institution be rescued? So asks a new book, Rescuing the World Bank, published by the Center for Global Development. It's a wide ranging and provocative volume. The CGD have posted many of the essays (PDF files) online:

Preface

A Global Credit Club, Not Another Development Agency by Nancy Birdsall

Votes and Voice: Reforming Governance at the World Bank by Masood Ahmed

The Battle for the Bank by Ngaire Woods

The World Bank and Low-Income Countries: The Escalating Agenda by William Easterly

The Role of the Bank in Low-Income Countries by Steven Radelet

Has the World Bank Lost Control? by Adam Lerrick

The World Bank and the Middle-Income Countries by David de Ferranti

The Missing Mandate: Global Public Goods by Michael Kremer

The "Knowledge" Bank by Devesh Kapur

Evaluations and Aid Effectiveness by Pierre Jacquet

The Evaluation Agenda by Ruth Levine and William D. Savedoff

The World Bank: Buy, Sell, or Hold? by Mark Stoleson

Demos: what's inside the tank?

Think tanks come in allshapes and sizes. British tank Demos was influential in forming New Labour's political philosophy - but it has often been derided for its more outlandish ideas. Guardian John Harris asks: Blue sky thinking - or just plain barmy? Personally, I think he's too kind.

Demos, the thinktank that is paid to come up with policies, ideas and wheezes, and has long been in the habit of chucking forth headline-grabbing proposals. Indeed, surveying the more entertaining aspects of Demos's 13-year history, you can make out the framework of some sort of romantic modern utopia where - to take a few of its more out-there suggestions - the government makes a point of encouraging alfresco eating, there is an annual "physical activity week" in Manchester, and every airport has a library.

Just lately, this vision of the future has been augmented by Demos's claim that hairdressers - "the most authentic voice on the high street", apparently - might be a useful sounding-board for local councils, and that more of our politicians should step outside the Westminster grind by writing poetry. To those who only hear about Demos via the occasional headline, it all might raise the question: are they a little bit barmy?

"We don't sit down and say, 'Right - what's going to really get everyone going this month?'" says Demos's 32-year-old director, Tom Bentley (born and raised in Bethnal Green, comprehensive-educated and an Oxford graduate). "But we do look for the kind of ideas that create talking points. To give you a pompous version of it, we're in favour of public deliberation, and media reaction is a precondition of that."

And does it matter if some of the ideas teeter on the edge of absurdity? "I don't care about being thought of as absurd," he says. "I don't mind people dismissing what we say, as long as they're talking about it, and there's some substance underlying the talking point."

Sounds a bit like the typical blogger - nothing if not provocative. And yes, Demos do have a weblog: Demos Greenhouse. That's an example other think tanks should emulate.

How do countries get rich?

C. Peter Timmer from the Center for Global Development has written a new CGD Brief: How Countries Get Rich. He begins with Adam Smith's contention...

..that peace, low taxes, and good government will lead a nation to prosperity. Timmer updates this view by analyzing the role that investments in education, technology and trade have made in the rapid progress of countries like South Korea, Singapore, and Brunei. He concludes that the "miracle" of getting rich lies in creating a durable set of institutions - some public, some private - that encourage the "Smithian conditions" as well as economic openness for long periods of time.

The Earned Income Tax Credit at age 30

Brookings Fellow Alan Berube spoke last week to European Union labour counsellors on The Earned Income Tax Credit at Age 30: An Overview. He discusses how the EITC works, whom it benefits, what effects it has on work and poverty, and what issues surround the credit as it enters its 31st year. The transcript is now available.

Is GDP per capita a good measure of well-being?

Boosting per capita incomes has been the main focus of most government economic policy for a very long time. But obviously the well-being of individuals and households also depends on other factors, such as leisure time, environmental quality, health and distributive issues. The growing happiness literature has raised serious doubts as to whether money matters more than these other factors. A new OECD Economic Working Paper by Romina Boarini, Åsa Johansson and Marco Mira D'Ercole, Alternative measures of well-being, takes a sober look at the issue.

It reviews different measures of well-being and how they relate to levels, rates of change and international rankings of GDP per capita. It also looks at other measures of well-being. While fairly non-commital in its conslusions, it's a very useful overview of the (burgeoning) literature. Here's the abstract:

This paper assesses if GDP per capita is an adequate proxy as a measure of wellbeing or whether other indicators are more suitable for this purpose. Within the national accounts framework, other better measures of economic resources exist, but they are closely correlated with GDP per capita and are not as readily available. Illustrative calculations to 'extend' measures of economic resources to include leisure time, the sharing of income within households and distributional concerns suggest that cross-country ranking of based on these indicators and GDP per capita are generally similar, although they have evolved differently over time.

