Journal Issue

Recent staff studies

International Monetary Fund. External Relations Dept.
Published Date:
March 1983
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Peter H. Neumann and Maureen A. Cunningham

Mexico’s Free Textbooks: Nationalism and the Urgency to Educate

World Bank Staff Working Paper No. 541, US$5.

Increased enrollments in developing countries often mask the reality of teachers without the tools with which to teach and children without the books from which to learn. Textbooks are a small item in any school system’s budget, but they are crucial to the effectiveness of the educational effort and in the developing countries a relatively small investment in increased distribution can provide dramatic returns.

Mexico nationalized the publication of primary school textbooks in 1959 and has for 20 years distributed them free to its primary school students. Its success in overcoming political, economic, and technical obstacles in the face of limited resources reflects the importance of political will and commitment and suggests that the Mexican experience might offer a valuable example for other developing countries.

The authors analyze the factors at work in the Mexican program and conclude that any successful national effort to provide free textbooks must have the following: (1) strong and continued government commitment; (2) carefully planned institution building (with proper concern for the indigenous publishing industry); (3) development of a realistic curriculum; (4) staff who were, or were trained to become, experts in educational publishing; (5) regard for existing models of successful textbooks and series; (6) teacher participation in development of textbooks; (7) research and testing of materials; (8) training teachers to use new textbooks; (9) continuous improvement of materials; and (10) an element of choice among textbooks, so that materials can be better matched to local needs.

Douglas H. Keare and Scott Paris

Evaluation of Shelter Programs for the Urban Poor: Principal Findings

World Bank Staff Working Paper No. 547, US$5.

The World Bank began lending for projects in urban development in 1972. Now, a decade later, the first detailed evaluation of four such projects (in El Salvador, the Philippines, Senegal, and Zambia) indicates that they have been remarkably successful.

New sites and services developments and schemes to upgrade squatter areas that provide secure tenure and basic services would, the Bank believed, enable and encourage low-income households to improve their housing through self-help financing and/or construction. But could private savings be mobilized; could truly low-cost shelter be designed for low-income households; and, if this occurred on a small scale, could it influence national shelter policies?

While confirming the projects’ effectiveness in meeting these objectives, the paper notes some problem areas and yields some unexpected findings. As hoped, housing stocks increased (by as much as 50 per cent in Zambia), and fears of a generation of new slums were allayed when the quality of this new housing exceeded expectations. The projects were effective in reaching low-income groups, and services showed significant improvement, though early problems arose in coordinating the large number of government and private organizations involved. (These problems could be avoided, it was found, by simplifying the first projects undertaken in a country.)

These urban projects did reach the poor, but one surprising finding is that the range of household incomes within a project area—particularly in squatter areas—was much broader than expected. This could work to the advantage of the poorer members of the community—for example, by providing income-earning opportunities. On the other hand, the heterogeneity poses problems in targeting benefits directly to low-income groups.

Housing construction and upgrading generated substantial employment and income and significantly greater rental income than expected. Self-help proved a relatively efficient construction method, though the use of self-help labor was apparently not as economical as, and therefore less common than, anticipated. Costs were a particularly impressive element in the projects’ success—running less than one fifth of those for conventional housing in Zambia and less than one half in El Salvador. Cost recovery, however, presented problems in three of the four projects.

Robert C. Effros (editor)

Emerging Financial Centers: Legal and Institutional Framework

International Monetary Fund, Washington, DC, 1982, xvi + 1150 pp., US$35.

The nineteenth and twentieth centuries witnessed the rise of a number of great financial centers, which developed, as a rule, in powerful and growing economies. The second half of this century, however, has been marked by a new phenomenon: the emergence of certain developing countries as financial centers that are not necessarily located in great national economies. They may, in fact, be geographically distant from the principal sources and destinations of their funds. This book, edited by the Assistant General Counsel (Legislation) in the Fund’s Legal Department, examines seven such centers: the Bahamas, Hong Kong, the Ivory Coast, Kenya, Kuwait, Panama, and Singapore.

The common feature that sets these centers apart from their neighbors is the sophistication and development of their financial institutions. In each, banks, insurance companies, specialized financial institutions, and securities brokers—both local and foreign—offer a wide range of services to residents, and often to nonresidents as well. While each is a success in its own right as a developing financial center, not every one is at the same stage of development. Some have an effect well beyond their boundaries, while the importance of others is still largely national.

Why have these economies consistently distinguished themselves from their neighbors in the breadth and drive of their growth as financial centers? The history and development of the emerging financial centers reveals numerous accidental circumstances and diverse causation, yet despite obvious differences, the centers have had to confront common problems. Their evident success in dealing with similar challenges suggests a degree of commonality in their legislation and experience. The similarity is likely to be greatest among those financial centers that have evolved furthest, with the most uniformity among those centers that have acquired international significance. These centers, which compete with each other and are judged against more established international financial centers, must satisfy more rigorous criteria than those that meet only the needs of the local banking system.

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