Opportunities in the Time of Crisis

MESSAGE 2 FROM 14 GERARDO PHIL WOOLAS DELLA talks about PAOLERA, ‘Development GDN on the Move’ President LORD ANTHONY GIDDENS at a 4 Special Session on Climate Change

better research better policy better ‘developing‘ worldresearch MONITOR The biannual newsletter of the Global Development Network Issue No. VIII, June 2010 Opportunities in the time of Crisis

“…we are living in an unsustainable world…there has to be a world on the other side. Therefore, I would say that we are living in a period that is not the end of History, but the end of end of History.” —Lord Anthony Giddens, renowned Sociologist . Conference Issue: he global economic crisis has propelled the Contents world onto a pathway of ‘change.’ It has high- Tlighted the limitations of existing frameworks of globalization, which now need to be re-config- ’No Substitute to ured. Aptly, GDN’s 11th annual conference, held Strong Institutions’ 2 recently in Prague, asked the question ‘Regional and Global Integration: Quo Vadis?’ Over 400 par- Special Session on ticipants discussed key issues that have become Climate Change 4 critical in the face of the crisis. Over a year since the start of the crisis, regional pol- Plenary 1 6 icy responses have initiated a global recovery. Greater policy coordination between countries is Plenary 2 7 however, necessary to sustain growth and avert 11th ANNUAL GLOBAL DEVELOPMENT CONFERENCE Plenary 3 9 future crises. To this end, a global regulatory JAN 13-19, 2010 authority is much needed, suggested Prof. Plenary 4 10 Guillermo Calvo from Columbia University, the keynote speaker at the opening plenary session, ‘Globalization Under Threat.’ Plenary 5 12 That the conference was held in the Czech Republic, Eastern Europe, was of special signifi- Special Sessions 14 cance. Amid polarized debates over how much globalization is too much globalization, the EU has proved to be a model of international integration that has worked considerably well Parallel Sessions 16 (for all its limitations). Participants at the second plenary, ‘Lessons for Regional Integration from the EU – Is the EU Sui Generis?,’ however, cautioned against attempts of its direct repli- GDN Awards and Medals 22 cation in other regions. Program at a Glance 25 With the limitations of ‘Capitalism-as we-know-it’ becoming more apparent in the post-crisis scenario, discussions brought to the fore the need for greater regulations in markets and Press Conference 26 national economies, rooted in “common sense” and “moral values,” at the third plenary session, ‘One Way or Many? Varieties of Capitalism.’ Our Regional Network Partners 26 At the fourth plenary, a roundtable on ‘Regional Responses to the Crisis,’ panelists analyzed GDN’s Research 27 policy measures taken in response to the economic crisis by developing countries across the world. Discussions highlighted the importance of strong institutions to building A Word from the Participants 28 resilience to shocks. At the concluding Roundtable that dwelled on ‘Reforming Global Financial Governance,’ 12th Annual Global GDN Chairman Ernesto Zedillo, highlighting an idea iterated throughout the conference, Development Conference 28 said that “we have more intense globalization, more interdependence and therefore we need more global governance.” 11TH ANNUAL GLOBAL DEVELOPMENT CONFERENCE

the age when these concepts constituted moral/philanthropic considerations, and ‘No Substitute to should realize that sustainable development is also the smart thing to do, consid- Strong Institutions’ ering geophysical realities and the extent to which the earth has been depleted of its GDN President Gerardo della Paolera says that “...there were examples of resources. countries that were victims of previous crises, but that had invested in The idea of sustainability and stability (as building strong institutions making them much more resilient to shocks.” opposed to indiscriminate growth) is equal- ly relevant in the context of the internation- he recent true than today. The global balance of al financial system. While inadequate regu- global eco- world power is at a ‘tipping point.’ lations boded well for growth in terms of Tnomic crisis Conventional thinking about globalization the volume of transactions, they were for- has been a defining has been shaken to the core. The transition ever in conflict with ensuring that the finan- phenomenon of our of the global economy, with a shifting cen- cial markets worked to the advantage of a time; one that will ter of gravity from the West to the East, large section of the society, and for a sus- shape the phase the poses an enormous political economy tained period of time. ‘Sustainability’ of the world economy challenge to foster globalization and a international financial system can be enters hereafter. more cohesive global governance archi- brought about by better, greater interna- The collapse of tecture. With no obvious successor to the tional governance of the markets; all of this Lehman Brothers and its aftershocks did Washington Consensus in sight, we are left points towards a supra-national authority not just represent a failure of the interna- in a no man’s land. A vast majority of the as a possible solution. This thought was tional financial markets; it also highlighted participants at the conference echoed this echoed several times throughout the con- the limitations of the fundamental tenets view and reiterated that no region of our ference, although much more research and of globalization and regional integration globalized world stay insulated from its consultation is required before specific con- that have stayed unchallenged for so long. implications. figurations can be arrived at. Our task, thus, is not just to mend markets This crisis was also unique in that it origi- but also to reflect upon the political econo- nated in the North. While there was much At a broader level, the takeaway seems to my and philosophy of globalization. concern about how little we have been be that while growth is necessary, restraint able to learn from previous crises, there is is essential for it to be sustainable. The 11th Annual Global Development considerable optimism to be drawn from Conference in Prague severed as a timely effective responses by many developing Revisiting Capitalism forum. Out of discussions and debates countries. Across the developing world The crisis has brought Capitalism-- the eco- among more than 400 researchers and poli- there were examples of countries that nomic system associated so strongly with cymakers, several questions were were victims of previous crises, but had ‘democracy’ and the ‘free world’-- under the addressed: Have we brought about ‘too invested in building strong institutions scanner. While an outright rejection of much globalization? Where did we go making them much more resilient to Capitalist systems would still be considered wrong? What paradigm would now succeed shocks. Across sessions, there was an itera- radical, there is considerable consensus that or can be built on The Washington tion of this idea of ‘Better Institutions, Capitalism-as-we-know-it needs to be tem- Consensus? Can we put together an effec- Better Financial Governance,’ a lesson pered with mechanisms that keep it from tive global financial authority for better developed countries would do well to galloping out of control into further crises. coordination between countries? Can exam- learn more from their Southern counter- ples of successful regional integration be parts with more experience of firefighting The crisis has also led to a second look at replicated globally? What will be the con- crises. the so-called ‘authoritarian capitalism,’ the tours of the ‘new Capitalism’ being touted to kind some argue has enabled China to replace the Anglo-Saxon model whose limi- Opportunities amid Crisis achieve staggering growth rates and tations have now come under the scanner? As Lord Antony Giddens pointed out in his muster economic might that almost belies How do we factor into all of this the recent address that the financial crisis (in the con- the incidence of the crisis. As expected, the additions to the ‘Development’ debate, like text of Climate Change) presents an Chinese model was evoked many a time the issue of Climate Change? Answering opportunity to ‘start a revolution,’ i.e. bring during the conference, and questions were these questions is essential to take practical about systemic changes underpinned by raised on the assumed natural relationship steps towards lifting 1.4 billion people out social, political and economic transforma- between Capitalism, democracy, globaliza- of poverty. tion. More specifically, we need to refor- tion and growth. mulate our conception of growth to a level Times of Change: New Perspectives of sophistication wherein it also includes Restraint, again, is recommended to That ‘Change is Permanent’ was never more the element of sustainability. We are past ensure that we do not merely jump from

2 RESEARCH MONITOR REGIONAL AND GLOBAL INTEGRATION: QUO VADIS? one band wagon to another. For one, economic institutions are not merely Regional Network Partners outcomes of empirical analyses and diagnostics recommended by Economists. They are also products of socio-political processes and power structures in the society, and it is imperative that any attempt at reform “GDN Helps Break should take them into consideration. Secondly, we should not (as we often Professional Isolation...” do) lose sight of the fact that the ultimate aim of all economic thought and endeavors is human well-being. As development professionals, a normative DN cooperates with 11 Regional Network Partners, belief in human freedom should form the core of our thinking, even as we Geight of which are based in developing and transition critically analyze conventional concepts of democracy and well-being. countries. This cooperation allows us to truly reach our core constituency - local researchers in the developing and This sentiment was echoed at a plenary session entitled ‘One Way or transition world. In addition to offering financial assistance Many? Varieties of Capitalism.’ Participants discussed how markets could to our Regional Network Partners, we: neglect systemic risks, and called for regulations rooted in “common Provide access for researchers to high-quality data sense” and “moral values.” India was also cited alongside China, as an without cost through our website example of a nation that had achieved considerably high growth rates Produce policy-relevant knowledge on a global scale whilst investing in building transparency and democratic institutions Build research capacity to advance development and through ‘just means.’ alleviate poverty Learning from Europe Facilitate knowledge sharing among researchers As we work towards greater coordination between national economies GDN’s role has been decisive in strengthening the and markets across the world, there is a lot to be learnt from regions dialogue within Latin America, and between Latin America and the developed world. —Mauricio Cardenas where countries have already achieved trade, governance and economic President, Latin American and Caribbean integration of varying degrees. The European Union is an obvious case in Economic Association (LACEA) point. While it is never advisable to try and replicate integration processes across different contexts, much can be learnt from the EU’s experiences. By being a part of GDN, EUDN is in direct contact with strongly articulated networks representing different areas Eminent experts from across the world pondered on ‘Lessons for Regional of the developing world, and that provides a unique Integration from the EU- Is the EU Sui Generis?’ at a plenary session at the opportunity to articulate together a number of initiatives conference. Most of them recognized that imperative to the process was a in which we could participate by providing our input or consensus and shared vision of economic and regional integration, mani- expertise, and also using our experience in this field. fested in the building of supra-national institutions. It was such institu- —Jean Philippe-Platteau tions that saw EU through despite conflicts between domestic considera- Chair, European Development Network (EUDN) tions and the integration process that involves giving up sovereignty in certain areas. Even so, this long-standing union is now facing new chal- This is where GDN has the greatest value—in bringing lenges to harmonize their intra-country fiscal policies which call for more down multidisciplinary groups, Economists and non- delegation to a regional government; hence adding up to the need to Economists, together… You can then have cross- redefine sovereign political economy matters. professional discourse to share experiences on how to conduct policy-relevant research, and not only in the Quo Vadis? context of a region, but across regions. So we are Discussions will go on. The conference’s value lay in the fact that it brought breaking professional isolation not only in the sense of together leading ‘thinkers’ and influential ‘doers’ from across the world, one discipline, but across disciplines. —William Lyakurwa which served well the purpose of streamlining debates and their policy Executive Director, African Economic Research Consortium (AERC) uptake. As a ‘global, development network,’ GDN places singular emphasis on such dialogues. These are perhaps the best way towards optimum coor- The world “network” is thrown around a lot when you talk about GDN, but it’s an important strength of GDN. One dination between development researchers, institutes and policy makers thing that is true particularly for Eastern Europe is that good across the world. For us, perhaps the most important learning from the researchers tend to be isolated… Occasionally you find financial crisis has been that greater globalization demands greater interna- someone who is really dedicated, who is really a researcher, tional coordination; and greater global foresight in all actors involved. This really a scholar, wants to be in the academic sector, wants has reinstated our belief in GDN’s mandate— to achieve through to do something good for their country—they’re all alone. research capacity building a critical mass of researchers who GDN as a network creates a peer group for those people. It are globally interconnected and produce good helps them find each other. —Randall Filer research to inform public policy. Network Head, Center for Economic Research and Graduate Education - Economics Institute (CERGE-EI), Czech Republic

Our task, thus, is not just to mend markets but also The most important thing that GDN does is build capacity to reflect upon the political economy and by training researchers, training academics… these people then inform the wider society. —Tom Coupe philosophy of globalization. Network Head, Economics Education GERARDO DELLA PAOLERA, PRESIDENT OF GDN and Research Consortium (EERC), Ukraine 3 RESEARCH MONITOR 11TH ANNUAL GLOBAL DEVELOPMENT CONFERENCE

