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1661. Tajikistan: On the Road to Failure

Publication Date:
02-2009
Content Type:
Working Paper
Institution:
International Crisis Group
Abstract:
Far from being a bulwark against the spread of extremism and violence from Afghanistan, Tajikistan is looking increasingly like its southern neighbour – a weak state that is suffering from a failure of leadership. Energy infrastructure is near total breakdown for the second winter running, and it is likely migrant labourer remittances, the driver of the country's economy in recent years, will fall dramatically as a result of the world economic crisis. President Emomali Rakhmon may be facing his greatest challenge since the civil war of 1992-97. At the very least the government will be confronted with serious economic problems, and the desperately poor population will be condemned to yet more deprivation. At worst the government runs the risk of social unrest. There are few indications that the Rakhmon administration is up to this challenge. To address the situation, the international community – both at the level of international organisations and governments – should ensure any assistance reaches those who truly need it, place issues of governance and corruption at the centre of all contacts with the Tajik government, and initiate an energetic dialogue with President Rakhmon on democratisation.
Topic:
Democratization, Development, Government, Islam, Terrorism, and War
Political Geography:
Afghanistan, Asia, and Tajikistan

1662. Using Indicators to Encourage Development? Lessons from the Millennium Development Goals

Author:
Richard Manning
Publication Date:
01-2009
Content Type:
Working Paper
Institution:
Danish Institute for International Studies
Abstract:
The Millennium Declaration included a highly significant innovation – universal, support by the world's governments for a short list of development results to be, achieved by a set date. As the target year of 2015 approaches, the paper compares the, MDG framework that emerged from the Declaration with other ways of measuring, and incentivising progress, sets out some initial hypotheses about its impact and addresses issues about its structure and coverage. This leads to proposals about how to, get the best value from the MDGs over the years to 2015 and five hypotheses about, how the world might approach the issue of what framework, if any, to put in place, to measure and incentivise development progress after 2015.
Topic:
Development, Health, Human Welfare, Humanitarian Aid, International Cooperation, International Political Economy, Third World, and United Nations

1663. Pricing and Access: Lessons from Randomized Evaluations in Education and Health

Author:
Michael Kremer and Alaka Holla
Publication Date:
01-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper surveys evidence from recent randomized evaluations in developing countries on the impact of price on access to health and education. The debate on user fees has been contentious, but until recently much of the evidence was anecdotal. Randomized evaluations across a variety of settings suggest prices have a large impact on take-up of education and health products and services. While the sign of this effect is consistent with standard theories of human capital investment, a more detailed examination of the data suggests that it may be important to go beyond these models. There is some evidence for peer effects, which implies that for some goods the aggregate response to price will exceed the individual response. Time-inconsistent preferences could potentially help explain the apparently disproportionate effect of small short-run costs and benefits on decisions with long-run consequences.
Topic:
Development, Economics, Education, Health, Human Welfare, and Markets

1664. 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

1665. Institutions Versus Policies: A Tale of Two Islands

Author:
Peter Blair Henry and Conrad Miller
Publication Date:
01-2009
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
Recent work emphasizes the primacy of differences in countries' colonially-bequeathed property rights and legal systems for explaining differences in their subsequent economic development. Barbados and Jamaica provide a striking counter example to this long-run view of income determination. Both countries inherited property rights and legal institutions from their English colonial masters yet experienced starkly different growth trajectories in the aftermath of independence. From 1960 to 2002, Barbados' Gross Domestic Product (GDP) per capita grew roughly three times as fast as Jamaica's. Consequently, the income gap between Barbados and Jamaica is now almost five times larger than at the time of independence. Since their property rights and legal systems are virtually identical, recent theories of development cannot explain the divergence between Barbados and Jamaica. Differences in macroeconomic policy choices, not differences in institutions, account for the heterogeneous growth experiences of these two Caribbean nations.
Topic:
Development, Economics, International Trade and Finance, Political Economy, and Poverty
Political Geography:
Caribbean

