“For rapid, shared growth, governments must promote economic integration which, at its core, is about the mobility of people, products, and ideas,” said the World Development Report 2009: Reshaping Economic Geography, released amid a function on Monday.
The report argued that the most effective policies for promoting long-term growth are those that facilitate geographic concentration and economic integration, both within and across countries.“History shows that severe crises can cause nations to become inward-looking, sometimes with negative consequences,” argued the report.
“The world’s most geographically disadvantaged people know all too well that growth does not come to every place at once,” said Indermit S Gill, Director of the World Development Report (WDR) and World Bank Chief Economist, Europe and Central Asia.
Integration should be the pivotal concept in policy discussions involving the location of production, people and poverty—in particular, the debates on urbanization, regional development and globalization, said the report and added that instead, all three overemphasize place-based interventions.
“The ideas that the report bring to the table are highly relevant to the transitions that Nepal is currently undertaking,” said Susan Goldmark, the World Bank Country Director for Nepal.
The WDR has reframed the policy debates to include all the instruments of integration—common institutions, connective infrastructure and targeted interventions. By common institutions, the report means regulations affecting land, labor and commerce, and social services such as education and health financed through taxes and transfers.
Infrastructure refers to roads, railways, ports, airports and communications systems. Interventions include slum clearance programs, special tax incentives to firms, and preferential trade access for poor countries.
Geography matters greatly in deciding what is needed, what is unnecessary, and what will fail, argued the report. By calibrating the blend of these policies, developing nations can reshape their economic geography, much as today’s high-income economies did in the past. If they do this well, the report concludes, their growth will still be unbalanced, but their development will be inclusive.
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