Gill, Indermit Singh

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Gill, Indermit Singh

Office of the Chief Economist, Europe & Central Asia, World Bank

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Macroeconomics

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Office of the Chief Economist, Europe & Central Asia, World Bank

Last updated: November 14, 2023

Biography

Indermit Gill is the Chief Economist of the Europe and Central Asia Region of the World Bank. Since joining the World Bank in 1993, he has worked in both the Latin America and East Asia regional offices. He was the director of the 2009 World Development Report, Reshaping Economic Geography, the principal author of Golden Growth: Restoring the Lustre of the European Economic Model, of Keeping the Promise of Social Security in Latin America and of An East Asian Renaissance. Mr. Gill has an M.A. in Economics from the Delhi School of Economics and a Ph.D. in Economics from the University of Chicago.

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Now showing 1 - 10 of 21

Making the Low-Income Country Debt Sustainability Framework Fit for Purpose
(World Bank, Washington, DC, 2023-11-14) Gill, Indermit
The World Bank and the International Monetary Fund use the Low-Income Country Debt Sustainability Framework to assess the sustainability of sovereign debt in about 75 low- and middle-income developing countries. It is overdue for a review, and this paper recommends that it be replaced for three reasons. First, it was designed when official concessional external debt was virtually synonymous with public debt. Over the past decade, however, the marginal cost of borrowing for Low-Income Country Debt Sustainability Framework countries has been defined increasingly by domestic and external debt markets. This has rendered the framework largely obsolete. Second, the framework focuses mainly on external debt, but development outcomes in the framework countries are more closely related to overall public debt. The mission of the World Bank—and, increasingly, the International Monetary Fund—is to improve growth, stability and living standards. So public debt ought to be the principal focus of the revised Low-Income Country Debt Sustainability Framework. Third, causality in the framework countries flows from fiscal deficits to current account deficits rather than the other way around, and the public component constitutes the lion’s share of total external debt. To focus on external debt distress in these circumstances is tantamount to tackling the symptom—accumulated current-account deficits—instead of the fundamental cause: fiscal deficits, or the gap between government investment and saving. The experiences of Ethiopia, Ghana and Zambia illustrate the arguments. The paper recommends a framework based on nominal public debt and its dynamics, supplemented with a thorough analysis of international liquidity. Discarding the Low-Income Country Debt Sustainability Framework could well be disruptive in the short run. However, the alternative would be worse: retaining an obsolete framework that has failed to anticipate public debt crises and is poorly aligned with the Sustainable Development Goals.
Europe 4.0: Addressing the Digital Dilemma
(World Bank, Washington, DC, 2020-11-09) Fengler, Wolfgang; Hallward-Driemeier, Mary; Nayyar, Gaurav; Gill, Indermit; Aridi, Anwar
This report examines the underlying economics of different types of digital technologies. It highlights what the new drivers of change are, why the dynamics with this latest round of technological change may be different, and what the distributional impacts may be within and across countries. It then examines the evidence for how different digital technologies are – or are not – contributing to competitiveness and opportunities for small and young firms, and firms in less developed areas, and what can be done about it. Europe faces a digital dilemma. European firms are particularly strong in operational technologies such as smart robotics and 3D printing. While this helps Europe's competitiveness, it also widens the divide between large and small firms, and leading and lagging regions. On the other hand, digital technologies, such as transactional technologies or matching platforms, have the greatest potential for market inclusion and convergence, but this is where Europe remains less competitive. The report lays out how Europe 4.0 is attainable. The COVID-19 (coronavirus) pandemic has highlighted the importance of the data economy — and raised the risks if the digital dilemma is not addressed. This report provides a framework, evidence and recommendations on how governments can respond. Europe has the chance to attain a dynamic and inclusive technologically enhanced future, it should take that chance.
The Middle-Income Trap Turns Ten
(World Bank, Washington, DC, 2015-08) Kharas, Homi; Gill, Indermit S.
Since we introduced the term “middle-income trap” in 2006, it has become popular among policy makers and researchers. In May 2015, a search of Google Scholar returned more than 3,000 articles including the term and about 300 articles with the term in the title. This paper provides a (non-exhaustive) survey of this literature. The paper then discusses what, in retrospect, we missed when we coined the term. Today, based on developments in East Asia, Latin America, and Central Europe during the past decade, we would have paid more attention to demographic factors, entrepreneurship, and external institutional anchors. We would also make it clearer that to us, the term was as much the absence of a satisfactory theory that could inform development policy in middle-income economies as the articulation of a development phenomenon. Three-quarters of the people in the world now live in middle-income economies, but economists have yet to provide a reliable theory of growth to help policy makers navigate the transition from middle- to high-income status. Hybrids of the Solow-Swan and Lucas-Romer models are not unhelpful, but they are poor substitutes for a well-constructed growth framework.
