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This paper presents an analysis of the recent evolution of social assistance in the developing world, looking at its complex typological configuration, which has interlinked with, and partly reflects the complex demographic and epidemiological transitions and rapid urbanization and economic convergence that many developing countries have exhibited over the past decades. The paper underscores the principles of the poverty focus of social assistance and presents an overview of existence evidence of first- and second-order effects of social assistance, particularly in the domains of poverty, education, health and labour markets. Moreover, the paper highlights the knowledge gaps with regard to the longer-term and gender-specific welfare effects of social assistance, and the redistributive effects, and the incentives and distortion mechanisms that transfer programmes can generate in the labour and insurance markets.

In this paper, we present evidence that indicates that democratization has had a positive and significant effect on the current expansion of social transfers in low- and middle income countries. Overall, we find that electoral democracies seem to have favoured the expansion of conditional cash transfer (CCTs) programmes and social pensions, whereas autocracies and infant electoral democracies seem to have favoured pure cash transfers and public works, which are, on average, smaller in scale and more prone to political clientelism. Our findings also show that consumption taxes, and natural resource rents in particular, have contributed to the expansion of social transfers over the past two decades, although at the cost of delaying tax reforms that are necessary to guarantee the survival of welfare benefits. The current tax structure has also exposed net resource-exporting countries to the vagaries of commodity markets and reduced the fiscal space that these countries enjoyed just a decade ago. The policy implications of our findings are threefold: first, a strong technical approach to the formulation of social transfers is clearly desirable to maximize the poverty-reducing and welfare-enhancing effects of these programmes. However, a narrow focus on technical considerations can miss out wider implications of certain policy choices, especially in contexts characterized by electoral autocratic regimes. Second, state capabilities matter for an effective distribution of welfare benefits. However, without strong institutional settings and effective checks and balances, pro-poor redistribution can be subject to the capture of opportunistic clientelistic regimes. Third, any effort to expand social protection systems without parallel reforms to tax systems risks the long-term sustainability of transfer programmes. However, attempts to introduce more progressive forms of taxation would be destinated to fail without a good understanding of the strength and upfront position of elites.

Voter coercion is a recurrent threat to pro-poor redistribution in young democracies. In this study we focus on Mexico's paradigmatic Progresa-Oportunidades-Prospera (POP) programme. We investigate whether local mayors exploited POP to coerce voters, and if so, what effect these actions had on the municipal incumbent's vote.

How social protection programmes affect work choices is a question that has been at the centre of labour economics research for decades. More recently, a scant literature has focused on the effects of social protection on work choices and informal employment in the context of low- and middle-income countries. This paper contributes to this scant literature by examining the effect of Bolivia's Renta Dignidad , a universal non-contributory old-age pension that covers all Bolivians aged 60 years and older.

This paper follows a quasi-experimental research design to assess the impact of the electronic payment system of Mexico’s Progresa-Oportunidades-Prospera (POP) programme. The switch from cash payments to electronic payments delivered via savings accounts is found to have medium-term effects on savings decisions, transaction costs, and coping strategies. Overall, the study finds that, following the intervention, a substitution effect emerged between saving portfolio choices, with the poor favouring bank accounts over informal saving arrangements. It also found that the Oportunidades savings account led to an increase in remittance reception, which in turn had important implications for household consumption smoothing and risk management decisions. The study also reveals impact heterogeneity depending on household composition and the rural-urban divide, with important implications for replicability of similar policy innovations in other countries.

