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  • Author: Vijaya Ramachandran, Alan Gelb, Christian J. Meyer
  • Publication Date: 02-2014
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: We consider economic development of Sub-Saharan Africa from the perspective of slow convergence of productivity, both across sectors and across firms within sectors. Why have "productivity enclaves", islands of high productivity in a sea of smaller low-productivity firms, not diffused more rapidly? We summarize and analyze three sets of factors: First, the poor business climate, which constrains the allocation of production factors between sectors and firms. Second, the complex political economy of business-government relations in Africa's small economies. Third, the distribution of firm capabilities. The roots of these factors lie in Africa's geography and its distinctive history, including the legacy of its colonial period on state formation and market structure.
  • Topic: Development, Economics, Industrial Policy, Markets
  • Political Geography: Africa
  • Author: Amanda Glassman, Justin Sandefur
  • Publication Date: 07-2014
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Across multiple African countries, discrepancies between administrative data and independent household surveys suggest official statistics systematically exaggerate development progress. We provide evidence for two distinct explanations of these discrepancies. First, governments misreport to foreign donors, as in the case of a results-based aid program rewarding reported vaccination rates. Second, national governments are themselves misled by frontline service providers, as in the case of primary education, where official enrollment numbers diverged from survey estimates after funding shifted from user fees to per pupil government grants. Both syndromes highlight the need for incentive compatibility between data systems and funding rules.
  • Topic: Development, Foreign Aid, Foreign Direct Investment, Governance, Developing World
  • Political Geography: Africa
  • Author: Dean Karlan, Pia Raffler, Greg Fischer, Margaret McConnell
  • Publication Date: 11-2014
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: In a field experiment in Uganda, we find that demand after a free distribution of three health products is lower than after a sale distribution. This contrasts with work on insecticide-treated bed nets, highlighting the importance of product characteristics in determining pricing policy. We put forward a model to illustrate the potential tension between two important factors, learning and anchoring, and then test this model with three products selected specifically for their variation in the scope for learning. We find the rank order of shifts in demand matches with the theoretical prediction, although the differences are not statistically significant.
  • Topic: Development, Health
  • Political Geography: Uganda, Africa
  • Author: Michael Clemens, Gabriel Demombynes
  • Publication Date: 09-2013
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: The Millennium Villages Project is a high profile, multi-country development project that has aimed to serve as a model for ending rural poverty in sub-Saharan Africa. The project became the subject of controversy when the methodological basis of early claims of success was questioned. The lively ensuing debate offers lessons on three recent mini-revolutions that have swept the field of development economics: the rising standards of evidence for measuring impact, the “open data” movement, and the growing role of the blogosphere in research debates.
  • Topic: Development, Economics, Poverty, Foreign Aid
  • Political Geography: Africa
  • Author: Benjamin Leo
  • Publication Date: 12-2013
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: The United States government has made repeated declarations over the last decade to align its assistance programs behind developing countries' priorities. By utilizing public attitude surveys for 42 African and Latin American countries, this paper examines how well the US has implemented this guiding principle. Building upon the Quality of Official Development Assistance Assessment (QuODA) approach, I identify what people cite most frequently as the 'most pressing problems' facing their nations and then measure the percentage of US assistance commitments that are directed towards addressing them. By focusing on public surveys over time, this analysis attempts to provide a more nuanced and targeted examination of whether US portfolios are addressing what people care the most about. As reference points, I compare US alignment trends with the two regional multilateral development banks (MDBs) – the African Development Bank and the Inter-American Development Bank. Overall, this analysis suggests that US assistance may be only modestly aligned with what people in Sub-Saharan Africa and Latin America cite as their nation's most pressing problems. By comparison, the African Development Bank – which is majority-led by regional member nations – performs significantly better than the United States. Like the United States, however, the Inter-American Development Bank demonstrates a low relative level of support for people's top concerns.
