There are several efforts underway in the Pacific Islands to insure public and private assets against natural disasters such as cyclones and earthquakes. These efforts are designed to mitigate the annual costs of such disasters which range from a few percent to over 50 percent of GDP. However, insurance is not a substitute for aid. Most islands are heavily aid dependent and cannot afford to pay the high premiums associated with disaster risk insurance.
How Do African Firms Respond to Unreliable Power? Exploring Firm Heterogeneity Using K-Means Clustering - Working Paper 493
While previous studies have found a positive relationship between the reliability of power and firm growth, we find that such a clear relationship seems not to prevail. In other words, some firms are able to cope with an unreliable supply of power while many others do not.
Can Africa Be a Manufacturing Destination? Labor Costs in Comparative Perspective - Working Paper 466
Our central question is whether African countries can break into global manufacturing in a substantial way. Our results suggest that for any given level of GDP, labor is more costly for firms that are located in Sub-Saharan Africa. However, we also find that there are a few countries in Africa that, on a labor cost basis, may be potential candidates for manufacturing—Ethiopia in particular stands out.
The need for infrastructure improvements is a top-tier economic, political, and social issue in nearly every African country. Although the academic and policy literature is extensive in terms of estimating the impact of infrastructure deficits on economic and social indicators, very few studies have examined citizen demands for infrastructure.
Development as Diffusion: Manufacturing Productivity and Sub-Saharan Africa’s Missing Middle - Working Paper 357
We consider economic development of Sub-Saharan Africa from the perspective of slow convergence of productivity, both across sectors and across firms within sectors.
Many countries in Africa suffer high rates of underemployment or low rates of productive employment; many also anticipate large numbers of people to enter the workforce in the near future. This paper asks the question: Are African firms creating fewer jobs than those located in other parts of the world? And, if so, why?
Africa’s industrial progress has been disappointing. Part of the reason is that labor costs are higher than one might expect, given GDP per capita. Alan Gelb, Christian Meyer, and Vijaya Ramachandran distill the policy lessons.
China's Development Finance to Africa: A Media-Based Approach to Data Collection - Working Paper 323
China’s presence in Africa is, beyond dispute, large in both trade and what can be called official finance to Africa. But how large, exactly? A new database from the College of William and Mary brings additional resources to help answer the question. This paper describes the new database, its key findings, and its possible applications and limitations of the data, which is being made publicly available for the first time.
Brave New World: A Literature Review of Emerging Donors and the Changing Nature of Foreign Assistance - Working Paper 273
This paper investigates the scale and scope of emerging donors and ways the international donor community could encourage their greater transparency and accountability.
The Commanders Emergency Response Program in Afghanistan: Refining U.S. Military Capabilities in Stability and In-Conflict Development Activities - Working Paper 265
The U.S. military has become substantially engaged in the development and stabilization space and will likely continue to operate in this space for some time to come. This paper proposed five policy changes for the military to improve its development activities.
This paper addresses the response to historically high rice prices in 2008 first by presenting a historical review of trends in the West African rice sector and, second, by assessing the effect of world rice prices on domestic prices, primarily at the consumer level.
Financing Food Assistance: Options for the World Food Programme to Save Lives and Dollars - Working Paper 209
The World Food Programme has world-class logistics, but its ability to manage financial risk is extremely limited. The WFP should consider implementing a targeted hedging pilot strategy for increased predictability. Greater commitments of untied cash from donors and support for the proposed Food Security Trust Fund at the World Bank would help.
This paper examines how the lack of recognition of Somaliland by the international community—and the consequent ineligibility for foreign financial assistance—has shaped the region's political development. It finds evidence that Somaliland’s ineligibility for foreign aid facilitated the development of accountable political institutions and contributed to the willingness of Somalilanders to engage constructively in the state-building process.
To Formalize or Not to Formalize? Comparisons of Microenterprise Data from Southern and East Africa - Working Paper 175
Why do so many businesses choose to remain informal? Vijaya Ramachandran and co-authors discover that the answer is more nuanced than often believed. In East Africa, for instance, the difference in productivity between formal and informal firms is often indistinguishable, while in Southern Africa productivity it is more differentiated. Policies to encourage formalization and increase productivity are likely to be more successful in East Africa, whereas an emphasis on job training and vocational skills might be more appropriate in Southern Africa.
A Fresh Look at Global Governance: Exploring Objective Criteria for Representation - Working Paper 160
The authors of this CGD working paper analyze what the principal bodies of global government—the Bretton Woods institutions and the UN, the G-20 and the OECD—would like if a country’s membership and roles were contingent upon objective criteria that would better balance representation and effectiveness. They find major disparities between the results of their analysis and the state of affairs today, and they point to the need for changes far more fundamental than the incremental tweaks now being considered.
Do Regulatory Reforms Stimulate Investment and Growth? Evidence from the Doing Business Data, 2003-07 - Working Paper 159
In this paper, witha foreword by senior fellow Vijaya Ramachandran, Benjamin Eifert of UC-Berkeley investigates the effects of regulatory reform by drawing on years of data across 90 countries. He discusses the characteristics of countries that choose to reform and the results of these reforms. The paper it contains valuable insights for policymakers and institutions focused on regulatory reform in weak states.
Does Influence-Peddling Impact Industrial Competition? Evidence from Enterprise Surveys in Africa - Working Paper 127
CGD visiting fellow Vijaya Ramachandran and co-authors Manju Kedia Shah and Gaiv Tata used firm-level survey data from more than 1,500 enterprises in six African countries to discover how and why African firms lobby. Their working paper concludes that larger, entrenched firms lobby to protect their market share, and that this inhibits competition, reducing efficiency and growth. The authors suggest that regional integration could be one way out of this trap, because it expands the number of enterprises in the marketplace as well as the size of the market, thus making it both harder and less worthwhile for domestically entrenched enterprises to lobby to protect their market share.
Why Doesn't Africa Get More Equity Investment? Frontier Stock Markets, Firm Size and Asset Allocations of Global Emerging Market Funds - Working Paper 112
Africa receives only a tiny fraction of global investments in emerging markets. But the problem is not that fund managers are scared away by a seemingly steady stream of bad news out of Africa, nor is a general marketing of Africa to global investors the solution. Instead the authors of this new CGD working paper find that the small size of African markets and low levels of liquidity are a binding deterrent for foreign institutional investors. Drawing on firm surveys to explore why African firms remain small, the authors offer practical recommendations for increasing portfolio investment in Africa. Learn more