Tag: Development in Transition

Development in Transition, New social contract

Middle-income countries should not be rushed to graduate

By Otaviano Canuto, Senior Fellow at the Policy Centre for the New South, Non-Resident Senior Fellow at Brookings Institution, and Former Vice President at the World Bank; Matheus Cavallari, Senior Advisor and Tiago Ribeiro dos Santos, Advisor at the Board of Executive Directors of the World Bank Group. Opinions here are their own. The authors wrote chapter 12 of the recent book: Alonso, J.A. & Ocampo, J.A. (eds.), Trapped in the Middle? Developmental Challenges for Middle-Income Countries, Oxford University Press, 2020

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Development Matters
Development in Transition, New social contract

Can middle income countries rise up to their citizens’ expectations?

By Mario Pezzini, former Director of the OECD Development Centre and Special Advisor to the OECD Secretary General on Development[i]

A call for a new social contract

Despite significant economic growth over the past years, middle-income countries (MICs) face increasingly complex challenges related to, among others, a growing demand from their new and still vulnerable middle-classes. As middle-classes have grown in recent decades, so have citizens’ aspirations and demands for quality public goods, better services and a more responsive and transparent state. More educated, better informed, and more connected than ever before, citizens are asking for more voice in public decisions. In parallel, growing aspirations confronted with chronic vulnerability of middle-classes tend to generate frustration and, more and more frequently, social turbulence. Discontent has been erupting for several years in many of these countries, going back to the Arab Spring, with recent examples like Lebanon, and some Latin American countries, including high-income countries like Chile. Today, challenges are exacerbated as the COVID-19 crisis pushes members of the middle class who had previously escaped extreme poverty, back into it. Governments seem increasingly incapable of understanding how people perceive their quality of life.

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Development Matters
Covid-19, Development in Transition, New social contract, Reviving multilateralism

Beyond vested interests: Reforming international co-operation post COVID-19

By Imme Scholz, Deputy Director of the German Development Institute / Deutsches Institut für Entwicklungspolitik (DIE) and Deputy Chair of the German Council for Sustainable Development[i]

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

The world is now in the eighth month of the COVID-19 pandemic. When this was written, the highest daily infection rates were recorded in India, the US and Brazil, while the highest death rates (per 100,000 inhabitants) were registered in Europe and the Americas. Africa so far has not turned into a hotspot of the disease – good news that is attributed to effective public health workers and Africa’s young population. The COVID-19 pandemic has laid bare weaknesses and blind spots in societies, economies and policies worldwide. Notably that public services the world over take too long to understand their new responsibilities under changed circumstances and as a result act too slowly, at the expense of the most vulnerable. For example, infection and death rates are high in OECD countries despite good health care systems. And insufficient digital infrastructure and access in public administrations, schools and households, exacerbated by social inequalities, affect access to education in Germany or in Latin American countries alike.

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Development Matters
Covid-19, Development in Transition, Reviving multilateralism

COVID-19: A game changer for the Global South and international co-operation?

By Debapriya Bhattacharya, Chair, Southern Voice and Distinguished Fellow, Centre for Policy Dialogue (CPD), and Sarah Sabin Khan, Senior Research Associate, CPD

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

In a short but seemingly never-ending time span, the COVID-19 crisis has propelled governments into the dilemma of balancing the response to immediate health, economic and social fallouts, with long-term recovery. Some remain vigorously engaged in saving lives. Others are seesawing between loosening restrictions and enforcing new ones to prevent a second wave. Countries from the Global South are among the worst affected by the pandemic. This is due to both their weak pre-crisis conditions as well as their disadvantaged position in global governance. There is a broad consensus that things will not and cannot go back to the way they were before. A “new normal” will emerge in terms of how governments, producers, businesses, consumers and other economic agents conduct themselves. This will be also true for global governance structures and the conventionally dialectical relationship between the North and the South.  

In this context, pessimistic views and optimistic outlooks on the post-COVID world confront one another. 

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Covid-19, Development in Transition, Reviving multilateralism

COVID-19 and the human development crisis: what have we learnt?

By Pedro Conceição, Director of the Human Development Report Office and lead author of the Human Development Report and Mario Pezzini, former Director of the OECD Development Centre and special adviser to the OECD Secretary-General on development

This blog is part of a series on tackling COVID-19 in developing countries. Visit the OECD dedicated page to access the OECD’s data, analysis and recommendations on the health, economic, financial and societal impacts of COVID-19 worldwide.

To say COVID-19 is unprecedented is no cliché. Its simultaneous impact on multiple development areas – education, health and the economy – sets it apart. As does its geographic reach: the pandemic, and its spillover, have touched every country.

