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71. What Is Poverty Reduction?

Author:
Owen Barder
Publication Date:
04-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
There is a healthy debate about how to achieve poverty reduction in developing countries, but not enough discussion of what we mean by “poverty reduction.” “Poverty reduction” is often used as a short-hand for promoting economic growth that will permanently lift as many people as possible over a poverty line. But there are many different objectives that are consistent with “poverty reduction,” and we have to make choices between them. There are trade-offs between tackling current and future poverty, between helping as many poor people as possible and focusing on those in chronic poverty, and between measures that tackle the causes of poverty and those which deal with the symptoms. Because donors focus on just one dimension of poverty reduction (growth) they marginalise other legitimate objectives such as reducing chronic poverty or providing social services in countries that cannot otherwise afford them.
Topic:
Development, Environment, Humanitarian Aid, Poverty, Third World, and Foreign Aid

72. Do Regulatory Reforms Stimulate Investment and Growth? Evidence from the Doing Business Data

Author:
Benjamin P. Eifert
Publication Date:
01-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The role of regulatory barriers in inhibiting entrepreneurship, investment and employment creation is an old topic in economics. This study utilizes a five-year panel of data on regulations and procedures from the World Bank's Doing Business project, along with Arellano-Bond dynamic panel estimators, looking for evidence that regulatory reforms lead to higher aggregate investment rates (roughly, factor demand) or GDP growth conditional on investment rates (roughly, factor productivity). It looks both at individual regulatory indicators and more aggregate measures of the incidence of reforms, finding some evidence of positive impacts of regulatory reforms in countries which are relatively poor (conditional on governance) and relatively well-governed (conditional on income). Relatively poor and relatively well-governed countries grow about 0.4 and 0.2 percentage points faster in the year immediately following one or more reforms, respectively. In both subsets of countries, investment rates accelerate by about 0.6 percentage points in the subsequent year.
Topic:
Development, Economics, Markets, Poverty, and Third World

73. Saving Ghana from Its Oil: The Case for Direct Cash Distribution

Author:
Todd Moss and Lauren Young
Publication Date:
10-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Ghana can be considered a relative success story in Africa. We cite six variables—peace and stability, democracy and governance, control of corruption, macroeconomic management, poverty reduction, and signs of an emerging social contract—to suggest the country's admirable political and economic progress. The expected arrival of sizeable oil revenues beginning in 2011–13, however, threatens to undermine that progress. In fact, numerous studies have linked natural resources to negative outcomes such as conflict, authoritarianism, high corruption, economic instability, increased poverty, and the destruction of the social contract. The oil curse thus threatens the very outcomes that we consider signs of Ghana's success. This paper draws lessons from the experiences of Norway, Botswana, Alaska, Chad, and Nigeria to consider Ghana's policy options. One common characteristic of the successful models appears to be their ability to encourage an influential constituency with an interest in responsible resource management and the means to hold government accountable. The Alaska model in particular, which was designed explicitly to manufacture citizen oversight and contain oil-induced patronage, seems relevant to Ghana's current predicament. We propose a modified version of Alaska's dividend program. Direct cash distribution of oil revenues to citizens is a potentially powerful approach to protect and accelerate Ghana's political and economic gains, and a way to strengthen the country's social contract. We show why Ghana is an ideal country to take advantage of this option, and why the timing is fortuitous. We conclude by confronting some of the common objections to this approach and suggest that new technology such as biometric ID cards or private mobile phone networks could be utilized to implement the scheme.
Topic:
Corruption, Economics, Oil, and Poverty
Political Geography:
Africa and Ghana

74. Opening Markets for Poor Countries: Are We There Yet?

Author:
Kimberly Ann Elliott
Publication Date:
10-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Despite six decades of trade liberalization, trade policies in rich countries still discriminate against the exports of the world's poorest countries. Preferential market access programs were designed to spur larger and more diversified exports from developing countries, but product exclusions and burdensome rules undermined their usefulness, especially for the poorer countries. Most rich countries have made reforms since the UN Millennium Declaration in 2000 called for duty-free, quota-free market access for the least-developed countries. After the World Trade Organization ministerial communiqué called upon developing countries “in a position to do so” to also provide such access, key countries have moved toward that goal. But much remains to be done to achieve the goal of meaningful market access for the poorest countries, including reformed rules of origin that facilitate rather than inhibit trade.
Topic:
International Trade and Finance, Poverty, and United Nations

75. Commitment to Development Index 2009

Publication Date:
10-2009
Content Type:
Policy Brief
Institution:
Center for Global Development
Abstract:
The Commitment to Development Index (CDI) ranks 22 of the world's richest countries on their dedication to policies that benefit the five billion people living in poorer nations. Moving beyond standard comparisons of foreign aid volumes, the CDI quantifies a range of rich-country policies that affect poor people in developing countries: Quantity and quality of foreign aid Openness to developing-country exports Policies that encourage investment Migration policies Environmental policies Security policies Support for creation and dissemination of new technologies Scores on each component are scaled so that an average score in 2008, the reference year, equals 5.0. A country's final score is the average of those for each component. The CDI adjusts for size in order to compare how well countries are living up to their potential to help.
Topic:
Development, International Cooperation, Poverty, Third World, International Affairs, and Foreign Aid

