Publishing Institution: Center for Global Development / Topic: Poverty

1. Who Are the World’s Poor? A New Profile of Global Multidimensional Poverty

Author:: Gisela Robles Aguilar and Andy Sumner
Publication Date:: 01-2019
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Who are the world’s poor? This paper presents a new global profile of multidimensional poverty using three specifications of multidimensional poverty. The paper draws comparisons with the global monetary poverty profile and with the new World Bank measure of combined monetary and non-monetary poverty; discusses how global poverty differs by specification, the extent of multidimensionality, and presents a set of estimates of the disaggregated characteristics of global multidimensional poverty in 2015. We find the following: (i) at an aggregate level, the overall characteristics of global multidimensional poverty are similar to those of global monetary poverty at $1.90 per day; (ii) at a disaggregated level, we find that poverty in rural areas tends to be characterized by overlapping deprivations in education and access to decent infrastructure (water, sanitation, electricity, and housing) and counterintuitively, given the proximity, in principle, to better health care and economic opportunities, it is child mortality and malnutrition that is more frequently observed within urban poverty; and (iii) the extent of the multidimensionality of poverty differs substantially by region; moreover, some deprivations frequently overlap while others do not.
Topic:: Poverty, World Bank, Inequality, and Rural
Political Geography:: Global Focus

2. Examining World Bank Lending to China: Graduation or Modulation?

Author:: Scott Morris and Gailyn Portelance
Publication Date:: 01-2019
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Under the World Bank’s 2018 capital agreement, borrowing countries are expected to gradually reduce their portfolios once a base income threshold—the Graduation Discussion Income (GDI)—is reached. However, the agreement also affirms the case for ongoing lending to these countries. One justification is tied to external value beyond the borrowing country’s borders (global public goods, or GPGs). Another is tied to building capacity within the borrowing country, which can mean a focus on sub-regions where poverty remains high and capacity weak. In this paper, we examine World Bank graduation policies and lending through the lens of China, which maintains a large portfolio of World Bank projects. China currently exceeds the GDI thresholds for IBRD borrowing at the national level, while income inequality within the country leaves many noncoastal provinces below the GDI per capita threshold. Aggregate and provincial-level analysis of World Bank lending in China shows that less than half of China’s portfolio comprises activities clearly linked to GPGs, while a slight majority of projects are based in provinces with per capita income below the GDI threshold. A substantial number of World Bank projects in China focus on climate change mitigation and transportation infrastructure construction, while a smaller number relate to capacity building. Overall, we find evidence that China’s borrowing is broadly consistent with the 2018 principles of institutional capacity strengthening and GPG-related engagement, although significant areas of bank engagement do not appear to fall within the parameters of these principles.
Topic:: Poverty, Infrastructure, World Bank, and Inequality
Political Geography:: China and Asia

3. The Impact of the Tax System and Social Expenditure on the Distribution of Income and Poverty in Latin America

Author:: Nora Lustig
Publication Date:: 03-2017
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: This paper presents results on the impact of fiscal policy on inequality and poverty in sixteen Latin American countries around 2010. The countries that redistribute the most are Argentina, Brazil, Costa Rica and Uruguay, and the least, Guatemala, Honduras and Peru. At higher social spending, greater redistribution is achieved, but countries with a similar level of social spending show different levels of redistribution which suggests that other factors such as the composition and targeting of the expenditures are involved in determining the redistributive effect beyond its size. Fiscal policy reduces extreme poverty in twelve countries. However, the incidence of poverty after taxes, subsidies and monetary transfers is higher than the pre-fisc poverty rate in Bolivia, Guatemala, Honduras, and Nicaragua, even when fiscal policy does reduce inequality. Expenditure on pre-school and primary education is equalizing and pro-poor in all countries. Spending on secondary education is equalizing in all countries and also pro-poor in some countries but not all. Expenditure on tertiary education is never pro-poor, but it is equalizing, with the exception of Guatemala, where it is regressive and unequalizing and in Venezuela, where its redistributive effect is zero. Health spending is always equalizing but it is pro-poor only in Argentina, Brazil, Chile, Costa Rica, Ecuador, the Dominican Republic, Uruguay and Venezuela.
Topic:: Civil Society, Poverty, Capitalism, and Income Inequality
Political Geography:: Latin America

4. The Impact of Taxes and Social Spending on Inequality and Poverty in El Salvador

Author:: Nora Lustig, Margarita Beneke, and José Andrés Oliva
Publication Date:: 01-2017
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: We conducted a fiscal impact study to estimate the effect of taxes, social spending, and subsidies on inequality and poverty in El Salvador, using the methodology of the Commitment to Equity project. Taxes are progressive, but given their volume, their impact is limited. Direct transfers are concentrated on poor households, but their budget is small so their effect is limited; a significant portion of the subsidies goes to households in the upper income deciles, so although their budget is greater, their impact is low. The component that has the greatest effect on inequality is spending on education and health. Therefore, the impact of fiscal policy is limited and low when compared with other countries with a similar level of per capita income. There is room for improvement using current resources.
Topic:: International Trade and Finance, Poverty, and Income Inequality
Political Geography:: El Salvador

5. Commitment to Development Index 2014

Author:: Owen Barder and Petra Krylová
Publication Date:: 01-2015
Content Type:: Policy Brief
Institution:: Center for Global Development
Abstract:: The Commitment to Development Index ranks 27 of the world's richest countries on their policies that affect more than five billion people living in poorer nations. Moving beyond comparing how much foreign aid each country gives, the CDI quantifies a range of rich country policies that affect poor people.
Topic:: Development, Poverty, Foreign Aid, and Foreign Direct Investment

6. New Estimates of Global Poverty and Inequality: How Much Difference Do Price Data Really Make?

Author:: Peter Edward and Andy Sumner
Publication Date:: 05-2015
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: This paper makes new estimates of global poverty and inequality in 2012 using both ‘old’, 2005 and ‘new’, 2011 purchasing power parity (PPP) price data in order to assess systematically what difference PPP data makes to the estimates. The methodology for the 2011 PPP data is thought to be superior. However, contentions remain. We discuss the PPPs and justify the use of 2011 PPP data to estimate global poverty and inequality, at least for comparison purposes.
Topic:: Poverty

7. Philanthropy, Welfare Capitalism or Radically Different Global Economic Model: What Would It Take to End Global Poverty within a Generation Based on Historical Growth Patterns?

Author:: Peter Edward and Andy Sumner
Publication Date:: 09-2015
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: This paper considers the effectiveness and efficiency of global growth, as a route to poverty reduction, since 1990 and then demonstrates the redistributive challenges implicit in various poverty lines and scenarios: the significance being that this historical data can inform understanding and appreciation of what it would involve to end global poverty in the future. We find that a very modest redistribution of global growth could have ended poverty already at the lowest poverty lines. However, higher, but arguably more reasonable, poverty lines present radically different challenges to the current workings of national economic systems and to global (normative) obligations.
Topic:: Development, Economics, Humanitarian Aid, and Poverty

8. Inequality and Fiscal Redistribution in Middle Income Countries: Brazil, Chile, Colombia, Indonesia, Mexico, Peru and South Africa

Author:: Nora Lustig
Publication Date:: 08-2015
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: This paper examines the redistributive impact of fiscal policy for Brazil, Chile, Colombia, Indonesia, Mexico, Peru and South Africa using comparable fiscal incidence analysis with data from around 2010. The largest redistributive effect is in South Africa and the smallest in Indonesia. While fiscal policy always reduces inequality, this is not the case with poverty.
Topic:: Economics, Poverty, and Social Stratification
Political Geography:: Africa, South America, and Latin America

9. The Median Is the Message: A Good-Enough Measure of Material Well-Being and Shared Development Progress

Author:: Nancy Birdsall and Christian J. Meyer
Publication Date:: 01-2014
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: We argue that survey-based median household consumption expenditure (or income) per capita be incorporated into standard development indicators, as a simple, robust, and durable indicator of typical individual material well-being in a country. Using household survey data available for low- and middle-income countries from the World Bank's PovcalNet tool, we show that as a measure of income-related well-being, it is far superior to the commonly used GDP per capita as well as survey-based measures at the mean. We also argue that survey-based median measures are "distributionaware", i.e. when used as the denominator of various widely available indicators such as mean consumption expenditure per capita they provide a "good-enough" indicator of consumption (or income) inequality. Finally, as a post-2015 indicator of progress at the country-level in promoting shared development and reducing inequality, we propose that the rate of increase in median consumption per capita after taxes and transfers exceed the rate of increase in average consumption in the same period.
Topic:: Development, Diplomacy, Poverty, and World Bank
Political Geography:: United Nations

10. From Maize to Haze: Agricultural Shocks and the Growth of the Mexican Drug Sector

Author:: Oeindrila Dube, Omar Garcia-Ponce, and Kevin Thom
Publication Date:: 02-2014
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: We examine how commodity price shocks experienced by rural producers affect the drug trade in Mexico. Our analysis exploits exogenous movements in the Mexican maize price stemming from weather conditions in U.S. maize-growing regions, as well as export flows of other major maize producers. Using data on over 2,200 municipios spanning 1990-2010, we show that lower prices differentially increased the cultivation of both marijuana and opium poppies in municipios more climatically suited to growing maize. This increase was accompanied by differentially lower rural wages, suggesting that households planted more drug crops in response to the decreased income generating potential of maize farming.
Topic:: Agriculture, Economics, Poverty, War on Drugs, and Narcotics Trafficking
Political Geography:: Latin America and Mexico

11. Migration as a Strategy for Household Finance: A Research Agenda on Remittances, Payments, and Development

Author:: Michael Clemens and Timothy N. Ogden
Publication Date:: 02-2014
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: It is time to fundamentally reframe the research agenda on remittances, payments, and development. We describe many of the research questions that now dominate the literature and why they lead us to uninformative answers. We propose reasons why these questions dominate, the most important of which is that researchers tend to view remittances as states do (as windfall income) rather than as families do (as returns on investment). Migration is, among other things, a strategy for financial management in poor households: location is an asset, migration an investment. This shift of perspective leads to much more fruitful research questions that have been relatively neglected. We suggest 12 such questions.
Topic:: Economics, Migration, Political Economy, Poverty, Labor Issues, and Immigration

