Partnerships for the Goals
The Scorecard on Development, 1960-2010
Jun 2011
Working Paper
This paper examines data on economic growth and various social indicators for 193 countries over the past 50 years, divided into three periods: 1960-1980, 1980-2000, and 2000-2010. The paper finds that after a sharp slowdown in economic growth and in progress on social indicators during the second (1980-2000) period, there has been a recovery on both economic growth and, for many countries, a rebound in progress on social indicators (including life expectancy, adult, infant, and child mortality, and education) during the past decade. The paper discusses some of the economic and policy changes that might explain the slowdown and rebound.
The Global Consumption and Income Project (GCIP)
Jan 2015
Working Paper
We introduce two separate datasets (The Global Consumption Dataset (GCD) and The Global Income Dataset (GID)) containing an unprecedented portrait of consumption and income of persons over time, within and across countries, around the world. The benchmark version of the dataset presents estimates in PPP units of monthly real consumption and income for every decile of the population (a ‘consumption/income profile’) for 133 countries and more than half a century (1960-2012). We describe the construction of the datasets and demonstrate some possible uses by presenting preliminary results concerning the consumption distribution, poverty and inequality for the world and specific country aggregates.
The Spillover Effects of Unconventional Monetary Policies in Major Developed Countries on Developing Countries
Oct 2013
Working Paper
The objective of this paper is to examine the impact of unconventional monetary policy measures adopted in developed countries (the US, UK, Euro Area and Japan) on developing economies (Brazil, China, India and Russia). First, we analyse the domestic and cross-border financial market impact of unconventional monetary policy announcements by central banks, using a series of event studies. We find that quantitative easing (QE) by the FED, BoE, ECB and BoJ influenced long term yields, equity prices, and possibly exchange rates both in the developed and developing countries (for example we find that QE resulted in decreases in long term yields by about 125 basis points in the US, about 100 basis points in the UK, and about 50 basis points in the Euro Area and Japan). Next, using the National Institute’s global macroeconomic model NIGEM, we conduct a series of macroeconomic simulations that allow us to assess the impact of lower yields, higher equity prices, and lower investment premia (attributable to unconventional monetary policy measures) on the real economy in the developed and developing countries (for example, we find that lower yields only, could have stimulated GDP (average change in levels, over a 5 year period) by about 1 /₄ per cent inthe US, 1 /₂ per cent in the UK, /₄ per cent in the Euro Area and Japan, about 1 per cent in Brazil and Russia (in Brazil more than Russia), and /₄ per cent in India and China (in India more than China)).
Development Aid and Economic Growth
Sep 2006
Working Paper
We analyze the growth impact of official development assistance to developing countries. Our approach is different from that of previous studies in two major ways. First, we disentangle the effects of two components of aid: a developmental, growth-enhancing component, and a geopolitical, possibly growth-depressing component. Second, our specifications allow for the effect of aid on economic growth to occur over long time-lags. Our results indicate that developmental aid promotes long-run growth. Th e effect is large and robustly significant, and withstands an array of robustness checks including alternative specifications, choices of the proxy for development aid, and treatments of outliers.
Can Microfinance Reduce Economic Insecurity and Poverty?
Oct 2009
Working Paper
The paper suggests that, rather than through its narrow, direct financial impact, microfinance may prove to be more potent in reducing insecurity and poverty through its indirect, broader impact conducing to a more egalitarian initial endowment distribution that is necessary for the “take-off” of an equitable growth process. The paper begins by examining the distinctive roles of micro credit, micro savings, and micro insurance programs in dealing with poverty and insecurity, and highlights the complementariness that exists among these programs and how this complementariness can be used to overcome the weaknesses of the individual programs.
Recent Macroeconomic Trends in Emerging Economies and Implications for Development
Jun 2014
Working Paper
The paper reviews the sluggish growth and inclusive developments of the Brazilian economy in the last decade. The first section analyzes the macroeconomic performance pointing export growth as the engine of growth. The second evaluates social policies and their relationship with the improvements in the labor market. The third examines Brazilian policy reactions to the global crisis that managed to recover consumption but failed to sustain investment and growth. The discussion of challenges for a sustainable development concludes the paper. Investment in education and infrastructure are consensual policy advices but there are plenty of disagreements and controversies with regards to industrial policies, financing strategies and the role to be played by the public sector.
