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371. Learning to Share: Explaining the Conditions under Which States Delegate Governance

Author:
Aila M. Matanock
Publication Date:
09-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
A potential solution for weak or failing states is to enact a delegation agreement whereby a host relinquishes authority over some governance function to an external actor. Through case studies in Melanesia, I find that these arrangements can be implemented as treaties, rather than contracts, so that the external actor remains somewhat exempt from the normal procedure or law of the host state. I also generate hypotheses about the conditions under which host states and external actors enact these self-enforcing equilibria: host states request these agreements either where a major law and order problem leads to a loss of monopoly on the use of force, or where extortion or corruption leads to budgetary crisis. External actors agree to them only under the latter circumstances since this makes the reputational and actual costs of the mission lower, as judged against alternative methods for resolving the problem, and where that state also poses a specific transnational security threat.
Topic:
Corruption, Debt, Fragile/Failed State, and Governance

372. Skill Flow: A Fundamental Reconsideration of Skilled-Worker Mobility and Development

Author:
Michael Clemens
Publication Date:
08-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Large numbers of doctors, engineers, and other skilled workers from developing countries choose to move to other countries. Do their choices threaten development? The answer appears so obvious that their movement is most commonly known by the pejorative term “brain drain.” This paper reconsiders the question, starting from the most mainstream, explicit definitions of “development.” Under these definitions, it is only possible to advance development by regulating skilled workers' choices if that regulation greatly expands the substantive freedoms of others to meet their basic needs and live the lives they wish. Much existing evidence and some new evidence suggests that regulating skilled-worker mobility itself does little to address the underlying causes of skilled migrants' choices, generally brings few benefits to others, and often brings diverse unintended harm. The paper concludes with examples of effective ways that developing countries can build a skill base for development without regulating human movement. The mental shift required to take these policies seriously would be aided by dropping the sententious term “brain drain” in favor of the neutral, accurate, and concise term “skill flow.”
Topic:
Development, Migration, Labor Issues, and Brain Drain

373. Making Markets for Merit Goods: The Political Economy of Antiretrovirals

Author:
Ethan Kapstein and Josh Busby
Publication Date:
08-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper examines the role of policy entrepreneurs and global activists in shaping the international market for antiretroviral drugs to combat HIV/AIDS. When ARVs first came on the market in the 1990s they were exceedingly expensive; the cost of treatment was upwards of $10,000 per year. These drugs were thus accessible only to those patients who had high incomes. But in 2006, the “international community,” meeting at a United Nations General Assembly Special Session (UNGASS), made an astonishing pledge to those who were infected with HIV. It proclaimed that there should be universal access to ARV treatment. This UNGASS, following up on an earlier historic UN special session devoted entirely to AIDS in 2001, marked the first time in history that the international community pledged itself to chronic care for the ill, which in this case includes the approximately 30 million people around the world estimated to be HIV positive. How do we explain the transformation of ARVs from private goods, which only a few could afford, into merit goods that were (at least declaratively) to be made available to everyone? In other words, how does a norm of “universal access to treatment”—that no person should be denied these life-extending drugs—become the ethical basis for global public policy with respect to pharmaceutical allocation? What are the lessons of the ARV story for other global issues? These are the primary questions we explore in this paper. Briefly, we argue that the policy entrepreneurs and activists who promoted the creation of a universal access to treatment regime—of the transformation of ARVs into global merit goods—relied on a combination of moral arguments and ideas with favorable material circumstances. From the ethical perspective, the task of these entrepreneurs was to convince the “international community” that access to ARVs was a “human right,” or conversely to convince decision-makers that it was morally wrong to allocate these life-enhancing drugs solely on the basis of ability to pay. But from a material standpoint, these arguments were greatly facilitated by the lowering prices of ARVs caused by a combination of differential pricing (that is, lower prices for drugs in the developing world than in the advanced welfare states) and competition from generics producers, coupled with increases in foreign aid spending devoted to HIV/AIDS and other diseases.
Topic:
Health, Human Welfare, Humanitarian Aid, and Political Economy

