Ideas to Action:
Independent research for global prosperity
International aid works, but it could work much better. Reform efforts focused on better planning often ignore what constrains aid agencies and takes the bite out of their commitments. In this working paper, Owen Barder shows how forming a "collaborative market" around aid—one marked by transparency and collective regulation—would pave the way for more effective aid.
Despite six decades of trade liberalization, trade policies in rich countries still discriminate against the exports of the world’s poorest countries. Much remains to be done to achieve the goal of meaningful market access for the poorest countries, including reformed rules of origin that facilitate rather than inhibit trade.
As temperatures rise this century, massive tropical storm surges and growing populations may collide in disasters of unprecedented size. CGD senior fellow David Wheeler and co-authors explore the implications for 84 developing countries, providing new data for 577 cyclone-vulnerable coastal cities with populations greater than 100,000. Bottom line: carefully targeted international assistance will be essential to protect population centers.
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In this working paper, commissioned as part of CGD's Drug Resistance Working Group, Prashant Yadav analyzes how changes in supply-chain business practices could help fix the misaligned incentives that hinder worldwide access to high-quality medical goods.
Continuing CGD’s work on weak and fragile states, Aila Matanock of Stanford University investigates why and when states delegate governance functions to others—and why the other agrees to take on the responsibilities. A survey of what works in Melanesia points toward potential solutions to promote stability worldwide.
The emigration of skilled workers from developing countries is often referred to as brain drain and considered something that should be limited. In this paper, resident fellow Michael Clemens takes the term to task and shows instead that a more open skill flow—a more accurate and neutral label—would both benefit home countries and guarantee workers the freedom that is the hallmark of development.
Efforts to decentralize educational systems often arouse fears that the quality of schooling will become less equal as a result. But what’s the evidence? CGD non-resident fellow Lant Pritchett and co-author Martina Viarengo show in a new CGD working paper that the supposedly greater equality of centralized systems is often little more than the illusion of a bureaucracy blinded to local realities.
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Before a 2006 UN Special Session proclaimed there should be universal access to antiretrovirals (ARV), the life-saving drugs were far too expensive for most people with AIDS. In a new CGD working paper, Ethan Kapstein and Josh Busby examine how activists transformed ARVs from expensive private goods into so-called merit goods—products that society agrees should be accessible to all. In a related blog post they discuss the implications of their analysis for AIDS and other global challenges.
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What do developing countries want from global climate negotiations? A new CGD working paper by Jan von der Goltz outlines the negotiating stances of the developing world’s major emitters ahead of December talks in Copenhagen. It shows that developing countries have floated compromises on key issues including burden sharing, monitoring, and implementation; an annex describes how developing countries are already acting to limit the growth of their emissions.
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AND A RELATED BLOG POST
What happens when capital and sophisticated goods flow uphill, from poorer to richer countries? With a new dataset of foreign direct investment and a measure of the sophistication of exports, CGD senior fellow Arvind Subramanian and his co-author Aaditya Mattoo find that developing countries sending goods and services uphill experience economic growth and other development benefits.
Why do so many businesses choose to remain informal? Vijaya Ramachandran and co-authors discover that the answer is more nuanced than often believed. In East Africa, for instance, the difference in productivity between formal and informal firms is often indistinguishable, while in Southern Africa productivity it is more differentiated. Policies to encourage formalization and increase productivity are likely to be more successful in East Africa, whereas an emphasis on job training and vocational skills might be more appropriate in Southern Africa.
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CGD fellow David Roodman and Jonathan Morduch a landmark evaluation of the impact of microcredit on poor households in Bangladesh. They replicate the study's statistical analysis and put an end to the controversy surrounding it by showing that it fails to rule out reverse causation. A positive association between microcredit and household spending, for example, may merely indicate that richer families borrow more. With these studies in doubt, solid academic evidence that microcredit reduces poverty is even scarcer than previously understood.
CGD visiting fellow John Gibson and David McKenzie investigate the economic determinants behind decisions to migrate and decisions to return home. Using Pacific island countries as case studies, they find that expected gains in income may not be as influential as other expectations and preferences.
Billions of people depend on rice to survive. During the 2007–08 rice price crisis, the international community increased funding for food aid and governments tried to stabilize their domestic prices—only to further destabilize the world market. In the newest of three CGD working papers on the crisis, non-resident fellow Peter Timmer untangles the factors affecting world grain prices, from simple supply and demand to hoarding, the availability of storage, and the influence of speculation.
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Economists often use instrumental variables to demonstrate a causal relationship between some trait of a country and economic growth. In this new analysis, Samuel Bazzi and Michael Clemens show that a variety of instrumental variables used in top economics journals have severe but hidden limitations. They present three guidelines to improve future empirical studies of growth determinants.
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In this working paper, Owen Barder raises fundamental questions about the purpose of aid transfers. For many donors the purpose is "poverty reduction" in the narrow sense of growth that reduces poverty. Barder argues that such a focus ignores key trade-offs, such as between reducing current and future poverty and between addressing the causes and symptoms of poverty, and results in less effective aid. This is an important paper for practitioners as well as students of how the aid system works.
This paper evaluates an intervention aimed at improving road safety in Kenya, in which long-distance minibus passengers were encouraged to speak up and admonish their driver when they felt their safety was being compromised. Evocative messages designed to empower passengers were placed in a random sample of more than 1,000 minibuses. Comprehensive insurance claims data suggest the stickers reduced accidents by between one-half and two-thirds, and driver and passenger surveys indicate that passenger heckling contributed to this reduction.
This working paper by CGD research fellow David Roodman provides an original synthesis and exposition of the statistical theory behind one of the most influential studies of the impact of microcredit on borrowers (Pitt and Khandker, Journal of Political Economy, 1998). The present paper also documents Roodman’s program, called cmp which for the first time makes it easy for other researchers to apply these methods. The program implements a "maximum likelihood" estimator for "fully observed, recursive, mixed-process systems of equations," and runs in the commercial statistical analysis package, Stata.
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