12. Stopping Deforestation: What Works and What Doesn't

Author:: Jonah Busch and Kalifi Ferretti-Gallon
Publication Date:: 05-2014
Content Type:: Policy Brief
Institution:: Center for Global Development
Abstract:: A new Center for Global Development meta-analysis of 117 studies has identified the key factors that drive or deter deforestation. Some findings confirm conventional wisdom. Building roads and expanding agriculture in forested areas, for example, worsen deforestation, whereas protected areas deter deforestation. Encouragingly, payments for ecosystem services (PES) programs that compensate people who live in or near forests for maintaining them are consistently associated with lower rates of deforestation. But contrary to popular belief, poverty is not associated with greater deforestation, and the rising incomes brought about by economic growth do not, in themselves, lead to less deforestation. Community forest management and strengthening land tenure, often thought to reduce deforestation while promoting development, have no consistent impact on deforestation.
Topic:: Agriculture, Economics, Environment, and Poverty

13. Understanding Latin America's Financial Inclusion Gap

Author:: Liliana Rojas-Suarez and Maria Alejandra Amado
Publication Date:: 05-2014
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: This paper analyzes Latin America's Financial Inclusion Gap, the difference between the average financial inclusion for Latin America and the corresponding average for a set of comparator countries. At the country level, we assess four types of obstacles to financial inclusion: macroeconomic weaknesses, income inequality, institutional deficiencies and financial sector inefficiencies. A key finding of this paper is that although the four types of obstacles explain the absolute level of financial inclusion, institutional deficiencies and income inequality are the most important obstacles behind the Latin America's financial inclusion gap. From our analysis at the individual level, we find that there is a Latin America-specific effect of education and income. The results suggest that the effect of attaining secondary education on the probability of being financially included is significantly higher in Latin America than in its comparators. Furthermore, the difference in the probability of being financially included between the richest and the poorest individuals is significantly higher in Latin America than in comparator countries.
Topic:: Economics, Education, Human Rights, and Poverty
Political Geography:: Latin America

14. Primary Schooling, Student Learning, and School Quality in Rural Bangladesh

Author:: Mohammad Niaz Asadullah and Nazmul Chaudhury
Publication Date:: 12-2013
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Using a primary school curricular standard basic mathematics competence test, this paper documents the low level of student achievement amongst 10-18 year old rural children in Bangladesh and tests the extent to which years spent in school increases learning. Our sample includes children currently enrolled in school as well as those out of school. About half of the children failed to pass the written competence test, a finding that also holds for those completing primary schooling. Even after holding constant a wide range of factors such as household income, parental characteristics, current enrollment status, and a direct measure of child ability, there remains a statistically significant correlation between schooling attained and basic mathematics competence above and beyond primary school completion. This pattern is more pronounced for girls who have lower competence compared to boys despite higher grade completion.
Topic:: Development, Economics, Islam, and Poverty
Political Geography:: South Asia

15. Is It All About the Tails? The Palma Measure of Income Inequality

Author:: Alex Cobham and Andy Sumner
Publication Date:: 09-2013
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: There are normative or instrumental reasons why inequality may be said to matter (e.g. fairness and meritocracy). However, much global literature has taken an instrumentalist approach as to why high or rising inequality can hinder development. For example, Birdsall (2007) argues that income inequality in developing countries matters for at least three instrumental reasons: where markets are underdeveloped, inequality inhibits growth through economic mechanisms; where institutions of government are weak, inequality exacerbates the problem of creating and maintaining accountable government, increasing the probability of economic and social policies that inhibit growth and poverty reduction; and where social institutions are fragile, inequality further discourages the civic and social life that underpins the effective collective decision-making that is necessary to the functioning of healthy societies.
Topic:: Economics, Poverty, Social Stratification, and Labor Issues

16. The New Transparency in Development Economics: Lessons from the Millennium Villages Controversy

Author:: Michael Clemens and 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, and Foreign Aid
Political Geography:: Africa

17. Commitment to Development Index 2013

Author:: Owen Barder and Petra Krylová
Publication Date:: 11-2013
Content Type:: Policy Brief
Institution:: Center for Global Development
Abstract:: The Commitment to Development Index ranks 27 of the world's richest countries on policies that affect the more than five billion people living in poorer nations. The CDI goes beyond measures of foreign aid to quantify performance in seven areas: Quantity and quality of foreign aid Openness to trade policies that encourage investment and financial transparency Openness to migration Environmental policies Promotion of international security Support for technology creation and transfer Why does the CDI matter? Because in an integrated world, the behavior of rich countries and powerful institutions can profoundly affect the lives of people in poor countries and because poverty and weak institutions in developing countries can breed public health crises, security threats, and economic crises that know no borders. Committing to policies that promote development and well-being is a global imperative: no human being should be denied the chance to live free of poverty and oppression and to enjoy a basic standard of education and health. The CDI countries all promote respect for human life and dignity; the Index looks at whether the policies of rich countries match these aspirations.
Topic:: Security, Development, Education, Health, Poverty, and Fragile/Failed State

18. Savings by and for the Poor: A Research Review and Agenda

Author:: Dean Karlan, Jonathan Zinman, and Aishwarya Lakshmi Ratan
Publication Date:: 11-2013
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: The poor can and do save, but often use formal or informal instruments that have high risk, high cost, and limited functionality. This could lead to undersaving compared to a world without market or behavioral frictions. Undersaving can have important welfare consequences: variable consumption, low resilience to shocks, and foregone profitable investments.
Topic:: Development, Economics, Globalization, International Trade and Finance, Markets, Poverty, and Financial Crisis

19. What's Wrong with Dodd-Frank 1502? Conflict Minerals, Civilian Livelihoods, and the Unintended Consequences of Western Advocacy

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, and Financial Crisis
Political Geography:: Africa, United States, and Democratic Republic of the Congo

20. Due Diligence: An Impertinent Inquiry into Microfinance

Author:: David Roodman
Publication Date:: 01-2012
Content Type:: Policy Brief
Institution:: Center for Global Development
Abstract:: Microfinance: Few development ideas have been so buoyed by high expectations in recent decades, and few have been so buffeted by difficulties in recent years. Images of microfinance lifting people out of poverty now compete with ones of the poor driven by debt to suicide. Where does the truth lie? David Roodman investigates in Due Diligence. He finds no evidence that small loans lift people out of poverty en masse but argues that financial services, like clean water and electricity, are essential to a modern life. The practical question is not whether microfinance should continue, but how it can play to its strengths, which lie in providing useful services to millions of poor people in a businesslike way. Due Diligence is the most complete investigation ever into the sources and consequences of microfinance. Rood - man explores the financial needs of poor people, the history of efforts to meet those needs, the business realities of doing so, and the arguments and evidence about how well modern microfinance is succeeding.
Topic:: Debt, Development, Economics, Globalization, Poverty, and Foreign Direct Investment

21. Global Health and the New Bottom Billion: How Funders Should Respond to Shifts in Global Poverty and Disease Burden

Author:: Amanda Glassman, Andy Sumner, and Denizhan Duran
Publication Date:: 01-2012
Content Type:: Policy Brief
Institution:: Center for Global Development
Abstract:: After a decade of rapid economic growth, many developing countries have attained middle-income status. But poverty reduction in these countries has not kept pace with economic growth. As a result, most of the world's poor—up to a billion people—now live in these new middle-income countries (MICs), making up a “new bottom billion.” As the new MICs are home to most of the world's poor, they also carry the majority of the global disease burden. This poses a challenge to global health agencies, in particular the GAVI Alliance and the Global Fund, which are accustomed to disbursing funds on the assumption that the majority of poor people live in poor countries.
Topic:: Development, Economics, Health, and Poverty

22. The Buoyant Billions: How "Middle Class" Are the New Middle Classes in Developing Countries? (And Why Does It Matter?)

Author:: Andy Sumner
Publication Date:: 10-2012
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Middle-income countries (MICs) are now home to most of the world's extreme poor—the billion people living on less than $1.25 a day and a further billion people living on between $1.25 and $2. At the same time, many MICs are also home to a drastically expanding emerging middle or nonpolar group, called here the “buoyant billions.” This group includes those (mostly in MICs) living on between $2 and $4 a day and another billion people (also mostly in MICs) between $4 and $10 a day. Although they are above the average poverty line for developing countries, many people in these new “middle classes” may be insecure and at risk of falling into poverty. This paper outlines indicative data on trends relating to poverty and the nonpoor by different expenditure groups, and critically reviews the recent literature that contentiously labels such groups as “middle class.” The paper argues that such groups are neither extremely poor nor secure from poverty and that such groups are worthy of closer examination because their expansion may potentially have wider societal implications related, for example, to taxation, governance, and—ultimately—domestic politics.
Topic:: Development, Economics, Emerging Markets, and Poverty

23. Declining Inequality in Latin America in the 2000s: The Cases of Argentina, Brazil, and Mexico.

Author:: Nora Lustig, Luis F. Lopez-Calva, and Eduardo Ortiz-Juarez
Publication Date:: 10-2012
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Between 2000 and 2010, the Gini coefficient declined in 13 of 17 Latin American countries. The decline was statistically significant and robust to changes in the time interval, inequality measures, and data sources. In-depth country studies for Argentina, Brazil, and Mexico suggest two main phenomena underlie this trend: a fall in the premium to skilled labor and more progressive government transfers. The fall in the premium to skills resulted from a combination of supply, demand, and institutional factors. Their relative importance depends on the country.
Topic:: Development, Economics, Emerging Markets, Globalization, International Trade and Finance, Poverty, and Social Stratification
Political Geography:: Brazil, Argentina, Latin America, and Mexico

24. Commitment to Development Index 2012

Author:: David Roodman
Publication Date:: 10-2012
Content Type:: Policy Brief
Institution:: Center for Global Development
Abstract:: Why does the CDI matter? Because in an increasingly integrated world, the behavior of rich countries can profoundly affect the lives of people in poor countries and because poverty and weak institutions in developing countries can breed public health crises, security threats, and economic crises that know no borders. Committing to policies that promote develop- ment and well-being is a global imperative—no human being should be denied the chance to live free of poverty and oppression and to enjoy a basic standard of education and health. The CDI countries, all democracies, preach concern for human life and dignity within their own borders; the Index looks at whether rich countries' actions match their words.
Topic:: Development, Economics, Education, Health, and Poverty

