PSD Blog - The World Bank Group

Bank privatization and productivity

Two Brazilian researchers have examined the recent history of Brazil’s banking industry, evaluating the impact of privatizations and an increasing trend of mergers and foreign entry. Their conclusion:

.. state-owned banks are less productive than private owned ones.… privatization has had a positive impact on productivity. Moreover, the positive effects of privatization seem to take some time to materialize. Privatization proved also to be a superior strategy than restructuring and keeping the bank under state control.

A new way to house the poor

The Economist reports that the UK has quietly moved towards a new way of housing the poorest:

In the past few years, an increasing proportion [of homeless] have been biding their time in private housing, most of it arranged by local authorities but some leased directly from landlords. Tenants pay rent and recoup the outlay through housing benefit. That is, in some ways, an excellent solution. Private housing is both more flexible than social housing and more dispersed: pockets of deprivation like those found on council estates are less likely to emerge.

Of course, as with many public-private initiatives, the proper alignment of incentives still needs work – some claiming that the current structure actually creates a disincentive for entering the formal workforce.

Private participation in healthcare events

Two events next week for those of you in DC:

On October 4 the Center for Global Development will be having an event on Private Sector Responses to HIV/AIDS: The Case of Debswana, Botswana’s Diamond Company.

On October 5 the USAID funded 'Banking on Health' project will be having a discussion on Strengthening Contracting Out in the Private Sector in Nicaragua.

$100 laptop from Negroponte

Nicholas Negroponte, chairman and founder of the Massachusetts Institute of Technology Media Labs, has been outlining designs for a sub-$100 PC. The laptop will be tough and foldable in different ways, with a hand crank for when there is no power supply.

That's from the BBC. Some commentators worry that the device will be copied by fakers or sold to buy food. Not sure that's such a problem, although it might have been easier to helicopter in some cash than these cool new laptops.

How to understand

Write something to explain what you see in simple language, says Robert Frank:

Over the years, my students have posed and answered literally thousands of fascinating questions. My favorite was submitted by Jennifer Dulski, who asked, "Why do brides often spend thousands of dollars on wedding dresses they will never wear again, while grooms often rent cheap tuxedos, even though they will attend many formal social events in the future?"

The answer is here. I've been writing about economics for a few years now; I couldn't agree more, although I can't claim as much insight as Professor Frank's students. HT Marginal Revolution.

How to spend billions of dollars?

That is the welcome burden facing Roman Abramovich, Britain’s richest man and owner of the Chelsea football club, who yesterday essentially doubled his fortune – making $13.1 billion when he sold his share in Sibneft. The Financial Times asks its readers for suggestions on how he should spend this new bounty. As I write this, only one response so far, but it was nice to see that it was in favor of alleviating poverty - not buying up all of the Serie A and NBA as well. I think we know what Jeffrey Sachs would say. What would you do?

Private pension systems

When you consider that trillions of dollars are now managed by the private pensions industry, it’s extremely important to know how well they have performed in providing high rates of return, secure and reliable benefits and constraining costs.  These continue to be among the most hotly debated pension policy questions in virtually all countries worldwide.

…the words of  Robert Holzmann, World Bank Director of Social Protection. On Monday the World Bank, OECD and ING announced a new joint research partnership that will study how privatized pension systems have performed in developing and transition economies during the past twenty years. They are looking for more potential partners.

2005-06 Global Competitiveness Report

The World Economic Forum has released their annual ranking of worldwide competitive conditions. Finland, the US and Sweden lead the way, with five Nordic countries placing in the top 10.  The WEF praised the solid public institutions and macro economic management of the Scandinavians:

[The results challenge] the conventional wisdom that high taxes and large safety nets undermine competitiveness, suggesting that what is important is how well government revenues are spent, rather than the overall tax burden per se.

Of course, Doing Business would agree,

Just 8 percent of economic activity in Nordic countries occurs in unregistered (informal sector) businesses. The reason is that regulations are simple to comply with and businesses receive excellent public services for what they pay in taxes. For example, Denmark has the world’s best infrastructure... In the Nordic countries, as well as the other top 30, reformers do not have to choose between making it easy to do business and providing social protection. They can do both.

More on the WEF report: download the full report, growth competitiveness index or business competitiveness index.

Update: More coverage at the WEF Blog, and Lawrence White questions what a "competitiveness" ranking really is?

Most expensive US states for doing business

The World Bank’s Doing Business report ranks the US 3rd out of 155 economies globally in terms of the ease-of-doing-business. However, if you want state-specific numbers on the cost-of-doing business, see the latest index from the Milken Institute. For state benchmarking beyond just business costs, see their other indexes. Or are you more interested in China? (ht: Don Iannone)

Green public-private partnerships

Christian Verschueren, the Director-General of CropLife International, believes that expanding public-private partnerships is the best way to achieve a "Green Revolution" for Africa:

It is true that the UN and Bretton Woods institutions must be prepared to step up official development aid to developing countries to make this happen. But, governments must also remember that the private sector has a big role to play, and that a stronger impact can be achieved through co-operation and expansion of successful public-private partnerships.

He goes on to discuss sustainable farming techniques, pest control, the International Rice Genome Sequencing Project, biodiversity…