View
5
Download
0
Category
Preview:
Citation preview
1
WDR 2003
World Development Report 2003
Sustainable Development in a Dynamic World:
Transforming Institutions, Growth, and the Quality of Life
Zmarak Shalizi, Director WDR 2003
UNEP Finance Initiatives Roundtable,
Tokyo, Japan
October 20-21, 2003
2
WDR 2003
Many Accomplishments2 billion people added to world’s population between 1970 and 2000—mostly in low- and medium-income countries⇒Average per capita income in LDCs grew from ~ $1,000 in
1980 to ~ $1,400 in 2000⇒ Infant mortality rates per 1,000 live births fell from 100 in
1970 to 60 in 2000 ⇒Adult illiteracy rates have fallen from about 50% in 1970 to
25% in 2000
However the development path generating these gains has been costly
3
WDR 2003
Social Stress-MistrustIncreasing inequality within and between countries ⇒ (Some inequality unavoidable due to differential risks and
opportunities, but not all: Per capita income ratio between the 20 richest and 20 poorest countries is 35—double what it was in 1970—mostly due to low growth in poor countries)
1.2 billion people still live on <$1/ day (scale similar to population that is underweight and malnourished)⇒ (The number of the poorest people declined by 200 million
in last two decades despite global population increase) 46 countries suffered from armed conflict--including half of the 33 poorest countries. Destroys pastdevelopment gains, breeds mistrust, impedes future growthLow growth, conflict, and inequality undermine collective action in support of a sustainable pattern of development
4
WDR 2003
Environmental Stress - DegradationUrban air pollution is several times WHO recommendations; CO2 emissions are up two-thirds since 19701/3 of people live in countries with moderate to high water shortage; 1/5 of farm land is degraded; 10% of tropical forests cleared each decade;70% of fisheries are fully or over exploited;2/3 of coral reefs have been destroyed or threatened; 1/3 of terrestrial biodiversity, accounting for 1.4 percent of the Earth's surface, is in vulnerable "hot spots" and threatened with complete loss in the event of natural disasters or further human encroachment;This pattern of depleting environmental stocks cannot be repeated.
5
WDR 2003
Big issues for next 50 years?2-3 billion more people⇒ Core Economic Development Challenge:
How to provide productive work and a good quality of life for this additional population plus the existing 2.8 billion people living under $2/day (Requires substantial growth in output and productivity in developing countries)
At 3% p.a.could have $140 trillion global economy by 2050⇒ Core Environmental and Social Challenge:
How to ensure that a global economy 4X larger than today’s creates less social and environmental stress (Requires substantial change in the way we do business)
One time window of opportunity to move to sustainable patterns of development at lower cost
6
WDR 2003
Demographic Transition: 1950- 2050
0
2
4
6
8
10
12
1950
Popu
latio
n (B
illio
ns)
Population growth is slowing, will stabilize at approximately
10 billion by the end of the century
Medium-Low VariantMedium VariantMedium-High Variant
1970 2000 20502030
Year
7
WDR 2003
Increasing Savings Potentialwith Changing Age Structure and Declining Dependency Ratios
4 0
50
6 0
70
8 0
9 0
10 0
19 6 0 19 70 19 8 0 19 9 0 2 0 0 0 2 0 10 2 0 2 0 2 0 3 0 2 0 4 0 2 0 50Year
Eas t As ia & the Pacific
Eas tern Euro p e &Central As ia
So uth As ia
Hig h-Inco me OECDCo unt ries
4 0
50
6 0
70
8 0
9 0
10 0
19 6 0 19 70 19 8 0 19 9 0 2 0 0 0 2 0 10 2 0 2 0 2 0 3 0 2 0 4 0 2 0 50Year
Lat in America & theCarib b ean
M id d le Eas t & No rthAfrica
Sub -Saharan Africa
Hig h-Inco me OECDCo unt ries
8
WDR 2003
DTC DTC DTC DTC DTC
Urban Transition
0
2
4
6
8
Population (billions)
1950 1970 2000 2030 2050
For the first time in history, most people will live in cities
CitiesTowns
Rapid urban growth
Megacities
15
1
54
29
0
Many megacities
Global population stabilizes before end of century
DTC OECD DTC OECD DTC OECD DTC OECD DTC OECD
1 2 4 5 5
9
WDR 2003
Increasing Investment Potentialwith Ability to service more people at lower cost per person
