In response to the recent migrant and refugee crisis, rich countries have redoubled policy efforts to deter future immigration from poor countries by addressing the “root causes” of migration. We review existing evidence on the extent and effectiveness of such efforts.
As waves of migrants have crossed the Mediterranean and the US Southwest border, development agencies have received a de facto mandate: to deter migration from poor countries. Will it work? Here we review the evidence on whether foreign aid has been directed toward these “root causes” in the past, whether it has deterred migration from poor countries, and whether it can do so.
We estimate the economic effects of short-term work by a small sample of farmers from Haiti in the United States, where no US workers are available. We then compare these to the effects of more traditional assistance. We find that these work opportunities benefit Haitian families much more directly, and to a dramatically greater extent, than more traditional forms of assistance—raising workers’ current earnings on average by multiple of 15.
The New Transparency in Development Economics: Lessons from the Millennium Villages Controversy - Working Paper 342
In this paper, Michael Clemens and Gabriel Demombynes discuss how a new transparency is changing the debate about what works.
When Does Rigorous Impact Evaluation Make a Difference? The Case of the Millennium Villages - Working Paper 225
The authors examine the Millennium Villages Project (MVP), an experimental and intensive package intervention to spark sustained local economic development in rural Africa, to illustrate the benefits of rigorous impact evaluation. Estimates of the project’s effects depend heavily on the evaluation method.
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.
Paul Collier's new book, The Bottom Billion: Why the Poorest Countries Are Failing and What Can Be Done About It, argues that many developing countries are doing just fine and that the real development challenge is the 58 countries that are economically stagnant and caught in one or more "traps": armed conflict, natural resource dependence, poor governance, and geographic isolation. In a review of the book recently published in Foreign Affairs, CGD research fellow Michael Clemens explores whether or not Collier's proposed solutions constitute a practical middle path between William Easterly's development pessimism and Jeffrey Sach's development boosterism.
The international goal for rich countries to devote 0.7% of their national income to development assistance has become a cause célèbre for aid activists and has been accepted in many official quarters as the legitimate target for aid budgets. The origins of the target, however, raise serious questions about its relevance.
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.
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 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.
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.
The US government's proposed $5 billion Millennium Challenge Account (MCA) could provide upwards of $250-$300m or more per year per country in new development assistance to a small number of poor countries judged to have relatively "good" policies and institutions. Could this assistance be too much of a good thing and strain the absorptive capacity of recipient countries to use the funds effectively? Empirical evidence from the past 40 years of development assistance suggests that in most potential MCA countries, the sheer quantity of MCA money is unlikely to overwhelm the ability of recipients to use it well, if the funds are delivered effectively.
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.