Since 1974 the world has experienced a “third wave” of democratization. Ensuring that these new democracies consolidate is critical to both global prosperity and peace. Unfortunately, the academic literature that might help policy-makers shape appropriate foreign assistance programs remains underdeveloped, in that it lacks strong behavioral foundations, or explanations of why people act the way they do. This paper argues that the process of democratic consolidation requires a transition from clientelistic to contractual exchange relationships. Without that transition, efforts to promote democratic consolidation are unlikely to succeed.
Paradoxically, in most successfully developing countries, especially those in the rice-based economies of Asia, the public provision of food security quickly slips from its essential role as an economic stimulus into a political response to the pressures of rapid structural transformation, thereby becoming a drag on economic efficiency. The long-run relationship between food security and economic growth thus tends to switch from positive to negative over the course of development. Because of inevitable inertia in the design and implementation of public policy, this switch presents a serious challenge to the design of an appropriate food policy.
In the face of continuing development challenges in the world's poorest countries, there have been new calls throughout the donor community to increase the volume of development aid. Equal attention is needed to reform of the aid business itself, that is, the practices and processes and procedures and politics of aid. This paper sets out the shortcomings of that business on which new research has recently shed light, but which have not been adequately or explicitly incorporated into the donor community's reform agenda. It outlines seven of the worst "sins" or failings of donors, including impatience with institution building, collusion and coordination failures, failure to evaluate the results of their support, and financing that is volatile and unpredictable. It suggests possible short-term practical fixes and notes the need ultimately for more ambitious and structural changes in the overall aid architecture.
This paper argues that regional public goods in developing countries are under-funded despite their potentially high rates of return compared to traditional country-focused investments. In Africa the under-funding of regional public goods is primarily a political and institutional challenge to be met by the countries in this region. But the donor community ought to consider the opportunity cost – for development progress itself, in Africa and elsewhere – of its relative neglect, and explore changes in the aid architecture that would encourage more attention to regional goods.
This paper reviews research on the impact of rice prices on the poor, on real wages in rural and urban areas, and on the broader macroeconomic consequences for investments in labor-intensive manufacturing.
Is there any reason to think trade negotiations are more likely now than in the past to encourage substantial reform of rich countries’ farm policies? This paper looks at the evolution of and current approaches to agricultural policies in rich countries to see if there are lessons from the past that might improve chances for reform this time around.
In 1999, the United States and other major donor countries supported an historic expansion of the heavily indebted poor country (HIPC) debt relief initiative. Three years after the initiative came into existence, we are beginning to see the apparent impact that HIPC is having, particularly on recipient countries' ability and willingness to increase domestic spending on education and HIV/AIDS programs. Yet it has also become clear that the HIPC program is not providing a sufficient level of predictability or sustainability to allow debtor countries (and donors) to reap the larger benefits, particularly in terms of sustained growth and poverty reduction, originally envisioned. After reviewing some of the main critiques and proposals for change, we offer here a new way forward -- a proposal to deepen, widen, and most importantly insure debt relief to poor countries.
Double-Standards, Debt Treatment, and World Bank Country Classification: The Case of Nigeria - Working Paper Number 45
Nigeria is currently classified by the World Bank as a ‘blend’ country, making it the poorest country in the world that does not have ‘IDA-only’ status. This paper uses the World Bank’s own IDA eligibility criteria to assess whether Nigeria has a case for reclassification.
Recent research offers differing assessments of the overall, worldwide effect of foreign aid on economic growth in the countries that receive aid. To understand these differences, we re-analyze the same data and same regressions used in the three most influential aid-growth studies. In all three, increases in aid have been followed on average by modest increases in investment and growth. The most plausible explanation is that aid causes some degree of growth in recipient countries, though the magnitude of this relationship is modest, varies greatly across recipients, and diminishes at high levels of aid.
Towards a New Consensus for Addressing the Global Challenge of the Lack of Education - Working Paper 43
This paper is part of the Copenhagen Consensus process, which aims to assess and evaluate the opportunities available to address the ten largest challenges facing the world. One of these ten challenges is the “lack of education.” This paper provides an analytical framework to evaluate the various options that can be used to address this issue.
The Commitment to Development Index of the Center for Global Development rates 21 rich countries on the “development-friendliness” of their policies. It is revised and updated annually. In the 2004 edition, the component on foreign assistance combines quantitative and qualitative measures of official aid, and of fiscal policies that support private charitable giving.
Is Africa’s Skepticism of Foreign Capital Justified? Evidence from East African Firm Survey Data - Working Paper 41
The world has increasingly recognized that private capital has a vital role to play in economic development. African countries have moved to liberalize the investment environment, yet have not received much FDI. At least part of this poor performance is because of lingering skepticism toward foreign investment, owing to historical, ideological, and political reasons. Results from our three-country sample suugest that many of the common objections to foreign investment are exaggerated or false. Africa, by not attracting more FDI, is therefore failing to fully benefit from the potential of foreign capital to contribute to economic development and integration with the global economy.
The Trouble with the MDGs: Confronting Expectations of Aid and Development Success - Working Paper 40
*REVISED Version September 2004
The Millennium Development Goals (MDGs) are unlikely to be met by 2015, even if huge increases in development assistance materialize. The rates of progress required by many of the goals are at the edges of or beyond historical precedent. Many countries making extraordinarily rapid progress on MDG indicators, due in large part to aid, will nonetheless not reach the MDGs. Unrealistic targets thus may turn successes into perceptions of failure, serving to undermine future constituencies for aid (in donors) and reform (in recipients). This would be unfortunate given the vital role of aid and reform in the development process and the need for long-term, sustained aid commitments.
This paper focuses on key ways in which donors can improve the quality of foreign assistance and make it more effective in achieving the Millennium Development Goals (MDGs).
"Pro-poor growth" is the new mantra of the development community. This exploratory essay, commissioned by the Indonesia Project at Australian National University (ANU), places this new interest in pro-poor growth in regional perspective and then attempts to draw historical and policy lessons for Indonesia.
This work quantifies how long it has taken countries rich and poor to make the transition towards high enrollments and gender parity. It finds that many countries that have not raised enrollments fast enough to meet the Millennium Development Goals have in fact raised enrollments extraordinarily rapidly by historical standards and deserve celebration rather than condemnation. The very few poor countries that have raised enrollment figures at the rates envisioned by the goals have done so in many cases by accepting dramatic declines in schooling quality, failing large numbers of students, or other practices that cast doubt on the sustainability or exportability of their techniques.
Boom Towns and Ghost Countries: Geography, Agglomeration, and Population Mobility - Working Paper 36
Ghost towns dot the West of the United States. These cities boomed for a period and then, for various reasons, fell into a process of decline and have shrunk to a small fraction of their former population. Are there ghost countries—countries that, if there were population mobility, would only have a very small fraction of their current population? This paper carries out four empirical illustrations of the potential magnitude of the "ghost country" problem by showing that the "desired population" of any given geographic region varies substantially.
The history of foreign development assistance is one of movement away from addressing immediate needs to a focus on the underlying causes of poverty. A recent manifestation is the move towards "sustainability," which stresses community mobilization, education, and cost-recovery. This stands in contrast to the traditional economic analysis of development projects, with its focus on providing public goods and correcting externalities.