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Accelerating energy innovation could be an important part of an effective response to the threat of climate change. This book complements existing research on the subject with an exploration of the role that public and private policy have played in enabling—and sustaining—swift innovation in a variety of industries, from agriculture and the life sciences to information technology. Chapters highlight the factors that have determined the impact of past policies, and suggest that effectively managed federal funding, strategies to increase customer demand, and the enabling of aggressive competition from new firms are important ingredients for policies that affect innovative activity.

This is volume I of a four volume set, with papers developed as part of a large-scale project and associated conference series funded by the Gates Foundation. It is comprised of careful empirical reports on progress with economic, political, and social development in Africa over recent decades. Papers are grouped by a rough hierarchy of development. The first volume therefore deals with the essential issues that any country must resolve if there is to be any kind of sustained economic growth and shared benefits from development: is there social peace, does the government function in any kind of reasonable manner, and how does the private sector cope with government dysfunction? The broad theme of our project was that Africa has made much more progress with economic and social development than is widely supposed, and that there is a great deal of success – particularly since 1990 – from which lessons can be gleaned. The papers in this volume deal with ensuring peace after civil conflict, establishing a robust level of revenue for government, thinking about the implications of who holds political power, creating secure property rights, and understanding the nature of the informal economy. Papers also cover important policy innovations, both around road safety and economic development more broadly. We also include a paper that could become a model of how to measure changes in household and per capita income using available data from Africa, and a detailed case study that focuses on the impact of foreign aid on growth.

This is Volume II of a four set series that reports on progress with economic, political, and social development in Africa over recent decades. Volume I deals with social peace, the basic functioning (or not) of government, and how to measure economic development at the household level. Volume II is focused on human capital. This includes public health and various efforts to improve the empowerment–and thus the human development outcomes–for women and girls. We place these issues in a broad economic context, and also include some cutting-edge research on other dimensions of human capital in the African development context. As with the overall economic picture on the past two decades, there are signs of improvement along purely social dimensions of development in Africa. Volume I established that the institutional context for development in Africa remains difficult. But a key theme in Volume II is that no one should conclude that African specifics imply nothing works or that everything becomes corrupted into being completely ineffective. Our researchers have identified important issues, as well as interventions or policy innovations that appear to be gaining traction. The companion volumes III and IV deal with modernization and sustainable growth respectively. Countries covered in detail in this volume include Burkina Faso, Burundi, Ghana, Guinea-Bissau, Kenya, Malawi, Tanzania, and Zambia.

This is Volume III of a four volume set that reports on progress with economic, political, and social development in Africa over recent decades. Volume I deals with the essential issues of social stability and other prerequisites for growth. Volume II covers health, gender, and education, all of which are of first-order importance if people are to benefit from and contribute to economic development. Volume III focuses on specific issues of modernization and three key sectors or types of economic activity: finance, mobile phones, and exports. The papers in Volume III contain some firm-level analysis, studies of specific sectors, and cross-country econometrics. We did not attempt to build a comprehensive picture across all countries, but there is a great deal of information about what is going on in wide range of countries – the chapters in this volume contain more in-depth studies of Burundi, Kenya, Lesotho, Malawi, Nigeria, and Tanzania. Our main goal was to provide a catalyst for applied research on Africa, and this set of papers demonstrates how we set about achieving that objective. The authors include top researchers, among them people with a great deal of Africa experience and those for whom this was their first time digging into African realities.

This is Volume IV of a four volume set reporting on research on Africa funded by the Gates Foundation. Volume I is focused on conditions that make growth possible; Volume II deals with human development; and Volume III discusses ways in which modernization has come to sub-Saharan Africa, including banking, mobile phones, and dimensions of the export sector. Volume IV examines whether recent African growth rates will prove sustainable. This volume offers three different ways to address this general question. First, five of our research teams look at the details of African agriculture, ranging from its overall prospects to the specific institutional arrangements in two countries. As in our other volumes, the chapters here set a high standard in terms of putting together high quality data and analyzing it using appropriate statistical and econometric technique. Second, one team looked carefully at barriers to trade within West Africa – what keeps markets segmented and prevents trade from developing? Can these obstacles be overcome in the foreseeable future? Four teams look at particular country case studies to understand growth and development and also pay considerable attention to episodes of poor economic performance. Researchers participating in this project were encouraged to combine careful NBER-type empirical analysis with investigations of specific country experiences. In terms of in-depth country analysis, this volume includes material on Cape Verde, Ghana, Kenya, Mali, Mauritius, Mozambique, Niger, Nigeria, Sierra Leone, and Uganda.

