The AfCFTA proceeded fairly smoothly, albeit only in the first stages of integration. The contrast between these two processes was stark. Last year saw Britain’s exit from the European Union and the signing of the African Continental Free Trade Agreement (AfCFTA). Breaking up is harder than getting together. To reword Richard Carlson, don’t sweat the big stuff. The lesson here is that, when a distortion gets extremely big, people find ways of working around it. At these sealed-bid auctions, the dollar fetched a price of over 500 SSPs. The Bank of South Sudan decided to hold an auction for the foreign exchange that it received as part of an IMF program. Sri Lanka has a few, large firms that export canned fruits and vegetables, where the raw material is bought from those farms that are permitted to grow them. In reviewing these countries’ experiences last year, it dawned on me that the private sector seems to find ways of getting around these distortions, especially when they are egregious. In both cases, policy advisers (including myself) have tried to convince the government to remove the distortions-but they have remained in place. dollar, the parallel market rate is about 500 SSPs to the dollar. In South Sudan, whereas the official exchange rate is 55 South Sudanese Pounds (SSP) to the U.S. In Sri Lanka, the land policy constrains farmers to grow paddy while other crops such as fruits and vegetables are more lucrative. In many countries, there are one or two giant distortions that impede growth and poverty reduction. This is also a rare case where the paper’s co-author (Banerjee) is also part of the identification strategy. Not only did the intervention significantly increase the suggested behavior in the treatment group, but it seemed to increase behaviors, such as mask-wearing, that were not mentioned in the original message. In West Bengal, India, some 25 million people were sent an SMS message by Nobel Laureate and West Bengal native Abhijit Banerjee encouraging various health-promoting behaviors such as social distancing, handwashing, and reporting symptoms to community health workers. The second is to provide information, alongside money and other resources, to poor people to influence behavior. One is to engage communities and civil society in the management of public expenditures. Many COVID-19 programs are doing at least one of two things that have been shown to make public spending more effective. COVID-19-related public spending has a better chance of reaching the poor. On reflection, however, I am optimistic about 2021, because of what we are learning.
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