GSDRC newsfeed on Economic growth

Nigeria: The Political Economy of Reform - Strengthening Incentives for Economic Growth

Pat Utomi, Alex Duncan, Gareth Williams — Mon, 01 Jan 2007 00:00:00 GMT

How does reform take place within the constraints of political and economic processes? What has driven recent policy and institutional reforms in Nigeria, and how can Nigeria's reform process be sustained and extended? This briefing paper from the Policy Practice argues that the failure to achieve sustainable economic growth and poverty reduction in Nigeria is linked to institutional and incentive problems. Efforts are needed to strengthen incentives for economic growth and public accountability in Nigeria. All stakeholders must recognise the realities and risks to sustainable reform, as well as the long time-scale required.

Political Economy

World Bank — Mon, 01 Jan 2007 00:00:00 GMT

What hinders growth-supporting policy reform in Ghana, and how can these obstacles be addressed? In recent years, Ghana has experienced relative macroeconomic stability and growth. However, accelerating and sustaining growth requires significant policy change across a range of areas. This extract from the World Bank�s Country Economic Memorandum of Ghana examines the political incentives of policymakers to pursue such change. Clientelism undermines progress in pro-growth reforms. Reform should focus on: education; improving the collection of and access to government information; and ensuring that policy does not favour particular ethnic groups.

Inclusive Growth in Nepal

Magnus Hatlebakk — Tue, 01 Jan 2008 00:00:00 GMT

How can inclusive growth be promoted in Nepal? This paper from the Chr. Michelsen Institute examines pathways out of poverty in Nepal between 1995 and 2003 and proposes ways in which the government, non-governmental organisations and international donors can help foster future inclusive growth. Targeted education and training schemes for the poor and for excluded groups, subsidised health care and investment in infrastructure are key areas of intervention.

The Political Economy of Public Spending on Education, Inequality and Growth

Mark Gradstein — Wed, 01 Jan 2003 00:00:00 GMT

This paper from the World Bank examines data on public spending on education in developing countries, revealing significant inequality in the distribution of resources between rich and poor groups. While current donor policy is to alleviate poverty through the universal provision of public services in developing countries, the evidence suggests that political dynamics within these countries often distort these goals to the disadvantage of the poor. Personal rent-seeking, in the form of political pressure from richer households, skews resource allocation, often resulting in both increased inequality and social exclusion.

Institutions and Economic Performance: Implications for African Development

John M. Luiz — Thu, 01 Jan 2009 00:00:00 GMT

How are sub-Saharan Africa�s (SSA) institutions helping or hindering economic development? This paper from the Journal of International Development explores current theories on how institutions impact economic growth in SSA. �Good� institutions could be the key to increasing the stagnant economic growth in this region. Any attempt to build �good� institutions must consider the existing impediments of poor political institutions, weak social capital and weak state capacity.

The Role of Gender Inequalities in Explaining Income Growth, Poverty and Inequality: Evidences from Latin American Countries

Joana Costa, Elydia Silva, Fabio Vaz — Thu, 01 Jan 2009 00:00:00 GMT

What role can gender play in understanding income growth, poverty and inequality? This working paper, published by the International Policy Centre for Inclusive Growth, argues that gender equality is critical in any attempt to reduce poverty. In particular, increasing women's access to the labour market correlated very positively with greater economic equality overall. The analysis draws on microsimulations performed for eight Latin American countries, covering four areas of gender inequality: labour market participation, occupational status, wage discrimination and characteristic endowments.

Decentralisation, Local Development and Social Cohesion: An Analytical Review

Zoe Scott — Thu, 01 Jan 2009 00:00:00 GMT

There is a vast difference between the purported benefits of decentralisation and its actual effects on service delivery, economic development and social cohesion. This analytical review, published by the Governance and Social Development Resource Centre, discusses the nature, extent and impact of decentralisation in developing countries. Decentralisation cannot be considered the solution to all local service delivery and economic development issues, and should not necessarily be standard policy in all development contexts.

The Cost of Failing States and the Limits to Sovereignty

Lisa Chauvet, Paul Collier, Anke Hoeffler — Mon, 01 Jan 2007 00:00:00 GMT

What are the costs of state failure? What implications do these costs have for sovereignty? This paper from the United Nations University World Institute for Development Economics Research estimates the costs of state failure for failing states and their neighbours. It finds that the total cost of state failure is very large and borne mainly by the neighbours of failing states. There may therefore be good reason to vest sovereignty in the region or sub-region rather than the state, empowering international intervention in the process.

Can Fragile States Learn from the Development Tigers?

Ivan Briscoe — Tue, 01 Jan 2008 00:00:00 GMT

Can the developmental success of East Asian countries be used as a road map for low-income economies run by weak states? This paper from Fundación para las Relaciones Internacionales y el Diálogo Exterior argues that the national and historical context of fragile states makes it difficult to export the experience of states like South Korea or Taiwan. However, lessons can be learned. Active state intervention, strategic economic policies and a hands-off approach by the international community are all crucial to kick-starting fast economic growth. There are huge difficulties in bringing fast development to weak states, divided elites and informal subsistence economies, but greater freedom of action for poor countries is essential.

Pro-Poor Growth: Explaining the Cross-Country Variation in the Growth Elasticity of Poverty

Ajay Chhibber, Gaurav Nayyar — Mon, 01 Jan 2007 00:00:00 GMT

What explains variations in the poverty impact of economic growth? This Brooks World Poverty Institute paper analyses cross-country variations in growth elasticity between 1990 and 2000. It finds that important determinants of the poverty-reducing impact of growth are: the level of initial inequality; credit available to the private sector; literacy; business regulations; and trade openness. The results show that policies to encourage pro-poor growth can be designed.

