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  • Author: Tessa Bold, Mwangi Kimenyi, Germano Mwabu, Justin Sandefur
  • Publication Date: 10-2011
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: A large empirical literature has shown that user fees signicantly deter public service utilization in developing countries. While most of these results reflect partial equilibrium analysis, we find that the nationwide abolition of public school fees in Kenya in 2003 led to no increase in net public enrollment rates, but rather a dramatic shift toward private schooling. Results suggest this divergence between partial- and general-equilibrium effects is partially explained by social interactions: the entry of poorer pupils into free education contributed to the exit of their more affluent peers.
  • Topic: Education, Government, Poverty
  • Political Geography: Kenya, Africa
  • Author: Amanda Glassman, Andy Sumner, Denizhan Duran
  • Publication Date: 10-2011
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: After a decade of rapid growth in average incomes, many countries have attained middle-income country (MIC) status. At the same time, the total number of poor people hasn't fallen as much as one might expect and, as a result, most of the world's poor now live in MICs. In fact, there are up to a billion poor people or a 'new bottom billion' living not in the world's poorest countries but in MICs. Not only has the global distribution of poverty shifted to MICs, so has the global disease burden. This paper examines the implications of this 'new bottom billion' for global health efforts and recommends a tailored middle-income strategy for the Global Fund and GAVI. The paper describes trends in the global distribution of poverty, preventable infectious diseases, and health aid response to date; revisits the rationale for health aid through agencies like GAVI and the Global Fund; and proposes a new MIC strategy and components, concluding with recommendations.
  • Topic: Development, Globalization, Health, Poverty
  • Author: Jenny C. Aker
  • Publication Date: 09-2011
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Agriculture can serve as an important engine for economic growth in developing countries, yet yields in these countries have lagged far behind those in developed countries for decades. One potential mechanism for increasing yields is the use of improved agricultural technologies, such as fertilizers, seeds and cropping techniques. Public-sector programs have attempted to overcome information-related barriers to technological adoption by providing agricultural extension services. While such programs have been widely criticized for their limited scale, sustainability and impact, the rapid spread of mobile phone coverage in developing countries provides a unique opportunity to facilitate technological adoption via information and communication technology (ICT)-based extension programs. This article outlines the potential mechanisms through which ICT could facilitate agricultural adoption and the provision of extension services in developing countries. It then reviews existing programs using ICT for agriculture, categorized by the mechanism (voice, text, internet and mobile money transfers) and the type of services provided. Finally, we identify potential constraints to such programs in terms of design and implementation, and conclude with some recommendations for implementing field-based research on the impact of these programs on farmers' knowledge, technological adoption and welfare.
  • Topic: Agriculture, Development, Poverty, Science and Technology, Foreign Aid, Foreign Direct Investment
  • Author: David Wheeler, Robin Kraft, Dan Hammer
  • Publication Date: 12-2011
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: This report summarizes recent trends in large-scale tropical forest clearing identified by FORMA (Forest Monitoring for Action). Our analysis includes 27 countries that accounted for 94 percent of clearing during the period 2000–2005. We highlight countries with relatively large changes since 2005, both declines and increases. FORMA produces indicators that track monthly changes in the number of 1-sq.-km. tropical forest parcels that have experienced clearing with high probability. This report and the accompanying spreadsheet databases provide monthly estimates for 27 countries, 280 primary administrative units, and 2,907 secondary administrative units. Countries' divergent experiences since 2005 have significantly altered their shares of global clearing in some cases. Brazil's global share fell by 11.2 percentage points from December 2005 to August 2011, while the combined share of Malaysia, Indonesia, and Myanmar increased by 10.8. The diverse patterns revealed by FORMA's first global survey caution against facile generalizations about forest clearing in the pantropics. During the past five years, the relative scale and pace of clearing have changed across regions, within regions, and within countries. Although the overall trend seems hopeful, it remains to be seen whether the decline in forest clearing will persist as the global economy recovers.
  • Topic: Agriculture, Economics, Globalization, Natural Resources
  • Political Geography: Indonesia, Malaysia, Myanmar
  • Author: David Wheeler, Robin Kraft, Dan Hammer
  • Publication Date: 12-2011
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: In this paper, we develop and illustrate a prototype incentive system for promoting rapid reduction of forest clearing in tropical countries. Our proposed Tropical Forest Protection Fund (TFPF) is a cash-on-delivery system that rewards independently monitored performance without formal contracts. The system responds to forest tenure problems in many countries by dividing incentive payments between national governments, which command the greatest number of instruments that affect forest clearing, and indigenous communities, which often have tenure rights in forested lands. The TFPF incorporates both monetary and reputational incentives, which are calculated quarterly. The monetary incentives are unconditional cash transfers based on measured performance, while the reputational incentives are publicly disclosed, color-coded performance ratings for each country. The incentives include rewards for: (1) exceeding long-run expectations, given a country's forest clearing history and development status; (2) meeting or exceeding global REDD+ goals; and (3) achieving an immediate reduction in forest clearing. Drawing on monthly forest clearing indicators from the new FORMA (Forest Monitoring for Action) database, we illustrate a prototype TFPF for eight East Asian countries: Cambodia, China, Indonesia, Lao PDR, Malaysia, Myanmar, Thailand, and Vietnam. A system with identical design principles could be implemented by single or multiple donors for individual or multiple forest proprietors within one or more countries, as well as national or local governments in individual countries, tropical regions, or the global pan-tropics. Our results demonstrate the importance of financial flexibility in the design of the proposed TFPF. Its incentives are calculated to induce a massive, rapid reduction of tropical forest clearing. If that occurs, a TFPF for East Asia will need standby authority for disbursements that may total $10–14 billion annually for the next two decades. This financial burden will not persist, however, because the TFPF is designed to self-liquidate once all recipient countries have achieved clearly specified benchmarks. We estimate that the TFPF can be closed by 2070, with its major financial responsibility discharged by 2040.