Special Session on Climate Change Copenhagen Accord a Promising way Forward: Giddens

hile the Copenhagen accord came the main difficulty at Copenhagen, which acknowledging to its full extent how tough to many as a disappointment, for was this massive split that opened up it is to organize the kind of international col- Wbeing non-binding and agreed between the developing world on the one lective action that is needed for the provi- upon by just a few countries, renowned hand and the developed world on the sion of this highly complex global public sociologist Lord Anthony Giddens sees it as other,” he said. good. Our leaders failed to recognize that a ‘promising way forward.’ practically every complexity associated with Introducing Professor Giddens and the topic the provision of any conceivable global “We have come, by default, to a way for- of the special session, GDN Chairman public good is inherent to the question of ward which is more promising than Kyoto- Ernesto Zedillo said that Climate Change climate change mitigation,” he said. style universal agreements,” he said, in his was, without doubt, the most critical devel- A renowned scholar, Professor Giddens is keynote address. opment issue at the moment. the most widely cited sociologist in the With only the United States, China, India, “We, as social scientists, have a great respon- world according to Google Scholar. His South Africa and Brazil backing the accord, sibility, not only to keep debating about the impact upon politics has been profound. it has been criticized by many for not topic but also try and understand why it According to Bill Clinton, his most recent achieving wide consensus. Giddens, howev- was not possible to get a serious, compre- book, ‘The Politics of Climate Change,’ was ‘a er, suggested that a smaller group was more hensive agreement among the community landmark study in the struggle to contain likely to develop it into an effective deal. of nations to deal with this issue,” he said. Climate Change, the greatest challenge of our era.’ “A smaller group of nations can not only Dr. Zedillo added that for a good under- hope to agree, it can also hope to push for- standing of the issue, it was important to Reiterating a view expressed by participants ward policy more quickly and more effec- look at it as one of achieving international throughout the conference, Giddens con- tively than a massive group of nations work- coordination for providing a global public tended that though seemingly different ing together could do? Second, it cross-cuts good. “At the core of the failure was… not issues, both ‘tackling climate change’ and

Lord Anthony Giddens addressing the Special Session on Climate Change

4 RESEARCH MONITOR REGIONAL AND GLOBAL INTEGRATION: QUO VADIS?

‘mending the global financial system’, demanded reform in governance. Donors, Partners

“There is a tremendous overlap between & Sponsors what needs to be done internationally to contest Climate Change and what has been The Vienna Institute for the subject matter of this conference. In both International Economic Studies cases we need to have a new global architec- (WIIW), Austria ture. We live in a world of massively Australian Agency for International increased interdependence, where climate Development (AusAID), Australia change is the negative side of that interde- Lord Anthony Giddens pendence, but we simply don’t have effec- Ministry of Finance, Austria across the developing world, given the tive enough governmental institutions,” he European Union, Belgium limits to earth’s resources. Sustainable said. Linking the two issues further, Giddens development, thus, should be consid- The United Nations University - argued that the financial crisis had, in fact, ered to be the next smart business Comparative Regional Integration presented an opportunity for a new deal in model and not just a liability. Studies (UNU - CRIS), Belgium climate change, underpinned by dramatic 4. Employ social and economic innovation social, political and economic transforma- International Development alongside technological innovation, for tion. Calling for a re-evaluation of “patholo- Research Centre (IDRC), Canada this is absolutely necessary for a global gies of growth,” he said that both developed Center for Economic Research and transition to a low-carbon economy. and developing countries needed to refor- Graduate Education - Economics Central to this, appealed Giddens, would mulate indicators of economic growth, and be a dash of ‘utopian realism’ in our way Institute (CERGE-EI), Czech Republic the measures by which these are achieved. of thinking. “I’d ask for a leap of imagina- City of Prague, Czech Republic It is now widely agreed that growth, once it tion on the part of everyone sitting here, Ministry of Foreign Affairs, Czech reaches a certain level, does not necessarily and I’d ask for an understanding of the lead to greater personal and social welfare. Republic fact that we are on the cusp of a world He summed up his speech offering four The United Nations University - that is going to differ from our present innovations that need to be made in the World Institute for Development day world, as much as the world preced- politics of climate change, particularly in the Economics Research (UNU-WIDER), ing the industrial revolution differed industrial countries: from the world after it,” he said. Finland 1. Pioneer a long-term politics of climate- Air France, France change, planning in terms of 20-30-year “A few years ago Francis Fukuyama wrote a International Initiative for Impact cycles, not necessarily by the state. famous book called ‘the End of History’ and Markets need to play a crucial role, but he said that we know of no other kind of Evaluation (3ie), India should be made to think long term. society beyond the one we live in now in Japan International Cooperation 2. Pioneering politics of consensus: Citing the West. Ladies and gentlemen, we are liv- Agency (JICA), Japan US as an example, Giddens pointed out ing in an unsustainable world…there has to Ministry of Finance, Japan that Climate Change politics have been be a world on the other side. Therefore, I Arab Fund for Economic and Social increasingly mirroring the polarization would say that we are living in a period that Development (AFESD), Kuwait between the ‘right’ and the ‘left.’ Public is not the end of History, but the end of end debate on the issue has become of History,” he appealed. Ministry of Finance, Luxembourg polemic, making it difficult to garner Ministry of Foreign Affairs, The support for collective action from peo- Netherlands ple across the political spectrum. Department for International 3. Think of climate change as an opportu- Development (DFID), UK nity for technological and social transfor- mation, and not merely as a cost. It is Bill & Melinda Gates Foundation, simply impossible to sustain the west- USA ern style of growth or The World Bank, USA replicate it We are living in an unsustainable world…there has to be a world on the other side. Therefore, I would say that we are living in a period that is not the end of History, but the end of end of History LORD ANTHONY GIDDENS 5 RESEARCH MONITOR 11TH ANNUAL GLOBAL DEVELOPMENT CONFERENCE

credit freeze. The significance of the thesis Conference Roundup lies in its emphasis on ‘credit flow,’ unlike most other analyses that look for falls in OPENING PLENARY ‘credit stock.’ A sudden cut in ‘credit flow’ brings about a sudden cut in expenditure Global Authority Needed for Sustainable that, in turn, effects changes in relative International Financial System prices. The US real-estate sector experienced a similar, sudden stop in credit flow from the banks. The element of surprise set off panic in the financial markets, magnifying the real damage and amplifying the crisis. The fall of Lehman Brothers proved to be the defining shock in the current crisis. According to Calvo, such negative shocks are key causes of economic crises and much more difficult to prevent than a financial collapse. He illustrated this point by citing quick recovery in levels of domestic credit and capital flows after lenders of last resort signaled they would not let large financial institutions go bankrupt.

Especially affected by large CSS are credit dependent goods—like durable goods, real estate etc.— that constitute sectors The Opening Plenary in Progress with large multiplier effects. It was for this reason that the sub-prime crisis spread he theme of the opening plenary of harm than good have been gaining throughout financial sectors across the the 11th Annual Global strength. world despite starting in an obscure corner TDevelopment Conference, of the capital markets. ‘Globalization Under Threat,’ reflected a Urging not to lose sight of globalization’s concern that has underlined development rewards thus far, H.E. Dr. Juraj Chmiel, Czech Explaining and proving how a single event policy and research since the economic Minister of Foreign Affairs, said that “…glob- could trigger a global downturn across crisis broke out in 2008. With the financial alization is the engine of progress world- countries and sectors, the above frame- virus spreading worldwide from an wide. We cannot afford that it falls victim to work also implies a need for greater policy obscure event like the US sub-prime any short term quick fixes.” “Too much is at coordination across countries for a more mortgage crisis, protectionist voices stake. What is of essence, therefore, is not to sustainable international financial system. claiming globalization could do more try to curb the progress of globalisation, but Professor Calvo suggested that this could to better understand its implications to be be achieved by setting a global regulatory WELCOME REMARKS able to handle its power in a more sensible authority, one that would also act as a H.E. Dr. Juraj Chmiel, and responsible way,” he added. lender of the last resort. Hon. Minister for European Affairs Office of the Government of the The session was chaired by GDN President While acknowledging that some develop- Czech Republic Dr. Gerardo della Paolera. Presenting an ing countries had been able ward off the CHAIR analytical framework to understand a phe- most severe effects of the crisis by accu- Gerardo della Paolera nomena like the current crisis, Professor mulating foreign reserves, Calvo warned President Guillermo Calvo (Columbia University), the that this was an example of how a policy Global Development Network, India keynote speaker, claimed that they were feasible at the national level ends up KEYNOTE SPEAKER caused by a bank-run that connected the increasing global imbalances. Guillermo Calvo financial and the real sectors by a sudden freeze in credit. Calvo introduced the con- “They (developing countries) have less Professor of Economics, International and Public Affairs cept of ‘Credit Sudden Stop’ (CSS)— a capital- presumably the marginal produc- Columbia University, USA large, unanticipated decline in credit flow tivity of capital is larger in poorer countries from local banks—as a measure of this so capital should be

6 RESEARCH MONITOR REGIONAL AND GLOBAL INTEGRATION: QUO VADIS?

the EU model of regional integration, widely regarded as one that has ‘deepened’ and Warm Welcome by a ‘widened’ as it has evolved over the years. Snow-Covered Prague Chaired by Dr. Ahmed Galal (Managing Director, Economic Research Forum), the session heard presentations and discussions focusing on various aspects of the EU experience, drawing substantially from the historical context of the formation of the union.

H.E. Dr. Juraj Chmiel, Hon. Minister for Professor Andre Sapir from Université Libre European Affairs, Czech Republic, de Bruxelles, posited that the EU experi- addressing the opening plenary ence had shown that economic integration was a ‘process,’ in that it had to follow clear flowing in that direction, but its flowing in objectives, step-by-step planning and a he 11th Annual Global Development the opposite direction. Again this is a topic timeframe to remove internal barriers. TConference was held under the aus- for GDN to work on…If you are concerned Additionally, a ‘union’ should be mindful of pices of The Ministry of Foreign Affairs, about poverty, one thing you have to make costly external barriers and set a frame- Czech Republic and The City of Prague. Without their support and hospitality, sure is that capital flows into the poor work for handling macro shocks. the event could not have been the suc- regions. But if you leave this problem in the cess it was. hands of individual countries, they will con- Illustrating his point, he reminded that tinue to build international reserves,” the successful integration in Europe start- “We asked ourselves what we could do as he said. ed with a political vision that was “deter- hosts to make this a special occasion for you… (then we decided) lets arrange for mined to lay the foundations of an ever our magical city of Prague to be covered in There were several questions from the floor, closer union among the peoples of snow!” quipped H.E. Tomáš Chalupa, expressing concern that while an interna- Europe” (Treaty of Rome, 1957) and an Hon. Chair, Foreign Affairs Committee, tional financial authority was desirable in economic vision that was “determined to City of Prague, welcoming participants at principle, setting one up was fraught with facilitate the removal of trade barriers and the Special Session on Climate Change on issues associated with supra-national gover- the promotion of closer economic cooper- day one of the conference. nance. Acknowledging the concerns, Calvo ation” (European Free Trade Association GDN is especially grateful to our hosts for said that this was an issue to be addressed Treaty, 1960). not only providing us logistical and finan- nevertheless, and urged groups like the G- cial support, but also participating actively 20 countries to take concrete actions in this Pointing out that the EU had achieved in the conference. Inaugurating the open- regard. On the issues of corruption, big ‘deep’ integration at present, Professor ing plenary, ‘Globalisation Under Threat,’ bonuses, etc., he said that they were rele- Sapir identified three challenges that lay H.E. Dr. Juraj Chmiel, Minister for vant, but not fundamental to understanding ahead of the Union-- managing partial European Affairs, cautioned against mak- the spread of the ‘financial virus’ and its integration, managing increasing size and ing globalization the scapegoat of protec- transmission to the real sector. diversity, and managing its integration tionist economic policies. “ What is of with the rest of the world. essence, therefore, is not to try to curb the progress of globalisation, but to better understand its implications to be able to Professor Alan Winters (Chief Economist, PLENARY 2: handle its power in a more sensible and DFID, UK and Professor. University of responsible way,” he said. Sussex), emphasized that EU’s success in EU Integration an integration lay in the fact that it emerged On day two of the conference, H.E. Jan Kohout, Hon. Deputy Prime Minister out of what was primarily a politi- Example to Learn from, and Minister of Foreign Affairs threw cal and ideological move- open the gates of the Czernin Palace, seat not Replicate ment that had economic of the Czech Ministry of Foreign Affairs, to consequences. conference participants for a gala recep- t the second plenary session ‘Lessons tion. Minister Kohout presented awards to Afor Regional Integration from the EU- is winners of the Global Development the EU sui generis?,’ panelists reflect- Awards and Medals at the function. ed on lessons that could be GDN would also like to thank the Center drawn from for Economic Research and Graduate Education-Economics Institute (CERGE-EI), If you are concerned about poverty, one thing our local partners in Prague. Without you have to make sure is that capital flows CERGE-EI’s crucial support, a conference of into the poor regions. this magnitude would have been very dif- GUILLERMO CALVO ficult to manage. 7 RESEARCH MONITOR 11TH ANNUAL GLOBAL DEVELOPMENT CONFERENCE

Prof. van Langenhove said that the problem with hailing European integration on the basis of their economic integration was a mistake, as “…economics was used as a tool… to come to this security vision.” “If we think about if the EU can be a model for other regions in the world, then rather than starting from economic issues we need to start from security issues and see what role regional organizations can play from a security perspective.”