  • Topic: Security, Crime, Development, Economics, Foreign Aid
  • Political Geography: Africa, United States, America, Latin America
  • Author: Laura E. Seay
  • Publication Date: 01-2012
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Although its provisions have yet to be implemented, section 1502 of the Dodd-Frank Wall Street Reform and Consumer Protection Act is already having a profound effect on the Congolese mining sector. Nicknamed “Obama's Law” by the Congolese, section 1502 has created a de facto ban on Congolese mineral exports, put anywhere from tens of thousands up to 2 million Congolese miners out of work in the eastern Congo, and, despite ending most of the trade in Congolese conflict minerals, done little to improve the security situation or the daily lives of most Congolese. In this report, Laura Seay traces the development of section 1502 with respect to the pursuit of a conflict minerals-based strategy by U.S. advocates, examines the effects of the legislation, and recommends new courses of action to move forward in a way that both promotes accountability and transparency and allows Congolese artisanal miners to earn a living.
  • Topic: Security, Development, Economics, International Trade and Finance, Markets, Poverty, Natural Resources, Financial Crisis
  • Political Geography: Africa, United States, Democratic Republic of the Congo
  • Author: Lant Pritchett, Amanda Beatty
  • Publication Date: 04-2012
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Learning profiles that track changes in student skills per year of schooling often find shockingly low learning gains. Using data from three recent studies in South Asia and Africa, we show that a majority of students spend years of instruction with no progress on basics. We argue shallow learning profiles are in part the result of curricular paces moving much faster than the pace of learning. To demonstrate the consequences of a gap between the curriculum and student mastery, we construct a simple, formal model, which portrays learning as the result of a match between student skill and instructional levels, rather than the standard (if implicit) assumption that all children learn the same from the same instruction. A simulation shows that two countries with exactly the same potential learning could have massively divergent learning outcomes, just because of a gap between curricular and actual pace—and the country which goes faster has much lower cumulative learning. We also show that our simple simulation model of curricular gaps can replicate existing experimental findings, many of which are otherwise puzzling. Paradoxically, learning could go faster if curricula and teachers were to slow down.
  • Topic: Development, Education, Poverty
  • Political Geography: Africa, South Asia
  • Author: Nigel Purvis, Abigail Jones
  • Publication Date: 04-2012
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Worldwide, about 1.3 billion people lack access to electricity (one in five people), while unreliable electricity networks serve another 1 billion people. Roughly 2.7 billion—about 40 percent of the global population—lack access to clean cooking fuels. Instead, dirty, sometimes scarce and expensive fuels such as kerosene, candles, wood, animal waste, and crop residues power the lives of the energy poor, who pay disproportionately high costs and receive very poor quality in return. More than 95 percent of the energy poor are either in sub-Saharan Africa or developing Asia, while 84 percent are in rural areas—the same regions that are the most vulnerable to the adverse effects of climate change.
  • Topic: Climate Change, Development, Economics, Energy Policy, Environment, Poverty
  • Political Geography: Africa, United States, Asia
  • Author: Vijaya Ramachandran, Benjamin Leo, Ross Thuotte
  • Publication Date: 04-2012
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: The World Bank Group faces significant operational changes over the near to medium term. More than half of poor countries are projected to graduate from the World Bank's International Development Association (IDA) concessional assistance over the next 15 years. As a result, IDA's country client base is projected to become dominated by African fragile states. To its credit, the World Bank Group recognizes these coming changes and the unique needs and constraints present in fragile environments. It has publicly expressed a plan to develop an organization-wide strategy tailored specifically for fragile and conflict-affected situations.
  • Topic: Development, Foreign Aid, Fragile/Failed State, World Bank
  • Political Geography: Africa, South Sudan
  • Author: Todd Moss, Stephanie Majerowicz
  • Publication Date: 07-2012
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Ghana's largest and most important creditor for the past three decades has been the International Development Association (IDA), the soft loan window of the World Bank. That will soon come to an end. The combination of Ghana's rapid economic growth and the recent GDP rebasing exercise means that Ghana suddenly finds itself above the income limit for IDA eligibility. Formal graduation is imminent and comes with significant implications for access to concessional finance, debt, and relations with other creditors. This paper considers the specific questions related to Ghana's relationship with the World Bank, as well as the broader questions about the country's new middle-income status.
  • Topic: Development, Economics, Poverty, Foreign Aid, Foreign Direct Investment
  • Political Geography: Africa
  • Author: Dean Karlan, Ryan Knight, Christopher Udry
  • Publication Date: 11-2012
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: We show how financial and managerial constraints impede experimentation and thus limit learning about the profitability of investments. Imperfect information about one's own type, but willingness to experiment to learn one's type, leads to short-run negative expected returns to investments, with some outliers succeeding. We find in an experiment that entrepreneurs invest randomized grants of cash and adopt advice from randomized grants of consulting services, but both lead to lower profits on average. In the long run, they revert back to their prior scale of operations. In a meta-analysis, results from 19 other experiments find mixed support for this theory.