Golden Growth : Restoring the Lustre of the European Economic Model
(Washington, DC: World Bank, 2012-04-18) Raiser, Martin; Gill, Indermit S.
Europe's growth will have to be golden in yet another sense. Economic prosperity has brought to Europeans the gift of longer lives, and the continent's population has aged a lot over the last five decades. Over the next five, it will age even more by 2060; almost a third of Europeans will be older than 65 years. Europe will have to rebuild its structures to make fuller use of the energies and experience of its more mature population's people in their golden years. These desires and developments already make the European growth model distinct. Keeping to the discipline of the golden rule would make it distinguished. This report shows how Europeans have organized the six principal economic activities trade, finance, enterprise, innovation, labor, and government in unique ways. But policies in parts of Europe do not recognize the imperatives of demographic maturity and clash with growth's golden rule. Conforming growth across the continent to Europe's ideals and the iron laws of economics will require difficult decisions. This report was written to inform them. Its findings the changes needed to make trade and finance will not be as hard as those to improve enterprise and innovation; these in turn are not as arduous and urgent as the changes needed to restructure labor and government. Its message the remedies are not out of reach for a part of the world that has proven itself both intrepid and inclusive.
Grow, Invest, Insure: A Game Plan to End Extreme Poverty by 2030
(World Bank, Washington, DC, 2016-11) Zeballos, Christian; Gill, Indermit S.; Revenga, Ana
As global extreme poverty has fallen -- by one measure, from close to 2 billion people in 1990 to about 700 million today -- the world has learned about antipoverty strategies that work. These experiences should inform the final push to end extreme poverty. In the 1960s and 1970s, when close to half of the world was living in extreme poverty, the approach that worked best consisted of two sets of complementary measures: encouraging broad-based growth that is labor using, and investing in education, health, and family planning. When extreme poverty rates came down—first in East Asia and then in other parts of the developing world—it became clear that the two-point strategy to make economies grow and enable people to invest in human capital needed a social assistance supplement to help people with disadvantages so severe that they could not benefit from economic opportunities and better social services. This two-and-a-half-point strategy has been working well over the past quarter century, and the end of extreme poverty is in sight. But more people are now at risk of slipping back into poverty because of economic, natural, and health-related hazards. To end extreme poverty by 2030, the approach now needs three complementary components: economic growth, investments in people, and measures to insure against setbacks to families, nations, and regions due to disabilities, recessions, disasters, and disease. In countries that have reduced poverty a lot and those that could do a lot better, a winning game plan for putting a quick end to extreme poverty should be based on a three-point strategy: grow, invest, and insure.
Diversified Development : Making the Most of Natural Resources in Eurasia
(Washington, DC: World Bank, 2014-02-26) Gill, Indermit S.; van Eeghen, Willem; De Rosa, Donato; Izvorski, Ivailo; Iootty De Paiva Dias, Mariana; Kojo, Naoko; Matin, Kazi M.; Pathikonda, Vilas; Sugawara, Naotaka
This report is about the twelve countries of the former Soviet Union (Eurasia). About 85 percent of the region’s economic output is in six resource-rich economies. Today, 85 percent of Eurasia’s 280 million people are no longer poor. But academics who study resource-based economies debate whether these countries are cursed or blessed. And Eurasia’s policymakers long for the day when their economies are less extractive and more innovative. These observations prompt questions: Are resources a blessing or a curse? If it is one of these things, what would make it into the other? How much should Eurasia try to diversify their exports and economies away from natural resources? Are there ways to make Eurasian economies both extractive and innovative? The answers: a large majority of Eurasia’s people should consider themselves blessed. To make sure that this blessing does not become a curse, Eurasian economies have to become efficient—more productive, job-creating, and stable. But efficiency is not the same as diversification: there is little evidence that more concentrated economies have slower productivity growth, fewer jobs, or much more economic volatility. Governments need to worry less about the composition of exports and production and more about asset portfolios—natural resources, built capital, and economic institutions. They have much to do. Eurasia’s portfolios are heavy in tangibles like oil and gas and roads and railways and light in intangibles such as the institutions for managing resource earnings, providing social services, and regulating enterprise. But tangibles are not what distinguish success from failure—investments in intangibles, early in their development, have made some resource-rich countries both extractive and innovative.
East Asian Visions : Perspectives on Economic Development
(Washington, DC : World Bank, 2007) Huang, Yukon; Gill, Indermit; Kharas, Homi
