Following the seminal work by Kydland and Prescott (1977) and the vast literature that ensued,  central bank independence has become an established, rock solid truth in the theory and practice of monetary policy. A concrete case about the negative consequences of less-than-full central bank independence was recently discussed by Wyplosz (2015), with specific reference to the ECB. However, no discussion has taken place in a long time within academic and policy circles about cases where central bank independence might be called into question, not even after the deep reconsideration of optimal macroeconomic policy prompted by the global crisis.
In fact, the crisis has offered an important opportunity to discuss if and under what circumstances, and rules, central bank independence might be temporarily revoked or suspended, so that the central bank and government would coordinate their action for the purpose of achieving some specific priority macroeconomic objective. Regrettably, this debate has not happened thus far. In summarizing the conclusions of last April’s IMF conference on ‘Rethinking Macro Policy’, Blanchard (2015) noted that there was general consensus among participants “that central banks should retain full independence with respect to traditional monetary policy”.
"Another word for 'profession' is 'ghetto'. People who work in the same field develop their own codes and slang. They sleep and socialise with each other. Without intending to, they seal off their world from uncomprehending outsiders."
- Janan Ganesh, a political columnist for the Financial Times. Previously, he was a political correspondent for The Economist. He appears weekly on BBC1's Sunday Politics television show and wrote a biography of George Osborne, the UK chancellor
“What are you waiting for? Get out there and create your future”. This conveys the spirit of Mohammed Yunus’ lecture last week at the World Bank. His messages on social business and entrepreneurship raised a number of questions as to how we think about education, skills, employment and the future prospects of youth in the world.
Each month People, Spaces, Deliberation shares the blog post that generated the most interest and discussion. In July 2015, the featured blog post is "The printed book will never die" by Gonzalo Castro de la Mata, Chairman of the Inspection Panel at the World Bank.
When will the printed book die? Some think that its replacement by electronic media is imminent and promote this view using arguments that are both romantic and utopic: a new society where massive amounts of information can be accessed instantaneously and free, and with reduced environmental damage because of a decrease in the use of paper.
Although neither argument can stand serious analysis, there is no question that the electronic book is rapidly gaining in popularity. Most major “brick and mortar” bookstores have gone out of business, and today Amazon sells more electronic books than printed ones. There is also an explosion of blogs related to every imaginable (and unimaginable) topic, and there is no question that electronic media have some advantages over certain printed media such as newspapers and magazines.
Two recent Washington seminars suggest that – by pursuing innovation and inclusion, and by focusing on broad-scale social “well-being” – policymakers can define realistic paths toward development success.
“Creative destruction is good for social mobility” and broader inclusion, in the long run, because it causes a steady procession of “new innovators to replace old incumbents.” The effect of each wave of innovation is fleeting, especially in a hyperspeed economy: “You get temporary ‘rents’ when you innovate. You don’t get them forever,” because the relentless Schumpeterian process will eventually cause yesterday’s innovators to become, in turn, tomorrow’s has-beens.
Focusing simply on present-day inequality is less informative than focusing on social mobility, he asserted. There’s nothing wrong with an economy that bestows ample financial rewards upon genuine innovators who create new products and processes. There is, however, something deeply wrong – and economically growth-inhibiting – with governments that allow no-longer-innovative incumbents to use their political connections to suppress potential competitors.
The IMF panel’s respondents amplified Aghion’s analysis. World Bank economist Daniel Lederman noted that it would be wise to use “the lexicon of ‘inequality of opportunity’,” because some degree of wealth inequality is inevitable (and perhaps even desirable) when individuals’ talent and effort are rewarded with rising incomes. IMF economist Benedict Clements – deploring the “great degree of disparity in ‘equality of opportunity’ ” that now prevails in advanced economies, including the United States – noted that there need be “no conflict between equity and efficiency if you design your policies right.”
In the rural water sector in Senegal, as with many parts of the world that have experienced tremendous changes, context is everything. Rarely does one single act spur a shift at the government level; many elements combine to prompt a change in approach.
The PPP team in Senegal was privileged to be able to develop a brand-new system for rural water delivery in Senegal (see previous post here), but our activity was just one contributing factor in a much larger national and even international effort. The political context in Senegal, along with sustained attention to the Millennium Development Goals (MDGs), created the right atmosphere for this PPP.
