From Rome to Accra via Kigali: ‘Aid Effectiveness’ in Rwanda

Since the mid‐2000s, significant strides have been made in Rwanda to implement the ‘aid effectiveness’ agenda as captured in the 2005 Paris Declaration on Aid Effectiveness. This article explores the historical evolution of this process since 1994, exposing the complex manoeuvring to establish workable practices, and the less visible political implications of this agenda. The Rwandan government is considered to have strong ‘ownership’ of aid strategies. However, the article demonstrates that the concept of progressive ownership implicit within ‘aid effectiveness’ discourse is misleading. The evidence points rather to joint ownership between donor and recipient, reflecting limitations to the amount of control over aid that donors will cede.     

Affordable housing in Pakistan

This paper demonstrates how the design of standards, pricing and finance must be integrated if affordable housing is to be achieved in a sustainable and replicable way. The paper does this by identifying basic principles in achieving affordability and applying these principles through a simple, computer-based integrated-design model to a ‘model’ housing project in Pakistan. In most instances, where there is not a development grant or forgivable loan, affordability must be combined with cost-recovery if projects are to be sustainable and replicable. Keys to such projects are the use of market prices, incremental construction using sweat equity, efficient and affordable standards, differential pricing, and financing using market interest rates but with affordable down payments and repayment rates. The paper demonstrates that the ‘model’ project in Pakistan, as designed, is not affordable. Through examining several alternative designs using different land-use standards, pricing and financing systems, the paper shows what needs to be done to make such projects affordable. In doing so, it illustrates how affordability, standards, pricing, finance, and cost-recovery can be integrated in the design process. While applied to Pakistan, the relevance to Canada of this integrated-interactive design process is explored.     

Financing reform for long-term care: strategies for public and private long-term care insurance

The way the nation provides for the financing and delivery of long-term care is badly in need of reform. The principal options for change are private insurance, altering Medicaid, and public long-term care insurance. This article uses the Brookings-ICF Long-Term Care Financing Model to evaluate each of these options in terms of affordability, distribution of benefits, and ability to reduce catastrophic out-of-pocket costs. So long as private insurance is aimed at the elderly, its market penetration and ability to finance long-term care will remain severely limited. Affordability is a major problem. Selling to younger persons could solve the affordability problem, but marketing is extremely difficult. Liberalizing Medicaid could help solve the problems of long-term care, but there is little public support for means-tested programs. Finally, universalistic public insurance programs do well in meeting the goals of long-term care reform, but all social insurance programs are expensive and seem politically infeasible in the current political environment.     

Policy Experiments,Democratic Ownership and Development Assistance

In an effort to enhance the impact of development aid, recipients are called on to provide democratically sustained ‘ownership’ for development policies, and donors to align their interventions with these ownership‐dictated strategies of their partners. This article illustrates the weaknesses of such an approach. From a political‐economy perspective, severe tensions exist between concepts of democratic ownership, on the one hand, and the experimental and iterative organisation of a society's encompassing interests in democratic settings, on the other. These tensions are even more pronounced in emerging democracies, making democratic ownership as a prerequisite for aid effectiveness an illusion, and provoking the re‐emergence of traditional donor‐recipient problems.     

On large enterprises: new findings from a European comparison

The recent evolution of Italian capitalism shows the increasing relevance of large enterprises at three levels: the economic and institutional environment, the ownership structure, and the financing policy. A comparison of the financial structure of Italian large enterprises with those of other European countries (France, Germany, and Spain), using Bank for the Accounts of Companies Harmonised data, shows their financial fragility, where the prevalence of debt over equity justifies the still strong and close relationship between ownership control and management in their strategies and the prevalence of obsolete bank–firm relationships based on short-term external finance and multiple business lendings. These factors slow down firms’ expansion and consequently the need for companies to grow so as to face the new global market. Finance is confirmed as a determinant of growth both in size and in organisation. We conclude that a pivotal role for the growth of Italian firms lies in a “revised” relationship between size, governance, and the firms’ financial structure.     

