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Development Challenges in a Postcrisis World University of Pennsylvania ScholarlyCommons Business Economics and Public Policy Papers Wharton Faculty Research 2011 Development Challenges in a Postcrisis World Claudia Sepúlveda Ann Harrison University of Pennsylvania Justin Yifu Lin Follow this and additional works at: https://repository.upenn.edu/bepp_papers Part of the Business Commons, Economics Commons, and the Public Affairs, Public Policy and Public Administration Commons Recommended Citation Sepúlveda, C., Harrison, A., & Lin, J. Y. (2011). Development Challenges in a Postcrisis World. 1-389. http://dx.doi.org/10.1596/978-0-8213-8522-7 This paper is posted at ScholarlyCommons. https://repository.upenn.edu/bepp_papers/74 For more information, please contact [email protected]. Development Challenges in a Postcrisis World Keywords challenges, postcrisis, world bank Disciplines Business | Economics | Public Affairs, Public Policy and Public Administration This conference paper is available at ScholarlyCommons: https://repository.upenn.edu/bepp_papers/74 Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Public Disclosure Authorized Development Challenges in a Postcrisis World ANNUAL WORLD BANK CONFERENCE ON DEVELOPMENT ECONOMICS Previous titles in this series: ABCDE 2010, Lessons from East Asia and the Global Financial Crisis ABCDE 2009, Global: People, Politics, and Globalization ABCDE 2008, Global: Private Sector and Development ABCDE 2008, Regional: Higher Education and Development ABCDE 2007, Global: Rethinking Infrastructure for Development ABCDE 2007, Regional: Beyond Transition ABCDE 2006, Europe: Securing Development in an Unstable World ABCDE 2006: Growth and Integration ABCDE 2005, Europe: Are We on Track to Achieve the Millennium Development Goals? ABCDE 2005: Lessons of Experience ABCDE 2004, Europe: Economic Integration and Social Responsibility ABCDE 2004: Accelerating Development ABCDE 2003, Europe: Toward Pro-Poor Policies—Aid, Institutions, and Globalization ABCDE 2003: The New Reform Agenda Annual World Bank Conference on Development Economics—Global 2011 Development Challenges in a Postcrisis World Edited by Claudia Sepúlveda, Ann Harrison, and Justin Yifu Lin © 2013 International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org Some rights reserved 1 2 3 4 16 15 14 13 This work is a product of the staff of The World Bank with external contributions. Note that The World Bank does not necessarily own each component of the content included in the work. The World Bank therefore does not warrant that the use of the content contained in the work will not infringe on the rights of third parties. The risk of claims resulting from such infringement rests solely with you. The fi ndings, interpretations, and conclusions expressed in this work do not necessarily refl ect the views of The World Bank, its Board of Executive Directors, or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judg- ment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Nothing herein shall constitute or be considered to be a limitation upon or waiver of the privileges and immunities of The World Bank, all of which are specifi cally reserved. Rights and Permissions This work is available under the Creative Commons Attribution 3.0 Unported license (CC BY 3.0) http://creativecommons.org/licenses/by/3.0. Under the Creative Commons Attribution license, you are free to copy, distribute, transmit, and adapt this work, including for commercial purposes, under the following conditions: Attribution—Please cite the work as follows: Sepúlveda, Claudia, Ann Harrison, and Justin Yifu Lin, eds. 2013. ABCDE 2011: Development Challenges in a Postcrisis World. Washington, DC: World Bank. DOI: 10.1596/978-0-8213-8522-7. License: Creative Commons Attribution CC BY 3.0 Translations—If you create a translation of this work, please add the following disclaimer along with the attribution: This translation was not created by The World Bank and should not be considered an offi cial World Bank translation. The World Bank shall not be liable for any content or error in this translation. All queries on rights and licenses should be addressed to the Offi ce of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2625; e-mail: [email protected]. Edited by Claudia Sepúlveda, Ann Harrison, and Justin Yifu Lin Professional affi liations identifi ed in this volume, unless otherwise noted, are as of the time of the conference, May 31–June 2, 2010. ISBN (paper): 978-0-8213-8522-7 ISBN (electronic): 978-0-8213-8730-6 DOI: 10.1596/978-0-8213-8522-7 Library of Congress