SOCIAL DEVELOPMENT DEPARTMENT
The World Bank
Department of Economic and Social Affairs:
Development Forum on Productive
Employment and Decent Work:
Panel 6: Generating Employment
Dr. Anis A. Dani
May 8-9, 2006
New York
Outline
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Background
Issues
Role of Governments
Policy Framework
Background
 An anthropologist’s perspective
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Don’t mess with people and cultures
Sustainable livelihoods approach
 Traditional development practitioner’s perspective
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Development is inevitable; globalizing trends are ubiquitous
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how can we protect the poor against adverse impacts?
Social protection perspective; safeguards; risk management
 How do we go forward?
Issues
 Most countries have
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liberalized trade and financial markets
controlled runaway inflation
privatized many public assets
moved in varying degrees toward democratization
seen the growth of civil society organisations
permit more diversified forms of civic engagement
Issues - 2
 Economies have diversified
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Except for Africa, less dependence on agriculture
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Emergence of other sectors varies by country context:
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East Asian tigers overtaken by China
South Asian countries also posting impressive growth rates 6-8%
Transition economies in Eastern Europe emerging from poverty, largely
fueled by EU Integration
The resilience of countries and people against crises and shocks varies
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industrialization, services, knowledge economy
Many formerly low income countries are growing rapidly
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both for employment and contribution to GDP
Economies have been relatively stagnant in sub-Saharan Africa (with a
few notable exceptions)
Jobless growth in Latin America has led to rising inequality
Inequality is also rising in many other regions that are growing fast,
including China and South Asia
Issues - 3
 We know that
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The impact of growth on poverty reduction is considerably greater when
the benefits of growth are more widely shared (eg WB and DESA
flagships on inequality)
Some interpret this as a call for more public intervention to ensure
redistribution and social protection
 The real issue is that traditional livelihoods are not sustainable.
In-country market penetration and globalization are eroding
traditional livelihoods, or the returns on those livelihoods
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With few exceptions, perhaps indigenous peoples, who wish to retain
their customary lifestyles most people seek alternative livelihoods (e.g.
through migration), expecting to improve their welfare
What public policies can help people adapt to alternate modes of
livelihoods?
Issues - 4
 Limits to what governments alone can do
 Countries with weak infrastructure and institutions are
unable to attract investment
 Barometer surveys reveal that personal insecurity is
arguably the single biggest constraint for the poor
 Even in countries with relatively better infrastructure,
the poor have less access to infrastructure and
services, either due to spatial inequality, or informal
status, or unaffordability
 Basic education alone is no longer sufficient to create
jobs; skill demands increasing in job market
Role of Government
 What is the record of governments?
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Monopoly over use of force is not always used for the benefit of people.
In South Asia, as in much of Latin America and Africa, trust in public
institutions is lowest for the police
Latin America and Eastern Europe show even lower trust in political
institutions than South Asia
 Weaker governments tend to be more amenable to elite
capture and rent-seeking
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Governments are better at creating state-owned enterprises than at
running them
Public actions seen as the primary source of wealth creation, hence
asset stripping
Re-classification of public assets, licensing/concessions easy source of
wealth accumulation by those who have access to power
Every policy change is an opportunity for those exercising power or
controlling information to capture more resources, in the absence of
transparency and accountability to citizens
Trust in Public Institutions (De Souza 2005)
 Main sources of insecurity: First, theft/robbery, Second, physical
attack/harassment (except Pakistan who fear insurgency), Third,
India - Insurgency, Pakistan- attack by another country, and Sri
Lanka - kidnapping/extortion.
 Overall trust in political institutions: India 64 , Pakistan 43, Sri Lanka
55 (in South Asia overall score 60 on 100 point scale). Higher except
for Pakistan.
 Global picture of political trust, region-wise: Afrobarometer 47%,
New Europe Barometer 26%, East Asia 50%, Latino Barometro
21%.
 Trilateral countries: decline in public confidence.
 Low trust and high trust countries in South Asia.
Disaggregating political trust –
Four clusters, 10 institutions
 Institutions: Natl govt, Provincial govt, Local govt, Civil service, Police,
Army, Courts, Parliament, Political parties, Govt controlled media) (in
percentages)
 India:
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(Total 5390)
trusting 47, not trusting 26 (except army), partly trusting 8 (highest tr local
govt). partly no trust 19.(highest no tr Police)
Army highest among 3 clusters, Police lowest among 2 clusters.
 Pakistan
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(Total 2681)
trusting 20, not trusting 35, partly trusting 24, (highest no trust of police), partly
no trust 21 (no tr in army and police)
 Sri Lanka (Total 4616)
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trusting 36, not trusting 17, partly trusting 27 (highest tr Army and courts), partly
no trust 20 (no tr in all)
Role of Government - 2
 Direct role in creation of public jobs has mixed record
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Affirmative action has created jobs for SC/ST in India but these are low-paying,
low-status jobs that have not led to social change, leading some to argue that
AA has outlived its utility
Governments are better at creating jobs through SOEs than sustaining them
Governments can create enabling environment for employment, e.g Household
responsibility system, municipal enterprises, industrial parks, etc.
Record on public works programs also very mixed
 Governments are best-placed to create public goods
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Mobilize resources for public infrastructure
Create environment and provide facilities for economic activities
Create policy environment for enterprise development (Doing Business 2006)
Invest in human capital formation, but need to move beyond schooling to skills
development and higher/technical education
 Different tiers and arms of government have diverse interests which can
generate effective checks and balances among them
 The government can also promote a system of checks and balances
between government, private sector and civil society
Policy Framework:
subjects and beneficiaries or citizens
1. Personal security, rule of law, access to justice – Legal Empowerment of
the Poor
2. Create and increase access to physical infrastructure and utility services –
“Reaching the poor” – Lessons from 20 years of infrastructure
3. Improve the business environment to facilitate enterprise formation, give
space to informality, facilitate access to information and services
4. Strengthen the asset-base for evolution of livelihoods – invest in skills
beyond primary education, invest in long-term knowledge economy and
higher education
5. Focus on the rural space – with greater flexibility, tax breaks (e.g.
Romania), venture capital, easier access to credit – to create growth poles
6. Target urban slums and informal sector with integrated approach that goes
beyond housing to partnerships between government and civil society
7. Provide incentives to investors for job creating growth
8. Strengthen regulatory capacity and citizen voice for privatized or
monopolistic public services and utilities
9. Develop migration policies and strategies to provide security to migrant
families and reclaim benefits from the diaspora
10. Focus on revenue generation, rather than aid dependency to sustain growth
and achieve redistribution, within an acceptable social compact.
SOCIAL DEVELOPMENT DEPARTMENT
The World Bank
Reflections