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Investment in emerging and developing economies: Reversion to trend is not enough

22. Februar 2023 - 20:47

By Kersten Stamm, Dana Vorisek

Investment in emerging market and developing economies (EMDEs) is projected to grow at a pace below the average rate of the past two decades through the medium term, after declining in the majority of countries during the pandemic. This outlook for investment is unwelcome news on several counts. Whether the policy priority is bolstering resilience to climate change, improving social conditions, smoothing the transition away from growth driven by natural resources, or supporting long-term per capita income growth, investment (gross fixed capital formation, or buildings, machinery, equipment, and intangible assets used for more than one year) is critical.

Broad-based investment contraction during the pandemic

As business operations were disrupted and uncertainty spiked in 2020, aggregate investment in EMDEs shrank by 1.5 percent. This was a substantially worse performance than during the previous global recession, in 2009, despite easier financial conditions and the provision of sizeable fiscal stimulus in many large EMDEs during the pandemic.

Excluding China, EMDEs suffered a far deeper investment decline in 2020, of more than 8 percent, also a worse performance than in 2009. A key difference in the experience of 2009 versus 2020 was the number of affected EMDEs. Investment contracted in about 70 percent of EMDEs in 2020, compared to 55 percent in 2009 (Figure 1).

Figure 1. Share of EMDEs with an investment contraction

Sources: Haver Analytics; World Bank; World Development Indicators.
Note: Investment refers to gross fixed capital formation.

A subdued investment recovery

Investment growth is projected to average 3.5 percent per year in EMDEs during 2022-23, and 4.1 percent in EMDEs excluding China. These projected investment growth rates are below the long-term (2000-21) average. Moreover, the subdued outlook follows not only a sharp decline during the pandemic, but also a prolonged investment growth slowdown during the 2010s as China shifted away from investment- and trade-led growth, commodity-exporting EMDEs suffered a sharp mid-decade decline in oil and metals prices, and the effects of weak economic growth and post-global financial crisis deleveraging generated spillovers to EMDEs (Figure 2).

Figure 2. Investment growth

Sources: Haver Analytics; World Bank; World Development Indicators.
Note: Investment refers to gross fixed capital formation. Investment growth is calculated with countries’ real annual investment in constant U.S. dollars as weights. Years of global recessions and one year after (2009-10 and 2020-21) are removed from averages shown in the bars. Sample includes 69 EMDEs.

Further, the investment recovery in EMDEs following the pandemic is proceeding much more slowly than the recovery following the global financial crisis. By 2024, four years after the 2020 recession, the level of investment in EMDEs is projected to be about 15 percent above the pre-pandemic (2019) level. By comparison, four years after the 2009 recession, investment in EMDEs was already nearly 50 percent above the pre-recession level (Figure 3).

Figure 3. Investment level in EMDEs

Sources: Haver Analytics; World Bank; World Development Indicators.
Note: Investment refers to gross fixed capital formation. On the x-axis, year zero refers to the year of global recessions in 2009 and 2020. Dotted portion of the 2020 line is a forecast. Sample includes 69 EMDEs. 

Large investment needs

The weak investment recovery from the 2020 global recession is particularly concerning because EMDEs’ investment needs are substantial. Building resilience to climate change and putting countries on track to reduce emissions by 70 percent compared to current levels, for instance, is estimated to require an additional investment of 1 to 10 percent of GDP annually between 2022 and 2030 in EMDEs, with higher investment needed in low-income countries. To achieve the infrastructure-related Sustainable Development Goals, EMDEs would need to invest 4.5 to 8.2 percent of GDP annually during 2015-30, depending on policy choices and infrastructure service quality. Most of this amount would go to transport and electricity.

The benefit of policy reform

A challenging global financing environment and constrained fiscal space will make boosting investment in EMDEs challenging. Yet a comprehensive set of fiscal and structural policies, tailored to country circumstances, can help.

Spending on public investment can be boosted by reallocating expenditures toward growth-enhancing investment, improving public spending efficiency, or better mobilizing domestic resources. Private sector participation in filling investment needs is crucial in most EMDEs, but attracting such investment requires a sufficient regulatory and operating environment.

Setting appropriate and predictable rules relating to investment decisions and encouraging firm formalization can promote investment. Simplification of border procedures and elimination of unnecessary duties can increase trade flows, with associated benefits for investment. Development of digital infrastructure and capabilities and modernizing infrastructure to withstand climate change, two priority areas for many EMDEs, can be advanced with private sector involvement.

Figure 4. Investment growth in EMDEs around reforms

Source: PRS Group International Country Risk Guide (ICRG); World Bank.
Note: Investment reform events are derived from the ICRG “investment profile,” which includes three subcomponents: contract viability/expropriation, profit repatriation, and payment delays. Bars show the increase in investment growth around a reform spurt or setback at t=0 relative to the countries not experiencing a reform spurt or setback. Vertical lines show the 95 percent confidence interval.

Over the past four decades, countries with investment policy reform spurts have been found to be associated with significantly higher investment growth—by about 6 percentage points, on average—relative to non-reforming countries during the same year, while reform setbacks are associated with about 7 percentage points lower investment growth (Figure 4). Reforms do make a difference.

Kategorien: english

Government debt has declined but don’t celebrate yet

21. Februar 2023 - 23:16

By M. Ayhan Kose, Franziska Ohnsorge, Kersten Stamm, Naotaka Sugawara

Growth and inflation have unexpectedly helped lower government debt-to-GDP ratios in many countries since early 2021. However, government debt is still elevated and fragile in its composition, and the magic of growth and inflation is unlikely to last long. To reduce debt in a lasting manner, growth-boosting reforms and, in some countries, debt relief are needed.

During the 2020 global recession, government debt rose to multi-decade highs, marking the largest jump in five decades. Since early 2021, some of this government debt surge has been unwound, as the latest update of the World Bank’s Cross Country Database of Fiscal Space suggests. The decline in debt has in part reflected the impact of strong growth and elevated inflation of the past two years.

Stronger growth and higher inflation in 2021-22

2021 brought a record-strong global growth rebound from the collapse in activity in 2020. Global and advanced-economy growth in 2021 reached 25-year highs of 5.9 percent and 5.3 percent, respectively. In 2022, however, widespread and rapid monetary policy tightening and the impact of the Russian Federation’s invasion of Ukraine on commodity markets weighed heavily on the global economy. Global growth decelerated sharply by 3 percentage points to 2.9 percent in 2022.

The recovery lagged somewhat in emerging market and development economies (EMDEs) but, even in EMDEs, growth at 6.7 percent in 2021 was almost one-half above its 2000-2019 average. Like in advanced economies, growth in EMDEs also slowed sharply in 2022 but was still above its 2000-19 average in more than one-third of EMDEs. Major exceptions were China, where COVID-related measures hindered growth, and Russia and Ukraine, where the war severely disrupted activity.

Since its pandemic trough in May 2020, global inflation has risen sharply. By December 2021, global inflation had increased to 5.6 percent from 1.2 percent in May 2020 before reaching a 27-year high of 9.6 percent in October 2022. Since then, it has eased somewhat (to 9.1 percent in December 2022), but inflation is now running above target in all inflation targeting advanced economies and EMDEs.

Surprise, surprise: Debt is coming down

Government debt declined between 2020 and 2022 in nearly 65 percent of countries, including more than 70 percent of advanced economies and 60 percent of EMDEs. In advanced economies as a whole, government debt declined to 112 percent of GDP from a five-decade high of 125 percent of GDP in 2020. Among EMDEs, declines in debt in the majority of EMDEs were offset by large increases in some large EMDEs. As a result, among EMDEs as a whole, government debt remained broadly steady at 64 percent of GDP in 2022.

Strong growth and high inflation have played key roles in reducing debt-to-GDP ratios since 2020. Rapid growth and high inflation improve nominal incomes that are subject to taxation. For a given nominal government debt stock, the government of a faster-growing and higher-inflation economy is therefore in a better position to raise the revenues needed to honor obligations: It has a larger “debt-carrying capacity.” This is captured in a falling government debt-to-GDP ratio when growth and inflation are high.

A simple accounting decomposition illustrates this impact of growth and inflation on debt. In this decomposition, two counterfactual debt-to-GDP ratios are calculated for each country: One assuming its average nominal GDP growth over 2010-19 and a second one assuming average 2010-19 real GDP growth. These counterfactuals are compared with the actual path of the debt-to-GDP ratio. The difference between the actual debt-to-GDP ratio and the second counterfactual ratio (with average 2010-19 real GDP growth) is attributed to above-average growth; the difference between the two counterfactual ratios to inflation.

This exercise suggests that, in 2021, above-average growth shaved at least 3 percentage points of GDP off advanced-economy debt (Figure 1A). In EMDEs other than China, Russia, and Ukraine, it shaved at least 1 percentage point of GDP off debt (Figure 1B). In that year, when inflation was just beginning to accelerate, above-average inflation reduced debt-to-GDP ratios by just over 1 percentage point in advanced economies and around 1 percentage point in EMDEs.

Figure 1. Contributions to government debt reduction A. Advanced economies B. EMDEs excluding China, Russia, and Ukraine

Source: Kose, Kurlat, Ohnsorge, and Sugawara (2022).
Note: The contribution of growth is defined as the difference between the change in the government debt-to-GDP ratio assuming real GDP growth had been its country-specific 2010-19 average and the actual change in the government debt-to-GDP ratio. The contribution of inflation is defined as the difference between the change in the government debt-to-GDP ratio assuming nominal GDP growth had grown at its country-specific 2010-19 average and the change in the government debt-to-GDP ratio assuming real GDP growth has been its country-specific 2010-19 average. “Other” includes factors such as fiscal consolidation and valuation changes. U.S. GDP dollar-weighted averages.