  • Topic: Agriculture, Economics, Globalization, Markets
  • Political Geography: China, Indonesia, Malaysia, East Asia, Vietnam, Cambodia, Thailand, Southeast Asia, Myanmar
  • Author: Shantayanan Devarajan, Hélène Ehrhart, Tuan Minh Le, Gaël Raballand
  • Publication Date: 12-2011
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: To enhance efficiency of public spending in oil-rich economies, this paper proposes that some of the oil revenues be transferred directly to citizens, and then taxed to finance public expenditures. The argument is that spending that is financed by taxation—rather than by resource revenues accruing directly to the government—is more likely to be scrutinized by citizens and hence subject to greater efficiency. We develop the case as follows: First, we confirm that public expenditure efficiency is lower in oil-rich countries compared with other developing countries. Second, we develop a theoretical model to explain why citizens' scrutiny over public expenditure can be increased by transferring oil revenues to citizens and then taxing them. By receiving transfers and then paying taxes, citizens are better informed about the level of government revenue, and they have an incentive to ensure that their taxes are spent on public goods. Third, we show empirically that enhanced citizens' scrutiny is associated with more efficient government spending decisions and that accountability is stronger in countries that rely more on taxation to finance public spending. We conclude that, while it may be difficult to implement such a proposal in existing oil producers, there is scope for introducing it in some of Africa's new oil producers.
  • Topic: Economics, International Trade and Finance, Oil
  • Political Geography: Africa
  • Author: David Wheeler, Robin Kraft, Susmita Dasgupta, Dan Hammer, Brian Blankespoor
  • Publication Date: 12-2011
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: This paper uses a large panel database to investigate the determinants of forest clearing in Indonesian kabupatens since 2005. Our study incorporates short-run changes in prices and demand for palm oil and wood products, as well as the exchange rate, the real interest rate, land-use zoning, forest protection, the estimated opportunity cost of forested land, the quality of local governance, the poverty rate, population density, the availability of communications infrastructure, transport cost, and local rainfall and terrain slope. Our econometric results highlight the role of dynamic economic factors in forest clearing. We find significant roles for lagged changes in all the short-run economic variables—product prices, demands, the exchange rate and the real interest rate—as well as communications infrastructure, some types of commercial zoning, rainfall, and terrain slope. We find no significance for the other variables, and the absence of impact for protected-area status is particularly notable. Our results strongly support the model of forest clearing as an investment that is highly sensitive to expectations about future forest product prices and demands, as well as changes in the cost of capital (indexed by the real interest rate), the relative cost of local inputs (indexed by the exchange rate), and the cost of land clearing (indexed by local precipitation). By implication, the opportunity cost of forested land fluctuates widely with changes in international markets and decisions by Indonesia's financial authorities about the exchange and interest rates. Our results suggest that forest conservation programs are unlikely to succeed if they ignore such powerful forces.
  • Topic: Agriculture, Economics, Globalization, Markets, Natural Resources
  • Political Geography: Indonesia
  • Author: Tessa Bold, Mwangi Kimenyi, Germano Mwabu, Justin Sandefur
  • Publication Date: 12-2011
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Existing studies from the United States, Latin America, and Asia provide scant evidence that private schools dramatically improve academic performance relative to public schools. Using data from Kenya—a poor country with weak public institutions—we find a large effect of private schooling on test scores, equivalent to one full standard deviation. This finding is robust to endogenous sorting of more able pupils into private schools. The magnitude of the effect dwarfs the impact of any rigorously tested intervention to raise performance within public schools. Furthermore, nearly two thirds of private schools operate at lower cost than the median government school.
  • Topic: Development, Education, Government, Poverty
  • Political Geography: Kenya, United States, Asia, Latin America
  • Author: Charles Kenny, Andy Sumner
  • Publication Date: 12-2011
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: What have the MDGs achieved? And what might their achievements mean for any second generation of MDGs or MDGs 2.0? We argue that the MDGs may have played a role in increasing aid and that development policies beyond aid quantity have seen some limited improvement in rich countries (the evidence on policy change in poor countries is weaker). Further, there is some evidence of faster-than-expected progress improving quality of life in developing countries since the Millennium Declaration, but the contribution of the MDGs themselves in speeding that progress is—of course—difficult to demonstrate even assuming the MDGs induced policy changes after 2002. The paper concludes with reflections on what the experience of MDGs in terms of global goal setting has taught us and how things might be done differently if there were to be a new set of MDGs after 2015. Any MDGs 2.0 need targets that are set realistically and directly link aid flows to social policy change and to results.
  • Topic: Development, Economics, Humanitarian Aid, Poverty, Foreign Aid
  • Author: Arvind Subramanian, Aaditya Mattoo
  • Publication Date: 12-2011
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Until recently, the World Trade Organization (WTO) has been an effective framework for cooperation because it has continually adapted to changing economic realities. The current Doha Agenda is an aberration because it does not reflect one of the biggest shifts in the international economic and trading system: the rise of China. Even though China will have a stake in maintaining trade openness, an initiative that builds on but redefines the Doha Agenda would anchor China more fully in the multilateral trading system. Such an initiative would have two pillars. First, a new negotiating agenda that would include the major issues of interest to China and its trading partners, and thus unleash the powerful reciprocal liberalization mechanism that has driven the WTO process to previous successes. Second, new restraints on bilateralism and regionalism that would help preserve incentives for maintaining the current broad non-discriminatory trading order.
