With rigorous economic research and practical policy solutions, we focus on the issues and institutions that are critical to global development. Explore our core themes and topics to learn more about our work.
In timely and incisive analysis, our experts parse the latest development news and devise practical solutions to new and emerging challenges. Our events convene the top thinkers and doers in global development.
Nora Lustig is Samuel Z. Stone Professor of Latin American Economics and Director of the Commitment to Equity Institute (CEQ) at Tulane University. Professor Lustig’s research focuses on economic development, poverty and inequality, and social policies in developing countries. She has published more than seventy articles and fifteen edited volumes and books. Her current research is centered on assessing the impact of taxation and social spending on inequality and poverty in low and middle income countries, and on the determinants of income distribution in Latin America. Prof. Lustig is a founding member and past president of the Latin American and Caribbean Economic Association (LACEA) and was a co-director of the World Bank’s World Development Report 2000/1, Attacking Poverty. She is the editor of the Journal of Economic Inequality Forum and a member of the Inter-American Dialogue, the Center of Global Development’s Advisory Board, ECINEQ’s Executive Council, PEP’s Board of Directors, and the World Economic Forum’s Economic Growth and Social Inclusion Stewardship Board. She is also a Nonresident Fellow at the Center for Global Development and the Inter-American Dialogue. Prof. Lustig has served on the Atkinson Commission on Poverty and on the Stiglitz et al. Commission on Measuring Economic Performance and Social Progress. She received her doctorate in Economics from the University of California, Berkeley.
Investing in Health for Economic Development: The Case of Mexico, in Advancing Development Core Themes in Global Economics, edited by George Mavrotas and Anthony Shorrocks (Palgrave Macmillan in association with the United Nations University-World Institute for Development Economics Research, 2007)
The Microeconomics of Income Distribution Dynamics, co-edited with Francois Bourguignon and Francisco Ferreira (World Bank, 2004)
“Do We Know How Much Poverty There Is?” Oxford Development Studies, 32(4), December 2004. (Coauthor)
“Rising Inequality in Mexico: Returns to Household Characteristics and Regional Effects,” Journal of Development Studies, 39(4), 112-33, April 2003. (Coauthor)
“Life is not Easy: Mexico’s Quest for Stability and Growth,” Journal of Economic Perspectives, 15(1), 85-106, Winter 2001.
Shielding the Poor: Social Protection in the Developing World, ed. (Brookings Institution, 2001)
“Crises and the Poor: Socially Responsible Macroeconomics,” Economía, The Journal of the Latin American and Caribbean Economic Association, 1(1), 1-45, Fall 2000.
Mexico: The Remaking of an Economy (Brookings Institution, 2nd ed 1998)
Labor Markets in Latin America: Combining Social Protection With Market Flexibility, co-edited with Sebastian Edwards (Brookings Institution, 1997)
Coming Together? Mexico-U.S. Relations, co-edited with Barry Bosworth and Susan Collins (Brookings Institution, 1997)
Coping with Austerity: Poverty and Inequality in Latin America (Brookings Institution, 1995)
Poverty and well-being are multidimensional. Nobody questions that deprivations and achievements go beyond income. There is, however, sharp disagreement on whether the various dimensions of poverty and well-being can be aggregated into a single, multidimensional index in a meaningful
way. Is aggregating dimensions of poverty and well-being useful? Is it sensible? Here CGD non-resident fellow Nora Lustig summarizes and contrasts three key papers that respond to these questions in strikingly different ways.
Mexico’s Progresa/Oportunidades conditional cash transfers program (CCT) is constantly used as a model of a successful antipoverty program. This paper argues that the transformation of well-trained scholars into influential practitioners played a fundamental role in promoting a new conceptual approach to poverty reduction.
New research shows that inequality in Latin America is falling. In this paper, the authors summarize recent findings, analyze the affect of different regimes, and investigate the relationship between inequality and changes in the size of the middle class in the region. They conclude with some questions about whether and how changes in income distribution and in middle-class economic power will affect the politics of distribution in the future.
Visiting fellow Nora Lustig examines the policy dilemmas rising food prices force on developing countries. Letting prices adjust can generate inflationary pressure while efforts to stabilize domestic prices often exacerbate global price increases; during the recent food price crisis, many countries chose instead to shift the burden back to international markets.
We perform the first comprehensive fiscal incidence analyses in Brazil and the US, including direct cash and food transfers, targeted housing and heating subsidies, public spending on education and health, and personal income, payroll, corporate income, property, and expenditure taxes.
Guatemala is one of the most unequal countries in Latin America and has the highest incidence of poverty. The indigenous population is more than twice as likely to be poor than the nonindigenous group.
