Economics

Using original data from client-community assessments, we examine motivations in the Ugandan NGO sector. In general, client-community satisfaction with NGO interventions is high, even though some NGO sta¤ are viewed as unresponsive, underskilled, or self-serving.

Using detailed survey data from Uganda, this paper examines whether co¤ee producers sell to itinerant traders or directly to markets, where they can get a higher price but must incur a transport cost. We …nd that selling to the market is more likely when the quantity sold is large and the market close by. Wealthy farmers are less likely to sell to the market, possibly because the shadow value of their time is higher. But if they have a large quantity of co¤ee for sale, they are more likely to sell it to the market. They are also more likely to travel to a distant market. These …ndings are consistent with their better ability to pay for public transportation. We …nd no evidence that the decision to sell at the farm-gate is driven by a self-control motive.

This paper examines the determinants of assets at marriage in rural Ethiopia. We identify and test three separate processes that determine assets brought to marriage: assortative matching; compensating parental transfers at marriage; and strategic behavior by parents. We Þnd ample evidence for the Þrst, none for the second, and some evidence of the third for brides. We also Þnd no evidence of competition for parental assets among siblings. Results suggests that parents do not transfer wealth to children in ways that compensate for marriage market outcomes. Certain parents, however, give more assets to daughters whenever doing so increases the chances of marrying a wealthy groom.

There are several theories of why cities exist. Many revert around agglomeration externalities driven by returns to specialization. Using survey data from Nepal, we examine the relationship between proximity to urban centers and the organization of labor. We show that wards located in and near cities have more diversiÞed and more market oriented activities.

Using original survey data, we document the activities, resources, and governance structure of NGOs operating in Uganda. The NGO sector is funded primarily by international non-governmental organizations and bilateral donors. We …nd large di¤erences in size and funding across NGOs, with only a few NGOs attracting most of the funding. Most NGOs are small and underfunded and focus on raising awareness and advocacy. Few NGOs are faith-based. Most screening and monitoring is done by grant agencies. Some monitoring is also done internally by members and trustees. Little monitoring is done by government. NGOs do not …le an income tax returns and few respondents are able to provide coherent …nancial accounts.

This paper examines the determinants of human and physical capital at marriage. Using detailed data from rural Ethiopia, we …nd that assets brought to marriage are distributed in a highly unequal manner. For …rst unions, assets brought to marriage are positively associated with parents'wealth, indicating that a bequest motive a¤ects assets at marriage. Parental wealth a¤ects the inheritance of neither groom nor bride. Sibling competition from brothers a¤ects grooms' inheritance, but sisters have no e¤ect. The marriage market is a major conduit for rural and gender inequality, although avenues do exist for couples to accumulate wealth over their life cycle.

This paper tests the efficiency of insurance markets in the Pakistan Punjab by examining how crop choices are affected by the presence of price and yield risk. We estimate reduced-form and structural models of crop choices. Although we cannot reject the hypothesis that village members efficiently share risk among themselves, production choices are shown to depend on risk. Existing risk sharing and selfinsurance mechanisms thus imperfectly protect Punjab farmers against village-level shocks. Results also indicate that households respond to consumption price risk, thereby suggesting that empirical and theoretical work on risk should avoid putting an exclusive emphasis on yield and output price risk.

This paper investigates how the control and devolution of productive assets are allocated among husband and wife. Theory predicts that bargaining power within marriage depends on the division of assets upon divorce and on control over assets during marriage. Using detailed household data from rural Ethiopia, we show that assets brought to marriage, ownership of assets, control within marriage, and disposition upon death or divorce are only partly related. Productive resources are controlled by thehousehold head. Disposition upon death or divorce only loosely depends on individual ownership during marriage but control is associated with larger claims upon divorce. Assets brought into marriage have little impact on disposition upon death, but matter in case of divorce. in preparing the questionnaire and in cleaning the data. We thank Michael Bamberger, Bereket Kebede, John Maluccio, two anonymous referees, as well as participants in seminars at Oxford and IFPRI for excellent comments.