  • Topic: Economics, Industrial Policy, International Trade and Finance
  • Political Geography: China, Israel, Asia
  • Author: Charles Kenny
  • Publication Date: 12-2011
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: The Broadband Commission for Digital Development is an ITU (UN International Telecommunications Union) and UNESCO–backed body set up to advocate for greater broadband access worldwide. The commission's Declaration of Broadband Inclusion for All and other reports call for governments to support ubiquitous fixed broadband access as a vital tool for economic growth and to reach the Millennium Development Goals. Examining the evidence, however, shows that the benefits of broadband are being oversold. Several points stand out: (i) the evidence for a large positive economic impact of broadband is limited; (ii) the impact of broadband rollout on achieving the MDGs would be marginal; (iii) there is little evidence ubiquitous broadband is needed for 'national competitiveness' or to benefit from opportunities like business process outsourcing; (iv) the costs of fixed universal broadband rollout dwarf available resources in developing countries; (and so) (v) the case for government subsidy of fixed broadband rollout is very weak. There are, however, some worthwhile policy reforms that could speed broadband rollout without demanding significant government expenditure.
  • Topic: Development, Globalization, Science and Technology, Communications
  • Political Geography: United Nations
  • Author: Devesh Kapur, Milan Vaishnav
  • Publication Date: 12-2011
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: In developing countries where elections are costly and accountability mechanisms weak, politicians often turn to illicit means of financing campaigns. This paper examines one such channel of illicit campaign finance: India's real estate sector. Politicians and builders allegedly engage in a quid pro quo, whereby the former park their illicit assets with the latter, and the latter rely on the former for favorable dispensation. At election time, however, builders need to re-route funds to politicians as a form of indirect election finance. One observable implication is that the demand for cement, the indispensible raw material used in the sector, should contract during elections since builders need to inject funds into campaigns. Using a novel monthly-level data set, we demonstrate that cement consumption does exhibit a political business cycle consistent with our hypothesis. Additional tests provide confidence in the robustness and interpretation of our findings.
  • Topic: Corruption, Democratization, Government, Politics
  • Political Geography: South Asia, India
  • Author: Dean Karlan, John A. List
  • Publication Date: 04-2011
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: We develop a simple theory which formally describes how charities can resolve the information asymmetry problems faced by small donors by working with large donors to generate quality signals. To test the model, we conducted two large-scale natural field experiments. In the first experiment, a charity focusing on poverty reduction solicited donations from prior donors and either announced a matching grant from the Bill and Melinda Gates Foundation, or made no mention of a match. In the second field experiment, the same charity sent direct mail solicitations to individuals who had not previously donated to the charity, and tested whether naming the Bill and Melinda Gates Foundation as the matching donor was more effective than not identifying the name of the matching donor. The first experiment demonstrates that the matching grant condition generates more and larger donations relative to no match. The second experiment shows that providing a credible quality signal by identifying the matching donor generates even more and larger donations than not naming the matching donor. Importantly, the treatment effects persist long after the matching period, and the quality signal is quite heterogeneous—the Gates\' effect is much larger for prospective donors who had a record of giving to "poverty-oriented" charities. These two pieces of evidence support our model of quality signals as a key mechanism through which matching gifts inspire donors to give.
  • Topic: Development, Government, Humanitarian Aid, Markets, Foreign Aid
  • Political Geography: United States
  • Author: Wren Elhai
  • Publication Date: 03-2011
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: A thorny set of obstacles stands in the way of the United States and other donors as they try to scale up development spending in Pakistan. The sheer scale of the country's population and development challenges requires effective mobilization of local resources and local institutions. Incentives for politicians to push for reform are weak. Monitoring spending is difficult, especially when it is spent through Pakistan's own government. Donors and local stakeholders may disagree about which development projects are most needed. A possible solution to these problems is Cash on Delivery Aid. In COD Aid, funders pay for measured and verified progress against an agreed-upon development outcome. The approach has been most clearly thought out in application to the education sector, but it can be applied whenever a donor and recipient can agree on a clear, measurable metric for assessing progress. This brief examines options for a COD Aid contract in Pakistan's education sector and its potential benefits for improving the relationship between official donors and the government of Pakistan, and for increasing the effectiveness of aid spending in Pakistan.
  • Topic: Demographics, Development
  • Political Geography: Pakistan, United States, South Asia
  • Author: Andy Sumner
  • Publication Date: 03-2011
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: Most of the world's poor no longer live in low-income countries. An estimated 960 million poor people—a new bottom billion—live in middle-income countries, a result of the graduation of several populous countries from low-income status. That is good news, but it has repercussions. Donors will have to change the way they think about poverty alleviation. They should design development aid to benefit poor people, not just poor countries, keep supporting middle-income countries, think beyond traditional aid to craft coherent development policies, and work to help create space for more inclusive policy processes in new and old MICs.
  • Topic: Development, Poverty, Foreign Aid
  • Author: Michael Clemens, Kaci Farrell
  • Publication Date: 06-2011
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: Natural disasters such as earthquakes, floods, and hurricanes can devastate people's lives and a country's economy, particularly in the developing world. More than 200,000 people perished when a catastrophic earthquake struck Haiti in January 2010, and Americans responded with an outpouring of private and public assistance. Those relief efforts, as they nearly always do, focused primarily on delivering aid. The United States barely used another tool for disaster relief: migration policy. This policy brief explores the various legal channels through which the U.S. government could, after future overseas disasters, leverage the power of migration to help limited numbers of people. We describe what could have been done for Haiti, but the lessons apply to future scenarios.
