In theory, firms in developing countries benefit from viable, well-used, stable, and efficient local financial markets as a source of investment for local firms. Financial markets in the home countries of multinationals can also act as a source of FDI to the developing world when local financial markets are weak. This column discusses recent empirical data that support both arguments, and argues that advocates of tighter regulation for financial markets should consider the wider impact on developing country economies.
Holger Görg, Christiane Krieger-Boden, Peter Nunnenkamp, 23 August 2016
Thorvaldur Gylfason, 22 August 2016
One-dimensional indicators such as GNI per capita are known to be flawed measures of wellbeing. The Human Development Index (HDI) introduced dimensions of health and education alongside income. This column argues that an HDI adjusted for inequality and hours worked gives deeper insight into a country's economic standing. Using this composite measure, the US falls from first to seventh among G8 countries.
Klaus Desmet, Ignacio Ortuño-Ortin, Romain Wacziarg, 31 July 2016
The current refugee crisis has highlighted the importance of understanding how ethnic and cultural differences affect social cohesion. This column investigates the links between ethnicity and culture, and the relationship between diversity and civil conflict. It finds that globally, there appears to be little overlap between ethnic identity and cultural identity. Also, ethnic diversity per se has no effect on civil conflict. It is when differences in culture coincide with differences in ethnicity that conflict becomes more likely.
Eduardo Cavallo, Tomás Serebrisky, 29 July 2016
The Latin American and Caribbean region is trapped in a vicious cycle of low savings and poor use of these savings. This column describes how this problem is reinforced by the current financial system, and prescribes three remedies to policymakers and households to break the cycle. The government should create a better environment for saving and develop a better financial system, but it should also tackle investment distortions and fix broken pension systems. Meanwhile, a change in saving culture should be encouraged from the ground up, with financial education offered to citizens early on in their lives.
Rajiv Kumar, 22 July 2016
Despite Narendra Modi’s successful leadership as chief minister of Gujarat, some question his ability to achieve the same progress at the national level as India’s prime minister. This column analyses Modi’s political background and state- and national-level experience to assess his capacity to navigate India through a politically and economically important time towards its goal of becoming a prosperous economy. It finds that while Modi can lean on his Gujarati experience to some extent, in other aspects he will have to depart from his incremental approach to policymaking in favour of radical changes, particularly in the area of employment maximisation.
Rajesh Ramachandran, 11 July 2016
In this video, Rajesh Ramachandran discusses the effects of teaching in a colonial language in sub-Saharan countries. The research shows that teaching in a colonial language actually worsens educational attainments. This video was recorded during a UNU-WIDER conference on “Human capital and growth” held in June 2016.
Paul Collier, 06 July 2016
Fragile states cause spillovers not only to their neighbours but also to the rest of the world. In this video, Paul Collier discusses power and authority in fragile states. Legitimacy is built gradually rather than being imposed. This video was recorded during the International Growth Centre’s annual conference held in June 2016 at the LSE.
Janet Currie, Hannes Schwandt, 02 July 2016
Inequalities in mortality rates are a good indicator of economic wellbeing, but most of the existing literature does little to distinguish between developments in infants and adults. This column uses extensive US data to analyse mortality trends across all age groups. It finds that the health of the next generation in the poorest areas of the US has improved significantly and the race gap has declined significantly. Underlying explanations include declines in the prevalence of smoking and improved nutrition, and a major cause is social policies that target the most disadvantaged.
Jean-Philippe Platteau, Catherine Guirkinger, 01 July 2016
Family is a key institution in many countries, particularly developing countries. In this video, Jean-Philippe Platteau and Catherine Guirkinger discuss the role of families in society. In countries where the judicial system is weak, families are important in settling conflicts and can replace formal institutions. Families can also change the impact of public policies. This video was recorded during the conference on “Economic Development and Institutions” held in Paris in June 2016.
Munshi Kaivan, 29 June 2016
Institutions are implicit or explicit rules that bring people with the same objective together. In this video, Kaivan Munshi discusses the role of informal community-based institutions in migration and the development process. Pre-existing social groups support migration and eventually development. This video was shot during the conference on “Economic Development and Institutions” held in Paris in June 2016.
Samuel Bowles, 27 June 2016
Institutions define the rules of the game, and understanding them allows to us to understand how economies change. In this video, Sam Bowles discusses the role of institutions for wealth inequality and redistribution of wealth. Politics and institutions are the key to understanding inequality. This video was shot during the Conference on Economic Development and Institutions held in January 2016 at the University of Namur.
Andrew Bernard, Valerie Smeets, Frederic Warzynski, 22 June 2016
Deindustrialisation is a major policy concern in high-income countries not only because of resulting unemployment, but also because of the long-run implications for growth. This column uses evidence from Denmark to analyse whether it is being measured in the right way. A substantial fraction of the decline in manufacturing actually reflects the changing nature of production. Service sector firms that still perform many of the value-adding activities of traditional manufacturing firms should not be overlooked by policymakers.
