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  • Author: David Roodman
  • Publication Date: 01-2006
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Much public discussion about foreign aid has focused on whether and how to increase its quantity. But recently aid quality has come to the fore, by which is meant the efficiency of the aid delivery process. This paper focuses on one process problem, the proliferation of aid projects and the associated administrative burden for recipients. It models aid delivery as a set of production activities (projects) with two inputs—the donor's aid and a recipient-side resource—and two outputs—development and 'throughput', which represents the private benefits of implementing projects, from kickback s to career rewards for disbursing. The donor's allocation of aid across projects is taken as exogenous while the recipient's allocation of its resource is modelled and subject to a budget constraint. Unless the recipient cares purely about development, an aid increase can reduce development in some circumstances. Sunk costs, representing for the recipient the administrative burden of donor meetings and reports, are introduced. Using data on the distribution of projects by size and country, simulations of aid increases are run in order to examine how the project distribution evolves, how the recipient's resource allocation responds, and how this affects development if the recipient is not a pure development optimizer. A threshold is revealed beyond which marginal aid effectiveness drops sharply. It occurs when development maximization calls for the recipient to withdraw from some donor-backed projects, but the recipient does not, for the sake of throughput. Donors can push back this threshold by moving to larger projects if there are scale economies in aid projects.
  • Topic: International Relations, Debt, Economics, Humanitarian Aid
  • Author: George Mavrotas, S. Mansoob Murshed
  • Publication Date: 12-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The present paper utilises a short-run theoretical macroeconomic model of a small open economy to look at the impact of macroeconomic policies and financial deepening upon poverty through sectoral changes. This is because an expansion in certain sectors may cause greater poverty reduction. The model involves a non-traded and a traded sector on the formal side of the economy. The former is more capital intensive and the latter more unskilled labour intensive. Increased employment in the traded sector is more pro-poor compared to a similar rise in the non-traded sector as the former draws workers out of poverty in the informal sector. The model in our paper analyses short-run effects of devaluation, a rise in the money supply induced by financial deepening, and taxation to discourage non-traded goods consumption. Financial deepening can induce greater output and reduce poverty. Other results are mixed and taxonomic. We also attempt to differentiate between the stylised experiences of East Asia and Latin America. East Asian economies have relied more heavily on labour-intensive manufactured exports, whereas Latin America has had a relatively greater share of capital intensive and natural resource based exports. In recent decades countries in these two regions have had differing experiences in poverty reduction, with poverty arguably declining more in East Asia.
  • Topic: International Relations, Development, Economics, Poverty
  • Political Geography: East Asia, Latin America
  • Author: Iftekhar Hasan, Leonardo Becchetti, George Mavrotas
  • Publication Date: 12-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Our paper investigates the unexplored impact of education on inflation and of this relationship on economic growth. By using a sample of 102 countries observed on non-overlapping five-year data spells over the period 1963-2001, we find that average schooling years of the working population have a significant negative impact on inflation rates after controlling for the effects of the stance of domestic monetary policy. We also show that the negative impact of inflation on growth in conditional convergence estimates is significantly increased when the former is instrumented by educational variables. Our findings outline a third potential role of human capital on conditional convergence. They show that education is not only a production factor or a variable which may reduce demographic pressures, but also an important antidote against inflationary pressures which, in turn, negatively affect economic growth and conditional convergence. We interpret our findings by identifying three potential rationales for the education-inflation nexus: (i) education raises consumers' awareness of their power in contrasting producers' inflationary pressures; (ii) more educated individuals have lower inflationary expectations when they are also wealthier and their consumption bundle is relatively less (more) intensive in inferior (superior) goods with higher (lower) inflation potential; (iii) more (less) educated and wealthier (less wealthy) individuals tend to be net creditors (debtors) in their maturity, thereby contributing to increase (reduce) the power of anti-inflationary lobbies.
  • Topic: International Relations, Development, Economics, Education
  • Author: Stephen Njuguna Karingi, Bernadette Wanjal
  • Publication Date: 12-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: In evaluating tax reform in the developing countries, one first needs to determine what is the unique role of the tax system in each particular country. One of the key reasons for undertaking tax reforms in Kenya was to ad dress issues of in equality and to create a sustainable tax system that could generate adequate revenue to finance public expenditures. In this respect, the tax modernization programme introduced in the country was to achieve a tax system that was sustainable in the face of changing conditions domestically and internationally. Policy was shifted towards greater reliance on indirect taxes as opposed to direct taxes. Consumption taxes were seen to be more favourable to investments and hence growth. Trade taxes, instead of being used for protection or revenue-maximization purposes, were viewed more as instruments to foster export-led industrialization. Trade taxes were therefore used to create a competitive exports sector rather than protect the import-competing manufacturing sector, as had been done in the past.