  • Topic: Humanitarian Aid, Migration, Natural Disasters, Foreign Aid
  • Political Geography: United States
  • Author: Katie Stein
  • Publication Date: 04-2011
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: With a new executive director appointed in November 2010, the United Nations Population Fund (UNFPA) is in a position to re-assert its role and lead the world's effort toward landmark achievements in improving women's health and well-being. The Fund's performance will literally be a matter of life or death for millions of women and children. The numbers speak for themselves: an estimated 215 million women lack access to modern contraceptives, and there are approximately 350,000 maternal deaths each year. As the lead agency for the United Nations' work on population and reproductive health, UNFPA can reduce this terrible and unnecessary toll of lost lives.
  • Topic: Demographics, Development, Gender Issues, Health, United Nations
  • Author: Guillermo Perry
  • Publication Date: 04-2011
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: Direct support to private firms in developing countries constitutes a large and growing share of multilateral development banks' financial activities. This trend contrasts with the advice MDBs gave developing countries until a decade ago to privatize or liquidate the development banks supporting private firms, or to transform them into nonbanking development agencies. Opinion has changed since then, especially after development banks successfully intervened in the recent financial crisis. In this brief, Guillermo Perry assesses whether arguments in favor of such MDB direct support are valid and whether MDBs are living up to priorities coherent with such arguments. He finds that they do so only partially. His recommendations include deepening MDB support to small and medium enterprises, reducing the procyclicality of MDB lending, increasing the share of MDB loans and guarantees to private firms that are made in domestic currencies, and paying more attention to firms in infrastructure and social sectors and to those introducing new products, exports, or technologies.
  • Topic: Development, Foreign Aid, Foreign Direct Investment, Financial Crisis
  • Author: Jenny Ottenhoff
  • Publication Date: 09-2011
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: The regional development banks (RDBs) are multilateral financial institutions that provide financial and technical assistance for development in low- and middle-income countries within their regions. Finance is allocated through low-interest loans and grants for a range of development sectors such as health and education, infrastructure, public administration, financial and private-sector development, agriculture, and environmental and natural resource management. The term RDB usually refers to four institutions:
  • Topic: Development, Economics, Foreign Aid, Foreign Direct Investment
  • Political Geography: Africa, Europe, Asia
  • Author: Jenny Ottenhoff
  • Publication Date: 09-2011
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: The International Finance Corporation (IFC) is a multilateral financial institution that provides financial and technical assistance to the private sector in middle- and low- income countries. Unlike other international financial institutions, the IFC operates on a commercial basis and invests exclusively in for-profit projects that promote poverty reduction and development. Increasingly, the IFC is investing in the world's poorest countries and fragile states that have few private investors. IFC investments support a range of activities including agribusiness, manufacturing, health and education, microfinance programs, and infrastructure development.
  • Topic: Development, Markets, Poverty, Foreign Aid, Foreign Direct Investment
  • Author: Jenny Ottenhoff
  • Publication Date: 09-2011
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: The primary role of the International Monetary Fund (IMF) is to promote stability of the international monetary system, the system of exchange rates and international payments that enables countries to transact with one another. To do so, the IMF provides financial assistance in the form of loans to help member countries address balance-of-payments problems, stabilize their economies, and restore sustainable economic growth. The IMF also carries out technical assistance and surveillance activities that help strengthen underlying economic fundamentals of member countries and the global financial systems at large.
  • Topic: Development, Economics, International Monetary Fund, Foreign Aid, Financial Crisis
  • Author: Todd Moss, Sarah Jane Staats, Julia Barmeier
  • Publication Date: 09-2011
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: The international financial institutions dramatically increased their lending in 2008–09 to help developing countries cope with the global financial crisis and support economic recovery. Today, these organizations are seeking billions of dollars in new funding. The IMF, which only a few years ago was losing clients and shedding staff, expanded by $750 billion in 2009. The World Bank and the four regional development banks for Africa, Asia, Europe, and Latin America have asked to increase their capital base by 30 to 200 percent. A general capital increase (GCI) for these development banks is an unusual request. A simultaneous GCI request is a oncein- a-generation occurrence.
  • Topic: Development, Foreign Aid, Financial Crisis
  • Political Geography: Africa, Asia, Latin America, Ethiopia
  • Author: Jenny Ottenhoff
  • Publication Date: 09-2011
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: The World Bank is a multilateral financial institution that provides financial and technical assistance for development in low- and middle-income countries. Finance is allocated through low-interest loans and grants for a range of development sectors such as health and education, infrastructure, public administration, financial and private-sector development, agriculture, and environmental and natural resource management.
  • Topic: Development, Education, Environment, Health, Foreign Aid, Infrastructure, World Bank
  • Political Geography: Pakistan, Indonesia, India
  • Author: Jenny Ottenhoff
  • Publication Date: 09-2011
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: The International Financial Institutions (IFIs) are multilateral agencies. The term typically refers to the International Monetary Fund (IMF), which provides financing and policy advice to member nations experiencing economic difficulties, and the multilateral development banks (MDBs), which provide financing and technical support for development projects and economic reform in low- and middle-income countries. The term MDB is usually understood to mean the World Bank and four smaller regional development banks: African Development Bank (AfDB). Asian Development Bank (ADB). European Bank for Reconstruction and Development (EBRD) Inter-American Development Bank (IDB).
  • Topic: Development, Economics, International Monetary Fund, Foreign Aid, World Bank
  • Political Geography: Africa, America, Europe, Asia
  • Author: Amanda Glassman, Kate McQueston
  • Publication Date: 08-2011
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: Noncommunicable diseases (NCDs) such as cancer, diabetes, respiratory and cardiovascular diseases, and mental illnesses are the leading cause of death and disability worldwide. Surprisingly, the burden is especially high in developing countries, which bear 80 percent of deaths due to NCDs. Four main factors are at fault: tobacco use, physical inactivity, unhealthy diets, and alcohol use. The good news is that much of the NCD burden can be prevented through interventions that are affordable in most countries. The United States can help now by taking five low-cost or no-cost steps:End tariff-reducing trade practices for tobacco.Partner with public and private donors.Leverage U.S. influence in multilateral development institutions.Exploit synergies between disease control and other development projects.Encourage evidence-informed budget allocation.
