Michael Clemens released a groundbreaking (pun intended) new CGD working paper today titled The Effect of Foreign Labor on Native Employment: A Job-Specific Approach and Application to North Carolina Farms. Too busy to wade through the research methodology?
Paraphrasing "jesting Pilate", "what is truth when academic superstars supposedly produce it?" is possibly the most important yet neglected question raised by the recent Reinhart-Rogoff (R-R) affair.
The essential facts of this episode are these: two Harvard professors, Carmen Reinhart and Kenneth Rogoff, used their academic research to become strong advocates in the policy realm, although not among fellow academics, of the need for fiscal austerity when economies approach a threshold level of debt-to-GDP ratio of 90 per cent. Their superstar reputations (deservedly earned through previous work) rendered their advocacy influential, even highly so, in the charged policy debates in the United States and all over Europe. The research - especially the critical and attention-grabbing finding of a sharp growth discontinuity at that 90 per cent threshold - was subsequently exposed as flawed.
Nicola Gennaioli, Rafael La Porta, Florencio Lopez-de-Silanes and Andrei Shleifer have just published a fascinating paper in the QJE: “Human Capital and Regional Development”. They constructed a database of 1,569 subnational regions across 110 countries covering GDP, population, education levels, geographic and institutional factors, and looked at correlates with higher per capita income. They suggest that geography and education are significant correlates of regional GDP, while their measures of institutions and culture are less well correlated. They have followed up with a working paper using an expanded dataset, “Growth in Regions” that reports regional convergence of 2.5% a year and note that a rate so slow suggests “significant barriers to factor mobility within countries.”
I and all my colleagues at the Center for Global Development (CGD) are thrilled with the announcement today that CGD senior fellow, Michael Clemens, has won this year’s Royal Economic Society prize - a prize awarded annually to the author(s) of the best non-solicited paper published in The Economic Journal
Today, the World Bank launched a new report, "Growing Africa: Unlocking the Potential of Agribusiness." The report argues that agriculture and agribusiness should be at the top of the development and business agenda in Sub-Saharan Africa. The Bank is right to emphasize this issue--of the $25 billion of food that African countries import annually, only $1 billion comes from other African countries. The report offers a clear and well-researched exposition of the state and prospects of African agribusiness. It is broad in scope, encompassing agricultural production and upstream input markets as well as supply chains and agro-processing.
As India’s economy slows, is Indian growth losing its way? CGD senior fellow Arvind Subramanian thinks so. This week Arvind faces off against Shashi Tharoor, a member of the Indian parliament, in a debate on the Indian economy hosted by The Economist. Their opening remarks were posted today, and you can read them here (free registration required).
One thing we emphasized in the Karver/Kenny/Sumner paper on MDGs 2.0 was that the MDGs are far better remembered, and have been far more influential, than the rest of the Millennium Declaration from which they were drawn. We suggested that was because the MDGs were easy to understand, self-evidently important, numerical and time bound, and we called for any follow up goals to keep those vital features. That point seems to be widely agreed, a
This Wonkcast was originally recorded in February 2011. Andy Sumner updates the data from the original Bottom Billion brief in his recent working paper, Where Will the World's Poor Live? An Update on Global Poverty and the New Bottom Billion.
Paul Collier’s 2007 book, The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It, changed the way we think about poverty and development. Collier argued that the majority of the 5-billion people in the "developing world" live in countries with sustained high growth rates and would eventually escape from poverty. The rest—the bottom billion—live in 58 small, poor, often land-locked countries that are growing very slowly or not at all. These countries, stuck in poverty traps, should be the focus of foreign aid, Collier argued.
This piece originally appeared in the Financial Times on September 23, 2012 (gated) and is posted here with permission.
The Indian government’s recent reforms to reduce government subsidies and embrace greater foreign direct investment were unexpected and bold. Markets have rewarded them with surging stock prices and a rebound in the value of the rupee. The reforms may yet be reversed or diluted because of the political backlash. Their impact may be more symbolic than substantive. Nevertheless, they are significant in that they reflect changes in the operating assumptions of Indian politics.
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.