Stephen Cecchetti, Kim Schoenholtz, 08 June 2018

Global remittances total $600 billion annually - equivalent to about four times the value of development assistance. Yet despite huge innovations in the underlying technology, the cost of remittances remains persistently high, at around 7% on average. Stephen Cecchetti and Kim Schoenholtz discuss the causes of this, and suggest some options available to policymakers to lower costs. The G8, G20 and Sustainable Development Goals targetting lower remittance costs could be realised by a two-pronged approach of educating consumers on the one hand and fostering competition among providers on the other.

Peter Jensen, Markus Lampe, Paul Sharp, Christian Skovsgaard, 08 June 2018

Denmark is a paragon of economic development because it rapidly modernised its agriculture 150 years ago by using technology and cooperatives. This column argues that Denmark's development story has in fact been misrepresented. Rapid agricultural development was the end of a process begun by landed elites in the 18th century. It may be a mistake to cite the case of Denmark to argue that a country with a lot of peasants and cows can cooperate its way out of underdevelopment.

Andara Kamara, 06 June 2018

Policymakers use microsimulation models to gauge the impact of policies across the economy. Andara Kamara discusses the work of the IFS with the Ghanaian government, which uses such models to better understand the impact of a range of taxes on different demographic groups, particularly in the absence of historical data.

Ross Warwick, 29 May 2018

Similarly to advanced economies, developing countries often subsidise VAT rates on food and other basic goods and services. Ross Warwick discusses his research at the IFS, which suggests these subsidies may in fact disdvantage the poorest, because the subsidised goods and services are consumed disproportionately more by richer households.

Dan Nuer, 22 May 2018

For Ghana to move beyond aid to being self-sufficient on its own tax revenues, it must first gather huge amounts of data on the tax profiles of its citizens and businesses. Dan Nuer talks about the challenges the Ghanaian government faces in doing this, and how its work with the Institute for Fiscal Studies can help address them.

Rachel Cassidy, Marcel Fafchamps, 15 May 2018

Informal savings and borrowing institutions are a way to intermediate between savers and borrowers in the developing world. But if these associations attract mostly savers or mostly borrowers, or are concentrated in one occupation, they may not function as well as they should. This column uses survey results from Malawi to suggest that commitment savers and borrowers mix in such associations, but occupations have tended to stick together. This may make them vulnerable to shocks such as a bad harvest. 

Matthew Jackson, 19 April 2018

Social networks are important even in developing countries. Professor Matthew Jackson of Stanford University explains the channels through which they make an economic impact, and how to improve their study in economic research.

Andrés Rodríguez-Pose, 06 February 2018

Persistent poverty, economic decay and lack of opportunities cause discontent in declining regions, while policymakers reason that successful agglomeration economies drive economic dynamism, and that regeneration has failed. This column argues that this disconnect has led many of these ‘places that don’t matter’ to revolt in a wave of political populism with strong territorial, rather than social, foundations. Better territorial development policies are needed that tap potential and provide opportunities to those people living in the places that ‘don’t matter’.

Jutta Bolt, Robert Inklaar, Herman de Jong, Jan Luiten van Zanden, 25 January 2018

Research on long-run economic development has relied heavily on the database compiled by Angus Maddison. This column presents a new version of the Maddison Project Database based on historical growth data, but also incorporating historical cross-country income comparisons. The revisions shed new light on patterns of long-term development and cross-country income convergence.

Vito Amendolagine, Andrea Presbitero, Roberta Rabellotti, Marco Sanfilippo, 24 January 2018

A new wave of foreign direct investment has swept sub-Saharan African countries, with inflows becoming more diversified both geographically and sectorally. This column presents an analysis that shows a high degree of complementarity between involvement in global value chains and FDI. Policies supporting the entry and upgrading of countries in such chains – especially via a strong institutional setting and a well-educated labour force – can help maximise the spillovers from foreign investment.