Trillions of Dollars of investment in next 50 years –Whether we do it right or wrong has profound implications for poverty, the economy, and the local and global environmentMost infrastructural capital stock required to operate the future economy of growing cities (new homes, factories, transport and power) and to reduce poverty has yet to be built – can be designed to be more economically and fiscally sustainableDeveloping countries provide a potentially large market over thenext 10-20 years that can support the emergence (R&D and amortization of initial costs) of new, more efficient, and sustainable technologies. With more appropriate investment criteria – can be designed to be more environmentally sustainableDeveloping countries are not locked into existing technology andcapital stock, and have the opportunity to improve on existing decision-making practices. With more inclusive decision making –can be designed to be more socially sustainable
10
WDR 2003
0
2
4
6
8
Population (billions)
1950 1970 2000 2030 2050
Global population stabilizes before end of century
Other ruralFragile lands
Still many in fragile
areas
CitiesTowns
Rapid urban growth
OECD
1
OECD
2
OECD
4
OECD
5
OECD
5
DTC DTC DTC DTC DTC
Megacities
15
1
54
29
0
Many megacities
These people are stuck and invisible. This is where poverty is.If there is a rising global tide, will they be able to catch it?
…Still Many in Rural Fragile Lands
11
WDR 2003
Getting Ahead of the Frontiers
In order to address emerging stresses and seize opportunities, we must: A. Think long-term, when acting nowB. Manage a broader portfolio of assetsC. Take institution-building more seriously
• Institutions include rules and organizations, both formal and informal—and their interaction
• Pay special attention to the distribution of assets as they shape the evolution of institutional competence and policies
• Nurture institutional catalysts for change in different spatial locations
(Expanding Cities, Inappropriate Conversion of Land, Forests, Freshwater, Last Untapped Ocean Fisheries)
What Must be Done?
12
WDR 2003
A. Think Long Term, but Act NowTime to develop new technologies
Time for capital stock turnover
Shorten it
CO2 emissions, MT C
+ 1º to 3º CCLIMATE FRIENDLY SCENARIO
+ 3º to 5.8º CTemperature increase by year 2100
FOSSIL FUEL INTENSIVE SCENARIO
30
20
10
0
1990
2000
2010
2020
2030
2040
2050
2060
2070
2080
2090
2100
13
WDR 2003
Well-being
Social assets Environmental assets
Output and income
Human capital Physical capital
B. Need to Manage a Broader Portfolio of Assets
14
WDR 2003
C. Take Institution Building More Seriously—Policies & Processes
WDR 1992 focused on policies to correct market failures (public goods and externalities—spillovers) but these have not yet been widely adopted or implemented—why?Spillovers give rise to coordination (collective action) problems, and distributional considerations are central to resolving conflicting interests and coordinating solutionsEconomic and Environmental problems are at root social/coordination problems and Institutions help solve coordination problems
15
WDR 2003
People, Assets, Threats, and the Need for Protective InstitutionsFor people to be forward looking—they need a stake in society
For assets to thrive—they need protection (Secure commitment to law and property)⇒ Assets are not all vulnerable to the same threats, but all
assets—natural as well as human-made, in the village and in the city—depend on protective institutions
When more people are heard, fewer assets are wasted
16
WDR 2003
More complex examples:
Failure of Protective Institutions to Restrain
New Foundland cod catch, tons,1850-2000 Case of dispersed interests
Enron, market value, 1985-2002 Case of vested interests
17
WDR 2003
Presence or Absence of Inclusiveness and Distribution of Assets Matters:
PoliciesPolicies
InstitutionsInstitutions
Distribution of assetsDistribution of assets
The distribution of assets shapes institutions and
policies
Policies shape institutions and the distribution of assets
Vicious or Virtuous CyclesEffects are long lasting (Path Dependency) leading to
18
WDR 2003
Competent Institutions Build Trust—Key Functions
