The European Development Fund audit body just came out with a report that suggested its aid funding on roads had been less successful than expected because a lot of them were falling apart due to heavy traffic and insufficient maintenance. So this seems like a good moment to revisit the sectoral aid effectiveness debate.
Economists, development and otherwise, often assume that people given the right information will make informed decisions in their own best interest. Not! Just like the rest of us, the poor people targeted by development programs sometimes lack self-control and fail to take actions that would benefit them in the long run, even when they understand the potential benefits.
This is a joint post with Alice Lépissier and Liza Reynolds.
This blog post announces the launch of the Europe Beyond Aid initiative and presents a summary of the research and preliminary analysis in its first working paper.
Europeans more than pull their weight in aid to developing countries. Last year Europeans provided more than €60 billion ($80bn) in aid, more than two and a half times as much as the United States. European members account for just 40% of the national income of the Development Assistance Committee (DAC) but give more than 60% of the aid.
Precisely as Africa is rising on the radar screens of investors and security types, it seems to be falling off the US foreign policy map. With the exception of Governor Romney’s mention of Mali (twice!) in the third debate, Africa hardly featured at all. That’s a shame, since Africa is both a growing opportunity and will become a greater threat if neglected. I’ve been deeply disappointed to see the United States reduce its engagement with the continent under the current administration, losing ground on the progress made under Presidents Clinton and Bush. Regardless of who wins on November 6, the scope for doing better—and more without more money—is obvious.
The following originally appeared on October 1 as “Missing in Africa” on ForeignAffairs.com.
This is a joint post with Vijaya Ramachandran.
The first-ever National Business Census began in Haiti this month. A census of formal and informal businesses has never been conducted and there is no comprehensive business database. Although a daunting task, the census will likely help to strengthen small and medium enterprises and increase local procurement.
The survey began September 3rd and will be conducted by 500 interviewers recruited by 42 supervisors from across the country – at a cost of 26 million gourdes (around $600,000). Wilson Laleau, the Minister of Trade and Industry, explained that this survey will enable the government to assist entrepreneurs with access to credit, help meeting standards, and entering new markets. Maintaining crops, inventories, and production is notoriously difficult with disasters such as Hurricane Isaac. A comprehensive census could improve access to credit and insurance coverage for natural disasters. Prime Minister Laurent Lamothe said: “Everyone recognizes the importance of such an activity… [a census is a] prerequisite to any policy to support the development of entrepreneurship in Haiti.”
Last week I gave a speech at the UN General Assembly (UNGA). I was the keynote speaker for a session on the global economy and the Millennium Development Goals. I came away with mixed feelings. On one hand, the inefficiency of the UN can be maddening—the place is badly overdue for a good skewering on The Daily Show.
Colleagues and friends of CGD:
This week I started leave from CGD for three-plus months, to teach at Williams College. For those of you from the US west coast and outside the United States, Williams is among America’s most selective (and expensive!) small liberal arts colleges. It’s nestled in a tiny town in the Berkshire mountains in western Massachusetts.
David Cameron co-chairs the UN Panel on the future of the development agenda, so his 'golden thread' view of development is likely to have a global impact. In the second of three blog posts looking at development policy through the lens of complexity thinking, Owen Barder asks whether the British government's golden thread is good development policy. He concludes that though it has much to commend it, it also has significant weaknesses.
The British Prime Minister, David Cameron, wants us to stop talking simply about the quantity of aid we give, and:
“start talking about what I call the ‘golden thread’, which is you only get real long-term development through aid if there is also a golden thread of stable government, lack of corruption, human rights, the rule of law, transparent information.”
This is not a new wheeze: Mr Cameron has been talking about the golden thread since before he became leader of the Conservative party. Given that he is a co-chair of the UN High Level Panel on the global development agenda after 2015, we can expect to see some of this thinking in that panel’s recommendations.
This is the first of three blog posts looking at the implications of complexity theory for development. These posts draw on a new online lecture by Owen Barder, based on his Kapuscinski Lecture in May 2012 which was sponsored by UNDP and the EU. In this post, Barder explains how complexity science, which is belatedly getting more attention from mainstream economists, gives a new perspective to the meaning of ‘development’.
This is a joint post with Milan Vaishnav.
One of the biggest experiments in development economics is about to begin on Honduras's Northern Coast. Honduras has altered its constitution to open the way to ceding a large tract of land to build a new "Special Economic Zone", modeled on NYU economist Paul Romer's idea of charter cities -- new cities, built up from scratch, where first-world institutions and third-world immigrants can meet and do business.