inequality

13 October 2017

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The IMF’s Fiscal Monitor 2017 is launched during the Annual Meetings of the IMF and the World Bank where the broader economic mood is positive with messages welcoming a global economic recovery. It is labelled “Tackling inequalities”. It shows that since the late 1980ies global inequality has declined while inequalities within countries have increased for half countries in the world. It unpacks 3 policy debates — progressive taxation, universal basic income (UBI) and public spending in health and education — without making explicit recommendations to policy makers. As UBI remains a hotly debated topic (that Horizons has summarized for you) and as the conversation around our house is growing on universal child grant, the report is worth browsing through.

In “The Red Cross presses Silicon Valley to fight cyberwarfare”, FastCompany interviews ICRC President Peter Maurer who met big techs to discuss responsibility and possible game changing role in humanitarian contexts. Arguing that governments with cyberwarfare capacities are not interested in regulation, he points to areas of convergence between the private sector and humanitarian organizations and suggests that collaborating with big techs could be a way to shape necessary norms and standards. Watch that space.

My graph this week is from Alvaredo and al “Measuring Inequality in the Middle East, 1990-2016: The World’s Most Unequal Region?” It combines household surveys, income tax data, wealth rankings and national accounts to estimate income concentration for 1990-2016 in Middle East countries. It then compares results with other parts of the world to show that the top income share in the Middle East is higher than in Western Europe, USA, Brazil and South Africa.

One week after unveiling the “Human capital project” aiming to create a human capital index for each country with the help of the Institute for Health Metrics and Evaluation (yes, same crowd who worked on the Gates Foundation SDG report), World Bank Group Jim Kim announces: “Soon, we’ll publish The Changing Wealth of Nations, and for the first time, we’re looking at human capital as part of the overall wealth of nations. It turns out that more than 65 percent of the wealth of all nations in the world is in human capital.”

13 April 2017

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It is always good to have a quick look at the curtain raisers for the IMF-World Bank Spring Meetings. They give a sense of where the IFIs are going. This year, they come out right after a joint WTO-IMF-World Bank expression of support for open trade and international cooperation. IMF Christine Lagarde’s “Building a more resilient and inclusive economy” brings some good news about the health of the global economy including in low income countries helped by a much awaited rise of commodity prices. She zooms in on equitable growth arguing that technology has increased income gaps and will slow employment growth in emerging and low income countries. She points to governments’ responsibility to provide lifelong learning (from ECD to online senior course) and to maintain intergenerational equity in ageing societies. World Bank Jim Kim focuses on “Rethinking development finance” which is about using billions of public money to leverage trillions of private finance. What is worth keeping an eye on, here, is the new IDA $2.5 billion private window that came out of the last replenishment round concluded last December. Note the focus on fragile contexts which could shake up operations on the ground. And note the push to change the organization’s culture and incentivize staff to work at facilitating investments rather than designing loans: the Bank is “putting in place a tracking system that captures indirect forms of mobilization, and figuring out how to reward staff who focus on advisory programs, building markets, and creating the environment for investment”. Heads up!

Tom Jackson writes about technology in Africa. His March round-up helps us keep up with the fast financial services transformation in Kenya. Safaricom-supported M-Pesa, the super successful mobile money transactions system born in Kenya a decade ago, has since spread to India, Afghanistan and Romania. But Kenyan banks who originally tried (and failed) to regulate M-Pesa out of their industry just launched a competitor product, PesaLink, cutting transaction costs, allowing real-time inter-bank transfers, and attracting 2 million customers in two months. Safaricom responded by launching an M-Pesa App, and halving its fee. And it is now possible for Kenyans to buy government treasury bonds through their phones.

My graph this week is from Ana Moraru’s “Ghost village project” that uses monthly data of household power consumption to map population density and identify patterns of rural-urban migration in Moldova. Moraru works with the UNDP-sponsored Moldova Social Innovation Hub and tells us that this project is meant to inform a major 2018 administrative reform and associated local investments in public services in a context where internal migration is only documented by low frequency census data.

My quote this week is from Kevin Watkins’ interview with Sarah Brown in her Better Angels series “[The SDG agenda] ought to appeal to anyone who is driven by values and by a sense of solidarity, compassion and empathy. We need hard skills that are harnessed to good values. We need economists, people who understand finance, people who understand the law. Because these are great instruments for achieving change.” [30’]

31 March 2017

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I have not yet written about fiction books here. But here is an interesting trend: sales of dystopian novels are exploding. Orwell’s “1984” reached a 9,500 percent increase in sales in one week end of January. Rather than re-reading the classics, I started exploring those written for young people and finished M.T. Anderson’s “Feed”. It tells the story of two teenagers in a futuristic world ravaged by environmental degradation and driven by consumerism where news, games, advertisement, and chats feed people’s brains non-stop through electronic implants. As her parents decided to fight the feed, one of the main characters did not get her implant in the early days of her brain development and we observe the increasingly damaging consequences of this choice. The book, written 15 years ago before the smartphones and algorithm mania, feels surprisingly close to our “now” with its self-driving cars, occasional trips to the moon, hacking threats and over polluted air and water. It is a thought provoking read.