In 2022, however, as inflation soared and growth stalled, above-average inflation shaved at least 4 percentage points off government debt in advanced economies and over 1 percentage point in EMDEs. In contrast, the impact of above-average growth was negligible in advanced economies as well as EMDEs.

Over the two-year period from 2020 to 2022, inflation therefore reduced the debt-to-GDP ratio for advanced economies by almost 6 percentage points of GDP, while economic growth had about half the impact. For EMDEs excluding China, Russia, and Ukraine, above-average inflation and growth lowered debt-to-GDP ratios by more than 4 percentage points—almost 3 percentage points of GDP due to inflation and more than 1 percentage point of GDP due to growth.

This exercise assumes that the nominal stock of government debt is unchanged across scenarios. In practice, however, higher growth and inflation also helped raise revenues and narrow fiscal deficits, thus reducing the need for government borrowing. Hence, the estimates cited here can be considered lower bounds.

Don’t celebrate yet

While growth and inflation helped improve debt-to-GDP ratios over the past two years, significant debt-related challenges remain.

Figure 2. Rise in government debt and debt distress A. Countries with a higher debt-to-GDP ratio in 2022 than in 2019 B. EMDEs in high debt distress or near high debt distress

Sources: Kose, Kurlat, Ohnsorge, and Sugawara (2022).
Note: A. Yellow line indicates 50 percent. B. Debt distress is defined as a score of less than 6 in the average long-term foreign sovereign debt rating.

  • Still elevated debt. Government debt remains higher than its 2019 level in about three-quarters of countries following the unprecedented fiscal stimulus during the COVID-19 pandemic (Figure 2A). In 2023, slowing growth and tightening financial conditions raise the risk of debt distress in EMDEs as servicing debt is becoming more costly. In fact, rating agencies already rated 23 EMDEs at being in or near debt distress at some point in 2022, the largest number of countries in more than two decades (Figure 2B). Among the poorest countries in the world, more than half of low-income developing economies are already in, or at high risk of, debt distress.
  • Still risky debt. The composition of government debt has not materially improved since 2020. In the average EMDE, foreign currency-denominated debt still accounted for nearly 50 percent of government debt in 2022 (Figure 3A); nonresident-held debt accounted for about 45 percent of government debt (Figure 3B). This exposes EMDEs to the risk of rising debt servicing cost because of currency depreciation or loss of international investor confidence.
Figure 3. Composition of EMDE government debt A. Share of foreign currency-denominated debt B. Share of nonresident-held debt

Source: Kose, Kurlat, Ohnsorge, and Sugawara (2022).
Note: Blue bars denote unweighted averages, and yellow whiskers interquartile ranges. A. Data for 31 EMDEs. B. Data for 43 EMDEs.

  • Weaker growth in horizon. Consensus forecasts anticipate a plunge in global growth to 1.6 percent in 2023 from 2.9 percent in 2022. Longer-term trends also point to weaker growth in the 2020s than in the 2010s. Clearly, governments will not be able to rely on growth alone to lower debt levels.
  • Higher borrowing costs. Headline inflation is anticipated to fall as a result of declining energy prices and slowing growth. However, even if headline inflation declines, major central banks will likely keep interest rates high until they see a sustained decline in core inflation. This may present challenges in rolling over or servicing debt in countries with high debt. Were inflation to remain high instead, depreciation pressures and a flight to safety would likely put upward pressure on government debt in some EMDEs.
Reducing debt: What needs to be done

There is no magic bullet to reduce debt levels quickly, but domestic policymakers and the international community can take several supportive measures.

  • Policy reforms to deliver strong and sustained growth. Supply-side reforms that lift growth in a lasting manner without causing inflation pressures can help sustainably lower debt. These include reforms to business climates and governance that foster private investment without incurring large fiscal cost,  better spending efficiency, and domestic revenue mobilization to boost growth dividends from public spending.
  • Policies to maintain low and stable inflation. Inflation cannot be a lasting solution to deal with high debt because economic agents adjust their behavior once high inflation seeps into inflation expectations. Once they reckon that high inflation is here to stay, they adjust their interest rate expectations, wage demands, and pricing strategies accordingly. Even if actual inflation eases, higher inflation expectations would make rolling over short-term debt or additional borrowing to fund fiscal deficits costly. Weaker growth and persistently high inflation rates could put debt-to-GDP ratios on a rising trajectory.
  • Debt relief in some cases. The international community also needs to bolster efforts to reduce debt distress and attenuate the risk of debt crises in lower-income developing economies. Debt restructuring at an early stage can help avoid the long and costly adjustment process that sometimes accompanies more incremental efforts and can result in more favorable outcomes for both borrowers and lenders.
Kategorien: english

The Comprehensive Learning Diagnosis: Chile’s approach to assess socio-emotional learning in schools

21. Februar 2023 - 22:19

By José Weinstein, Juan Bravo

Education in Chile has important challenges of quality, equity, and social integration.1 For decades, policies tried to respond to these concerns with a high-stakes accountability institutional framework, which has not had success. The underlying vision of educational quality was limited. The assessment system in place privileged cognitive and academic dimensions of educational results. Socio-emotional learning had been neglected or considered secondary, without an infrastructure of assessment tools that allowed teachers and principals to diagnosis students’ situations and monitor their progress. The COVID-19 crisis was an opportunity for change: Students’ socioemotional needs were a main concern for schools and society, and the regular accountability system based on standardized tests was interrupted. Subsequently, the Comprehensive Learning Diagnosis (DIA) was launched by the Education Quality Agency.

The DIA is a voluntary assessment tool made available to all Chilean schools. The DIA promotes the comprehensive development of students, providing timely information and guidance to internally monitor students’ learning in the academic and socio-emotional domains at several points during the school year. Specifically, with respect to socio-emotional learning, three areas were considered: personal, community, and citizenship. In each of these areas, a set of socioemotional skills were defined, operationalized, and became possible to monitor by school communities. The DIA also collects students’ opinions of school management practices regarding socio-emotional skills.

The DIA has received a wide acceptance in school communities. Despite being voluntary, an ample majority of schools decided to participate. The information collected from the DIA allows for practical use by principals and teachers. Moreover, the DIA provides the opportunity for students to inform school management. The new Chilean government has decided to strengthen DIA as an important component in a four-year national plan for reactivating academic and socio-emotional learning in schools. The previous high-stakes accountability system, which involved external assessments, has been suspended and is under discussion.

The DIA experience has shown that critical social and educational situations can provide fertile ground to motivate deep and rapid transformation, if an educational actor (in this case the Education Quality Agency) is capable of enacting a pertinent, timely, and practical response to school needs. The DIA is not only an example of productive uses of students´ assessment by schools, but also a demonstration that it is possible to build an institutional arrangement among local, intermediate, and national levels of school systems, where a vertical hierarchy is changed by a collaborative relationship based on local agency, mutual trust, and differentiated technical contributions.

The summary report “Transforming education for holistic student development: Learning from education system re(building) around the world” lays out 10 key lessons for transforming education systems, which are all exemplified in this case study. In particular, this case study highlights the need to:


1. Monitor practice and performance: Conduct consistent, ongoing monitoring of practice and performance for continuous improvement and professional learning.


2. Balance common conventions with local discretion: Balance common systemwide conventions with the need for local discretion to promote and encourage reform.


3. Build social infrastructure: build a social infrastructure that engages stakeholders about holistic student development and the entailments for instruction.

Download the full case study».

Kategorien: english

Urban economic development in Africa: A case study of Nairobi city

17. Februar 2023 - 6:01

By Jacob Nato, Humphrey Njogu, Rose Ngugi, Aloysius Uche Ordu, Ede Ijjasz-Vasquez

At about 4.4 percent, Africa has the fastest urbanization rate globally. Already, the region has reached 40 percent urbanization and by 2050, the number of urban residents will have doubled. Moreover, about 60 percent of Africa’s urban population today lives in informal low-income neighborhoods.

In most countries, urbanization leads to substantial productivity gains supported by scale, density, and agglomeration. Better connected people and firms lead to savings in transport and logistics, technological and information spillovers, and more efficient labor markets. However, Africa’s urbanization has not realized the full potential and benefits of such agglomeration. The economic transformation and benefits of urbanization, observed in other regions, are yet to be achieved in sub-Saharan Africa.

To understand the barriers, and unlock the economic opportunities of urbanization, the Africa Growth Initiative (AGI) at the Brookings Institution developed an “Urban Economic Growth Framework for African cities.” The framework focuses on the three primary constraints limiting a city’s ability to benefit from agglomeration and generate productive jobs: Accessibility, the business environment, and public sector governance. The framework provides specific indicators and ways to identify these three critical constraints, with a view to inform and guide policymakers on specific actions and appropriate policies.

As a start, the AGI framework was applied to the city of Nairobi (Kenya’s capital), to analyze Nairobi’s key challenges and possible solutions for growth and employment.

Unemployment and underemployment in Nairobi are a top concern, especially as youth makeup 48 percent of the total unemployed workforce (15 to 64 years). While the labor force in Kenya has been growing at an average annual rate of about 3 percent, Nairobi needs to generate many more (and better) jobs to offer improved livelihood opportunities to its large youth demographic. At the national level, Kenya has registered good progress in creating jobs, especially in the digital and gig economy. The report recommends two areas of focus. First, in coordination with the national government, Nairobi City County needs to support the gradual formalization of the large number of informal jobs and enterprises by easing business registration and motivating registration through targeted support programs. Second, better education and skills in targeted economic sectors are required to enhance productivity and earnings. Nairobi city should ensure that tertiary institutions provide training and skills consistent with emerging technologies.

[Nairobi] city has enormous potential to achieve the benefits of urban agglomeration and create productive jobs by paying particular attention to its challenges in accessibility and infrastructure, business environment, as well as public sector governance and finance.

Furthermore, enterprise data in Nairobi shows that businesses are likely to transition from micro- to medium-, and to large enterprises as the owners’ levels of education attainment rises.