World food prices risen over the past five years at an alarming pace after decreasing for three consecutive decades. CGD visiting fellow Nora Lustig argues that despite some relief since July 2008, the price hikes significantly set back poverty reduction, upset social stability, promote inflation, compromise rules-based trading systems, and hurt poor net consumers. Nonetheless, too many developing countries lack the instruments, administrative capacity, and fiscal space to implement safety nets fast enough and in the required scale.
CGD policy experts are urging the International Monetary Fund to push for the inclusion of emerging market and developing countries in the re-write of bank supervision guidelines and other international financial rules that they say is likely to happen soon as a result of the global financial crisis.
“The IMF no longer has the financial heft to act as a lender of last resort,” said CGD president Nancy Birdsall. “But the IMF does have a key role to play in managing today’s crisis. Its leadership can help to restore confidence in the global financial system by insisting that China, Brazil, and other emerging market economies have a voice in rewriting international financial rules,” she said.
Birdsall said she welcomed World Bank president Robert Zoellick’s announcement Monday that he is creating a high-level commission to look into modernizing the governance of the World Bank Group, a step that a CGD working group on the future of the World Bank urged in 2005. She also voiced support for his call to replace the G7 with a new 14-member “Steering Group” that would include Brazil, China, India, Mexico, Russia, Saudi Arabia, and South Africa in addition to the current G7 members.
“Bob Zoellick seems to have taken advantage of the opportunity presented by the unsettled global economic situation and a lame duck U.S. president to open the way for overdue reform of the World Bank to give developing countries greater voice,” she said. “He’s right: more fully engaging rising Asia and other emerging markets at the bank will strengthen the bank’s role in solving urgent global problems. I hope that the leadership of the IMF will follow suit and find ways to ensure that China, India and other key countries are at the table during the re-write of global financial rules.”
Zoellick’s announcement came as the financial crisis that began with the sub-prime mortgage meltdown in the United States spread to Europe and rattled markets in Asia. CGD experts have warned that the crisis will have profound implications for developing countries.
The crisis will be topic number one when finance ministers from around the world convene in Washington this week for the annual meetings of the two Bretton Woods institutions, so-called because they were conceived at a conference in Bretton Woods, New Hampshire, in the waning days of World War II as collective means of avoiding a repeat of the Great Depression. A growing number of economists warn that the unfolding crisis could lead to the worst recession since the 1930s, yet analysts agree that neither institution has the means to avert a severe global downturn with harsh consequences for the world’s poor.
“Developing countries will be badly hurt by this crisis, yet they have had almost no role in shaping the global financial rules that fostered it,” said CGD senior fellow Liliana Rojas-Suarez, a financial economist who has held senior research positions on Wall Street and at the Inter-American Development Bank and the IMF.
Rojas-Suarez said that the IMF should push for developing countries to become active participants in the Financial Stability Forum, (FSF) which coordinates international standards and codes to strengthen financial systems. Membership is limited to a handful of high-income countries and to international financial institutions, including the IMF and the World Bank.
Another important body dominated by the high-income countries is the Basel Committee on Banking Supervision (BCBS), which issues recommendations on banks' capital adequacy requirements, most recently through the Basel II Accord. While the BCBS conducts consultations that include developing countries, rich countries make the decisions. Developing countries have long argued that these bodies fail to address their needs and concerns.
Rojas-Suarez said that she hoped that during the meetings this week IMF Managing Director Dominique Strauss-Kahn would “seize this opportunity to take leadership in the design of a system of global financial regulation that is strong yet flexible enough to meet the needs of countries with very different circumstances.”
Nora Lustig, a CGD board member and development economist who has written extensively on the poverty impacts of financial crises, and who has held senior positions in UNDP, the World Bank and the Inter-American Development Bank, said that both the IMF and the World Bank need to prepare to help developing countries cope with the effects of lower growth on their fiscal and balance of payments accounts, while the World Bank will need to focus on helping countries buffer the negative impact of the crisis on poor people.
“This may entail helping countries in designing and implementing safety net programs or expanding them where they already exist,” she said. “In the poorest countries, it may mean providing financial support to the safety net programs in the form of grants or low cost loans.”
If the global downturn proves to be deep and long lasting, the IMF and the World Bank “may have to go back to their 20th Century role of providing credit to countries that have no access to the international private capital markets,” Lustig said. “While this may not happen to middle-income countries as it did in the 1980s, the countries that are most vulnerable and least attractive to foreign investment will find it hard to access global capital markets.”
By Lawrence MacDonald, CGD director of communications and policy
NO LONGER AVAILABLE: Lustig, Nora and Sean Higgins. 2013. Commitment to Equity Assessment (CEQ): Estimating the Incidence of Social Spending, Subsidies and Taxes. Handbook. CEQ Working Paper 1, Center for Inter-American Policy and Research and Department of Economics, Tulane University and Inter-American Dialogue, September.