In this paper Arvind Subramanian and co-authors investigate the differential effects of cooperatitve policy action on climate change and find that one size doesn't fit all. Policy instruments should distinguish between low- and high-carbon countries to avoid serious trade consequences.
The authors suggest a new approach assessing carbon taxes on imports to address the concerns from high-income countries about the effect of taxes on competition without damaging trade from developing countries.
Despite six decades of trade liberalization, trade policies in rich countries still discriminate against the exports of the world’s poorest countries. Much remains to be done to achieve the goal of meaningful market access for the poorest countries, including reformed rules of origin that facilitate rather than inhibit trade.
Criss-Crossing Globalization: Uphill Flows of Skill-Intensive Goods and Foreign Direct Investment - Working Paper 176
What happens when capital and sophisticated goods flow uphill, from poorer to richer countries? With a new dataset of foreign direct investment and a measure of the sophistication of exports, CGD senior fellow Arvind Subramanian and his co-author Aaditya Mattoo find that developing countries sending goods and services uphill experience economic growth and other development benefits.
Visiting fellow Nora Lustig examines the policy dilemmas rising food prices force on developing countries. Letting prices adjust can generate inflationary pressure while efforts to stabilize domestic prices often exacerbate global price increases; during the recent food price crisis, many countries chose instead to shift the burden back to international markets.
The White House and the World: A Global Development Agenda for the Next U.S. President shows how modest changes in U.S. policies could greatly improve the lives of poor people in developing countries, thus fostering greater stability, security, and prosperity globally and at home. Center for Global Development experts offer fresh perspectives and practical advice on trade policy, migration, foreign aid, climate change and more. In an introductory essay, CGD President Nancy Birdsall explains why and how the next U.S. president must lead in the creation of a better, safer world.
While the precise contribution of biofuels to surging food prices is difficult to know, policies promoting production of the current generation of biofuels are not achieving their stated objectives of increased energy independence or reduced greenhouse gas emissions. Reaching the congressionally mandated goal of blending 15 billion gallons of renewable fuels in gasoline by 2015 would consume roughly 40 percent of the corn crop (based on recent production levels) while replacing just 7 percent of current gasoline consumption. The food crisis adds urgency to the need to change these policies but does not change the basic fact that there is little justification for the current set of policies.
The Structural Transformation as a Pathway out of Poverty: Analytics, Empirics and Politics - Working Paper 150
Successful poverty reduction hinges on successful structural transformation, but poor countries must cope with political pressures resulting from deteriorating income distribution and simultaneously retain the policies that generate rapid economic growth. Based on historical and statistical evidence, CGD non-resident fellow Peter Timmer and Selvin Akkus argue for enacting policies to do just that: policies that value the many non-market payoffs of investment in agriculture, the main driver of short- and medium-term poverty reduction; context-specific policies to connect rural workers to urban economies to reduce rural poverty in the long term; and fairer rich-world agricultural trade policies to allow small farmers better access to domestic supply chains.
In this CGD Essay, visiting fellow Nancy Lee provides the full details and policy recommendations for a strategy of regional investment integration in the Americas. The essay, excerpted from her chapter in the forthcoming White House and the World: A Global Development Agenda for the Next U.S. President, builds on a previously published CGD Note by specifying the scope of the proposed agreement, outlining its expected gains, and identifying the initial steps the United States could take to encourage a fresh agreement to be reached.
The Commitment to Development Index for Africa: How Much Do the Richest Countries Help the Poorest Continent?
How committed are the world's richest countries to the development of Africa, the world's poorest continent? Rich countries are usually compared on how much foreign aid they give as a percentage of their GDP, but helping Africa involves much more than aid. CGD's Commitment to Development Index has long compared 21 rich countries on aid, trade, migration, and other policies that affect the entire developing world. In the new CDI for Africa, research fellow David Roodman trains the CDI methodology on rich countries' links to this one continent. While the results may not be what you expect, one message is clear: all rich countries could do much more to foster development in Africa.
