Embassy of the United States

Economic Affairs

Economic Development Archive

PROMOTING SAVINGS AS A TOOL FOR INTERNATIONAL DEVELOPMENT.
New America Foundation. Jamie M. Zimmerman and Shweta S. Banerjee. October 2009.
Full Text [PDF format, 12 pages]

Scholars, policymakers, and practitioners of microfinance are increasingly turning their focus toward devising and offering effective and accessible savings services for the poor. Not only have experts argued that demand for savings services greatly exceeds that of microcredit, but many also contend that savings-led programs and products, with a focus on building assets, may be more effective than credit in providing a pathway out of poverty, according to the report.

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EUREKA MOMENTS: HOW A LUXURY ITEM BECAME A TOOL OF GLOBAL DEVELOPMENT (Economist, September 24, 2009)
Full Text [HTML format]

Mobile phones, now affordable to the vast majority of people around the world, have become the single most transformative tool for development, according to Jeffrey Sachs of the Columbia University’s Earth Institute. In Africa, “mobile money” now means financial transactions can be carried out easily even in remote areas. Mobile phones play a huge role in micro businesses, which make up 50 to 60 percent of business globally, and as much as 90 percent in Africa. Small businesses can more efficiently negotiate with suppliers and reduce the overhead of running their small enterprises. There is also some evidence that mobile phones can be used to root out corruption; the article cites the example of an official in Pakistan overseeing land transfers, who randomly called the mobile numbers of buyers and sellers to find out if they had been asked to pay bribes.

WORLD DEVELOPMENT REPORT 2010: DEVELOPMENT AND CLIMATE CHANGE.
World Bank. September 15, 2009.
Full Text [PDF format, 365 pages]

According to the report. developing countries can shift to lower-carbon paths while promoting development and reducing poverty, but this depends on financial and technical assistance from high-income countries, says a new World Bank report released today. High-income countries also need to act quickly to reduce their carbon footprints and boost development of alternative energy sources to help tackle the problem of climate change.

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BUILDING TOGETHER A BETTER AFRICA.
African Development Bank Group. July 17, 2009.
Full Text [PDF format, 52 pages]

Mozambique is considered one of Sub-Saharan Africa’s strongest economic performers and remains a successful example of post-conflict transition, according to the report. The country has enjoyed impressive economic growth averaging 8% in the past ten years, and sustained macroeconomic and political stability. Growth has been driven mainly by investment in mineral resources, industry, services, policy reform, pro-poor government expenditure and strong donor support. The investment climate has been enhanced, resulting in an improvement of its ranking in the ease of doing business from 140th position to 134th place.

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Kapstein, Ethan AFRICA’S CAPITALIST REVOLUTION (Foreign Affairs, vol. 88, no. 4, July/August 2009, pp. 119-130)
Full Text (EbscoHost; password required)

Kapstein, with the Center for Global Development in Washington, DC, notes that in recent years, Africa has experienced a major economic transformation; since 2004, economic activity in Africa has grown at a rate of about six percent a year, and the continent is attracting more foreign investment. This is a marked change from much of the previous half-century, which was characterized by stagnant economic conditions, and poor governance and monopolistic regimes led by dictators; few foreign investors were interested in Africa. Kapstein writes that one virtue of urbanization in Africa is that “it has forced members of different tribes to interact on a regular basis in ways that remain unusual in more rural settings;” this regular contact is necessary to the development of market economies and democratic institutions, because it helps erode the patrimonial relationships, in which a command economy is controlled by tribal chiefs. Kapstein predicts that the global financial crisis will slow down Africa’s progress, although the continent has been relatively insulated from the current economic downturn. Africa remains relatively open to global trade, and Kapstein says that the West must help them by avoiding its own protectionist impulses. He writes: “Africans have already taken up the shovel to dig themselves out of a half-century-old hole of poor economic management and bad governance. It is now up to the United States and its European allies to help them complete the job.”

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Eberstadt, Nicholas DRUNKEN NATION: RUSSIA’S DEPOPULATION BOMB (World Affairs, Vol. 171, no. 4, Spring 2009, pp. 51-62)
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The relentless depopulation of Russia amounts to an ethnic self-cleansing, says the author, a scholar at the American Enterprise Institute. The process threatens to reshape life and society, diminish the prospects for economic development, and affect country’s potential influence on the international stage. This trend, which began in 1992, constitutes the longest period of population decline in modern Russian history. With the collapse of Soviet rule, Russia has seen a drastic change in childbearing patterns and living arrangements described by Eberstadt as “withering away” of the family itself that has produced low levels of fertility. In addition, high premature mortality rates are of a scale akin to results of a devastating war, he says. The high death rates are a result of serious epidemics of HIV/AIDS and tuberculosis, as well as with an upsurge of cardiovascular disease and fatal injuries from alcohol abuse. As Russian authorities have mainly ignored the nation’s human resources crisis in their strategic plans, the country’s economic and democratic future is in jeopardy.

GLOBAL MONITORING REPORT 2009: A DEVELOPMENT EMERGENCY.
World Bank. Web posted May 9, 2009.
Full Text [PDF format, 244 pages]

The global economic crisis, the most severe since the Great Depression, is rapidly turning into a human and development crisis. No region is immune, says the report. The poor countries are especially vulnerable, as they have the least cushion to withstand events. The crisis, coming on the heels of the food and fuel crises, poses serious threats to their hard-won gains in boosting economic growth and reducing poverty. It is pushing millions back into poverty and putting at risk the very survival of many.

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THE ATLANTIC CENTURY: BENCHMARKING EU & U.S. INNOVATION AND COMPETITIVENESS.
European-American Business Council and Information Technology and Innovation Foundation. February 2009.
Full Text [PDF format, 38 pages]

The study uses 16 indicators to assess the global innovation-based competitiveness of 36 countries and 4 regions. The report finds that while the United States still leads the European Union in innovation-based competitiveness, it ranks sixth overall. Moreover, the U.S. ranks last in progress toward the new knowledge-based innovation economy over the last decade.

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Secor, Laura THE RATIONALIST: LETTER FROM TEHRAN (The New Yorker, February 2, 2009)
Full Text (EbscoHost; password required)

Many Iranians are angered by the troubled state of their nation's economy -- by high unemployment, income inequality, and by pervasive corruption and cronyism, according to the author, who recently visited Iran's foremost free-market economist, Mohammad Tabibian. Three decades of populism won the loyalty of Iran's rural underclass, but at the cost of an effective educated middle class. Many middle-class Iranians live off unsustainable and unproductive sources of income: remittances sent by relatives working abroad, brokered deals between third parties and sales of family property. During the past three decades, the ruling regime has continually swept economic experts out of government. Yet, the ideas of western-trained economics experts like Tabibian are harder to dislodge, Secor writes. Tabibian believes liberalization of Iran's economy is a precondition for political freedom. Secor says that Iran's most recent development plan includes privatization that permits entrepreneurs to start new businesses and in the long run, could help transform the country's economy. To raise revenue in the future, the government will have to rely on taxes paid by people with skills and capital to produce goods, instead of depending on the oil sector, where prices have collapsed. Iran's administration has recently proposed to eliminate energy subsidies, a step that could lead to eliminating other subsidies.

ARTS & THE ECONOMY: USING ARTS AND CULTURE TO STIMULATE STATE ECONOMIC DEVELOPMENT.
National Governors Association. Web posted January 15, 2009.
Full Text [PDF format, 44 pages]

Fostering the arts and culture sector has played a vital role in state economic development, according to the report. Arts and culture-related industries, collectively known as “creative industries,” provide direct economic benefits to states and communities by creating jobs, attracting new investments, generating tax revenues and stimulating tourism and consumer purchases.

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RISK INTELLIGENCE IN EMERGING MARKETS: EXECUTIVE WORKSHOP.
Deloitte and Economist Intelligence Unit. Web posted December 27, 2008.
Full Text [PDF format, 28 pages]

Highlights of the workshop, held in Paris in November 2008, were a presentation that included an interactive workshop on how to create a risk intelligence organization in today’s challenging Emerging Markets and the EIU offering of 10 key points about the current financial climate and its impact on Emerging Markets’ economies. Some of the analysis shows China’s impact on Emerging Markets and uncovering hotspots and vulnerabilities, and a case study from Christian Wiest, who serves as executive vice president in the International Operation Division at Schneider Electric.

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NORMALIZATION OF ECONOMIC RELATIONS: CONSEQUENCES FOR IRAN’S ECONOMY AND THE UNITED STATES.
National Foreign Trade Council. Dean A. DeRosa and Gary Clyde Hufbauer. December 2008.
Full Text [PDF format, 44 pages]

If the United States lifted sanctions on Iran and the nation liberalized its economic regime, the world price of oil could fall by 10 percent and Iran’s gross domestic product (GDP) could increase by 23 percent annually, according to the paper. The paper was written based on the assumption that U.S. sanctions currently in place are lifted, and Iran adopts more open policies toward foreign investment and expands other dimensions of its economy. “To generate significant economic gains, any normalization of Iran’s economic relations must entail dramatic changes beyond the lifting of U.S. sanctions. Iran must adopt policies that welcome foreign direct investment in its oil sector,” wrote the authors.

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Rowe, Jonathan FALSE READINGS: HOW THE GROSS DOMESTIC PRODUCT LEADS US ASTRAY (Columbia Journalism Review, vol. 47, no. 4, November/December 2008, pp. 22-24)
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The Gross Domestic Product, or GDP, was devised as a planning tool by economist Simon Kuznets at the U. S. Commerce Department in 1933 to help navigate the Depression. Since that time it has been extensively used -- erroneously, according to the author -- as a barometer of how the economy is doing. Looking at GDP alone without examining the side effects of “growth” gives an inaccurate picture, Rowe maintains. Some effects, assumed harmless, may not be when consumption is the result of diseases caused by industrial pollution, a byproduct of growth. Kuznets, who ultimately won a Nobel Prize, came to see “fixation on the GDP as fundamentally misguided.” The author offers Kuznets’ view that knowing exactly what is growing and the effects of that growth is as important as knowing the rate of economic growth.

WORLD RESOURCES 2008: ROOTS OF RESILIENCE – GROWING THE WEALTH OF THE POOR.
United Nations Development Programme et al. Web posted October 13, 2008.
Full Text [PDF format, 277 pages]

Expanding nature-based enterprises can increase income for the world’s rural poor. This approach, as outlined in the report, can also develop the rural poor’s resilience to social and environmental threats such as climate change. Three-quarters of the 2.6 billion people who live on less than $2 a day are dependent upon local natural resources for their livelihoods. Threats such as climate change and ecosystem degradation are beginning to strain those livelihoods, and it will be necessary to shape development strategies that build resilience against such threats and ensure stable and prosperous communities. The report argues that properly fostered nature-based enterprises can improve rural livelihoods and, in the process, create resilience to economic, social, and environmental threats.

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THE NEW COMPETITION FOR GLOBAL RESOURCES.
Knowledge@Wharton, University of Pennsylvania. Web posted September 28, 2008.
Full Text [PDF format, 24 pages]

Companies in the U.S. and Western Europe once had unfettered access to the world’s resources, such as raw materials, capital and talent. Thanks to increasing demand from India, China, Brazil, Russia and other rapidly developing economies, however, that access is no longer assured. In the report, experts discuss the ways in which this unprecedented “race” for resources is reshaping global business, and how key political and financial trends in emerging economies are likely to affect companies anywhere in the world.

