Globalization and Development

Trade and Development – Two lectures

These lectures will cover the following four related topics:

• Trade and Growth
• Trade and Productivity
• Trade Policy and Industrialisation
• Trade and Poverty

I will introduce you to the literature but there will time for little detail on specific pieces of work. I intend to emphasise the applied and policy aspects of the analysis and to leave time for discussion in the sessions.

Because of the breadth of the subject, the reading list comprises mainly survey articles, but a number of specific pieces are listed below for those who wish to explore them.

Surveys:

Winters, L .A. (2004) Trade Liberalisation and Economic Performance: An Overview. The Economic Journal, Vol. 114 (February), pp. F4-F21.
Tybout, James R. (2001) ‘Plant- and Firm-Level Evidence on "New" Trade Theories’, NBER Working Paper No. 8418
Pack, Howard and Saggi, Kamal, "The Case for Industrial Policy: A Critical Survey," World Bank Policy Research Working Paper, No 3839.
Winters, L. Alan, Neil McCulloch and Andrew McKay, 2004. Trade Liberalization and Poverty: The Evidence So Far. Journal of Economic Literature, Vol. XLII (March), pp. 72-115.
Goldberg P and Pavcnik, N (2007) ‘Distributional effects of globalisation in developing countries’, JEL, XLV,39-82.

Examples of the Literature:

Noguer, M. and M. Siscart 2005. “Trade raises income: a precise and robust result” Journal of International Economics  65:447-60.
Wacziarg R and Welch K H (2003) ‘Trade liberalisation and growth: new evidence’, NBER WP 10152.
Rodriguez, F. and Rodrik, D. (2001) Trade policy and economic growth: a skeptic’s guide to the evidence. NBER Macroeconomics Annual 2000, plus comments by Hsieh and Jones.
Baldwin R E (1969) ’The case against infant industry protection,’ Journal of Political Economy, vol 77, pp.295-305.
Rodrik, D, 2004, Industrial Policy for the Twenty-first Century, http://www.ekh.lu.se/Kurser/472/UNIDOSrodrik.pdf
Porto G (2006) ‘Using Survey Data to Assess the Distributional Effects of Trade Policy’, Journal of International Economics, vol:70 (1) p.140

Lectures on Migration and Development
KISSEP, Thursday, July 3rd, 2008.
Lecturer: Hillel Rapoport, Bar-Ilan University and EQUIPPE, University of Lille.

Program and Reading List

Morning session:
"The brain drain: the perspective of developing countries"
Reading list:
Beine, M., F. Docquier and H. Rapoport (2008): "Brain drain and human capital formation in developing countries: winners and losers", Economic Journal, 118 (April), pp. 631-52. Download from:
http://www.blackwell-synergy.com/toc/ecoj/118/528 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1111800.
Docquier, F. and H. Rapoport (2007): "Skilled migration: the perspective of developing countries" (with Frédéric Docquier), IZA Discussion Paper No 2873, June. Download from: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=625259

Afternoon session:
"Migration and development: insights from the recent Mexican migration experience".
Reading list:
McKenzie, D. (2006): "Beyond remittances: the effects of migration of Mexican households", in C. Ozden and M. Schiff, eds., International Migration, Remittances and the Brain Drain, New York: Palgrave-McMillan and World Bank.
Download from: http://siteresources.worldbank.org/DEC/Resources/310436360_200509297001236.pdf
McKenzie, D. and H. Rapoport (2007): "Network effects and the dynamics of migration and inequality: theory and evidence from Mexico", Journal of Development Economics, 84, 1: 1-24.
Download from: http://dx.doi.org/10.1016/j.jdeveco.2006.11.003
McKenzie, D. and H. Rapoport (2007): "Self-selection patterns in Mexico-US migration: the role of migration networks", BREAD Working Paper No 137, January.
Download from: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=959764

Kiel Institute Summer School on Economic Policy
Globalization and Development
Kiel, Germany, June 29-July 6, 2008

Lectures on Comparative Development
By James A. Robinson, Harvard University

Lecture 1, Monday June 30 13.30-16.30

Some basic facts about comparative development, proximate and fundamental approaches to development, the role of institutions, geography and culture.

Acemogu, Daron (2008) Introduction to Modern Economic Growth, to be published by Princeton University Press. Chapter 1. Available at: http://econ-www.mit.edu/files/2383
Acemoglu, Daron, Simon Johnson and James A. Robinson (2001) “The Colonial Origins of Comparative Development: An Empirical Investigation,” American Economic Review, 91, 1369-1401.

Lecture 2, Tuesday July 1 9.00-12.00

The role and impact of globalization.

