Ideas to Action:

Independent research for global prosperity



December 20, 2016

The Impact of Anti-Money Laundering Regulation on Payment Flows: Evidence from SWIFT Data - Working Paper 445

Regulatory pressure on international banks to fight money laundering (ML) and terrorist financing (TF) increased substantially in the past decade. We find countries that have been added to a high-risk greylist face up to a 10% decline in the number of cross border payments received from other jurisdictions, but no change in the number sent. We also find that a greylisted country is more likely to see a decline in payments from other countries with weak AML/CFT institutions. We find limited evidence that these effects manifest in cross border trade or other flows. Given that countries that are placed on these lists tend to be poorer on average, these impacts are likely to be more strongly felt in developing countries.

December 12, 2016

An Agenda for Harmful Cultural Practices and Girls' Empowerment

Harmful cultural practices and norms—even the seemingly non-violent ones that consign girls to bear the brunt of household labor—have consequences for nutrition, health, educational achievement, sexual abuse, and child marriage. Accordingly, it is critical to develop a research agenda that places girls aged 0 to 10 at the center of policy to address harmful practices. Both as an issue of gender-based violence and as an impediment to girls reaching their potential, we need greater commitments to country-level data, informed and enforced legislative action, and innovative methods to challenging and shifting socially shared definitions of girlhood.

December 6, 2016

MCC Country Eligibility Predictions for FY2017

The last board meeting of the Millennium Challenge Corporation (MCC) under the Obama administration will take place on December 13, 2016. On the docket? Selecting which countries will be eligible for MCC assistance for fiscal year (FY) 2017. For the fourteenth year running, CGD’s Rethinking US Development Policy Initiative discusses the overarching issues that will impact the decisions and offers its predictions of which countries will be selected.

November 21, 2016

AidChoice: Give the People who Pay for Aid a Voice in Spending It

What if taxpayers could decide for themselves how some of the UK’s aid budget is spent? Allocating funding would let taxpayers engage meaningfully with development issues, potentially reinforcing support for tackling poverty and deprivation overseas. Competition for funding would give international development organisations an incentive to offer an explicit value proposition. This could catalyse a race to the top in becoming transparent, measuring impact, and delivering value-for-money. AidChoice, as set out below, would be revenue neutral, would not lower the UK’s overall spending on foreign aid (or the amount scored as ODA), and might generate modest but meaningful savings, all while increasing public support for development spending and improving accountability.

October 18, 2016

India’s States Increase Health Spending, But Will They Spend Effectively?

Since 2015, India has devolved an increasing share of its national tax yield to state governments and undertaken reforms to other kinds of centre-to-state grants. For many, the increased revenue via the tax devolution was considered good news but some health experts worried that states would give little priority to health under these conditions of greater autonomy. We find that at least two states, Bihar and Uttar Pradesh, have much more to spend in general and are budgeting more for health in 2015-2016 as compared to previous fiscal years.

Results Through Transparency: Does Publicity Lead to Better Procurement?
September 19, 2016

Results Through Transparency: Does Publicity Lead to Better Procurement? - Working Paper 437

Governments buy about $9 trillion worth of goods and services a year, and their procurement policies are increasingly subject to international standards and institutional regulation. Using a database of World Bank financed contracts, we explore the impact of a relatively minor procurement rule governing advertising on competition using regression discontinuity design and matching methods. Our findings suggest the potential for more significant and strongly enforced transparency initiatives to have a sizeable effect on procurement outcomes.

Biometric Elections
August 17, 2016

Biometric Elections in Poor Countries: Wasteful or a Worthwhile Investment? - Working Paper 435

Elections have emerged as a leading area for the application of biometric technology in developing countries, despite its high costs and uncertainty over its effectiveness. This paper finds that a reduction in the probability of post-election violence by only a few percentage points could offset the cost of the technology. However, this is possible only in particular situations.

June 14, 2016

Global Health, Aid and Corruption: Can We Escape the Scandal Cycle?

Global health action has been remarkably successful at saving lives and preventing illness in many of the world’s poorest countries. This is a key reason that funding for global health initiatives has increased in the last twenty years. Nevertheless, financial support is periodically jeopardized when scandals erupt over allegations of corruption, sometimes halting health programs altogether.

May 24, 2016

How Does OPIC Balance Risks, Additionality, and Development? Proposals for Greater Transparency and Stoplight Filters

As the U.S. government’s development finance institution, the Overseas Private Investment Corporation (OPIC) provides investors with financing, political risk insurance, and support for private equity investment funds when commercial funding cannot be obtained elsewhere. Its mandate is to mobilize private capital to help address critical development challenges and to advance U.S. foreign policy and national security priorities. However, balancing risks, financial needs, and development benefits comes with tradeoffs.

March 22, 2016

Financial Regulations for Improving Financial Inclusion

As recently as 2011, only 42 percent of adult Kenyans had a financial account of any kind; by 2014, according to the Global Findex database, that number had risen to 75 percent, including 63 percent of the poorest two-fifths. In Sub-Saharan Africa as a whole, the share of adults with financial accounts, either a traditional bank account or a mobile account, rose by nearly half over the same period. Many countries in other developing regions have also recorded, if less dramatic, gains in access to the basic financial services that most people in richer countries take for granted. Much of this progress is being facilitated by the digital revolution of recent decades, which has led to the emergence of new financial services and new delivery channels.

March 7, 2016

Anti-Corruption Strategies in Foreign Aid: From Controls to Results

Corruption is an obstacle to social and economic progress in developing countries yet we still know very little about the effectiveness of anti-corruption efforts and their impact on development impact. This essay looks at 25 years of efforts by foreign aid agencies to combat corruption and proposes a new strategy which could leverage existing approaches by directly incorporating information on development results.

by Carlos Lowry
February 16, 2016

Middle-Class Heroes: The Best Guarantee of Good Governance

The two economic developments that have garnered the most attention in recent years are the concentration of massive wealth in the richest one percent of the world’s population and the tremendous, growth-driven decline in extreme poverty in the developing world, especially in China. But just as important has been the emergence of large middle classes in developing countries around the planet. This phenomenon—the result of more than two decades of nearly continuous fast-paced global economic growth—has been good not only for economies but also for governance. After all, history suggests that a large and secure middle class is a solid foundation on which to build and sustain an effective, democratic state. Middle classes not only have the wherewithal to finance vital services such as roads and public education through taxes; they also demand regulations, the fair enforcement of contracts, and the rule of law more generally—public goods that create a level social and economic playing field on which all can prosper.

February 12, 2016

International Tax, Transparency, and Finance for Development: A Short Guide for the Perplexed

In the search for sustainable sources of finance for development, the potential for developing countries to collect more domestic revenues from taxation has risen to prominence in recent years. International tax evasion and avoidance and the role of tax havens have been raised as critical barriers, and transparency is often advocated as a key solution. This briefing offers a short outline of the key issues, terms, and numbers involved.