GDI Lecture series: Should Rich Nations Help the Poor? with Professor David Hulme
On Wednesday, 12th October 2016, Executive Director of the Global Development Institute, Professor David Hulme discussed his latest book, Should Rich Nations Help The Poor?. You can find the slideshare, video and podcast from the event below.
‘Sustainability Challenge’ offers valuable lessons for universities’ engagement with the public
By Judith Krauss, post-doctoral associate at the Rory and Elizabeth Brooks Doctoral College
In the biggest-ever event on campus, The University of Manchester ran the ‘Sustainability Challenge’ for its 8,200 first-year undergraduates, encouraging students to realise their tremendous role in the University’s social responsibility agenda. I helped facilitate the challenge and think that there are broader lessons for universities’ public engagement to be learned from this experience.
The Sustainability Challenge’s premise is that the University of Manchester’s undergraduates morph into members of staff at the fictitious ‘University of Millchester’. Diverse teams, deliberately mixing civil engineers and sociologists, medics and mathematicians, are tasked with developing a ‘Campus East’ which meets fiduciary obligations, but also complies with a hard carbon cap. Each option, for teaching and learning or accommodation, energy or transport, comes with social, economic and environmental advantages and disadvantages, the magnitude and constellations of which are based on research conducted at The University of Manchester. For instance, choosing the high-cost energy option will improve the campus’s carbon footprint, but also eat into the budget significantly. By contrast, choosing high-cost teaching and learning leaves little money for accommodation. Yet maybe the corporate sponsorship offers from a fast food chain or an oil company could offer budgetary respite?
It was a privilege and a joy to be part of the Sustainability Challenge, with far more staff than just the 160 facilitators contributing to the research, preparation and implementation of the Challenge. The six student teams I got to meet were as enthusiastic in choosing their group names – Prestigious Innovative Food Ninjas Ltd., Green Queens and The Sustainables come to mind – as they were in devising and defending their diverse visions for Campus East: one team saw no issue with enlisting the corporate support of the oil company, as long as they spent the extra money on high-quality teaching and learning and offsetting carbon emissions. Others considered all sponsorship a sell-out. One team devised an eco-science park only generating minimal carbon emissions. All sought to create benefits for Campus East’s surrounding community.
The activity not only impressed students in terms of the University sparing no resources to put #GetSust into practice. They got to realise that sustainability has many facets and interpretations, which require diverse skills and have to be negotiated with various interest groups. And they experienced that every individual has a part to play in social responsibility and sustainability – an insight which I hope they will take into their studies and into their future positions of responsibility in public sector, business and civil society, where each of their choices will have impacts on social, economic and environmental sustainability.
Emphasising the complex nature of sustainability, but also the imperative it constitutes for everybody is where the Challenge in my view offers broader lessons for the way universities engage with stakeholders and the public.
Given a widespread discontent with ‘experts’ in public discourse, there is much work to be done by universities to allay suspicions of Ivory Towers unrelated, and unsympathetic, to what goes on around them. Equally, there is a need to make clear how the work of universities, through research and teaching, entails benefits for all of society despite high tuition fees and often inaccessible research outputs.
What the Sustainability Challenge teaches, in my view, is firstly that it is imperative, and fun, to make research accessible, through a game, a challenge, or an engaging activity which makes palpable the outputs of research funding, and will stay with the participants for a long time to come. Secondly, building on the contact hypothesis, institutes of learning have a chance, nay an obligation, to bring together people who may never have met otherwise, offering them a space to discover and engage with each others’ diverse foci, viewpoints and motivations. Finally, setting a clear task which can only be solved through collaboration sets free surprising abilities to cooperate, innovate and trust in the jointly produced solutions which no one could have devised alone.
I think we can go even further in terms of the Sustainability Challenge’s learning potential: I hope that future Sustainability Challenges, at Manchester and elsewhere, will not only issue an invitation to on-campus students, but use a question, format and implementation which is accessible and relevant far beyond one university or city. Evidently, there is no doubt that finding a question of interest locally and globally, a viable format, and the resources for preparation and implementation would no doubt be a mammoth Sustainability Challenge requiring collaboration beyond any one actor.
