Topics:
Expertise
Migration and development, economic growth, aid effectiveness, economic history
Bio
Michael Clemens is co-director of migration, displacement, and humanitarian policy and a senior fellow at the Center for Global Development, where he studies the economic effects and causes of migration around the world. He has published on migration, development, economic history, and impact evaluation, in peer-reviewed academic journals including the American Economic Review, and his research has been awarded the Royal Economic Society Prize. He also serves as a Research Fellow at the IZA Institute of Labor Economics in Bonn, Germany, an Associate Editor of the Journal of Population Economics and World Development. He is the author of the book The Walls of Nations, forthcoming from Columbia University Press. Previously, Clemens has been an Affiliated Associate Professor of Public Policy at Georgetown University, a visiting scholar at New York University, and a consultant for the World Bank, Bain & Co., the Environmental Defense Fund, and the United Nations Development Program. He has lived and worked in Colombia, Brazil, and Turkey. He received his PhD from the Department of Economics at Harvard University, specializing in economic development, public finance, and economic history.
Click here for full CV
April 11, 2013
Publications
The US economy needs low-skill workers now more than ever, and that requires a legal channel for the large-scale, employment-based entry of low-skill workers. The alternative is what the country has now: a giant black market in unauthorized labor that hinders job creation and harms border security. A legal time-bound labor-access program could benefit the American middle class and low-skill workers, improve US border security, and create opportunities for foreign workers.
March 15, 2016
Blog Post
While I was still a BBC journalist I remember reporting on a terrible anniversary: the third year of the Syrian civil war. At that time, it was unimaginable that what had seemingly started as one domino in the Arab Spring, had spiraled and unraveled into a bloody quagmire. And yet now, even that pales by comparison to the horrors occurring today, as we mark the fifth anniversary of Syria's disintegration. A tenuous ceasefire notwithstanding, the millions of Syrians displaced will not be returning home anytime soon. The world knows it, and it raises another critical question: what to do about refugees and migrants?
Denmark, the UK, and other European countries have introduced or are considering new laws designed to keep refugees out. In the US, presidential candidates debate whether there should be a ban on Muslims, and one has said that migrants from Mexico are rapists.
What CGD can do is to delve beneath the rhetoric to examine the facts about migrants and refugees, courtesy of our migration expert, Michael Clemens, who joins me on the CGD Podcast. Are they really taking our jobs? Do they really import terror?
It's more complicated than that, Clemens tells me. "Think of these inflows as kind of like an investment. It's foolish to pretend that investments don't have costs, but it's also foolish to say [they're] just a burden, because they do have payoffs."
What's happening now is a major social transition, Clemens explains in the clip below, but the answer is not to try to block the transition. Instead, "what we need are institutions to smooth that transition."
March 11, 2016
Michael Clemens
A tenuous ceasefire notwithstanding, the millions of Syrians displaced will not be returning home anytime soon. What CGD can do is to delve beneath the anti-migration rhetoric to examine the facts about migrants and refugees, courtesy of our migration expert, Michael Clemens, who joins me on the CGD Podcast.
March 1, 2016
Blog Post
By now you may have heard of #InequalityIs, the Ford Foundation’s latest endeavor ticking through Twitter feeds around the world. The campaign kicked off last month with a series of videos featuring Sir Elton John, feminist powerhouse Gloria Steinem and journalist/activist/filmmaker Jose Antonio Vargas describing, in two minutes, what inequality means to them.
#InequalityIs at the heart of every injustice. What does it mean to you? How can you disrupt it? @FordFoundation https://t.co/Ur34MIkug7
— Gloria Steinem (@GloriaSteinem) January 19, 2016
Here at the Center for Global Development, our experts have spent much time identifying and measuring inequality. Fighting global poverty and inequality through rigorous research and active engagement in the policy community has been at the core of our mission since our founding nearly 15 years ago. So when the Ford Foundation asked senior fellow and migration economist Michael Clemens to weigh in alongside the stars to describe what inequality is, we jumped at the opportunity.
Thus far the videos have been largely personal, but at CGD we measure inequality by the numbers (“hard-nosed compassion,” as The Economist once called it). We won’t spoil the video for you, but the gist of Michael’s argument is this: Inequality is global.
Inequality means that Michael can make a close prediction of your income just by knowing a single thing about you: the country you live in. This kind of inequality of opportunity is akin to leaving a mountain of cash on the side of the road: if just one in 20 people living in a developing country were able to move to a wealthy country, world GDP would rise by trillions of dollars each year.
Put simply: people contribute more to the economy in places that pay them more.
If you’re an economist or economist-in-training, check out this paper by non-resident fellow Branko Milanovic that illustrates this point.
