DEVELOPMENT AGENDAS AND INSIGHTS

20 Years

UNU-WIDER Research

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DEVELOPMENT AGENDAS AND INSIGHTS

UNU-WIDER Research

UNITED NATIONS @ UNIVERSITY

UNU-WIDER World Institute for Development Economics Research

This book is a publication of World Institute for Development Economics Research of the United Nations University (UNU-WIDER) Katajanokanlaituri 6 B FIN-00 l60 Helsinki Finland Telephone +358961599 11 Fax + 358 9 615 99 333 E-mail wider@wider.unu.edu Website http://www.wider.unu.edu

UNU-WIDER acknowledges the financial contributions to the current research

programme by the governments of Denmark (Royal Ministry of Foreign Affairs), Finland (Ministry for Foreign Affairs), Norway (Royal Ministry of Foreign Affairs),

Sweden (Swedish International Development Cooperation Agency-Sida) and the

United Kingdom (Department for International Development).

Copyright 0 United Nations University 2005 Copublished with United Nations Publications and ADECO Van Diermen Editions. The designations employed in UNU-WIDER publications and the presentation of material therein do not imply the expression of any opinion whatsoever on the part of UNU-WIDER concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or borders. Short extracts from this publication, excluding illustrations, may be reproduced

unaltered without authorization on condition that the source is indicated. Apply to UNU-WIDER for

rights of reproduction or translation.

Library of Congress Cataloging-in-Publication Data applied for Addison, Tony. Shorrocks, Tony. Swallow, Adam. Editors. Development Agendas and Insights / Twenty Years UNU-WIDER Research / Tony Addison ... (et al.) 98 pages 245 X 2 10 mm. Includes bibliographical references. A CIP catalogue record for this title is available from the British Library. Deposited with Swiss National Library and DkpBt L6gal (France).

United Nations Publications Sales Number GV.E.06.0.1 Printed in France Design and Layout by ADECO-Van Diermen, Blonay, Switzerland

ISBN for United Nations 92- 1 - 10 1 108-6 ISBN for ADECO-Van Dierrnen Editions 2-88283-420-9

DEVELOPMENT AGENDAS AND INSIGHTS

20 Years UNU-WIDER Research

Edited by Tony Addison, Tony Shorrocks and Adam Swallow

With assistance from

Matthew Clarke, Giovanni Andrea Cornia, Indranil Dutta,

Barbara Fagerman, Basudeb Guha-Khasnobis, Taina Iduozee,

Ara Kazandj ian, George Mavrotas,

Mark McGillivray, Liisa Roponen, Anne Ruohonen,

Sherry Ruuskanen, Susanna Sandstrom,

Arnelia Santos-Paulino, S. Subramanian,

Lorraine Telfer-Taivainen, Guanghua Wan

Photograph permissions

Front cover: O UNICEF/HQO 1-0505 Shehzad Noorani.

Back cover: Kari Rissa.

Page 20: Curt Carnemark, World Bank.

Page 28: Anwar Hossain, IFAD.

Pages 6, 14,36, and 52: Martti Lintunen.

Cartography

Page 42: Christopher Beacock.

CONTENTS Introducing UNU-WIDER . . . . . . . . . . viii

. . . . . . . . . . . . . . . . WIDER Research xii

UNU-WIDER Directors.

Current UNU-WIDER Board . . . . . . . xvi

Chapter 1: Poverty and Prosperity . . . 1

Poverty and Hunger . . . . . . . . . . . . . . . . . 2

Insurance against Poverty . . . . . . . . . . . . . 3

Growth. Inequality. and Poverty . . . . . . . . 3

Chapter 2: Inequality and Spatial

Disparities . . . . . . . . . . . . . . . . . . . . . .7

Trends in Income Inequality . . . . . . . . . . . 8

The World Income Inequality Database

(WIID) . . . . . . . . . . . . . . . . . . . . . . . . . . 9

. . . . . . . . . . . . . . . . . Spatial Disparities 10

. . . . . . . . . . . . . . . . Inequality in China 11

Chapter 3: Globalization and 'Ikade . . 15

. . . . . . . . . A Changing World Economy 16

The Challenges of Trade-led Growth . . . . 17

Globalization, Privatization. and Utilities . . 17

Trade Policies. Poverty.

. . . . . . . . . . . . . . . and the Environment 18

. . . . Chapter 4: Development Finance 21

. . . . . International Private Capital Flows 2.2

. . . . . . . . . . . . . . . . . . . . . Debt Relief 23

Increasing the Level and Effectiveness of

External Financing . . . . . . . . . . . . . . . . . . . 23

Development Aid . . . . . . . . . . . . . . . . . . . 23

Domestic Resource Mobilization . . . . . . . . 24

. . . . New Sources of Development Finance 24

Chapter 5: Conflict and Governance . . 29

NewWars . . . . . . . . . . . . . . . . . . . . . . . . 31

New Regionalism . . . . . . . . . . . . . . . . . . . 32

Humanitarian Emergencies . . . . . . . . . . . . 32

Moving Africa into Post-Conflict Recovery 32

Avoiding Conflict . . . . . . . . . . . . . . . . . . . 34

. . . . . . Chapter 6: Transition to Market 37

Aspects of Transition . . . . . . . . . . . . . . . . . 38

Transition and Institutions . . . . . . . . . . . . . . 39

Chapter 7: Africa's Economic

Development . . . . . . . . . . . . . . . . . . . . . 41

. . . . . . . . . . . Restarting Economic Growth 43

Improving the Quality of Institutions and . .

Pol~cies . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Chapter 8: Reform of the United Nations

. . . . and the Bretton Woods Institutions 47

. . . . Chapter 9: Wider Thinking Ahead 53

Annotated Bibliography . . . . . . . . . . . . . 57

Abbreviations and Acronyms . . . . . . . . . . 78

vii

INTRODUCING UNU-WIDER

The United Nations University has been

described as the fmt of a new generation of academic

institutions designed to deal with the interlocking

problems of an inter-dependent world, looking at issues

from a buly global perspective, as well as acting as a

bridge between the academic community and the United

Nations system.

According to its Charter, the United Nations University

(UNU) is 'an intemational community of scholars, enga-

ged in research, post-graduate training anddissemination

of knowledge in furtherance of the purposes and

principles of the Charter of the United Nations'. It was

established in order 'to research into the pressing global

problems of human survival, development and welfare

that are the concerns of the United Nations and its

agencies'. These objectives are carried out via anetwork

of researcb institutes and post-graduate training centres

in both developed and developing countries, with

planning and co-ordination provided by the headquarters

inTokyo. As a worldwide system of research and training

centres and programmes, the UNU ha-in the words of

the Charter-'its location at the site of each centre or

programme'. It is therefore strikingly different in

structure and mode of operation from the usual campus-

based university.

In canying out its mandate to further the purposes and

principles of the United Nations Charter, UNU seeks in

particular to:

- encourage intellectual co-operation among

scholars and scientists of the world to help

understand and solve urgent problems beyond

the capacities of single nations or regions;

- increase the practical impact of research and

advanced training by organizing networks of

collaborating individuals and institutions;

- increase the ability of developing countries to

solve their own problems by helping to

strengthen their research and advanced training

capabilities;

- improve the outreacb of institutions all over

the world by involving them in international

efforts to deal with global problems of concern

to all nations.

The World Institute for Development Economics Research (WIDER) was the first

research and traimng centre to be established by the

UNU. It is an integral part of the University and enjoys

considerable autonomy and academic freedom within

the overall h e w o r k of UNU activities.

WIDER'S creation was prompted by increasing concern

about the state of the global economy and about the

limitations of existing economic and social perspectives

on global problems. Following consultation with

prominent public figures and scholars, UNU convened

a special meeting of 24 world experts at the London

Schoolof Economics andPolitical Science (LSE) in 1982

to consider the proposal to set up WIDER The meeting,

chaired by the Director of LSE, Professor Ralf

Dahrendorf, strongly endorsed the importance and global

need for such an Institute.

. . . Vl l l

THE UNITED NATIONS UNIVERSITY

L l S f OF PARTICIPANTS

Exploratory Heeting on the UNU Global Economic Policy Research i n s t i t u t e

4-5 March 1982, a t London School

Cha i rman Dr. Ralf Dahrendorf D i rec tor London School o f Economies Houghton Street, London WC2 United Kingdom

Dr. Oragoslav Avramovic United Nations Conference on

Trade and Deve l opmen t (uNcTAD) Pala i s des Nations 1211 Geneva 10, Swi t ier land

Hr. Moinuddin Baqai IBRD Core Planning Team Kuwait M in i s t r y o f Planning Box 15, Safat, Kuwait

M. Yves Berthelot D i rec to r Centre d4Etudes Prospectives e t

d'lnformations internat ionales 9 rue Georges P i t a r d P a r i s X V , France

D r . Jozsef Bognaf S c i e n t i f i c Council f o r World Economy Budapest X I 1 Kallo esperes utca I S Hungary

D r . Guido Car1 i V ia le De l l 'As t ronmia 30 Rome 1 , I t a l y

D r . Louis Emmerij l n s t i t u t e of Social Studies 25 1 Badhu i sweg P.O. Box 90733 NL-2509 LS, The Hague Netherlands

of Economics

Dr. Jose Encarnacion School o f Economics Univers i ty of Phi1 ippines Quezon Ci ty , Phi l ippines

D r . A. Foxley Corporation lnvestigaciones

Economicas para Lat ino America AV. C. Colon 3494 Cas i l la 16434 Santiago, Chile

Dr. Helen Hughes, D i rec tor Economic Analysis and Project ions

Oepa rtmen t World Bank 1850 - f Street, N.W. Washington, D.C. 20433 U.S.A.

D r . Leszek Kasprzyk Centre Scien t i f ique de 1 '~cadgrnie

Polonaise des Sciences 74, rue taur is ton 75116 Paris, France

D r . Assar Lindbeck Univers i ty o f Stockholm 10 5-10691 Stockholm Sweden

D r . Rodrigo Botero Hontoya Avenida 25-C, No.3-80 Bogota, Colombia

D r . H.N.A. O n i t i r i Resident Representative UNDP P.D. Box 4775 Salisbury, Zimbabwe

D r . Jozef Pa jes t ka Faculty o f Economics Warsaw Univers i ty ul. Krakowskie Przedmiescie Warsaw, Poland

16. Dr.. K. N. R a j Centre for Development Studies Ulloor Trivandrum-695011 Kerala State, India

7. M. Jean Ripert Under-Secretary-General Department o f lnternational

Economic & Social A f f a i r s United Nations, Room 2925A New York, N.Y. 10017 U.S.A.

18. Hr. Peter Ruof The Ford Foundation 320 East 4 3 r d Street New York, N.Y. 10017 U . S . A .

19. Dr. Amartya Sen All Souls College Oxford OX1 4AL U n i ted Kingdom

20. Dr. Saiah Al-Shaikhly Centre far Research on New

International Economic Order Queen E l i z a b e t h House 20 St. John Street Oxford OX1 2LQ Uni ted Kingdom

21. Dr. Ibrahim Shihata Direcror-General The OPEC Fund P . O . Box 995 1011 Vienna, Austria

22. Dr. Paul Streeten Centre for Asian Devetopment

Studies Boston University Room 544 264 Baystate Road Boston, Hass. 02215 U.S.A.

24. Dr. Mahbub U1-Haq World Bank 1818 H Street, N.W. Washington, D.C. 20433 U . S . A .

United Nations.University:

25. Mr. Soedjatmoko, Rector

26. Dr. Alexander A. Kwapong, Vice-Rector, lnstitutional Planning & Resource

Development Division

27. D r . Kinhide Nushakoj i , Vice-Rector, Regional & Global Studies Division

28. Dr. Miguel Urrutia, Vice-Rector, Development Studies Division

29. M r . Edward W. Ploman, Vice-Rector, Global Learning Division

30. Dr. Janusz Golebiowski Senior Programme Of f ice r Regional and Global Studies D i v i s i o n

31. Hr. C.T. lsolani Information Representative for Europe

23. Dr. Wouter Tirns Free Un i vers i ty 1105 de Boelelaan l081 HV Amsterdam Netherlands

In November 1983 the government of Finland offered

to host WIDER, providing premises for the Institute

and an endowment fund of US$25 million. This offer

was accepted by the Council of UNU in December 1983,

and the Host Country Agreement and Memorandum of

Understanding were signed on 4 February 1984 by the

Foreign Minister of Finland, Paavo Vayrynen, and the

Rector of UNU, Soedjatmoko. Following approval by

the Finnish parliament, the Agreement came into force

on 20 June 1984. WIDER'S inaugural director La1

Jayawardena was appointed on 1 March 1985, and the

institute was established in premises at Annankatu

42C in Helsinki.

Speaking at the signing ceremony, Foreign Minister

Vayrynen said that 'a research institute of this kind can

play a catalytic role . . . . It can provide the international

community with impartial facts and unbiased advice on

the options governments have when they try to solve

pressing economic problems.'

The unique status and position of WIDER has become

evident in the two decades since it began its activities in

Helsinki in 1985. During that time, WIDER has

established a reputation as one of the world's leading

research institutes on development economics. As Eric

Hobsbawm wrote in his Age of Extremes (1994: X),

'reading the papers, listening to the discussions and

generally keeping my ears open during the conferences

organized on various macro-economic problems at

UNU-WIDER in Helsinki [as] it was transformed into

a major international centre of research and

discussion under the direction of Dr La1 Jayawardena

. . . the summers I was able to spend at that admirable

institution as a McDonnell Douglas visiting scholar were

invaluable to me'.

The research at WIDER has particular interest in:

providing original analysis of emerging topics

and policy advice aimed at the sustainable

economic and social development of the

poorest nations

helping to identify and meet the need for

policy-orientated socio-economic research on

pressing global and development problems,

common domestic problems, and their

interaction

analyzing the problems of the world economy,

including structural issues, and assisting in

producing new responses to existing and future

problems

providing a forum for professional interaction

and for the advocacy of policies for robust,

equitable, gender-balanced, and environ-

mentally sustainable growth

supporting basic analytical research on under-

lying theories, concepts, and measurement

promoting capacity building and training for

scholars and policymakers in economic and

social development, and encouraging the search

for new modes of international economic co-

operation and management.

In attempting to meet these goals, WIDER benefits

greatly from UNUYs strategic position at the intersection

of the academic community and the United Nations

system. It is consequently well-placed to address the

need of policymakers for new and original insights into

the economic and social development of the poorest

nations. WIDER also benefits from having considerable

autonomy and academic freedom, secured in part by the

distinguished academics and other members of the

governing bodies who provide advice on arange of issues.

Another important source of autonomy is the

endowment fund that was established when WIDER

was founded, with contributions from the governments

of Finland and India, the Swedish International

Development Cooperation Agency (Sida), and the

Sasakawa Foundation (Japan). Income from the

endowment fund has covered most of the core

expenditures to date. Supplementaty financial support

for research and other activities has been received from

the governments of Denmark Finland, Italy, Norway,

Sweden, and the United Kingdom; the Arab Fund for

Economic Development (Kuwait), Ford Foundation,

Yrj6 Jahnsson Foundation (Finland), MacArthur

Foundation, McDomell Foundation, Oracle (Finland),

Rockefeller Foundation, SITRA (Finnish National Fund

for Research and Development), United Nations

Department ofEconomic and Social ARairs (UN-DESA),

United Nations Development Programme (UNDP), and

the World Bank. In-kind contributions, such as

assistance in hosting workshops and conferences, are

also regularly received from various universities, United

Nations agencies and other international organizations.

WIDER RESEARCH

The research programme at WIDER is planned and

managedby asmall complement ofHelsinki-based staff:

about 10 full-time researchers, including the Director

and Deputy Director, assisted by 13 support staff.

This team is complemented mually by about 20 visiting

fellows and PhD interns, and an external network of

over 300 researchen worldwide. The network includes

scholars working in universities and research institutes

together with specialists from the UnitedNations, World

Bank, International Monetary Fund, and other

intemational organizations, who conduct research and

participate in the programme activities. Over the past

twenty years, seven winners of the Nohel Prize in

Economics have contributed to the work of WIDER:

Joseph Stiglitz, awarded the prize in 2001, Amartya

Sen 1998; James Mirrlees 1996, John Harsanyi 1994,

Robert Fogel and Douglass North 1993, and Robert

Solow 1987.

Topics in the research programme are chosen with

several criteria in mind. The projects should relate to

themes emerging from current debate and address issues

of central importance to the work of the UN. Preference

is also givento topics in which WIDER has traditionally

had a research interest. Finally, whenever possible,

WIDER projects should provide opportunities to

involve researchers from developing and transition

countries.

xii

Specific proposals for projects typically evolve in-house

through consultation with the various constituencies

with which WIDER has close contact, including sister

organizations in the UNU, UN partners, and policy-

makers from both the North and the South.

Subsequently, advice and evaluation is provided by the

WIDER Board which comprises economists, social

scientists, and policymakers from different regions of

the world. Guidance is also provided by the UNU

Council, which annually evaluates the research

programme and other activities of WIDER, and in

addition determines the overall principles and policies

of the United Nations University.

The sections that follow review twenty years of WIDER

research into economic development. Many of the

issues-such as poverty, finance and conflict-are as

relevant today as they were two decades ago. Through

its analysis and insights, WIDER has profoundly

influenced the way in which these issues are now

considered. Through its future research, WIDER hopes

to continue this tradition.

xiii

Disseminating WIDER Research

WIDER publishes work arising from its research projects as Discussion Papers and Research Papers. Other series include the Annual Lectures, Policy Briefs, and the biennial WIDER Angle newsletter. Published papers are subject to peer review and revision under the direction of the project director, who usually acts as editor of the volume published by an academic press or a special issue of an academic journal.

WIDER series publications may be downloaded free of charge from the website: www.wider.unu.edu . Printed copies are mailed to over 200 depository and exchange libraries and institutes, as well as to researchers and students in developing countries and regions that do not have easy access to the internet.

uver me past twenty years WIDER has produced over 120 books, 18 journal special issues, and 900 published papers authored by more than 1,200 contributors.

The website contains copies of all the papers published since 1998, as well as conference papers, research summaries, the World Income Inequality Database (WIID). and a calendar of events. Details of project meetings and conferences around the world are also announced in advance.

xiv

WIDER AREAS OF RESEARCH

Major themes in the early yern

Development and technological transfers

Economic growth and the environment

Finance and bade

Global security and military restructuring

Hunger and poverty

Stabilization and adjustment in developing

countries

Women and development

Recent themss

Causes of humanitarian emergencies

Income inequality and poverty reduction

Insurance against poverty

International migration and~fugeea

Micro-simulation of tax benefit reforms

Mortality crisis in transition economies

Social impact of privatization

Spatial disparities in development

Sustainability of development finance

EMU and its impact on developing countries

Fiscal policies for growth

Information technology and economic growth

Growth, and development in subdaharan Atiica

Nahual resources and development

Reform of the UN and the Bretton Woods

institutions

Transition and institutions

Reconstruction after conflict

Current research

BuildingAl3can capacity for policy simulation

Development aid

Hunger and food security

MDGs: Assessing and forecasting progress

Global trends in inequality and poverty

Inequality and poverty in China

International mobility of talent

Personal assets from a global perspective

Financial sector development for growth and

poverty reduction

Impact of globalization on the world's poor

Institutions for economic development

Globabtion and vulnerable economies

Impact of WTO agreements on low income

countries

UNU-WIDER DIRECTORS

La1 Jayawardena (March 1985-Febmary 1993)

MiMy Simai (March 1993-December 1995)

Giovanni Andrea Cornia (January 1 9 9 6

December 1999)

Matti Pohjola (acting director: January-

December 2000)

Anthony Shorrocks (January 2001-present)

CURRENT UNU-WIDER BOARD

Deepak Nayyar (Jawaharlal Nehru University, India,

Chairperson)

Emest Aryeetey (University of Ghana, Ghana)

Francois Bourguignon (World Bank, USA)

Ronald Findlay (Columbia University, USA)

Martti HetemW (Ministry of Finance, Finland)

Nora Lustig (Universidad de las Americas-Puebla,

Mexico)

Vladimir Popov (Carleton University, Canada, and

New Economic School, Russia)

Ex o@o

Hans van Ginkel (Rector, United Nations University)

Anthony Shorrocks (Director, UNU-WIDER)

xvi

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

The eradication of poverty has become the overriding

objective of the international development community.