Accessibility within the city: Accessibility is vital for connecting workers to firms and firms to markets. Despite the excellent progress made on infrastructure development, there is a high concentration of unpaved roads in Nairobi’s high-density informal settlements.

Consequently, as shown in the report, most jobs are not accessible within one hour of public transport commute i.e., commuting time by bus, matatu (shared taxi), or foot. The city also has a mismatch in zoning and land use. Nairobi therefore needs a new approach to urban planning that considers population growth, infrastructure, housing, and land use. Equally important is updating the land appraisal system and creating more public spaces.

Business environment: Many businesses in the city face several challenges, including complex processes to access licenses and permits, insufficient finance, expensive land, rigid labor regulations, inefficiency in tax administration, and crime risk. For example, a business takes about 92 days to secure an electricity connection. A firm loses about KSh 2.3 million per year due to power outages on average. These are critical areas for Nairobi to enhance its business environment. Furthermore, it is essential to coordinate the implementation of business policy reforms between the national and county governments.

Public sector governance and finances: The devolution process in Kenya has given Nairobi City County a total of 14 constitutional functions. The city faces important challenges in terms of financing, despite the commendable increase in revenues and fiscal transfers from KSh 9.51 billion in FY 2013/14 to KSh 19.42 billion in FY 2020/21. Still, the city faces several financing shortfalls, from high levels of pending bills and fiscal deficits, to delays in receipt of equitable fiscal transfers. These challenges call for proper budget planning, improved budget execution, and higher levels of the city’s source revenue.

The application of the AGI Urban Economic Growth Framework to Nairobi City County shows that the city has enormous potential to achieve the benefits of urban agglomeration and create productive jobs by paying particular attention to its challenges in accessibility and infrastructure, business environment, as well as public sector governance and finance.

Kategorien: english

Urban economic growth in Africa: A case study of Nairobi City County, Kenya

16. Februar 2023 - 18:58

By James Gachanja, John Karanja, Jacob Nato, Rose Ngugi, Humphrey Njogu, Brian Nyaware, Charity Mbaka, Shadrack Mwatu, Melap Sitati

For most countries, urbanization has resulted in substantial productivity gains created by the agglomeration economies that cities generate. However, while Africa has the highest rate of urbanization in the world, the region’s cities are not realizing the full potential and benefits of agglomeration. Sub-Saharan Africa is failing to reap the economic benefits of urbanization observed in other regions.

To unlock the potential for Africa’s cities to act as an engine of productivity growth and structural change, the Africa Growth Initiative at Brookings formulated a framework to help identify key constraints to productive urbanization.

In this report, the framework is applied to the city of Nairobi in Kenya. The study focuses on four major objectives: generating productive jobs, linking workers to firms, connecting firms to markets, strengthening public governance, and a review of policy initiatives for Nairobi to enhance the city’s economic growth.

Key findings suggest that jobs are not accessible within one hour of public transport commute and that Nairobi city county also has a mismatch in zoning and land use. In addition, urban firms face complex compliance processes and regulations. Moreover, the city’s administration faces financing shortfalls resulting from delays in the receipt of fiscal transfers and low levels of source revenue.

The report concludes with a summary of recommendations to enhance the productivity as well economic growth of Nairobi City County with the overarching goal of creating jobs.

Download the full report here.

Kategorien: english

Ensuring inclusive, affordable, and smooth climate transition in Indonesia

16. Februar 2023 - 14:30

By M. Chatib Basri, Teuku Riefky

How should a climate-vulnerable coastal country heavily dependent on coal transition to a sustainable development path? In this working paper, Basri and Riefky discuss the climate transition in Indonesia. Basri and Riefky first assess Indonesia’s economic and environmental situation, noting that Indonesia is one of the countries most affected by climate change, facing issues ranging from disrupted life in its myriad coastal communities to food insecurity. Then, they discuss the measures taken by Indonesia to transition to a green economy, including the design of NDC and financing efforts. Based on this, the authors discuss how Indonesia has transitioned in terms of political economy, fiscal transition, and coal phase-out. Finally, the authors outline an ambitious blueprint for Indonesia’s climate transition, which includes the joint efforts of the government, civil society, and the international community. 

Q & A with the authors What is one main message from your chapter?   

The success of achieving inclusive, affordable, and smooth climate transition in Indonesia will be determined by its ability to come up with policies that are financially, politically, and institutionally practical. 

What presents the biggest opportunity?   

Framing climate policies as part of long-term development agenda that are aligned with the government’s priorities and political interest will gain necessary support to push forward the transition agenda. 

What serves as the biggest challenge?   

Indonesia’s high dependency on coal and fossil fuel transpire into high transition cost, stemming from large, vested interest of the private sectors and high political cost from the government. 

What gives you the most hope? 

The increasing role of civil society in advocating climate issues will help raise awareness and build a public consensus, which exerts more pressure on the policymakers and tilts the balance of political incentives in favor of more aggressive climate actions. 

Download the full working paper here.

Kategorien: english

Delivering Nigeria’s green transition

16. Februar 2023 - 14:30

By Belinda Archibong, Philip Osafo-Kwaako

How should countries with many people living in absolute poverty combat climate change and energy transition while addressing poverty, creating jobs, and making progress on other sustainable development goals? This working paper focuses on Nigeria, highlighting the challenges and opportunities of implementing its green transition objectives. Archibong and Osafo-Kwaako discuss the interrelated challenges for Nigeria: high climate vulnerability, low human development indicators, low energy access, and high energy cost. Then, the authors review the Nigerian government’s policies and barriers to support the green transition and discuss institutional arrangements and other priorities that could help implement climate-related activities in Nigeria. The central argument is that while climate change poses a risk to Nigeria’s development prospects, it also provides opportunities for Nigeria to rethink the design and implementation of its national development programs. A coherent development plan focusing on the climate investment opportunity could enable Nigeria to improve its development indicators while pursuing its international climate commitments. 

Q & A with the authors What is one main message from your chapter?  

Despite Nigeria’s heavy reliance on the oil and gas sector, a green, just transition is not only possible, it is necessary to achieve poverty reduction, expand employment opportunities and boost economic growth for the millions of households in the country. There are various effective policies to boost domestic and international financing and invest in climate mitigation and adaptation measures that can deliver a growth-enhancing green transition.   

What presents the biggest opportunity? 

A green, just transition is possible and can help improve energy access, cut firm production and reduce poverty and inequality through improving the health and labor market outcomes of Nigeria’s population. Policies and investments focused on mitigation, through both emission fees and more efficient commercialization of the gas sector domestically, and mobilizing international financing internationally, and adaptation, through investment in increasingly lower cost renewable energy and climate-smart architecture, can produce huge economic returns by 2030, if promptly and properly implemented. 

What serves as the biggest challenge?  

The Nigerian economy’s heavy dependence on the oil and gas sector for government revenue makes both funding and facilitating a green transition a major challenge. Poverty (both income poverty and energy poverty in the case of the country’s lagging electricity access) and regional inequality make the majority of households extremely vulnerable to climate shocks. Green transition policies must jointly tackle poverty reduction and climate mitigation measures/a shift away from fossil fuels with policies that provide the most gains to the most vulnerable regions and populations in the country, so as not to worsen economic inequality.  

What gives you the most hope?

Nigeria has a history of successful implementation of large-scale policies and projects that reduced poverty and inequality for millions of its residents. Policies like the country’s 1976 Universal Primary Education reform which significantly improved access to primary education for millions of people, show that the country has the potential to enact large-scale, sweeping, effective, welfare-enhancing reforms. Recent government commitments through the 2021 Climate Change act provides an institutional framework for large scale reforms to facilitate a just transition that would similarly transform the lives of millions of the country’s population, given prompt and proper implementation. 

Download the full working paper here.

Kategorien: english

Keys to climate action: How developing countries could drive global success and local prosperity

16. Februar 2023 - 14:30

By Amar Bhattacharya, Homi Kharas, John McArthur

A new narrative needs to capture the interwoven nature of the world’s climate and economic development challenges, anchored in the evolving and diverse perspectives of developing countries themselves.  

An updated portrayal begins with the stark reality of climate change’s devastating consequences already hindering economic development around the world. It underscores the need for urgent investments in adaptation, resilience, and nature to avoid development setbacks while paying heed to the world’s narrow window for climate action. It requires empathy for many developing countries’ profound energy conundrum: a tension between the need to expand access for people who need it most while facing pressures to pursue low-carbon opportunities, often in the face of local political and financing headwinds. It implies practical urgency in tackling the broken threads of the international financing system for climate and development.  

To set a more robust global path to net-zero emissions by 2050, the world needs to pay greater attention to the needs of emerging markets and developing economies (EMDEs), even when holding aside the special case of China. Over the coming several decades, no part of the world will play a greater role in both experiencing and affecting global climate change outcomes than EMDEs themselves.  They need greater international support to tackle growth-enhancing sustainable development strategies.  

With their growing leverage, developing countries have new opportunities to lean forward with a unified “ask” in global climate and development negotiations. The broader prize and aspiration amount to a full-fledged re-conception of models for sustainable development and of international cooperation. Falling short by losing sight of the big picture or wrangling excessively over details will dim the prospects for prosperity around the world. Rising to the occasion, however, can help usher in a new era of prosperity for all. 

This edited volume brings together a cross section of distinguished academics and leading policy voices from a variety of developing country geographies and contexts. First, it presents perspectives on the local climate and development challenges and opportunities in Bangladesh, Egypt, India, Indonesia, Nigeria, and South Africa. Then, broader case studies focus on issues spanning East Africa, the African continent as a whole, Latin America and the Caribbean, and the Vulnerable Twenty (V20) Group of Ministers of Finance of the Climate Vulnerable Forum. The volume concludes with a chapter focused on systemic issues in financing development and climate-driven prosperity.  