East Asian Visions: Perspectives on Economic Development is a collection of essays by 17 eminent East Asians who represent a broad spectrum of backgrounds and experiences. All are senior policy makers, statesmen, or scholars who have either had to deal with or think through some of the most critical financial and developmental issues confronting their countries and the region. Collectively, 10 of them have, at some point in their careers, been at the head of key ministries and central banks; nearly a dozen have been academics and scholars of distinction; several have served as ambassadors to the West and bring a more global strategic perspective; and many have been influential policy advisers and decision makers in governments and international financial agencies. Their essays reflect individual experiences at critical economic junctures and are occasionally quite personal, not surprising since each author selected a topic of his or her own choosing. Given their backgrounds, they have chosen to write about the highly diverse country experiences of East Asia, covering rich, middle income, and poor countries, and they speculate on how their countries fit into a rapidly changing region and globalizing world. Four themes permeate these essays: explaining East Asia's growth and developmental success; the powerful forces of regional integration and building efficiency versus vulnerability; avoiding domestic disintegration given growing public intolerance of increasing inequities, pollution, and corruption; and where will East Asia find its next generation of leaders.
An East Asian Renaissance : Ideas for Economic Growth
(Washington, DC: World Bank, 2007) Kharas, Homi; Gill, Indermit; Bhattasali, Deepak; Brahmbhatt, Milan; Datt, Gaurav; Haddad, Mona; Mountfield, Edward; Tatucu, Radu; Vostroknutova, Ekaterina
The region has been transformed by these developments, changing from a set of countries that rapidly integrated with the world to one that is also aggressively exploiting the sources of dynamism that lie within Asia. But countries in East Asia now face the domestic side-effects of rapid growth driven by international integration: congestion, conflict, and corruption. The challenge now is to complement global and regional integration with domestic integration. This requires ensuring vibrant cities that are not only linked to the outside world but also well-integrated domestically, strengthening social cohesion and reducing inequality, and providing clean governments which efficiently reinvest the economic returns that accompany fast growth.
Scale Economies and Cities
(World Bank, 2010-08-02) Goh, Chor-Ching; Gill, Indermit S.
This paper summarizes the policy-relevant insights of a generation of research on scale economies. Scale economies in production are of three types: internal economies associated with large plants, localization economies that come from sharing of inputs and infrastructure and from greater competition among firms, and urbanization economies that are generated through diversity and knowledge spillovers. The benefits (and costs) of localization and urbanization are together called “external (dis) economies” because they arise due to factors outside any single household, farm or firm. The empirical literature yields some stylized facts. Internal scale economies are low in light industries and high in heavy industries. External scale economies are amplified by economic density and dissipate with distance from places where economic activity is concentrated. Scale economies are most visibly manifest in towns and cities. To simplify somewhat, towns allow firms and farms to exploit internal scale economies, medium-sized cities help firms in an industry exploit localization economies, and large cities and metropolises provide urbanization economies to those who locate within or nearby. Scale economies have implications for policy makers. The first is that because urban settlements rise and thrive because market agents demand their services, they should be seen as creatures of the market, not creations of the state. The second is that because settlements of different sizes provide differing services, towns, cities, and metropolises are more often complements for one another, not substitutes. Third, as a corollary, policymakers should aim to improve the functioning of urban settlements, and not become preoccupied with their size.
Reshaping Economic Geography : Implications for New EU Member States
(World Bank, Washington, DC, 2009-04) Goh, Chor-ching; Gill, Indermit; Roberts, Mark
The ongoing crisis should spur deeper European integration, rather than a return to the nationalism of the past. The World Development Report 2009, reshaping economic geography, spotlights several issues for new European Union (EU) member states. From 1950 to 1990, Eastern Europe was impermeable to the flow of goods, services and ideas from the West, and grew slowly. During the same period, gross domestic product (GDP) per capita in fourteen Western European economies grew at three times the pace of Eastern Europe. The drivers of West European growth were market economies, regional cooperation, and global economic integration. The European Economic Community, started by six Western European nations in 1957, continued to increase its membership with the ultimate aim of full economic and monetary integration. After the collapse of the former Soviet Union in 1991, the EU10 countries, along with Malta and Cyprus, joined the expanded European Union, an economic zone based on the principles of democracy, markets and the free mobility of goods, capital and labor. The 27country European Union has a combined population of almost 500 million people and accounts for over 30 percent of the world's GDP. But the legacy of division has meant that the EU10 countries lag considerably behind most of the other member states. While the EU10 have brought 123 million people into the European Union, they have reduced its average level of GDP per capita by an estimated 15.6 percent.