Suchergebnisse

This paper explores the phenomenon of "job-loan trading"—in which employers offered jobs in exchange for substantial loans from their new employees—as practiced in mid-nineteenth-century California. A sample of newspaper advertisements from 1857–76 reveals that despite the obvious inefficiencies of linking labor and capital markets, job-loan trading was both common and profitable. I assess labor market bonding against moral hazard or adverse selection as a possible explanation, but conclude that the job-loan trades primarily provide evidence of substantial Pacific Coast capital market imperfections. This conclusion has implications for the broader question of how financial markets develop.

The recent global financial crisis placed new economic and fiscal pressures on donor countries that may have long-term effects on their ability and willingness to provide aid. Not only did donor-country incomes fall, but the cause of the drop -- the banking and financial-sector crisis -- may exacerbate the long-term effect on aid flows. This paper estimates how donor-country banking crises have affected aid flows in the past, using panel data from 24 donor countries between 1977 and 2010. We find that banking crises in donor countries are associated with a substantial additional fall in aid flows, beyond any income-related effects, at least in part because of the high fiscal costs of crisis and the debt hangover in the post-crisis periods. Aid flows from crisis-affected countries are estimated to fall by 28% or more (relative to the counterfactual) and to bottom out only about a decade after the banking crisis hits. In addition, our results confirm that donor-country incomes are robustly related to per-capita aid flows, with an elasticity of about 3. Findings are robust to estimation using either static or dynamic panel data methods to account for possible biases. Because many donor countries, which together provide two-thirds of aid, were hit hard by the global recession, this historical evidence indicates that aggregate aid could fall by a significant amount (again, relative to counterfactual) in the coming years. We also explore how crises affect different types of aid, such as social-sector and humanitarian aid, as well as whether strategic interaction among donors is likely to deepen or mitigate the fall in aid. [Copyright Elsevier B.V.]

According to World Bank policy, countries remain eligible to borrow from the IBRD until they are able to sustain long-term development without further recourse to Bank financing. Graduation from IBRD is not an automatic consequence of reaching a particular income level, but rather is supposed to be based on a determination of whether the country has reached a level of institutional development and capital-market access that enables it to sustain its own development process without recourse to Bank funding. This paper takes a positive approach to IBRD graduation policy, investigating what income and non-income factors appear to have influenced graduation status in recent decades, based on panel data for 1982 through 2009. Explanatory variables include the per-capita income of the country, as well as measures of institutional development and market access that are cited as criteria by the graduation policy, and other plausible explanatory variables that capture the levels of economic development and vulnerability of the country. We find that the observed correlates of Bank graduation status are generally consistent with the stated policy. Countries that are wealthier, more creditworthy, more institutionally developed, and are less vulnerable to trade, financial, and other shocks are more likely to be graduates. Predicted probabilities generated by the model conform closely to the actual graduation and de-graduation experiences of Trinidad and Tobago and Korea, among other countries, and suggest that Hungary and Latvia may have graduated prematurely-a prediction subsequently borne out by the large loans that they later received from the IBRD in the wake of the global financial crisis. Adapted from the source document.

Despite significant gains in promoting economic growth and living conditions (or "human progress") globally over the last twenty-five years, much of the developing world remains plagued by poverty and its attendant problems, including high rates of child mortality, illiteracy, environmental degradation, and war. In Growth and Empowerment, Nicholas Stern, Jean-Jacques Dethier, and F. Halsey Rogers propose a new strategy for development. Drawing on many years of work in development economics--in academia, in the field, and at international institutions such as the World Bank--the authors base their strategy on two interrelated approaches: building a climate that encourages investment and growth and at the same time empowering poor people to participate in that growth. This plan differs from other models for development, including the dogmatic approach of market fundamentalism popular in the 1980s and 1990s. Stern, Dethier, and Rogers see economic development as a dynamic process of continuous change in which entrepreneurship, innovation, flexibility, and mobility are crucial components and the idea of empowerment, as both a goal and a driver of development, is central. The book points to the unique opportunity today--after 50 years of successes and failures, and with a growing body of analytical work to draw on--to pursue new development strategies in both research and action.