This annual report marks two milestones in 2016: CGD’s 15th anniversary and, at the end of the year, its first leadership transition, with founding president Nancy Birdsall being succeeded by Masood Ahmed.
As recently as 2011, only 42 percent of adult Kenyans had a financial account of any kind; by 2014, according to the Global Findex database, that number had risen to 75 percent, including 63 percent of the poorest two-fifths. In Sub-Saharan Africa as a whole, the share of adults with financial accounts, either a traditional bank account or a mobile account, rose by nearly half over the same period. Many countries in other developing regions have also recorded, if less dramatic, gains in access to the basic financial services that most people in richer countries take for granted. Much of this progress is being facilitated by the digital revolution of recent decades, which has led to the emergence of new financial services and new delivery channels.
The two economic developments that have garnered the most attention in recent years are the concentration of massive wealth in the richest one percent of the world’s population and the tremendous, growth-driven decline in extreme poverty in the developing world, especially in China. But just as important has been the emergence of large middle classes in developing countries around the planet. This phenomenon—the result of more than two decades of nearly continuous fast-paced global economic growth—has been good not only for economies but also for governance. After all, history suggests that a large and secure middle class is a solid foundation on which to build and sustain an effective, democratic state. Middle classes not only have the wherewithal to finance vital services such as roads and public education through taxes; they also demand regulations, the fair enforcement of contracts, and the rule of law more generally—public goods that create a level social and economic playing field on which all can prosper.
Todd Moss, Caroline Lambert, and Stephanie Majerowicz offer a well-argued explanation of how oil-to-cash transfers could help countries overcome the corruption, economic volatility, and lack of government accountability that too often plague countries with rich resources but weak institutions.
The current size of the income-secure middle class and its likely future growth, suggest that optimism is indeed warranted for many of today’s middle-income countries. But it is not warranted for all of them, and especially not for most of the low-income countries of South Asia and sub-Saharan Africa — even if they continue to grow at the relatively healthy rates they have enjoyed in the last decade and more.
The lack of reliable development statistics for many poor countries has led the U.N. to call for a “data revolution” (United Nations, 2013).
Reliable estimates of the effects of violence on economic outcomes are scarce. We exploit the manyfold increase in homicides in 2008-2011 in Mexico resulting from its war on organized drug traffickers to estimate the effect of drug-related homicides on house prices.
My goal is to get students to think critically about development theory and practice. A slight majority of examples and readings will be drawn from sub-Saharan Africa, in part give the course some focus, and in part because it is my area of expertise. But in I will also bring in a considerable amount of material on Latin America, the early development of the US and Europe, and to a lesser extent Asia—an order determined largely by my knowledge or ignorance.
This paper lists—and attempts to address—the most serious objections to Oil-to-Cash. The response to many objections is to ask about a plausible counterfactual (how do cash transfers compare to the alternative policy options?). Others warrant a clearer articulation of available evidence or ways to mitigate real worries through smart program design.
Reliance on natural resource revenues, particularly oil, is often associated with bad governance, corruption, and poverty. Worried about the effect of oil on Alaska, Governor Jay Hammond had a simple yet revolutionary idea: let citizens have a direct stake. Thirty years later, Hammond’s vision is still influencing oil policies throughout the world.
In this speech delivered to the UN General Assembly, Nancy Birdsall argues that in the absence of an activist global political entity to address these issues, global citizens should press their own governments to adopt policies that address these problems, domestically and internationally.
This course introduces students to the relations among growth, inequality and globalization of economic markets, with a focus on implications for the developing world.
Global Poverty: Challenges and Hopes in the New Millennium (Syllabus) – University of California, Berkeley
This introductory course teaches students about dominant paradigms of development and welfare, and situates such paradigms in the 20th century history of capitalism and liberal democracy.
The authors argue that many reform initiatives in developing countries fail to achieve sustained improvements in performance because they are merely isomorphic mimicry. They present a new framework for breaking out of capability traps.
The authors assess the World Bank’s private sector interventions in African fragile states. They summarize and analyze project-level data from IDA, IFC, and MIGA, and introduce a new framework which may assist in the design and implementation of projects in fragile states.
Direct Redistribution, Taxation, and Accountability in Oil-Rich Economies: A Proposal - Working Paper 281
To enhance efficiency of public spending in oil-rich economies, this paper proposes that some of the oil revenues be transferred directly to citizens, and then taxed to finance public expenditures. The argument is that spending that is financed by taxation—rather than by resource revenues accruing directly to the government—is more likely to be scrutinized by citizens and hence subject to greater efficiency.
Traditional donor financing mechanisms tend to track inputs instead of results, lack transparency, accountability, and country ownership. These inefficiencies waste resources, erode the trust of aid constituencies, and fail to improve the lives of the poor. TrAid+ is a new mechanism that aims to address these problems by acting as a third-party stamp of approval that all parties involved can trust to know that aid is being used effectively and is contributing to the development objectives of the recipient country. This paper describes the trAid+ concept in detail and proposes practical steps to establish the traAid+ platform.
Failed states often suffer the repeated return to power of former warlords who weaken institutions and make people poorer. In this working paper, Rajan argues that the only way to break the cycle of dictators is to empower the citizenry through economic growth. In the case of failed states, he proposes a unique solution to allow the electorate to choose an impartial foreigner to govern the country and lay the foundations for good governance and sustainable economic progress.