This paper analyses the effects of risk on the holding of inventories and liquid assets by manufacturing firms. Using a panel data set for Zimbabwe which includes firmspecific measures of contractual risk, we show that contractual risk has a major effect on the holding of stocks of inputs and, to a lesser extent, the constitution of cash reserves. This is consistent with the role of inventories as a hedge against stockout risk. By contrast, we find that firms facing more inter-annual market risk hold less inventories. This suggests that African manufacturers prefer adapting to long-term market fluctuations as they materialize rather than building up inventories. This interpretation is consistent with the finding that high market risk firms also have a low capacity utilization rate.

This paper examines how relationships and networks affect market exchange in Sub-Saharan Africa. After noting that market exchange arguably plays a larger role in Africa than in developed economies, we show that the presence of transactions costs naturally leads market participants to enter in long-term trading relationships. These relationships form business networks that shape market outcomes. We argue that network segmentation can have large efficiency and equity costs, particularly in international trade. Because of network externalities, groups and countries that are familiar with a particular activity tend to continue investing in that activity.

1 Social capital is seldom used as an input in the theoretical modeling of economic production processes. However, the returns to social capital in a real world with transaction costs might be as important as to labor, physical or human capital. Evidence from Madagascar shows that agricultural traders rank the importance of relationships for success in business higher than input prices, output prices, and access to credit or equipment. It is shown that traders use social capital to overcome transaction costs through a reduction in information and search costs and through substitution for poor market institutions. Moreover, the significant effect of experience in business on performance of the traders is for a large part explained by the accumulation of social capital over time. Controlling for labor and physical capital, traders who do not develop the appropriate social capital, do not grow.

1 This paper documents the role that personal relationships play in economic exchange. Original survey data show that agricultural traders in Madagascar perceive relationships as the most important factor for success in their business. Evidence details the extent to which relationships are used to serve a variety of purposes such as: the circulation of information about prices and market conditions; the provision of trade credit; the prevention and handling of contractual difficulties; the regularity of trade flows; and the mitigation of risk. Of these, the regularity of supply and demand and the sharing of risk appear particularly important. Larger and more prosperous traders are those with quantitatively and qualitatively better relationships. Family plays little role in business beyond assistance at start-up.

This paper revisits the tragedy of the commons and examines the conditions under which externalities contribute to livestock cycles. Using a stylized intertemporal model capturing the main characteristics of African livestock producers, we show that externalities magnify livestock cycles triggered by occasional droughts. This is true even when producers are fully rational. Two forces fuel such cycles: producers' concerns with consumption smoothing; and expected capital gains when demand for livestock products is inelastic. Implications regarding African livestock production are discussed. _ ______________ † I benefitted from comments from participants to various conferences and to seminars in Berkeley and Stanford.

Recent empirical evidence indicates that rural households in the Third World smooth consumption through reciprocal gifts and informal credit but fail to achieve Pareto efficiency in risk sharing. Extending previous models of informal contracts as repeated games, this paper shows that several often described features of informal risk sharing arrangements can be understood as limitations imposed by their self-enforcing nature. We argue that informal credit between friends and relatives is a hybrid transaction, half-way between market exchange and gift giving, whose purpose is to overcome enforcement problems present in pure income pooling arrangements.

Not only does livestock makes an important contribution to rural incomes and export earnings in the Sahel, it is also kept as insurance against weather risk. Fluctuations in livestock prices can therefore trigger food entitlement failures. Using monthly price data from Niger, we show that livestock prices respond to droughts and pasture availability. They are also exposed to aggregate shifts in export revenues and meat demand that affect Niger and its southern neighbor, Nigeria. These shifts add an important element of risk to the livelihood of Sahelian farmers and pastoralists. Famine early warning systems should keep an eye not only on weather shocks but also on macroeconomic conditions and other factors affecting the livestock economy. Department of Agriculture reclassified animal categories and the price series are no longer comparable. Fifteen categories of animals are distinguished --camels, horses, chicken, three categories of goats, three of sheep, and six of cattle. Gathered over an extensive range of time and space, the data are limited both in quantity and quality.

Credit from suppliers is an important but often neglected source of finance for manufacturing firms. Zimbabwe is no exception. Unlike credit from financial institutions, trade credit does not rely on formal collateral but on trust and reputation. Contract enforcement is flexible.