Marianne Bertrand, Patricia Cortes, Claudia Olivetti, Jessica Pan, 21 June 2016
Marriage rates of skilled and unskilled women have evolved quite differently across countries since 1995. The rate is lower overall for skilled women but the gap is narrowing, and even reversing, in some countries. This column uses evidence from 23 countries between 1995 and 2010 to consider how skilled women’s labour market opportunities impact their marriage prospects in different societies. Generally, more conservative societies have lower marriage rates for skilled women relative to unskilled women, with the effects of an increase in skilled women’s wages depending on the degree of conservatism.
Paul Stevens, 08 June 2016
In 2014, after more than a decade of a booming oil market, oil prices collapsed. In this video, Paul Stevens discusses the effects of the super cycle for oil-exporting countries. The higher oil prices destroyed demand, leading to over-supply and a fall in prices. As a consequence, oil-exporting countries had difficulties in meeting budget expenditures and needed to diversify their economies. This video was shot during the International Growth Centre’s annual conference held in London in June 2016.
Alexander Bick, Nicola Fuchs-Schündeln, David Lagakos, 04 June 2016
The development accounting literature tries to account for cross-country output per worker differences by taking stock of inputs per worker. The data employed are often measured without great precision, however, making comparisons difficult. This column presents a new, internationally comparable dataset of average hours worked per adult across the world income distribution. Adults in poor countries are found to work a lot more and with lower productivity than those in rich countries. The findings suggest that those from poorer countries are not only ‘consumption poor’, but also ‘leisure poor’.
Marcela Eslava, Xavier Freixas, 31 May 2016
Public development banks play a significant role in the allocation of credit to businesses that may be unable to attain credit under normal circumstances, despite generating positive externalities. But there is concern that lending by these institutions may end up being allocated inefficiently. This column considers the costly screening that banks must do to allocate funds. It finds that the inefficient allocation of credit may arise when banks are unable to fully internalise the benefits of possible projects. Direct lending and the implementation of subsidies for intermediated lending are two possible ways to counter expensive screening.
Gilles Duranton, Ejaz Ghani, Arti Grover Goswami, William Kerr, 27 May 2016
Optimising the allocation of factors of production improves productivity. In India, where evidence suggests land is severely misallocated to inefficient manufacturing firms, access to financing is disproportionately tied to access to land. This column examines the link between the misallocation of land and access to capital through financial markets. A very strong positive correlation emerges between the two, consistent with the fact that land and buildings can provide strong collateral support for accessing finance from the credit market.
Topics will include improving quality of Early Childhood care in the home and child-care centres; scaling-up ECD programs; process of skill formation over the course of childhood; long-run effects of early childhood investments.
J. Lawrence Aber (NYU)
Mariana Alfonso, (IDB)
Maria Caridad Araujo (IDB)
Orazio Attanasio (UCL and IFS)
Jere R. Behrman (Pennsylvania)
Raquel Bernal (Universidad de los Andes)
Prashant Bharadwaj (UC San Diego)
Pedro Carneiro (UCL and cemmap)
Gabriella Conti (UCL and IFS)
Yyannú Cruz-Aguayo (IDB)
Flávio Cunha (Rice)
Janet Currie (Princeton)
Professor Sir Ian Diamond (Aberdeen)
Sally Grantham-McGregor (UCL)
Sonya Krutikova (EDePo at IFS)
Karen Macours (Paris School of Economics)
Costas Meghir (Yale and IFS)
Scott Rozelle (Stanford)
Marta Rubio-Codina (IDB and International Research fellow, IFS)
Norbert Schady (IDB)
Essi Viding (UCL)
Hirokazu Yoshikawa (Steinhardt NYU)
This event is free to attend.
Shyamal Chowdhury, Annabelle Krause, Klaus F. Zimmermann, 28 April 2016
Across the world, 650 million people still lack access to clean water, despite great progress over last two decades. This column looks at the case of Bangladesh, where around 45 million people are at risk from drinking water that is contaminated with naturally occurring arsenic. Drinking this water can lead to symptoms of arsenicosis, which have a significant negative impact on mental health and thus on household productivity and wellbeing.
Jeremiah Dittmar, Ralf R Meisenzahl, 26 April 2016
Throughout history, most states have functioned as kleptocracies and not as providers of public goods. This column analyses the diffusion of legal institutions that established Europe’s first large-scale experiments in mass public education. These institutions originated in Germany during the Protestant Reformation due to popular political mobilisation, but only in around half of Protestant cities. Cities that formalised these institutions grew faster over the next 200 years, both by attracting and by producing more highly skilled residents.