  • Topic: Development, Health, Poverty
  • Political Geography: United Nations
  • Author: Nancy Birdsall, Homi Kharas, Rita Perakis
  • Publication Date: 11-2011
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: As demonstrated by the Paris Declaration on Aid Effectiveness and Accra Agenda for Action, the development community has reached a broad consensus on what constitutes good practice for the delivery of development assistance. But since these high-level agreements were made, there has been almost no independent quantitative analysis of whether donors are meeting the standards they have set for themselves.
  • Topic: Development, Humanitarian Aid, Poverty, Treaties and Agreements, Foreign Aid
  • Political Geography: Paris
  • Author: Charles Kenny
  • Publication Date: 11-2011
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: It is widely agreed by economists and political scientists that the middle class is vital to progress because of its many virtues. But it is difficult to define a middle class by income in a manner that does not either include a lot of very poor people or suggest that most countries have no middle class to speak of. Survey evidence suggests the middle class is not culturally unique, particularly socially progressive, or entrepreneurial. When the middle of the income distribution sides with poor people in demanding equitable access to quality government services (instead of siding with the wealthy for small government and unequal access), pro-poor policies are far more likely to emerge. But this necessary role should not be confused with virtue.
  • Topic: Development, Economics, Education, Poverty, Social Stratification
  • Author: Mead Over
  • Publication Date: 11-2011
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: An unprecedented surge in donor support for HIV/AIDS treatment over the last decade has lengthened and improved the lives of millions of people living with HIV/AIDS. But because the rate of new infections outpaces the rate of AIDS-related deaths, the number of people living with AIDS—and therefore the number of people needing treatment—is growing faster than the funding needed to treat them. In 2009, about 1.8 million people died from AIDS-related illnesses while about 2.6 million were newly infected with HIV, increasing the total number of people living with HIV/AIDS by more than three-quarters of a million.
  • Topic: Development, Health, Foreign Aid
  • Author: Amanda Glassman, Thomas Bollyky
  • Publication Date: 10-2011
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: More than a billion people suffer from neglected diseases, and millions die each year. Effective remedies have been few because of low investment, but with a surge in funding in the past decade, dozens of candidate drugs and vaccines are now in the pipeline. Before these products can reach the people who need them, they must be tested in large-scale clinical trials that are expensive, time-consuming, and risky. These trials must be conducted with highly vulnerable patients in resource-and infrastructure-poor countries where the neglected disease burden exists. There is not enough funding to support the costs and regulatory oversight of these clinical trials. A two-pronged approach to improve the quality and lower the cost of clinical trials in the developing world is needed.
  • Topic: Development, Health, Poverty, Infrastructure
  • Author: Michael Clemens, Tejaswi Velayudhan
  • Publication Date: 10-2011
  • Content Type: Policy Brief
  • Institution: Center for Global Development
  • Abstract: The United States should take modest steps to create a legal channel for limited numbers of people fleeing natural disasters overseas to enter the United States. This would address two related problems: the lack of any systematic U.S. policy to help the growing numbers of people displaced across borders by natural disasters and the inability of U.S. humanitarian relief efforts to reduce systemic poverty or sustainably improve victims' livelihoods. The aftermath of the 2010 Haiti earthquake presents a compelling case study of the administrative and legislative ways the U.S. government could address both problems. Migration is already a proven and powerful force for reducing Haitians' poverty. A few modest changes in the U.S. approach could greatly aid Haiti's recovery.
  • Topic: Humanitarian Aid, Migration, Developing World
  • Political Geography: United States, Caribbean, Haiti
  • Author: Oeindrila Dube, Suresh Naidu
  • Publication Date: 01-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Does foreign military assistance strengthen or further weaken fragile states facing internal conflict? We address this question by estimating how U.S. military aid affects violence and electoral participation in Colombia. We exploit the allocation of U.S. military aid to Colombian military bases, and compare how aid affects municipalities with and without bases. Using detailed political violence data, we find that U.S. military aid leads to differential increases in attacks by paramilitaries (who collude with the military), but has no effect on guerilla attacks. Aid increases also result in more paramilitary (but not guerrilla) homicides during election years. Moreover, when military aid rises, voter turnout falls more in base municipalities, especially those that are politically contested.
  • Topic: Arms Control and Proliferation, Democratization, Foreign Aid
  • Political Geography: United States, Colombia, Latin America
  • Author: Paul Romer
  • Publication Date: 03-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Non-resident fellow Paul Romer argues that the principal constraint to raising living standards in this century will come neither from scarce resources nor limited technologies. Rather it will come from our limited capacity to discover and implement new rules—new ideas about how to structure interactions among people, such as land titles, patents, and social norms. The central task of reducing global poverty is to find ways for developing countries to adopt new rules that are known to work better than the ones they have. Economists who advise leaders on policy have often overlooked why some good rules get adopted and others do not. But a better understanding of rules-that-change-rules could lead to breakthrough thinking about development policy. The special rules of China's Special Economic Zones, where new cities like Shenzhen could grow up, created small laboratories through which rules from Hong Kong spread to the mainland, helping unleash the largest and fastest reduction of poverty on record. Romer concludes that a new type of development policy would be to voluntarily charter new cities for the purpose of changing rules, using a range of new legal and political structures analogous to the ones that made Hong Kong and Shenzhen possible. The essay is adapted from a talk presented in Mexico City on October 2009, at the conference, “Challenges and Strategies for Promoting Economic Growth,” organized by Banco de México.