This paper investigates the extent to which poor households are discouraged from making a non-divisible but profitable investment. Using data on irrigation wells in India, we estimate the parameters of a structural model of irreversible investment. Results show that poor farmers fail to undertake a profitable investment that they could, in principle, self-finance because the non-divisibility of the investment puts it out of their reach.

We investigate whether available enforcement mechanisms a¤ects who shares risk with whom in sub-Saharan Africa by applying dyadic regression analysis to data from a lab-type experiment, surveys and a genealogical mapping exercise. During the experiment participants were invited to form risk sharing groups under three enforcement mechanisms: external, intrinsic, and extrinsic, i.e., social sanctioning. Same sex dyads and dyads who belong to the same economic community-based organizations (CBOs) are more likely to share risk.

Using matched employer-employee data from eleven African countries, we investigate if there is job sorting in African labor markets. We …nd that much of the wage gap associated with education is driven by selection across occupations and …rms. This is consistent with educated workers being more e¤ective at complex tasks like labor management. In all countries the education wage gap widens rapidly at high levels of education. Most of the education wage gap at low levels of education can be explained by selection across occupations. We also …nd that the education wage gap tends to be higher for women, except in Morocco where many poorly educated women work in the export garment sector. A large proportion of the gender wage gap is explained by selection into low wage occupations and …rms.

In this paper we attempt to (i) extend the competitive equilibrium neoclassical growth model to incorporate consumer preferences that feature temptation and selfcontrol as in the framework developed by Gul and Pesendorfer; (ii) use the model to analyze taxation and welfare; and (iii) extend and specialize the Gul-Pesendorfer temptation formulation to be dynamic and, in particular, quasi-geometric, thus providing a link to, and possibly an interpretation of, the Laibson model.

Does capital-embodied technological change play an important role in shaping labor market inequalities? This paper addresses the question in a model with vintage capital and search-matching frictions where costly capital investment leads to heterogeneity in productivity among vacancies in equilibrium. The paper Þrst demonstrates analytically 1) how technology growth affects equilibrium wage inequality, income shares and unemployment, and 2) how its impact depends on the presence of labor market institutions (welfare beneÞts, Þring taxes). Next, it applies the model to a quantitative evaluation of vintage capital as an origin of wage inequality: through labor market frictions, a 10-year age differential in capital translates into a 4% wage gap among exante equal workers. Finally, the model allows a U.S.-continental Europe comparison: a common embodied technological acceleration interacted with different labor market institutions can explain a substantial part of the differential rise in unemployment and capital share and some of the differential dynamics in wage inequality.

We study the e ects of taxation in a model with a representative agent with time-inconsistent preferences: discounting is quasi-geometric. Utility is derived from consumption and leisure, and taxation can be based on consumption and investment spending as well as on capital and labor income. The model allows for closed-form solutions, and welfare comparisons can be made across di erent taxation systems.

In this paper we attempt to (i) extend the competitive equilibrium neoclassical growth model to incorporate consumer preferences that feature temptation and selfcontrol as in the framework developed by Gul and Pesendorfer; (ii) use the model to analyze taxation and welfare; and (iii) extend and specialize the Gul-Pesendorfer temptation formulation to be dynamic and, in particular, quasi-geometric, thus providing a link to, and possibly an interpretation of, the Laibson model.

Does capital-embodied technological change play an important role in shaping labor market inequalities? This paper addresses the question in a model with vintage capital and search-matching frictions where costly capital investment leads to heterogeneity in productivity among vacancies in equilibrium. The paper Þrst demonstrates analytically 1) how technology growth affects equilibrium wage inequality, income shares and unemployment, and 2) how its impact depends on the presence of labor market institutions (welfare beneÞts, Þring taxes). Next, it applies the model to a quantitative evaluation of vintage capital as an origin of wage inequality: through labor market frictions, a 10-year age differential in capital translates into a 4% wage gap among exante equal workers. Finally, the model allows a U.S.-continental Europe comparison: a common embodied technological acceleration interacted with different labor market institutions can explain a substantial part of the differential rise in unemployment and capital share and some of the differential dynamics in wage inequality.