The Harvard Business Review ran a series on businesses and inequality this week. Interesting articles and powerful graphs, with two highlights for me. One, Nicholas Bloom’s “Corporations in the age of inequalities” calls for a shift of policymakers’ attention from gaps between rich and poor people, to gaps between high-paying and low-paying firms. He uses a growing body of evidence to show that wages gaps between companies is a huge driver of income inequality. And he argues that three trends widen this gap: “the rise of outsourcing, the adoption of IT, and the cumulative effects of winner-take-most competition”. Two, Melissa Kearney’s “Income inequality may harm upward mobility” illustrates how boys who grow up in poor homes are more likely to drop out of school if they live in places with high income inequalities than poor boys living in more equal ones. Her work shows that highly unequal environments lock young people, and especially boys, into “economic despair”.

My illustration this week is from Simon Maxwell’s “A new case should be made for aid. It rests on three legs“: 1. understand the problem; 2. match instruments to need; and 3. tell a story that convinces the public. Agreed. He then sorts out aid instruments according to public support and demonstrated effectiveness.

My quote this week is from Otherlab’s Mikell Taylor in “Cardboard gliders could revolutionize aid delivery in disaster zones“: “It’s a cross between a paper airplane and a pizza box. The plane lands right where it needs to be. You don’t want to have to account for a bunch of assumed [cargo drops] loss because the wind blew your parachutes into a lake.”

10 March 2017

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Wild, Booth and Valters’ “Putting theory into practice: How DFID is doing development differently” should have been 5 pages long so more people would read it. The ODI authors spent one year helping DFID change its practices and they document the experience in this paper. At the programme level, these changes look like moving from giving grants to CSOs to using DFID’s political savviness to help CSOs strategically connect with governments, parliaments and the media; or moving from financing the construction of a water and sanitation rural infrastructure to a pay-by-result system that pushes district authorities to construct and maintain the infrastructure. That means a problem driven approach with an emphasis on DFID’s facilitation role and the use of ‘everyday political analysis’. At the process and procedure level, these changes look like distilling mountains of guidelines into a handful of principles, smart rules or top tips.

I spent my Tuesday lunch break listening to NYU CIC’s Sarah Cliffe give an overview of conflict-related trends. Here is my summary. Four main trends: (i) there are more and more protracted crises, and humanitarian work has become development work; (ii) following a drop in international wars after WWII, conflicts and crises are increasingly internationalized again; (iii) multiple and combined sources of risks (eg populism, population growth, resource scarcities) make crises and conflicts harder to solve; (iv) populations are losing confidence in the ability of national and international entities to solve conflicts. Four underlying factors to these trends: (a) decades of inattention to inequalities; (b) lack of investment in shared identities; (c) shifting geopolitical patterns; (d) innovations in ICT. Three big picture solutions: 1. Strengthen the humanitarian-development continuum for better prevention; 2. Join the political/security part of the international system with its humanitarian-development part; 3. Rethink economic and migration models. I found this helpful in structuring my thoughts.

My graph this week is from the Economist Intelligence Unit’s new “Inclusive internet index”. Commissioned by Facebook’s Internet.org, the index codes four enablers of internet inclusion for 75 countries: availability, affordability, relevance, readiness. At the aggregate level, no big surprise in terms of who comes first. But breaking down results by country or enabler gives less expected results. Malaysia comes first and Chile fourth for readiness with Kazakhstan and Argentina at the 10^th and 11^th places. And Nepal, Tanzania and Senegal have the highest overall rankings of low income countries (56^th, 57^th, 58^th).

My quote this week is from Anthony Heyes in “Air pollution brings down the stock market”: “Animals that breathe polluted air fight more than those that breathe cleaner air. People perform less well across a variety of tasks on polluted days than on less polluted days. Peach pickers pick fewer peaches. Baseball umpires are worse at calling balls and strikes. Call center employees field fewer calls.”

3 February 2017

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Last week’s “how to talk about books you have not read” suggestion generated interesting feedback. Some thought it was funny while others found it naive in a “post truth” context. And some asked why I chose that book now. I read it a while back and liked it because I come from a culture where quoting a book can be used to assert power in a conversation. I picked it up again recently as I saw all these celebrities arguing that reading books was THE thing to do. Leaders, say presidents, read books to find ideas and inspirations. Big investors, say some of the biggest, read books to get richer. Philanthropists, new and more seasoned, just read books. Etc. Then I came across Lorraine Berry’s historical review of bibliomania where she argues that “Bibliomania [is] now a bragging right”. That brought me back to Bayard, for a breather.