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THE MILLENNIUM DEVELOPMENT GOALS REPORT 2008.
United Nations. Web posted September 13, 2008.
Full Text [PDF format, 56 pages]

The eight Millennium Development Goals have been adopted by the international community as a framework for the development activities of over 190 countries in ten regions. They have been articulated into over 20 targets and over 60 indicators. The report summarizes progress towards the goals in each of the regions.

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THE DEVELOPING WORLD IS POORER THAN WE THOUGHT, BUT NO LESS SUCCESSFUL IN THE FIGHT AGAINST POVERTY.
World Bank. Shaohua Chen and Martin Ravallion. Web posted August 26, 2008.
Full Text [pdf format, 46 pages]

The paper presents a major overhaul to the past estimates of global poverty, incorporating new and better data. Extreme poverty is found to be more pervasive than previously thought. However, the data also provide significant evidence of continually declining poverty incidence and depth since the early 1980s. Progress was uneven across regions. The poverty rate in East Asia fell from 80% to under 20 percent over this period. By contrast it stayed at around 50 percent in Sub-Saharan Africa, though with signs of progress since the mid 1990s.

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PROMOTING FILM AND MEDIA TO ENHANCE STATE ECONOMIC DEVELOPMENT.
Center for Best Practices, National Governors Association. July 15, 2008.
Full Text [pdf format, 30 pages]

As governors continue exploring innovative strategies to grow their economies, states are increasingly looking to film, television and related media arts productions as a means of attracting high-paying jobs and related high-tech businesses, according to the report. The state and local economic benefits brought by hosting a major motion picture production are numerous. Film, TV and media arts productions help create local jobs by using residents to staff the production, as well as boost local economies by purchasing goods and services from local vendors.

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CHINA’S ECONOMIC RISE: FACT AND FICTION.
Carnegie Endowment for International Peace. Albert Keidel. July 2008.
Full Text [pdf format, 16 pages]

China’s economy will surpass that of the United States by 2035 and be twice its size by mid century, the report concludes. China’s rapid growth is driven by domestic demand—not exports—and will sustain high single-digit growth rates well into this century. The report examines China’s likely economic trajectory and its implications for global commercial, institutional, and military leadership.

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CREATING VALUE FOR ALL: STRATEGIES FOR DOING BUSINESS WITH THE POOR.
Development Programmes, United Nations. Web posted July 5, 2008.
Full Text [pdf format, 180 pages]

The report showcases 50 studies by researchers predominantly from developing countries. These case studies demonstrate the successful pursuit of both revenues and social impact by local and international small- and medium-sized companies, as well as multinational corporations. The report highlights five strategies used successfully to overcome the most common obstacles to doing business with the poor, as well as two new tools: a strategy matrix to help find potential solutions to common constraints and heat maps that identify opportunities by depicting access to water, credit, electricity or telephone service in a specific geographical area using color codes. More inclusive business models recognize the poor not only as consumers, but also as drivers of growth.

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RUSSIA’S ECONOMIC PERFORMANCE AND POLICIES AND THEIR IMPLICATIONS FOR THE UNITED STATES. Congressional Research Service, RL34512, Library of Congress. William H. Cooper. Web posted June 22, 2008.
Full Text [pdf format, 29 pages]

The Russian economy has grown impressively since 1999 and has been one of the fastest growing economies in the world. The growth has brought an improvement in the standard of living of the average Russian citizen and has brought economic stability that Russia had not experienced in at least a decade. The Russian economy is highly dependent on the production and export of oil, gas, and other natural resources. Its success has largely been the result of record-breaking world energy prices, although prudent fiscal policies have also helped to promote economic stability. While U.S. exports to Russia are still relatively small, for some producers, such as poultry, energy equipment, and technology, Russia is an important market. Russia is also an important supplier of a number of raw materials that are critical to U.S. manufacturers.

TRENDS IN SUSTAINABLE DEVELOPMENT, 2008-2009.
Economics & Social Affairs, United Nations. June 2008.
Full Text [pdf format, 42 pages]

Efforts to reduce poverty and improve food security in developing countries are hampered by declining support for strong agricultural growth, long considered a hallmark of successful poverty reduction strategies, according to the study. The report highlights recent trends in agriculture, rural development, land, desertification and drought – five of the six themes being considered by the Commission on Sustainable Development. Strong agricultural growth is four times more effective than growth in other sectors in benefiting the poorest half of the population, the report finds. However, while many developing countries have posted gains in agricultural production, distribution and exports, people living in areas of high inequality and in isolation from the broader economy typically benefit little from them.

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Schramm, Carl; Litan, Robert E. THE GROWTH SOLUTION (The American, July/August 2008)
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A quick look back through American history reveals that many of the most important radical innovations in the past…have been introduced and commercialized first by entrepreneurs. What all of us, regardless of our political affiliation, should want in our next presidents and in our other governmental officials, therefore, is an understanding of the need to promote policies that will best foster the entrepreneurial spirit that drives radical innovation.

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Rowe, Jonathan OUR PHONY ECONOMY (Harper's, vol. 316, no. 1897, June 2008, pp. 17-24)
Full text available from your nearest American Library

Economic growth, ordinarily thought to be a good, could be generated by the $20 million that Americans spend yearly on divorce lawyers, or the $9 billion they spend on gasoline burned while they sit in traffic or many other expenditures that are in fact indicators of social and environmental breakdown. In the obsession to boost the economy, policy makers, the media and the public do not ask what is growing and what the effects are. "The failure to do this is insane," Rowe writes. "By the standard of the GDP (gross domestic product), the worst families in America are those that actually function as families -- that cook their own meals, take walks after dinner, and talk together instead of just farming the kids out to the commercial culture." Answering his own question of how the notion of the economy became so uneconomical, Rowe writes that the GDP is a catalogue of national wealth for the purposes of taxation, confiscation, planning and mobilization for war, not a measure of living standards or well-being. With the medical system expected to produce 30 to 40 percent of new jobs over the next 30 years, Rowe writes that the next insanity will be a "disease-led recovery," in which people will have to be encouraged to be sick so the economy can be healthy.

WHILE DOHA SLEEPS: SECURING ECONOMIC GROWTH THROUGH TRADE FACILITATION.
CATO Institute. Daniel Ikenson. June 17, 2008.
Full Text [pdf format, 24 pages]

The report states that improving the international trading system does not require a new, comprehensive multilateral agreement. The trade facilitation includes reforms aimed at improving the chain of administrative and physical procedures involved in the transport of goods and services across international borders. Countries with inadequate trade infrastructure, burdensome administrative processes, or limited competition in trade logistics services are less capable of benefiting from the opportunities of expanding global trade. Companies interested in investing, buying, or selling in local markets are less likely to bother if there are too many frictions related to document processing or cargo inspection at customs, antiquated port facilities, logistics bottlenecks, or limited reliability of freight or trade-financing services.

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MICROFINANCE MEETS THE MARKET.
Policy Research Working Paper, World Bank. Robert Cull et al. May 27, 2008.
Full Text [pdf format, 40 pages]

Microfinance institutions have provided reliable banking services to poor customers. Their second aim is to do so in a commercially-viable way. The paper analyzes the tensions and opportunities of microfinance as it embraces the market, drawing on a data set that includes 346 of the world’s leading microfinance institutions and covers nearly 18 million active borrowers.

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AN EXPLORATION OF TECHNOLOGY DIFFUSION.
Harvard Business School Working Papers. Diego A. Comin and Bart Hobijn. Web posted April 30, 2008.
Full Text [pdf format, 48 pages]

How long are technology adoption lags? Can cross-country differences in technology adoption lags account for a significant fraction of cross-country GDP disparities? This paper examines the diffusion process of individual technologies and the consequences that this has for aggregate growth. The model presented here looks at 15 technologies in 166 countries.

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THE DISCRETE CHARM OF THE WASHINGTON CONSENSUS.
The Levy Economics Institute of Bard College. Jan Kregel. Web posted May 1, 2008.
Full Text [pdf format, 24 pages]

According to Jan Kregel, in the last two centuries in Latin America, a Washington Consensus development strategy based on integration in the global trading system has dominated both domestic demand management and industrialization from within. The paper looks at the performance of each from the impact of external conditions and the validity of its underlying theory. It concludes that replacing the Consensus will require not only reform of the international financial architecture but also a return to the integrated policy framework represented in the Havana Charter.

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REVIVING ECONOMIC GROWTH IN LIBERIA - WORKING PAPER 133.
Steve Radelet, Center for Global Development, November 2007
Summary, with link to Full Text

“Liberia was decimated by 25 years of gross economic mismanagement and 14 years of brutal civil war. GDP fell by over 90% in less than two decades, one of the largest economic collapses in the world since World War II. In this new working paper, senior fellow Steve Radelet, who is serving as an advisor to Liberian president Ellen Johnson Sirleaf, explores the challenges Liberia faces in reinvigorating rapid, inclusive and sustained economic growth. He examines the new government's progress so far, including the major steps it has taken in its first 18 months and the unique way that it has organized government-donor relations.” – From the Summary

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Stoll, Steven FEAR OF FALLOWING: THE SPECTER OF A NO-GROWTH WORLD (Harper's, vol. 316, no. 1894, March 2008, pp. 88-94)
Full text available from your nearest American Library

Using the giant warehouse store Costco as a backdrop, Stoll, senior fellow at the Rutgers Center for Historical Analysis, expresses astonishment at the scale of the modern global economy and its ability to marshal natural resources and energy to sustain economic growth. In this discussion of several recently-released books on the subject, Stoll notes that in the last 250 years, growth of the industrial economy has created what amounts to an exponential-growth culture, particularly in the U.S., where talk of an end to economic growth is tantamount to the end of progress. He notes that economists forget that “growth and ecology operate by different rules ... whereas economies might expand, ecosystems do not.” There is growing realization that humanity is approaching a variety of natural limits simultaneously — fossil fuel resources, fresh water, forests, minerals and fisheries, to name a few — that may preclude non-stop future economic growth. Stoll cites the example of the government of Newfoundland, which has placed intermittent bans on its fishing industry to allow fish populations to recover. Such “fallowing”, temporary investment in non-production in order to maintain long-term yields, runs counter to our current mindset. But Stoll argues that progress needs to be redefined as “something other than accumulation”, and our challenge will be to “maintain social tolerance without continued physical expansion.”

ITALY'S CHOICE: REFORM OR STAGNATION.
[Brookings Institution]. Michael Calingaert. Web posted March 4, 2008.
Full Text [pdf format, 7 pages]

Italy is one of the great success stories of the post–World War II era. A massive transformation of the country’s economy and society has taken place over the past 60 years. A nation that in 1958 was the least developed of the six founding members of the European Community has become one of the world’s leading industrial countries. Today, however, Italy faces a range of acute and pressing challenges. Many Italians fear that these pose a threat to their country’s prosperity and wellbeing. The citizens also question their political leadership’s capacity to address the challenges, which stem largely from ongoing political, economic, and demographic trends.

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CREATIVE CAPITALISM: CAN IT MEET THE NEEDS OF THE WORLD’S POOR?
Hudson Institute, panel discussion transcript. January 30, 2008.
Full Text [pdf format, 29 pages]

Can Bill Gates’ “creative capitalism” make significant inroads against world poverty? That was the question addressed on January 30 by William Easterly of Brookings, Eugene Steuerle of the Urban Institute, and Allen Hammond of the World Resources Institute. The Hudson Institute’s William Schambra served as the discussion’s moderator.

