VoxDev Development Economics

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

In 1981, 44% of the world’s population were living in extreme poverty. By 2019, that number had fallen to 9%. This seems like a good news story, but how did it happen?

Tom Vogl of UC San Diego is one of the authors of a paper called simply, “How Poverty
Fell”. In it, they use surveys to track the progress out of poverty of individuals and
generations, to discover whether this progress has been driven by individuals and families becoming less poor over their lives or by successive generations who are less likely to be born into poverty. Has the progress been driven by women in the workplace, by government support, or by the move out of agriculture? And, significantly, do those who move out of poverty stay in that position or, is it, as Tom tells Tim Phillips, “Like climbing a slippery slope”?

Read the full show notes here: https://voxdev.org/topic/methods-measurement/how-has-global-poverty-fallen

Read the paper: https://econweb.ucsd.edu/~pniehaus/papers/how_poverty_fell.pdf

In the latest episode of the collaboration between Yale’s Economic Growth Center and VoxDev, host Catherine Cheney is asking one of the most complex questions in global development: how can the clean energy transition move forward quickly and equitably, particularly for low- and middle-income countries still grappling with poverty? There is a balance between emissions reductions and economic growth. While wealthy nations historically contributed the most to climate change, LMICs are now under pressure to take costly action to avoid it.

Catherine is joined by Max Bearak of the New York Times, Jessica Seddon of Yale Jackson School and the Dietz Family Initiative on Environment and Global Affairs, and Anant Sudarshan of the University of Warwick and the Energy Policy Institute at the University of Chicago.

Read the full show notes here: https://voxdev.org/topic/energy-environment/climate-capital-and-conscience-who-will-pay-global-energy-transition

The Graduation approach to helping people to escape from poverty was pioneered in 2002 by BRAC in Bangladesh. Today the approach is used around the world. In more than 20 years, what have we learned about how it works, when it works best, and how to implement it at scale? Shameran Abed, the Executive Director of BRAC International talks to Tim Phillips about how the Graduation approach reaches people that other programmes miss, why it works, and how it can be scaled up to meet needs around the world.

Read the full show notes

The BRAC Ultra-Poor Graduation Initiative

Multinational enterprises in every industry are shifting profits to low-tax jurisdictions. These corporate tax havens reduce tax revenues everywhere, but that hits hardest in developing countries where corporate taxes are a larger part of the overall tax take. The International Growth Centre has published a policy toolkit report into corporate tax havens. Ludvig Wier, the author, explains to Tim Phillips how profit shifting works, how a global initiative is reducing the allure of tax havens, and how AI might level the playing field for overstretched developing country tax offices.

Read the full show notes on VoxDev: https://voxdev.org/topic/public-economics/profit-shifting-global-challenge-hitting-developing-countries-hardest

IGC Policy Toolkit: Corporate tax havens and their impact on development