In 2014, prior to the political transition of 2015 towards democracy, the government published the Myanmar National Social Protection Strategic Plan with the aim of supporting socio-economic development, and strengthening the resilience of vulnerable people against shocks and life cycle contingencies. In this study, we take stock of the social protection system in place in Myanmar until the end of 2020, paying attention to the design features, and levels of institutionalisation of these programmes. We conduct a poverty and inequality decomposition analysis as well as a benefit-incidence analysis to examine the degree of progressivity or regressivity of these programmes. Overall, we find low coverage rates of welfare benefits, with negligible poverty reducing effects at the national level. The contribution of welfare benefits to reducing inequality is mixed, with social insurance having disequalising effects while social assistance programmes have a more equalizing contribution to the distribution of income. Further simulation analysis indicates that expanding coverage under poverty targeting approaches would produce larger welfare gains than universal approaches in the delivery of welfare benefits, irrespective of the design features of programmes.

This paper examines Chile Solidario, a social protection programme that provides poor households in Chile with preferential access to a conditional cash transfer programme designed to facilitate investments in children’s health and education. We assess the programme’s longer-term impact on educational attainment and labour income at ages 25–28. Overall, Chile Solidario has a positive and long-lasting effect, albeit with significant impact heterogeneity. The effects on educational attainment are similar for women and men, and for indigenous and non-indigenous people, but the effects on labour income are driven by men and non-indigenous people. The impact on labour income is not significantly different from zero for women with children, but is positive and significant for women without children. The effects on both education and labour income are concentrated in urban areas. Our results indicate that the impact of Chile Solidario depends on societal and structural factors underpinning labour markets in Chile.

This paper presents a synopsis of the contextual conditions, factors and challenges under which the recent evolution of tax systems has taken place over the past three decades. The paper gives especial emphasis to the role of natural endowments, political economy, social structure and history, and the interplay between politics and tax revenues. These are relevant issues, considering that the Millennium Development Goals (MDGs) and now the Sustainable Development Goals (SDGs) have placed fiscal policy, and tax policy and revenue mobilization in particular, at the centre of national and international development efforts. Delivering on the SDGs will require a level of state revenue mobilization capacity in many ways unprecedented in the history of development policy.

We investigate heterogeneous and nonlinear intergenerational transmission of education and the impact on this of house prices. Using the China Household Finance Survey, we construct household history of property purchases and educational investment over the past 16 years with current filial educational achievement. High house prices tighten the household's credit constraints, resulting in the concave slopes of filial education as a function of father's education. On average one standard deviation in father's (mother's) education accounts for 0.375 (0.098) standard deviations of filial education. Decomposition reveals the “glass ceiling” and the “glass floor” in two tails of education distribution.

Over the past two decades, there has been unprecedented attention to the promotion of human development via government spending in the social sectors as a conditio sine qua non for economic growth and improved aggregate welfare. Yet the existing evidence on the subject remains limited and contested. This paper contributes to the literature by examining the causal effect of government spending on the social sectors (health, education and social protection) on three measures of aggregate welfare: the Human Development Index, the Inequality-adjusted Human Development Index and child mortality rates, using longitudinal data from 55 low-income and middle-income countries from 1990 to 2009. We find strong evidence to support the proposition that government social spending has played a significant role in improving aggregate welfare in the developing world. Our results are fairly robust to, inter alia, the method of estimation, the set of control variables and the use of alternative samples and instruments. © 2017 UNU-WIDER. Journal of International Development published by John Wiley & Sons, Ltd.

The notion that social protection should be a key strategy for reducing poverty in developing countries has now been mainstreamed within international development policy and practice. Promoted as an integral dimension of the post-Washington Consensus that emerged around the turn of the new millennium, all major international development agencies and bilateral donors now include a strong focus on social protection in their advocacy and programmatic interventions, and a commitment to providing social protection was recently enshrined within the Sustainable Development Goals. The rhetoric around social protection, particularly when delivered in the form of cash transfers, has sometimes reached hyperbolic proportions, with advocates seeing it as a silver bullet that can tackle multi-dimensional problems of poverty, vulnerability, and inequality and a southern-led success story that challenges the unequal power relations inherent within international aid. This book examines how the operation of power and politics at multiple levels of governance shapes the extent to which political elites are committed to social protection, the form this commitment takes, and the implications this has not only for the future shape of welfare regimes but also for state–citizen relations on the continent. With a particular focus on cash transfers, the chapters set out how the politics of promoting social protection has played out in countries from all regions of sub-Saharan Africa. The power relations we examine include those that operate within and amongst global development agencies, between global actors and political and bureaucratic elites, and between and amongst political and bureaucratic elites within Africa.