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GAINING GROUND: NEW REFORMS FROM OLD EUROPE.
American Enterprise Institute. Conference held February 20, 2008.
Full Text [direct link with several related links to conference presentations]

“Old Europe”-- the Western European and Scandinavian countries -- has become, to some critics, a symbol of economic stagnation and political gridlock. But in recent years, many European countries have adopted reform policies that will surprise many Americans. Indeed, Western Europe is fast becoming a land of “new ideas” from which American policymakers can learn.

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Osborne, Brian; Kovacs, Jason CULTURAL TOURISM: SEEKING AUTHENTICITY, ESCAPING INTO FANTASY, OR EXPERIENCING REALITY (Choice, vol. 45, no. 6, February 2008, pp. 927-937)
Full text available from your nearest American Library

Cultural tourism, or culture tourism, can be defined as the subset of tourism concerned with a country or region's culture, especially its arts. It generally focuses on traditional communities who have diverse customs, unique forms of art and distinct social practices, which basically distinguishes it from other types/forms of culture. Today it is playing a major role in economic development in both the developed and the developing worlds. The authors believe that what history has been to national identity, so cultural tourism, and its protection of heritage, is now to renewing economic vitality. This bibliographical review focuses on recent literature that considers tourism strategies in which culture and heritage are considered integral to the attraction of distinctive places and experiences, especially to studies concerned with the better management of cultural tourism in terms of economic rationality, ecological sustainability, and cultural compatibility.

INDEX OF ECONOMIC FREEDOM: 2008.
Kim Holmes, et. al., The Heritage Foundation and the Wall Street Journal. Web posted January 15, 2008.
Full Text [pdf format, 422 pages]

The Index of Economic Freedom annually documents the link between economic opportunity and prosperity in countries around the world. This document is the 14th edition of the Index.

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INDIGENOUS AND COLONIAL ORIGINS OF COMPARATIVE ECONOMIC DEVELOPMENT: THE CASE OF COLONIAL INDIA AND AFRICA.
C.A. Bayly. Policy Research Working Paper, World Bank. Web posted January 10, 2008.
Full Text [pdf format, 37 pages]

This paper concerns the institutional origins of economic development, emphasizing the cases of nineteenth-century India and Africa. Colonial institutions – the law, western style property rights, newspapers, and statistical analysis – played an important part in the emergence of Indian public and commercial life.

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SOUTH AFRICA AND THE ARAB WORLD: FACING COMMON CHALLENGES.
Marcus Noland, et. al., Peterson Institute for International Economics. Web posted January 16, 2008.
Full Text [pdf format, 9 pages]

This report evaluates social and economic problems common to South Africa and the Arab world. It identifies specific areas of concern like private sector employment among foreign nationals in the two regions and how this might become problematic as large numbers of local youth reach working age. It calls for the expansion of “labor-intensive manufacturing or services exports” while stating that neither region has done well in this regard.

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SERVICES TRADE AND GROWTH.
Bernard Hoekman and Aaditya Mattoo. Policy Research Working Paper, World Bank. Web posted January 2, 2008
Full Text [pdf format, 38 pages]

The competitiveness of firms in open economies is often determined by access to low-cost and high-quality producer services; i.e., telecommunications, transport, financial intermediation. This report discusses the role of these services in economic growth focusing on the openness to trade in services to increase productivity. The report also offers suggestions on policy reforms to open services markets to foreign participation.

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NATURAL RESOURCES FOR SUSTAINABLE DEVELOPMENT IN AFRICA: AFRICAN DEVELOPMENT REPORT: 2007.
African Development Bank, Oxford University Press. November 10, 2007.
Full Text [pdf format, 26 pages]

This report attempts to better understand natural resource management in Africa and how these resources contribute to economic growth and poverty reduction. The main objectives of the report are to:

• Define the meaning of natural resources and how it relates to sustainable development and social outcomes;
• Examine and analyze good and poor management practices;
• Advance and analyze the theory that better natural resource management will reverse Africa’s poverty and economic malaise;
• Propose concrete suggestions to improve public policies and governance in natural resource-endowed countries.

This report was generated from the Big Table 2007 Forum organized by the African Development Bank and the U.N. Economic Commission for Africa (ECA).

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Zachary, G. Pascal THE COMING REVOLUTION IN AFRICA (Wilson Quarterly, vol. 32, no. 1, Winter 2008, pp. 50-66)
Full Text [html format]

Even as daily headlines bring grim news of misery, disease, and death in Africa, an agricultural transformation is lifting tens of millions of people out of poverty. A rising generation of small farmers promises not only to put food on the African table but to fundamentally change the continent’s economic and political life. While media images of starving and diseased Africans dominate international discussions of this continent, food production in the most heavily populated areas has far outpaced actual population growth, such as in Nigeria, with the largest population of any African country; here food production has grown faster than population for twenty years. In other West African countries, including Ghana, Niger, Mali, Burkina Faso, and Benin, crop output has risen by more than four percent annually, far exceeding the rate of population growth. Farm labor productivity in these countries is now so high that in some cases it matches the levels in certain parts of Asia. The World Bank’s African Development Indicators 2007 reports that many African economies have moved to a path of faster and steadier economic growth. However, farmers still must deal with the skepticism of African leaders who scorned and exploited them for decades but who are now beginning to support and even participate in agricultural development.

CHINA REGIONAL DISPARITIES: THE CAUSES AND IMPACT OF REGIONAL INEQUALITIES IN INCOME AND WELL-BEING. Albert Keidel. Carnegie Endowment for International Peace. Web posted November 2, 2007.
Full Text [pdf format, 27 pages]

In China’s major regions, the “official GDP [gross domestic product] per capita terms and for rural income and consumption, disparities appear large.” However, this analysis suggests that the regional inequality is actually beneficial to China’s economic reform programs because it provides incentives for labor migration and produces higher income employment opportunities.

THRIVING IN A GLOBAL ECONOMY: THE TRUTH ABOUT U.S. MANUFACTURING AND TRADE. Daniel Ikenson. Center for Trade Policy Studies, CATO Institute. August 28, 2007.
Full Text [pdf format, 28 pages]

“Since the depth of the manufacturing recession in 2002, the sector as a whole has experienced robust and sustained output, revenue, and profit growth. The year 2006 was a record year for output, revenues, profits, profit rates, and return on investment in the manufacturing sector.” The U.S. remains the world’s most prolific manufacturer—producing 2½ times more than China. 

The 110th Congress has introduced several “antagonistic, or protectionist” trade bills. The author asserts that these bills are not necessary since the manufacturing sector has thrived because of international trade.

VENEZUELAN ECONOMY IN THE CHÁVEZ YEARS. Mark Weisbrot and Luis Sandoval. Center for Economic and Policy Research (CEPR). Web posted July 26, 2007.
Full Text [pdf format, 23 pages]

The Venezuelan economy has experienced rapid growth since 2003—10.3 percent growth in 2006. The most commonly held view is that the current economic expansion is an “oil boom” and the economy is headed for a “bust” as a result of the government’s mismanagement. The authors contradict this conventional wisdom. They show that the economy has had continuous growth since the onset of political stability; real (inflation-adjusted) GDP has grown by 76 percent since the 2003 low; central government spending has increased from 21.4 percent of GDP in 1998 to 30.0 percent in 2006; and short-term interest rates have been negative throughout most of the recovery.

IGNORING PRODUCTIVITY AT OUR PERIL: SLOWING PRODUCTIVITY GROWTH AND LOW BUSINESS INVESTMENT THREATEN OUR ECONOMY. Christian E. Weller and Amanda M. Logan. Center for American Progress. August 2007.
Full Text [pdf format, 28 pages]

This paper examines the links between investment, productivity, income, and economic growth. The authors state that “more business investment can lead to higher future productivity growth via an enlarged capital base” thus creating a cycle of higher investment, rising productivity growth, and growing income. This paper reviews the evidence of this business cycle and draws the conclusion that faster investment growth will give the economy a boost as consumer spending slows.

AA07314
Siddiqi, Moin. INDUSTRIALISATION CANNOT WAIT (African Business, No. 333, July 2007, pp. 20-21)
View article on ProQuest (password required)

The author, an independent economist specializing in trends in the Middle East, Africa and Central Asia, looks at the Africa’s, especially Sub-Saharan Africa’s, lack of economic growth. South Africa remains an only exception in the SSA region with its advanced industrialization. In comparison with the growing Asian economies, the SSA economy is limited to “commodity-reliant,” involving simple labor-intensive activities. For economic growth, following the example of Asia’s recently industrialized countries, there needs to be export diversification and upgrading of manufacturing methods. There is also tremendous need for infrastructure improvement, along with regional trade, which could lead to solid industrial base, eventually expanding to larger areas. Siddiqi believes it would take a long time, more than a mere “five-year development plan,” before the desired economic growth can be achieved.

AA07311
Birol, Fatih. ENERGY ECONOMICS: A PLACE FOR ENERGY POVERTY IN THE AGENDA? (Energy Journal, Vol. 28, No. 3, 2007, pp. 1-6)
View article on ProQuest (password required)

The issue of energy poverty has been overshadowed by energy security and climate change, says the author, chief economist of the International Energy Agency. The lack of access to electricity and reliance on traditional biomass for cooking and heating have a number of negative consequences for the world’s poorest people, such as inadequate education and healthcare, low worker productivity and deforestation. Birol argues that, without a sharper increase in electricity rates and use of alternative fuels, eradicating extreme poverty in the next two decades will be impossible. He claims such an increase can be achieved quickly at modest short-term costs and views strong political will of the poorest country governments as necessary conditions. What he doesn’t say is that the policies aimed at mobilizing investment necessary to build energy infrastructure have rarely been pursued by governments of developing countries because they have lacked the will or resources. For the poorest countries, public-private partnerships, rather than exclusive reliance on private capital, may be one way forward, Birol says.

PERSPECTIVES FROM AMERICA’S ECONOMIC ENGINE: US MIDDLE MARKET OUTLOOK 2007. Dan Armstrong, editor, and Nigel Adam. Economist Intelligence Unit and CIT Group. Web posted July 30, 2007.
Full Text [pdf format, 32 pages]

The middle market sector is perceived to be one of the strongest drivers of the U.S. economy primarily because of the number of people it employs and the diversity of its industries. The middle market sector affects consumers, government agencies, and financial service providers. This report examines the sector's growth prospects, the obstacles, and the financial aspects.

THE LEAST DEVELOPED COUNTRIES REPORT, 2007. United Nations Conference on Trade and Development (UNCTAD), United Nations. Web posted July 19, 2007.
Full Text [pdf format, 221 pages]

The UN’s list of least developed countries (LDC) identifies countries with low income, weak human assets, and high economic vulnerability. In the past, the key to sustained economic growth and poverty reduction in LDCs has been the development of productive capacities and creation of employment. The 2007 list corroborates this pattern by focusing on knowledge accumulation, technological learning, and innovation. “The Report is the first comprehensive insight into the development objective of technological learning and innovation capacity-building in LDCs. It is intended to increase awareness of this issue and enrich the policy dialogue toward the new ‘paradigm shift’ on poverty reduction through productive capacity-building.”

