This abstract presents some interesting findings, as well as a few puzzles:

This paper identifies factors associated with takeoff — a sustained period of high growth following a period of stagnation. We examine a panel of 241 “stagnation episodes” from 146 countries, 54 % of these episodes are followed by takeoffs. Countries that experience takeoffs average 2.3% annual growth following their stagnation episodes, while those that do not average 0% growth; 46% of the takeoffs are “sustained,” i.e. lasting 8 years or longer. Using probit estimation, we find that de jure trade openness is positively and significantly associated with takeoffs. A one standard deviation increase in de jure trade openness is associated with a 55% increase in the probability of a takeoff in our default specification. We also find evidence that capital account openness encourages takeoff responses, although this channel is less robust. Measures of de facto trade openness, as well as a variety of other potential conditioning variables, are found to be poor predictors of takeoffs. We also examine the determinants of nations achieving sustained takeoffs. While we fail to find a significant role for openness in determining whether or not takeoffs are sustained, we do find a role for output composition: Takeoffs in countries with more commodity-intensive output bundles are less likely to be sustained, while takeoffs in countries that are more service-intensive are more likely to be sustained. This suggests that adverse terms of trade shocks prevalent among commodity exports may play a role in ending long-term high growth episodes.

Joshua Aizenman & Mark Spiegel – “Takeoffs” – NBER WP 13084. Ungated copy here (pdf).

“[President Hugo] Chávez has now reached the Robert Mugabe level of economic incompetence by messing with the farm sector. Let’s hope he does not move past that to the Mao Zedong/Great Leap Forward level of economic mismanagement.” — Dan Drezner

The latest issue of Foreign Policy has a provocative piece by Alvaro Vargas Llosa on the “Latin American Idiots” who love Chávez and President Evo Morales of Bolivia.

Emmanuel points to an article in the American by Tom Bethell, who is skeptical of Muhammad Yunus.

via Johan Norberg: “For the first time, more people worldwide work in the service sector than in agriculture (the biggest employer the last 10,000 years).”

Good news:

For the first time since the World Bank started measuring poverty, the number of people in extreme poverty around the world is now fewer than 1 billion.

WDI press release here.

Nancy Birdsall of CGD will be doing an online Q&A session about globalization and inequality tomorrow. Submit questions here.

Bill Gates, Paul Wolfowitz, Ellen Johnson-Sirleaf, and Bill Easterly discuss scaling innovation in foreign aid at the World Economic Forum.

Hat tip: Emmanuel

Easterly’s Law: “The poorer the country, the poorer the economic analysis applied to it.”

Read the full WSJ piece courtesy of Mark Thoma, who also provides reasons to be skeptical of Easterly’s claims.

Easterly’s Law: “The poorer the country, the poorer the economic analysis applied to it.”

Read the full WSJ piece courtesy of Mark Thoma, who also provides reasons to be skeptical of Easterly’s claims.

An editorial in Nature criticizes the Millennium Development Goals for projecting a “pseudoscientific” image:

Every year, the UN rolls out reports with slick graphics, seemingly noting with precise scientific precision progress towards the goals. But the reports mask the fact that the quality of most of the underlying data sets is far from adequate. Moreover, the indicators often combine very different types of data, making aggregation and analysis of the deficient data even more complicated.

There are decent data for just a handful of indicators, such as child mortality, but for most of the 163 developing countries, many indicators do not even have two data points for the period 1990–2006. And few developing countries have any data for around 1990, the baseline year. It is impossible to estimate progress for most of the indicators over less than five years, and sparse poverty data can only be reliably compared over decades. To pretend that progress towards the 2015 goals can be accurately and continually measured is false.

[Hat tip: Ruth Levine at CGD]