This paper defines two distinct and overarching objectives for the MCA and proposes 12 criteria for assessing recipient country eligibility. The authors recommend that the MCA be targeted to the poorest countries that are eligible for World Bank grants and concessional loans.
In this paper we argue that neither the level nor the change in a country's trade/GDP ratio can be taken as an indication of the "openness" of a country's trade policy. In particular, we examine the ways in which terms of trade shifts have affected trade/GDP ratio over the past two decades, and find that the empirical evidence offered by the existing literature overstates the importance of trade policy in economic growth.
While most technical assessments classify privatization as a success, it remains widely and increasingly unpopular, largely because of the perception that it is fundamentally unfair, both in conception and execution. We review the increasing (but still uneven) literature and conclude that most privatization programs appear to have worsened the distribution of assets and income, at least in the short run. This is more evident in transition economies than in Latin America, and less clear for utilities such as electricity and telecommunications, where the poor have tended to benefit from much greater access, than for banks, oil companies, and other natural resource producers.
This paper defines seven principles to guide the design and implementation of the Millennium Challenge Account" (MCA), a new compact for development announced by President Bush in March. It assumes that MCA resources will be targeted to low-income countries that have limited, if any, access to private capital markets for sovereign debt, and for whom borrowing from the World Bank and other multilaterals is limited; and that the MCA will be an additional program to those already financed and administered by the U.S. government, which have related but not identical objectives, and affect a set of countries that is not necessarily the same.
How Does The Proposed Level of Foreign Economic Aid Under the Bush Budget Compare with Historical Levels? And What Would Be The Effects of Bush's New "Millennium Challenge Account"?
This paper examines trends in U.S. non-military global aid and how the administration’s proposed budget for fiscal year 2003 would affect those trends. The analysis addresses how the overall level of proposed aid compares with past levels and examines three standards for measuring aid over time: aid as a percentage of total government outlays, aid as a percentage of the economy, and aid in inflation adjusted terms.
This study brings readers up to date on the complicated and controversial subject of debt relief for the poorest countries of the world.
Over the last several years, the United States and other major donor countries have supported a historic initiative to write down the official debts of a group of heavily indebted poor countries, or HIPCs. Donor countries had two primary goals in supporting debt relief: to reduce countries' debt burdens to levels that would allow them to achieve sustainable growth; and to promote a new way of assisting poor countries focused on home-grown poverty alleviation and human development. While the current "enhanced HIPC" program of debt relief is more ambitious than any previous initiative, it will fall short of meeting these goals. We propose expanding the HIPC program to include all low-income countries and increasing the resources dedicated to debt relief. Because debt relief will still only be a first step, we also recommend reforms of the current "aid architecture" that will make debt more predictably sustainable, make aid more efficient, and help recipient countries graduate from aid dependence.
This paper outlines the likely effects of the AIDS pandemic in Africa on the continent's ability to produce education and use it effectively for growth and poverty reduction.
At the end of the 1990s the future of Latin America seemed grim in the face of four devastating problems—slow and unsteady economic growth, persistent poverty, social injustice, and personal insecurity. For 10 years Latin America had pursued—with considerable vigor—the 10 economic policies that make up the Washington Consensus, the growth formula promoted by the U.S. Treasury and the international financial institutions. But performance fell far short of expectations, and a new approach was needed.