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In timely and incisive analysis, our experts parse the latest development news and devise practical solutions to new and emerging challenges. Our events convene the top thinkers and doers in global development.
Professor, Columbia University
Former Chief Economist, Inter-American Development Bank
Dennis Weatherstone Senior Fellow at the Peterson Institute for International Economics
President of Banorte. Former Governor of Central Bank of Mexico
Dean, School of Government and Professor, Universidad Torcuato di Tella
Former Vice-Minister of Finance, Argentina
Former Minister of Finance, Argentina
Pedro Carvalho de Mello
Professor, ESALQ, Universidade de São Paulo
Former Commissioner of Comissão de Valores Mobiliários, Brazil
Over the last year, economic and financial uncertainties in developed countries have been increasing. Not only has the European crisis intensified and the camp of analysts predicting one or more defaults in the Euro area has expanded, but also the issue of the sustainability of the United States sovereign debt has taken center stage in the policy debate. Political dithering in the developed world is exacerbating these problems further.
But problems in the North don’t stay there. Instead, they are increasing vulnerabilities in the South, fueling large capital inflows that may be subject to sudden reversals and and very high and volatile commodity prices. The Latin American Shadow Financial Regulatory Committee (CLAAF) will discuss the extent of the potential damage to growth and stability in emerging market economies, especially Latin America, arising from the severe problems facing developed countries. In particular, the Committee will address:
• Whether current difficulties in the North could lead to a fresh global crisis of “Lehman’s dimensions”
• Whether the resilience shown by many emerging markets, especially Latin America, during the 2008-09 global crisis could be repeated if a new severe global disruption were to emerge.
• Whether early signals of economic and financial instability have already appeared in Latin America; and
• What policy options should Latin America take to avoid a “band aid approach” where many small remedies fail to achieve the desired cure.
In a recent paper, Kate Ambler and coauthors studied the impact of one-season cash transfers for agricultural investment in Senegal and Malawi, using data from a randomized control trial (RCT) in each country. They found evidence that transfers reduced both the number of decision makers and female decision making in Senegal in the short-run, particularly for measures directly related to agriculture. However, the effects disappeared two years after the transfers. Conversely, the authors find transfers in the Malawi program led to robust transitory increases in these measures, seeing a greater impact related to the number of decision makers in the household persisting after two year period. Join us for the latest CGD Invited Research Forum to discuss these opposing findings on the effects of cash transfers on household decision making.
Indian agriculture remains vulnerable to the vagaries of weather, and the looming threat of climate change may expose this vulnerability further. Using district-level data on temperature, rainfall and crop production, Siddharth Hari’s paper first documents a long-term trend of rising temperatures, declining average precipitation and increase in extreme precipitation events. One key finding is that the impact of temperature and rainfall are felt only in the extreme: when temperatures are much higher, rainfall is significantly lower, and the number of “dry days” greater is than normal. He also finds that these impacts are significantly more adverse in unirrigated areas (and hence rainfed crops) compared to irrigated areas. Can policy makers react to the challenges of climate change and find ways to get “more crop for every drop?"
Estimating intergenerational mobility in developing countries is difficult because matched parent-child income records are rarely available and education is measured very coarsely. In particular, there are no established methods for comparing educational mobility for subsamples of the population when the education distribution is changing over time.
In their recent paper, Sam Asher and coauthors present new methods and new administrative data to overcome this gap, and study intergenerational mobility across groups and across space in India. They find that the intergenerational mobility for the population as a whole has remained constant since liberalization, but cross-group changes have been substantial. Rising mobility among historically marginalized "Scheduled Castes" is almost exactly offset by declining intergenerational mobility among Muslims, a comparably sized group that has few constitutional protections. These findings contest the conventional wisdom that marginalized groups in India have been catching up on average. The paper also explores heterogeneity across space, generating the first high-resolution geographic measures of intergenerational mobility across India, with results across 5600 rural subdistricts and 2300 cities and towns.