Search

Begin New Search Topic Foreign Aid Content Type Working Paper Publishing Institution Center for Global Development Publication Year within 25 Years

1. Are Development Finance Institutions Good Value for Money?

Author:
Paddy Carter
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Finance institutions take money from foreign aid budgets to invest in private enterprises. How much should they be given? We can make some progress on that question by looking at the return on investment in the form of higher real incomes for workers and customers, and comparing that to a cash transfer benchmark. There is considerable uncertainty, but what evidence we have suggests returns on investment are in a range that compares well to that benchmark. There is also a diversification argument that because we don’t know which of the things that aid can finance will ultimately prove most important for poverty eradication, aid allocation should hedge its bets. A low single digit percentage of aid allocated to increase the quantity and quality of private investment in low- and middle-income countries seems reasonable.
Topic:
Development, Foreign Aid, Finance, Investment, and Institutions
Political Geography:
Global Focus

2. Some Unpleasant ODA Arithmetic

Author:
Ranil Dissanayake and Atousa Tahmasebi
Publication Date:
10-2021
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Official development assistance is supposed to be designed to prioritise the economic development and welfare of developing countries. The OECD’s Development Assistance Committee is a club of wealthy donor countries which collaborate to set rules and norms to this effect. However, digging into the official data submitted by donors to the OECD reveals some unpleasant truths. We use data on every funding line reported by donors to the OECD between 2006 and 2019 to investigate the pattern and distribution of commitments and disbursements of ODA to developing countries, and discover that ODA is targeted poorly within the group of eligible developing countries; that this group of eligible countries is gradually expanding to include more relatively wealthy places; that aggregate ODA flows are organized and structured sub-optimally; and that ODA responds more to arbitrary income classifications than it should. We suggest informational and incentive reforms in response. These findings also suggest limits to what realistic reform of ODA can achieve, and, consequently, the importance of non-aid development policy for outcomes in developing countries.
Topic:
Development, International Cooperation, Foreign Aid, and Welfare
Political Geography:
Global Focus

3. A Short-Sighted Vision for Global Britain

Author:
Owen Barder, Hannah Timmis, and Arthur Baker
Publication Date:
03-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
here has been a resurgence in calls to reconsider the cross-party consensus in the UK on foreign aid and development. The main political parties are all committed to spending 0.7 percent of gross national income on aid, to using the internationally agreed definition of aid, and to maintaining a separate government department to administer the majority of this aid, led by a Cabinet Minister. In their recent report, Global Britain: A Twenty-first Century Vision, Bob Seely MP and James Rogers lay challenge to these long-established pillars of UK development policy. In this note, we consider some of the questions they raise and suggest alternative answers.
Topic:
Development, Government, Foreign Aid, and Bureaucracy
Political Geography:
Britain and Europe

4. The Dos and Don’ts of USG Humanitarian Reorganization

Author:
Jeremy Konyndyk
Publication Date:
04-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The FY 2020 budget request released by the White House last month contained a sweeping proposal to rationalize and streamline US government humanitarian assistance programs overseas. The proposal would merge the three humanitarian budget accounts (International Disaster Assistance, Migration and Refugee Assistance, and Food For Peace Title II); strip programming responsibilities from the State Department’s refugee bureau and consolidate them entirely in a new humanitarian bureau at USAID; and establish a vaguely described “dual hat” senior leader role to oversee humanitarian activities at both USAID and the State Department. The proposed changes would be the most significant overhaul of USG humanitarian structures in decades. The proposal in its current form is unlikely to get much traction in Congress, where it is seen on both sides of the aisle as dramatically weakening US leadership on refugees. In light of other moves by the administration—like slashing refugee resettlement numbers and treating asylum seekers roughly—that is a legitimate and vital concern. There is ample reason to approach the proposal with caution, particularly the idea of stripping away the refugee bureau’s resources.
Topic:
Foreign Aid, Budget, Refugees, and Humanitarian Crisis
Political Geography:
United States and North America

5. What Is “Country Ownership”? A Formal Exploration of the Aid Relationship

Author:
William Savedoff
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The aid literature and high-level accords like the Paris Declaration argue that “country ownership” is critical to the effectiveness of aid. In response, donors and recipients renamed themselves “development partners,” obscuring the tendency for country ownership benefits (i.e. more successful and sustainable programs) to come at the expense of satisfying the funding countries’ priorities. This paper illustrates the tradeoff between country ownership and funders’ priorities with a formal model in which aid is governed by a contract to produce a jointly desired outcome. The model generalizes the Principal-Agent approaches for studying aid which treat countries as having multiple objectives. The new model illustrates how a recipient country’s rational resource allocation choices vary with different aid contracts, whether based on lump sum payments, input-based payments, conditional payments, matching grants or outcome payments. It reveals two critical aspects of the country ownership debate. First, even when funders and recipients agree on project goals, funders can only achieve their priorities through distorting domestic allocative choices. Second, funders are likely to fully embrace country ownership only in cases where they believe alternative uses of domestic funds have integrity (as defined by the funder). The model also shows that when funders put higher priority on achieving their goals than accommodating recipient allocation preferences, they should prefer conditional payments, matching grants, or outcome payments. Among these, the donor’s preferences would depend on the relative observability of expenditures to outcomes. If instead funders embrace country ownership and seek to maximize the country’s welfare, lump sum grants are better. In terms of Paris Declaration goals of sustainability, the aid contracts which are least aligned with recipient country priorities will not be sustained after aid ends unless domestic preferences are altered by a process of hysteresis.
Topic:
Development, Diplomacy, International Cooperation, and Foreign Aid
Political Geography:
Global Focus

6. UK Aid Quality Indicators

Author:
Caitlin McKee, Ian Mitchell, and Arthur Baker
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper discusses the United Kingdom’s foreign aid quality based on an updated assessment of the Quality of Official Development Assistance (QuODA) published by the Center for Global Development. QuODA uses 24 quantitative indicators based on how aid is given, grouped into four themes: maximizing efficiency, fostering institutions, reducing the burden on recipient countries, and transparency and learning. These are based on principles which donor and recipient countries agreed to in a series of high-level meetings on aid effectiveness. We find UK aid quality has decreased from 2012 to 2016 and now ranks 15th out of the 27 countries assessed. The quality of its multilateral aid is relatively strong with significant contributions to EU institutions who score in the top half of multilateral agencies, and well-above the UK’s bilateral aid. We analyse the UK’s bilateral aid in detail, identifying areas of relative strength but also four recommendations for the UK Government to improve aid effectiveness
Topic:
Development, International Cooperation, Foreign Aid, and Multilateralism
Political Geography:
United Kingdom and Europe

7. Rethinking the Financial Design of the World Bank

Author:
Devesh Kapur and Arjun Raychaudhuri
Publication Date:
01-2014
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Since their inception, through 2012, the institutions comprising the World Bank group have been involved in lending nearly a trillion dollars. In this paper, we focus on the IBRD, which is the core of the World Bank. The IBRD has the potential to continue to grow and be an important player in official financial flows, supporting critical long-term development projects with large social returns, in sectors ranging from infrastructure, social sectors, or environment.
Topic:
Development, Economics, Environment, Foreign Aid, Infrastructure, and World Bank
Political Geography:
Europe