However, an even greater Sustainability Challenge would be introducing societal benefits and sustainability awareness even more systematically into universities’ fabric than Manchester has already done. Examples could be placing social, economic and environmental sustainability at the heart of all curricula, making stakeholder and public engagement a compulsory element of undergraduate, postgraduate and PhD programmes, or requiring research outputs to be accompanied by jargon-free ‘accessible’ summaries.
Yet in my view, given the grand challenges of our time, the key role universities play in addressing them and the fundamental need to rethink universities’ responsibility towards society, the question is whether we can afford not to tackle this greatest ‘Sustainability Challenge’.
Staff Spotlight: Dr Rory Horner
Dr Rory Horner is an economic geographer and Lecturer, ESRC Future Research Leader and Hallsworth Research Fellow at GDI. He is originally from Ireland and holds a PhD in Geography from Clark University in the United States.
What is the current focus of your research?
My research looks at globalisation, trade and the industrial development of the pharmaceutical industry, particularly the production and trade of generic medicines in the global South. I look at how and why production patterns emerge, and which ones under which conditions could improve social and health outcomes.
Currently, my specific focus – supported by an ESRC Future Research Leader Award (2016-2019) – is on Indian pharmaceutical companies and their engagement with Sub-Saharan Africa. I am initially trying to shine a light on the dynamics of how the value chain operates, while considering some broader issues related to industrial development and health. Indian medicines are known to many as the “pharmacy to the developing world” because of the large volume of supply at a relatively lower cost than elsewhere. For some, these imports create a health dependence issue for developing countries, which is being combatted by a push for local production across much of Sub-Saharan Africa. A big current debate questions whether developing countries should domestically produce as much of their own medicines as possible or should the pharmaceuticals supply largely come from only large developing countries (such as India or China) or even Europe or North America? And which supply may be better for public health?
What is the biggest hurdle in the system?
The first is that the whole system is quite opaque and there is relatively little evidence available on the dynamics of the pharmaceutical industry in this context. Policymakers need this evidence to make decisions that are actually based on a concrete understanding of the dynamics – right now, the picture is far too fragmented.
Policy coordination is another big issue. On a national level, different aspects of the pharmaceutical industry fall under the different ministries, creating competing priorities or at least some disagreement. In South Africa, for example, there is debate between the relevant departments for industry and health: the first would like to promote South African manufacturers but the latter generally finds that it is more cost effective to buy the medicines it needs from India. The counter argument from the Department of Trade and Industry is that the longer term health outcomes are better if South African manufacturers are promoted to claim more domestic control over medicine supply. Of course, the dynamics between the different stakeholders are different depending on the country in question, but most are complex.
Why is this ESRC Future Research Leader research project important?
India is currently sending a large volume of medicines to developing countries, and there are claims made that this benefiting all parties concerned. But is that really the case? From the India angle, we need to trace out how “India’s pharmacy to the developing world” actually plays out. Does it really function the way it is perceived and is it really a win-win situation where India and people elsewhere in the Global South (from consumers to patients) all benefit?
The other angle is to look at the dynamics in the African countries, where the issues centre around local production, the effects of the dependence on imported, and the potential situation of health insecurity on one side, but also the potential health benefit of large volumes of relatively lower-cost medicines on the other side. For countries that have had smaller regulatory capacities to govern what drugs are imported, locally produced or how they are marketed and sold, who is keeping an eye on quality? All of these issues have potential significance for social and health outcomes for millions of people.
Finally, pharmaceuticals are an under-researched industry for development. I recently wrote a paper on why pharmaceuticals are important for development theory – basic development courses will frequently talk about the natural resource curse or labour standards in textile industry, but rarely delve into the pharmaceutical industry, which has a lot of broad lessons for students and researchers on the balancing act between promoting industrial development while delivering optimal social and health outcomes.