  • Topic: Development, Poverty, Science and Technology
  • Political Geography: China, Asia, Mexico, Hong Kong, Shenzhen
  • Author: Liliana Rojas-Suarez, Arturo J. Galindo, Alejandro Izquierdo
  • Publication Date: 02-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: This paper explores the impact of international financial integration on credit markets in Latin America. Using a cross-country dataset covering 17 Latin American countries between 1996 and 2008, the authors find that financial integration amplifies the impact of international financial shocks on aggregate credit and interestrate fluctuations. Despite this pernicious effect, the net impact of integration on deepening credit markets is positive and dominates for the large majority of states of nature. The paper also uses a detailed bank-level dataset covering more than 500 banks in Latin America for a similar time period to explore the role of financial integration—captured through the participation of foreign banks—in propagating external shocks. The authors find that interest rates charged and loans supplied by foreign-owned banks respond more to external financial shocks than those supplied by domestically owned banks. However, this result does not hold for all foreign banks: Spanish banks in the sample behave more like domestic banks and do not amplify the impact of foreign shocks on credit and interest rates. Important policy recommendations to avoid foreign banks' amplification of external financial shocks include the establishment of ring-fencing mechanisms, the development of early-warning systems, and the incorporation for agreements between domestic and foreign supervisors.
  • Topic: Economics, Markets
  • Political Geography: Latin America, Spain
  • Author: Liliana Rojas-Suarez
  • Publication Date: 01-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: The international financial crisis of 2008–09 exposed the strengths and weaknesses of the current paradigm of development in Latin America, a paradigm based on liberalized capital accounts and significantly improved macroeconomic conditions. This paper presents lessons derived from the crisis, not only for the region itself, but also for other developing countries that might seek economic growth in the context of greater integration to the international capital markets. Some of the lessons are not new but have been reinforced by the crisis, such as Latin America's imperative need for export diversification (not only in products but in partners). Other lessons break with longstanding myths about the region, such as its inability to undertake counter-cyclical policies—at least on the monetary side. Yet other lessons reflect new developments in the current growth paradigm, such as a renewed assessment of (1) the relative roles of foreign and domestic banks in shielding the financial system against external shocks and (2) the potential costs of adopting blanket international financial regulations that do not account for a country's degree of development. Taken together, the lessons in this paper bring a new sense of optimism for growth in Latin America.
  • Topic: Economics, International Trade and Finance, Financial Crisis
  • Political Geography: Latin America
  • Author: Michael Clemens
  • Publication Date: 01-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Rich countries have made efforts for half a century to help people in poor countries catch up to rich-country standards of living. Those efforts have included giving foreign aid, encouraging overseas investment, dismantling trade barriers, and spreading ideas and institutions. That is, their international development policy has been to encourage the globalization of almost all factors of production—except labor. So far, this policy has failed to cause the living standards of most people in most developing countries to converge with living standards in rich countries. But the globalization of labor—greater mobility for workers across borders—quickly and massively raises migrants' living standards toward those of rich countries. This paper argues that every rich country should consider its immigration policy to be part of its international development policy, and vice versa. A development policy that includes migration will be more effective; an immigration policy that includes development will better serve rich countries' ideals and interests. The paper also gives a non-technical review of new research on several common objections to unifying development policy and migration policy. One concrete way forward is for rich countries to greatly open up legal pathways for temporary labor movement.
  • Topic: Globalization, Foreign Aid, Labor Issues
  • Author: Satish Chand
  • Publication Date: 01-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: This paper builds an analytical framework that models predation (banditry) and production as part of the choice of a rational utility-maximising agent. Aggregating this choice up for society produces equilibrium outcomes ranging from Utopia (where no one predates) to Amorphy (where everyone does). The intermediate position constitutes Anarchy where a mix of predation and production prevail. This framework shows that (i) organized conflict can lower welfare relative to the level that prevails without such organization; and, (ii) peacekeeping raises welfare, but the equilibrium is self-enforcing only with the requisite level of peacekeeping technology. The last is then used to analyse conditions under which peacekeeping arises endogenously and the potential (and catalytic) role for external assistance in the above.
  • Topic: Conflict Prevention, Human Welfare, Peace Studies, War
  • Author: David Wheeler, Susmita Dasgupta, Benoit Laplante, Brian Blankespoor
  • Publication Date: 01-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Without international assistance, developing countries will adapt to climate change as best they can. Part of the cost will be absorbed by households and part by the public sector. Adaptation costs will themselves be affected by socioeconomic development, which will also be affected by climate change. Without a better understanding of these interactions, it will be difficult for climate negotiators and donor institutions to determine the appropriate levels and modes of adaptation assistance. This paper contributes by assessing the economics of adaptation to extreme weather events. We address several questions that are relevant for the international discussion: How will climate change alter the incidence of these events, and how will their impact be distributed geographically? How will future socioeconomic development, notably an increased focus on education and empowerment for women and girls, affect the vulnerability of affected communities? And, of primary interest to negotiators and donors, how much would it cost to neutralize the threat of additional losses in this context?
  • Topic: Climate Change, Development, Third World, Foreign Aid
  • Author: Nicholas Eubank
  • Publication Date: 01-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Since its secession from Somalia in 1991, the east-African nation of Somaliland has become one of the most democratic governments in eastern Africa. Yet Somaliland has never been recognized by the international community. This paper examines how this lack of recognition—and the consequent ineligibility for foreign financial assistance—has shaped Somaliland's political development. It finds evidence that Somaliland's ineligibility for foreign aid facilitated the development of accountable political institutions and contributed to the willingness of Somalilanders to engage constructively in the state-building process.