25. The Impact of Taxes and Social Spending on Inequality and Poverty in Argentina, Bolivia, Brazil, Mexico, and Peru: A Synthesis of Results

Author:: Nora Lustig
Publication Date:: 11-2012
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: We apply a standard tax-and-benefit-incidence analysis to estimate the impact on inequality and poverty of direct taxes, indirect taxes and subsidies, and social spending (cash and food transfers and in-kind transfers in education and health). The extent of inequality reduction induced by direct taxes and transfers is rather small (2 percentage points on average), especially when compared with that found in Western Europe (15 percentage points on average). What prevents Argentina, Bolivia, and Brazil from achieving similar reductions in inequality is not the lack of revenues but the fact that they spend less on cash transfers—especially transfers that are progressive in absolute terms—as a share of GDP. Indirect taxes result in that net contributors to the fiscal system start at the fourth, third, and even second decile on average, depending on the country. When in-kind transfers in education and health are added, however, the bottom six deciles are net recipients. The impact of transfers on inequality and poverty reduction could be higher if spending on direct cash transfers that are progressive in absolute terms were increased, leakages to the nonpoor reduced, and coverage of the extreme poor by direct transfer programs expanded.
Topic:: Development, Economics, Education, Health, and Poverty
Political Geography:: Brazil, Argentina, Latin America, Mexico, Peru, and Bolivia

26. Europe Beyond Aid: Assessing Europe's Commitment to Development

Author:: David Roodman, Owen Barder, Julia Clark, Alice Lépissier, and Liza Reynolds
Publication Date:: 12-2012
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: European countries pride themselves on being leaders in spurring development within poor countries. We find that Europe's approach to development could be characterised as energetically tackling the symptoms of poor economic opportunities for developing countries by providing effective aid, while doing relatively little to tackle the underlying structural causes of poverty. We use the Center for Global Development Commitment to Development Index (CDI) as a tool to examine Europe's performance overall. We combine the scores for the twenty-one European countries which are included in the 2012 edition of the Commitment to Development Index to calculate the single score they would have obtained if they had been a single country. This represents the combined commitment to development of these countries, by giving appropriate weight to the larger, more populous countries in Europe, which tend to have less development-friendly policies than the Nordic countries and the Netherlands. Our calculations show that compared to the other countries in the CDI, Europe as a whole performs better than most CDI countries on aid and environment, but less well in other dimensions such as trade and security. This paper provides the background to a series of more detailed studies of the policies of European countries, individually and collectively through the European Union, in each dimension of the CDI, which the Center for Global Development in Europe is coordinating.
Topic:: Development, Political Economy, Poverty, and Foreign Aid
Political Geography:: Europe

27. The Negative Consequences of Overambitious Curricula in Developing Countries

Author:: Lant Pritchett and 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, and Poverty
Political Geography:: Africa and South Asia

28. Value for Money in Malaria Programming: Issues and Opportunities

Author:: Paul Wilson and Ya'ir Aizenman
Publication Date:: 04-2012
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Although there have been studies of the cost-effectiveness of particular malaria interventions, there has been less analysis of broader aspects of value for money in malaria programming. In this paper, Paul Wilson and Ya'ir Aizenman examine opportunities for value for money in malaria control, extensively analyzing the effectiveness of interventions and current trends in spending. The authors conclude that on the whole resources for malaria control are well spent, but also note some areas where meaningful efficiencies might be possible, including (i) improving procurement procedures for bed nets, (ii) developing efficient ways to replace bed nets as they wear out, (iii) reducing overlap of spraying and bed net programs, (iv) expanding the use of rapid diagnostics, and (v) scaling up intermittent presumptive treatment for pregnant women and infants. In some ways, improving value requires increasing the quality of services—for example, while changing insecticides might increase the cost of spraying campaigns in the short run, it could save much larger amounts in the long run by forestalling resistance. In addition to these recommendations, this paper offers a framework for analyzing value for money in malaria and considers a comprehensive set of factors, from spatial heterogeneity in malaria transmission to mosquito resistance to insecticides. If better results can be achieved at lower cost—and often they can be—donors and recipients alike should better utilize such opportunities. This paper offers not only recommendations to achieve better results in malaria, but also a platform for evaluation of global health interventions that will be useful in future analyses.
Topic:: Development, International Cooperation, Poverty, and Health Care Policy

29. Energizing Rio+20: How the United States Can Promote Sustainable Energy for All at the 2012 Earth Summit

Author:: Nigel Purvis and 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, and Poverty
Political Geography:: Africa, United States, and Asia

30. The Quality of Official Development Assistance Assessment 2009: Is Aid Quality Improving?

Author:: Nancy Birdsall, Homi Kharas, and Rita Perakis
Publication Date:: 04-2012
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: This report presents the results of the second edition of the Quality of Official Development Assistance (QuODA) assessment, with a focus on the changes that have occurred in donor performance since the first edition. These results were released in summary form in November, 2011, just before the Fourth High Level Forum on Aid Effectiveness in Busan, South Korea.
Topic:: International Relations, Development, Economics, Humanitarian Aid, Poverty, and Foreign Aid
Political Geography:: South Korea

31. State Health Insurance and Out-of-Pocket Health Expenditures in Andhra Pradesh, India

Author:: Victoria Fan, Anup Karan, and Ajay Mahal
Publication Date:: 06-2012
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: In 2007, the state of Andhra Pradesh in southern India began rolling out the Aarogyasri health insurance to reduce catastrophic health expenditures in households “below the poverty line.” We exploit variation in program roll-out over time and districts to evaluate the impacts of the scheme using difference-in-differences. Our results suggest that, within the first year of implementation, Phase I of Aarogyasri significantly reduced out-of-pocket inpatient expenditures and, to a lesser extent, outpatient expenditures. These results are robust to checks using quantile regression and matching methods. No clear effects on catastrophic health expenditures or medical impoverishment are seen. Aarogyasri is not benefiting scheduled caste and scheduled tribe households as much as the rest of the population.
Topic:: Health, Poverty, and Health Care Policy
Political Geography:: India, Asia, and Andhra Pradesh

32. No Longer Poor: Ghana's New Income Status and Implications of Graduation from IDA

Author:: Todd Moss and 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, and Foreign Direct Investment
Political Geography:: Africa

33. A Note on the Middle Class in Latin America

Author:: Nancy Birdsall
Publication Date:: 08-2012
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: The Carbon Monitoring for Action (CARMA) database provides information about the carbon dioxide emissions, electricity production, corporate ownership, and location of more than 60,000 power plants in over 200 countries. Originally launched in 2007, CARMA is provided freely to the public at www.carma.org and remains the only comprehensive data source of its kind. This paper documents the methodology underpinning CARMA v3.0, released in July, 2012. Comparison of CARMA model output with reported data highlights the general difficulty of precisely predicting annual electricity generation for a given plant and year. Estimating the rate at which a plant emits CO2 (per unit of electricity generated) generally faces fewer obstacles. Ultimately, greater disclosure of plant-specific data is needed to overcome these limitations, particularly in major emitting countries like China, Russia, and Japan. For any given plant in CARMA v3.0, it is estimated that the reported value is within 20 percent of the actual value in 85 percent of cases for CO2 intensity, 75 percent for annual CO2 emissions, and 45 percent for annual electricity generation. CARMA's prediction models are shown to offer significantly better estimates than more naïve approaches to estimating plant-specific performance.
Topic:: Democratization, Economics, Poverty, and Social Stratification
Political Geography:: Russia, Japan, China, America, and Latin America

34. Where Will the World's Poor Live? An Update on Global Poverty and the New Bottom Billion

Author:: Andy Sumner
Publication Date:: 09-2012
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: This paper updates the distribution of global poverty data and makes projections up to 2020. The paper asks the following question: Do the world's extreme poor live in poor countries? It is argued that many of the world's extreme poor already live in countries where the total cost of ending extreme poverty is not prohibitively high as a percentage of GDP. And in the not-too-distant future, most of the world's poor will live in countries that do have the domestic financial scope to end at least extreme poverty. This would imply a reframing of global poverty as largely a matter of domestic distribution.
Topic:: Development, Economics, and Poverty

35. International Finance Corporation (ABCs of the IFIs Brief)

Author:: Jenny Ottenhoff
Publication Date:: 09-2011
Content Type:: Policy Brief
Institution:: Center for Global Development
Abstract:: The International Finance Corporation (IFC) is a multilateral financial institution that provides financial and technical assistance to the private sector in middle- and low- income countries. Unlike other international financial institutions, the IFC operates on a commercial basis and invests exclusively in for-profit projects that promote poverty reduction and development. Increasingly, the IFC is investing in the world's poorest countries and fragile states that have few private investors. IFC investments support a range of activities including agribusiness, manufacturing, health and education, microfinance programs, and infrastructure development.
Topic:: Development, Markets, Poverty, Foreign Aid, and Foreign Direct Investment

36. Affordable Interventions to Prevent Noncommunicable Diseases Worldwide

Author:: Amanda Glassman and Kate McQueston
Publication Date:: 08-2011
Content Type:: Policy Brief
Institution:: Center for Global Development
Abstract:: Noncommunicable diseases (NCDs) such as cancer, diabetes, respiratory and cardiovascular diseases, and mental illnesses are the leading cause of death and disability worldwide. Surprisingly, the burden is especially high in developing countries, which bear 80 percent of deaths due to NCDs. Four main factors are at fault: tobacco use, physical inactivity, unhealthy diets, and alcohol use. The good news is that much of the NCD burden can be prevented through interventions that are affordable in most countries. The United States can help now by taking five low-cost or no-cost steps:End tariff-reducing trade practices for tobacco.Partner with public and private donors.Leverage U.S. influence in multilateral development institutions.Exploit synergies between disease control and other development projects.Encourage evidence-informed budget allocation.
Topic:: Development, Health, and Poverty
Political Geography:: United Nations