Should There be a Coordinated Response to the Problem of Global Imbalances?
Sep 2008
Working Paper
This paper analyzes the options for international policy coordination in order to redress the global imbalances. The case for policy coordination rests on a number of assumptions such as the existence of important spillover effects of national policies and a common understanding of the nature of the problem. In reality, important obstacles exist to get to effective policy coordination, including resistance from domestic interest groups and disagreement of the effectiveness of policy instruments. These obstacles can be reduced by developing a multilateral consensus on common goals and by addressing commitment problems via issuing multi-year schedules for policy adjustments.
Developing and Transition Economies in the Late 20th Century
Sep 2006
Working Paper
This study reviews the growth and development performance of developing countries in the latter part of the 20th century. Sustained growth among “successful” countries was accompanied by structural change in terms of output and labour share shifts, trade diversification, sustained productivity growth with some strong reallocation effects due to movements of labour from low to high productivity sectors. Neither the widely accepted “twin deficits” nor the “consumption smoothing” behaviour views of macro adjustment seem to apply, though macroeconomic flexibility may be very important. Finally, neither human capital accumulation nor foreign direct investment are sufficient, by themselves, to stimulate growth.
Economic Diversification
Aug 2017
Working Paper
Economic diversification is very relevant for poorer developing countries to create jobs and foster economic development. That need has been recognized in key internationally agreed development goals. The empirical economic literature has identified several stylized facts about the pattern of diversification of economies, but the development of explanations for those patterns in general has been only loosely associated with economic theory on growth, trade, technology change and structural transformation. Making that connection is relevant because it could inform policymakers in developing countries in designing and implementing policies for promoting diversification. This paper presents a model of structural economic dynamics and endogenous technological change that is able to replicate empirical regularities related to economic diversification. The model is used to study strategies to foster diversification in poorer countries, which could help to better target action in the implementation of internationally agreed goals related to the economic diversification of these countries.
Economic Integration, Inequality and Growth
Jan 2011
Working Paper
This paper presents a simple theoretical framework to explain variations in income inequality over time and between countries. It also analyses the factors responsible for the widespread risein inequality during the neo-liberal reforms of 1980-2000 in the fields of trade, foreign direct investment (FDI) and capital flows, and the rise in migration. Finally, it compares the decline in inequality observed in most of Latin America over 2000-2008 with the steady increase of inequality in many European transition economies during this period despite their return to robust growth. The paper argues that such divergence is explained by differences in policies.
Growth, Poverty and Inequality
Nov 2010
Working Paper
This paper reviews recent economic policy debates about the relationship between growth, poverty and inequality. These debates have tended to focus on whether market-led growth is sufficient to eliminate poverty and reduce inequality, or whether specific policies are necessary because untargeted growth may be insufficient or even perverse. The paper charts the degenerating outcomes of these debates, and the emergence of the inclusive growth (IG) paradigm within the World Bank. A critical examination of IG suggests that its weaknesses are best addressed through a more ambitious restatement of the pro-poor goals of economic policy.
Social Policy in Development
Sep 2010
Working Paper
Research and practice related to social policy and poverty alleviation have left a legacy of a very broad agenda of “things that need to be done”, along with important unanswered questions about how to integrate social and economic development. These suggest the fruitfulness of focusing more on the distinctions among countries, in terms of their capacities, generating ideas about priorities and sequences, and working to reduce the agenda. Instead of new big ideas and new paradigms, the development community needs to get better at matching ideas to realities, and at generating contextually grounded processes for taking the next step.
Absorbing Innovative Financial Flows
Oct 2014
Working Paper
This paper explores the scope for Innovative Development Finance (IDF) to compensate for declining Official Development Assistance (ODA) and/or to enhance the efficiency of ODA. It shows that IDF has not helped much to increase the volume of aid. With regard to efficiency, the role of IDF-related mechanisms remains controversial. In view of the above, it may be more productive to focus on other resources available to Asia. The paper points to two such resources, namely the surpluses accumulated in the form of reserves, Sovereign Wealth Funds (SWFs), etc. and the migrant remittances. Efficient utilization of these two sources can vastly change the development finance landscape in Asia.