  • Topic: Development, Foreign Aid
  • Political Geography: Africa, Somalia
  • Author: Nancy Birdsall, Molly Kinder
  • Publication Date: 05-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: During the 1990s, the World Bank and several donor partners provided a “surge” in external aid to support Pakistan's social sectors. Despite the millions of donor dollars spent, the program failed. Poverty was higher in Pakistan in 2004 than it was a decade earlier when the antipoverty program began. This working paper re-releases a CGD analysis of the World Bank's program, which was prepared in 2005 by CGD researchers Nancy Birdsall, Milan Vaishnav, and Adeel Malik. The analysis reports the many problems donors faced while working with Pakistan's government to improve health and education outcomes. A new preface by Nancy Birdsall and Molly Kinder identifies the key lessons from this massive donor experiment that are relevant today, as the United States and other donors prepare to increase their assistance to Pakistan to historic levels.
  • Topic: Development, Poverty, Foreign Aid, World Bank
  • Political Geography: Pakistan, United States, Central Asia
  • Author: Nandini Oomman, Steven Rosenzweig, Michael Bernstein
  • Publication Date: 04-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: To what extent do the major funders of HIV/AIDS programs in developing countries use past performance to guide decisions about future funding? This question is important for those concerned with the effectiveness of the significant funding flows for the treatment, care, and prevention of HIV and AIDS: linking funding to performance can help ensure that the best programs are given continued resources (and the failing ones are not) and that program managers have the strongest incentives to perform at a high level and to improve the performance of their programs. Performance-based funding can also have unintended negative consequences. Linking funding to performance can also induce single-minded attention to specific targets to the exclusion of harder-to-measure but important outcomes and loss of integrity of information systems.
  • Topic: Humanitarian Aid, Non-Governmental Organization, Foreign Aid, World Bank
  • Political Geography: United States
  • Author: Kimberly Elliott, Antoine Bouët, David Laborde Debucquet, Elisa Dienesch
  • Publication Date: 03-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: This paper examines the potential benefits and costs of providing duty-free, quota-free market access to the least developed countries (LDCs), and the effects of extending eligibility to other small and poor countries. Using the MIRAGE computable general equilibrium model, it assesses the impact of scenarios involving different levels of coverage for products, recipient countries, and preference-giving countries on participating countries, as well as competing developing countries that are excluded. The main goal of this paper is to highlight the role that rich and emerging countries could play in helping poor countries to improve their trade performance and to assess the distribution of costs and benefits for developing countries and whether the potential costs for domestic producers are in line with political feasibility in preference-giving countries.
  • Topic: Economics, International Political Economy, International Trade and Finance, Markets, Third World
  • Author: Nancy Birdsall
  • Publication Date: 03-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Inclusive growth is widely embraced as the central economic goal for developing countries, but the concept is not well defined in the development economics literature. Since the early 1990s, the focus has been primarily on pro-poor growth, with the "poor" being people living on less than $1 day, or in some regions $2 day. The idea of pro-poor growth emerged in the early 1990s as a counterpoint to a concern with growth alone (measured in per-capita income) and is generally defined as growth which benefits the poor as much or more than the rest of the population. Examples include conditional cash transfers, which target the poor while minimizing the fiscal burden on the public sector, and donors' emphasizing primary over higher education as an assured way to benefit the poor while investing in long-term growth through increases in human capital. Yet these pro-poor, inclusive policies are not necessarily without tradeoffs in fostering long-run growth. In this paper I argue that the concept of inclusive growth should go beyond the traditional emphasis on the poor (and the rest) and take into account changes in the size and economic command of the group conventionally defined as neither poor nor rich, i.e., the middle class.
  • Topic: Economics, International Political Economy, Poverty, Foreign Aid
  • Author: Kimberly Ann Elliott
  • Publication Date: 04-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Trade preference programs are an important and underused tool for stimulating exports, creating jobs, reducing poverty, and promoting prosperity and stability in poor countries. While many rich countries provide special access for exports from the least developed countries (LDCs) to promote these benefits, the trade preferences often do not extend to the products that matter most to LDCs, such as agriculture and clothing. Improving these programs could make a major difference in the lives of the poor, while having minimal effects on production or exports in preference-giving countries because the affected trade is so small: less than 1 percent of global exports are from LDCs. And, in the longer term, improved trade preferences for LDCs will promote shared prosperity and stability in rich and poor countries alike. Recognizing the role of trade in poverty reduction, the UN's Millennium Development Goals (MDGs) for poor countries call on high-income countries to provide duty-free, quota-free market access for the LDCs.
  • Topic: Development, Economics, International Political Economy, International Trade and Finance, Poverty, Third World
  • Author: David Wheelter, Saurabh Shome
  • Publication Date: 03-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Until recently, India's intransigent negotiating posture has conveyed the impression that it will not accept any carbon emissions limits without full compensation and more stringent carbon limitation from rich countries. However, our assessment of India's proposed renewable energy standard (RES) indicates that this impression is simply wrong. India is seriously considering a goal of 15 percent renewable energy in its power mix by 2020, despite the absence of any meaningful international pressure to cut emissions, no guarantees of compensatory financing, and a continuing American failure to adopt stringent emissions limits. If India moves ahead with this plan, it will promote a massive shift of new power capacity toward renewables within a decade. We estimate the incremental cost of this change from coal-fired to renewable power to be about $50 billion-an enormous sum for a society that must still cope with widespread extreme poverty. If India moves ahead with its current plan, it should give serious pause to those who have resisted U.S. carbon regulation on the grounds on that it will confer a cost advantage on "intransigent" countries such as India.