37. Iraq's Last Window: Diffusing the Risks of a Petro-State

Author:: Johnny West
Publication Date:: 09-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Although Iraq's oil industry is 80 years old, it has an opportunity to introduce an oil dividend based on the expansion of production currently being undertaken. Even assuming a conservative price for crude, the resulting predicted rise in revenues will allow the government to allocate a significant dividend which halves poverty, helps diversify the economy by creating demand at all income levels for goods and services, and stimulates capital formation—all without cutting into the government's capital spending plans. A dividend, starting at $220 per capita in October 2012 and rising with expanded production, could also cement the affiliation of all citizens to Iraqi territorial integrity, act as a powerful disincentive to secession in oil-producing regions, and create popular pressure among all sections of the population to discourage acts by the ongoing insurgency which disrupt economic reconstruction. Logistically, dividends could be mapped onto the nationwide and universal rationing system, as the electoral roll has been, and combined with Iraq's ubiquitous mobile phone networks and new biometric ID cards. A partial dividend would create a strong domestic political constituency for transparency to reinforce international technical efforts to help the government manage oil revenues and create efficient management structures. It would also help Iraq develop an alternative economic model to a future, which the country's present trajectory now threatens, of a bloated state as the country's only significant employer, with all the attendant problems of patronage networks, politicization of the civil service, and outright corruption. Support for an oil dividend policy is growing among some politicians, notably those seeking votes among the Iraqi poor such as the Sadrists and Fadhila party. International support could help the government structure a dividend which functions well and in the public interest.
Topic:: Development, Oil, and Poverty
Political Geography:: Iraq, Middle East, and Arabia

38. Brave New World: A Literature Review of Emerging Donors and the Changing Nature of Foreign Assistance

Author:: Vijaya Ramachandran and Julie Walz
Publication Date:: 11-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: In this paper, we look at the scale and scope of emerging donors, many of which are developing economies themselves. On the basis of a survey of the literature, we find that estimates of annual aid flows from new donors (so-called non-DAC donors) vary greatly and are somewhere between $11 billion and $41.7 billion, or 8 and 31 percent of global gross ODA. We find that new donors are not a monolithic group but instead represent three distinct models of aid delivery, which we describe as the DAC Model, the Arab Model and the Southern Model.
Topic:: Development, Poverty, International Affairs, and Foreign Aid
Political Geography:: Arabia

39. Why Did Abolishing Fees Not Increase Public School Enrollment in Kenya?

Author:: Tessa Bold, Mwangi Kimenyi, Germano Mwabu, and Justin Sandefur
Publication Date:: 10-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: A large empirical literature has shown that user fees signicantly deter public service utilization in developing countries. While most of these results reflect partial equilibrium analysis, we find that the nationwide abolition of public school fees in Kenya in 2003 led to no increase in net public enrollment rates, but rather a dramatic shift toward private schooling. Results suggest this divergence between partial- and general-equilibrium effects is partially explained by social interactions: the entry of poorer pupils into free education contributed to the exit of their more affluent peers.
Topic:: Education, Government, and Poverty
Political Geography:: Kenya and Africa

40. Global Health and the New Bottom Billion: What Do Shifts in Global Poverty and the Global Disease Burden Mean for GAVI and the Global Fund?

Author:: Amanda Glassman, Andy Sumner, and Denizhan Duran
Publication Date:: 10-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: After a decade of rapid growth in average incomes, many countries have attained middle-income country (MIC) status. At the same time, the total number of poor people hasn't fallen as much as one might expect and, as a result, most of the world's poor now live in MICs. In fact, there are up to a billion poor people or a 'new bottom billion' living not in the world's poorest countries but in MICs. Not only has the global distribution of poverty shifted to MICs, so has the global disease burden. This paper examines the implications of this 'new bottom billion' for global health efforts and recommends a tailored middle-income strategy for the Global Fund and GAVI. The paper describes trends in the global distribution of poverty, preventable infectious diseases, and health aid response to date; revisits the rationale for health aid through agencies like GAVI and the Global Fund; and proposes a new MIC strategy and components, concluding with recommendations.
Topic:: Development, Globalization, Health, and Poverty

41. Dial "A" for Agriculture: A Review of Information and Communication Technologies for Agricultural Extension in Developing Countries

Author:: Jenny C. Aker
Publication Date:: 09-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Agriculture can serve as an important engine for economic growth in developing countries, yet yields in these countries have lagged far behind those in developed countries for decades. One potential mechanism for increasing yields is the use of improved agricultural technologies, such as fertilizers, seeds and cropping techniques. Public-sector programs have attempted to overcome information-related barriers to technological adoption by providing agricultural extension services. While such programs have been widely criticized for their limited scale, sustainability and impact, the rapid spread of mobile phone coverage in developing countries provides a unique opportunity to facilitate technological adoption via information and communication technology (ICT)-based extension programs. This article outlines the potential mechanisms through which ICT could facilitate agricultural adoption and the provision of extension services in developing countries. It then reviews existing programs using ICT for agriculture, categorized by the mechanism (voice, text, internet and mobile money transfers) and the type of services provided. Finally, we identify potential constraints to such programs in terms of design and implementation, and conclude with some recommendations for implementing field-based research on the impact of these programs on farmers' knowledge, technological adoption and welfare.
Topic:: Agriculture, Development, Poverty, Science and Technology, Foreign Aid, and Foreign Direct Investment

42. Measuring the Quality of Aid: QuODA Second Edition

Author:: Nancy Birdsall, Homi Kharas, and Rita Perakis
Publication Date:: 11-2011
Content Type:: Policy Brief
Institution:: Center for Global Development
Abstract:: As demonstrated by the Paris Declaration on Aid Effectiveness and Accra Agenda for Action, the development community has reached a broad consensus on what constitutes good practice for the delivery of development assistance. But since these high-level agreements were made, there has been almost no independent quantitative analysis of whether donors are meeting the standards they have set for themselves.
Topic:: Development, Humanitarian Aid, Poverty, Treaties and Agreements, and Foreign Aid
Political Geography:: Paris

43. Where Is the Virtue in the Middle Class?

Author:: Charles Kenny
Publication Date:: 11-2011
Content Type:: Policy Brief
Institution:: Center for Global Development
Abstract:: It is widely agreed by economists and political scientists that the middle class is vital to progress because of its many virtues. But it is difficult to define a middle class by income in a manner that does not either include a lot of very poor people or suggest that most countries have no middle class to speak of. Survey evidence suggests the middle class is not culturally unique, particularly socially progressive, or entrepreneurial. When the middle of the income distribution sides with poor people in demanding equitable access to quality government services (instead of siding with the wealthy for small government and unequal access), pro-poor policies are far more likely to emerge. But this necessary role should not be confused with virtue.
Topic:: Development, Economics, Education, Poverty, and Social Stratification

44. Safer, Faster, Cheaper: Improving Clinical Trials and Regulatory Pathways to Fight Neglected Diseases

Author:: Amanda Glassman and Thomas Bollyky
Publication Date:: 10-2011
Content Type:: Policy Brief
Institution:: Center for Global Development
Abstract:: More than a billion people suffer from neglected diseases, and millions die each year. Effective remedies have been few because of low investment, but with a surge in funding in the past decade, dozens of candidate drugs and vaccines are now in the pipeline. Before these products can reach the people who need them, they must be tested in large-scale clinical trials that are expensive, time-consuming, and risky. These trials must be conducted with highly vulnerable patients in resource-and infrastructure-poor countries where the neglected disease burden exists. There is not enough funding to support the costs and regulatory oversight of these clinical trials. A two-pronged approach to improve the quality and lower the cost of clinical trials in the developing world is needed.
Topic:: Development, Health, Poverty, and Infrastructure

45. The High Return to Private Schooling in a Low-Income Country

Author:: Tessa Bold, Mwangi Kimenyi, Germano Mwabu, and Justin Sandefur
Publication Date:: 12-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Existing studies from the United States, Latin America, and Asia provide scant evidence that private schools dramatically improve academic performance relative to public schools. Using data from Kenya—a poor country with weak public institutions—we find a large effect of private schooling on test scores, equivalent to one full standard deviation. This finding is robust to endogenous sorting of more able pupils into private schools. The magnitude of the effect dwarfs the impact of any rigorously tested intervention to raise performance within public schools. Furthermore, nearly two thirds of private schools operate at lower cost than the median government school.
Topic:: Development, Education, Government, and Poverty
Political Geography:: Kenya, United States, Asia, and Latin America

46. More Money or More Development: What Have the MDGs Achieved?

Author:: Charles Kenny and Andy Sumner
Publication Date:: 12-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: What have the MDGs achieved? And what might their achievements mean for any second generation of MDGs or MDGs 2.0? We argue that the MDGs may have played a role in increasing aid and that development policies beyond aid quantity have seen some limited improvement in rich countries (the evidence on policy change in poor countries is weaker). Further, there is some evidence of faster-than-expected progress improving quality of life in developing countries since the Millennium Declaration, but the contribution of the MDGs themselves in speeding that progress is—of course—difficult to demonstrate even assuming the MDGs induced policy changes after 2002. The paper concludes with reflections on what the experience of MDGs in terms of global goal setting has taught us and how things might be done differently if there were to be a new set of MDGs after 2015. Any MDGs 2.0 need targets that are set realistically and directly link aid flows to social policy change and to results.
Topic:: Development, Economics, Humanitarian Aid, Poverty, and Foreign Aid

47. The Best Things in Life are (Nearly) Free: Technology, Knowledge and Global Health

Author:: Charles Kenny and Ursula Casabonne
Publication Date:: 05-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Casabonne and Kenny argue that two major factors underlie improved global health outcomes: first, the discovery of cheap technologies that can dramatically improve outcomes; second, the adoption of these technologies, thanks to the spread of knowledge. Other factors have played a role. Increased income not only allows for improved nutrition, but also helps to improve access to more complex preventative technologies. Institutional development is a second key to the spread of such complex technologies. Nonetheless, evidence of dramatic health improvements even in environments of weak institutions and stagnant incomes suggests that the role of these factors may be secondary.
Topic:: Development, Health, Poverty, and Foreign Aid