Social assistance programmes proliferated and expanded across much of the global South from the mid-1990s. Within Africa there has been enormous variation in this trend: some governments expanded coverage dramatically while others resisted this. The existing literature on social assistance, or social protection more broadly, offers little in explanation of this variation. Drawing on the literature on political settlements and democratic politics, we argue that variation results from the political contestation and negotiation between political elites, voters, bureaucrats, and transnational actors. The forms of politics that matter at each of these inter-related sites of negotiation include struggles over ideas as well as material interests and reflect the ways in which social assistance is being used to advance certain political as well as developmental projects in sub-Saharan Africa.

This article examines the impacts of the financial, food and fuel crises on poor and vulnerable households in two states of Nigeria: Lagos and Kano. It uses retrospective household‐level data to analyze the impacts of induced price variability on household welfare. The results indicate that aggregate shocks have significant adverse effects on household consumption, schooling and child labour decisions, with a degree of impact heterogeneity across regions and rural and urban areas of the country. We find that the coping strategies adopted by the poor to deal with the short‐term effects of the crises can lock households in a low‐income equilibrium or poverty trap. Provided that covariate shocks exacerbate these effects, they become central for policy design.

We conducted a systematic review to identify policy interventions that improve education quality and student learning in developing countries. Relying on a theory of change typology, we highlight three main drivers of change of education quality: (1) supply-side capability interventions that operate through the provision of physical and human resources, and learning materials; (2) policies that through incentives seek to influence behaviour and intertemporal preferences of teachers, households, and students; (3) bottom-up and top-down participatory and community management interventions, which operate through decentralisation reforms, knowledge diffusion, and increased community participation in the management of education systems. Overall, our findings suggest that interventions are more effective at improving student performance and learning when social norms and intertemporal choices are factored in the design of education policies, and when two or more drivers of change are combined. Thus, supply-side interventions alone are less effective than when complemented by community participation or incentives that shift preferences and behaviours.

This article reviews what has been learned over many decades of foreign aid to education and discusses what works and what does not work. It shows the positive contribution that aid has made to education in aid-recipient countries, the most tangible outcome of which is the contribution that aid makes to expanding enrolments especially of basic education. But the article also indicates that there is a considerable gap between what aid does and what it could potentially achieve, especially in relation to its contribution to improvements in educational quality. It shows the distortions caused by focusing on enrolments and insufficiently on quality. Sustainable education outcomes will not be achieved merely by reproducing yet more successful, but individual projects. Perversely, development agencies which focus only on demonstrable short-term impact may well be contributing, unwittingly, to an undermining of long-term impact on the education systems and their deepening development, to whose progress they are trying to contribute.

In 2006, the Bolivian government introduced a large-scale cash transfer programme, Bono Juancito Pinto (BJP). Exploiting the exogenous variation of the programme expansion, this paper examines the impact of BJP on schooling and child labour. The analysis suggests that the transfer increases the likelihood of school enrollment but has no sizeable effect on the incidence of child labour. The results are in line with theoretical models that predict that if leisure and schooling decisions are substitutes, a school incentive will have either positive or neutral effects on child labour. Our findings support previous evidence that schooling and work decisions are not perfect substitutes among children.

Social assistance programmes proliferated and expanded across much of the global South from the mid-1990s. Within Africa there has been enormous variation in this trend: some governments expanded coverage dramatically while others resisted this. The existing literature on social assistance, or social protection more broadly, offers little in explanation of this variation. Drawing on the literature on political settlements and democratic politics, we argue that variation results from the political contestation and negotiation between political elites, voters, bureaucrats, and transnational actors. The forms of politics that matter at each of these inter-related sites of negotiation include struggles over ideas as well as material interests, and reflect the ways in which social assistance is being used to advance certain political as well as developmental projects in sub-Saharan Africa.