76. Income Per Natural: Measuring Development for People rather than Places - Working Paper 143

Author:
Michael Clemens and Lant Pritchett
Publication Date:
03-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
It is easy to learn the average income of a resident of El Salvador or Albania. But there is no systematic source of information on the average income of a Salvadoran or Albanian. We create a first estimate a new statistic: income per natural—the mean annual income of persons born in a given country, regardless of where that person now resides. If income per capita has any interpretation as a welfare measure, exclusive focus on the nationally resident population can lead to substantial errors of the income of the natural population for countries where emigration is an important path to greater welfare. The estimates differ substantially from traditional measures of GDP or GNI per resident, and not just for a handful of tiny countries. Almost 43 million people live in a group of countries whose income per natural collectively is 50% higher than GDP per resident. For 1.1 billion people the difference exceeds 10%. We also show that poverty estimates are very different for national residents and naturals; for example, 26 percent of Haitian naturals who are not poor by the two-dollar-a-day standard live in the United States. These estimates are simply descriptive statistics and do not depend on any assumptions about how much of observed income differences across naturals is selection and how much is a pure location effect. Our conservative, if rough, estimate is that three quarters of this difference represents the effect of international migration on income per natural. This means that departing one's country of birth is today one of the most important sources of poverty reduction for a large portion of the developing world. If economic development is defined as rising human well being, then a residence-neutral measure of well-being emphasizes that crossing international borders is not an alternative to economic development, it is economic development.
Topic:
Demographics, Development, Economics, Migration, Poverty, and Population
Political Geography:
United States and Albania

77. The Structural Transformation as a Pathway out of Poverty: Analytics, Empirics and Politics

Author:
Peter Timmer and Selvin Akkus
Publication Date:
07-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
A powerful historical pathway of structural transformation is experienced by all successful developing countries, and this Working Paper presents the results of new empirical analysis of the process. Making sure the poor are connected to both the structural transformation and to the policy initiatives designed to ameliorate the distributional consequences of rapid transformation has turned out to be a major challenge for policy makers over the past half century. There are successes and failures, and the historical record illuminates what works and what does not. Trying to stop the structural transformation does not work, at least for the poor, and in fact can lead to prolonged immiseration. Investing in the capacity of the poor to cope with change and to participate in its benefits through better education and health does seem to work. Such investments typically require significant public sector resources and policy support, and thus depend on political processes that are themselves conditioned by the pressures generated by the structural transformation itself.
Topic:
Agriculture, Development, Economics, and Poverty

78. Thought for Food: The Challenges of Coping with Soaring Food Prices

Author:
Nora Lustig
Publication Date:
11-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
World food commodities prices increased 130 percent from January 2002 to July 2008. Individual agricultural commodities show even more pronounced increases: corn, wheat, rice and soybeans rose by 190, 162, 318 and 246 percent, respectively. Since July, food commodities prices began to fall. While this decline comes as a relief, prices are likely to stay high in the foreseeable future. Available evidence suggests that the decline in living standards of net consumers caused by higher food prices outweighs the benefits accruing to poor net sellers in the majority of countries that have been analyzed so far. The time to implement measures to help the poor net consumers cope with higher food prices is now. However, too many developing countries lack the instruments, administrative capacity and fiscal space to implement safety nets fast enough and in the required scale. This is one of the most pressing policy challenges that we face. For the poor who are net sellers, governments should seize the opportunity to convert the short-run windfall into longer-term gains. Multilateral financial institutions can play a key role in providing financial resources to countries facing negative terms of trade shocks, technical assistance in the design of safety nets and resources to add fiscal space to countries to fund safety net programs. International organizations can also help countries design the appropriate macroeconomic policy response. This will call for greater flexibility in the menu of policy options traditionally deployed by the Bretton Woods institutions.
Topic:
Security, Agriculture, International Political Economy, International Trade and Finance, Markets, and Poverty

79. Performance-based Incentives for Health: Demand- and Supply-Side Incentives in the Nicaraguan Red de Protección Social - Working Paper 119

Author:
Ferdinando Regalía and Leslie Castro
Publication Date:
04-2007
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Nicaragua's Red de Protección Social (RPS) is one of the first conditional cash transfer (CCT) programs implemented in a low-income country. Demand-side incentives, in the form of monetary transfers, are provided to poor households on condition that their children attend school and visit preventive health care providers. The design of the program is unique among CCT programs because these demand-side incentives are complemented by supply-side incentives aimed at improving the provision of health care. Health care providers are paid on the basis of their performance against predetermine d targets. Both private and nonprofit health care providers contracted by the government extend the coverage of services to previously underserved areas.
Topic:
Education, Health, Non-Governmental Organization, and Poverty
Political Geography:
Nicaragua

80. Performance-Based Incentives for Health: Conditional Cash Transfer Programs in Latin America and the Caribbean - Working Paper 120

Author:
Amanda Glassman, Jessica Todd, and Marie Gaarder
Publication Date:
04-2007
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
In order to support poor families in the developing world to seek and use health care, a multi-pronged strategy is needed on both the supply and the demand side of health care. A demand-side program called Conditional Cash Transfer s (CCTs) strives to reduce poverty and also increase food consumption, school attendance, and use of preventive health care. Since 1997, seven countries in Latin America have implemented and evaluated CCT programs with health and nutrition components. The core of the program is based on encouraging poor mothers to seek preventive health services and attend health education talks by providing a cash in centive for their healthy behavior (with healthy behavior representing performance). Evaluations of these programs measured outputs in the utilization of services; health knowledge, attitudes, and practice; food consumption; the supply and quality of services; as well as outcomes in vaccination rates; nutritional status; morbidity; mortality; and fertility.
Topic:
Education, Health, and Poverty
Political Geography:
South America, Latin America, Central America, and Caribbean