  • Topic: International Relations, Development, Economics
  • Political Geography: Kenya, Africa
  • Author: Peter Quartey, Robert Darko Osei
  • Publication Date: 12-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Ghana's tax reforms constitute the major policy instrument needed to accelerate growth and poverty reduction. Over the past two decades, the government has consistently spent more revenue than it is able to generate and the gap is often financed with foreign aid which has perpetuated the country's aid dependency. Two options can be explored to reduce the gap between government revenue and expenditure; generate more revenue or reduce government expenditure. Although the latter sounds reasonable, the government needs to spend more on key sectors like education, health and infrastructure if the country is to significantly reduce poverty. The critical issue has been how to generate the needed resources domestically, using tax instruments that are least harmful to the poor. This will obviously involve reforming the tax system to ensure efficiency by widening the tax net without necessarily increasing the tax rate. This paper provides an assessment of the changing structure of the tax system in Ghana over the last two decades and suggests ways to improve tax administration in the country.
  • Topic: International Relations, Development, Economics
  • Political Geography: Africa, Ghana
  • Author: Oliver Morrissey, Karuna Gomanee, Sourafel Girma
  • Publication Date: 09-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper is a contribution to the literature on aid and growth. Despite an extensive empirical literature in this area, existing studies have not addressed directly the mechanisms via which aid should affect growth. We identify investment as the most significant transmission mechanism, and also consider effects through financing imports and government consumption spending. With the use of residual generated regressors, we achieve a measure of the total effect of aid on growth, accounting for the effect via investment. Pooled panel results for a sample of 25 Sub-Saharan African countries over the period 1970 to 1997 point to a significant positive effect of foreign aid on growth, ceteris paribus. On average, each one percentage point increase in the aid/GNP ratio contributes one-quarter of one percentage point to the growth rate. Africa's poor growth record should not therefore be attributed to aid ineffectiveness.
  • Topic: International Relations, Development, Economics
  • Political Geography: Africa
  • Author: Peter Quartey
  • Publication Date: 09-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: There has been significant amount of aid inflow s to developing countries including Ghana, but these have been very volatile. Aid flows have been associated with low domestic resource mobilization and have reduced Ghana to a country heavily dependent on aid. The amount of official development assistance (ODA) inflow s has fallen in recent years and has become unpredictable. It is general knowledge that aid has not yielded the desired benefit. In an attempt to improve aid effectiveness donors have used tie d aid not just to promote commercial interests but also to target aid to particular projects that have direct links with poverty. However, this has not yielded the maximum benefits required. Recently, the government of Ghana and its development partners agreed on an aid package dubbed the multi-donor budgetary support (MDBS), which would ensure continuous flow of aid to finance the government's poverty related expenditures.
  • Topic: International Relations, Development, Economics
  • Political Geography: Africa, Ghana
  • Author: Mark McGillivray, Simon Feeny, Robert Lensink, Niels Hermes
  • Publication Date: 08-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This paper surveys 50 years of empirical research on the macroeconomic impact of aid, looking mainly at studies examining the link between aid and growth. It argues that studies dating until the late 1990s produced either contradictory or inconclusive results. Aid either worked, or it didn't, according to this research. The paper then highlights a major shift in the literature that coincided with the release of the World Bank's Assessing Aid: What Works, What Doesn't and Why. Practically all research published since that report agrees with its general finding that aid works, to the extent that in its absence growth would be lower. One controversy may therefore have been settled. Yet, we show, the report has set-off an intense de bate over the context in which aid works. That debate centres on whether the effectiveness of these inflows depends on the policy regime of recipient countries. Some possible avenues through which the heat might be taken out of this debate are considered.
  • Topic: International Relations, Debt, Development, Economics
  • Author: Jennifer Widner
  • Publication Date: 08-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Over 1975-2003 nearly 200 new constitutions were drawn up in countries at risk of conflict, as part of peace processes and the adoption of multiparty political systems. The process of writing constitutions is considered to be very important to the chances of sustaining peace, and The Commonwealth and the US Institute for Peace have developed good practice guidelines in this area. These emphasize consultation, openness to diverse points of view and representative ratification procedures. But assessing the impact of constitution-writing processes on violence is methodologically difficult, since there are many channels of influence in the relationship. This paper reports on preliminary findings from an ongoing research project into the effects of processes in constitution-writing. Regression analysis is used to control for important contextual features such as differences in income levels and ethnic diversity across countries. A key finding is that differences in the degree of participation in the drafting of constitutions has no major effect on post-ratification levels of violence in some parts of the world, such as Europe, but does make a difference in Africa, the Americas, and the Pacific together.
