Development

Ana Paula Franco, Sebastian Galiani, Pablo Lavado, 29 July 2021

Historical institutions can have long-lasting effects on societies and economies. The Inca Road has been a linchpin of the colonial economy in the New World, but its impact on current development has not been studied in great depth. This column examines the impact of the road on today’s educational, development, and labour outcomes. Proximity to the Inca Road increased the average level of educational attainment and decreased stunting among children by 5%. It boosted average hourly wages by 20% and reduced informality by six percentage points. Moreover, these effects were around 40% greater among women.

Lin Ma, Gil Shapira, Damien de Walque, Quy-Toan Do, Jed Friedman, Andrei Levchenko, 19 July 2021

There has been ongoing debate over what type of lockdowns are warranted to counter Covid-19 and whether the benefits justify the accompanying economic contractions. This column uses a macro-susceptible-infected-recovered model to show that the impact of economic contractions on child mortality in poorer countries combined with their younger demographic composition, as well as the greater community-related transmission and lower healthcare capacity in these countries, mean that under certain circumstances, lockdowns could actually increase overall (COVID-19 plus non-COVID-19) mortality for the lowest-income countries.

Fiona Burlig, Anant Sudarshan, Garrison Schlauch, 27 June 2021

At the outset of the Covid-19 pandemic, the developing world took many of the same policy steps as developed nations to contain the spread, including lockdowns. This column uses evidence from India, where the government implemented one of the most stringent lockdowns, to show that domestic travel bans may actually have increased Covid-19 cases in developing countries with large urban-rural migrant populations. While a travel ban is in place, the spread of the disease in migrants’ rural home districts is indeed temporarily stopped. But when travel is finally permitted, migrants return home possibly carrying many more infections than if they had been allowed to leave early.

Alessandro Antimiani, Lucian Cernat, 24 June 2021

Many believe that the global trading system could offer little more to least developed countries beyond the various unilateral preferential schemes currently in place. This column argues that there is room for new multilateral initiatives to strengthen the participation of these countries in global value chains. It advocates for a new ‘GVCs for LDCs’ global preferential scheme based on least developed countries’ value added, thereby covering exports by these countries along the entire supply chain. Estimates suggest that such a scheme would increase global trade, improve least developed countries’ value added, and promote further value chain integration between these and other developing countries.

Tim Besley, Chris Dann, Torsten Persson, 18 June 2021

The determinants of economic development have been debated for many years. However, some of these determinants have been hard to measure internationally. This column reviews evidence from 25 years of data to argue that countries form persistent ‘development clusters’ according to their levels of internal peace and state capacity.

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