1666. Does Openness To International Financial Flows Raise Productivity Growth?

Author:
Marco E. Terrones, Eswar Prasad, and Ayhan Kose
Publication Date:
01-2009
Content Type:
Working Paper
Institution:
The Brookings Institution
Abstract:
Economic theory has identified a number of channels through which openness to international financial flows could raise productivity growth. However, while there is a vast empirical literature analyzing the impact of financial openness on output growth, far less attention has been paid to its effects on productivity growth. This paper provides a comprehensive analysis of the relationship between financial openness and total factor productivity (TFP) growth using an extensive dataset that includes various measures of productivity and financial openness for a large sample of countries. We find that de jure capital account openness has a robust positive effect on TFP growth. The effect of de facto financial integration on TFP growth is less clear, but this masks an important and novel result. We find strong evidence that FDI and portfolio equity liabilities boost TFP growth while external debt is actually negatively correlated with TFP growth. The negative relationship between external debt liabilities and TFP growth is attenuated in economies with higher levels of financial development and better institutions.
Topic:
Debt, Development, Economics, and Foreign Direct Investment

1667. Haiti 2009: Stability at Risk

Publication Date:
03-2009
Content Type:
Policy Brief
Institution:
International Crisis Group
Abstract:
A series of crises in 2008 have increased the potential for serious trouble in Haiti this year. The politically motivated, violent April riots against high living costs caused widespread disruption and suffering, toppled the government of Prime Minister Jacques-Édouard Alexis and forced postponement of a donor conference. In August and September, four tropical storms and hurricanes killed 800, affected nearly one million, exacerbated food shortages and pushed yet more Haitians into poverty. Extensive damage was caused to infrastructure and agriculture. The global financial crisis is making it difficult for donors to meet commitments and reducing diaspora remittances. President René Préval and Prime Minister Michèle Pierre-Louis, who took office in September 2008, need to secure the support of donors and parliament quickly for a wide-ranging stabilisation strategy or risk political instability and violence. These are major challenges in a year in which parliamentary elections will be held and constitutional reform is on the agenda.
Topic:
Conflict Resolution, Political Violence, Development, Disaster Relief, Economics, Politics, Post Colonialism, and Poverty
Political Geography:
Caribbean and Haiti

1668. A Balanced Strategy: Reprogramming the Pentagon for a New Age

Author:
Robert M. Gates
Publication Date:
01-2009
Content Type:
Journal Article
Journal:
Foreign Affairs
Institution:
Council on Foreign Relations
Abstract:
The Pentagon has to do more than modernize its conventional forces; it must also focus on today's unconventional conflicts -- and tomorrow's.
Topic:
Development, Economics, and Governance
Political Geography:
Afghanistan, United States, and Iraq

1669. How Development Leads to Democracy: What We Know About Modernization

Author:
Ronald Inglehart and Christian Welzel
Publication Date:
03-2009
Content Type:
Journal Article
Journal:
Foreign Affairs
Institution:
Council on Foreign Relations
Abstract:
Democratic institutions cannot be set up easily; they are likely to emerge only when certain social and cultural conditions exist. But economic development and modernization push those conditions in the right direction and make democracy increasingly likely.
Topic:
Development and Economics

1670. Whither aid? Financing development in Mozambique

Author:
Sam Jones
Publication Date:
03-2009
Content Type:
Working Paper
Institution:
Danish Institute for International Studies
Abstract:
Careful consideration of the appropriate level and composition of aggregate public spending is vital in low income countries, especially in the presence of large volumes of foreign aid. Not only can expansion of the public sector weaken economic growth, but also provision of public services may be difficult to re­trench. These issues are relevant to Mozambique as the share of government in GDP already is comparatively high and strategic management of aggregate public spending historically has been weak. A new long-term macroeconomic model quantifies the implications of alternative aggregate spending profiles. It shows that small increases in minimum levels of government spending correspond to large increases in the duration to aid independence. Sharp reductions in aid availability would necessitate significant fiscal and economic adjustments, including cuts in real public spending per capita. For this reason, there is no room for complacency as regards the future of development finance to Mozambique.
Topic:
Development, Economics, Humanitarian Aid, International Political Economy, Poverty, and Third World
Political Geography:
Africa