To assist with progress towards the United Nations Millennium Development Goals (MDGs) in developing countries, the international community is scaling-up foreign aid to record levels. Concurrently, there are concerns that additional aid will not be used effectively due to a problem of absorptive...

Policy reforms aimed at boosting long-run growth often have side effects – positive or negative – on an economy’s vulnerability to shocks and their propagation. Macroeconomic shocks as severe and protracted as those since 2007 warrant a reconsideration of the role growth-promoting policies...

SMEs are key to strengthening productivity, delivering more inclusive growth and adapting to the major transformations of our time. SMEs that grow have a considerable positive impact on employment creation, innovation, productivity growth and competitiveness. While the population of SMEs is very...

The typical identification strategy in aid effectiveness studies assumes donor motives do not influence the impact of aid on growth. We call this homogeneity assumption into question, first constructing a model in which donor motives matter and then testing the assumption empirically. -- Aid ;...

This paper develops an analytical framework to identify the policies relevant for firm exit and the channels through which they shape aggregate productivity growth. A range of potentially relevant policies are identified, spanning insolvency regimes, regulations affecting product, labour and...

This book discusses the impact of taxation on economic growth, employment, investment, consumption and the environment. The public finance literature commonly distinguishes between three major functions of taxation: the traditional function of raising revenue to finance government expenditure;...

This study aims to assess to what extent the institutional environment is responsible for worldwide differences in economic development. To answer this question, a new concept of the institutions-augmented Solow model is constructed. The analysis covers 153 countries and the period 1994-2009....

Indonesia’s growth performance is improving, following a slow recovery from the 1997-98 financial crisis. Investment is picking up, despite considerable business-climate obstacles to entrepreneurship. Unemployment remains high, and labour informality is pervasive. Fiscal policy has been...

This paper investigates the impact of complementarity reforms on growth and how it depends on GDP per capita. Based on reform data for six policy areas compiled from various sources during the period 1994–2006 for over 100 countries, we compute composite indicators of reform level and...