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Views from the Center

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Do Immigrants Fill Public Coffers, or Drain Them? We Finally Have an Authoritative Estimate

People who move from poor countries to rich countries add colossal value to the world economy. They can do this, my research has shown, because their labor is often several times more valuable in the countries they move to. Workers who move, even in modest numbers, can create economic gains in the trillions of dollars, and most of that value accrues to the destination country.

The New Penn World Tables

Today is a special day for all researchers and practitioners of economics, especially development and international economics. The new (version 8) of the Penn World Tables (PWT) has been released. The PWT revolutionized, actually by making possible, research on economic development, especially to answer questions that needed cross-country comparisons.

Reinhart-Rogoff: The Problem and Solutions

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.

A Global Map of Subnational GDP

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.”

Is Agribusiness the Key to Africa’s Growth?

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.

Europe’s Policy Footprint on Development

This is a joint post with 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.

On My Wish List for the Next Administration: A US Africa Policy Worthy of Africa

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.

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