Whose Global Pulse:  Diagnosing Sickness or Health? Wim Naudé UNU-WIDER Global Pulse Workshop, Tarrytown, USA,  8-10 Septe...
 
20 Years Ago... <ul><li>Nelson Mandela stepped as a free man from prison </li></ul><ul><li>The Berlin Wall had just fallen...
Since then human-made and natural disasters struck <ul><li>Financial crises </li></ul><ul><li>13 Oct 1989: Friday the 13th...
Since then man-made and natural disasters struck <ul><li>Natural disasters: </li></ul>Source of data: CRED
Since then man-made and natural disasters struck <ul><li>Food and energy price shocks </li></ul>Source: FAO Source: UNCTAD...
The exhorbitant cost of recent disasters Impacts of the Food, Fuel and Financial Crises on Selected Global Development Ind...
The exhorbitant cost of the financial crisis
UNU-WIDER thinking about human wellbeing
Measuring Human Development and Wellbeing <ul><li>Why:  </li></ul><ul><ul><li>Track progress (or decline) </li></ul></ul><...
Shortcomings <ul><li>Future dimension </li></ul><ul><ul><li>The world has become ‘risk sensitive’ </li></ul></ul><ul><ul><...
Vulnerability Initiatives <ul><li>Vulnerability is the risk of some negative event taking place. </li></ul><ul><li>It refe...
What is ’Vulnerability to poverty’? <ul><li>Micro-level  :  = the risk of households  falling in  or  remaining  in povert...
Measurement of Vulnerability -II <ul><li>Examples: Vulnerability to poverty can be measured either as  </li></ul><ul><ul><...
Examples: Typical components of a macro-economic vulnerability index <ul><ul><li>Size of (local) economy  </li></ul></ul><...
Examples: ‘Intervention index’ for South Africa Source: Naudé, W.A. , McGillivray, M. and Rossouw, S. (2009). ‘Measuring t...
Shortcomings of Vulnerability Measures <ul><li>Largely based on existing national macro-data or household and labor survey...
Resilience (coping) <ul><li>Is it better to measure resilience? </li></ul><ul><li>Resilience refers to the ability to with...
So how to measure resilience? <ul><li>Institutional quality </li></ul><ul><ul><li>Governance (accountability, effectivenes...
Vulnerability to Poverty and Resilience focusing on the household Source : Naudé, Wim, Santos-Paulino, Amelia and Mark McG...
Responding to Vulnerability, a Generic Approach Source : Naudé, Wim, Santos-Paulino, Amelia and Mark McGillivray, eds. 200...
Example: Vulnerability and resilience in Africa during the financial crisis -1
Example: Vulnerability and resilience in Africa during the financial crisis -2 Source : Naudé, W.A. (2010). Africa And The...
Questions <ul><li>Frequency of measurement? </li></ul><ul><li>Correlations with income? (NMR – ‘intervention index’) </li>...
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Whose Global Pulse: Diagnosing Sickness or Health?

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Presentation by Wim Naudé of UNU-WIDER addressing issues of vulnerability and resilience at the United Nations Global Pulse Data and Analytics Workshop in Tarrytown, USA, 8-10 September 2010.

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Whose Global Pulse: Diagnosing Sickness or Health?