One immediate target--endorsed at the United Nations

Millennium Snmmit by virtually all world leaders-is to

reduce the incidence of income-poverty from 30per cent

to 15 per cent between 1990 and 2015. Regrettably,

progress towards this objective has been slow and the

number of people in developing countries living in

poverty remains around 1.2 billion p e o p l ~ fifth of

the world's population.

Widespread acceptance of the goal of poverty reduction

contrasts sharply with the lack of agreement concerning

how the goal should be achieved. One major subject of

controversy is the extent to which governments should

aim simply to maximize aggregate economic growth, on

the assumption that the benefits of growth will

eventually 'trickle down' to all strata of society. Opinions

are also divided on the most appropriate way of

characterizing poverty, for example in terms of inadequate

income, malnutrition, poor health a d o r social exclusion.

The adoption of the United Nations Millennium

Development Goals (MDGs) has given additional

emphasis to the multi-faceted nature of deprivation and

to the urgent need to identify policies to address these

problems. Over the years, UNU-WIDER has contributed

significantly to the debates on both the underlying

conceptual issues and the best policy responses.

Poverty and Hunger

When WIDER launched its research programme in the

mid-1980s, the Horn of Africa was in the middle of a

terrible faminefew can forget the sbocldng scenes in

Eth~opia at that time. A concern with food entitlements

and undernutrition, and how they are linked to poverty

and inequality, was therefore very appropriate and

timely. One of the very first WIDER themes, and one

of the best hown, was called 'Hunger and Poverty:

The Poorest Billion', directed by Jean Ddze andNobel

Laureate Amartya Sen. The resulting three volume study

The PoliticolEconomy of Hunger (1991) by Ddze and

Sen, together with Hunger and Public Acfion (1990),

transformed critical thinking on issues of famine and

food security. By bringing to the fore the 'entitlement'

approach to famiie, the work fundamentally changed

the perception of the causes of famines, which in turn

altered the policy prescriptions for f i e prevention.

It also laid the foundation for a deeper understanding of

the concept of living standards. Subsequent WIDER

volumes on Nutrition andPovery (Osmani 1993) and

Poverty and Undernuhition (Svedberg 2000) followed

through on these impottant issues.

Although the main fidings of this research bave been

known formore than a decade, millions of people remain

desperately food insecure. In many countries there has

been little or no improvement in food entitlement. A

current research project, 'Hunger and Food Security:

New Challenges and New Opportunities ', investigates

why progress in food-security has been disappointing

in so many countries (especially in Afiica) despite the

implementation of extensive donor-inspired reform in

agriculhrre, and despite the possibility of learning from

the successful reduction of hunger in many parts of

Asia.

[GROWTH,

INEQUALITY, AND

POVERTY] IS A

TIMELY AND

COHERENT

CONTRIBUTION TO

AN IMPORTANT

AREA. THE TOPIC

IS PARTICULARLY

SIGNIFICANT IN

LIGHT OF THE

FIRST

MILLENNIUM

DEVELOPMENT

GOAL OF THE

UNITED

NATIONS-THE

HALVING OF

POVERTY AND PROSPERllY

Food is only onealbeit crucial--dimension of human

well-being. Defining andmeaswing human well-being

in all its dimensions has been a central feature of

WIDER'S research programme since its inception. The

best-sellmg study The Qualify ofLife (1993) by Martha

Nussbaum and Amarlya Sen is a thorough examination

of the philosophical concept of well-being and its link

WORLD to practical issues such as the assessment of the quality

BY THE YEAR of life of women. Recently, WIDER returned to similar 2015. THE themes in a conference held in 2003 on 'Inequality,

Poverty and Human Well-being'. Alternative measures AND EMPIREAL of 'well-being' are alsobeing usedinnurentworkaimed

ANALYSIS OF at assessing the achievements of countries with regard

GROWTH. INEQUALTZ to the m&, AND POVERTY

WILL BE OF Insurance against Poverty CENTRAL CONCERN

To AND Vulnerability to shocks is an important cause of

MAKERS persistent poverty in developing counties. Crop failure,

ALIKE. droughts, floods, illness, job loss, and economic

downturns often accompany transitions of households

SUDHIR ANAND, into poverty. Can households in developing countries

VICEMASTER, insure against such adverse events? This is the core

ST CATHERDIE'S question addressed in Insurance Against Poverty

COLLEGE, percon 2004). The study confirms that it is not easy

mNERs1Tl'oE OXFORD for the poor to make provision against nahual disasters,

civil unrest and economic uncertainty. Informal

mechanisms such as diversified income sourcs, savings,

marriage, the extended family, and investment in social

capital provide some protection; but they are weak in

the face of major calamities that a f k t households en

masse, for example drought or economic recession.

Moreover the lack of formal insurance coverage

constrains investment, growth, and poverty reduction.

Building on insights h m micrdevel studies, the WIDER

project looked at alternative ways of broadening

protection, identifying new fomis of insurance, savings,

and safety nets, as well as the means to strengthen the

poor's asset base. Local communities have a big role to

play: public funds should not be used to replace

indigenous community-based support networks; rather

they should be used to build on the strengths of these

networks to ensure broader andmore effective protection.

Given that poverty issues lie at the heart of so many

topics in development economics, it is inevitable that

many other WIDER activities touch on povertydated

questions. For example, the international conference on

'Unlocking Human Potential', organized in collaboration

with the Swedish Ministry of Foreign Affairs (EGDI) in

2004, gave much attention to the poverty implications

of the links between the formal and informal sectors of

the economy. WIDER's research on macroeconomic

issues has also always given much emphasis to the

poverty impact of macroeconomic policy choices in the

developing world, including measures to protect the poor.

Growth, Inequality, and Poverty

Poverty-alleviation policies often rely heavi lydr even

exclusively-on achieving robust economic growth.

However, the precise connection between growth and

poverty has been one of the most contmversial issues in

development economics. Early work in the 1950s

revealed strong links between the level of aggregate

income per capita and how that income is distributed,

with the evidence suggesting that inequality increases

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

during the initial phases of development, and then falls

back later as prosperity continues to rise. This led to a

complacent attitude towards poverty alleviation: in the

early stages of development, growth would dispropor-

tionately benefit the better-off, causing an increase in

inequality rather than a fall in poverty; but continued

growth would eventually be shared by all via a trickle-

down effect.

Subsequent evidence questioned whether rising inequality

was inevitable during the early stages of development.

Strong doubts also emerged about whether rising prospe-

rity really touches everyone, especially those in extreme

poverty. As prosperity failed to improve the conditions

of the poor, disenchantment grew towards policies

focusing exclusively on overall economic growth. In the

1970% many countries adopted interventionist policies

with the aim of improving distribution and reducing ine-

quality and poverty. Although these anti-poverty pro-

grammes halted the increase in poverty, the rapid

economic growth of East Asian economies gave new

impetus to policies that promote economic growth as a

means of enhancing prosperity and reducing poverty.

This renewed focus on aggregate economic growth was

reinforced by the push for globalization and by the rise

of the Washington Consensus; which called for market-

oriented reforms to achieve the goal of prosperity for

all. At the same time, new developments in the theory of

economic growth in the 1990s stressed the importance

of distributional aspects of development. By the turn of

the millennium, it was quite evident that ahighly unequal

distribution is a hindrance to development: market-

oriented reforms and globalization alone are not sufficient

to improve the living standards ofthe p m indeveloping countries.

WIDER has put considerable effort into understanding

the relationship between growth and poverty, and has

been one of the world's most active contributors to the

debate on the underlying issues. A conference organized

in 2001 to study the links between growth, inequality,

and poverty resulted in two volumes edited by Anthony

Shorrocks and Rolph van der Hoeven: Perspecfives on

Gmwth and Poverty (2003) and Gmwth, Inequality,

and Poverty: Prospects for Pro-Poor Economic

Development (2004).

One of the main conclusions from these studies is that

it is difficult to draw general conclusions. Sweeping

statements such as 'growth is good for the poor',

'education is good for the poor', or 'redistribution is

more effective than growth at reducing poverty' tend to

blur the debate on growth and poverty rather than

illuminate it. From an aggregate cross-country

perspective there is a strong correlation between growth

and poverty reduction, but the links are much less

evident when it comes to disaggregated analysis.

Certainly, high levels of inequality can weaken the link

between growth and poverty.

The evidence suggests that structural and institutional

conditions-particularly the quality of institutions--

play an important role in enhancing economic growth

and reducing poverty. The time horizon is also

important. So the speed and sequencing of policy reform

packages, and the level and distribution ofbenefits, need

to be formulated andevaluated in the light of the specific

circumstances of each country. Country-specific

conditions affectthe speed withwhich growthcan reduce

poverty and also determine whether policies have a

THE ARTICLES

BY LEADING

AUTHORITIES M

THE FIELD,

PROVIDE A

STATE OF THE

ART

COLLECTION OF

THINKING ON

HOW POOR

PEOPLE DEAL

WITH THE

MULTIPLE RISKS

FACING THEM,

AND HOW

PUBLIC POLICY

CAN HELP

PROVIDE

BETTER SAFETY

POVERWAND PROSPERIW

NETS FOR THE

MOST VULNERABLE.

.. . THE INSIGHTS

OFFERED BY THE

ARTICLES [IN

INSURANCE AGAINST

POVERTY] WILL

CONTRIBUTE

CONSIDERABLY TO

POLICIES TOWARDS

GLOBAL POVERTY

ALLEVIATION.

ALEXANDER SARRIS,

DIRECMR,

COMMODmS AND

TRADE DIVISION, FAO,

ROME

pm-poor or an anti-poor outcome--trade liberalization

is a case in point. Improved education often contributes

to reducing poverty, but its effect on inequality depends

on supply and demand factors, whichdiffer s i ~ ~ c a n t l y

across countries. Likewise, in many countries a

redistribution of one per cent of income from the rich to

the poor would reduce poverty more than a one per

cent increase in total national income; but in some

countries this is not the case. Thus microeconomic

analysis of inequality needs to go hand-in-hand with

macroeconomic analysis of inequality. Very often,

detaikd microeconomic studies reveal the desirability

of redistributive policies, especially in the face of

exogenous shocks.

The growth-poverty debate has also recently become

intertwined with the debate on globalization, which has

focussed widespread public attention on the core issues

linking international economic relations and the plight

of poor people in developing countries.Acurrent project

on 'The Impact of Globaliation on the World's Poor',

led by Machiko Nissanke and Erik Tborbecke looks at

the complex question of how the current wave of

globalization is affecting the poor in the developing

world. Aseries of meetings have been organized around

the world. These include regional workshops in Asia

and Africa, reflecting a desire to pay proper attention to

the regional implications of globalization, since the

impact of glohalization on the poor can be expected to

vary significantly across countries with often very

different economic structures.

AFTER TWO DECADES OUT OF

THE MAINSTREAM, INCOME

DISTRIBUTION IS FINALLY BEING

BROUGHT IN FROM THE COLD.

[GROWTH. INEQUALIT): AND

POVERTY] ADDS SUBSTANTIVELY

TO THE RE-DISCOVERY, WITH

NEW RESEARCH FROM NEW

NAMES AS WELL AS REFLECTTONS

AND NEW WORK FROM

DISTINGUISHED OLD HANDS. FOR

THOSE WANTING TO CATCH UP

ON NEW THINKING AND RE-

DISCOVERED ISSUES, THIS

VOLUME PROVIDES A GOOD

OVERVIEW AND NEW INSIGHTS

FROM ACROSS THE SPECTRUM OF

RE-THINKING

REHARD JOLLY, HONORARY

PROFESSOR AND RESEARCH ASSOCIATE,

INSl'lTUTE OF D!TELOPMENT STUDIES,

UNIVERSITY OF SUSSEX

WIDER PROVIDES [IN INEQUALITX

GROWTH, AND POVERTY IN AN ERA

OF LIBERALIZATION AND

GLOBALIZATZOW HARD DATA AND

ANALYTICAL INPUT FOR A

SUBJECT THAT IS MORE

COMMONLY DEALT WITH IN

TERMS OF IDEOLOGICAL

STANDINGS.

J O S ~ ANTOMO OCAMPO, UNDER-

SECRETARY-OENERAL. UN-DESA

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

A concern with inequality-the gap between the rich

and the poor-is central to successful development

strategies. One reason is that any assessment of a

country's economic performance must take account of

both the aggregate level of income and the way in which

incomes or expenditures are distributed. High inequality

tends both to raise the level of poverty and to reduce the

efficacy of economic growth for poverty alleviation. The

undesirable political and social impacts of inequality-

on crime and political stability, for example-are also

widely acknowledged. Finally, there is growing

recognition that inequality can affect the level of

economic growth itself, via the impact on consumer

demand, national savings, and human capital formation.

However, the net direction of the effect remains unclear:

high inequality may be conducive to saving and

investment (and hence growth) in the short run, but

detrimental to growth in the long-run via the negative

effect on investment in human capital.

Despite the importance of these issues, policymakers

have tended to ignore the problems associated with

inequality. This neglect is all the more surprising because

income inequality has risen over the last twenty years in

two-thirds of the countries that have adequate data. In

almost all the transition economies, the increase in

inequality is dramatic, causing considerable discontent

among the population. In China, for example, inwme

inequality is considered to be one of the most pressing

social problems. Worse still, many national governments

appear to possess no effective tools to tackle rising

inequality, even if they wish to address the problem.

Overthe last decade, UNU-WIDER has been very active

in encouraging the development community and national

governments to give appropriate attention to inequality.

The work has included studies on recent changes in

income ineqnahty, on the spatial dimension of inequality,

and onineqnality in China. WIDER has also been at the

forefront of efforts to improve data resources in this

area, by compiling the World Income Inequality

Database (WIID), the most comprehensive international

database of inequality statistics presently available.

Research in this area is continuing with a new project

on wealth inequality, which many feel is even more

important than income inequality in determining the

relationship between growth, inequality and poverty.

Trends in Income Inequality

In the late 1990s WIDER undertook a major study of

income inequality trends throughout the world under

the direction of Giovanni Andm Cornia, Director of

UNU-WIDER at that time. The project resulted in a

book Inequalify, Growth and Poverry in an Era of

Liberalizafion and GlobaIizatwn (Cornia 2004) and also

the first version of the WIID.

The study provided a systematic analysis of changes in

income inequality over the period 1980-2000 against

the background of changes that took place during the

preceding three decades. Analysis of the WIID data

establishes that inequality has risen in most wuntries

since the early 1980s, in many cases sharply.

'Traditional' sources of inequality, such as land

concentration, urban-biased policies, and unequal access

to education and credit, are not responsible for this

INEQUALITY AND SPATfAL DlSPARmES

increase in inequality. Instead it appears that the surges

in inequality around the world are due to 'new causes'

linked to excessively liberal economic policies and the

way in which economic reforms have been implemented.

However, rising inequality is not inevitable in a world

dominated by technological change and globalization.

Countries can maintain low inequality and fast growth:

Canada and Taiwan provide two clear examples.

The study paid particular attention to the relationship

between inequality and public policies in the fields of

domestic external liberalization, taxation and income

transfer, labour market institutions, and safety nets. It

argued that the rise in within-country inequality

coincided with the emergence of a new policy paradigm

(the Washington Consensus) that advocatedtheremoval

of barriers to international trade, the liberalization of

capital flows, and the creation of a strong intellectual

property regime regulating technology transfers and

intellectual property. Such policies may have favourable

effectsunder adequate conditions, but they can generate

adverse distributive outcomes in the presence of weak

institutions or when applied prematurely in situations

where key markets are missing or underdeveloped (that

of credit, for example).

The appropriate mix of policy responses to the problem

of inequality will vary, depending on the extent of the

problem and specific national characteristics. The bigher

the level of inequality, the stronger will be the measures

required to reduce it. However the need to contain

inequality within acceptable levels is pressing, since a

high level of inequality makes it more difficult to reduce

poverty via economic growth and since a growing body

of evidence suggests that countries with a relatively

egalitarian distribution of assets and incomes tend to

grow at a faster rate. The study directed by Comia found

that although trade liberalization has a positive impact

on growth in the short run, inequality has a negative

effect on growth in the long run, and has a greater impact

on growth than trade liberalization. The study also found

that capital account liberalization, which was in vogue

before the Asian fnancial crisis of 1997-98, has the most

'disequalizing' effect and thus a negative impact on

growth.

The World Income Inequality Database (WIID)

Research on inequality has been handicapped in the past

by lack of reliable data. To help address this problem

WIDER compiled and made available the World Income

Inequality Database m), the most comprehensive

database of statistics on inequality trends within

countries. The initiative was initially undertaken in

collaboration with the United Nations Development

Programme and draws heavily on the statistics compiled

earlier by Klaus Deininger and Lyn Squire at the World

Bank.

The WIID contains information on income and

expenditure inequality for developed, developing, and

transition countries. The database can be used for

analyzing trends in inequality, for studying the

relationship between inequality and various other

economic, social, and demographic factors or simply as

areference source for the degree of income inequality in

different countries.

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

The data are published in a spreadsheet format and have

been distributed via the WIDER website since September

2M)O. The substantially revised version of the database

published in mid 2005 includes information forthe period

195&2003 on Gini indices, quiutile or decile shares, and

average incomes or expenditures. To help usersjudge the

quality of the estimates and the degree of comparability

between them, the database also includes details of the

defmitions underlying the estimates, the quality ratings,

and the background documentation.

Spatial Disparities

The growing inequality observed recently within

countries frequently has a spatial dimension. Spatial

disparity refers to differences in income, consumption,

or other measures of well-being across locations. These

disparities are often large, in some cases extremely large;

for example, per capita income in the southeast region of

Brazil is three times higher than it is in the northeast.

Urban-rural disparities are often v e v large and Wen

within cities incomes can vary significantly across

different neighbourhoods.

There is some evidence that spatial inequality within

countries increases during the early stages of

development and during periods of rapid economic

change. In China, Russia, India, Mexico, and SouthAfrica,

for example, regional variations in economic activity,

incomes, and social indicators, appears to be on the

increase. While spatial inequality can be regarded as just

one of the dimensions of overall inter-pmnal inequality,

it takes on added significance when spatial and regional

divisions align with political and ethnic tensions to

undermine social and political stability. Also important

in the policy debate is a perception that increasing

spatial inequality within countries is related to greater

openness of theeconomy and to giobalization in general.

The WIDER project on 'Spatial Inequality and

Development' directed by Ravi Kanbur and Anthony

Venables brought together economists and geographers

to investigate these issues for a wide range of countxies.

Publications include special issues of the Journal of

African Economies (2004), Review of Development

Economics (2005), and the Journal of Economic

Geography (2005) and the books, Spatial Inequaliv

and Development (Kanbur and Venables 2005), and

Spatial Disparities in Human Development:

Perspectives &m Asia (Kanbur, Venables and Wan

2005).

