Ideas to Action:

Independent research for global prosperity

Publications

 

April 1, 2003

From Promise to Performance: How Rich Countries Can Help Poor Countries Help Themselves

At the United Nations Millennium Summit in 2000 the nations of the world committed to join forces to meet a set of measurable targets for reducing world poverty, disease, illiteracy and other indicators of human misery—all by the year 2015. These targets, later named the Millennium Development Goals, include seven measures of human development in poor countries. At the same summit, world leaders took on several qualitative targets applicable to rich countries, later collected in an eighth Goal. The key elements of the eighth Goal, pledge financial support and policy changes in trade, debt relief, and other areas to assist poor countries'domestic efforts to meet the first seven Goals. Combined, the eight Goals constitute a global compact between poor and rich to work today toward their mutual interests to secure a prosperous future.

December 20, 2002

World Bank Capital Neither Complements Nor Substitutes for Private Capital - Working Paper 20

What should the World Bank optimally do with the US$10 to $20 billion it can loan each year? Has it, in fact, done what is optimal? This study suggests a simple framework within which to measure the World Bank against an optimal international public financier for development. It goes on to argue that a careful treatment of the empirical evidence on Bank lending strongly contradicts optimal behavior under different assumptions. The evidence, in fact, rejects any notion that the Bank has substituted for private capital or that it has successfully catalyzed private development finance.

Michael A. Clemens
December 19, 2002

Do Rich Countries Invest Less in Poor Countries than the Poor Countries Themselves? - Working Paper 19

Global private capital flows have barely touched the poorest nations; the rich invest mostly with the rich. It is possible that failures in the global capital market prevent capital from exploiting high returns in poor countries; it is also possible that fundamental returns to investment are lower in poor countries. In this paper, a novel empirical framework uses standard data to conclude that 85% of wealth bias, whether caused by market failure or not, is domestic in origin. That is, poor country lenders are deterred from investing in poor countries to nearly the same degree that rich-country lenders are.

Michael A. Clemens