Discussant Dr. Antoni Estevadeordal of the Inter-American Development Bank posited that with the concept of regional integration undergoing recalibration the world (Left to right ) Julius Horvath, Alan Winters, Ahmed Galal, André Sapir, Luk Van over, the EU was now less of a model than Langenhove and Antoni Estevadeordal it was before.

“It didn’t arise because a bunch of econo- political-ideology of integration as being “In the mid ‘90s there were models of the mists sat down with their slide rules and rooted in a history dotted with several process of integration in developing coun- did a cost-benefit analysis… We should efforts of integration, wars and repeated tries. In Latin America many experiences look at the EU as a high ideological experi- affirmation of European Nationalism creat- were built on the EU model. What we have ence,” he said. Prof. Winters explained the ing a sense of collective identity among seen after the mid ‘90s is spaghetti and people. noodles integration with many bilateral agreements between countries in different CHAIR The European Commission, Prof. Winters RTAs. Today we have lasagna agreements Ahmed Galal pointed out, “… is charged with the between Asia and the Americas,” he said. RNP Head and Managing Director European ideal and is the guardian of the Economic Research Forum (ERF), Egypt European vision.” It was the Commission Dr. Estevadeordal, however, said other SPEAKERS that kept the EU project going during the countries could still learn from EU’s micro- André Sapir 1980s when its future was uncertain, by experiments and policies, like promotion Professor of Economics proposing a Single Market. It also worked of Free Trade Agreements and building of Université Libre de Bruxelles (ULB), towards encouraging member states to regional infrastructure corridors. Belgium give up sovereignty and pass powers to Luk Van Langenhove common institutions, such as the Discussant Prof. Julius Horvath from the European Central Bank, the European Central European University, Hungary, Director, Comparative Regional Parliament and the Court of Justice of the suggested that a wide view of the EU as a Integration Studies Programme European Union. political and monetary union would sug- United Nations University (UNU-CRIS), gest that (1) despite cross-country varia- Belgium In his presentation “The Three Faces of the tions, support from the European people Alan Winters EU,” Professor Luk van Langenhove, at large continues to strengthen the Chief Economist Director, UNU-CRIS unpacked the concept Union’s legitimacy, and (2) efforts to Department for International of EU, analyzing the Union as a (i) regional enhance economic policy coordination Development (DFID), UK trade association, (ii) a federal unit of gov- among member countries does not nec- DISCUSSANTS ernance and (iii) as a global actor. He essarily demand an EU-level centraliza- Antoni Estevadeordal argued that the EU could definitely be pre- tion of economic policy. “While EU area Manager, Integration and Trade Sector, sented as a regional integration success members have intensified coordination in Vice Presidency for Sectors and story from the regional trade point of view, macroeconomic policies over the last ten Knowledge and somewhat partially as a federal unit of years… this has not, as some predicted, Inter-American Development Bank, USA governance. Its position as a global actor, created pressure (which we would feel Julius Horvath however, is faced with the shift in global now) for further centralization of eco- Head, Department of Economics economic power from the West to the East, nomic decision-making in the EU,” Central European University, Hungary and a declining share in world population. he said. Iterating a point made by Prof. Winters,

8 RESEARCH MONITOR REGIONAL AND GLOBAL INTEGRATION: QUO VADIS?

PLENARY 3 agglomeration effects, imperfect markets, Workshop: cumulative causation and multiple equilib- Post-Crisis Capitalism: ria justified a greater role for public policy. Strengthening Towards a New Paradigm Institutions to Improve Reflecting on changes that the crisis was he current financial crisis has brought likely to bring about, he said that OECD Public Expenditure Tto the fore the limitations of Capitalism- governments would borrow more than Accountability - arguably the most dominant economic 25% of the global savings in the years to model worldwide— considered to be the come, markets would tolerate smaller way to go for economies that want to link external deficits and there would be his was the third technical training and with the world market, grow and modern- stricter regulation of markets. Tpeer-learning workshop of the DFID- ize. Presentations at the third plenary, ‘One funded five-year project, emphasizing on Way or Many? Varieties of Capitalism’ con- Suggesting that different ‘varieties of rigorous analysis to design reliable public verged at this central idea as they dis- Capitalism’ be conceived as different setups expenditure policy options and thus, cussed various strands of Capitalism preva- of economic institutions, Professor James inform policy in three sectors-- Water, lent in the world, how they had been Robinson from Harvard University argued Health and Education. It specifically focus- affected by the current crisis and whether that while the crisis would certainly influence es on strengthening the capabilities of new forms were likely to emerge as a them, it would not change them deeply. partner institutions to conduct public result. “Economic institutions are the outcome of expenditure analysis and constructively engage with policy makers.

Fifteen partners — research institutes and think tanks — from as many countries shared findings and results of ‘Program Budgeting Analysis’ and ‘Benefit Incidence Analysis.’ Participants identified key trends and budget allocations across countries, and shared challenges related to methodology and data availability that they faced. Among other findings, it emerged that recurrent expenses (expenditure on wages and salaries and pur- chase of goods and services) were higher than capital expenses (expenditure on (from left to right) Daniel Daianu, Devesh Kapur, Lawrence MacDonald, James fixed assets) in the health and education Robinson and George Mavrotas at the third plenary session sectors, while the reverse was true in the water sector. Daniel Daianu, Professor of Economics at collective choices, and reflect the distribu- the National School of Political and tion of power in the society,” he said. “Don’t An important conclusion emerging across Administrative Studies, Romania, argued think about changing the institutions, presentations of ‘Benefit Incidence that the current crisis marked the failure of change the power relations in the socie- Analysis’ results was that policies should the neo-liberal paradigm that influenced ty… Institutions grow out of politics, and address the lack of access of the poor to economic policy till recently. Prof. Daianu identifying and understanding the political tertiary and university education, to stressed that there was ample evidence equilibrium is crucial before suggesting ensure that they benefited from public that markets could neglect systemic risks, reform,” he added. expenditure in these areas. and called for regulations rooted in “common sense” and “moral values.” Based on the two sets of analyses, GDN and Results for Development are also cre- Calling for greater regulation of financial ating cross-country benchmarks for pub- markets, he argued that while it was true lic expenditure analysis. that it was firms, and not countries, who competed, phenomena like Participants also received training on the next analytical activity in the project: ‘Cost-Effectiveness Analysis.’ Experts from The World Bank, Results for Development Economic institutions reflect the distribution of power in the and National Institute of Public Health, society. Don’t think about changing the institutions, Mexico, explained key concepts, methods, change the power relations in the society. challenges and cases related to cost- 9 JAMES ROBINSON effectiveness analysis on the second day. RESEARCH MONITOR 11TH ANNUAL GLOBAL DEVELOPMENT CONFERENCE

Dr. Devesh Kapur from University of ed consumerism over the years in the con- overviews of policy responses to the crisis Pennsylvania raised the important ques- text of the recent financial crisis and by countries in Sub-Saharan Africa, Eastern tion of whether “authoritarian capitalism stressed the need for safety nets to keep Europe, Latin America, East Asia and the was worse or better” than the one strongly the world’s poor from bearing the brunt. Arab region. A common theme emerging associated with democratic values. Dr. “Our predominant focus should be on across presentations was that many devel- Kapur compared the Indian and Chinese poverty reduction” he said, “since there is a oping countries had resisted the worst models of Capitalism, both of which had danger, in our effort to restore the financial effects of the current crisis much better achieved extraordinary growth despite system, to lose focus on what is truly than previous ones, largely due to their being different from each other. important – namely lifting 1.4 billion peo- recent investments in institutional reforms. ple out of poverty.” The Chinese Communist Party, he said, was CHAIR more meritocratic which made the process The presentations elicited a flurry of ques- Andrew Steer of its leaders’ decision-making quick and tions and comments from the audience, efficient. Transparency, however, was not especially around the point whether the Director General, Policy and Research the regime’s strongest card. India, on the recent setbacks to the democratic capital- Department for International other hand, had expended considerable ism suggested that authoritarian capital- Development, UK efforts towards building democratic insti- ism was a viable option, and whether the PANELISTS tutions and transparency through “just Beijing Consensus was a more prudent Michaela Erbenova means.” Ironically, India had performed less development strategy than the Deputy Division Chief, Financial Sector well than authoritarian China on counts of Washington Consensus. Dr. Edward K Y Oversight Division, Monetary and Capital growth, poverty and human development. Chen from Hong Kong University argued Markets Department, International It was, thus, worth examining whether the that unlike popular conception, the former Monetary Fund, USA relationship between Capitalism and was a more dynamic concept, a “pragmatic Mouna Cherkaoui Democracy was natural, mutually reinforc- development strategy” that lay emphasis Professor, Mohamed V University ing and what was the direction of causality. on the “speed and sequencing of reforms Morocco that has nothing to do with democracy or Andrés Neumeyer Dr. George Mavrotas, Chief Economist, no democracy.” Professor of Economics, Universidad GDN wondered if decades of research had Torcuato Di Tella, Argentina really taught us anything at all about eco- Yung Chul Park nomic crises and how to handle them. He Distinguished Professor also reflected on issues related to unabat- PLENARY 4: Korea University, Republic of Korea Ernest Aryeetey Roundtable on Regional Responses Director, The Africa Growth Initiative at CHAIR to the Crisis The Brookings Institution Lawrence MacDonald Vice President, Communications and Strong Institutions Policy Outreach Crucial to Weathering Center for Global Development, USA “It is not simply a question of market SPEAKERS the Storm reforms, but of building institutions, the Daniel Daianu tightening of regulatory environment… Professor of Economics When I look at Africa, the countries that National School of Political and feared the session would outline how lit- had better functioning central banks, the Administrative Studies, Romania Itle we understood about the appropriate countries that had better functioning regu- responses in the face of the crisis,” said latory environment were those able to deal Devesh Kapur Andrew Steer (Director General, Policy and with the crisis (better) than others,” said Dr. Director, Center for the Advanced Study Research, DFID, UK), Chair of the Ernest Aryeetey, Director of the Africa of India, University of Pennsylvania, USA Roundtable on Regional Responses to the Growth Initiative at The Brookings James Robinson Crisis, on January 17. Dr. Steer said that he Institution. Professor of Government, Harvard was surprised at the level of optimism University, USA among some developing countries about While acknowledging that the crisis had DISCUSSANT the prospect of recovering from the recent led to a shrinking of African economies, George Mavrotas economic crisis, even though “we are not reduced the continent’s economic growth Chief Economist yet out of the woods.” by 2-4 per cent in 2009 and affected the Global Development Network, India capacity of the state to deliver social pro- Five speakers at the session presented tection, he illustrated

