Bringing Financial Literacy and Education to Low and Middle Income Countries: The Need to Review, Adjust, and Extend Current Wisdom

This paper presents a World Bank led and Russia trust fund financed work program to measure financial capability and the effectiveness of financial education in low and middle income countries. The two activities and their staging have been motivated by the lessons of high-income countries with financial literacy programs and the deviating characteristics of low and middle income countries. While progress has been made in high-income countries to measure financial capability, there is little robust empirical evidence that financial education can improve it. While applying the financial capability concept in low and middle-income countries looks promising it will need to be adjusted to their characteristic and supported by innovative interventions and rigorous impact evaluation to improve it.financial literacy, financial capability, financial education, impact evaluation

A World Bank perspective on pension reform

This report highlights the World Bank's thinking and worldwide involvement in pension reform. Both are driven by the Bank's mandate to help countries develop economically and to reduce poverty. The Bank has four key concerns in working with clients on pension policy: 1) short-term financing and long-term financial viability; 2) effects on economic growth; 3) adequacy and other distributive issues; and 4) political risk and sustainability. In response to these concerns and after review of the three main reform options for unfunded systems-mere pay-as-you-go reform, a rapid and complete shift to a mandatory funded system, and a gradual shift to a multi-pillar scheme-the Bank favors the later approach, but in a pragmatic and country-specific manner. When helping to implement a pension reform, the Bank takes full account of country preferences, circumstances and ownership, bases its support on sound reform criteria, links client assistance with knowledge management, provides training and other measures to enhance the reform capacity of a country, and seeks cooperation with other international institutions.Pensions&Retirement Systems,Banks&Banking Reform,Environmental Economics&Policies,National Governance,Health Monitoring&Evaluation

Can investments in emerging markets help to solve the aging problem ?

Prefunding of pension commitments in OECD (Organization of Economic Cooperation and Development) economies is increasingly seen as a central strategy to cope with the aging of their populations. This paper argues that investments in emerging markets can help at the margin but are unable to solve the demographic problem. While these investments bring potential advantages through enhanced risk diversification, higher rates of return, and accelerated financial market development, the total effects are likely to be limited. Furthermore, in order to harvest them, capital-sending and -receiving countries must fulfill various politically and economically challenging requirements. For pension policy, the limited contribution of pre-funding at home and abroad in order to address the demographic problem implies that enhanced emphasis must be given to domestic reforms.Environmental Economics&Policies,International Terrorism&Counterterrorism,Health Economics&Finance,Banks&Banking Reform,Economic Theory&Research

Risk and vulnerability : the forward looking role of social protection in a globalizing world

The paper outlines a forward-looking role of social protection against the background of increasing concerns about risk, and vulnerability, exemplified by the recent East Asian crisis, the concerns of the World Development Report (WDR) 2000, the need for a better understanding of poverty dynamics, and the opportunity and risks created by globalization. These considerations, and the need for a more proactive approach to lasting poverty reduction, have led to the development of a new conceptual framework, which casts social protection as social risk management. The paper highlights the main elements of the new conceptual framework, and its main strategic conclusions for attacking poverty, before addressing crucial issues for its implementation: the need for an operational definition of vulnerability; the use of social risk assessments as an operational entry point for a new policy dialogue; economic crisis management, and the lessons for social protection; and, the undertaking of social expenditure reviews to enhance the effectiveness of government intervention for addressing risk and vulnerability. The pilot experience with some of these elements, yields cautious optimism that a promising road for addressing poverty has been found.Environmental Economics&Policies,Social Risk Management,Health Economics&Finance,Poverty Assessment,Insurance&Risk Mitigation

Can Investments in Emerging Markets Help to Solve the Aging Problem?

Prefunding of pension commitments in OECD economies is increasingly seen as a central strategy to cope with the aging of their populations. This paper argues that investments in emerging markets can help at the margin but are unable to solve the demographic problem. While these investments bring potential advantages through enhanced risk diversification, higher rates of return, and accelerated financial market development, the total effects are likely to be limited. Furthermore, in order to harvest them, capital sending and receiving countries must fulfill various politically and economically challenging requirements. For pension policy, the limited contribution of pre-funding at home and abroad in order to address the demographic problem implies that enhanced emphasis must be given to domestic reforms.Aging, pensions, international investments, emerging markets, risk diversification

Itinerant-electron magnetism: the importance of many-body correlations

Do electrons become ferromagnetic just because of their repulisve Coulomb interaction? Our calculations on the three-dimensional electron gas imply that itinerant ferromagnetim of delocalized electrons without lattice and band structure, the most basic model considered by Stoner, is suppressed due to many-body correlations as speculated already by Wigner, and a possible ferromagnetic transition lowering the density is precluded by the formation of the Wigner crystal.Comment: published version including supplementary materia

Bringing financial literacy and education to low and middle income countries : the need to review, adjust, and extend current wisdom

This paper presents a World Bank led and Russia trust fund financed work program to measure financial capability and the effectiveness of financial education in low and middle income countries. The two activities and their staging have been motivated by the lessons of high income countries with financial literacy programs and the deviating characteristics of low and middle income countries. While progress has been made in high-income countries to measure financial capability, there is little robust empirical evidence thatfinancial education can improve it. While applying the financial capability concept in low and middle-income countries looks promising it will need to be adjusted to their characteristic and supported by innovative interventions and rigorous impact evaluation to improve it.Financial Literacy,Access to Finance,Access&Equity in Basic Education,Education For All,Poverty Impact Evaluation