Rodríguez, Francisco and Dani Rodrik (2000) “Trade Policy and Economic Growth: A Skeptic's Guide to the Cross-National Evidence,” NBER Macroeconomic Annual, eds. Ben Bernanke and Kenneth S. Rogoff, MIT Press for NBER, Cambridge, MA.
Dollar, David and Aart Kraay (2004) “Trade, Growth, and Poverty,” Economic Journal, 114, F22-F49.

Aid and Development

Kiel Institute Summer School on Economic Policy: Globalization and Development

Kiel, Germany, June 29 – July 6, 2008

By Finn Tarp

Outline of presentation

Introduction
Historical background
Aid allocation
The impact of foreign aid
The current aid and development debate
Conclusion

Essential readings
Burnside, C. and Dollar, D. (2000) ‘Aid, Policies, and Growth’, American Economic Review, 90: 847–68.

Dalgaard, C.J., Hansen, H. & Tarp, F. (2004) ‘On the Empirics of Foreign Aid and Growth’. Economic Journal. 114(496): F191-F216.

Rajan, R.G. & Subramanian, A. (2007) ‘Aid and Growth: What Does the Cross-Country Evidence Really Show?’, Forthcoming Review of Economics and Statistics, http://www.iie.com/publications/papers/subramanian0707.pdf

Roodman, D. (2007) ‘Macro Aid Effectiveness Research: A Guide for the Perplexed’, Working Paper 135, Center for Global Development, Washington, DC, available at http://www.cgdev.org/content/publications/detail/15003

Tarp, F. (2006) ‘Aid and Development’. Swedish Economic Policy Review, 13(2), 2006, pp. 9-61.

Further readings
Adam, C.S., Chambas, G., Guillaumont, P., Guillaumont, J. and Gunning, J.W. (2004) ‘Performance Based Conditionality: A European Perspective’, World Development, 32: 1059-1070.

Alesina, A. and  Dollar D. (2000) ‘Who Gives Foreign Aid to Whom and Why?’, Journal of Economic Growth, 5(1): 33-63.

Andersen, T.B., Harr, T. & Tarp F. (2006) ‘On US Politics and IMF Lending’. European Economic Review, 50(7): 1843-1862.

Arndt, C., Jones, S. & Tarp, F. (2007) ‘Aid and Development: The Mozambican Case’. Chapter 14 (pp. 235-288) in S. Lahiri (ed.) Sajal Lahiri (ed) Frontiers of Economics and Globalization: Theory and Practice of Foreign Aid, Elsevier.

Berthélemy, J.C. (2006) ‘Bilateral Donors’ Interest vs. Recipients’ Development Motives in Aid Allocation: Do All Donors Behave the Same?, Review of Development Economics 10: 179–194.

Berthélemy, J.C, and A. Tichit (2004) ‘Bilateral Donors’ Aid Allocation Decisions: A Three-dimensional Panel Analysis, International Review of Economics and Finance 13: 253-274.

Birdsall, N., Rodrik, D. & Subramanian, A. (2005) ‘How to Help Poor Countries’, Foreign Affairs 84, http://www.cgdev.org/doc/commentary/FAhelp.pdf  

Boone, P. (1994) ‘The Impact of Foreign Aid on Savings and Growth. London School of Economics’, CEP Working Paper 677.

Boone, P. (2006) ‘Effective Intervention, Making Aid Work’, CEP Centre Piece Winter 2005/2006 edition, available at http://cep.lse.ac.uk/centrepiece/default.asp.

Bourguignon, F. & Sundberg, M. (2007) ‘Aid Effectiveness – Opening the Black Box’, The American Economic Review, 97 (2): 316-321.

Burnside, C. and Dollar, D. (1997) ‘Aid, Policies, and Growth’, Policy Research Working Paper 1777, World Bank, Washington, DC.

Cassen, R. and Associates (1994), Does Aid Work? Clarendon Press, Oxford.

Chenery, H. B. and Strout, A. M. (1966) ‘Foreign Assistance and Economic Development’, American Economic Review, 56: 679–733.

Clemens, M., Radelet, S. and Bhavnani, R. (2004), ‘Counting chickens when they hatch: the short-term effect of aid on growth’, Working paper 44, Center for Global Development,  Washington, DC., available at http://www.cgdev.org/Publications/index.cfm?PubID=130.

Collier, P. and Dollar, D. (2001) ‘Can the World Cut Poverty in Half? How Policy Reform and Effective Aid Can Meet the International Development Goals’, World Development, 29: 1787–802.

Collier, P. and Dollar, D. (2002) ‘Aid Allocation and Poverty Reduction’, European Economic Review, 46: 1475–500.

Collier, P. (2007) The Bottom Billion: Why the Poorest Countries are Failing and What Can be Done About It. Oxford University Press, Oxford.

Commission for Africa (2005) Our Common Interest: An Argument, Penguin Books, London.