Chapters and Contributors  

1. Overview: Keys to Climate Action— Download here, or access the key messages here.

Amar Bhattacharya, Homi Kharas, and John W McArthur

2. A just and green transition in Bangladesh

Saleemul Huq and Mizan Khan

3. Climate action in Egypt: Challenges and opportunities

Hala Abou-Ali, Amira Elayouty, and Mahmoud Mohieldin    

4. Managing climate change: A strategy for India

Montek Singh Ahluwalia and Utkarsh Patel  

5. Ensuring inclusive, affordable, and smooth climate transition in Indonesia 

Muhamad Chatib Basri and Teuku Riefky  

6. Delivering Nigeria’s green transition

Belinda Archibong and Philip Osafo-Kwaako  

7. South Africa’s ‘just transition’: A whole economy transformation 

Richard Calland  

8. Challenges and opportunities of climate change: The case of East Africa

Njuguna Ndung’u and Théophile Azomahou  

9. Delivering Africa’s great green transformation

Vera Songwe and Jean-Paul Adam  

10. Tackling climate change from an investment-led development perspective in Latin America and the Caribbean

Daniel Titleman, Michael Hanni, Noel Pérez Benítez, and Jean-Baptiste Carpentier  

11. Climate action in the most vulnerable countries

Sara Jane Ahmed  

12. Financing climate change mitigation and adaptation in developing countries

Montek Singh Ahluwalia and Utkarsh Patel  

Kategorien: english

Climate action in the most vulnerable countries

16. Februar 2023 - 14:30

By Sara Jane Ahmed

In this working paper, Ahmed focuses on the V20, a group of finance ministers representing 58 climate-vulnerable countries, home to 1.4 billion people. She documents the massive wealth destruction from climate losses incurred over the last two decades—around $525 billion or 20 percent of total potential. Ahmed highlights a key initiative of the V20 – Climate Prosperity Plans (CPPs) designed to integrate measures that counteract climate risks and leverage transition opportunities. CPPs catalyze and accelerate the realization of green transition outcomes as a co-benefit of what is ultimately a more effective development strategy compared to business as usual, including narrow, one-size-fits-all climate strategies. The V20 case highlights major gaps in the international financial architecture: from making debt work for the most vulnerable to overcoming capital hurdles to investment to facilitating global exchanges via carbon finance, fully integrating climate risks, climate action prioritization of development finance institutions (DFIs), and establishing pre-arranged and trigger-based funding responsive to loss and damage settings. Special mechanisms are likewise urgently needed to maximize renewable energy wealth and resilience while reducing new sources of financial vulnerability from volatility and increasing fossil fuel-induced severity of climate change-fueled events that result in the mounting cost of capital and spiraling debt levels in many V20 countries. Ahmed explains in the working paper why many renewable energy, adaptation, and resilience initiatives only become bankable when the cost of capital is reasonable. Mechanisms to bring down this cost are thus vital to securing durable pathways to climate prosperity. 

Q & A with the author What is one main message from your chapter?  

To achieve truly enduring and transformational outcomes, the Paris Agreement must go far beyond COP negotiations and bring about rapid changes in the real economy. This is why it is critical to advance and realize vulnerable country initiatives such as Climate Prosperity Plans with multilateral reforms over the next two to three years. 

What presents the biggest opportunity?

Accelerate reform of the international financial architecture in 2023 in order to course correct and finally deliver durable gains for economies that face extreme vulnerability as well as to shift financial flows toward the 1.5°C safety limit of Paris. 

What serves as the biggest challenge?  

The question bears repeating – can fiscal space be assessed properly without including physical risk, transition risk and spillover transition risks? Fossil fuels are sources of financial liability and the way they continue to generate new dimensions of financial vulnerability.   

What gives you the most hope?

While vulnerable countries are still often left out of global strategies to avert climate breakdown, more and more are now grasping the tremendous global impact potential of new vulnerable country-driven partnerships and economic cooperation where inclusive, sustainable development goals drive positive climate action between advanced economies and the most climate vulnerable. 

Download the full working paper here.

Kategorien: english

Managing climate change: A strategy for India

16. Februar 2023 - 14:30

By Montek Singh Ahluwalia, Utkarsh Patel

In this working paper, Ahluwalia and Patel describe how India could make progress towards meeting its climate change mitigation commitments which involve achieving net zero emissions by 2070. This will require action on several fronts, notably: transforming the electricity sector to rely increasingly on renewable energy (RE), electrification of transport, decarbonization of hard-to-abate industrial sectors like steel and fertilizer using green hydrogen, etc. All this must be accompanied by improvements in energy efficiency which in turn depend upon rational energy pricing and suitable regulation. The shift to RE will present problems of intermittent supply which has to be balanced through grid-scale batteries or pumped-hydro storage. The working paper shows that the government is aware that action will be needed in several areas and some movement in these directions has already begun. However, the pace of progress has to be greatly accelerated. The multiplicity of interventions needed require coordination not only across ministries but also across different levels of government. The transformation will also involve significant additional investment, and this will call for substantial international financial support. Ahluwalia and Patel emphasize that although there has to be a large role for international finance, much of the additional investment would need to come from domestic sources, both public and private. Private investment in the power sector in particular calls for urgent reforms of the distribution sector which is currently financially unviable because of unsustainably low tariffs and persistent nonpayment of electricity dues. The overall picture presented by the authors is that the transition is feasible, but it calls for determined action in many areas, some of which are politically sensitive. As a practical matter, the long term decarbonization strategy needs to be decomposed into a strategy for the next ten years, with granular detail on what needs to be done in each sector over the ten-year period. 

Q & A with the authors What is one main message from your chapter?  

A successful decarbonization of the economy on the scale required to meet COP26 commitments is technically feasible, but also very difficult. A practical way of proceeding is to decompose the long-term transition pathway to net zero into short-term phases of around ten years and define sector-specific targets for decarbonization in this period. 

What presents the biggest opportunity?

Much of the investments needed for managing climate change align with sustainable development goals, and therefore, developing countries can tackle both issues simultaneously by prioritizing climate action along with economic development. 

What serves as the biggest challenge?

Transitioning to greener sources of energy, which tends to be intermittent and requires balancing at an additional cost, while ensuring energy access to low-income households. Ideally, the transition should be facilitated by action on the price front which means introducing some form of carbon taxation and using the revenues to expand RE capacity and to support affected households with cash transfers. 

What gives you the most hope?

India is a fast-growing large economy, and the Indian government has made bold commitments to transition to RE and reduce emissions. This has already helped accelerate private sector involvement in the green sectors of the economy, driving technology adoption and advancements. There is also growing public awareness and civil society participation in the areas of environment, ecology, and climate to promote sustainability.

Download the full working paper here.

Kategorien: english

Climate action in Egypt: Challenges and opportunities

16. Februar 2023 - 14:30

By Hala Abou-Ali, Amira El-Ayouti, Mahmoud Mohieldin

Although Egypt accounts for only 0.6 percent of annual global carbon dioxide (CO2) emissions, it is becoming one of the most heavily affected by extreme weather patterns. In this working paper, Abou-Ali, Elayouty, and Mohieldin examine how well Egypt sets out a pathway for climate action. With the urgent need to translate climate ambitions into action and results, Egypt needs to harness the long-standing experience in the climate-related policy of other countries, including those in the OECD, to seize the opportunities available in the global wave of achieving climate goals. The most salient obstacles to Egypt’s transition can be categorized into three main pillars. The first relates to data systems availability to track and measure progress toward climate goals. The second concerns the implementation capacity for efforts relating to emissions mitigation, adaptation and resilience, and multilateral and multi-disciplinary collaboration. The third impediment is financing, investments, and business action mobilization. Finally, the working paper presents opportunities for progress in critical sectors such as agriculture, power, and transport. Egypt has a unique opportunity to transition to a more sustainable, inclusive, and resilient economy by undertaking urgent action and laying the basics for financial, economic, and social recovery. 

What is one main message from your chapter?  

Egypt needs to adopt a holistic approach that urgently tackles adaptation needs, fast-tracks mitigation investments, and supports more Egyptians pivot from struggling to succeeding. 

What presents the biggest opportunity?

Egypt has a great opportunity to play a key leadership role in promoting development and reinforcing cooperation regarding liquified natural gas and renewable energy-produced green hydrogen supplies between Africa and Europe. 

What serves as the biggest challenge?  

Egypt is highly vulnerable to heatwaves, sea level rise, increased soil salination, rainfall retention, and desertification. Leading to potentially devastating impacts on the country’s economy, food security as well as people’s health and wellbeing. Hence, it has become critical to identify and evaluate strategies for adaptation. 

What gives you the most hope?

Egypt possesses an abundance of land, sunny weather, and high wind speeds, making it a prime location for renewable energy projects. The government can easily harness climate technology innovation through fixing some economic incentives such as offering adoption subsidies and revisiting some of the environmental regulations. 

Download the full working paper here.

Kategorien: english

Financing climate change mitigation and adaptation in developing countries

16. Februar 2023 - 14:30

By Montek Singh Ahluwalia, Utkarsh Patel

One of the most critical pushes to address the climate crisis is getting public and private finance flowing to climate action, especially in emerging markets and developing economies. This working paper attempts to quantify the scale and possible composition of the international financial assistance required to help developing countries fulfill their climate change mitigation and adaption targets and suggests how this might be agreed upon in international negotiations. First, Ahluwalia and Patel provide a brief historical review of how the commitment to provide financial assistance has evolved since the start of the negotiations in the UNFCCC in 1992. Second, they review estimates emerging from different studies of the additional investment that developing countries will have to make to meet the challenge of containing global warming to 1.5°C above preindustrial levels. Third, they recognize that although international financing has a big role to play, it is unrealistic to think that all the additional investment needed must come from international sources. They argue that developing countries should realize that at least half the additional investment will have to come from domestic sources, with the rest coming from international sources both official and private. In this context, they reason that multilateral development banks (MDBs) have a critical role in leveraging private finance to raise the amount of financial flows to the required level. Finally, the authors provide recommendations for developing countries to organize themselves for more realistic financial commitments, and, through the G20 forum, push for an agreement with the G7 on increasing the capital base of the MDBs to enable the banks to lend at the scale needed. 