  • Topic: Development, Economics, Markets, Foreign Aid, Foreign Direct Investment
  • Political Geography: Africa
  • Author: Todd Moss, Benjamin Leo
  • Publication Date: 03-2011
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Even under conservative assumptions, IDA will likely face a wave of country graduations by 2025. We project that it will lose more than half of its client countries and that the total population living in IDA-eligible countries will plunge by two-thirds. The remaining IDA-eligible countries will be significantly smaller in size and overwhelmingly African, and a majority are currently considered fragile or post-conflict. This drastically altered client base will have significant implications for IDA's operational and financial models. We conclude with three possible options for IDA and recommend that World Bank shareholders and management begin frank discussions on its future sooner rather than later.
  • Topic: Demographics, Development, Health, World Bank, Health Care Policy
  • Political Geography: Africa
  • Author: John Gorlorwulu
  • Publication Date: 07-2011
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Countries emerging from protracted and devastating conflicts are often seen as needing significant external intervention in their financial markets to rebuild their private sector and promote quick and effective economic recovery. Despite enormous challenges, the provision of credit or the implementation of various lending schemes often dominate efforts to promote domestic private-sector recovery in the immediate aftermath of conflict. This approach raises a number of questions: First, how effective are loan programs in the development of domestic enterprises in the immediate aftermath of conflicts? Second, can loan programs work without significant improvements in the business climate? How sensitive is the design of lending programs to the success of domestic enterprise development projects following devastating conflicts? This paper explores the experience of the Liberian Enterprise Development Finance Company, which was established in 2007 to provide medium-and long-term credit to small and medium domestic enterprises. In addition to shedding light on the challenges such an enterprise faces in a post conflict environment, the paper explores whether the strategies employed are effective and if there are opportunities for effecting remedial changes that could improve the outcomes of such a program in post-conflict environments generally.
  • Topic: Conflict Resolution, Civil War, Development, Foreign Aid, Foreign Direct Investment
  • Political Geography: Africa, Liberia
  • Author: Rachid Boumnijel, Amanda McClelland, Niall Tierney, Jenny C. Aker
  • Publication Date: 09-2011
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Conditional and unconditional cash transfers have been effective in improving development outcomes in a variety of contexts, yet the costs of these programs to program recipients and implementing agencies are rarely discussed. The introduction of mobile money transfer systems in many developing countries offers new opportunities for a more cost-effective means of implementing cash transfer programs. This paper reports on the first randomized evaluation of a cash transfer program delivered via the mobile phone. In response to a devastating drought in Niger, households in targeted villages received monthly cash transfers as part of a social protection program. One-third of targeted villages received a monthly cash transfer via a mobile money transfer system (called zap), whereas one-third received manual cash transfers and the remaining one-third received manual cash transfers plus a mobile phone. We show that the zap delivery mechanism strongly reduced the variable distribution costs for the implementing agency, as well as program recipients' costs of obtaining the cash transfer. The zap approach also resulted in additional benefits: households in zap villages used their cash transfer to purchase a more diverse set of goods, had higher diet diversity, depleted fewer assets and grew more types of crops, especially marginal cash crops grown by women. We posit that the potential mechanisms underlying these results are the lower costs and greater privacy of the receiving the cash transfer via the zap mechanism, as well as changes in intra-household decision-making. This suggests that m-transfers could be a cost-effective means of providing cash transfers for remote rural populations, especially those with limited road and financial infrastructure. However, research on the broader welfare effects in the short- and long-term is still needed
  • Topic: Agriculture, Development, Science and Technology
  • Political Geography: Africa
  • Author: Nicholas Eubank
  • Publication Date: 01-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Since its secession from Somalia in 1991, the east-African nation of Somaliland has become one of the most democratic governments in eastern Africa. Yet Somaliland has never been recognized by the international community. This paper examines how this lack of recognition—and the consequent ineligibility for foreign financial assistance—has shaped Somaliland's political development. It finds evidence that Somaliland's ineligibility for foreign aid facilitated the development of accountable political institutions and contributed to the willingness of Somalilanders to engage constructively in the state-building process.