Agriculture historically employed a large share of the overall population. For example, even in 1800, more than half the population in most European countries was working in agriculture. With the start of the industrial revolution and the accompanying mechanization, labor shifted out of agriculture. Still, throughout the 19th century and the beginning of the 20th century, increases in agricultural production were mainly driven by an increase in the growing area, whereas yields (output per area) were rather constant. This changed abruptly in the middle of the 20th century: yields have been increasing at a steady pace ever since. At the same time, inflation-adjusted agricultural commodity prices have been trending downward as increases in supply outpaced increases in demand. Food is an essential good, and while its price is currently low due to its abundance, it is responsible for a large consumer surplus given the highly inelastic demand. Understanding what factors contribute to the upward trend in yields is hence of first order importance for food security and human welfare. This book contains eight chapters that were presented at a NBER conference in May 2017. They examine in further detail what contributes to the remarkably steady increase in yields around the globe and assess whether this can continue into the future and whether it will impose significant environmental externalities. The book offers new innovative analyses using the methodological innovations as well as recently available micro-level data sets.

Most people would agree that it makes sense to tax a company that pollutes in a way that directly reflects the amount of environmental and social damage it has done. Yet in practice, such taxes are fraught with difficulty and have far-reaching implications. A company facing a new tax may lay off workers, for example, exacerbating an unemployment problem. This volume focuses on such external issues and examines in detail the trade-offs involved in designing policies to deal with environmental problems. Reflecting the broad nature of the subject, the contributors include leading economists in the areas of public finance, industrial organization, and trade theory, as well as environmental economists. Integrating both theoretical and empirical methods, they examine environmental policy design as it relates to location decisions, compliance costs, administrative costs, effects on research and development, and international factor movements.

Humans are plagued by shortsighted thinking, preferring to put off work on complex, deep-seated, or difficult problems in favor of quick-fix solutions to immediate needs. When short-term thinking is applied to economic development, especially in fragile nations, the results—corruption, waste, and faulty planning—are often disastrous. This book draws on the latest research from psychology, economics, institutional design, and legal theory to suggest strategies to overcome powerful obstacles to long-term planning in developing countries. Drawing on cases from Africa, Asia, and Latin America, the book applies strategies such as the creation and scheduling of tangible and intangible rewards, cognitive exercises to increase the understanding of longer-term consequences, self-restraint mechanisms to protect long-term commitments and enhance credibility, and restructuring policy-making processes to permit greater influence of long-term considerations. The book features theoretically informed research findings and policy examples, and shows how the vagaries of human behavior affect international development.

In 1945, Vannevar Bush published Science: The Endless Frontier and thereby established an intellectual architecture that has largely defined public science institutions and policy since. In this NBER volume, we take stock of the science and innovation environment today and consider two key questions: (1) what are critical dimensions of change in science and innovation systems since Vannevar Bush articulated his vision, and (2) what are the implications of these changes for policies and institutions in the years and decades ahead? The Changing Frontier has twelve chapters in four parts. Part I investigates the organization of scientific research, especially the increasingly dominant role of teamwork. Part II examines shifts in the geography of scientific research and connects to a broader literature suggesting that geographic agglomeration remains an enduring feature of innovative activity. Part III considers market-based innovation, emphasizing new modes of entrepreneurship in mobile applications and clean energy, while also considering state-level entrepreneurship policies. Part IV investigates the evolution of science institutions in the light of Bush’s initial vision, and then considers how science-innovation linkages have shifted with the nature of technology. This volume brings together in one place many important changes in the nature of science and innovation, and articulates the interplay between science and innovation practice and public science institutions and policy.

The rapid decline in the cost of storage, computation, and transmission of data has changed how firms operate and has altered the kinds of products and goods being sold. Increasingly, economic activity is digital. This volume aims to set an agenda for future research in the economics of digitization. Each chapter identifies a promising area of research related to the rise of digital technology, touching topics in areas such as the economics of internet infrastructure, leisure time, search, prediction, labor markets, and advertising. Research on the economics of digitization is distinguished by an emphasis on how digital technology interacts with market outcomes. Digital technologies have some features that suggest that many well-studied economic models may not apply. For example, digital products and services have very low marginal costs of production and distribution and consequently a far greater variety of such goods are available. While such features do not require fundamentally new economic models, they do require more than simply taking theoretical and empirical results from other markets and assuming the implications will be the same. The volume highlights that many public policies that were developed for the offline world seem poorly adapted to digital markets. This has implications in policy debates in areas such as copyright, security, privacy, and antitrust.

