The Unassuming Economist

While the Covid-19 pandemic hit the world very hard, it is particularly well known that developing economies took the largest hit. In that, Latin America’s “long-standing fiscal and social deficits” have compounded the problem for policymakers, as discussed in a recent blog for VoxEU CEPR by Ilan Goldfajn (Chairman of the Board, Credit Suisse) and Eduardo Levy Yeyati (Dean, School of Government, Universidad Torcuato Di Tella).

“The pandemic also flagged two long-standing but often overlooked regional deficits: poor state capacity, and labour exclusion and informality. This explains the region’s worse performance during the pandemic: larger welfare costs and meager relative recovery. Not surprisingly, societies face growing indifference with political regimes (Latinobarómetro 2021), and social outbursts in several countries, such as Chile or Colombia, reveal dissatisfaction which will likely limit economic policy looking forward. On the one hand, many countries came from a period of increased civil unrest that reduced the government’s ability to restrict mobility. On the other hand, lack of political cohesion made it more difficult to implement restrictions, which inevitably led to lockdown fatigue and declining compliance. On top of that, a background of discontent and/or ongoing recessions clouded any perception of effective pandemic response.”

The article then moves on to discuss some areas that may possibly restrain constructive policy solutions, such as the limited size of the public sector given the already mounting primary deficit, populist policy temptations clashing with economically robust policies, etc.

Read the full blog here.

The National Council of Applied Economic Research (NCAER) recently hosted Dr. Gita Gopinath, currently serving as the Chief Economist at the IMF for a discussion on the outlook for global growth in 2022. Among other things, the discussion touched upon topics like vaccination for protection against Covid-19, inflationary pressures in several countries, and the unique set of challenges before policymakers.

Watch the full video here.

David Malpass, President of the World Bank Group, and Henrietta H Fore, Executive Director of UNICEF write about mitigating educational challenges of the Covid-19 pandemic in a recent opinion piece (December 2021) for Project Syndicate. Excerpts from the article:

“According to World Bank estimates, pandemic-related school closures could drive up “learning poverty” – the share of 10-year-olds who cannot read a basic text – to around 70% in low- and middle-income countries. This learning loss could cost an entire generation of schoolchildren $17 trillion in lifetime earnings. Throughout the pandemic, marginalized children have struggled the most. When classrooms around the world reopened this fall, it became clear that these children had fallen even further behind their peers. Before the pandemic, gender parity in education was improving. But school closures placed an estimated ten million more girls at risk of early marriage, which practically guarantees the end of their schooling.”

Further, they discuss prospects for higher investment in education, some best practices, and access to digital learning as a “great equalizer”.

Click here to read the full article.

In a column for VoxDev ( December 2021), economists Eeshani Kandpal and Elina Pradhan of the World Bank Development Research Group, Madhulika Khanna from Yale University, and Benjamin Loevinsohn of The Global Fund explain results from an experiment in Nigeria. “Providing operating funds to public health facilities can be as effective as alternative pay-for-performance models, at half the cost”, they write.

The authors discuss some factors besides poor effort put in by healthcare workers, such as lack of control on operational budget by PHCs which causes delays and other inefficiencies to build a case in favor of decentralized financing. The study compares outcomes from two interventions- pay for performance and decentralized facility financing. It presents conclusions about the performance of both interventions in areas like quality of service delivered, immunization of children, use of contraceptives, antenatal care-seeking. The article also discusses several policy insights.

Click here to read the full column.

The latest report by World Health Organization, Global expenditure on health: Public spending on the rise? (2021), highlights interesting statistics about expenditure in high income, low income, and low middle-income countries on primary healthcare, the correlation between government spending and out-of-pocket expenditure, trends in public investment patterns, etc. It analyzes data over a 20 year period, from 2000 until 2019, and provides crucial policy insights alongside recent developments.

“Overall, global spending on health has doubled in real terms over the past two decades, reaching US$ 8.5 trillion in 2019 and 9.8% of GDP (up from 8.5% in 2000). Spending on health remained highly unequal—and more unequal than the distribution of global GDP. High income countries accounted for nearly 80% of global spending on health (with the United States of America alone accounting for more than 40%), and their average spending per capita was more than four times the average GDP per capita of low income countries. In countries for which data were available, about half of health spending went towards primary health care (PHC), representing about 3% of GDP on average. Nearly half of PHC spending was funded by private sources, the same as for non-PHC services. Among the low income countries for which data were available, about one-third of PHC spending came from external aid and one-fifth came from government sources, whereas the composition was reversed for non-PHC spending. Further analysis from a set of low and middle income countries indicates that the share of PHC spending that went to infectious diseases was significantly higher than the share that went to noncommunicable diseases and injuries.”

Click here to access the full report.