  • Topic: Development, Foreign Aid
  • Political Geography: Africa, Somalia
  • Author: Benjamin Lee, Julia Barmeier
  • Publication Date: 08-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: In September, world leaders will assemble in New York to review progress towards the Millennium Development Goals (MDGs). Ahead of the ensuing discussions, we examine how individual countries are faring towards achieving the highly ambitious MDG targets. We outline a new MDG Progress Index, which compares country performance against the core MDG targets on poverty, hunger, gender equality, education, child mortality, health, and water. Overall, we find evidence of dramatic achievements by many poor countries such as Honduras, Laos, Ethiopia, Uganda, Burkina Faso, Nepal, Cambodia, and Ghana. In fact, these countries' performance suggests that they may achieve most of the highly ambitious MDGs. Moreover, sub-Saharan Africa accounts for many of the star MDG performers. Interestingly, poor countries perform nearly on par with middle-income countries. Not surprisingly, the list of laggards largely consists of countries devastated by conflict over the last few decades, such as Afghanistan, Burundi, the DRC, and Guinea-Bissau. Most countries fall somewhere in between, demonstrating solid progress on some indicators and little on others.
  • Topic: Development, Human Welfare, Poverty, Third World, United Nations
  • Political Geography: Uganda, Africa, New York, Cambodia, Nepal, United Nations, Ethiopia
  • Author: Michael Clemens, Gabriel Demombynes
  • Publication Date: 10-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: When is the rigorous impact evaluation of development projects a luxury, and when a necessity? We study one high-profile case: the Millennium Villages Project (MVP), an experimental and intensive package intervention to spark sustained local economic development in rural Africa. We illustrate the benefits of rigorous impact evaluation in this setting by showing that estimates of the project's effects depend heavily on the evaluation method. Comparing trends at the MVP intervention sites in Kenya, Ghana, and Nigeria to trends in the surrounding areas yields much more modest estimates of the project's effects than the before-versus-after comparisons published thus far by the MVP. Neither approach constitutes a rigorous impact evaluation of the MVP, which is impossible to perform due to weaknesses in the evaluation design of the project's initial phase. These weaknesses include the subjective choice of intervention sites, the subjective choice of comparison sites, the lack of baseline data on comparison sites, the small sample size, and the short time horizon. We describe how the next wave of the intervention could be designed to allow proper evaluation of the MVP's impact at little additional cost.
  • Topic: Development, Economics, Foreign Aid
  • Political Geography: Africa, Nigeria
  • Author: Tony Blair
  • Publication Date: 12-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Country ownership has become the new watchword in development. The problem for traditional donors is that ownership is too often code for convincing developing country governments to adopt the donors' agenda as their own: a way of securing influence without imposing conditionality. What is really needed is genuine country leadership. As President Obama said when he announced the United States' new development policy at the UN Millennium Development Goals summit in New York in September, “We will partner with countries that are willing to take the lead. Because the days when your development was dictated in foreign capitals must come to an end.”
  • Topic: Development, Human Welfare, Humanitarian Aid, Foreign Aid
  • Political Geography: Africa, United States, New York, United Nations
  • Author: Benedicte Vibe Christensen
  • Publication Date: 11-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: In recent years, China has dramatically expanded its financing and foreign direct investment to Africa. This expansion has served the political and economic interests of China while providing Africa with much-needed technology and financial resources. This paper looks at China's role in Africa from the Chinese perspective. The main conclusion is that China, as an emerging global player and one of Africa's largest trading and financial partners, can no longer ignore the macroeconomic impact of its operations on African economies. Indeed, it is in China's interest that its engagement leads to sustainable economic development on the continent. Trade, financing, and technology transfer must continue at a pace that African economies can absorb without running up against institutional constraints, the capacity to service the costs to future budgets, or the balance of payments. A key corollary is that China should show good governance in its own operations in Africa. Finally, macroeconomic analysis needs to be supported by better analytical data and organization of decision making to support China's engagement in Africa.
