Charles Kenny

Why Do Some Donors Give More Aid to Poor Countries?

A CGD note.  Donors vary considerably in how much they focus their spending on poorer countries. There are good reasons to believe that the utility-maximizing allocation is focused heavily on the world’s poorest countries, where an extra dollar is likely to make the greatest difference to welfare. However, donors may also allocate resources towards humanitarian causes: particularly seeing disadvantaged subgroups within countries including refugees fleeing violence or natural disasters as deserving particular attention. In addition, donors might believe their aid will achieve more in democratic or ‘well governed’ countries. Perhaps less legitimately, donors might prefer to allocate more aid to countries with closer political or economic ties: ex-colonies, allies, supporters in the UN, or trade partners. Similarly, they might choose to focus their aid on the ‘near abroad,’ as a tool of diplomacy or reflecting higher immediate self-interest. This paper uses some of the indicators highlighted as significant by that literature to examine if they can help explain the variation in poverty focus of donor aid.

A Dark Pandemic Year Could Still Portend a Brighter Future

Maybe... for Foreign Affairs.

Your World, Better

Your World, Better: Global Progress and What You Can Do About It is a book written for the smart and engaged middle school student.  It looks at how America and the World has changed since the reader's parents and grandparents were young: what has happened to health and wealth, homes, school and work, rights and democracy, war and the environment, happiness and depression.   It talks about the things that have gotten better, the sometimes-intensifying challenges that remain, and what readers can do about them. 

Your World Better is optimistic, but it doesn’t shy away from the considerable problems we face: from inequality through discrimination and depression to climate change and infectious threats.  It is meant to encourage kids to help make the world better themselves: tip them from a sense of powerlessness toward action, not into complacency.

The pdf of Your World Better is available to download here for free.  Or you can buy a kindle version for 99 cents or a hard copy for $8.10 on Amazon (or six pounds on UK Amazon here).  Any author royalties from those sales will be donated to UNICEF. I talk about the book to Marian Tupy for the Human Progress podcast and to two (fantastic) middle schoolers for NPR.  Then I did a Slack chat with five middle schoolers for Slate. A CGD discussion about the book and talking to children about progress is here. And here's a fifteen minute video about the book (or try it on Youtube).

"Everyone, no matter how old, or how young, should read this. I’m sending to grandkids and their parents." --Nancy Birdsall

"Great read for middle school kids who want to understand how the world is getting better -- and can become even more so!" --Parag Khanna

"How can you pass up a free book?! And one that is so relevant for today? If you know a middle school student or teacher, pass this along! Incredibly fresh and honest." --Karen Schulte 

"Kids are taught that everything's getting worse and we're all doomed--factually incorrect, and a message that leads to cynicism & fatalism, not constructive action. An antidote: Charles Kenny's new Your World, Better..." --Steven Pinker

 

Degrowth in the Age of Dickens

For The Breakthrough Journal.  In his Principles of Political Economy, JS Mill wrote a chapter “Of the Stationary State.”  In it he argued that the need for economic growth in the richest countries had run its course. “It is only in the backward countries of the world that increased production is still an important object.”  I discuss that idea and some possible lessons for the modern degrowth movement.

We Should Be Spending More of Available Aid in Poorer Countries, Not Less

A working paper for CGD.  In the context of an ongoing debate around the role of aid in middle income countries, it is worth revisiting the discussion around aid allocation in general. Accounting for the (disputed) impact of policy and declining marginal returns of aid flows, using a measure designed to focus aid on those in extreme poverty or an approach that accounts for the declining marginal utility of income consistently suggests aid is currently insufficiently focused on the poorest countries. To be equally effective as spending in poor countries, any aid used in upper middle-income countries needs the potential to generate returns that are multiples of those expected in poor countries or have considerable spillover effects in those poorer counties.

Measuring the Development Impact of the IFC and Development Finance

A working paper with George Yang for CGD.  Development Finance Institutions (DFIs) including the International Finance Corporation (IFC) tend to look at their development impact using project-level indicators of outputs and employment impacts. Evaluation of the development impact of DFIs should try to estimate the difference between how the country and sector is with the DFI investment com-pared to how the country and sector would be absent the investment. Using a database of IFC and other investments and sector outcomes covering infrastructure and finance, we find the quantity of IFC investment was significantly associated with larger sums of future non-IFC private investment, but it is difficult to find evidence of an impact on outcomes.

Official Development Assistance, Global Public Goods, and Implications for Climate Finance

A policy paper for CGD.  Is research into a Covid-19 vaccine a suitable use of Official Development Assistance (ODA)? What about finance to reduce carbon dioxide emissions? Both are clearly good ways to spend money with considerable benefits to developing countries, but is that enough? This note attempts to tease apart a discussion of “is this ODA” from “is this a global public good?” and then separate out again “is this ODA and/or a global public good?” from “is this an efficient way to spend money?” It uses that discussion to frame conclusions about how and what financing of GPGs should be counted as ODA and takes a specific look at the issue of climate change in that regard.

What to Do When You Can’t Prove DFI Additionality

A note for CGD with Todd Moss.  Answer: competition, make loans less attractive than market, use transparent benchmarks.

Direct cash payments work. We’re about to see how

In the Washington Post on the COVID-19 stimulus component that is giving cash directly to people.  

The Real Immigration Crisis

For Foreign Affairs.  The next several decades will see populations in Europe and North America age and shrink as people have fewer and fewer children. That trend will hurt economic growth and dynamism and leave too few workers for every retiree. Robots and artificial intelligence will not save rich countries from the economic consequences of a shrinking population. Nor, without a dramatic reversal of current policies toward immigrants, will a flow of workers from elsewhere. To avoid sclerosis and decline, the rich world will have to compete to attract immigrants, not turn them away.