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Easterly, William. THE IDEOLOGY OF DEVELOPMENT (Foreign Policy, No. 161, July/August 2007, pp. 31-35)
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The author, a professor of economics at New York University, condemns the theories and practices of the World Bank, the International Monetary Fund, and the United Nations as “a dark ideological specter is haunting the world. It is almost as deadly as the tired ideologies of the last century -– communism, fascism, and socialism -– that failed so miserably. It feeds some of the most dangerous trends of our time, including religious fundamentalism. It is the half-century-old idea of Developmentalism. And it is thriving.” In common with all ideologies, developmentalism offers a comprehensive answer to society’s problems and the idea that there is but one correct answer -– in this case, “free markets.”

The author provides a litany of examples where the “solutions” imposed by the World Bank have backfired – such as in Nicaragua, Argentina, Venezuela, Bolivia and Zimbabwe -– and suggests that this situation has created a backlash against globalization that “threatens to kill sensible, moderate steps toward the freer movement of goods, ideas, capital, and people.” It is necessary to acknowledge that the imposition of rigid development ideology has failed. The best solution is to allow poor societies the freedom to make their own choices and find their own paths to greater prosperity.

“USABLE PRODUCTIVITY” GROWTH IN THE U.S.: AN INTERNATIONAL COMPARISON, 1980-2005. Dean Baker and David Rosnick. Center for Economic and Policy Research. June 2007.
Full Text [pdf format, 18 pages]

This paper examines the U.S. economy’s sustainable rate of “usable productivity” growth from 1995-2005 and compared it with other OECD countries. The authors made two technical adjustments to measure productivity growth. These adjustments were “a net measure of output” and “a consumption deflator instead of an output deflator.” After these two adjustments were made, productivity growth in the U.S. and other wealthy countries were measured. The U.S. performance looks relatively worse from 1980 to 1995 and from 1995 to 2005. Therefore, the usable productivity growth is slower in the U.S. than in other wealthy countries during the period of 1995-2005.

ARTS AND ECONOMIC PROSPERITY III: THE ECONOMIC IMPACT OF NONPROFIT ARTS AND CULTURE ORGANIZATIONS AND THEIR AUDIENCES: NATIONAL REPORT. Robert L. Lynch. Americans for the Arts. Web posted May 22, 2007.
Full Text [pdf format, 314 pages]

This is the third study of the nonprofit arts and culture industry and its impact on the economy. This study covered 156 regions (116 cities and counties, 35 multi-county regions and five states) that included 6,080 nonprofit arts and culture organizations.

The study shows that the nonprofit arts and culture industry generates $166.2 billion in economic activity—a 24 percent increase since 2002. The industry supports 5.7 million full-time jobs; generates $30 billion in revenue to local, state, and federal governments; and pumps revenue into restaurants, hotels, retail stores, and other local businesses. “Nationally, as well as locally, the arts mean business!”

AA07251
Baker, Gerard ONE COUNTRY, TWO SYSTEMS, TEN YEARS: HONG KONG IS STILL HONG KONG (Weekly Standard, Vol. 12, No. 39, June 25 - July 2, 2007, pp. 20-22)
Full text (html format)

The author, U.S. editor of the Times of London, says ten years of Chinese control over Hong Kong have had mixed results. The economy, he says, is better than ever, in spite of weathering the Asian financial crisis, a collapse in property values, and an outbreak of SARS. Economic growth is prodigious -- it now surpasses New York in total amounts raised for initial public offerings; and "it remains the model of a low-tax, small-welfare, low regulation enterprise culture," writes Baker. Politically, he says, Hong Kong remains freer than anywhere else in China, but "it feels as though it is on a long leash." He says Taiwan democrats call Hong Kong a "birdcage democracy." Vigorous political activity in Hong Kong elicits warnings from Beijing to "stop messing around with politics." The March general election campaign took place for the edification of a total of 800 voters (in a territory of seven million people), most of them carefully chosen by Beijing. The pro-Beijing candidate won 80 percent of the vote. Still, he writes, the opposition candidate was allowed to criticize Beijing all over the territory, including in two U.S.-style debates.

WORLD ECONOMIC SITUATION AND PROSPECTS 2007. Department of Economic and Social Affairs (DESA) and United Nations Conference on Trade and Development (UNCTAD), United Nations. Web posted May 31, 2007.
Full Text [pdf format, 177 pages]

The growth rate for the world economy is expected to slow to 3.2 per cent in 2007, which is down from 3.8 per cent in 2006. The U.S. economy will be the main cause of this slowdown. Growth in Europe is expected to be around 2 per cent and in Japan slightly less than 2 percent. Developing countries and economies in transition will remain robust through 2007; although they are vulnerable to any slowdown in the major economies and to the volatility of international commodity and financial markets. China and India will have "growth through increasing South-South trade and financial linkages.” A strong demand for energy and primary commodities will continue.

WORLD ECONOMIC AND SOCIAL SURVEY 2007: DEVELOPMENT IN AN AGEING WORLD. Economic and Social Council, United Nations. April 23, 2007.
Full Text [pdf format, 212 pages]

This Survey analyses the challenges and opportunities of an aging population. Its aim is to facilitate discussions in furthering the Madrid International Plan of Action on Ageing adopted on April 12, 2002. The survey stresses the need to recognize and harness the productive and social contribution of older persons. It also emphasizes the prospect of a shrinking labor force that must support an older population.

ECONOMIC AND SOCIAL SURVEY OF ASIA AND THE PACIFIC 2007: SURGING AHEAD IN UNCERTAIN TIMES. Economic and Social Commission for Asia and the Pacific, United Nations. May 2007.
Full Text [pdf format, 196 pages]

Asian and Pacific nations are “emerging as engines of global growth. In 2006, the 7.9 percent increase in the size of the region’s developing economies represented a third of worldwide growth.” The developed economies increased by 2.2 per cent while the countries affected by the 1997 Asian financial crisis grew at 5 percent. 

This survey identifies opportunities and challenges for the region. The survey also addresses the issues of gender discrimination such as restrictions on women’s choices and opportunities. The report makes recommendations in four sectors: economic participation, education, health, and empowerment.

MOVEMENT AND ACCESS RESTRICTIONS IN THE WEST BANK: UNCERTAINTY AND INEFFICIENCY IN THE PALESTINIAN ECONOMY. World Bank Technical Team, The World Bank. May 9, 2007.
Full Text [pdf format, 18 pages]

In December 2004, all parties including the Government of Israel (GOI) and the Palestinian Authority (PA) agreed that economic revival of Palestine was essential. To accomplish this, a dismantling of the closure regime needs to be addressed from several perspectives. “This note looks, in particular, at the situation within the West Bank which is experiencing severe and expanding restrictions on movement and access, high levels of unpredictability and a struggling economy.”

SOUTH AFRICA: MACROECONOMIC CHALLENGES AFTER A DECADE OF SUCCESS.
Jeffrey Frankel, Ben Smit and Federico Stutzenegger. Faculty Research Working Paper Series, John F. Kennedy School of Government, Harvard University. April 24, 2007.
Full Text [pdf format, 99 pages]

“More than halfway through the new decade, the South African economy has done very well. Growth was high in 2004, 2005 and 2006, capital inflows and the rand are strong, the budget is relatively healthy, and inflation rates and interest rates are low. As democracy continues to consolidate, there are plenty of grounds for optimism; in fact business confidence indicators and private investment are at an all time high.” This report examines such questions as:
Is the job done?
Are there new challenges?
Are there risks?

CHINA’S ECONOMIC PROSPECTS 2006-2020. 
He Jianwu, Li Shantong, and Sandra Polaski. Carnegie Papers, Trade, Equity, and Development Program, Carnegie Endowment for International Peace. April 2007
Full Text [pdf format, 56 pages]

Over the past 25 years China has had remarkable growth that has brought hundreds of millions of people out of extreme poverty. Its accession to the World Trade Organization (WTO) has benefited the economy, but the price of imports has risen more than the price of goods. 

However, there is a dramatic difference between the “optimistic and pessimistic scenarios” since there are few opportunities for the rural poor and agricultural workers. Chinese officials need to make policy choices to raise household incomes (particularly those of rural and lower-income urban households), to increase the living standards, to increase productivity, and to make the economy evolve in a balanced and sustainable manner.

BEYOND MICROFINANCE: GETTING CAPITAL TO SMALL AND MEDIUM ENTERPRISES TO FUEL FASTER DEVELOPMENT.
David de Ferranti and Anthony J. Ody. Policy Brief, The Brookings Institution. Web posted March 26, 2007.
Full Text [pdf format, 10 pages]

Small and medium-sized enterprises (SMEs) are those that employ between 10 and 250 workers. SMEs are the backbone of modern economies and are the “seedbeds of innovation.” In the developing world, SMEs are “under-represented, stifled by perverse regulatory climates, and poor access to inputs.” 

The authors provide two new governmental options to promote SMEs: (1) remove artificial policies and regulatory obstacles; and (2) stimulate competition and develop credit information systems. The authors argue that SMEs need more attention to build more dynamic competitive economies in developing countries.

ASIAN CENTURY OR MULTI-POLAR CENTURY?
David Dollar. World Bank Policy Research Working Paper, The World Bank. March 2007.
Full Text [pdf format, 37 pages]

“The “rise of Asia” is something of a myth.” During 1990-2005, China accounted for 28% of the global growth, India for 9%, and the rest of developing Asia reported only 7%. China’s economy grew because it has a better base of human capital, is more open to foreign trade and investment, and has an improved climate for investments. China’s wages are also two to three times higher than the other most populous Asian countries. The conclusion drawn from this review was that we will face a “multi-polar century” rather than an Asian one. 

AA07150
de Ferranti, David; Ody, Anthony. BEYOND MICROFINANCE: GETTING CAPITAL TO SMALL AND MEDIUM ENTERPRICES TO FUEL FASTER DEVELOPMENT
(Brookings Institution Policy Brief No. 159, March 2007)
Full text [html format]

Small and medium-sized enterprises (SME’s), typically employing between 10 and 250 workers, can be crucial engines of development, contend the authors. In most OECD countries, they generate two-thirds of private-sector employment and are seedbeds of economic innovation. But in much of the developing world, SME’s are under-represented, mostly due to stifling regulatory climates and lack of access to capital. They are ignored both by big commercial banks and “microfinance” lenders that concentrate on poor micro-enterprises. But new options for SMEs are developing, due to improved banking services in the poorest countries and creative application of venture capital. Governments of developing countries can strengthen this tendency by removing artificial regulatory obstacles and promoting greater competition within the financial sector.

STATE-OWNED ENTERPRISES: POST-CONFLICT POLITICAL ECONOMY CONSIDERATIONS. 
Zoë Cooprider, Merriam Mashatt and James Wasserstrom. USIPeace Briefing, U.S. Institute of Peace. Web posted March 22, 2007.
Full Text [sections in html format, various pagings]

The U.S. Institute of Peace (USIP) working group met to discuss the viability of revitalizing State-Owned Enterprises (SOEs) in Iraq. At one time, nearly 200 SOEs produced consumer and durable goods in Iraq, but these were shut down at the beginning of the stabilization and reconstruction efforts in 2003. After eight months of research, the Deputy Undersecretary of Defense for Business Transformation selected ten factories that will be reopened within the next two or three months. This briefing “provides an overview of the SOEs in Iraq as well as relevant insights learned from the United Nations Mission in Kosovo’s experience overseeing SOEs . . .”

