The Commitment to Development Index (CDI) of the Center for Global Development ranks 21 of the world’s richest countries by evaluating their stance on seven domains of government policy to determine how those policies affect developing countries. This brief summarizes the components and results of the 2005 edition of the CDI.
Production-weighted Estimates of Aggregate Protection in Rich Countries toward Developing Countries - Working Paper 66
These new estimates of rich-country barriers to developing country exports show that the poorest countries face the highest barriers. The trade component of the 2005 CDI is based on this paper.
Reliving the '50s: The Big Push, Poverty Traps, and Takeoffs in Economic Development - Working Paper 65
Bill Easterly challenges a central rationale of the push for the 2015 Millennium Development Goals: the idea that poverty can be overcome with a big push in foreign aid and investment. Instead, change must come from the bottom up, he says.
In this posthumously published working paper, Dick Sabot argues that the U.S. external deficit is putting at risk the welfare of poor people in developing countries. This accessible paper draws on a forthcoming book, The U.S. as a Debtor Nation, by William Cline, and has been updated to include Cline's latest results.
This CGD brief is based on the book From Social Assistance to Social Development: Targeted Education Subsidies in Developing Countries, by Samuel Morley and David Coady.
After two decades of neglect, interest in agriculture is on the rise. This new working paper by one of the leading thinkers in rural development argues that the reach and efficiency of rural infrastructure, coupled with effective investment in agricultural research and extension, hold the key to unlocking the potential of agriculture for poverty reduction.
Zimbabwe has experienced a precipitous collapse in its economy over the past five years. The government blames its economic problems on external forces and drought. We assess these claims, but find that the economic crisis has cost the government far more in key budget resources than has the donor pullout. We show that low rainfall cannot account for the shock either. This leaves economic misrule as the only plausible cause of Zimbabwe’s economic regression, the decline in welfare, and unnecessary deaths of its children.
Before the G-8 Summit, President Bush said that U.S. aid to Africa had tripled since he took office and would double again by 2010. CGD’s Steve Radelet and Bilal Siddiqi find that total U.S. aid to the region has doubled, but not tripled, since 2000, continuing an upward trend that began in 1996. Going forward, the pledge to double aid implies an additional $4.3 billion in aid to Africa by 2010, accounted for by projected increases in the Millennium Challenge Account ($2.0-$2.5 billion), the global AIDS program (PEPFAR) ($1.5 billion), and the recently announced malaria program ($0.5 billion). The pledge to double aid should be seen as a recommitment to previous (important) pledges, rather than an announcement of something new.
The Global War on Terror and U.S. Development Assistance: USAID allocation by country, 1998-2005 - Working Paper 62
The launch of the Global War on Terror (GWOT) soon after September 11, 2001 has been predicted to fundamentally alter U.S. foreign aid programs. In particular, there is a common expectation that development assistance will be used to support strategic allies in the GWOT, perhaps at the expense of anti-poverty programs. In this paper we assess changes in country allocation by USAID over 1998-2001 versus 2002-05. We find that any major changes in aid allocation related to the GWOT appear to be affecting only a handful of critical countries, namely, Iraq, Afghanistan, Jordan, and the Palestinian Territories. Concerns that there is a large and systematic diversion of U.S. foreign aid from fighting poverty to fighting the GWOT do not so far appear to have been realized.
In this MCA Monitor Analysis Steve Radelet and Mvemba Dizolele address the challenges the new leader of the Millennium Challenge Corporation will face when Paul Applegarth leaves office, including scaling up activities to provide countries with a strong commitment to development with substantial funding for high priority activities to support growth, and increasing the speed of country approval without compromising country ownership.
Debt and Development: How to Provide Efficient, Effective Assistance to the World's Poorest Countries
Nancy Birdsall testified in front of a subcommittee of the House Committee on Financial Services concerning debt relief and IMF gold.
Time to put to rest the stale debate over whether the World Bank should disburse grants or loans to the world’s poorest countries. It is critical that the Bank provide more of its funding as grants, but in a more rational manner than has been the case to date. A third Bank window should distribute grants – and grants only – to very poor countries, for example, with incomes below $500 per capita. Shifting to grants-only for the very poorest countries would ensure they never again find themselves with unpayable debt burdens, and would allow them to re-invest resources into their own economies rather than repay the Bank.
Patents, Price Controls and Access to New Drugs: How Policy Affects Global Market Entry - Working Paper 61
We consider how patent rights and price regulation affect whether new drugs are marketed in a country, and how quickly. The analysis covers a large sample of 68 countries at all income levels and includes all drug launches over the period 1982-2002. It uses newly compiled information on legal and regulatory policy, and is the first systematic analysis of the determinants of drug launch in poor countries. Price control tends to discourage rapid product entry, while the results for patents are mixed. There is evidence that local capacity to innovate matters and that international pricing externalities may play a role.
This report was prepared by a Working Group convened by the Center for Global Development to identify key priorities the Paul Wolfowitz at the start of his tenure at the World Bank on June 1, 2005. It argues that Wolfowitz's biggest challenge will not be managing the Bank, with its 10,000 staff, but leading its shareholders, the nations of the world. The report offers five bold but practical recommendations for restoring the legitimacy and increasing the effectiveness of the world's largest development institution.
The British proposal to create an International Finance Facility in order to 'frontload' $50 billion in aid per year until 2015 has generated a lot of attention and will likely be a major topic at the G8 meeting this July. But the IFF has also been shrouded in confusion and misconceptions. This paper explains the IFF proposal and highlights some of the common misunderstandings surrounding it, including the mechanics of the scheme itself, the potential for a U.S. role, and the expectations of aid which underlie the IFF’s premise. The UK deserves plaudits for elevating global poverty on the international agenda and for seeking ways to better harness the power of private capital markets for development. But the IFF, as currently conceived, is an idea that merits more scrutiny and a healthy dose of skepticism.
Financial Regulations in Developing Countries: Can they Effectively Limit the Impact of Capital Account Volatility? - Working Paper 59
After more than a decade of financial sector liberalization, both of domestic markets and of international financial transactions (capital account liberalization), policymakers in many developing countries remain concerned about the effects that large and highly volatile capital flows have on their financial systems. However, in spite of the tremendous costs associated with the resolution of crises and signs of discontent among the population with the outcome of some reforms, to date there is no significant evidence indicating a reversal of the reform process. While one could advance a number of hypotheses explaining this "commitment to reforms," developing countries’ decisions and actions seem to indicate that policymakers perceive capital inflows as a necessary component to achieve growth and development.
This MCA Monitor Analysis assesses the potential impact of five new global governance indicators--rule of law, government effectiveness, voice and accountability, control of corruption and regulatory quality-- on country qualification for FY 2006 Millennium Challenge Account (MCA) funding.
CGD President Nancy Birdsall testified before the U.S. Senate Foreign Relations Committee on Tuesday, May 17, 2005 on the Commission for Africa report initiated by Tony Blair. She suggested the U.S. should prepare a package of Africa-related initiatives for the UK-hosted G-8 Summit in July covering areas such as peace and security, advance market commitments for vaccines; debt relief, trade, and aid delivery. Sen. Lugar praised the proposal for an advance market commitment for vaccines. "This is an extraordinary idea and I thank you for bringing it to our attention," he said.