Each month People, Spaces, Deliberation shares the blog post that generated the most interest and discussion. In August 2016, the featured blog post is "Nudge for good: How insights from behavioral economics can improve the world— and manipulate people" by Roxanne Bauer.
Richard H. Thaler is a world-renowned behavioral economist and professor of finance and psychology. Recently, he was interviewed by The Economist. The discussion covers some of the fundamental studies in the field, like “save more tomorrow” which encourages people to save more by signing up to increase their savings rate every year and auto-enrollment for pensions that have drastically increased employee participation in pension funds.
Thaler also suggests, in the interview, that behavioral economics has the ability to influence human behavior for both good and bad. He argues that much of what behavioral economics does is remove barriers. The goal is not to change people but to make life easier. However, that idea can be skewed by organizations or individuals looking to capitalize on the biases of people. Whenever he is asked to sign a copy of his book Nudge, he writes “nudge for good” which is a plea, he says, to improve the lives of people and avoid insidious behavior.
The list of ways companies nudge behavior is endless, and I would love to hear more examples from you all in the comments section. In the meantime here are a few- I’ll let you judge which ones “nudge for good”:
The World Bank offered up to half-a-billion dollars to finance the reconstruction of Nepal through different financing mechanisms, such as the Nepal Rural Housing Reconstruction Program.
Here is a particular example of the work done in Nepal by a small organization and their innovative outreach effort. On April 19, 2016, the Cloudbase Foundation (which works with hang glider and paraglider pilots to be effective agents of change within communities where they fly) published a video under the “GoPro for a cause” campaign to raise funds and awareness of the work that they are doing to help Nepalese communities recover from the effects of the earthquake.
Safia Khan, guest blogger, is a researcher at Research ICT Africa
In much of Africa there has been a rapid uptake of mobile phones. Their ability to contribute to increased welfare outcomes such increased gender equality and the alleviation of extreme poverty has been widely discussed. But, analysis of the impacts of such information and communication technology (ICT) on the labor market outcomes of those in developing countries, is almost non-existent.
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with an economic value of over US$3 billion per year.
A World Bank study puts , half of which occurs in developing countries. Water utilities suffer from the huge financial costs of treating and pumping water only to see it leak back into the ground, and the lost revenues from water that could have otherwise been sold. If the water losses in developing countries could be halved, the saved water would be enough to supply around 90 million people.
We refer to it as non-revenue water (NRW), or water that is pumped and then lost or unaccounted for.
The need to manage NRW better and protect precious water resources has become increasingly important. , enhance financial performance, make cities more attractive, increase climate resilience and reduce energy consumption.
Podcasts are more popular than ever, thanks in large part to the wildly successful This American Life produced, Serial, and the rise of smartphones and Bluetooth enabled cars, that allow listeners to stream podcasts practically anywhere.
At the World Bank Group, Senior Communications Officer, Richard Miron has produced a new podcast series, called Bookmark that explores the creative literary works of staff members.
Each week, Richard interviews a variety of staff members, past and present, who have put pen to paper and written books of their own. It’s not about World Bank books, but rather the expansive literary talent that work at the Bank.
Richard explains the thinking behind the series:
“The people of the World Bank are what makes the institution tick. They come with different experiences and from differing backgrounds. The aim of Bookmark is to show– ‘the literary side’ of those at the Bank, and to illustrate how their work has contributed to their writing and how their experience in writing has added to their work.”
The first episode features Agi Kiss, who currently works as a Regional Environmental and Safeguards Advisor. During her career at the World Bank Group, Agi worked in Nairobi, Kenya, managing a wildlife and protected areas project. She went on a number of safaris to explore the country.
The Infrastructure Prioritization Framework (IPF) is a quantitative tool that synthesizes and displays financial and economic as well as social and environmental indicators at the infrastructure project level. Two composite indices or dimensions are displayed in a Cartesian plane to offer a simplified picture of comparative performance alongside the public budget constraint for a particular sector.
