GSDRC newsfeed on Economic growth

Aid, Institutions and Governance: What Have We Learned?

David Booth — Sat, 01 Jan 2011 00:00:00 GMT

This article reviews research on institutions, governance and aid. Three constructive themes emerge: how and with what qualifications 'institutions rule'; the limitations of the instruments easily accessible to development assistance organisations; and the idea of context-sensitive facilitation of institutional change. Research indicates that both institutions and policy choices influence development outcomes. The nature of the 'right' institutions is context- and time period-specific, and institutional change is not self-generating. Aid needs to become more context-sensitive, more politically-informed, and less supply-driven. Donors should abandon formulaic 'best practice' interventions and think about how to build on institutions that already exist. Researchers should deliver more finely-tuned ideas about the building blocks, and the potential room for manoeuvre, in facilitating appropriate and feasible institutional innovations.

Success Stories from 'Emerging Africa'

Steven Radelet — Fri, 01 Jan 2010 00:00:00 GMT

What changes have occurred among sub-Saharan African nations since the mid-1990s? This essay highlights 17 African countries that have achieved dramatic improvements in economic growth, poverty reduction and political accountability. Another six 'threshold' countries have experienced promising change. The turnaround was ignited by a combination of economic reform and political change. While the countries of 'emerging Africa' face challenges and risks, they seem likely to continue their progress.

Growth in a Carbon Constrained Global Economy

Karen Ellis et al. — Fri, 01 Jan 2010 00:00:00 GMT

How will the economies of developing countries be affected by efforts to deal with climate change? This report examines the impact of international mitigation policies on economic opportunities in developing countries. Greater understanding of the impacts of different mitigation policies on developing countries is needed to inform the decision-making of developed country policymakers'. More importantly, such understanding can help developing countries to start taking advantage of new opportunities and to protect themselves from new risks arising from mitigation. Donors need to increase support for developing countries' low carbon growth efforts, and compensate countries where they lose out from international mitigation efforts.

Social Security and the Socio-Economic Floor: Towards a Human Rights-based Approach

Wouter van Ginneken — Thu, 01 Jan 2009 00:00:00 GMT

Globalisation triggers the need for frequent adjustment to national production processes, jobs and life strategies, and there are vast gaps in income and security between countries. The International Labour Organisation suggests that establishing a global socio-economic floor would improve international development and security. This article investigates the impact of taking a rights-based approach to a core element of that floor, social security, concluding that it could make a significant impact on achieving the Millennium Development Goals of poverty eradication and development, and provide a framework for the future.

Economic Aspects of Adaptation to Climate Change: Costs, Benefits and Policy Instruments

Shardul Agrawala and Samuel Fankhauser (eds.) — Tue, 01 Jan 2008 00:00:00 GMT

This report assesses adaptation costs and benefits in key climate-sensitive sectors, as well as across sectors. It moves the discussion beyond cost estimation to examining market and regulatory mechanisms that can be used to incentivise adaptation actions. It argues that for adaptation to be effective, a number of policy measures will be required to prepare the ground. A combination of markets and public policy can refine risk sharing (through innovative insurance schemes), improve natural resource management (through the creation of environmental markets) and help climate-proof infrastructure (through Public-Private Partnerships).

Charting a New Low-Carbon Route To Development

United Nations Development Programme — Thu, 01 Jan 2009 00:00:00 GMT

How can sub-national governments incorporate climate change into their planning? This Primer argues for systematic action across all levels of long-term development planning and cross-sectoral implementation (regional, national, sub-national and local). It introduces approaches to help sub-national authorities design an Integrated Territorial Climate Plan (ITCP), from setting objectives and participatory arrangements for the preparation of the Plan, to financing priority activities. Meeting the challenge of climate change will require the full engagement of regional and local governments, and the formulation of innovative policy development and planning instruments. Comprehensive partnerships and strong coordination mechanisms will be needed.