8. How Should Donors Respond to Resource Windfalls in Poor Countries?

Author:
Alan Gelb, Anton Dobronogov, and Fernando Brant Saldanha
Publication Date:
07-2014
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Natural resources are being discovered in more countries, both rich and poor. Many of the new and aspiring resource exporters are low-income countries that are still receiving substantial levels of foreign aid. Resource discoveries open up enormous opportunities, but also expose producing countries to huge trade and fiscal shocks from volatile commodity markets if their exports are highly concentrated. A large literature on the "resource curse" shows that these are damaging unless countries manage to cushion the effects through countercyclical policy. It also shows that the countries least likely to do so successfully are those with weaker institutions, and these are most likely to remain as clients of the aid system. This paper considers the question of how donors should respond to their clients' potential windfalls. It discusses several ways in which the focus and nature of foreign aid programs will need to change, including the level of financial assistance. The paper develops some ideas on how a donor like the International Development Association might structure its program of financial transfers to mitigate volatility. The paper outlines ways in which the International Development Association could use hedging instruments to vary disbursements while still working within a framework of country allocations that are not contingent on oil prices. Simulations suggest that the International Development Association could be structured to provide a larger degree of insurance if it is calibrated to hedge against large declines in resource prices. These suggestions are intended to complement other mechanisms, including self-insurance using Sovereign Wealth Funds (where possible) and the facilities of the International Monetary Fund.
Topic:
Economics, International Trade and Finance, Natural Resources, and Foreign Aid
Political Geography:
Uganda, Kenya, Tanzania, and Ghana

9. The Political Economy of Bad Data: Evidence from African Survey Administrative Statistics

Author:
Amanda Glassman and Justin Sandefur
Publication Date:
07-2014
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Across multiple African countries, discrepancies between administrative data and independent household surveys suggest official statistics systematically exaggerate development progress. We provide evidence for two distinct explanations of these discrepancies. First, governments misreport to foreign donors, as in the case of a results-based aid program rewarding reported vaccination rates. Second, national governments are themselves misled by frontline service providers, as in the case of primary education, where official enrollment numbers diverged from survey estimates after funding shifted from user fees to per pupil government grants. Both syndromes highlight the need for incentive compatibility between data systems and funding rules.
Topic:
Development, Foreign Aid, Foreign Direct Investment, Governance, and Developing World
Political Geography:
Africa

10. Can Results-Based Payments Reduce Corruption?

Author:
Charles Kenny and William Savedoff
Publication Date:
10-2013
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
A common objection to results-based programs is that they are somehow more vulnerable to corruption. This paper explains why results-based approaches to foreign aid may be less vulnerable to corruption than the traditional approaches which monitor and track the purchase and delivery of inputs and activities. The paper begins by classifying different corruption costs and specifically distinguishes the problem of diverted funds from the costs associated with failing to generate benefits. It then characterizes the key differences between traditional input-tracking programs and results-based approaches in terms of how they are supposed to work, the implicit risks that preoccupy designers, how they function in practice, and what this means both for the scale of corruption and the realization of benefits. It then considers the conditions under which one approach or another might be more appropriate. The paper concludes that input-tracking approaches are vulnerable to corruption because they have high failure costs and a weak track record for controlling diverted funds. By contrast, results-based approaches are less prone to failure costs and limit the capacity of dishonest agents to divert funds unless those agents first improve efficiency and outputs.
Topic:
Corruption, Development, Foreign Aid, and Governance

11. The New Transparency in Development Economics: Lessons from the Millennium Villages Controversy

Author:
Michael Clemens and Gabriel Demombynes
Publication Date:
09-2013
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The Millennium Villages Project is a high profile, multi-country development project that has aimed to serve as a model for ending rural poverty in sub-Saharan Africa. The project became the subject of controversy when the methodological basis of early claims of success was questioned. The lively ensuing debate offers lessons on three recent mini-revolutions that have swept the field of development economics: the rising standards of evidence for measuring impact, the “open data” movement, and the growing role of the blogosphere in research debates.
Topic:
Development, Economics, Poverty, and Foreign Aid
Political Geography:
Africa

12. Is Anyone Listening? Does US Foreign Assistance Target People's Top Priorities?

Author:
Benjamin Leo
Publication Date:
12-2013
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The United States government has made repeated declarations over the last decade to align its assistance programs behind developing countries' priorities. By utilizing public attitude surveys for 42 African and Latin American countries, this paper examines how well the US has implemented this guiding principle. Building upon the Quality of Official Development Assistance Assessment (QuODA) approach, I identify what people cite most frequently as the 'most pressing problems' facing their nations and then measure the percentage of US assistance commitments that are directed towards addressing them. By focusing on public surveys over time, this analysis attempts to provide a more nuanced and targeted examination of whether US portfolios are addressing what people care the most about. As reference points, I compare US alignment trends with the two regional multilateral development banks (MDBs) – the African Development Bank and the Inter-American Development Bank. Overall, this analysis suggests that US assistance may be only modestly aligned with what people in Sub-Saharan Africa and Latin America cite as their nation's most pressing problems. By comparison, the African Development Bank – which is majority-led by regional member nations – performs significantly better than the United States. Like the United States, however, the Inter-American Development Bank demonstrates a low relative level of support for people's top concerns.
Topic:
Security, Crime, Development, Economics, and Foreign Aid
Political Geography:
Africa, United States, America, and Latin America

13. An Index of the Quality of Official Development Assistance in Health

Author:
Amanda Glassman and Denizhan Duran
Publication Date:
02-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Health is one of the largest and most complex aid sectors: 16 percent of all aid went to the health sector in 2009. While many stress the importance of aid effectiveness, there are limited quantitative analyses of the quality of health aid. In this paper, we apply Birdsall and Kharas's Quality of Official Development Assistance (QuODA) methodology to rank donors across 23 indicators of aid effectiveness in health. We present our results, track progress from 2008 to 2009, compare health to overall aid, discuss our limitations, and call for more transparent and relevant aid data in the sector level as well as the need to focus on impact and results.
Topic:
Development, Health, Human Welfare, Humanitarian Aid, and Foreign Aid

14. Incentives for Life: Cash-on-Delivery Aid for Tobacco Control in Developing Countries

Author:
Amanda Glassman and Thomas J. Bollyky
Publication Date:
04-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Fewer people are smoking in the United States, Europe, and most of the developing world. Excise taxes, bans on smoking in public places, and graphic health warnings are achieving such dramatic reductions in tobacco use in developed countries that a recent Citigroup Bank investment analysis speculated that smoking could virtually disappear in wealthy countries over the next thirty to fifty years.
Topic:
Agriculture, Development, Gender Issues, International Trade and Finance, and Foreign Aid
Political Geography:
United States and Europe

15. Supporting Private Business Growth in African Fragile States: A Guiding Framework for the World Bank Group in South Sudan and Other Nations

