Commission on Growth and Development

75 items available

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https://hdl.handle.net/10986/4397

The Growth Commission’s reports identify the ingredients that, if used in the right country-specific recipe, can deliver growth and help lift populations out of poverty. The Commission, consisting of 19 experienced leaders and 2 Nobel prize-winning economists, has released several commission reports, thematic volumes, and background working papers. The spring 2010 volume is the final book from the Commission. The Commission is succeeded by The Growth Dialogue.

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Macro Crises and Targeting Transfers to the Poor
(World Bank, Washington, DC, 2010) Kanbur, Ravi
A central question for policy makers concerned with helping the poor through a macro crisis is how to target scarcer resources at a time of greater need. Technical arguments suggest that finer targeting through tightening individual programs or reallocation resources towards more tightly targeted programs uses resources more efficiently for poverty reduction. These arguments survive even when the greater informational costs and the incentive effects of finer targeting are taken into account. But political economy arguments suggest that finer targeting will end up with fewer resources allocated to that program, and that looser targeting, because it knits together the interests of the poor and the near poor, may generate greater resources and hence be more effective for poverty reduction despite being 'leakier.' Overall the policy advice to tighten targeting and to avoid more loosely targeted programs during crises needs to be given with consideration caution. However, the advice to design transfer systems with greater flexibility, in the technical and the political economy senses, is strengthened by the arguments presented here. The case for external assistance to design flexible transfer systems ex ante and to relieve the painful tradeoffs in targeting during a crisis is also shown to be strong.
Financial Crisis and Global Governance: A Network Analysis
(World Bank, Washington, DC, 2010) Sheng, Andrew
This paper attempts to use network theory, drawn from recent work in sociology, engineering, and biological systems, to suggest that the current crisis should be viewed as a network crisis. The author surveys the concepts of networks, their defining characteristics, applications to financial markets, and the need for supervision and implications for national and global governance. Then, author briefly examines the current financial crisis in the light of the network analysis and surveys the recent reforms in financial regulation and architecture. The paper concludes with an analysis of the policy implications of network analysis.
Globalization and Growth - Implications for a Post-Crisis World : Commission on Growth and Development
(World Bank, 2010) Spence, Michael; Leipziger, Danny
The commission on growth and development was established in April 2006 as a response to two observations. While the author felt that the benefits of growth were not fully appreciated, the author recognized that the causes of growth were not fully understood. Growth is often overlooked and underrated as an instrument for tackling the world's most pressing problems, such as poverty, illiteracy, income inequality, unemployment, and pollution. At the same time, understanding of economic growth is less definitive than commonly thought, even though advice sometimes has been given to developing countries with greater confidence than perhaps the state of our knowledge will justify. Consequently, the commission's mandate was to 'take stock of the state of theoretical and empirical knowledge on economic growth with a view to drawing implications for policy for the current and next generation of policy makers.' This mandate has even more significance in the aftermath of the financial and economic crisis of 2008. As developing countries seek to repair the damage to their economies and to re-launch themselves on a sustained high-growth path, there has never been a greater need for fresh new ideas and approaches to achieving sustained high growth. There has been no dearth of commentary about what the crisis may mean, but in reality, until the bottom has been reached and the path to recovery is clear, it will be difficult to draw general lessons for the future. This collection of essays encompasses a variety of viewpoints and covers both medium- and long-term policy issues. It is said that more textbooks have become obsolete in 2009 than in any year since the great depression. As a corollary, much has been written that is worth reviewing in a volume on globalization. The papers look at the issue of globalization from diverse points of view and add insights and perspective to the recommendations of the growth report.
Leadership and Growth : Commission on Growth and Development
(World Bank, 2010) Brady, David; Spence, Michael
In May 2008, the commission on growth and development (the growth commission) issued its report entitled 'the growth report'. In it the commission attempted to distill what had been learned in the past two decades, from experience and academic and policy research, about strategies and policies that produced sustained high growth in developing countries. It became clear in the course of the work that politics, leadership, and political economy (the interaction of economic and political forces and choices) were centrally important ingredients in the story. Dealing with the politics and the interaction of political and economic forces is a work in progress in research, an important one. Given this breadth, one of the editors' roles is to focus the reader's attention on what they take to be common issues across these chapters. These common problems are fourfold: (1) promoting national unity; (2) building good, solid institutions; (3) choosing innovative and localized policies; and (4) creating political consensus for long-run policy implementation. This report represent an excellent first step toward understanding the role of leadership in generating economic growth, and the author hope that they generate ideas and lead to new research on the problem of leadership in economic growth.
Post-Crisis Growth in Developing Countries : A Special Report of the Commission on Growth and Development on the Implications of the 2008 Financial Crisis
(Washington, DC: World Bank, 2010) Commission on Growth and Development