Byzantine and rational behaviors are increasingly recognized as unavoidable realities in today's cooperative services. Yet, how to design BAR-tolerant protocols and rigorously prove them strategy proof remains somewhat of a mystery: existing examples tend either to focus on unrealistically simple problems or to want in rigor. The goal of this paper is to demystify the process by presenting the full algorithmic development cycle that, starting from the classic synchronous Repeated Terminating Reliable Broadcast (R-TRB) problem statement, leads to a provably BAR-tolerant solution. We show i) how to express R-TRB as a game; ii) why the strategy corresponding to the optimal Byzantine Fault Tolerant algorithm of Dolev and Strong does not guarantee safety when non-Byzantine players behave rationally; iii) how to derive a BAR-tolerant R-TRB protocol: iv) how to prove rigorously that the protocol ensures safety in the presence of non-Byzantine rational players.

We present the first peer-to-peer data streaming application that guarantees predictable throughput and low latency in the BAR (Byzantine/Altruistic/Rational) model, in which nonaltruistic nodes can behave in ways that are self-serving (rational) or arbitrarily malicious (Byzantine). At the core of our solution is a BARtolerant version of gossip, a well-known technique for scalable and reliable data dissemination. BAR Gossip relies on verifiable pseudo-random partner selection to eliminate non-determinism that can be used to game the system while maintaining the robustness and rapid convergence of traditional gossip. A novel fair enough exchange primitive entices cooperation among selfish nodes on short timescales, avoiding the need for long-term node reputations. Our initial experience provides evidence for BAR Gossip's robustness. Our BAR-tolerant streaming application provides over 99% convergence for broadcast updates when all clients are selfish but not colluding, and over 95% convergence when up to 40% of clients collude while the rest follow the protocol. BAR Gossip also performs well when the client population consists of both selfish and Byzantine nodes, achieving over 93% convergence even when 20% of the nodes are Byzantine.

Climate change governance is an emerging topic in the citizen engagement discourse.  This is an Expert Group Meeting (EGM) report focused on the socioeconomic impacts of climate change on citizen engagement that reciprocate creative solutions from the bottom-up in public administration processes.  The EGM held during the World Civic Forum 2009 initiative on May 5 - 8 May 2009 in Seoul, Korea. The overarching theme of the forum was Building Our humanitarian Planet, espoused by three sub-themes: 1. Civic Values for Global Justice; 2. Civic Engagement in Public.  It was agreed that there is a need for UNDESA to boost its activities to enhance citizen engagement to cope with climate change challenges was emphasized during the EGM. Promotion of public awareness, preparedness, adaptation, and mitigation were recognized as critical to success. Over ten concrete policy and programme proposals were identified for further analysis, which will be presented by UNDESA as input to the forthcoming United Nations Climate Change Conference to be held in Copenhagen, 7-18 December 2009, as well as to ECOSOC through its subsidiary body, the Committee of Experts on Pubic Administration (CEPA).

While the political transition to democratic rule in South Africa was smooth and rapid, the economic transition has been slow and difficult. Nowhere is this more apparent than in the labour market. Job creation has not matched the growing labour supply and the unemployment rate continues to rise. This paper attempts to document and identify the key trends in labour force participation, unemployment and employment so as to better understand the factors that drive the performance of the labour market.

