The Power of Political Voice: How Women in Politics Can Help Tackle Gender CrimeDr Anandi Mani, Associate Professor of Economics, University of Warwick, No. 13, March 2014
Crimes against women are a persistent and even a growing problem in many developing countries. In India, research suggests that having female political representatives can be an effective tool to empower women in the battle against gender crime.
Human Development as Positive Freedom: A World View since 1870Leandro Prados de la Escosura, February 2014
In this paper Professor Leandro Prados de la Escosura argues that substantial gains in world human development have been achieved since 1870, but research shows that the main improvement actually occurred between World War I and 1970. Despite initial successes in lifting human development, the socialist experiments of the 20th century failed to sustain momentum and then (with the exception of Cuba) stagnated and fell behind prior to the socialist model's ultimate demise. Since 1970, while most OECD countries have experienced a second (later life) health transition, all developing regions have fallen behind in this dimension.
Saving the Euro: A Pyrrhic Victory?Nicholas Crafts, November 2013
The euro has survived a lengthy recession and an ominous legacy of public debt, but the fundamental flaws in its original design have not been corrected. Fiscal consolidation alone seems inadequate to address the fiscal sustainability problems of highly-indebted economies in the euro area. The author of the Chatham House-CAGE Briefing Paper Saving the Euro: A Pyrrhic Victory? will argue that the crisis has inflicted significant damage to future growth prospects in the eurozone, both through the debt legacy it has created and in terms of the impetus it has given to detrimental supply-side policies.
The Danger of High Home Ownership: Greater UnemploymentDavid G. Blanchflower and Andrew Oswald, October 2013
'The evidence is that high home ownership weakens the vitality of the labour market and slowly grinds out greater rates of joblessness' Although encouraging home ownership has been a major policy objective for Western governments in recent decades, Professors Blanchflower and Oswald argue that evidence from the United States strongly suggests that high home ownership is a major reason for the high unemployment rates of the industrialized nations in the post-war era.
Fiscal Federalism in the UK: How Free is Local Government?Ben Lockwood, September 2013
Looking at the effects of party control and performance management schemes on local government and its behaviour, Professor Lockwood’s work shows that in spite of the many constraints on local government in England and Wales, party control does appear to matter for expenditure, taxes, and local public employment. Focusing on performance management schemes, such as the Comprehensive Performance Assessment (CPA), the author will also argue that such schemes have increased local government spending and taxation but generally have failed to improve efficiency in the use of resources. A roundtable discussion will follow.
The Design of Pro-Poor Policies: How to Make Them More EffectiveSayantan Ghosal, July 2013
A key policy concern in emerging-market economies is the appropriate design of policy interventions to alleviate chronic poverty. Largely missing from conventional analyses of poverty traps are the psychological mechanisms through which the experience of poverty forms the beliefs, values and aspirations of the poor Pro-poor policies tend to focus on relaxing external constraints that may perpetuate poverty traps, such as lack of credit or insecure property rights, but internal constraints such as learned helplessness, pessimistic beliefs and an external locus of control are also important These internal constraints are endogenous because they adapt to the experience of chronic poverty. Over time, however, they become an independent source of disadvantage for poor persons in their own right Pro-poor policies aimed at raising aspirations will alleviate poverty more effectively than those that address external constraints alone The ‘Dream Building’ sessions pioneered by the Durbar Foundation to empower a marginalised, stigmatized community of sex workers in Kolkata provides suggestive evidence of the potential impact of interventions in raising aspirations.
Registering for Growth: Tax and the Informal Sector in Developing CountriesChristopher Woodruff, July 2013
Low- and lower-middle-income countries typically have a large informal sector, very high self-employment rates and low levels of tax collection. A recent project in Sri Lanka to induce small firms in the informal sector to register did little to change the trajectory of most, but registration did help some firms generate rapid growth – an outcome with important policy implications. For governments in developing countries, getting firms to register should not be simply a cost-benefit calculation involving a trade-off between enforcement costs and tax collection. Registration can also improve the attitude of small business owners towards the state and, more importantly, help stimulate economic growth. The tendency of small firms to remain in the informal sector may have an even more pervasive detrimental impact on growth than one might expect. Their informal status usually allows them to avoid taxes by keeping costs and revenues off the books. However, the lack of information arising from production costs, and the basic accounting systems on which they rely, mean many costly errors in pricing can be made, resulting in considerable lost business. Focusing on avoiding taxes in the informal sector can often distract firms’ attention away from important growth opportunities. Although taxes may discourage some economic activity, the problem in low-income countries is typically lack of capacity and under-enforcement, rather than over-taxation.
Soaring Dragon, Stumbling Bear: China's Rise in a New ContextMark Harrison and Debin Ma, March 2013
The speakers will argue that in a historic reversal of fortunes, China has overtaken the territory of the former Soviet Union in GDP per capita. China’s model of rapid economic development offers powerful lessons for economies in transition, but they need to be seen in the country’s historical and political context. The conditions that enabled China’s success may not apply elsewhere and were not in evidence in the parallel case of the Soviet Union. China’s exceptional size and long history of regionally decentralized authoritarianism (RDA) provided perhaps the unique circumstances for this favourable outcome. The authors stress that the key to sustained economic development is continuous policy reform. Whilst China’s existing economic model has encouraged this in the past, current risks of the continuity of China’s economic modernization include two traps: complacency an conflict. As the country moves towards middle-income status there is the danger that its leaders will cease to pursue reforms that are in the national interest and will acquiesce to the private interests of bureaucratic or corporate incumbents.