Ruth Greenspan Bell, 10 January 2018

Should countries keep extracting natural resources? In this video, Ruth Greenspan Bell discusses the challenge of promoting development while protecting the environment. This video was recorded at UNU-WIDER in May 2016.

Raul Sanchez de la Sierra, 19 December 2017

We have theories of why states form, but until now no systematic data on the process. This column uses a new dataset on 650 locations in the Democratic Republic of the Congo to explain why armed actors may create the functions of a state. When a village's output was valuable but could not easily be taxed, armed actors developed sophisticated fiscal and legal administrations to extract revenue. Household welfare improved only when these stationary bandits had ties to the population.

Céline Carrère, Marcelo Olarreaga, Damian Raess, 15 December 2017

Protecting workers through the inclusion of labour clauses in trade agreements has become more common since the first such causes were included in NAFTA, but some argue that by increasing labour costs in developing countries, they represent a form of protectionism. This column uses new data to argue that there is no evidence for adverse effects on trade from labour clauses. When such clauses are strong, and if they emphasise cooperation in their implementation, they have a positive effect on the commercial interests of developing countries.

Joseph Stiglitz, 20 November 2017

Finding the right balance between the role of the state and the market is key for susccesful development. In this video, Joseph Stiglitz explains why they should complement each other. This video was recorded at the UNU-WIDER 30th anniversary conference in Helsinki in September 2015.

Susanne Frick, Andrés Rodríguez-Pose, 20 October 2017

Big cities have historically been seen as an important prerequisite for a country’s economic growth. In recent decades, however, developing countries have rapidly urbanised, and large cities are increasingly found in relatively poor countries. This column uses a new dataset to revisit the relationship between city size and economic growth. It finds that relatively small cities (with populations under three million) have been more conducive to economic growth, while very large cities are only growth-enhancing in countries with a very large urban population.

Martin Ravallion, Shaohua Chen, 15 September 2017

Past studies have measured poverty in either relative terms (mostly in the developed countries) or absolute terms (the developing world). This column presents a new unified approach to global poverty that assumes that people care about both their own income and their income relative to others in their country of residence. The study finds that global poverty has declined more in absolute terms than in relative terms. The vast bulk of the relatively poor now live in the developing world. The advanced countries have seen little progress against poverty, unlike the developing world.

The Editors, 22 June 2017

VoxEU is pleased to announce the launch of its new sister site – VoxDEV will focus on development issues, posting research-based analysis and commentary by leading economists. The Editor-in-Chief is Tavneet Suri, Professor of Economics at MIT.

Ejaz Ghani, Stephen O'Connell, 15 June 2017

There are concerns that the premature deindustrialisation experienced by low-income countries in Africa and South Asia will negatively affect their growth. This column argues that this is not the case, since services, rather than manufacturing, are driving growth in the developing world. While demographics and urbanisation can help growth in low-income countries, the low quality of physical infrastructure is a major challenge.

Kostadis Papaioannou, Ewout Frankema, 15 June 2017

Tropical Asia has historically hosted larger and denser agricultural civilisations than tropical Africa. Using colonial-era rainfall and population data, this column explores the role of climatological conditions in the development of dense rural populations in the two regions. Rainfall shocks were both more frequent and severe in Africa than in Asia, lending support to the argument that ecological barriers to agricultural intensification were more challenging in tropical Africa than elsewhere.

Ejaz Ghani, Arti Grover Goswami, Sari Pekkala Kerr, William Kerr, 06 May 2017

Developing countries around the world are implementing structural reforms and pro-competitive policies to promote growth, but the impact of this on gender equity is unclear. This column examines the case of India, one of the world’s fastest growing countries, and finds that gender equality has not improved. Policymakers must do more to eliminate gender discrimination. They have an opportunity to not only improve the allocative efficiency of factors and increase growth, but also create an environment of equal opportunity for all, by targeting domestic market competition. 



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