This paper offers an original survey of the Malaysian crisis and the effects of the consequent imposition of capital controls by authorities in September 1998 and of their subsequent relaxation in February and September 1999. We identify Malaysia’s unique strengths and weaknesses before the crisis, appreciate the differential timing and nature of the Malaysian crisis vis-à-vis the other neighbouring crisis countries, and distinguish carefully between the restrictive and incentive components of the imposed controls. Against this backdrop, we analyse both the “level” (first-order) effects and the “volatility” (second-order) effects of controls on key macroeconomic, banking and financial market variables. On the level effects, we found the Malaysian recovery (starting late 1998) to be at least as quick, strong and lasting as that of the other crisis countries, and discovered important channels of influence from controls to interest rates (which were lowered) and stock markets (which recovered dramatically). These results on the effectiveness of controls are consistent with earlier studies by Edison & Reinhart (2001) and Kaplan & Rodrik (2001). However, due to the longer time period used here, a stronger restatement of their conclusions is now possible. We study the secondorder effects of controls by introducing a Capital Asset Pricing Model (CAPM)-based portfolio choice model and show how controls, especially when they work as an asymmetric tax on short-term investment, reduce both the volume of speculative flows and the associated interest rate volatility. To test these theoretical results, we set up a standard Generalized Autoregressive Conditional Heteroskedasticity (GARCH) model of interest rate and stock market volatility where capital control dummies are introduced in the variance equation. Our model is an improvement over earlier studies in two ways: a more sophisticated capital control dummy was used to take account of the relaxation of controls in February 1999; and we dealt with the problem of endogeneity in the mean equation by using regressors that are not Granger-caused by the regressand (Malaysian interest rate and stock returns). The model shows that controls did limit interest rate volatility in line with the theoretical prior, but worsened stock market volatility. The latter result lends credence to the view that controls shifted the burden of adjustment from quantity to prices.

The aim of this paper is to estimate the power of the French automatic stabilisers using the macro-econometric model MESANGE. The main appeal of MESANGE lies in its very detailed description of public finances. Automatic stabilisation denotes the capacity of the public budget to dampen economic cycles. For instance, during a downturn, taxes (indexed on consumption, profits, etc.) decrease while cyclical public expenditures (mostly unemployment benefits) expand, both contributing to the reduction of the initial downturn in a Keynesian fashion. In the Euro area, automatic stabilisers gain importance as national monetary policy is lost, all the more since the Growth and Stability Pact seeks to limit discretionary fiscal policy.  Recently, several authors have undertaken cross-country comparisons of the power of automatic stabilisers, with mixed results for the performance of France’s a priori large fiscal stabilisers (Van den Noord (2000), Barrel and Pina (2000, 2003), Brunila et al. (2002)). This study focuses on a detailed analysis of automatic stabilisers, leaving aside the issue of cross-country comparisons. I compute the contribution of each budgetary item to stabilisation, for different demand and supply shocks, and explain it by the sensitivity of the budgetary items and their fiscal multipliers. According to the model MESANGE, after a demand shock GDP fluctuations are only slightly dampened (by around 10%) during the first the year of the shock, whereas stabilisation is stronger during the second year (20%). Indirect taxes, production taxes and unemployment benefits are found to be the most efficient stabilisers. The strength of stabilisers depends, however, on the dynamic profile of shocks. Sudden shocks that revert to the mean gradually are best stabilised, because of the lags in the behavioural and fiscal equations. The paper finally assesses stabilisation of supply shocks taking into account the effect on potential GDP. Contrary to widely accepted claims (e.g. Blanchard, 2000), I show that public finances are indeed beneficial after a productivity shock in neo-Keynesian models, although automatic stabilisers worsen oil-price driven volatility.

We present new evidence that households are unable to protect themselves from rainfall failure that occurs on average every five years in rural Ethiopia. However, other less extreme rainfall variation and idiosyncratic shocks such as illness and crop pests do not impact significantly on consumption. Agricultural shocks impact negatively on farm income as expected, however they also stimulate non-agricultural earnings by an equivalent amount. In the case of a covariate shock such as severe rainfall failure, this smoothing mechanism may be ineffective and rainfall insurance or drought-triggered safety nets could provide further protection.

This article proposes that the post-communist transition in Poland can profitaby be understood through the concept of the transnationalization of the state. It argues that change in Eastern and Central Europe has predominately been explained as a domestic process with few attempts made to contextualize the changes taking place in the region as part of neoliberal globalization. Therefore it explores the restructuring of the Polish state since 1989 by connecting concrete instances of policy to broader historical processes, social structures and political economy through the process of the transnationalization of the state. Rather than a loss of power or withdrawal of the state, setting transition as part of a wider transnationalization process reveals the subtleties of the restructuring of state apparatuses and hierarchies in the relationship between state and capital. The article reflects this by investigating the role adopted by the Polish state in representing the interests of a nascent bourgeoisie as they are increasingly penetrated by transnational capital and the impact of administration through the transnationalization of the state.