Second‐Generation Poverty Reduction Strategies: New Opportunities and Emerging Issues

The poverty reduction strategy paper (PRSP) approach has taken centre stage in development asssistance over the past five years. International endorsement of the approach has led to important gains in government focus on poverty reduction, civil society participation and donor behaviour. Yet PRSPs also potentially offer a much greater contribution to aid effectiveness, good governance and poverty reduction in developing countries. With a second generation of PRSPs now set to appear, this article examines the technical and political challenges that need addressing to realise their potential over time. Emerging issues include how to respond to political transitions, alternative design approaches, how to assess financing needs, and ways of enhancing the predictability of aid.     

Inequality of Pension Arrangements Among Different Segments of the Labor Force in China

Social security for older people in China today has been established institutionally. However, there are substantial problems such as coverage, affordability, fund management, and corruption. This paper aims to provide a general picture of China's social security system for older people and to argue that the inequality of pension arrangements among different segments of the labor force is one of the most conspicuous problems challenging the Chinese government. Four unequal aspects of the pension system concerning the financing resources and pension levels are examined in this paper: (1) unequal institutional arrangements among different sectors, (2) unbalanced governmental expenditure in pension provision, (3) an increasing gap in pension levels between urban and rural areas, and (4) uncovered groups such as the unemployed and self-employed. Historical, economic, and political reasons all contribute to this unequal institution under transition from socialism to a market-oriented economy. At present, it is urgent for the central government to take measures to integrate the various pension arrangements into the unified Old Age Insurance and to reduce the gaps among different regions.     

Criteria for Assessing the Case for Overseas Aid: A Note

This note derives minimum appraisal criteria for foreign aid consistent with those used by donor governments for domestic spending, and discusses implications for the level, allocation and financing of aid programmes. One finding is that aid is only welfare‐enhancing when the recipient country's social time preference rate is higher than the donor's, as will normally be the case. This implies that endowment financing is inferior to funding aid from current income, though borrowing against future aid as proposed by the International Financing Facility can be worthwhile provided returns exceed the borrowing cost.     

Financing Reform for Long-Term Care

The way the nation provides for the financing and delivery of long-term care is badly in need of reform. The principal options for change are private insurance, altering Medicaid, and 110 FROM NURSJNG HOMES TO HOME CARE public long-term care insurance. This article uses the Brookings-ICE Long-Term Care Financing Model to evaluate each of these options in terms of affordability, distribution of benefits, and ability to reduce catastrophic out-of-pocket costs. So long as private insurance is aimed at the elderly, its market penetration and ability to finance long-term care will remain scverely limited. Affordability is a major problem. Selling to younger persons could solve the affordability problem, but marketing is extremely difficult. Liberalizing Medicaid could help solve the problems of long-term care, but there is little public support for means-tested programs. Finally, universalistic public insurance programs do well in meeting the goals of longterm care reform, but all social insurance programs are expensive and seem politically infeasible in the current political environment. The way the nation provides for the financing and delivery of long-term care is badly in need of reform. No other part of the health care system generates as much passionate discontent as does long-term care. At the heart of the problem is the absence of any satisfactory way to help people anticipate and pay for long-term care. The disabled elderly find, often to their surprise, that the costs of nursing home and home care are not covered to any significant extent by Medicare or private insurance. Instead, they must rely on their own savings or, failing that, turn to welfare in the form of Medicaid. At a national average cost of $40,000 a year for nursing home care, long-term care is a leading cause of catastrophic out-of-pocket health care costs for the elderly. In addition, despite the strong preferences of the disabled for home and community-based services, current financing is highly skewed toward care in nursing homes. While the debate over long-term care reform has many facets, it is primarily an argument over the relative merits of private- versus publicsector approaches. Differences over how much emphasis to put on each sector partly depend on values that cannot be directly proved or disproved. Some believe that the primary responsibility for care of the elderly belongs with individuals and their families, and that government should act only as a payer of last resort for those unable to provide for themselves. The opposite view is that the government should take the lead in ensuring comprehensive care for all disabled older people, regardless of financial need, by providing comprehensive, compulsory social insurance. In this view, there is little or no role for the private sector. Between these polar positions, many combinations of public and private responsibility are possible.     