48. Declining Inequality in Latin America: Some Economics, Some Politics

Author:: Nancy Birdsall, Nora Lustig, and Darryl McLeod
Publication Date:: 05-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Latin America is known to have income inequality among the highest in the world. That inequality has been invoked to explain low growth, poor education, macroeconomic volatility, and political instability. But new research shows that inequality in the region is falling. In this paper we summarize recent findings on inequality, present and discuss an assessment of how the type of political regime matters and why, and investigate the relationship between changes in inequality and changes in the size of the middle class in the region. We conclude with some questions about whether and how changes in income distribution and in middle-class economic power will affect the politics of distribution in the future.
Topic:: Economics, Poverty, and Social Stratification
Political Geography:: Latin America

49. Economics and Emigration: Trillion-dollar Bills on the Sidewalk?

Author:: Michael Clemens
Publication Date:: 08-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Large numbers of people born in poor countries would like to leave those countries, but barriers prevent their emigration. Those barriers, according to economists' best estimates to date, cost the world economy much more than all remaining barriers to the international movement of goods and capital combined. Yet economists spend much more time studying the movement of goods and capital, and when they study migration at all, they focus on the effects of immigration on nonmigrants in destination countries. I ask why this is the case and sketch a four-point research agenda on the effects of emigration. Barriers to emigration deserve a research priority that is commensurate with their likely colossal economic effects.
Topic:: Economics, Migration, Poverty, and Immigration

50. Incentive Proliferation? Making Sense of a New Wave of Development Programs

Author:: William Savedoff
Publication Date:: 08-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: A new wave of development programs that explicitly use incentives to achieve their aims is under way. They are part of a trend, accelerating in recent years, to disburse development assistance against specific and measurable outputs or outcomes. With a proliferation of new ideas under names such as “payments for performance,” “output-based aid,” and “results based financing,” it is easy to lose sight of basic underlying similarities in these approaches and to miss some significant differences. This paper proposes a way of classifying and distinguishing the range of incentive programs being debated today, emphasizing two particular dimensions: the agent whose behavior the incentive seeks to change and the specificity of the output or outcome measure. It begins by characterizing a basic incentive arrangement, discussing the range of available contracts and how they appear in development programs, presents a classification of existing incentive programs and illustrates the scheme with examples. The paper concludes by identifying four broad categories that address different problems and offers some cautionary notes.
Topic:: Development, International Political Economy, Poverty, and Foreign Aid

51. Scholars Who Became Practitioners

Author:: Nora Lustig
Publication Date:: 08-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Celebrated by academics, multilateral organizations, policymakers and the media, Mexico's Progresa/ Oportunidades conditional cash transfers program (CCT) is constantly used as a model of a successful antipoverty program. Here I argue that the transformation of well-trained scholars into influential practitioners played a fundamental role in promoting a new conceptual approach to poverty reduction, ensuring the technical soundness and effectiveness of the program, incorporating rigorous impact evaluation, and persuading politicians to implement and keep the program in place. The involvement of scholar-practitioners also helped disseminate the new CCT “technology” to many countries around the world quite rapidly.
Topic:: Development, Poverty, and Foreign Aid
Political Geography:: Mexico

52. Oil to Cash: Fighting the Resource Curse through Cash Transfers

Author:: Todd Moss
Publication Date:: 01-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Many of the world's poorest and most fragile states are joining the ranks of oil and gas producers. These countries face critical policy questions about managing and spending new revenue in a way that is beneficial to their people. At the same time, a growing number of developing countries have initiated cash transfers as a response to poverty, and these programs are showing some impressive results. In this paper, I propose putting these two trends together: countries seeking to manage new resource wealth should consider distributing income directly to citizens as cash transfers. Beyond serving as a powerful and proven policy intervention, cash transfers may also mitigate the corrosive effect natural resource revenue often has on governance.
Topic:: Development, Energy Policy, Oil, Poverty, and Natural Resources

53. Where Have All the Donors Gone? Scarce Donor Funding for Non-Communicable Diseases

Author:: Rachel Nugent and Andrea B. Feigl
Publication Date:: 01-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Health conditions in developing countries are becoming more like those in developed countries, with non-communicable diseases (NCDs) predominating and infectious diseases declining. The increased awareness of changing health needs, however, has not translated into significant shifts in resources or policy-level attention from international donors or governments in affected countries. Driven by changes in lifestyle related to nutrition, physical activity, and smoking, the surging burden of NCDs in poor countries portends painful choices, particularly for countries with weak health systems that are struggling to manage persistent infectious disease burdens and to protect the poor from excessive out-of-pocket expenses.
Topic:: Development, Health, Poverty, Third World, and Foreign Aid

54. Quantifying Vulnerability to Climate Change: Implications for Adaptation Assistance

Author:: David Wheeler
Publication Date:: 01-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: This paper attempts a comprehensive accounting of climate change vulnerability for 233 states, ranging in size from China to Tokelau. Using the most recent evidence, it develops risk indicators for three critical problems: increasing weather-related disasters, sea-level rise, and loss of agricultural productivity. The paper embeds these indicators in a methodology for cost-effective allocation of adaptation assistance. The methodology can be applied easily and consistently to all 233 states and all three problems, or to any subset that may be of interest to particular donors. Institutional perspectives and priorities differ; the paper develops resource allocation formulas for three cases: (1) potential climate impacts alone, as measured by the three indicators; (2) case 1 adjusted for differential country vulnerability, which is affected by economic development and governance; and (3) case 2 adjusted for donor concerns related to project economics: intercountry differences in project unit costs and probabilities of project success. The paper is accompanied by an Excel database with complete data for all 233 countries. It provides two illustrative applications of the database and methodology: assistance for adaptation to sea level rise by the 20 island states that are both small and poor and general assistance to all low-income countries for adaptation to extreme weather changes, sea-level rise, and agricultural productivity loss.
Topic:: Climate Change, Development, Poverty, and Foreign Aid
Political Geography:: China

55. TrAid+ Channeling Development Assistance to Results

Author:: Alex Ergo and Ingo Puhl
Publication Date:: 03-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Development assistance is meant to improve the lives of poor people in developing countries, but the effectiveness of aid in meeting this goal is uncertain. Demonstrating failure—or success—is difficult because traditional donor financing mechanisms track inputs, not results. This is compounded by poor coordination between actors and a lack of transparency, accountability, and country ownership. Development assistance that is ineffective or has unknown outcomes wastes resources, erodes the constituency for aid, and most importantly fails to improve the lives of poor people as much as it could. TrAid+ is a new mechanism that aims to address these problems by creating a market for certified development outputs—outputs for which both the delivery and the quality have been verified. By ensuring that these outputs, such as safe deliveries or gas connections, meet certain standards, trAid+ acts as a third-party stamp of approval that donors, tax payers, recipient-country governments, service providers, and beneficiaries can trust to know that their aid is being used effectively and is contributing to the development objectives of the recipient country. And trAid+ makes all information accessible online, making it easier for funders to link with projects that are working and projects that are working to link with anyone interested in purchasing certified development outputs. TrAid+ can be tailored to any sector where outputs can be clearly defined and measured, whether health, education, infrastructure, or agriculture. This paper describes the trAid+ concept in detail and proposes practical steps to establish the trAid+ platform.
Topic:: Development, Humanitarian Aid, Poverty, and Foreign Aid

56. The Post-Washington Consensus: Development after the Crisis

Author:: Francis Fukuyama and Nancy Birdsall
Publication Date:: 03-2011
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: A clear shift in the development agenda is underway. Traditionally, an agenda generated in the developed world was implemented in—and, indeed, often imposed on—the developing world. The United States, Europe, and Japan will continue to be significant sources of economic resources and ideas, but the emerging markets will become significant players. Countries such as Brazil, China, India, and South Africa will be both donors and recipients of resources for development and of best practices for how to use them. In fact, development has never been something that the rich bestowed on the poor but rather something the poor achieved for themselves. It appears that the Western powers are finally waking up to this truth in light of a financial crisis that, for them, is by no means over.
Topic:: Development, Economics, Emerging Markets, Poverty, and Foreign Aid
Political Geography:: United States, Japan, China, Europe, India, South Africa, and Brazil

57. The New Bottom Billion: What If Most of the World's Poor Live in Middle-Income Countries?

Author:: Andy Sumner
Publication Date:: 03-2011
Content Type:: Policy Brief
Institution:: Center for Global Development
Abstract:: Most of the world's poor no longer live in low-income countries. An estimated 960 million poor people—a new bottom billion—live in middle-income countries, a result of the graduation of several populous countries from low-income status. That is good news, but it has repercussions. Donors will have to change the way they think about poverty alleviation. They should design development aid to benefit poor people, not just poor countries, keep supporting middle-income countries, think beyond traditional aid to craft coherent development policies, and work to help create space for more inclusive policy processes in new and old MICs.
Topic:: Development, Poverty, and Foreign Aid

58. Technologies, Rules, and Progress: The Case for Charter Cities

Author:: Paul Romer
Publication Date:: 03-2010
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Non-resident fellow Paul Romer argues that the principal constraint to raising living standards in this century will come neither from scarce resources nor limited technologies. Rather it will come from our limited capacity to discover and implement new rules—new ideas about how to structure interactions among people, such as land titles, patents, and social norms. The central task of reducing global poverty is to find ways for developing countries to adopt new rules that are known to work better than the ones they have. Economists who advise leaders on policy have often overlooked why some good rules get adopted and others do not. But a better understanding of rules-that-change-rules could lead to breakthrough thinking about development policy. The special rules of China's Special Economic Zones, where new cities like Shenzhen could grow up, created small laboratories through which rules from Hong Kong spread to the mainland, helping unleash the largest and fastest reduction of poverty on record. Romer concludes that a new type of development policy would be to voluntarily charter new cities for the purpose of changing rules, using a range of new legal and political structures analogous to the ones that made Hong Kong and Shenzhen possible. The essay is adapted from a talk presented in Mexico City on October 2009, at the conference, “Challenges and Strategies for Promoting Economic Growth,” organized by Banco de México.
Topic:: Development, Poverty, and Science and Technology
Political Geography:: China, Asia, Mexico, Hong Kong, and Shenzhen

