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Sub-Saharan African states urgently need expanded and more dynamic private sectors, more efficient and effective infrastructure/utility provision, and increased investment from both domestic and foreign sources. The long-run and difficult solution is the creation and reinforcement of the institutions that underpin and guide proper market operations. In the interim, African governments and donors have little choice but to continue to experiment with the use of externally supplied substitutes for gaps in local regulatory and legal systems.
The Burnside and Dollar (2000) finding that aid raises growth in a good policy environment has had an important influence on policy and academic debates. We conduct a data gathering exercise that updates their data from 1970-93 to 1970-97, as well as filling in missing data for the original period 1970-93. We find that the BD finding is not robust to the use of this additional data. (JEL F350, O230, O400)
This paper applies a new approach to the estimation of the impact of policy, both the levels and the changes, on wage differentials using a new high-quality data set on wage differentials by schooling level for 18 Latin American countries for the period 1977–1998. The results indicate that liberalizing policy changes overall have had a short-run disequalizing effect of expanding wage differentials, although this effect tends to fade away over time.
Conventional wisdom about US foreign policy toward Africa contains two popular assumptions. First, Democrats are widely considered the party most inclined to care about Africa and the most willing to spend resources on assistance to the continent. Second, the end of the Cold War was widely thought to have led to a gradual disengagement of the US from Africa and reduced American attention toward the continent. This paper analyzes OECD data on US foreign assistance flows from 1961-2000 and finds that neither of these assumptions is true.
In Latin America, privatization started earlier and spread farther and more rapidly than in almost any other part of the world. Despite positive microeconomic results, privatization is highly and increasingly unpopular in the region. While privatization may be winning the economic battle it is losing the political war: The benefits are spread widely, small for each affected consumer or taxpayer, and occur (or accrue) in the medium-term. In contrast, the costs are large for those concerned, who tend to be visible, vocal, urban and organized, a potent political combination.
Poverty reduction is now, and quite properly should remain, the primary objective of the World Bank. But, when the World Bank dreams of a world free of poverty—what should it be dreaming? I argue in this essay that the dream should be a bold one, that treats citizens of all nations equally in defining poverty, and that sets a high standard for what eliminating poverty will mean for human well-being.
The history of foreign development assistance is one of movement away from addressing immediate needs to a focus on the underlying causes of poverty. A recent manifestation is the move towards "sustainability," which stresses community mobilization, education, and cost-recovery. This stands in contrast to the traditional economic analysis of development projects, with its focus on providing public goods and correcting externalities.
Ghost towns dot the West of the United States. These cities boomed for a period and then, for various reasons, fell into a process of decline and have shrunk to a small fraction of their former population. Are there ghost countries—countries that, if there were population mobility, would only have a very small fraction of their current population? This paper carries out four empirical illustrations of the potential magnitude of the "ghost country" problem by showing that the "desired population" of any given geographic region varies substantially.