The results of the study suggest that spatial inequality

can account for up to one-third of total inequality in

personal incomes witkm a country. This is a substantial

figure bearing in mind that it is not due to underlying

differences in individual characteristics-such as

ability--but is simply a consequence of where people

1ive.A~ regards the evolution of spatial inequality, there

is evidence of an increase in many countries over the

past two decades. In Mexico and China where trade

liberalization has been associated with overall growth,

the benefits of growth have not flowed evenly across

space. The same has been true in many transition

countries. However, some increase in spatial inequality

may be a natural feature of development, when growth

is initially concentrated in a few regions. Another open

question coucems whether the increase in inequality is

INEQUAUTY AND SPATIAL DISPARITIES

temporary, and how long it takes for growth to spread

h region toregion.

The project also examined the determinants of spatial

inequality and the implications for policy. If economic

activity tends to ciuster in particular locations then

development is unlikely to take the form of smooth

convergence in the economic performance ofregions or

countries. Some places wiU boom, while others will lag

behind. Development becomes an inherently 'lumpy'

process, as growth is spatially concentrated. Whether

or not this creates inequalities depends largely on the

extent to which labour can move from lagging regions to

fast growing ones. This suggests a prominent role for

policies to facilitate migration. However, migration is

not always easy, and individuals can get trapped in a

declining region for a number of reasons, especially those

relating to housing. Furthermore, it is not always clear

that promoting migration is the correct policy response.

There are typically multiple market failures associated

with the location decisions of firms and individuals.

Some are positive, for example, setting up a new fm in

a location may have spillover effects for local workers

and neighbouring fm. Others may be negative, for

example, bringing more activity into a large city might

exacerbate congestion, and could also damage the source

regions from which the activity has moved. Thus

investing directly in infrastructure in sending regions is

a policy option that must always be kept on the table.

Inequality in China

lnequalityin China is an important case study, not merely

because of the size of China's population, but because

its fast growth has been accompanied by dramatically

rising inequality. While the economic failures of the

socialist era m blamed in part on egalitarian policies,

fast rising inequality is shaking the foundations of society.

This is largely atbibutahle to variations across regions,

but more specifically associated with urhan-rural

differences: it is estimated that 6&70 per cent of the

recent increase in regional inequality is due to the urb*

tural divide. The Chinese government is giving serious

attention tothe problem, hut the issue raises many policy

dilemmas.

In view of the importance of this topic, WIDER has

initiated a project on inequality and poverty in China

directed by Guanghua Wan. In contrast to previous

studies which focused on measurement issues and

regional differences, this project emphasizes the causes

of increased inequality and expands the analysis to cover

inter-personal and inter-household inequality.

Preliminary findings suggest that the largest contributor

to regional inequality is domestic capital, and that the

relative contributions of factors such as education,

location, urbanization, and the dependency ratio have

been declining. Furthermore, it appears that glohalization

accounts for a substantial proportion of regional

inequality and that this proportion has been rising over

time, as has also the impact of economic reforms such as

privatization.

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

[SPATIAL INEQUALITY AND

DEVELOPMENTI OFFERS A FRESH

AND IMPORTANT ACCOUNT OF

SPATIAL INEQUALITY WIDE IN

GEOGRAPHICAL SCOPE, ITS MOST

IMPORTANT CONTRIBUTION IS THE

MANY-SIDED DEMONSTRATION

THAT SPATIAL DIFFERENCES IN

AVERAGE INCOMES AND

CONSUMPTION PLAY A NOT

INSIGNIFICANT ROLE M

EXPLAINING TOTAL

INTERPERSONAL INCOME

INEQUALITY, THAT GEOGRAPHY

MATTERS AND THAT TACKLING

SPATIAL INEQUALITY COULD

MAKE AN IMPORTANT

CONTRIBUTION TO COMBATING

POVERTY.

AN OUTSTANDING SET OF PAPERS

ONTHE CENTRALCHALLENGEOF

OUR AGE: AMBITIOUS,

ANALYTICALLY SOUND, AND

THOROUGHLY GROUNDED IN

REAL EVIDENCE. [INEQUALIT):

GROWTH, AND POVERTY

IN AN ERA OF LIBERALIZATION AND

GLOBALIZATIONI DESERVES

CAREFUL READING BY ALL

STUDENTS

OF INEQUALITY AND

DEVELOPMENT

NANCY BIRDSALL, pmsmm,

CENTER FOR GLOBAL DEVELOPMENT

MICK DUNPORD, SCHOOL OF SOCIAL

SCIENCES AND CULTURAL. STUDIES,

UNnTERSITYOF SUSSEX

INEQUALITY AND SPATIAL DISPARITIES

[ I N E Q U A L m GROWTH AND

POVERTY IN AN ERA OF

LIBERALIZATION AND

GLOBALIUTION IS] A TIMELY

AND VALUABLE CONTRIBUTION

TO CURRENT THINKING ON

DEVELOPMENT ISSUES, SINCE IT

UNDERSCORES BOTH THE

COMPLEXITY OF THE

CHALLENGES THAT LIE AHEAD

AS WELL AS THE OPPORTUNITIES

CREATED BY THE PROCESS OF

GLOBALIZATION.

ENRIQUE v. IGLESIAS, m s m m , NIE%AMERlCAN DEVE4WMZNT

BANK, WASMNGTON DC

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

Since the establishment of W - W I D E R in 1985, the

world economy has experienced an intense evolution of

economic policy, particularly in the area of international

trade. At the same time economic integration has

increased, as reflected in higher trade and financial flows.

This process-generally known as globalization-has

been the result of human innovation and technological

progress. It has also affected the movement of people

(labour) and knowledge (technology) across international

borders. But, there are cultural, political, and

envimnmental dimensions of globalization that go beyond

international trade. WIDER has undertaken an extensive

research agenda on a range of topics related to globali-

zation, trade, and ewnomic development.

A Changing World Economy

Both internal and external factors have prompted the

need for more ouiward-oriented trade policy regimes.

Aid donors and international financial organizations tried

to counteract the economic and debt crisis in developing

countries during the late 1970s and early 1980s with a

major change in development policies, shifting towards

more conditional aid flows. As aresult, the International

Monet;uy Fund and the World Bank began to recommend

market-oriented reforms, which included the reduction

oftrade barriers and the opening of international trade to

foreign competition, along with other long-term growth

and development policies. For example, the main goals

of trade liberalization in IMl-supported programmes

have been to improve economic eff~ciency by creating a

transparent and neutral system of incentives to eliminate

anti-export bias (as well as direct impediments to trade,

and to reduce economic distortions caused by restrictive

trade regimes). Although most of the 'good practice'

countries have managed to reduce to some extent the

degree of trade policy distortions, a significant number,

including those starting with highly restrictive trade

regimes, did not formulate any quantifmble target for

reducing trade restrictions. These outcomes were

influenced by country-specific political and

socioeconomic factors.

There are soundtheoretical reasons why free& augments

world output by guiding raources to their best possible

usages at any given point of time, and there are major

studies which provide empirical support to this claim.

However, a fully liberalized trade regime does not

necessarily make evay individual better& In fact, h e

tradehas differential impacts across society leading to two

potential sources of wnilict The first wncems the way

that the benefits of free hade are shared between countries.

In this respeq the world trading community is divided

into two broad groups-developing and developed

countrieand their differences essentially reflect how

the spoils of ike trade should be split The second source

of wntlict is inherent within countries. Certain groups of

people gain relatively more than others. Indeed, in the

absence of any redistributionof income by the government,

some groups may even lose h m h r trade.

These two sources of conflict manifest themselves in

subtly different ways. Developing countries as a group

are not against freer trade, although they are often

misunderstood as being so. Rather, they are unhappy

with the benefits they have received from a freer world

tradiigregime comparedto what they in turn are forced

to offer in global trade negotiations. In contrast, celtain

[THE WTO,

DEVELOPING

COUNTRIES AND

THE DOHA

DEVELOPMENT

AGENDA] SHOWS

THAT A LACK OF

GOOD

ARGUMENTS FOR

AMBITIOUS

TRADE

LlBERALlZATlON

IS NOT THE

PROBLEM AT THE

DOHA ROUND

TALKS. A

VAST ARRAY OF

CRUCIAL ISSUES

GLOBALIZATION AND TRADE

FOR BOTH THE

AGRICULTURE

AND THE

INDUSTRIAL

PRODUCTS

NEGOTIATIONS

ARE SOUNDLY

ADDRESSED IN

THIS USEFUL

BOOK.

ERNEST0 ZEDILLO,

DIRECTOR, YALE

CENTERFOR THE

S n m Y OF

GLOBALIZATION, AND

FORMER PRESIDENT

OF MEXICO

groups within both developing and developed countries

are against freer trade because they stand to lose from

it, unless compensated in some way.

The Challenges of Trade-led Growth

These conflicts have been part and parcel of the

successive rounds of the General Agreement on Tariffs

and Trade (GATT) and, since 1995, the World Trade

Organization (WTO), as countries try to liberalize trade.

The WTO regime has been especially turbulent, with

concerns about its development-credibility. A recent

WIDERproject aimed to evaluate the prospects as well

as the challenges of trade-led growth. It addressed several

key issues, including the state of market access in

manufacturing and agriculture, subsidy reform in the

Organisation for Economic Co-operation and

Development (OECD), preferential trading

arrangements, export-promotion in developing countries,

and so on. The fmdings and policy recommendations

were published in The WTO, Developmg Countries and

the Doha Development Agenda: Prospects and

Challenges for Trade-led Gmwth (Guha-Khasnobis

2004).

In addressing the practical challenges oftrade-led growth,

this study assessed the European Union's 'Everything

But Arms' initiative and its impact on, specifically,

A ~ c a ' s trade, and found that it was largely beneficial,

especially for sugar producers. The study also found

that the United States preferential trade agreement, the

African Growth Opportunity Act, encouraged a

significant rise in African exports to the US. However,

the reform of the EU's subsidy policy-which currently

depresses world food prices-will benefit those

countries which are net exporters of food and hurt those

countries that are net importers of food.

An ongoing project on 'The Impact of Globalition on

the World's Poor', led by Machiko Nissanke and Erik

Thorbecke addresses the complex, but important, issue

of how the current wave of globalizatiou is affecting the

poor in the developing world. This project consists of a

series of regional meetings, including one to be held in

South Africa to look at globalization's implications for

African poverty and inequality. The theme of

globalization has also been taken up in the WIDER

h u a l Lectures, including the 2003 and 2004 Lectures

by Jeffrey Williamson and Kaushik Basu.

Globalization, Privatization, and Utilities

The privatization of state-owned enterprises (SOEs) has

been one of the major trends of the last two decades, and

one of the most controversial of all economic reforms.

Moreover, since privatization often involves foreign

direct investment, privatization is another dimension of

globalization. Reducing the fiscal burden of lossmaking

SOEs can h e up public money for use elsewhere, in

primaryeducation and basic healthcare, for example. But

the privatization of utilities in key services such as

electricity, water, and telecommunications does not

always improve service quality and access. This is a

particularly important issue for poor households, but

also for a country's overall development; an efficient

and modern system of telecommunications and

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

information technology services is absolutely vital to

success in the present global economy.

Utiliv Privafization and Regulation: A Fair Deal for

Consumers? (Ugaz and Waddams Price 2003) examines

how consumers fared from the sale and introduction of

competition to utilities inLatin America, starting in Chile

in the 1980s (the pioneer in the region) and more recently

inhgentina, Bolivia, and Peru;There are large areas of

these countries where there isno effective access to many

infrastructure s e ~ c e s . In the past, public subsidies have

generally been extensive, but they have often benefited

those with political power, the urban elite, rather than

necessarily those in greatest need. The current challenge

is to reach the poor (particularly in rural areas) who

have been excluded fmm networks and subsidies.

Overall, the study found a very mixed picture; prices

have often risen as a result of reforms, and this has some

times adversely affected low income groups more than

others. But most networks (including mobile telecom-

munications) are extending their coverage, and the poor,

who have had least coverage to date, have benefited from

greater access. In electricity provision, the benefits do

not seem to have bypassed the poor, and higher utility

charges were offset by increased s e ~ c e coverage inmany

cases. However, the picture is less positive for access

by the poor to natural gas, water and sewage, where the

deficit in connection, particularly for water and sewerage,

remains high in many Latin American countries, as

reforms have concentrated on urban areas. Strengthening

the public accountability of private utilities and making

it more participatory is crucial to ensure that privatization

benefits the poor, and development, more broadly.

Trade Policies, Poverty, and the Environment

Several earlier WIDER pmjects focused on aspects of

globalization and international trade. 'Zkade Policy,

IndusIrialization and Development: New Perspectives

(Helleiner 1992) built upon new developments in the

theory of international trade and helped improve our

understanding of the constraints imposed by

industrialization and growth in developing countries.

The volume covers a range of issues oftenneglected by

orthodox economics: oligopoly, ewnomies of scale,

learning, foreign ownership, and externalities. A

subsequent book, Trade Policy and Indusfrializafion in

Turbulent Times (Helleiner 1994) reviewed the

experience of 14 developing countries hAfrica,Asia,

and Latin America, during the 1970s and 1980s. It

concluded that there are many routes to industrial

expansion and that there is no single trade policy

prescription that can guarantee improved economic

performance. The successful implementation ofpolicies

depends upon initial conditions and constraints, as well

as the institutional capability to carry them out

effectively.

The globalization debate often draws attention to the

comktion between trade liberalization and poverty.

However, the empirical link between liberalization and

poverty reduction is difficult to identify and analyse.

Empirical evidence tends to show that trade liberalization

will alleviate poverty in the long run. At the same time,

the evidence does not support a view that the short-

run, microeconomic effects of liberalization always

benefit the poor. One policy implication is that the

GLOBALIZATION AND TRADE

impact of trade reforms on poveay will depend on the

environment in which liberalization is implemented,

alongside the policies associated with it. Moreover,

while a number of studies have investigated the

globalization-poverty nexus using cross-comtry

analyses, a deeper insight into this relation requires

empirical research in a country- and region-specific

MnteXt.

Trade negotiations under the Doha Agenda, which place

development at the centre of such negotiations forthe first

time in the history of the multilateral tradingdes, remain

to be completed. WTO country-members have still to

address the developmental concerns establishedat theDoha

Round, including market access for least developed and

msition countries. This raises complex issues concerning

the governance andinstihrtionaldimensions ofintemaIional

m&, making research on these questions all the more

imperative.

Intematiionaleade andglobalizationcancleadyplay amajor

mkinachievingtseobjdvwoftheMiueanbrmDeclaration

through the creation of more employment and growth

WTDERwill continue developingresearch e m and ideas

towards realizing a more &&ve link behveen p o v w

reduction and the development of the global economy.

THE PROSPECTS FOR RAPID

ECONOMIC GROWTH AND

POVERTY REDUCTION IN

DEVELOPING COUNTRIES

ARE CRITICALLY

DEPENDENT W O N THE

CLIMArnFOREXTERNAL

TRADE. [ rnE WTO,

DEYELOPLVG COUNTRIES AND

THE DOHA DEVELOPMENT

AGENDA] PRESENTS AN

INVALUABLE AND

SYSTEMATIC ANALYSIS OF

SUCH PROSPECTS COVERNG

A WIDE CANVAS OF ISSUES

INCLUDING MARKET ACCESS,

TARIFFS AND NON-TARIFF

BARRIERS, EXPORT

SUBSIDIES, OECD DOMESTIC

SUPPORT AND THE LIKE. AS

SUCH, IT WILL BE OF

CONSIDERABLE VALUE TO

THE LARGE AUDIENCE

INTERESTED IN THIS TOPIC.

RAGHBENDRA JliA, RAIlV GANDHI

CHAIR PROFESSOR AND

EXECmVEDlReCrOR,

AUSTRALIA som MU

RESEARCH CENTRE, RSPAS,

AUSTRALlAN NATIONAL

UNNERSTY

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

Despite the rapid and large increase in flows of trade,

finance, and technology across the global economy, most

developing countries have limited access to the f m c e

needed for development. Private portfolio flows into

equities and bonds are limited to a narrow range of

emerging markets, foreign direct investment (PDI) is

highly concentrated on a narrow range of countries, and

official aid flows have been stagnant and declining in

recent years. Lack of fmance limits the ability of many

countries to diversify their trade, access new

technologies, and achieve poverty reduction. Recent years

have seen considerable UNU-WIDER research on issues

relatedto development fmance, broadly defined to include

not only external finance (development aid, debt relief,

FDI, short-term private capital flows) but also domestic

resource mobilization (savings mobilization and fmancial

sector development for growth and poverty reduction).

International Private Capital Flows

Most developing countries are keen to attract private

capital flows, and an overview of the issues and an

assessment ofthe various forms of financing m explored

in External Finance for Private Sector Development

Appraisals and Issuer (Odedokun 2004). Short-term

and volatile portfolio-capital flows may have a high cost

for development, as became clear during the Mexican

crisis of 1994-95, the 1997 Asian crisis, the Russian and

Brazilian crises of 1998, and the near collapse of theUS-

based Long-Term Capital Management Fund. Short-

term CapiialFlows andEmmmic Crises (CkiiBbJones

et al. 2001) examined the costs and benefits for

developing countries of large flows of potentially

reversible, highly volatile and short-term international

capital. Governance problems and weaknesses in the

functioning of the international financial markets were

also addressed, as well as the systemic risk that such

unregulated flows can induce. The sequel to this research,

From Capital Suqes to Drought: Seeking Stabilify for

Emei@ig Economies (Pknch-Davis and Griffith-Jones

2003), studied trends in various types of capital flows

to emerging economies since the Asian crisis, their

determinants, and their intemationalpolicyimplicatio11~,

along with an evaluation of national policies to reduce

the volatility of capital flows and the negative impact

of such volatility on domestic economies.

FDI is at the fore6nnt of policymakers' attention, and in

September 2003 a number of papers on FDI were

presented at the WIDER international conference on

'Sharing Global Prosperity'. A selection of the pspem will

bepublishedinaspecialissueofthe WorldEconomyjod.

This topic is timely in view of the hesitant upward rrend

of FDI flows to developing countries as well as the need to

increase substantially development finance trends in order

to achieve the Miennium Development Goals (MDGs).

'Ibis research focuses on the direction of causation between

FDI and growtb; the potential role of information

technology for atb.acting FDI flows; and the process of

skill acquisition which takes place as result of FDI. Gther

questions relate to specific regions stiu unable to attract

suffcient FDI flows, such as AiXca where FDI is largely

confined to the mining sector.

DEVELOPMENT FINANCE

Debt Relief

The Heavily Indebted Poor Countries ( H E ) initiative

launched in 1996, 'enhanced' in 1999 andbtheraccelerated

withtheG8meetingin2005,aims toreducedeb&mxkhg

to sustainable levels in eligible counhies. Progress on debt

relief has been slower than many countries want, but the

issue has at least been kept at the forefront of the

development debate. However critics of debt relief argue

that the HIPC initiative will do little for development. But

what does research show? Debt relief can raise growth by

reducing the so-called 'debt-overhang effect', which acts

as a disincentive to private investment, and by making

more resources available f o r g ~ m d ~ enhancing (and povmly

reducing) public investments where those reso- would

otherwise go to servicing debt. This negative effect of high

debt on growth is borne out by empirical research,

confirming that debt relief can raise growth and, by

implication, reduce pov- (although the scale ofpov-

reduction depends on the character of the growth process).

However, if debt relief does not add to concessional

finance-for example if donors substitute debt relief for

ai&4en growth is unWrely to rise; the literature stresses

the impotiance of odditionaliiy of debt d e f resources.

Debt reliefmust therefore go hand-in-hand withmore aid.

These and other debt-related issues are addressed in

Debt Relieffor Poor Countries (Addison, Hansen, and

Tap 2004), an outcome of a WIDERconference held in

Helsinki in August 2001. The study examines why poor

countries become indebted in the fust place and what

can be done to prevent the problem fiomre-emerging. It

also provides a valuable menu of techniques for assessing

the effects of HPIC debt relief on economic growth and

poverty reduction. Other topics examined at the

conference include the way in which debt relief affects

inflation and growth, how the resources released by debt

relief can be used for improving basic social services (of

particular relevance to the MDGs); how debt relief can

affect the totalvolume of aid available to poor countries;

the role of trade policy in resolving the debt crisis of

poor countries; and the merits of a complete debt write-

off.