For several decades now, Uganda has been generously hosting refugees and asylum seekers from the conflict-affected countries in its neighborhood, especially the Democratic Republic of Congo, Somalia, South Sudan, Rwanda and Burundi. Since achieving its independence in 1962, the country has been hosting an average of approximately 161,000 refugees per year; and the numbers crossed 550,000 in August 2016. In three weeks since the latest fighting in South Sudan broke out on 8 July, nearly 37,491 people were forced to flee to Uganda, more than in the first six months of 2016, according to UNHCR.
We observed that over 78 percent of refugees in rural settlements, where they receive agricultural land, are engaged in agricultural activities compared to 5 percent in urban areas. Crop surpluses attract Ugandan traders to the refugee settlements, operating as a direct supply chain for sale of agriculture produce but also supply of agriculture inputs like fertilizers and seeds.
However, about 66 percent of respondents reported that local traders use faulty scales when weighing produce, which shortchanges them. Seventy percent decried the extremely low prices offered by local traders for produce, with implications for the ability and timing of refugees to become self-reliant. This was made worse by the significant losses in quality and quantity of agriculture produce due to poor harvest handling techniques and inadequate storage facilities, and surpluses were sold immediately after harvest at the lowest point in the price cycle. This shows that while refugees have land to cultivate, they are unable to realize the potential due to lack of technical, infrastructural and marketing support, contributing to food insecurity and under nutrition among smallholder farming refugee families, especially during lean seasons.
Business enterprises such as bars, hair dressing, milling, transportation, money transfers, and retail are run by refugees. Twenty-eight percent of female refugees are involved in agriculture, trade, or are self-employed; their participation in the formal sector is low—only 9 percent. Initiatives such as Community Savings Groups and women savings and credit groups have provided female refugees with seed money to start businesses. There is reportedly some level of gender discrimination with respect to access to land, credit, employment, and self-employment opportunities.
We observed that almost 43 percent of the refugees are actively engaged in the labor market of their host communities: 12 percent in the formal sector and 31 percent self-employed. However, refugees expressed constraints accessing formal employment both in urban areas and rural settlements, relating to unfamiliarity with the language, legal issues, poor interview skills, discrimination, and a lack of relevant documents.
Refugee settlement areas have attracted the attention of Ugandan private enterprises, such as the Ugandan telecom companies, which launched several initiatives aimed at targeting refugee users of SMS banking and transfer services. For example, Orange Uganda Limited, a provider of telecommunication and Internet services in Uganda, invested in a large radio tower in the Nakivale settlement to promote its "Orange money" services. In Rwamwanja and Adjumani, a number of refugees operate as mobile money unit agents providing employment for them, while facilitating other refugees in accessing remittances from their relatives and friends within or outside the country. This mobile money is hugely helpful to refugees trying to meet expenses, including school fees for their children.
But in Uganda, and across the rest of the Horn of Africa, refugee camps and settlements are located in areas where the host communities are among the most underserved, with significant development deficits of their own. The majority of refugee settlements in Uganda are in the relatively stable north, though it has communities still in a state of latent conflict, driven by new and long-standing grievances, poverty, perception of marginalization, competition over national resources, and societal fracture as legacies of decades of violent conflict. The region also has high levels of poverty and youth unemployment which poses challenges to refugee efforts at self-reliance.
This got us thinking about a couple of important questions: " What insights does this provide to the range of organizations including UNHCR and NGOs engaged in advocacy efforts aimed at more progressive refugee laws and policies?"
We believe that progressive refugee laws that guarantee freedom of movement and right to work and own property are critical for economic self-reliance of refugees, without which it would be an impossibility. However, the Ugandan experience also tells us that while refugees have engaged in economic activities and employment, they haven’t all achieved self-reliance and many remain aid dependent. For us an important learning is that , benefitting from the attendant reduction in poverty, increase in quality of basic services, better infrastructure and economic opportunities.
