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Senior Fellow Liliana Rojas-Suarez was interviewed by CNN en Español on the current debt crisis within Europe. In this interview she states her view that a banking crisis is highly likely within Europe. She notes that, in addition to the recent issues experienced by the French banks, many other European banks are struggling. As opposed to the United States, the problems in Europe started in the public sector and moved to the private sector; the banks, in particular. Also in contrast to the US, the European banks don’t have a full Lender of Last Resort (a function that the European Central Bank is not committed to pursue). Moreover, given the political disagreements within Germany, a TARP like program does not seem probable. In this context, banks’ recapitalization would need to take place with private sector resources, which are not forth coming given the low levels of confidence in European financial systems as the risk of contagion increases. For example, French banks have a large exposure to debt issued by Greece. At this point, if the ECB were to develop a deposit guarantee fund, Germany will have to provide the backing, which at this point looks unlikely.

If you found a trillion-dollar bill on the sidewalk, would you pick it up? Michael Clemens thinks he has found a bunch of such bills—huge gains to the poor people and the world economy that could be achieved by easing restrictions on cross-border labor mobility.  He has written a working paper that sets forth a new research agenda on migration and is urging economists to pay more attention to the benefits of increased labor mobility for the people who move, the people and countries that receive them, and those who remain at home. In this week’s Wonkcast we discuss his four-point research agenda, and explore why some important questions about labor mobility are so rarely investigated.  

Take the topic of so-called “brain drain.” While plenty of research has gone into documenting the exodus of skilled workers from developing countries, Michael says, little research has examined the actual effects of these departures on those left behind—and even less has considered the welfare gains to those who move. “When people talk about migration at the international level, they tend to only focus on the costs,” says Michael. “This negative labeling happens to such a degree that they eventually define the movement with a pejorative little rhyme, brain drain.”

Here at CGD, we talk a lot about the “what” of policy. We’re in the business of ideas and that sometimes leads us to overlook the crucial question of the “who” in the policy process.

Thankfully we have Nora Lustig, a non-resident fellow at the Center for Global Development, Samuel Z. Stone Professor of Latin American economics at Tulane University, and non-resident fellow at the Inter-American Dialogue. Nora has just written a working paper on the role of scholar-practitioners in the creation, design, evaluation, and political survival of Mexico’s Progresa/Oportunidades anti-poverty program, which has become a model for both impact evaluation and for conditional cash transfer programs around the world. On this week’s show, she draws on her new paper to tell me the story of scholar-practitioners and Protgresa/Oportunidades.

Senior Fellow Liliana Rojas-Suarez was interviewed by CNN en Español on the European Central Bank’s (ECB) recent purchases of bonds from Italy and Spain. She notes that the size and duration of the intervention is important in determining its efficacy. Without a clear commitment by the ECB to act as a lender of last resort, the current monetary intervention will do little to resolve deeper economic problems within the European Union. Even more, a sustainable resolution of the crisis involves the restructuring of Italy and Spain’s bad debt in Europe’s peripheral countries.

In celebration of our 10th anniversary, we prepared this film to recount some of CGD's greatest impact achievements over the years. The video features three short stories detailing our work on the 2008 global financial crisis, clean-tech finance, and HIV/AIDS and includes two bonus vignettes about COD Aid and our Closing the Evaluation GAP initiative.

Are mobile phones revolutionizing development in Africa, or have they been over-hyped? My guest this week, Jenny Aker, says the truth is a little of both. Jenny is an assistant professor at Tufts University’s Fletcher School and a non-resident fellow here at the Center for Global Development. Her research interests include the impact of communication technologies in poor countries, especially Africa.

Mobile phone use has spread across Africa at a stunning pace. The percentage of Africans who could access a mobile phone leapt from only 10% in 1999 to more than 60% by 2008—far outstripping improvements in other infrastructure (roads, clean water, or indeed landline telephones). In a new CGD working paper, to be published later this summer in the Journal of Economic Perspectives, Jenny and her co-author Isaac Mbiti describe four main ways phones have been applied to the problems of the poor. In the Wonkcast, we discuss these four applications:

The American media is abuzz with stories of doom and gloom as tensions mount over stalled efforts to raise the U.S. debt ceiling. Europe, meanwhile, has its own debt woes, with mounting fears that a default in Greece could spill over into Ireland, Portugal and Spain. So far, however, there has been relatively little discussion about what these twin crises would mean for the 5 billion people living in developing countries. Sadly, those with the least influence over the issue could pay the highest price.

On this week’s Wonkcast, I invite senior CGD fellow and global finance expert Liliana Rojas-Suarez to explain why it’s important to the rest of the world that Europe and the United States put their financial affairs in order. The showdown in the U.S. is especially worrying, Liliana says, because of the U.S. dollar’s role as the international reserve currency.

 

Every year, billions of dollars are spent on food assistance to provide lifesaving sustenance to millions of people. That’s a lot of money, and an important cause, so it was encouraging to learn last week that the United States and the G-20 are starting to seriously scrutinize food aid policy. Recent developments in Washington and Paris show a growing consensus that it’s about time to overhaul outdated approaches to feeding the hungry.

Joining me this week to discuss these developments is Connie Veillette, director of CGD’s Rethinking U.S. Foreign Assistance Program and CGD research fellow Ben Leo. Having closely tracked U.S. and international food aid, both have concluded that reforms in financing, procurement and delivery can help ensure that food aid reaches more people who need it at lower cost.