Increasing the Level and Effectiveness of External Financing

An increased volume of external f m c s b o t h private

and public-is seen by many as vital to the achievement

of the MDGs. The WIDERproject on the 'Sustainability

of External Development Finance' undertook a

comprehensive assessment of forms of financing,

including foreign direct investment, donor support for

microcredit, multilateral aid allocation, and the financing

of global public goods. The project resulted in External

Finance for Private Sector Development: Appraisals and

Issues (Odedokun 2004) as well as two special issues of

journals: WorldEconomy (2004) andIntemationalRwiew

ofEconomics & Finance (2004).

Development Aid

The MDGs provide a clear set of objectives for

mobilizing the international development community,

notably in the area of development f m c e . The recent

Miennium Project Repod recommends that high-income

countries increase official development assistance from

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

0.25 per cent of donor GNP in 2003 to 0.44 per cent in addressing the linkages between financial development,

2006 and 0.54per cent in 2015. This woulddonbleofficial investment and growth in low-income and transition

world aid from its current level to approximately US$120 countries in order to identify how financial development

billion per year. Donors are paying increased attention canmore effectively contribute (and

to bow they allocate aid across countries, but why recent financial sector reforms have been

recommendations are highly controversial, in particular, disappointing in their effect on growth).

the policy context for effective aid, and the link between

aid and the achievement of the MDGs, is not yet New Sources of Development adequately developed. A WIDER project on Finance 'Development Aid: A Fresh Look' is investigating the

effectiveness of different types of aid, in particular the

impact on growth and poverty (and on key intervening

macroeconomic variables), and developing ways to bring

poverty more efficiently into the allocation of aid across

countries. Case studies include Cate d'lvoire, Egypt,

Kenya, Tanzania, and Uganda, and aid to Africa in

general.

Domestic Resource Mobilization

While external finance is crucial for meeting the MDGs,

domestic resource mobilization should not be overlooked.

Effective mobilization of domestic savings for private

investment plays an important role in achieving growth

and poverty reduction. Over the last decade many

countries have undertaken considerable financial reform,

including financial-market liberalization, bank

privatization, and efforts to build the capacity of central

banks and financial authorities to conduct prudential

regulation and supervision of the financial system. The

current WIDER project on 'Financial Sector

Development for Growth and Poverty Reduction' is

The MDGs can be achieved by either doubling the

existing amount of official development assistance and

other private capital flows andlorby mobilizing domestic

development finance. In case existing sources are unable

to raise the funds necessary to meet the MDGs,

alternative ways of 6nancingneedto be explored. Recent

discussion of 'new' or 'additional' sources of

development finance (see the Table) has covered a levy

on currency transactions (the 'Tobin tax'); a global

lottery (and global premium bond); the UK's

International Finance Facility; a development-focused

allocation of special drawing rights; globalenvironmental

taxes (such as a carbon tax); and efforts to facilitate

remittances by migrants and to increase private

donations for development purposes. These proposals

were assessed in a WIDER study led by Anthony

Atkinson, which was undertaken in cooperation with

the UN Department of Economic and Social Affairs

(UN-DESA) following a UN General Assembly

resolution which called for a rigorous investigation of

the advantages and disadvantages of new and innovative

sources of funding. The findings are published in New

Sowces ofDevelopment Finance (Atkinson 2004), and

DEVELOPMENT FINANCE

'roposals for Innovative Sources of Deve ent Fundin!

Global environmental taxes

Currency transactions tax

Creation of new Special Drawing Rights (SDRs)

International Finance Facility (IFF)

lncreased private donations

for development

Global lottery or global premium bond

lncreased remittances

from emigrants

Taxes on goods generating environmental externalities, with specific reference to a tax on the use of hydrocarbon fuels according to their carbon content.

Tax on foreign currency transactions, collected on a national or a market basis, covering a range of transactions (spot, forward, future, swaps and other derivatives).

Creation of SDRs for development purposes, with donor countries making their SDR allocation available to fund development.

Long-term funding guaranteed to the poorest countries by the donor countries. Long-term pledges of a flow of annual payments to the IFF would leverage additional money from the international capital markets.

Charitable donations by private individuals and firms. Measures to encourage private funding of development: tax incentives, global funds, corporate giving, and the Internet.

Global lottery operated through national state- operated and state-licensed lotteries, with proceeds shared between national participants and development institutions. Global premium bond; a lottery-style prize structure but investment preserved in the event of 'no luck'.

Logistics (reducing cost of remittances), financial institutions (encouraging repatriation) and citizenship rather than residence basis for taxation.

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

summarized in WIDER Policy Brief 10. A report by the

UN Secretary-General on the study's main proposals was

presented to the Economic and Social Council (ECOSOC)

in 2004, and copies of the Policy Brief were distributed at

a meet* of Heads of State, convened at the UN by the

govemmenb of B 4 Chile, France, and Spainto discuss

their proposal on Action Against Huoger. The study yielded

two key conclusions. First, modest rates of international

taxaton can result in wnsidemble sums for meeting the

MDGs and some, fa example, global environmental taxes

have a 'double dividend; both raisingrevenue and reducing

global warming. Seconcl, while global taxes require a large

measure ofpolitical agreement, andare therefore diflicult to

achieve; individual w d e s a walitions of wuntlies can

implement measures such as the IFF or the global loliq.

[FROM CAPrrAL SURGES TO

DROUGW IS OUTSTANDING IN

COMBINING ECONOMIC ANALYSIS

WITH POLICY IMPLICATIONS AT

THE NATIONAL AND

INTERNATIONAL LEVEL. IT LOOKS

AT CAPITAL FLOWS TO EMERGING

MARKETS FROM DIFFERENT

PERSPECTIVES AND PROVlDES A

COMPREHENSIVE OVERVIEW OF

PROBLEMS, ISSUES, AND POSSIBLE

SOLUTIONS WITHOUT GETTING

LOST IN ECONOMIC JARGON. THIS

SEMINAL WORK MUST BE READ BY

ANYONE CONCERNEDABOUT

INTERNATIONAL DEVELOPMENT

AND THE FUTURE OF THE WORLD

ECONOMY.

BBRNHARD G 0- PROIECT

DlRBCTOR, NEW RULES FOR GLOBAL

FINANCE M)AWTlON. WASHINGTON DC

DEVELOPMENT FINANCE

[FROM CAPnAL SURGES TO DROUGHT]

IS A MARVELLOUSLY LUCID AND

ACCESSIBLE SET OF ESSAYS FROM

SOME OF THE LEADING EXPERTS IN

THE FIELD-WHO UNLIKE MANY

OTHER CONTRIBUTORS TO THE

LITERATURE, DO NOT ASSUME THAT

WHAT IS BEST FOR FINANCE IS BEST

FOR THE WHOLE ECONOMY AND

SOCIETY.

ROBERT HUNER WADE, PROFESSOR OF

POLmCAL ECONOMY, DEVELQPMENT

STUDIES INS- LSE CAN DEBT RELIEF BE A POWERFUL

TOOL FOR ADVANCING HUMAN

RIGHTS, HELPING TO SAVE

LITERALLY MILLIONS OF LIVES, AND

FOR LAYING THE FOUNDATlONS FOR

ECONOMIC GROWTH, AS ITS

PROPONENTS OFTEN CLAIM? IN

THIS PIONEERING VOLUME [DEBT

RELIEF FOR POOR C O W E S ] A

GROUP OF ECONOMISTS

CHALLENGE SOME OF THESE

UNQUESTIONED ASSUMPTIONS. ...

THESE ARE IMPORTANT AND

TIMELY CONTRIBUTIONS THAT

WILL DEEPEN THE DEBATE ON

DEBT RELIEF AND POVERTY

REDUCTION.

FANIU CHERU, PROFFSSOR, SCHOOL OF

INT%FNATIONAL SERVICE, AMBRICAN

-m WASHINGTON DC

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

The cold war was nearing its end when UNCT-WIDER

was established in 1985. It would be another four years

before the Berlin Wall fell. But the geo-politics of the

cold war were already shifling, with improved relations

between the superpowers as well as the mobilization of

civil society in central and eastern Europe which would

lead to the 'velvet revolution' in Czechoslovakia, and an

eventual tcansition kom communism across the former

Soviet Bloc.

These events were met with a wave of optimism about the

future. People had lived with the spectre of nuclear war

since 1945, and great possibilities were seen for the peace

dividend that would emanate h ending the stand-off

between the United States, the Soviet Union, and their

respective allies. For the United Nations, the end of the

cold war aLw seemed to offer the oppommity to press

forward with agendas that had remained stymied in cold

war rivalry, and to deal with pressing and long-standing

conflicts thaf while they had their own paaicular origins

(notably in Africa, Central America, and the Middie East),

had become part of the cold war itsew. The last few yeam of

the 1980s and the early years ofthe 1990s were accordingly

heralded as a new em in international relations. There was

much talk of the intanational community at last brnoming

just that-+ community of nations committed to acting

cohesively in defence of agreed principles. There was also

much talkof a new gloM security policy that would uphold

human rights and prevent wnflict anoss the world.

This optimism was soon shattered. The international

community appeared unahle-and perhaps worse,

unwilling-to halt the war and humanitarian disaster in

Somalia, the genocide in Rwanda where 800,000 were

killed in 100 days, and the vicious civil war in

Yugoslavia, including the massacre of those in the UN

'safe haven' in Srehrenica. In the former Soviet Union

itself, violent conflict erupted in many of the newly

independent states. And many of the countries that had

gone through conflicts in which the superpowers

supported opposing sideeAfghanistan and Angola for

example-now entered a new and deadly phase in their

histories, in which commercial motives for civil war

came to the forefront (diamonds inAngola, for example)

and connections with international terrorist networks,

notably al Qaeda in Afghanistan, became vigorous.

Nowhere was this more evident than in Afica, where

the end of the cold war left the continent's dictators

bereft of the militaty and financial support upon which

they had for long relied (notably in Ethiopia, Zaire-

now Democratic Republic of Congeand Somalia).

This led to a wave of democmtization across Afica as

civil societies mobilized themselves for multi-party

democracy (facilitated by the new information

technologies); butthe weakening ofAfrca's old dictators

also provided an opening for a new generation of

warlords, notably in West Afica-a region replete in

valuable minerals and timber, ripe for the taking.

Thus, during the two decades of WIDER'S existence,

the nature of conflict has undergone profound change.

Wars between states (iiter-state wars) of the traditional

kind remain a constant threat, but wars within states

(intra-state wars) are particularly deadly-untold

millions ofAfricans have beenkilled or maimed overthe

last two d e c a d e ~ d state failure is one of the most

difficult issues for international aid donors to deal with.

Traditional development economics assumed the

FROM CONFLICT

TO RECOYERY IN

AFRICA IS AN

OUTSTANDING

CONTRIBUTION

TO THE

LITERATURE ON

CONFLICT

PREVENTION AND

PEACE BUILDING

. . . BASED ON

EXCELLENT CASE

STUDIES .. . ITS

CONFLICT AND GOVERNANCE

CONCLUSIONS ARE

WIDELY

APPLICABLE, EVEN

'0 CONFLICT

S) TUATIONS AND

CR?IS STATES

OUT: IDE OF

AFRIC. .

OEOROES NZONGOLA-

NTAWADIRECIUR,

UNDP OSLO

GOVERNANCE CENTRE

existence of a functioning state with some capability

for purposeful action; but a number ofAfrican countries

now have hgi le states whose remit offen does not go

much beyond the major cities and towns, if that. This

causes immense difliculties for achieving the traditional

development goals of economic growth and

macroeconomic stability, as well as the newer and

broader goal of poverty reduction. The Mi l l e~ ium

Development Goals are least likely to be achieved in

the counhies marked by deep and violent conflict, and

in countries that have 6agile states. Although the last

twenty years have seen much to celebrate, including

South Af?ica's peaceful transition h apartheid and

the successful transition from civil war in Mozambique,

a significant number of countries appear to remain m k d

in seemingly intractable conflict Aside 6rom the resulting

human misery, such conflict is generally a disaster for

economic development.

Violent conflict in all its foms has therefore been a key

issue for UNU which has mobilized considerable

research through its 'Peace andGovemance' programme,

of which WIDER's work on conflict is an important

part Moreover, as an institution located in Finland, a

country with a longstanding commitment to international

diplomacy to aeate peace as well as peacekeeping and

humanitarianactivities, the investigationof conflict and

its aflemath have all been natural themes for WIDER'S

work. The research has been driven by the belief that

while economics can bring important insights to the

conflict agenda, conflict as a phenomenon does not lend

itself to a neat comparhnentalization of issues into

separate disciplines; accordingly all of the social sciences

must be brought to bear on tbis most urgent of human

problems. This is the context in which the institute's

research on conflict is organized.

New Wars

WIDER'S initial workon conflict consisted oftwo broad

streams of intellectual in-. The first was the resesrch

conducted by Mary Kaldor and her team on the 'new

wars' that chanrcterized the 1990s and the related issue

of r e s h u c t ' g the global military sector. This resulted

in three volumes: New Wars; The End of Military

Fordism; The European Rupture: The Defme Sector in

Transition; and, Global Insemi@ (Kaldor et al. 1997-

2000). The conflicts of the 1990s were called 'new wars'

to emphasize their political character and to distinguish

them from violent crime (although obviously one of their

defining charactaistics was often crime on large scale)

as well as to differentiate tbem from the traditional inter-

state wars. This was more than a matter of terminology:

the description enabled the WIDER project to identify

and to focus on characteristics of contemporary conflict

that conventional security planners had overlooked or

misdiagnosed By applying the labels 'law-intensity' or

'internal' to these wars, security plannem had trivialized

conflicts that had major humanitarian and development

implications and, increasingly, effects that went well

beyondthe borders ofthe countries concerned (as shown

by the flows of arms and mercenaries into the conflict

countries, and the millions of dollars of loot, including

diamonds and other gemstones, that flowed out of them

and into international markets). The project emphasized

the need to maintain, establish, or restore democratic

m m 1 over glpbal organizedviolence andbecame highly

influential in the global policy debate.

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

New Regionalism

The second stream of WIDER'S work on conflict and

governance was in the area of what has become hown

as the 'new regionalism' andits implications for security

and development. The project resulted in The New

Regionalism andtheFuture ofSecuriry andDevelopment

(Hettne et al. 2000), as well as c o u n q and regional

studies such as The Political Economy of the Peace

Process in a Changing Middle-East (WIDER World

Development Study g), by Moustafa Ahmed Moustafa.

This research identified ways in which conflicts cross

borders and the prospects for regional peace initiatives.

Humanitarian Emergencies

WIDER'sresearchthentumedtothesocialandeconomic

causes of conflict, specifically through the theme of

complex humanitarian emergenciesthe emergencies of

mass population displacement, starvation, and poverty

that the international community was increasingly called

on to deal with, and which were not natural disasters.

V a c Hunger and Displacement: The Origins of

Humanitarian Emergencies (Nafziger, Stewart, and

VHyrynen 2000) emphasized the role of inequality,

particularly horizontal inequality (the unequal treatment

of groups defined by ethnicity, region, gender, or other

similar attributes). In his 1999 report to the UN General

Assembly, the Secretary-General Kofi AMan presented

the argUment as follows:

In recent years poor countries have been fat more likely

to become embroiled in armed conflicts thao rich ones.

Yet poverty per se appears not to be the decisive factor;

most poor countries live in peace most of the time. A

recent study completed by the United Nations

University shows that countries that are afflicted by

war typically also suffer from inequality among

domestic groups. It is this, rather than poverty, that

seems to be the critical factor. The inequality may be

based on ethnicity, religion, national identity or economic

class, but it tends to be reflected in unequal access to

political power that too often forecloses paths to

peaceful change. (Official Records, Filly-fourth Session,

Supplement No. 1 (M5411)).

This theme was also picked up in the 2001 WIDER

Annual Lecture, Horizontal Inequality: A Neglected

Dimemion ofDevelopment, by Frances Stewart, in which

she identified cases, such as Malaysia, where conflict

has been reduced by addressing horizontal inequalities.

Moving Africa into Post- Conflict Recovery

With so many donor resources being committed to the

task of 'post-conflict' reconstruction, WIDER decided

to take a hard look at the issues, particularly in Africa

( 'pos t -dct ' kquently being amisleading description

of the process of war-to-peace transition which, too

often, is followed not by peace and development but

by the return of war). This project focused on Angola,

Eritrea, Ethiopia, Guinea-B'isau, and Mozambique, in

order to investigate the issues in depth in a set of

countries where economic failure and political

authoritarianism had interacted with the cold war to

produce conflicts that killed over 4 million people.

TONY ADDISON'S

EDITED VOLUME

FOCUSES ON THE

ECONOMIC

DAMAGE

INVARIABLY DONE

BY CONFLICT AND

THE POLICY

CHALLENGE OF

HOW TO REPAIR IT,

CONCLUDING THAT

ONLY AN EARLY

AND SUSTAINED

EFFORT TO

ADDRESS

STRUCTURAL

REFORMS CAN DO

THE TRICK. IT IS A

CONCLUSION

WHICH DEMANDS

MORE FROM THE

DONOR

COMMUNITY THAN

A NARROWER,

RECONSTRUCTION-

AND

HUMANITARIAN-

ORIENTED

APPROACH, BUT IT

IS NONE THE LESS

VALID FOR THAT.

ALYSONI. K BAILES,

DIRUIMR SIPRI

CONFLICT AND GOVERNANCE

Horizontal Inequality: A Neglected Dimension of Developement

Horizontal inequalities are inequalities between culturally defined groups

Important groups include families, kinship groups, communities, ethnic and religious groups, social and work place groups

Individual's membership of groups is a fundamental source of well-being

Horizontal inequalities lie behind most current conflicts, including the 'war against terrorism'

To reduce conflict, horizontal inequalities need to be monitored both nationally and internationally

Unfortunately, as Africa moved into the 1990s, an

increase in conflict became all too apparent; not only

civil wars but also wars between states (Eritrea-

Ethiopia, 1998-2000) and competition between states

overthe rich spoils ofthe Democratic Republic of Congo.

Not all was gloom: Mozambique emerged ftom a long

civil war. However, concern is rightly expressed about

the wntinuing fragility of peace on the wntinent, and

the devastating human and economic impact of war.

Bringing an end to the fightingis only a start. The project

emphasized the need to focus reconstruction efforts on

the needs of the poor, who are often left out of the

recovery process. To this end, considerable efforts are

necessaryto rebuild and reform the state, and to facilitate

private and public investment, especially in the remoter

regions which contain great concentrations of poverty.

Countries must move rapidly into a peace that is not

only sustainable politically, but also one that

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

reinvigorates economic growth and builds on htgmvth

to make sure that the poorest andmost vulnerable people

participate in the recoveq!. Since women are often the

worst-affected, a gender dimension to post-conflict

recovery must be at the heart of strategies as well.

From Conflict to Recovery in Afria (Addison 2003) sets

out a strategy for achieving pm-poor recovery in the

African wntext. The countries selected by this project

for intensive study show just how difficult it is to get

development going when insecurity is high. During the

lifetime of the project, Angola went from peace to war

and back to peace again; Guinea-Bissan's promising

recovery was knocked off course by a military revolt,

and Eritrea and Ethiopia went to war with each other

after appearing, for much of the 1990s, to be on a

successful and peaceful process ofmvering from earlier

conflict. Of the country-case studies, only Mozambique

has sustained peace, and managed a continuing recovey

since the end of its civil war in 1992. James 0. C. Jonah,

former United Nation's Under-Secretary-General for

Political Affairs and Minister of Finance of Sierra Leone

(1998-2001) wrote of his regret 'that this book was not

available at that time, as the case studies would have

provided many lessons for countries like Sierra Leone'.