Assessing the Costs of Adaptation to Climate Change: A review of the UNFCCC and Other Recent Estimates � Overview of Conclusions

Martin Parry et al. — Thu, 01 Jan 2009 00:00:00 GMT

How realistic are current estimates of adaptation costs for climate change? Will low investment levels in some regions require full funding of climate change development? This report analyses the United Nations Framework Convention on Climate Change (UNFCCC) and argues that its climate change adaptation costs are substantially under-estimated. It recommends more detailed assessments of residual damage that might occur if adaptation funding is inadequate and calls for analyses of country- and sector-specific adaptation costs.

The Economics of Low Carbon, Climate Resilient Patterns of Growth in Developing Countries: A Review of the Evidence

Steve Pye et al. — Fri, 01 Jan 2010 00:00:00 GMT

To what extent can developing countries move towards low carbon growth without compromising economic development? This study reviews the literature on the economics of climate change. It finds that all countries need to act decisively in order to reduce emissions, and that preventing economic growth targets from increasing emissions will require significant additional investment. However, these extra costs may not be prohibitive, and low carbon patterns of growth may offer opportunities for developing countries. These include improving efficiency and lowering energy costs, developing low carbon industries, improving technology, raising carbon finance through international mechanisms and safeguarding natural resources.

The Economics of Adaptation to Climate Change

World Bank — Fri, 01 Jan 2010 00:00:00 GMT

How much will it cost to help developing countries adapt to climate change? How can country development plans incorporate adaptation measures? This study estimates the cost between 2010 and 2050 of adapting to a two-degree temperature increase by 2050 as between $70-$100 billion a year. This is more than 80 per cent of the development assistance given in 2008, but is approximately 0.17 per cent of developing countries' GDP. Key lessons are to build flexibility into both policies and hardware and to ensure that outside assistance for institutional reform builds on internally-driven changes.

The MDGs and Beyond: Can Low Carbon Development be Pro-poor?

Frauke Urban — Fri, 01 Jan 2010 00:00:00 GMT

Can low carbon development be pro-poor? This article explores several policy responses to the Low Carbon Development (LCD) debate and analyses how pro-poor they are. It argues that poverty reduction must be linked to LCD as part of a post-2015 Millennium Development Goal agenda. There is no explicit pro-poor concern or consideration of equity in the current LCD debate.

From Adaptation to Climate-Resilient Development: The Costs of Climate-Proofing the Millennium Development Goals in Africa

Samuel Fankhauser and Guido Schmidt-Traub — Fri, 01 Jan 2010 00:00:00 GMT

How much would it cost to ensure that the Millennium Development Goals are achieved in Africa despite climate change? This paper estimates that climate-resilient development in Africa could require international financial assistance of $100 billion a year over the period 2010-2020. This total is about forty percent higher than the original MDG estimate of $72 billion. Adaptation is, in fact, climate-resilient development, and integrated adaptation and development frameworks must be applied in the form of concrete development plans at the country level.

Peace-Building without External Assistance: Lessons from Somaliland

Nicholas Eubank — Fri, 01 Jan 2010 00:00:00 GMT

How has the absence of international recognition and lack of external development assistance affected state-building in Somaliland? This paper examines how Somaliland�s government was motivated to establish credible, accountable and representative political institutions and engage with the business community to create a tax-based relationship with its citizens. Despite unique characteristics, Somaliland provides a valuable case-study for policymakers, suggesting that the international community adopt a tempered approach to aid interventions in fragile and post-conflict areas.

Early Economic Recovery in Fragile States

Hugo de Vries, Leontine Specker — Thu, 01 Jan 2009 00:00:00 GMT

How can economic activities contribute to stability as part of an integrated reconstruction strategy in fragile states? This report from the Clingendael Institute examines: (1) emergency employment for high-risk and vulnerable groups; (2) income generating activities, private sector development and micro- finance for communities; and (3) creating an enabling national environment for growth. All three �tracks� must be considered and worked on from the start, and this process should be led by the country itself as soon as possible. Where the international community needs to 'come in', and what activities to emphasise, will depend on the country context.

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.