How does your work address global inequalities, one of The University of Manchester’s research beacons?
In two distinct ways. Firstly, access to medicines is a huge global inequality. Most developing countries don’t have health insurance systems, and certainly not of the kind that you find in the UK. This means that most people rely on their own private expenditure to pay for their medicines. So, the price of those medicines directly affects millions – and not just whether the medicine is cheap, but is it of the same quality and will it treat just as effectively as the pricier versions? My research tries to look at the underlying industrial mechanisms that eventually determine price and access to medicines, understanding the economic and wider social, political and health dimensions of development through that.
Secondly, between different countries, there’s huge variation in the price of medicines and in the underlying capacity to produce medicine. Different countries find themselves in very different bargaining positions when dealing with global donors or setting trade policies related to pharmaceuticals, for example. A country that is dependent on multinationals from Europe and North America for their medicines may find it difficult to implement policies in favour of generic medicines. There is also a clear North/South divide on critical patent protection issues that could create significant obstacles for the supply of generic medicines.
What is your favourite thing about GDI? Or what do you enjoy the most?
The international environment and context: both the student body and the colleagues I work with, who come from many different countries and backgrounds. We are also international in terms of outlook and orientation – there is broad support and interest for globally oriented teaching and research that involves fieldwork all over the world.
Also, the connectivity: there are so many opportunities to engage with different types of networks and colleagues, from workshops to high-profile guest lecturers. You feel well connected to the development studies and policy worlds, and in a good place to make new and relevant connections when working here.
What advice would you give to a PhD student?
It’s important to make sure that you’re producing tangible outputs (from papers to public engagement), but it isn’t all about the thesis: a PhD is a professional training that should provide you the basic skill set that you can build up as you grow as a researcher and teacher.
Who is your development hero?
Going by my EndNote files, probably Peter Evans and Gary Gereffi. The first has done a huge amount of work on the global economy, the latter on global value chains – but both started out doing research on pharmaceuticals! The shared interest in pharmaceuticals is coincidental though, I really enjoy and find relevance in all of their work. If I was pressed to choose one, it might be Evans, who wrote a pivotal book about the developmental state and really challenged the idea that the state didn’t matter for development.
What do you do when you’re not busy with research?
I used to row competitively but fieldwork cut into my training schedule. I still row, cycle, and am generally outside doing some kind of sport. Running is a favourite no-equipment option in the field!
Lose neither your hair nor your head: Six tips for starting the PhD journey
By Judith Krauss, post-doctoral associate at the Rory and Elizabeth Brooks Doctoral College
How do you best combat the jitters of starting a PhD? With over a dozen new PhD researchers joining the Rory and Elizabeth Brooks Doctoral College at the University of Manchester’s Global Development Institute, we called upon our existing PhD researchers to ease our new arrivals’ transition.
The formidable panel of Corinna Braun-Munzinger, Sally Cawood, Connie Kang, Lina Khraise, Virgi Sari, Ryo Seo-Zindy, Gaby Zapata Roman, Dani Malerba, Robbie Watt and Bala Yusuf kindly shared their much appreciated insights on the Do’s and Don’ts for the PhD journey.
The first six months
Make sure you have a life to balance your work from the beginning. The PhD is a new step – unlike previous higher education, there are only a limited number of classes to attend, and most of the work will be self-directed. Consequently, it is easy to fall into unhealthy patterns of working long hours, which can become unproductive. As a result, taking breaks, distancing yourself from work, having friends who have no idea what a conceptual framework is (and frankly don’t care) is vital. But find your own path – you know best what can help you relax, and what can help you work more productively.
Whatever you do, share your thoughts and struggles – whatever you may be feeling, someone else will have felt it before you. Hopefully, that will help you avoid the fates of two of our PhD researchers: one lost all his hair in the first PhD year, and the other realised at one point that she had not talked to her husband for a week!
Data collection
Stay level-headed: it is absolutely normal if things do not go according to plan. As a result make sure you have enough flexibility to deal with inevitable delays, limited access to databases/interviewees, and take advantage of the unexpected opportunities which present themselves.