  • Topic: Development, Foreign Direct Investment
  • Political Geography: Africa, China
  • Author: David Wheeler, Dan Hammer
  • Publication Date: 11-2010
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Female education and family planning are both critical for sustainable development, and they obviously merit expanded support without any appeal to global climate considerations. However, even relatively optimistic projections suggest that family planning and female education will suffer from financing deficits that will leave millions of women unserved in the coming decades. Since both activities affect fertility, population growth, and carbon emissions, they may also provide sufficient climate-related benefits to warrant additional financing from resources devoted to carbon emissions abatement. This paper considers the economic case for such support. Using recent data on emissions, program effectiveness and program costs, we estimate the cost of carbon emissions abatement via family planning and female education. We compare our estimates with the costs of numerous technical abatement options that have been estimated by Nauclér and Enkvist in a major study for McKinsey and Company (2009). We find that the population policy options are much less costly than almost all of the options Nauclér and Enkvist provide for low-carbon energy development, including solar, wind, and nuclear power, second-generation biofuels, and carbon capture and storage. They are also cost-competitive with forest conservation and other improvements in forestry and agricultural practices. We conclude that female education and family planning should be viewed as viable potential candidates for financial support from global climate funds. The case for female education is also strengthened by its documented contribution to resilience in the face of the climate change that has already become inevitable.
  • Topic: Agriculture, Climate Change, Development, Gender Issues, Third World
  • Political Geography: Africa
  • Author: James Habyarimana, William Jack
  • Publication Date: 04-2009
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: In economies with weak enforcement of traffic regulations, drivers who adopt excessively risky behavior impose externalities on other vehicles, and on their own passengers. In light of the difficulties of correcting inter-vehicle externalities associated with weak third-party enforcement, this paper evaluates an intervention that aims instead to correct the intra-vehicle externality between a driver and his passengers, who face a collective action problem when deciding whether to exert social pressure on the driver if their safety is compromised. We report the results of a field experiment aimed at solving this collective action problem, which empowers passengers to take action. Evocative messages encouraging passengers to speak up were placed inside a random sample of over 1,000 long-distance Kenyan minibuses, or matatus, serving both as a focal point for, and to reduce the cost of, passenger action. Independent insurance claims data were collected for the treatment group and a control group before and after the intervention. Our results indicate that insurance claims fell by a half to two-thirds, from an annual rate of about 10 percent without the intervention, and that claims involving injury or death fell by at least 50 percent. Results of a driver survey eight months into the intervention suggest passenger heckling was a contributing factor to the improvement in safety.
  • Topic: Development, Economics, Political Economy, Third World
  • Political Geography: Kenya, Africa
  • Author: Vijaya Ramachandran, Manju Kedia Shah, Alan Gelb, Taye Mengistae
  • Publication Date: 07-2009
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Why do firms choose to locate in the informal sector? Researchers often argue that the high cost of regulation prevents informal firms from becoming formal and productive. Our results point to a more nuanced story.
  • Topic: Development, Economics, Markets, Labor Issues
  • Political Geography: Africa
  • Author: Macartan Humphreys, James Fearon, Jeremy M. Weinstein
  • Publication Date: 12-2009
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Can brief, foreign-funded efforts to build local institutions have positive effects on local patterns of governance, cooperation, and well-being? Prior research suggests that such small-scale, externally driven interventions are unlikely to substantially alter patterns of social interaction in a community, and that the ability of a community to act collectively is the result of a slow and necessarily indigenous process. We address this question using a randomized field experiment to assess the effects of a community-driven reconstruction (CDR) project carried out by the International Rescue Committee (IRC) in northern Liberia. The project attempted to build democratic, community-level institutions for making and implementing decisions about local public goods. We find powerful evidence that the program was successful in increasing social cohesion, some evidence that it reinforced democratic political attitudes and increased confidence in local decision-making procedures, but only weak evidence that material well-being was positively affected. There is essentially no evidence of adverse effects. *Jeremy Weinstein is on leave from the Center for Global Development.
  • Topic: Conflict Resolution, Civil Society, Civil War, Development, Foreign Aid
  • Political Geography: Africa, Liberia
  • Author: Megan Crowley, Devesh Kapur
  • Publication Date: 02-2008
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: This paper analyzes a relatively neglected facet of the complex debate regarding human capital – higher (or tertiary) education. It addresses five broad questions examining higher education in developing countries. One, are the economic effects of higher education on developing countries different from those in industrialized countries, with its links with labor markets of lesser importance than its impact on institutional development? Two, how does the impact of higher education depend on the type of education and its beneficiaries? Three, with the state unable to meet growing demand pressures, what should be the proper role of the state to ensure not just quality but also equity and access? Four, how should countries rethink the provision of higher education in an “open economy” from seeking education abroad or encouraging foreign providers into the country or simply linking domestic institutions with foreign quality assurance mechanisms? And five, do new technologies offer developing countries a new paradigm to expand the provision of high quality but low cost higher education? The aim is not to provide categorical answers to these complex questions, but rather highlight the analytical and empirical lacuna with regard to each of these question.
