Economic Growth Officers' Conference

Didn't know USAID had economic growth officers- I wonder what Prof. Easterly would say about it. Anyway I have collated some of the the podcasts of the sessions below- Romer's session is highly recommended.

Technology Drive Growth, Rules Drive Development
Paul Romer, Stanford University
Steve Radelet, Department of State

The Millennium Development Goals: The Road to 2015

Global Climate Change: Impact on Agriculture and Costs of Adaptation

Global Climate Change: Leveraging Investment Flows for Mitigation

Reinventing Government: Designing Programs to Enhance Public Sector Effectiveness and Performance
H.E. Minister Imad Fakhoury, Ministry of Public Sector Development, Government of the Hashemite Kingdom of Jordan
Ms. Widad Qutaishat, Results-Oriented Government Component Lead, USAID/Jordan Fiscal Reform II Project, DAI
Dr. Emil Bolongaita, Director, Management Systems International
Moderator: Dr. Mark Gallagher, Chief of Party, USAID/Jordan Fiscal Reform II Project, DAI

A Behavioral Approach to Economic Development
Sendhil Mullainathan, Poverty Action Lab and Harvard University
Michael Kremer, Harvard University

Government ICT Applications that Save Businesses Time and Money
Valentina Mintah, Crown Agents
Efrain Laureano, Chemonics International
Judy Payne, USAID/EGAT/I&E/ICT

Accelerating Job Creation and Growth
Steve Kapsos, ILO/Geneva
Mary Hobbs, USAID/Kosovo
Eduardo Tugendhat, CARANA Corporation
Lili Stern, U.S. Department of Labor

Access to Innovative Financial Services

World Bank’s Doing Business Indicators: Lessons Learned and New Directions
Svetlana Baguadinova, Doing Business Project, The World Bank
Rita Ramalho, Enterprise Analysis Unit, The World Bank
Carolin Geginat, The World Bank

Monitoring and Evaluation for Economic Growth

Shared Growth Diagnostics: Finding the Binding Constraint to Growth and Poverty Reduction

USAID Economic Growth Programming: Ultimate Impacts

Why is growth stronger in expenditure-driven corrections?

Interesting recent paper;

Goldman Sachs Global Economics, Commodities and Strategy Research- Limiting the Fall-Out from Fiscal Adjustment (via Irish Economy blog)

In a review of every major fiscal correction in the OECD since 1975, we find that decisive budgetary adjustments that have focused on reducing government expenditure have (i) been successful in correcting fiscal imbalances; (ii) typically boosted growth; and (iii) resulted in significant bond and equity market outperformance. Tax-driven fiscal adjustments, by contrast, typically fail to correct fiscal imbalances and are damaging for growth....

In a landmark paper in the mid-1990s, the economists Alberto Alesina and Roberto Perotti found that economic growth fared much better during large fiscal corrections that were (i) decisive rather than gradual and (ii) relied on reductions in current government spending, rather than cuts in public-sector investment or higher taxes.

It's the policies that matter?

Institutions vs. Policies: A Tale of Two Islands;

Recent work emphasizes the primacy of differences in countries' colonially-bequeathed property rights and legal systems for explaining differences in their subsequent economic development. Barbados and Jamaica provide a striking counter example to this long-run view of income determination. Both countries inherited property rights and legal institutions from their English colonial masters yet experienced starkly different growth trajectories in the aftermath of independence. From 1960 to 2002, Barbados' GDP per capita grew roughly three times as fast as Jamaica's. Consequently, the income gap between Barbados and Jamaica is now almost five times larger than at the time of independence. Since their property rights and legal systems are virtually identical, recent theories of development cannot explain the divergence between Barbados and Jamaica. Differences in macroeconomic policy choices, not differences in institutions, account for the heterogeneous growth experiences of these two Caribbean nations.

Basics- Finding binding constraints to growth

One economics, many recipes, -Rodrik interview

Podcast of the Day

The Growth Report: Strategies for Sustained Growth and Inclusive Development

The panel discussion featured two members of the Commission, Robert Solow, Nobel Laureate and MIT Professor Emeritus, and Danny Leipziger, Vice-President of the World Bank. Columbia professors Jagdish Bhagwati and Guillermo Calvo hosted the guests and provided comments and discussion.

Related;
The Catch-Up Game;
F&D: The Growth Report says that "sustainable high growth is catch-up growth and the global economy is the essential resource." What do you mean by that?

Spence: We called it catch-up growth because of the global economy's contribution to growth—which we found was an essential element after looking at the dynamics of the successful high-growth cases. It is pretty well understood from trade theory and modern growth theory that global markets are big and a country can grow pretty fast without expanding its market share much—and if it has the terms of trade. But the other part, which is emphasized by Paul Romer and other distinguished leaders in the area of growth theory, is that catch-up growth is really about learning. It's about knowledge transfer. It's expanding your potential output based on what the economy—both the private and public sector sides—comes to have expertise in doing, and that is the catch phrase, no pun intended, for catch-up growth. This is what, we believe, more than anything else enables countries to grow at rates in the 7–10 percent range, and nobody else can do that. You can't do it in isolation and you can't do it as an advanced country with no counterexamples because you have to invent all the technology that moves the production possibility out, whereas developing economies can, at least for a period of time, import it. You have to import it and adapt it so it takes a considerable amount of ingenuity, innovation, and adaptation.