The rest of us should check out "A Self-Interested Approach to the Migration Crisis," Michael Clemens and Justin Sandefur’s latest essay in Foreign Affairs.
And here’s a new paper by Michael and senior fellow Lant Pritchett detailing how the world needs more migration, not less.
Keep an eye out for Michael’s #inequalityis video – likely out this summer. In the meantime, be sure to check out our upcoming CGD podcast with Michael about the economic benefits of migration.
February 23, 2016
Publications
For decades, migration economics has stressed the effects of migration restrictions on income distribution in the host country. Recently the literature has taken a new direction by estimating the costs of migration restrictions to global economic efficiency. In contrast, a new strand of research posits that migration restrictions could be not only desirably redistributive, but in fact globally efficient. This is the new economic case for migration restrictions: empirically, a case against the stringency of current restrictions.
February 23, 2016
Event
In this paper Patricia Navarro-Palau studies the effects of an increase in school choice by examining a 2008 reform that made the value of Chile's (previously flat, universal) school voucher a step function of student income. This policy increased the proportion of private schools that low income, eligible children could access free of charge from 0.5 to 0.7. She identifies the impact of the policy by combining its introduction with variation from a date of birth enrollment cutoff for 1st grade. She shows that the differentiated voucher lowered the probability that students used public schools by a small fraction and that these students shifted out of low achievement public schools to enroll in low achievement private schools.
February 16, 2016
Event
This event is cancelled.
We develop and implement a novel, mobile phone-based information clearinghouse, and experimentally evaluate its ability to overcome information asymmetries and improve public service delivery to farmers in Punjab, Pakistan. Like many crowdsourcing websites, our clearinghouse collects and disseminates ratings—here, on the success of government veterinarians in inseminating livestock. We find that, compared to control, farmers receiving ratings enjoy 27 percent higher insemination success. This effect is entirely due to increased veterinarian effort, rather than farmers switching veterinarians. Treatment farmers are also 33 percent more likely to return to a government veterinarian rather than seeking a private provider. These results suggest large welfare benefits from a low-cost information intervention, which holds out hope for improved government accountability for the poor using basic mobile technology.
February 11, 2016
Event
The economic consequences of large-scale government investments in education depend on the general equilibrium (GE) effects in both the labor market and the education sector. I develop a novel general equilibrium model and derive sufficient statistics that capture the economic consequences of a massive countrywide schooling initiative implemented by the Indian government. I provide unbiased estimates of the sufficient statistics using a Regression Discontinuity design. The earnings returns to a year of education are 13.4%. The general equilibrium labor market effects are substantial: they depress the returns to skill and dampen the increase in economic benefits. These GE effects have distributional consequences across cohorts and skill groups, where as a result of the policy unskilled workers are better off and skilled workers are worse off. In the education sector, more private schools enter these markets negating concerns of crowd-out. These results indicate that researchers and policymakers need to consider the GE effects when scaling up micro-interventions.
Pages
September 10, 2013
Blog Post
How can we know when an aid project ‘works’?
Today Nina Munk released a new book on the Millennium Villages Project, an intensive experimental “solution to extreme poverty” underway across rural Africa. Munk wrote her book, The Idealist, after observing the Project firsthand for six years, and her account is sympathetic to its founder while deeply critical of the Project itself. For Joe Nocera of the New York Times, the book makes it “tough to believe” the project is succeeding; for James Traub in the Wall Street Journal, the book shows how the Project was “beset by immemorial forms of misfortune that Mr. Sachs's team in New York hadn’t counted on.”
Right, but how do we know when a project works or doesn’t? There’s bad news and good news. The bad news is that development economists have made little progress on answering big questions like how to “solve poverty”.
The good news is that they have gotten much better at telling the difference between a project that does what it says it can do and one that does not. There is a new transparency in development economics. In a new CGD working paper, forthcoming in the journal World Economy, Gabriel Demombynes and I discuss how a new transparency is changing the debate about what works.
The new transparency comes from three revolutions in development economics over the last decade: Methods, materials, and medium.
The revolution in methods is that development economists have adopted a new set of scientific tools previously used mostly by psychology and medicine. These methods help analysts more carefully measure the true effects of a project, and cut back on confirmation bias and spurious correlation. The revolution in materials is the spread of open-access data, which makes it much easier for scientists to check and critique each other’s work. The revolution in medium is that research discussions are more frequently happening on blogs, which means rapid back-and-forth and a lasting, open-access record of the debate. Such discussions used to happen only in slower journals or in more opaque private discussions and closed seminars.In our new paper, Gabriel and I illustrate these three revolutions with the story of the public controversy on the impact of the Millennium Villages intervention. Early reports on progress of the project linked evidence of improvements at the village sites to the project itself. We explain how a simple impact evaluation tool called “differences-in-differences” revealed that some of the project’s statements of its impact were inaccurate, leading to the eventual retraction of research findings from a top scientific journal. We explain how we were only able to do our research because open-access data from an independent agency were available to check claims that the project made based on its closed, confidential data. And we explain how much of this interaction happened on blogs, giving it a speed, accountability, and transparency that could not have existed in earlier years.