Economic Growth Without Social Justice: EU-India Trade Negotiations and their Implications for Social Development and Gender Justice

C Wichterich — Mon, 01 Jan 2007 00:00:00 GMT

Do trade negotiations between the EU and India still see social development as a parallel objective to economic development? This WIDE Network paper argues that there is no coherence between the development aid agenda and the trade and investment agenda. It provides civil society actors with background information so that they can critically engage in policymaking on trade and development between the EU and India.

Governance, Development, and Democratic Politics: DFID's Work in Building More Effective States

Department for International Development — Sun, 01 Jan 2006 00:00:00 GMT

An effective state is the single most important factor in determining whether development progress occurs. This paper, published by the United Kingdom (UK) Department for International Development (DFID), discusses the agency�s approach to governance development and how it works with partner countries and the international development system. Governance work has moved beyond designing stand-alone projects; it now seeks to address how power is held and in whose interests it is used.

Can New Aid Modalities Handle Politics?

A de Haan and M Everest-Phillips — Mon, 01 Jan 2007 00:00:00 GMT

Do aid modalities take sufficient account of political context? Are ambitions of better political understanding inevitably thwarted by aims to increase aid flows? This paper from UNU-WIDER considers whether recent commitment to increasing financial flows, scaling-up of aid, and promoting donor coordination are compatible with a political understanding of policy processes in partner or recipient countries. It argues for increased socio-political analysis and puts forward ways in which a better understanding of political context and change can inform the post-Monterrey consensus. As a starting point, it is essential to see donors as political agents.

Decentralisation and Development: Emerging Issues from Uganda's Experience

J A Okidi and M Guloba — Mon, 01 Jan 2007 00:00:00 GMT

Is decentralisation consistent with development goals? What can we learn from Uganda? This paper from the Economic Policy Research Centre, Kampala, reviews Uganda�s experience of decentralisation to highlight its effects on the empowerment of local leaders and residents, local elite capture, service delivery and the promotion of sector responses. Uganda�s experience illustrates that decentralisation is consistent with economic and democratic development to an extent, but that there are potential problems, for instance in terms of local capacity and participation, which suggest that decentralisation should proceed gradually.

Aid Effectiveness and the Millennium Development Goals

S Radelet — Thu, 01 Jan 2004 00:00:00 GMT

How can donors improve the quality of aid so as to promote the attainment of the Millennium Development Goals (MDGs)? This working paper from the Centre for Global Development outlines methods to improve aid allocation and delivery in order to reduce poverty in poorer countries. Donors should identify clear goals in their Poverty Reduction Strategy Papers (PRSPs) and provide flexible aid delivery mechanisms which respond to partner states? governance standards. Well-governed countries should be granted more aid as budget support, covering a broader range of activities, whereas poorly-governed states should receive more project financing with a narrower policy focus.

Paying the Price: Why Rich Countries Must Invest Now in a War on Poverty

A Fraser and B Emmett — Thu, 01 Jan 2004 00:00:00 GMT

What investments are needed to meet the Millennium Development Goals (MDGs)? This study from Oxfam suggests that donor countries can afford to increase aid and reduce the burden of debt. To stand a chance of meeting the MDGs, world governments must draw up a Millennium Plan that makes binding commitments to reform international trade rules and increase the volumes and effectiveness of aid.

Inclusive Growth Toward a Prosperous Asia: Policy Implications

I Ali and J Zhuang — Mon, 01 Jan 2007 00:00:00 GMT

How can a development strategy based on inclusive growth help developing Asia eradicate extreme poverty and tackle inequality? This paper from the Asian Development Bank (ADB) argues that inclusive growth emphasises creation of, and equal access to opportunities; and that unequal opportunities arise from social exclusion associated with market, institutional, and policy failures. Thus, the ADB should modify its vision, mission and operational priorities to make inclusive growth its overarching goal.

Pity the Finance Minister: Issues in Managing a Substantial Scaling up of Aid Flows

P Heller — Sat, 01 Jan 2005 00:00:00 GMT

What are the challenges associated with substantially scaling up of aid flows? This working paper from the International Monetary Fund (IMF) identifies the critical issues to be addressed and offers recommendations for donors, recipients and the international financial Institutions (IFIs). Ultimately, scaling up will require development partners to address the impact of higher aid flows on: the competitiveness of aid recipients; the management of fiscal and monetary policy; the delivery of public services; behavioral incentives; and the rate of growth of the economy.

Rethinking the Policy Objectives of Development Aid: From Economic Growth to Conflict Prevention

S Fukuda-Parr — Mon, 01 Jan 2007 00:00:00 GMT

What role should conflict prevention play in development policy? This paper from the United Nations University (UNU-WIDER) explores the implications of increasing the focus of conflict prevention as a policy objective of development aid priorities and the international aid architecture in general. It argues that conflict prevention is an important policy objective as a means to achieving the Millennium Development Goals (MDGs) as well as an end itself. Integrating conflict prevention into development policy would imply making adjustments in aid architecture.

The Impact of Growth and Redistribution on Poverty and Inequality in South Africa

K Pauw and L Mncube — Mon, 01 Jan 2007 00:00:00 GMT

Do welfare transfers in South Africa target the poor and redistribute income? This paper from the International Poverty Centre evaluates the experience of the South African economy with respect to growth, poverty and inequality trends since the advent of democracy in 1994. There is little doubt that the significant growth spurt in welfare transfer expenditure has made important inroads into poverty. The impact on inequality is less clear. However, further increases in welfare transfers well above the inflation rate are unlikely to be sustainable.