Cataloging-in-Publication Data has been requested. Contents ABOUT THIS BOOK IX INTRODUCTION 1 Claudia Sepúlveda, Ann Harrison, and Justin Yifu Lin OPENING ADDRESS 13 Anders Borg OPENING ADDRESS 15 Justin Yifu Lin OPENING ADDRESS 19 Gunilla Carlsson Keynote Addresses Overcoming the Samaritan’s Dilemma in Development Aid 25 Elinor Ostrom Learning, Growth, and Development: A Lecture in Honor of Sir Partha Dasgupta 37 Joseph E. Stiglitz Weak States, Strong States, and Development 89 Torsten Persson Personal Histories and Poverty Traps 103 Partha Dasgupta Environmental Commons and the Green Economy Voluntary Pledges and Green Growth in the Post-Copenhagen Climate 127 Thomas Sterner V VI | CONTENTS World Economic Crises: Commodity Prices and Environmental Scarcity as Missing Links 153 Ramón López COMMENT 195 Simon Levin Postcrisis Debates on Development Strategy Does a Leapfrogging Growth Strategy Raise the Growth Rate? Some International Evidence 203 Zhi Wang, Shang-Jin Wei, and Anna Wong COMMENT 229 Franjo Štiblar The Political Economy of Fragile States State Fragility, Governance Indicators, and the Risk of Civil Conflict 247 James D. Fearon COMMENT 275 Louise Anten New Ways of Measuring Welfare Subjective Well-Being, Income, Economic Development, and Growth 283 Daniel W. Sacks, Betsey Stevenson, and Justin Wolfers Happiness Measures as a Guide to Development Policy? Promise and Potential Pitfalls 317 Carol Graham Individual Welfare and Subjective Well-Being: Comments on “Subjective Well-Being, Income, Economic Development, and Growth,” by Daniel W. Sacks, Betsey Stevenson, and Justin Wolfers 339 Peter J. Hammond, Federica Liberini, and Eugenio Proto COMMENT 355 Leonardo Gasparini Social Programs and Transfers: Are We Learning? The Evolution and Impact of Unconditional Cash Transfers in South Africa 363 Ingrid Woolard and Murray Leibbrandt COMMENT 385 Jane Fortson CONTENTS | VII CLOSING REMARKS 391 Joakim Stymne CLOSING REMARKS 395 Ann Harrison About This Book Since 1989, the Annual Bank Conference on Development Economics (ABCDE) has provided a forum for the presentation and discussion of new knowledge on development economics. The conference aims at promoting the exchange of ideas among researchers, policy makers, and students interested in development issues and emphasizes the contribution that empirical research in economics can make to understanding development processes and to formulating sound development policies. Conference papers are reviewed by the editors and are also subject to internal and external peer review. Some papers were revised after the conference to refl ect the comments made by discussants and/or participants from the fl oor. As a result, discussants’ comments may refer to elements of the paper that no longer exist in their original form. Most discussant’s comments were not revised. The conference took place in Stockholm, Sweden, from May 31 to June 2, 2010. Fourteen papers were presented at the conference: four keynote addresses and ten plenary session papers, as well as nine commentaries. All of them are gathered in this volume with the exception of three plenary session papers and their respective commentaries that were already committed for publication elsewhere. Unless other- wise noted, participation affi liations identifi ed in this volume are as of the time of the conference. The conference also featured the launch of the Global Development Debates, a joint effort by the Development Economics Department, Poverty Reduction and Economic Management Network, and the World Bank Institute. The theme of this fi rst debate was “Development Challenges in a Postcrisis World,” which was also the theme of the conference. The debate was moderated by Stephanie Flanders from the BBC and had Abhijit Banerjee, Partha Dasgupta, Eric Maskin, James Mirrlees, and Robert Solow as panelists. The discussion was wide ranging and included issues related to globalization, inequality, the role of the state, and the problems of poverty. The planning and organization of the conference was a joint effort by Sweden’s Ministry for Foreign Affairs and Ministry of Finance and by the World Bank. IX X | ABOUT THIS BOOK We gratefully acknowledge timely and valuable contributions by all members of the Steering Committee and other reviewers. We also thank Alan Gelb and Mia Horn for their insightful advice and Julia Hector and Leita Jones, conference organ- izers, whose excellent organizational skills helped to ensure a successful conference. Finally, we thank the staff of the World Bank’s Knowledge and Publishing Division, in particular, Stephen
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