10 RESEARCH MONITOR REGIONAL AND GLOBAL INTEGRATION: QUO VADIS?

Workshop Inequality and Public Policy

he workshop was conducted by The TVienna Institute for International Economic Studies (wiiw). It fed into GDN’s ‘Inter-Regional Research Projects’ initiative that aims to foster South-South research collaboration. Twelve papers were presented and discussed, examining various aspects of the (from left to right) Ernest Aryeetey, Mouna Cherkaoui, Andrew Steer, Michaela relationship between inequality and Erbenova, Andrés Neumeyer and Yung Chul Park public policy, like gender-based income inequality; link between socio-economic that countries with strong institutions and Overall, Arab countries had done well inequality and demographic better policies had been able to tide over through the crisis as they faced it with characteristics; relationship between the crisis better, citing Zambia, South decades of structural reforms behind them, social transfers and remittances; Africa and Tanzania as examples. and the resultant fiscal/monetary environ- taxation; public sector wages and In her presentation “The Crisis is Abating” ment that enabled quick recovery. micro-determinants of multi- Dr. Michaela Erbenova from the IMF illus- dimensional poverty. The papers were trated that the crisis had hit eastern Professor Andrés Neumeyer, from based on studies from Serbia, Bosnia, European economies severely. “In the Universidad Torcuato Di Tella, Argentina, Bulgaria, Romania, Albania and several Baltics there was a reversal of EU integra- focused his presentation on a comparative other Central, East and Southeast tion gains. A number of countries have analysis of responses by Latin American European transition economies. asked for support from the IMF and other economies to previous crises with respect IFIs.” It bode well for the region that the to the present one, i.e. ‘what’s different this global economy had now started growing time?’ In terms of effect, he highlighted again with government interventions sup- that unlike previous crises, when global porting demand and reducing systemic shocks got amplified when they hit Latin risks in financial markets, she said. America, the region had shown considerable insulation from the worst effects of However, she emphasized, it was impor- the current crisis and even signs of a quick tant that fiscal, monetary and financial recovery. policies remained supportive till a durable recovery was secured. Professor Neumeyer attributed this to stronger initial financial conditions (current Professor Mouna Cherkaoui from account/fiscal surpluses and high level of Mohamed V University, Morocco, present- reserves), better exchange rate risk man- ed an overview of the Arab countries’ agement and quick responses by bodies response to the crisis. In a nuanced analy- like the IMF and G20 who were quick to sis, she highlighted how the crisis had make resources available as Lenders affected oil-exporting and oil-importing of the Last Resort. He recom- countries differently. Unlike oil-importing mended that Latin countries in the Arab region, strong international reserves and fiscal positions had allowed their oil-exporting neighbors to respond rapidly to the adverse effects of the crisis. I am surprised at the level of optimism among some developing countries about the prospect of recovering from the recent economic crisis.

ANDREW STEER 11 RESEARCH MONITOR 11TH ANNUAL GLOBAL DEVELOPMENT CONFERENCE

American countries restore fiscal balance to be prepared for the next shock.

In his presentation titled ‘Impact of the Crisis: Deeper and Scary,’ Professor Yung Chul Park from Korea University illustrated the crisis’ effect on East Asia, positing that the region had been thrown into a deeper recession mainly through the trade chan- nel. Both exports and imports were plung- ing at double digit rates, producing recession surpluses. Besides, financial meltdown in the US had led to the contraction of global financial intermediation and dollar liquidity shortages, deepening the recession further.

He suggested that Asian countries change the composition of demand and produc- (from left to right) Alan M. Taylor, Padma Desai, Ernesto Zedillo, Gerardo della Paolera, tion in favor of non-tradeable, and that François Bourguignon and Santiago Levy rebalancing should focus on rectifying the bias of the incentive scheme in favor of across presentations was that a global- using the tax receipts to do whatever they export-oriented industries. He cautioned level institution was necessary to regulate want with it… It is exactly the same thing that prospects for recovery, however, were and coordinate financial systems across the as common regulation in all countries in marred by lack of policy coordination in world, and lead efforts to mitigate the the world, and from that point of view the the region. He expressed hope that the worst effects of future crises. problem is the same… as with (uniform) Chiang Mai Initiative Multilateralization financial reporting standards and things (CMIM) could evolve into a de facto region- In the opening presentation, Prof. Francois like that,” he said. At the same time, he al monetary fund, a step towards monetary Bourguignon, Director, Paris School of pointed out, there was a need for redistrib- unification and greater policy coordination Economics, argued that currently, there ution between countries, of the costs of among East Asian countries. was “no international actor big enough to regulation both in the case of Climate counteract forces that could lead the global economy in the wrong direction,” one that could undertake the roles of coordi- CHAIR nating the various actors in the global Gerardo della Paolera financial system and ensuring that there President PLENARY 5: was always enough liquidity in the global Global Development Network, India Roundtable on Reforming financial system. The role of The World PANELISTS Global Financial Governance Bank and the IMF, he argued, was limited Ernesto Zedillo to smoothing the effect of shocks faced by Chair, GDN Board of Directors and Call for Coordinated countries. Director, Yale Center for the Study of Response for Tackling Globalization, USA Prof. Bourguignon drew interesting paral- François Bourguignon Global Imbalances lels between global climate change negoti- Director, Paris School of Economics, ations and prospects of coordinated action France he current economic crisis has brought by countries to reform global financial gov- Padma Desai Tto fore the inadequacies of the institu- ernance. In both cases, he said there was a Director, Center for Transition Economies tions that currently form and integrate need for common regulation. Columbia University, USA financial markets worldwide. Discussions at Santiago Levy the Roundtable on ‘Reforming Global “We might be able to solve the whole envi- Vice President for Sectors and Knowledge Financial Governance,’ chaired by GDN ronmental problem through carbon tax, Inter-American Development Bank, USA President Dr. Gerardo della Paolera, but the carbon tax will have to be the Alan M. Taylor focused on analysing the shortcomings of same in all countries. There would be no Director, Center for the Evolution of the Global Economy University of California, the current institutional setup and explor- need for a global tax authority. We could Davis, USA ing possible reforms. A theme recurrent simply have all countries tax carbon and

12 RESEARCH MONITOR REGIONAL AND GLOBAL INTEGRATION: QUO VADIS?

Change management and global financial could mobilize large volumes of Workshop governance reforms. resources—free of conditionalities— towards weathering the crisis before any GDNet: Research Prof. Padma Desai, Director, Center for damage was done. Swap Lines were set up, Communication Transition Economies, at Columbia and the G20 increased credit lines to the University, reflected on the forthcoming international system soon after. Mexico to Inform Policy measures being taken in the US to protect received an estimated $80bn in flexible consumers and limit the risky behaviors of credit. ith a view to enhancing the impact Too-Big-To-Fail (TBTF) banks. She listed vari- Wof research and outreach to Policy, ous reasons why TBTF banks are prone to While this boded well for the economies, GDNet launched the “Research risk, including (a) abolition (in 1999) of the Dr. Levy argued that it was necessary to Communication Capacity Building Glass-Steagall Act of 1933 which separated institutionalize such ad-hoc responses. Program”. The program is intended to commercial banks and investment banks “Clearly, the international community can- assist researchers and research institutes and (b) the use of complex assets such as not rely on ad-hoc responses… on and networks to generate an effective Over the Counter Derivatives (OCDs), and whether the crisis originates in a large flow of key messages about the objectives Credit Default Swaps (CDSs) which were country and induces a kind of guilt and, and results of their policy relevant backed by shaky mortgage-based securities. therefore, a swift response.” research, as well as push forward policy For such reasons, she argued, such banks Prof. Alan Taylor, Director of the Center for recommendations based in the research. were fundamentally risk-prone and must be required to hold enough capital to back The “Communication for Policy their assets, at all times. She supported Influence” was held before the measures like Contingent Capital (COCO) GDN 11th Annual Conference bonds as part of a resolution setup for wind- “Regional and Global ing up TBTF financial institutions on the Integration: Quo Vadis?” in verge of collapse. Prague, Czech Republic as part of the GDNet Research On criticisms of bonuses and ‘high’ levels of Communications to Policy executive compensation in the US, she said Workshop Series. ODI provided that the federal government directives try support facilitating the work- to make an arbitrage between a short-term shop for the GDN-Awards and political problem and the long-term issue Medals finalist for 2009 to of bridging the gap between the rich and mainly provide support on the poor and of devising an appropriate presentation skills and the pro- tax policy for the purpose. “The govern- duction of relevant research to ment should not be regulating the com- policy products when pensation of executives. Let the boards do required. The workshop it,” she said. Participants at the GDNet workshop focused on how to; identify audience, articulate policy objectives, draft effective Dr. Santiago Levy, Vice-President for the Evolution of the Global Economy at the messages to key audiences, communica- Sectors and Knowledge at the Inter- University of California asked ‘What were tion channels and tools with a focus on American Development Bank, analysed the we thinking?’ both as a rhetorical and a policy briefs, press releases, work with the Latin American economies’ “better than real question. He identified two sets of ‘old media, how to prepare slides and an intro- expected” performance through the crisis. views’ which pre-dated the financial crisis. duction to online tools. Participants were These economies had entered the current “We thought that financial instability interested in the workshop material and crisis with much stronger fundamentals as was something that only happened found it particularly useful in preparation compared to the previous ones. However, a at the periphery, not at the for their presentation of their research closer look suggested that there were core. That it happened projects and proposals. They also other factors at play as well, knowing ‘to them’ and not expressed interest in allowing more time which was essential to understanding the ‘to us’. to digest the content and reflect captured crisis and preparing better for the next ideas on their slides and communication one. Crucially, national and interna- outputs. There was great value in integrat- tional financial institu- ing the research communication effort tions with GDN activities. A number of finalists expressed interest in the potential for We have more intense globalization, more developing an alumni network to provide interdependence and therefore we need support and track their progress. more global governance. ERNESTO ZEDILLO 13 RESEARCH MONITOR 11TH ANNUAL GLOBAL DEVELOPMENT CONFERENCE

This was a complacent view, and one that ignored both history and evidence.” SPECIAL Prof. Taylor said that the crisis had made it clear that ‘contagion happens both ways’, Development on the Move: and that those emerging markets that How Migration can Aid Human Development have come through this crisis well were relying on their own fundamentals and insurance measures put in place before the crisis. “This was perhaps the most important, wise and prudent precaution they had to insulate themselves.”

About the new regulatory framework, he expressed his doubts about its efficiency at the international level. According to him “emerging markets will try to enforce self insurance because that’s the only thing they can rely for sure. They can pool their reserves but there is an issue of sovereignty. Solving it will be more difficult. How global imbalances will change will influence the picture.”

Dr. Ernesto Zedillo, GDN Chairman and Director of the Yale Centre for the Study of Globalisation, started his presentation saying that it was important to consider whether, taking cue from the recent crisis, “global financial governance was more Phil Woolas, UK Minister of State for Borders and Immigration, addressing the warranted or less warranted” in the post- Special Session on Migration World War era of globalization currently underway. “We have more intense globali- e emigrate to Australia but we brate the policy.’ “UK Immigration Policies sation, more interdependence and there- retire to Spain. Overseas people in must better resonate with our fore we need more global governance,” he Wour country are immigrants but International Development Policies.” He said, acknowledging at the same time when we go to theirs, we’re expatriates. We said. “We need better understanding of the that efforts to this effect, initiated before see people from France as visitors but from push and pull factors behind international the crisis, had failed. further afield as immigrants,” said Phil migration at both the macro and micro Woolas, UK Minister of State for Borders level,” he said. “The G20 Pittsburgh records from 2009 and Immigration, illustrating how lan- show impeccable analysis. They said we guage reflected the narrative of interna- The research project, managed jointly by need a co-ordinated response to tackle tional migration dominant in the British GDN and Institute for Public Policy global imbalances. Then they commis- society. Research (ippr), UK, explores the develop- sioned a peer-review of macro-economic ment impacts of migration in Colombia, policies. This is a joke! We will never get Minister Woolas was addressing a special Fiji, Georgia, Ghana, Jamaica, Macedonia global co-ordination without an institu- parallel session on GDN’s global research and Vietnam, and provides valuable new tional mechanism with sufficient teeth to project ‘Development on the Move: micro-level information and analysis to fill make it credible and enforceable,” he said. Measuring and Optimizing Migration’s this gap. Economic and Social Impacts' on the sec- Dr. Zedillo also cautioned that while coor- ond day of the conference, organized in The session was moderated by George dinated effort at the international level partnership with the Institute of Public Mavrotas, Chief Economist of GDN, who was essential, it was difficult to achieve as Policy Research (ippr), London. stressed the importance of this major, local issues were often at loggerheads multi-year, innovative, as well as policy- with what was desirable for the interna- The Minister further said that migration focused project for the international devel- tional financial system. was the ‘second hottest issue’ in the (then) opment community, in view of the centrali- forthcoming General Election, and wanted ty of international migration issues in the to ‘explain why we got it wrong, and recali- development discourse recently. This was