There is a fine line between making sure you answer your research questions, but also being responsive enough to seize unexpected opportunities. In all likelihood, you will have far more data than you need to write a PhD – the question then simply becomes: which PhD do you want to write?
Other work
There are likely to be opportunities to teach, support other research projects and reach out to the community through public engagement in the course of your PhD. Be selective. What you choose to take advantage of should also depend on what you aspire to do after the PhD, helping you develop skills extending beyond your PhD research (teaching, editing, publishing, conference organising, blogging, etc). Make sure your supervisors and other academics are aware of your preferences so they can let you know about suitable opportunities.
Working with supervisors
A PhD is not so different from project management– you have to realise that a PhD is your project, you are managing it, and you are calling upon the help of two trusted consultants (ie your supervisors) when you need their input.
There is a fundamental incongruence: whereas the PhD will be almost your sole focus, supervisors will have a myriad research, teaching, administrative, supervisory, etc, responsibilities. Make sure that you use your time with them well, go into meetings with a clear idea of what you need, and also respect their other responsibilities by not sending them a chapter to read one hour before your supervisory meeting. You need high-quality supervision for guidance, but ultimately, it is your PhD, and you have to write it: you cannot sit in your PhD defence and explain that you only did this because your supervisor told you to. This also means you may have to disagree with your supervisors occasionally. But remember, your supervisors want you to succeed!
The PhD community
Your PhD colleagues are your friends, in more ways than one. They can offer immediate help on things like literature to read or software to use, and most importantly, they will understand the ups and downs of a PhD better than anyone else. Make sure you reach out to PhD candidates outside of your own discipline as well. Everyone will struggle at some point –it is important to share those experiences, and to keep an eye on each other.
Finally, never compare yourself against others’ achievements. Each PhD journey is different.
The PhD experience
While the PhD journey can be trying, it is also important to appreciate it as a privilege: few have the opportunity to spend several years reading, writing and thinking about a topic they have chosen themselves.
Make sure you enjoy it!
A note on the new proposed welfare prediction method for Kenya’s cash transfer programmes
Dr Juan Villa, Honorary Research Fellow, Global Development Institute
During my PhD at the Global Development Institute, The University of Manchester my supervisor, Professor Armando Barrientos, would repeatedly say to me “Juan, you cannot end poverty without learning who the poor are.” Although simple and perhaps colloquial, this phrase summarises why targeting is an important element in the implementation of antipoverty programmes. Apart from measuring general figures on poverty, we truly want to know who those in poverty are to respond efficiently with antipoverty interventions in an environment of scarce resources.
The Government of Kenya is currently implementing four different cash transfer interventions targeted at individuals in poverty and grouped under the National Safety Net Programme (NSNP). The Hunger Safety Net Programme was introduced in four northern areas with support of the UK’s DFID; the Cash Transfer for Orphan and Vulnerable Children currently operates almost nationwide with the support of UNICEF; the Older Persons Cash Transfer and the Cash Transfer for People with Severe Disability (CT-PWSD) were created as national initiatives to protect households with different vulnerabilities. Although these interventions belong to the NSNP, currently they are implemented with independent targeting methods that try to predict household consumption expenditure. Coming back to what Professor Barrientos would say, these interventions intend to discover who the poor are but with different identification tools and four different views of poverty.
I worked alongside with the World Bank and the African Institute for Health and Development (AIHD) in Nairobi to develop a brand new targeting method that would replace those currently used by the four programmes. While it is common to find unreliable income or consumption expenditure information in developing countries, coming up with a new method would require the identification of individuals or households in poverty with a proxy of their welfare.
After reviewing several reports on current targeting practices, I noted that there was general dissatisfaction with the implementation of current methods. These methods were based on a prediction of an official measure of consumption expenditure that allows the construction of general poverty figures, with dramatic imputations of household auto-consumption (dominant in rural areas).
