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Reality is not yet matching rhetoric in moving from “billions to trillions” to finance the SDGs—how can we accelerate sustainable development finance?
To meet the Sustainable Development Goals (SDGs), the world must ramp up development financing from billions to trillions of dollars. We must think beyond aid, to private finance, and unlocking developing countries’ own resources. The roles of financiers and developing country partners in mobilizing and allocating aid needs to change so that the international community can focus not only on country-by-country development, but also on pressing shared problems, such as climate change and the threat of pandemics.
At the same time that the world is looking to scale up development financing, the development financing system is becoming more complex. There are new donors, like China and India, with different development paradigms. And the emergence of new multilateral development agencies and national development banks add resources to the mix, but raise the question of whether new models of international cooperation are needed to maximize the leverage of scarce financing.
Our research focuses on five questions: How can the international financial system produce sufficient funding for development? How should it be allocated to help countries meet the SDGs and confront global challenges, such as climate change and pandemics? How can financing most effectively mobilize private capital, safeguard public monies, and keep debt levels sustainable? How can domestic resources be mobilized within developing countries? And how should existing institutions be changed to best cooperate?
The story of climate change and development can be told in three simple pie charts: Developing countries are hurt most by climate change (chart #1). Historically, developed countries were most responsible for climate change (chart #2). But now, developing countries are most responsible for climate change (chart #3). That shift may be what leads to a successful climate agreement this December in Paris.
PovcalNet, the World Bank’s global poverty database, provides all kinds of country statistics, including mean income, the share (and number) of the population living in absolute poverty ($1.90), the poverty gap and several measures of income inequality, such as the Gini coefficient. But one thing it doesn’t provide is median income or consumption. The median is a better measure of “typical” well-being than the mean, which is always skewed to the right.
We’ve been waiting for the World Bank to add these medians to its PovcalNet database, but we got impatient and did it ourselves. By manually running a few hundred queries in PovcalNet, we now have (and can share with you) the latest median income/consumption data for 144 countries (using 2011 PPPs — more on our methods below).
China’s presence in Africa is, beyond dispute, large in both trade and what can be called official finance to Africa. But how large, exactly? A new database from the College of William and Mary brings additional resources to help answer the question. This paper describes the new database, its key findings, and its possible applications and limitations of the data, which is being made publicly available for the first time.
There are arguments for and against “spending through the tax system.” On one hand tax incentives are relatively easy to implement; they don’t require an outlay of cash and they make use of information that revenue agencies already collect. But on the other, loading the tax system with too many policy objectives conflicts with the drive for a coherent, simple, transparent tax system. Despite decades of advice from international organisations to curtail tax incentives, they remain a popular tool for governments.
US leadership in multilateral institutions such as the World Bank and regional development banks is flagging. These institutions, rated as some of the most effective development actors globally, provide clear advantages to the United States in terms of geostrategic interests, cost-effectiveness, and results on the ground. Restoring US leadership in institutions like the World Bank will mean giving a greater priority to MDB funding, which today accounts for less than 10 percent of the total US foreign assistance budget and less than 0.1 percent of the total federal budget. Prioritizing multilateral assistance in an era of flat or declining foreign assistance budgets will necessarily mean some reallocation from other pots of foreign assistance money, as well as an effort to address the structural impediments to considering reallocations.
For the first time in its seven-decade-long history, World Bank staff staged a work stoppage earlier this month. Staff are unhappy about the “Change Process,” aka the ongoing internal reorganization that President Kim initiated on his arrival at the bank now more than two years ago.