NIGERIA’S ECONOMIC REFORMS: PROGRESS AND CHALLENGES. 
Ngozi Okonjo-Iweala and Philip Osafo-Kwaako. Working Paper, Global Economy and Development Program, The Brookings Institution. Web posted March 26, 2007.
Full Text [pdf format, 30 pages]

“Following years of economic stagnation, Nigeria embarked on a comprehensive reform program during the second term of the Obasanjo administration. The program was based on the National Economic Empowerment and Development Strategy (NEEDS) and focused on four main areas: improving the macroeconomic environment, pursuing structural reforms, strengthening public expenditure management, and implementing institutional and governance reforms. This paper reviews Nigeria’s recent experience with economic reforms and outlines major policy measures that have been implemented. Although there have been notable achievements under the program, significant challenges exist, particularly in translating the benefits of reforms into welfare improvements for citizens, in improving the domestic business environment, and in extending reform policies to states and local governments.” The authors argue that the reform program must be considered as “initial steps on a long journey”; consequently, they have outlined a number of outstanding issues that need to be addressed by future Nigerian administrations. [Note: Contains copyrighted material.]

BREAKING POINT: MEASURING PROGRESS IN AFGHANISTAN.
Seema Patel and Steven Ross. Post Conflict Reconstruction (PCR) Project, Center for Strategic and International Studies (CSIS). February 23, 2007.
Full Text [pdf format, 118 pages]

This study is a follow-up to the 2005 report In the Balance: Measuring Progress in Afghanistan. The conclusions of this study are based on 1,000 structured conversations in half of Afghanistan’s provinces, 13 surveys, polls, focus groups, and 200 expert interviews. 70 media sources and 182 organizations were also monitored. The report’s primary findings are:

• Afghans are losing trust in the government because of an escalation in violence
• Public expectations are neither being met nor managed
• Conditions in Afghanistan have deteriorated in all key areas targeted for development, except for the economy and women’s rights.”

THE NATION'S LONG-TERM FISCAL OUTLOOK: JANUARY 2007 UPDATE.
General Accountability Office (GAO). Web posted February 23, 2007.
Full Text [pdf format, 8 pages]

Since 1992, the General Accountability Office (GAO) has published a long-term fiscal simulation of deficits and debt levels using various assumptions. GAO’s current long-term outlook shows an ever-larger deficit. “Although the timing of deficits and the resulting debt build up varies depending on the assumptions used, both simulations show that we are on an unsustainable fiscal path.”

AA07066
Dichter, Thomas. A SECOND LOOK AT MICROFINANCE
(CATO Institute, Development Policy Briefing Paper, no. 1, February 15, 2007, 13 pp.)
Full text [pdf format, 16 pages]

Dichter, an economic development expert, says the economic history of rich nations has a lot to teach us about the relationship between credit and economic growth, and he makes several points. First, microcredit never played a significant role in business start-up or small business development. Second, the first efforts to “democratize” financial services were almost entirely savings and “thrift” based. Economic development, in fact, came before (or at best alongside) the movements to democratize financial services. And, credit for the poor followed the savings movement and developed almost entirely in relationship to consumption. Finally, most people are not entrepreneurs. Given these historical patterns, he notes, expectations about microcredit’s ability to create economic growth need to be radically reduced.

THE ROLE OF SMALL- AND MEDIUM-SIZED ENTERPRISES IN THE FUTURES OF EMERGING ECONOMIES.
Derek Newberry. Earth Trends, World Resources Institute. December 2006.
Full Text [pdf format, 6 pages]

“Small- and medium-sized enterprises (SME) are an important ingredient for stable and equitable growth in any national economy. Yet despite specific global efforts to strengthen the SME sector, these businesses face a number of stifling financial and regulatory barriers, particularly in developing countries.”

INFORMATION ECONOMY REPORT 2006: THE DEVELOPMENT PERSPECTIVE.
United Nations Conference on Trade and Development (UNCTAD). November 16, 2006.
Full report [pdf format, 346 pages]

This report emphasizes the role of governments in ensuring the development of policies that encourage competition and innovation in the information and communication technology (ICT) sector. According to the report, governments can play a major part in helping developing and transition countries establish and expand ICT networks that in turn stimulate economic growth and help domestic businesses compete internationally.

Currently 44% of developing and transition countries have national plans for fostering their information societies, and 20% are developing such plans. However, the report says, few of the countries that have such plans monitor and evaluate how effective they are.

AFRICA DEVELOPMENT INDICATORS (ADI) 2006.
World Bank. October 30, 2006.
Full report [pdf format, 160 pages]

This 2006 edition of the annual World Bank publication portrays a diverse continent, with several countries making remarkable progress, some stagnating and others lagging seriously behind. The full spectrum of achievers and laggards spreads from Zimbabwe, which recorded a negative growth rate of 2.4 percent - the only country with a negative growth rate in 2004 on the continent - to Equatorial Guinea, which recorded a 20.9 percent growth rate. Sixteen African countries have sustained annual GDP growth rates in excess of 4.5 percent since the mid-1990s; inflation on the continent is down to historic lows; most exchange rate distortions have been eliminated; and fiscal deficits are dropping. The good news includes evidence that primary enrollment rates have been raised significantly across the continent. HIV/AIDS prevalence and child mortality rates have started to fall and the gender gap has started to shrink in several countries.

The news is not all good. The report warns that the immense disease burden posed by HIV/AIDS, malaria, and tuberculosis, as well as by corruption, meager foreign aid, high tariffs barring made-in-Africa products from entering global markets and dwindling foreign direct investments pose a threat to gains in overall poverty alleviation. Sub-Saharan Africa received only 1.6 percent of global foreign direct investments (US $10.1 billion), largely due to the fact that it is home to six of the 10 countries judged as having the most difficult environment for starting a business. And efforts by African firms to enter the global marketplace remain hobbled, among others, by inadequate roads, inefficient ports, and power outages.

[Note: The Little Data Book on Africa 2006 is a quick reference, pocket edition of Africa Development Indicators 2006. It is available online

(pdf format, 128 pages; 64 pages if printed 2 pages per sheet of paper).]

CRIME, JUSTICE, AND GROWTH IN SOUTH AFRICA: TOWARD A PLAUSIBLE CONTRIBUTION FROM CRIMINAL JUSTICE TO ECONOMIC GROWTH.
Christopher Stone. Harvard University, John F. Kennedy School of Government. September 20, 2006.
Full report [pdf format, 20 pages]

The high crime rate in South Africa is widely believed to discourage investment. According to this report, both the mechanisms through which crime constrains growth and the actions that might be taken to change this situation are poorly understood. In light of the limited knowledge in the field and the limited capacity of criminal justice institutions, Stone urges officials to focus on two issues: (1) the costs of crime to business, especially household-based enterprises in low-income settlements, and (2) how violent crime leads to a perception of instability that discourages investment. For both issues the author proposes a cyclical process of iterative innovation in which government seeks to solve narrowly circumscribed crime problems, and then leverages each success to generate wider hope and confidence in the criminal justice system.

AA06360
Jimenez, Emmanuel Y.; Murthi, Mamta INVESTING IN THE YOUTH BULGE
(Finance and Development, vol. 43, no. 3, September 2006, pp. 40-43)
View on publisher's website

Jimenez and Murthi, both with the World Bank, say that many developing countries are experiencing the largest "youth bulge" in history. The authors discuss the risks and opportunities that this youth bulge can have on economic growth and poverty reduction. They recommend focusing on policies and goals that promote high employment, such as achieving universal primary and secondary education, making reforms in the trade and labor markets, and improving the investment climate for human capital. With the right investments, they write, developing countries can turn their large youth populations into a boon.

AA06306
Dolfsma, Wilfred IPRs, TECHNOLOGICAL DEVELOPMENT, AND ECONOMIC DEVELOPMENT
Journal of Economic Issues, Vol. 150, No. 2, June 2006, pp. 333-342)
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Dolfsma says intellectual property rights (IPRs) have become increasingly prominent in debates and are almost unanimously deemed to favor economic development -- especially by policymakers in developed countries. It is acknowledged that some parties may benefit more from a system of IPRs than others, but some degree of improvement for all parties is the expected outcome, he writes. He analyzes the empirical and theoretical findings relevant to the question of IPRs' effect on technological development, and thus prospect for economic development. He concludes that the ideal levels of IPRs change as a country becomes more developed. For example, he notes that under today's IPRs Japan might not have had its strong electronics industry and the U.S. might not have had its strong film industry. Dolfsma asserts IPR systems need to be carefully designed to balance the needs for incentives for inventors, incentives for follow-on innovations, consumer benefits and economic development.

WORLD DEVELOPMENT REPORT 2007: DEVELOPMENT AND THE NEXT GENERATION.
The International Bank for Reconstruction and Development / The World Bank. Web-posted September 16, 2006.
Full Report [pdf format, 336 pages]

Table of Contents [sections in pdf format, various pagings]

Short Reports [Overviews of approx. 30-35 pages]

In its World Development Report 2007: Development and the Next Generation, the World Bank states that there are now more than 1.3 billion young people in the developing world -- the largest number ever in history. The report says the sheer number of young people can stretch the capacity of governments to deliver services and jobs, a situation that poses serious risks for their countries and the world at large.

According to the report, specific areas for attention include:

• Many, if not most, young people in the developing world, lack adequate education.
• Nearly half of all unemployment in the world today is among young people.
• Unemployment rates for youth are two to three times those of adults.
• 500,000 young people under the age of 18 are recruited by military and paramilitary military groups.
• Some 300,000 young people under the age of 18 have been involved in armed conflict in more than 30 countries worldwide.
• 13 million adolescent girls give birth each year.
• Young people account for nearly half of all new HIV infections.

The authors urge governments to invest capital in these young people, not only to preclude serious social tensions, but also because they represent a large population of potential new workers to help bring about positive transformations in nations' economic well-being.

SUB-SAHARAN AFRICA REGIONAL ECONOMIC OUTLOOK.
International Monetary Fund (IMF). September 2006.
Download [pdf format, 75 pages]

According to this International Monetary Fund (IMF) report, economic growth in sub-Saharan Africa is expected to remain robust, despite high oil prices. Prudent macroeconomic policies of countries in the region have kept inflation under control.

The report says: "Real GDP in sub-Saharan Africa is projected to grow by 4.8 percent in 2006. Although below the rate of 5.6 percent in 2005-largely because of a temporary slowdown in oil production in oil-exporting countries like Equatorial Guinea, Chad, and Nigeria, and a moderation of growth in South Africa to more sustainable levels-this growth performance demonstrates the growing robustness of economic growth in sub-Saharan Africa."

The report continues: "Looking ahead to 2007, GDP growth for the region as a whole is projected to rise to about 6 percent. Growth in oil-exporting countries as a group could accelerate to 10 percent, mainly because oil production is rising in Angola and Equatorial Guinea. Growth in oil-importing countries should remain steady at 4.6 percent. Inflation for the region (excluding Zimbabwe) is projected to fall further, to 6 percent."

BUSINESS AND MALARIA: A NEGLECTED THREAT?
David Bloom, Lakshmi Bloom, Mark Weston. World Economic Forum, Global Health Initiative; Harvard School of Public Health. June 2006.
Download [pdf format, 54 page]

Combating malaria is good for business, governments and the community, say the authors of this report. The report states that Sub-Saharan African businesses are highly likely to be affected by malaria, with 72 percent of them reporting a current effect from malaria, and 39 percent reporting serious impacts to their business. According to the report, which surveyed over 8,000 business leaders worldwide across 100 countries, the global business community is becoming increasingly concerned over the threat of malaria, which costs Sub-Saharan Africa 0.6% of its GDP, with one malaria episode costing up to ten working days in terms of lost labor.