As we were more interested in targeting antipoverty transfers and not in measuring the national poverty headcount, I decided to apply different techniques that provide a proxy for household welfare bypassing the prediction of consumption expenditure. Based on the 2009 National Census data, I proposed a new questionnaire to collect the required information to generate a welfare score which is currently known as the Living Conditions Score (LCS). The LCS ranges between 0 and 100, with 0 being the household with the worst living conditions and 100 the household with the best in terms of dwelling materials, provision of electricity, water and sanitation, household composition and endowment of education attainment. The questionnaire is a two-sided form that can be filled out either manually on paper or with electronic devices:
Given its censual nature, the resulting welfare score now allows the mapping of household welfare in Kenya in three geographic areas (Nairobi, rural and urban) with which the government can prioritise certain regions with acute poverty:
The technicalities of the LCS are shown in the paper cited below (or click here). The survey questionnaire and the LCS are being currently piloted by the Hunger Safety Net Programme with the support of AIHD in order to assess its reliability and adaptability with the community component of the targeting process at large. So far nearly 6,000 households have been surveyed with the new method and it is expected that by 2017 it can be adopted by the NSNP.
Several lessons emerged during the development of the new targeting tool for the NSNP. Firstly, the community component in the operation of the programme cannot be ignored. Communities are the most relevant actors in the implementation of the four cash transfer interventions of the NSNP and not allowing them participate in the targeting process with a reliable and objective proxy for household welfare might generate conflict and jeopardise the overall local operation of the interventions.
Secondly, the institutional arrangements are also important. The alignment of the four interventions to use the same poverty identification method was challenging at the beginning. Given the integration of the four cash transfer interventions into one single strategy, agencies and officials are prone to think that such merger could translate into the closing of some of them. After several clarifications the four interventions have agreed to unify their poverty identification methods.
- This blog is based on the working paper “A harmonised proxy means test for Kenya’s National Safety Net programme.”
Will the 2016 drought call time on southern Africa’s sugar fix?
By Professor Phil Woodhouse, Global Development Institute
Across southern Africa governments watch anxiously for signs that the forecast rains will arrive to break the 2015/16 drought that has devastated the region’s economy and left 40 million people, including 40% of the rural population in Malawi and Zimbabwe, facing food shortages that are set to peak next month. Even South Africa, normally a food exporter, is due to import 3.5 million tons of food in the coming months. The crisis throws into sharp relief the region’s need to drought-proof its agriculture, but also increases scrutiny on current investment into irrigation, which has been dominated by one crop: sugar cane.
The sugar industry in southern Africa has increased its output by two-thirds and the (irrigated) land it cultivates by almost 50% over the past 20 years. During this time, three South African companies have expanded their operations across the region where they now account for over 90% of sugar output. In a region where food production is vulnerable to drought, large-scale corporate control of land and water to produce a crop whose consumption is increasingly criticised on health grounds highlights the contradictory forces at work in contemporary African agriculture. An unprecedented collection of papers published this month by the Journal of Southern African Studies explores the dynamics of sugar cane production in seven countries in southern Africa and provides insight into the logic that drives the corporations, governments and local communities involved.
While the collection bears out the specificity of different national contexts, some key factors stand out. First, the sugar industry offers to many African governments a tangible opportunity to develop modern agriculture and sophisticated industrial processing to deliver globally competitive products such as sugar and ethanol. Evidence from these studies questions the modernity and productivity credentials of sugar production in southern Africa, as elsewhere, not least in some of its labour practices. However, in pursuit of agricultural and industrial goals, governments make land and water available through special planning zones, protect their sugar markets from foreign imports and endeavour to build a constituency of support among rural communities through ‘outgrower’ schemes.
Second, the historical context is important. The rapid expansion of South Africa’s sugar companies across the region was possible by the liberation of South Africa’s businesses from the constraints of apartheid coupled with the budgetary pressure on neighbouring governments to divest themselves of loss-making sugar plantations. Yet such contexts change. The European Union market to which many southern African countries had privileged access has been reformed in the past decade and the South African sugar companies themselves are now the object of takeovers, including by European sugar refiners.
