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Begin New Search Topic Developing World Publishing Institution The John F. Kennedy School of Government at Harvard University

1. Quid Pro Quo, Knowledge Spillover and Industrial Upgrading

Author:
Jie Bai, Panle Barwick, Shengmao Cao, and Shanjun Li
Publication Date:
11-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Are quid pro quo (technology for market access) policies effective in facilitating knowledge spillover to developing countries? We study this question in the context of the Chinese automobile industry where foreign firms are required to set up joint ventures with domestic firms in return for market access. Using a unique dataset of detailed quality measures along multiple dimensions of vehicle performance, we document empirical patterns consistent with knowledge spillovers through both ownership affiliation and geographical proximity: joint ventures and Chinese domestic firms with ownership or location linkage tend to specialize in similar quality dimensions. The identification primarily relies on within-product variation across quality dimensions and the results are robust to a variety of specifications. The pattern is not driven by endogenous joint-venture network formation, overlapping customer base, or learning by doing considerations. Leveraging additional micro datasets on part suppliers and worker flow, we document that supplier network and labor mobility are important channels in mediating knowledge spillovers. However, these channels are not tied to ownership affiliations. Finally, we calibrate a simple learning model and conduct policy counterfactuals to examine the role of quid pro quo. Our findings show that ownership affiliation facilitates learning but quality improvement is primarily driven by the other mechanisms.
Topic:
International Trade and Finance, Science and Technology, and Developing World
Political Geography:
China and Asia

2. Tax Administration vs. Tax Rates: Evidence from Corporate Taxation in Indonesia

Author:
M. Chatib Basri, Mayara Felix, Rema Hanna, and Benjamin A. Olken
Publication Date:
10-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Developing countries collect a far lower share of GDP in taxes than richer countries. This paper asks whether changes in tax administration and tax rates can nevertheless raise substantial additional revenue – and if so, which approach is most effective. We study corporate taxation in Indonesia, where the government implemented two reforms that differentially affected firms. First, we show that increasing tax administration intensity by moving the top firms in each region into “Medium-Sized Taxpayer Offices,” with much higher staff-to-taxpayer ratios, more than doubled tax revenue from affected firms over six years, with increasing impacts over time. Second, using non-linear changes to the corporate income tax schedule, we estimate an elasticity of taxable income of 0.59, which implies that the revenue-maximizing rate is almost double the current rate. The increased revenue from improvements in tax administration is equivalent to raising the marginal corporate tax rate on affected firms by about 23 percentage points. We suggest one reason improved tax administration was so effective was that it flattened the relationship between firm size and enforcement, removing the additional “enforcement tax” on large firms. On net, our results suggest that improving tax administration can have significant returns for developing country governments.
Topic:
Governance, Developing World, Reform, Business, and Tax Systems
Political Geography:
Indonesia and Southeast Asia

3. Creative Destruction or Idiot Winds: Schumpeterian Theory Meets the Educational Sector in Developing Countries

Author:
Mark H. Moore
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
This is one of a series of working papers from “RISE"—the large-scale education systems research programme supported by the UK’s Department for International Development (DFID), Australia’s Department of Foreign Affairs and Trade (DFAT), and the Bill and Melinda Gates Foundation.
Topic:
Development, Education, Governance, and Developing World
Political Geography:
Global Focus

4. Why Does Hirschmanian Development Remain Mired on the Margins? Because Implementation (and Reform) Really is 'a Long Voyage of Discovery'

Author:
Michael Woolcock
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
A defining task of development is enhancing a state’s capability for policy implementation. In most low- income countries, alas, such capabilities seem to be stagnant or declining, in no small part because dominant reform strategies are ill-suited to addressing complex non-technical aspects. This has been recognized for at least six decades – indeed, it was a centerpiece of Albert Hirschman’s understanding of the development process – yet this critique, and the significance of its implications, remain on the margins of scholarship and policy. Why? I consider three options, concluding that, paradoxically, followers of Hirschman’s approach inadequately appreciated that gaining more operational traction for their approach was itself a type of problem requiring their ideas to embark on ‘a long voyage of discovery’, a task best accomplished, in this instance, by building – and tapping into the distinctive insights of – a diverse community of development practitioners.
Topic:
Development, Political Economy, Developing World, and International Development
Political Geography:
North America and United States of America

5. Who Wins in the World Economy and English Football?

Author:
Matt Andrews
Publication Date:
01-2019
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Globalization has fed significant economic gains across the world. The gains lead some policymakers in developing countries to believe in the potential of ‘catch up’—where they leverage the gains of an open world economy to foster rapid progress and compete with more developed nations. This belief is particularly evident in countries like Rwanda, where policymakers aspire to turn the country into ‘Africa’s Singapore’. This paper asks if such aspiration is realistic: Do developing countries really gain enough from globalization to catch up to more developed countries? The paper examines the world economy as a league in which countries compete for winnings (manifest in higher income and production). Wealthier countries are in the top tiers of this league and poorer countries are in the lower tiers. The paper asks if gains from the last generation of growth have been distributed in such a way to foster ‘catch up’ by lower tier countries, and if we see these countries ‘catching up’ by moving into higher tiers. This analysis of the world economy is compared with a study of English football, where over 90 clubs play in an multi-tier league system. Prominent examples of ‘catch up’ in this system include Leicester City’s rise from the third tier in 2008 to become first tier champion in 2015. The paper asks if such ‘catch up’ is common in English football, given the way winnings are distributed, and if ‘catch up’ is more common in this context than in the world economy more generally.
Topic:
Globalization, Developing World, Global Political Economy, and Economic growth
Political Geography:
Africa and Rwanda