Author:
Vijaya Ramachandran, Benjamin Leo, and Ross Thuotte
Publication Date:
04-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The World Bank Group faces significant operational changes over the near to medium term. More than half of poor countries are projected to graduate from the World Bank's International Development Association (IDA) concessional assistance over the next 15 years. As a result, IDA's country client base is projected to become dominated by African fragile states. To its credit, the World Bank Group recognizes these coming changes and the unique needs and constraints present in fragile environments. It has publicly expressed a plan to develop an organization-wide strategy tailored specifically for fragile and conflict-affected situations.
Topic:
Development, Foreign Aid, Fragile/Failed State, and World Bank
Political Geography:
Africa and South Sudan

16. The Quality of Official Development Assistance Assessment 2009: Is Aid Quality Improving?

Author:
Nancy Birdsall, Homi Kharas, and Rita Perakis
Publication Date:
04-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This report presents the results of the second edition of the Quality of Official Development Assistance (QuODA) assessment, with a focus on the changes that have occurred in donor performance since the first edition. These results were released in summary form in November, 2011, just before the Fourth High Level Forum on Aid Effectiveness in Busan, South Korea.
Topic:
International Relations, Development, Economics, Humanitarian Aid, Poverty, and Foreign Aid
Political Geography:
South Korea

17. Hoping to Win, Expected to Lose: Theory and Lessons on Microenterprise Development

Author:
Dean Karlan, Ryan Knight, and Christopher Udry
Publication Date:
11-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
We show how financial and managerial constraints impede experimentation and thus limit learning about the profitability of investments. Imperfect information about one's own type, but willingness to experiment to learn one's type, leads to short-run negative expected returns to investments, with some outliers succeeding. We find in an experiment that entrepreneurs invest randomized grants of cash and adopt advice from randomized grants of consulting services, but both lead to lower profits on average. In the long run, they revert back to their prior scale of operations. In a meta-analysis, results from 19 other experiments find mixed support for this theory.
Topic:
Development, Economics, Markets, Foreign Aid, and Foreign Direct Investment
Political Geography:
Africa

18. Europe Beyond Aid: Assessing Europe's Commitment to Development

Author:
David Roodman, Owen Barder, Julia Clark, Alice Lépissier, and Liza Reynolds
Publication Date:
12-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
European countries pride themselves on being leaders in spurring development within poor countries. We find that Europe's approach to development could be characterised as energetically tackling the symptoms of poor economic opportunities for developing countries by providing effective aid, while doing relatively little to tackle the underlying structural causes of poverty. We use the Center for Global Development Commitment to Development Index (CDI) as a tool to examine Europe's performance overall. We combine the scores for the twenty-one European countries which are included in the 2012 edition of the Commitment to Development Index to calculate the single score they would have obtained if they had been a single country. This represents the combined commitment to development of these countries, by giving appropriate weight to the larger, more populous countries in Europe, which tend to have less development-friendly policies than the Nordic countries and the Netherlands. Our calculations show that compared to the other countries in the CDI, Europe as a whole performs better than most CDI countries on aid and environment, but less well in other dimensions such as trade and security. This paper provides the background to a series of more detailed studies of the policies of European countries, individually and collectively through the European Union, in each dimension of the CDI, which the Center for Global Development in Europe is coordinating.
Topic:
Development, Political Economy, Poverty, and Foreign Aid
Political Geography:
Europe

19. Haiti: Where Has All the Money Gone?

Author:
Vijaya Ramachandran and Julie Walz
Publication Date:
05-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Since the 2010 earthquake, almost $6 billion has been disbursed in official aid to Haiti, a country with a population of just under 10 million. An estimated $3 billion has been donated to NGOs in private contributions in addition to official aid. The United States Government alone has disbursed almost $2 billion of this total amount and has pledged over $3 billion for relief and reconstruction.
Topic:
Corruption, Humanitarian Aid, Non-Governmental Organization, and Foreign Aid
Political Geography:
United States, Caribbean, and Haiti

20. Adolescent Fertility in Low- and Middle-Income Countries: Effects and Solutions

Author:
Amanda Glassman, Kate McQueston, and Rachel Silverman
Publication Date:
05-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Adolescent fertility in low- and middle-income countries presents a severe impediment to development and can lead to school dropout, lost productivity, and the intergenerational transmission of poverty. However, there is debate about whether adolescent pregnancy is a problem in and of itself or merely symptomatic of deeper, ingrained disadvantage. To inform policy choices and create a revised research agenda for population and development, this paper aggregates recent quantitative evidence on the socioeconomic consequences of and methods to reduce of teenage pregnancy in the developing world. The review finds variable results for all indicator types with the partial exception of knowledge-based indicators, which increased in response to almost all evaluating interventions, though it is not clear that such interventions necessarily lead to short- or long term-behavior change. The evidence base supporting the effectiveness of conditional cash transfers was relatively strong in comparison to other interventions. Similarly, programs that lowered barriers to attending school or increased the opportunity cost of school absence are also supported by the literature. On the basis of these findings, the authors argue that donors should adopt a rights-based approach to adolescent fertility and shift their focus from the proximate to distal causes of pregnancy, including human rights abuses, gender inequality, child marriage, and socioeconomic marginalization. Further research should be conducted to strengthen the evidence base by 1) establishing causality, 2) understanding the differential impacts of adolescent fertility in different contexts, and 3) investigating other the impact of adolescent fertility on other socioeconomic outcomes, such as labor participation, productivity, and the intergenerational transmission of poverty.
Topic:
Democratization, Demographics, Development, Economics, Foreign Aid, and Youth Culture

21. No Longer Poor: Ghana's New Income Status and Implications of Graduation from IDA

Author:
Todd Moss and Stephanie Majerowicz
Publication Date:
07-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Ghana's largest and most important creditor for the past three decades has been the International Development Association (IDA), the soft loan window of the World Bank. That will soon come to an end. The combination of Ghana's rapid economic growth and the recent GDP rebasing exercise means that Ghana suddenly finds itself above the income limit for IDA eligibility. Formal graduation is imminent and comes with significant implications for access to concessional finance, debt, and relations with other creditors. This paper considers the specific questions related to Ghana's relationship with the World Bank, as well as the broader questions about the country's new middle-income status.
Topic:
Development, Economics, Poverty, Foreign Aid, and Foreign Direct Investment
Political Geography:
Africa

