PSD Blog - The World Bank Group

Chicago microfinance conference

University of Chicago and Northwestern are teaming teamed up for a solid one day event on April 21st, Microfinance at the Crossroads. An impressive mix of public, private and NGO speakers, including Andre Laude from the IFC. Though I wish they hadn’t divided the breakout sessions into ‘finance’ and ‘impact’ tracks. One of my qualms with microfinance is that people divide it into this pro-poor vs. for-profit dichotomy. What we need is for the two approaches to learn more about (and from) each other. Maybe trick the guests to go to the wrong session? Via MicroCapital.

Also see a previous post asking whether the industry's training wheels should be taken off?

Update: As Owen correctly points out, this event already happened! Somehow I read April as May. I blame my mistake on Friday afternoon.

On cross-country regressions

There is only so much juice you can squeeze out of a stone...

Daron Acemoglu during a Wednesday session on growth theory I attended at PREM week.

The potential of the Chinese consumer

Morgan Stanley chief economist Stephen Roach discusses some surprising data emerging out of a recent Gallup poll in China. He sees amazing potential - once some key constraints are overcome. Mainly the urban-rural gap and building a new safety net.

Only by reducing the excesses of precautionary saving can China’s consumer culture truly flourish. Once that occurs, there is nothing but upside. Chinese consumption currently makes up just 50% of its GDP, well below the 65% norm of most major economies. Putting it another way, 20% of the world’s population accounts for only about 3% of total global consumption. The potential for the Chinese consumer could well be one of the greatest opportunities for the global economy in the 21st century.

Future international business trends

According to the latest McKinsey Global Survey, top global executives believe that the growing number of consumers in emerging markets (and the resulting changing consumer tastes) will be the most important trend for global business during the next five years.

Vaccines for development

Owen Barder has a new short note on vaccines for development. The concise piece discusses important ideas such as performance-based grants, purchasing funds, pooled procurement, and advanced market commitments. Also see Glennerster, Kremer & Williams’ new paper on creating markets for vaccines.

Sports Illustrated on nets for development

Not basketball or soccer nets, but mosquito nets. The latest from uberfamous sports journalist Rick Reilly:

We need nets. Not hoop nets, soccer nets or lacrosse nets. Not New Jersey Nets or dot-nets or clarinets. Mosquito nets. See, nearly 3,000 kids die every day in Africa from malaria. And according to the World Health Organization, transmission of the disease would be reduced by 60% with the use of mosquito nets and prompt treatment for the infected.

...You're a coach, parent, player, gym teacher or even just a fan who likes watching balls fly into nets, send $20. You saved a life. Take the rest of the day off. You have ever had a net in the driveway, front lawn or on your head at McDonald's, send $20. You ever imagined Angelina Jolie in fishnets, $20. So you stay home and eat on the dinette. You'll live.

No more sweatshops?

In a further sign of growing interest in corporate social responsibility within Chinese government, the Shenzhen Municipal Bureau of Labour and Social Security has released a new research report on CSR in the southern city and manufacturing base. As reported in the Shenzhen Daily, the report suggests most local companies are not very socially responsible, although a few Shenzhen firms do feature among the most respectable firms in China.

The report advocates strongly for CSR, noting that it can help win business from international firms and help address causes of social unrest

“It [the city] should make full use of its economic influence to promote corporate social responsibility” said bureau official Zhang Guojiu.

The city government is aiming to release CSR guidelines by the end of the year. Could this make Shenzhen a trend setter not just in China, but globally for city level action on CSR?

Update: see a previous post on sweatshops.

And how would you like that served, Madam?

The menu of corporate (social) responsibility offerings is getting rather heavy: there seems to be a new option on a daily basis. At least items are being provided to suit every taste.

For those who like their CSR information on a thematic basis, I'd recommend the recent PwC report. Partly analytical, partly promotional, it proposes six major trends which will influence CSR responses across industrial sectors geographic regions. One of these trends also triggered my biology-business radar (see my earlier post): the assertion that progress towards sustainability will be influenced by sudden disruptions which foster great change - an echo of the late Steven Jay Gould's hypothesis of punctuated equilibrium.

Want to play French Budget Minister?

Because if you do, now you can:

French Budget Minister Jean-Francois Cope has announced the launch of an online game for the country's taxpayers to have a go at balancing the books. The game, called Cyberbudget, will launch in May and will let users manage 300bn euros ($373bn)… It allows each person to get familiar with how [the budget] functions. In this game each French person can pretend they are the budget minister and make decisions to understand how much each [ministry's] budget costs, education spending, military spending, how it's all organised and see what kind of decision we can make when we want to cut taxes.

Seems the idea is to convince people how hard the job is. A better idea would be to track and use any collective wisdom that might emerge. (Tnx Tim)

The political cost of market reforms

…some of the macroeconomic outcomes that one expects to result from adoption of “Washington consensus” policies, notably a reduction in inflation, are indeed electorally popular. But they also find that “structural reforms,” calculated as an average of indexes for tax reform, financial liberalization, trade liberalization, and privatization, have a highly significant negative impact on votes in presidential elections. The incumbent’s party typically lost 23 percent of its presidential vote on account of promarket reforms if it introduced a typical dose of such reforms (and still lost 15 percent when one allowed for the favorable indirect effects of those policies in reducing inflation or increasing growth).