International corporations interested in joining the fight against global poverty can choose from a wide range of options, according to a new CGD report released last week. The report, Joining the Fight Against Global Poverty: A Menu for Corporate Engagement, suggests six approaches for corporations to consider. Based on interviews with senior executives at 15 firms with global reach, it includes stories about what has worked (and what hasn't) and describes some of the advantages that companies have found in working for development.
This CGD brief summarizes the results of the 2007 Commitment to Development Index (CDI), which ranks 21 of the world's richest countries on their dedication to policies that benefit the five billion people living in poorer nations. The Netherlands comes in first on the 2007 CDI on the strength of ample aid-giving, falling greenhouse gas emissions, and support for investment in developing countries. Close behind are three more big aid donors: Denmark, Sweden, and Norway.
Does Influence-Peddling Impact Industrial Competition? Evidence from Enterprise Surveys in Africa - Working Paper 127
CGD visiting fellow Vijaya Ramachandran and co-authors Manju Kedia Shah and Gaiv Tata used firm-level survey data from more than 1,500 enterprises in six African countries to discover how and why African firms lobby. Their working paper concludes that larger, entrenched firms lobby to protect their market share, and that this inhibits competition, reducing efficiency and growth. The authors suggest that regional integration could be one way out of this trap, because it expands the number of enterprises in the marketplace as well as the size of the market, thus making it both harder and less worthwhile for domestically entrenched enterprises to lobby to protect their market share.
For the past decade, U.S. attention to Latin America has focused mainly on promotion of free trade and opposition to narcotics trafficking and security threats. But there are signs that Washington is beginning to recognize the importance of helping the region tackle longstanding poverty and social inequality. Candidates at this weekend's Democratic presidential debate called for a robust foreign policy in Latin America and the Bush administration has recently shown a renewed interest in promoting development and improving Washington's image in the region. This new brief by CGD president Nancy Birdsall and Inter-American Dialogue president Peter Hakim sets forth a practical agenda for how the U.S. can help. Examples: buttress free trade agreements with aid programs that compensate losers; include land redistribution and alternative employment programs in the so-called "war against drugs."
Sierra Leone, where a brutal decade-long civil war finally ended in 2002, has just held remarkably fair, peaceful and well-organized elections. CGD visiting fellow Carol Lancaster, a former deputy administrator of USAID, was there as an election observer. In a new CGD Essay, she reflects on what democracy means in a country with a mere 35 percent literacy rate, a 70 percent unemployment rate, and life expectancy of only 40 years. She writes that progress will depend upon the new government's ability to tackle corruption, rebuild infrastructure and encourage investment. It will also require the emergence of a domestic constituency with the knowledge, power and commitment to hold new leaders accountable.
Why Doesn't Africa Get More Equity Investment? Frontier Stock Markets, Firm Size and Asset Allocations of Global Emerging Market Funds - Working Paper 112
Africa receives only a tiny fraction of global investments in emerging markets. But the problem is not that fund managers are scared away by a seemingly steady stream of bad news out of Africa, nor is a general marketing of Africa to global investors the solution. Instead the authors of this new CGD working paper find that the small size of African markets and low levels of liquidity are a binding deterrent for foreign institutional investors. Drawing on firm surveys to explore why African firms remain small, the authors offer practical recommendations for increasing portfolio investment in Africa. Learn more
Does foreign direct investment (FDI) channel capital and know-how to developing countries? Or does it bring corruption and abuse of labor standards? Harnessing Foreign Direct Investment shows that FDI's contribution to development can be extremely powerful but that some forms of FDI, especially infrastructure, have serious adverse consequences. CGD non-resident fellow Theodore H. Moran shows for the first time how some investors circumvent the U.S. and host country laws and international treaties outlawing corrupt payments without risking prosecution, and offers recommendations on what to do about it.