22. Escaping Capability Traps through Problem-Driven Iterative Adaptation (PDIA)

Author:
Lant Pritchett, Michael Woolcock, and Matt Andrews
Publication Date:
06-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Many reform initiatives in developing countries fail to achieve sustained improvements in performance because they are merely isomorphic mimicry—that is, governments and organizations pretend to reform by changing what policies or organizations look like rather than what they actually do. In addition, the flow of development resources and legitimacy without demonstrated improvements in performance undermines the impetus for effective action to build state capability or improve performance. This dynamic facilitates “capability traps” in which state capability stagnates, or even deteriorates, over long periods of time even though governments remain engaged in developmental rhetoric and continue to receive development resources. How can countries escape capability traps? We propose an approach, Problem-Driven Iterative Adaptation (PDIA), based on four core principles, each of which stands in sharp contrast with the standard approaches. First, PDIA focuses on solving locally nominated and defined problems in performance (as opposed to transplanting preconceived and packaged “best practice” solutions). Second, it seeks to create an authorizing environment for decision-making that encourages positive deviance and experimentation (as opposed to designing projects and programs and then requiring agents to implement them exactly as designed). Third, it embeds this experimentation in tight feedback loops that facilitate rapid experiential learning (as opposed to enduring long lag times in learning from ex post “evaluation”). Fourth, it actively engages broad sets of agents to ensure that reforms are viable, legitimate, relevant, and supportable (as opposed to a narrow set of external experts promoting the top-down diffusion of innovation).
Topic:
Development, Economics, Political Economy, Foreign Aid, Foreign Direct Investment, and Governance

23. Assessing the Quality of Aid for Agriculture

Author:
Kimberly Elliott and Edward Collins
Publication Date:
08-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
New international initiatives signal strong commitment to agriculture and food security in the face of growing demand and climate-change challenges. But aid to agriculture still represents just five percent of total official development assistance. With donor budgets under intense pressure, making aid effective is more important than ever, but we still know relatively little about the quality of aid in general and of agricultural aid in particular.
Topic:
Security, Agriculture, Climate Change, Development, Foreign Aid, and Food

24. A Commitment to Vaccination Index: Measuring Government Progress toward Global Immunization

Author:
Amanda Glassman, Denizhan Duran, and Juan Ignacio Zoloa
Publication Date:
08-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Vaccination is among the most cost-effective health interventions and has attracted ever greater levels of investment from public and private funders. However, some countries, mainly populous lower-middle-income countries, are lagging behind in vaccination financing and performance.
Topic:
Development, Foreign Aid, and Health Care Policy

25. Energy+ Country Performance Ratings, 2001–2010

Author:
David Wheeler
Publication Date:
07-2012
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper introduces ƐCPR, country performance ratings that support Norway's Energy+ initiative by monitoring the progress of 153 countries in reducing the CO2 emissions intensity of energy consumption. It develops annual ƐCPR ratings for the period from 2001 to 2010.
Topic:
Climate Change, Development, Energy Policy, and Foreign Aid

26. How Can Bill and Melinda Gates Increase Other People\'s Donations to Fund Public Goods?

Author:
Dean Karlan and 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, and Foreign Aid
Political Geography:
United States

27. Where Have All the Donors Gone? Scarce Donor Funding for Non-Communicable Diseases

Author:
Rachel Nugent and Andrea B. Feigl
Publication Date:
01-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Health conditions in developing countries are becoming more like those in developed countries, with non-communicable diseases (NCDs) predominating and infectious diseases declining. The increased awareness of changing health needs, however, has not translated into significant shifts in resources or policy-level attention from international donors or governments in affected countries. Driven by changes in lifestyle related to nutrition, physical activity, and smoking, the surging burden of NCDs in poor countries portends painful choices, particularly for countries with weak health systems that are struggling to manage persistent infectious disease burdens and to protect the poor from excessive out-of-pocket expenses.
Topic:
Development, Health, Poverty, Third World, and Foreign Aid

28. Quantifying Vulnerability to Climate Change: Implications for Adaptation Assistance

Author:
David Wheeler
Publication Date:
01-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper attempts a comprehensive accounting of climate change vulnerability for 233 states, ranging in size from China to Tokelau. Using the most recent evidence, it develops risk indicators for three critical problems: increasing weather-related disasters, sea-level rise, and loss of agricultural productivity. The paper embeds these indicators in a methodology for cost-effective allocation of adaptation assistance. The methodology can be applied easily and consistently to all 233 states and all three problems, or to any subset that may be of interest to particular donors. Institutional perspectives and priorities differ; the paper develops resource allocation formulas for three cases: (1) potential climate impacts alone, as measured by the three indicators; (2) case 1 adjusted for differential country vulnerability, which is affected by economic development and governance; and (3) case 2 adjusted for donor concerns related to project economics: intercountry differences in project unit costs and probabilities of project success. The paper is accompanied by an Excel database with complete data for all 233 countries. It provides two illustrative applications of the database and methodology: assistance for adaptation to sea level rise by the 20 island states that are both small and poor and general assistance to all low-income countries for adaptation to extreme weather changes, sea-level rise, and agricultural productivity loss.
Topic:
Climate Change, Development, Poverty, and Foreign Aid
Political Geography:
China

29. TrAid+ Channeling Development Assistance to Results

Author:
Alex Ergo and Ingo Puhl
Publication Date:
03-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Development assistance is meant to improve the lives of poor people in developing countries, but the effectiveness of aid in meeting this goal is uncertain. Demonstrating failure—or success—is difficult because traditional donor financing mechanisms track inputs, not results. This is compounded by poor coordination between actors and a lack of transparency, accountability, and country ownership. Development assistance that is ineffective or has unknown outcomes wastes resources, erodes the constituency for aid, and most importantly fails to improve the lives of poor people as much as it could. TrAid+ is a new mechanism that aims to address these problems by creating a market for certified development outputs—outputs for which both the delivery and the quality have been verified. By ensuring that these outputs, such as safe deliveries or gas connections, meet certain standards, trAid+ acts as a third-party stamp of approval that donors, tax payers, recipient-country governments, service providers, and beneficiaries can trust to know that their aid is being used effectively and is contributing to the development objectives of the recipient country. And trAid+ makes all information accessible online, making it easier for funders to link with projects that are working and projects that are working to link with anyone interested in purchasing certified development outputs. TrAid+ can be tailored to any sector where outputs can be clearly defined and measured, whether health, education, infrastructure, or agriculture. This paper describes the trAid+ concept in detail and proposes practical steps to establish the trAid+ platform.
Topic:
Development, Humanitarian Aid, Poverty, and Foreign Aid

30. The Post-Washington Consensus: Development after the Crisis

Author:
Francis Fukuyama and Nancy Birdsall
Publication Date:
03-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
A clear shift in the development agenda is underway. Traditionally, an agenda generated in the developed world was implemented in—and, indeed, often imposed on—the developing world. The United States, Europe, and Japan will continue to be significant sources of economic resources and ideas, but the emerging markets will become significant players. Countries such as Brazil, China, India, and South Africa will be both donors and recipients of resources for development and of best practices for how to use them. In fact, development has never been something that the rich bestowed on the poor but rather something the poor achieved for themselves. It appears that the Western powers are finally waking up to this truth in light of a financial crisis that, for them, is by no means over.
Topic:
Development, Economics, Emerging Markets, Poverty, and Foreign Aid
Political Geography:
United States, Japan, China, Europe, India, South Africa, and Brazil