Q & A with the authors What is one main message from your chapter?  

It is unrealistic for developing countries to expect that all the investment needed for climate change mitigation and adaption would come as international assistance. Nearly half of it would need to be financed through additional domestic effort, while a large part of the remaining amount could come as concessional or non-concessional loans from the MDBs, and as private sector investments. 

What presents the biggest opportunity?

Unabated climate change is bound to cost the global economy trillions of dollars in forgone income due to loss of productivity and collapse of ecosystems. It is in the best interest of everyone to invest in climate change mitigation and adaption, where every unit of investment will yield multiple of that in benefits.

What serves as the biggest challenge?  

The erosion of trust in multilateral institutions and lack of political support among the major developed countries which control these institutions for expanding MDB lending to the scale needed. 

What gives you the most hope?

Private corporations are increasingly focusing on decarbonization and climate change mitigation. Some of the biggest corporations have committed to reducing emissions from their global operations to net zero. Many large financial institutions with trillions in private capital have come together to commit to climate change-related investments in the form of alliances such as the GFANZ. However, we do not yet have a credible international mechanism to mobilize funds on the scale needed. 

Download the full working paper here.

Kategorien: english

A just and green transition in Bangladesh

16. Februar 2023 - 14:30

By Mizan Khan, Saleemul Huq

In this working paper, Khan and Huq describe Bangladesh as the ground zero of climate vulnerability, due to its dense population and exposure to floods, cyclones, sea level rise, and salinity incursions. However, Bangladeshi politicians remain committed to economic growth, with environmental sustainability as the second priority. Some segments of the business are, nevertheless, starting to commit to change. The key technical issues currently debated under Bangladesh’s “just transition” are around energy access, social equity, and building resilience—areas where international support has been less forthcoming compared to mitigation. With a low domestic tax regime, Bangladesh has limited economic capacity to significantly expand social programs, and its imminent graduation out of Least Developed Country status will further limit its access to concessional international assistance. Khan and Huq suggest using Bangladesh’s strong civil society organizations to play a more significant role, especially in encouraging green processes in private companies in the country’s critical garment sectors through promotion of renewable energy. They offer up important suggestions for nature-based solutions and a unique proposal for encouraging climate-resilient migrant-friendly towns as an adaptive response.  

Q & A with the authors What is one main message from your chapter?

Given the successful track record in economic growth in Bangladesh for the last decades, it is time that together with its upcoming graduation into middle-income country, Bangladesh will put a dedicated focus on ensuring environmental sustainability. 

What presents the biggest opportunity?

The solid record of innovative social engineering and women’s empowerment which contributed to rapid reduction of poverty level. 

What serves as the biggest challenge?

The biggest challenge lies in converting Bangladesh’s huge youth labor force into a great force for just and green transition.  

What gives you the most hope?

Resource constraints will push as a necessity for more innovative economic, social and environmental transformation. 

Download the full working paper here.

Kategorien: english

Resilience must drive USAID’s programs—Illustrations from Afghanistan

14. Februar 2023 - 17:15

By George Ingram, Naheed Sarabi

The U.S. Agency for International Development (USAID) has under review a draft revision of its 2012 resilience policy for fragile and conflict environments. As reported in the OECD’s “States of Fragility 2022,” fragility has been rising in recent years and is present across a diversity of country contexts. Of the 60 countries identified as fragile, 23 are low-income, and 33 are middle-income. Approximately half of the more than 100 countries in which USAID operates are on the list, highlighting that resilience should be at the core of the agency’s operating procedures.

Principles of resilience

The draft policy sets out seven principles for resilience:

Use evidence and analysis Employ cross-sectoral approaches Operationalize humanitarian-development-peace Strengthen systems for resilience Practice adaptive management Enable local agency and ownership Ensure equity and inclusion  

These seven principles represent not just good practice for building resilience, but good practice for development. It is noteworthy that one of those principles puts USAID in sync with the OECD’s 2022 report on fragility, the theme of which is bringing coherence to the humanitarian-development-peace complex.

There are a handful of topics that deserve further elaboration in the draft, but one rises to the level of being an eighth principle—donor coordination and collaboration.

Donor Coordination: The draft includes references to coordination, but principally to coordination among U.S. government agencies and with local partners. This coordination is important, but equally critical is coherence among donor policies and programs. The United States cannot advance development globally or in a country acting alone. The alternative—coordination among donors—needs to be at the center of donor efforts. Without question, donor coordination is easier to commit to than to execute, as each donor has its own priorities and complexity of operating procedures and requirements. But there are mechanisms for overcoming those difficulties: construct donor programs around a recipient country’s development strategy (as happens with education through the Global Partnership); collaborate around a country-led platform, as recommended in the seminal USIP report “Preventing Extremism in Fragile States“; put funding in another donor program that is working well (as UK Aid is doing with the USAID-funded TAPAS e-procurement program in Ukraine).

As the largest contributor of ODA, the U.S. can lead by example in donor coordination on account of the impact it can have by the way it operates. For example, over a 20-year period in Afghanistan, the U.S. contributed to multi-donor trust funds like the Afghanistan Reconstruction Trust Fund (ARTF). The ARTF, administered by the World Bank, implemented the largest national programs on health, education, and community development. ARTF’s role was crucial in providing budget support to the government and instrumental in building systems, one of the principles of resilience policy. The U.S. participation in the fund helped keep donor priorities in line with those of the ARTF. Such platforms are especially critical in fragile environments and during periods of political and economic shocks where domestic structures fail to coordinate donor efforts.

However, lessons learned from past experiences and the implementation of frameworks such as the “New Deal for Engagement in Fragile States” advocated by g7+ countries highlight the challenges of donor coordination. For Afghanistan (a member of g7+), aligning international development cooperation with government priorities, ownership, and achieving effective aid delivery was an ongoing concern. Despite international commitments to align ODA with government programs, according to a donor cooperation report by the Afghan government, the actual practice fell short, resulting in a financial gap in delivering government priorities. There was a lack of consensus as to what alignment with government priorities meant, leaving discretion to individual donors and sometimes the priorities of their constituencies. These challenges underscore the need for continued efforts to improve coordination and alignment between donors and recipient countries in order to achieve the goals of development cooperation and to move from statements to actual measurable practices.

Topics deserving further elaboration

Trust: The draft should provide greater attention to the triad of trust, politics, and social dynamics in a country. The lack of trust by the citizens of a country in the government and institutions is more often than not at the core of fragility. Fragility reflects a breakdown in the social contract between a people and the government, which, to be rebuilt, requires government leaders and agencies to listen and respond to the grievances and hopes of citizens. Too often donors design programs that are technically proficient but irrelevant or even counterproductive because they ignore the political and social contexts in a country.

Without a doubt, this was likely a core problem with much of the billions of assistance that donors poured into attempting to bring stability to Afghanistan. The Ministry of Finance data in 2018 showed that only 33 percent of total grants to Afghanistan were on-budget. This created a relationship gap between national and local authorities, and between government and citizens, in the delivery of services and so failed to strengthen trust by means of the social contract between people and government.

Risk: Donors must take greater risks and be more innovative. In fragile environments, donors are operating in an “unknown environment complicated by unexpected changes”—due to the difficulty in comprehending the underlying political and social foundations of a country and the frequently altering dynamics. Change is difficult and complicated in fragile environments and requires donors to take steps beyond the “true and tested” approaches or just work with new partners. The draft policy appropriately raises adaptability to the level of a key principle, as donor programs must tack with changing circumstances and move with agility away from efforts failing to produce results.

Sustained engagement: Building resilience and stability requires going beyond the typical donor timeframe of two-to-five years. It is a 20-25-50-year process requiring sustained, focused engagement. Progress is never linear and requires sustained donor support over the long haul. The predictability of external support is crucial for long-term development planning. Case in point: unpredictable resources limited Afghanistan’s ability to create multi-year programs and budgets. Donors would make four-year funding commitments, but yearly obligations often failed to fulfill those commitments and ignored Afghanistan’s budget cycle.

Managing partnerships: The draft policy does not address a key challenge in fragile environments—how to engage and how to manage relations with partners who may be unstable, have questionable commitment to reform, and in whom the donor does not have full confidence.

Private sector: Consistent with the World Bank’s “Strategy for Fragility, Conflict, and Violence 2020-2025,” which posits that “the private sector lies at the center of sustainable development model in fragile-conflict-violence settings,” the draft policy asserts that local and international business can play an important role in the transition to economic growth and stability. But the draft policy does not explain USAID’s specific role, and how it can help lay the groundwork for private sector investment. This requires work at the macroeconomic level and in building supportive systems, and at the transaction level. This is an arena in which collaboration is essential. USAID needs to join its resource and capabilities with those of other agencies, specifically the DFC, that are engaged in mobilizing development finance.

Small-to-scale: As articulated in the 2018 “Stabilization Assistance Review,” projects should start small, essentially in a test phase, and be scaled up only upon proof-of-concept. This approach applies in any development context (not just in fragile environments), requires ongoing feedback and adaptive management, and is best understood in the roadmap provided by Ann Mei Chang in “Lean Impact.”

Flexibility and innovation: Service delivery and locally-led development require innovative approaches in conflict environments. The Community Development Councils (CDCs) in Afghanistan are a successful example of how service delivery through locally-led platforms can build trust between people and government for 18 years. Studies show that CDCs have been more efficient in delivering emergency response, operating in areas under the Taliban control during the republic; as well as provision of basic infrastructure at a lower cost and up to international benchmarks. The CDCs were capacitated and coordinated by the government to ensure ownership and efficiency. While monitoring of education and health services has been successful, delivery of agriculture programs proved challenging.