Avoiding Conflict

The WIDER project 'Why Some Countries Avoid

Conflict While Others Fail' started from the premise

that understanding why some societies fall into intense

and violent conflict while others remain stable is a critical

issue for the international community in its efforts to

both prevent and resolve:contlict. The economic causes

of conflict include wntests over natural resource wealth,

public spending, and therevenues availablefmmplitical

control of the state, as well as the desire to redress

grievance8 arisinghregional, ethnic, and incomdasset

inequalities. The project emphasized that understanding

the incentives of potential and actual belligerents is

therefore of paramount importance, and that this in

bun must be based on an assessment of the costs and

benefits of contlict versus peace to different social

actors. Moreover, these incentives are critical to

understanding why peace negotiations and economic

re~nstruction break down, how thii-parties can get

belligerents to credibly commit to peace and

reconstruction, and the impact of different strategies

for economic development on the probability that social

stability rather than conflict will prevail. The project

resulted in special issues of the Journal of Peace

Research (2002) and the Journal of International

Development (2003). the latter including a case study

of Zimbabwe that discussed the relationship between

the land issue, economic recession, and conflict.

The latest project in this area of research looks at post-

conflict reconstruction, building on WIDER'S earlier

work o n m c a Rewnstmction h mnilict is a complex

and demanding task, and a major challenge for the UN

system as well as the broader donor community.

National authorities and their donor partners face

multiple priorities-rebuilding infrastructure, assisting

war-damaged communities, and recreating weakened

institutio-ften with insufficient resources to meet

these needs. Moreover, reconstruction ofienwmmences

when peace is highly uncertain, which adds considerably

to the difficulties.

CONFUCT AND GOVERNANCE

By unde~taking a comparative study of post-conflict capital are crucial. Rebuilding and reforming public-

reconstruction experiences, the project discusses the expenditure management are also critical, so that public

opportunities and problems that arise when a country's money and donor assistance go to pm-poor priorities,

emnoniic-policy h e w o r k i s premisedon braad-bared especially in education and health. And an over-arching

recovery from conflict, that is, a recovery that gender perspective must be built into the recovery

encompasses the needs of the poor and reduces the strategy since women are often left behiid, especially in

inequalities which often contribute to civil war. The the area of human capital.

project pays attention to rebuilding the sectors that are

most important to achieving human development and

the MDGs, including health and infiastluchue, as well

as the crucial gender dimension of post conflict

reconstnlction.

'!3e project's activities included a conference in Helsinki

in June 2004 which addressed themes such as: violent

conflict and its causes; conflict prevention and

peacekeeping; post-conflict reconstruction; foreign aid

to conflict and post-conflict coonbies; and the poverty

and human development effects of conflict. A policy-

orientated book (Making Peace Work: Meeting the

Conflict Challenge, Addison and BrlLck) is being

prepared together with papers targeted at those working

in and on conflict countries. A special issue ofthe journal

Round Table (2005) focuses on the interaction between

politics and economics in the conflicts of Africa and

Asia.

If the poor are not prioritized in the recovery strategy

then reconstruction will only benefit a narrow elite: the

end of war will have saved lives, but will have done

little for livelihoods. This implies extensive and early

reform so that policies impeding the recovery of poor

communities are changed For example, policies and

practices regarding the access of the poor to natural

A WELL RESEARCHED STUDY

THAT COMBINES SOLID

THEORETICAL ANALYSIS WITH A

DEEP UNDERSTANDING OF THE

COMPLEX EMPIRICAL REALITIES

OF POST-CONFLICT

RECONSTRUCTION AND

DEVELOPMENT IN AFRICA. ...

[FROM CONFUCT TO RECOVERY IN

AFRICA] SHEDS LIGHT ON HOW TO

ACHIEVE A BROAD-BASED

RECOVERY FROM CONFLICT AND

THE INTERPLAY AMONG ALL

NATIONAL ACTORS AS WELL AS

THE INTERNATIONAL

COMMUNITY. IT SENDS A

POWERFUL MESSAGE TO THE

INTERNATIONAL COMMUNITY

THAT IT HAS AN OBLIGATION TO

ASSIST AFRICAN COUNTRIES M

ACHIEVE DURABLE PEACE.

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

W - W I D E R was originally established to study the

economies of developing countries. However, the transition

to a market economy by the f m e r socialist countries of

Eumpe and Asia was certainly one of the most momentous

events in the last two decades of the second millennium: its

onset was unpredictable, and many of its outcomes con-

mted sharply with initial expectations. To help understand

the process, and to draw attention to the impact upon the

poorest members of society, WIDER undertwk research

pmj& into institutional transition, the emergence of small

andmediumsizedenterprises,regulation ofthenew market

economy, the social dimensions of transition, and the

mortality and demographic crisis in transition countries.

Aspects of Transition

The UNU-WIDER World Economy Group Report of 1990

(Blanchadet al. 199l)investigatedthemajn1policychoices

faced by the governments of Eastem Europe as they moved

h m centrally plannedto h m a r k e t economies. The 1992

Report(Blanchard et al. 1992) concluded that stabihtion

in the major Central European countries was done very

much 'by the book', whereas Russia, in contrast, followed

a path of reshucturing without stabilization. Inevitably this

led to large social costs, as unemployment sharply mse.

From Shock to Therapy: The Political Economy of

Poshocialivt Tronsfonnation (Kolodko 2000) examinedthe

huge cross-country differences in economic and social

performance, the role of initial institutional conditions, the

political economy of transition, and the role of external

advice in this process. WIDER has also studied and

compared emerging social sbudum in transitional societies

and has drawn attention to the diffidties k ing workers as

they adapted to new market economies ( h e r s and state-

sector employees as well as the bottom strata of socially

deprived and marginalized people). Inequality MdSocial

Smrchue During the Transition @W!mlev 2003) looked

into the causes of the high inequality and poverty

experienced in Russia and in the Commonwealth of

Independent States, in comparison with the more equal

income distribution and higher levels of social welfare in

Central Europe. Stronger institutions in the latter area

managed to contain at least some of the social costs of

transition, recessions were shallower and shorter, and

recovery was faster, thereby generating employment in

new sectors.

The Asian 'mad to the market' in China and V~etnam, has

generally been seen as a model of success and the object of

widespread admiration. Poww, Income Distribution and

w e n - ~ e i g inhiaduringthe i)mrririon (Aiguo and~ontes

2002) evaluates the regions experience and debunks some

of the most widely held myths, by identifying the link

between alternative transition models, public policies, and

household responses on the one hand, and key welfare

changes onthe other. Evenincnmtries iundergoing sustained

growth, therehave beenunmistakable signs of deep social

strain @articularly rising inequality) so that success has

not been unqualified

Small enterprises are a motor of growth and employment

generationinmarketeconomies. Whenthe transitionbegan

in 1989 in the former socialist economies, it was widely

assumed that the small enterprise sector would play a

dominant role in the transformation into free market

economies. SmalIMdMedium Ente?prisres in Z'kansitional

Economies (McIntyre and Dallago 2003) shows these

THE ISSUES

DISCUSSED IN

[POVERTI: INCOME

DISTRlBUTlON AND

WELL-BEING IN ASIA

DURING THE

TRANSITION] ARE

MOST IMPORTANT

AND TIMELY, WITH

SOME ESSENTIAL

LESSONS FOR

TRANSlTlON TO MARKET

BALANCE IN THE

TRANSITION

PROCESS TO LIMIT

THE (HOPEFULLY

TEMPORARY) LOSS

OF WELFARE.

NEPHIL MATANGI

MASKAY, GENERAL

SECRETARY, NEPAL

W T H ECONOMICS

ASSOCIATTON

expectations to be false, or at leastpremahue, andexplores

the complex relationship between the potential for

'development&om below' and the policies andinstiaaional,

historical, and cultural forces that shape its fite. Russia is

still struggling to achieve growth in its small entaprise

sector, and therefore the projectmmumendati~ll~ continue

to be highly relevant, some 16 years after trsnsition's stm.

Transition and Institutions

One of the major themes that has emerged k m WIDER

ksearch is the role of institutions in smooihmg transition

andin determining the successid implementationof refom

policies. hitionandZnstifutio11~: TheEipienceofLote

Refrmers (Comia and Popov 2001) argues that the speed

of reform per se (shock versus gradual transitiou) did

not matter a great deal. Instead, the depth and length of

the transitiou-induced recession had three main causes:

the great distortions in the former Soviet Union's

industrial structure and external trade patterns; the

collapse of state and uon-state institutions in the late

1980s and early 19908, which resulted in crisis

management instead of organized and manageable

transition; and, poor economic policies.

To put it differently, the Gorbacbev reforms of 1985-

91 Meduot because they were gradual, but because the

state's institutional capacity weakened, undermining its

ability to control the transition process. The Yeltsin

reforms in Russia, as well as the reforms in most other

states of the former Soviet Union, were costly not

because of shock therapy, but because of the collapse

of the institutions needed to enforce law and order and

to cany out a manageable transition.

The collapse of the Soviet state institutions that started

in the late 1980s (and which continued in the successor

states in the 1990s) explains the extreme length, if not

the extreme depk of the former Soviet Union's recession.

The exceptions-Uzbekistan, Belarus, and Estonia-

only prove the rule: the share of government spending in

GDP in these countries did not decline as much as the

former Soviet Union average.

In contrast, strong institutions explain much of the

success of gradual reforms in Cbina and shock therapy

in Vietnam: in both cases strong authoritarian regimes

were preserved and the institutions of central planning

were not dismantled before the creation of new market

institutions. Robust institutions also explain much of

the relative success of radical reforms inEastem Europe,

especially in Central European countries where strong

democratic regimes succeeded in creating new market

institutions.

Institutional capacity includes the government's ability

to enforce rules and regulations, collect taxes, protect

property and contract rights, and provide law and order.

The failure of former Soviet Union states to perform

these traditional task imposed costs on companies which

in tum increased the output and employment decline

associated with economic transition. Institutional

capacity depends not only on the efficiency of public

administration, but also on the existence of a degree of

social consensus that enables govemmena to cany out

policies that are opposed by particular interest groups

and lobbies. As a result, weak state institutions usually

imply import substitution and populist macroeconomic

policies (subsidies to nou-competitive industries, budget

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

Transition and Institutions: The Experience of Late Reformers

The former Soviet Union's output loss in the 1990s exceeded that of the USSR in the Second World War

and of western countries in the Great Depression of the 1930s.

Correcting the distortions associated with central-planning

led to a large supply-side shock in the former Soviet Union.

This was magnified by institutional collapse which turned transition into

a chaotic process that raised business costs and undermined growth.

Weak institutions led to weak macroeconomic

and industrial policies that reduced output even further.

Russia's output in 2001 was 65 per cent of its 1989 level,

deficits resulting in high indebtedness and/or inflation,

together with ovewalued exchange rates). These have a

devastating impact on output and employment.

In much of the former Soviet Union macroeconornic

policy was far ftom prudent. High inflation in the iirst

half of the 1990s and exchange-rate based stabilization

led to the excessive appreciation of real exchange rates

and currency crises in 1998-99. Industrial policies still

favour energy intensive industries, thereby hiding (but

not resolving) structural inefficiencies.

... THE EDITORS [OF SMALL AND MEDIUMENTERPRISES IN

TRANSITIONAL ECONOMIESl MANAGED TO MOBILIZE SEVERAL

EXCELLENT SPECIALISTS OF THE POST SOCIALIST SMALL

BUSINESS DEVELOPMENT WITH SUCCESS. IT BECAME CLEAR

FROM THE ESSAYS THAT THE PARTICIPANTS OF THIS PROJECT

HAD ACCUMULATED GREAT KNOWLEDGE OF TRANSITIONAL

ECONOMIES AND THE DEVELOPMENT OF THE SME SECTOR.

M d I y LAKL ACTA OECONOMCA

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

Africa remains in many ways one of the world's most finance, and the problems associated with conflict and

challenging regions for achieving development. UNU- reconsbuction. Here two further themes are discussed:

WIDER has unde*en an extensive range of research restarting economic growth, and improving the quality of

on Africa, including country case studies but also, and institutions.

perhaps more importantly, comparisons with other

developing regions. Previous chapters have documented

WIDER'S work on Africa in the context of reducing

poverty, increasing the level and effectiveness of external

AFRICA'S ECONOMIC DEVELOPMENT

Restarting Economic Growth

WIDER was established in 1985 at a time when issues

of economic reform and structural adjusbneotwere very

much in the minds of policymakers and donors. One of

WIDER'S fmt research projects took a rigorous look at

adjustment experiences across the developing world,

and resulted in Varieties of Stabilization Experience:

Towards Sensible Macroeconomics in the Third World

(1988), and the aptly-named TheRoc~RoadtoReform:

Adjusiment, Income Distribution, and Growth in the

Developing World (1993) both edited by Lance Taylor.

As with most ofthe studies cited here, these publications

were the result of collaborative projects involving teams

of researchers drawn from both North and South.

This research emphasized the rigidities, especially on

the supply-side, that make it difficult for African

economies to respond quickly to such policy changes

as devaluation, and the risk that the economy will suffer

a 'hard landing' if an overly-restrictive stabilization

policy is put in place. (Cuts in public spending, as part

of fiscal restraint, may have high social costs as well.)

These lessons have now been absorbed into conventional

wisdom, but it is important to realize how neglected

they were at the time. The International Monetruy Fund

and the World Bank were very confident that African

countries could turn around quickly but, as became

evident as structural adjustment dragged on through the

1980s and into the 1990% many of the early donor-

backed adjustment programmes failed to take account

of the supply-side, particularly in African agriculture

which is often the main source of commodity exports.

WIDER also started to examine Africa's trade, a

potentially strong motor of growth for the region, but

often one that has stalled-in part, because of the region's

overwhelming dependence on commodity exports, and

the macroeconomic diff~culties of dealing with high

volatility in world commodity prices. A landmark study

was that of Alfred Maizels and his team which resulted

in Commodities in Crisis: The Commodify Crisis of the

1980s and the Political Economy of International

Commodify Policies (Maizels 1992), followed by

Commodity Supply Management by Producing

Countries: A Case-Stu4 of the TtvpicalBwerage Crops

(Maizels, Bacon, and Mavrotas 1997).

This work on commodities highlighted the critical

importance of export diversification to Africa's growth

recovery; both diversification within the commodities

sector to higher value non-traditional exports and towards

manufacturing for export. However, Africa's experience

in industrial development was disappointing during much

of the post-independence period. Accordingly Non-

TraditionaIExpor? Promotion in Afnca: Experiences and

Issues (Helleiner 2001) set out lessons forAl%can export

prospects from the experiences of some of the more

successhl developing countries in East Asia and Latin

America. Helleiner also worked with WIDER on issues

of industrial development, resulting in Manufacturing

for Export in the Developing World: Problems and

Possibilities (Helleiner 1995) and Trade Policy and

Indushializafion in Turbulent Times (Helleiner 1994).

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

Such cross-regional and country comparisons constitute

a strong element of WLDER's research strategy. Africa's

problems, and the potential solutions, cannot be seen in

isolation from development experiences elsewhere, and

there are many lessons that the region can share with the

rest of the developing world. This is especially important

in such cutting-edge issues as the potential use of

information and communications technology @Cl') in

development. Thus WIDER'S 2002 conference on 'The

New Economy and Development' included studies of

Cameroon, Namibia and South Africa, among others, with

African participants interacting with researchers from

other parts of the developing world that have made

advanceduse of ICT to achieve faster growth. The spread

of ICT across sub-Saharan Africa is one of the most

promising of the recent developments in the region, and

could, if complemented by investment in education and

training, create sustained growth in the service sector.

Recent research has also looked at Africa's place in a

fast-changing global economy. The 2003 conference on

'Sharing Global Prosperity' discussed all aspects of the

global economy and how they impact on poor countries,

with papers onNigeria, Tanzania, and Zimbabwe among

others. A wide range of policymakers participated,

including bilateral donors, the IMF, as well as

representatives from the African, Caribbean and Pacific

(ACP) Group of States and the Parliament of South

Afiica. The conference identified many emerging trends

of relevance to Africa including the expansion of global

foreign direct investment, and, most recently, a reversal

of the downward trend in some commodity prices, in

part due to China's strong gmwth.

Improving the Quality of Institutions and Policies

Institution-building is of paramount concern to African

countries and has been at the centre of the reform effort

since the 1990s. Reforming Africa's Institutions:

Ownership, Incentives and Capabilities (Kayizzi-

Mugerwa 2003), examined the success and failure of

institution-building, and the thorny question ofwhether

the reforms am truly 'owned' by governments and,

indeed, what ownership means (with studies from

Ghana, Mozambique, Tanzania, and Zambia among

others). Institution-building is obviously required for

effective social service delivery, and the MDGs will not

be achieved without rapid improvement in the quality

of institutions. Innovation in delivery and a comparison

of experiences in Tanzania and Zimbabwe with those

elsewhere in the developing world are a feature of New

NON-TRADITIONAL

EXPORT

PROMOTION IN

AFRICA PROVIDES

INTERESTlNG

INSIGHTS IN THE

EXPERIENCE OF

DEVELOPING

COUNTRIES ...

[AND] GIVE

THIS IS CUTTING

EDGE RESEARCH.

THE LIST OF

Patterns of Social Sewice Provision in Low Income AUTHORS READS AS A

Couniries (Mwabu, Ugaz, and White 2001). This study WHO,S WHO? IN THE

identified numerous ways in which the poor, especially OF FISCAL

the rural poor, can improve their access to basic POLICY ANALYSIS

educationand health cam that am so essential to building DEVELOPrnG

human capital. COUNTRIES AND THE

QUALITY OF THE

Without better institutions, Africa stands little chance CONTRIBUTIONS

of implementing better policies. Policy with regard to VERY SxOND

the management ofresource abundance, both agticulb.ual [FISCAL FOR

resources and mineral resources, was addressed in DEVELOPMENq

Resource Abundance ondEconomicDevelopment (Auty MOVES WELL

2001) whichexamined the often dsappointhgec0n0mi~ BEYOND THE

performance of resource-rich countries and included case TRADITIONAL

studies of Ghana and South Africa. Unfortunately TOPICS. NOVEL

countries are prone to viewing commodity windfalls ISSUES INCLUDE THE

AFRICA'S ECONOMIC DEVELOPMENT

(higher world prices) as permanent rather than

temporary, and increase their public spending

accordingly. This leads to macroeconomic difficulties

HELPFUL when world prices fall, resulting in a loss of revenues,

TO MAKERS and the contraction of spending. Moreover, the

AND overvaluation of currencies that often accompanies

IDEAS FOR THE resource abundance can destroy other sectors

READER. (particularly agriculture) by undermining producer

incentives. A 'resource curse' is not inevitable, but it

TOBIAS KNEDLIK, does require goodeconomic policy tothe windfallwisely,

AFRIC(N DEvslOPmm and on social and economic infrastlucture of benefit to

PERSPECTIVES development in general.

YEARBOOK

WIDER has encouraged the interaction of researchers

and policymakers through its international development

OF NEW TAX conferences. Of the 145 people attending the 2001

WHEN THE conference on Debt Relief, some 40 were African

STATE IS VERY nationals, including representatives from central banks

WEAK, THE FISCAL in Uganda and Rwanda. One of the major themes to

OF emerge from this conference was the urgent need to

WAR, ASSESSING THE improve the quality of public expenditure management

OF FISCAL SO that the additional resources released by the Heavily

POLICY ON Indebted Poor Countries (HIPC) initiative find their

POVERTY, AND THE way to key priorities, particularly in the areas of pro-

EFFECT OF TAX poor infrastructure and basic health care and education.