Mohieldin: The 13 successful cases [in The Growth Report] of sustained high growth since the Second World War used their integration with the world in a very successful way through the vehicles of knowledge—obtaining it either directly by sending people to get educated abroad, or getting them through training programs—or even through foreign direct investment.

I am from a generation that was taught that the three pillars of any economic activity were land, labor, and capital, and when you added them together with an entrepreneur, you would see the marvels of economic activity. Today those three pillars have been replaced. In an interesting piece of work, Professor Romer discusses endogenous growth, and—according to him—the three new aspects of development are, first, learning, innovation, and the transfer of ideas. Second, labor has been replaced by "people," not just those who are in the workplace but those who could be in the workplace as well as those who are communicating with them. Third, to be safe, they added "other things," which could be anything such as capital, additional resources, etc. So today the three pillars are ideas, people, and other things.

The success stories of Singapore, Malaysia, Korea, China, and, more recently, India and Vietnam are based on these new pillars, rather than the traditional ones. And further integration with the rest of the world can benefit countries even more. This means globalization is going to remain relevant, even though I'm saying so at a time when people might be questioning the very merits of globalization.

The Ingredients of Sustained High Growth

Limitations of Growth Diagnostics

Rethinking the Growth Diagnostics Approach: Questions from the Practitioners

WDR 2009

World Development Report 2009

Related;
The Nobel Prize in Economics and Africa

In thinking about their implications for Africa, I was struck by how many of Paul’s ideas were brought to life in this year’s (forthcoming) World Development Report, Reshaping Economic Geography. Although the report will be published in November, earlier drafts show how Africa, especially those parts that consist of many small countries, could gain by concentrating production in certain locations, while ensuring goods and people can move easily among locations.

Reading for the weekend

Doing Growth Diagnostics in Practice: A 'Mindbook'
Ricardo Hausmann, Bailey Klinger, Rodrigo Wagner

Can Growth be achieved by decree and loans

The Growth Support Project for Mali aims at (1) improving the investment climate as much as possible in order to increase total factor productivity (TFP) and foster growth, with a particular focus on small and medium enterprises and on key sectors, (2) expanding the availability of the infrastructure base, and (3) promoting business innovation through financial and non financial services. There are four project components. Project Component 1 - Investment Climate and Institutional Strengthening --helps (1) implement the key recommendations that emerge from the recent investment climate assessment and improve the country's legal and regulatory framework in key areas so as better performances are reflected in the Doing Business indicators; and (2) strengthens both policymaking and operational capabilities in key sectors with a high growth contribution potential. Project Component 2 - Infrastructure Support for Growth-- seeks to improve economy-wide and sectoral total factor productivity by enhancing available infrastructure. It develops an industrial zone, improves the Bamako airport, supports the expansion of the telecommunications network, and (iv) supports infrastructure improvement for tourism and mining. Project Component 3 - Financial and Non-Financial Services for Innovation and Development-- increases term financing for micro, small and medium enterprises (MSMEs) and to provides quality business development services to MSMEs, including supply chains, so that they can innovate, develop and as to increase their output and productivity. Component 4 - Project Coordination, Monitoring and Evaluation-- ensures not only effective and coordinated implementation across various institutions involved, but also so ensure that both intermediate and final results sought are obtained

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Econ Blog of the Year

The Growth Blog

Rodrik of Harvard Business School?

Head of Research at Oxfam reviews Fixing Failed States;

In a manner analogous to the ‘growth diagnostics’ of the Harvard Business School, the authors argue that ‘the state-building agenda entails easing constraints on state institutions… Rather than adhering to a model that stipulates a priori both the institutions and the mechanisms for their creation, this approach encourages piecemeal, context-specific innovations.’ This ‘institutions diagnostics’ approach necessarily entails a lot of trial and error – a job for searchers, not planners, in William Easterly’s useful schema .

The Leopards of African growth

Hunting for Leopards : long run country income dynamics in Africa

Summary: This paper examines the country-level dynamics of long-run growth in Africa between 1975 and 2005. The authors examine how growth has affected mobility and the distribution of income among countries. They analyze changes in cross-country income structure and convergence, and look for evidence of the formation of country groups or "clubs." Using a novel method of breaking up the growth histories of African economies into medium-term spells of growth accelerations and declines, the authors investigate whether a group of African "leopards" - the regional equivalent of Asia's "tigers" - is beginning to emerge.

A Must Read Manual

A manual for growth diagnostics;

Suppose you were asking: what is the binding constraint to animals thriving in the Sahara desert? This is not unlike the question of what limits economic growth in a country. However, in the Sahara, it is instructive to note that of those few animals that do thrive in that environment, a very large proportion are camels and a very small proportion are hippopotamus. The fact that the animals most intensive in the use of water, hippopotamus, are scarce while the animals least intensive in the use of water, camels, are thriving suggests that the supply of water may be a binding constraint to the spread of animals in the Sahara.

In general, the idea is that looking at the nature of the most successful parts of the economy can be informative of the constraints that affect others. We would expect to observe that those who are either structurally less intensive in the constrained factor, or at least more able to bypass it, will be doing comparatively well. Conversely, those sectors most intensive in the constraint will be doing relatively poorly.