Of course, the world has seen many crises over the past 30 years, including health crises from HIV/AIDS to Ebola, and economic crises such as the Global Financial Crisis of 2007-09. Each has hit human development, devastating the lives of millions. But overall the world has still made development gains year on year. What distinguishes COVID-19 is the triple hit to health, income and education, fundamental building blocks of human development. And as a result the global human development index is on course to decline this year for the first time since the concept was introduced in 1990 – something that can still be avoided or at least mitigated with strong policy responses.

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Development in Transition, Reviving multilateralism

Can aid help countries avoid the middle-income trap?

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By Homi Kharas, Interim Vice President and Director – Global Economy and Development, Brookings Institution

This blog is part of an ongoing series evaluating various facets
of Development in Transition

Middle-income-trapMost aid agencies have tried to articulate a “middle-income” strategy for how to support client countries that are no longer poor. For example, see the Asian Development Bank Strategy 2030 and the World Bank’s approach to middle-income countries. In both cases, there is an emphasis on second-generation challenges, including those related to environmental, social and governance institutions. Failure to meet these challenges can trap countries in middle-income status.

The problem, however, is that there is no solid theoretical or empirical foundation on how to support growth in middle-income countries—the diversity of contexts and experiences is so large that robust policy conclusions are hard to draw, and useful interventions by aid agencies even harder to figure out.

Barro (2012) succinctly summarizes the limits of empirical work: “My view is that one has to accept the idea that pinpointing precisely which X variables matter for growth is impossible.” In a similar vein, Rodrik (2012) titled his paper “Why We Learn Nothing from Regressing Economic Growth on Policies.” Most researchers (see for example Jones (2016) and Kim and Park (2017)) find that middle-income growth is all about total factor productivity growth (TFP). TFP growth, in turn, is what is left over after accounting for the growth of all inputs. Jones breaks down TFP into two components: knowledge/ideas and M that he says stands for either misallocation or a measure of ignorance. Continue reading “Can aid help countries avoid the middle-income trap?”

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Development in Transition, Latin America and the Caribbean, New social contract, Reviving multilateralism

Social discontent in Latin America through the lens of development traps

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By Sebastián Nieto-Parra, Mario Pezzini and Juan Vázquez, OECD Development Centre

This blog is part of an ongoing series evaluating various facets of Development in Transition

Until recently, rising levels of citizen dissatisfaction with public services and institutions in Latin America might have merely been pictured as an upward line in a graph. However, it seems to have reached a breaking point. Growing social discontent has boiled over into protests across several Latin American countries over the past weeks. While these protests are complex and multifaceted, understanding the underlying causes is essential to defining policy priorities that may help address the structural sources of discontent.

GDP growth is not alone in driving social unrest, as protests have not necessarily taken place in countries with the lowest growth rates or at times of lower economic dynamism, like the 2008 crisis.  Furthermore, income gradually ‘delinks’ from well-being outcomes, as countries move up the income ladder. This has clearly been the case for most Latin American countries since the 2000s (OECD et al., 2019a). Continue reading “Social discontent in Latin America through the lens of development traps”

Development Matters4 Comments
Development finance, Development in Transition, Reviving multilateralism

Triangular, the shape of things to come?

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By Alicia Barcena, Executive Secretary, ECLAC, Mario Pezzini, Director, OECD Development Centre, and Stefano Manservisi,

This blog is part of an ongoing series evaluating various facets
of Development in Transition

As the global community gathers in Argentina to mark the 40th anniversary of the United Nations Conference on Technical Cooperation among Developing Countries, we have an additional opportunity to discuss, debate, and design a reinvigorated international co-operation system.

And something as small as what is currently called “triangular co-operation” can take centre stage in that system. Just like few imagined that the European Coal and Steel Community created in 1950 would grow into what the European Union is today, we think triangular co-operation’s future potential could very well dwarf its current status.

Rather than rationalise business as usual, we believe triangular co-operation could give us, instead, wide space for unleashing new thinking about the promise and value of multi-partner engagements to advance inclusive and sustainable development.

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Lia Beyeler3 Comments
Development finance, ODA, Policy, Reviving multilateralism

The Future of Development Co-operation: Not the end, just the beginning of a new era?

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By Andy Sumner, King’s College London

Yesterday’s blog listed five areas of change related to global poverty and economic development in developing countries. What do these changes mean for development co-operation?

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Development Matters
Development in Transition, Policy, Reviving multilateralism

5 facts about global poverty that may surprise you

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By Andy Sumner, King’s College London

This blog is part of an ongoing series evaluating various facets of Development in Transition.
The 2019 Perspectives on Global Development: Rethinking Development Strategies adds to this discussion

This blog is the first of two. Part one outlines five facts about global poverty and economic development in the developing world and discusses how the nature of development is changing. Part two, which will post tomorrow, will consider the implications of these changes for future development co-operation.

Fact 1. A new polarisation is emerging in the developing world. A new polarisation is emerging within the developing world between ‘moving’ and ‘stuck’ countries, as well as between ‘high-ODA’ and ‘post-ODA’ countries.

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