A CGD note. I'm comparatively optimistic about automation: Africa needs more of it, the rate of automation does not appear to be rapid enough to suggest short-term dislocation, manufacturing jobs have moved rather than gone away and services offers another technology-enhanced route to development.
Charles Kenny
Books, Papers and Articles
Charles Kenny writes about global development — what’s working, what isn’t, and how the world can do better. An economist who spent fifteen years at the World Bank, he is now a senior fellow at the Center for Global Development in Washington, DC.
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A policy paper for CGD. There is a significant and ongoing ramp-up in support for explicitly subsidized official development finance to the private sector around the world, but its role remains poorly defined. Lessons from the aid effectiveness literature as a whole and principles on effective use of aid suggest the need for approaches that do not merely finance the marginal private investment. Regarding experience of government intervention in markets, subsidies are only one of many options to incentivize the private sector, and bespoke subsidies provided by outside actors are rarely likely to be the most efficient form. This paper discusses where outside subsidy of the private sector may make sense and develops principles for the use of aid in subsidies based on that analysis. Subsidies should be allocated on the basis of necessity in meeting public policy goals; the norm for subsidy allocations should be competitive approaches or open offers; non-competitive subsidies should only support market making; subsidy levels should be capped; and subsidy levels should be transparent. Much of the content of these “new” principles is already implied or specified by the existing Multilateral Development Bank Principles to Support Sustainable Private Sector Operations, but they suggest that development finance institutions should not use their standard business model when using subsidies.
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A piece for the Contracting Excellence Journal with Caroline Anstey, summarizing The Principles on Commercial Transparency in Public Contracts.
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A note for CGD with Euan Ritchie and Lee Robinson. This paper argues there is a (fuzzy) spectrum of development procedures, for some of which global innovation, evaluation, or “best practice” can be informative, for some of which local evaluation or experimentation can be useful, and for some of which perhaps only practical experience and local wisdom can help. That there is a spectrum of intervention types and research opportunities, and that local evidence is often required, has implications for the kind of research that UK aid can usefully support as part of its R&D program and where that research should happen. In turn, that suggests a reform agenda for the way UK ODA for R&D is currently spent.
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A policy paper for CGD. Development finance institutions have positioned themselves as key agencies to help the world meet the Sustainable Development Goals. It is doubtful that they can deliver. This paper outlines the challenges facing DFIs in achieving (anywhere near) such an expansion in their impact, particularly in infrastructure and particularly in the poorest countries. It notes that private investment in SDG priority areas is low in the poorest countries, and the record of private investment in rolling out services is mixed. These issues are linked in part to significant supply side constraints based on country characteristics. DFIs do better than the market as a whole at investing in challenging infrastructure–but not by much. And while the scale of their ‘leverage’ in terms of attracting dollars that would otherwise not have been invested is hard to determine, in the poorest markets in infrastructure it is certainly low. Finally, DFIs and donors more broadly have long tried to improve deal flow with limited success, suggesting there are few deals on the margin of occurring which only require small extra incentives to materialize.
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A CGD blog. In this episode of Sounds Robotic, host Charles Kenny talks with Carl Benedikt Frey, co-director of the Program on Technology and Employment at the Oxford Martin School, about his fears that the wage stagnation and rocketing inequality that resulted from the first industrial revolution could be repe…
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A CGD blog. Today the IFC announced a step forward in its transparency around the use of aid resources to finance private companies. That’s right and proper: When scarce aid, and scarce tax resources, are used to support private firms, citizens of donor countries and recipient countries alike ha…
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A CGD blog with Euan Ritchie. The UK Prime Minister announced during his visit to the UN General Assembly that one billion pounds worth of overseas development assistance (ODA) will be used to set up the &lsquo Ayrton Fund’ to support British scientists and other scientists from around the world to &ldqu…
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A CGD blog with Euan Ritchie. Building on a recent paper on UK ODA-financed research and development that discussed some of the issues with the current funding allocation model for R& D including around transparency and the fact that it was largely (de facto) tied to UK institutions, this blog explores different…
Charles Kenny 