Commission on Growth and Development
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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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Publication
Equity and Growth in a Globalizing World : Commission on Growth and Development
(World Bank, 2010)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. -
Publication
Current Debates on Infrastructure Policy
(World Bank, Washington, DC, 2009)This paper provides an overview of the major current debates on infrastructure policy. It reviews the evidence on the macroeconomic significance of the sector in terms of growth and poverty alleviation. It also discusses the major institutional debates, including the relative comparative advantage of the public and the private sector in the various stages of infrastructure service delivery as well as the main options for changes in the role of government (i.e. regulation and decentralization). -
Publication
Investment Efficiency and the Distribution of Wealth
(World Bank, Washington, DC, 2009)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. -
Publication
The Growth Report : Strategies for Sustained Growth and Inclusive Development
(Washington, DC : World Bank, 2008)The report has four main parts. In the first, the commission reviews the 13 economies that have sustained, high growth in the postwar period. Their growth models had some common flavors: the strategic integration with the world economy; the mobility of resources, particularly labor; the high savings and investment rates; and a capable government committed to growth. The report goes on to describe the cast of mind and techniques of policy making that leaders will need if they are to emulate such a growth model. It concludes that their policy making will need to be patient, pragmatic, and experimental. In the second part, the commission lays out the ingredients a growth strategy might include. These range from public investment and exchange rate policies to land sales and redistribution. A list of ingredients is not enough to make a dish, of course, as Bob Solow, a Nobel Prize-winning economist and a member of the Commission, points out. The commission, however, refrains from offering policy makers a recipe, or growth strategy, to follow. This is because no single recipe exists. Timing and circumstance will determine how the ingredients should be combined, in what quantities, and in what sequence. Formulating a full growth strategy, then, is not a job for this Commission but for a dedicated team of policy makers and economists, working on a single economy over time. Instead of a country-specific recipe, the commission offers some more general thoughts on the opportunities and constraints faced by nations in Sub-Saharan Africa, countries rich in resources, small states with fewer than 2 million people, and middle-income countries that have lost their economic momentum. In the final part of the report, the commission discusses global trends that are beyond the control of any single developing-country policy maker. Global warming is one example; the surge in protectionist sentiment another; the rise of commodity prices a third. In addition, the commission discusses the aging of the world population and the potential dangers of America's external deficit. These trends are new enough that the 13 high-growth economies of the postwar period did not have to face them. The question is whether they now make it impossible for other countries to emulate that postwar success. -
Publication
Housing Policy in Developing Countries: The Importance of the Informal Economy
(World Bank, Washington, DC, 2008)All countries have a formal economy and an informal economy. But, on average, in developing countries the relative size of the informal sector is considerably larger than in developed countries. This paper argues that this has important implications for housing policy in developing countries. That most poor households derive their income from informal employment effectively precludes income-contingent transfers as a method of redistribution. Also, holding fixed real economic activity, the larger is the relative size of the informal sector, the lower is fiscal capacity, and the more distortionary is government provision of a given level of goods and services, which restricts the desirable scale and scope of government policy. For the same reasons, housing policies that have proven successful in developed countries may not be successful when employed in developing countries.