A few recent development economics articles and papers that caught my attention this past week should be on the top of anyone’s reading list who is interested in inequality, economic growth, or migration.
Economist Branko Milanovic has written a blog post quantifying the share of global inequality that can be attributed to where people live: The answer is two-thirds. The “citizenship premium” can be as high as 300 percent in some areas. The calculation is reminiscent of development economist Lant Pritchett’s measurement of the wage gap between migration-sending and -receiving countries, with migration-receiving countries providing wages 200-400 percent higher than sending countries. Both these articles make the point that migration may be the most powerful means of reducing global inequality.
Two interesting papers on economic growth were recently published: Stephen Broadberry and John Wallis show that long-run economic growth is due more to avoiding growth shrinkages than having bigger booms (Figure 1). Jonathan Haskel and Stian Westlake suggest that the slowdown in total factor productivity growth—a measure of the output generated over and above that attributed to labor and capital—may be due to the increased share of investment in intangible assets, such as software, research and development, and design. Since these are sometimes not measured, the slowdown could be due to mismeasurement. It could also be because intangibles generate greater spillovers in the economy, so that when there is a decline in intangible investment (such as after the Great Recession), the impact on total productivity growth is significant.
Two surveys have shone light on major development issues: Seema Jayachandran has a succinct, readable, and informative survey on gender inequality in developing countries. Researchers from the World Bank have published a useful survey on electricity subsidies in developing countries—a compelling issue for fiscal sustainability, infrastructure development, and climate change.
And last but not least, Donna Barne and Tariq Khokhar from the World Bank posted 12 of their best charts summing up now the world fared in 2017. The charts cover the global economy, natural disasters and extreme weather, education quality, poverty, and innovation and technology.