Charles Kenny reviews recent Economics Nobel Prize Winners Abhijit Banerjee and Esther Duflo’s new book, Good Economics for Hard Times.
CGD Policy Blogs
At their best, experts sitting in think tanks generate rigorous research and analysis inform policies and address the world’s most pressing challenges. But who gets to be counted among these experts? Are think tanks hiring, promoting, and compensating equitably and inclusively? And who is being left out of this group of experts, and, critically, what good ideas might we be missing as a result?
What US Government Initiative Do All Three 2019 Economics Nobel Winners Like? (Hint: It’s at USAID.)
It’s rare that good ideas in economics get such strong bipartisan political support in Washington. Hopefully that’s a sign of a secure future for DIV.
The new US International Development Finance Corporation (DFC), the successor to the Overseas Private Investment Corporation, will be a major player in global development finance.
Today the IFC announced a step forward in its transparency around the use of aid resources to finance private companies. That’s right and proper: When scarce aid, and scarce tax resources, are used to support private firms, citizens of donor countries and recipient countries alike have a right to know where the money is going to and how generous the terms. A number of us at CGD had been calling for greater transparency around subsidies to the private sector from the IFC and other development finance institutions, so this is a welcome first step. However, a few aspects have might be cause for concern.
Development finance institutions like the International Finance Corporation and the UK’s CDC Group use public finance to support private investments in developing countries. At their best they can help create new markets and invest in the delivery of vital goods and services, creating good jobs and entrepreneurial opportunity along the way. They have been rapidly expanding over the past few years.
The UK Prime Minister announced during his visit to the UN General Assembly that one billion pounds worth of overseas development assistance (ODA) will be used to set up the ‘Ayrton Fund’ to support British scientists “and other scientists from around the world” to “work in partnership with developing countries” on climate and energy.
Building on a recent paper on UK ODA-financed research and development that discussed some of the issues with the current funding allocation model for R&D including around transparency and the fact that it was largely (de facto) “tied” to UK institutions, this blog explores different types of research and where and how it makes sense to fund them.
For much of the last decade, the World Bank’s private sector arm, the International Finance Corporation (IFC), has delivered a share of its profits as grants to the World Bank Group’s soft lending arm for governments, the International Development Association (IDA). In the last couple of years that pattern has reversed.
The UK’s development agency, DFID, has stated that it views research as the best way to spend aid and that it intends to place high quality research central to its aid strategy. In a new paper, we find significant problems with the way that UK aid is being used to back research: a huge ramp-up in support has largely gone to fund opaque, unfocused research in UK universities. There are better approaches.