14 RESEARCH MONITOR REGIONAL AND GLOBAL INTEGRATION: QUO VADIS?

SESSIONS Workshop Promoting Innovative Programs from the Developing World: Evaluating Responses Towards Realising the Health MDGs in Africa and Asia to Shocks

his session reported on GDN’s major cess of a health program are considerably nternational Initiative for Impact twenty-study Global Research Project, specific to the context. When looking for IEvaluation (3ie), a program division of T‘Promoting Innovative Programs from winners, therefore, it may be more impor- GDN, conducted the two-day hands-on the Developing World: Towards Realizing the tant to grasp the idea behind a particular clinic focused on rigorous impact Health MDGs in Africa and Asia.’ The studies intervention rather than the specifics of its evaluation design, using examples of evaluate the impact of a wide range of implementation. (2) It is important to con- three different interventions to cope health programs in Africa and Asia, and look duct evaluations throughout the duration of with shocks - health insurance, to inform policy with evidence on the effec- the project. According to discussant Dr. emergency relief, and climate change tiveness of the ones that have the potential Santiago Levy, from the Inter-American adaptation and mitigation. to improve health outcomes in developing Development Bank, “development policy countries. should allow more place to evaluations... the Dr. Howard White, 3ie Executive Director, fact that a program work at the beginning started the workshop with a An overview of the project was presented at will not guarantee that it will work all the presentation explaining the basic the session, followed by findings from three time.” concepts related to Impact Evaluation of the studies—a community-based health- and methodological issues. He also insurance program in Karnataka, India; an The session was chaired by Dr. Lyn Squire dwelled on the nature and extent of the attempt to use cash transfers to influence from Brookings Institution, USA, who was uptake of impact evaluation by public sexual behavior of school-age girls in also the Project Manager. An overview of the policy. Malawi; and a program aimed at improving project was presented by Ranjeeta Thomas maternal health care in Peru. from University of York, UK. Three country Dr. Marie Gaarder, Deputy Director, 3ie, case studies-- "Impact Evaluation of India's presented an overview of important Two basic points emerged from the discus- 'Yeshasvini' Community-Based Health methodological tools used for impact sions: (1) the factors that determine the suc- Insurance Program" from India, "The Short- evaluation. She focussed largely on the Cont. on page 16 importance of experimental and quasi- Cont. from page 14 experimental designs, critical to coping followed by presentations from ed findings from the final report, emanat- with selection bias and ensuring rigour Dhananjayan Sriskandarajah, Director, ing from their research. Finally, Jeni in the impact evaluation process. Royal Commonwealth Society, UK (and Klugman, Director, Human Development Project Director) and Laura Chappell, Report Office, welcomed the research and Participants were also presented with Senior Research Fellow, ippr, who both in particular the richness of the studies, findings from real-life impact evaluation reflected on the central issues and key out- which clearly showed the nature of bene- studies. Hugh Waddington from 3ie comes emerging from the project. They fits and policy implications. “The research presented a synthetic review of two underlined that apart from making a sub- shows the importance of barriers to move- different evaluation studies of Mexico’s stantial contribution to the existing stock ment, especially legal movement. We need ‘Seguro Popular’ health insurance of knowledge about the impact of migra- to explore the nature of these barriers to program. Birte Snilstveit, Research tion on each of the countries in question, the movers themselves,” she said. “Mobility Assistant, 3ie, shared insights from an the comparative nature of the research has has the potential to enhance human devel- impact assessment of Pagos por also helped draw conclusions about the opment among movers, stayers and the Servicios Ambientales, a government impact of migration as a whole on devel- majority of those in destination places. program in Costa Rica that pioneered opment as a whole. But outcomes can be adverse: there the use of payment for environmental is lots of scope for improve- services (PES) as a conservation tool in a As lead researchers of the project’s country ment.” developing country. studies in Colombia and Macedonia respectively, Mauricio Cardenas (Senior The clinic was hands-on in nature, with Fellow, Brookings Institutions) and Zoran participants engaging in group Nikolovski (Director, EduCon discussions and practical exercises, Research, Macedonia) through which participants designed an present- impact evaluation study themselves.

Overseas people in our country are immigrants but when we go to theirs, we’re expatriates. PHIL WOOLAS 15 RESEARCH MONITOR 11TH ANNUAL GLOBAL DEVELOPMENT CONFERENCE

Term Impacts of a CCT Program for aging resource booms. The Argentina-Malawi Challenges of Policy and Practice.’ Schooling on the Sexual Behavior of Young study showed that urban households would Dr. Ghazala Mansuri, Senior Economist at Women" from Malawi and "The PARSalud mostly benefit from a surge in global food the Bank, outlined how it was difficult to find Program in Peru: Evaluating its Impact on prices through increased factor demand. evidence of the effectiveness of participatory Access to Institutional Delivery and approaches despite their perceived benefits. Adequate Maternal Care"-- were presented The session was co-chaired by Dr. Olusanya She posited that researchers are often critical by Dr. Aradhna Aggarwal from University of Ajakaiye, Director of Research, African of participatory projects because they often Delhi; Dr. Sarah Baird from George Economic Research Consortium and Dr. fail to deliver immediate success stories. She Washington University and Dr. Miguel Mauricio Cardenas, Senior Fellow and cautioned against being over-critical, arguing Jaramillo from Grupo de Análisis para el Director of the Latin America Initiative, that it takes time to empower people, which Desarrollo, Peru, respectively. Brookings Institution. is a pre-condition for true participation.

Dr. Michael Woolcock, Senior Social Scientist, The World Bank, argued that participatory development “is not an invariant technology, but an instrument with many people-centred moving parts”. He argued the need for a “counter-temporal” approach to monitoring and evaluation that asks “where should this project be at this time?” This question reflects upon different contexts, and helps guide future project initiatives.

Dr. Vijayendra Rao, Lead Economist of The World Bank’s Development Research Group, Panelists at the ‘Cross-regional Dialogue on the Effects of Commodity Dependence’ made a presentation on "The Conceptual Foundations of Localizing Development." The thematic papers on ‘Oil,’ ‘Copper’ and PARALLEL SESSIONS ‘Food Security’ were presented by Guillermo Professor Jean Philippe-Platteau, from Cross-regional Dialogue on Perry, Senior Research Associate, University of Namur, elucidated the key role the Effects of Commodity Fedesarrollo, Colombia; Patricio Meller, played by donors in a participatory project, Research Project Director, CorporaciÃn de the need for them to show tolerance, not to Dependence Estudios para Latinoamérica, Chile and Lucio be over prescriptive, and to put aside any —a session by the Latin American and Caribbean Castro, Executive Director, Center for the uncertainty regarding the ability of commu- Economic Association (LACEA) and African Implementation of Public Policies Promoting nities to identify their own needs. Describing Economic Research Consortium (AERC) Equity and Growth, Argentina. the inherent complexity of the process, he stated that “when communities are certain he session presented the work done about the preference of donors, they are under GDN’s Inter-Regional Research strongly induced to make a declaration close TProgram comprising of comparative to what these are”. He added that if donor studies on responses by countries in the two Assessing Participatory preferences are fuzzy, communities are more regions to similar commodity abundances. Development: Reflections likely to think more clearly about community needs, despite the tendency of elites to Studies were presented on ‘Oil’ in Nigeria and from the World Bank dominate this process. —a session by The World Bank Colombia; the role of ‘Copper’ in the Chilean and Zambian economies; and the ‘Impacts of Higher Food Prices’ in Argentina and Malawi, The session ‘Participatory Development: both food exporting nations. The key objec- Assessing the Evidence on Policy and tive across studies was to identify conditions Practice’ offered representatives from the Regionalism on Service that determine whether resource-abundance World Bank’s Development Research Group Delivery in Pacific Island proves to be a blessing or a curse and the and other scholars the opportunity to dis- role of institutions in managing these com- cuss the current ‘state of play’ in terms of States: Emerging Issues modities. participatory approaches to development —a session by the Oceania Development It emerged through the discussions that the and how they are assessed. The topic was Network (ODN) overall quality of institutions, infrastructure framed by the World Bank’s policy research and policy environment were crucial to man- report entitled ‘Localizing Development: Chaired by ODN Chairman Wood

16 RESEARCH MONITOR REGIONAL AND GLOBAL INTEGRATION: QUO VADIS?

Pacific, presented a paper titled ‘Reclaiming Workshop Pacific Island Regionalism: Women’s Voices.’ Calling for a new Pacific-regionalism, Dr. Cities: An Analysis of Slatter focused on easing capacity constraints for governments through increases the Post-Communist in the provision of services at the regional Experience level, and the need to examine it from a critical gender perspective. he workshop presented research Tbeing carried out as part of ‘Cities: Discussant Dr. Lake Ah Chong, Lecturer in An Analysis of the Post-Communist the Faculty of Education in the National Experience,’ an Inter-Regional Research University of Samoa, pointed out that while Project (IRP) launched recently by GDN such regionalism had much value, it was and led by the Centre for Economic Unpacking ‘Gross National Happiness’ at important to ensure that it did not clash Research and Graduate Education the session ‘How Do We Measure with the objectives of local governments (CERGE-EI) and the Economics educa- Development?’ and local people. tion and Research Institution (EERC).

The workshop featured presentations Salele, discussions at the session focused on of papers on four multi disciplinary the recent changes in approaches to Pacific themes: City Growth, the Economics of regionalism and their impact on service How Do we Measure Cities,the Sociology and Governance of delivery at household, district, national and Development? Cities. A total of 8 papers were present- regional levels. ed by researchers, and reviewed by —a session by the European Development Project Leaders Tom Coupe (Economics For many years, regionalism has been an Research Network (EUDN) Education and Research Council, important mechanism for providing the very Ukraine) and Randall Filer (Center for small and scattered Pacific Island nations Organized by the European Development Economic Research and Graduate with solidarity and the power to collectively Research Network (EUDN), GDN’s regional Education-Economics Institute). Some resist powerful outside interests that pose network partner in Europe, the parallel ses- of the issues/questions discussed, threats to their interests. Over the years, it sion brought to fore perspectives on meas- among others, were: has also been the basis for movements for uring ‘development.’ The theme reflected the Is there a natural equilibrium, from political independence, women’s rights, the growing uneasiness with currently used indi- which the Communist cities deviated- environment, opposition to nuclear testing, cators, whether of the conventional Gross and hence, should we see a gradual nuclear bases and dumping of nuclear National Product (GNP) type or of the return now? waste. Driven by neo-liberal rationalism and Human Development Index (HDI) type. Are there Urbanization Economies in the promotion and planning of regional eco- Post-Socialist cities? nomic markets that primarily serve external Prof. Francois Bourguignon, Head of the Dynamics of city size distribution in interests, the concept of regionalism now European Development Research Network CEE and CIS transition economies has significant long term implications for (EUDN) talked about the challenges of meas- Whether Multiple Equilibria are possi- livelihood options, development prospects, uring social and welfare progress. ble in the Russian Urban System quality of life and general well being of Bourguignon explained in his talk that the Pacific Island people, particularly road to nuanced measures is complex and The research will also compare histori- women. presents methodological challenges. cally determined development of cities in the West, to gain insight into the A key focus of discussions at the session was “Journalists would love us to give them a important features of 21st century the implications of regionalism for public ‘Gross National Happiness’ index, but we urban life. This project will complement services delivery, government accountability can’t do that. It’s complicated. the 2009 World Development Report and negotiating power for the region as a What we need to do is which focuses on Economic Geography trading bloc. develop a new but omits the unique environment of the CIS and CEE. Dr. Clair Slatter from the School of Social Sciences, University of the South For more information on “Cities…” and other Inter-regional Research Projects, Participatory development is not an visit www.gdnet.org invariant technology, but an instrument with many people-centred moving parts.