In May 2008, the Commission released the growth report: strategies for sustained growth and inclusive development. At that time, the financial systems of the United States and Europe were under stress. Commodity prices were also spiking, posing particular difficulties for developing countries because of the impact on the poor and on potential future inflation. But no one foresaw the full magnitude of the crisis that erupted in the fall of 2008, more than a year ago. The crisis was a destructive malfunction of the financial sectors of the advanced economies, which spread rapidly to the real economy and to the rest of the globe. Even countries far from the source of the crisis had to cope with capital volatility, tight credit, and rapidly falling trade. At the request of several members of the Commission, Commission held a workshop on the crisis and its implications for developing countries. Commission followed standard procedure of asking for help and insight from a distinguished group of scholars, analysts, and practitioners. This report is an outgrowth of that process. It is an attempt to look at the crisis and its aftermath from the point of view of developing countries. Commission wanted to assess the impact of these events, and determine if the growth strategies recommended needed major revision, or some adaptive fine tuning. Commission also wanted to think more carefully about resilience, and what it might mean for successful sustained growth. The report that follows is a summary of thinking on these and related questions.
Equity and Growth in a Globalizing World : Commission on Growth and Development
(World Bank, 2010) Kanbur, Ravi; Spence, Michael
The commission on growth and development was established in April 2006 in response to two insights: people do not talk about growth enough, and when they do, they speak with unearned conviction. The workshops turned out to be intense, lively affairs, lasting up to three days. It became clear that experts do not always agree, even on issues that are central to growth. But the Commission had no wish to disguise or gloss over these uncertainties and differences. And it did not want to present a false confidence in its conclusions beyond that justified by the evidence. While researchers will continue to improve people's understanding of the world, policy makers cannot wait for scholars to satisfy all of their doubts or resolve their differences. Decisions must be made with only partial knowledge of the world. One consequence is that most policy decisions, however well informed, take on the character of experiments, which yield useful information about the way the world works, even if they do not always turn out the way policy makers had hoped. It is good to recognize this fact, if only so that policy makers can be quick to spot failures and learn from mistakes. In principle, a commission on growth could have confined its attention to income per person, setting aside the question of how income is distributed. But this commission chose otherwise. It recognized that growth is not synonymous with development. To contribute significantly to social progress, growth must lift everyone's sights and improve the living standards of a broad swath of society. The Commission has no truck with the view that growth only enriches the few, leaving poverty undisturbed and social ills untouched.
From Growth Theory to Policy Design
(World Bank, Washington, DC, 2009) Aghion, Philippe; Durlauf, Steven
This paper focuses on how growth theory can guide growth policy design. It first argues that policy matters for growth, in particular when policy variables are interacted with country?specific variables (financial development, institutional environment, technological development, and so forth). Second, it argues that the Schumpeterian paradigm does a better job at delivering policy prescriptions that vary with country characteristics. Third, it discusses the advantages and drawbacks of growth regression analysis. Finally, it briefly describes and then questions the recently proposed 'growth diagnostic' approach.
Investment Efficiency and the Distribution of Wealth
(World Bank, Washington, DC, 2009) Banerjee, Abhijit V.
The point of departure of this paper is that in the absence of effectively functioning asset markets the distribution of wealth matters for efficiency. Inefficient asset markets depress total factor productivity (TFP) in two ways: first, by not allowing efficient firms to grow to the size that they should achieve (this could include many great firms that are never started); and second, by allowing inefficient firms to survive by depressing the demand for factors (good firms are too small) and hence factor prices. Both of these effects are dampened when the wealth of the economy is in the hands of the most productive people, again, for two reasons: first, because they do not rely as much on asset markets to get outside resources into the firm; and second, because wealth allows them to self insure and therefore they are more willing to take the right amount of risk. None of this, however, tells us that efficiency enhancing redistributions must always be targeted to the poorest. There is some reason to believe that a lot of the inefficiency lies in the fact that many medium size firms are too small.
A New Bretton Woods?
(World Bank, Washington, DC, 2009) Rajan, Raghuram G.
The Bretton Woods sisters, the International Bank for Reconstruction and Development (henceforth the World Bank) and the International Monetary Fund (IMF), were set up in 1944. The original purpose of the former was to help post-Second World War reconstruction; the purpose of the latter was to help revive global trade while averting the 'beggar-thy-neighbor' exchange rate policies that characterized the interwar years. Over the years, the World Bank has refocused on helping poor countries grow while the IMF broadly attempts to foster country policies that ensure macroeconomic stability and limit adverse spillovers to the rest of the world. While these roles still remain, their nature has changed somewhat. In particular, given the development of financial markets around the world, the primary role of these institutions has moved to shaping, guiding, supplementing, and stabilizing the flow of private finance rather than substituting fully for it. This paper focuses on the new ways multilateral institutions may have to perform old tasks, as well as the ways they could perform new tasks such as slowing climate change. Critical to their transformation will be the attitudes of the countries that play the largest role in their governance, as well as reform of the governance process itself.
Eight Reasons We Are Given Not to Worry About the U.S. Deficits
(World Bank, Washington, DC, 2009) Frankel, Jeffrey
The large U.S. current account deficit over the last decade-and the corresponding surpluses in China and elsewhere-has been interpreted in two very different ways. Many mainstream economists view the phenomena as primarily the outcome of a low rate of national saving in the United States, beginning with a large budget deficit (the other half of the 'twin deficits'). In this first view, the current account deficit is unsustainable, and will eventually result in a sharp depreciation of the dollar. But this unsustainability view has been challenged by a variety of other economists, with equally impeccable credentials. This paper enumerates eight arguments that they have given as to why we need not worry about the current account deficit. The paper is skeptical of all eight, and sides with the unsustainability view. But they deserve a hearing. The eight are: 1) the siblings are not twins; 2) alleged investment boom; 3) low U.S. private savings; 4) global savings glut; 5) its a big world; 6) valuation effects pay for it; 7) intermediation rents pay for it; and 8) second Bretton woods.