  1. 1. Whose Global Pulse: Diagnosing Sickness or Health? Wim Naudé UNU-WIDER Global Pulse Workshop, Tarrytown, USA, 8-10 September 2010.
  2. 3. 20 Years Ago... <ul><li>Nelson Mandela stepped as a free man from prison </li></ul><ul><li>The Berlin Wall had just fallen </li></ul><ul><li>It was the end of the Cold War </li></ul><ul><li>The Human Development Index was adopted by the UN </li></ul><ul><li>Britain ceased to be an Island;and </li></ul><ul><li>The Three Tenors sang for the first time... </li></ul>
  3. 4. Since then human-made and natural disasters struck <ul><li>Financial crises </li></ul><ul><li>13 Oct 1989: Friday the 13th mini-crash Wall St. </li></ul><ul><li>16 Sept 1992: Black Wednesday UK (withdrawal of pound from the ERM) </li></ul><ul><li>1992: Nordic Banking Crisis </li></ul><ul><li>December 1994: The Mexican crisis of 1994-1995 ( el error de diciembre ) </li></ul><ul><li>1995 Argentinian Crisis </li></ul><ul><li>July 1997: Asian Financial Crisis </li></ul><ul><li>17 August 1998: Russian Financial Crisis </li></ul><ul><li>The Brazilian crisis of 1998-1999 </li></ul><ul><li>The Argentinian crisis of 1999-2002 </li></ul><ul><li>10 March 2000: Dot-com bubble burst </li></ul><ul><li>27 February 2007: The Chinese Correction plunge </li></ul><ul><li>15 September 2008: Subprime Mortgage Crisis </li></ul><ul><li>2009 : Global Economic Crisis (global recession) </li></ul><ul><li>February 2010: Greek sovereign debt crisis </li></ul>....to name but a few of the more than 120 financial crises endured since the 1970s
  4. 5. Since then man-made and natural disasters struck <ul><li>Natural disasters: </li></ul>Source of data: CRED
  5. 6. Since then man-made and natural disasters struck <ul><li>Food and energy price shocks </li></ul>Source: FAO Source: UNCTAD Commodity Price Bulletin
  6. 7. The exhorbitant cost of recent disasters Impacts of the Food, Fuel and Financial Crises on Selected Global Development Indicators (Source: Adapted from Heady et al., 2009:14) (Note: a Taken from Friedman and Schady, 2009; b Based on the ILO (2009a) worst case scenario forecast)
  7. 8. The exhorbitant cost of the financial crisis
  8. 9. UNU-WIDER thinking about human wellbeing
  9. 10. Measuring Human Development and Wellbeing <ul><li>Why: </li></ul><ul><ul><li>Track progress (or decline) </li></ul></ul><ul><ul><li>Inform policy, inform responses </li></ul></ul><ul><li>How </li></ul><ul><ul><li>UN SNA (national economy) </li></ul></ul><ul><ul><li>Quality of life : (i) objective (ii) subjective indicators </li></ul></ul><ul><ul><li>Multidimensional Poverty Indexes, Deprivation Indexes, transient vs chronic poverty measurement, etc. </li></ul></ul><ul><li>Examples </li></ul><ul><ul><li>HDI, MPI, MDGs, Happy Planet Index, Global Peace Index, Global Prosperity Index, Gallup World Poll, Competitiveness Index, etc etc. </li></ul></ul>
  10. 11. Shortcomings <ul><li>Future dimension </li></ul><ul><ul><li>The world has become ‘risk sensitive’ </li></ul></ul><ul><ul><li>Impact of and possibilities for further disasters </li></ul></ul><ul><ul><ul><li>Human-made disasters </li></ul></ul></ul><ul><ul><ul><li>Natural disasters </li></ul></ul></ul><ul><li>Hence growth, GDP, HDI, MPI and MDGs are subject to risk and uncertainty </li></ul><ul><li>How can this risk be measured, so as to track whether we are more or less at risk and inform policy ? </li></ul><ul><ul><li>so to reduce risk, mitigate risk or assist risk coping </li></ul></ul>
  11. 12. Vulnerability Initiatives <ul><li>Vulnerability is the risk of some negative event taking place. </li></ul><ul><li>It refers to a specific source of risk (hazard): poverty, natural hazards, environmental degradation, conflict, climate change, etc. </li></ul><ul><li>Measurements </li></ul><ul><ul><li>Macro-level indexes (UN-DESA /Guilliamont, Briguglio etc) </li></ul></ul><ul><ul><li>Vulnerability to natural disasters (see e.g. UN-EHS) </li></ul></ul><ul><ul><li>Micro-focus: household vulnerability to poverty (risk to fall into or remain in income poverty) </li></ul></ul>
  12. 13. What is ’Vulnerability to poverty’? <ul><li>Micro-level : = the risk of households falling in or remaining in poverty due to either idiosyncratic hazards or covariate/aggregate hazards. </li></ul><ul><li>Macro-level : = the risk that a ‘system’ (such as a country) will be adversely affected by a shock or ‘perturbation’ - which include natural hazards, macro-economic shocks, or political conflict shocks – resulting in rising poverty. </li></ul>