MICHAEL WOOLCOCK 17 RESEARCH MONITOR 11TH ANNUAL GLOBAL DEVELOPMENT CONFERENCE

Philippe De Lombaerde from UNU-CRIS at a parallel session on South-South and North-South Cooperation dashboard of indicators that would reflect happiness/well-being and its possible impacts of South-South trade agree- the different aspects of wellbeing of people determinants. In particular, Dr. Clark ments compared to the alternative, and as well as allow us to track progress over focused on factors such as relative income, often the more favored, North-South time,” he said. Jeni Klugman, Director, employment, social capital, health and Integration. Human Development Report Office, said religion. that the 2010 Human Development Report Dr. Philppe Lombaerde from UNU-CRIS will, for the first time, incorporate multi- stressed on the need to critically examine dimensional measures of poverty, inequali- the compatibility between existing ty, empowerment and sustainability. North-South agreements and the grow- South-South and North- ing number of South-South ones. Talking Dr. Sabina Alkire, Director of Oxford South Cooperation: The about the merits of Economic Partnership Poverty and Human Development Report Agreements (EPAs) over unilateral prefer- Initiative at the University of Oxford, said New Dynamics of the Global ence for ACP(African, Caribbean and that methodologies were improving to Economy Pacific) trading partners, Dr. Alisa help with the task. “In the last five years —a session by United Nations DiCaprio from UNU-WIDER argued that there has been a 50% increase in the num- University’s Institute on Comparative they will help LDCs effectively graduate ber of multidisciplinary measures devel- Regional Integration Studies (UNU-CRIS) from their special status in the interna- oped to get over the complexity and intan- and World Institute tional trading system to one more in line gibility of measuring wellbeing and happi- for Development Economics with developing countries. The fact that ness,” he said. Research (UNU-WIDER) this development directly contradicts the spirit of the WTO treatment of LDCs sug- Dr. Andrew Clark from Paris School of UNU-CRIS and UNU-WIDER presented gests that LDC interests are not being Economics, one of the panelists, said he their ongoing project that focuses on adequately represented there. was a ‘happiness economist’ and had spent how the emergence and ramping up of the last ten years asking tens of thousands South-South cooperation has altered the Dr. Manuel F Monte from the United of people what it was that made them dynamics of the global economy. The ses- Nations Department of Economic and happy! He presented findings from across sion was chaired by Dr. Amelia U. Santos- Social Affairs said that in East Asia, South- various studies that he had carried out in Paulino from UNU-WIDER, Finland. South arrangements are widely regarded the past, dwelling on the exact nature of Discussions explored the development ‘as a way for the north to renege on their

18 RESEARCH MONITOR REGIONAL AND GLOBAL INTEGRATION: QUO VADIS?

economic agreements with the south’. He distribution of gains from trade, enforce- Workshop stressed the importance of China’s role in ment of rules/sanctions, and asymmetries the region’s recovery from the recent generated by the rebalancing of power Promoting Evidence- economic crisis. But he said that the between private agents and governments. recovery was not sustainable because Informed Agricultural their export-based economies are depen- Discussant Prof. Francois Bourguignon from Policies in Sub-Saharan dant on demand from markets outside of Paris School of Economics pointed out that their borders, in the west. in its policy recommendations, the report Africa and South Asia did not articulate the need for a short term EU strategy for extreme events, along with he workshop marked the substantive long-term financial or technical support. He Tinitiation of the launch phase of the stressed that this was a crucial aspect with- project. External experts in policy and European Report on out which an overall aid strategy would be economic research led a day-long Development 2009- incomplete. review with authors of ten Country Issues Notes (CIN) —specifically Overcoming Fragility in Africa: commissioned for the purpose—and Forging a New Approach other participants including staff from —a session by The European Commission donors, GDN and its regional network Impact of the Global Financial partners. The aim was to cull a set of The European Commission presented the themes for policy research relating to European Report on Development (ERD) Crisis on South Asia agricultural development including 2009 at the parallel session. Entitled —a session by the South Asia Network of aspects related to agricultural trade. The Economic Research Institutes (SANEI) ‘Overcoming Fragility in Africa: Forging a discussion identified several specific New Approach,’ the report identifies long- areas, highlighting also the importance term structural characteristics of Sub- The session featured presentations illumi- of contextual features such as the role of Saharan African nations that make them vul- nating the impact of the economic crisis on agriculture in each economy, rural nerable to external shocks, and makes a Pakistan, Sri Lanka and Bangladesh. livelihoods, food security, dualism, land series of recommendations to external use and fragmentation trends, natural actors, like the EU, to address the same Dr. Musleh ud Din from the Pakistan resource degradation (including the effectively. Institute of Development Studies (PIDS) likely impacts of climate change), illustrated how Foreign Direct Investment in political economy as well as changing Presenting an overview of the Report, Dr. Pakistan was already on the decline when consumption patterns. Giorgia Giovannetti and Dr. Simone Bertoli the crisis broke out, and suggested that a from the ERD team analysed the costs char- prudent regional economic policy along The project, supported by a grant from acteristics of fragility. They argued that the with a flexible monetary and economic poli- the Bill & Melinda Gates Foundation, most important characteristics common cy by the IMF could be the best response to seeks to support GDN demonstrate a across fragile countries are structural short- deal with the adverse impact of the crisis. viable model for effective bridging of comings like inability to mobilize domestic research and policy in collaboration with resources, low-levels of human develop- Dr. Parakrama Samarathunga from the its Regional Network Partners. It aims to ment and weak governance. Thus, EU’s aid Institute of Policy Studies, Colombo, illustrat- help researchers deliver policy-relevant strategy should be one that addresses such ed that timely fiscal and monetary policy research findings and policy options to issues, also because that would be its real responses by the government had con- decision-makers. A novel feature is the comparative advantage with respect to new tained the worst effects of the crisis. Dr. active involvement of policy makers and donors like China. Samarthunga recommended that further key stakeholders both in drawing policy intervention was necessary, implications as well as formulating Prof. Thierry Verdier, also from the ERD team, questions for research. reflected on whether regional integration like providing lending for could work towards reducing fragility. He exporters with A Discussion Note has been prepared, suggested that trade might help effect this cash flow distilling outputs from the in the African context. However, it would brainstorming at the workshop as well also present challenges related to as the content of the CIN’s, that will provide a platform for engaging in dialogue in selected countries to further elicit views on the identified focus areas. There is a strong link between resilience and fragility. Being able to deal with the financial crisis will be a learning process and a challenge for donors FRANÇOIS BOURGUIGNON 19 RESEARCH MONITOR 11TH ANNUAL GLOBAL DEVELOPMENT CONFERENCE problems in the short term, fiscal policy reform in the medium term and, in the long term, finding new export markets as the future of credit based consumption in the US was in doubt.

“Bangladesh is the only economy that has been growing at its highest rate during the economic crisis,” said Dr. Mustafa Mujeri, Head of SANEI and Director of Bangladesh Institute of Development Studies (BIDS). He argued that an emphasis on micro-finance and micro-level economic planning had worked well for Bangladesh, given its high man-land ratio. Textile exports and remittances had cushioned the economy well from a possible downturn. Involvement of NGOs and focus on social development at the grassroots level were other factors behind Bangladesh’s good performance, he added. Chalongphob Sussangkarn, Head of the East Asia Development Network (EADN) addressing the parallel session on ‘Economic Integration in Asia...’ The session was chaired by Dr. Rashid Amjad, Vice Chancellor, Pakistan Institute of Professor Shujiro Urata from Graduate Asian countries and how to identify bottle- Development Economics. Dr. Matthew School of Asia-Pacific Studies Waseda necks to the overall economic growth and Joseph, Senior Consultant from the Indian University, Japan, illustrated that the East development in the region. Council for Research on International Asian region had, in fact, been witnessing Economic Relations, was the lead discussant. growing regional integration through the rapid expansion of intra-regional trade and foreign direct investment (FDI). In terms of intra-regional trade ratio, defined as the pro- Accession, Neighborhood or portion of intra-regional trade to region’s Economic Integration in overall trade, East Asia exceeded 50 percent, Unity? The EU Experience Asia, Trade, Infrastructure lower than the corresponding value for the —a session by Center for Economic Research European Union (approximately 65%) but and Graduate Education - Economics and Finance higher than the value for North America Institute (CERGE-EI), Economic —a session by the East Asian Development (approx. 45%). He argued that this was in Education & Research Consortium (EERC) & Network (EADN) and GDN-Japan response to the financial crisis in the late Economic Research Forum (ERF) 1990s, as reflected in the growing number of The session discussed possible configura- intra-regional trade agreements since then. The European Union’s relationship with its tions of a new development architecture in neighboring countries has assumed vari- Asia- one that relies on a range of growth Dr. Chalongphob Sussangkarn, Head of the ous forms over the years, accession of drivers and not just exports to other regions, East Asia Development Network (EADN), some countries to association, neighbor- and based on institutions that ensure finan- suggested several ways in which the finan- hood and even unity with Southern cial stability. cial integration of the Asian region could be Mediterranean countries. furthered, like the formation of an Asian Session chair Prof. Kaoru Hayashi , from Monetary Fund and having a Common Moderated by Dr. Ahmed Galal (Managing JICA Research Institute, introduced the Exchange Rate. He stressed that it was Director, Economic Research Forum, topic with the suggestion that efforts be important to work simultaneously towards Egypt), discussions at the session made to develop a more prosperous and greater political integration as well. explored a range of these relationships. stable regional market and develop value Dr. Randall Filer, Head of the Centre for chains and production networks accord- Dr. Mohammad Ariff, Executive Director of Economic Research and Graduate ingly. Crucial to that, he said, would be the Malaysian Institute of Economic Education-Economic Institute was the improving the currently bad quality of Research, concluded the session by laying Lead Discussant. Panelists covered cases regional connectivity and investing in down some important questions for further from three different regions: Eastern infrastructure development. enquiry: how to manage capital flows in East Europe, the Commonwealth of

20 RESEARCH MONITOR REGIONAL AND GLOBAL INTEGRATION: QUO VADIS?

Independent States, the Middle East and social changes in member countries. The Workshop North Africa, in search of a better under- eventual ENP economic offer is meaning- standing of the different experiences and ful and integration with the EU is getting Climate Change: Refining their implications for countries that are stronger public support political elites in aspiring to join the EU. several CIS countries. However, she also the Research Agenda pointed out factors limiting the ENP’s Presenting two research papers, Dr. reform anchoring potential and offered he workshop was conducted as part of Bernard Hoekman (Senior Associate, specific policy recommendations for its TGDN’s upcoming Global Research Economic Research Forum and The World strengthening. Project on Climate Change, that aims to fill Bank) posited options to facilitate move- critical knowledge gaps related to the ment of workers between high-income Dr. Oleksandr Shepotylo, Assistant implications of global climate change for and developing countries within the Professor, Kyiv School of Economics, development, particularly to help countries framework of trade agreements, focusing Ukraine, presented a methodology for design effective policies for adaptation and on the European Union’s partnership trade policy analysis of costs and benefits sustainable growth. The workshop’s agreements with neighboring countries. of alternative regional integration scenar- proximate objective was to review the He argued that furthering the services ios, based on the disaggregated gravity project’s research agenda and solicit views on ways to enhance its policy traction.

