The aggregate economic impact of any developmental project depends on its effects within the chosen administrative region as well as its economic spillovers into other regions. However, little is known about how these spillovers propagate through geographic, ethnic and road networks. In this...

The shadow economy has long been an area of research for policymakers. The determinants of underground activity of late have been identified as high tax burdens and increased regulation, but has this relationship always existed? This seminal work examines the shadow economy in Norway, Sweden,...

This paper develops a model of costly firm creation in an economy with weak institutions, costly business environment as well as skill gaps where one of the equilibrium outcomes is a low-productivity trap. The paper tests the implications of the model using a cross-sectional dataset including...

Estimations of the size and development of the shadow economy for 145 countries, including developing, transition and highly developed OECD economies over the period 1999 to 2003 are presented. The average size of the shadow economy (as a percent of "official" GDP) in 2002/03 in 96 developing...

We propose a development-compatible refunding system designed to mitigate climate change. Industrial countries pay an initial fee into a global fund. Each country chooses its national carbon tax. Part of the global fund is refunded to developing and industrial countries, in proportion to the...

This paper investigates the economic fortunes of coerced vs. free workers in a global supply chain. To identify the differential treatment of otherwise similar workers we resort to a unique exogenous labor demand shock that affects wages in voluntary and involuntary labor relations differently....

Small farms and fragmented plots are hallmarks of agriculture in less-developed countries, and there is evidence of high returns to land consolidation and reallocation. Complementarities, holdout and asymmetric information mean that private trade will be slow to reallocate land, and imply that...

Are natural resources a “curse” or a “blessing”? The empirical evidence suggests either outcome is possible. The paper surveys a variety of hypotheses and supporting evidence for why some countries benefit and others lose from the presence of natural resources. These include that a...

In the first part of the paper we look at economic growth in Africa over the past three decades. We divide the past three decades into two parts: A "lost period" from 1981 to 1995 and a "recovery period" since the second half of the 1990s. During the first period, Africa did not catch up but...

The physical or absolute geography of Sub-Saharan Africa (SSA) is often blamed for its poor economic performance. A country's location however not only determines its absolute geography, it also pins down its relative position on the globe vis-a-vis other countries. This paper assesses the...