This Working Paper on Economic Growth is one of a series of 10 papers published alongside DFID's Research Strategy 2008-2013. It presents the case for DFID-funded research on economic growth, including infrastructure - drawing on the responses given during a global consultation that DFID convened in 2007 about its future research.
There is broad acceptance that rapid and sustained growth is the single most important way to reduce poverty. Growth accounts for more than 80 percent of poverty reduction and has lifted 500 million above the poverty line since 1980. In the 1990s growth rates in the developing world out-paced those in the developed world for the first time. Better growth performance in poor countries is therefore central to achieving the Millennium Development Goals (MDGs). Yet ensuring that more countries achieve and sustain high per capita growth rates remains key.
Past DFID-funded research has focused on the role of agriculture in improving livelihoods and contributing to growth, and has sought to address the institutional and political context as well as infrastructure needed to spur growth. However gaps in knowledge exist in a number of areas, including: how best to sustain growth; how to increase productivity in developing countries; how to extend opportunities for the poor to participate in growth; how to tackle exclusion and inequality; how best to achieve low-carbon growth; and better understanding of the role of institutions and good governance in fostering economic growth.
The consultation process highlighted a number of areas in which research will be important for greater global knowledge on the drivers, obstacles and policy options for sustained and inclusive growth in developing countries. These include the need for: focused research on the drivers and obstacles to growth in specific contexts; recognition of the pivotal role of agriculture in fostering growth; greater knowledge on human capital and appropriate skills; improved infrastructure, especially transport; new knowledge on the impacts of climate change, migration and urbanisation; the role of trade and regional integration; and understanding of the role of emerging economies in fostering growth in poor countries.
Generating greater knowledge on how best to achieve strong and sustained growth in different country contexts will be a central objective of DFID's new Research Strategy. It will support research that develops technical and methodological knowledge on the drivers and constraints to growth, provide analytical and policy support to developing countries and help build individual and institutional capacity on economics and growth research. The primary vehicle for identifying, designing, implementing and evaluating research on economic growth will be a new International Growth Centre.
DFID will also seek to make a distinct contribution in areas of growth research in the following areas: governance and growth; infrastructure and growth; education, work, skills and economic growth; climate change and low-carbon growth; and the social dimensions of inclusive growth. DFID will seek to improve knowledge on the future opportunities and challenges of emerging development trends likely to be faced by developing countries, and on what this will mean for economic growth and poverty reduction.
DFID, London, UK, 19 pp.