59. The U.S. Aid "Surge" to Pakistan: Repeating a Failed Experiment? Lessons for U.S. Policymakers from the World Bank's Social-Sector Lending in the 1990s

Author:: Nancy Birdsall and Molly Kinder
Publication Date:: 05-2010
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: During the 1990s, the World Bank and several donor partners provided a “surge” in external aid to support Pakistan's social sectors. Despite the millions of donor dollars spent, the program failed. Poverty was higher in Pakistan in 2004 than it was a decade earlier when the antipoverty program began. This working paper re-releases a CGD analysis of the World Bank's program, which was prepared in 2005 by CGD researchers Nancy Birdsall, Milan Vaishnav, and Adeel Malik. The analysis reports the many problems donors faced while working with Pakistan's government to improve health and education outcomes. A new preface by Nancy Birdsall and Molly Kinder identifies the key lessons from this massive donor experiment that are relevant today, as the United States and other donors prepare to increase their assistance to Pakistan to historic levels.
Topic:: Development, Poverty, Foreign Aid, and World Bank
Political Geography:: Pakistan, United States, and Central Asia

60. The (Indispensable) Middle Class in Developing Countries; or, The Rich and the Rest, Not the Poor and the Rest

Author:: Nancy Birdsall
Publication Date:: 03-2010
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Inclusive growth is widely embraced as the central economic goal for developing countries, but the concept is not well defined in the development economics literature. Since the early 1990s, the focus has been primarily on pro-poor growth, with the "poor" being people living on less than $1 day, or in some regions $2 day. The idea of pro-poor growth emerged in the early 1990s as a counterpoint to a concern with growth alone (measured in per-capita income) and is generally defined as growth which benefits the poor as much or more than the rest of the population. Examples include conditional cash transfers, which target the poor while minimizing the fiscal burden on the public sector, and donors' emphasizing primary over higher education as an assured way to benefit the poor while investing in long-term growth through increases in human capital. Yet these pro-poor, inclusive policies are not necessarily without tradeoffs in fostering long-run growth. In this paper I argue that the concept of inclusive growth should go beyond the traditional emphasis on the poor (and the rest) and take into account changes in the size and economic command of the group conventionally defined as neither poor nor rich, i.e., the middle class.
Topic:: Economics, International Political Economy, Poverty, and Foreign Aid

61. Open Markets for the Poorest Countries: Trade Preferences That Work

Author:: Kimberly Ann Elliott
Publication Date:: 04-2010
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Trade preference programs are an important and underused tool for stimulating exports, creating jobs, reducing poverty, and promoting prosperity and stability in poor countries. While many rich countries provide special access for exports from the least developed countries (LDCs) to promote these benefits, the trade preferences often do not extend to the products that matter most to LDCs, such as agriculture and clothing. Improving these programs could make a major difference in the lives of the poor, while having minimal effects on production or exports in preference-giving countries because the affected trade is so small: less than 1 percent of global exports are from LDCs. And, in the longer term, improved trade preferences for LDCs will promote shared prosperity and stability in rich and poor countries alike. Recognizing the role of trade in poverty reduction, the UN's Millennium Development Goals (MDGs) for poor countries call on high-income countries to provide duty-free, quota-free market access for the LDCs.
Topic:: Development, Economics, International Political Economy, International Trade and Finance, Poverty, and Third World

62. Making Trade Preferences Work for the Poorest Countries

Author:: Kimberly Ann Elliott
Publication Date:: 04-2010
Content Type:: Policy Brief
Institution:: Center for Global Development
Abstract:: Trade preference programs can reduce poverty and promote prosperity and stability in the world's poorest countries, but they often fall short of their intended goals. They regularly exclude commodities that poor countries can produce competitively, such as agricultural products and clothing, and many programs must be frequently renewed, creating uncertainty and discouraging investment. Extending comprehensive, usable, and predictable quota-free market access to all least developed countries could provide a critical boost to the world's poorest people with only trivial effects on preference-giving countries. G-20 leaders should embrace trade preference reform this year to promote growth and stability in the world's poorest countries.
Topic:: International Trade and Finance, Markets, Poverty, and Third World

63. Pulling Agricultural Innovation and the Market Together

Author:: Kimberly Elliott
Publication Date:: 06-2010
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Feeding an additional three billion people over the next four decades, along with providing food security for another one billion people that are currently hungry or malnourished, is a huge challenge. Meeting those goals in a context of land and water scarcity, climate change, and declining crop yields will require another giant leap in agricultural innovation. The aim of this paper is to stimulate a dialogue on what new approaches might be needed to meet these needs and how innovative funding mechanisms could play a role. In particular, could “pull mechanisms,” where donors stimulate demand for new technologies, be a useful complement to traditional “push mechanisms,” where donors provide funding to increase the supply of research and development (R). With a pull mechanism, donors seek to engage the private sector, which is almost entirely absent today in developing country R for agriculture, and they pay only when specified outcomes are delivered and adopted.
Topic:: Security, Agriculture, Development, and Poverty

64. Who Are the MDG Trailblazers? A New MDG Progress Index

Author:: Benjamin Lee and 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, and United Nations
Political Geography:: Uganda, Africa, New York, Cambodia, Nepal, United Nations, and Ethiopia

65. Learning about Schools in Development

Author:: Charles Kenny
Publication Date:: 12-2010
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: There has been considerable progress in school construction and enrollment worldwide. Paying kids to go to school can help overcome remaining demand-side barriers to enrollment. Nonetheless, the quality of education appears very poor across the developing world, limiting development impact. Thus we should measure and promote learning not schooling. Conditional cash transfers to students on the basis of attendance and scores, school choice, decentralization combined with published test results, and teacher pay based on attendance and performance may help. But learning outcomes are primarily affected by the broader environment in which students live, suggesting a learning agenda that stretches far beyond education ministries.
Topic:: Development, Economics, Education, and Poverty
Political Geography:: Afghanistan and East Asia

66. Capability Traps? The Mechanisms of Persistent Implementation Failure

Author:: Lant Pritchett, Michael Woolcock, and Matt Andrews
Publication Date:: 12-2010
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Many countries remain stuck in conditions of low productivity that many call “poverty traps.” Economic growth is only one aspect of development; another key dimension of development is the expansion of the administrative capability of the state, the capability of governments to affect the course of events by implementing policies and programs. We use a variety of empirical indicators of administrative capability to show that many countries remain in “state capability traps” in which the implementation capability of the state is both severely limited and improving (if at all) only very slowly. At their current pace of progress countries like Haiti or Afghanistan or Liberia would take hundreds (if not thousands) of years to reach the capability of a country like Singapore and decades to reach even a moderate capability country like India. We explore how this can be so. That is, we do not attempt to explain why countries remain in capability traps; this would require a historical, political and social analysis uniquely applied to each country. Rather, we focus on how countries manage to engage in the domestic and international logics of “development” and yet consistently fail to acquire capability. What are the techniques of failure? Two stand out. First, 'big development' encourages progress through importing standard responses to predetermined problems. This encourages isomorphic mimicry as a technique of failure: the adoption of the forms of other functional states and organizations which camouflages a persistent lack of function. Second, an inadequate theory of developmental change reinforces a fundamental mismatch between expectations and the actual capacity of prevailing administrative systems to implement even the most routine administrative tasks. This leads to premature load bearing, in which wishful thinking about the pace of progress and unrealistic expectations about the level and rate of improvement of capability lead to stresses and demands on systems that cause capability to weaken (if not collapse). We conclude with some suggestive directions for sabotaging these techniques of failure.
Topic:: Development, Economics, and Poverty
Political Geography:: Afghanistan, India, and Liberia

67. Giving Money Away? The Politics of Direct Distribution in Resource Rich States

Author:: Alexandra Gillies
Publication Date:: 11-2010
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: The governments of resource rich states have several options for how to allocate oil and mineral revenues, including the direct distribution of revenues to their citizens. This paper discusses the political feasibility and political implications of such cash transfers in the specific context of resource-rich states. Identifying the contexts in which this policy is mostly likely to emerge, and understanding the potential governance risks and benefits, will help policymakers to consider the desirability of cash transfers as an allocation choice.
Topic:: Development, Humanitarian Aid, Poverty, Foreign Aid, and Foreign Direct Investment

68. Emerging Africa: How 17 Countries Are Leading the Way

Author:: Steven Radelet
Publication Date:: 09-2010
Content Type:: Policy Brief
Institution:: Center for Global Development
Abstract:: There's good news out of Africa. Seventeen emerging countries are putting behind them the conflict, stagnation, and dictatorships of the past. Since the mid-1990s, these countries have defied the old negative stereotypes of poverty and failure by achieving steady economic growth, deepening democracy, improving governance, and decreasing poverty.
Topic:: Debt, Democratization, Development, Economics, and Poverty
Political Geography:: Africa

69. Saving Ghana from Its Oil: The Case for Direct Cash Distribution

Author:: Todd Moss and Lauren Young
Publication Date:: 10-2009
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Ghana can be considered a relative success story in Africa. We cite six variables—peace and stability, democracy and governance, control of corruption, macroeconomic management, poverty reduction, and signs of an emerging social contract—to suggest the country's admirable political and economic progress. The expected arrival of sizeable oil revenues beginning in 2011–13, however, threatens to undermine that progress. In fact, numerous studies have linked natural resources to negative outcomes such as conflict, authoritarianism, high corruption, economic instability, increased poverty, and the destruction of the social contract. The oil curse thus threatens the very outcomes that we consider signs of Ghana's success. This paper draws lessons from the experiences of Norway, Botswana, Alaska, Chad, and Nigeria to consider Ghana's policy options. One common characteristic of the successful models appears to be their ability to encourage an influential constituency with an interest in responsible resource management and the means to hold government accountable. The Alaska model in particular, which was designed explicitly to manufacture citizen oversight and contain oil-induced patronage, seems relevant to Ghana's current predicament. We propose a modified version of Alaska's dividend program. Direct cash distribution of oil revenues to citizens is a potentially powerful approach to protect and accelerate Ghana's political and economic gains, and a way to strengthen the country's social contract. We show why Ghana is an ideal country to take advantage of this option, and why the timing is fortuitous. We conclude by confronting some of the common objections to this approach and suggest that new technology such as biometric ID cards or private mobile phone networks could be utilized to implement the scheme.
Topic:: Corruption, Economics, Oil, and Poverty
Political Geography:: Africa and Ghana

