VoxDev Development Economics

In October 2024, Prabowo Subianto became president of Indonesia. He inherits the “Golden Indonesia” vision: By the time the country celebrates 100 years of independence in 2045, it aims to be one of the five largest economies in the world. But if Indonesia remains dependent on commodity exports like palm oil, coal, natural gas, and rubber, does it risk getting stuck in the “middle income trap” – too wealthy to compete with low-wage nations, but without the human capital or technology to become a HIC? Chatib Basri is an economist and former finance minister of Indonesia. He tells Tim Phillips about the industrial policies needed to accelerate Indonesia’s economy and diversify its exports, and the challenges if Indonesia does not accelerate its growth. Read the full show notes on VoxDev: https://voxdev.org/topic/macroeconomics-growth/going-economic-growth-lessons-indonesia Also on VoxDev: Is improving tax administration more effective than raising tax rates?  https://voxdev.org/topic/public-economics/improving-tax-administration-more-effective-raising-tax-rates-evidence

In the latest episode of the collaboration between Yale’s Economic Growth Center and VoxDev, host Catherine Cheney discusses one of Africa’s most persistent development challenges: the low productivity of smallholder farmers. Despite decades of investment, innovation, and policy reform, yields on African small farms remain significantly below those in high-income countries. While the limitations of smallholder models, that doesn’t mean that the problem is easy to solve, not least because the way that land is owned my make consolidation impossible. The result: fewer opportunities for structural transformation and rural development. Catherine is joined by Gérardine Mukeshimana, former Minister of Agriculture in Rwanda, Christopher Udry of Northwestern University and Mark Rosenzweig of Yale University.

It was almost business as usual at the Education World Forum in London last month. At the world’s largest annual gathering of education and skills ministers, this year’s theme was & "Building stronger, bolder, better education together." But the context was far from routine. The conference took place against a backdrop of global funding cuts to education programmes—the Institute for Economics and Peace estimates that more than 35 million children around the world depend on foreign aid for their basic education. How can policy be strong, bold, or better in the face of these cuts? Ben Piper, Director of Global Education at the Gates Foundation and a panellist on the Global Education Evidence Advisory Panel (GEEAP), was at the conference, meeting education ministers and discussing these problems with them. He tells Tim Phillips that, at a time when funding is scarce, foundational learning projects deliver cost-effective results for policymakers, and huge benefits for children. Read the full show notes here: https://voxdev.org/topic/education/why-we-need-invest-foundational-learning

From Brazil, we bring good news for poverty reduction: Brazil’s formerly sky-high wage inequality is not quite so sky-high anymore. From 1995 to 2015 Brazil became a more equal society, a trend that contrasts with rising inequality during that time in high-income countries. A soon-to-be-published article in the Journal of Economic Literature reviews the research that estimates the reduction, discovers the factors that have contributed to it and the mechanisms that have driven it. Alysson Portella of Insper tells Tim Phillips why there is no silver bullet that policymakers can use to reduce inequality, and why both implementing and evaluating policies in Brazil can be even more challenging than in other countries. Read the full show notes on VoxDev: https://voxdev.org/topic/macroeconomics-growth/understanding-brazils-falling-income-inequality

AI’s boosters claim that it is going to revolutionize growth in the developing world. The sceptics, many of whom are economists, point to a thin evidence base and the risk of unintended consequences. This is not an easy question to research, not least because the underlying technologies are literally changing by the day, while the pace of academic research is often measured in years. One of those researchers is David Yanagizawa-Drott of the University of Zurich. We spoke to him about his hopes and fears for AI, how he keeps his research relevant, and how economists can influence the future applications of AI. The Social Catalyst Lab: https://socialcatalystlab.org/

The Reducing Conflict and Improving Performance in the Economy (ReCIPE) programme was established in April 2024 as a CEPR research initiative to provide a better understanding of the links between conflict, economic growth, and public policies. One of its themes is the link between conflict and hate speech, social media use, media bias, and propaganda. We need to know more about how media has influenced violence, xenophobia, and recruitment for armed groups. Also, how we can use media sentiment to predict a rise in the risk of violence. Maria Petrova of the Barcelona School of Economics and Augustin Tapsoba of the Toulouse School of Economics are the theme leaders. They spoke to Tim Phillips about the challenges of researching the impact of media, especially social media, on conflict, and what recent research has discovered.

As aid programs are cut across the developing world, the focus falls on what investors can do to help create economic growth. Someone who knows all about impact investing is Yonas Alemu, the founder of Lovegrass Ethiopia, which creates products from teff, a gluten- free grain that's native to Ethiopia and sells them across the world. Yonas abandoned a successful career in investment banking in London to create a business in the country of his birth. He spoke to Tim Phillips about how entrepreneurship can stimulate positive change across Africa and how negative stereotypes of Africa’s dependency on aid discourage investment. Read the full show notes: https://voxdev.org/topic/firms/building-business-roots-yonas-alemus-journey-ethiopian-entrepreneur Discover more about Lovegrass Ethiopia’s products and history: https://thelovegrass.com/

Millions of people around the world have no access to sanitation. They defecate in the open, or in facilities where it’s hard to avoid human contact, unavoidably spreading disease. One of the Sustainable Development Goals that you don’t hear about so much is the call to end open defecation by 2030. What progress are we making, and what health improvements are we seeing so far? In the latest of our episodes based on J-PAL’s policy insights, Karen Macours of the Paris School of Economics, also co-chair of J-PAL's Health Sector, tells Tim Phillips about how we can achieve this development goal, why it’s not a quick fix, and the surprising results of research into the health benefits of improving sanitation. Read the full show notes on VoxDev: https://voxdev.org/topic/health/improving-sanitation-what-works-and-what-doesnt Read the Policy Insight on J-PAL: https://www.povertyactionlab.org/policy-insight/improving-sanitation-access-subsidies-loans-and-community-led-programs

We often talk about providing not just jobs, but decent jobs, in developing countries. But in many parts of the world, workers still have incredibly harsh working conditions. There have been interventions at the firm level to create safer workplaces, better health, higher job satisfaction. But have they succeeded? And, if these policies succeed in raising worker well-being, is there a cost or a benefit for the employer? In the latest in our collaborations with J-PAL to discuss their policy insights, Achyuta Adhvaryu, UC San Diego about their review of the research into worker well-being, the policies that encourage firms to improve it, and the outcomes for employees and employers alike. Read the full show notes on VoxDev: https://voxdev.org/topic/labour-markets/improving-worker-well-being-good-workers-good-business You can find the review here https://www.povertyactionlab.org/

A large proportion of economic activity takes place in the informal sector in every country, particularly in LMICs. Informality, and the lack of rights and protection that goes with it, affects the families who live in slums, the people who take off-the-books jobs, and the firms that choose to skirt regulations. It also affects the governments who want to increase the size of the formal sector – and the revenue they can collect from it. Gabriel Ulyssea of UCL and Mariaflavia Harari of the University of Pennsylvania are two of the editors of new VoxDevLit that examines what we know about the size of the informal sector and how it operates. They talk to Tim Phillips about the grey areas between formal and informal, and the limitations of policies that try to increase the size of the formal economy. Read the VoxDevLit here: https://voxdev.org/voxdevlit/informality