Financing for Development: The Gap between Words and Deeds since Monterrey

The Monterrey Consensus agreed at the UN summit on Financing for Development in 2002 promised a breakthrough in terms of donor generosity, aid effectiveness and new means of financing. However, the development orientation of world leaders proved to be short‐lived. This is even though our evaluation reveals progress since Monterrey in some areas, notably debt relief and private (FDI) flows. Calls for substantially scaling‐up regular aid had less effect than envisaged, and financial innovations have contributed only marginally to overall development financing so far. Nor is there much progress from the perspective of critics focusing on the quality of aid. In particular, the targeting of aid according to need and merit leaves much to be desired. The gap between words and deeds continues to be wide with regard to aid proliferation and donor co‐ordination as well.     

The discourse of security in development policies: A genealogical approach to “Security Sector Reform”

Security is one of the objectives that has become associated with development policies. This article offers a genealogical perspective on this shift, focusing on the introduction of “Security Sector Reform” (SSR) into development policy as an apparatus with a two‐fold normative process. The first point of note is the securitization of development policy. This pertains both to the discourse elements of the apparatus—here, the effects of the use of security semantics—and to its political technologies, with an SSR apparatus which can function as a new label for military co‐operation. This has led to new approaches in societies where this has taken place, with threat a key focus. There has also been a process of depoliticization in the wake of technical, standardized approaches. This has sidelined debate on the norms and political choices involved, albeit implicitly. Secondly, one can observe structural ambivalences in the field, chiefly on the issue of the state and the normative contradictions of a policy to strengthen “fragile states” that relies on external intervention in national politics. The case study of Lebanon complements this analysis, highlighting the structural tensions between the various aims of SSR, and how this affects local ownership: both the perception and reception of SSR are marked by power relationships which translate into hegemonic and counter‐hegemonic labelling.     

Investor preferences for positive social externalities and state-owned enterprises’ facilitated access to capital

State-ownership of commercial companies exists around the world, and it is important to understand its effect on financing and investment decisions. Empirically, firms that are partially state-owned (SOE) usually profit from easier access to capital. We propose a novel explanation for this: investors’ social preferences can affect capital allocation if SOEs are perceived as socially beneficial. In support of this we found that people attribute social benefits more to SOEs than to private firms, and their propensity to invest depends on this attitude. Further, in an incentivized modified stochastic public goods game, participants invested in risky options with positive externalities even when the aggregate of private return and externality was lower than the return of an investment option with only private returns. For the case of the EU, we discuss alternative explanations such as state guarantees and political lending in the light of regulations of state aid. We conclude that even if these regulations prohibit direct or indirect state aid for SOEs, state-ownership can affect capital allocation through investors’ social preferences.     

Better Homes and Families: Housing Markets and Young Couple Stability in Sweden

I model the relationship between aspects of the housing market influenced by housing policy and couple stability for cohabiting couples in Sweden. Using data on 3,851 cohabiting couples obtained from the Swedish Family Survey of 1992, I examine the effects of housing market characteristics on couple outcomes. I focus on three housing variables, including the affordability of housing, the availability of detached housing, and the profitability of ownership. I link these variables to the transitions from cohabitation to marriage or separation in Sweden. Policy relevant aspects of the housing market are shown to have significant effects on the stability of couples in Sweden. Greater affordability increases couple stability. Intriguingly, greater availability of detached housing significantly weakens couple stability.     

