This paper explores why increased aid flows require economic policymakers to confront some specific issues. Ensuring that increased aid promotes growth and reduces poverty is certainly the most important task. Empirical studies offer only mild support for aid-boosting growth. However, one study suggests that once one excludes the aid flows aimed at political and humanitarian goals, a positive net effect is observed for the remaining aid focused on economic objectives. This paper also outlines the roles to be played by development partners for making the aid being properly utilized for boosting growth.
This Selected Issues paper for Japan illustrates the impact of fiscal and structural reforms on the Japanese and world economies. Japan faces a sizable fiscal deficit, against a backdrop of weak trend growth and growing imbalances in the world economy. Moreover, upward pressure on health care and social security spending owing to an aging population will add significantly to strains on public resources in the near future. The Japanese government is taking a range of measures aimed at raising productivity growth and stabilizing the public debt in relation to GDP over the medium term.
Mr. Rabah Arezki, Mr. Christian Bogmans, and Mr. Harris Selod
This paper is the first to provide both theoretical and empirical evidence of farmland
globalization whereby international investors directly acquire large tracts of agricultural land
in other countries. A theoretical framework explains the geography of farmland acquisitions
as a function of cross-country differences in technology, endowments, trade costs, and land
governance. An empirical test of the model using global data on transnational deals shows that
international farmland investments are on the aggregate likely motivated by re-exports to
investor countries rather than to world markets. This contrasts with traditional foreign direct
investment patterns where horizontal as opposed to vertical FDI dominates.
Progress on fiscal policy during 2006/07 in Malawi was slower than expected. The 2006/07 (July-June) fiscal strategy focused on reducing domestic debt. In the third Poverty Reduction and Growth Facility (PRGF) review, the end-June target for domestic debt repayments was increased substantially. Domestic borrowing exceeded the adjusted target at end-December 2006 by MK 4.1 billion (0.9 percent of GDP). The government partially redressed this overrun by curtailing discretionary spending in the fourth quarter, as the scale of the end-December overrun became clear.