Africa's Growth Prospects in a European Mirror: A Historical PerspectiveStephen Broadberry and Leigh Gardner, February 2013
The relatively rapid growth rates achieved by many African countries in the last decade have raised hopes that the continent is finally on a path to economic convergence with Asia and Latin America, but history suggests that such optimism could be misplaced. Previous periods of rapid growth across Africa have often been followed by phases of economic decline which have erased many of the gains countries have achieved in per capita income. The continent's transition to modern economic growth will thus require a break in the boom-and-bust pattern which has characterized its economic performance during much of the 20th century. European experience since the Middle Ages suggests that the pattern of growth based on increasing demand for export staples, followed by economic reversals, has often resulted in limited overall gains in per capita income. This pattern was only broken following the introduction of significant institutional change. Placing Africa's recent economic performance in a wider historical perspective highlights the fact that the continent's level of per capita income is comparable to pre-industrial Europe and that the institutional changes needed to ensure sustained economic growth have yet to take place. Growth reversals remain a serious threat to Africa's future prosperity, and therefore it is incumbent on policy-makers to focus a great deal more on the introduction of measures that can encourage the development of a robust civil society.
Tax Competition and the Myth of the 'Race-to-the-Bottom': Why Governments Still Tax CapitalVera Troeger, February 2013
The majority of OECD countries have only experienced minor effects of capital market integration and capital tax competition since the mid-1980s. There have undoubtedly been some winners, mainly capital owners in larger liberal market economies, and some losers, especially large continental European welfare states. Not only have the dire predictions of the early doom theories not materialized; they have failed. Therefore, there is much to be gained in making the key assumptions underlying traditional tax competition models much more realistic, particularly in terms of predicting the impact of globalization on Western democracies. Tax competition affects countries differently and does not lead to a ‘race to the bottom’ since capital remains incompletely mobile. The competitiveness of a country determines fiscal adjustment strategies by others. Cutting capital taxes, therefore, will not necessarily generate more capital inflows. Tax competition and taxation have broader implications for the fiscal responses of countries to globalization and their redistribution efforts. Given that tax competition affects countries differently, governments will choose diverse strategies to cope with these international pressures. Competition will more negatively affect income inequality in countries that predominantly redistribute via the tax system than in those that historically set up a welfare state by redistributing via social transfers.
EU Structural Funds: Do They Lead to More Growth?Sascha Becker, December 2012
In this policy paper, Professor Sascha Becker argues that the EU transfer system, while currently yielding a certain amount of additional growth in some recipient regions, requires a degree of conditionality in order to deliver targeted results. In assessing the effectiveness of the EU's Regional Policy, the paper focuses on the Convergence Objective (formerly Objective 1) which suggests that, on average, it is successful at fostering growth in recipient regions, but that those with low levels of education and poor governance fail to make good use of EU transfers. For EU Structural Funds as a whole, a point is reached where returns begin to decline and additional funds do not lead to higher growth. Professor Becker argues that, in the future, EU transfers to regions should not exceed maximum desirable levels if inefficiency and misuse are to be avoided.
International Migration, Politics and Culture: the Case for Greater Labour MobilityInternational Migration, Politics and Culture: the Case for Greater Labour Mobility
A policy shift to liberalise global labour markets could be a key tool for development and poverty reduction. Given the significant benefits globally, economists and policy-makers should devote more attention than at present to the practicalities of relaxing barriers to international labour mobility. The potential gains from the globalisation of labour could dwarf those from foreign aid or even the liberalisation of trade and capital flows across borders. For example, a decision by developed countries to liberalise immigration restrictions by a mere 3% could result in an estimated output gain of more than $150 billion. Although immigration policy is always controversial, the absence of serious debate in international circles is not due entirely to the distributional impact of labour migration, but in large part to the perceived threat to national identity and culture in destination countries. While permanent migration would yield relatively larger economic gains, temporary labour migration programmes, targeted to specific sectors and more modest in scope, could be the answer and would be far more acceptable and politically sustainable in countries where citizens perceive migrants as a threat to culture and national identity.
Saving the Eurozone: Is a 'Real' Marshall Plan the Answer?Nicholas Crafts, June 2012
‘Saving the Eurozone: Is a ‘Real’ Marshall Plan the Answer?’ by Nicholas Crafts, argues that the rationale for a new Marshall Plan would be both to reduce the chances of a chaotic break-up of the eurozone and to allow more time to prepare for this eventuality – while at the same time working to improve the medium term economic performance of the euro periphery. The objective of a Marshall Plan for crisis-hit countries in the euro periphery of southern Europe would be to underpin European economic integration and the survival of the eurozone by raising productivity growth. This would entail increased but not massive transfers of funds. However, this is not appreciated by most economists today, let alone the politicians who argue for such a plan. What was the original Marshall Plan and how did it work in practice? An accompanying podcast can be accessed here along with slides from the presentation here.