New methods, materials, and media profoundly shaped the debate. Our paper draws out five lessons for development research and policy.
The new transparency is good news for the ethics of aid work. In an interview with Munk, project founder Professor Jeffrey Sachs dismissed this controversy as “armchair criticism” of his project, a dilettantish “spectator sport”. But in my view only ethical way to conduct aid interventions is to transparently show that they do what they say they can do, particularly when those projects are packaged as resting on science.
Aid money is scarce; spending it on one intervention means not spending it on something else that can do much more good. While the Millennium Villages Project burns through thousands of dollars for each single household affected, the same money could have been used to provide a different intervention to hundreds of households—rather than one household—such as exclusively providing anti-malaria bednets. Diverting money away from alternative valuable uses is most ethically done based on sound, accurate evidence. Sound and transparent evaluation, far from being a spectator sport, is an ethical imperative.
The old guard at this project and many others continues to insist that careful scientific evidence is unnecessary and that it’s unethical to experiment on people. A younger wave of development economists doesn’t accept the opacity of statements like this, statements that amount to “trust me”. Chris Blattman has a great recent post with a strong response to governments and organizations in general who discard transparent impact evaluation to avoid ‘experimenting’ on people:
“Let me be blunt: … When you give stuff to some people and not to others, you are still experimenting in the world. You are still flipping a coin to decide who you help and who you don’t, it’s just an imaginary one. You’re experimenting with your eyes closed.”
The new transparency is changing that. Change doesn’t come easily, but it’s a very good sign.
July 16, 2014
Blog Post
En español
Deadly violence in US neighbors has once again grabbed Americans’ attention. An unprecedented wave of Central American children has been arriving at the Southwest US border this year, often fleeing gang violence linked to the narcotics trade. Many of them come from Honduras, an epicenter of the Drug War with the world’s highest homicide rate.
What has caused murders to surge in this region? Drug trafficking need not spark violence by itself. Morocco and Turkey, for example, are major centers of the global illicit drug trade but have very low homicide rates—as Alejandro Hope has pointed out.
Related ResearchScarcity without Leviathan: The Violent Effects of Cocaine Supply Shortages in the Mexican Drug War - Working Paper 356
We might learn from the experience of Mexico, where homicides tripled from 2007 to 2010. Why and how did that happen? A ground-breaking new CGD working paper by Juan Camilo Castillo, Daniel Mejía, and Pascual Restrepo suggests that some of it may have been a ripple effect of policy more than a thousand miles away. This paper is one of the first to rigorously demonstrate such a transnational effect of antinarcotics policy. It’s an early product of a new CGD study group I lead, called Beyond the Fence.
The explosion of murders in Mexico stands out in the figure below, adapted from the paper. The dashed line is the homicide rate reported by Mexico’s National Institute of Statistics (INEGI):
In the standard narrative these deaths arose from a new phase of the Mexican drug war. They coincide with a series of attacks on drug cartels ordered by the then-president of Mexico, Felipe Calderón (Dec. 2006–Dec. 2012). Indeed, rigorous research by Melissa Dell of Harvard has revealed links between Calderón’s crackdown and the increased level of drug-related violence.
How are they linked? One link is intuitive: when the cartels are attacked they not only fight back but are also more likely to fight each other—in turf and succession battles as prior power structures are disrupted. Another important link is less obvious: attacks on cartels interrupt the supply of illicit drugs, raising prices, and thus raising the rewards to killing for control of drug supply routes. Usually these two things happen together, so they’re hard to disentangle.
The new CGD paper teases them apart by tracing the effects of anti-cocaine policy in one country—Colombia—on violence in a different country: Mexico. Anti-narcotics efforts in Colombia wouldn’t directly spark drug-related violence in Mexico via the first link but could raise international drug prices, thus indirectly fostering violent conflict via the second link.
Here’s how Castillo, Mejía, and Restrepo demonstrate that this is in fact what happened.
They begin by measuring the response to negative supply shocks—basically high-frequency data on cocaine seizures in Colombia. The analysis finds that negative monthly shocks in the supply of cocaine from Colombia caused an increase in the overall number of homicides in Mexico. This relationship is stronger in locations that are close to crossings in the US-Mexico border.