Here are five important elements that came together to make Senegal’s paradigm-shifting PPP possible:
Government officials’ forward-thinking views. Coming up with an original plan for the delivery of rural water depended on zoning changes. Our group’s internal study showed that dividing the country into three zones would make it possible to cluster services. Government’s willingness to consider clustering pipe systems across 14 regions was critical, because it made support from the private sector a viable option.
Earlier this year, we launched our eLearning course for social enterprises in January with a second installment in May. Social enterprises from across the globe – from places we didn’t even think we could reach – applied. So we began to wonder, who are these social enterprises? What are their models? What do they need most to reach the most marginalized populations? So I sat down with Charles Njemo Batumani and Arun Kumar Das, two social entrepreneurs who finished the first installment of our eLearning course in January to see what they’ve done, where they see their enterprises going and why eLearning was a way for them to improve their social enterprise. Charles is building affordable housing for low and middle income earners in Limbe, Cameroon while Arun is developing a natural plant product to combat malnutrition in Odisha, India.
Much is made of the need for 'innovation' in education. Bullet points containing words like 'disruption' and 'transformation' increasingly characterize presentations at big education gatherings -- especially in North America, and especially where educational entrepreneurs and 'Silicon Valley-types' are to be found. The popular press is replete with (sometimes breathless) articles about the 'revolutionary' potential of some new technology to impact teaching and learning in ways that are often quite exciting. Indeed: There can be little doubt that the increased diffusion of low(er) cost, (more) powerful, connected IT devices across and within communities offers exciting possibilities and potential to do things differently -- potentially in a good way.
For many people, the use of technology in education constitutes a de facto 'innovation'. Whether or not this belief is actually accurate, or useful, is a legitimate question for discussion. That said, there is no denying that many of the educational innovations celebrated (or at least touted) today are enabled by the use of such technologies in some way.
Around the world, there few more conservative and traditional sectors than those related to public education. In many ways this is totally understandable, and appropriate. Investments in education represent investments in the future -- of our children, of our future citizens and workers and leaders and community members. We don't want to gamble with or experiment with the way we educate our children and try out too many new things, or so goes one line of thinking. The potential downside, or failure, carries with it consequences that are just too great.
And yet: We know that, for millions children around the world, the education they are getting today isn't actually all that great. Some frightening stats from just one page of the latest Global Monitoring Report [pdf], drawing on recent research from RTI:
In Nicaragua in 2011, around 60% of second-graders could not identify numbers correctly and more than 90% were unable to answer a subtraction question.
In Malawi, 94% of second-graders could not respond correctly to a single question about a story they read in Chichewa, the national language.
In Iraq, 25% of third-graders were unable to tell the sound of a letter in Arabic.
And if you think that the situations in certain education systems are bad: Around the world, many children and adolescents -- 124 million, according to the latest figures from UNESCO -- are out of school and not getting any formal education at all.
In many cases then -- too many -- education systems aren't actually working all that well. In others -- like the global 'high performers' that are regularly held up as 'best practice' examples for other countries to emulate (Finland, Shanghai, Korea, Singapore) -- there is the danger that what worked well in the past (or what appears to be working well now) might not work so well in the future. The future is changing -- shouldn't we change the way we prepare for it? The riskiest course of action might well be one where people and institutions don't take risks.
Where business as usual is decidedly not working today,
or where it is feared that business as usual may not work tomorrow ...
what are some examples of business unusual from which
we might draw inspiration -- as well as practical insight?
Many good examples of this sort are regularly cited from experiences in highly developed, industrialized economies of North America, Europe and East Asia. No doubt much can be, and will be, profitably learned from what is happening such places. That said, the challenges facing education systems and families around the world are particularly acute where the needs are greatest: in many low- and middle-income countries, and especially within remote communities and traditionally disadvantaged populations.
Examples of 'innovation in education' from such places might just be more relevant to policymakers in Phnom Penh or Quito than are ones which originate in, say Palo Alto or Cambridge. (And, it is perhaps worth noting, that, if you believe that innovation often arises 'at the edges', where constraints compel people to be inventive in their approaches to solving problems in ways that folks in more resource-rich environments may never consider, it may just be that policymakers in Paris and Canberra may learn something to learn from what's happening in 'developing countries' as well.)
What examples do we have of innovative uses of educational technologies in such places?
Global commodity prices underwent an exceptionally strong and sustained boom beginning in 2000. Unlike a typical price cycle, this boom has been characterized as a “super cycle”, i.e., a demand-driven surge in commodity prices lasting possibly decades rather than years. Many researchers say this is the fourth “super cycle” of the past 150 years. The price super cycle has been attributed to strong growth in emerging markets.