We focus on the management of highly persistent shocks to aid flows, including HIPC or MDG-related increases in net flows, in the presence of currency substitution by the domestic private sector. Such shocks have beneficient long-run effects, but when currency substitution is high they can...

This paper assesses why the 2008–2009 global economic recession impacted East Asia less than it did the United States (US) and the European Union(EU). The paper utilizes a “growth-with-resilience” (GWR) index aimed at measuring the extent to which a country can absorb or counteract...

Informal payments are a frequently overlooked source of local public finance in developing countries. We use microdata from ten countries to establish stylized facts on the magnitude, form, and distributional implications of this "informal taxation." Informal taxation is widespread, particularly...

We estimate the impact of a large anti-poverty cash transfer program, the Uruguayan PANES, on political support for the government that implemented it. Using the discontinuity in program assignment based on a pre-treatment eligibility score, we find that beneficiary households are 11 to 14...

In the new millennium, the Western aid effort towards Africa has surged due to writings by well-known economists, a celebrity mass advocacy campaign, and decisions by Western leaders to make Africa a major foreign policy priority. This survey contrasts the predominant "transformational" approach...

Changes in financial policy are expected to result in the greater availability of credit as financial controls are relaxed and banking competition is increased. This ‘financial deepening’ should show up in ahigher consumption expenditure in areas where credit is often required, such as...

This paper surveys the existing literature on the determinants of household savings and credit in developing countries and examines the ways in which macro-level policies might impact on household financial behaviour.

The literature on aid effectiveness has focused more on recipient policies than the determinants of aid allocation yet a consistent result is that political allies obtain more aid from donors than non-allies. This paper shows that aid allocated to political allies is ineffective for growth,...

We provide a theoretical explanation why agricultural subsidy policies are likely to fail to ensure simultaneous eradication of the incidence of child labour and improvement in the well-being of the poor working families in terms of a three-sector general equilibrium model with child labour and...