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​When it comes to fiscal policy, it’s better to save for a rainy day than to let it pour

Otaviano Canuto's picture
While pro-cyclical fiscal policies – ie. expansionary fiscal policies in booms and contractionary fiscal stances in downturns - remain a common feature among developing countries, some countries have recently moved toward a less pro-cyclical fiscal stance, as a result of stronger institutions.

​How effective is growth for poverty reduction? Do all countries benefit equally from growth?

Israel Osorio Rodarte's picture
Economic growth has been vital for reducing extreme poverty and improving the lives of many poor people around the world. This is an indisputable fact.
However, does economic growth affect poverty reduction equally in different countries? Contrary to conventional wisdom, we don’t think so. And here’s why.

When theory about insurance doesn’t fit with reality

Daniel Stein's picture
Poor rainfall is one of the greatest risks faced by poor farmers throughout the world, but success has been elusive in developing private-sector financial products to manage this risk. Traditional indemnity insurance is not well-suited to smallholder farms (due to asymmetric information and high verification costs), and indeed this market has failed to materialize. Weather index insurance makes payouts based on readings at local weather stations (such as the amount of rainfall over a particular time period), and can have lower costs than indemnity insurance.

Addressing rising inequality in G20 economies

Zia Qureshi's picture
Income inequality has been rising in a majority of G20 economies, in some of them significantly. This rising trend in inequality has more recently started to focus attention on policies to promote a more inclusive pattern of growth. This shift in attention has also been motivated by increasing evidence from recent research that rising inequality may be harmful to economic stability and growth. Not only can rising inequality undermine longer-term growth prospects, but it can also hurt growth in the short to medium term by weakening aggregate demand.

Internet access boosts firm performance – even in difficult business environments

Caroline Paunov's picture
The Internet may boost private sector development in developing and emerging countries by improving access to market information, by facilitating more effective coordination of firms’ production and delivery chains and by creating new business opportunities. However, impacts on firm performance may not be equally strong across regions of the world, and differ with countries’ development status. A potential reason for weaker impacts is cumbersome framework conditions - shortcomings in physical infrastructures, weakly developed financial markets, and an often insufficiently skilled labor force.

Remembering John Nash

Kaushik Basu's picture
Last weekend, as my wife and I drove back to Washington after visiting James Madison’s home and the birthplace of the American constitution in Virginia, our daughter called to give us the news. John Nash and his wife, Alicia, had just been killed in a car accident on New Jersey Turnpike. The brutality of it was difficult to fathom. How could a person of such genius, after a life of so much struggle, battling schizophrenia and overcoming it, go in such a way?

Prosperity of Nations: Does culture matter for entrepreneurship?

Shankha Chakraborty's picture

Economists have been increasingly looking at culture to explain the divergent economic fortunes of nations. Does culture matter for development? If it does, what kind of culture?  In a recent paper we argue that differences in economic development across countries can be explained by a culture of entrepreneurship, that there is a role for government policy to shift culture towards risk-taking and innovation but that, ultimately, culture is subordinate to institutions.

Friday round up: Visualizing financial inclusion, food insecurity, behavioral economics, poverty among urban children, and citizen well-being

LTD Editors's picture
The Guardian's Global Development Professionals Network blog has created visualizations using Global Findex data.
The FAO finds in its 'The State of Food Insecurity in the World 2015' report that 795m people are undernourished globally, down 167m over the last decade, and 216m less than in 1990–92.

Stock-markets lead to more FDI...or is it vice-versa?

Fulbert Tchana Tchana's picture
Most studies on the relationship between foreign direct investments (FDI) and financial market development focus on financial market development as a link between FDI and economic growth. However at present our disciple has no deep understanding of direct causality between FDI and financial market development, especially in emerging markets, where financial markets are in the development stage.