Leandro de la Escosura, 20 November 2015

Human development provides a long-run view of well-being. This column presents a new historical index of human development covering 157 countries from the mid-19th century. The index gives a comprehensive view on human development on the global scale, and stresses the health and knowledge dimensions of well-being.

Axel Dreher, Vera Eichenauer, Kai Gehring, Sarah Langlotz, Steffen Lohmann, 18 October 2015

There is no consensus on whether foreign aid is effective in boosting the economy of the recipient country. This column suggests that there is no evidence that aid affects growth. This finding does not imply that aid is necessarily ineffective. Much of the aid is not given to affect growth in the first place, but as humanitarian aid following disasters, to fight terror, please political allies, or influence decisions in important international organisations. Such aid should thus be evaluated with its own goals in mind.

David McKenzie, Christopher Woodruff, 21 September 2015

Better management practices are associated with better firm performance, and the quality of management practices is also associated with per capita income. This column explores the effect of business practices on small firms in developing countries. The findings indicate that better business practices are correlated with higher productivity, higher firm profits, and higher rates of survival. Poor business practices are holding back small firms in developing countries.

Michael Callen, Suresh De Mel, Craig McIntosh, Christopher Woodruff, 03 February 2015

Recent findings in development economics indicate that microloans are likely to perform best when accompanied by financial education, insurance, and savings products. This column presents evidence from a natural experiment in Sri Lanka, which involved door-to-door collection services among rural households. The evidence suggests that the programme increased both savings and income. In order to build up savings in the initial period, participants increased the hours worked. The treatment also triggered exit from self-employment. Financial service innovation can, therefore, have a major effect on the incentives to exit poverty.

David Coady, Baoping Shang, 13 January 2015

The adverse effects of energy subsidies have been widely documented. While recent decreases in international oil prices have provided a welcome respite, past experience has highlighted the need for caution. This column argues that to make this respite a permanent gain will require the removal of government discretion in determining domestic energy prices. Adoption of an automatic energy pricing mechanism, possibly with in-built short-term price smoothing, can help prevent the return of subsidies and prepare the way for eventual price deregulation.

Janine Aron, John Muellbauer, 14 September 2014

Due to the adoption of inflation targeting and floating exchange rates, and the elimination of capital controls, exchange rate pass-through – the transmission of exchange rate movements to changes in the domestic price level – has become an increasingly important issue in developing and emerging market economies. This column discusses recent research on this topic, and highlights the frequent misspecifications that produce unreliable empirical estimates.

Eric Neumayer, Peter Nunnenkamp, Martin Roy, 01 August 2014

Hoping to attract more FDI, developing countries are increasingly entering stricter investment agreements. But there is no conclusive evidence that such agreements serve them well. This column argues that contagion may help explain this trend. Competition between developing countries for FDI from developed ones could drive the diffusion of international investment agreements.

Jie Bai, Seema Jayachandran, Edmund Malesky, Benjamin Olken, 22 November 2013

Eliminating corruption is a central policy goal of policymakers around the globe. It is known that corruption is a barrier to economic development because it increases the costs and risk of business activity, and deters investment. This column discusses a new study analysing the opposite causal relationship – the effect of economic growth on corruption. Both theoretical and empirical evidence show that economic growth causes the amount of corruption to fall.

Carlos Vegh, Guillermo Vuletin, 01 October 2013

Government spending is procyclical in developing countries, exacerbating the business cycle. However, an analysis of tax policy is also required in order to properly assess the overall stance of fiscal policy. This column presents recent research showing that tax policy tends to be procyclical in developing countries and acyclical in developed countries. Although some developing countries have managed to escape the procyclical fiscal policy trap, some developed nations – notably Eurozone members – are falling into it.

Hector Torres, 21 September 2013

'Special and differential treatment' was justified on the basis that developing countries lacked the fiscal resources to smooth the transition to free trade. However, despite improved fiscal circumstances, exceptions to WTO rules remain in place. Establishing an independent watchdog for the WTO could help it to address these issues.

Martin Cihák, Asli Demirgüç-Kunt, Erik Feyen, Ross Levine, 25 April 2013

Is there too much financial development, or too little? Can economists even measure it well? This column argues that commonly used measures of financial development are poor proxies of what the financial system actually does, presenting a new worldwide database that aims to fill some of the gaps. There needs to be a stronger link between the theory and measurement of financial development.

Peter Draper, 16 July 2012

Fundamental changes to global value chains are afoot. This column argues that over the next decade the underlying cost structures driving their location could change dramatically. It presents a recent report on the political economy of value chains and the implications for developing countries and trade policy.

Joshua Aizenman, Yothin Jinjarak, Donghyun Park, Minsoo Lee, 19 May 2012

The Eurozone debt crisis has emerged as the single biggest threat to the global outlook. Applying event study methodology, this column estimates the responsiveness of equity and bond markets in developing countries and emerging markets to crisis news between 2005 and 2011. Whereas global crisis news had a consistently negative effect on equities and bonds, the Eurozone crisis looks thankfully more mixed and limited, so far.

Céline Carrère, Jaime de Melo, 17 May 2012

It is not just the OECD countries where fiscal policy is the subject of fierce debate. This column presents results from an “event analysis” carried out on a database of 140 countries over the period 1972-2005. It suggests that, for developing countries at least, a fiscal stimulus can be effective – provided the rest of the economy is stable and the fiscal deficit is low.

Eduardo Cavallo, Carlos Scartascini, 12 May 2012

For some commentators, the recent financial crises are a sign that financial development has gone too far. Yet there are still countries where such concerns are the stuff of dreams. This column focuses on why the level of financial development in poor countries remains so low and what policymakers can do about it.

Jorge Andrade da Silva, Lucian Cernat, 09 February 2012

Natural disasters often hit developing countries hardest. To add to the devastating death toll, trade and development can be knocked off course. This column suggests that exports of small developing countries fall by nearly a quarter, and that this effect can be felt for up to three years. Exports of larger developing countries, on the other hand, are not significantly affected.

Benjamin Olken , Rohini Pande, 21 January 2012

Recent innovations in methodology have sparked a remarkable expansion in economists’ ability to measure corruption. This column reviews these new techniques, which range from inferring corrupt links from stock prices to attempting to observe bribes undercover. It concludes that, while corruption is prevalent in poor countries, there remains little consensus about its magnitude or the best way to fight it.

Thomas Farole, 28 September 2011

As competition for FDI and trade share intensifies in a tightening global environment, more and more countries are looking at the potential of special economic zones to kickstart growth. But China aside, do these zones work? This column asks: what have we learned from the experiences of developing countries over recent decades?

Bernard Hoekman, Guido Porto, 18 June 2010

When developing countries open up their markets, there are costs as well as benefits. The papers in this CEPR/World Bank volume investigate adjustment to trade, and argue that unemployment is only part of the story, adding that the development community should aim to address the constraints that prevent too many households from seizing the newly available opportunities.

Sübidey Togan, 28 April 2011

For developing countries, following the principles of sound economic policy and establishing the appropriate institutions of a functioning market economy is a very challenging task. This column says that completing the Doha Round could help them follow at least some of the principles of sound economic policy and establishing some of the appropriate institutions of functioning market economies.



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