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Development economics, globalism and inequality, the aid system, international financial institutions, education, Latin America, climate financing
Nancy Birdsall is president emeritus and a senior fellow at the Center for Global Development, a policy-oriented research institution that opened its doors in Washington, DC in October 2001. Prior to launching the center, Birdsall served for three years as senior associate and director of the Economic Reform Project at the Carnegie Endowment for International Peace. Her work at Carnegie focused on issues of globalization and inequality, as well as on the reform of the international financial institutions.
From 1993 to 1998, Birdsall was executive vice-president of the Inter-American Development Bank, the largest of the regional development banks, where she oversaw a $30 billion public and private loan portfolio. Before joining the Inter-American Development Bank, she spent 14 years in research, policy, and management positions at the World Bank, most recently as director of the Policy Research Department.
Birdsall has been researching and writing on economic development issues for more than 25 years. Her most recent work focuses on the relationship between income distribution and economic growth and the role of regional public goods in development.
Birdsall is a member of the Board of Directors of the International Food Policy Research Council (IFPRI), of the African Population and Health Research Center, and of Mathematica. She has chaired the board of the International Center for Research on Women and has served on the boards of the Social Science Research Council, Overseas Development Council, and Accion. She has also served on committees and working groups of the National Academy of Sciences.
Birdsall holds a PhD in economics from Yale University and an MA in international relations from the Johns Hopkins School of Advanced International Studies.
Putting Education to Work in Egypt, by Nancy Birdsall and Lesley O'Connell. Prepared for Conference, Growth Beyond Stabilization: Prospects for Egypt, sponsored by The Egyptian Center for Economic Studies in collaboration with the Center for Institutional Reform and the Informal Sector, University of Maryland; the Harvard Institute for International Development, and the US Agency for International Development, February 3-4, 1999, Cairo, Egypt. March 1999.
"Intergenerational Mobility in Latin America: Deeper Markets and Better Schools Make a Difference," with Jere R. Behrman and Miguel Szekely, in New Markets, New Opportunities? Economic and Social Mobility in a Changing World (1999)
"The U.S. and the Social Challenge in Latin America: The New Agenda Needs New Instruments," with Nora Lustig and Lesley O'Connell, in The Search for Common Ground: U.S. National Interests and the Western Hemisphere in a New Century (W.W. Norton & Company, Inc., 1999)
"Deep Integration and Trade Agreements: Good for Developing Countries?" with Robert Z. Lawrence in Global Public Goods: International Cooperation in the 21st Century (Oxford University Press, 1999)
"No Tradeoff: Efficient Growth Via More Equal Human Capital Accumulation in Latin America," in Beyond Trade-Offs: Market Reforms and Equitable Growth in Latin America (1998)
"That Silly Inequality Debate," in Foreign Policy, May/June 2002
"Education in Latin America: Demand and Distribution are Factors that Matter," with Juan Luis Londoño and Lesley O'Connell in CEPAL Review 66, December 1998
"Life is Unfair: Inequality in the World," in Foreign Policy, Summer 1998
"Public Spending on Higher Education in Developing Countries: Too Much or Too Little?" in Economics of Education Review, 1996
As Chair of the Board of the Center for Global Development, I am delighted to announce that, following a competitive international search, Masood Ahmed is to become the Center’s next president. He will succeed Nancy Birdsall who has been an outstanding founding president during CGD’s first fifteen years.
Please join us for a special event to mark CGD’s 15th anniversary, when IMF Managing Director Christine Lagarde will give a speech highlighting the critical role of global collaboration to address the issues facing low-income developing countries. Last year, the international community came together to agree on historic goals to drive development across the globe through 2030. Today those commitments are now even more urgent as the global economy faces serious challenges - low growth, weak commodity prices, financial market volatility, and geopolitical uncertainties. The implications for the poorest nations are stark.
The evidence is compelling that countries benefit from immigration, particularly if immigrants are already well-educated, working-age adults, as is the case with most of the Syrians fleeing war at home. Still, there are real economic, security, and political costs of hosting refugees when, as with the Syrians, the arrivals are sudden and substantial. Given those costs, how should we think about the obligations of potential host countries?
Theory and some empirical evidence suggest the two goals – reproductive rights for women and women’s economic empowerment – are connected: reproductive rights should strengthen women’s economic power. But our understanding of the magnitude of the possible connection and the nature of any causal link (vs. coevolution or reverse causation) in different times and places is limited. In this note we summarize what we know up to now and what more we could learn about that connection, and set out the data requirements and methodological challenges that face researchers and policymakers who want to better understand the relationship.
