This chapter reviews the literature on the relationship between the quality of government (QoG) and economic growth. As there is limited evidence on the link between QoG narrowly defined and growth, our focus is on the role of related aspects, such as democracy, formal institutions, and cultural norms. We discuss institutional challenges in generating and sustaining high growth rates. We then review the evidence on how QoG, and related aspects of political and economic life, affect growth and pay attention to the relevant channels. We also discuss whether it is harder to sustain growth if it increases inequality. Since a government needs to be both efficient and impartial to support aggregate economic performance, we argue that it is too strict to let QoG be defined as impartiality only.

This chapter discusses Deaton's contributions to the analysis of poverty in developing countries. He has a strong focus on the quality of measurement of economic variables. He argues that one also needs to look at other dimensions of poverty than income, such as health outcomes and food consumption. He has critically discussed the measurements of the level of global poverty, approaches used, and data shortcomings. He has worked extensively on the analysis of Indian poverty. Deaton has criticized the dominance of randomized controlled trials in the analysis of development and has emphasized that it is necessary to understand the mechanisms involved if we are to be able to use the results of the analyses effectively. Deaton has discussed how large parts of the world population have managed to escape from poverty and poor health. He emphasizes that apart from investments in physical capital, new knowledge and innovations and better governance have contributed to growth and poverty reduction. Deaton is critical of foreign aid and thinks that donors should get out of the way, since there presence undermines governance in the developing countries. He thinks that aid money instead should be used on projects that deliver relevant global public goods.

Combining Afrobarometer survey data with geocoded data on the discovery and shutdown dates of gold mines, we show that individuals who had gold mines within their district when they were in adolescence have significantly lower educational attainment as adults. Exploring mechanisms, we find that this effect is not driven by endogenous migration, nor a higher incidence of conflicts, nor by a lower provision of schools in mining districts. While data limitations prevent us from fully exploring other channels, prior work as well as suggestive evidence point towards a higher incidence of child labour in mining district as the main mechanism.

We use census panel data on Ethiopian manufacturing firms to analyze how enterprise clustering in local markets covaries with firm-level output prices and physical productivity. We find a negative and statistically significant relationship between the density of firms that produce a given product in a given location and the local price of that product. We also find a positive and statistically significant relationship between the density of firms that produce a given product in a location and the physical productivity of same-product firms in the location. These results are consistent with the notion that increased clustering of firms generates higher competitive pressure and positive externalities. Across firms that produce different products, we find no statistically significant relationship between enterprise clustering and firm-level output prices and productivity. We also find no clustering effects across towns. Our results suggest that while clustering can impact firm performance, the advantages are narrow in scope.

This article investigates the commonly assumed link between ethnic divisions and clientelism in African politics by examining the role of contextual ethnic divisions and specific ethnic affiliations in shaping attitudes towards clientelism. The empirical findings, drawing on quantitative data for 38,293 survey respondents across 25 African countries suggest important country heterogeneity, but also highlight some regularities. In particular, the ethnic composition of the population in the area of residence, rather than the individual's own ethnic affiliation, is important in shaping support for clientelism. Individuals living in a region where the majority of the population is the president's co-ethnics tend to be more supportive of clientelism, regardless of their own ethnic affiliation. The wide coverage of the results makes them especially interesting; while a number of studies suggest ethnically based targeted transfers in specific sectors or settings, this study explores the links between different forms of ethnic divisions and support for clientelism in a large multi-country African sample.

Is the global development agenda changing and, if so, what does this imply for development researchers? The following remarks first discuss our quest for global justice and relate this objective to the new Sustainable Development Goals (SDGs). Then I give my take on how the development of poor countries is determined and suggest what directions future research should take to support global justice through the development of poor countries. Considering aid as a principal tool to promote global justice, I conclude with a few comments about changes in the contemporary aid landscape and their implications for aid research.

We study how regional development affects identification with the nation state using a sample of 192 African regions in 16 countries. We measure national identification with survey data from the fourth wave of the Afrobarometer and proxy regional development with night lights data. To account for the endogeneity of regional development, we employ an instrumental variables approach and use a proxy for mineral resource wealth as our main instrument. Our results show that inhabitants of more prosperous regions are more likely to identify with their nation rather than their ethnic group. Regarding transmission channels, we find suggestive evidence consistent with the interpretation that national identification is higher in richer regions because of different cultural beliefs and a lower reliance on traditional ethnic networks. Overall, our research implies that African governments can foster national identification by ensuring that all parts of a country participate equitably in economic development. Journal of Comparative Economics 45 (2017) 622-643. University of Gothenburg, Gothenburg, Sweden; University of Siegen, Holderlinstr. 3, 57076 Siegen, Germany. (C) 2016 Association for Comparative Economic Studies. Published by Elsevier Inc. All rights reserved.

This paper discusses the historical roots of development economics and how it has changed over the last half century. We first identify the most important changes in orientation within development economics and discuss whether there are important areas that have been side-lined. Then we look at current work in development economics and discuss where the field should go in the future.

The study investigates how the composition and character of aid of Swedish aid has changed over time, and what effects these changes have had for the potential to realize key aspects of the Paris a ...