CHOICES ON Debt Relieffor Poor Countries (Addison, Hansen, and

ECONOMIC Tarp 2004) discusses all aspects of the economics of

GROWTH. debt relief, including case studies of Mozambique and

Zambia. With the recent attention given to debt relief at

the G8 meeting in Scotland in 2005, it is imperative to

PROFESSOR understand the development effects of the additional

FREE UNlVERsm, debt relief now being delivered. These include a release

AMSTERDAM of additional resources for pro-poor public spending,

and the positive effect on private. investment of a

reduction in the uncmtainty associated with high levels

of debt (the 'debt over-bang' effect). By improving the

macroeconomic profile of the Heavily Indebted Poor

Countries, debt relief will also enable countries to attract

more private capital flows, including foreign direct

investment

The importance of effective public expenditure

management, and the macroeconomics offiscal policy in

general, are discussed in FircolPolicy for Development:

Poverty Reconrmrction, and Growth (Addison and Roe

2004), including comprehensive analyses of many A6ican

countries. The study emphasized the importance of

viewing fiscal policy in a dynamic setting, one that

focuses on the development goals of economic growth

and povmy reduction. Fiscal policy has often been seen

in a purely static setting, one that focuses only on the

fiscal deficient as atool for lowering inflation. While low

inflation is important, public expendims must rise over

time to achieve growth through greater public investment

in critical infrastructure (thereby 'crowding in' private

investment). As growth rises, so it will generate

additional revenues with a rising tax base. To mobilize

that revenue in turn requires investment and effective

revenue institutions (both in tax and customs and excise).

Thus the art of good fiscal management consists in

expanding development-orientated public spending,

focusing that spendmg on the needs of the poor, and

meshing these processes into a macroeconomic

framework that ensures stability without constraining

growth.

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

This study was also one of the first to analyse the

importanceof fiscalissues i u ~ n s t r u c t i o n from conflict,

including studies of Burundi and Rwanda. Revenue

mobilization and effective public expenditure

management are crucial to assisting recovery and to

resolving some of the grievances that lead to civil war.

A key challenge in initiatives such as the Poverty

Reduction Strategy Papers (PRSPs) is the interface

between macroeconomic policy on the one hand, and

poverty reduction (and more broadly human

development) on the other. WIDER's project on 'Building

Aeican Capacity for Policy Simulation: Towards Better

Poverty Strategies', involves in-depth work on

Botswana, Cameroou, Nigeria, and Uganda in

collaboration with institutions from each of those

countries. The project has constructedmodels to simulate

the impact of reforming taxation and transferpolicies on

income distribution and poverty. Such technical analysis

can improve political choices since the social benefits

(and costs) of reform are often paramount for

governments and civil societies. Similar objectives

motivated the comprehensive review of experiences with

tax reform in Africa carried out by Tony Addison and

J6rgen Levin in 2004 at the request of DANIDA. This

includes case studies of Cameroon, Ethiopia, Ghana,

Kenya, andMozambique, and anoverview ofthe reform

experience across low-income countries. Apresentation

of the main fmdings and policy recommendations was

made at the Economic Commission for Africa (UN-ECA)

in Addis Ababa in 2004.

The CFA Zone is a unique fmancial institution that has

rewarded its African members with an unprecedented

degree of monetary and financial stability over the last

40 years. In the past this stability has been achieved at

the cost of somemacroeconomic inflexibility, leading to

constitutional reforms in the 1990s designed to provide

a foundation for sustained growth. Some of these issues

are addressed in a special issue of the JourM[ofAj%can

Economies (2004) and an edited volume Mocmecommic

Poliq in theFranc Zone (Fielding 2005). These studies

assess the extent to which Franc Zone institutions face

tensions resulting from heterogeneity among the member

states, the degree of effectiveness with which they

implement monetary policy, and the impact that policy

has on growth and poverty in the region. While the

Franc Zone remains a havenof f m c i a l stability, it also

faces serious challenges, and this WIDER research

provides an analytical framework with which to begin

addressing such challenges.

In summary, WIDER's long-standing work on AiXca

has emphasized the interface between poverty and

human development on the one hand, and effective

development policy on the other. Africa's position in

the global economy has often constrained its

government's room for manoeuvre, and the continent's

continuing dependence on primary commodities induces

volatility in export eamings and growth. But nevertheless

there are positive developments as well, including the

rising demand for commodities resulting from the strong

growth of China and India, the rapid take up of ICT in

the region, and the steady improvement in the quality

of economic policymaking. These and other

developments will provide new themes and issues for

WIDER's research in the years ahead.

REFORM OF THE UNITED NATIONS

AND THE BRETTON WOODS INSTITUTIONS

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

The United Nations and the Bretton Woods institutions

(the World Bank and International Monetary Fund) were

created in a world recovering frnm the effects of the

Great Depression and war. The 'Keynesian message'-

111 employment, the correction of 'market failures', and

the creation of world regulatory institutionbinspired

the postwar policy agenda. Many observers argue that

these institutions now operate on outdated political and

economic foundations, and that an increasing gap has

emerged between the changing problems of the world

economy on the one hand and the ability of world

institutions to govern on the other.

The rapid growth of international trade, capital flows,

migration, foreign direct investment, tourism, and

communication flows of the last 60 years has sharply

boosted global interdependence and increased the need

and scope for interventions by global institutions.

However, atthe same timeit has reducedthe effectiveness

of these interventions. The demand for stronger

governance has been heightened by the emergence of

supra-national problems (such as those in the

environment, terrorism, and crime) which have brought

to the fore the limitations of nation states in dealing with

the new challenges.

At the same time global institutions have experienced a

gradual erosion of their capacity to 'govern'. The

International Monettuy Fund now controls only 2 per

cent ofthe world's liquidity and its lending is increasingly

limited to a few developing countries, mostly the poorer

countries which have limited access to international

capital markets. The IMF has helped low-income

countries achieve a measure ofmacroeconomic stahiity

but the fundamental challenge, that of combining

macroeconomic stability with growth and poverty

reduction, remains in countries that are often small,

landlocked, and highly vulnerable to the vagaries of the

global economy. The IMF's ability to prevent balance

of payments crises has been challenged by a series of

difficulties, notably the Asian financial crisis of 1997-

98. This crisis called into question the push for rapid

capital-account liberalization which the IMF had

favoured up to that point. The rapid growth in

international capital markets over the last twenty years,

and the ability of capital to rapidly exit when the capital-

account is open, undermines the ability of countries to

stabilize their economies without incurring large costs

in terms of lost output and employment. Similarly, the

traditional mandate of the World Bank has been

challenged by the rapid evolution of the global economy

especially over the last twenty years, with many

countries now preferring to borrow from the

international capital market with the consequence that

the World Bank's operations have become concentrated

on a narrower range of countries, many in subJaharan

Africa. The shifl since 1990 towards povetty reduction

in the World Bank's focus is highly welcome, but the

poorest countries have limited room for manoeuvre in

the global economy.

While encouraging, the creation of the World Trade

Organization should not obscure the emergence of

powerful trade blocs, and protectionism continues to

work against the interests of many of the smaller and

poorer countries for whom rich country subsidies in

[GOING GLOBAL]

PRESENTS A

CAREFUL AND

ADVANCED

ANALYSIS OF

LIBERALIZATION

OF SOCIALIST

ECONOMICS INTO

THE GLOBAL

TRADING AND

FINANCIAL

SYSTEMS. THE

ESSAYS

COLLECTED IN

THIS BOOK, AS

REFORM OF THE UNITED NATIONS AND THE BRETlON WOODS INSTITUTIONS

WELL AS

THE EXCELLENT

INTRODUCTION,

WILL BE OF GREAT

VALUE TO BOTH

THE SCHOLAR AND

THEGENERAL

AUDIENCE

INTERESTED IN

TRANSITION.

ANDREl SHLEIFER,

DEPARTMEWT OF

ECONOMICS, HAWARD

UNlVERSlTY

agriculture have hindered their development by lowering

world prices (such distortions in world trade have also

worked against the effectiveness of the lending and the

policy advice of the Bretton Woods institutions).

Needless to say, similar problems plague the United

Nations, which suffers a 'democratic deficit' that was

an integral part of the original design but one which now

seems increasingly anachronistic. The moral authority

of the UN is also undermined when its laws and

principles are invoked selectively to suit the interests,

both economic and political, of rich and powerful

countries. At the same time, there is more need than

ever for an effective UN, given the range of global

problems that go beyond the remit of even the richest

nations, in particular the challenges of global

environmental change as well as international crime and

terrorism, problems that are also bound up with those

of 'failed states'.

The system of global governance has therefore not kept

pace with the far-reaching changes of the last 60 or so

years. Accordingly at the start of this millennium,

WIDER undertook a study, published as Governing

Globalization: Issues and Institutions (2002) and

directed by Deepak Nayyar, to identify a new agenda

for global governance and development. The study

recommended the reform of existing institutions to enable

them to meet the political and economic challenges of

the hventy-first century. For the UN, the Security

Council must be enlarged and made more representative,

and UN operations-particularly in the vital areas of

peace-keeping and humanitarian assistance-need to be

greatly enhanced by full or at least partial independent

financing. The establishment of a 'global people's

assembly', modelled on the European parliament, to run

parallel to the General Assembly and to serve as the

voice of global civil society, and the creation of an

'economic security council' in the UN would also greatly

improve global governance. For the IMF and the Wodd

Bank, the study urged much greater representation of

the developing countries in their governance, including a

reform of the voting system which favours the rich

countries. For both institutions, the study recommended

a rethink of their traditional policy advice to enhance

the objectives of growth and poverty reduction, and to

be more guarded about the benefits of the market system

and an open economy especially inpoorcountries, where

considerable institutional strengthening is neededto make

markets work well. For the WTO, there needs to be a

greater focus on dwelopment as an objective and greater

assistance to developing countries, particularly the

poorest ones, in 'trade-legal aid'.

Governing Globalization also went beyond an analysis

of existing institutious to identify institutional gaps and

missing institutions. Of particular importance is the need

for a framework for global economic management that

goes far beyond the present, largely G8 level,

moperation, that also takes account of the

damage that is done to poor countries by turbulence in

the global economy. Parallel to this is the need for a new

international financial architecture that supports the

integration ofthe developing countries into the global

economy in a way that promotes rather than hinden

their development-including better

and a fairer system to deal with debt problems. The

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

study also called for an international systern of governmm

for transnational corporations, given that their activities

go farbeyondthe scope ofnational rules andpolicies,

and afairersystantoregulatethe cmss-bordermovement

of people.

Global governance is not so mnch abont 'world

government' as it is about institutions and practices

combined with rnles that facilitate cooperation among

key actors. Historical experience suggests that crises are

the catalysts of change. Last time, it was the aftermath

of a world war and a worldwide economic depression

that led to the foundation of the UN system and the

creation of the Bretton Woods institutions. The world

should not wait for another crisis of such proportions to

contemplate and introduce the mnch needed changes in

global governance.

Reintegrating the transition countries of Europe and Asia

into the global economy was an especially important

concern in the late 1980s and early 1990s as these

countries accelerated their transition from central

planning to market-based economies. In Going Global:

Transition from Plan to Market in the World Economy

(Desai 1997) project director Padma Desai concluded

that fast economic reform increased integration into

international trade and finance, and appeared to promote

growth, but could have serious adverse effects on

employment, as old industries contracted rapidly and

new export sectors took time to expand. Hence, fast

reform is not necessarily superior to less ambitions,

gradnalist reforms that impose less short-term

unemployment and which may therefore be less

susceptible to political reversal than fast reform. Each

country must therefore decide for itself how to best

manage the speed of integration into the global economy,

the political ewnomy of the adjustment process being

especially important.

The United Nations estimated that in the year 2000

abont 140 million perso-I roughly 2 per cent of

the world's population-resided in a country where

they were not born. Substantial numbers ofpeoplehave

migrated-* sought to migra&€tom regions that are

amicted by poverty and insecurity to more prosperous

and stable parts of the world. Such population flows,

involving increasingly tortuous and dangetous long-

distance journeys, have been both prompted and

facilitated by a variety of factors associated with the

process of globalization: a growing disparity in the level

of human security to be found in different parts of the

world; improved transportation, wmmunications, and

information technology systems; the expansion of

transnational social networks; and the emergence of a

commercial (and sometimes criminal) industry, devoted

to the smuggling ofpeople a m s s international borders.

In 2002 WIDER held a conference to examine migration

and asylum issues, including studies of the impact of

globalization on the flows of people across the world.

This resulted in Poverty. International Migration and

Asylum (Bojas and Crisp 2005). During the conference

debate itbecame clear that nurent migration and asylum

policies do not fully address the predicament of asylum

seekers and irregular migrants. Indeed, in many senses

those policies have contributed to the current situation.

Expensive and cumbersome asylum systems are failing

toensureprotection forthosemost inneed, whilecreating

REFORM OF THE UNITED NATIONS AND THE BRE7lON WOODS INSTITUTIONS

scope for abuse by those who are not, thereby creating

a crisis of confidence in asylum procedures. Declining

resources for development and refugee assistance in the

poorest parts of the world have created the conditions

for additional migration and displacement. Political

pressures to retain restrictive immigration policies have

encouraged states to limit recruitment to those with

high skills. Such selective migration policies have

exacerbated the 'brain drain' problem experienced by

many poor countries, thereby impeding their

development; for example the exodus of healthcare

professionals iiom AWca to the medical services of the

rich world is undermining the attainment of the

Millennium Development Goals.

[POVERZX ZNTERNATIONAL

MIGRATION AND ASYLUM] HAS

FEW PARALLELS IN THE

BREADTH AND DEPTH OF ITS

TREATMENT OF

CONTEMPORARY ISSUES IN

MIGRATION. IT WILL SATISFY

THOSE WHO THIRST FOR

ANALYTICAL RIGOUR AND

FACTUAL EVIDENCE IN

MAKING UP THEIR MINDS

ABOUT THE COMPLEX CAUSES

AND CONSEQUENCES OF

MIGRATION.

IN SUCH RAPIDLY MOVING

FIELDS [POVERTK

INTERNATIONAL MIGRATION

AND ASYLUM] IS A USEFUL AND

ACCESSIBLE RESOURCE FOR

ALL THOSE ATTEMPTING TO

ADDRESS THESE COMPLEX

ISSUES. IT WILL BE

1NVALUABLE.TO STUDENTS

AND RESEARCHERS

INTERNATIONALLY AND

THROUGHOUT THE SOCIAL

SCIENCES, AS WELL AS TO

NATIONAL, REGIONAL AND

GLOBAL POLICYMAKERS.

ANN SINGLETON, CENTRE FOR llIE

STUDY OF m m n AND SOC~AL

NSTICE, SCHOOL FORPOLICY

STUDIES, UNWBRSITY OF BRISTOL

MANOLO ABELLA DIRECTOR

INTmNAnVNAL MIGRATION

PROORAMME no

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

WIDER THINKING AHEAD

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

The twenty years since the World Institute for

Development Economics Research (UNU-WIDER)

began work in 1985 have seen major changes in the

world economy with profound implications for the

developing world and for development economics. In

June 2005, leading researchers and policymakers met

in Helsinki to mark WIDER'S jubilee anniversary, to

reflect upon current thinking in development economics

and what the next two decades might hold. The

confmce sought to highlight new and emerging issues

in development, how research can best address these

questions, and the promising methodologies that can

push the frontiers of research and practice forward.

The world as we know it-and have known it for

l o n e i s one in which there is a great deal of deprivation,

disparity, and strife. Globalization has shrunk distances

among the countries of the world, hut sometimes at the

cost of deepening unequal trade and power relations.

The ability of the poorer countries to cope with and

benefit from globalization has been impeded by

dwindling international aid flows, volatile private

capital movements, a lack of attention to the causes of

conflict and to human security, as well as the social

costs of market liberalization. The deep poverty that

is still widespread, especially in Africa, is a stark

reminder that all is not well with the world even if

p& of it have witnessed continuing improvements to

their level of prosperity.

menu, andit is this option which WIDER, in furtherance

of its stated mandate, has chosen to pursue. By drawing

on the expertise and commitment of a truly international

profile of research effort, WIDER has endeavoured to

come to grips with the reality of the world's problems,

tounderstand the natureofprocesses atwork, to descnbe

and evaluate the vicissitudes of global development, to

provide sound empirical and conceptual bases to

assessment and redress, and to hold out informed hope

for improvement and mitigation in respect of problems

which it might have been tempting to regard as

fundamentally intractable. It wouldbe legitimate to hold

that, in the process, WIDER has presided over a body

of research of which some patt at least has been of a

genuinely seminal, 'ahead of the curve', and path-

The first twenty years ofWIDER's existence give cause

for satisfaction regarding the goals it set out for itself

and the degree to which these goals have been achieved.

It is hoped that the next twenty years will see a

continuation of both the vision and the success of

WIDER.

Pessimism, resignation, indifference, or recourse to

looking the other way, are all possible responses to the

state of the global order. But engagement is also on the

WIDER THINKING AHEAD

IT SEEMS THAT WITH EACH NEW BOOK IT

ISSUES, UNU-WIDER FURTHER

ESTABLISHES ITS REPUTATION AS THE

INTELLECTUAL LEADER AMONG

INTERNATIONAL ORGANISATIONS.

JOHN WEEKS,

PROFESSOR OP

DEVELOPhC3iT ECONOMICS,

SOAS,

UNIVERSITY OF LONDON

This page intentionally left blank

ANNOTATED BIBLIOGRAPHY SELECTED UNU-WIDER PUBLICATIONS: BOOKS AND JOURNAL SPECIAL ISSUES

Addison, T. (ed.) (2003) From Confict to Recovery in

Africa. UNU-WIDER Studies in

Development Economics, Oxford University

Press.

Establishing peace and reconstructing Africa's

war damaged economies are urgent challenges.

For Africa to recover, communities must

reconstruct, private sectors must revitalize,

and states must transfom themselves. Thus,

unless communities rebuild and strengthen

their livelihoods, neither reconstruction nor

growth can be poverty reducing.

Addison, T., H. Hansen and F. Tap (eds) (2004)

Debt Relieffor Poor Countries.

Studies in Development Economics and

Policy, Palgrave Macmillan.

After a massive international campaign calling

attention to the development impact of foreign

debt, the Heavily Indebted Poor Countries

(HIPC) initiative is now underway. But will

the HIPC Initiative meet its high expectations?

Will debt relief substantially raise growth?

How dowe make sure that debt relief benefits

poor people? And how can we ensure that

poor countries do not become highly indebted

again? These are some of the key policy

issues covered in this rigorous and independent

analysis of debt, development, and poverty,

Addism, T. and S. M. Murshed (eds) (2003) 'WIDER

Special Issue on: Explaining Violent Conflict:

Going Beyond Greed versus Grievance', Journal

of Infernational Development,

Volume 15, Issue 4.

~ddison, T. and A. Roe (eds) (2004) Fiscal Policy for

Development: Poverfy, Reconrhrction and

Growth. Studies in Development Economics and

Policy, Palgrave Macmillan.

Fiscal policy is critical to the development of

poor countries. Public spending on pro-poor

services and public goods must be increased, tax

revenues must be mobilized, and manoeconomic

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

stabilization must be achieved without inhibiting

growth, poverty reduction, and post-conflict

reconstruction. This book provides both a

comprehensive and balanced guide to the current

policy debate and new results on the

development impact of fiscal policies.

benefits of Western technologies can be enjoyed

only at the price of giving up indigenous ways

of knowing and valuing the world, an idea

fostered as much by present-day elites, who

have internalized colonial elites who ruled before

them.

