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.
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Up until early 2020, global poverty had been decreasing, but that progress is now at risk. Bllions of people still do not have the resources they need to survive and thrive. Economic growth can reduce poverty, but it can also drive inequality that generates social and economic problems. And efforts at domestic resource mobilization through taxation, though critical to funding the Sustainable Development Goals, can negatively impact the poor.
In this work, CGD experts offer suggestions to improve how changes in development financing in such a way that they tackle poverty and inequality.
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.
The tragedy of foreign aid is not that it didn't work; it was never really tried. A group of well-meaning national and international bureaucracies dispensed foreign aid under conditions in which bureaucracy does not work well. The hostile environment under which such aid agencies functioned induced them to organize a cartel that increased inefficiency and reduced effective supply of development services, frustrating the good intentions and dedication of development professionals. The cartel of good intentions allows rich country politicians to feel that they are doing all in their power to help the world's poor, supports rich nations' foreign policy goals, preserves a panoply of large national and international institutions, and provides resources to poor country politicians with which to buy political support; in short, foreign aid works for everyone except for those whom it was intended to help.
Somewhere in a village in Nigeria, a young girl is sitting in school today, just like she does every day, packed onto a crowded wooden bench in a faded school uniform. She represents a victory in the global effort to get all children learning, and her presence will be recorded as progress in the global databases maintained by UNESCO and the World Bank. There's just one catch. She's not learning anything.
This annual report marks two milestones in 2016: CGD’s 15th anniversary and, at the end of the year, its first leadership transition, with founding president Nancy Birdsall being succeeded by Masood Ahmed. In this first era, the Center has established itself as an influential voice in international development policy, with a unique model of nonpartisan policy innovation.
Nicola Gennaioli, Rafael La Porta, Florencio Lopez-de-Silanes and Andrei Shleifer have just published a fascinating paper in the QJE: “Human Capital and Regional Development”. They constructed a database of 1,569 subnational regions across 110 countries covering GDP, population, education levels, geographic and institutional factors, and looked at correlates with higher per capita income. They suggest that geography and education are significant correlates of regional GDP, while their measures of institutions and culture are less well correlated. They have followed up with a working paper using an expanded dataset, “Growth in Regions” that reports regional convergence of 2.5% a year and note that a rate so slow suggests “significant barriers to factor mobility within countries.”