Development

Marianna Battaglia, Selim Gulesci, Andreas Madestam, 06 January 2019

Small firms in developing countries are commonly thought to be prevented from making profitable investments by lack of access to credit and insurance markets. This column uses evidence from an experiment in Bangladesh to show that repayment flexibility leads to substantial improvements in business outcomes and socioeconomic status, as well as lower default rates. The results are driven by an increase in entrepreneurial risk taking, suggesting that lack of insurance is an important constraint for small firms but that a simple financial product that increases repayment flexibility can be an effective tool for enabling growth.

David Miles, 04 January 2019

If our wealth has been acquired unjustly in the past, does that injustice fade or persist? David Miles of Imperial College tells Tim Phillips how economics can help to answer this question.

Alexandra L. Cermeño, Kerstin Enflo, 03 January 2019

Urban growth is crucial for modernisation, and the wave of new towns in China since the 1980s is one example of a strategy employed by policymakers to encourage the process. This column analyses the long-run success of a town foundation policy in Sweden between 1570 and 1810. While the ‘artificially’ created towns failed to grow in the short term, they eventually began to grow and thrive, and today are as resilient as their medieval counterparts. 

Francesco Amodio, Michele Di Maio, 09 December 2018

The economic impact of conflict can be catastrophic, but disentangling and identifying the different ways in which conflict affects the economy is challenging. Using data from the Occupied Palestinian Territory during the Second Intifada, this column examines the specific mechanisms through which economic losses materialise in a conflict zone with low-intensity violence. The findings highlight the close interaction between security and trade issues, calling for an integrated policy approach acting on both fronts.

Mitali Das, 13 November 2018

Evidence that routinisation lies behind labour market polarisation has been documented for many developed economies, but less is known about its impact in emerging markets. This column draws on national censuses and labour surveys for 160 countries between 1960 and 2015 to argue that although large-scale labour market dislocation is not imminent, emerging markets are becoming increasingly exposed to routinisation – and thus labour market polarisation – from the long-term effects of structural transformation and the onshoring of routine-intensive jobs.

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