Key points: 1. Climate data needed to be improved in terms of quality, volume and access. A ‘Vulnerability Index’ should be created to identify priority areas of intervention. 2. Channels should be improved for better knowledge sharing between developed and developing countries. 3. The potential of private sector engagement-- in executing strategies, data collection, policy processes and designing market-based low-carbon development models—should be explored and realized. 4. Research on governance should be integrated with the political economy of climate policies. The session ‘Accession, Neighborhood or Unity? The EU Experience’ in progress 5. Identifying and documenting various sources of technology as well as funding trade dimension in the EU’s trade agree- equation, and applies it to calculate the its transfer and adaptation is much ments offered significant potential Pareto impact of the EU’s enlargement on inte- needed. gains. gration strategies of non-member coun- 6. Further research is needed on the trade- tries. Discussing findings from application off involved in switching to a low-carbon Dr. Wojciech Paczynski, Fellow, Center for of the model to the impact of the EU’s growth path. Social and Economic Research, Poland, enlargement in 2004 from the standpoint 7. Success stories in climate adaptation discussed the current and potential role of Ukraine, Dr. Shepotylo argued that pro- needs to be analysed systematically to of the European Neighbourhood Policy jecting results into the future indicates understand how they could be (ENP) in anchoring economic reforms in that the benefits of EU accession for the replicated across diverse contexts. countries in EU’s eastern neighbourhood. country would have been unam- 8. Non-governmental institutions and Reviewing available empirical evidence, biguously positive. mechanisms need to be integrated with she argued that the ENP shares some fea- ‘mainstream’ processes. tures with the EU accession process that has proven to be an effective mechanism A broad conclusion that emerged at the supporting major economic, political and end of the workshop was that GDN’s effort should encompass both a “Bottom-Up” approach to increase the granularity of the To achieve economic integration, it is important knowledge base pertaining to developing countries as well as a “Top-Down” approach to work simultaneously towards greater that addresses key analytical themes in the political integration as well. international policy dialogue, focusing in CHALONGPHOB SUSSANGKARN particular on the need to articulate 21 developing country perspectives. RESEARCH MONITOR 11TH ANNUAL GLOBAL DEVELOPMENT CONFERENCE

Members of the Jury, Donors and GDN Chairperson, Ernesto Zedillo (back row 4th from right) with the winners of the 2009 Annual Global Development Awards and Medals Competition Global Development Awards and Medals Competition 2009

he impressive Czernin Palace in development. We need this market of ideas empowering vulnerable children through Prague formed the perfect backdrop to boom; and all participants of the 2009 life skills. Tfor the prize distribution ceremony Competition are evidence that it is, indeed, of the Global Development Awards and booming.” Dr. Gerardo della Paolera, GDN President, Medals Competition 2009. Ten entries were A self-sustaining education project in announced a five-year collaboration with awarded in the three categories for out- Paraguay to be implemented by Fundación the Japan Social Development Fund (JSDF), standing research and development proj- Paraguaya won the Japanese Award for the under which winners of the annual ects. H.E. Jan Kohout, Hon. Deputy Prime Most Innovative Development Project 'Japanese Award for Most Innovative Minister and Minister of Foreign Affairs, (MIDP). Fundación Paraguaya won the Development Project' (MIDP) would be eli- Czech Republic, presented awards to win- ‘Most Innovative Development Project’ gible to apply for a $200,000 JSDF grant for ners of one of the categories. Awards were award for providing affordable, quality their project. Further details about the col- also presented by Andrés Rius (Team education to chronically poor youth in laboration will be available on the GDN Leader, IDRC’s Globalization, Growth and Paraguay. Called ‘The Financially Self- website in the run-up to the 2010 round of Poverty Program), Miguel Marques Gomes Sufficient School,’ the project finances itself the Awards and Medals Competition, of (Senior Advisor, Ministry of Finance, without relying on long-term government which MIDP is a part. Government of Luxembourg) and Hiroshi support, donor funding or costly school Kato (Deputy Director, JICA-Research fees. The project combines teaching agri- The competition, among the biggest for Institute). Addressing the gathering, GDN cultural and business within schools to young researchers working on multi-disci- President Gerardo della Paolera welcomed generate income to cover 100% of costs. It plinary themes related to development, the gathering and congratulated the award argues that it is possible for even the poor- also saw Ms. Dayna Zaclicever and co- winners. GDN Chairman Dr. Ernesto est people can have access to education. author Laura de Costa Ferré from Zedillo, stated that “Each year, we unearth The second prize in this category was Universidad de la República (UdelaR) new talent and support new ideas on awarded to Dream A Dream, India for receive the first prize in the category

22 RESEARCH MONITOR REGIONAL AND GLOBAL INTEGRATION: QUO VADIS?

‘Japanese Award for Outstanding along three important dimensions viz., Research on Development.’ The second economic, political, and social fields to MIDP Awards for prize in the category went to Mr. Gilberto assess the pros and cons of globalization. Paraguay and India Libânio, Federal University of Minas Gerais, The results show a small but significant Brazil, for his proposed research on region- positive association between globalization Projects al impacts of the economic slowdown in and economic growth for a panel of 21 low trade flows. income African countries for the period DN believes that quality Development 1970 - 2005. GResearch is not merely an intellectual Once again, this year’s medal recipients exercise, for it deals with issues that affect formed a multidisciplinary group, with The medals for this category were funded people and their well-being. The Network, wide-ranging backgrounds affiliated to by the International Development thus, lays much emphasis on linking various academic and professional institu- Research Centre, IDRC. research to policy and development prac- tions around the world. This year, the com- tice, apart from producing and facilitating petition focused on the following three Medals for Research on Development - research itself. themes: International Migration: Crossing Globalization, Regulation and Borders, Changing Lives This belief is reflected in the structure of Development the Awards and Medals Competition, in International Migration: Crossing First Prize: Mr. Christian Hubert Ebeke the ‘Most Innovative Development Project’ Borders, Changing Lives? and Mr. Alassane Drabo from the Centre award sponsored by The Government of Regional Integration – Convergence d'Etudes et de Recherches sur le Japan. The award honours innovative Big Time, or, an Opportunity Wasted? Développement International (CERDI), for development interventions from the their co-authored research titled grassroots that with a proven positive The winners are: impact. Medal for Research on Development - ‘Remittances, Public Health Spending and Globalization, Regulation and Foreign Aid in the Access to Health Care This year, two very creative (and success- Development Services in Developing Countries’. ful) skills-based education programs proj- First Prize: Adriana Kugler, John ects bagged the honours. Haltiwanger, Marcela Eslava and The research found that remittances, Maurice Kugler for their co-authored health aid and public spending are impor- ‘The Financially Self-Sufficient School’ won research on trade reforms and market tant determinants of access to health serv- the first prize in the category. The project selection in Colombia. ices in recipients’ countries. It also illustrat- finances itself without relying on long- ed how remittances lead to a sectorial term government support, donor funding The study uses variation across sectors in glide in the uses of health care services or costly school fees. The project com- tariff changes after the Colombian trade from the public to the private sector for bines teaching agricultural and business reform to assess whether the impact of the intermediate income class. This result within schools to generate income to market fundamentals on plant exit holds also for the richer quintiles that are cover 100% of costs. changed with increased international com- the major recipients of remittances in petition. It demonstrated evidence that developing countries. Moreover, remit- “Our project shows shows that children improvements in market selection from tances and foreign health aid are comple- from the very poorest backgrounds can trade reform help to weed out the least ments for the access to health care services have the same educational choices as the productive plants and increase average in “low” income countries. middle classes; and that it is possible to do productivity. In addition, we find that trade Second prize: Ms. Asmaa Elbadawy and this in an entirely sustainable manner,” liberalization increases productivity of Ms. Rania Roushdy, Population Council, says Martin Burt, Director of Fundacion incumbent plants and improves the alloca- Egypt, for their co-authored research on Paraguaya, the implementing agency. tion of activity within industries. impacts of international migration and remittances on child schooling and The Second Prize winner was ‘Dream a Second Prize: Mr. Krishna child aid. Dream,’ an NGO from India that has C. Vadlamannati from India for his worked with over 3000 vulnerable chil- research entitled ‘Did globalization benefit dren and youth and offering them innova- low income African countries?’ tive programs that foster life skills.

Mr. Vadlamannati’s research meas- “The Conference has been a big learning ures globalization for all of us, especially understanding what kind of data is available for entrepreneurs It is really a magical moment for me. It’s a recognition like us, and how to use the knowledge of my research… I will spend the prize money on buy- base,” said Vishal Talreja, Founding ing data and books to further my research. Director, Dream-a-Dream. A MEDAL WINNER 23 RESEARCH MONITOR 11TH ANNUAL GLOBAL DEVELOPMENT CONFERENCE

Growth, India), for their co-authored research entitled ‘Regional Openness, Income Growth and Disparity across Major Indian States during 1980-2004’.

The medals for this category were funded by the Luxembourg Ministry of Finance.

The study finds that Indian states which moved away from importable production to exportable production, grew faster than others by at least 1-1.5% per annum. Also, some newly industrialized states show an increasing dependence on exportable production.

The competition received 486 submissions, over 60% of which were from Sub-Saharan Africa and South Asia. More and more Marcela Eslava from Los Andes University, Colombia, receiving the Medal for Research young researchers are taking part, with the and Development for her work on ‘Trade reforms and market selection: evidence average age being 38 years in the 2009 from manufacturing plants in Colombia,’ from from Andrés Rius (Team Leader, IDRC’s competition. Over a period of 10 years, Globalization, Growth and Poverty Program). Looking on are (left to right) GDN nearly 6,200 researchers and development Chairman Ernesto Zedillo; Czech Deputy Prime Minister and Minister of Foreign practitioners representing more than 100 Affairs, and GDN President Gerardo della Paolera. countries throughout the developing and transitioning economies have participated The medals for this category were funded al currency basket mechanism would in the GDN Awards and Medals by the Czech Ministry of Foreign Affairs. lessen the adverse effect of intra-regional Competition. Over $2 million have been The study brought forth several interesting exchange rate flexibility and engineer a col- distributed in prizes and travel to finalists findings. It found that remittances have a lective exchange rate adjustment for resolv- and winners. The competition accepts largely positive effect on attendance of ing the global payment imbalance against applications from nationals of developing young boys and girls. As for child work, East Asia. and transition countries across all social sci- migration and remittances have a large Second prize: Mr. Dibyendu Maiti and ence disciplines. negative effect on market work for young Mr. Sugata Marjit (Institute of Economic boys as well as a negative effect on long- duration domestic and subsistence work. However, unlike older boys, remittance income appears to reduce heavy domestic work for older girls.

Medals for Research on Development - Regional Integration-Convergence Big Time, or, an Opportunity Wasted?

First Prize: Mr. Mizanur Rahman, University of Dhaka, Bangladesh, for his project entitled ‘The Impact of Real Exchange Rate Flexibility on East Asian Exports’.

The study estimates the impact of intra- Dr. Gilberto Libanio, Professor of Economics at Universidade Federal de Minas Gerais regional real exchange rate flexibility on (Brazil), receiving the Japanese Award for Outstanding Research on Development East Asian exports, hypothesizing that the (Second Prize), from Mr. Hiroshi Kato, Deputy Director, Japan International impact would be negative for East Asian Cooperation Agency-Research Institute (JICA-RI). Looking on are (left to right) H.E. Jan countries regardless of their exchange rate Kohout, Deputy Prime Minister and Minister of Foreign Affairs, Czech Republic and Dr. regimes. The findings suggest that a region- Gerardo della Paolera, President, GDN.