70. Opening Markets for Poor Countries: Are We There Yet?

Author:: Kimberly Ann Elliott
Publication Date:: 10-2009
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Despite six decades of trade liberalization, trade policies in rich countries still discriminate against the exports of the world's poorest countries. Preferential market access programs were designed to spur larger and more diversified exports from developing countries, but product exclusions and burdensome rules undermined their usefulness, especially for the poorer countries. Most rich countries have made reforms since the UN Millennium Declaration in 2000 called for duty-free, quota-free market access for the least-developed countries. After the World Trade Organization ministerial communiqué called upon developing countries “in a position to do so” to also provide such access, key countries have moved toward that goal. But much remains to be done to achieve the goal of meaningful market access for the poorest countries, including reformed rules of origin that facilitate rather than inhibit trade.
Topic:: International Trade and Finance, Poverty, and United Nations

71. Do Regulatory Reforms Stimulate Investment and Growth? Evidence from the Doing Business Data

Author:: Benjamin P. Eifert
Publication Date:: 01-2009
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: The role of regulatory barriers in inhibiting entrepreneurship, investment and employment creation is an old topic in economics. This study utilizes a five-year panel of data on regulations and procedures from the World Bank's Doing Business project, along with Arellano-Bond dynamic panel estimators, looking for evidence that regulatory reforms lead to higher aggregate investment rates (roughly, factor demand) or GDP growth conditional on investment rates (roughly, factor productivity). It looks both at individual regulatory indicators and more aggregate measures of the incidence of reforms, finding some evidence of positive impacts of regulatory reforms in countries which are relatively poor (conditional on governance) and relatively well-governed (conditional on income). Relatively poor and relatively well-governed countries grow about 0.4 and 0.2 percentage points faster in the year immediately following one or more reforms, respectively. In both subsets of countries, investment rates accelerate by about 0.6 percentage points in the subsequent year.
Topic:: Development, Economics, Markets, Poverty, and Third World

72. The End of ODA: Death and Rebirth of a Global Public Policy

Author:: Jean-Michel Severino and Olivier Ray
Publication Date:: 03-2009
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: The world of international development assistance is undergoing three concomitant revolutions, which concur to the emergence of a truly global policy. First, it is living through a diversification of the goals it is asked to pursue: to its traditional objective of ushering convergence between less and more developed economies have progressively been adjoined those of financing access to essential services and protecting global public goods. Secondly, faced with this new array of challenges, the world of development aid has demonstrated an impressive capacity to increase the number and diversity of its players, generating a governance conundrum for this eminently fragmented global policy. Thirdly, the instruments used by this expanding array of actors to achieve a broader range of policy objectives have themselves mushroomed, in the wake of innovations in mainstream financial markets. Yet surprisingly, this triple revolution in goals, actors and tools has not yet impacted the way we measure both the financial volumes dedicated to this emerging global policy nor the concrete impacts it aims to achieve. This paper argues for the need to move from the conventional measure of Official Development Assistance to the construction of clearer benchmarks for what ultimately matters: resources and results that concur to 21st century international development.
Topic:: Development, Humanitarian Aid, Post Colonialism, Poverty, and Third World

73. Estimating Fully Observed Recursive Mixed-Process Models with cmp

Author:: David Roodman
Publication Date:: 04-2009
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: At the heart of many econometric models is a linear function and a normal error. Examples include the classical small-sample linear regression model and the probit, ordered probit, multinomial probit, Tobit, interval regression, and truncated-distribution regression models. Because the normal distribution has a natural multidimensional generalization, such models can be combined into multi-equation systems in which the errors share a multivariate normal distribution. The literature has historically focused on multi-stage procedures for estimating mixed models, which are more efficiently computationally, if less so statistically, than maximum likelihood (ML). But faster computers and simulated likelihood methods such as the Geweke, Hajivassiliou, and Keane (GHK) algorithm for estimating higher-dimensional cumulative normal distributions have made direct ML estimation practical. ML also facilitates a generalization to switching, selection, and other models in which the number and types of equations vary by observation. The Stata module cmp fits Seemingly Unrelated Regressions (SUR) models of this broad family. Its estimator is also consistent for recursive systems in which all endogenous variables appear on the right-hand-sides as observed. If all the equations are structural, then estimation is full-information maximum likelihood (FIML). If only the final stage or stages are, then it is limited-information maximum likelihood (LIML). cmp can mimic a dozen built-in Stata commands and several user-written ones. It is also appropriate for a panoply of models previously hard to estimate. Heteroskedasticity, however, can render it inconsistent. This paper explains the theory and implementation of cmp and of a related Mata function, ghk2(), that implements the GHK algorithm.
Topic:: Development, Humanitarian Aid, Poverty, and Third World

74. What Is Poverty Reduction?

Author:: Owen Barder
Publication Date:: 04-2009
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: There is a healthy debate about how to achieve poverty reduction in developing countries, but not enough discussion of what we mean by “poverty reduction.” “Poverty reduction” is often used as a short-hand for promoting economic growth that will permanently lift as many people as possible over a poverty line. But there are many different objectives that are consistent with “poverty reduction,” and we have to make choices between them. There are trade-offs between tackling current and future poverty, between helping as many poor people as possible and focusing on those in chronic poverty, and between measures that tackle the causes of poverty and those which deal with the symptoms. Because donors focus on just one dimension of poverty reduction (growth) they marginalise other legitimate objectives such as reducing chronic poverty or providing social services in countries that cannot otherwise afford them.
Topic:: Development, Environment, Humanitarian Aid, Poverty, Third World, and Foreign Aid

75. Thought for Food: The Challenges of Coping with Soaring Food Prices

Author:: Nora Lustig
Publication Date:: 11-2008
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: World food commodities prices increased 130 percent from January 2002 to July 2008. Individual agricultural commodities show even more pronounced increases: corn, wheat, rice and soybeans rose by 190, 162, 318 and 246 percent, respectively. Since July, food commodities prices began to fall. While this decline comes as a relief, prices are likely to stay high in the foreseeable future. Available evidence suggests that the decline in living standards of net consumers caused by higher food prices outweighs the benefits accruing to poor net sellers in the majority of countries that have been analyzed so far. The time to implement measures to help the poor net consumers cope with higher food prices is now. However, too many developing countries lack the instruments, administrative capacity and fiscal space to implement safety nets fast enough and in the required scale. This is one of the most pressing policy challenges that we face. For the poor who are net sellers, governments should seize the opportunity to convert the short-run windfall into longer-term gains. Multilateral financial institutions can play a key role in providing financial resources to countries facing negative terms of trade shocks, technical assistance in the design of safety nets and resources to add fiscal space to countries to fund safety net programs. International organizations can also help countries design the appropriate macroeconomic policy response. This will call for greater flexibility in the menu of policy options traditionally deployed by the Bretton Woods institutions.
Topic:: Security, Agriculture, International Political Economy, International Trade and Finance, Markets, and Poverty

76. Income Per Natural: Measuring Development for People rather than Places - Working Paper 143

Author:: Michael Clemens and Lant Pritchett
Publication Date:: 03-2008
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: It is easy to learn the average income of a resident of El Salvador or Albania. But there is no systematic source of information on the average income of a Salvadoran or Albanian. We create a first estimate a new statistic: income per natural—the mean annual income of persons born in a given country, regardless of where that person now resides. If income per capita has any interpretation as a welfare measure, exclusive focus on the nationally resident population can lead to substantial errors of the income of the natural population for countries where emigration is an important path to greater welfare. The estimates differ substantially from traditional measures of GDP or GNI per resident, and not just for a handful of tiny countries. Almost 43 million people live in a group of countries whose income per natural collectively is 50% higher than GDP per resident. For 1.1 billion people the difference exceeds 10%. We also show that poverty estimates are very different for national residents and naturals; for example, 26 percent of Haitian naturals who are not poor by the two-dollar-a-day standard live in the United States. These estimates are simply descriptive statistics and do not depend on any assumptions about how much of observed income differences across naturals is selection and how much is a pure location effect. Our conservative, if rough, estimate is that three quarters of this difference represents the effect of international migration on income per natural. This means that departing one's country of birth is today one of the most important sources of poverty reduction for a large portion of the developing world. If economic development is defined as rising human well being, then a residence-neutral measure of well-being emphasizes that crossing international borders is not an alternative to economic development, it is economic development.
Topic:: Demographics, Development, Economics, Migration, Poverty, and Population
Political Geography:: United States and Albania

77. Performance-based Incentives for Health: Demand- and Supply-Side Incentives in the Nicaraguan Red de Protección Social - Working Paper 119

Author:: Ferdinando Regalía and Leslie Castro
Publication Date:: 04-2007
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Nicaragua's Red de Protección Social (RPS) is one of the first conditional cash transfer (CCT) programs implemented in a low-income country. Demand-side incentives, in the form of monetary transfers, are provided to poor households on condition that their children attend school and visit preventive health care providers. The design of the program is unique among CCT programs because these demand-side incentives are complemented by supply-side incentives aimed at improving the provision of health care. Health care providers are paid on the basis of their performance against predetermine d targets. Both private and nonprofit health care providers contracted by the government extend the coverage of services to previously underserved areas.
Topic:: Education, Health, Non-Governmental Organization, and Poverty
Political Geography:: Nicaragua

78. Performance-Based Incentives for Health: Conditional Cash Transfer Programs in Latin America and the Caribbean - Working Paper 120

Author:: Amanda Glassman, Jessica Todd, and Marie Gaarder
Publication Date:: 04-2007
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: In order to support poor families in the developing world to seek and use health care, a multi-pronged strategy is needed on both the supply and the demand side of health care. A demand-side program called Conditional Cash Transfer s (CCTs) strives to reduce poverty and also increase food consumption, school attendance, and use of preventive health care. Since 1997, seven countries in Latin America have implemented and evaluated CCT programs with health and nutrition components. The core of the program is based on encouraging poor mothers to seek preventive health services and attend health education talks by providing a cash in centive for their healthy behavior (with healthy behavior representing performance). Evaluations of these programs measured outputs in the utilization of services; health knowledge, attitudes, and practice; food consumption; the supply and quality of services; as well as outcomes in vaccination rates; nutritional status; morbidity; mortality; and fertility.
Topic:: Education, Health, and Poverty
Political Geography:: South America, Latin America, Central America, and Caribbean