Against this shifting backdrop of international markets and corporate investment in agriculture, stability may seem a problematic concept. Yet, for southern African governments and rural land users perhaps the key trade-off has been between the stability and steady growth of demand for sugar and the volatility of markets for many alternative (food) crops. This year’s drought and the prospect of changing rainfall patterns associated with climate change suggest this trade-off may need further scrutiny. Sugar cane is a highly water-intensive crop requiring ten months or more of growth before harvest. Even if food is to be imported with cash earned from sugar exports, it is likely to be a very inefficient use of water if irrigation is to underpin the region’s food security. Yet, as these studies show, sugar production is a manifestation of many intersecting interests which reflect the historical and economic context of the different countries in southern Africa, as well as their contemporary political and economic dynamics. Efforts to bring about change must rest on an understanding of each local context.
Global Development Institute Lecture Series
The Global Development Institute Lecture Series brings together scholars involved in cutting edge research on international development. It aims to facilitate dialogue and discussion, providing a space for leading development thinkers to share their latest research ideas.
The Lecture Series will begin on Wednesday, 12th October with GDI Executive Director David Hulme discussing his latest book ‘Should Rich Nations Help the Poor?’
Lectures will be held in Theatre B, Roscoe Building from 5.00 – 6.30pm BST.
- 12 October: Should Rich Nations Help the Poor? Professor David Hulme, Global Development Institute, The University of Manchester. Watch the lecture here.
- 26 October: The UK’s Post-Brexit Trade Policy: What about development? Professor Alan Winters, The Department for International Development, The University of Sussex. Watch the lecture here.
- 9 November: Capitalism and Conservation in the Age of Security: The Vitalization of the State Professor Elizabeth Lunstrum, York University. Watch the lecture here.
- 23 November: The Magic Number: 1.5°C or 2°C Limit on Warming. But, what does this actually mean for Least Developed Countries? Dr Saleemul Huq, Director of International Centre for Climate Change & Development and Senior Fellow at International Institute for Environment and Development. Watch the lecture here.
- 7 December: Bangladesh Confronts Climate Change: Keeping Our Heads Above Water Professor David Hulme, Dr Manoj Roy (Lancaster University) and Dr Joseph Hanlon (Open University). Watch the lecture here.
All the lectures will be followed by a Q&A.
The lectures will be livestreamed via Facebook Live. You can submit questions on Twitter using #GDILecture or in the Facebook Live comments section. The lectures will also be available as podcasts after the event. Find out more on the GDI website, Twitter or Facebook page.
Tracking the savings of poor households
Following on from David Hulme’s blog post Do you want to know how poor people really manage their money? Stuart Rutherford, an Honorary Research Fellow at the Global Development Institute, analyses the latest data from his fascinating financial diaries project.
The ongoing Hrishipara Daily Diary project collects data on the daily money flows of 50 low-income households living near a market town in central Bangladesh. Data collection started in May 2015 and we have published an ‘Interim Report’ covering some findings from the period up to the end of March 2016. In this blog we use more recent data to look at poor households’ savings patterns.
How poor are our ‘diarists’?
Using household net income as a measuring stick, we have categorized our 50 ‘diarists’ into four groups. The poorest have incomes which fall below the Bangladesh government’s ‘lower poverty line’ and we refer to them as extreme poor. Fifteen diarists (or about third of all diarists) are in this group. Another 7 diarists fall below the ‘upper poverty line’ and we call them very poor. Twelve more, our moderate poor diarists, have incomes up to double the upper poverty line and the remaining 16 enjoy higher incomes and we describe them as near poor. (The income figures include the value of produce farmed by diarists for their own consumption). The median income is 81 Bangladesh taka a day per person in the household, the Purchasing Power Parity equivalent of fractionally over US$2, not far from the World Bank’s ‘extreme poverty’ benchmark of $1.90.