This study presents an analysis of the electoral impacts of one of the most prominent conditional cash transfers in the world: Mexico’s Progresa-Oportunidades-Prospera (POP) programme. Using population censuses, and POP’s administrative records and elections data, we exploit the targeting criteria of the programme and its gradual expansion to implement difference-in-differences estimators and a regression discontinuity design for past presidential elections (2000, 2006, and 2012). Overall, we find no sizeable electoral effects of POP in favour to the incumbent in the 2000 and 2012 presidential elections, but instead a significant negative effect in the very competitive presidential election of 2006. We provide a theoretical rationalization for this result, which highlights the role of behaviour towards risk near a subsistence threshold and ex-ante expectations among the poor in control localities that were influenced by campaign externalities. We conclude with a discussion on the implications of our results for future theoretical and empirical research.

The effects of conditional cash transfers (CCTs) on poverty and well-being have been widely studied. However, there is limited knowledge on how a CCT should respond to the dynamics of poverty. How should program administrators treat beneficiaries that exit poverty in period t-1, but exhibit a high probability of falling into poverty in period t? This is a relevant, yet unanswered question. This paper provides an analysis of the implications of poverty dynamics in the implementation of graduation strategies of CCTs, taking Mexico’sProgresa-Oportunidades-Prospera(POP) program as reference case. We propose a Markovian transition model that allows to control for unobserved heterogeneity, state dependence, and attrition. The model provides a framework for a generic graduation condition that can be applied to cash transfer programs that follow well-defined eligibility income thresholds. Overall, we find that only one-third of program beneficiaries that were poor in 2002 exhibited low probabilities of becoming poor in 2009–12 and therefore could be regarded as true ‘graduates’ of the program. We also find that the ‘recertification’ process of POP—which takes place every three years—would be more efficient if it took place every 3.7 and 5.1 years in urban and rural areas, respectively.

This paper presents a synopsis of the contextual conditions, factors and challenges under which the recent evolution of tax systems has taken place over the past three decades. The paper gives especial emphasis to the role of natural endowments, political economy, social structure and history, and the interplay between politics and tax revenues. These are relevant issues, considering that the Millennium Development Goals (MDGs) and now the Sustainable Development Goals (SDGs) have placed fiscal policy, and tax policy and revenue mobilization in particular, at the centre of national and international development efforts. Delivering on the SDGs will require a level of state revenue mobilization capacity in many ways unprecedented in the history of development policy.

The interest in the level of global inequality has surged in recent years. This paper complements existing estimates of global inequality by providing the first estimates of the level of bipolarization of the global income distribution. During 1975–2010, global bipolarization declined substantially according to ‘relative’ measures, while it increased according to ‘absolute’ measures. The results mirror trends in global inequality over the same period.

This paper discusses past and current social policy strategies in the international aid architecture as an introduction to the UNU-WIDER Special Issue. Beginning in the 1990s, aid strategy and policy shifted to put a stronger emphasis on human development. This accelerated with the Millennium Development Goals (MDGs) and will continue under the Sustainable Development Goals (SDGs) which have even more ambitious targets. The paper also assesses some of the concerns associated with the ‘Paris-style’ aid modalities, and discusses major challenges for the future global development agenda. Copyright © 2015 John Wiley & Sons, Ltd. © 2015 UNU-WIDER. Journal of International Development published by John Wiley & Sons, Ltd.