Evidence shows that when women have the opportunity to serve as political leaders, governments are not only more inclusive but also perform better. Women politicians are shown to champion policies improving health services and education systems, and they serve as positive role models influencing girls’ career aspirations and educational attainment. But across the world, women’s rates of political leadership remain lower than men’s. What are the obstacles standing in the way of women’s equal political participation? And what can be done to overcome these obstacles?
In a new CGD report, U.S. and Pakistani development experts urge a substantial revamp of the U.S. approach to Pakistan, saying that U.S. efforts to build prosperity in the nuclear-armed nation with a fledgling democratic government, burgeoning youth population, and shadowy intelligence services are not yet on course.
In the 2005 WIDER Annual Lecture, “The World is not Flat: Inequality and Injustice in our Global Economy” (PDF), CGD President Nancy Birdsall addresses the challenge that global inequality poses for managing globalization so that it works for the developing world. She first argues that inequality matters to people. Moreover, in developing countries, where markets and politics are far-from-perfect, inequality can be destructive, reducing prospects for growth, poverty reduction, and good government. She then turns to a fundamental problem of globalization--that it is asymmetric, i.e. that it benefits the rich more than the poor, both within and across countries. Birdsall argues that the world is not flat as argued by New York Times columnist Thomas Friedman. Rather, what appears to be a level playing field to people on the surface is actually a field full of craters in which poor people and poor countries are stuck. Birdsall discusses the implications of these craters for shared prosperity, global security, and global social justice. She concludes by suggesting steps for addressing the core problem: We have a global economy but no effective global polity.
In the accompanying article Rising Inequality in the New Global Economy (PDF) Nancy Birdsall argues that globalization is disequalizing, rewarding the already rich while leaving the poor behind, and that we need a global polity to address the asymmetric impacts of globalization.
Download slides from the lecture "Why Inequality Matters in a Globalizing World" (PDF, 580KB) delivered October 26, 2005 at the World Institute for Development Economic Research (WIDER) in Helsinki, Finland
The lecture draws upon the following previously released CGD publications:
Commodity Dependence, Trade and Growth: When Openness Is Not Enough
Economic Policy and Wage Differentials in Latin America
Give Us Your Best and Brightest. The Global Hunt for Talent and Its Impact on the Developing World
Consumption taxes for goods and services—sometimes called Value Added Taxes or VAT—are a common and effective revenue-raising tool used in many developing countries. But in some low- and middle-income countries, all but the poorest 10% of the population pay more in such taxes than they receive in cash transfers—even to the extent of worsening poverty levels. This has occurred in countries as varied as Armenia, Bolivia, Brazil, Colombia, Ethiopia and Sri Lanka. Lustig will draw on new research from the Commitment to Equity (CEQ) project to show how replacing external aid with domestic resources generated through consumption taxes could have onerous consequences for the poor.
Lustig directs the Commitment to Equity (CEQ), a partnership with Tulane University, the Inter-American Dialogue, and CGD. The CEQ offers research and analysis on the equity impact of taxes and transfers in an effort to support governments, multilateral institutions, and nongovernmental organizations in their efforts to build more equitable societies.
J. Brian Atwood, chair of the OECD Development Assistance Committee (DAC), analyzes the process and achievements of the Fourth High-Level Forum on Aid Effectiveness, held in Busan, South Korea, in 2011.
In 2016 on the CGD Podcast, we have discussed some of development's biggest questions: How do we pay for development? How do we measure the sustainable development goals (SDGs)? What should we do about refugees and migrants? And is there life yet in the notion of globalism? The links to all the full podcasts featured and the work they reference are below, but in this edition, we bring you highlights of some of those conversations.
In 2009, Guyana created a Low Carbon Development Strategy to develop economically while keeping its entire forest intact, and signed a Memorandum of Understanding with Norway to receive performance-based payments in the tens of millions of dollars annually contingent upon holding nationwide deforestation to a near-zero rate. In mid-February, 2014, we visited Guyana as part of a three-country study to attempt to gain insights of value to the future expansion of performance-based payments in other countries and other sectors.
Integration of the global economy has outpaced the ability of international institutions to address key market failures—inequality, volatility, and inadequate provision of global public goods—undermining the prospects for inclusive and sustainable growth, CGD president Nancy Birdsall said in an address to the UN General Assembly.
In the absence of an activist global political entity to address these issues, as national governments attempt to do within sovereign states, the growing number of people who are coming to regard themselves as global citizens should press their own governments to adopt policies that address these problems, domestically and internationally, she said.