Currently, governments undertake a large portion of malaria control efforts. But many governments lack the resources for effective prevention and treatment, creating a need for greater private sector involvement. This report states that recognition of malaria as a serious workplace issue is vital to the long-term productivity and efficiency of African businesses, which ultimately impacts the health and prosperity of the wider continent.

THE LEAST DEVELOPED COUNTRIES REPORT, 2006: DEVELOPING PRODUCTIVE CAPACITIES.
United Nations Conference on Trade and Development (UNCTAD). July 20, 2006.
Full Report [pdf format, 387 pages]

Overview [pdf format, 35 pages]

This report reveals that the economies of the 50 poorest countries grew by an average of 5.9% in 2004, the highest rate in two decades. This was associated with a doubling of aid from rich countries between 1999 and 2004, with high demand for oil and other natural resources, with record merchandise exports in 2004 of US$57.8 billion, and with a record $10.7 billion in private foreign investment.

But in this report, UNCTAD warns that sustaining this progress will depend on channeling a higher proportion of aid into increased investment in productive sectors and into infrastructure improvements such as upgrading roads, ports and electricity supplies, as well as enhancing support to improve domestic financial systems, upgrade technological capabilities and support the development of local firms.

Unless more aid is channeled into building up the productive bases of LDC economies, according to the report, those economies will remain vulnerable to sudden downturns. Substantial long-term reductions in poverty will not occur, since productive jobs are the way economic growth translates into rising living standards for most people. Enabling countries to produce more products, and products of increasing complexity and added value, should expand the employment base over the long term and reduce the need for emergency aid over time. The report contends that this type of assistance is also the only way to diminish pressures for international migration from poor countries.

[Note: Material in this publication may be freely quoted or reprinted, but acknowledgement is requested, together with a reference to the document symbol -- UNCTAD/LDC/2006]

FROM POVERTY, OPPORTUNITY: PUTTING THE MARKET TO WORK FOR LOWER INCOME FAMILIES.
Matt Fellowes. Brookings Institution. Metropolitan Policy Program. July 18, 2006.
Download [pdf format, 80 pages]

In general, says the author of this report, lower income families tend to pay more for the same products than families with higher incomes pay. He cites data in a number of categories to illustrate this point. For example:

• Grocery stores in lower income neighborhoods tend to be smaller and more expensive than in higher income neighborhoods.
• Nationwide, 4.5 million lower income consumers pay, on average, two percentage points more in interest for an auto loan than the average higher income consumer.
• Companies-from banks to insurance companies- face both real and perceived higher costs of doing business with lower income consumers. They charge higher prices to cover the increased costs.

Fellowes argues that reducing the additional costs that lower income families pay for standard household goods and services is a powerful and widely underutilized opportunity to help families get ahead. Among other recommendations, he advocates these actions:

• Public and private leaders, working together, can encourage mainstream businesses to serve lower income markets, where there remains great demand for services and products.
• Public and private leaders need to control abuses of alternative, high-priced businesses that have blossomed in lower income neighborhoods. Local leaders can exercise their licensing and zoning authorities, and state and federal leaders should enact legislation to limit the fees and interest rates that businesses sometimes impose on lower income consumers.
• Public and private leaders need to promote consumer responsibility and empower lower income consumers with better market information.

WAYS OF USING THE AFRICAN OIL BOOM FOR SUSTAINABLE DEVELOPMENT. Geerd Wurthmann. African Development Bank. March 2006.
Download [pdf format, 19 pages]

Sub-Saharan-Africa is considered the fastest-growing oil-producing region worldwide. Production has risen by 36 percent in the past ten years (as against 16 percent worldwide). The oil revenues can give rise to a rent-seeking mentality, however. Political decision-makers may focus on distributing the income on the basis of private interests rather than putting it to use for productive development purposes.

This paper reviews ways the African oil boom can be used for sustainable development of the continent. The author states: "What is ultimately decisive in determining whether oil-based development progress succeeds or fails, turns out to be a curse or a blessing, is whether the principles of good governance are respected throughout government and society."

[Note: Contains copyrighted material.]

THE ROAD TO 2050: SUSTAINABLE DEVELOPMENT IN THE 21ST CENTURY.
World Bank. June 2006.
Part one [pdf format, 35 pages]

Part two [pdf format, 25 pages]

If GDP growth in developing countries can return to the rates of the 1960s and 1970s, according to this publication, there could be a significantly changed world by 2050 -- wealthier, more equitable, and more sustainable, provided choices made today are the right ones. The report asserts that progress towards this larger economy involves both creating opportunities and overcoming constraints:

• For the environment and natural resources there are clear risks tied to growth, but there are also unexploited opportunities to transform natural wealth into human and social capital, as well as man-made products.
• Governance is a major constraint on development today, and rectifying this will require both institutional reforms and the mobilization of civil society.
• Social development must encompass the goals of cohesion, inclusion, and accountability if social welfare is to rise and conflicts are to be avoided.
• New agricultural technologies must fill an impending gap between population growth and food supply. Other sectors, including energy and water supply, face similar challenges.
• Further progress is required on the "aid and trade" agenda.
• Climate-change risks must be reduced through mitigation and adaptation.

[Note: Contains copyrighted material.]

INTERNATIONAL ENERGY OUTLOOK 2006.
U.S. Department of Energy, Energy Information Administration. June 2006.
Full Report [pdf format, 202 pages]

Table of Contents [sections in both html and pdf formats, various pagings]

The International Energy Outlook 2006 (IEO2006) presents an assessment by the Energy Information Administration (EIA) of the outlook for international energy markets through 2030. Worldwide marketed energy consumption is projected to grow by 71 percent between 2003 and 2030, according to the reference case projection. The IEO2006 shows the strongest energy consumption growth in developing countries outside the Organization for Economic Co-operation and Development (OECD), especially non-OECD Asia (including China and India), where robust economic growth drives the increase in energy use. Energy use in non-OECD Asia nearly triples over the projection period.

Projected reference case world oil prices are 35 percent higher in 2025 than in last year's IEO, reflecting a more pessimistic view of the willingness of oil-rich countries to expand production capacity as aggressively as previously envisioned. The higher prices dampen expected growth in world oil demand, which is 8 million barrels per day lower in 2025 than in last year's reference case. As a result, oil's share of total energy use is projected to fall from 38 percent in 2003 to 33 percent in 2030, whereas natural gas and coal both gain in their share of total energy. Petroleum consumption is still expected to grow strongly, however, reaching 118 million barrels per day in 2030. The United States, China, and India together account for 51 percent of the projected growth in world oil use. Other highlights include:

• Higher fossil fuel prices and concerns about security of energy supplies are expected to improve prospects for nuclear power capacity over the projection period, and many countries are expected to build new nuclear power plants. World nuclear capacity is projected to rise from 361 gigawatts in 2003 to 438 gigawatts in 2030, with significant declines in capacity projected only for Europe, where several countries have either plans or mandates to phase out nuclear power, or where old reactors are expected to be retired, and not replaced.
• In the IEO2006 reference case, which does not include specific policies to limit greenhouse gas emissions, energy-related carbon dioxide emissions are projected to rise from 25.0 billion metric tons in 2003 to 33.7 billion metric tons in 2015 and 43.7 billion metric tons in 2030. Much of the projected increase in emissions is expected to occur in the non-OECD regions of the world, accompanying large increases in fossil fuel use. Non-OECD countries accounts for three-fourths of the projected growth in emissions between 2003 and 2030.

AA06205
Woods, Ngaire THE GLOBALIZERS IN SEARCH OF A FUTURE: FOUR REASONS WHY THE IMF AND WORLD BANK MUST CHANGE, AND FOUR WAYS THEY CAN (CGD Brief, April 2006, 6 pp.)
View on publisher's website

Woods, a member of the Center for Global Development's Advisory Group, says the IMF and World Bank are being assailed for lacking legitimacy, independence and effectiveness. He elaborates on four main reasons these institutions need to change. First, their income is running out because they are over-reliant on the big borrowers who have largely paid off their loans; secondly, their traditional client countries are turning elsewhere because they see the IMF and World Bank as manipulative tools of the U.S. and Europe. Additionally, their use of conditionality has failed, however they have not found a new mechanism for managing loans; and they are also seen as being incapable of providing impartial policy advice since they answer to powerful countries first rather than to the borrowers. Nevertheless, Woods writes, the IMF and World Bank can ensure their future relevance if their reforms accomplish deep changes such as focusing on the borrowers, contributing to rather than hijacking a country's policy debates, involving borrowers in decision-making, and focusing on roles for which they have a unique capacity.

AA06204
Bhalla, Surjit S. TODAY'S GOLDEN AGE OF POVERTY REDUCTION (The International Economy, Vol. 20, No. 2, Spring 2006, pp. 22-25,58)
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Bhalla, an Indian economist, says the claims that globalization increases poverty and inequality is simply false. In the last twenty years, over a billion people have moved out of poverty, he notes. And, he adds, poverty as a share of population has decreased by approximately 4 percent every twenty years from 1820 to 1950; 14 percent to 1980; and an astonishing 20 percent since 1980. The increases in poverty that organizations like the World Bank report are based purely on the number of poor, he explains, so while increased population does mean more poor, the numbers fail to reflect the even larger increase in number of people who have moved out of poverty. History has proven that economic liberalization leads to production efficiency, which leads to economic growth, which leads people out of poverty, Bhalla asserts. He also suggests that poverty reduction has been so successful that it is time to move the absolute poverty line to about two dollars a day.

CHOICES MATTER: IFC SUSTAINABILITY REPORT 2005. International Finance Corporation (IFC). April 2006.
View on publisher's website

The International Finance Corporation (IFC) is the private-sector arm of the World Bank Group. IFC provides loans, equity, structured finance and risk management products, and advisory services to build the private sector in developing countries.

This report describes how IFC responds to global challenges such as climate change, poverty, corruption, HIV/AIDS, participation of women in private-sector development, and the preservation of natural resources. The report also provides a good deal of information about how sustainability is integrated into decision-making throughout IFC's investment cycle.
[Note: Contains copyrighted material.]

AA06188
van Gelder, Alec FASHION AND FOREIGN AID: A REALISTIC LOOK AT THE "DIGITAL DIVIDE" (Review - Institute of Public Affairs, Vol. 58, No. 1, April 2006, p. 31-34)
View article on ProQuest (password required)

The hype and the attention devoted to the digital divide risks diverting scarce resources away from efforts that really matter to improving the lot of the poor, writes van Gelder. It is true that information and communications technology (ICT) remain inaccessible for the vast majority of the poor, he says, but other development indicators -- necessary predecessors to productive use of ICT -- such as clean water and air, reliable sources of energy, high-quality education, and rule of law are also lacking in these countries. There are successful examples of ICT use in poor countries, but he questions the wisdom of placing too much emphasis on the digital divide in places that lack free institutions and basic living standards.

