PSD Blog - The World Bank Group

Weekend Reading

Regulatory failure, special interests, and financial sector lobbying: European Union edition.

Negative interest rates on T-bills: This time is different.

"The fact that oil is trading at $80 a barrel in this climate should tell you that it is trading more as a financial asset than on supply/demand imbalances".

California is doing its part in the fight against deflation, one university at a time.

The recession is having quite an impact on migration trends in the United States. Plus, our People Move blog looks at new remittance data.

Tyler Cowen describes these two posts from Paul Krugman and Brad Delong as "critically important stuff and two of the best recent economics blog posts, in some time."

War is brewing in the financial blogosphere.

Matthew Yglesias thinks that Chinese leverage over the US is overblown.

More emerging market attempts to stop the appreciation of their currencies.

Finally, as the US gets ready for the Thanksgiving holiday, Adam Gopnik analyzes our hunger for cookbooks.

Weekend Reading: Unemployment Edition

Can development workers win wars?

Is transport infrastructure the most important aspect of urban evolution?

The Treasury's courtship of the blogosphere.

Is China's changing worldview bad for business?

America's largest retailer: it's not Wal-Mart.

Why are some marathons more volatile than others?

The EU's role in reducing state fragility in Sub-Saharan Africa.

Thoughts on migration: Kosovo edition.

Unemployment

What America can learn from Europe about unemployment.

Other difficulties that arise from high unemployment.

Plus, unemployment charts galore from Calculated Risk.

A less pessimistic take on today's numbers (it's still ugly).

Why employment is down and GDP up? It's all about productivity.

The civil war of the self

I recently blogged about a website that allows people to bet with themselves on whether they will achieve certain weight loss goals. The smart minds behind the website, Dean Karlan and Jonathan Zinman, have provided an answer to the question I posed at the end of that post - are there any better uses to which we could put these kinds of commitment devices?

In turns out, they have already worked quite well in helping people quit smoking in a developing country context. The researchers carried out a randomized control trial wherein participants deposited money into a savings account and forfeited this money at the end of six months if they failed a nicotine test. (Surprise test visits followed at a later date.) Here's what they found:

Thomas Schelling meets weight loss

Thomas Schelling, one of the fathers of game theory, would be proud. There are now websites that allow people to place bets with themselves over whether they will achieve certain weight loss goals:

Kate Borden, 32, from Lancashire, signed up to one of the diet-betting sites, stickK.com, last November. She wanted to lose a stone in six months. “I just find it tough to motivate myself,” she says. “The only other time I had lost weight was when I had a bet with friends one New Year's Eve. The thought that it was almost a competition with myself and that someone else was the judge did it for me.”

Schelling recognized that people have multiple competing interests - the trick is figuring out how to lock in the choices of your "better self." Betting with yourself might just do the trick. The question is, can we think of any better uses than helping someone get to the gym?

Development 2.0: Putting complexity and risk at the heart of the development agenda

Are social networking sites changing the governance of sustainable development? A recent report by the International Institute for Sustainable Development tries to provide the answer to what is clearly an emerging field of research. (Hat tip: Rachel Kyte)

The taxonomy used by the author to categorise social media is, in my view, a bit reductive. (By the way, when are we going to get the Development 2.0 equivalent of E-participation or, even better, the Board of Innovation?) As I have argued in the past, classifying social media based on their features, e.g. out of the box vs. hosted, rather than business objectives and models risks missing out on their potential for radical innovation.

The new book at the old World Bank

The boundaries between traditional publishing and blogs/wikis is breaking down further and further. Exhibit A is the recently published book Creative Capitalism, which was built around a blog of the same name with many top-notch contributors. Now a research fellow at the Center for Global Development is doing something similar for a book on microfinance. David Roodman is publishing draft chapters of a forthcoming book on the Microfinance Open Book Blog. Definitely worth checking out (and adding your thoughts). I just wonder - how long will it take before the World Bank engages in this kind of exercise?

Update: I suggested a few names to David for this new concept - is it a blook? a boog? Any other ideas? Send me your thoughts in the comments section. I'll start using whichever entry generates the most support. 

Innovations for poverty action

One more worthy participant has just entered the blogosphere. Innovations for Poverty Action, a research outfit dedicated to the use of randomized controlled trials, has just launched a website as well as a blog. I plan on watching this one closely.

The work of IPA spans multiple fields, but for the private sector-inclined, make sure to check out Are Women More Credit Constrained?, which found that returns to capital were higher for male rather than female-owned microenterprises, and What’s Advertising Content Worth? Evidence from a Consumer Credit Marketing Field Experiment, which found that "creative content" can have a substantial impact on consumer credit demand.

Bill Easterly, blogger

Bill Easterly, author of the White Man's Burden, and many op-eds besides, has entered the world of blogging. Be forewarned, it looks like Aid Watch won't be pulling any punches.

Update: Shanta Devarajan, World Bank Chief Economist for Africa, responds to Easterly's post on Robert Zoellick's op-eds in the New York Times and the Financial Times. 

(Hat tip: Chris Blattman) 

P2P lending, coming soon to an OECD country near you

It looks like person-to-person (P2P) lending is no longer just for the developing world. Kiva, the originator of the P2P model, now has at least one imitator in an OECD country. Smava, a German-based company, now offers P2P lending in Germany and starting this year in Poland as well. Perhaps finally the financial crisis will stimulate a bit more of the 'creative' side of creative destruction. 

Are virtual worlds a tool for better government?

As virtual worlds gain increasing popularity, what should policy makers do with them (beyond, of course, visiting the Doing Business island)?

A report by IBM, Government in 3D: How Public Leaders Can Draw on Virtual Worlds attempts to provide some answers. The authors identify several areas where virtual worlds could benefit policy makers: from reaching out to citizens to emergency training, from recruitment to fostering tourism and economic development.

The report is full of interesting (if, admittedly, still isolated) examples: from the first US congressional hearing in Second Life to five tons of carbon emissions saved by teleporting a speaker to the UNCCC meeting in Bali (always in Second Life); from "beta testing" the impact of policies through games such as a World Without Oil to SecondHealth, a 3D tool to educate the British public about a new health plan and its implications for citizens.