  • Topic: Development, Education
  • Political Geography: Africa
  • Author: Satish Chand, Ruth Coffman
  • Publication Date: 02-2008
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: When can a donor (successfully) exit from an on-the -ground presence in a post-conflict state? The answer, according to the analysis presented here, is in decades: figures well beyond what was originally envisioned when peacekeeping troops were first deployed. In the specific cases of Liberia, Mozambique, Solomon Islands, and Timor-Leste considered here, the best case scenario for successful exit ranges from 15 to 27 years. Successful exit, for the purposes of this paper, entails the creation of the necessary fiscal space to fund the recurrent budget from internally generated revenues. This is a necessary, albeit, not sufficient condition for donor exit. Of essence, however, is the time rather than the dollar value of support provided. An extended donor presence, it is argued, provides the space for the creation, sustenance, and maturation of institutions that are finally able to undergird the state from rolling back into state failure on donor exit.
  • Topic: Conflict Resolution, Development, Peace Studies
  • Political Geography: Africa, Asia, Liberia, Mozambique, Solomon Islands, Timor-Leste
  • Author: Vijaya Ramachandran, Manju Kedia Shah, Gaiv Tata
  • Publication Date: 10-2007
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Prior research has emphasized that the high costs and risks arising from a poor investment climate—lack of clear property rights, macro-instability , the burden of regulation and taxation, poor infrastructure, lack of finance, and lack of human capital—have impeded the development of the private sector in sub-Saharan Africa, despite adoption of structural adjustment and liberalization policies. Given the resulting wide differentials in productivity, it is not surprising that most of the African manufacturing sector has not been competitive in exports. However, trade liberalization should have had greater impact on domestic markets for manufactured goods in Africa, leading to either a rapid decline in the size of the manufacturing sector due to import competition, or to a rapid increase in productivity of surviving enterprises. In fact, neither has happened to any significant degree over the last 20 years.
  • Topic: Development, Economics, Regional Cooperation
  • Political Geography: Africa
  • Author: Steve Radelet
  • Publication Date: 11-2007
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Liberia was decimated by 25 years of gross economic mismanagement and 14 years of brutal civil war. GDP fell by over 90% in less than two decades, one of the largest economic collapses in the world since World War II. This paper explores the challenges in reinvigorating rapid, inclusive, and sustained economic growth in the post-war environment. It stresses the importance of not just reigniting growth, but rebuilding the economy in a way that avoids the substantial income concentration of the past and creates significant economic opportunities to groups that were marginalized and excluded in the past. It examines the new government's progress so far, including the major steps it has taken in its first 18 months and the unique way that it has organized government-donor relations.
  • Topic: Development, Government, International Cooperation, International Political Economy
  • Political Geography: Africa, Liberia
  • Author: David Goldsbrough, Ben Elberger
  • Publication Date: 04-2007
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: This paper examines the nature of aid projections in IMF programs with low-income countries. On average, IMF projections of net aid increased sharply in the first year of programs but tapered off in subsequent years. Projections were also significantly more optimistic in countries with low initial levels of aid but differed little across regions. Most notably, projections of net aid to countries in Sub-Saharan Africa following the Gleneagles Summit are significantly more pessimistic than the path implied by commitments to double aid to Africa by 2010. This pattern is strong throughout the group with only two Sub-Saharan African countries showing increases in net aid consistent with the Gleneagles commitments.