In recent years, experimental methods have been both highly celebrated, and roundly criticized, as a means of addressing core questions in the social sciences. They have received particular attention in the analysis of development interventions. This paper focuses on two key questions: (1) what have been the main contributions of RCTs to the study of government performance? and (2) what could be the contributions, and relatedly the limits? It draws inter alia on a new systematic review of experimental and quasi-experimental studies on governance to consider both the contributions and limits of RCTs in the extant literature. A final section introduces the studies included in this symposium in light of this discussion. Collectively, the studies push beyond polarized debates over experimental methods towards a new middle ground, considering both how experimental work can better address identified weaknesses and how experimental and non-experimental techniques can be combined most fruitfully.

This paper provides a broad picture of national, regional and global trends of inequality in length of life over the period 1950–2015. We use data on life tables from World Population Prospects to develop a comprehensive database of a battery of inequality measures for 201 countries at five-year intervals over the period under analysis. We estimate both absolute and relative inequality measures which have the property of being additively decomposable. This property makes the database remarkably flexible because overall inequality can be computed for any group of countries using only the information included in our database. The decomposition analysis reveals that differences in life expectancy between countries account for a very small portion of the observed changes in global inequality in length of life, evolution of which is large driven by within-country variation. Our estimates indicate that inequality in length of life has decreased sharply since 1950, a reduction that can be largely attributed to the substantial progress made in reducing child mortality worldwide. We also observe a degree of heterogeneity in the distributional patters of inequality in length of life across world regions.

We examine the heterogeneous and dynamic impact of China’s New Rural Pension Scheme on intergenerational wealth dependence using a nationally representative longitudinal household survey covering the period 2011–13. We adopt an instrumental quantile regression– discontinuity design to address the endogeneity of partial compliance of the pension scheme and the observed individual heterogeneity. Overall, we find that the pension scheme smooths wealth dependence between generations in the short term, but strengthens the persistence of assets among the wealthiest households in the medium term. The mechanisms underlying these distributional effects are intergenerational transfers, time reallocation, and filial adjustments of the wealth portfolio. Complementary policy interventions, particularly for the poor across generations, would be needed to neutralize the distributional impact of the pension in terms of intergenerational wealth persistence.

Over the last 35 years, microfinance has been generally regarded as an effective policy tool in the fight against poverty. Yet, the question of whether access to credit leads to poverty reduction and improved wellbeing remains open. To address this question, we conduct a systematic review of the quantitative literature of microfinance’s impacts in the developing world, and develop a theory of change that links inputs to impacts on several welfare outcomes. Overall, we find that the limited comparability of outcomes and the heterogeneity of microfinance-lending technologies, together with a considerable variation in socio-economic conditions and contexts in which impact studies have been conducted, render the interpretation and generalization of findings intricate. Our results indicate that, at best, microfinance induces short-term dynamism in the financial life of the poor; however, we do not find compelling evidence that this dynamism leads to increases in income, consumption, human capital and assets, and, ultimately, a reduction in poverty.

Over the last 35 years, microfinance has been generally regarded as an effective policy tool in the fight against poverty. Yet, the question of whether access to credit leads to poverty reduction and improved wellbeing remains open. To address this question, we conduct a systematic review of the quantitative literature of microfinance’s impacts in the developing world, and develop a theory of change that links inputs to impacts on several welfare outcomes. Overall, we find that the limited comparability of outcomes and the heterogeneity of microfinance-lending technologies, together with a considerable variation in socio-economic conditions and contexts in which impact studies have been conducted, render the interpretation and generalization of findings intricate. Our results indicate that, at best, microfinance induces short-term dynamism in the financial life of the poor; however, we do not find compelling evidence that this dynamism leads to increases in income, consumption, human capital and assets, and, ultimately, a reduction in poverty.

