Search

Begin New Search Topic Economics Publishing Institution Center for Global Development (CGD)

31. Does Development Reduce Migration?

Author:
Michael Clemens
Publication Date:
03-2014
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
The most basic economic theory suggests that rising incomes in developing countries will deter emigration from those countries, an idea that captivates policymakers in international aid and trade diplomacy. A lengthy literature and recent data suggest something quite different: that over the course of a "mobility transition", emigration generally rises with economic development until countries reach upper-middle income, and only thereafter falls. This note quantifies the shape of the mobility transition in every decade since 1960. It then briefly surveys 45 years of research, which has yielded six classes of theory to explain the mobility transition and numerous tests of its existence and characteristics in both macro- and micro-level data. The note concludes by suggesting five questions that require further study.
Topic:
Economics, Migration, Social Stratification, Social Movement, and Developing World
Political Geography:
United States, Canada, and Mexico

32. The Health Financing Transition: A Conceptual Framework and Empirical Evidence

Author:
William Savedoff and Victoria Fan
Publication Date:
03-2014
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
Almost every country exhibits two important health financing trends: health spending per person rises and the share of out-of-pocket spending on health services declines. We describe these trends as a "health financing transition" to provide a conceptual framework for understanding health markets and public policy. Using data over 1995-2009 from 126 countries, we examine the various explanations for changes in health spending and its composition with regressions in levels and first differences. We estimate that the income elasticity of health spending is about 0.7, consistent with recent comparable studies. Our analysis also shows a significant trend in health spending - rising about 1 percent annually - which is associated with a combination of changing technology and medical practices, cost pressures and institutions that finance and manage healthcare. The out-of-pocket share of total health spending is not related to income, but is influenced by a country's capacity to raise general revenues. These results support the existence of a health financing transition and characterize how public policy influences these trends.
Topic:
Development, Economics, Health, and Governance
Political Geography:
United States

33. A Case against Taxes and Quotas on High-Skill Emigration

Author:
Michael Clemens
Publication Date:
05-2014
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
Skilled workers have a rising tendency to emigrate from developing countries, raising fears that their departure harms the poor. To mitigate such harm, researchers have proposed a variety of policies designed to tax or restrict high-skill migration. Those policies have been justified as Pigovian regulations to raise efficiency by internalizing externalities, and as non-Pigovian regulations grounded in equity or ethics. This paper challenges both sets of justifications, arguing that Pigovian regulations on skilled emigration are inefficient and non-Pigovian regulations are inequitable and unethical. It concludes by discussing a different class of policy intervention that, in contrast, has the potential to raise welfare.
Topic:
Economics, Human Rights, Human Welfare, Immigration, and Monetary Policy
Political Geography:
India

34. Publishing Government Contracts: Addressing Concerns and Easing Implementation (Brief)

Author:
Charles Kenny
Publication Date:
11-2014
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
Government contracts regarding the use of public property and finances should be published by default. Many jurisdictions already require that contracts be made public in response to requests for the information; some now publish contracts proactively. Doing so helps new entrants compete in the market for public contracts, helps governments model their projects on other successful examples, and allows citizens greater insight into how their taxes are being spent. This brief, summarizing the conclusions of the Working Group on Government Contract Publication, provides a practical outline for reaping the benefits of open contracts while addressing legitimate concerns about costs, collusion, privacy, commercial secrecy, and national security.
Topic:
Economics and Government
Political Geography:
United Kingdom

35. Value Subtraction in Public Sector Production: Accounting Versus Economic Cost of Primary Schooling in India

Author:
Lant Pritchett and Yamini Aiyar
Publication Date:
12-2014
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
We combine newly created data on per student government expenditure on children in government elementary schools across India, data on per student expenditure by households on students attending private elementary schools, and the ASER measure of learning achievement of students in rural areas. The combination of these three sources allows us to compare both the “accounting cost” difference of public and private schools and also the “economic cost”—what it would take public schools, at their existing efficacy in producing learning, to achieve the learning results of the private sector. We estimate that the “accounting cost” per student in a government school in the median state in 2011/12 was Rs. 14,615 while the median child in private school cost Rs. 5,961. Hence in the typical Indian state, educating a student in government school costs more than twice as much than in private school, a gap of Rs. 7,906. Just these accounting cost gaps aggregated state by state suggests an annual excess of public over private cost of children enrolled in government schools of Rs. 50,000 crores (one crore=10 million) or .6 percent of GDP. But even that staggering estimate does not account for the observed learning differentials between public and private. We produce a measure of inefficiency that combines both the excess accounting cost and a money metric estimate of the cost of the inefficacy of lower learning achievement. This measure is the cost at which government schools would be predicted to reach the learning levels of the private sector. Combining the calculations of accounting cost differentials plus the cost of reaching the higher levels of learning observed in the private sector state by state (as both accounting cost differences and learning differences vary widely across states) implies that the excess cost of achieving the existing private learning levels at public sector costs is Rs. 232,000 crores (2.78% of GDP, or nearly US$50 billion). It might seem counterintuitive that the total loss to inefficiency is larger than the actual budget, but that is because the actual budget produces such low levels of learning at such high cost that when the loss from both higher expenditures and lower outputs are measured it exceeds expenditures.
Topic:
Economics, Education, Privatization, and Reform
Political Geography:
India and Asia

