Closing the Infrastructure Gap

Written by Ryan McGuine // In 2017 the McKinsey Global Institute estimated that the world would need to spend $67 trillion by 2035, or $3.7 trillion annually on infrastructure in order to merely keep up with projected economic growth. This difference between current spending on infrastructure and the need for additional funding, commonly referred to as the "infrastructure gap," is present nearly everywhere, but is particularly detrimental to growth in low- and middle-income countries. Continue reading

Premature Deindustrialization: Economic Growth Then & Now

Written by Ryan McGuine // The conventional path for economic development has been to use industrialization as a means to enable rapid convergence. Over time, advanced economies have a natural tendency to deindustrialize, but Dani Rodrik has recently brought attention to a pattern of "premature deindustrialization." Continue reading

The Randomistas Shouldn’t Rule, but They Needn’t be Renounced

Written by Ryan McGuine // In August, Martin Ravallion wrote a working paper for the Center for Global Development titled Should the Randomistas (Continue to) Rule? questioning the wisdom of allowing proponents of randomized control trials to dictate the development research agenda. Continue reading

The Causes of the Wealth of Nations

Written by Ryan McGuine // Sustained, long-term output per capita growth, often referred to simply as "economic growth" is the ultimate goal of most economic policy interventions. There are a number of models designed to explain how adjusting certain variables affects output per capita. The Solow Model is one of the simplest and most widely-used. Continue reading

The Nature of the Wealth of Nations

Written by Ryan McGuine // Before inquiring into the causes of development phenomena observed, it is a good idea to first establish just what phenomena are observed. Toward those ends, Nicholas Kaldor presented a set of six stylized facts in 1961 designed to summarize what had been learned about economics in the 20th century and establish a research agenda framework. Following the same line of reasoning in the 21st century, Charles Jones and Paul Romer presented another set of six facts in 2009 — dubbed the "New Kaldor Facts." Continue reading

Defining Development

Written by Ryan McGuine // The term "development" broadly refers to the level of well-being that people enjoy, but quantifying well-being is not an easy thing to do. The traditional way to measure and compare levels of well-being across countries is personal income, measured as gross national income per capita, but many attempts have been made to develop more useful metrics. Continue reading