This paper develops a critical international political economy analysis of the processes that we commonly understand as globalization and their application in the development of Poland's transition from state socialism. It does so by tracing the rise of social forces shaped by the restructuring of social relations of production and the form of state in Poland. The paper argues that a series of important social shifts occurred to move Poland towards a neoliberal strategy of capitalist accumulation with the failure of state-socialism as a development project and the uncoupling of the social basis of Communist Party hegemony. It is social forces most intimately associated with transnational capital, irrespective of their party or social position, that are most successful in the struggle over competing reform strategies. These strategies eventually coalesce through material and ideological changes associated with a new openness to transnationalized circuits of capital.

This article aims to address a fundamental question for analysts and students of MERCOSUR : what explains the bloc's survival despite its recurrent crises and frequent pessimistic forecasts predicting its collapse ? It argues that the maintenance of co-operation after 1999, when the economic and political economy rationale of the project had almost disappeared, is best understood in terms of the convergent strategic interests of MERCOSUR partners. This convergence of interests in the continuity of the regional regime reflects three types of strategic incentives. First, defensive considerations reflecting external forces and a shared sense of vulnerability vis-à-vis the external environment have provided the main motivation for partners to engage in negotiations and attempt to move the process of integration forward. Secondly, the offensive incentives faced by Brazil, given its relatively stronger position within the region have also worked to foster regional co-operation. But besides these power considerations, the sustainability of co-operation has been at least partially assisted by an emerging process of socialisation among executive officials taking place within regional institutions. These processes of increased interaction and enmeshment have reinforced interests in regional integration, giving way to positive incentives to maintain MERCOSUR.

Differing expectations about who should get what benefits from digging the wealth out of the ground are causing serious tensions in the Copperbelt region of Northern Zambia. Multinational copper-mining companies, the Zambian Government, workers and local communities all desperately want recently privatised copper mines to succeed, and for the region to return to its golden age as one of the most developed parts of Africa. Yet all have different beliefs about how to make it happen, and what rights and responsibilities should attach to private companies, the state and citizens.

After decades of decline, the price of copper has been rising at unprecedented levels since 2003.  The value of Zambia’s copper exports more than doubled between 2005 and 2006, reaching US$2.78 billion.  Government and the mining companies claim that all are benefiting from this boom on the Copperbelt. And yet in September 2006 Copperbelt voters roundly rejected current policies, electing to every urban seat in the region MPs representing the Patriotic Front (PF), a party that ran on a platform of deporting foreign investors that exploit the workforce, increasing corporate taxes and limiting foreign ownership of mines. This report aims to contribute to the discussion about the costs and benefits of privatisation and what might be done by Government, companies and donors to secure greater benefits for Zambia, and especially for those working in and living near the mines.

"In 1984, the world was shocked at the scale of a famine in Ethiopia that caused over half a million deaths, making it one of the worst in recent history. The mortality impacts are clearly significant. But what of the survivors? This paper provides the first estimates the long-term impact of
the famine twenty years later, on the height of young adults aged 17--25 who experienced this severe shock in-utero and as infants during the crisis. Improving methodologically on other studies, famine intensity is measured at the household level, while impacts are assessed using a difference-in-differences comparison across siblings. We find that by adulthood, affected children who were under the age of 36 months at the peak of the crisis are significantly shorter than the older cohort, by at least 3cm. They are also less likely to
have completed primary school, and more likely to have experienced recent illness. Indicative calculations show that this may lead to income losses of between 3%  and 8% per year over their lifetime. The evidence also suggests that the relief operations at the time made little difference."

Este estudio tiene como principal objetivo analizar el impacto de la ineficiencia judicial sobre la pequeña empresa en Perú. Se funda sobre la hipótesis de que los problemas crónicos de los sistemas de justicia de la región tienen consecuencias negativas para el desarrollo de las micro, pequeñas y medianas empresas. Nuestro análisis se concentra, en primer lugar, en la forma en que las pymes se relacionan con el sistema de justicia. En segundo lugar, indaga acerca de las decisiones tomadas por los pequeños empresarios a fin de mitigar los efectos del mal desempeño de los tribunales. Por último, identifica las diversas maneras en que la ineficiencia judicial se traslada al sector productivo y se intenta cuantificar su impacto económico.