79. Performance-Based Incentives for Health: Six Years of Results from Supply-Side Programs in Haiti - Working Paper 121

Author:: Rena Eichler, Paul Auxila, Uder Antoine, and Bernateau Desmangles
Publication Date:: 04-2007
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: USAID launched a project in 1995 to deliver basic health services in Haiti. The project began by reimbursing contracted NGOs for documented expenditures or inputs. In 1999, payment was changed to being based partly on attaining performance targets or outputs. The project also provided technical assistance to the NGOs, along with opportunities to participate in an NGO network and other cross-fertilization activities. Remarkable improvements in key health indicators have been achieved in the six years since payment for performance was phased in. Although it is difficult to isolate the effects of performance-based payment on these improved indicators from the efforts aimed at strengthening NGOs and other factors, panel regression results suggest that the new payment incentives were responsible for considerable improvements in both immunization coverage and attended deliveries. Results for prenatal and postnatal care were less significant, perhaps suggesting a strong patient behavioral element that is not under the influence of provider actions.
Topic:: Development, Education, Health, and Poverty
Political Geography:: Haiti

80. Performance-Based Incentives for Health: A Way to Improve Tuberculosis Detection and Treatment Completion?

Author:: Rena Eichler, Diana Weil, and 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:: Health, International Organization, and Poverty
Political Geography:: Africa, Europe, and Asia

81. The Provision of Banking Services in Latin America: Obstacles and Recommendations

Author:: Liliana Rojas-Suarez
Publication Date:: 06-2007
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: The depth of and access to financial services provided by banks throughout Latin America are extremely low in spite of its recognized importance for economic activity, employment and poverty alleviation. Low financial depth and access hurts the poor the most and is due to a variety of obstacles that are presented in this paper in four categories, along with recommendations to overcome them. The first category groups socio-economic obstacles that undercut the demand for financial services of large segments of the population. The second category identifies problems in the operations of the banking sector that impedes the adequate provision of financial services to households and firms. The third category captures institutional deficiencies, with emphasis on the quality of the legal framework and the governability of the countries in the region. The fourth category identifies regulations that tend to distort the provision of banking services. Recommendations to confront these obstacles include innovative proposals that take into consideration the political constraints facing individual countries. Some of the policy recommendations include: public-private partnerships to improve financial literacy, the creation of juries specialized in commercial activities to support the rights of borrowers and creditors, and the approval of regulation to allow widespread usage of technological innovations to permit low-income families and small firms to gain access to financial services.
Topic:: Development, Economics, International Trade and Finance, and Poverty
Political Geography:: Latin America

82. Reflections on the Macro Foundations of the Middle Class in the Developing World

Author:: Nancy Birdsall
Publication Date:: 10-2007
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: In this working paper I define inclusive growth as growth conducive to increasing the size and economic command of the middle class. I suggest a definition of the middle class based on absolute and relative measures of country-based income distributions, and present evidence of change in the size of the “middle class” for selected developing countries. I then review how macroeconomic policies shape the environment and incentives for inclusive growth, focusing on three areas: fiscal discipline, the more rule-based the better; a fair tax and redistribution system; and a business friendly exchange rate.
Topic:: Education and Poverty
Political Geography:: South America, Latin America, and Central America

83. Liberia's External Debt: Moving Towards Comprehensive Debt Relief

Author:: Steven Radelet
Publication Date:: 04-2007
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: In this essay, CGD senior fellow Steve Radelet describes Liberia's debt situation and the key issues in moving forward on debt relief with the IMF, World Bank, African Development Bank and bilateral creditors. He explains why it is important for Liberia's recovery that the international community act quickly and outlines the key steps necessary for Liberia to achieve a debt deal before the end of 2007.
Topic:: Debt, Political Economy, and Poverty
Political Geography:: Africa and Liberia

84. What Have IMF Programs With Low-Income Countries Assumed About Aid Flows?

Author:: David Goldsbrough and 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, and International Monetary Fund
Political Geography:: Africa

85. Cost-Effective Prevention of Diarrheal Diseases: A Critical Review

Author:: Michael Kremer and Alix Peterson Zwane
Publication Date:: 04-2007
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: This paper critically reviews the existing research on the cost-effective prevention and treatment of diarrheal diseases, and identifies research priorities in this area aimed at finding ways to reduce the diarrheal disease burden. In contrast to the empirical knowledge base that exists for traditional child health programs to reduce diarrheal morbidity and mortality, evidence on the relative effectiveness and cost-effectiveness of various environmental health interventions is limited and subject to significant methodological concerns. There is a limited understanding of the determinants of long-term water and sanitation technology adoption and behavior change at the individual level. Even less is known about how collective action problems in water and sanitation infrastructure maintenance can be overcome. An agenda for future research includes evaluating alternative transmission interruption mechanisms, improving understanding of the determinants of individual-level technology adoption in the water and sanitation sector, and assessing the quality of infrastructure maintenance under different management schemes.
Topic:: Health, Human Welfare, Humanitarian Aid, and Poverty

86. Income Distribution: Effects on Growth and Development

Author:: Nancy Birdsall
Publication Date:: 04-2007
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: I review the literature on the effects of inequality on growth and development in the developing world. Two stylized facts emerge from empirical studies: inequality is more likely to harm growth in countries at low levels of income (below about $3200 per capita in 2000 dollars); and it is at high levels of inequality (at or above a Gini coefficient of .45) that a negative association emerges. Between 15 and 40 percent of the developing world's population lives in countries with these characteristics, depending on the inclusion of China, whose level of inequality has recently been measured at almost .45. Theory and evidence suggest that high inequality affects growth: (1) through interaction with incomplete and underdeveloped markets for capital and information; (2) by discouraging the evolution of the economic and political institutions associated with accountable government (which in turn enable a market environment conducive to investment and growth); and (3) by undermining the civic and social life that sustains effective collective decision-making.
Topic:: Development, Humanitarian Aid, Political Economy, and Poverty
Political Geography:: China

87. Group Versus Individual Liability: A Field Experiment in the Philippines

Author:: Xavier Giné and Dean Karlan
Publication Date:: 01-2007
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Group liability is often portrayed as the key innovation that led to the explosion of the microcredit movement, which started with the Grameen Bank in the 1970s and continues on today with hundreds of institutions around the world. Group liability claims to improve repayment rates and lower transaction costs when lending to the poor by providing incentives for peers to screen, monitor and enforce each other's loans. However, some argue that group liability creates excessive pressure and discourages good clients from borrowing, jeopardizing both growth and sustainability. Therefore, it remains unclear whether group liability improves the lender's overall profitability and the poor's access to financial markets. We worked with a bank in the Philippines to conduct a field experiment to examine these issues. We randomly assigned half of the 169 pre-existing group liability “centers” of approximately twenty women to individual-liability centers (treatment) and kept the other half as-is with group liability (control). We find that converting to individual liability from group liability but keeping other aspects of group lending such as weekly repayment meeting does not affect the repayment rate, but leads to higher outreach by attracting new clients.
Topic:: Economics, Markets, and Poverty
Political Geography:: Philippines and Southeast Asia

88. Observing Unobservables: Identifying Information Asymmetries with a Consumer Credit Field Experiment

Author:: Dean Karlan and Jonathan Zinman
Publication Date:: 01-2007
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Information asymmetries are important in theory but difficult to identify in practice. We estimate the presence and importance of adverse selection and moral hazard in a consumer credit market using a new field experiment methodology. We randomized 58,000 direct mail offers issued by a major South African lender along three dimensions: 1) an initial "offer interest rate" featured on a direct mail solicitation; 2) a "contract interest rate" that was revealed only after a borrower agreed to the initial offer rate; and 3) a dynamic repayment incentive that extended preferential pricing on future loans to borrowers who remained in good standing. These three randomizations, combined with complete knowledge of the Lender's information set, permit identification of specific types of private information problems. Our setup distinguishes adverse selection from moral hazard effects on repayment, and thereby generates unique evidence on the existence and magnitudes of specific credit market frictions. We find evidence of moral hazard and weaker evidence for adverse selection. A rough calibration suggests that perhaps 7% to 16% of default is due to asymmetric information problems. Asymmetric information may help explain the prevalence of credit constraints even in a market that specializes in financing high-risk borrowers at very high rates.
Topic:: Civil Society, Development, Markets, and Poverty
Political Geography:: South Africa

89. Expanding Credit Access: Using Randomized Supply Decisions to Estimate the Impacts

Author:: Dean Karlan and 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, and Poverty
Political Geography:: Africa and South Africa

90. Social Cohesion, Institutions

Author:: William Easterly, Michael Woolcock, and Jozef Ritzen
Publication Date:: 08-2006
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: We present evidence that measures of “social cohesion,” such as income inequality and ethnic fractionalization, endogenously determine institutional quality, which in turn casually determines growth.
Topic:: Civil Society, Development, Government, and Poverty
Political Geography:: Global Focus

91. Stormy Days on an Open Field: Asymmetries in the Global Economy

Author:: Nancy Birdsall
Publication Date:: 02-2006
Content Type:: Working Paper
Institution:: Center for Global Development
Abstract:: Openness is not necessarily good for the poor. Reducing trade protection has not brought growth to today's poorest countries, and open capital markets have not been good for the poorest households in emerging market economies. In this paper I present evidence on these two points. First, countries highly dependent on primary exports two decades ago, despite their substantial engagement in trade and a marked decline in their tariff rates in the 1990s, have failed to grow. Second, within high-debt emerging market economies the financial crises of the last decade, whether induced by domestic policy problems or global contagion, have been especially costly for the poor (in welfare terms if not in terms of absolute income losses). I discuss the asymmetries in the global economy that help explain why countries and people cannot always compete on equal terms on the “level playing field” of the global economy.
Topic:: Economics, Globalization, International Trade and Finance, Poverty, and Financial Crisis

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COLUMBIA UNIVERSITY PRESS