36. Stopping Deforestation: What Works and What Doesn't

Author:
Jonah Busch and Kalifi Ferretti-Gallon
Publication Date:
05-2014
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
A new Center for Global Development meta-analysis of 117 studies has identified the key factors that drive or deter deforestation. Some findings confirm conventional wisdom. Building roads and expanding agriculture in forested areas, for example, worsen deforestation, whereas protected areas deter deforestation. Encouragingly, payments for ecosystem services (PES) programs that compensate people who live in or near forests for maintaining them are consistently associated with lower rates of deforestation. But contrary to popular belief, poverty is not associated with greater deforestation, and the rising incomes brought about by economic growth do not, in themselves, lead to less deforestation. Community forest management and strengthening land tenure, often thought to reduce deforestation while promoting development, have no consistent impact on deforestation.
Topic:
Agriculture, Economics, Environment, and Poverty

37. Understanding Latin America's Financial Inclusion Gap

Author:
Liliana Rojas-Suarez and Maria Alejandra Amado
Publication Date:
05-2014
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
This paper analyzes Latin America's Financial Inclusion Gap, the difference between the average financial inclusion for Latin America and the corresponding average for a set of comparator countries. At the country level, we assess four types of obstacles to financial inclusion: macroeconomic weaknesses, income inequality, institutional deficiencies and financial sector inefficiencies. A key finding of this paper is that although the four types of obstacles explain the absolute level of financial inclusion, institutional deficiencies and income inequality are the most important obstacles behind the Latin America's financial inclusion gap. From our analysis at the individual level, we find that there is a Latin America-specific effect of education and income. The results suggest that the effect of attaining secondary education on the probability of being financially included is significantly higher in Latin America than in its comparators. Furthermore, the difference in the probability of being financially included between the richest and the poorest individuals is significantly higher in Latin America than in comparator countries.
Topic:
Economics, Education, Human Rights, and Poverty
Political Geography:
Latin America

38. How Should Donors Respond to Resource Windfalls in Poor Countries?

Author:
Alan Gelb, Anton Dobronogov, and Fernando Brant Saldanha
Publication Date:
07-2014
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
Natural resources are being discovered in more countries, both rich and poor. Many of the new and aspiring resource exporters are low-income countries that are still receiving substantial levels of foreign aid. Resource discoveries open up enormous opportunities, but also expose producing countries to huge trade and fiscal shocks from volatile commodity markets if their exports are highly concentrated. A large literature on the "resource curse" shows that these are damaging unless countries manage to cushion the effects through countercyclical policy. It also shows that the countries least likely to do so successfully are those with weaker institutions, and these are most likely to remain as clients of the aid system. This paper considers the question of how donors should respond to their clients' potential windfalls. It discusses several ways in which the focus and nature of foreign aid programs will need to change, including the level of financial assistance. The paper develops some ideas on how a donor like the International Development Association might structure its program of financial transfers to mitigate volatility. The paper outlines ways in which the International Development Association could use hedging instruments to vary disbursements while still working within a framework of country allocations that are not contingent on oil prices. Simulations suggest that the International Development Association could be structured to provide a larger degree of insurance if it is calibrated to hedge against large declines in resource prices. These suggestions are intended to complement other mechanisms, including self-insurance using Sovereign Wealth Funds (where possible) and the facilities of the International Monetary Fund.
Topic:
Economics, International Trade and Finance, Natural Resources, and Foreign Aid
Political Geography:
Uganda, Kenya, Tanzania, and Ghana

39. The Quality of Official Development Assistance 2014

Author:
Nancy Birdsall, Homi Kharas, and Nabil Hashmi
Publication Date:
07-2014
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
The Quality of Official Development Assistance (QuODA) measures donors' performance on 31 indicators of aid quality to which donors have made commitments. The indicators are grouped into four dimensions associated with effective aid: maximizing efficiency, fostering institutions, reducing the burden on partner countries, and transparency and learning. The 2014 edition finds that donors are overall becoming more transparent and better at fostering partner country institutions but that there has been little progress at maximizing efficiency or reducing the burden on partner countries. The World Bank's concessional lending arm, the International Development Association (IDA), performs very well in QuODA, ranking in the top 10 of 31 donors on all four dimensions. The United States ranks in the bottom half of all donors on three of the four dimensions of aid quality and last on reducing the burden on partner countries. The United Kingdom ranks in the top third on three of four dimensions of aid quality and scores particularly well on transparency and learning. The Global Fund ranks in the bottom third on fostering institutions but ranks in the top third on the other three dimensions of aid quality, including the top spot in maximizing efficiency.
Topic:
Foreign Policy, Development, Economics, Foreign Aid, and Foreign Direct Investment
Political Geography:
United States and United Kingdom

40. How Has the Developing World Changed since the Late 1990s? A Dynamic and Multidimensional Taxonomy of Developing Countries

Author:
Andy Sumner and Sergio Tezanos Vázquez
Publication Date:
08-2014
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
Many existing classifications of developing countries are dominated by income per capita (such as the World Bank's low, middle, and high income thresholds), thus neglecting the multidimensionality of the concept of 'development'. Even those deemed to be the main 'alternatives' to the income-based classification have income per capita heavily weighted within a composite indicator. This paper provides an alternative perspective: clusters of developing countries. We take 4 'frames' on the meaning of development: economic development, human development, better governance, and environmental sustainability. We then use a cluster procedure in order to build groups of countries that are to some extent internally 'homogeneous', but noticeably dissimilar to other groups. The advantage of this procedure is that it allows us identify the key development characteristics of each cluster of countries and where each country fits best. We then use this taxonomy to analyze how the developing world has changed since the late 1990s in terms of clusters of countries and the country groupings themselves.
Topic:
Development, Economics, Governance, and Reform