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Underfunded Regionalism in the Developing World - Working Paper Number 49

11/23/04

This paper argues that regional public goods in developing countries are under-funded despite their potentially high rates of return compared to traditional country-focused investments. In Africa the under-funding of regional public goods is primarily a political and institutional challenge to be met by the countries in this region. But the donor community ought to consider the opportunity cost – for development progress itself, in Africa and elsewhere – of its relative neglect, and explore changes in the aid architecture that would encourage more attention to regional goods.

2004 MCA Threshold Program: A Comment on Country Selection

10/27/04
Sarah Lucas and Rikhil Bhavnani

In September, the Millennium Challenge Corporation named seven countries as eligible for the MCA Threshold Program: Albania, East Timor, Kenya, Sao Tome e Principe, Tanzania, Uganda and Yemen. This paper reviews the selection process and the countries selected, and offers recommendations for improving the program.

Round Two of the MCA: Which Countries are Most Likely to Qualify

10/12/04
Rikhil Bhavnani

On August 31, 2004, the Millennium Challenge Corporation (MCC) announced some modest changes in the process it will use to select countries for MCC eligibility in FY 2005. This note examines the new set of indicators and the countries most likely to qualify in round two.

Beyond HIPC: Secure Sustainable Debt Relief for Poor Countries - Working Paper Number 46

9/27/04
Brian Deese

In 1999, the United States and other major donor countries supported an historic expansion of the heavily indebted poor country (HIPC) debt relief initiative. Three years after the initiative came into existence, we are beginning to see the apparent impact that HIPC is having, particularly on recipient countries' ability and willingness to increase domestic spending on education and HIV/AIDS programs. Yet it has also become clear that the HIPC program is not providing a sufficient level of predictability or sustainability to allow debtor countries (and donors) to reap the larger benefits, particularly in terms of sustained growth and poverty reduction, originally envisioned. After reviewing some of the main critiques and proposals for change, we offer here a new way forward -- a proposal to deepen, widen, and most importantly insure debt relief to poor countries.

A Note on the MCC Selection Process for 2005

9/23/04

On August 31, 2004, the Millennium Challenge Corporation (MCC) announced some modest changes in the process it will use to select countries for MCC eligibility in FY 2005. This note appraises those changes, focusing on the "school completion rate" and "inflation" indicators.

Whither Development Assistance? An Analysis of the President's 2005 Budget Request

7/30/04
Rikhil Bhavnani

This note reviews the President’s 2005 international affairs budget request and offers insight into the potential MCA allocations in the context of the broader development assistance budget. The authors note that requested funding for the MCA is lower than promised and may be indirectly coming at the expense of existing development assistance programs.

Counting Chickens When They Hatch: Timing and the Effects of Aid on Growth - Working Paper 44

7/22/04
Michael Clemens , Steven Radelet , Rikhil Bhavnani and Samuel Bazzi

Recent research offers differing assessments of the overall, worldwide effect of foreign aid on economic growth in the countries that receive aid. To understand these differences, we re-analyze the same data and same regressions used in the three most influential aid-growth studies. In all three, increases in aid have been followed on average by modest increases in investment and growth. The most plausible explanation is that aid causes some degree of growth in recipient countries, though the magnitude of this relationship is modest, varies greatly across recipients, and diminishes at high levels of aid.

Anarchy of Numbers data set

7/1/04

CGD working paper 32, "The Anarchy of Numbers: Aid, Development, and Cross-country Empirics" submits seven aid-growth studies to robustness testing and finds that most are fragile. The data used in the paper are in Excel (data set) and Stata formats (4-year and 5-year aggregates). Full results are available in Excel format. All are included in the zip file.

An Index of Donor Performance - Working Paper 42

6/22/04

The Commitment to Development Index of the Center for Global Development rates 21 rich countries on the “development-friendliness” of their policies. It is revised and updated annually. In the 2004 edition, the component on foreign assistance combines quantitative and qualitative measures of official aid, and of fiscal policies that support private charitable giving.

Is Africa’s Skepticism of Foreign Capital Justified? Evidence from East African Firm Survey Data - Working Paper 41

6/10/04
Todd J. Moss , Vijaya Ramachandran and Manju Kedia Shah

The world has increasingly recognized that private capital has a vital role to play in economic development. African countries have moved to liberalize the investment environment, yet have not received much FDI. At least part of this poor performance is because of lingering skepticism toward foreign investment, owing to historical, ideological, and political reasons. Results from our three-country sample suugest that many of the common objections to foreign investment are exaggerated or false. Africa, by not attracting more FDI, is therefore failing to fully benefit from the potential of foreign capital to contribute to economic development and integration with the global economy.

On the Brink, Weak States and US National Security

6/8/04
Jeremy M. Weinstein , John Edward Porter and Stuart E. Eizenstat

A Report of the Commission for Weak States and US National Security

Terrorists training at bases in Afghanistan and Somalia. Transnational crime networks putting down roots in Myanmar/Burma and Central Asia. Poverty, disease, and humanitarian emergencies overwhelming governments in Haiti and Central Africa. A common thread runs through these disparate crises that form the fundamental foreign policy and security challenges of our time. These crises originate in, spread to, and disproportionately affect developing countries where governments lack the capacity, and sometimes the will, to respond.

These weak and failed states matter to American security, American values, and the prospects for global economic growth upon which the American economy depends.

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