Africa’s industrialisation: leaving no woman behind

By Li Yong, UNIDO Director General

Explore this topic further with the upcoming launch of the
2017 African Economic Outlook: Entrepreneurship and Industrialisation in Africa.
Stay tuned for details.

women-work-industry-africaAfrica must industrialise to fulfill its economic potential. To achieve the Sustainable Development Goals (SDGs) as part of the 2030 Agenda, we need to support Africa in accelerating its development by promoting inclusive and sustainable industrialisation.

Inclusive industrialisation means ensuring that no one is left behind, especially not women. Including women is critical, not only because gender equality is a fundamental human right, but also because it enables faster economic growth, shared prosperity and sustainable development. The 2016 Global Gender Gap report1 shows a positive correlation between gender equality and gross domestic product, economic competitiveness and human development. The economic benefits to increasing female labor force participation are real. The OECD estimates that GDP would increase by 12% if participation rates for women were to reach those of men by 2030.2 

Continue reading

On Deaton and development: consumption, poverty and well-being

By Marcelo Neri, Director of FGV Social, Professor at EPGE-Fundação Getulio Vargas, Former Brazilian Minister of Strategic Affairs, Executive Secretary of the CDES Council for Economic and  Social Development and President of Ipea Institute for Applied Economic Research

The Royal Sweden Academy of Sciences titled Angus Deaton’s Nobel prize “Consumption, Poverty and Welfare.” The evaluation commission organised Deaton’s scientific contributions during the last 40 years under three headings: i) demand models for groups of consumption expenditures, such as food, housing, etc., that already had earned  his mentor, Sir Richard Stone (1913-1991), a Nobel in 1984; ii) the study of the choice between consumption and saving, which was the object of the prizes awarded to Franco Modigliani (1918-2003) in 1985 and Milton Friedman (1912-2006) in 1976; and iii) studies about “poverty” and “welfare” that already had conferred Amartya Sen with a Nobel in 1998. I would include a fourth element of Deaton’s work, not cited by the commission, on “subjective indicators and well-being” for which Daniel Kahneman earned a Nobel in 2002.

If all the aforementioned issues were subjects of previous awards, what is the logic behind a Nobel for Angus Deaton? In my opinion, the award comes from his ability to face the most fundamental human choices involving people, things, moments of time and states of nature through a rare combination of rigor and relevance, covering different aspects, such as measurement, theory and empirical evaluation. Deaton’s greatest contribution is to integrate statistics, sociology and economics. More than the sum of his isolated original contributions, the prize can be explained by Deaton’s vast work taken altogether.

What also justifies the award are the direct consequences of Deaton’s work in people’s lives. These include the better design of indicators, solid public policy or better empirical evaluation of the impacts achieved. He has this ability to innovate in key parts of the journey without losing the direction development takes as a whole.

As a professor, Deaton transmits to his students an irresistible will to follow his steps, multiplying results along the way. I had the great pleasure to tell him that personally in 2014. The books Deaton published are better than his seminal articles, reflecting his ability to align core elements in a powerful narrative, involving principles and evidences, choices and results, individuals and societies.

Consumption is the main aggregate expenditure, particularly among the poor. It is a theme present in the first pages of both microeconomics and macroeconomics textbooks. In fact, no one addressed the link between these two levels of analysis with the precision and clarity of Deaton’s 1980 book with John Muellbauer, Economics and Consumer Behavior.

Angus Deaton was born in Scotland, the birthplace of economics. He knows the importance of adapting to the demands and challenges of his time. In 1974, he estimated equations of household consumption expenditures and formulated the Almost Ideal Demand System (AIDS) that became the cornerstone of the field. When the fashion was the co-integration of macroeconomic series, or the analysis of common properties of long-run statistical time series, Deaton’s Paradox showed that consumption should be more volatile than income, but it is not. This revealed the need to use disaggregated databases. In 1985, he invented the so-called pseudo-panels that allowed studying the dynamics of income and consumption over the life-cycle without having to follow the trajectory of each individual. Then, he showed how inequality in the same generation tends to grow across the life-cycle. His 1992 book, Understanding Consumption, is still the best-written piece on the dilemma between present and future consumption. Deaton is instrumental in designing, utilising and disseminating household microdata bases around the world. These surveys collect information about individuals in their homes. His 1997 book, The Analysis of Household Surveys, is an obligatory reference.

Indeed, the author transcends the role of rigorous academic and revives the tradition of public intellectual. In other words, by leading a debate of ideas, Deaton influenced the design of policies in several countries, including in South Africa, Pakistan and India. He proved in his 2013 book, The Great Escape: Health, Wealth and the origins of Inequality, that the reduction of poverty and the rise in social welfare the world experienced in the past 30 years was the largest statistically documented in humanity’s history, despite rising inequality within most countries. His decisive contributions to constructing global goals, such as the United Nations Sustainable Development Goals, prove his ability to adapt to and shape new times.

Deaton connected “means to ends” in recent years. This thinking enters the psychology of preferences formation, generally treated as exogenous in the field. He, thus, aligns theory with evidence using subjective indicators of well-being, a term that gives name to his new center at Princeton University.

Deaton demonstrates, still in his 2013 book, that in a sufficiently large set of countries, including the poorest, a closer relationship between overall life-satisfaction and income emerges than previous studies suggested. He also shows elsewhere a saturation point of $75,000 a year, where more money does not bring more happiness.

Clearly, according to this evidence, Angus Deaton’s Nobel Prize in economics is a source of happiness not because of its generous resources but rather its well-deserved recognition.

