Ever since Adam Smith, economists have debated what conditions are required for nations to become wealthy. In a new CGD brief, senior fellow Peter Timmer argues that the "Smithian conditions" – low taxes, good government, and peace – are necessary but far from sufficient. He shows how investments in education, technology, and trade have contributed to the rapid progress of countries like South Korea, Singapore, and Brunei. The "miracle" of getting rich, Timmer concludes, lies in creating durable institutions that perpetuate both sets of policies over many decades.
This new working paper by Owen Barder and Ethan Yeh analyzes the benefits and costs of frontloading and predictability, two innovative features of the International Finance Facility for Immunization (IFFIm). The paper concludes that taken together, predictability and front-loading increase the health impact of vaccine coverage by 22 percent, even taking account of the additional cost of finance. By delivering the same money better, about two million extra lives will be saved.
The G-8 has endorsed sweeping efforts to combat bribery and corrupt payments by international investors. Are these efforts effective? A new working paper by Theodore H. Moran says no. In How Multinational Investors Evade Developed Country Laws, Moran presents evidence that multinational corporations evade anti-corruption laws by making payments to relatives and cronies of developing country rulers. The findings will be discussed at a CGD event on Thursday, Feb. 16.
Maureen Lewis examines the relationship in poor countries between governance and health care woes such as absenteeism, corruption, informal payments, and mismanagement. She finds that returns to investments in health are low where governance is weak and suggests ways that donors could help.
One of the Millennium Challenge Corporation’s (MCC) key innovations is its transparency criteria for country selection. But is the MCC as transparent in its decision-making process, particularly in decisions that are exceptions to rules? This paper argues that the MCC should deepen its transparency agenda, particularly with the consistency and clarity of the country selection decisions and the compact and threshold program development process.
Nancy Birdsall and Kemal Dervis propose that a "Stability and Social Investment Facility" be housed either at the IMF or the World Bank to offer emerging market economies with high debt-burdens lonas on a concessional basis. Read this CGD Working Paper to see how this Facility would be a useful step forward in promoting pro-poor growth.
How do employers decide whether to provide their employees with HIV/AIDS prevention services? CGD Visiting Fellow Vijaya Ramachandran's data from 860 firms and 4,955 workers in Uganda, Tanzania, and Kenya shows that larger firms, and those with more highly skilled workers, invest more in HIV/AIDS prevention. Firms in which more than 50 percent of workers are unionized also are more likely to provide more prevention services.
This new report by a group comprising several of Latin America's most influential economic policymakers, CGD senior fellow Liliana Rojas Suarez, and CGD president Nancy Birdsall suggests ways for the IDB to become more flexible and to step up its support for market oriented reforms. The IDB's new president, Luis Alberto Moreno, warmly endorsed the recommendations, calling them "a key agenda."
As the Bush Administration prepares to announce the reorganization of U.S. foreign assistance, Nancy Birdsall, Stewart Patrick and Milan Vaishnav argue in a new essay that making a dent in global poverty will require that the U.S. address four flaws: low volume and poor quality of aid; incoherence in non-aid development policies; lack of a strategy for weak and failing states; and a penchant for unilateral over multilateral action. Related event: Transformational Diplomacy, a talk by Steve Krasner, Director of the State Department’s Policy Planning Staff.
At a time when the international dialogue surrounding development is focused on increasing the quantity of aid, this paper focuses on how each dollar of foreign assistance can be more effective in reducing poverty. Using a sophisticated mathematical modeling process, the author explores the phenomena of project proliferation and absorptive capacity in foreign aid delivery.
An Aid-Institutions Paradox? A Review Essay on Aid Dependency and State Building in Sub-Saharan Africa- Working Paper 74
Does foreign aid help develop public institutions and state capacity in developing countries? In this Working Paper, the authors suggest that despite recent calls for increased aid to poor countries by the international community, there may be an "aid-institutions paradox." While donor intentions may be sincere, the authors conclude that it is possible that aid could undermine long-term institutional development, particularly in sub-Saharan Africa.
In this new working paper, CGD Research Fellow Stewart Patrick urges analysts and policymakers to look more deeply at the links between failed states and global threats such terrorism, weapons proliferation, organized crime, and global pandemics. He then provides the tools: a framework for determining which types of states are associated with which dangers.
Updated January 2014
David Roodman, creator of the Commitment to Development Index (CDI), has devised a measure of foreign aid flows that takes into account the interest payments that developing countries make to rich country creditors. The Net Aid Transfers data set, which is a component of the CDI, is available for download.
The ninth negotiating round, named the "Doha" Round for the city in Qatar where it was launched, has proven to be unique, because many developing countries are flexing their political muscle as never before. As a result, the Doha Round seems destined to fail unless rich countries cut the trade barriers that hurt developing countries most: those in agriculture.
With the prospects for an ambitious outcome in the Doha Round of trade negotiations seemingly fading, many are lamenting the welfare gains that would be lost from a superficial agreement while others are asking whether it matters for the world's poorest and, if so, how.
Are we doing well by doing good?
This CGD Note by C. Peter Timmer explores the alliance between US farmers, processors and shippers that forms the political foundation of the US food aid program. The Note outlines the current winners and losers of US food aid, and argues that surprisingly, the recipients are most often the losers.
Senior Fellow William R. Cline outlines a "grand bargain" that negotiators can strike at the upcoming "Doha Development Round" that would ahieve increased trade liberalization.
In this CGD Brief, Todd Moss and Vijaya Ramachandran analyze the survey results of 300-400 manufacturing firms in Kenya, Tanzania and Uganda. Their main finding? Foreign firms perform better than local firms in generating jobs, increasing the productivty of their workers, and in skills transfer.