Across OECD countries, levels of most measures of specific social conditions are significantly related to GDP per capita while changes over time are not. However, survey based data on happiness and life-satisfaction across OECD countries are only weakly related to levels of GDP per capita.

Overall, measures of GDP per capita and economic growth remain critical for any assessment of wellbeing but they need to be complemented with measures of other dimensions of well-being to get a comprehensive picture of well-being.

Is the OECD losing its way?

Founded to ensure the success of free-market economies at the height of the Cold War, the Organization for Economic Cooperation and Development (OECD) "is facing a crisis of identity more than 15 years after Communism crumbled across Europe". So wrote James Kanter in a recent International Herald Tribune piece, When a club of winners loses its way

What happens when an organization loses its reason for existence? Founded to ensure the success of free-market economies at the height of the Cold War, the Organization for Economic Cooperation and Development is facing a crisis of identity more than 15 years after communism crumbled across Europe.

Although the OECD remains an important forum for rich-world governments to swap tips on raising living standards and competitiveness, countries with surging economies like China still are outside the 30-member club, and there is little prospect of their swift admission.

Meanwhile, the quest by OECD officials for a prominent role in a world that already boasts an alphabet soup of seemingly similar organizations has yielded, at best, mixed results. Donald Johnston, the OECD secretary general, acknowledges that the body must embrace more countries and rekindle its sense of mission or face an uncertain future.

I'm worried about the OECD losing its relevance," Johnston said in a recent interview. "How are you going to shape the global economy if you're basically working with a minority of it?"

The OECD was founded in 1961 as the successor to the organization that administered the Marshall Plan, the American aid program to rebuild the economies of European countries ravaged by World War II. Rather than lending money, as the World Bank does, offering bailouts like the International Monetary Fund, arbitrating international disputes like the World Trade Organization or making binding decisions like the United Nations, the mission of the OECD is to gather data and to narrow policy differences among its members to aid economic growth.

New book: Better Humans?

From smart pills to designer babies and extended life spans... A public debate is needed now about the potential for new technologies to make us ‘better than human’ according to a report published today by UK think tank Demos and the Wellcome Trust. Better Humans? The politics of human enhancement and life extension (0.6Mb PDF) is a new collection of essays by leading scientists and commentators, edited by Paul Miller and James Wilsdon:

We all share a desire for self-improvement.Whether through education, work, parenthood or adhering to religious or ethical codes, each of us seeks to become a ‘better human’ in a variety of ways. And for some people, more consumerist pursuits hold the key to self-improvement: working out in the gym, wearing makeup, buying new clothes, or indulging in a spot of cosmetic surgery.

But now a new set of possibilities is opening up. Advances in biotechnology, neuroscience, computing and nanotechnology mean that we are in the early stages of a period of huge technological potential. Within the next 30 years, it may become commonplace to alter the genetic make-up of our children, to insert artificial implants into our bodies, or to radically extend life expectancy.

This collection of essays explores the implications of human enhancement technologies and asks how citizens and policy-makers should respond.

You can also download individual essays:

Chapter 1 Stronger, leaner, faster - Paul Miller and James Wilsdon
Chapter 2 Is it wrong to try to improve human nature? - Arthur Caplan
Chapter 3 Welcome to a world of exponential change - Nick Bostrom
Chapter 4 The mand who wants to live forever - Paul Miller and James Wilsdon
Chapter 5 The transhumanists as tribe - Greg Klerkx
Chapter 6 Brain gain - Steven Rose
Chapter 7 The cognition-enhanced classroom - Danielle Turner and Barbara Sahakian
Chapter 8 Better by design - Sarah Franklin
Chapter 9 More life - Jon Turney
Chapter 10 Nip/Tuck nation - Decca Aitkenhead
Chapter 11 The perfect crime - Rachel Hurst
Chapter 12 The unenhanced underclass - Gregor Wolbring
Chapter 13 Does smarter mean happier? - Raj Persaud

These issues will also be debated at Forum 2006, a major international conference on human enhancement taking place at Oxford University from 14-17 March 2006. Organised by the James Martin Institute, the conference will bring together scientists, ethicists and policymakers to explore the implications of these developments.