WORLD ECONOMIC OUTLOOK: GLOBALIZATION AND INFLATION. International Monetary Fund (IMF). April 2006.
Full Report [pdf format, 283 pages]

Table of Contents [text sections in pdf format, charts in csv format]

This World Economic Outlook (WEO) report paints an overall rosy picture of the world economy, with what looks like a third year of significantly above-trend growth. Growth is also becoming more balanced, with Japan picking up strongly, and the Euro area showing advance signs of steadier growth. Perhaps the best reflection of the world economic growth is that sub-Saharan Africa is headed for its best growth performance in over 30 years. In the Middle East and many Central Asian countries, a key challenge will be to channel the high oil export receipts into productive investment. High commodity prices also support many economies in Latin America, permitting very welcome reductions in external debt levels and accumulation of foreign currency reserves.

The WEO notes that an important reason for this good performance has been greater flows of goods, services, and capital across the world, otherwise known as, globalization. There is, however, concern that policy reform may be slipping in some countries.

[Note: Contains copyrighted material.]

GLOBAL MONITORING REPORT 2006. MILLENNIUM DEVELOPMENT GOALS: STRENGTHENING MUTUAL ACCOUNTABILITY, AID, TRADE, AND GOVERNANCE. World Bank and the International Monetary Fund. April 20, 2006.
Full Report [pdf format, 248 pages]

Table of Contents [sections in pdf format]

This is the third annual Global Monitoring Report on the Millennium Development Goals (MDGs), published by the World Bank and the International Monetary Fund. The eight MDGs, which call for halving between 1990 and 2015 the proportion of the world's people living on less than $1 a day, and reducing child mortality and HIV/AIDS, among others, were approved by 189 world leaders in 2000. The Global Monitoring Report (GMR) reviews progress on implementation of a compact between developed and developing countries in Monterrey in March 2002, in which developing countries agreed to improve their policies and governance, while developed countries pledged to increase and improve their aid, and provide developing countries with more access to their markets.

The GMR highlights evidence of reduced child deaths in nine out of the 10 developing countries surveyed, namely Madagascar, Indonesia, Philippines, Bolivia, Bangladesh, Burkina Faso, Morocco, Mozambique & Cameroon. It notes rapid gains in primary school enrolment, with 50 countries having achieved universal primary completion, up from 37 in 2000, and it cites signs of the first decline in HIV/AIDS infection rates in high-prevalence countries such as Haiti, Uganda and Zimbabwe. But the advances "remain uneven", the report says. Many countries, especially in Africa and Latin America, are still not making strong inroads into poverty reduction, while progress on human development indicators in South Asia has been insufficient.

Strengthened public sector governance is a primary focus of attention in the report. The authors outline a framework for monitoring "the key actors in a governance system," namely political leaders, checks-and-balance institutions, the public bureaucracy, and citizens and firms. The GMR also calls on countries and institutions providing aid to developing countries to deliver on the commitments they made in 2005 to increase transfers and debt relief, including an additional $25 billion per year in aid to Africa by 2010, and $50 billion more per year for all developing countries. In addition, the GMR urges redoubled efforts to speed up the Doha Development Round of trade talks at the World Trade Organization.

[Note: Contains copyrighted material.]

WINNERS AND LOSERS: IMPACT OF THE DOHA ROUND ON DEVELOPING COUNTRIES. Sandra Polaski. Carnegie Endowment for International Peace (CEIP). Web-posted March 2006.
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This report by CEIP's Trade, Equity, and Development Project presents a new model of global trade to analyze the potential impacts of the WTO Doha Round negotiations and the underlying economic interests of the WTO's diverse members. The model makes several critical innovations --notably, modeling unemployment in developing countries, and separating agricultural labor markets from urban unskilled labor markets. The result is a detailed analysis of the impact of trade policies on both developing and developed countries.

The author concludes that it is important not to overstate the possible gains from the Doha Round. The model suggests that "trade is one factor among many that can contribute to economic growth and rising incomes, but its contribution is likely to be very modest."

The report offers recommendations meant to address the interests and problems of the developing world in the Doha Round. These include:

• Many developing countries will require very long phase-in periods and a careful sequencing of sectoral liberalization measures.
• Special treatment for developing country agricultural sectors will be needed because of the high concentrations of employment in those sectors.
• For the LDCs, additional measures will be needed to ensure that they are not net losers from the Doha Round.
• A solution must also be found for the group of low-income countries that are just above the threshold for LDC status, because they may be made worse off by the effort to help the poorest.

[Note: Contains copyrighted material.]

THE JUDICIARY AND ECONOMIC DEVELOPMENT. Kenneth W. Dam. The Brookings Institution. March 2006.
Download the document [pdf format, 41 pages]

The author contends that no degree of substantive law improvement -- even world "best practice" substantive law -- will bring the Rule of Law to a country without effective enforcement. A sound judiciary is key to enforcement. While some technical laws can be enforced by administrative means, a Rule of Law, in the primary economic sense of protecting property and enforcing contracts, requires a judiciary to resolve disputes between private parties. Moreover, protection against the state is made easier where the judiciary can resolve a controversy raised by a private party against the state, based on constitutional provisions or parliamentary legislation.

Several studies show some of the positive benefits of strong effective judiciaries, which include:

• The degree of judicial independence is correlated with economic growth.
• Better performing courts have been shown to lead to more developed credit markets.
• A stronger judiciary is associated with more rapid growth of small firms as well as with larger firms in the economy.
• Within individual countries, the relative competence of provincial and state courts affects comparative economic competitiveness.

How the Scope of Government Shapes the Wealth of Nations. Brett D. Schaefer. Heritage Lecture #925. March 7, 2006
View article on publisher's website

"There are two nearly universally accepted broad principles on the scope of government and its impact on economic growth. First, some level of government spending is necessary to ensure that the basic structures of society function smoothly enough to facilitate economic activity. Second, excessive government spending shifts resources from the private sector and impedes economic growth. Between these two principles lies an ocean of possibilities ...", states the author. The ensuing dicussion on optimal government size and level of government intervention in economies focuses on developing countries. Economic freedom is strongly advocated for economic development and is supported by empirical findings. Shaefer concludes that "Developed countries can assist development by encouraging good policy and opening their markets to developing country products, but success in development ultimately depends on developing countries adopting and implementing policies that promote economic freedom, good governance and the rule of law."

BACK TO THE FUTURE FOR AFRICAN INFRASTRUCTURE? WHY STATE-OWNERSHIP IS NO MORE PROMISING THE SECOND TIME AROUND.
John Nellis. The Center For Global Development. February 2006.
Download the document [pdf format, 36 pages]

African state-owned enterprises (SOEs), particularly those in infrastructure, have a long history of poor performance. But moves in the 1990s to rely instead on private-sector participation and ownership have yet to deliver the hoped-for improvements. Is a return to SOEs the solution? This paper's author says no.

He argues that the prospects for success of Africa's SOEs are no greater now than before, and that private firms still have not been given a real chance. He shows that private participation in infrastructure initiatives has been comparatively small-scale and weak. A number of initiatives that have been launched have run into problems, to the point where both investor and African government interest in the approach has waned in the last few years. Moreover, such reforms are not popular - public opinion surveys in 15 African countries reveal that only one-third of respondents prefer private to state-owned firms.

Nonetheless, the author recommends that African states (and their supporters) not jettison private participation in infrastructure. Rather, they should acknowledge the limitations of such an approach, and recognize the large scope and moderate pace of the preparatory measures required both to improve the investment climate, and to make private participation in infrastructure work effectively.

[Note: Contains copyrighted material.]

POVERTY REDUCTION AND GROWTH: VIRTUOUS AND VICIOUS CIRCLES.
Guillermo E. Perry, et. al. World Bank, Latin American and Caribbean Studies. Web-posted February 2006.
Download the document [pdf format, 238 pages]

The annual flagship report by the World Bank's Latin American and Caribbean Studies division takes a fresh look at how growth and poverty are interlinked, and makes new recommendations on how to boost growth and reduce poverty at the same time. The report revisits how growth can reduce poverty and how much emphasis should be placed on growth relative to distribution, given a country's income and inequality levels.

A central theme of the report is that investments in the poor are good business for society as a whole. Poverty itself hampers the achievement of high and sustained growth rates, completing a variety of vicious circles. For instance, poor students, faced with substandard schools and volatile returns to their human capital, underinvest in education. Poor entrepreneurs, excluded from capital markets, underinvest in good projects. Poor regions, lacking infrastructure, fail to attract investment, and have fewer citizens able to adopt, manage, and generate new technologies. Poor countries, unable to moderate income disparities, find ethnic or racial tensions exacerbated that, in turn, thwart the establishment of a healthy business climate.

To move to a virtuous circle of growth and poverty reduction will take action on many poverty fronts and an approach that not only considers how the poor can benefit from growth, but also how they can contribute to it. Key among these is investment in human capital. The report emphasizes that an integrated strategy, taking into account barriers to getting education and the entire lifecycle of students, is essential.

The report's findings are grounded in detailed analysis and examples, and are intended to provide additional insights to policy makers and development practitioners in the different countries of the region.

[Note: Contains copyrighted material.]

AA06090
Rodrik, Dani. HOME-GROWN GROWTH: PROBLEMS AND SOLUTIONS TO ECONOMIC GROWTH
(Harvard International Review, vol. 27, no. 4, Winter 2006, pp. 74-77)
View article on ProQuest (password required)

Rodrik, a professor of international political economy at Harvard University, discusses development problems. He addresses questions such as human rights vs. economic development; the role of trade liberalization in spurring economic growth; the failure of the Washington Consensus; the role of foreign aid in poverty alleviation; and the need for democracy and strong institutions for sustainable successful economies. A lot of development has to do with accountability, giving people a sense of ownership, a stake and a voice in the community -- and that is what democracy is all about, he writes.

AA06039
Ratha, Dilip. REMITTANCES: A LIFELINE FOR DEVELOPMENT (Finance and Development, Vol. 42, No. 4, December 2005, pp. 42-43)
View article on the publisher's web site

Ratha, a Senior Economist in the World Bank's Development Prospects Group, says remittances play an important role in development, but it is hard to estimate the exact size of flows because many transfers take place through unofficial channels. He notes that remittance flows target specific needs of the recipients and thus tend to reduce poverty. Remittances are more stable than capital flows and are counter-cyclical, increasing during economic downturns or after natural disasters when private capital flows typically decrease. However, he adds, there are potential costs to reliance on remittances such as loss of highly skilled workers, labor shortages, appreciation of the real exchange rate (if remittances are large), or breeding dependency by undercutting the recipient's incentives to work. Transaction costs need to be lowered in order to increase the positive impacts of remittances, he writes; this can be accomplished through improved access to banking and competitive services rather than targeted government incentives.

OFFSHORING OF SERVICES: AN OVERVIEW OF THE ISSUES [GAO-06-05].
United States General Accounting Office (GAO). November 2005.
Download the document [pdf format, 86 pages]

Offshoring generally refers to an organization's purchase of goods or services from abroad that were previously produced domestically. Extensive public debate has arisen about both the potential benefits of services offshoring, such as lower consumer prices and higher U.S. productivity, as well as the potential costs, such as increased job displacement for selected U.S. workers. GAO produced this report to help policy makers better understand the potential impacts and policy implications of services offshoring.

This GAO report:

• Provides an overview of experts' views on the potential impacts of services offshoring;
• Describes the types of policies that have been proposed in response to offshoring; and
• Highlights some key areas where additional research might help advance the debate about offshoring.

