Ideas to Action:
Independent research for global prosperity
Oil and gas discoveries in developing countries are often associated with short-sighted economic policies and, in response, calls to insulate resource management from populist impulses.
Most countries in sub-Saharan Africa have not implemented testing of children’s learning that can be benchmarked regionally or globally, in contrast to almost all countries in Latin America. Our analysis of the political economy of cross-national learning measurement in Latin America suggests that policymakers perceive the risks of exposing their education system’s performance by joining cross-national assessments, but they also value the quality of the data generated, the strengthening of domestic technical capacity, and the political benefits in using comparative results to argue for reforms or to advertise progress.
Does governance matter for the long-run financing and effectiveness the multilateral development banks? Does their system of weighted voting matter for their long-run access to financing and their effectiveness as development institutions? Does the voting structure involve some tradeoff between the confidence of creditor countries in the different MDBs, and the sense of ownership, legitimacy, and trust of borrowers?
In this paper, we show a strong association between living close to a conflict zone and acute malnutrition in Nigerian children in 2013. This is related to the severity of the conflict, measured both in terms of the number of conflict deaths and the length of time the child was exposed to conflict.
Researchers from many academic institutions and think tanks have studied the relationship between contraception and women's economic empowerment. In both the developing and developed world, the evidence suggests that access to contraception is not only correlated with but can even cause women’s economic empowerment and drive economic growth.
Globalization is under attack in the West. The debate among pundits is no longer about whether globalization is to blame or not. It is about why globalization is now the bugaboo it has become. A common thread are changes, for the worse, in the economic and social standing of the Western middle class.
In the wake of the global financial crisis, the IMF undertook a series of reforms to its lending facilities to manage volatility and help prevent future crises. The reforms included the adoption of two new lending instruments: the Flexible Credit Line (FCL), introduced in 2009, and the Precautionary and Liquidity Line (PLL), introduced in 2011. They are meant to serve as precautionary measures—effectively, as insurance—for member states with a proven track economic record. Yet, the IMF’s precautionary instruments remain underutilized.
This paper addresses four misconceptions (or ‘myths’) that have likely played a role in the limited utilization of the IMF’s two precautionary credit lines, the Flexible Credit Line (FCL) and the Precautionary and Liquidity Line (PLL). These myths are 1) too stringent qualification criteria that limit country eligibility; 2) insufficient IMF resources; 3) high costs of precautionary borrowing; and 4) the economic stigma associated with IMF assistance. We show, in fact, that the pool of eligible member states is likely to be seven to eight times larger than the number of current users; that with the 2016 quota reform IMF resources are more than adequate to support a larger precautionary portfolio; that the two IMF credit lines are among the least costly and most advantageous instruments for liquidity support countries have; and that there is no evidence of negative market developments for countries now participating in the precautionary lines.
Behind the learning crisis in much of the developing world is a huge data gap.
Theory and some empirical evidence suggest the two goals – reproductive rights for women and women’s economic empowerment – are connected: reproductive rights should strengthen women’s economic power. But our understanding of the magnitude of the possible connection and the nature of any causal link (vs. coevolution or reverse causation) in different times and places is limited. In this note we summarize what we know up to now and what more we could learn about that connection, and set out the data requirements and methodological challenges that face researchers and policymakers who want to better understand the relationship.
The Millennium Challenge Corporation (MCC) was established to provide large-scale grant funding to poor, well-governed countries to support their efforts to reduce poverty and generate economic growth. However, the statutory definition of which countries are “poor” for the purposes of MCC candidacy is inadequate. Based solely on GNI per capita with a rigid graduation threshold, it does not portray a clear picture of broad-based well-being in a country. Using a new, comprehensive country-level dataset of median consumption/income, the authors explore the merits and limitations of such a measure and suggest how it might be applied as an additional determinant of MCC candidacy.
The two economic developments that have garnered the most attention in recent years are the concentration of massive wealth in the richest one percent of the world’s population and the tremendous, growth-driven decline in extreme poverty in the developing world, especially in China. But just as important has been the emergence of large middle classes in developing countries around the planet. This phenomenon—the result of more than two decades of nearly continuous fast-paced global economic growth—has been good not only for economies but also for governance. After all, history suggests that a large and secure middle class is a solid foundation on which to build and sustain an effective, democratic state. Middle classes not only have the wherewithal to finance vital services such as roads and public education through taxes; they also demand regulations, the fair enforcement of contracts, and the rule of law more generally—public goods that create a level social and economic playing field on which all can prosper.
On December 8, 2015, CGD President Nancy Birdsall testified before the Senate Foreign Relations Committee at a hearing about the Millennium Challenge Corporation: Lessons Learned after a Decade and Outlook for the Future.
From the testimony:
The United States has been at the forefront of providing several development-related global public goods, including peace and security via its contributions to international peacekeeping, the monitoring of international sea trade routes, its engagement in forums such as the Financial Action Task Force to stem flows of funding to terrorist organizations, and more. Yet it has not fully capitalized on its comparative advantage in research and development at home that matters especially for the world’s poor, or on its opportunities for globally transformative investments abroad in such areas as clean power and disease surveillance. We propose two areas where the United States should lead on providing even more transformative global public goods.
Protecting tropical forests is good for the global climate and good for development in forested countries. In the absence of robust carbon markets, performance-based funding to reduce emissions from deforestation is a key way donors can provide the incentives and commitment tropical countries need to curtail forest loss.
Tropical forests are undervalued assets in the race to avert catastrophic climate change. They deliver a global—and very public— benefit by capturing and storing atmospheric carbon.
Updated May 19, 2015
Global public goods (GPGs) provide benefits to people in both rich and poor countries. They play a crucial role in safeguarding the social, economic, and political progress of the past century. They are fundamental to managing global risks such as climate change, infectious diseases, and financial crises that can harm developing countries disproportionately; and in exploiting opportunities, such as new vaccines, that can benefit them especially. Yet very little is known about how much governments spend on GPGs that matter for developing countries.
Last year, the Asian Development Bank (ADB) management proposed a major financial restructuring that would increase the amount of bank capital available for investment. This proposal offers many benefits in and of itself. But it also creates an opening for additional and complementary changes in governance that would greatly strengthen the bank and would ensure all of the benefits of the restructuring are fully captured. The merger proposal represents a highly credible down payment by the ADB on a set of innovations that can greatly expand the institution’s ability to respond to the region’s needs and opportunities—and in the process, stimulate similar dynamics at other MDBs.
The current size of the income-secure middle class and its likely future growth, suggest that optimism is indeed warranted for many of today’s middle-income countries. But it is not warranted for all of them, and especially not for most of the low-income countries of South Asia and sub-Saharan Africa — even if they continue to grow at the relatively healthy rates they have enjoyed in the last decade and more.
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