24 RESEARCH MONITOR REGIONAL AND GLOBAL INTEGRATION: QUO VADIS?

Program at a Glance GDNet Research Regional and Global Integration: Quo Vadis? Communication for and The Eleventh Annual Global Development Conference from the Global South PRE-CONFERENCE WORKSHOPS Special Session on Climate Change and Opening Dinner DNet is a knowledge hub that brings WEDNESDAY JANUARY 13, 2010 Gtogether and communicates policy Workshop (Strengthening Institutions to Improve DAY 2: SUNDAY JANUARY 17, 2010 relevant research from the Global South. Public Expenditure Accountability) Plenary 3: One Way or Many? Varieties of It aims to be an internationally recog- Capitalism nized focal point / knowledge broker for Parallel 3.1 Japanese Award for Outstanding THURSDAY JANUARY 14, 2010 Research on Development (Presentations by development research to inform policy Workshop (Evaluating Responses to Shocks: 3ie) Finalists of the 2009 Global Development Awards debate. GDNet is a partnership with Workshop (Shaping Agricultural and Trade Policies Competition, Themes 1,2 and 3) regional networks and leading experts in in Sub-Saharan Africa and South Asia) Parallel 3.2 Japanese Award for the Most the field. GDNet provides access to on- Workshop (Strengthening Institutions to Improve Innovative Development Project (Presentations by Public Expenditure Accountability) Finalists of the 2009 Global Development Awards line journals and data, synthesizes and Workshop (GDNet Research Communications to Competition) communicates Southern research, and Policy) Parallel 3.3 (Impact of the Global Financial Crisis strengthens research communications on South Asia) capacity. FRIDAY JANUARY 15, 2010 Parallel 3.4 (How Do We Measure Development?) Workshop (Cities: An Analysis of the Post- Plenary 4: Roundtable on Regional Responses to Communist Experience) the Crisis Launch of the new GDNet platform Workshop (Cross-regional Dialogue on the Effects Special Parallel Session on GDN’s Global Research The new platform and website were of Commodity Dependence ) Project, ‘Development on the Move: Measuring and successfully launched on January 18th Workshop (Climate Change) Optimizing Migration’s Economic and Social Impacts’ 2009, in time for GDN’s 10th Annual Workshop (GDNet Research Communications to Special Parallel Session on GDN’s Global Research Conference in Kuwait. The new architec- Policy) Project, ‘Promoting Innovative Programs from the ture enhances usability, knowledge shar- Workshop (Strengthening Institutions to Improve Developing World: Towards Realizing the Health Public Expenditure Accountability) MDGs in Africa and Asia’ ing and focuses on promoting 2009 Global Development Awards and Medals researchers and their work. MAIN CONFERENCE Prize Distribution Ceremony With the new design, GDNet should DAY 1: SATURDAY JANUARY 16, 2010 DAY 3: MONDAY JANUARY 18, 2010 become the first stop for those working Opening Plenary (Globalization Under Threat) Parallel 4.1: Session on GDN’s Latin America-Africa Parallel 1.1 (South-South Integration in a North- Inter-regional Research Project (Cross-Regional in development to network with others South Context) Dialogue on the Effects of Commodity researchers and research institutes, creat- Dependence) Parallel 1.2 (Economic Integration in Asia, Trade, ing connections in and between the Integration and Finance) Parallel 4.2 (Regionalism and Service Delivery in north and south. Parallel 1.3 (European Report on Development: Pacific Island States: Emerging Issues) Overcoming Fragility in Africa- Forging a New Parallel 4.3: World Bank Session (Participatory European Approach) Development: Assessing the Evidence on Policy Three new languages were introduced Parallel 1.4 (Accession, Neighbourhood or Unity? and Practice) besides English: Spanish, in the Latin The EU Experience) Plenary 5 (Roundtable on Reforming Financial America Window; French, in the Africa Plenary 2: Lessons from Regional Integration from Governance) Window; and Arabic, in the MENA the EU- Is the EU Sui Generis? Meeting of the Heads of GDN’s Regional Network Parallel 2.1 (Globalization, Regulation and Partners Window. Development) Presentations by Finalists of the Dinner of GDN’s Board of Directors and Heads of 2009 Global Development Medals Competition, Regional Network Partners New audio and visual spaces were creat- Theme 1 ) ed to promote social networking, policy Parallel 2.2 (International Migration: Crossing TUESDAY JANUARY 19, 2010 Borders, Changing Lives?) Presentation by Finalists outreach and discussion of key topical Meeting of the GDN Board of Directors of the 2009 Global Development Medals issues, including a ‘Policy Corner,’ ‘Focus Dinner of the GDN Board of Directors Competitions, Theme 2 and Donor Advisory Committee On’ and ‘People Count.’ Parallel 2.3 (Regional Integration- Convergence Big Time or an Opportunity Wasted?) Presentations by Finalists of the 2009 Global Development Medals www.gdnet.org Competition, Theme 3

An opportunity to attend a conference of this magnitude, to interact with so many eminent people from around the globe...it is amazing NATASHA KAY MORTLEY, RESEARCHER, UNIVERSITY OF WEST INDIES 25 RESEARCH MONITOR About Us Financial Institutions helped GDN is a small, independent International Organization that allies inancial institutions with regulatory researchers and institutes in Fauthority were key to keeping Europe development globally. from the worst effects of the global economic crisis, said Guillermo Calvo, GDN aims to support researchers in Professor of Economics at Columbia developing and transition countries to University, at a press conference ahead of generate and share applied social the 11th Annual Global Development science research to advance social and Conference in Prague, on January 15, economic development. 2010.

Our core business is building research Calvo is an internationally acclaimed capacity. Our aspiration is to achieve a authority on economic crises. His recent critical mass of researchers who are work has dealt extensively with capital globally interconnected and producing a flows and balance-of-payments crises in global public good, i.e. quality research Emerging Market Economies. At the press to inform public policy. conference, local journalists (from Eastern Europe) and international correspondents discussed with him the crisis’ implication for the region. for example. I think that was right. I think Eastern Europe has a very big advantage Global Policy Dialogues “European financial institutions, were from that point of view. You have, for constituted as strong ones — that were example, Austrian Banks operating within GDN’s Global Policy Dialogues are series of going to be directly or indirectly the region and Austrian Banks are consultations, designed to further GDN’s supported by the European Central Bank, protected by their own Central Banks strategic objectives to promote networking across Social Sciences researchers and poli- cymakers; expand outreach of world class research, and shape global policy debates.

Launched in 2009, the Dialogues are Our Regional Network Partners designed to ensure that developing country-perspectives remain at the core of these GDN works with Regional Network Partners (RNPs) covering almost every region in the objectives. Specifically, the consultations: world. This ensures that research is generated by those best placed to understand the complexities of the challenges faced by different regions in their efforts to alleviate provide a platform for evidence-based poverty. Many of our partners are networks in themselves and allow for the flexible and policy debates on global issues related to effortless production of knowledge and its translation into policy. Development, so that there is greater clarity around the ideas Our network is varied and evolving. Some regional research hubs already existed before the establishment of GDN, such as the African Economic Research Consortium (AERC), ensure that Southern perspectives are the Economic Research Forum (ERF), the Center for Economic Research and Graduate articulated on the global platform Education-Economics Institution (CERGE-EI) operating in Eastern and Central Europe and the Economics Education and Research Consortium (EERC) operating in the help GDN partner researchers, policy- Commonwealth of Independent States. Other networks - the East Asian Development makers and intellectuals in exchanging Network (EADN) and the South Asia Network of Economic Research Institutes (SANEI) cross-disciplinary perspectives and con- are more recent. Our network partner in Japan, GDN-Japan, was established in 2000. tribute to a body of knowledge that The Oceania Development Network (ODN), launched in 2003, is a unique network in informs policy better. that it brings together research communities from both developing and developed nations through the involvement of the South Pacific countries, Australia and New Zealand. BREAD is a network of leading scholars engaged in research in development economics, based in the United States. GDN’s relationship with the European Development Research Network based in Europe dates back to 1999 when the first GDN conference was organized in Bonn, Germany.

26 RESEARCH MONITOR Europe tide over Crisis: Calvo GDN Research iven its unique structure—compris- and, at the end of the day, by European Ging of network partners in 11 regions Central Banks,” said Dr. Calvo. across the world, GDN carries out bulk of its research through a process that com- The press conference was also addressed bines local research with a cross-context by GDN President Dr. Gerardo della analysis on global themes. Undertaken as Paolera and Dr. George Mavrotas, Chief Global Research Projects (GRPs), the Economist, GDN and Director of the research thus produced builds under- Conference. standing at the country-level and places it at the same time within the Dr. Mavrotas said that the conference was global context. an instrumental exercise as much as an academic one, given its theme and timing. GRPs also encourage networking and cross-fertilization among researchers “The 2008 financial crisis has forced us to from different countries. Key to this effort take an entirely fresh look on a broad is the facilitation of high quality work by spectrum of issues related to the local authors in partnership with each globalization process, in a way that we do other and with development specialists not find ourselves embracing globalization from around the world. (from left to right) Professor Guillermo with the same enthusiasm of the pre-crisis Calvo (Columbia University), Dr. Gerardo era… It is great that we have 450 Ongoing/ Completed GRPs: della Paolera (President, GDN) and participants coming from various Varieties of Governance: Effective Public Dr. George Mavrotas (Chief Economist, disciplines and leading thinkers among Service Delivery GDN) addressing journalists at the press them debating and reflecting on these conference. important issues,” he said. Promoting Innovative Programs from the Developing World: Towards Realizing the Health MDGs in Africa and Asia

Development on the Move: Measuring and Optimizing Migration’s Economic and Social Impacts

The Annual Global Development Conferences Explaining Growth

There is no learning without dialogue, and no action without reasonable consensus. Understanding Reform GDN’s annual conferences provide the venue for the exchange of ideas on the most Bridging Research and Policy pressing development challenges with internationally influential academicians, policy- makers, heads of government, renowned researchers, representatives of national and Impact of Rich Countries' Policies on international organizations, and sponsors of research. Poverty: Perspectives from the Developing World Research capacity-building in developing countries is at the heart of many of GDN’s activities. GDN’s Global Development Awards and Medals Competitions culminate at the conference, with a presentation ceremony and parallels sessions where researchers from Upcoming GRPS: developing and transition countries get present their research to a global audience. Price of Capital and Development

In addition, several parallel sessions organized in partnership with a range of organi- The Climate Challenge: Sustaining Development Progress in a Warming zations allow researchers from the world over to come together, discuss their World research on specific areas of interest and most importantly, decide on how research can be taken further. Learning to Compete: Can Africa Learn from the Success of Others?

Urbanization in Developing Countries: A Path for Inclusive Development

www.gdnet.org

27 RESEARCH MONITOR January 2011 A Word from the Participants … The 12th Annual Global Development Conference “An opportunity to attend a conference of this magnitude, too he GDN 12th Annual Global Development interact with so many eminent people from around the globe...it is TConference will be held on January 13-15, 2011 in Bogotá, Colombia. The Universdad de amazing. The range of issues and topics that have come up in the los Andes will host the conference and will also workshop; just that interaction, those debates… that’s what the real be GDN’s local partner. The central theme of value of the event is, getting my name and my work out there.” the conference will be “Financing Development: Need for a Fresh Look.” Natasha Kay Mortley, Researcher, University The recent global economic crisis has led inter of West Indies alia to drastic cuts in aid budgets, a development that may undermine efforts to accelerate “The plenary sessions were great, but I was really amazed at the further progress with the Millennium Development Goals. At the same time, the Awards and Medals Competition. I attended some of the sessions; international development community is now the presentations were excellent. It was a real pleasure to know that more open to re-consider alternative sources of development finance beyond aid and other people were doing such good things.” external capital flows, which seemed to be Veronika Movchan, Institute for Economic Research unthinkable a few years back. There is also a and Policy Consulting clear need to explore further the overall nexus between financial sector development and domestic resource mobilization. Last, but cer- “It is really a magical moment for me. It’s a recognition of my tainly not least, microfinance has a central role research… I will spend the prize money on buying data and books to play in the age of uncertainty. Against this new emerging landscape for financing devel- to further my research.” opment the GDN 12th Annual Conference in Dibyendu Maiti, Institute of Economic Growth, Bogotá will try to take stock of what we have learnt so far in the broad area of development New Delhi; Second-prize Winner, Medal finance, delve deeper into the new modalities for Research on Development and mechanisms for financing development and take a fresh look at a broad range of policy issues emerging in this crucial area. Topics to be covered at the conference will include (but Global Development Network not restricted to): Headquarters: New Delhi Regional office: Cairo Regional office: Washington DC Development Aid: The Emerging New Landscape 2nd Floor, West Wing, ISID Building 144/A - 3rd Floor, Suite 1210, Complex, Plot No 4 Smart Village 1875 Connecticut Avenue, Financial Sector Development and Vasant Kunj Institutional Area, Cairo-Alex Desert Road, NW Washington DC 20009, USA Domestic Resource Mobilization: Another New Delhi 110070, India Giza, Egypt Tel: (1) 301-681-0911, Angle to Look at the MDGs? Tel: (91) 11-2613-9494 / 6885; Tel: + 202 3539 2420; Fax: (1) 301- 592-0442 Fax: (91) 11-2613-6893 Fax: + 202 3539 2422 Toll free: (1) 866-580- GDNI (4364) Dealing with a New Revolution in Email: [email protected] Email: [email protected] Email: [email protected] Microfinance External Capital Flows, Financing Constraints and Volatility Web: www.gdnet.org In Search of the Holy Grail: A Global System of Financial Regulation vis-à-vis a System of Stronger National Regulation? The Rise of the New Philanthropy Innovative Sources of Development Finance: Old Wine in New Bottles?

28 RESEARCH MONITOR