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
    Urbanization and Growth : Commission on Growth and Development
    (World Bank, 2009) Spence, Michael; Annez, Patricia Clarke; Buckley, Robert M.
    Structural change is a key driver of rapid growth: countries diversify into new industries, firms learn new things, people move to new locations. Anything that slows this structural change is also likely to slow growth. Because urbanization is one of the most important enabling parallel processes in rapid growth, making it work well is critical. Urbanization's contribution to growth comes from two sources: the difference between rural and urban productivity levels and more rapid productivity change in cities. In the early decades of development, when the majority of the population is still rural, the jump from rural to urban employment makes a big contribution to growth. As cities grow larger, the second effect faster gains in urban productivity - begins to dominate, as it operates on a larger base. Mortgages can improve households' ability to buy decent housing. But finance relaxes demand constraints only. Unless it is accompanied by measures to increase supply, better finance may result in overshooting prices. This volatility can jeopardize macroeconomic stability. In a typical pattern, strong income growth leads to a rapid increase in housing demand. An injection of liquidity from some source, often overseas, may help over stimulate the market, leading to over optimism and a dangerous concentration of wealth in real estate.
  • Publication
    Public Finance and Economic Development: Reflections Based on the Experience in China
    (World Bank, Washington, DC, 2009) Gordon, Roger H.
    Low tax revenue and slow economic growth are two central concerns in developing countries. However, policies that raise tax revenue also harm economic growth. With tax revenue coming mainly from large capital-intensive firms, and with a large informal sector, policies that aid large firms and policies that discourage entry of new firms both help increase tax revenue. Entrepreneurial activity as a result is discouraged, lowering growth. There is a basic tension in policy design between current tax revenue and economic growth. In fact, a loss in tax revenue can itself reduce growth, due to less spending on education and infrastructure. It can also undermine political support for the reforms from the poor and from government bureaucrats, both of whom are key beneficiaries of government expenditures. What policies encourage growth without undue loss of current expenditures? One is debt finance, but this creates the risk of a financial crisis if tax revenue rises too slowly to repay this debt. A second is user fees, but such fees still undermine political support from the poor. A third is partial reform, maintaining both higher taxes on and some protection for easily taxed firms, even while barriers to entry are eased.
  • Publication
    Current Debates on Infrastructure Policy
    (World Bank, Washington, DC, 2009) Estache, Antonio; Fay, Marianne
    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).