This is clear in the next figure, also from the paper, which shows how a reduction of 10 metric tons in the monthly supply affects violence in Mexican municipalities located at different distances from the US border. The vertical axis shows the percent increase in violence caused by a 10 metric tons fall in the Colombian supply of cocaine during one month. The horizontal axis plots the distance to the nearest entry point from Mexico to the US.
These effects are large. They imply that negative shock to Colombian cocaine supply between 2006 and 2009 can explain roughly 20% of the increase in overall homicides, during the same period, in the Mexican municipalities closest to the US.
The ripple effect from Colombia likely interacted with and reinforced the effects of Calderón administration policy in Mexico. The paper measures how the response of violence in each locality depends on the historical support for Calderón’s party (PAN). The collaboration between the federal and the local government is stronger in places that have historically voted for PAN, leading to more effective action against cartel leaders. The results confirm that negative supply shocks cause larger violence increases in places with more historical PAN support. And supply shocks have little effect on violence when no cartel or only a single cartel is present; but violence soars when two or more cartels are present, especially when they are established enemies.
This research offers some of the first rigorous evidence that drug war policies in one country can have major ripple effects on violence in other countries. I hope that this research and related work contribute to a broader understanding of Colombian and Mexican antinarcotics efforts—both of which receive large support from the US government. Other new research by the Beyond the Fence Study group is here, and more is coming over the next few months.
La violencia mortal en los países vecinos de Estados Unidos ha acaparado una vez más la atención de los estadounidenses. Una ola sin precedentes de niños centroamericanos ha estado llegando a la frontera suroeste de Estados Unidos este año, a menudo huyendo de la violencia de pandillas vinculadas al narcotráfico. Muchos de ellos provienen de Honduras, un epicentro de la guerra contra las drogas con la tasa de homicidios más alta del mundo. ¿Qué ha causado la escalada de los asesinatos en esta región? El tráfico de drogas no tiene por qué desencadenar la violencia por sí mismo. Marruecos y Turquía, por ejemplo, son grandes centros del comercio mundial ilícito de drogas, pero tienen tasas de homicidios muy bajas. Podríamos aprender de la experiencia de México, donde los homicidios se triplicaron entre 2007 y 2010. ¿Por qué y cómo sucedió eso? Un innovador documento de trabajo de CDG escrito por Juan Camilo Castillo, Daniel Mejía, y Pascual Restrepo sugiere que en cierta medida puede ser consecuencia de un efecto dominó de las políticas aplicadas a más documento de mil kilómetros de distancia. Este artículo es uno de los primeros en demostrar rigurosamente un efecto tan transnacional de la política antinarcóticos. Estos son los primeros pasos de un nuevo grupo de estudio de CGD, el cual lidero, llamado Más Allá del Muro.
La explosión de asesinatos en México se destaca en la figura siguiente, adaptado del referido artículo. La línea punteada es la tasa de homicidios reportados por el Instituto Nacional de Estadísticas de México (INEGI):
El común denominador de estas muertes es que surgieron de una nueva fase de la guerra contra las drogas en México. Ellas coinciden con una serie de ataques contra los cárteles de drogas ordenadas por el entonces presidente de México, Felipe Calderón (dic. 2006 – dic. 2012). De hecho, la investigación rigurosa de Melissa Dell en Harvard ha revelado vínculos entre la ofensiva de Calderón y el aumento de la violencia relacionada con las drogas. ¿Cómo se relacionan? Hay un vínculo intuitivo: cuando son atacados, los cárteles no sólo se defienden, sino que también son más propensos a luchar entre sí por territorio y control (ya que las estructuras preexistentes de poder se ven afectadas). Otro vínculo importante es menos obvio: los ataques contra los cárteles interrumpen el suministro de drogas ilícitas, elevando los precios y elevando así la recompensa de matar por control de las rutas de suministro de drogas. Por lo general, estas dos cosas suceden al mismo tiempo, por lo que son difíciles de discernir. El documento de trabajo de CGD los diferencia cuidadosamente, rastreando los efectos de la política de lucha contra la cocaína en un país: Colombia, sobre la violencia en un país diferente: México. Los esfuerzos antinarcóticos en Colombia no provocan directamente violencia relacionada con drogas en México a través del primer vínculo, pero podrían aumentar los precios internacionales de la droga, por lo tanto fomentando indirectamente el conflicto violento a través del segundo vínculo.