Dalgaard, C.-J. and Hansen, H. (2001) ‘On aid, growth and good policies’, Journal of Development Studies, 37: 17–41.

Dalgaard, C.-J. and Hansen, H. (2005) ‘The Return to Foreign Aid’, Discussion Paper 05-04, University of Copenhagen, available at http://www.econ.ku.dk/wpa/pink/2005/0504.pdf.

Easterly, W. (1999) ‘The Ghost of Financing Gap: Testing the Growth Model Used in the International Financial Institutions’, Journal of Development Economics, 60: 423-438.

Easterly, W. (2001) The elusive quest for growth, MIT Press, Cambridge, MA.

Easterly, W. (2006), The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done so Much Ill and so Little Good, Penguin Press, New York.

Easterly, W. (2007) ‘Are Aid Agencies Improving?’, Economic Policy, October: 633-78.
Gallup, J.L., Sachs, J.D. & Mellinger, A.D. (1999) ‘Geography and Economic Development’, International Regional Science Review, 22: 1790-232.

Hansen, H. & Tarp, F. (2000) ‘Aid Effectiveness Disputed’, Journal of International Development, 12(3): 375-98.

Hansen, H. & Tarp, F. (2001) ‘Aid and Growth Regressions’. Journal of Development Economics, 64(2): 547-570.
International Monetary Fund (2005) ‘The Macroeconomics of Managing Increased Aid Inflows: Experiences of Low-Income Countries and Policy Implications’, Policy Development and Review Department.

Jones, S. & Tarp, F. (2008) ‘Foreign Aid and the Bottom Billion’, IDS in Focus 3, no. 12.  http://www.ids.ac.uk/UserFiles/File/publications/in_focus/InFocus_03.12.pdf

Killick, T. & Foster, M. (2007) ‘The Macroeconomics of Doubling Aid to Africa and the Centrality of the Supply Side’, Development Policy Review, 25 (2): 167-192.

Mosley, P., Hudson, J. and Verschoor, A. (2004) ‘Aid and Poverty Reduction and the ‘New Conditionality’’, Economic Journal, 114: 217–243.

Obstfelt, M. (1999) ‘Foreign resource inflows, saving and growth’, in K. Schmidt-Hebbel and L. Servén (eds.) The economics of savings and growth, Cambridge University Press, Cambridge.

Riddell, R. (2007), Does Foreign Aid Really Work?, Oxford University Press, Oxford.

Robinson, S. & Tarp, F. (2000) ‘Foreign Aid and Development: Summary and Synthesis’ (pp. 1-14) in F. Tarp (ed.) Foreign Aid and Development: Lessons Learnt and Directions for the Future. London and New York: Routledge.

Roland-Holst, D. & Tarp, F. (2004) ‘New Perspectives on Aid Effectiveness’. Chapter in part I (pp. 43-62) in B. Tungodden, N. Stern, and I. Kolstad (eds.) Toward Pro-Poor Policies - Aid, Institutions and Globalization. Washington and New York: World Bank/Oxford University Press.

Roodman, D. (2004) ‘The anarchy of numbers: aid, development, and cross-country empirics’, Working Paper 32, Center for Global Development, Washington, DC, available at http://www.cgdev.org/content/publications/detail/2745

Roodman, D. (2007) ‘A Short Note on the Theme of Too Many Instruments’, Working Paper 125, Center for Global Development, Washington, DC, available at http://www.cgdev.org/content/publications/detail/14256

Sachs, J. (2005), The End of Poverty: Economic Possibilities for Our Time, Penguin Press, New York.

Svensson, J. (2000) ‘Foreign aid and rent-seeking’, Journal of International Economics, 51: 437-461.
Svensson, J. (2003) ‘Why conditional aid doesn’t work and what can be done about it?’ Journal of Development Economics, 70: 381–402.

Tarp, F. (ed.) (2000) Foreign Aid and Development: Lessons Learnt and Directions for the Future. London and New York: Routledge.
Tarp, F. (2001) ‘Aid and Reform in Africa’ (review of World Bank volume by S. Devarajan, D. R. Dollar and T. Holmgren). Journal of African Economies, 10(4): , 2001, pp. 341-53.

Thorbecke, E. (2000) ‘The evolution of the development doctrine and the role of foreign aid, 1950–2000’, in F. Tarp (ed.) Foreign Aid and Development: Lessons Learnt and Directions for the Future, Routledge, London and New York.

Tarp, F. (2008) ‘Foreign aid’. The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, The New Palgrave Dictionary of Economics Online.

World Bank (1998) Assessing aid: what works, what doesn’t, and why, Oxford University Press, Oxford.
World Bank (2002) A case for aid: building a consensus for development assistance, World Bank, Washington, DC.

See also various articles in Review of World Economics  Volume 143, Number 4 / April, 2007