  • Topic: Development, Political Economy, Poverty, International Monetary Fund
  • Political Geography: Africa
  • Author: Rena Eichler, Diana Weil, Alexandra Beith
  • Publication Date: 04-2007
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Tuberculosis is a public health emergency in Africa, Eastern Europe, and Central Asia. Of the estimated 1.7 million deaths from TB, 98 percent are in the developing world, the majority being among the poor. In order to reach the MDG and the Stop TB partnership targets for 2015, TB detection rates need to double, treatment success rates must increase to more than 7075 percent, and strategies to address HIV-associated TB and multi-drug resistant TB must be aggressively expanded. DOTS, the internationally-recommended TB control strategy is the foundation of TB control efforts worldwide. A standard recording and monitoring system built on routine service-based data allows nearly all countries in the world to track progress in case detection and treatment completion through routine monitoring. This provides a good base for measuring the impact of different strategies for improving TB control outcomes.
  • Topic: Development, Health, Human Welfare, Humanitarian Aid
  • Political Geography: Africa, Central Asia, Eastern Europe
  • Author: Nancy Birdsall
  • Publication Date: 03-2007
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: The implicit assumption of the donor community is that Africa is trapped by its poverty, and that aid is necessary if Africa is to escape the trap. In this note I suggest an alternative assumption: that Africa is caught in an institutional trap, signaled and reinforced by the small share of income of its independent middle-income population. Theory and historical experience elsewhere suggest that a robust middle-income group contributes critically to the creation and sustenance of healthy institutions, particularly healthy institutions of the state. I propose that if external aid is to be helpful for institution-building in Africa's weak and fragile states, donors need to emphasize not providing more aid but minimizing the risks more aid poses for this group in Africa.
  • Topic: Corruption, Development, Government, Humanitarian Aid
  • Political Geography: Africa
  • Author: Dean Karlan, Jonathan Zinman
  • Publication Date: 01-2007
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Policymakers often prescribe that microfinance institutions increase interest rates to eliminate reliance on subsidies. This strategy makes sense if the poor are rate insensitive: then microlenders increase profitability (or achieve sustainability) without reducing the poor's access to credit. We test the assumption of price inelastic demand using randomized trials conducted by a consumer lender in South Africa. The demand curves are downward-sloping, and steep for price increases relative to the lender's standard rates. We also find that loan size is far more responsive to changes in loan maturity than to changes in interest rates, which is consistent with binding liquidity constraints.
  • Topic: Development, Economics, Markets
  • Political Geography: Africa, South Africa
  • Author: Dean Karlan, Jonathan Zinman
  • Publication Date: 01-2007
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Expanding credit access is a key ingredient of development strategies worldwide. Microfinance practitioners, policymakers, and donors have ambitious goals for expanding access, and seek efficient methods for implementing and evaluating expansion. There is less consensus on the role of consumer credit in expansion initiatives. Some microfinance institutions are moving beyond entrepreneurial credit and offering consumer loans. But many practitioners and policymakers are skeptical about “unproductive” lending. These concerns are fueled by academic work highlighting behavioral biases that may induce consumers to overborrow. We estimate the impacts of a consumer credit supply expansion using a field experiment and follow-up data collection. A South African lender relaxed its risk assessment criteria by encouraging its loan officers to approve randomly selected marginal rejected applications. We estimate the resulting impacts using new survey data on borrower behavior and well-being, and administrative data on loan repayment. We find that the marginal loans increased credit access and produced measurable benefits in the form of increased employment, reduced hunger, and reduced poverty. The marginal loans also appear to have been profitable for the lender. The results must be interpreted with caution but suggest that consumer credit expansions can be welfare-improving.
  • Topic: Development, Markets, Poverty
  • Political Geography: Africa, South Africa
  • Author: Vijaya Ramachandran, Manju Kedia Shah
  • Publication Date: 01-2007
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Much of the growth in Sub-Saharan Africa in the past decade has come from extractive industries, rather than from private, entrepreneurial activity. Furthermore, non-extractive activity in the private sector is often dominated by firms owned by ethnic minorities. This paper analyzes the characteristics of the formal private sector in five countries in sub-Saharan Africa, with a particular emphasis on Black African-owned (indigenous) firms. We find that indigenous firms start smaller and grow more slowly; however their rate of growth is positively influenced by whether the owner-entrepreneur has a university degree. We do not find overwhelming evidence that credit is the binding constraint but we do find that indigenous firms get less access to trade credit than firms owned by minority entrepreneurs. Finally, we discuss policy solutions that might enable a larger number of indigenous entrepreneurs to enter and survive in a vibrant, multi-ethnic private sector.
