Cotton,biotechnology and economic development

During the past decade, cotton prices remained considerably below other agricultural prices (although they recovered toward the end of 2010). Yet, between 2000-04 and 2005-09 world cotton production increased 13 percent. This paper conjectures that biotechnology-induced productivity improvements increased supplies by China and India, which, in addition to keeping cotton prices low, aided these countries to cap-ture market share from (and cause losses to) non-users of biotechnology.

By contrast, with a single exception, Africa has not adopted biotechnology and, not coincidentally, its cotton output declined by more than 20 percent between the first and second half of the past decade. The paper concludes that the development implications of biotechnology go beyond cotton and Africa. High energy prices have been an important driver of the recent commodity price boom.

Therefore, investment and policy strategy responses to a cost-driven boom should be consistent with cost-saving alternatives. Biotechnology clearly meets this challenge.

Author:Baffes,John.Document Date: 2011/12/01.Document Type: Policy Research Working Paper.Report Number: WPS5896.Volume No: 1 of 1

Cotton, biotechnology, and economic development

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Job growth and finance: are some financial institutions better suited to early stages of development than others?

This paper combines firm-level data from 89 countries with updated country-level data on financial structure, and uses two estimation approaches. It finds that in low-income countries, labor growth is swifter in countries with a higher level of private credit/gross domestic product; the positive effect of bank credit is especially pronounced in industries that depend heavily on external finance; and banking development is positively associated with more physical and human capital investment.

These findings are consistent with predictions from new structural economics. In high-income countries, labor growth rates are increasing in the level of stock market capitalization, which is also consistent with predictions from new structural economics, although the analysis is unable to provide evidence that the association is causal. It finds no evidence that small-scale firms in low-income countries benefit most from private credit market development.

Rather, the labor growth rates of larger, capital-intensive firms increase more with the level of private credit market development, a finding consistent with the history-based political economy view that banking systems in low-income countries serve the interests of the elite, rather than providing broad-based access to financial services

Author:Cull,Robert;Xu,L.Colin. Document Date: 2011/11/01.Document Type:  Policy Research Working Paper. Report Number: WPS5880.Volume No:  1 of 1

Job growth and finance: are some financial institutions better suited to early stages of development than others?

The Slovak Republic should integrate environment into its economic development

As the Slovak Republic strives to increase productivity and competitiveness in the recovery from the financial crisis, the OECD Environmental Performance Review of the Slovak Republic recommends that it strengthen environmental policies and institutions, promoting green growth to help achieve its economic goals.

The Slovak Republic has made major progress in protecting the environment and enhancing its citizens’ quality of life over the past decade. Its environmental achievements include: reducing emissions of most air pollutants during a period of fast economic growth; significantly improving the efficiency of water, energy and material use; improving industries’ environmental performance; and promoting biodiversity conservation in central Europe.

See the data in Excel here

The report also identifies a range of challenges: unhealthily high pollution in some urban centers; dangerous and costly floods; high reliance on landfill for waste disposal; and among the highest consumption of energy and carbon per unit of GDP of any OECD country.

The OECD Environmental Performance Review of the Slovak Republic makes 35 recommendations including:

• Develop a new environmental strategy as an integral part of Slovakia’s economic and social development planning.
• Improve general innovation capacity, including promoting eco-innovation.
• Draw up a coherent framework to develop and implement climate, energy and transport policies.
• Make environmentally-related taxes more efficient and effective.
• Strengthen dialogue and co-operation with business, NGOs and other stakeholders.
• Better target environmental outcomes when designing support schemes for agriculture and rural development.

The Slovak Republic should integrate environment into its economic development

OECD’s Review of the Development Co-operation Policies and Programmes of the Netherlands

For each of the past 35 years, the Netherlands has surpassed the UN target of spending at least 0.7% of its national income on Official Development Assistance (ODA). In 2010, its ODA was USD 6.35 billion – making the Netherlands the 6th largest donor in the world. However, national belt-tightening will extend to ODA and the Netherlands will reduce aid over the coming years, from 0.81% of national income in 2010 to 0.7% by 2012.

Responding to global economic, social and political shifts, the Netherlands is revising its approach to development co-operation, supporting the economic self-reliance of developing countries. It is focussing on 4 priorities: security and the rule of law, water, food security, and sexual and reproductive health. It is also reducing the number of countries with which it works - from 33 to 15. The OECD’s Development Assistance Committee (DAC), which groups the world’s major donors, welcomes the increased focus of Dutch aid, but recommends that these changes should be made in consultation with both the governments of developing countries and other donors. The DAC review also notes that the shift in focus will demand new expertise among Dutch development staff.

 To ensure that Dutch citizens are well-informed about the outcomes of development cooperation efforts, the government is issuing more information on it’s results to the public. The OECD’s Review of the Development Co-operation Policies and Programmes of the Netherlands recommends that a communications strategy and stronger engagement with civil society, development institutions and think tanks would help.

Other recommendations in the report include:

• Ensure that ODA does not fall below 0.7% of national income;
• To encourage ‘development beyond aid’, ensure that all Dutch and EU policies support – or at least do not undermine – development policies;
• To make aid delivery more efficient, involve Dutch embassies, staff working in the field and, where appropriate, civil society in the planning and management of this;
• Strengthen knowledge management and staffing through information sharing and improve support for locally recruited staff.

The Netherlands: Full report (pdf, 1.58 MB)

The evolving importance of banks and securities markets

This paper examines the evolving importance of banks and securities markets during the process of economic development. As economies develop, they increase their demand for the services provided by securities markets relative to those provided by banks, such that securities markets become increasingly important for future economic development.

Some exploratory evidence further suggests that deviations of a country’s actual financial structure -- the mixture of banks and markets operating in an economy -- from the estimated optimal structure are associated with lower levels of economic activity.

Author:Demirguc-Kunt,Asli;Feyen,Erik;Levine,Ross;Document Date: 2011/09/01.Document Type: Policy Research Working Paper.Report Number: WPS5805. Volume No: 1 of 1

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