Pick up signals to diagnose problems early and from the fringes (requires information, voice, feedback): social or geographic; Thailand—AIDS; Tunisia—fragile landsBalance interests to identify durable solutions(requires transparency, forums): Europe—acid rain; South Africa—democracy; Malaysia—new economic policy; Ait Iktel, Morocco—“cultural translators”Execute agreed decisions, particularly for the long term, to ensure credibility ex-post (requires credible commitments ex-ante and accountability): Cameroon—public forest auction; Marine Stewardship Council—sustainable fisheriesObserved social, environmental and economic problems can be traced to failure in one or more of these functions
19
WDR 2003
Emergence of Competent Institutions
How do you get good policies if institutions are inadequate? How can good institutions emerge in an unfavorable setting? ⇒Institutions don’t appear overnight or fully grown
⇒Need catalysts to build momentum and scale up
⇒Need to adapt to changing conditions through innovation, experimentation, and systematic learning
⇒Need to not just solve current problems, but also have the ability to respond to new problems not yet defined by better understanding how technologies, preferences, and behavior change
20
WDR 2003
Catalysts for ChangeScientific research/Credible information, and education: signals and helps diagnose problems, builds awareness and support for change, so that institutions can react (global level: ozone and global warming; local level: pollution disclosure program in China and Indonesia)Conflict Resolution: Organizing to diagnose problems, balance interests (Europe—acid rain; South Africa—democracy; Malaysia—new economic policy; “cultural translators”—Ait Iktel, Morocco)Transparency and monitoring: To tighten accountability (Cameroon—Forest Auction; Marine Stewardship Council—sustainable fisheries)Think and do tanks: Organizations that learn from the grass roots and have access to policy makers—are able to adapt and promote exchange of ideas, innovate and solve problems unique to their country—(Singapore, Malaysia, Korea, UK, Costa Rica, Bolivia, Brazil) e.g. by pairing national and foreign expertise
21
WDR 2003
Catalysts for Change— specially for Poor People
Partnerships: Civil society, govt., private sector, “cultural translators” (Cameroon; Marine Stewardship Council)
Leadership: East Asia’s more equal access to assets (Malaysia’s NEP, Singapore)
Assets for the poor: schooling, healthcare, social capital, voice, tenure (Brazil’s favelas)
R&D: productivity & assets for the poor– crops, drought-resistant maize, medicines, vaccines
22
WDR 2003
Implications for Development Strategies and Assistance
Shift to breaking vicious cycles that keep growth low and distribution of assets unequal—requires better sharing of new forms of assets and additional assets as growth progresses; Get ahead of the frontier in anticipation of known trends and destructive/unfettered races for property rights, e.g. agricultural land conversion, urban expansion, growth-generated pressures on eco-systems and natural resources;Invest in conflict avoidance and durable institutions that evolve through long-term commitment to inclusiveness, local catalysts, innovations and learning ability, not stand alone projects;Shape the trillions of dollars of investment in long-lived assets in the next 50 years to be more socially and environmentally sustainable;Lower income countries need consistent and sustained support from higher income countries to create better institutions (that can then implement new policies)
23
WDR 2003
Next StepsWhat role can the private sector play in engaging and reinforcing the catalystsidentified in WDR 2003 to shape institutions and make them more inclusive and effective with the ability to ⇒ pick up signals early and from the fringes,
⇒ balance interests for durable solutions, and
⇒ commit to implement -- especially for changes that require time to implement ?
24
WDR 2003
Interactive website: http://www.dynamicsustainabledevelopment.org
Website: http://econ.worldbank.org/wdr/wdr2003/
25
WDR 2003
Obtaining the WDRElectronically available at: http://econ.worldbank.org/wdr/wdr2003/text-17926/To order by phone or fax (from 9 AM to 5 PM EDT weekdays):Phone 1-800-645-7247 or 703-661-1580;Fax 703-661-1501To order by mail:Write to--The World BankP.O. Box 960Herndon, VA 20172-0960, U.S.A. To order by e-mail (from 9 AM to 5 PM EDT weekdays): books@worldbank.orgPrice: $26 for those from OECD countries, discounted price of $ 12 for those from non-OECD countries.
Recommended