6. Enhancing Public Health Outcomes in Developing Countries: From Good Policies and Best Practices to Better Implementation

Author:
Michael Woolcock
Publication Date:
02-2018
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
In rich and poor countries alike, a core challenge is building the state’s capability for policy implementation. Delivering high-quality public health and health care – affordably, reliably, at scale, for all – exemplifies this challenge, since doing so requires deftly integrating refined technical skills (surgery), broad logistics management (supply chains, facilities maintenance), adaptive problem solving (curative care) and resolving ideological differences (who pays? who provides?), even as the prevailing health problems themselves only become more diverse, complex and expensive as countries become more prosperous. The current state of state capability in developing countries, however, is demonstrably alarming, with the strains and demands only likely to intensify in the coming decades. Prevailing ‘best practice’ strategies for building implementation capability – copying and scaling putative successes from abroad – are too often part of the problem, while individual training (‘capacity building’) and technological upgrades (e.g., new management information systems) remain necessary but deeply insufficient. An alternative approach is outlined, one centered on building implementation capability by working iteratively to solve problems nominated and prioritized by local actors.
Topic:
Health, Developing World, State, Public Policy, and Policy Implementation
Political Geography:
Global Focus

7. Welcome Home in a Crisis: Effects of Return Migration on the Non-migrants' Wages and Employment

Author:
Ricardo Hausmann and Ljubica Nedelkoska
Publication Date:
01-2017
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Over the past few decades, migration from developing to developed countries was often viewed as 'brain drain', as talented workers were forced out of their home countries due to lack of competitive opportunities. The population that left these countries and settled in the more economically advanced parts of the world have, over time, acquired financial capital and built social networks within host countries. Hence, while the home countries were still suffering from the scarcity of knowhow, significant shares of their populations began to actively engage in more productive economies. It seems that, through migration, developing countries had unexpectedly created significant networks of human and financial capital abroad. But are these foreign networks transferring knowhow back to their home countries? It turns out that those same reasons that induced the economic migration in the first place, often make it difficult for migrants to engage afterwards. What would happen, however, if a large proportion of these diasporas was forced to return back to their home country - would that lead to knowhow transfer? Our study investigates the impact of such an abrupt return migration wave between Greece and Albania.
Topic:
Development, Migration, Labor Issues, Developing World, and Economy
Political Geography:
Europe, Eastern Europe, Greece, and Albania

8. The Big Stuck in State Capability for Policy Implementation

Author:
Matt Andrews, Lant Pritchett, and Michael Woolcock
Publication Date:
01-2016
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
We divide the 102 historically developing countries (HDCs) into those with ‘very weak’, ‘weak’, ‘middle’, and ‘strong’ state capability. Analyzing the levels and recent growth rates of the HDCs’ capability for policy implementation reveals how pervasively “stuck” most of them are. Only eight HDCs have attained strong capability, and since most of these are small (e.g., Singapore, UAE), less than 100 million (or 1.7%) of the roughly 5.8 billion people in HDCs currently live in high capability states. Almost half (49) of these countries have very weak or weak capability, and thus their long-run pace of acquiring capability is also very slow. Alarmingly, three quarters of these countries (36 of 49) have experienced negative growth in state capability in recent decades, while more than a third of all countries (36 of 102) have low and (in the medium run at least) deteriorating state capability. At current rates, the ‘time to high capability’ of the 49 currently weak capability states and the 36 with negative growth is obviously “forever”. But even for the 13 with positive growth, only three would reach strong capability by the end of the 21st century at their current medium run growth.
Topic:
Developing World, International Development, State, and Public Policy
Political Geography:
Global Focus and United States of America

9. Can one retell a Mozambican reform story through Problem Driven Iterative Adaptation?

Author:
Matt Andrews
Publication Date:
02-2014
Content Type:
Working Paper
Institution:
The John F. Kennedy School of Government at Harvard University
Abstract:
Many public sector reforms in developing countries fail to make governments more functional. This is typically because reforms introduce new solutions that do not fit the contexts in which they are being placed. This situation reflects what has recently been called the 'capability trap' in development—which results in many interventions producing new forms that are not functional in states across the globe. The work on capability traps suggests that reforms can yield more functional influence in even the most complex states, however; if reformers adopt non-traditional approaches to doing reform. In particular, the work suggests that reforms will tend to be more contextually fitted if: (i) They are driven by problems that agents in the context care about; and (ii) They are introduced iteratively—through a stepwise process where ideas are tried and lessons are learned and used to adapt (or fit) ideas to context. The capability traps work embeds these ideas into an approach to doing reform called Problem Driven Iterative Adaptation (PDIA). This approach has deep roots in various literatures but many observers still ask how PDIA-type reforms could work to foster successful reform in complex hierarchical developing country governments and whether these approaches really help foster reforms that better fit such complex contexts. This paper responds to such question by describing an action research study where PDIA is being used to retell a story of reform that has to date been limited. The action research study is in Mozambique’s judicial sector and will examine whether and how a problem driven iterative approach can (i) flush out the contextual factors that often limit reform success, (ii) provide a viable route to find and fit reforms that actually foster greater functionality, and (iii) promote the authority needed to ensure change is implemented and institutionalized.
Topic:
Government, Developing World, Reform, and Public Sector
Political Geography:
Africa and Mozambique