From projects to programs: The U.S. and the Afghan government launched a unique effort to review the U.S. civilian assistance in Afghanistan. It was a major step in information sharing with the host country about the nature of off-budget assistance. A major finding from the government side was that a shift from projects (the U.S. was administering 155 projects) to programs was needed to achieve development goals and improve efficiency and coordination.


The need for greater resilience is present in all countries—those that are extremely poor, emerging countries, and even wealthy nations. But the need varies depending on contexts that are specific to each country. The policies laid out in the draft resilience update represent best practices and need only minor additions and elaboration. Whatever the details of the final policy, resilience should drive USAID’s programs in all countries and serve to inform the policies and programs of other U.S. government agencies and other donors.

Kategorien: english

The power of mistakes: 10 lessons to leverage learning in scaling

13. Februar 2023 - 22:45

By Brad Olsen, Muhannad Jarrah

“To err is to be human,” wrote Alexander Pope. “Success is not final, failure is not fatal: It is the courage to continue that counts,” Churchill proclaimed. An African proverb announces that “Only those who do nothing never make mistakes.”

We know that in many cases the meaning of these adages is true—not just in life but for scaling education innovations for sustainable impact. Yet, for organizational and cultural reasons, global development contexts disincentivize talking openly about our scaling mistakes while the work is still underway. Similar to other professions (like medicine, governance, and education leadership), we in the scaling field shy away from articulating to others the mistakes we make as individuals or teams.

We focus on “challenges” instead, because externally caused difficulties are safer to discuss. We employ the passive voice—”mistakes were made”—to separate ourselves from what went wrong. Our monitoring, evaluation, and learning systems (MEL) often promote the M and the E but demote the L. And when we share “lessons learned,” we typically detach them from the mistakes that gave rise to them in the first place.

Many contexts discourage the candid sharing of mistakes

We’re reluctant to admit our mistakes because we do not want to be perceived as incompetent—or because we don’t want to lose our job, funding, or legitimacy. We are disinclined to admit mistakes because society has imposed on us an imposter syndrome, nudges us toward fixed mindsets, and weighs many people down with stereotype threats.

That’s too bad, because this buries effective mechanisms for improvement: processes like trial and error, experimentation, and honest course correcting. When those proven learning techniques are relegated to the shadows, scaling suffers. As Adam Grant wrote, “The harder you make it to voice problems, the harder it becomes to solve them.”

Michael Fullan defines scaling as “learning by doing.” John List writes about the regular need to ask yourself if it is time to pivot or scale down your innovation, or if you’re not the right person to be scaling it. The literature on scaling repeatedly tells us these things and yet, when the consequences feel hazardous, it becomes irrational to do so.

We should do more to establish professional spaces where we can share and learn from our mistakes without losing face. On a personal level, sharing the scaling mistakes we make liberates us from the discomfiting straitjacket of perfectionism. From a learning standpoint, it allows us to analyze what went wrong and learn something new. On an organizational level, it underscores the fact that innovation is always about erecting progress out of the shards of our collective mistakes. And from a scaling standpoint, it makes visible what is sometimes hidden: Scaling is an imperfect science often best accomplished by trial and error.

We know that none of this is as simple as it sounds. Who can share their mistakes to whom in what context is linked to power, hierarchies, and the extent to which listeners are supportive. And accountability is a necessary but entangled part of any quality control system (yet could often be improved by way of critical interrogation and reasonable adjustment).

Morbidity and mortality conferences

The medical profession uses “morbidity and mortality conferences” as a protected space where peers meet to analyze cases that went wrong. By opening mistakes up for supportive scrutiny, rather than blame and punishment, medical professionals can identify patterns of error, learn from others’ mistakes, and modify their practices and judgment to reduce the likelihood of the mistakes occurring elsewhere or again.

Scaling could use such a space. In our ROSIE project, we recently hosted a virtual workshop to try out just such a space. We first presented cultural and psychological reasons why talking about our mistakes is disincentivized, and what supports and protections must be in place to create a trusting space in scaling work. We did this not only to create psychological safety for the workshop itself, but also to model such behavior so scaling teams can create similar trust in their own contexts.

In small groups we discussed the mistakes we’ve made in our scaling and research work and mistakes we’ve seen others make. What came out of the workshop was a stronger learning community, several collaboratively generated ideas for how to leverage mistakes for individual and collective learning, and a list of actual lessons learned.

Some scaling lessons learned from mistakes made
  1. During the initial scaling project proposal stage, conduct a rigorous analysis of the broader system in which you will scale.
  2. Don’t neglect introductory and foundational scaling conversations with team members and stakeholders. For example, collectively define “scalability” and “sustainability.”
  3. Identify your uninterrogated assumptions about practices, beliefs, and cultures of others and be sure to see things from your participants’ perspectives—not just through your own eyes. Many times, it’s the false assumptions about what lies outside your model that will complicate scaling.
  4. Overwork has consequences: When everyone is working to their limit, it’s hard to notice mistakes, learn from them, or be patient when others make them.
  5. You need personal backchannels with high-level decisionmakers alongside the formal communication pipelines.
  6. It’s better to go slow when concerned about electoral politics or government turnover to allow for a safer or more stable process of planning with government.
  7. Always have a Plan B.
  8. Talking about mistakes with donors depends on the donor. Some donors have unrealistic expectations; others are hungry for the conversation.
  9. If leaders (and funders) model this process by sharing their own mistakes, it becomes easier for the rest of us to follow suit.
  10. Put an agenda item on recurring team meetings that asks, “What mistakes have we noticed recently and how can we address and learn from them?”

If the broader education scaling community—including funders, universities, and development organizations—can establish productive, trusting spaces for sharing and learning from our scaling mistakes, then we can incentivize authentic and collaborative peer learning, improve the trial-and-error dimension of scaling, and offer compelling contributions to the knowledge base. Such a culture shift should encourage the kind of mindset shift that turns missteps into progress.

Note: This project is supported by the Global Partnership for Education Knowledge and Innovation Exchange (KIX), a joint partnership between the Global Partnership for Education (GPE) and the International Development Research Centre (IDRC). The views expressed herein do not necessarily represent those of GPE, IDRC or its Board of Governors. 

Brookings is committed to quality, independence, and impact in all of its work. Activities supported by its donors reflect this commitment and the analysis and recommendations are solely determined by the scholar.

Kategorien: english

A country in flux: Recent and future policy shifts in China

13. Februar 2023 - 17:35

Since the 20th Party Congress in October 2022, China’s politics have produced surprises, from its abrupt exit from zero-COVID lockdowns to an overhaul of property sector regulations and an easing of restrictions on the technology sector. There also have been debates about whether China is moderating its diplomatic tone, and if so, whether the shift is superficial or substantive.

On Friday, March 10, the John L. Thornton China Center at Brookings will host a panel discussion featuring China experts from varied backgrounds who will evaluate the recent policy shifts within China, their underlying causes, and potential implications for the future.

Viewers may submit questions by emailing, on Twitter @BrookingsFP using #ChinaPolitics.

Kategorien: english

STEM education in Africa: Risk and opportunity

10. Februar 2023 - 18:39

By Ruth Kagia

“It is within the possibility of science and technology to make even the Sahara bloom into a vast field with verdant vegetation for agricultural and industrial developments.”

Former President of Ghana Kwame Nkrumah’s statement above on the promise of science and technology is as pertinent today as it was in 1963. It is indeed breakthroughs in science and technology, driven by a workforce skilled in science, technology, engineering, and mathematics (STEM), that will enable Africa to overcome crippling development challenges including climate change, food insecurity, inequality, and poverty. And the one-fifth of the global population under the age of 25 who currently reside in sub-Saharan Africa will need STEM skills to drive economic transformation and competitiveness.

STEM education inculcates problem-solving, critical-thinking, communications, collaboration, and digital skills. Young people need these skills to build the resilience to navigate an uncertain future where technological advances will fundamentally alter industries and eliminate about one-half of the jobs today.

The STEM education landscape in Africa is characterized by risk and opportunity. While effectiveness is hampered by resource and capacity constraints, opportunity lies in centers of excellence and promising pathways of policy and practice.

The Science, Technology, and Innovation Strategy for Africa (STISA) provides the regional STEM policy framework. Centres of excellence such as the Centre for Mathematics, Science and Technology Education in Africa (CEMASTEA), provide implementation support to countries. And with varying degrees of success, at least 10 countries, are implementing a competency-based curriculum (CBC) which emphasizes inquiry-based learning, STEM, and Technical and Vocational Education and Training (TVET). For example, coding and computer programming is part of the CBC digital learning program in Kenya.

You cannot code without basic numeracy, neither can you innovate if you lack the basic skills to acquire and apply knowledge.

Low education quality is however a binding constraint. And yet, even before the COVID-19 pandemic exacerbated the situation, more than 50 percent of children in basic education in sub-Saharan Africa were unable to read and understand a simple age-appropriate story.

A critical first step towards improving STEM education, therefore, is to get the basics right. We can achieve vast improvements in strengthening foundational skills by integrating into teaching and learning: new and exciting knowledge on the science of learning, and recent evidence from neuroscience on how the human mind works.

There are also huge benefits to achieving universal basic skills. It would raise future world GDP by $700 trillion over the remainder of the century which would be transformative for low-income countries.

Recent studies (ADEA and ACET 2022), indicate that the two greatest constraints to STEM education are inadequate facilities and sub-optimal teacher classroom practices. Schools can provide minimum STEM and other facilities if countries allocate at least 20 percent of their budget to education.

In the countries surveyed, STEM and computer labs exist but less than half of them are functional, while a lack of facilities inhibits practical training. Second, the STEM gender gap widens progressively through school in part because of under representation of female STEM teachers. In Ghana, only 5 percent of STEM teachers in the upper grades are female. Less than 25 percent of students pursue STEM-related career fields in higher education in sub-Saharan Africa as a result of a compounding of these issues reduces.