This morning I sat for a couple of hours at a geospatial data show-and-tell. I did not understand all the acronyms but saw some pretty cool tools to better understand infrastructure, settlements and population dynamics. Google earth engine was one. Click on timelapse and select an area to see changes from the 1980ies to now. Looking at the Aral Sea is really depressing. Looking at Dalian’s urbanization is fascinating. The googler told us that earth engine was used to better target health service delivery (eg bed net campaigns). Internet.org was another one. This is the Facebook initiative to connect the most remote areas to the internet. A first step to do this was to map these areas. They used satellite data and worked in 35 countries. The data they collected confirmed that more than half of the world population lives in cities and it also showed that 99% live within 55 km of a city. The discussion was also super interesting. A lot of talk about definitions (what is “urban”?) and about which data are reliable (versus official). A passionate exchange about open access data where the rep from the Gates Foundation recalled that grants will now be conditional on data and knowledge being published in open access journals. As we also heard from the recent World Data Forum: geospatial-for-social-good is trending.

Evan Osnos’ “Doomsday prep for the super-rich” explores a trend not much talked about. We follow how the 1% gets richer than the rest of the population. We track the 1% increasingly giving back through philanthropy. This article is about a growing portion of the 1% embracing survivalism. They are making back up plans to protect themselves and their family from disasters like an earthquake, a global pandemic or a political breakdown. Their two main strategies are (i) buying airstrips and farms in New Zealand and (ii) buying condos in nuclear-proofed bunkers. It’s all about escaping as fast as possible.

My graph this week is from Benedict Evans’ “Mobile is eating the world” updated presentation. As the Iphone is celebrating its 10^th anniversary, the world is half way to being fully connected. And 2.5 billion people have smartphones. Yes: 2.5 billion. The rest of the presentation is great if you have not seen an earlier version.

My quote this week is from an anonymous British civil servant in “Civil servants warned office cake culture could be a public health hazard”: “I get it. When you’re writing a submission with a tight deadline and may not have time to eat, it’s easy to put an extra sugar in your tea or grab a chocolate bar from the vending machine for that energy boost. I know – I’ve done it. And don’t forget mid-week cake, ‘back from travel’ treats and birthday doughnuts ‘in the usual place’.” You’ve been warned.

20 January 2017

Posted on January 20, 2017 Leave a Comment

The National Intelligence Council’s Global Trends report comes out every four years. This year’s “Paradox of Progress” does not bring much novelty when it comes to the list of global trends considered [summary p. 6]. The three scenarii (islands, orbits, communities) piqued my curiosity a little more, in particular the third one discussing the future of governing. In this scenario, successful countries are those who manage to share governing power with local authorities and non-state actors when responding to citizens’ needs. The idea is that national governments retain “hard power” (eg security) while “soft power” is decentralized both geographically and to other actors with technology providing some kind of partnership gel. And there is an emphasis on the growing power of human agency. International organizations get revived because they know how to bring multi-stakeholder partnerships [yes, this non-UN document uses such term] to life. I’d also recommend the first annex [p.85] offering a 3-page five-year outlooks for each region. The Artic/Antarctica and space sections are exciting, not least because they are presented as regions where international cooperation may have the brightest near future. They also got me thinking that most UN agencies do not have a regional office for these parts of the world (nor for the deep and high seas for that matter). And yet, they will increasingly matter for next generations and the natural resources, food, and habitat they will need. Should we consider piloting a desk for polar, space and sea?

It was Davos week. Global reports flooded the Swiss resort. Oxfam did it again: for the fourth year in a row they grabbed headline news with their inequality report showing that the 8 richest men have as much wealth as the poorest half of the world population. The Commission on Business and Sustainable Development report argued that $12 trillion of market opportunities could be unlocked by 2030 if companies embraced a sustainable growth model. And the Edelman’s 2017 Trust Barometer, surveying 30,000 people in 28 countries, unpacked the global trust crisis. Trust in institutions is declining across the board from governments and businesses to NGOs and the media. More than half of interviewees, including those with high-income and college degree, believe that the system is failing them. The credibility of government leaders and CEOs is at all-time low. The most credible person today is a peer (“person like yourself”). Information coming from a spontaneous speaker, relating to personal experience, and communicated via a company’s social media is more likely to be perceived as true than information with a more traditional format, style and channel. The report thus calls for a communication model that work “with the people” rather than “for the people”.

Two weeks ago, I flagged exciting trends for renewable energy generation. But green power can only boom with matching prospects on the storage and distribution fronts. This graph from the International Finance Corporation’s “Energy storage trends and opportunities in Emerging markets” offers just that. It forecasts that “energy storage deployments in emerging markets worldwide are expected to grow by over 40 percent annually in the coming decade”.

My quote this week is from Andrew Sullivan’s “I used to be a human being”: “If you had to reinvent yourself as a writer in the internet age, I reassured myself, then I was ahead of the curve. The problem was that I hadn’t been able to reinvent myself as a human being.”