31. GAVI's Future: Steps to Build Strategic Leadership, Financial Sustainability, and Better Partnerships

Author:
Amanda Glassman, Lisa Carty, J. Stephen Morrison, and Margaret Reeves
Publication Date:
06-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
On June 13, the GAVI Alliance convenes its first pledging conference in London with the aim of securing $3.7 billion to immunize an additional 250 million children by 2015. Founded in 2000, GAVI is an innovative partnership that combines donors, partner governments, UNICEF, WHO, civil society, and the private sector. It is designed to accelerate the financing and delivery of selected vaccines and related health services to the world's most disadvantaged populations. As GAVI enters its second decade of operations, it has established itself as a quiet success. And as it strives to sustain and expand its model of operations, it simultaneously strives to make itself better known and understood; better led, managed, and resourced; better assured of essential high-level political and financial support; and better served by well-functioning relations with its many essential partners.
Topic:
Development, Economics, Health, and Foreign Aid

32. Migration as a Tool for Disaster Recovery: A Case Study on U.S. Policy Options for Post-Earthquake Haiti

Author:
Royce Bernstein Murray and Sarah Petrin Williamson
Publication Date:
06-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
After a natural catastrophe in a developing country, international migration can play a critical role in recovery. But the United States has no systematic means to leverage the power and cost-effectiveness of international migration in its post-disaster assistance portfolios. Victims of natural disasters do not qualify as refugees under U.S. or international law, and migration policy toward those fleeing disasters is set in a way that is haphazard and tightly constrained. This paper comprehensively explores the legal means by which this could change, allowing the government more flexibility to take advantage of migration policy as one inexpensive tool among many tools for post-disaster assistance. It explores both the potential for administrative actions under current law and the potential for small changes to current law. For concreteness, it focuses on the case of the 2010 earthquake in Haiti, but its policy lessons apply to future disasters that are sadly certain to arrive. The paper neither discusses nor recommends "opening the gates" to all disaster victims, just as current U.S. refugee law does not open the gates to all victims of persecution, but rather seeks to identify those most in need of protection and provide a legal channel for entry and integration into American life.
Topic:
Humanitarian Aid, Migration, Natural Disasters, and Foreign Aid
Political Geography:
United States

33. New SME Financial Access Initiatives: Private Foundations' Path to Donor Partnerships

Author:
Benjamin Leo
Publication Date:
06-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
In recent years, a number of private foundations and organizations have launched ambitious initiatives to support promising entrepreneurs in developing countries, on both a for-profit and not-for-profit basis. Many of these programs have focused exclusively on building business capacity. While these tailored programs play an important role in supporting small- and medium-sized enterprise (SME) development, their overall effectiveness remains hamstrung in part by continuing constraints on entrepreneurs' access to expansion and operating capital. Simultaneously, the U.S. government, other bilateral donors, and international financial institutions (IFIs) have launched a series of initiatives that provide both financial and technical assistance to SMEs in developing countries. Surprisingly, collaboration or formalized partnerships between private foundations and donor agencies has been somewhat limited-particularly on a strategic or globalized basis. This paper is targeted for these private foundations, especially those focused on women entrepreneurship. First, it provides a brief literature review of the rationale for and against SME initiatives. Second, it presents an overview of existing targeted USG and IFI programs. Lastly, it offers several new, incremental options for private foundations to establish focused partnerships with donor agencies in support of their ongoing organizational goals.
Topic:
Development, Humanitarian Aid, and Foreign Aid
Political Geography:
United States

34. Cash at Your Fingertips: Biometric Technology for Transfers in Developing and Resource-Rich Countries

Author:
Alan Gelb and Caroline Decker
Publication Date:
06-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Cash transfers are often a good way for developing countries to address economic and social problems. They are less expensive than directly providing goods and services and allow recipients the flexibility to spend on what they need the most, but for many developing countries, the technical requirements for large-scale programs have been prohibitive. Now, however, biometric technologies have improved and become ubiquitous enough to allow the confident identification and low cost needed to implement successful cash-transfer programs in developing countries. This paper surveys the arguments for and against cash-transfer programs in resource-rich states, discusses some of the new biometric identification technologies, and reaches preliminary conclusions about their potentially very large benefits for developing countries. The barriers to cash-transfers are no longer technical, but political.
Topic:
Development, Economics, Science and Technology, and Foreign Aid

35. The Best Things in Life are (Nearly) Free: Technology, Knowledge and Global Health

Author:
Charles Kenny and Ursula Casabonne
Publication Date:
05-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Casabonne and Kenny argue that two major factors underlie improved global health outcomes: first, the discovery of cheap technologies that can dramatically improve outcomes; second, the adoption of these technologies, thanks to the spread of knowledge. Other factors have played a role. Increased income not only allows for improved nutrition, but also helps to improve access to more complex preventative technologies. Institutional development is a second key to the spread of such complex technologies. Nonetheless, evidence of dramatic health improvements even in environments of weak institutions and stagnant incomes suggests that the role of these factors may be secondary.
Topic:
Development, Health, Poverty, and Foreign Aid

36. Find Me the Money: Financing Climate and Other Global Public Goods

Author:
Nancy Birdsall and Benjamin Leo
Publication Date:
04-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The global community faces a number of critical challenges ranging from climate change to crossborder health risks to natural-resource scarcities. Many of these so-called global commons problems carry grave risks to economic growth in the developing world and to the livelihoods and welfare of their people. Climate change is the classic example. Despite the risks involved, donor governments have funded programs addressing global challenges such as climate change at far lower levels than traditional programs of country-based development assistance. The prospects for dealing with such global challenges will depend at least in part on new collective financing mechanisms.
Topic:
Climate Change, Development, Health, Humanitarian Aid, and Foreign Aid

37. Constraints to Domestic Enterprise Financing in Post-Conflict Liberia

Author:
John Gorlorwulu
Publication Date:
07-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Countries emerging from protracted and devastating conflicts are often seen as needing significant external intervention in their financial markets to rebuild their private sector and promote quick and effective economic recovery. Despite enormous challenges, the provision of credit or the implementation of various lending schemes often dominate efforts to promote domestic private-sector recovery in the immediate aftermath of conflict. This approach raises a number of questions: First, how effective are loan programs in the development of domestic enterprises in the immediate aftermath of conflicts? Second, can loan programs work without significant improvements in the business climate? How sensitive is the design of lending programs to the success of domestic enterprise development projects following devastating conflicts? This paper explores the experience of the Liberian Enterprise Development Finance Company, which was established in 2007 to provide medium-and long-term credit to small and medium domestic enterprises. In addition to shedding light on the challenges such an enterprise faces in a post conflict environment, the paper explores whether the strategies employed are effective and if there are opportunities for effecting remedial changes that could improve the outcomes of such a program in post-conflict environments generally.
Topic:
Conflict Resolution, Civil War, Development, Foreign Aid, and Foreign Direct Investment
Political Geography:
Africa and Liberia