Most African countries inherited a dual economic structure and high levels of inequality from the colonial times, and inequality has remained high since independence. The pattern of structural change in Africa has implied a shift of labour out of agriculture, but since the movers have mostly been absorbed into low-paying, often informal activities, this transformation has not led to a significantly lower overall inequality. A change of the structure of the economy leading to an expansion of better-paying jobs requires higher rates of investment.

Abstract During the twentieth century there were dramatic changes in the structure of Kenya’s economy and in the sectorial allocation of labour. Kenya started out with almost the whole of its labour force in agriculture and related activities, but a century later more than half of the labour force is in formal or informal non-agricultural activities. The share of agriculture in gross domestic product has fallen from above three-quarters to about a quarter. This structural transformation has driven the changes in incomes, income distribution, and poverty. This chapter seeks to measure and explain changes in incomes, inequality, and poverty in Kenya. It starts from a very long-term perspective covering the twentieth century, then focuses on a more detailed analysis of the recent period for which data are available.

Many studies suggest that one of the main reasons for Africa's dismal growth performance over most of the 20th century is its degree of ethnic fragmentation. Yet, there is still insufficient knowledge about whether ethnic diversity necessarily entails large economic costs, or whether the implications of diversity depend, inter alia, on the government's approach toward the ethnic question. We note that economic growth tends to increase average incomes, but it also affects the income distribution. Then, if growth is accompanied by growing economic inequality, the perception of the impartiality of the government toward different ethnic groups is likely to be important for whether growth can be sustained, or whether sparks of growth will evaporate because of rising political divisions and internal conflicts. In this paper, we study whether the degree of ethnic impartiality in the government's policies is related to the emergence of sustained growth in sub-Saharan Africa, irrespective of the actual content of the policies. We measure perceptions about the impartiality of the government with survey data from the Afrobarometer covering 20 countries starting in the late 1990 s. Our main definition of sustained growth is when there is a GDP per capita growth rate of at least 2% for at least five consecutive years. Our empirical results suggest that countries whose governments are perceived as impartial are more likely to experience sustained growth. We conclude that in order to ensure economic development, it is not only important to choose the "right" policies, but also to implement these policies in a fair manner. (C) 2016 The Authors. Published by Elsevier Ltd.

We use data on Ethiopian manufacturing firms and commodity-level data on tariffs to examine the effects of trade liberalisation on firm performance. We distinguish the productivity gains that arise from reducing final goods tariffs from those that arise from reducing tariffs on intermediate inputs. We find no evidence that output tariff reduction improves productivity, but we find large positive effects of input tariff reductions. These are robust to alternative productivity measures, treating tariffs as endogenous, and various generalisations of the model. We conclude that policy measures designed to facilitate access to inputs produced abroad may lead to productivity gains.

The EU’s Role in Fighting Global Imbalances looks at the role of the European Union in addressing some of the greatest challenges of our time: poverty, protectionism, climate change, and human trafficking. Contributions from ten leading scholars in the fields of economics, law, and political science provide in-depth analyses of three key dimensions of EU foreign policy, namely: the internal challenges facing the EU, as its 28 member countries struggle to coordinate their actions; the external challenges facing the EU on the global arena, in areas where global imbalances are particularly pervasive, and where measures taken by the Union can have an important impact; and the EU´s performance on the global arena, in the eyes of other key actors. Based on a broad and interdisciplinary understanding of the concept of global imbalances, this book argues that these challenges follow from pervasive global imbalances, which at root are economic, political, and legal in character.

We study the effect of two tax innovations - value added taxes (VAT) and autonomous revenue authorities (ARA) - on tax revenues in sub-Saharan Africa. The dataset consists of 47 countries over 1980-2010. We find that VATs have no effect on total tax revenues, neither in the short- nor in the long-run. ARAs lead to higher tax revenues in the short- and medium-run, but the effect dissipates over time. The main conclusion is that tax innovations are not a panacea to overcome the revenue shortages in African countries, but they are helpful in the short- and medium-run.

In light of the empirical evidence on clientelism and ethno-regional favouritism in African politics, the present paper examines the relationship between ethnic divisions and clientelism. Specifically, we ask whether – and what type of – ethnic divisions affect the experiences with, perceived prevalence of, and attitudes to clientelism. Empirical findings drawing on data for more than 20 000 respondents across 15 African countries challenge the dominant role of ethnic divisions for clientelist practices in Africa. Contextual measures of ethnic fragmentation and ethnic identification are found to have limited explanatory power for the concerned clientelism outcomes, and, considering possible subjects of ethno-regional favouritism, the empirical findings point more to the relevance of regional than ethnically based targeting of clientelist transfers.

This chapter discusses dimensions of inequality in sub-Saharan Africa and their causes. It starts with a review of the empirical evidence about inequality during the colonial period as well as the post-independence era. Then it discusses the forces that determine inequality change, focusing on factor accumulation and structural change. Next it considers the relationship between inequality and growth, the role of agriculture in the development process, the relationships between ethnicity and social stratification and governance, and external influences on inequality. The chapter concludes with some comments on what policy interventions can do to reduce inequality.