The recent issue of the Economist continues their coverage of the importance of cellular phones for development (which we have highlighted before).
The 2005 G8 summit in Gleneagles has come to an end. Despite where you stand on what was (or was not) accomplished, here is what they say about private sector development in the summit’s final statements:
Website effectiveness consultant David Bowen reflects on all the recent discussion about how Africa’s entrepreneurs can play a key role in changing the continent’s future. However, when he goes online to find evidence of African IT-entrepreneurship he finds very little to be optimistic about:
A recent paper by Sendhil Mullainathan looks at development economics through the lens of psychology. On property rights he says:
It was recently brought to my attention that the UK Overseas Development Institute (ODI) has launched a new blog on development, aid effectiveness and G8 issues.
Martin Wolf asks: is aid petrol on a fire, or water on a plant?
There are at least two negative views of aid (needless to say there are many positive ones, too). Both parallel views on the famous 'resource curse': few resource-rich developing countries have grown strongly over the past four decades, while many resource-poor countries have done so. Angola, Nigeria and Venezuela compare poorly with China, Mauritius and Thailand.
The Emerging Markets Group, a consulting firm, organised a recent workshop on Aligning Private Sector Development Instruments with the focus on Africa; I attended. The report is here.
Most of the 'instruments' were cheap money. 'Aligning' them seems to mean, for example, making sure that private firms don't get cheap money when they're small and then run out of cheap money as they start to grow, or making sure the cheap money is spread around equitably.
In the current Economist there is an excellent (and long) article on what the development community has tried to do for Africa, the lessons learnt, and what is needed going forward. The article is a good synthesis of much of the recent academic research, but is also full of very telling concrete examples and tidbits. One of their stronger arguments is that size does matter in development, and that grand macro-solutions can often fail to address the nagging micro-foundations and constraints.
The Economist has a large and very interesting piece on the migration of World Bank thinking towards recognising that 'institutions' are important.
Part of the difficulty, as Dani Rodrik of Harvard University points out, is that typical measures capture institutional outcomes, not institutional forms. The “rule of law”, for example, measures how secure an investor feels about his property. It tells us little about precisely what makes him feel that way.