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1. Cash on Delivery: A New Approach to Foreign Aid

Author:
Nancy Birdsall, Ayah Mahgoub, and William D. Savedoff
Publication Date:
11-2010
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
Foreign aid often works, but it is often criticized for being ineffective or even for undermining progress in developing countries. This brief describes a new approach, Cash on Delivery Aid, which gives recipients full responsibility and authority over funds paid in proportion to verified measures of progress. Through the example of using COD Aid to support universal primary-school completion, the brief illustrates a practical approach to aid that holds the promise of making aid more effective and less burdensome by fundamentally restructuring the relationships of accountability among funders, recipients, and their respective constituencies.
Topic:
Development, Education, Third World, and Foreign Aid

2. Schooling Inequality, Crises, and Financial Liberalization in Latin America

Author:
Nancy Birdsall, Gunilla Pettersson, and Jere R. Behrman
Publication Date:
03-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Latin America is characterized by high and persistent schooling, land, and income inequalities and extreme income concentration. In a highly unequal setting, powerful interests are more likely to dominate politics, pushing for policies that protect privileges rather than foster competition and growth. As a result, changes in policies that political elites resist may be postponed in high-inequality countries to the detriment of overall economic performance.
Topic:
Economics, Education, Globalization, and Political Economy
Political Geography:
Latin America

3. Reflections on the Macro Foundations of the Middle Class in the Developing World

Author:
Nancy Birdsall
Publication Date:
10-2007
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
In this working paper I define inclusive growth as growth conducive to increasing the size and economic command of the middle class. I suggest a definition of the middle class based on absolute and relative measures of country-based income distributions, and present evidence of change in the size of the “middle class” for selected developing countries. I then review how macroeconomic policies shape the environment and incentives for inclusive growth, focusing on three areas: fiscal discipline, the more rule-based the better; a fair tax and redistribution system; and a business friendly exchange rate.
Topic:
Education and Poverty
Political Geography:
South America, Latin America, and Central America

4. Human Capital and the Quality of Growth

Author:
Nancy Birdsall
Publication Date:
12-2000
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
T. W. SCHULTZ was ahead of his time, at least among economists. The earliest postwar models of development emphasized accumulation of physical capital, and saw spending on health and education as a drain on the accumulation of "productive" assets. But eventually, the newer classical growth models incorporated formally Schultz's insight, and related work on accounting for growth by Hollis Chenery and colleagues at the World Bank pointed to the contribution of more skilled workers with more human capital to increased productivity and growth. The more recent endogenous growth models are even more emphatic. Sustainable growth in these models is the result in part of positive externalities generated by education, an important form of human capital. In these models, the new ideas and new technologies that are critical to high sustained growth rely fundamentally on high levels of human capital.
Topic:
Economics, Education, and Science and Technology
Political Geography:
India

5. Natural Resources, Human Capital, and Growth

Author:
Nancy Birdsall, Thomas Pinckney, and Richard Sabot
Publication Date:
02-2000
Content Type:
Working Paper
Institution:
Carnegie Endowment for International Peace
Abstract:
In this paper, we present evidence that among developing countries, those that are resource-abundant invest less in education. We then discuss the economic processes behind this evidence. We describe a virtuous circle in which rising private returns to human capital and other assets lead to increased work effort and higher rates of private investment immediately, including among the poor, and generate higher productivity and lower inequality in the future. With resource abundance, however, governments are tempted to move away from the policies that generate this virtuous circle. Dutch Disease and related effects tend to lower the rate of return to the agricultural and human capital investments available to the poor. Resource rents accumulate in the hands of the government, and/or a small number of businessmen, further reducing incentives to invest. Staple-trap effects lead to the subsidization of capital, thereby taxing labor. The labor market in the resulting capital-intensive economy offers little benefit for moderate levels of education. The government may try to assuage the poor by directing some proportion of resource rents to populist programs that create new fiscal burdens but that do not enhance productivity. In short, resource abundance tends to break the virtuous circle linking education, growth and inequality in several places: the choice of development strategy, the level of inequality, the lack of incentives for investment in education, and the creation of a welfare state. We illustrate this breakdown by contrasting the cases of Korea and Brazil, and, since resource abundance need not be destiny, we conclude with policy lessons for resource-abundant developing economies.
Topic:
Economics, Education, Emerging Markets, Government, Political Economy, and Third World
Political Geography:
Brazil and Korea