Closing the gender gap in STEM education is a “best buy.” Women are key to addressing the existential challenges that face the continent. They account for 60 percent of the farmers in Africa and are the primary providers of water and firewood. With strong STEM skills, women could be at the vanguard of environmental sustainability and adoption of agricultural technology. A quantum leap in child survival, national health, and education attainment could be achieved if women as the gatekeepers to child health and family welfare obtain at least 12 years of science-driven basic education.

Successful interventions include targeted scholarships, mentorship using role models, and early exposure to STEM based career opportunities. Moreover, through digital technology, students in resource constrained environments can tap into expert STEM training. Rwanda’s One-Laptop-Per-Child (OLPC) flagship program, Kenya’s digital learning program, the university of Colorado science simulation program, PhET, and massive open online courses (MOOCs) such as EdX, have demonstrated the leapfrogging potential of digital learning.

But we can go even further to nurture and build upon these green shoots that are sprouting on the continent by:

  • Creating an interactive classroom-industry interface. Kenya has over 1,000 start-ups that could provide such an interface to give students relevant work exposure, sharpen their focus, and raise their ambition in STEM.
  • Nurturing and rewarding excellence in STEM. Africa is brimming with creative, home grown innovations. Norah Magero’s Vaccibox, a small, mobile, solar-powered fridge that safely stores and transports medicines, for use in remote clinics and Charlot Magayi’s Mukuru Clean Stoves, which uses processed biomass to create 90 percent less pollution than an open fire, demonstrate the huge reservoir of talent in the continent. These two women innovators from Kenya have recently won international awards. Competitions such as the Young Scientists Kenya (YSK), which aim to catalyze and spotlight the quality of STEM, have proved useful in tapping into the innovative energy of secondary school students.
  • And finally, we need to strengthen the training of STEM trainers. We can do so by providing targeted financing incentives to higher education institutions that offer STEM programs. Furthermore, we need to reinvigorate and protect specialization of universities, such as the Technical University of Kenya or Jomo Kenyatta University of Technology and Agriculture, that were originally designed as centers of excellence in STEM.
Kategorien: english

Nigeria in 2023: Bridging the productivity gap and building economic resilience

6. Februar 2023 - 14:18

By Wilson Erumebor

The last seven years (2015–2021) have been tough for Nigerians. During this period, GDP growth averaged 1.1 percent as the country experienced two economic recessions. Unemployment and underemployment rates increased to an all-time high of 56.1 percent in 2020, pushing 133 million Nigerians into multidimensional poverty, according to the latest data from the National Bureau of Statistics. Likewise, economic growth has not been inclusive, and Nigeria’s economy faced key challenges of lower productivity, and the weak expansion of sectors with high employment elasticity.

Another key feature of Nigeria’s economy in the last seven years has been the shift of economic activity towards agriculture and a slowdown of the manufacturing sector. As a share of GDP, agriculture expanded from 23 percent in 2015 to 26 percent in 2021, while manufacturing declined from 9.5 percent to 9 percent respectively. During this period, non-oil exports as a share of non-oil GDP averaged 1.3 percent while manufactured goods as a share of total exports remained low at 5.2 percent in 2021. Part of the problem facing the economy is the neglect of the manufacturing sector. Essentially, Nigeria is not producing enough, for both local consumption and export. The consequences of having a weak manufacturing base for a country with such a large population are evident in its foreign exchange shortages, limited number of jobs created to accommodate workforce entrants, and an import bill that can hardly be met (nor sustained) by current export earnings.

Worse still, 80 percent of workers are employed in sectors with low levels of productivity—agriculture and non-tradable services. This means that the kind of jobs needed to generate income growth and lift many Nigerians out of poverty are not available in large numbers. As Nigeria approaches the general elections in 2023, there is immense pressure on political leaders to tackle these economic challenges and implement policies that will deliver an inclusive and competitive economy.

As Nigeria approaches the general elections in 2023, there is immense pressure on political leaders to tackle these economic challenges and implement policies that will deliver an inclusive and competitive economy.

The new administration, working with stakeholders, needs to develop an agenda for economic and social inclusion. At the heart of such agenda must be improving the lives of the average Nigerian. This agenda must also include a practical strategy on how to structurally transform the economy, moving labor and economic resources from low productivity sectors to high productivity sectors.

At the top of the productivity ladder is the tradable services sector, which has the potential to improve incomes and raise overall productivity. The challenge with this sector, however, is its inability to accommodate labor in large numbers. Nevertheless, the sector is important, given Nigeria’s young population who are increasingly driving technological revolution across various sectors on the African continent. To leverage the full potential of this sector, the government will need to design and implement national skills programs aimed at upskilling young Nigerians, to ensure many more embrace digital skills and capabilities.

At the middle of the productivity ladder sits manufacturing. The sector has a much higher productivity level than agriculture and can accommodate, in large numbers, the kind of labor that is abundant in the country. Nigeria’s rising population (which is projected to reach 428 million by 2050), the existence of mineral resources, and the adoption of a single market in Africa—the African Continental Free Trade Area (AfCFTA)—present a case for why manufacturing would thrive in Nigeria. The priority, therefore, for the incoming government must be to address the burgeoning infrastructure deficit and inadequate power supply, which limit the competitiveness of the manufacturing sector. In addition, the government will need to develop an industrial policy that seeks to support the scale, efficiency, and competitiveness of local firms within the manufacturing sector; bearing in mind that developing the sector is key to building economic resilience against vulnerability and future shocks. Such policies must be integrated with Nigeria’s AfCFTA strategy and support transition of small-scale firms that are often the drivers of job creation in the country.

Kategorien: english

Beyond the headlines: 8 issues we’re tracking in 2023

6. Februar 2023 - 13:30

By Amy Liu, Chris Meserole, Molly E Reynolds, Rashawn Ray, Keon L. Gilbert, Carol Graham, Richard G. Frank, Jenny Schuetz, Tonantzin Carmona, Glenn D. Rudebusch, John McArthur

Amy Liu Interim President – The Brookings Institution

From U.S. relations with China, Russia, Iran or Pakistan to issues like the debt ceiling, police violence, or the rise of U.S. industrial policy that can help blue and red places alike, there is no shortage of headline issues to keep track of in 2023. At the same time, there remains a plethora of challenges that will define our reality, yet may never make it onto your newsfeed. I asked some of our best and brightest about these issues – the topics not likely to be “breaking news” or brought up in this year’s State of the Union,  but are worth monitoring closely. Their answers below are just a few topics Brookings scholars will be working on in the year ahead.

The web will feel new again. Chris Meserole (@chrismeserole)
Director of Research – Artificial Intelligence and Emerging Technology Initiative

For the last fifteen years, how we create, share, and discover information online has largely stayed the same. We search the web on Google, we watch videos on YouTube, we connect on Facebook and Twitter. Although those services aren’t going anywhere, this year their look and feel will start to shift—and new applications will rise alongside them. For instance, the explosive growth of chatGPT, the new AI-assistant released by OpenAI, points toward a future where we simply ask for information rather than search the web. Likewise, the release of powerful new “generative AI” tools for audio, images, and video are poised to fill our social feeds with personalized, auto-generated digital content rather than user-created media. And as social media relies more on AI for recommended content, we’ll increasingly find new things to watch and read based on what algorithms present to us rather than what our friends have shared. While all this innovation is exciting for consumers, the policy environment will also need to keep pace. AI’s transformation of the web will add new complexity—and urgency—to a wide range of tech policy discussions, from data privacy to algorithmic transparency.

It’s not just what the House of Representatives does, it’s how it does it. Molly Reynolds (@mollyereynolds)
Senior Fellow – Governance Studies

While many eyes are on the debt limit and avoiding a government shutdown, another big challenge for the year ahead will be how the House actually runs – or doesn’t. Speaker of the House Kevin McCarthy made a range of promises to holdouts in his party to secure the necessary support to win the gavel. But how many of those promises will matter? Past Speakers have promised to open up debate on the floor of the House, only to renege when the going got politically tough. How much power will the members of the McCarthy-skeptical faction actually try to exercise over what comes up for consideration? The potential for change in how the chamber operates is real, but we’ll need to pay careful attention to how things actually play out.

It’s time to address the trauma caused by police killings. Rashawn Ray (@SociologistRay)
Senior Fellow – Governance Studies Keon Gilbert (@DrKLG4Health)
David M. Rubenstein Fellow – Governance Studies

There is growing community awareness about what police are doing and who is holding them accountable. Less covered, however, are the collateral consequences left behind after police violence. This is a pressing and timely issue, as research documents that police violence harms the mental, physical, economic, and social health of entire communities.  Following the brutal death of Tyre Nichols, five Memphis police officers were fired after “violating multiple department policies” and charged with murder. Other first responders have either been fired or removed from duty. This incident adds to a growing total of police killings following a decade high in 2022, thus adding to the growing trauma in communities. Though the Black Lives Matter movement has raised awareness and shifted policy, more reform is needed at local, state, and federal levels. 2023 may be a year towards addressing police violence, which ought to include providing necessary resources to address the “illness spillovers of police violence” following these incidents. We have developed models and response teams to provide the mental health resources after school shootings. A similar community-level and holistic response is needed to structure healing justice and restorative practices for all community members, which includes those responsible for emergency responses and public safety. Comprehensive community health is the way we heal our plagued communities from the collateral consequences of violence.