  • Topic: Energy Policy, Environment
  • Political Geography: United States, America, India
  • Author: Jenny C. Aker, Michael W. Klein, Stephen A. O'Connell, Muzhe Yang
  • Publication Date: 04-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: This paper addresses two important economic issues for Africa: the contribution of national borders and ethnicity to market segmentation and integration between and within countries. Market pair regression analysis provides evidence of higher conditional price dispersion for both a grain and a cash crop between markets separated by the Niger-Nigeria border than between two markets located in the same country. A regression discontinuity analysis also confirms a significant price change at the international border. The international border effect is lower, however, if the cross-border markets share a common ethnicity. Ethnicity is also linked to higher price dispersion within Niger; we find a significant intranational border effect between markets in different ethnic regions of the country. This suggests that ethnic similarities diminishing international border effects could enhance international market integration, and ethnic differences could contribute to intranational market segmentation in sub-Saharan Africa. We provide suggestive evidence that the primary mechanism behind the internal border effect is related to the role of ethnicity in facilitating access to credit in agricultural markets. We argue that the results are not driven by differences in price volatility or observables across borders.
  • Topic: Agriculture, Economics, Ethnic Conflict, Markets
  • Political Geography: Africa, West Africa, Nigeria
  • Author: Nancy Birdsall, Augusto de la Torre, Felipe Valencia Caicedo
  • Publication Date: 05-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: In this paper we analyze the Washington Consensus, which at its original formulation reflected views not only from Washington but also from Latin America. We trace the life of the Consensus from a Latin American perspective in terms of evolving economic development paradigms. We document the extensive implementation of Consensus-style reforms in the region as well as the mismatch between reformers' expectations and actual outcomes, in terms of growth, poverty reduction, and inequality. We then present an assessment of what went wrong with the Washington Consensus-style reform agenda, using a taxonomy of views that put the blame, alternatively, on (i) shortfalls in the implementation of reforms combined with impatience regarding their expected effects; (ii) fundamental flaws—in either the design, sequencing, or basic premises of the reform agenda; and (iii) incompleteness of the agenda that left out crucial reform needs, such as volatility, technological innovation, institutional change and inequality.
  • Topic: Economics
  • Political Geography: Washington, Latin America
  • Author: Vijaya Ramachandran, Benjamin Leo, Owen McCarthy
  • Publication Date: 04-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: The World Food Programme has world-class logistics, but its ability to manage financial risk is extremely limited. The WFP procures 100 percent of its food through spot markets, which subjects it to substantial commodity and transport price risks and significant delays delivering food. Relying on reactive emergency appeals and on donors that tend to earmark contributions and make commitments one year at a time only adds to operational inflexibility and uncertainty.
  • Topic: Humanitarian Aid, Food
  • Political Geography: United States
  • Author: Jenny C. Aker, Isaac M. Mbiti
  • Publication Date: 06-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: We examine the growth of mobile phone technology over the past decade and consider its potential impacts upon quality of life in low-income countries, with a particular focus on sub-Saharan Africa. We first provide an overview of the patterns and determinants of mobile phone coverage in sub-Saharan Africa before describing the characteristics of primary and secondary mobile phone adopters on the continent. We then discuss the channels through which mobile phone technology can impact development outcomes, both as a positive externality of the communication sector and as part of mobile phone-based development projects, and analyze existing evidence. While current research suggests that mobile phone coverage and adoption have had positive impacts on agricultural and labor market efficiency and welfare in certain countries, empirical evidence is still somewhat limited. In addition, mobile phone technology cannot serve as the “silver bullet” for development in sub-Saharan Africa. Careful impact evaluations of mobile phone development projects are required to better understand their impacts upon economic and social outcomes, and mobile phone technology must work in partnership with other public good provision and investment.
  • Topic: Economics
  • Political Geography: Africa
  • Author: Mead Over, Timothy B. Hallett
  • Publication Date: 04-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: In contrast to current donor policy, which funds a recipient country's national AIDS control program, this paper proposes a measurement strategy to enable a donor to reward a recipient country's success at HIV prevention, irrespective of the inputs, activities, or who gets the credit. In accordance with the “cash-ondelivery” model of foreign assistance, the objective is not to replace traditional input- or activity-oriented aid, but to complement it by enhancing the motivation for local actors and their partners (including the traditional bilateral and multilateral funding agencies and their agents) to achieve measurable reductions in the rate of new HIV infections. This paper proposes two approaches to measuring the number of HIV infections averted between a baseline survey and a follow-up survey and explores the properties of ten alternative “payout functions” which would link measured epidemic changes to the size of the reward to be paid. All measurement approaches include the possibility of statistical error and thus a risk of rewarding the country too little or too much. This risk depends on the initial rate of infection and on HIV prevention success and can be reduced by either increasing the survey sample size or increasing the interval between surveys. By negotiating in advance the choice of one of these measurement approaches and one of a menu of payout functions, the donor and recipient agree on the recipient's incentive structure with respect to the magnitude and precision of the estimated reduction in the rate of new infection.
  • Author: Michael Clemens
  • Publication Date: 06-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: This study uses a unique natural experiment to test a simple model of international differences in workers' wages and productivity. Large differences in wages across countries could arise from several sources. These include barriers to trade in outputs, differences in technology, differences in workers, or differences in the other factors of production accessible in different countries. To measure the relative importance of these sources in one setting, this study exploits the randomized processing of U.S. visas for a group of Indian workers who produce software within a single multinational firm. In this setting, international barriers to trade in outputs, barriers to technology transfer, and all observable or unobservable differences between workers are extremely low. The results indicate that location outside of India causes a sixfold increase in the wages of the same worker using the same technology to produce a highly tradable good. Under plausible assumptions about competition in the industry, this suggests that country-of-work by itself is responsible—in this industry—for roughly three-quarters of the gap in productivity between workers in India and workers in the richest countries. These findings have implications for open questions in labor, growth, international, and development economics.
  • Topic: Economics, Labor Issues
  • Political Geography: United States, India