Initiative For Policy Dialogue

• Development Cooperation in Times of Crisis
  Author(s): Alonso, José Antonio; Ocampo, José Antonio
  Abstract:

  Leading governments undertook extraordinary measures to offset the 2008 economic crisis, shoring up financial institutions, stimulating demand to reverse recession, and rebalancing budgets to alleviate sovereign debt. While productive in and of themselves, these solutions were effective because they were coordinated internationally and were matched with sweeping global financial reforms. Unfortunately, coordination has weakened after these initial steps, indicating one of the crisis’s adverse effects will be a significant reduction in development cooperation.

  Urging advanced nations to improve their support for development, the contributors to this volume revisit the causes of the 2008 collapse and the ongoing effects of recession on global and developing economies. They reevaluate the international response to crisis and suggest more effective approaches to development cooperation. Experts on international aid join together to redesign the cooperation system and its governance, so it can accept new actors and better achieve the Millennial Development Goals of 2015 within the context of severe global crisis. In their introduction, José Antonio Alonso and José Antonio Ocampo summarize different chapters and the implications of their analyses, concluding with a frank assessment of global economic imbalance and the ability of increased cooperation to rectify these inequalities.

• Escaping the Resource Curse
  Author(s): Humphreys, Macartan, Jeffrey D. Sachs, and Joseph E. Stiglitz, eds.
  Keyword(s): IPD; Economics; International Affairs
  Abstract:

  The wealth derived from natural resources can have a tremendous impact on the economics and politics of producing countries. In the last quarter century, we have seen the surprising and sobering consequences of this wealth, producing what is now known as the "resource curse." Countries with large endowments of natural resources, such as oil and gas, often do worse than their poorer neighbors. Their resource wealth frequently leads to lower growth rates, greater volatility, more corruption, and, in extreme cases, devastating civil wars.

  In this volume, leading economists, lawyers, and political scientists address the fundamental channels generated by this wealth and examine the major decisions a country must make when faced with an abundance of a natural resource. They identify such problems as asymmetric bargaining power, limited access to information, the failure to engage in long-term planning, weak institutional structures, and missing mechanisms of accountability. They also provide a series of solutions, including recommendations for contracting with oil companies and allocating revenue; guidelines for negotiators; models for optimal auctions; and strategies to strengthen state-society linkages and public accountability.

  The contributors show that solutions to the resource curse do exist; yet, institutional innovations are necessary to align the incentives of key domestic and international actors, and this requires fundamental political changes and much greater levels of transparency than currently exist. It is becoming increasingly clear that past policies have not provided the benefits they promised. Escaping the Resource Curse lays out a path for radically improving the management of the world's natural resources.

• Growth and Policy in Developing Countries: A Structuralist Approach
  Author(s): Ocampo, Jose Antonio, Codrina Rada, and Lance Taylor
  Keyword(s): IPD; Economics; International Affairs; Development
  Abstract:

  Economic structuralists use a broad, systemwide approach to understanding development, and this textbook assumes a structuralist perspective in its investigation of why a host of developing countries have failed to grow at 2 percent or more since 1960. Sensitive to the wide range of factors that affect an economy's strength and stability, the authors identify the problems that have long frustrated growth in many parts of the developing world while suggesting new strategies and policies to help improve standards of living.

  After a survey of structuralist methods and post-World War II trends of global economic growth, the authors discuss the role that patterns in productivity, production structures, and capital accumulation play in the growth dynamics of developing countries. Next, it outlines the evolution of trade patterns and the effect of the terms of trade on economic performance, especially for countries that depend on commodity exports.

  The authors acknowledge the structural limits of macroeconomic policy, highlighting the negative effects of financial volatility and certain financial structures while recommending policies to better manage external shocks. These policies are then further developed through a discussion of growth and structural improvements, and are evaluated according to which policy options-macro, industrial, or commercial—best fit within different kinds of developing economies.

• New Perspectives on International Migration and Development
  Author(s): Cortina, Jeronimo; Ochoa-Reza, Enrique
  Keyword(s): IPD; International Affairs; Development; Economics
  Abstract:

  With contributions from leading scholars in international development, economics, political science, and sociology, this collection draws attention to migration’s developmental impacts on sending and receiving societies. Through current case studies, contributors examine the interplay among migration, development, culture, family reunification, human rights, and government, all with the aim of advancing more effective solutions to international migration issues.

  The volume’s multidisciplinary perspective combines theoretical discussions with empirical applications, appealing to both academics and policymakers eager to maximize migration’s developmental impacts. The collection begins with a discussion detailing when and why migration promotes growth and what kind of indicators beyond GDP should be considered. Challenging a number of misconceptions, such as the assumption that redressing poverty and alleviating underdevelopment in immigrant communities are solely economic pursuits, contributors acknowledge the inherent cultural dimension in the migration–development debate and define the contours of a research program that systematically and comparatively weighs the cultural dynamics of development and migration. They also emphasize the role of human rights in reinforcing positive developmental outcomes, how traditional social roles and its developmental impacts are reshaped by the international migration of women and children, and international migration’s developmental impacts within specific geographic regions.

