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Of peacocks, development theory and empirics: ABCDE 2014

Merrell Tuck-Primdahl's picture

Development economics may be having a bit of a coming out moment, like a peacock unfurling a sheen of multicolored feathers after a long time wandering around a dusty yard with its tail feathers modestly folded.

This was my impression at the 25th  Annual Bank Conference on Development Economics at the World Bank earlier this week. ‘The Role of Theory in Development Economics’ was the theme, but the proverbial church was broad.

Development Economics and Method: A Quarter Century of ABCDE

Kaushik Basu's picture

[Opening Remarks at the ABCDE 2014, Washington, D.C.]

Introduction

It gives me great pleasure to welcome all of you to the Annual Bank Conference on Development Economics (ABCDE) 2014.

The first time I attended an ABCDE was when Stanley Fischer used to do my job. A letter arrived, quite unexpectedly, in my Delhi mailbox inviting me to attend the ABCDE in Washington. The World Bank would cover all my expenses and, not just that, I was not given any specific task, like that of writing a paper or commenting on one. Several members of the eminences grises of the profession were at the conference and I remember feeling rather tongue tied. So, taking advantage of the fact that I did not have a specific brief, I hardly spoke during the two days. I later figured that if you measured the World Bank’s expenditure on different participants in terms of the amount spent for each word uttered, I was the most highly-paid person at that conference.

I made up for that a little in 1992, when Larry Summers was the Chief Economist, and I was invited once again from Delhi, this time to comment on Paul Romer’s paper (Romer, 1993). And I will make up for this today, since the Bank did not have to spend on my travel and I do intend to say a few things.

What do we know about preferential trade agreements and temporary trade barriers?

LTD Editors's picture

Two of the most important trade policy developments to take place since the 1980s are the expansion of preferential trade agreements and temporary trade barriers, such as antidumping, safeguards, and countervailing duties. Despite the empirical importance of preferential trade agreements and temporary trade barriers and the common feature that each can independently have quite discriminatory elements, relatively little is known about the nature of any relationships between them. A new World Bank policy research working paper by Chad P. Bown, Baybars Karacaovali, and Patricia Tovar surveys the literature on some of the political-economic issues that can arise at the intersection of preferential trade agreements and temporary trade barriers and uses four case studies to illustrate variation in how countries apply the World Trade Organization's global safeguards policy instrument. The four examples include recent policies applied by a variety of types of countries and under different agreements: large and small countries, high-income and emerging economies, and free trade areas and customs unions. The analysis reveals important measurement and identification challenges for research that seeks to find evidence of systematic relationships between the formation of preferential trade agreements, the political-economic implications of their implementation, and the use of subsequent temporary trade barriers.

Finance and growth in China and India

Sergio Schmukler's picture

China and India are hard to ignore. Over the past 20 years they have risen as global economic powers, at a very fast pace. By 2012, China has become the second-largest world economy (based on nominal GDP) and India the tenth. Together, they account for about 36% of world population.

Friday round up: Syria, Piketty pushes back, Universal Health Coverage, GMOs to fight hunger, and Brazil

LTD Editors's picture

Syria's economy is heading into ruin, warns a Reuters news story based on a new study by the Damascus based-Syrian Centre for Policy Research. Commissioned by the United Nations and the International Monetary Fund (IMF) the study estimates that there was a 40 percent contraction in GDP since the start the conflict in 2011 and two-thirds of the nation's population is estimated to be living in extreme poverty.

Thomas Piketty, author of 'Capital in the 21st Century,' has responded in detail to the FT's recent assertion that his blockbuster book used erroneous computations.

A development e-story: Estonia

Swati Mishra's picture

"Once upon a time in the faraway Baltic region was a tiny nation of Estonia. Newly independent, with a population of 1.3 million, and with 50 percent of its land covered in forests, it was saddled with 50 years of under development. While it was operating with a 1938 telephone exchange, it’s once comparable neighbor across the gulf, Finland, had a 30 times higher GDP per capita and was waltzing its way into new technological advances. Estonia was faced with the challenge of catching-up with the rest of the world. It too embarked upon the technology bandwagon, but revolutionized it’s progression, by creating identity, secured digital Identity for its citizens. And finally, Estonia became a country teeming with cutting-edge technology. The end. “

Son preference, fertility and family structure: Evidence from reproductive behavior among Nigerian women

LTD Editors's picture

Strong boy-bias and its consequences for young and unborn girls have been widely documented for Asia. A new World Bank policy research working paper considers a country in Sub-Saharan Africa and finds that parental gender preferences do affect fertility behavior and shape traditional social institutions with negative effects on adult women's health and well-being. Using individual-level data for Nigeria, the paper shows that, compared to women with first-born sons, women with first-born daughters have (and desire) more children and are less likely to use contraceptives. Women with daughters among earlier-born children are also more likely to have shorter birth intervals, a behavior medically known to increase the risk of child and maternal mortality. Moreover, they are more likely to end up in a polygynous union, to be divorced, and to be head of the household. The preference for sons is also supported by child fostering patterns in which daughters are substitutes for foster girls, while the same does not hold for sons and foster boys. These results can partly explain excess female mortality among adult women in Sub-Saharan Africa.

Cash transfers and temptation goods: A review of global evidence

LTD Editors's picture

Cash transfers have been demonstrated to improve education and health outcomes and alleviate poverty in various contexts. However, policy makers and others often express concern that poor households will use transfers to buy alcohol, tobacco, or other "temptation goods." The income effect of transfers will increase expenditures if alcohol and tobacco are normal goods, but this may be offset by other effects, including the substitution effect, the effect of social messaging about the appropriate use of transfers, and the effect of shifting dynamics in intra-household bargaining. The net effect is ambiguous. A new paper by David K. Evans and Anna Popova reviews 19 studies with quantitative evidence on the impact of cash transfers on temptation goods, as well as 11 studies that surveyed the number of respondents who reported they used transfers for temptation goods. Almost without exception, studies find either no significant impact or a significant negative impact of transfers on temptation goods. In the only (two, non-experimental) studies with positive significant impacts, the magnitude is small. This result is supported by data from Latin America, Africa, and Asia. A growing number of studies from a range of contexts therefore indicate that concerns about the use of cash transfers for alcohol and tobacco consumption are unfounded.

Global income distribution: From the fall of the Berlin Wall to the Great Recession

Christoph Lakner's picture

The period between the fall of the Berlin Wall and the Great Recession saw probably the most profound reshuffle of individual incomes on the global scale since the Industrial Revolution. This was driven by high growth rates of populous and formerly poor or very poor countries like China, Indonesia, and India; and, on the other hand, by the stagnation or decline of incomes in sub-Saharan Africa and post-communist countries as well as among poorer segments of the population in rich countries.

​Friday Roundup: Tackling Inequality, Ushahidi on crisis data, Technology and Africa, Gates on Sachs, and ABCDE sign up

LTD Editors's picture

Ana Revenga, soon to be the head of the Bank's Poverty Global Practice, blogs on the importance of starting early when tackling inequality and also links to a new user-friendly inequality dashboard.

From his days as an MIT professor, to his stint as World Bank Chief Economist, #2 at the IMF, and head of Israel's central bank, Stan Fischer is a towering figure in economics circles. He's just been appointed by Fed Chairwoman Janet Yellen to be her deputy. Read Dylan Matthew's profile of Stan here.

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