Aiguo, Lu and M. F. Montes (eds) (2002) Poverty, Apffel-Marglin, F. and S. A. Marglin (eds) (1996)

Income Distribution and Well-Being in Asia Decoloniring Knowledge: From Development

during the Transition. Studies in Development to Dialogue.

Economics and Policy, Palgrave Macmillan. UNU-WIDER Studies in Development

The 'Asian road to the market' has generally Economics, Oxford University Press.

been seen as amodel of success and the object of

widespread admiration. This volume evaluates

the actual experience and debunks some of the

most widespread impressions in this area, by

identifying the linkages between alternative

transition models, public policies and household

responses on the one side, and key welfare

changes on the other.

Apffel-Marglm, F. and S. A. Mar& (eds) (1990)

Dominating Knowledge: Development, Culture,

andResistance. UNLT-WIDER Studies in

Development Economics, Oxford University

Press.

This book addresses the role of howledge in

economic development and in resistance to

development. It questions the conventionalview

that development is the application of superior

knowledge to the problems of poor countries,

and that resistance to development comes out of

ignorance and superstition. It argues instead that

the basis of resistance is the fear that the material

Development failures, environmental

degradation and social fragmentation can no

longer be regarded as side effects of

'externalities'. They are the toxic consequences

of pretensions that the modem Western view of

knowledge is auniversal neutral view, applicable

to all people at all times. The very word

'development' and its cognates

'underdevelopment' and 'developing'

confidently mark the 'first'world's as the future

of the 'third'. This book argues that the linear

evolutionary paradigm of development that

comes out of modem Westem view of

knowledge is a contemporary form of

ANNOTATED BIBUOGRAPHY - SELECTED REFERENCES

colonialism

Auty, R. M. (ed.) (2001)

Resource Abundance andEconomic

Development.

UNU-WIDER Studies in Development

Economics, Oxford UniversityPress.

explores policies for reviving collapsed

economies with reference to Costa Rica, South

Afirica, Russia, and Central Asia. It

demonstrates the impoltance of initial

conditions to successful economic reform.

Blanchard, O., M. Boycko, M. Dabrowski,

R Dornbusch, R Layard and A. Sbleifer

(1992)

Posl-Communist Reform: Pain

and Progress.

UNU-WIDER World Economy Group

1992 Report, MIT Press and United

Nations University Press.

This volume explains the disappointing

performance of resource-abundant

countries by examining both natural and social

capital. The resulting synthesis identifies two Stabilization in the major Central European

contrasting development trajectories: the wuntries was done very much by the book.

competitiveindustrialization of the resource- Russia, in conbast, is following a path of

poor countries and the staple trap of many restructuring without stabilization. The

resource-abundant countries. Malaysia, a rare authorsdiscuss how far this alternative

example of succesful resource-abundant strategy is likely to get.

development, is contrasted with Ghana, Bolivia,

Saudi Arabia, Mexico, an Argentina, which all

experienced a growth wllapse. The book also

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

Blanchard, O., R. Dombusch, P. Krugman, R. Layard

and L. Summers (1991) Reform in Eastern

Europe. UNU-WIDER World Economy Group

1990 Report, MlT Press.

How can the new governments of Eastern

Eumpe succeed in moving from centrally

planned to freemarket economies? This incisive

report identifies and describes the major policy

choices to be made and dismsses what will work

and what will not.

Borjas, G J. and J. Crisp (eds) (2005) Poverty,

International Migration and Asylum. Studies in

Development Economics and Policy,

Palgrave Macmillan.

Cornia, G A. (ed.) (2004) Inequalily. Growth and

Poverty in an Era of Liberalization and

Globalization. UNU-WIDER Studies in

Development Economics, Oxford University

Press.

A unique systematic analysis of the changes in

within-country income inequality over the last

20 years; based on an extensive review of the

literature and econometric analysis of trends in

inequality indexes this volume shows that

inequality worsened in 70 per cent of the 73

developed, developing, and transitional countries

analyzed. Providing an evaluation of the possible

causes of this rise in income inequality and

examining the likely impacts of rising inequality

on poverty and economic growth this volume is

the first to offer an empirical assessment of the

relation between policies towards liberalization

and globalization and income inequality.

Comia, G A. and N. H. I. Lipumba (eds) (1999) 'The

Impact of the Liberalization of the E x c h g e Rate

and Financial Markets in Sub-Saharan Africa',

Journal ofIntemationalDevelopment, Volume

11.Number3.

This book ex;imines the economic consequences Cornia, G. A. and R. Paniccih (eds) (2000) The Mortality

of immigration and asylum migration: it focuses Crisis in Transitional Economies. UNU-WIDER

on the economic consequences of legal and illegal Studies in Development Economics, Oxford

immigration as well as placing the study of University Press.

immigration in a global context. From the mid-1960s, health conditions in the

countries of Eastem Europe and the former

Soviet Union began to stagnate or deteriorate;

the 'excess mortality' recorded over the period

ANNOTATED BIBLIOGRAPHY - SELECTED REFERENCES

1989-96 alone has caused some three million

additional deaths. This study, drawing on the

contribution of economists, demographers,

epidemiologists, and sociologists, attempts to

provide an integrated explanation of this

phenomenon. Placing the accent on the impact

of rising psychosocial stress, and incorporating

other useful perspectives in a consistent whole,

the volume can be considered the first attempt

to deal with the transition mortality crisis in a

systematic way.

Comia, G. A. and V. Popov (eds) (1998) 'Neglected

Key Issues in the Transition Debate', MOCT-

MOSTEconomic Policy in Transitional

Economies, Volume 8, Number 1.

Comia, G. A. and V. Popov (eds) (2001) Transition

andlnstitutions: The Experience of Gradual

and Late Reformers. W - W I D E R Studies

in Development Economics, Oxford

University Press.

This contribution to the debate about the

transition process focuses on structural

institutions in Russia and the East. In

transitional countries with unfavourable

initial conditions and weak institutions,

economic and social performance can only in

part be explained by the approaches followed

in the field of macroeconomic adjustment,

privatization, and liberalization. By reviewing

the impact of initial conditions on industrial

and institutional conditions in the gradual and

late reforming countries, this book seeks to

rekindle the debate surrounding these

largely neglected issues.

Dasgupta, P. and K-G W e r (eds) (1997) The

Environment and Emerging Development

Issues: Volumes 1-2.

W - W I D E R Studies in Development

Economics, Oxford University Press.

In these two volumes, expert contributors

provide a set of authoritative studies of emerging

development issues, from foundational matters

to case studies. They address both analytic and

empirical issues on the role of environmental

resources in the development process,

presenting explanations of existing situations

and policies for the future. Their chapters go

beyondthe confmes of environmental economics

proper to cover broader theoretical issues

fundamental to our understanding of

environmental policy.

Dasgupta, P., K-G MHler and A. Vercelli (eds) (1997)

The Economics of Pansnational Commons.

W - W I D E R Studies in Development

Economics, Oxford University Press.

Transnational commons, cross-border areas

without well-defined property rights, have long

been ignored in 'official' development

economics. This volume redresses the balance

by adopting an environmental approach which

stresses the importance of shared natural

resources and the links between acute poverty

and environmental degradation.

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WDER RESEARCH

de Janw, A., G GordiUo, LP. Platteau and E. Sadoulet

(eds) (2001)Access to h d , RuralPoverty, and

Public Action. W - W I D E R Studies in

Development Economics, Oxford University

Press.

The issue of access to land has recently returned

to the international agenda, motivated by

pervasive inefficiencies in land use, continued

extensive rural povedy to which changes in

access to land can offer a solution, and

environmental pressures created by misuse

Wed to forms of access. This book addresses

issues such as reliance on traditional forms of

access to land, greater use of land markets

properly regulated and assisted, and greater

complementarity between land interventions

and policy and institutional reforms, combined

with detailed country case studies that span

Aiiica,Asia, Latin America, and Eastem Europe.

Desai, P. (ed.) (1997) Going Global: Tramitionfrom

Plan to Mnrkef in the WorldEconomy.

MIT Press.

m her intmductory essay, Desai synthesizes

the findings, which cover fourteen countries of

East and Central Europe, the former Soviet

Union, and Asia, and cuts through analytical

confusion over such issues as shock therapy

versus gradualism. Rather than advocate 'the

faster the better', she discusses the possible

difficulty of sustaining rapid transition reforms

and globalization in the face of rising

unemployment.

Drhze, .l. and A. Seu (1990) Hunger andpublic Action.

W - W I D E R Studies in Development

Economics, Oxford University Press.

Tlis is an important and innovative book which

was well-received and attracted much media

attention when it appeared in 1990. It advocates

a new approach to the relief of famine and

hardship in developing countries by addressing

the political issues that prevent fair distribution

of resources, nither than by simply seeking to

provide more food and services.

D+=, J.,A. Sen andA. Hussain (eds) (1995) ThePolifical

Economy of Hunger: Selected Essays. UNU-

WIDER Studies in Development Economics,

Oxford University Press.

An abridged selection of papers from three

previously published bardhack volumes. Hailed

in its initial publication as a work with urgent

implications for countless lives, The Political

Economy of Hunger is the classic analysis of an

exhaordinary paradox: in a world of food

surpluses and satiety, hunger kills millions more

ANNOTATED BIBLIOGRAPHY - SELECTED REFERENCES

people each year than wars or political Epstein, G A. and H. M. Gintis (4s) (1995)

repression. Ranging from Africa to South Asia ~croeconomic Policy afler the Conservative

m China and written by an international m y of Erd: Shrdies in Znveshnent, SavingandFinance.

authorities, these essays give the hest available Cambridge University Press.

analysis of the causes of worldwide hunger and A conservative approach to economic growth

deprivation, and the best hope for effective aid has dominated policy circles for close to two

policies in the future. decades. This approach holds that the key to

restoring economic growth lies in reducing the

D*=, 3. and A. Sen (1997) Indian Development: size and role of government in the market

SelecfedRegional Perspectives. economy through deregulation of the financial

UNU-WIDER Studies in Development sector, privatization, and lower taxes. The

Economics, Oxford University Press. contributors to this bookargue that the principles

of 'trickle-down' economics are of dubious

validity, and have led to economic stagnation,

bighunemployment, and increasing inequality.

They develop a new perspective on

macroeconomic policy, one affirming that

egalitarian and democratic economic structures

are not only compatible with economic revival,

but in fact offer the best hope for sustainable

growth of living standards.

India is a country of extreme economic and social

diversity, and the perfo~mances of Indian states

in eliminating basic deprivationvary widely. This

volume is an attempt to learn from this diversity,

and to supplement the lessons from successes

of other developing countries on which Indian

public policy is increasingly based. The

emphasis is on the importance of positive public

initiatives in promoting social opportunities and

laying the basis for participatory growth.

Fhch-Davis, R. and S. Griffith-Jones (eds) (2003)

From Capital Surges to Drought: Seeking.

Stabiliry for Emerging Economies. Studies in

Development Economics and Policy, Palgrave

Macmillan.

This book analyses the new trends in capital

flows to emerging markets since the Asian

crisis, their determinants and policy

implications. Senior bankers, regulators, and

well-known academics explain why such

flows have declined sodramatically in recent

years, emphasizing both structural and

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

cyclical factors, and suggests what coping

mechanisms developing countries could adopt

to deal with crisis situations; what measures

should be taken at the national and

international levels to make recipient countries

less vulnerable to international financial

instability; how such instability can be

reduced; and what can be done on the source

countries to encourage larger more stable

capital flows to developing countries.

Fielding, D. (ed.) (2004) 'WIDER Special Issue: The

CFAFranc Zone 10 Years After Devaluation',

Journal ofAfrican Economies,

Volume 13, Number 4.

analyses the recent economic experiences of the

Franc Zone's member states and of its economic

institutions. It pays particular attention to the

way in which this disparate group of countries

exploit the advantages and manage the costs of

adhering to a single currency. It also analyses

the impact Franc Zone institutions on poverty.

Griffith-Jones, S., M. F. Montes and A. Nasution (eds)

(2000) Shon-Term Capital Flows andEconomic

Crises. UNU-WIDER Studies in Development

Economics, Oxford University Press.

This volume discusses the governance problems

and weaknesses in the functioning of the

international financial markets as well as the

systemic risk which unregulated flows can

induce. This risk is exacerbated by reckless

f m c i a l liberalization, inadequate banking

supervision, and macroeconomic imbalances in

emerging markets. The volume makes policy

recommendations on the development of

financial markets in developing countries,

monitoring and regulating mutual funds in source

countries, and the improvement of international

financial markets.

Guha-Khasnohis, B. (ed.) (2004) 'WIDER Special Issue:

Fielding, D. (ed.) (2005) MacroeconomicPolicy in fhe Developing Countries in the WTO Regime:

Franc Zone. Studies in Development Economics Selected Issues', Journal of Economic

and Policy, Palgrave Macmillan. Integralion, Volume 19, Number2.

The CFA Franc Zone in West and Central Africa

represents the largest monetary union in the Guha-Khasnobis, B. (ed.) (2004) The W O , Developing

southern hemisphere, predating the European Counm'es and the Doha Development Agenda:

Monetary Union by decades. This hook Prospects and Challenges for Trade-led Growth.

ANNOTATED BIBLIOGRAPHY - SELECTED REFERENCES

Studies in Development Economics and Policy,

Palgrave Macmillan.

The 'development credibility' of the current

trade regime in general, and the WTO in

particular, is at stake. The Doha Round aims to

reverse the brewing scepticism by providing a

reliable engine of trade-led growth and

development. The essays in this volume identify

the key challenges in this regard, make an

assessment of the current situation in agricultllle

and manufacturing market access, and evaluate

alternative policy options that will make the goal

attainable.

Helleiner, G. K. (ed.) (1994) TradePoliq and

Industrialization in Turbulent Times. Routledge.

The relationship between trade policy and

industrialization has provoked much controversy.

Can trade policy promote economic growth in

developing countries? Those actively working

in the area are becoming increasingly sceptical

about the conventional advice given by

international policy advison and organizations.

This volume builds upon earlier theoretical and

empirical research on trade policy and

industrialization but is the fust cross-the-board

attempt to review developing country

experiences in this realm for 20 years.

Helleiner, G K. (ed.) (1995) Manufachrring forExpori

in the Developing World: Problems and

Possibilities. Routledge.

There has been much made of the success of

developing countries, particularly in East Asia,

that achieved rapid economic growth by

manufacturing goods for export. This volume

looks at the experience of a number of countries

which have tried to effect a similar transition,

including case studies of five countries (Chile,

Colombia, Mexico, Tanzania and Turkey). The

book uncovers serious potential difficulties in

maintainingthepace of manufacturing for export

in developing cowries, and shows that there is

no simple relationship between import

liberalization and manufachuing for export.

Helleiner, G K (ed.) (2001) Non-Traditional Export

Promotion in Africa: Ezqerience and Issues.

Studies in Development Economics and Policy,

Palgrave Macmillan.

These original essays by developing country

authors derive lessons for African export

prospects h m the experiences of some of the

more successful developing countries in East Asia

and Latin America, and to present up-to-date

data and analysis on non-traditional exporting

experience, problems, and prospects in a sample

of seven sub-Saharan African countries.

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

Hettne, B., A. Inotai and 0. Sunkel (eds) (1999-2001)

The 'New Regionalism'series.

International Political Economy Series,

Macmillan and St Martin's Press.

Korea and Taiwan, community forestry groups

in South Asia, organizations of sex-workers in

Calcutta, and health NGOs in Uganda. The

recent shift towards a stronger role for market

incentives has exerted powerful pressures on

groups to use more material incentives,

undermining the cooperation essential to sustain

efficiency and equity. The universal

presumption in favour of monetary incentives

needs to be abandoned. Non-market behaviour

needs to be valued and protected as well.

A five volume series comprising Globalism and

the New Regionalism, NafionalPerspectives on

the New Regionalism in the North, National

Perspecfiver on the New Regionalism in fhe

South, %New Regionalism and theFufure of

Securiry andDevelopmenf, and Comparing

Regionalism: Implications for Global

Development.

Heyer, l., F. Stewart and R. Thorp (eds) (2002)

Group Behaviour and Development: Is the

Market Deshoying Cooperation? UNU-WIDER

Studies in Development Economics; Queen

Elizabeth House Series in Development Studies.

Oxford University Press.

Focusing on group behaviour in developing

countries, this includes eleven case studies by

different authors, including producers'

associations in Brazil, farmers' organizations in

Hjerppe, R. with P. E. Bergldl (eds) (1998)

Urbanization: Its Global Trends, Economics and

Governance. Finnish Government Institute for

Economic Research (VAm)).

Small-scale neighbourhoods-countryside and

small towns--are often seen as ideal living

environments. Yet large cities all over the world

are growing rapidly. A contradiction seems to

exist between what people want, and what is

evolving. The economics of urbanization-as

described in this book-provides means to

explain the apparent paradox between the

desires and actions of people moving into cities.

This book discusses the problem of governance

of urbanization: the decisions different players

face, and the role of the markets and government

policies.

ANNOTATED BIBLIOGRAPHY - SELECTED REFERENCES

Kaldor, M. et al. (eds) (1997-2000) Restruchrring the Kanbur, R. and A. l. Venables (eds) (2005) Spatial

Global Military Sector: 3 volumes. Inequality and Development. UNU-WIDER

Volume 1: New Wars (with B. Vashee). Volume 2: Studies in Development Economics, Oxford

The End of Military Fordism (with U. Albrecbt University Press.

and G Schm6der). Volume 3: Globallnsenrrity.

Continuum International Publishing Group.

Spatial inequality is a dimension of overall

inequality, but it has added significance when

Since the mid-1980s there have been substantial spatial and regional divisions align with political

cuts in military spending throughout the world and'ethnic tensions to undermine social and

except for Pacific Asia. The reasons are both political stability. Spatial inequality is on the

political-the end of the Cold War, increase globally. This volume presents an

democratization in Aftica and Latin America- analysis of increasing spatial inequality, and

and economic-structural adjustment policy recommendations for addressing the

problem, based on data and experiences i?om 25 programmes, debt and cuts in public spending.

These studies investigate the changes taking countries covering all the regions of the world.

place worldwide in armed forces, arms industries

and all other military-related activities. Kanbur, R, A. J. Venables, and G. Wan (2005) Spatial

Disprm'ties in Human Development: Perspectives

Kanbur, R. and A. J. Venables (eds) (2005) from Asia. United Nations University Ptess. , . . .

'Special issue on Spatial Inequality and This book focuses on issues of poverty and

Development', Journal of Economic Geography, inequality that m directly related to the

Volume 5, Number 1. Millennium Development Goals. It addresses a

wide range of issues including conflict-inequality,

inter-linkages, poverty mapping, and the causes

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

and consequences of inequality. It applies the

latest research techniques such as regression-

based decomposition, poverty decomposition

and computable general equilibrium models. The

authors examine spatial disparities in countries

and regions that are attracting considerable

professional and political attention, such as

China, Russia and Central Asian countries.

Kanbur, R., A. J. Venables, and G Wan (2005) 'Special

Issue: Spatial Inequality and Development in

Asia', Review of Development Economics,

Volume 9, Number 1.

Kayizzi-Mugawa, S. (ed.) (2003)

ReformingAfricak Znsfinrtions.

United Nations University Press.

The book looks at the extent to which reforms

undertaken in sub-Saharan Afiicainrecentyears

have enhanced institutional capacities across the

breadth of govemment. To what extent have the

reforms been internalized and defended by the

governments? The book also looks specifically

at the impact of public sector reforms on the

economies and poses the question whether

'ownership' can be attained when countries

continue to be heavily dependent on external

support.

Khoury, N. E andV M. Moghadam (eds) (1995) Gender

and Development in the Arab World: Women k

EconomicParticipation: Panerns andpolicies.