  • Topic: International Relations, Development, Economics, Humanitarian Aid
  • Political Geography: Africa
  • Author: Gunilla Petterson, Michael A. Clemens
  • Publication Date: 08-2006
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: The migration of doctors and nurses from Africa to developed countries has raised fears of an African medical brain drain. But empirical research on the causes and effects of the phenomenon has been hampered by a lack of systematic data on the extent of African health workers' international movements. We use destination-country census data to estimate the number of African-born doctors and professional nurses working abroad in a developed country circa 2000, and compare this to the stocks of these workers in each country of origin. Approximately 65,000 African-born physicians and 70,000 African-born professional nurses were working overseas in a developed country in the year 2000. This represents about one fifth of African-born physicians in the world, and about one tenth of African-born professional nurses. The fraction of health professionals abroad varies enormously across African countries, from 1% to over 70% according to the occupation and country. 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.
  • Topic: Development, Health, Migration
  • Political Geography: Africa
  • Author: Todd Moss
  • Publication Date: 05-2006
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: The Multilateral Debt Relief Initiative (MDRI) is the latest phase of debt reduction for poor countries from the World Bank, the IMF, and the African Development Bank. The MDRI, which will come close to full debt reduction for at least 19 (and perhaps as many as 40) qualifying countries, is being presented as a momentous leap forward in the battle against global poverty. However, the analysis in this paper suggests that the actual gains may be more modest and elusive. This is not because, as some anti-debt campaigners fear, that the initiative is a mere accounting trick. Rather, the limited short-term financial impact of the MDRI on affected countries is because the debt service obligations being relived were themselves relatively insignificant. For example, in 2004 the average African country in the program paid $19 million in debt service to the World Bank, but received 10 times that amount in new Bank credit and more than 50 times as much in total aid. Just as importantly, finances are rarely the binding constraint on poverty and other development outcomes. This is not to say that the MDRI is futile. Indeed the impact could be considerable over the long-term, especially on the ability of creditors to be more selective in the future. But most of the impact of the MDRI will be long-term and difficult to measure. As such, expectations of the effect on indebted countries and development indicators should be kept modest and time horizons long.
  • Topic: Debt, Development, Economics, International Organization
  • Political Geography: Africa
  • Author: John Nellis
  • Publication Date: 02-2006
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: Too many African state-owned enterprises (SOEs), particularly those in infrastructure sectors, have a long history of poor performance. African governments and donors labored through the 1970s and 1980s to improve SOE performance through “commercialization”——i.e., methods short of ownership change. These generally failed, giving rise, in the 1990s, to much more heavy reliance on private sector participation and ownership. This approach produced some successes, but Africa's private participation in infrastructure (PPI) initiatives have been comparatively few and weak. A number of those that have been launched have run into problems, to the point where both investor and African government interest in the approach has waned in the last few years. The reform is not popular——surveys of public opinion in 15 African countries reveal that only a third of respondents prefer private to state-owned firms. Nonetheless, African states (and their supporters) should not jettison the PPI approach. Rather, they should acknowledge its limitations, and recognize the large scope and moderate pace of the preparatory measures required both to improve their investment climates and to make PPI work effectively.
  • Topic: Development, Economics, Non-Governmental Organization
  • Political Geography: Africa
  • Author: Todd Moss, Nicolas Van de Walle, Gunilla Pettersson
  • Publication Date: 01-2006
  • Content Type: Working Paper
  • Institution: Center for Global Development
  • Abstract: A number of proposals today support a substantial increase in foreign aid levels to sub-Saharan Africa even though this region already receives a historically unprecedented volume of aid. This essay reviews the evidence regarding the potentially negative effects of aid dependence on state institutions, a topic which has received relatively little attention. We note several pathways through which political institutions might be adversely affected and devote particular attention to fiscal and state revenue issues. In addition to reviewing the economic literature on the aid-revenue relationship, this essay brings in the long-standing political science literature on state-building to consider the potential impact of aid dependence on the relationship between state and citizen. We conclude that states which can raise a substantial proportion of their revenues from the international community are less accountable to their citizens and under less pressure to maintain popular legitimacy. They are therefore less likely to have the incentives to cultivate and invest in effective public institutions. As a result, substantial increases in aid inflows over a sustained period could have a harmful effect on institutional development in sub-Saharan Africa.
  • Topic: Development, Humanitarian Aid, Political Economy
  • Political Geography: Africa