374. Aid, Dutch Disease, and Manufacturing Growth

Author:
Arvind Subramanian and Raghuram G. Rajan
Publication Date:
12-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
We examine the effects of aid on the growth of manufacturing, using a methodology that exploits the variation within countries and across manufacturing sectors, and corrects for possible reverse causality. We find that aid inflows have systematic adverse effects on a country\'s competitiveness, as reflected in the lower relative growth rate of exportable industries. We provide some evidence suggesting that the channel for these effects is the real exchange rate appreciation caused by aid inflows. We conjecture that this may explain, in part, why it is hard to find robust evidence that foreign aid helps countries grow.
Topic:
Development, Economics, and Foreign Aid
Political Geography:
Washington

375. It\'s One Climate Policy World Out There—Almost

Author:
Nancy Birdsall and Jan von der Goltz
Publication Date:
12-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
In the run-up to the December 2009 Copenhagen climate conference, the authors surveyed members of the international development community with a special interest in climate change on three sets of detailed questions: (1) what action different country groups should take to limit climate change; (2) how much non-market funding there should be for emissions reductions and adaptation in developing countries, and how it should be allocated; and (3) which institutions should be involved in delivering climate assistance, and how the system should be governed. About 500 respondents from 88 countries completed the survey between November 19–24, 2009. About a third of the respondents grew up in developing countries, although some of them now live in developed countries. A broad majority of respondents from both developing and developed countries held very similar views on the responsibilities of the two different country groups, including on issues that have been very controversial in the negotiations. Most favored binding commitments now by developed countries, and commitments by 2020 by \'advanced developing countries\' (Brazil, China, India, South Africa and others), limited use of offsets by developed countries, strict monitoring of compliance with commitments, and the use of trade measures (e.g. carbon-related tariffs) only in very narrow circumstances. Respondents from developing countries favored larger international transfers than those from developed countries, but the two groups share core ideas on how transfers should be allocated. Among institutional options for managing climate programs, a plurality of respondents from developed (48 percent) and developing (56 percent) countries preferred a UN-managed world climate fund, while many from both groups also embraced the UN Adaptation Fund\'s approach, which is to accredit national institutions within countries which are eligible to manage implementation of projects that the Fund finances. Among approaches to governance, the most support went to the Climate Investment Fund model—of equal representation of developing and developed countries on the board.
Topic:
Climate Change, Energy Policy, and Treaties and Agreements
Political Geography:
China, India, South Africa, Brazil, and United Nations

376. Development Assistance, Institution Building, and Social Cohesion after Civil War: Evidence from a Field Experiment in Liberia

Author:
Macartan Humphreys, James Fearon, and Jeremy M. Weinstein
Publication Date:
12-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Can brief, foreign-funded efforts to build local institutions have positive effects on local patterns of governance, cooperation, and well-being? Prior research suggests that such small-scale, externally driven interventions are unlikely to substantially alter patterns of social interaction in a community, and that the ability of a community to act collectively is the result of a slow and necessarily indigenous process. We address this question using a randomized field experiment to assess the effects of a community-driven reconstruction (CDR) project carried out by the International Rescue Committee (IRC) in northern Liberia. The project attempted to build democratic, community-level institutions for making and implementing decisions about local public goods. We find powerful evidence that the program was successful in increasing social cohesion, some evidence that it reinforced democratic political attitudes and increased confidence in local decision-making procedures, but only weak evidence that material well-being was positively affected. There is essentially no evidence of adverse effects. *Jeremy Weinstein is on leave from the Center for Global Development.
Topic:
Conflict Resolution, Civil Society, Civil War, Development, and Foreign Aid
Political Geography:
Africa and Liberia

377. Will World Bank and IMF Lending Lead to HIPC IV? Debt Deja-Vu All Over Again

Author:
Benjamin Leo
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Four years ago, the G-7 pushed through an unprecedented initiative forcing the international financial institutions to cancel 100 percent of their outstanding debt claims on the world's poorest countries. Through the Multilateral Debt Relief Initiative (MDRI), these heavily indebted poor countries (HIPCs) stand to receive up to $60 billion in debt relief over time. Moreover, the World Bank, African Development Bank, and IMF shareholders approved a new debt sustainability framework to govern future lending decisions and prevent the need for yet another round of systemic debt relief. All parties emerged from these landmark agreements confident that the dragon of unsustainable debt finally had been slain. However, several unsettling trends raise serious questions about the finality of these actions. First, World Bank and AfDB lending disbursement volumes to these very same HIPC countries remain very high, and nearly the same as compared to pre-MDRI. Emergency IMF lending in response to the global economic crisis has compounded the situation. Second, IMF and World Bank growth projections for HIPCs remain overly rosy compared to actual and historical performance. Our new dataset of IMF growth projections suggests a structural optimism of at least one percentage point per year. Third, HIPCs continue to experience significant volatility in country performance measures that has a direct impact on their ability to carry debt sustainably. Taken together, these findings suggest that donor countries should re-examine the issue of debt sustainability in low-income countries and the system for determining the appropriate grant/loan mix. The upcoming IDA and AfDF replenishment negotiations present a timely opportunity to do so. Absent assertive and corrective action, the international community may be faced with the prospect of a HIPC IV agreement in the not too distant future.
Topic:
Development, Economics, and Foreign Aid
Political Geography:
Latin America