UPDATE: Josie Appleton discusses the book on Sp!ked Online: Can technology make us more or less human? For Appleton, its not about the technology:

In all these questions, it's human values that are the key - not the particular technology being used, or even the provenance of the body part. It is possible to make a foreign organ into part of yourself - as seen in organ transplants, prosthetic limbs, or the recent face transplant of a French woman. Equally, it is possible to feel that your own body parts don't really belong to you - as seen in cases of sex-change operations, or voluntary amputation. The question hangs on whether we are self-possessed or alienated from ourselves.

It's because this area is really a debate about values that it is interesting. Do we want to live longer - if not, why not? How do we use technologies to extend ourselves rather than avoid ourselves? It is also why it should be a matter for public discussion, rather than just the concern of scientists and futurists.

Left and right attack US Budget

Ron Nessen writes in today's Washington Post Think Tank Town column that Left and Right Attack Budget:

Think tanks on the left and think tanks on the right are complaining about President Bush’s new budget. The left-leaning Center on Budget and Policy Priorities says the budget fails on three counts: fiscal responsibility, fairness and balance, and honesty and transparency.

“The nation and its policy makers can do better,” the think tank declares in what it calls a preliminary analysis paper. On fiscal responsibility, the paper says the President’s budget would increase the government’s deficit over both the short run and long run by cutting many domestic programs and using the savings – and then some – to cover the cost of tax cuts and military and homeland defense expenses.

As for fairness and balance, the think tank concludes that the tax cuts would go to the most well-off while the budget cuts would primarily affect low- and middle-income Americans.

And on honesty and transparency, the Center’s analysis faults Bush for not including in his budget funding for operations in Iraq, lost revenue from extending relief from the Alternative Minimum Tax, information to support claims that the deficit will be cut in half by 2009, and estimates of revenues, expenses, and deficits beyond 2011.

Meanwhile, from right, the Heritage Foundation complains that Bush’s budget contains increased spending for such items as education, international affairs, health research, and housing.

A paper by Heritage budget expert Brian Riedl contends that the budget does not propose enough bold reforms to quickly cut back on fast-growing and “unsustainable” entitlement programs – Social Security, Medicare, and Medicaid – which threaten to overwhelm the government’s fiscal structure.

The think tanker does have a few good things to say about the President’s budget. He praises Bush for freezing non-defense discretionary spending at last year’s levels, eliminating or reducing 141 “outdated and wasteful” programs, and proposing to make previously-approved temporary tax cuts permanent.

President Bush’s next steps should be to demand that Congress work within the new budget framework, threaten to veto excess spending, and propose substantial reform of entitlement programs, the Heritage scholar advises.

Doubtful.

Corruption: what the people think

Transparency International have published their Global Corruption Barometer 2005. Based on a Gallup International survey conducted for International Anti-Corruption Day 2005, it reveals widespread concern about corruption around the globe.

Close to 55,000 people in 69 countries were polled as part of the Gallup International Voice of the People 2005 survey, between May and October 2005 to assess their views on corruption.

Asked to indicate the degree of change over the past three years, the overall view of citizens in 48 countries out of 69 is that corruption has increased. In six countries, citizens’ views overall are that corruption declined over that period: Colombia, Georgia, Indonesia, Hong Kong, Kenya and Singapore.

In 13 countries – Bolivia, Costa Rica, Dominican Republic, Ecuador, India, Israel, Nicaragua, Nigeria, Panama, Paraguay, Peru, Philippines and Venezuela – more than 50 percent of those responding feel that corruption increased a lot. Africans and Latin Americans are the most negative about the past.

Looking to prospects for the next three years, the picture is somewhat more upbeat. In 12 countries, respondents overall expect corruption to decline, with Indonesians being the most optimistic (63% expecting corruption to decrease a lot). 

From a regional perspective, Africa stands out as a region of relative optimism.

Hat tip: Pablo Halkyard at Private Sector Development Blog

British unions 'risk irrelevancy'

They may talk tough, but they are failing British workers. A new Fabian Pamphlet, Raising Lazarus, argues that the 'fighting back' strategy and rhetoric adopted by left-wing British union leaders risks making them irrelevant. As the pamphlet points out, union membership has fallen from over 12 million in 1979 to 6.4 million today - yet 62% of workers support a collective voice in the workplace. Many potential new union members are put off by "union rhetoric of struggle, strikes and strife which has little appeal to employees who care more about getting on than getting even".

The pamphlet was written by David Coats, former chief economist at the TUC and now associate director of the Work Foundation. Unfortunately it is not available online, but can be ordered from the Fabians.