Quality mental health treatment can save lives and livelihoods. Carol Graham (@cgbrookings)
Interim Vice President and Director – Economic Studies Richard Frank
Director – USC-Brookings Schaeffer Initiative for Health Policy

For many people with mild to moderate mental illness, recent advances in the quality of mental health treatment can, evidence indicates, alleviate many of the functional consequences of those illnesses. Achieving this requires improving the match between clinical problems and treatments. For people with serious and persistent illnesses however, treatment can be much more difficult. Indeed, improving these individuals’ wellbeing (physical and mental) is often complicated by systemic socioeconomic factors, including rising housing costs, increased criminalization of disturbed behavior, and growing returns to cognitive and interpersonal skills in the labor market. Thus, solving the mental health crisis in the US will ultimately require a combination of health, economic, and social policies. Growing recognition of this issue will be essential to the national health conversation, especially as it pertains to mental health, and one likely to gain increased importance and attention in 2023. For our part at Brookings, we’ve constructed a nation-wide vulnerability index and are in the process of adapting it to include vulnerability to misinformation and radicalization, to which people in despair are particularly vulnerable. Related work is also bearing down on the implications of the increase of mental illness on labor force participation and productivity, and how that in turn is exacerbated by the new skills now required in the labor market. These are deeply interconnected – but also fairly “under-the-radar” – challenges, and all of them are likely to impact the many national debates that will play out in the year ahead.

Will 2023 be the Year of the YIMBY? Jenny Schuetz (@jenny_schuetz)
Senior Fellow – Brookings Metro

Housing affordability—or lack thereof—is one of the most urgent issues facing American families. State and local governments across the country are exploring new policies to increase the production of moderately priced homes and create more diverse housing options. Policy levers to achieve these goals include zoning reforms that legalize duplexes, rowhouses, and apartments as well as procedural changes to make housing development simpler, shorter, and more transparent. The pro-housing movement has grown rapidly over the past several years, and is one of the few issues that attracts bipartisan support. In 2023, look for even more governors and state legislatures to lean into abundant housing, from states as diverse as New York, Virginia, Montana, and Utah.

Latinos will receive more attention as the nation gears up the 2024 election. Tonantzin Carmona (@Tonantzin_LC)
David M. Rubenstein Fellow – Brookings Metro

In the aftermath of the 2022 midterms, there was a surge in media coverage on whether Latinos are migrating to the Republican Party. In reality, the results of the midterm elections were mixed and reflected historical trends. Even so, there remains a lack of understanding of Latinos by policymakers or the media, thus prompting more curiosity through the lens of issues that matter to Latinos—like the economy. Latinos usually hear about immigration issues from pundits and politicians, but, as in previous election cycles, the economy was their top concern during the 2022 midterms. According to the 2019 Survey of Consumer Finances, the average white family has five times the wealth of the average Latino family, and Latinos are eager to close this gap. Expect to hear more about public policies that can promote wealth-building and economic opportunity in Latino communities in 2023. With more Latinos in Congress than ever before, it will also be worth examining what policies Latino representatives propose to address these issues.

Climate policy curves can help frame important policy decisions. Glenn Rudebusch (@GlennRudebusch)
Nonresident Senior Fellow – Economic Studies

The extent of future climate change largely depends on policy choices made today. A new framing device, a climate policy curve, can help quantify the link between policy actions and subsequent climate outcomes. Climate policy curves (CPCs) are constructed using a model that can assess how varying efforts to reduce greenhouse gas emissions affect economic growth and global warming. CPCs incorporate both economic relationships and climate science and provide a useful tool for understanding what needs to be done to transition to a low-carbon economy. For example, they can quantify the climate-economic trade-off between current and future action. Limiting global temperatures can be achieved with strong climate action this year or by postponing even more significant action to the future, and CPCs can illuminate this generational burden-shifting in a straightforward way.

World leaders will debate the future of the Sustainable Development Goals in 2023. John McArthur (@mcarthur)
Director – Center for Sustainable Development

This year, the world is approaching a new crossroads in how it tackles its biggest challenges of poverty, inequality, and environmental protection—within and across all countries. These are the issues embedded in the 17 Sustainable Development Goals (SDG), agreed by all countries in 2015, focused on a 2030 deadline. The situation is so stark that the United Nations (UN) Secretary-General has recently started talking about the need to “rescue” the goals. In September, the UN will host a summit of world leaders focused on how to shift gears to do better during the “second half” (until the 2030 deadline) of the SDG era. Countless lives and livelihoods depend on finding better paths forward, as does the health of the planet itself. Fortunately, there have been many breakthrough success stories since 2015, including amid the COVID-19 pandemic. But over the coming months, the world faces a major challenge in forging new forms of bottom-up international cooperation that harness new technologies and new forms of leadership to chart a better way forward.

Kategorien: english

Will rising insecurity erase West Africa’s economic development gains?

3. Februar 2023 - 20:28

By Mounir Siaplay, Eric Werker

As West Africa enters 2023, the region faces a new period of instability following recent coups d’état in Burkina Faso, Guinea, and Mali. These coups are occurring amid continuous conflict in the Sahel region, where violence displaced more than 2.5 million people and was projected to kill some 8,000 individuals in 2022. Hostilities have moved outside the Sahel and closer to previously peaceful areas. For instance, Benin and Togo witnessed deadly attacks in 2021 and 2022, terrifying citizens and contributing to growing evidence of broadening violent activities in the region’s coastal states.

These events can no longer be viewed as isolated incidents chalked up to foreign-funded extremists hiding in the desert. A significant and growing risk of regional instability recalls the calamities of the 1990s and 2000s, when civil wars engulfed Liberia, Sierra Leone, Guinea-Bissau, and Côte d’Ivoire—and Mali, Niger, and Nigeria faced insurgencies—which impeded economic growth and development. West Africa’s youthful population of 429 million, growing at 2.5 percent per year (according to the U.N. population division), risks getting stuck in a rut of insecurity and stalled human development.

Two recent changes exemplify the complexity and internationalization of the region’s insecurity: the arrival of the Russia-backed Wagner group in Mali at the end of 2021 (together with a disinformation campaign) and the cessation of France’s decadelong Operation Barkhane—which once saw 5,500 troops across the region—by November 2022. Regional stability has been deteriorating despite the presence of other external military forces, including the United Nations stabilization force in Mali, the European Union Task Force under the French command, and the combined Sahel states’ “Joint Force.”

Coups and bad governance

According to the Center for Systemic Peace, a research institute, West Africa’s five successful coups in the last three years is more than what the region has experienced at any time in the last thirty years (see Figure 1). Even though these five coups have occurred in just three countries (Burkina Faso, Guinea, and Mali), failed coups in Niger, Guinea-Bissau, and Mali—and an alleged coup attempt in the Gambia as 2022 came to a close—underline the breadth of state fragility.

Figure 1. Coups in West Africa, 1990-2022

Center for Systemic Peace.
Note: Figure data visualized by the authors.

Poor governance is both a cause and a symptom of insecurity, with weak governance driving low government legitimacy and clientelistic politics, and serving as an excuse for coup makers. A look at West Africa’s governance indicators, as measured by the World Bank and reported in Figure 2, shows two important observations. One, West Africa’s scores are low on average, well below zero for an indicator that ranges from -2.5 to 2.5. Two, the subscore that has fared the worst over the past two decades is political instability and violence, including terrorism. Moreover, these governance indicators, particularly instability, are correlated with economic growth.

Figure 2. West Africa’s Worldwide Governance Indicators

Worldwide Governance Indicators.
Note: Data visualized by the authors. Governance performance scores range from -2.5 (weak) to 2.5 (strong).

As a result of the rising conflict and violence in the region, the possibility of conflict spillover to neighboring countries is elevated. Consequently, based on our analysis of data from Stockholm International Peace Research Institute (SIPRI), countries in the region have increased military expenditure eightfold to combat internal and external threats over the last three decades, which equates to a compound annual growth rate of close to 8-percent net of inflation. While this expenditure may be necessary to manage the threat of instability, it nonetheless represents a diversion from spending on essential social services such as healthcare or education.

Languishing growth and investment

Also, instability brings political risk, which drives investors away. According to our analysis of World Bank data, West Africa’s GDP grew, net of inflation, at a compound annual rate of 4 percent between 1990 and 2021, but on a per-capita basis, this came out to just 1.3 percent due to rapid population growth. Over that period, foreign direct investment has been minimal, with one exception corresponding to the iron ore price cycle of 2009-14; even when commodity prices picked up in 2020, investment has not seemed to follow. Furthermore, trade has been flat, and net official development assistance has been steadily declining.

The net result of insecurity, including its impacts through worse governance, higher military spending, and foregone investment, has affected West Africa’s average human development index, which as of 2021 had barely passed 0.5, significantly trailing other developing regions.

Changing the trajectory

So, what can the international community do to reverse the trends of insecurity in the region?

First, a comprehensive and politically-informed strategy for intervening to reduce fragility in the most unstable states is required. Rather than focusing on counterterrorism alone, this means investing in both political and economic constituencies to counterbalance the centralized rent creation that enables and encourages autocratic power politics. It also means considering the sociopolitical structures that support some of the highest fertility rates in the world precisely where the coup and coup attempts have taken place (with Niger and Mali taking two of the top three spots).

Second, bilateral and multilateral efforts should focus on containing the insecurity and preventing its spread to border regions and urban centers in neighboring countries. Here, a strategy is needed to invest in both state capacity, including an accountable and professional military, and legitimacy, which comes from functioning government service delivery and democratic mechanisms.

Third, international actors should partner with national and regional bodies to invest in alternative futures for the region. Diversified economies can generate more sustainable growth, broader influences in decisionmaking, and increased resilience in the face of external shocks. Creating gainful employment, particularly for the region’s youthful population and for women, may have a greater impact on reducing insecurity than military interventions. However, the changing climate, associated with a greater risk of conflict and internal displacement, adds another level of complexity.

Tomorrow’s global crisis?

West Africa risks being locked into a rut of insecurity and missed opportunities, with war economies spilling into the mainstream and progress reversing. With global attention focused on Ukraine, energy, and inflation, today’s peripheral wars risk becoming tomorrow’s global crises. Development and diplomatic actors cannot afford to abandon the increasingly fragile West African countries to strongmen and mercenaries.

Kategorien: english