• Privatization: Successes and Failures
  Author(s): Roland, Gérard, ed.
  Keyword(s): IPD; Economics; International Affairs; Government
  Abstract:

  The privatization of large state-owned enterprises is one of the most radical policy developments of the last quarter century. Right-wing governments have privatized in an effort to decrease the size of government, while left-wing governments have privatized either to compensate for the failures of state-owned firms or to generate revenues. In this way, privatization has spread from Europe to Latin America, from Asia to Africa, reaching its zenith with Central and Eastern Europe's transition from socialism to capitalism.

  In many countries state ownership has been an important tool in bringing cheap water, energy, and transport to poorer segments of the population. In other instances, it has sponsored aggressive cutbacks, corruption, and cronyism. Privatization: Successes and Failures evaluates the practices and results of privatization in Eastern Europe, Africa, Latin America, and Asia. Featuring the world's leading economists and experts on privatization, this volume offers a broad and balanced analysis of specific privatization projects and uncovers some surprising trends. Partial privatization, for example, tends to be more widespread than one might think, and the effects of privatization on efficiency are generally mixed but rarely negative. Also, while privatization appears uncontroversial in competitive sectors, it becomes increasingly complex in more monopolistic sectors where good regulation is crucial. Privatization concludes with alternative frameworks for countries in Africa and other regions that seek to develop privatization policy and programs.

• Reforming the International Financial System for Development
  Author(s): Kwame Sundaram, Jomo
  Keyword(s): IPD
  Abstract:

  The 1944 Bretton Woods conference created new institutions for international economic governance. Though flawed, the system led to a golden age in postwar reconstruction, sustained economic growth, job creation, and postcolonial development. Yet financial liberalization since the 1970s has involved deregulation and globalization, which have exacerbated instability, rather than sustained growth. In addition, the failure of Bretton Woods to provide a reserve currency enabled the dollar to fill the void, which has contributed to periodic, massive U.S. trade deficits.

  Our latest global financial crisis, in which all these weaknesses played a part, underscores how urgently we must reform the international financial system. Prepared for the G24 research program, a consortium of developing countries focused on financial issues, this volume argues that such reforms must be developmental. Chapters review historical trends in global liquidity, financial flows to emerging markets, and the food crisis, identifying the systemic flaws that contributed to the recent downturn. They challenge the effectiveness of recent policy and suggest criteria for regulatory reform, keeping in mind the different circumstances, capacities, and capabilities of various economies. Essays follow ongoing revisions in international banking standards, the improved management of international capital flows, the critical role of the World Trade Organization in liberalizing and globalizing financial services, and the need for international tax cooperation. They also propose new global banking and reserve currency arrangements.

• Taxation in Developing Countries: Six Case Studies and Policy Implications
  Author(s): Gordon, Roger H., ed.
  Keyword(s): IPD; Economics; Business
  Abstract:

  Taxes are a crucial policy issue, especially in developing countries. Just recently, proposals to raise middle-class taxes toppled the Bolivian government, and plans to extend or increase the value-added tax caused political unrest in Ecuador and Mexico. Despite the impact of tax policy on developing countries, a comprehensive study has yet to be written. Treating Argentina, Brazil, India, Kenya, Korea, and Russia as key case studies, this volume outlines the major aspects of current tax codes and explores their economic and political implications.

  Examples of both the poorest and wealthiest developing countries, Argentina, Brazil, India, Kenya, Korea, and Russia uniquely demonstrate the diverse fiscal problems of tax reform. Each economy relies heavily on indirect and corporate income taxes, though recently some have reduced their tariff rates and have switched from excise to value-added taxes. There is a large, informal economy in most of these countries, and tax evasion by firms is a significant concern. As a result, tax revenue remains low, even though rates are as high as those in developed economies. Also, unconventional methods to collect revenue have been implemented, including bank debit taxes, state ownership of firms, and implicit taxes on individuals in the informal sector.

  Exploring these and other concerns, as well as changes in tax law, administration, and fiscal pressures, this comprehensive anthology clarifies the current landscape of tax administration and the economic future of the world's poorer economies.

• The Right to Know: Transparency for an Open World
  Author(s): Florini, Ann, ed.
  Keyword(s): IPD; Economics; Political Science
  Abstract:

  The Right to Know is a timely and compelling consideration of a vital question: What information should governments and other powerful organizations disclose? Excessive secrecy corrodes democracy, facilitates corruption, and undermines good public policymaking, but keeping a lid on military strategies, personal data, and trade secrets is crucial to the protection of the public interest.

  Over the past several years, transparency has swept the world. India and South Africa have adopted groundbreaking national freedom of information laws. China is on the verge of promulgating new openness regulations that build on the successful experiments of such major municipalities as Shanghai. From Asia to Africa to Europe to Latin America, countries are struggling to overcome entrenched secrecy and establish effective disclosure policies. More than seventy now have or are developing major disclosure policies or laws. But most of the world's nearly 200 nations do not have coherent disclosure laws; implementation of existing rules often proves difficult; and there is no consensus about what disclosure standards should apply to the increasingly powerful private sector.

  As governments and corporations battle with citizens and one another over the growing demand to submit their secrets to public scrutiny, they need new insights into whether, how, and when greater openness can serve the public interest, and how to bring about beneficial forms of greater disclosure. The Right to Know distills the lessons of many nations' often bitter experience and provides careful analysis of transparency's impact on governance, business regulation, environmental protection, and national security. Its powerful lessons make it a critical companion for policymakers, executives, and activists, as well as students and scholars seeking a better understanding of how to make information policy serve the public interest.