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“The World Development Report 2006” World Bank 2005

The World Development Report 2006 aims to present evidence of global inequality of opportunity and show how it impairs development. The report advocates taking equity into account when determining development priorities and supports public action that aims to expand the opportunities of those who are less capable and where policy interventions are absent. The report is divided into three parts. Part I considers the inequality of opportunity, within and across countries. The report attempts to quantify inequality of opportunity but, more generally it relies on evidence of highly unequal outcomes across groups defined by predetermined circumstances—such as gender, race, family background, or country of birth. These are considered markers for unequal opportunities. For example the report looks at childhood access to a basic package of immunization services.

There is substantial inequality in access to immunizations between, for example, Egypt, where almost everyone is covered (on the left), and Chad, where more than 40 percent of children are excluded (on the right). Yet the disparities can be as large within some countries as they are across all nations in the sample. In Eritrea, for instance, the richest fifth enjoys almost complete coverage,but almost half of all children in the poorest fifth are excluded.

Part II of the WDR report asks why equity matters. The section primarily focuses on the two consequences of inequality on the development of nations. These include the effects of unequal opportunities in a range of markets. The consequences of unequal opportunities can also impair the development of public institutions. The case study that the report turns to is the situation of children within the caste system in India. The report makes the case that discrimination and stereotyping are mechanisms that reproduce inequality between groups and lower the self-esteem, effort, and performance of individuals. This reduces their potential for individual growth and their ability to contribute to the economy. Figure 5 shows evidence of the detrimental effects of the caste system’s discrimination.

Children from different castes were asked to complete simple exercises, such as solving a maze, with real monetary incentives contingent on performance.The key result of the experiment is that low-caste children perform on par with high-caste children when their caste is not publicly announced by the experimenter. When the caste is made public the children perform significantly worse. If a similar inhibition of talent occurs in the real world, this implies a loss of potential output owing to social stereotyping. The final section of the World Development Report asks how public action can level the political and economic playing fields. For example, the report looks at the way that in many developing countries, state provision of services can magnify—rather than attenuate—inequalities at birth. Because differences in cognitive development start to widen from a very early age,early childhood development initiatives can be central to more equal opportunities.The report refers to an experiment in Jamaica to support this finding.

The experiment focused on undersized children (9 to 24 months) and found that they suffered from lower levels of cognitive development than those of normal height. Nutritional supplements and a program of regular exposure to mental stimulation,helped offset this disadvantage. After 24 months, children who received both better nutrition and more stimulation had virtually caught up developmentally with children who started life at a normal height. This illustrates how decisive and well-designed public action can substantially reduce the opportunity gaps between those least privileged and the societal norm. Investing in the neediest people early in their childhoods can help level the playing field.

Within countries, the Report makes the case for investing in people and expanding access to justice, land, infrastructure, and promoting fairness in markets. Internationally, the report analyses the functioning of global markets and the rules that govern them. It supports the complementary provision of aid to help poor countries and poor people build greater endowments.

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