Publications

Does aid to Africa undermine the emergence of a robust African middle class? If so, what can be done about it? In this new working paper, CGD president Nancy Birdsall argues that high and unpredictable aid flows could be making life harder for Africa's small and medium-sized businesses by, for example, inflating wages and making governments less reliant on domestic revenue—and hence less accountable to taxpayers. She urges that donors systematically monitor such impacts in aid-dependent countries and suggests ways that aid could help to bolster Africa's crucial but fragile middle-income groups. Learn more

In response to both public health imperative and unprecedented political pressure, aid to fight HIV/AIDS has increased massively in recent years: global funding to combat the disease in low- and middle-income countries has more than tripled since 2001, from $2.1 billion to an estimated $8.9 billion in 2006. This paper, by Michael Bernstein and Myra Sessions, discusses the increase in aid commitments by the three main financing agencies--the President's Emergency Plan for AIDS Relief (PEPFAR), the Global Fund to Fight AIDS, Tuberculosis and Malaria, and the World Bank's Multi-Country HIV/AIDS Program (MAP)--and the receiving countries' ability, or lack thereof, to absorb the aid. It is one in a series of analyses of the sources of funding for HIV/AIDS programs in developing countries conducted under the Center for Global Development’s HIV/AIDS Monitor.

In CGD working paper 95, research fellow Michael Clemens and Gunilla Petterrsson estimate the number of African-born doctors and professional nurses working abroad in a developed countries circa 2000 using destination-country census data. They then compare this to the stocks of these workers in each country of origin. These numbers are the first standardized, systematic, occupation-specific measure of skilled professionals working in developed countries and born in a large number of developing countries. Compilation of the dataset is a part of CGD's ongoing research on the links between international labor mobility and global development.

Group liability--wherein individuals are both borrowers and guarantors of other client's loans--is often described as the key innovation that led to the explosion of microcredit. It is thought to create incentives for peers to screen, monitor and enforce each other's loans. But some argue that group liability actually discourages good clients from borrowing, jeopardizing growth and sustainability. In this working paper, CGD non-resident fellow Dean Karlan and his co-author discuss the results of a field experiment at a bank in the Philippines, where they randomly reassigned half of the existing group liability centers as individual liability centers. They find that converting group liability to individual liability, while keeping aspects of group lending like weekly repayments and common meeting place, does not affect the repayment rate, and actually attracts new clients. This paper is one in a series of six CGD working papers by Dean Karlan on various aspects of microfinance (Working Paper Nos. 106 –111).

Policymakers often urge microfinance institutions to increase interest rates to eliminate reliance on subsidies. This makes sense if the poor will borrow regardless of interest rates: then micro lenders increase profitability without reducing the poor's access to credit. But there is little evidence as to whether this is actually true. In this working paper, CGD non-resident fellow and his co-author test the elasticity of demand for microcredit using field data from South Africa. They find that price sensitivity increased sharply when individuals were offered a rate above their prior loan's rate. They also found that loan size is far more responsive to changes in loan maturity than to changes in interest rates. This paper is one in a series of six CGD working papers by Dean Karlan on various aspects of microfinance (Working Paper Nos. 106 –111).

Microfinance is often viewed as a tool for empowering women. However, it is not clear that increasing a woman's share of household income also improves her status within the household. In this working paper, CGD non-resident fellow Dean Karlan and his co-authors examine whether access to individually held savings accounts leads to an increase in female decision-making power within the household. They find positive impacts, particularly for women who start with below-average decision-making power; there is a shift towards the purchase of female-oriented durables in the household. This paper is one in a series of six CGD working papers by Dean Karlan on various aspects of microfinance (Working Paper Nos. 106–111).

This week the Millennium Challenge Corp. briefed staff-level representatives of its Board on plans to add two new indicators, for Natural Resources Management and Land Rights and Access, to the country eligibility criteria starting with the FY 2008. Expand and Enhance: A Proposal to Strengthen the MCA Eligibility Process When Adding the Natural Resource Indicators, a new MCA Monitor paper by Steve Radelet, Sheila Herrling, and Sarah Rose, offers suggestions about how to incorporate the new indicators into the existing three-part criteria: Ruling Justly, Investing in People, and Economic Freedom.

Treating poverty-stricken AIDS patients with antiretrovirals (ARVs) extends their lives and enables them to retun to work. It seems reasonable to expect that their children would benefit, too. Now there is research to support this idea. CGD post-doctoral fellow Harsha Thirumurthy and his co-authors use household surveys from western Kenya to show that children of adults who receive ARVs experience large and rapid improvements in schooling and nutritional outcomes. Specifically, children of treated adults work significantly less and spend more time in school; and very young children are better nourished.