The loss of rice production in Myanmar is worsening the crisis in world rice markets, where prices have trebled this year. Meanwhile, Japan has 1.5 million tons of surplus rice, most of it imported from the U.S. Releasing this rice to global markets would prick a speculative bubble and bring rice prices down fast, while also encouraging China and Thailand to release their surplus stocks. But first Washington must lift its objections and Japan must decide to re-export rice that it imported from the U.S., Thailand, and Vietnam. Failure to act would mean that high-quality U.S. rice would be fed to Japanese pigs and chickens while millions of poor people suffer from hunger and malnutrition. Tom Slayton, a former editor of The Rice Trader, and Peter Timmer, CGD non-resident fellow and visiting professor at Stanford University, explain how prompt action could prevent the rice price crisis from becoming a hunger crisis.
Each year since 2003, the Commitment to Development Index (CDI) has ranked 21 rich countries on their dedication (or not!) to policies that benefit the five billion people living in poor countries. The CDI moves beyond simple comparisons of aid funding and in so doing embodies the mission of CGD, which addresses all government policies that affect poorer countries. This report summarizes the results of this year's Index, discusses key ideas that underpin each component and shows how countries' scores have changed over time.
This CGD brief summarizes the results of the 2007 Commitment to Development Index (CDI), which ranks 21 of the world's richest countries on their dedication to policies that benefit the five billion people living in poorer nations. The Netherlands comes in first on the 2007 CDI on the strength of ample aid-giving, falling greenhouse gas emissions, and support for investment in developing countries. Close behind are three more big aid donors: Denmark, Sweden, and Norway.
By any measure, the United States is one of the most open economies in the world—importing more than $1 trillion worth of goods duty-free in 2006 alone. Yet poor nations still pay much higher U.S. tariffs than rich countries—an average of 15 percent on a quarter of their imports, compared to 2-5 percent for rich countries. Not only is this unfair, it also undermines American interests by hindering growth in the poorest countries, thereby making them more vulnerable to epidemic diseases, terrorists, and transnational criminal organizations. In this new CGD Brief, senior fellow Kimberly Ann Elliott makes the case for the U.S. to fix this problem by permanently granting all least-developed countries 100% duty-free, quota-free market access and simplifying rules of orgin.
Core labor standards--an end to forced and child labor, nondiscrimination, and respect for workers' right to organize--are important for sharing the benefits of globalization. But how to enforce them remains contentious. In this CGD Note, senior fellow Kimberly Elliott says that U.S. policy should focus on domestic issues, such as ensuring that U.S. workers have adequate safety nets, and international issues, such as assisting countries in improving compliance with labor standards. The U.S should leave the details of labor laws to national governments, with monitoring by the International Labor Organization.
Although many countries must share responsibility for the negotiating stalemate in the Doha Round of trade negotiations, the proximate cause of the talks' collapse last summer was the U.S. refusal to offer additional reductions in agricultural subsidies. In this CGD Note, senior fellow Kimberly Elliott discusses concessions the U.S. and other rich countries must make to save the Round, particularly reductions in agricultural subsidies and lowering barriers to imports of agricultural goods. Overcoming the impasse is crucial for developing countries: failure would deny them opportunities for job creation and growth that increased trade would provide, and would contribute to erosion of the multilateral, rules-based system that protects small, weak countries from discrimination by the powerful.
In this CGD/ Peterson Institute Brief, CGD senior fellow Kimberly Elliott argues that agriculture liberalization is crucial to the successful completion of the Doha Round of multilateral trade negotiations, since it is the sector with the highest remaining barriers in rich countries and the greatest potential gains from further liberalization. She examines patterns in rich-country support for agriculture and what reform would mean for developing countries, and offers recommendations for how to complete the round and ensure that developing countries benefit.
Agricultural market liberalization is the linchpin for a successful conclusion to the Doha Round of World Trade Organization (WTO) negotiations because these are the most protected markets remaining in most rich countries. But the implications for developing countries, especially the poorest, are more complex than the current debate suggests. In her new book, Delivering on Doha: Farm Trade and the Poor, Kimberly Ann Elliott, a joint senior fellow at CGD and the Peterson Institute for International Economics, examines the structure of agricultural support in rich countries and the challenges and opportunities for reviving and completing the Doha Round of trade negotiations.