Economic development and the effectiveness of foreign aid: A historical perspective

Sebastian Edwards 28 November 2014

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Foreign aid is controversial in development economics. Three distinct camps may be distinguished:

  • One believes that official assistance is ineffective, and has harmed poor countries throughout the years.

This views official aid as creating dependency, fostering corruption, and encouraging currency overvaluation (Easterly 2014 and Moyo 2010). It also prevents countries from taking advantage of the opportunities provided by the global economy.

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Topics:  Development

Tags:  foreign aid, development, development aid

Deep roots or current policies – what drives sustained prosperity differences across locations?

Mercedes Delgado, Christian Ketels, Michael Porter, Scott Stern 18 September 2014

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What explains the dramatic differences in prosperity levels across locations? A large segment of the research-oriented literature points towards ‘deep roots’, i.e. legacy factors that have been set long ago (Spolaore and Wacziarg 2012). The debate rages on as to whether geographic location and natural endowments (e.g. McCord and Sachs 2013, Sachs et al. 2001) or institutional legacies – themselves influenced by geography and natural conditions (e.g. Acemoglu et al. 2001, Acemoglu and Robinson 2012) – are key.

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Topics:  Development Institutions and economics

Tags:  deep roots, development, Botswana, institutions, geography, colonialism, extractive institutions, natural resources

African growth looking forward

Marco Annunziata 16 August 2014

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Views on Africa’s growth prospects have jumped from utter pessimism to extreme enthusiasm. The latter has been centre-stage with the US–Africa Summit hosted in Washington DC from 4–6 August 2014, with the participation of top political and business leaders. My coauthors Todd Johnson and Shlomi Kramer and I have tried to take a sober assessment of Africa’s progress and prospects, looking beyond the current hype and the inevitable frustration that doing business in the region still generates (Annunziata et al. 2014).

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Topics:  Development

Tags:  development, growth, Africa, human capital, trade, innovation, infrastructure, commodity boom

Connecting Brazil to the world

Patricia Ellen, Jaana Remes 12 July 2014

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Despite a decade of rapid growth and falling poverty rates, Brazil has failed to match the global average for income growth – let alone to achieve the kind of impressive gains posted by other rapidly transforming emerging economies. As of 2012, Brazil had become the world’s seventh-largest economy, but it ranked only 95th in the world for gross national income per capita (IHS Economics and Country Risk data). To raise household living standards, Brazil needs to find a new formula for accelerating productivity growth.

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Topics:  Development International trade Productivity and Innovation

Tags:  development, growth, productivity, globalisation, MERCOSUR, trade, openness, Brazil, global value chains

Institutions, trade shocks, and regional differences in long-run educational and development trajectories

André Carlos Martínez, Aldo Musacchio, Martina Viarengo 09 July 2014

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Understanding the determinants of long-run socio-economic development is a major concern for academics and policymakers in many countries around the world. In particular, beyond understanding differences in development or educational and other outcomes across countries, the origins of within-country inequality are now a fundamental issue, given the impact inequality has on the long-run prosperity of nations.

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Topics:  Development Economic history Education

Tags:  development, education, growth, institutions, Inequality, Brazil, colonialism, trade shocks, extractive institutions

Newspaper readership, civic attitudes, and economic development: Evidence from the history of African media

Julia Cagé, Valeria Rueda 14 May 2014

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Poor governance due to lack of political accountability is often cited as an explanation for the low level of economic development in sub-Saharan Africa. Lack of political accountability can emerge when voters do not choose their candidates according to their expected performance. In sub-Saharan Africa, voters often use the ethnic profile of a candidate as an informational shortcut for the candidate’s political agenda (Ichino and Nathan 2013). As a consequence, politicians rely on tribal allegiances that deliver the votes of co-ethnics irrespective of performance (Casey 2013).

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Topics:  Development Economic history Institutions and economics Politics and economics

Tags:  development, democracy, Africa, religion, technology, media, voting, accountability

More to do on measuring hunger

Joachim De Weerdt, Kathleen Beegle, Jed Friedman, John Gibson 18 February 2014

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One of the first Millennium Development Goals is to reduce hunger by half between 1990 and 2015. To date, the global hunger count has fallen slightly, from 1 billion in 1990–1992 to 870 million in 2010–2012 (Food and Agriculture Organization 2013). As a proportion of the world’s population, this is just a one-third fall in the hunger rate, from 19% to 13%. In contrast, the other highly visible Millennium Development Goal – reducing extreme poverty by half – was achieved by 2010.

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Topics:  Poverty and income inequality

Tags:  development, Africa, Poverty, Millennium Development Goals, food, hunger, measurement error, surveys, Tanzania

GDP and life satisfaction: New evidence

Eugenio Proto, Aldo Rustichini 11 January 2014

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A commission on the measurement of economic performance and social progress was created on the French government’s initiative. Since 2008, this distinguished group of social scientists has put subjective well-being into the limelight as a possible supplement to traditional measures of development such as GDP (Stiglitz et al. 2009). The British government has also shown considerable interest in developing a subjective well-being measure in recent years as an instrument for policy.

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Topics:  Development Frontiers of economic research

Tags:  development, growth, happiness, Easterlin paradox, subjective well-being, national income

Government quality and spatial inequality: A cross-country analysis

Andrés Rodríguez-Pose, Roberto Ezcurra 29 November 2013

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Spatial inequality has received considerable attention from both scholars and politicians in the last two decades, coinciding with advances in globalisation. The growing interest has to do with the fact that spatial inequality – income inequality across geographical or administrative units within country or region – is a primary component of overall inequality across individuals (Milanovic 2005). When spatial inequality increases within a given country (all else equal), so does national inequality.

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Topics:  Poverty and income inequality

Tags:  development, spatial inequality, government institutions

AGOA rules: The intended and unintended consequences of special fabric provisions

Lawrence Edwards, Robert Z. Lawrence 20 November 2013

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The US and EU often claim credit for granting duty-free quota-free access to products from the least developed countries. Such preferential treatment is of interest not only because it might provide one-time benefits in the form of higher incomes and increased employment, but also because trade is often associated with dynamic benefits that lead to faster growth and development.

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Topics:  Development International trade

Tags:  development, Africa, tariffs, quotas

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