Savings balances and savings flows
In the Interim Report we wrote about the savings and loan balances that our diarists hold in formal accounts at banks, insurance companies and MFIs (microfinance institutions like Grameen Bank, BRAC and ASA). What we found may surprise some readers. For example, we found that although MFIs were set up originally to lend to ‘the poorest of the poor’, in our sample the very poorest were the least likely to be using MFIs and in general the higher your income the more likely it was that you used MFIs. We also found that poor diarists who did use MFIs tended to use them more for saving than for borrowing. Overall, among all the diarists, savings balances were higher than loan balances. We concluded that it looked as if the MFIs have become the main receptacle for storing the savings deposits of a very large swathe of rural Bangladeshis, from the poor to the near-poor.
This analysis left many questions unanswered. Are diarists saving at other institutions besides banks and MFIs? What are their savings ‘habits’ – little-and-often or in occasional bursts, or seasonal? – and do these habits vary according to income level, or occupation, or some other characteristic? Who most likes to save? – we know that richer people tend to have bigger savings balances, but are they bigger relative to their income? And why do our diarists save?
Many of these questions are best researched by looking at the flows of income, expenditure, saving and borrowing, rather than looking at totals or balances. A strength of the financial diary methodology is that it reveals these flows in great detail and sets them in the context of the household’s economic, financial, social and even emotional life.
Going with the flow
To look more closely at savings flows, we take a sample of 44 of our diarists for whom we have complete transaction data for the six months from March to August 2016 (we have excluded six diarists for various reasons, such as their sending most of their earnings back to villages where we can’t tell how much of it was saved).
Records for these 44 diarists reveal two other popular places to deposit money besides formal banks and MFIs: the less formal local Co-operatives, and the informal village or occupational savings clubs, known in Bangladesh as ‘samities’. As the following graphics show, 40 of these 44 diarists deposited savings into one or more of these four options during the period.
More diarists deposited into MFIs than in to any other destination, but the less formal Co-operatives came a close second, and the total amount deposited into these Co-operatives during the period was greater than any of the other options. Banks attracted only two depositors, and though a quarter of all diarists in the sample saved into informal samities, the amount they saved was small.
Our diary records help to interpret these numbers. Generally speaking, the MFIs accept deposits only once a week, at a fixed time. The Co-operatives, on the other hand, take deposits at much more frequent intervals, and some send a collector each day to their clients’ homes or workplaces. Several of the samities take savings daily, but, being small entities based on the trust formed in a small community, they prefer not to handle large sums of money. All this suggests that being big enough to handle large sums, while at the same time nimble enough to collect deposits frequently, results in the most intensive saving.
Do savings rates vary with income?
The next graphic shows the saving rates (the proportion of total income deposited into the four destinations noted above) for the six-month period 1 March to 31 August 2016, by selected income class (we have omitted the very poor class because the sample size is small).
What stands out is that our extreme poor diarists, despite their income poverty, save about the same proportion of their income as do the much better-off near poor.
Within these categories, though, the behaviour of individuals varies. Our last graphic shows the percentages of total income saved by the 12 extreme poor diarists in this sample. The poorest of all (on the extreme left of the graphic) is an illiterate widow who does odd jobs for market shopkeepers for a living and feeds herself and, for part of the time, her teenage daughter on an income of less than 75 cents (PPP) a day. By avoiding debt, by living extremely modestly, and by being determined, she manages to save 25 cents most days into a Co-operative and in that way saved one fifth of her total income during the period.
Why does she do it? She tells us she isn’t saving for a particular expenditure, but to protect herself from illness, old age and misfortune, and to provide a better life for her daughter – including as a good a marriage as she can arrange for her. Such reasons for savings are the most commonly heard among our poorer diarists.
These brief notes suggest that the propensity to save is common to all levels of poor households, but the rate of savings depends on a mix of factors: the savings opportunities that are available, the way in which savings is collected, and the specific circumstances and personality of the saver. Financial diaries are perhaps the best way to explore these issues in great detail.
Any reader who would like to grapple with the Hrishipara data can get them from the author at write.ser@gmail.com.