He aquí cómo Castillo, Mejía, y Restrepo demuestran que esto es en realidad lo que pasó. Comienzan midiendo la respuesta a los choques negativos de oferta, esto es, básicamente datos de alta frecuencia en las incautaciones de cocaína en Colombia. El análisis demuestra que variaciones mensuales negativas en la oferta de cocaína desde Colombia causaron un aumento en el número total de homicidios en México. Esta relación es más fuerte en lugares que están cerca de cruces de frontera entre Estados Unidos y México. Esto se ve claramente en el siguiente gráfico, también del artículo reseñado, que muestra cómo una reducción de 10 toneladas métricas en la oferta mensual, afecta la violencia en los municipios mexicanos situados a diferentes distancias de la frontera con Estados Unidos. El eje vertical muestra el porcentaje de aumento de la violencia causada por una caída de 10 toneladas métricas en la oferta colombiana de cocaína durante un mes. El eje horizontal representa gráficamente la distancia hasta el punto de entrada más cercano de México a los EE.UU. Estos efectos son enormes. Implican que el choque negativo a la oferta de cocaína de Colombia entre 2006 y 2009 puede explicar aproximadamente el 20% del incremento de los homicidios en general, durante el mismo período, en los municipios mexicanos más cercanos a los EE.UU.
El efecto dominó de Colombia probablemente interactuó con la política de la administración Calderón en México y reforzó sus efectos. El artículo mide cómo la respuesta de la violencia en cada localidad depende del apoyo histórico al partido de Calderón (PAN). La colaboración entre el gobierno federal y el gobierno local es más fuerte en los lugares que han votado históricamente por el PAN, lo que conlleva a una acción más eficaz contra líderes de los cárteles. Los resultados confirman que los choques negativos de oferta causan mayores incrementos de la violencia en lugares con mayor apoyo histórico al PAN. Y los choques de oferta tienen poco efecto sobre la violencia cuando no hay cártel o un solo cártel está presente; pero la violencia se dispara cuando dos o más carteles están presentes, especialmente cuando se ha establecido que son enemigos.
Esta investigación ofrece algunas de la primeras evidencias rigurosas de que las políticas de lucha contra las drogas en un país pueden tener un poderoso efecto dominó sobre la violencia en otros países. Espero que esta investigación y los trabajos relacionados contribuyan a forjar una concepción más amplia de los esfuerzos antinarcóticos de Colombia y México, que en ambos casos reciben gran apoyo del gobierno de Estados Unidos. Otra nueva investigación realizada por el grupo de estudio Más Allá del Muro está aquí, y tendremos más en los próximos meses.
December 17, 2014
Blog Post
I’m delighted to be helping organize again, for 2015, the world’s premier research conference on the economics of migration and development. Full-paper submissions are due January 20, at migdevconference@cgdev.org.
I’ve gushed before about the uncommon rigor and innovation in the papers at this highly selective conference, year after year. The people who come are simply the best in the field. The conference is part of a historic shift in how development researchers think about migration and vice versa. Human mobility shapes, and is shaped by, the development process in ways that scholars are only beginning to understand.
This year we’ll have keynote speeches from two stars, Dani Rodrik of the Institute for Advanced Study and Ran Abramitzky from Stanford University. The papers selected for presentation will be considered for a special issue of the World Bank Economic Review. As in previous years, the heavy lifting is being done by our collaborators at the Paris School of Economics, the Agence Française de Développement, and the World Bank—to all of whom we’re very grateful.
Click below to enlarge the full conference announcement:
January 25, 2016
Publications
Many developing countries need the World Bank’s capital less and less. What role should the Bank play in the 21st century? This paper argues that many features of the Bank today reflect a new role. That role, resting on the economic theory of bargaining and public good provision, is to reduce extreme poverty. Donor subsidies to the Bank already reflect this role, which implies new ways to structure and evaluate the Bank’s work.
February 23, 2016
Publications
For decades, migration economics has stressed the effects of migration restrictions on income distribution in the host country. Recently the literature has taken a new direction by estimating the costs of migration restrictions to global economic efficiency. In contrast, a new strand of research posits that migration restrictions could be not only desirably redistributive, but in fact globally efficient. This is the new economic case for migration restrictions: empirically, a case against the stringency of current restrictions.
January 27, 2014
Blog Post
This is a joint post with Erin Collinson.
President Obama delivered his 2014 State of the Union speech Tuesday, January 28. Before the speech, we polled CGD experts to find out what they hoped to hear from from the president's address. Check out their oratorical contributions below and read about the development-related decisions and policies they would like to emerge in support of the rhetoric.
You may not be surprised that development didn’t feature prominently in the president’s speech. However, we were pleased to hear references to inequality, the economic benefits of immigration, climate, and trade, if not necessarily with the development lens offered by CGDers below. We were also thrilled to hear the shout-out to Power Africa (oh, and to Mad Men).
President Obama will deliver his 2014 State of the Union speech Tuesday, January 28. We polled CGD experts to find out what they’re hoping to hear when the president addresses Congress and the nation. Check out their oratorical contributions below and read about the development-related decisions and policies they would like to emerge in support of the rhetoric.