Put the UN General Assembly on The Daily Show! Or Maybe Not? (Blog)
Global Citizens and the Global Economy (Speech)
“I am a US citizen by birth and a development economist by training. But with the globalization of everything—supply chains, Facebook, civil society, and more—I have felt more and more like a citizen of the world. I suspect that many of you feel much the same way,” Birdsall said.
The September 10 address was the focus of this year’s UN General Assembly session on the Millennium Development Goals, the UN-endorsed poverty-reduction targets that expire in 2015.
Birdsall made clear that market-driven growth has put the world on the winning side in the global war on poverty, creating opportunities for hundreds of millions of people to lift themselves out of poverty, and supporting rapid progress in many countries on the MDGs.
But, she added, “economic globalization has outpaced political globalization. We have a global economy without the equivalent at the global level of a state.”
For example, she said, unmanaged markets tend to exacerbate inequality, within and across nations, as those with the right assets—such as access to quality education—enjoy high and rising incomes while those who lack such assets fall further behind. Similarly, the gap between the richest and poorest nations has widened with globalization, she said.
Volatility, especially in global financial markets, can exacerbate inequality, she said. “In 2007 and 2008, we saw how the tightening of fuel and food markets led to price spikes that were particularly painful for importing countries that had relied on global trade of these products—and for poor households in those countries. Then at the end of 2008 came the collapse of financial markets around the world—with real effects on growth, jobs, and well-being everywhere, though thankfully not long-lasting in many developing countries.”
Even so, "the high public debt that follows government rescues of banks and other financial institutions crowds out private investment and job creation and reduces the fiscal space for spending on infrastructure, education, and health programs that benefit the poor and help build a middle class." Such crises also strip assets from the poor, sometimes with lifelong consequences, she said. For example, children pulled from school because of a family's financial hardship often do not return, even when markets have recovered.
The third problem with unmanaged markets, she said, is the inadequate provision of public goods, a problem that is most urgent and obvious at the global level in the lack of agreement to limit a global public bad, emissions of carbon and other heat-trapping gasses that are driving climate change.
“Just as local pollution control requires that a government entity imposes regulations or creates offsetting incentives through taxes or subsidies, global‐level control of greenhouse gas emissions is likely to require that an activist international community, including at the least the major polluter countries, impose controls or agree on incentives,” Birdsall said.
“Climate change is the biggest and most glaring example of a global problem that hits the poor people and countries hardest. By an unfortunate twist of fate, tropical countries that contributed least to the accumulation of gases are likely to suffer the worst declines in agricultural productivity, in precisely the sector where the poor within countries are heavily concentrated.”
“In the absence of corrective action at the global level, projected declines in agriculture in India are on the order of 30 percent in the next 70 years—and as much or worse in parts of Africa. Sea-level rise in Bangladesh, drought and floods, and the expanding reach of malaria and other diseases in many tropical areas will also hit those most vulnerable hardest.”
What to do? The first-best solution would in principle be an activist global polity, she said, one with the mandate from global citizens to set and enforce policies and practices that would reduce global inequality, deal with volatility, and ensure adequate provision of such global public goods as zero-carbon-emissions energy.
“But in fact the world is made up of sovereign nations—and it is within sovereign nations that democratic and representative systems of government are rooted. It is within nations that citizens of the world ... have the possibility and the responsibility to hold the governments of their own countries accountable for policies and practices that have impacts within and beyond their borders.”
She concluded her speech with a list of suggestions—many grounded in CGD research—for policies and practices that those who consider themselves global citizens should urge their governments to adopt.
Among these: for the United States to put a price on carbon emissions, and for the Europe and the United States to endorse governance reforms in the IMF and World Bank that would give the big emerging-market nations a larger stake—and thus to help these institutions become more effective in responding to global challenges (financial market volatility in the case of the IMF and inadequate provision of global public goods in the case of the World Bank).
She also offered suggestions for the rich and powerful individuals in the big emerging-market countries such as China, India, Brazil, and Indonesia, including protection of their own forests and investments in infrastructure, health, and education to enable people who remain poor in those countries to lift themselves out of poverty.
“All of us in this room are among the world’s rich, influential, and powerful. We are each responsible for holding our own countries accountable—for domestic policies that at the least do no harm elsewhere, and for our own countries’ support of multilateralism and international cooperation on global economic and financial challenges,” she said. “I do believe that more citizens of the world, particularly young citizens, are getting on board. Let us all join them.”