Sharing perspectives on labour standards and labour laws in rising powers
Image by: Steve Snograss
Many in Western countries think of emerging economies such as China and India as places with weak labour standards where workers are being exploited. This ignores changes on the ground in many ‘rising powers’ countries, such as China, India, South Africa and Brazil, which have seen systematic reforms in labour laws and codes as well as an emergence of voluntary corporate social responsibility (CSR) standards over the past decade.
A workshop held in Cambridge at 5-6 September 2016 brought together researchers from two projects under the ‘Rising Powers and Interdependent Futures’ programme with practitioners and experts to discuss these trends. Stimulating discussions over the two days not only drew on diverse perspectives across academic disciplines but also allowed policy-oriented exchange between academia and practice.
To investigate the complex changes in labour regulation and CSR in the rising powers, the two projects combine very different disciplinary and methodological approaches. From a law and economics perspective, researchers on the ‘Law Development and Finance’ project at the University of Cambridge explore trends in public labour regulation based on the Centre for Business Research (CBR) Labour Regulation Index, a unique quantitative dataset that documents labour laws in 117 countries over the period 1970 to 2013. The data first of all shows that labour regulation in rising powers is becoming increasingly strict. Another finding that may be surprising for some is that stronger regulation does not necessarily lead to losses in employment and productivity, but can improve economic performance.
Coinciding with these reforms in public regulation, the project on ‘Labour Standards and Global Production Networks’ at the University of Manchester finds an emergence of voluntary standards and local norms around CSR in China, India, South Africa and Brazil. Researchers from Manchester draw on qualitative methods and case study analysis to understand how these local CSR standards interact with state regulation and with global labour standards set by international organisations and Western multinational companies. Discussions during the workshop highlighted the very different understandings of CSR across rising power countries. They also underlined the need to take into account the different ways in which CSR interacts with public regulation in these countries.
Following from the lively exchange around labour reforms, academic researchers and practitioners arrived at the question: How can we bridge the gap between academia and practice better and more often? One key lesson was that closer academia-policy interaction could result in better ‘co-production’ of research, and in ways that might have greater impact. Discussions revealed, however, some challenges around the current debate on the wider impact of academic research. For instance, often practical impact is difficult to measure for a single researcher or piece of work, but becomes clearer for an entire body of literature that changes thinking and policy-making. Another challenge is that communication channels may not be conducive to academic research informing policy, e.g. if academic papers only draw conclusions for the literature, or if media interviews are cut too short to allow a researcher to communicate a differentiated idea. Some of the ideas for moving forward were to highlight policy conclusions also in academic journals and to foster links between media and academics that have become weaker over the past years.
For more details, please refer to the publications from the two projects:
- output from the Manchester project on the Rising Powers website
- output from the Cambridge project on the Rising Powers website and on the University of Cambridge website
This post first appeared on the Rising Powers blog
What matters most for improving the prospects of low-income and disadvantaged people?
We asked the participants of the DSA conference this question at the GDI stand last week, and gave them four options: politics, institutions, economic growth, or something else?
Although a blind vote might have made the results fairer, the winner is not particularly surprising considering that the conference theme was “Politics in Development”. Institutions had a brief surge on day two of the conference, but politics pulled ahead to win at the end. One of its supporters was GDI’s Executive Director David Hulme:
https://youtu.be/YVTuqVVlCDY
GDI’s PhD researcher Daniele Malerba chose economic growth, but differentiated his answer by low- and middle-income countries.
https://youtu.be/N8Po0ZE1KrY
The “Something Else” answer also had its fair share of support, led by Duncan Green who advocated for ‘social norms’:
https://youtu.be/b0PuYDUUeWc
All of these three factors (and many others) clearly matter, and most are intertwined with each other, but as a thought exercise, what matters most? What do you think?
GDI at #DSA2016 asked: what matters most for improving the prospects of low-income and disadvantaged people?
— Global Dev Institute (@GlobalDevInst) September 23, 2016