This working paper examines the relationship between high inequality and liberalization of the financial sector in Latin America from 1975 to 2000. Using panel data, the authors find that increases in financial liberalization were associated with bank crises and other domestic and external shocks, and that higher schooling inequality reduces the impetus for liberalization brought on by bank crises.
Five billion people in developing countries are innocent victims of the global economic crisis. How well they cope will be crucial to sustained global recovery. In this CGD Note, Nancy Birdsall estimates that developing countries may need $1 trillion for bank rescues, for fiscal stimulus, and to maintain their minimal social safety nets over the next couple of years. She then explains how these funds could be unlocked from existing resources.
The Development Agenda as a Global Social Contract; or, We Are All in This Development Boat Together
Nancy Birdsall delivered this speech on December 8, 2008, to the Dutch Scientific Council in The Hague.
The global financial crisis and economic slowdown are subjecting poor countries to increased financial, price, and output volatility. How can the multilateral development banks help? A new CGD brief by visiting fellow Nancy Lee, non-resident fellow Guillermo Perry, and CGD president Nancy Birdsall makes the case for a broad range of new and expanded activities to help developing countries manage risk.
READ THE BRIEF
Improving education should be a part of the global development agenda of the next U.S. president. While aid for primary education has always appealed to U.S. policymakers and the public and is consistent with American values of expanding opportunity for all, U.S. aid for education has languished in the past two decades. Aid for health has increased six-fold while aid for education has grown by only a third. The next president should consider announcing U.S. support for a big international push to expand quality primary schooling in low-income countries so that all children have the chance to learn.
Why Global Development Matters and What the Next U.S. President Should Do About It (White House and the World Policy Brief)
The need for a fresh American approach to development has never been more urgent. The economic crisis at home, the threat of failed states and hostile countries acquiring nuclear weapons, our inability to solve critical global problems like climate change alone—all these mean that America needs to find ways to engage with the developing world that go beyond our outdated aid mechanisms and our narrow focus on such issues as terrorism, narcotics, and illegal immigrants. Our economic growth, our security, and our ability to shape the new multilateral system all depend on our readiness to forge new, mutually beneficial alliances with a broad range of developing countries. To engage effectively, we must offer these countries more effective partnerships on their own development challenges.
Foreign Assistance in the Americas: Testimony for the House Foreign Affairs Subcommittee on the Western Hemisphere
Testimony for the House Foreign Affairs Subcommittee on the Western Hemisphere
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.
In September 2008 official aid donors and recipients will meet in Accra, Ghana, to discuss how to make development assistance more effective. CGD president Nancy Birdsall and co-author Kate Vyborny suggest that advocates of better aid who really want a win at Accra forget haggling over broad conceptual issues and focus instead on getting a public commitment from donors to one or more very concrete steps to improve aid effectiveness and to hold donors accountable.
Building on International Debt Relief Initiatives: Testimony for the Senate Foreign Relations Committee
Testimony for the Senate Foreign Relations Committee
In an increasingly globalized world, inequality is an issue of rising concern, especially in Latin America, home to many of the world's most unequal societies. This new book, co-published by the Center for Global Development and the Inter-American Dialogue, describes the links between recent growth trends, changing patterns of inequality, and rising cynicism and frustration with the political leadership across the region. The authors, Nancy Birdsall, Augusto de la Torre, and Rachel Menezes, present a dozen economic policy tools to make life fairer for the great majority of people--without sacrificing economic growth.
Reflections on the Macro Foundations of the Middle Class in the Developing World - Working Paper 130
Shared growth—growth that helps to build a middle class—is now widely embraced as a central economic goal for developing countries. In this new working paper CGD president Nancy Birdsall reviews how macroeconomic policies shape incentives for inclusive growth, focusing on fiscal discipline; fair revenue and expenditure practices; and a business-friendly exchange rate. Relying heavily on the experience in Latin America and drawing lessons for other parts of the developing world, Birdsall argues that growth that strengthens the middle classes helps poor people, too.
In this CGD Essay, Birdsall and Subramianian argue that the World Bank faces twin crises of relevance and legitimacy in a rapidly changing world. The solution, they argue, is for the bank to become a more active catalyst for generating global public goods and knowledge and a more reluctant lender to governments. The World Bank should move, in effect, from being a bank to being a global development cooperative. The essay suggests specific, practical steps for such reforms.
For the past decade, U.S. attention to Latin America has focused mainly on promotion of free trade and opposition to narcotics trafficking and security threats. But there are signs that Washington is beginning to recognize the importance of helping the region tackle longstanding poverty and social inequality. Candidates at this weekend's Democratic presidential debate called for a robust foreign policy in Latin America and the Bush administration has recently shown a renewed interest in promoting development and improving Washington's image in the region. This new brief by CGD president Nancy Birdsall and Inter-American Dialogue president Peter Hakim sets forth a practical agenda for how the U.S. can help. Examples: buttress free trade agreements with aid programs that compensate losers; include land redistribution and alternative employment programs in the so-called "war against drugs."
A White House conference on social justice in Latin America this week may signal a shift to U.S. engagement with the region that goes beyond security, free trade, and anti-narcotics efforts. CGD president Nancy Birdsall and Peter Hakim, president of the Inter-American Dialogue, suggest seven ways that the U.S. could more effectively support Latin American efforts to address persistent inequality--starting with a more effective approach on trade and drugs.
In this Essay, CGD president Nancy Birdsall describes the World Bank as a global club with a structure close to that of a credit union in which the members are nations. Its mission, as originally conceived–-to promote broadly shared and sustainable global prosperity--serves the common interests of all its country members. In light of this idea of the Bank as a global credit club, Birdsall addresses the issues that arise with respect to its current governance structure and how these issues affect the Bank's legitimacy, effectiveness and relevance in the global system.
In this new working paper, CGD president Nancy Birdsall reviews a large body of work, primarily of economists, that shows that high levels of inequality in developing countries are likely to inhibit growth. She argues that high income inequality can discourage the evolution of the economic and political institutions associated with accountable government and can undermine the civic and social life that sustains effective collective decision-making, especially in multi-ethnic settings. Learn more
Nancy Birdsall testifies before House Foreign Affairs Committee about Poverty and Inequality in Latin America
On Wednesday, March 28, 2007, Nancy Birdsall testified before the U.S. House of Representatives Subcommittee on the Western Hemisphere of the House Foreign Affairs Committee. Dr. Birdsall, who leads CGD's initiative on Globalization and Inequality, took this opportunity to explain how the U.S. can improve efforts to attack poverty and inequality in Latin America.