We see a huge opportunity in Uganda with the recent government-led efforts to address the development challenges of settlements that are home to locals and refugees with the inclusion of the Settlement Transformative Agenda (STA) as part of National Development Plan II (NDP II 2015/16–2019/20). The STA aims to promote social and economic development in the refugee hosting areas for both locals and refugee communities in partnership with the UN agencies in Uganda, the World Bank and other stakeholders. The World Bank is supporting this effort through the Development Response to Displacement Impacts Project (DRDIP) in Uganda, which will help improve access to basic social services, expand economic opportunities, and enhance environmental management for communities hosting refugees in Adjumani, Arua, Isingiro and Kyriandongo districts.
“Globalization and technological change create huge challenges for modern economies, but they are not uncontrollable forces of nature. The economy we have is the economy we choose to build. It is time to make different choices, and show that capitalism can be remade.” — Prof. Mariana Mazzucato of the University of Sussex and Prof. Michael Jacobs of University College London, the editors of “Rethinking Capitalism.”
The shadows lengthen and the daylight shortens amid these elegiac end-of-summer evenings — but there’s a palpable feeling nowadays, in Washington and other capitals, that we’re approaching not just the sunset of a season, but the twilight of an era.
The sudden change in the policy discourse over the past year has shattered the familiar old contours of the globalization debate, with a “populist explosion” in the world’s developed economies forcing policymakers everywhere to reconsider the boundaries of “the art of the possible.” In many of the world's developed economies, a recalibration of globalization is under way.
In this insolite interim, the fraught phrase of Antonio Gramsci comes to mind: “The crisis consists precisely in the fact that the old is dying and the new cannot [yet] be born. In this interregnum, a great variety of morbid symptoms appear.”
Three incisive recent analyses illustrate the impassioned arguments that underscore this end-of-an-era feeling. Together, the analyses set the stage for the imminent publication of a new book of essays by a group of eminent economists, whose ideas may chart the way toward a more durable, more inclusive approach to globalization.
- First: An eloquent “grand sweep of history” essay in The Guardian by Martin Jacques – critiquing the laissez-faire the policy package broadly known as “neoliberalism” – declares bluntly that “we are witnessing the end of the neoliberal era. It is not dead, but it is in its early death throes.” Jacques discerns that “the causes of this political crisis, glaringly evident on both sides of the Atlantic, are much deeper than simply the financial crisis and the virtually stillborn recovery of the last decade. They go to the heart of the neoliberal project that dates from the late 1970s . . . [that] embraced at its core the idea of a global free market in goods, services and capital.”
- Second: Diagnosing how a phase of economic history may have run its course, Nobel Prize-winner Joseph Stiglitz (a former Chief Economist of the World Bank) in Project Syndicate asserts that the laissez-faire approach to globalization has reached its (il)logical conclusion: “The failure of globalization to deliver on the promises of mainstream politicians has surely undermined trust and confidence in the ‘establishment.’ . . . Neoliberals have opposed welfare measures that would have protected the losers [of globalization]. But they can’t have it both ways: If globalization is to benefit most members of society, strong social-protection measures must be in place. The Scandinavians figured this out long ago; it was part of [their] social contract. . . . Neoliberals elsewhere have not – and now, in elections in the US and Europe, they are having their comeuppance.”
- Third: A series of insightful columns by Martin Sandbu in The Financial Times – tracing an “insurrection [that] has been a long time coming” – explores the links among economic stress and social-class anxiety that provoked this year’s social eruption: “Over the past generation, the trajectory of the white working class has no doubt changed the most for the worse, compared with the previous generation.”
The history-minded reflections of Jacques, Stiglitz and Sandbu underscore the fact that many economists are still pondering how so many of their policy prescriptions went so badly wrong, opening the way for the global financial crisis.