38. The Health Systems Funding Platform: Resolving Tensions between the Aid and Development Effectiveness Agendas

Author:
Amanda Glassman and William Savedoff
Publication Date:
07-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Global health aid is exceedingly complex. It encompasses more than one hundred bilateral agencies, global funds, and independent initiatives that interact with an equally complex and diverse set of institutions involved in financing and providing health care in developing countries. Numerous efforts have been made to better coordinate these activities in the interest of making them more effective. The Health Systems Funding Platform (the Platform) is one of the most recent of these initiatives. Established in 2009, the Platform has advanced farthest in two countries, Ethiopia and Nepal, and is currently expanding to several others. This paper briefly assesses the Platform and argues that the way the initiative is proceeding differs little from prior initiatives, such as sector- wide approaches and budget support. However, the initiative does represent an opportunity to make global health aid more effective if it were to deepen its commitment to improving information for policy, link funding explicitly to well-chosen independently verified indicators, and establish an evaluation strategy to learn from its experience.
Topic:
Development, Health, International Cooperation, International Organization, and Foreign Aid
Political Geography:
Nepal and Ethiopia

39. Incentive Proliferation? Making Sense of a New Wave of Development Programs

Author:
William Savedoff
Publication Date:
08-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
A new wave of development programs that explicitly use incentives to achieve their aims is under way. They are part of a trend, accelerating in recent years, to disburse development assistance against specific and measurable outputs or outcomes. With a proliferation of new ideas under names such as “payments for performance,” “output-based aid,” and “results based financing,” it is easy to lose sight of basic underlying similarities in these approaches and to miss some significant differences. This paper proposes a way of classifying and distinguishing the range of incentive programs being debated today, emphasizing two particular dimensions: the agent whose behavior the incentive seeks to change and the specificity of the output or outcome measure. It begins by characterizing a basic incentive arrangement, discussing the range of available contracts and how they appear in development programs, presents a classification of existing incentive programs and illustrates the scheme with examples. The paper concludes by identifying four broad categories that address different problems and offers some cautionary notes.
Topic:
Development, International Political Economy, Poverty, and Foreign Aid

40. Scholars Who Became Practitioners

Author:
Nora Lustig
Publication Date:
08-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Celebrated by academics, multilateral organizations, policymakers and the media, Mexico's Progresa/ Oportunidades conditional cash transfers program (CCT) is constantly used as a model of a successful antipoverty program. Here I argue that the transformation of well-trained scholars into influential practitioners played a fundamental role in promoting a new conceptual approach to poverty reduction, ensuring the technical soundness and effectiveness of the program, incorporating rigorous impact evaluation, and persuading politicians to implement and keep the program in place. The involvement of scholar-practitioners also helped disseminate the new CCT “technology” to many countries around the world quite rapidly.
Topic:
Development, Poverty, and Foreign Aid
Political Geography:
Mexico

41. The Commander's Emergency Response Program in Afghanistan: Five Practical Recommendations

Author:
Vijaya Ramachandran, Gregory Johnson, and Julie Walz
Publication Date:
09-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The U.S. military has become substantially engaged in economic development and stabilization and will likely continue to carry out these activities in in-conflict zones for some time to come. Since FY2002, nearly $62 billion has been appropriated for relief and reconstruction in Afghanistan. The Commander's Emergency Response Program (CERP), which provides funds for projects to address urgent reconstruction and relief efforts, is one component of the military's development operations. In this analysis, we take U.S. military involvement in development as a given and concentrate on providing recommendations for it to operate more efficiently and effectively. By doing so, we are not advocating that the U.S. military become involved in all types of development activities or that CERP be used more broadly; rather, our recommendations address the military's capacity to carry out what it is already doing in Afghanistan and other in-conflict situations.
Topic:
Conflict Resolution, Development, Economics, War, and Foreign Aid
Political Geography:
Afghanistan and United States

42. Brave New World: A Literature Review of Emerging Donors and the Changing Nature of Foreign Assistance

Author:
Vijaya Ramachandran and Julie Walz
Publication Date:
11-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
In this paper, we look at the scale and scope of emerging donors, many of which are developing economies themselves. On the basis of a survey of the literature, we find that estimates of annual aid flows from new donors (so-called non-DAC donors) vary greatly and are somewhere between $11 billion and $41.7 billion, or 8 and 31 percent of global gross ODA. We find that new donors are not a monolithic group but instead represent three distinct models of aid delivery, which we describe as the DAC Model, the Arab Model and the Southern Model.
Topic:
Development, Poverty, International Affairs, and Foreign Aid
Political Geography:
Arabia

43. Dial "A" for Agriculture: A Review of Information and Communication Technologies for Agricultural Extension in Developing Countries

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, and Foreign Direct Investment

44. More Money or More Development: What Have the MDGs Achieved?

Author:
Charles Kenny and 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, and Foreign Aid

45. A Labor Mobility Agenda for Development

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, and Labor Issues

46. The Economics of Adaptation to Extreme Weather Events in Developing Countries

Author:
David Wheeler, Susmita Dasgupta, Benoit Laplante, and 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, and Foreign Aid

47. Peace-Building without External Assistance: Lessons from Somaliland

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 and Foreign Aid
Political Geography:
Africa and Somalia

48. The U.S. Aid "Surge" to Pakistan: Repeating a Failed Experiment? Lessons for U.S. Policymakers from the World Bank's Social-Sector Lending in the 1990s

Author:
Nancy Birdsall and 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, and World Bank
Political Geography:
Pakistan, United States, and Central Asia

49. Are Funding Decisions Based on Performance?

Author:
Nandini Oomman, Steven Rosenzweig, and 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, and World Bank
Political Geography:
United States

50. The (Indispensable) Middle Class in Developing Countries; or, The Rich and the Rest, Not the Poor and the Rest

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, and Foreign Aid

51. Inside the World Bank's Black Box Allocation System: How Well Does IDA Allocate Resources to the Neediest and Most Vulnerable Countries?

Author:
Benjamin Leo
Publication Date:
06-2010
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
During the last few International Development Association (IDA) replenishment negotiations, several large donors have pressed for reforms to further increase the share of IDA resources provided to the neediest and most vulnerable countries. While the proposed reforms take different forms, the philosophical Thrust is the same—push IDA's focus further down the development chain. Against this backdrop, this paper explores just how well IDA's existing performance-based allocation (PBA) system actually addresses these issues. To achieve this, I examine how IDA allocations are distributed at each successive stage of the PBA methodology based upon a number of need and vulnerability measures. Next, I apply two simple measures to gauge IDA's performance: (1) whether per-capita allocations to the neediest and most vulnerable countries are equal to or greater than those for the best off countries and (2) whether allocations to the neediest and most vulnerable countries increase between the baseline and final allocation scenarios. Based on these criteria, IDA has a mixed track record. IDA's performance is very modest with respect to the relative share allocated to the neediest or most vulnerable countries. Of the eight measures examined, only two illustrate parity between final allocations to the bottom and top quartile of countries. However, the litany of PBA exceptions clearly helps to redistribute resources in absolute terms. Per-capita allocations to the neediest and most vulnerable countries more than doubles between the baseline and final PBA scenarios for every need and vulnerability indicator examined. Clearly, the existing system has several built-in biases to redistribute resources to these countries. However, these exceptions fall short from ensuring full parity that some IDA donors may wish to achieve. As such, the philosophical debate among key IDA donors likely will continue for the foreseeable future.
Topic:
Development, Economics, Foreign Aid, and Financial Crisis