This paper measures trends in global interpersonal inequality during 1975–2010 using data from the most recent version of the World Income Inequality Database (WIID). The picture that emerges using ‘absolute,’ and even ‘centrist’ measures of inequality, is very different from the results obtained using standard ‘relative’ inequality measures such as the Gini coefficient or Coefficient of Variation. Relative global inequality has declined substantially over the decades. In contrast, ‘absolute’ inequality, as captured by the Standard Deviation and Absolute Gini, has increased considerably and unabated. Like these ‘absolute’ measures, our ‘centrist’ inequality indicators, the Krtscha measure and an intermediate Gini, also register a pronounced increase in global inequality, albeit, in the case of the latter, with a decline during 2005 to 2010. A critical question posed by our findings is whether increased levels of inequality according to absolute and centrist measures are inevitable at today's per capita income levels. Our analysis suggests that it is not possible for absolute inequality to return to 1975 levels without further convergence in mean incomes among countries. Inequality, as captured by centrist measures such as the Krtscha, could return to 1975 levels, at today's domestic and global per capita income levels, but this would require quite dramatic structural reforms to reduce domestic inequality levels in most countries.

OBJECTIVE: To assess the effectiveness of non-clinical interventions against acute respiratory infections and diarrhoeal diseases among young children in developing countries. METHODS: Experimental and observational impact studies of non-clinical interventions aimed at reducing the incidence of mortality and/or morbidity among children due to acute respiratory infections and/or diarrhoeal diseases were reviewed, following the Cochrane Handbook for Systematic Reviews of Interventions and the PRISMA guidelines. RESULTS: Enhancing resources and/or infrastructure, and promoting behavioural changes, are effective policy strategies to reduce child morbidity and mortality due to diarrhoeal disease and acute respiratory infections in developing countries. Interventions targeting diarrhoeal incidence generally demonstrated a reduction, ranging from 18.3% to 61%. The wide range of impact size reflects the diverse design features of policies and the heterogeneity of socio-economic environments in which these policies were implemented. Sanitation promotion at household level seems to have a greater protective effect for small children. CONCLUSION: Public investment in sanitation and hygiene, water supply and quality and the provision of medical equipment that detect symptoms of childhood diseases, in combination of training and education for medical workers, are effective policy strategies to reduce diarrhoeal diseases and acute respiratory infections. More research is needed in the countries that are most affected by childhood diseases. There is a need for disaggregation of analysis by age cohorts, as impact effectiveness of policies depends on children's age.

Improved household accessibility to credit is a significant determinant of intra-household allocation of labor resources with important implications for productivity, income, and poverty status. However, credit accessibility could also have wider impacts on poverty if it leads to new hires outside the household. This paper contributes to the existing literature on microcredit in two important ways. First, it investigates the routes through which microcredit reaches those in poverty outside the household. We test whether by lending to the vulnerable non-poor microcredit can indirectly benefit poor laborers through increased employment. Second, we conduct the study in the context of urban poverty Mexico. This is relevant when considering that labor often represents the only source of livelihoods to the extreme urban poor. Our findings point to significant trickle-down effects of microcredit that benefit poor laborers; however, these effects are only observed after loan-supported enterprising households achieve earnings well above the poverty line.

SummaryThe “diversity debit” hypothesis – that ethnic diversity has a negative impact on social, economic, and political outcomes – has been widely accepted in the literature. Indeed, with respect to public goods provision – the focus of this article – the conventional wisdom holds that a negative relationship between ethnic heterogeneity and public goods provision is so well-established empirically that future research should abandon examination of whether such a relationship exists and focus instead on why it exists, that is, on the mechanisms underlying a negative relationship. This article challenges the conventional wisdom on empirical grounds. It demonstrates at the sub-national level strong evidence for a “diversity dividend” – that is, a positive relationship between ethnic heterogeneity and some measures of public goods provision, in particular welfare outcomes related to publicly provided goods and services. Building on the literature, the article draws on new analysis at district level for Zambia, using a new dataset compiled by the authors from administrative, budget, and survey data, which cover a broader range of public goods outcomes than previous work, including information on both budgetary and welfare outcomes. The article explores why relationships may differ for sub-national budgetary and welfare outcomes, considering separate models for each. Analysis shows results to be robust across a variety of alternative specifications and models. Given the more nuanced relationship between ethnic diversity and public goods provision documented, the article argues that the key task for future work is not to address why the relationship is negative, but to study under what conditions such direction holds true, and the mechanisms that underlie a diversity dividend. It concludes by considering key explanatory hypotheses against the Zambian data to identify promising areas for such theory development. More broadly, while the diversity debit hypothesis highlights the costs of diversity and could be interpreted as providing support for polices that minimize it, the findings in this article are consistent with a view that diversity can be good for communities, not only for normative reasons, but also because, under some conditions, it can support concrete welfare gains.