378. FORMA: Forest Monitoring for Action--Rapid Identification of Pan-tropical Deforestation Using Moderate-Resolution Remotely Sensed Data

Author:
David Wheeler, Robin Kraft, and Dan Hammer
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Rising concern about carbon emissions from deforestation has led donors to finance UN-REDD (Reducing Emissions from Deforestation and Forest Degradation in Developing Countries), a program that offers direct compensation for forest conservation. Sustainable operation of UN-REDD and other direct-compensation programs will require a transparent, credible, frequently updated system for monitoring deforestation. In this paper, we introduce FORMA (Forest Monitoring for Action), a prototype system based on remotely sensed data. We test its accuracy against the best available information on deforestation in Brazil and Indonesia. Our results indicate that publicly available remotely sensed data can support accurate quarterly identification of new deforestation at 1 km spatial resolution. More rapid updates at higher spatial resolution may also be possible. At current resolution, with efficient coding in publicly available software, FORMA should produce global updates on one desktop computer in a few hours. Maps of probable deforestation at 1 km resolution will be accessible with Google Earth and Google Maps, with an open facility for ground-truthing each pixel via photographs and text comments.
Topic:
Agriculture, Climate Change, and Development
Political Geography:
Indonesia and Brazil

379. Is Newer Better? Penn World Table Revisions and Their Impact on Growth Estimates

Author:
Arvind Subramanian, Simon Johnson, William Larson, and Chris Papageorgiou
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper sheds light on two problems in the Penn World Table (PWT) GDP estimates. First, we show that these estimates vary substantially across different versions of the PWT despite being derived from very similar underlying data and using almost identical methodologies; that this variability is systematic; and that it is intrinsic to the methodology deployed by the PWT to estimate growth rates. Moreover, this variability matters for the cross-country growth literature. While growth studies that use low-frequency data remain robust to data revisions, studies that use annual data are less robust. Second, the PWT methodology leads to GDP estimates that are not valued at purchasing power parity (PPP) prices. This is surprising because the raison d'être of the PWT is to adjust national estimates of GDP by valuing output at common international (PPP) prices so that the resulting PPP-adjusted estimates of GDP are comparable across countries. We propose an approach to address these two problems of variability and valuation.
Topic:
Development, Economics, International Political Economy, International Trade and Finance, and International Affairs

380. Moving Mugabe's Mountain: Zimbabwe's Path to Arrears Clearance and Debt Relief

Author:
Todd Moss and Benjamin Leo
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Zimbabwe is embarking on a long, complex, and difficult journey to rebuild its economy, which has been shattered by years of neglect and destructive government policies. If the final political hurdles are overcome hopefully sooner rather than later—the new coalition government will be faced with making politically difficult decisions and addressing conclusively the economic ghosts of the past. One of those ghosts is more than $5 billion owed to external creditors, of which nearly 80 percent is arrears. Clearing Zimbabwe's external debt arrears and securing comprehensive debt relief will be a critical step in eventual recovery. By doing so, the government will remove a crippling burden on its budget, investment climate, and overall macroeconomic environment. More important to the success of the coalition government, it will unlock hundreds of millions of dollars in new external assistance for critical reconstruction programs that will improve the Zimbabwean people's quality of life. This paper provides a detailed overview of the arrears clearance and debt relief processes. The purpose is to spark a debate in creditor capitals and hopefully to buttress the government's analytical foundation. With a strong dedicated team of experts—and support from relevant donor agencies— the Zimbabwean government will one day conclusively address its crushing debt burden and proceed with the rebuilding of a once vibrant and proud nation.
Topic:
Corruption and Governance
Political Geography:
Africa and Zimbabwe