AA05345
THE NINE PRINCIPLES OF RECONSTRUCTION AND DEVELOPMENT. Natsios, Andrew S. Parameters, Vol. 35, No. 3, Autumn 2005, p. 4-20.
Download the document [pdf format, 17 pages]

Natsios, Administrator for the U.S. Agency for International Development, says the U.S. foreign assistance community is in the midst of the most fundamental shift in policy since the Marshall Plan at the end of World War II. The Bush administration has made development work a national security priority; further, the dynamics of today's asymmetrical warfare, in which military success increasingly depends on successful economic development, require much greater collaboration between the military and development communities, he states. Natsios reviews the Nine Principles of Reconstruction and Development -- ownership, capacity-building, sustainability, selectivity, assessment, results, partnership, flexibility, and accountability -- which are inspired by the military's Nine Principles of War. Foremost among the principles is ownership, writes Natsios, because reconstruction/development is simply not effective if local populations do not feel a sense of ownership toward donor programs.

AA05309
Kaufmann, Daniel TEN MYTHS ABOUT GOVERNANCE AND CORRUPTION (Finance and Development, Vol. 42, No. 3, September 2005)
View article on publisher's website

Kaufmann, director of Global Programs at the World Bank Institute, says governance -- which is being given a higher priority in development circles -- is a much misunderstood topic. There are still unresolved questions and debates in the development community, not only about the importance of governance, but also about the ability of international financial institutions to help countries improve on it, he explains. Kaufmann explores 10 myths about governance and concludes by recommending a bolder approach to development in which the rich world must not only deliver on its aid and trade liberalization promises -- but also lead by example.

WORLD RESOURCES 2005 -- THE WEALTH OF THE POOR: MANAGING ECOSYSTEMS TO FIGHT POVERTY.
World Resources Institute. August 2005.
Download the document [pdf format, 228 pages]

Quick reference guide [pdf format, 228 pages]

Published by the World Resources Institute in collaboration with the United Nations Development Program, United Nations Environment Program, and World Bank, World Resources 2005 is the 11th in a series of biennial reports on global environment and governance issues published since 1984. The report explores the following propositions:

• Economic growth is the only realistic means to lift the poor out of extreme poverty in the developing world; but the capacity of the poor to participate in economic growth must be enhanced if they are to share in its benefits.
• The building blocks of a pro-poor growth strategy begin with natural resources. These provide the base upon which the vast majority of the poor now depend for their fragile existence, but over which they exercise little control, and therefore can't exercise full stewardship.
• The role of governance -transparent and accountable governance- is critical to fostering pro-poor growth and essential to ensuring that the engine of that growth, natural resource wealth, is managed wisely.

The author's note that much of what the report calls for is captured in the Millennium Development Goals, adopted by the United Nations in 2000. Building on this, the World Resources 2005 report shows how important pro-poor management of ecosystems is to attaining these goals. It presents a wealth of examples that demonstrate how nations can support a bottom-up approach to rural growth that begins naturally with the assets the poor already possess.

Note: Contains copyrighted material.

AA05236
Siddiqi, Moin. VOLATILITY IS THE ENEMY (African Business, Vol. 311, July 2005, pp. 28-29)
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Siddiqi says that periods of extreme output volatility adversely effect long-term economic growth, welfare, income inequality and poverty reduction, especially in the developing world -- and Africa still has the highest volatility in the developing world. The effects of volatility in low-income countries with undeveloped financial markets and bad macroeconomic policies are considerable, he states. A 1970-2003 study attributes over 73 percent of all output volatility in developing countries to country-specific factors such as macroeconomic policies and institutional capacities, he notes. Good policies designed to improve the investment environment, reform financial systems and the public sector, and increase trade, would alleviate the volatility problem that currently impedes sustainable development in poverty-stricken Africa - but success would demand fuller commitments from both African governments and donor countries, says Siddiqi.

AA05251
Anderson, Robert E. WALL STREET IN THE THIRD WORLD? (Regulation, Vol. 28, No. 1, Spring 2005, pp. 40-42)
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Anderson, an economic development consultant, says the New York Stock Exchange is often used to symbolize a capitalist, market economy, but it is only important in the U.S. because of its peculiar model of small, dispersed share ownership. Developing countries are often led to believe that they, too, should have a large stock exchange in order to develop their economies, he explains. But most corporate ownership in developing countries is characterized by a small number of investors with large holdings, so the importance of stock markets for them is exaggerated, says Anderson. Many developed countries with strong economies do not share the U.S. model of corporate ownership, he notes, which disproves the idea that it is the only road to success. Attempts to encourage dispersed share ownership in developing economies may increase the size of their stock markets -- but it could be at the expense of poor corporate governance and reduced company performance, he writes.

AA05253
Paredes, Troy A. CORPORATE GOVERNANCE AND ECONOMIC DEVELOPMENT (Regulation, Vol. 28, No. 1, Spring 2005, pp. 34-39)
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Paredes, associate professor of law at Washington University, says U.S.-style corporate governance, which is a market-oriented model, may be a poor fit for the developing world. In the U.S., shareholders are protected by nonlegal mechanisms such as contracts, market forces, and norms of good practice that directors and officers follow, he explains. This market-oriented approach encourages innovation, entrepreneurship, and risk-taking - but its success depends on several preconditions -- such as an effective, sophisticated judicial system, in-depth experience and understanding of private ordering, and a predictable future, states Paredes. Developing countries lack these preconditions, he writes, therefore a system of more stringent mandatory corporate law is the better option, because clear shareholder protections are needed to encourage investment, the development of capital markets, and, ultimately, economic growth

FREE ADVICE FOR PAUL WOLFOWITZ.
Foreign Policy. Web posted May 2005
View the documents on the publisher's site

On June 1, former Deputy Defense Secretary Paul Wolfowitz became the head of the World Bank. His mission is ending global poverty. FOREIGN POLICY asked five of the world's leading development experts to offer Wolfowitz some advice on getting the job done. Their suggestions include:

• Stimulating economic growth rather than providing direct aid.
• Focusing on knowledge and providing information that will assist governments in establishing economic policies that promote development.
• Microfinancing of the poor in order support entrepreneurship by offering small loans
• Linking the overall volume of lending to the funding of critical institutions, such as basic education, basic health, and nondiscriminatory legal frameworks. In this way, the bank would fund the very things that drive growth, be it infrastructure or higher education.
• Developing a clear, integrated, viable, and sustainable mission for the Bank as well as exploring innovative financing instruments

AFRICAN ECONOMIC OUTLOOK 2004/2005. [OVERVIEW AND COUNTRY STUDIES]
Organisation for Economic Co-operation and Development (OECD). May 17, 2005.
Table of Contents [Sections in html format, various sizes]

This fourth edition of the African Economic Outlook reviews the recent economic situation and the short-term evolutions of African countries. It includes an overview of the continent, 29 country notes, a statistical annex and a focus on small and medium enterprises issues in Africa. The bulk of the report contains for each of each country a 20-page study presented according to a common analytical framework that includes a forecasting exercise for the next two years, based on a simple macroeconomic model, together with an analysis of the social and political context.

Country coverage comprises:

• North Africa: Algeria, Egypt, Morocco and Tunisia.
• West Africa: Benin, Burkina Faso, Côte d'Ivoire, Ghana, Mali, Niger, Nigeria and Senegal.
• Central Africa: Cameroon, Chad, the Republic of Congo, the Democratic Republic of Congo, Gabon and Rwanda.
• East Africa: Ethiopia, Kenya, Madagascar, Mauritius, Tanzania and Uganda.
• Southern Africa: Angola, Botswana, Mozambique, South Africa and Zambia.

AA05141
Corrigan, Paul; Glomm, Gerhard; Mendez, Fabio. AIDS CRISIS AND GROWTH (Journal of Development Economics, Vol. 77, No. 1, June 2005, pp. 107-124)
Full text available from your nearest American Library

The authors examine the economic growth effects of an AIDS epidemic in a community in sub-Sahara Africa. Economic growth factors impacted by AIDS are many, but the authors focus on two: the effect of decreased life expectancy on investment in physical and human capital, and the changes wrought by a large generation of orphans. They use models to evaluate the economic behavior of an AIDS community and make suggestions for further study. The authors note that understanding the economic behavior of communities impacted by AIDS is essential to providing the best possible policies to mitigate the economic devastation.

WORLD DEVELOPMENT INDICATORS [WDI] 2005.
World Bank. April 17, 2005.
Download the document [Table of Contents page, sections in html format, various pagings]

World Development Indicators (WDI) is the World Bank's premier annual compilation of data about development. The 2005 WDI includes more than 800 indicators in 83 tables organized in 6 sections: World View, People, Environment, Economy, States and Markets, and Global Links. According to the WDI data, only 33 countries are on track to reach the 2015 goal of reducing child mortality by two-thirds from its 1990 level. Almost 11 million children in developing countries die before the age of five, most from causes that are readily preventable in rich countries. These include acute respiratory infection, diarrhea, measles and malaria, which together account for 48 percent of child deaths in the developing world.

Four regions-East Asia and the Pacific, Eastern Europe and Central Asia, Latin America and the Caribbean, and the Middle East and North Africa-have made substantial progress toward the target of reducing child mortality by two-thirds. The most difficult challenge is faced by Sub-Saharan Africa, where child mortality has fallen only marginally, from 187 deaths per thousand in 1990 to 171 deaths in 2003, the last year for which figures are available. The Millennium Development Goal (MDG) target for Sub-Saharan Africa is to reduce the under-five mortality rate to 62 deaths per thousand by 2015.

Also, South Asia and Sub-Saharan Africa lag far behind the "Education for All" goal and, at the present pace, will not reach it by 2015, while the developing countries of Europe and Central Asia and the Middle East and North Africa, will also have to pick up their pace of enrolments to achieve it. Meanwhile, the regions of East Asia and the Pacific and Latin America and the Caribbean are expected to reach the target well before 2015.

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2005 GLOBAL MONITORING REPORT. MILLENNIUM DEVELOPMENT GOALS: FROM CONSENSUS TO MOMENTUM.
World Bank and International Monetary Fund (IMF). Web-posted April 12, 2005.
Full Report [pdf format, 280 pages]

Executive Summary [pdf format, 6 pages]

Table of Contents [sections in pdf format, various pagings]

This report was prepared as a focal point of discussion by finance ministers, central bankers, and development ministers in Washington this past weekend at the spring meetings of the World Bank and International Monetary Fund (IMF). It will also serve as an important input into the upcoming G8 heads of state meeting to be held in the UK in July and the UN Summit on the Millennium Development Goals (MDGs) in September.

The authors of the report warn that progress towards the 2015 Millennium Development Goals is falling short and recommend the following steps to accelerate progress:

• Ensure that development efforts are country-owned. Scale up development impact through country-owned and led poverty reduction strategies
• Improve the environment for private sector-led economic growth. Strengthen fiscal management and governance, ease the business environment, and invest in infrastructure
• Scale up delivery of basic human services. Rapidly increase the supply of health care workers and teachers, provide larger and more flexible and predictable financing for these recurrent cost-intensive services, and strengthen institutional capacity
• Dismantle barriers to trade through an ambitious Doha Round, including major reform of agricultural trade policies-and also increasing "aid for trade"
• Double development aid in the next five years. In addition, improve the quality of aid, with faster progress on aid coordination and harmonization.

Note: Contains copyrighted material.