Despite the growing interest in global inequality, assessing inequality trends is a major challenge becauseindividual data on income or consumption is not often available. Nevertheless, the periodic release of cer-tain summary statistics of the income distribution has become increasingly common. Hence, groupeddata in form of income shares have been conventionally used to construct inequality trends based onlower bound approximations of inequality measures. This approach introduces two potential sourcesof measurement error: first, these estimates are constructed under the assumption of equality of incomeswithin income shares; second, the highest income earners are not included in the household surveysfrom which grouped data is obtained. In this paper, we propose to deploy a flexible parametric model,which addresses these two issues in order to obtain a reliable representation of the income distributionand accurate estimates of inequality measures. This methodology is used to estimate the recent evolutionof global interpersonal inequality from 1990 to 2015 and to examine the effect of survey under-coverageof top incomes on the level and direction of global inequality. Overall, we find that item non-response atthe top of the distribution substantially biases global inequality estimates, but, more importantly, itmight also affect the direction of the trends. The authors hereby acknowledge UNU-WIDER and the project World Inequality where an earlier version of this study was published. The authors are grateful to Stephen Jenkins, Branko Milanovic, Nora Lustig, Juan Gabriel Rodriguez, Gustavo Marrero, Roy Van der Weide and participants at the UM Sustainability and Development Conference, Seventh ECINEQ Meeting, the 33th Annual Congress of the European Economic Association, and UNU-WIDER internal seminar series for helpful comments on earlier versions of this paper. Vanesa Jorda wishes to acknowledge financial support from the Ministerio de Economía y Competitividad (Project ECO2016-76203-C2-1-P).

The global financial crisis has emphasised the fundamental role of social protection institutions in developing countries. There is also growing evidence that countries with programmes focused on children have a greater chance of minimising the longer-term effects of the crisis. However, financing remains a major challenge: the effects of a slowdown in growth are likely to reduce the fiscal space in low-income countries. Focusing on sub-Saharan Africa and Latin America in particular, this article shows that improved fiscal balances, debt relief, aid and revenues from natural resources could provide a window of opportunity in many countries. Raising the ratio of tax revenues to GDP is, however, the main challenge in the medium term.

This paper develops a model of opportunistic behaviour in which an incumbent government resort to expansionary fiscal and/or monetary stimuli to foster economic growth and thus, maximize the probability of re-election. Using a panel dataset of 51 African countries covering the period 1980 to 2012, we test first, whether aid and institutional quality factors have an effect on growth. We find evidence to support the most recent studies showing that aid has a positive impact on growth. We however, do not find evidence to support the proposition that institutional quality is a sine qua non conditional for aid to achieve impact on growth. Second, we test whether donor aid facilitates political business cycles, and investigates their effect on growth. We find evidence that donors, through guaranteeing support to incumbent governments, unwittingly do instigate political business cycles. Forbearance, and sometimes complicity by donors, aid seems to allow incumbent governments to instigate macroeconomic stimuli that ensure electoral victory with no fear of losing aid.

Conflict depletes all forms of human and social capital, as well as supporting institutions. The scale of the human damage can overwhelm public action, as there are many competing priorities and resources are often insufficient. What then should be the pr

We investigate the heterogeneous and nonlinear intergenerational transmission channels of education and the impact on this of house price appreciation. Using the China Household Finance Survey 2011, we construct household history of property purchases and educational investment over the past 16 years with current filial educational achievement.