Informal is normal in Latin America: taxes matter

By Juan Carlos Benítez, Economist at the Latin American and Caribbean Unit, and Angel Melguizo, Head of the Latin American and Caribbean Unit, at the Organisation for Economic Co-operation and Development (OECD)


Informality equals vulnerability. In emerging economies and particularly in Latin America, informal is normal. On average, 55% of workers in the region did not contribute to pension or healthcare programmes in 2013. Although informality rates vary significantly across countries (Figure 1), a common feature of informality is its large prevalence amongst the poor and low-middle income workers (e.g. Jutting and De Laiglesia, 2009). On average, 85% and 73% of households in the lowest earning quintiles do not have any member contributing to social security schemes. Furthermore, informality is “one of the most striking differences, within the middle sectors, between the vulnerable population and the consolidated middle class” (Lustig and Melguizo, 2015).

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Creating jobs in the developing world

By Elizabeth L. Littlefield, OPIC President and CEO

Development-financeA generation ago, private capital flowing into developing countries was a small fraction of aid dollars. In recent years that ratio of aid to investment has flipped, and the amount of investment flowing to the developing world far exceeds aid dollars.

This significant increase in private investment comes at a good time. The cost of addressing the world’s most urgent development challenges outlined last year in the 2030 Agenda for Sustainable Development is in the trillions of dollars. Compare that to the estimated USD135 billion per year in total global aid flows.

Development finance institutions like the U.S.-based Overseas Private Investment Corporation (OPIC) were built on the understanding that the challenges the world faces are greater than any government can address on its own. They also reflect the conviction that business can serve as a force for good in development. OPIC works to mobilise private capital to support entrepreneurship and expand access to housing, education, financial services, energy and more. Continue reading

Nourrir sa population constitue le principal secteur d’activité de l’économie de l’Afrique de l’Ouest

par Laurent Bossard, Directeur, Secrétariat du Club du Sahel et de l’Afrique de l’Ouest (CSAO/OCDE)

(English version follows)

Cover image FREn inaugurant la nouvelle collection  « Notes Ouest-africaines » du Secrétariat du CSAO/OCDE, T. Allen et P. Heinrigs nous proposent une réflexion sur les opportunités de l’économie alimentaire de la région. Une occasion utile et nécessaire de se tourner vers le passé pour mesurer l’ampleur des mutations du monde réel… et de celles des idées.  

Je fais partie de ceux qui ont l’âge de se souvenir de l’agriculture ouest-africaine – sahélienne en particulier – au milieu des années 1980. Nous constations – déjà – la puissance de la croissance démographique. Entre 1960 et 1985, le nombre de sahéliens avait doublé et la population urbaine avait été multipliée par cinq. Et l’agriculture ne suivait pas le rythme. Abstraction faite des aléas climatiques (on sortait de la grande sécheresse de 1983), la tendance sur 25 ans était à l’augmentation des importations à un rythme de l’ordre de 8% par an. Jacques Giri dans son livre « Le sahel face aux futurs » paru en 1987, tirait la sonnette d’alarme : « Le système de production alimentaire sahélien est demeuré très traditionnel dans son ensemble, très vulnérable à la sécheresse et peu productif : il ne s’est adapté ni en quantité, ni en qualité, aux besoins (..). La région est de plus en plus dépendante de l’extérieur et en particulier de l’aide alimentaire. Le retour à des conditions climatiques plus favorables n’a pas fait disparaître cette dépendance ».  Continue reading

The Gig Economy

By Juan R. de Laiglesia and Caroline Tassot, OECD Development Centre


Wolfgang von Kempelen built an impressive chess-playing automat in 1770 known as the “mechanical Turk.’’ Dressed in its fancy turban, the “Turk’’ would move the pieces on the chessboard, playing (and beating) such notables as Napoleon, Catherine the Great and Benjamin Franklin. The unfortunate use of this national stereotype (which we in no way support) was meant to enchant imaginations with exoticism in the face of the automat’s extraordinary prowess in 18th century Europe. As suspected, the automat was an elaborate hoax, although this was discovered only much later. Several chess grandmasters operated it during its rather long history until its demise in a Philadelphia fire in July 1854.

What’s the relevance? In 2005, Amazon’s catalogue started to get unwieldy, and the Internet company realised that it needed better tagging on its items for sale. For example, if one searched for a crimson shirt, shirts labelled “red” should be displayed as well as those tagged as “crimson.” Even Amazon faced tasks that computers could not do more quickly and accurately than people.  Continue reading

How to make the SDGs walk the talk about gender equality and women’s empowerment

By Keiko Nowacka, Gender coordinator at the OECD Development Centre

This September, the world will adopt a new development framework: the Sustainable Development Goals (SDGs) that aim to “transform our world by 2030.”  Gender equality and women’s empowerment feature as a stand-alone goal (SDG5) and are integrated through many of the other goals (e.g. SDG1, 3, 5, 10, 11). By 2030, the SDGs aim to ensure that “every woman and girl enjoys full gender equality” (paragraph 15) through ambitious and comprehensive targets missed in the Millennium Development Goals. Focus now includes unpaid care, violence against women, early marriage and women’s political participation. It is no exaggeration to say that the SDGs boast unprecedented potential for dramatically challenging and changing the status quo of gender equality. Continue reading