Read the whole thing below or jump to a topic:
On inequality, Nancy Birdsall
On immigration, Michael Clemens
On multilateralism, Scott Morris
On transparency, Charles Kenny
On climate and forests, Frances Seymour
On global health, Amanda Glassman
On trade, Kimberly Elliott
On US Africa policy, Ben Leo
On inequality from Nancy Birdsall:
“Last year I called for an end to extreme poverty in the world by 2030. That end is in our sights. But inequality is rising not only here in the United States, but in China and India, in Europe and in Africa. To achieve real progress in tackling this pernicious challenge, we need to put the fight against inequality on our global agenda, as well as our domestic one.”
The president is justifiably concerned with growing inequality and declining social mobility in the United States. In the developing world, inequality remains a serious problem and one increasingly associated with a worrying cycle in which high concentrations of economic wealth corrupt political systems, and in turn feed rent-seeking by privileged insiders. Protests this year in Turkey, and in Brazil and Chile (countries where inequality is falling but remains very high), and the rise of resurgent extreme right parties in Greece and Spain signal citizens' growing frustration with economic policies that seem to sustain rather than fight that cycle— whether intentionally or not. The president can send a critical message, at no cost in budget terms, about American democratic values and commitment to inclusive growth around the world -- simply by referring to inequality as a global political as well as economic challenge. Follow-up should include revisiting the position of the United States on the framing of a post-2015 development agenda, as well as revitalizing support at the upcoming G20 summit for toughening up measures on tax cooperation and reduction of cross-border tax abuses already agreed to by the G-8 last year.
On immigration from Michael Clemens:
“The US economy was built by the hard work of immigrants and today immigration is more important than ever. But Silicon Valley does not run on engineers alone. It also runs on nannies, janitors, farm workers, and dish washers. Immigration reform that creates safe, legal pathways for low-skill migration will contribute to the recovery and continued sustained growth of our economy, prevent future crises of unauthorized immigration, and foster global development in ways that go beyond traditional aid.”
Over the next decade the US economy will need more than 5 million new low-skill workers for jobs like health aids, nannies, food services workers, and landscapers—jobs that require less than a high-school education, and can’t be off-shored or mechanized. Over this same period, just 1.7 million Americans will enter the labor force, only a small fraction of them without a high school diploma. The country needs a way for economically essential migration to take place legally. Filling those essential jobs is critical for our economic recovery and continued economic growth, because they directly complement higher-skill workers and make all of us more productive. This is why immigration reform that includes a robust temporary low-skill worker program, like the W-Visa program in the immigration bill passed by the Senate last year, is good for the American middle class. Meeting American firms’ demand for these low-skill workers will prevent future flows of unauthorized immigration, and expanding opportunities for temporary work in the US will have development benefits that far out size what traditional aid can offer—and at no fiscal cost to US taxpayers.
On the US commitment to multilateralism from Scott Morris:
“I am calling on Congress to pass legislation that will ensure continued US leadership in the IMF, a vital partner to America’s economic interests. Congressional inaction undermines US interests in an institution that plays a critical role in combatting deeply damaging financial crises globally, helps to ensure a level playing field for US workers and companies around the world, and works with us to root out the financial seeds of terrorism.”
The United States badly needs a win on the international economic stage. In a year when the global community decided to go big in support of IDA, the World Bank’s fund for the poorest, the United States decided instead to go big on the Global Fund to Fight Aids, Tuberculosis, and Malaria. As a result, a substantial chunk of the United States’ NPR-style matching pledge to the Global Fund went unmatched, and the champions of IDA this time around were countries like the UK and China (China!). But nowhere in the international economic sphere is the United States more visibly out of step with the rest of the world than on IMF reform, where the US is singlehandedly holding up a hard-won agreement due to congressional inaction. Just a few months ago, President Obama weighed in personally on behalf of the Global Fund, making a direct appeal to other donors. It’s time for him to put his voice to the need for Congress to act on the IMF.
On transparency from Charles Kenny:
“American taxpayers deserve to know the government spends their hard-earned money. My Administration has taken steps to make accessing data on government spending faster and easier, but we can do more. I will instruct the Office of Management and Budget to publish the full text of all government contracts and task orders online at USAspending.gov, in a fully searchable database, and to develop new guidelines consistent with the Freedom of Information Act that will provide specific guidance on commercial and national secret exceptions.”
US taxpayers fund government contracts with the private sector that are worth hundreds of billions a year. They have a right to know what they are paying for, and there is plentiful evidence that greater transparency in the contracting process can lead to better outcomes in terms of price and quality. A number of other countries from Colombia to Slovakia to the UK already publish government contracts online. In the United States, you can access government contracts using a Freedom of Information Act request, but it can be a long, painful process and the rules governing what counts as ‘commercial secrets’ within a contract are vague enough that the released, redacted document is sometimes more black marker than text. The US should join a growing global movement towards contracting transparency-–and an Executive Order could make it happen.
