Development

Oriana Bandiera, 21 October 2019

The 2019 Nobel Prize in Economic Sciences has been jointly awarded to Abhijit Banerjee, Esther Duflo, and Michael Kremer “for their experimental approach to alleviating global poverty”. This column discusses the new laureates’ vision and their common interest in both understanding and addressing the persistence of poverty and the huge differences in living standards across countries.

Emily Breza, Supreet Kaur, Nandita Krishnaswamy, 12 October 2019

Enforcing collective action through social norms and social sanctions can be particularly relevant in poor countries, where local social networks are often key in risk sharing and information diffusion. This column uses two experimental exercises to test whether social norms shape aggregate labour supply in informal markets for casual daily agricultural labour in India. It finds that social norms help sustain wage floors, with workers taking jobs at wage cuts in private but rejecting them in public due to fear of sanctions.

Li Yang, Filip Novokmet, Branko Milanovic, 09 October 2019

The historically unprecedented economic and social transformation in China over the past four decades has seen urban areas becoming much richer, but also much more unequal. This column analyses changes in the Chinese urban elite. It finds that, compared to the 1980s, the elite today consists mainly of professionals, self-employed, and smaller and larger business people, they are much better educated, and they receive a much greater share of total urban income. This is reflected also in the composition of the Communist Party of China.

Axel Dreher, Andreas Fuchs, Roland Hodler, Bradley Parks, Paul Raschky, Michael Tierney, 07 October 2019

Chinese development projects have the potential to improve the lives of millions of people, but political capture of its development finance by politicians may undermine its effectiveness. This column examines local development outcomes across 47 African countries and the effects of financial support from China between 2001 and 2012. The results not only show that Chinese aid registers positive effects on economic development at the district-level and province-level, but also that political bias in the subnational distribution of Chinese aid does not substantially undermine local development outcomes.

Beata Javorcik, 13 September 2019

Economists argue whether foreign direct investment in developing economies exports pollution or generates green growth. Beata Javorcik talks to Tim Phillips about a surprising conclusion from factory-level research.

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