The Emperor’s New Suit
Dec 2009
Working Paper
The recent revision of the World Bank’s global poverty estimates based on a new $1.25 (2005 PPP) poverty line underlines their unreliability and lack of meaningfulness. It is very difficult to justify various aspects of the Bank’s approach. In the short term, less weight should be given to the Bank’s poverty estimates in monitoring the first MDG. In the longer term, a solution to the observed problems requires adopting an altogether different method. Such an alternative exists but requires global institutional coordination. Until it is implemented, the crisis in the monitoring of global consumption poverty can be expected to intensify. Subsequent versions of this paper, correcting errors or extending the argument, will be made available on socialanalysis.org
Public-Private Partnerships and the 2030 Agenda for Sustainable Development
Feb 2016
Working Paper
In light of a cautious emphasis given to public-private partnerships (PPPs) as a mechanism to finance infrastructure projects and highlighting the need for capacity building and knowledge sharing at the Third International Conference on Financing for Development in Addis Ababa, this paper reviews the extant literature on the subject and identifies areas requiring better understanding and institutional innovation for ensuring value for money, minimizing contingent fiscal risk and improving accountability. An institutional capacity to create, manage and evaluate PPPs is essential to ensure that they become an effective instrument of delivery of important services, such as infrastructure. There is also a need for a common definition of PPPs and internationally accepted guidelines, including uniform accounting and reporting standards.
The Conflict-Growth Nexus and the Poverty of Nations
Jun 2007
Working Paper
Lack of growth limits poverty reduction while poverty increases conflict risk. Institutional failure and other factors seem to cause both growth failure and civil war. The greed explanation for conflict is common in cross-country econometric investigation, despite its dubious role in directly causing civil war. The relationship between natural resource revenues and conflict onset works through other mechanisms, such as a weakening social contract and withering state capacity. The grievance explanation for contemporary civil war is supported by detailed case studies where horizontal inequality is important. Economic deconstruction following war should therefore be pro-poor and address horizontal inequalities engendering conflict.
Property Rights for Poverty Reduction?
Dec 2009
Working Paper
This paper reviews the links between property rights and poverty reduction. Poor people not only lack current income, but also assets with which to generate incomes. Billions of poor people have access to land which may not be legally recognized. While legislation may provide more secure land tenure for the poor and thus reduce poverty, this outcome is not guaranteed. Policies that do not recognize the complexity of property rights have backfired, reducing poor people’s security of tenure. Finally, understanding legal pluralism can lead to more effective policies and interventions to strengthen poor people’s control over assets.
Inequality and Environmental Sustainability
Aug 2015
Working Paper
This paper synthesizes the evidence of a negative correlation between income inequality and environmental quality. It shows that inequality exerts adverse impact on environmental outcomes through several channels, including the household, community, national, and international channels. These channels however overlap with one another and can thus reinforce the impact of inequality. Other dimensions of inequality, in particular gender inequality, also impact environmental quality negatively. The concept of the Environmental Kuznets Curve (EKC) is not that helpful in explaining the negative correlation between inequality and environmental quality. The findings of the paper suggest that reduction of inequality will have an important role in achieving environmental sustainability.
Leaving no one Behind: The COVID-19 Crisis Through the Disability and Gender Lens
May 2020
Working Paper
This policy brief highlights the impact of COVID-19 (coronavirus) on women and girls with disabilities and provides policy guidance for governments and other stakeholders to adopt inclusive and accessible measures to not only mitigate the adverse impacts of the crisis but build resilient societies.
Real Income Stagnation of Countries, 1960-2001
Sep 2006
Working Paper
We examine the phenomenon of real-income stagnation in a large cross-section of countries during the last four decades. Stagnation is defined as negligible or negative growth extending over a number of years. We find that stagnation has affected more than three fifths of countries (103 out of 168). Stagnating countries were more likely to have been poor, in Latin America or sub-Saharan Africa, conflict ridden and dependent on primary commodity exports. Stagnation is recurrent: countries that were stagnators in the 1960s had a likelihood of 75 percent of having been stagnators in the 1990s.
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