This article should not be reported as representing the official views of the OECD, the OECD Development Centre or of their member countries. The opinions expressed and arguments employed are those of the author.

The SDGs call for a revitalised global partnership: What should we do differently this time?

By Nicola Harrington, Deputy Director, OECD Development Centre

Partnerships were central from the adoption of the Millennium Development Goals (MDGs) in 2000.  Public, private and civil society entities forged ties, leading to some outstanding results. This was notable in health, where path-breaking co-operation across governments, companies and foundations improved millions of lives through medicines and vaccines. Given this track record, why do the Sustainable Development Goals (SDGs) 15 years later require revitalising global partnerships? What was missing the first time, and what should be different now? Continue reading

Measuring discrimination will bring the gender equality global goal a step closer

By Keiko Nowacka, gender coordinator at the OECD Development Centre

A warning often repeated since the Rio+20 summit is that lessons learned from the millennium development goals (MDGs) should not be forgotten when the sustainable development goals (SDGs) – the new development framework adopted at the United Nations general assembly – replace them. Such concerns seem warranted given the mixed report card on the MDGs.

While there were substantial improvements in poverty reduction and education, other goals showed patchier progress. The MDGs were praised for focusing the development community’s attention on eight priority areas, but also criticised for leaving out other key sectors. Many lessons have been learned over the past 15 years on how to make development more effective and help those most in need. As we look to the next 15 years, which of these key lessons should we take to heart to turn the promises of the SDGs into reality – particularly when it comes to gender equality and women’s empowerment (MDG3)?

First, focus matters. A standalone goal on gender equality has been retained (SDG5). A dedicated goal makes a big difference in mobilising action and resources. Furthermore, SDG5 includes many ambitious targets left out of MDG3. Tackling gender-based violence, unpaid care work, early marriage and harmful practices, among others, are now high on the gender and development agenda.

Second, strong indicators that can monitor the SDG commitments, inform policy action and ensure accountability on gender equality are just as important. After the adoption of the SDGs, all eyes will be on the selection of indicators to track progress on the 17 goals and 169 targets. Over the past year, representatives from governments, UN specialised agencies and international organisations, such as the Organisation for Economic Co-operation and Development (OECD), have worked on establishing a list of provisional indicators, which will be adopted at next year’s 46th UN statistical commission. While this list shows how much better we have become at measuring complex areas, gaps in data coverage and availability present real challenges to the SDG enterprise.

Indicators and data on gender equality are a case in point. A data revolution, strengthened national statistical systems and other statistical initiatives have already given us a very detailed understanding of remaining gender inequalities in the labour market or in education, just to cite two areas, and what policy interventions have worked to reduce them. Still, so much is not captured systematically by regular social or economic surveys, which are critical for measuring gender equality, and also for tracking progress towards SDG5. Here, the MDGs taught us another valuable lesson: what gets measured, gets done.

Addressing discriminatory social norms and institutions has become a new development priority and features strongly across the SDG5 targets. Yet, this area needs much more statistical work and investment. Data reveals how formal and informal laws, practices and attitudes shape women’s ability to enjoy their rights and take advantage of empowerment opportunities.

Results from the OECD Development Centre’s Social Institutions and Gender Index (SIGI), for example, highlight how a discriminatory social practice such as early marriage adversely affects girls’ educational attainments, or how an unequal share of unpaid care work between women and men can exacerbate gender wage gaps. These examples demonstrate the value of including targets in the new framework; quantifying and measuring discrimination against women is challenging, but possible.

Indeed, the OECD Development Centre recently completed its first SIGI survey in Uganda, where new data on social norms was generated for the first time at the local level, providing evidence on how these norms can exacerbate inequalities despite the introduction of gender-sensitive laws. The survey showed that one-quarter of Ugandans agree that women and men should not enjoy equal land rights. Close to half of the population (45%) agree that early marriage is acceptable for girls (but not for boys). Such data is critical and a valuable resource for identifying how to make laws more efficient, and target the root causes of inequalities between women and men.

So what will it take to step up to this statistical challenge? Financing and technical support for statistical agencies is key. Most of the proposed indicators for SDG5 are classified as tier two (methodology exists, data not easily available) or tier three (methodology needs to be developed). For example, unpaid care work is measured through time-use surveys. However, less than half of the world’s countries have conducted such surveys in the past 10 years. Designing surveys, harmonising methodologies to ensure cross-country comparability or including indicators in existing surveys can be costly. Worryingly, this summer’s Financing for Development conference in Addis Ababa did not include increased commitments for statistics, even though it is estimated that at least an additional $200m (Paris21) is needed.

 The silver lining is that data on gender is getting better all the time. We now know much more about the prevalence of and attitudes towards violence against women than in 2000, thanks to demographic and health surveys. Political will has proved critical too. Colombia and Uruguay, for example, have passed legislation to mandate regular time-use surveys. Innovative projects, such as the Evidence and Data for Gender Equality initiative led by agencies, including the World Bank, UN statistics directorate, UN Women, the OECD and the Food and Agriculture Organisation, have shown exciting results in advancing our knowledge of women’s asset ownership through new approaches and thinking around data collection. This is promising for future measuring of results for the SDGs: more reliable data and innovative methodologies will help truly capture and track women’s empowerment in the home, the workplace and in public life.

While these investments in indicators and data may appear formidable, the promise of a high return if we are able to achieve SDG5 by 2030 is certainly worth it.

This article first appeared in The Guardian on September 28, 2015. Read it anew here.

This article should not be reported as representing the official views of the OECD, the OECD Development Centre or of their member countries. The opinions expressed and arguments employed are those of the author.