On climate and forest conservation from Frances Seymour:
“Stopping the loss of tropical forests is one of the most urgent, affordable, and feasible actions the international community can take to avert catastrophic climate change. The United States will provide meaningful rewards to those countries and companies that demonstrate success in reducing deforestation.”
Greenhouse gas emissions from tropical deforestation are our emissions too: forests are being cleared to make way for production of the food, fuel, and fiber that US citizens consume. But there are practical solutions to decouple production from deforestation, including policies being put into place by the governments of forest countries to improve law enforcement and forest management, and commitments from private companies to rid their supply chains of deforestation. The United States should join Norway and Germany in allocating aid funding to reward governments that successfully reduce deforestation with “Cash on Delivery.” As part of its contribution to the Tropical Forest Alliance, the US should ensure that the Lacey Act--designed to prevent the import of illegally-produced forest products-- is fully funded and aggressively implemented, and that federal procurement standards are “greened” to create markets for products certified as deforestation-free.
On global health from Amanda Glassman:
“We will ensure that our anti-tobacco policies are supported—not subverted—by our trade policies, and strengthened by our investments in aid.”
The United States invests billions each year to address some of the most pressing health challenges around the world, but more can be done to ensure that US policies on international trade back up this commitment to global health. Globally, deaths from tobacco use each year exceed the number of deaths from HIV/AIDs, TB, and malaria combined. At home, the United States has enacted smart policies and made tremendous progress against tobacco-related deaths--efforts that should be ‘exported’ and replicated around the world. Failure to stand up to the big tobacco bullies will make it more difficult for these countries to enforce anti-tobacco policies like package warnings and advertising restrictions, and will undermine the United States standing as a leader in global health. Further, the United States should do more to ensure that organizations like the World Bank and the IMF that have a mandate to modify taxes and subsidies, support countries in increasing tobacco taxes and cutting tobacco subsidies, saving both lives and money.
On trade from Kimberly Elliott:
“We know trade is vitally important to our economy, but it is also a critical tool to reduce global poverty. As the United States continues to make progress negotiating with our trade partners across the Pacific and the Atlantic, we must ensure that these agreements benefit US workers and consumers but do not undermine our efforts to promote development in low-income countries or weaken the multilateral trade system that is so crucial to global prosperity.”
Negotiations across the Pacific and with the European Union will no doubt dominate the US trade agenda this year. The greatest risk for smaller, poorer countries is that these “mega-regional” deals will weaken the World Trade Organization and leave those countries with no refuge from discrimination and bullying by more powerful trader partners. Some poor countries, particularly Bangladesh and Cambodia, could also see their exports fall as a result of more favorable market access granted to competitors that are included in these deals, such as Vietnam.
To guard against the risk of undermining multilateralism, President Obama needs to be equally committed to ensuring that ongoing negotiations and development of a work program at the WTO are successful. In particular, US negotiators should push for a food security package that reduces or eliminates rich country agricultural subsidies, reforms food aid, and develops new rules that give developing countries the tools they need to pursue food security goals without distorting global markets. And, to mitigate the potential for trade diversion, President Obama should work with Congress to reduce barriers to trade with the world's poorest and most vulnerable countries.
On US policy in Africa from Ben Leo:
“My Administration will work closely with Congress to extend trade legislation with Sub-Saharan Africa, negotiate new investment treaties, and significantly expand our efforts to promote more US investment in this important region, particularly in the power sector. Increasing our engagement will yield benefits to US businesses and put more Americans to work. And I look forward to finding additional opportunities for partnership this coming August, when I will host the first ever US-Africa Summit with leaders from 47 African nations.”
This past week, the White House formally announced that President Obama will host leaders from 47 African nations in early August. The summit agenda will focus heavily on promoting trade and investment ties with the region. These interests reflect the continent’s rapid economic growth over the last decade and widespread improvements in macroeconomic management and governance (despite pockets of instability and ongoing challenges in places like South Sudan and the Central African Republic). In the interim, the Administration and Congress will be considering a number of important programs and policies. First, both branches will be determining whether (and how) to extend the African Growth and Opportunities Act, which provides preferential US market access for qualifying countries. Second, the Administration will continue efforts to conclude bilateral investment treaty negotiations with the East African Community. Third, the Administration will continue implementation of its Power Africa Initiative, which seeks to expand electricity access for 20 million households. A presidential reference to these three efforts will be important for either getting them over the finish line (in the case of AGOA and the US-EAC BIT) or putting pressure for early and concrete results (for the Power Africa Initiative).