52. Twenty Concrete Steps to Improve the United States' Commitment to Development

Author:
David Roodman and Cindy Prieto
Publication Date:
07-2010
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The Commitment to Development Index (CDI) ranks 22 rich countries on their dedication to policies that benefit poor nations. Looking beyond standard comparisons of foreign aid flows, the CDI measures national policies on aid, trade, investment, migration, environment, security, and technology. The United States ranked 17th overall in 2009, strong in trade and security but less competitive in aid and environment. This memo describes how to boost the U.S. score and links to CGD materials with more detail.
Topic:
Development, Foreign Aid, and Foreign Direct Investment
Political Geography:
United States

53. Bases, Bullets, and Ballots: The Effect of U.S. Military Aid on Political Conflict in Colombia

Author:
Oeindrila Dube and 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, and Foreign Aid
Political Geography:
United States, Colombia, and Latin America

54. Can Donors Be Flexible within Restrictive Budget Systems? Options for Innovative Financing Mechanisms

Author:
Benjamin Leo
Publication Date:
10-2010
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper focuses on how budgetary scorekeeping systems affect governments' ability or willingness to support innovative development finance initiatives and explores several options to overcome the restrictions the systems often impose. As a starting point, it assumes that donor governments, such as the United States, will not reform their budgetary system regulations to accommodate innovative development finance commitments due to political and budget policy concerns. In general, each option outlined entails important financial, political, and bureaucratic challenges and tradeoffs. In other words, there are no silver bullets. However, there are possible approaches that may merit further exploration by donor governments that want to support specific innovative development finance initiatives but are constrained by existing budgetary systems.
Topic:
Development, Economics, and Foreign Aid
Political Geography:
United States

55. When Does Rigorous Impact Evaluation Make a Difference? The Case of the Millennium Villages

Author:
Michael Clemens and Gabriel Demombynes
Publication Date:
10-2010
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
When is the rigorous impact evaluation of development projects a luxury, and when a necessity? We study one high-profile case: the Millennium Villages Project (MVP), an experimental and intensive package intervention to spark sustained local economic development in rural Africa. We illustrate the benefits of rigorous impact evaluation in this setting by showing that estimates of the project's effects depend heavily on the evaluation method. Comparing trends at the MVP intervention sites in Kenya, Ghana, and Nigeria to trends in the surrounding areas yields much more modest estimates of the project's effects than the before-versus-after comparisons published thus far by the MVP. Neither approach constitutes a rigorous impact evaluation of the MVP, which is impossible to perform due to weaknesses in the evaluation design of the project's initial phase. These weaknesses include the subjective choice of intervention sites, the subjective choice of comparison sites, the lack of baseline data on comparison sites, the small sample size, and the short time horizon. We describe how the next wave of the intervention could be designed to allow proper evaluation of the MVP's impact at little additional cost.
Topic:
Development, Economics, and Foreign Aid
Political Geography:
Africa and Nigeria

56. Austerity and the IMF

Author:
Kenneth Rogoff
Publication Date:
10-2010
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
It is a great honor to present the fifth annual Richard H. Sabot lecture at the Center for Global Development. In this talk, I will take up a relatively narrow but absolutely fundamental question in the international monetary system, particularly in developing countries: Is the International Monetary fund (the IMF) guilty of bringing excessive austerity to the countries that turn to it for bailout funding? Should the IMF instead put much more weight on encouraging countercyclical fiscal policy, as it does in rich countries? Extremely difficult and complex issues underlie these seemingly straightforward questions. My modest aim in this lecture is to help clarify the issues so as to promote rational dialogue.
Topic:
Economics, International Organization, International Monetary Fund, and Foreign Aid

57. Aid for Trade: Supporting Trade Preference Reform

Author:
Susan Prowse
Publication Date:
09-2010
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Aid-for-trade programs can help strengthen low-income countries' supply capacity and knowledge of trade preferences, which will allow them to take fuller advantage of these preferences. Aid for trade to support preference reform can be divided into three categories: (i) creation of information-sharing mechanisms to ensure that governments, SMEs and other businesses are aware of the opportunities that preferential market access offers; (ii) capacity-building support to overcome supply-side and policy constraints; and (iii) support to ease the adjustments to preference erosion that will inevitably occur. As with other aid initiatives, coordination and cohesion among assistance programs is critical for success. Delivery mechanisms such as the Enhanced Integrated Framework (EIF), the Trade Facilitation Facility (TFF), and the Standards and Trade Development Facility (STDF), are aimed at facilitating such coordination, but more could be done. And, as preference programs are intended to be temporary, aid for trade can also facilitate graduation from these programs and compensate beneficiaries for preference erosion. Unfortunately, this area is still lacking the level of innovation and financial support needed.
Topic:
Development, Economics, and Foreign Aid

58. How Can Donors Create Incentives for Results and Flexibility for Fragile States? A Proposal for IDA

Author:
Alan Gelb
Publication Date:
10-2010
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
International Development Association (IDA) donors and others operating a country performance-based allocation system face two difficult problems: how to strengthen incentives to produce and document development results and how to increase flexibility for fragile states. Fragile states have the greatest need for projects, but their projects tend to rate poorly in performance-based allocations systems, which provide little incentive to produce successful projects in fragile states or other countries.
Topic:
Development, Economics, and Foreign Aid

59. The Legacy of the Jubilee Debt Relief Movement: Agreements, Lessons, and Remaining Challenges

Author:
Benjamin Leo
Publication Date:
10-2010
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Over the last 25 years, the international community has pursued a series of measures to address unsustainable debt burdens in low-income countries. Early actions focused on debt relief for official bilateral claims—initially by rescheduling—followed by increasing levels of debt stock reduction. During this period, the Paris Club repeatedly reduced or rescheduled the debts of a number of countries.
Topic:
Debt, Development, and Foreign Aid

60. Not Just Aid: How Making Government Work Can Transform Africa

Author:
Tony Blair
Publication Date:
12-2010
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Country ownership has become the new watchword in development. The problem for traditional donors is that ownership is too often code for convincing developing country governments to adopt the donors' agenda as their own: a way of securing influence without imposing conditionality. What is really needed is genuine country leadership. As President Obama said when he announced the United States' new development policy at the UN Millennium Development Goals summit in New York in September, “We will partner with countries that are willing to take the lead. Because the days when your development was dictated in foreign capitals must come to an end.”
Topic:
Development, Human Welfare, Humanitarian Aid, and Foreign Aid
Political Geography:
Africa, United States, New York, and United Nations

61. Giving Money Away? The Politics of Direct Distribution in Resource Rich States

Author:
Alexandra Gillies
Publication Date:
11-2010
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The governments of resource rich states have several options for how to allocate oil and mineral revenues, including the direct distribution of revenues to their citizens. This paper discusses the political feasibility and political implications of such cash transfers in the specific context of resource-rich states. Identifying the contexts in which this policy is mostly likely to emerge, and understanding the potential governance risks and benefits, will help policymakers to consider the desirability of cash transfers as an allocation choice.
Topic:
Development, Humanitarian Aid, Poverty, Foreign Aid, and Foreign Direct Investment