This study analyzes the impact of judicial inefficiency on small businesses in Peru. It is based on the hypothesis that chronic problems in the region’s judicial systems have negative consequences on the development of micro, small and medium-sized businesses. The analysis focuses, first, on the relationship between small businesses and the legal system. Secondly, it looks at decisions made by small businesses to mitigate the effects of poor performance by the courts. Lastly, it identifies several ways in which judicial inefficiency is transferred to the business sector. The analysis also attempts to quantify the economic impact of judicial inefficiency.

Democracy and human development are the twin pillars on which to build prosperity and sustainability. Democratization and development are inherently controversial and multidimensional processes. However, from a human development perspective, both are mutually inclusive and compatible. From this standpoint, both processes are intertwined in an endogenous relationship. At least at the conceptual level, both have the same logic of inference: the promotion of individual freedoms and the expansion of well-being.

The thesis argues that: (1) Democracy contributes towards human development through its multifaceted characteristics, as well as through its individual attributes. (2) Democratization and human development turning points are both path-dependent and interdependent. However, institutional arrangements that are based on cooperation and consent lead to longer periods of development improvements. (3) Institutional arrangements for the establishment of democracy that are based in cooperation and consent may deteriorate and force a vicious circle in which non-cooperation among political parties obstructs the policy-making-processes, leading to the stagnation of human development levels. (4) There exist strong reciprocal connections between human development and democratization that form two chains. However, over the long run, and from an empirical standpoint, democratization has precedence.

In doing so, this dissertation falls within the rubric of comparative methods, both in terms of analytical substance and methodological strategy. It aims to provide arguments on the need and validity to combine quantitative and qualitative methods to explain the direction of the relationship between human development and democracy in a single study. In fact, the dissertation attempts to explain the extent to which democracy may promote (or obstruct) development in identifiable stages of transition. Costa Rica and El Salvador will be given special consideration. The findings illustrate the benefits of method triangulation (i.e. paired comparisons complemented with cross-country analyses) to explore the complementarities between democracy and development.

The shift away from purely state-centric politics to a more multi-layered global governance has not been applied uniformly. As Amartya Sen notes, “the world has changed and yet the international economic, financial, and political architecture of the world – including the World Bank, the International Monetary Fund (IMF), and other institutions – was set up in 1944.”  This incompatibility between the reality of today’s “complex emergencies”  and the nature of policy responses to them represent a fundamental challenge to the international aid system.

This paper examines the channelling of state-funded official development assistance during cases of complex emergency. The capacity of non-state actors is considered, with particular attention devoted to the non-governmental sector, and opportunities for making state aid more effective are discussed.

Globalization is both a dynamic and multi-faceted phenomenon. Foremost, the process is associated with global capitalism and is shorthand for the likes of Nike, Coca Cola, and McDonalds. Secondly, globalization in the political, social, and cultural spheres, as well as the economy, is about global interconnectedness. It is, according to Anthony Giddens, “the stretching of time and place.” From the post-1914 surge in short-term financial flows to lower cost international air travel and to the information and communications technology revolution, ours is a world of growing interdependence. Thirdly, globalization is about global consciousness [of humanity]. In the aggregate, then, it is best seen as a multidimensional set of processes and not one singular event.

While this multi-continental network of interdependence is both increasingly thick and acquiring an institutional velocity, it is hardly universal. On the contrary, globalization varies by region, locality, and issue relevance. While global interconnectedness is on the rise, the world today is increasingly divided into a global class of information “haves” [David Held’s “cosmopolitan elite”] and a localized class of information “have nots.” Globalization is at one and the same time a process of homogenization and fragmentation—Schumpeter’s “creative destruction.” Furthermore, while it does shrink distance, it does not make distance irrelevant. It is a complex process by which both homogenization [i.e., McWorld] and fragmentation [i.e., Jihad] are unfolding simultaneously.