Paul Romer, 10 June 2011

Paul Romer of NYU’s Stern School of Business talks to Romesh Vaitilingam about his vision of dysfunctional poor countries kick-starting their own development by creating new cities with new rules – what he calls ‘charter cities’. The interview was recorded in London in June 2011 at a ‘blue-sky’ conference on development policy-making organised by CAGE, the Centre for Competitive Advantage in the Global Economy at the University of Warwick. [Also read the transcript.]

Uwe Sunde, Florian Jung, 30 May 2011

This paper revisits the seminal correlation first noted by SM Lipset in 1959: Almost without exception, stable democracies are economically well-developed. Why? The authors argue that democracy will stick only in fairly balanced economic environments. Distribution appears to matter for the longevity of democracy.

Nicholas Bloom, Aprajit Mahajan, David McKenzie, John Roberts, 13 April 2011

“The Office”, a popular British television programme, has been shown in more than 50 countries. Its international appeal likely stems from its universal theme: managerial incompetence. This column looks at the case of India and shows how the poor management of its companies is holding the country back.

Eduardo Levy Yeyati, 03 April 2011

Conventional wisdom states that financial globalisation has been advancing since the mid-1980s, particularly in developing countries. It also states that this should have fostered international portfolio diversification and consumption smoothing. But this column takes a closer look at the data and argues that neither financial globalisation nor portfolio diversification has grown significantly in emerging markets over that period.

Svetlana Andrianova, Panicos Demetriades, David Fielding, Badi H Baltagi, 25 March 2011

International donors provide large amounts of financial capital to Africa in the form of aid and grants, but there are also large financial flows in the opposite direction. Many African banks invest large sums abroad and lend relatively little to local businesses. This column explains that this is because many banks suffer from a shortage of information about the creditworthiness of some of their customers.

Martin Ravallion, 23 January 2011

Measuring and comparing the level of human development across the world continues to be a highly contentious issue. This column argues that the new Human Development Index has – perhaps inadvertently – sharply reduced its valuation of longevity, raising doubts about whether it is sending the right signals to the governments of poor countries aiming to promote human development.

Giorgia Giovannetti, Marco Sanfilippo, 23 January 2011

Can developing countries afford large social-protection programmes, such as unemployment benefits or medical insurance? Summarising studies from across Africa, this column finds that such programmes are politically, fiscally, and administratively feasible – even for low-income Sub-Saharan African countries – and on a scale and scope previously thought out of reach.

Nauro Campos, Ralitza Dimova, 24 December 2010

Does corruption sand or grease the wheels of economic growth? This column reviews recent research that uses meta-analysis techniques to try to provide more concrete answers to this old-age question. From a unique, comprehensive data base of 460 estimates of the impact of corruption on growth from 41 studies, the main conclusion that emerges is that there is little support for the “greasing the wheels” hypothesis.

Raphael Auer, 10 December 2010

Do skill-intensive imports from rich nations reduce skill accumulation in emerging economies? This column presents new evidence from 41 emerging economies to suggest that being close to the global supply of skilled labour decreases domestic human capital. A one-standard deviation higher geographic proximity to skilled labour is associated with a 12% lower average education length of the country’s workforce. This may have profound consequences for the ability of poorer nations to catch up with richer ones.

Xavier Sala-i-Martin, Maxim Pinkovskiy, 06 December 2010

Sub-Saharan Africa has made little progress in reducing extreme poverty, according to the latest Millennium Development Report. This column presents evidence from 1970 to 2006 to the contrary.

David Cuberes, 01 December 2010

How do cities develop and grow? This column presents historical data from a large number of cities in several countries. It finds that there are a few cities that grow much faster than the rest; the first cities to grow quickly are the largest; and this pattern of sequential city growth is more pronounced in periods of rapid growth in urban population.

Axel Dreher, Peter Nunnenkamp, Hannes Öhler, 26 November 2010

Performance-based aid provides a promising alternative to the failed traditional approach but hardly any empirical evidence exists on its effectiveness in inducing reforms. This column provides new evidence from the Millennium Challenge Corporation’s impact on corruption. It suggests performance-based aid can lead to reforms but only if uncertainty about the timeliness and amount of aid rewards is avoided.

Nauro Campos, Fabrizio Coricelli, 22 November 2010

Conditional cash transfer programmes are now a central part of the debate on social protection policies. So far the emphasis has been on “conditional”. This column focuses on the “cash” and suggests that it might benefit financial development – and that this possibility should be explored at the very least.

Jose Enrique Garcilazo, Joaquim Oliveira Martins, William Tompson, 20 November 2010

The World Bank's Indermit Gill recently argued that economic growth will naturally be spatially unbalanced and that to try to spread it out – too thinly or too soon – would discourage it. This column responds by pointing out that economic concentration is neither necessary nor sufficient for growth.

Lisa Chauvet, Paul Collier, Marguerite Duponchel, 16 November 2010

The end of war is the beginning of a new set of challenges for aid workers. This column asks whether this is the best time to start aid projects. Examining project-level data from the World Bank, it finds that post-conflict aid is more effective, though this is not true for all projects and the advantage erodes over time.

Elias Papaioannou, Stelios Michalopoulos, 15 November 2010

How much influence did colonisation have on Africa’s development? This column examines data from before colonisation up to the modern day and argues that differences in colonial institutions do not explain differences in regional economic performance. Instead, it finds that pre-colonial political centralisation and ethnic class stratification have a significantly positive impact on local development.

Andrew Mold, 24 October 2010

Developing countries have enjoyed strong economic performance over the past decade – often growing twice as fast as OECD economies. This column asks whether developing countries will continue to outpace rich countries over the coming two decades. Updating Angus Maddison’s famous projections, it forecasts a world starkly different from today’s. The worlds’ poor countries will account for nearly 70% of global GDP in 2030.

Daniel Lederman, Lixin Colin Xu, 17 October 2010

Foreign direct investment has been an important component in development success stories around the world. This column explores why southern African countries have not been part of this story. Using newly available data it finds that FDI can help development and provide positive spillovers to the local economy. But Africa must have strong fundamentals to attract investment – in particular, greater openness to trade.

Martin Ravallion, 14 October 2010

Policymakers and commentators are constantly looking for new ways to measure development. This column warns against embracing new composite indices with little guidance from economic or other theories. It provides a critical overview of the strengths and weaknesses of using such “mashup” indices of development.

Justin Wolfers , Betsey Stevenson, Daniel Sacks, 11 October 2010

Does money buy happiness? Discussion Paper 8048 examines the relationship between subjective well-being and income along three dimensions: between individuals in the same country, between other countries, and during a country's growth. In each case higher income correlates with higher reported levels of subjective well-being. Higher income, the authors conclude, does in fact make people happier with their lives.

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