Beyond this, the US government should also take further steps to promote greater trade and investment ties with Sub-Saharan Africa, including: (1) unleashing the Overseas Private Investment Corporation; (2) expanding select USAID programs focused on unlocking private capital for development, such as the Development Credit Authority; and (3) announcing a new strategy for improving the impact and coherence of US trade capacity building programs.
January 7, 2013
Article
Photo: EU Humanitarian Aid and Civil Protection / cc
As we approach the third anniversary of the Haiti earthquake, reconstruction and recovery efforts continue—as does the debate within the development community: Why aren’t recovery efforts moving faster? Are international donors and NGOs helping or hurting recovery? Can traditional aid work amidst Haiti's weak government institutions? Are there alternative approaches that would be better?
CGD’s efforts on Haiti’s challenges continue. Here are our recent suggestions for alternative approaches in Haiti, as well as previous innovative ideas that remain relevant:
1) Cash Transfers for Haitians
Vijaja Ramachandran, Senior Fellow
Hurricane Sandy has exacerbated the food crisis in Haiti, as well as increased the incidence of water-based diseases, like cholera. Donors have responded accordingly, but donors must also take steps to improve the quality of their assistance to Haiti. Cash transfers are often the best way to empower disaster victims to rebuild their lives, while also generating demand that fuels the local economy. I recommend the World Food Programme’s Cash for Assets program as an effective model to be implemented for Haitians to purchase much-needed goods and services, in addition to coordinated humanitarian relief.
2) Improve Transparency and Accountability
Vijaya Ramachandran, Senior Fellow, and Julie Walz, Policy Analyst
Since the 2010 earthquake, over $6 billion has been disbursed in official aid to help the people of Haiti. Almost 90 percent of aid has gone to international NGOs and private contractors (9.5 percent has gone to the Government of Haiti and .4 percent to Haitian NGOs and businesses). Yet, there’s very little transparency about how this money is spent. Funders should require more evaluations of NGO and contractor activities, and also report their activities in the IATI format. Further, the Government of Haiti should be encouraged to procure services through competitive bidding. This would not only increase accountability of NGOs and contractors providing the services but also enable the Haitian government to build control over the process.
3) Increase Local Procurement
Vijaya Ramachandran, Senior Fellow, and Julie Walz, Policy Analyst
Out of every $100 spent by the US Government for reconstruction following the 2010 earthquake in Haiti, only $1.35 went directly to Haitian companies. The current US development strategy focuses on stimulating economic activity and pledges support to Micro, Small, and Medium Enterprises along with the development of Caracol Industrial Park. Yet, a key tool is missing in the strategy to build economic security and jobs in Haiti – buying from local businesses.
4) Better Haiti Aid: MigrationMichael Clemens, Senior Fellow
“The U.S. government added Haiti to the list of more than 50 countries eligible to participate in the H-2 visa program for temporary and seasonal workers, ending a longstanding policy of excluding Haitians from America’s largest temporary employment-based visa program. This is wonderful news for Haitians and Americans. It has the potential to unlock hundreds of millions of dollars in new economic opportunity for Haitian workers and their families—at no cost to the U.S. or Haitian governments, and with no increase in overall U.S. immigration. This seemingly tiny change has vast economic potential. Given the huge wage differences (an estimated $19,000 in additional annual income per Haitian worker), if just 2,000 Haitians are permitted to work as H-2 workers in the United States each year, over the course of 10 years, that’s $400 million in additional, new income for Haitian families. That’s equal in size to the entire U.S. post-earthquake budget for reconstruction in Haiti. Building on this great work, the US should consider a Haitian Family Reunification Parole Program. Haitians who have been approved for US permanent residency must sometimes wait as much as 11 years in Haiti to receive their green cards. A parole program would permit some of them to wait for their green cards in the United Stated instead.”
5) Cholera in Haiti: The Blame GameVictoria Fan, Research Fellow, and Richard Cash, Senior Lecturer on Global Health, Harvard School of Public Health
“Since October 2010, Haiti has struggled to control a deadly cholera outbreak—on top of ongoing recovery efforts from the devastating earthquake in January 2010. In December 2011, a group of lawyers in Haiti, on behalf of some 15,000 victims of cholera, sued the United Nations for $50,000 for each victim and double that for families of those who died. Focusing on these immediate objects of blame are of epidemiologic interest, but deflect attention away from the country experiencing the disease, and in this case, unable to control the spread. In a country where aid agencies and NGOs play major roles relative to the government, this outbreak should draw attention not only to immediate causes but more importantly to the long-term failure by every involved party and to the urgency of improving Haiti’s water and sanitation as soon as possible.”
Click here and here to see earlier lists of alternative development ideas for Haiti, featuring more ideas and commentary on post-quake development efforts.
Commentary Menu