The Ajaokuta steel factory in 1994

How should donors work with the private sector?

We are enthusiastic about the growing interest in supporting private investment in developing countries, but it matters a lot how this is done. The tools that donor countries usually use to “crowd in” the private sector — guarantees and cheap loans — distort firms’ incentives by reducing their risks or increasing their rewards irrespective of how well they do. Donors should not pick winners. Read the full post »
A picture of Thomas Piketty in front of a bookcase

Why are taxes on capital income lower than taxes on labour income?

If we want to raise the share of national income going to labour, we could start by not taxing labour income more heavily than capital income. Read the full post »
Owen Barder at a podium in front of a Standard Chartered sign

Development Impact Bonds: what do YOU think?

The Center for Global Development and our partner Social Finance has just published a big new report on Development Impact Bonds. The Working Group invites comments on the draft report over the next six weeks.

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Daron Acemoglu, Jim Robinson, Owen Barder

It’s the politics, stupid

One thing that the public knows, which many development experts apparently do not, is that poor countries are poor because they are badly governed and have institutions which prevent growth and permit a small elite to capture the nation's wealth. According to Why Nations Fail, by Daron Acemoğlu and Jim Robinson, the public is (as usual) basically right. Read the full post »
A hand gun in front of a US flag

Guns & economics

Two interesting ideas from economists on gun control. First: require gun owners to take out liability insurance. Second, create a fund which for every dollar the NRA pays to a political candidate would pay $2 to the opponent. Read the full post »
European countries 3d illustration - european continent marked with flags

How committed is Europe to development really?

Europe’s approach to development could be characterized as energetically tackling the symptoms of poor economic opportunities for developing countries by providing substantial and effective aid, while doing relatively little to tackle the underlying structural causes of poverty. Read the full post »