Corrosive and Costly Corruption

By IMFblog

July 14, 2017 

Corruption can hurt growth and ruin people’s economic chances (photo: Eugene Keebler/iStock)

Corruption can lead to pervasive distrust in government, generating violence, civil strife, and conflict. And the results are devastating for people.

Another problem is that corruption is costly—particularly for those who are already worse off. IMF research shows that in countries with greater levels of corruption, infant mortality and dropout rates are especially high, partly due to less spending on health and education. Reduced investment in these areas tends to hurt poor people the most, and contributes to higher inequality. Continue reading “Corrosive and Costly Corruption” »

No Time to Stand Still: Strengthening Global Growth and Building Inclusive Economies

By Christine Lagarde

July 5, 2017

Versions in عربي (Arabic), 中文 (Chinese), Français (French), Deutsch (German), 日本語 (Japanese), Русский (Russian), and Español (Spanish)

The port of Hamburg, Germany: G20 leaders meet to discuss policies to strengthen the global economic recovery (photo: Markus Lange/robertharding/Newscom)

Nearly sixty years ago, a little-known band called the Beatles arrived in Hamburg, got a haircut, recorded their first song, and found their sound.

Taking a cue from the Fab Four, world leaders gathering for the Group of Twenty Summit this week can make the most of their time in Hamburg—and leave Germany with a sound plan to strengthen global growth.

Continue reading “No Time to Stand Still: Strengthening Global Growth and Building Inclusive Economies” »

Chart of the Week: Ireland’s Fight Against Income Inequality

By IMFBlog

June 30, 2017

Shoppers in Dublin, Ireland: the country has high income inequality, before taxes and transfers (photo: Caro Rupert Oberhaeuser/Newscom)

Ireland’s economy continues to recover after a housing market crash in 2008 plunged the country into a deep and severe crisis. The strong social welfare system provided an important cushion against the worst effects of the crisis.

Ireland’s tax-benefit system is one of the most effective in the European Union in redistributing income. The tax system is relatively progressive and funds a robust system of social benefits, a significant share of which is means-tested. Income inequality before taxes and transfers in Ireland is high—37 percent of income is held by the top 10 percent of income earners. Social transfers make up about 70 percent of income for the bottom 20 percent of earners.

Continue reading “Chart of the Week: Ireland’s Fight Against Income Inequality” »

The Compact with Africa—The Contribution of the IMF

By Christine Lagarde

June 12, 2017

Versions in عربي (Arabic),  中文 (Chinese), Deutsch (German), Français (French), 日本語 (Japanese), Русский (Russian), and Español (Spanish)

IMF Managing Director Christine Lagarde on a visit to Nigeria in 2016 (photo: IMF staff/Steve Jaffe)

Some of the world’s top policymakers and investors are gathering in Berlin to discuss a new initiative that could help reshape Africa’s economic future.

Millions of citizens could see tangible economic benefits from the recently launched Group of Twenty advanced and emerging economies' initiative, known as the “Compact with Africa.” The goal is to boost private investment by harnessing the expertise and resources of governments, investors, and international organizations.

The Compact is about facilitating projects that can lift productivity and living standards. It is about creating fresh opportunities on a continent where 70 percent of the population is under 35 years of age.

Continue reading “The Compact with Africa—The Contribution of the IMF” »

Beheading the Hydra: How the IMF Fights Corruption

By Alistair Thomson 

May 18, 2017 

Versions in عربي (Arabic), 中文 (Chinese), Français (French), 日本語 (Japanese), Русский (Russian), and Español (Spanish)

Corruption drains public resources and drags down economic growth in multiple ways (photo: dareknie/iStock by Getty Images)

Corruption—the abuse of public office for private gain—is a many-headed monster. It is pervasive in many countries, but only a fraction of cases make headlines; fewer are successfully prosecuted. Yet the cumulative burden is massive. By some estimates, bribery alone amounts to $1 trillion each year, and corruption more broadly to much more. While the precise figures are the subject of debate, the importance of the problem is not. Continue reading “Beheading the Hydra: How the IMF Fights Corruption” »

Chart of the Week: Budget-friendly, Equitable Growth in France

By IMFBlog

May 15, 2017

Version in Français (French)

One need look no further than the national motto—liberté, égalité, fraternité—to understand that equality is an especially important concept in France. French policies play an important role in combating inequality. This is primarily achieved through a combination of minimum wage policies and an extensive tax and transfer system.

But these traditional equality-enhancing policies may have reached their limits as unemployment has become entrenched and budgets have been severely stretched. So, what are the best policies for a country weighing how to boost growth, lessen inequality, and minimize costs? It is not a zero sum game.

Continue reading “Chart of the Week: Budget-friendly, Equitable Growth in France” »

By | May 15th, 2017|Economic research, Employment, Europe, Government, IMF, Inequality, Public debt, taxation|

A New Twist in the Link Between Inequality and Economic Development

By Francesco Grigoli

May 11, 2017

Version in  عربي (Arabic),  Español (Spanish)

Much has been written about the relationship between inequality and economic development, but theory remains inconclusive. When income is more concentrated in the hands of a few individuals, this can lead to less demand by the general population and lower investment in education and health, impairing long-term growth. At the same time, a certain level of inequality endows the rich with the means to start businesses, and creates incentives to increase productivity and investment, promoting economic activity. But the initial inequality levels also matter to explain why an increase in inequality varies in its impact on economic development across countries.

Continue reading “A New Twist in the Link Between Inequality and Economic Development” »

The Economics of Trust

By IMFBlog

May 10, 2017

Trust in other people—the glue that holds society together—is increasingly in short supply in the United States and Europe, and inequality may be the culprit.

In surveys over the past 40 years, the share of Americans who say that most people can be trusted has fallen to 33 percent from about 50 percent. The erosion of trust coincides with widening disparities in incomes. Continue reading “The Economics of Trust” »

Chart of the Week: Conflict’s Legacy for Growth

By IMFBlog

Versions in عربي (Arabic)

May 8, 2017

Conflict has been on the rise since the early 2000s given the wars in Afghanistan, Iraq, and Syria.

 Conflict leads not only to immeasurable human costs, but also to substantial economic losses with consequences that can persist for years. The tragic rise in conflict has weighed on global GDP growth in recent years, given the increasing number of countries experiencing strife, the severe effect on economic activity, and the considerable size of some of the affected economies.

The IMF’s most recent World Economic Outlook (Box 1.1) takes a closer look through the lens of conflict’s impact on economic growth and migration.  Continue reading “Chart of the Week: Conflict’s Legacy for Growth” »

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