  13. 14. Measurement of Vulnerability -II <ul><li>Examples: Vulnerability to poverty can be measured either as </li></ul><ul><ul><li>(a) uninsured exposure to risk, </li></ul></ul><ul><ul><li>(b) expected poverty or </li></ul></ul><ul><ul><li>(c) lower expected utility, as a result of shocks which affects income or consumption. </li></ul></ul><ul><li>Some Examples on macro-level: </li></ul><ul><ul><li>Commonwealth Vulnerability Index (CVI) </li></ul></ul><ul><ul><li>Inter-American Bank’s Prevalent Vulnerability Index (PVI) </li></ul></ul><ul><ul><li>Environmental Vulnerability Index (EVI) developed by UNEP and South Pacific Applied Geoscience Commission (SOCAP. </li></ul></ul>
  14. 15. Examples: Typical components of a macro-economic vulnerability index <ul><ul><li>Size of (local) economy </li></ul></ul><ul><ul><li>Structure of the local economy </li></ul></ul><ul><ul><li>International trade capacity </li></ul></ul><ul><ul><li>Peripherality </li></ul></ul><ul><ul><li>Development level of a place </li></ul></ul><ul><ul><li>Income volatility </li></ul></ul><ul><ul><li>Demography and health </li></ul></ul><ul><ul><li>Governance </li></ul></ul><ul><ul><li>Environment and geography, and </li></ul></ul><ul><ul><li>Financial system </li></ul></ul>
  15. 16. Examples: ‘Intervention index’ for South Africa Source: Naudé, W.A. , McGillivray, M. and Rossouw, S. (2009). ‘Measuring the Vulnerability of Sub-National Regions’, Oxford Development Studies , Sept. 37 (3): 249-276.
  16. 17. Shortcomings of Vulnerability Measures <ul><li>Largely based on existing national macro-data or household and labor surveys </li></ul><ul><li>Problems with data availability and comparisons over time. </li></ul><ul><li>Data frequency, lags. </li></ul><ul><li>Cannot predict a hazard from occurring. </li></ul><ul><li>Number of risks and VIs multiplying – a catastrophizing industry) </li></ul><ul><li>Says little about responses or reactions </li></ul><ul><li>Black Swan problem (e.g. Oil spill in Gulf of Mexico) </li></ul>
  17. 18. Resilience (coping) <ul><li>Is it better to measure resilience? </li></ul><ul><li>Resilience refers to the ability to withstand shocks, to recover and bounce back. </li></ul><ul><ul><li>Ex ante households often attempt to diversify their sources of incomes, </li></ul></ul><ul><ul><li>ex post they rely on various forms of ‘insurance’ (insurance, migration, networks, wealth) </li></ul></ul><ul><ul><li>Household capabilities, household assets, and the fragility of their contexts (including state and natural environment fragility) play an important role in resilience </li></ul></ul><ul><li>It is not the inverse of vulnerability (sometimes reducing vulnerability does not mean improved resilience and vice versa – see e.g. trade) </li></ul><ul><li>Resilience may also refer to a more long-term, stable ability than vulnerability </li></ul>
  18. 19. So how to measure resilience? <ul><li>Institutional quality </li></ul><ul><ul><li>Governance (accountability, effectiveness, freedom, control of corruption) </li></ul></ul><ul><ul><li>Entrepreneurial economy response (ease of doing business) </li></ul></ul><ul><ul><li>Macro-economic stability and management </li></ul></ul><ul><ul><li>Shared society </li></ul></ul><ul><ul><li>Infrastructure, public assets </li></ul></ul><ul><ul><li>Aid effectiveness </li></ul></ul><ul><li>Household / Individual capabilities </li></ul><ul><ul><li>Education and skills, incl . Entrepreneurial orientation (diversification, innovation) </li></ul></ul><ul><ul><li>Health </li></ul></ul><ul><ul><li>Networks </li></ul></ul><ul><ul><li>Assets </li></ul></ul><ul><ul><li>Insurance </li></ul></ul><ul><ul><li>Migration </li></ul></ul><ul><li>Starting on a national level is a begin, but sub-national geographically referenced data is ultimately needed </li></ul>
  19. 20. Vulnerability to Poverty and Resilience focusing on the household Source : Naudé, Wim, Santos-Paulino, Amelia and Mark McGillivray, eds. 2009. Vulnerability in Developing Countries . Tokyo: UNU Press
  20. 21. Responding to Vulnerability, a Generic Approach Source : Naudé, Wim, Santos-Paulino, Amelia and Mark McGillivray, eds. 2009. Vulnerability in Developing Countries . Tokyo: UNU Press
  21. 22. Example: Vulnerability and resilience in Africa during the financial crisis -1
  22. 23. Example: Vulnerability and resilience in Africa during the financial crisis -2 Source : Naudé, W.A. (2010). Africa And The Global Economic Crisis: A Risk Assessment And Action Guide. RSCAS Working Paper no 2010/27 , European University Institute, Florence.
  23. 24. Questions <ul><li>Frequency of measurement? </li></ul><ul><li>Correlations with income? (NMR – ‘intervention index’) </li></ul><ul><li>Confidence in predictive ability? </li></ul><ul><li>Only relative measures: what level of resilience is enough and for what type of hazards? </li></ul><ul><ul><li>Complacency (e.g. financial crisis) </li></ul></ul><ul><ul><li>Threshold levels: circuit breakers and signals </li></ul></ul><ul><li>Dangers of labels? </li></ul><ul><li>Moral hazards in resilience measures? </li></ul>
  24. 25. Thank you!

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