62. What Is Poverty Reduction?

Author:
Owen Barder
Publication Date:
04-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
There is a healthy debate about how to achieve poverty reduction in developing countries, but not enough discussion of what we mean by “poverty reduction.” “Poverty reduction” is often used as a short-hand for promoting economic growth that will permanently lift as many people as possible over a poverty line. But there are many different objectives that are consistent with “poverty reduction,” and we have to make choices between them. There are trade-offs between tackling current and future poverty, between helping as many poor people as possible and focusing on those in chronic poverty, and between measures that tackle the causes of poverty and those which deal with the symptoms. Because donors focus on just one dimension of poverty reduction (growth) they marginalise other legitimate objectives such as reducing chronic poverty or providing social services in countries that cannot otherwise afford them.
Topic:
Development, Environment, Humanitarian Aid, Poverty, Third World, and Foreign Aid

63. The Impact of Microcredit on the Poor in Bangladesh: Revisiting the Evidence

Author:
David Roodman and Jonathan Morduch
Publication Date:
06-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The most-noted studies on the impact of microcredit on households are based on a survey fielded in Bangladesh in the 1990s. Contradictions among them have produced lasting controversy and confusion. Pitt and Khandker (PK, 1998) apply a quasi-experimental design to 1991–92 data; they conclude that microcredit raises household consumption, especially when lent to women. Khandker (2005) applies panel methods using a 1999 resurvey; he concurs and extrapolates to conclude that microcredit helps the extremely poor even more than the moderately poor. But using simpler estimators than PK, Morduch (1999) finds no impact on the level of consumption in the 1991–92 data, even as he questions PK's identifying assumptions. He does find evidence that microcredit reduces consumption volatility. Partly because of the sophistication of PK's Maximum Likelihood estimator, the conflicting results were never directly confronted and reconciled. We end the impasse. A replication exercise shows that all these studies' evidence for impact is weak. As for PK's headline results, we obtain opposite signs. But we do not conclude that lending to women does harm. Rather, all three studies appear to fail in expunging endogeneity. We conclude that for non-experimental methods to retain a place in the program evaluator's portfolio, the quality of the claimed natural experiments must be high and demonstrated.
Topic:
Development, Economics, Foreign Aid, and Foreign Direct Investment
Political Geography:
Bangladesh, South Asia, and Asia

64. Beyond Planning: Markets and Networks for Better Aid

Author:
Owen Barder
Publication Date:
10-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The political economy of aid agencies is driven by incomplete information and multiple competing objectives and confounded by principal-agent and collective-action problems. Policies to improve aid rely too much on a planning paradigm that tries to ignore, rather than change, the political economy of aid. A considered combination of market mechanisms, networked collaboration, and collective regulation would be more likely to lead to significant improvements. A “collaborative market” for aid might include unbundling funding from aid management to create more explicit markets; better information gathered from the intended beneficiaries of aid; decentralized decision-making; a sharp increase in transparency and accountability of donor agencies; the publication of more information about results; pricing externalities; and new regulatory arrangements to make markets work. The aid system is in a political equilibrium, determined by deep characteristics of the aid relationship and the political economy of aid institutions. Reformers should seek to change that equilibrium rather than try to move away from it. The priority should be on reforms that put pressure on the aid system to evolve in the right direction rather than on grand designs.
Topic:
Development, Political Economy, and Foreign Aid

65. Aid, Dutch Disease, and Manufacturing Growth

Author:
Arvind Subramanian and Raghuram G. Rajan
Publication Date:
12-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
We examine the effects of aid on the growth of manufacturing, using a methodology that exploits the variation within countries and across manufacturing sectors, and corrects for possible reverse causality. We find that aid inflows have systematic adverse effects on a country\'s competitiveness, as reflected in the lower relative growth rate of exportable industries. We provide some evidence suggesting that the channel for these effects is the real exchange rate appreciation caused by aid inflows. We conjecture that this may explain, in part, why it is hard to find robust evidence that foreign aid helps countries grow.
Topic:
Development, Economics, and Foreign Aid
Political Geography:
Washington

66. Development Assistance, Institution Building, and Social Cohesion after Civil War: Evidence from a Field Experiment in Liberia

Author:
Macartan Humphreys, James Fearon, and Jeremy M. Weinstein
Publication Date:
12-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Can brief, foreign-funded efforts to build local institutions have positive effects on local patterns of governance, cooperation, and well-being? Prior research suggests that such small-scale, externally driven interventions are unlikely to substantially alter patterns of social interaction in a community, and that the ability of a community to act collectively is the result of a slow and necessarily indigenous process. We address this question using a randomized field experiment to assess the effects of a community-driven reconstruction (CDR) project carried out by the International Rescue Committee (IRC) in northern Liberia. The project attempted to build democratic, community-level institutions for making and implementing decisions about local public goods. We find powerful evidence that the program was successful in increasing social cohesion, some evidence that it reinforced democratic political attitudes and increased confidence in local decision-making procedures, but only weak evidence that material well-being was positively affected. There is essentially no evidence of adverse effects. *Jeremy Weinstein is on leave from the Center for Global Development.
Topic:
Conflict Resolution, Civil Society, Civil War, Development, and Foreign Aid
Political Geography:
Africa and Liberia

67. Will World Bank and IMF Lending Lead to HIPC IV? Debt Deja-Vu All Over Again

Author:
Benjamin Leo
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Four years ago, the G-7 pushed through an unprecedented initiative forcing the international financial institutions to cancel 100 percent of their outstanding debt claims on the world's poorest countries. Through the Multilateral Debt Relief Initiative (MDRI), these heavily indebted poor countries (HIPCs) stand to receive up to $60 billion in debt relief over time. Moreover, the World Bank, African Development Bank, and IMF shareholders approved a new debt sustainability framework to govern future lending decisions and prevent the need for yet another round of systemic debt relief. All parties emerged from these landmark agreements confident that the dragon of unsustainable debt finally had been slain. However, several unsettling trends raise serious questions about the finality of these actions. First, World Bank and AfDB lending disbursement volumes to these very same HIPC countries remain very high, and nearly the same as compared to pre-MDRI. Emergency IMF lending in response to the global economic crisis has compounded the situation. Second, IMF and World Bank growth projections for HIPCs remain overly rosy compared to actual and historical performance. Our new dataset of IMF growth projections suggests a structural optimism of at least one percentage point per year. Third, HIPCs continue to experience significant volatility in country performance measures that has a direct impact on their ability to carry debt sustainably. Taken together, these findings suggest that donor countries should re-examine the issue of debt sustainability in low-income countries and the system for determining the appropriate grant/loan mix. The upcoming IDA and AfDF replenishment negotiations present a timely opportunity to do so. Absent assertive and corrective action, the international community may be faced with the prospect of a HIPC IV agreement in the not too distant future.
Topic:
Development, Economics, and Foreign Aid
Political Geography:
Latin America