  • Topic: Conflict Resolution, International Relations, Peace Studies, Politics
  • Political Geography: Africa, United States, America, Europe
  • Author: Erik Thorbecke, Machiko Nissanke
  • Publication Date: 06-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The paper offers a critical literature review of the debate surrounding the globalization-poverty nexus, focusing on channels and linkages through which globalization affects the poor. After introducing four different concepts used to measure trends in world income inequality, it examines first the 'growth' conduit through which globalization affects poverty. Treating inequality as the explicit filter between growth and poverty reduction, the causal chain of openness-growth-inequality-poverty is scrutinized, link by link. The paper then moves on to examine other channels in the globalization-poverty nexus that operate through changes in relative factor and good prices, factor movements, the nature of technological change and diffusion, the impact of globalization on volatility and vulnerability, the worldwide flow of information, global disinflation, and institutions, respectively. The paper concludes with a discussion of strategic policy issues within the context of the globalization debate.
  • Topic: International Relations, Economics, Globalization, Poverty
  • Author: George Mavrotas, David Fielding
  • Publication Date: 06-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Issues related to the volatility of aid flows are now becoming crucial in view of their relevance to the achievement of the Millennium Development Goals. The paper examines aid volatility using data for 66 aid recipients over the period 1973-2002. We improve upon earlier work in this important area by disaggregating total aid inflows into sector and programme aid. In this way we avoid focussing on a single aggregate, unlike most previous studies on aid volatility. We also adopt a different methodology to capture aid volatility. The institutional quality of the aid recipient affects the stability of sector aid but not that of programme assistance. Moreover, more open economies, which tend to be smaller and richer, ceteris paribus, are associated with more volatile sector aid flows.
  • Topic: International Relations, Economics, International Cooperation, Poverty
  • Author: Anne Trebilcock
  • Publication Date: 04-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The ILO was founded for social justice, a mandate expressed today in terms of decent work as a global goal, for all who work, whether in formal or informal contexts. In June 2002, the delegates to the International Labour Conference from governments, workers' and employers' organizations adopted a resolution incorporating conclusions on decent work and the informal economy. The four components of decent work – opportunities for employment and income, respect for rights at work, social protection and stronger social dialogue – form the backbone of the ILO's approach to the informal economy. These elements can also be seen through a development lens, and necessarily feature a strong gender dimension. To make the action foreseen by the ILC conclusions more easily operational in a cross-disciplinary way, the issues they address can be cast in terms of macro policy, governance, enhancement of productivity, markets and employment, social protection/addressing vulnerabilities, and representation and voice. All play key roles in poverty reduction. Moreover, recognizing the importance of measuring progress towards decent work, developments in relation to indicators are briefly described. This paper includes annexes reproducing the ILC conclusions along with two relevant resolutions adopted by the International Conference of Labour Statisticians and a list of ILO websites that address various aspects of decent work and the informal economy.
  • Topic: International Relations, Civil Society, Economics, Government
  • Author: Reema Nanavaty
  • Publication Date: 02-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This is a brief sketch of the Self Employed Women's Association's (SEWA) three-decade-long journey from the local to global and informal to formal sector in search of finding work and income for now 720,000 women workers. Though SEWA remains a local and an informal economy workers' organization, its aim has always been to mainstream its issues, hopes, and achievements.
  • Topic: International Relations, Economics, Emerging Markets, International Trade and Finance
  • Author: Elinor Ostrom
  • Publication Date: 01-2005
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Unlocking human potential requires a rich network of institutional arrangements in both private and public spheres. Opening the private sphere to entrepreneurship and complex market organization is well understood as a key to increasing the level and quality of private goods available to consumers. Opening the public sphere to entrepreneurship and innovation at local, regional, and international levels is also a key to increasing the level and quality of public goods – e.g., peace, safety, and health – available to citizens. This paper reviews studies of urban service delivery that have repeatedly found communities of individuals who have self-organized to provide and co-produce surprisingly good local services. In addition to unlocking individual freedom, we need to unlock the public sector from rigid, top-down, hierarchical organization.
  • Topic: International Relations, Economics, Emerging Markets, International Trade and Finance
  • Author: Ravi Kanbur, Anthony J. Venables
  • Publication Date: 09-2005
  • Content Type: Policy Brief
  • Institution: United Nations University
  • Abstract: Amidst a growing concern about increasing inequality, the spatial dimensions of inequality have begun to attract considerable policy interest. In China, Russia, India, Mexico, and South Africa, as well as most other developing and transition economies, there is a sense that spatial and regional disparities in economic activity, incomes and social indicators, are on the increase. Spatial inequality is a dimension of overall inequality, but it has added significance when spatial and regional divisions align with political and ethnic tensions to undermine social and political stability. Also important in the policy debate is a perceived sense that increasing internal spatial inequality is related to greater openness of economies, and to globalization in general.