Zed Books and UnitedNations University hess.

This book explores Arab women's share in

employment and their contribution to national

economic development. It documents the

pattems and trends of female employment and

highlights the determinants of labour force

participation in a number of countries. The

authors highlight and analyze avariety of factors

which limit the scope ofwomen's employment-

including educational opportunities and

attainments, prevalent social norms and

discriminatory practices. F i y they explore

the policy implications for improving Arab

women's lot, especially in the world of work.

The book was prepared with the assistance of

UNU-WIDER and the Labour and Population

Team for the Middle East and Mediterranean

Region of the ILO.

ANNOTATED BIBLIOGRAPHY - SELECTED REFERENCES

Kolodko. G W. (2000)

From Shock to Therapy: The PoIiticaIEconomy

ofPostsocialist Transformation.

UNU-WIDER Studies in Development

Economics, Oxford University Press.

Most of the transition debate has placed greater

attention on some aspects of this great

transformation, e.g. on rapid macroeconomic

stabiliation, liberalization, and privatization.

It has emphasized less the role of initial

institutional conditions, the political economy

of transition, and the role of external advice in

this process. This highly original study on the

economics of post-socialism, attempts to fill

this gap. Kolodko places his analysis of the

transition in a broader social and political-

economic context, and strongly emphasizes the

need for a gradual build-up of institutions.

Kozul-Wright, R and R Rowthorn (4s) (1998)

Transnational Corporations and the Global

Economy.

Macmillan and St Martin's Press.

This volume challenges the idea that a world

economy organized thmugh unregulated

markets and subordinate to the global

production strategies of transnational

corporations (TNCs) will experience the kind

of rapid and broad-based economic

development that has so far eluded

much of the world's population. The papers

aim to link the basic fact of global

interdependence and the growing importance of

TNCs, with the ongoing search for effective

development strategies and the need for state

institutions to implement these strategies.

Maizels, A. (1992) Commodities in Crisis: The

Commodiw Crisis of the 1980s andfhePoIitica1

Economy oflnternational Commodi~Policies.

UNU-WIDER Studies in Development

Economics, Oxford University Press.

Maizels, A., R. Bacon and G Mavrotas (1997)

CommodiQ Supply Management by Producing

Countries: A Case-Shrdy of the Tmpical

Beverage Crops. UNU-WIDER Studies in

Development Economics, Oxford University

Press.

The collapse in commodity prices since 1980

has been a major cause of the economic crisis in

a large number of developing countries. This

book investigates whether the commodity-

pmducing countries, by joint action, could have

prevented the price collapse by appropriate

supply management. The results indicate that

supply management by producing countries

would, indeed, have been a viable alternative to

the 'ke market' approach favoured by the

developed countries.

Marglq S. A. and 1. B. Schor (eds) (1990) The Golden

Age of Capitalism: Reinterpreting the Postwar

Experience. UNU-WIDER Studies in

Development Economics, Oxford University

Press.

For some twenty years after the Second World

War, Keynesian economic policies in countries

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

of the capitalist West were successful in

generating rapid growth with high employment.

This 'golden age of capitalism' did not survive

the economic traumas of the 1970s; nor has the

more recent emphasis on monetarist policies and

supply-side performance succeeded in

regenerating comparable growth rates. Blending

historical analysis with economic theory, this

book seeks to understand the making and

uKnaldng ofthis 'golden age', questionsthe basis

of much present policymaking, and suggests

alternative directions for policy.

McGillivray, M. and A. S h m c k s (eds) (2005)

'Inequality and Multidimensional Well-being',

Review oflncome and Wealth,

Volume 51, Number 2.

McIntyre, R J. and B. Dallago (eds) (2003) Small and

Medium Enterprises in Transitional Economies.

Studies in Development Economics and Policy,

Palgrave Macmillan.

Experience with development processes points

to the centrality of small-enterprise systems for

both micro- and macro-level success, economic

and social sustainability of transformation

processes, and a wide range of possible

organjzational and ownership forms. The book

deals with three main issues. First, it includes a

comparative analysis of Western and Chinese

experiences as a benchmark for transformation

countries. Second, other studies concentrate on

countries that are particularly interesting for the

significance of SME development. Lastly, the

book analyses crucial topics such as financing,

the shadow economy, entrepreneurship, and

privatization.

Mikhalev, V. (ed.) (2003) Inequality andSocialStructure

During the Tmition. Studies in Development

Economics and Policy, Palgrave Macmillan.

This collection studies and compares emerging

social structures in transitional societies and

discusses the life of the large majority of workers

(farmers and state-sector employees) as well as

socially deprived and marginalized people. The

contributors look into causes of high inequality

and poverty in Russia and other CIS countries,

as well as more equal income distribution and

higher levels of social welfare in Central Europe.

ANNOTATED BIBUOGRAPHY - SELECTED REFERENCES

Moghadam, V. M. (ed.) (1996) Mwabu, G, C. Ugaz and G White (eds) (2001) New

Pah io~hy andEconomic Developmenf: Women h Patterns of Social Service Provision in Low

Positions at rhe Endof the Twentieth Century. Income Countries. UNU-WIDER Studies in

UNU-WIDER Studies in Development Development Economics, Oxford University

Ecouomics, Oxford UniversityPress. Press.

This study explores new ways of providing and

financing social services in developing countries,

focusing on the types of services known as

quasi-public goods (health care, education,

sanitation, child care). Consumption of these

services improves welfare and increases human

capital, and more fundamentally, enhances the

quality of human life, a role that gives them the

status of merit goods in virtually all societies.

At the end of the twentieth century, after four

world conferences on women, debates on the

impact of economic development on the lives

and status of women continue unresolved. The

chapters in this hook explore two parallel

phenomena: the changing position of women

and gender relations and the relevance of the

concept of patriarchy, and the impact of

development-nd especially industrialization

and wage w o r k - m women and gender.

Murshed, S. M. (ed.) (2002) 'On Civil War in

Developing Countries', Journal of Peace

Research, Volume 39, Number 4.

Nafiiger, E. W., E Stewart and R. VXyrynen (eds)

(2000) Wac Hunger, and Displacement:

Volumes 1: The Origim ofHumanifarian

Emergencies: War and Displacement in

Developing Countries, Volume 2: Weak Stafes

and Vulwable Economies: Humanitarian

Emergencies in Developing Counhies. UNU-

WIDER Studies in Development Economics,

Oxford University Press.

This two-volume work focuses on a

comprehensive analysis of the long-term

economic, social, and political roots of

humanitarian emergencies and on early measures

to help prevent such disasters. The fmt volume

provides a general overview of the nature and

causes of the emergencies. The second volume

presents detailed case studies of thirteen

conflicts, including, among others, Rwanda,

Burundi, and Afghanistan. The volumes

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

emphasize the importance of protracted

economic stagnation and decline, high and rising

inequality, especially horizontal inequalities, and

state failure and predatory rule in causing

emergencies.

Nafziger, E. W. and R Vayrynen (eds) (2002) The

Prevention of Humanitarian Emergencies.

Studies in Development Economics and Policy,

Palgrave Macmillan.

Since the end of the Cold War, civil wars and

state violence have escalated, resulting in

thousands of deaths. This book provides a

resource for donors, international agencies, and

developing countries to prevent conflict. The

emphasis is on long-term development policies

rather than mediation or reconstruction after the

conflict ensues. Policies include

democratization, reforming institutions,

strengthening civil society, improving the state's

administrative capability, agrarian reform,

accelerating economic growth through

stabilization and adjustment, reducing

inequalities, and redesigning aid to be more stable

and oriented to local agricultural technology.

Nayyar, D. (ed.) (2002) Governing Globalimtion: Issues

and Institutions. UNU-WIDER Studies in

Development Economic, Oxford University

press.

This book is the first to examine, in depth, the

governance needs of the world economy and

polity. It evaluates the experience of institutions,

with a focus on the UN, the IMF, the World

Bank and the WTO, to sketch contours of reform

and change necessary in the existing system. It

analyses issues of emerging significance, such as

global macroeconomic management, transnational

co~~orations, international capital movements

and cmss-border movements of people, to

suggest that there are some missing institutions

which are needed.

Nussbaum, M. and J. Glover (eds) (1995) Women,

Culture andDevelopment: A Study ofHuman

Capabilities. UNU-WIDER Studies in

Development Economics, Oxford University

Press.

Women, a majority of the world!s population,

receive only a small proportion of its

opportunities and benefits. This examination of

women's quality of life thus addresses questions

which have a particular urgency. It aims to

describe the basic situation of all women and so

develops a universal account that can answer

the charges of 'Western imperialism' frequently

ANNOTATED BIBLIOGRAPHY - SELECTED REFERENCES

made against such accounts. Like its predecessor, philosophical questions and philosophers of the

The Qualify oflife, this volume encourages the importance of linking theoretical enquiries to an

reader to think critically about the central understanding of complex practical problems.

fundamental concepts used in development

economics and suggests major criticisms of Odedokun, M. (ed.) (2004) ' W - W I D E R Special Issue

current economic approaches h m that on Development Financing', WorldEconomy,

fundamental viewpoint. Volume 27, Number 2.

Nussbaum, M. C. and A. Sen (eds) (1993)

The Qualify of Life.

W - W I D E R Studies in Development

Economics, Oxford University Press.

Odedokun, M. (ed.) (2004) ExtemalFinance forprivate

Sector Development: Appraisals and Issues.

Studies in Development Economics and Policy,

Palgrave Macmillan.

The book examines the practices of multilateral

and bilateral donors and those ofNGOs in private

sector development financing, giving special

attention to microfwce and micrnenterprises.

It also explains the flow of foreign direct

investment and why poor countries have often

been bypassed, just as a framework is suggested

and applied for identifying the fundamentals

that drive private capital flows fiom developed

to developing countries.

Osmani, S. R. (1993) Nufrition andpoverfy. W-

WIDER Studies in Development Economics, This book addresses issues of defining and Oxford University Pms. measuring the quality of life. Leading This volume addresses issues arising from the philosophers and economists examine recent definition and measurement of poverty in terms developments in the philosophical definition of of nutritional status. Ahigh degree of nutritional well-being and lid them to practical issues such deprivation is considered to be an indicator of as the delivery of health care and the assessment poverty. Hence the definition of an appropriate of women's quality of life. The volume reflects nutritional yardstick and its measurement are the growing need for interdisciplinary work as of crucial sigtufcance for determining the level

economists become more aware of fundamental and magnitude of poverty.

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

Pagano, U. and R Rowthorn (eds) (1996) Democracy

andEficiency in theEconomicEnte~rise.

Routledge Studies in Business Organization and

Networks, Routledge.

The collapse of central planning was hailed as

evidence of the economic and moral superiority

of capitalism over any possible alternative. The

essays in this book challenge that claim. Their

authors accept that markets and competition

have a major role to play in the modern economy

but they reject the view that democracy equals

private ownership plus elections. The capitalist

enterprise is frequently a bastion of autocracy

over which the bulk of the workforce has little

control. The authors argue that this is neither

morally justified nor economically etficient. The

orthodox viewpoint amongst economists is that

any shift to more democratic forms of enterprise

contml would be unworkable. The essays in

this book provide a thorough theoretical and

empirical critique of this orthodoxy.

Pobjola, M. (ed.) (2001) Information Technology,

Productivity andEconomic Growth:

International Evidence and Implications for

Economic Growth. UNU-WIDER Studies in

Development Economics, Oxford University

Press.

The popular view is that information

technology (IT) will change the world by

between IT investment and overall productivity,

By presenting new micro- and macroeconomic

evidence, this volume shows that in recent years

IT investment has exerted a stmng influence on

productivity and economic growth in many

industrial and newly industrialized countries.

It also identifies national IT strategies to promote

participation in the information economy.

Pohjola, M. (ed) (2002) 'Special Issue on The New

Economy ', Information Economics and Policy.

Volume 14, Number2.

Rowbotham, S. and S. Mitter (eds) (1994) Dignity and

Daily Bread: New Forms of Economic

Organising among P w r Women in the Third

World and theFimt. Routledge.

The hook compares the lives of women in the

first and third worlds and examines how women

have resisted and reorganized existing forms of

production to create alternative, more hnmane

circumstances of work and daily life. Covering a

wide radge of issues and areas, from street

vendors of India and garment workers of Mexico

to homeworkers of Britain, the contributors

begin to break down some of the ideological

barriers that colonialism and racism build among

women.

boosting productivity and economic growth. But

while IT has many visible effects on the modern

economy, studies have found little correlation

ANNOTATED BIBLIOGRAPHY - SELECTED REFERENCES

Shomcks, A. and R. van der Hoeven (eds) (2004)

Gmwth,Inequali!y, andPoverty: Policies for

Pro-poor Economic Development.

UNU-WIDER Studies in Development

Economics, Oxford University Press.

The relationship between growth, inequality

and poverty lies at the heart of developm&t

economics. This volume draws together many

of the most important recent contributions to

the controversies surrounding this topic.

Simai, M. (ed.) (1995) The Evolving New Global

Environment for the Development

Process. United Nations University Press.

The subject of this book is the impact of

change on different dimensions of the

development process--economic growth,

commodity production and trade, resource

management and human capital formation,

labour markets and female employment,

foreign investment, development assistance,

and development studies. The book offers an

informative and compelling account of changes

in development and the main political and

economic trends shaping the international

environment.

Sun, L. (ed.) (2002) 'Symposium Papers', Journal of

Comparative Economics, Volume 30,

Issue 4.

Sun, L. (ed.) (2003) Ownership and Governance of

Entqrises: Recent Innovative Developments.

Studies in Development Economics and Policy,

Palgrave Macmillan.

Conventional wisdom recommends the

superiority of private ownership of

enterprises. The reality coni?onts this wisdom

with a rich diversity in ownership and

governance structures. This book examines five

types of unorthodox ownership and

governance forms emerging in the industrial

sector across major economies and also

explores relevant policy implications for

developing and transition economies.

Svedberg, P. (2000) Poverty and Undernutrition: Theory.

Measurement, andpolicy. W - W I D E R

Studies in Development Economics, Oxford

University Press.

Almost one billion people snff.er ftom

undernutrition in developing countries. This

book provides a detailed analytical study of

undernutrition in sub-Saharan Africa, the worst

affected area, and provides crucial advice for

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

all those concerned in development worldwide.

The book concentrates on the five challenges

that undernutrition creates: what

undernutrition is, who the undernourished are,

where the undernourished are, when people are

undernourished, and why people are

undernourished.

Taylor, L. (ed.) (1993)

The Rocky Rood to Reform:

Adjustment, Income Distribution, and Growth

in fhe Developing World.

MIT Press and United Nations University

Press.

The case studies of Colombia, Chile, Thailand,

Malaysia, Sri Lanka, Tanzania, Uganda, the

Philippines, Mexico, Nigeria, Zimbabwe,

Argentina, Brazil, Nicaragua, Zambia, and

Senegal, by an international roster of

development economists, provide valuable

insights into the difficulty of establishing

answers to the fundamental question of why

nations grow at different rates, with inequitable

patterns of wealth and income distribution.

Taylor, L. (ed.) (1996) 'Sustainable

Development: Macroeconomic, Environmental

and Political Dimensions', WorIdDevelopmenf,

Volume 24, Number 2.

Ugaz, C. and C. Waddams Price (2003) Utility

Privafizafion ondRegulotion: A Fair Deal for

Comumers? Edward Elgar in association with

m - W I D E R .

Latin American countries have now privatized a

large number of their utility industries and make

more use of market approaches to delivery

through networks. Privatization has major

consequences for efficiency, long-tenn growth,

consumer welfare and income distribution but

insufficient attention has been paid to the direct

effect on consumers of regulation and the

introduction of competition. This book assesses

how reform processes can be improved,

particularly in the light of experience in some

Latin American and European countries.

UNU-WIDER (2005) Wider Perspecfives on Global

Developmenf. Studies in Development

Economics and Policy, Palgrave Macmillan.

This volume brings together some of the most

influential scholars in development economics

to explore how to improve the well-being of the

poor, how to design effective st~ctures and

institutions for poverty reduction and what the

role of economic, political and social dimensions

are (and should he) in global development.

Issues addressed include globalization; both

its governance and a historical perspective;

inequality, of income, and the potential for

conflict; trade and labour practises in a

transitional and developing world, and; the

natures and characteristics of institutions and

markets.

van der Hoeven, R. and A. Shomcks (eds) (2003)

Perspectives on Gmwth andpoverty. United

Nations University Press.

This volume contains a selection of papers

that deal with institutional and policy

questions, as well as sectoral issues and

individual country experiences, illustrating

well the broad range of objectives and topics

addressed by the conference. One set of

conclusions that emerge are that initial

conditions matter, institutions matter,

specific country structures matter, and time

horizons matter. Initial conditions affect the

speed at which growth can reduce poverty.

Initial conditions, institutions and the

structureof the economy also affect whether

policies have a pro-poor or an anti-poor

outcome. Improved education is an end in

itself and can also contribute to reducing

poverty--but its effect on inequality depends

on supply and demand factors which differ

significantly across countries.

ANNOTATED BIBLIOGRAPHY - SELECTED REFERENCES

Wyplosz, C. (2001) The Impact of EMTJon Eumpe and

the Developing Counfries. UNU-WIDER

Studies in Development Economics, Oxford

University Press.

Now that EMU is here and likely to stay, the

'second generation' of reseaich is under way.

This volume presents a significant sample of

that research and explores questions such as:

How do central hankers who used to run their

own banks now melt into a single pot? Are

labour markets going to shape up? Is the euro

becoming a world currency?

DEVELOPMENT AGENDAS AND INSIGHTS: 20 YEARS OF UNU-WIDER RESEARCH

ABBREVIATIONS AND ACRONYMS ACP

CFA

CIS

DANIDA

DFlD

ECOSOC

EGDl

EMU

EPlAM

EU

FAO

FDI

G8

GAT

GDP

GNP

HlPC

ICT

IFAD

IFF

110

IMF

rr LSE

MDGs

NGO

OECD

OECD-DAC

PRSPs

SADCC

SDR

African, Caribbean and Pacific group of states

Communautb Financi6reAfricaine (African Financial Community)

Commonwealth of Independent States

Danish International DevelopmentAgency

Department for lnternational Development, UK

Economic and Social Council of the UN

Expert Group on Development Issues, Sweden

European Monetary Union

Ex-Ante Poverty Impact Assessment of Macroeconomic Policies

European Union

Food and Agriculture Organization of the UN

foreign direct investment

Group of Eight

General Agreement on Tariffs and Trade

gross domestic product

gross national product

Heavily Indebted Poor Countries

information and communications technologies

lnternational Fund forAgricultural Development

international finance facility

lnternational Labour Organization

lnternational Monetary Fund

information technology

London School of Economics and Political Science

Millennium Development Goals

non-governmental organization

Organization for Economic Co-operation and Development

Development Assistance Committee of the OECD

Poverty Reduction Strategy Papers

Southern African Development Coordination Conference

special drawing rights

ABBREVIATIONS AND ACRONYMS

Sida

SlPRl

SlTRA

SME

SOAS

SOE

TICAD

TNCs

UN

UN-DESA

UNDP

UN-ECA

UNICEF

UNU

USSR

WIDER

WllD

W O

Swedish lnternational Development Cooperation Agency

Stockholm lnternational Peace Research Institute

Finnish National Fund for Research and Development

small and medium sized enterprise

School of Oriental and African Studies, University of London

state-owned enterprise

Tokyo lnternational Conference on Africa's Development

transnational corporations

United Nations

United Nations Department of Economic and Social Affiirs

United Nations Development Programme

United Nations Economic Commission for Africa

United Nations Children's Fund

United Nations University

Union of Soviet Socialist Republics

World Institute for Development Economics Research of the UNU

World Income Inequality Database

World Trade Organization