The book responds to proceedings of the past couple of decades, especially the efficacy of collective action in light of reports of the Intergovernmental Panel on Climate Change (IPCC). The types of adaptation to climate that are described in this volume have received less attention in the economics literature than have policies for mitigation of emissions. The chapters in this volume provide important new empirical information on and analyses of the economics of climate change. They examine responses to past climatic events and in so doing indicate the range of possible future adaptations. This knowledge is critical for understanding how society has reacted to similar occurrences in the past and for developing effective, new private and governmental policies to address them. The chapters describe research findings regarding historical climate-related events as they have been faced in the American economy; the responses of individuals, organizations, and government institutions to those climate challenges; and assessments of their successes in addressing potential disruptions and in promoting the continued economic growth and welfare. The chapters also provide new data sources for measuring and evaluating how economic agents have adjusted to and progressed even in light of formidable environmental concerns.

Latin America has one of the highest crime rates in the world, creating climates of fear and lawlessness in several countries. Despite this situation, there has been a lack of systematic effort to study crime in the region or the effectiveness of policies designed to tackle it. This book makes an important contribution to the current debate on causes and solutions by applying lessons learned from recent developments in the economics of crime. The book presents a survey of the crime problem in Latin America, which takes a very broad and appropriately reductionist approach to analyze the determinants of the high crime levels, focusing on the negative social conditions in the region, including inequality and poverty, and poor policy design, such as relatively low police presence. The chapters illustrate three channels through which crime might generate poverty, that is, by reducing investment, by introducing assets losses, and by reducing the value of assets remaining in the control of households. The book also highlights the fact that although crime rates in Latin America are extremely high and have been growing in many countries in the last two decades, there are cities within the region that have experienced a different dynamic. Part of the strategies applied in these cities seems to have been simply an investment in the capacity of the state to attack these problems, which resulted in a combination of more intense and effective repressive measures together with social support programs.

There is still no consensus on the underlying reasons for recent drastic changes in food prices and continuing agricultural market volatility merits a thorough investigation. This book is a collection of research and discussion by various experts on food price volatility, its effect on the farmer and consumer alike, and an evaluation of current knowledge on the subject. They also identify topics that merit further analysis. With great advances in agricultural technology, the fluctuations can largely be attributed to changes in economic policies. Corn has a high degree of importance in the US, which holds about 40% of the crop’s world production. Government subsidies for corn to be used as ethanol have had major impacts on food prices and made them unusually sensitive to weather shocks. Other price fluctuations in food can be attributed to substitution between calorie sources and policy changes, particularly in impoverished countries seeking to insulate their market from more prosperous nations. In recent years, some observers have claimed that food price bubbles have been generated by financial investments in agricultural commodity markets. This new research on food price volatility may help both private and public decision makers to develop improved management strategies and policies that can address current and future market instability.

While the world has seen much progress in economic growth and poverty reduction over the last few decades, the persistence of extreme poverty and its increased concentration in specific places has stimulated renewed interest in the processes of economic development and the possibility of poverty traps. This volume, based on papers first presented at an NBER conference in June 2016, draws together an outstanding collection of new studies of the dynamic, stochastic processes by which households accumulate assets and increase their productivity and earnings potential, as well as the conditions under which some individuals, groups, and economies struggle to escape poverty, and when and why adverse shocks have persistent welfare consequences. Poverty traps may arise when poverty becomes self-reinforcing because the poor's equilibrium behaviors perpetuate low standards of living. The poverty traps hypothesis carries especially important implications for the design and evaluation of policies and projects intended to reduce poverty. The chapters in this volume extend and integrate the range of the mechanisms hypothesized to generate poverty traps, including feedback loops between poverty and mental health, aspirations and preferences. The chapters link the relevant theory to empirics, and offer new empirical evidence that highlights both the insights and the limits of a poverty traps lens on the contemporary policy commitment to achieve zero extreme poverty worldwide by 2030.

The growth in future US living standards will likely depend significantly on the evolution in the “knowledge” economy. This may require a parallel transformation in worker skills in order to implement and operate the new technology and business models. A century ago the US became a world leader in the expansion of secondary and tertiary education, which helped propel US productivity growth for decades. However, a growing body of evidence suggests that human capital accumulation in the US has slowed in recent years and may not be keeping pace with the evolving demands placed on it. What are the implications of the evolution of human capital and its interaction with technology on the future of US growth? This volume studies various facets of this question. The overall objective is to provide an overview of some of the main issues and basic statistics of educational attainment in the US, and to explore some of the demand and supply channels through which the skills and education of the labor force impact GDP growth. There is still considerable debate over many of the issues examined in this volume, including the roles of college and vocational education, and the size and nature of the “skills gap”. The authors bring new data to bear on some the issues, and attempt to link different bodies of research (growth accounting, skill-development, issues in higher education, immigration, etc.) to assess how well students are being prepared for the current and future world of work.

