Connecting Brazil to the world
Patricia Ellen, Jaana Remes, 12 July 2014
Brazil has grown rapidly and reduced poverty over the past decade, but it has grown more slowly than other emerging economies and its income per capita remains relatively low by global standards. This column points out that sectors of the Brazilian economy that have been opened up to international competition have outperformed those that remain heavily protected. Deeper integration into global markets and value chains could provide competitive pressures that would improve Brazil’s productivity and living standards.
Despite a decade of rapid growth and falling poverty rates, Brazil has failed to match the global average for income growth – let alone to achieve the kind of impressive gains posted by other rapidly transforming emerging economies.
Topics: Development, International trade, Productivity and Innovation
Tags: Brazil, development, global value chains, globalisation, growth, MERCOSUR, openness, productivity, trade
Institutions, trade shocks, and regional differences in long-run educational and development trajectories
André Carlos Martínez, Aldo Musacchio, Martina Viarengo , 9 July 2014
Institutions are known to play a powerful and enduring role in countries’ divergent levels of economic development. This column presents evidence that institutions matter for within-country inequality, too. In Brazil, changes in export prices and export tax revenues led to an increase in education spending in states that experienced commodity booms, which increased the number of schools and improved educational outcomes such as literacy rates. However, the effect was limited in states where slavery was predominant in colonial times.
Understanding the determinants of long-run socio-economic development is a major concern for academics and policymakers in many countries around the world.
Topics: Development, Economic history, Education
Tags: Brazil, colonialism, development, education, extractive institutions, growth, Inequality, institutions, trade shocks
Newspaper readership, civic attitudes, and economic development: Evidence from the history of African media
Julia Cagé, Valeria Rueda, 14 May 2014
African regions where Protestant missionaries were active had indigenous newspapers a century before other regions. This column argues, based on new research, that this difference has had lasting effects. Proximity to a mission that had a printing press in 1903 predicts newspaper readership today. Population density and light density (a proxy for economic development) is also higher today in regions nearer to missions that had printing presses. The results suggest that a well-functioning media – not Protestantism per se – was important for development.
Poor governance due to lack of political accountability is often cited as an explanation for the low level of economic development in sub-Saharan Africa. Lack of political accountability can emerge when voters do not choose their candidates according to their expected performance.
Topics: Development, Economic history, Institutions and economics, Politics and economics
Tags: accountability, Africa, democracy, development, media, religion, technology, voting
More to do on measuring hunger
Joachim De Weerdt, Kathleen Beegle, Jed Friedman, John Gibson, 18 February 2014
Whereas the Millennium Development Goal of reducing extreme poverty by half was achieved by 2010, the global hunger rate has only fallen by a third since 1990. Differences in survey design may account for part of this discrepancy. This column presents the results of a recent experiment in which households were randomly assigned to different survey designs. These different designs yield vastly different hunger estimates, ranging from 19% to 68% of the population being hungry.
One of the first Millennium Development Goals is to reduce hunger by half between 1990 and 2015. To date, the global hunger count has fallen slightly, from 1 billion in 1990–1992 to 870 million in 2010–2012 (Food and Agriculture Organization 2013). As a proportion of the world’s population, this is just a one-third fall in the hunger rate, from 19% to 13%.
Topics: Poverty and income inequality
Tags: Africa, development, food, hunger, measurement error, Millennium Development Goals, Poverty, surveys, Tanzania
GDP and life satisfaction: New evidence
Eugenio Proto, Aldo Rustichini, 11 January 2014
The link between higher national income and higher national life satisfaction is critical to economic policymaking. This column presents new evidence that the connection is hump-shaped. There is a clear, positive relation in the poorer nations and regions, but it flattens out at around $30,000–$35,000, and then turns negative.
A commission on the measurement of economic performance and social progress was created on the French government’s initiative. Since 2008, this distinguished group of social scientists has put subjective well-being into the limelight as a possible supplement to traditional measures of development such as GDP (Stiglitz et al. 2009).
Topics: Development, Frontiers of economic research
Tags: development, Easterlin paradox, growth, happiness, national income, subjective well-being
Government quality and spatial inequality: A cross-country analysis
Andrés Rodríguez-Pose, Roberto Ezcurra, 29 November 2013
Does government quality affect the size and evolution of regional inequality? This column approaches this question using regional data for 46 countries with different degrees of economic development over the period 1996-2006. We find that there is a strong negative association between quality of government and within-country disparities. Countries with better quality of government register lower levels of spatial inequality.
Spatial inequality has received considerable attention from both scholars and politicians in the last two decades, coinciding with advances in globalisation.
Topics: Poverty and income inequality
Tags: development, government institutions, spatial inequality
AGOA rules: The intended and unintended consequences of special fabric provisions
Lawrence Edwards, Robert Z. Lawrence, 20 November 2013
Preferential import policies that allow developing markets to export to advanced economies are intended to dynamically promote development rather than just provide basic gains from trade. This column argues that the Africa Growth and Opportunities Act achieves the latter but not the former, distorting incentives along the value-added chain. While beneficial, preferential trade deals are not a panacea and are certainly not a replacement for pro-development policies.
The US and EU often claim credit for granting duty-free quota-free access to products from the least developed countries. Such preferential treatment is of interest not only because it might provide one-time benefits in the form of higher incomes and increased employment, but also because trade is often associated with dynamic benefits that lead to faster growth and development.
Topics: Development, International trade
Tags: Africa, development, quotas, tariffs
Growth still is good for the poor
David Dollar, Tatjana Kleineberg, Aart Kraay, 19 November 2013
A key Millennium Development Goal was to halve the number of people living on less than $1.25 a day. This was met five years ahead of schedule, and the World Bank is promoting a new goal of ‘shared prosperity’ defined in terms of the growth rate of incomes in the bottom 40% of households. This column discusses research showing that there is a strong one-for-one relationship between overall growth and average income growth in the poorest quintiles. Overall growth is thus still important.
With the formulation of the Post-2015 Development Agenda in full swing, it is important to reassess how and to what extent new development challenges should be reflected in the agenda. A key part of the soon-expiring Millennium Development Goals aimed at halving absolute poverty – as defined by the World Bank's $1.25/day standard – between 1990 and 2015.
Tags: development, growth, Inequality, Millennium Development Goals, Poverty, World Bank
Long-term barriers to growth
Enrico Spolaore, Romain Wacziarg, 3 October 2013
There is now widespread agreement that ‘deep’ history matters for comparative development. Recent research has shown that ancestry – the transmission of genetic and cultural traits across generations – matters more than the history of geographic regions. This column argues that long-term divergences in inherited traits can create barriers to the diffusion of technology. The greater a population’s genetic distance to the population on the technological frontier, the lower its relative income will be. Development policies should aim at reducing barriers to exchange and communication.
Students of comparative development have turned their focus to factors rooted deeper and deeper in history.
Topics: Development, Economic history
Tags: ancestry, Culture, development, geography, growth, technology transfer
Alberto Alesina, Stelios Michalopoulos, Elias Papaioannou, 18 November 2012
This paper explores the consequences and origins of contemporary differences in well-being across ethnic groups within countries. The authors show that ethnic inequality is strongly inversely related to per capita income, and that differences in geographic endowments across ethnic homelands explain a sizable portion of contemporary ethnic inequality. This deeply rooted inequality in geographic attributes across ethnic regions is also negatively related to comparative development.
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Topics: Development, Poverty and income inequality
Tags: development, diversity, ethnicity, geography, Inequality