  • Topic: International Relations, Foreign Policy, Demographics, Development
  • Political Geography: Russia, China, India, South Africa, Mexico
  • Author: Jeremy Heimans
  • Publication Date: 07-2004
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: Multiactor global funds (MGFs) are emerging as important new mechanisms for the financing of development and other global priorities. MGFs like the Global Fund for AIDS, Tuberculosis and Malaria are distinctive because they are administered and financed by multiactor coalitions of governments, international organizations, the private sector and civil society, they operate independently of any one institution and are tied to particular issue or policy areas. This paper considers the desirability of MGFs as instruments for international financial mobilization, resource allocation and as a form of experimentation in global governance. It is argued that MGFs hold considerable promise as focal points for generating additional public and private resources to address urgent global problems and to finance global public goods. They may be more operationally nimble than traditional mechanisms and capture some of the benefits of collaboration among different actors. However, MGFs may also result in a less coherent response to global problems, duplicate existing structures and be weakly democratically accountable.
  • Topic: International Relations, Economics, International Trade and Finance, Non-Governmental Organization
  • Author: Peter Burnell
  • Publication Date: 07-2004
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: This study is premised on the view that reports circulating in the 1990s, claiming foreign aid was in terminal crisis, were premature. Aid's reviving fortunes are explained in terms both of a growing awareness of the uneven implications of globalization and the after-effects of the terrorist events of 11 September 2001. However these two 'drivers' make uneasy partners. Furthermore, aid for democratization, argued in the 1990s to be an instrument for indirectly addressing socioeconomic weakness and improving development aid's effectiveness—making it a positive feature in a bleak decade—is increasingly seen as problematic. For now, aid's resurgence should target pro-poor development rather than democratic reform, although the likelihood is that old fashioned determinants of realpolitik will continue to get in the way.
  • Topic: International Relations, Economics, Human Welfare, Poverty
  • Author: Khalid Koser, Nicholas Van Hear
  • Publication Date: 03-2003
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: The purpose of this paper is to synthesize what is known about the influence of asylum migration on countries of origin. It combines an analysis of data, a review of the literature and empirical examples from our own research. In the first section we consider the effects of the absence of refugees on countries of origin, focusing on the scale of movements, the characteristics of refugees, where they go and their length of time in exile. In the second section, we review the evidence about the influence of asylum-seekers and refugees on their country of origin from exile. Third, we consider the implications for countries of origin of the return of asylum-seekers and refugees. The conclusion acknowledges the limited state of current knowledge and draws out some policy implications.
  • Topic: Conflict Resolution, International Relations, Development, Human Welfare, Migration
  • Author: Claudia Tazreiter
  • Publication Date: 02-2003
  • Content Type: Working Paper
  • Institution: United Nations University
  • Abstract: During the last decade measures of overt and covert surveillance, information sharing and deterrence of the illegal movement of people has increased within and between states. Border security has come to dominate international relations, and increasingly to deflect the needs of asylum-seekers who search for a state that will offer them substantive protection under the Refugee Convention. Measures of internal and external deterrence diminish the reality of protection to genuine refugees as some of the most vulnerable individuals in the world today. Australia, as a country of relative geographic isolation, has not experienced the large-scale influxes of asylum-seekers seen in many parts of the world. Notwithstanding this, the Australian Government has in recent years implemented harsh policy and administrative measures directed at asylum-seekers with a substantial measure of public support. In August 2001, an incident involving 433 asylum-seekers was branded in popular discourse an 'asylum crisis'. This incident involved a Norwegian freighter, the Tampa, which picked up survivors from a sinking boat who were making their way to Australian waters in order seek protection under the Refugee Convention. The Tampa was repelled by Australian security forces from disembarking the people they had picked up in distress on Australian soil. In this article, I explore the Tampa incident against the backdrop of refugee policy development from 1999. I argue that rather than responding to a crisis, the Australian government has generated the perception of a crisis in the Australian community. Implications of the Australian response to asylum-seekers are significant not only in the Asia/Pacific region, but further afield, as policy responses toward asylum-seekers by receiving states have converged in the recent past.
  • Topic: International Relations, Government, Human Welfare, Migration
  • Political Geography: Australia/Pacific
  • Author: Jerry Velasque, Uli Piest
  • Publication Date: 05-2003
  • Content Type: Policy Brief
  • Institution: United Nations University
  • Abstract: Embedded in the United Nations University's Environment and Sustainable Development Programme (ESD), the Inter-linkages Initiative is an innovative approach to managing sustainable development. Based on the recognition that environmental management is strongly related to human behaviour at all levels of natural and human interaction, it promotes greater connectivity between ecosystems and societal performance. On a practical level, the inter-linkages initiative is based on the assumption that improving the implementation of existing environmental mechanisms does not necessarily require new instruments but, rather, a greater level of coherence among the tools already available. In this regard, Interlinkages represents a time- and cost-effective approach to strengthening the existing systems of managing sustainable development.
  • Topic: International Relations, Development, International Cooperation, United Nations