Over the past two decades, the percentage of the world's population living on less than a dollar a day has been cut in half. How much of that improvement is because of—or in spite of—globalization? While anti-globalization activists mount loud critiques and the media report breathlessly on globalization's perils and promises, economists have largely remained silent, in part because of an entrenched institutional divide between those who study poverty and those who study trade and finance. This book bridges that gap, bringing together experts on both international trade and poverty to provide a detailed view of the effects of globalization on the poor in developing nations, answering such questions as: Do lower import tariffs improve the lives of the poor? Has increased financial integration led to more or less poverty? How have the poor fared during various currency crises? Does food aid hurt or help the poor? Poverty, the chapters show here, has been used as a popular and convenient catchphrase by parties on both sides of the globalization debate to further the book's various arguments. This book provides the more nuanced understanding necessary to move that debate beyond the slogans.

Using economic models and empirical analysis, this volume examines a wide range of agricultural and biofuel policy issues and their effects on American agricultural and related agrarian insurance markets. Beginning with a look at the distribution of funds by insurance programs—to support farmers but often benefiting crop processors instead—the book then examines the demand for biofuel and the effects of biofuel policies on agricultural price uncertainty. Also discussed are genetically engineered crops, which are assuming an increasingly important role in arbitrating tensions between energy production, environmental protection, and the global food supply. Other chapters discuss the major effects of genetic engineering on worldwide food markets. By addressing some of the most challenging topics at the intersection of agriculture and biotechnology, this volume informs crucial debates.

Hidden behind a number of economic crises in the mid- to late 1990s—including Argentina's headline-grabbing monetary and political upheaval—is the fact that Latin American economies have, generally speaking, improved dramatically in recent years. Their success has been due, in large part, to macroeconomic reforms, and this book brings together economists and policymakers to assess a decade of such policy shifts, highlighting both the many success stories and the areas in which further work is needed. Contributors offer both case studies of individual countries and regional overviews, covering monetary, financial, and fiscal policy. Contributors also work to identify future concerns and erect clear signposts for future reforms. For instance, now that inflation rates have been stabilized, one suggested “second stage” monetary reform would be to focus on reducing rates from high to low single digits. Financial sector reforms, it is suggested, should center on improving regulation and supervision. And, contributors argue, since fiscal stability has already been achieved in most countries, new fiscal reforms need to concentrate on institutionalizing fiscal discipline, improving the efficiency and equity of tax collection, and modifying institutional arrangements to deal with increasingly decentralized federal systems. The analysis and commentary in this volume—authored not only by academic observers but by key Latin American policymakers with decades of firsthand experience—will prove important to anyone with an interest in the future of Latin America's continuing economic development and reform.

The disparity between rich and poor countries is the most serious, intractable problem facing the world today. The chronic poverty of many nations affects more than the citizens and economies of those nations; it threatens global stability as the pressures of immigration become unsustainable and rogue nations seek power and influence through extreme political and terrorist acts. To address this tenacious poverty, a vast array of international institutions has pumped billions of dollars into these nations in recent decades, yet despite this infusion of capital and attention, roughly five billion of the world's six billion people continue to live in poor countries. What isn't working? And how can we fix it? This book provides answers to these questions. The book draws on extensive microeconomic studies of thirteen nations over twelve years—conducted by the Institute itself—to counter virtually all prevailing wisdom about how best to ameliorate economic disparity. The research, which included studying everything from state-of-the-art auto makers to black-market street vendors and mom-and-pop stores, conclusively demonstrates that, contrary to popular belief, providing more capital to poor nations is not the best way to help them; nor is improving levels of education, exchange-rate flexibility, or government solvency enough. Rather, the key to improving economic conditions in poor countries, the book argues, is increasing productivity through intense, fair competition and protecting consumer rights. As the book explains, this sweeping solution affects the economies of poor nations at all levels.

While the importance of innovation to economic development is widely understood, the conditions conducive to it remain the focus of much attention. This volume offers theoretical and empirical contributions to questions relating to the economics of innovation and technological change while revisiting the findings of a classic book. Central to the development of new technologies are institutional environments, and among the topics discussed here are the roles played by universities and other nonprofit research institutions, and the ways in which the allocation of funds between the public and private sectors affects innovation. Other chapters examine the practice of open research and how the diffusion of information technology influences the economics of knowledge accumulation.