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Efficient, resilient, and accountable governance systems are essential to successfully manage natural resources, provide public services, foster trade, attract private investment, and manage aid relationships. Corruption and secrecy are often at odds with such goals. Illicit financial flows, for example, undermine development and governance while secrecy in extractive industries can squander a nation’s wealth and weaken the social contract.
CGD’s work in this area focuses on contact transparency, tax evasion and avoidance, efforts to combat money laundering and terrorism financing, and the negative effects they can have on remittance flows and international security.
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The paper sets out two views of the facts about the effects of globalization on world poverty and inequality. The bottom line: globalization is not the cause, but neither is it the solution to world poverty and inequality. The paper then explores why and how the global economy is stacked against the poor, making globalization asymmetric, at least up to now. It concludes with some ideas about a new agenda of good global politics, an agenda to shape a future global economy and society that is less poor and less unequal—not only because it is more global and competitive, but also because it is more fair and more politically representative.
The paper addresses three key issues raised by the G-7 in its proposals to reform the multilateral banks, in 2001. One, the restructuring of IDA with a part of its lending in the form of grants rather than loans. Two, the harmonization of procedures, policies and overlapping mandates among MDBs. And three, the volume of support by MDBs for Global Public Goods (GPGs) and the rankings and priorities among them.
We assess the dynamic behind the high net resource transfers of donors and creditors, IDA, bilaterals, IBRD, IMF and other multilateral creditors to the countries of sub-Saharan Africa in the 1980s and 1990s. Analyzing a panel of 37 recipient countries over the years 1978-98, we find that net transfers were greater in poorer and smaller countries. The quality of countries' policy framework mattered little, however, in determining overall net transfers.
I suggest in this paper the logic of going beyond the standard, poverty-targeted, elements of good social policy to a modern social contract adapted to the demands and the constraints of an open economy. Such a contract would be explicitly based on broad job-based growth. Second, it would be politically and economically directed not only at the currently poor but at the near-poor and economically insecure middle-income strata.
In this paper I set out the economic logic for why good global economic governance matters for reducing poverty and inequality and argue that a step towards better global governance would be better representation of developing countries in global and regional financial institutions.
The US government's proposed $5 billion Millennium Challenge Account (MCA) could provide upwards of $250-$300m or more per year per country in new development assistance to a small number of poor countries judged to have relatively "good" policies and institutions. Could this assistance be too much of a good thing and strain the absorptive capacity of recipient countries to use the funds effectively? Empirical evidence from the past 40 years of development assistance suggests that in most potential MCA countries, the sheer quantity of MCA money is unlikely to overwhelm the ability of recipients to use it well, if the funds are delivered effectively.
After a decade of economic reforms that dramatically altered the structure of economies in Latin America, making them more open and more competitive, and a decade of substantial increases in public spending on education, health and other social programs in virtually all countries, poverty and high inequality remain deeply entrenched. In this paper we ask the question whether some fundamentally different approach to what we call "social policy" in Latin America could make a difference — both in increasing growth and in directly reducing poverty. We propose a more explicitly "bootstraps"-style social policy, focused on enhancing productivity via better distribution of assets. We set out how this broader social policy could address the underlying causes and not just the symptoms of the region's unhappy combination of high poverty and inequality with low growth.
This paper is part of the Copenhagen Consensus process, which aims to assess and evaluate the opportunities available to address the ten largest challenges facing the world. One of these ten challenges is the “lack of education.” This paper provides an analytical framework to evaluate the various options that can be used to address this issue.