Institutional Environments,Sociopolitical Processes,and Health Movement Organizations: The Growth of Self‐Help/Mutual‐Aid1

This study examines the relationship between sociopolitical processes and health social movement organization formation. Two central research questions are posed: How do self‐help/mutual‐aid institutional environments characterized by professional actors, the state, and social movements influence organizational formation, and do these influences grow stronger or weaker as the self‐help/mutual‐aid movement matures? Analyses comparing the impact of institutional factors such as physician hegemony and autonomy, professional affiliation, state spending, and political ties on self‐help/mutual‐aid founding rates reveal negative effects of professionals but positive effects of the state. These relationships tend to grow stronger as the movement matures. For example, declining professional authority increasingly eases organizational foundings during movement maturity as does the beneficial impact on formation of state expansion in health markets and political ties. Implications are discussed.     

THE MATCHING OF HETEROGENEOUS FIRMS AND POLITICIANS

We use a Chinese firm‐director panel dataset to examine the matching of heterogeneous firms and politicians. On the basis of 36,308 detailed biographies, we identify individuals who previously held bureaucratic positions and classify the rank of each position in the Chinese political hierarchy. Using this direct measure of political capital, we examine how firms with heterogeneous productivity match politicians with different political strength. Our results indicate a positive assortative matching in the political capital market. More productive firms are paired with more powerful politicians. Furthermore, the preference for political capital relative to conventional human capital increases in firms' dependence on external financing and the inefficiency of local governments. Conditional on the endogenous matching, new hires with political capital receive more compensation than their co‐workers in the same cohort. The marginal effect of a one‐step rise on the political ladder significantly exceeds the marginal effect of raising education attainment from, for example, high school to college. (JEL D21, D73, J24, J31, O12)     

A THEORY OF THE POLITICALLY OPTIMAL COMMODITY TAX

A theory of the politically optimal tax is developed where tax rates are endogenous and determined by forces in the political market. The theory is used to explain the levels of alcoholic beverage taxes between states in the United States. It is shown that these rates are influenced by the ownership structure existing in the liquor industry, the consumption externalities associated with drinking, the minimum drinking age laws, the earmarking of tax revenues, the enforcement of regulations and real income.     

The structure of forest ownership in Scotland: a first approximation

An attempt is made to outline the structure of forest ownership in Scotland, insofar as the available sources of information permit. Particular attention is focused on the private sector, where most recent afforestation has been concentrated and to which some forests have been transferred from the Forestry Commission in recent years. More than half of the private-sector area is now owned by personal or corporate “investment’ owners: as recently as 20 years ago the sector was almost completely dominated by the traditional landed estates. Deficiencies in sources of information are reviewed, and the importance of information on ownership, in relation to matters such as future wood production and management regimes, is discussed.     

Expert advising under checks and balances

This paper attempts to compare the efficiencies of different political institutions (with or without checks and balances) in extracting external “cheap talk” information. We find that a political institution with checks and balances can extract more credible information (measured by the number of signals) from an external partisan expert because no policymaker can unilaterally exploit revealed expert information to her own best advantage. However, there is a tradeoff between signal quantity and distribution under checks and balances, as more signals tend to be distributed more unevenly due to the existence of an “inertia region” where credible communication is more difficult. Institutions using checks and balances are more efficient when conflict of interest between policymakers is relatively small, in which case the signal distribution is less uneven.     

After the Paris Declaration: Taking on the Issue of Power

The new approach to assisting developing countries inspired by the Paris Declaration emphasises greater recipient control over the funds provided, thus confining donors’influence to upstream points in the policy process, where political aspects of development co‐operation become more important. Understanding better the role that power plays in the aid relationship will be critical to the implementation of the Declaration. This article shows how the political science literature can inform this set of issues. It argues that an understanding of aspects of power illuminates the challenges involved in transforming relations between donors and recipient governments as well as between governments and civil society organisations.