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This Special Issue explores macroeconomic effects of aid from various perspectives through a blend of studies, both conceptual and empirical in nature. The overall aim is to enhance the understanding of the macroeconomic dimensions of aid in the policy and research communities, and to inspire further innovative work in this important area. This opening article provides a scene setting summary of five generations of aid research, with a particular focus on how the JDS has contributed to this literature, and ends with an overview of the papers included in this Issue.

This paper puts sub-Saharan Africa's economic development into perspective. While much did not go as hoped for at independence, much of the region has been on a more promising development trajectory since the mid-1990s, as we illustrate using growth, poverty, and human development indicators. We identify key weaknesses, including lack of structural transformation and the slow rate of employment growth. We refer to global shocks that have played a critical role in sub-Saharan Africa's economic performance alongside domestic events, policies, and governance. Finally, we discuss a set of critical challenges requiring effective management for sub-Saharan Africa to realize its considerable development potential.

Using a unique survey data set this paper documents a positive effect of self-employment in farming on subjective well-being. This direct effect is only partly offset by negative, indirect effects working through income and other variables. These findings are interpreted as effects of self-employment in farming on perceived autonomy, competence and relatedness. The results suggest that economic transformation is associated with a psychological cost, which may contribute to explaining earnings gaps between sectors and types of employment. We also investigate other determinants of happiness, and for example find strong positive effects of own income and strong negative effects of neighbors’ income, suggesting the importance of relative rather than absolute levels of income.

The rights-based approach to development targets progress towards the realization of 30 articles set forth in the Universal Declaration of Human Rights. Progress is frequently measured using the multidimensional poverty index. While elegant and useful, the multidimensional poverty index is in reality inconsistent with the Universal Declaration of Human Rights principles of indivisibility, inalienability, and equality. We show that a first-order dominance methodology maintains consistency with basic principles, discuss the properties of the multidimensional poverty index and first-order dominance, and apply the measures to 26 African countries. We conclude that the multidimensional poverty index and first-order dominance are useful complements that should be employed in tandem.

We investigate the trend in the gender employment gap in the expanding nonsubsistence sector of the economy in Mozambique, a country still characterized by a large subsistence agricultural sector. We show evidence that the gender gap has widened over time and we identify two factors strongly associated with it. One factor is the still relatively lower level of female human capital, with less attained education, as well as literacy and Portuguese proficiency rates. The lower conditional employment probabilities of married women, as compared with men, is the other factor. These findings point at expanding women´s education and facilitating the access of married women to the emerging labour market as the most effective ways of achieving a more inclusive growth path that does not leave women behind.

Using a specially designed survey instrument in combination with a representative sample of Vietnamese enterprises, we explore firm-level efficiency effects of corporate social responsibility. We find a positive relationship between adoption of corporate social responsibility initiatives and firm efficiency, and reveal that the impact is stronger for firms in non-competitive industries. Moreover, we show that local community focused corporate social responsibility initiatives drive the aggregate effect. This suggests that socially responsible actions by firms are likely to pay-off when stakeholder engagement has a localized focus. We provide evidence of reciprocity by showing that employees accept a lower share of additionally generated value added in exchange for working in a company that signals 'good' corporate values.

We contribute to the literature on trends in living standards in Tanzania by analysing child welfare using two multi-dimensional approaches, first-order dominance (FOD) and Alkire-Foster (AF). Between 1991/92 and 2010, remarkably similar area rankings emerge that suggest a widening gap between the best and worst performing areas with the majority of areas lying in a tight range in the middle. The methodologies also complement each other by providing upper and lower bounds on underlying welfare dynamics. While both methods point to overall improvements since 1991/92, AF suggests a consistent trend while FOD suggests periods of advance and stagnation.

This paper explores the relationship between imports and firm productivity, focusing on imported intermediates. Using firm-level data on over 20,000 manufacturing firms in Viet Nam, we find evidence for competition-induced productivity gains from trade. We show that gains in intermediate sectors spill-over to downstream sectors such that firms using more inputs from import-intensive sectors experience higher productivity gains. The evidence indicates that the main source of spill-over is better quality, domestically produced inputs. Ignoring the gains from trade through this mechanism may significantly underestimate the impact of trade on productivity.

We broadly review the challenges encountered and choices made in the national assessments of consumption poverty using the 1996/97, 2002/03, and 2008/09 budget surveys. Efforts to maintain consistency with the previous survey imply that prior choices tend to be adopted in subsequent analyses. However, because 'best practice' evolves, there arises a natural tension between the desire to follow best practice and the desire to maintain consistency with previous analyses. New estimates produce qualitatively very similar results. We conclude that the principal conclusions of the poverty assessments are robust. The results also highlight the value of a consistent and reproducible approach.

Private consumption capabilities form only one facet of comprehensive living standards assessments, but they are an important facet whose measurement should be done well. Measurement is complex due to a multitude of methodological choices, which often interact with imperfect data and a desire for comparability through time. This paper outlines ideas underpinning these choices with particular attention to the tensions between consistency and specificity. We also highlight a series of limitations associated with typical cost of basic needs approaches. Finally, we reaffirm that a 'sensibly eclectic' approach, employing multiple methods, is the best available mode for addressing these limitations.

We investigate the relationship between the corporate social responsibility practices of local domestic firms and their engagement with foreign markets using four waves of panel data on a sample of more than 4,500 manufacturing firms from Viet Nam. We develop a measure of corporate social responsibility that combines compliance with labour standards, management commitment to corporate social responsibility, and community activities. We find a strong relationship between engagement in international markets and the corporate social responsibility activities of firms, with the exception of trade with China. Results suggest that firms in export-intensive sectors engage in more corporate social responsibility activities, while those in sectors with higher levels of imports engage in less.

Volatility in commodity markets poses an acute risk to farmers in developing countries who rely on cash crop agriculture. We combine a time series of international coffee prices with a long-running panel on coffee-growing households in Viet Nam to investigate coping mechanisms employed by farmers in a transitioning economy. We find that households cope with lower coffee prices by increasing wage labour of adults with children and adolescents substituting for adults on the farm and in home production. Account should be taken of this finding in formulating and implementing social protection and inclusive growth policies.

Thirteen economists, which included four former Chief Economists of the World Bank, met over two days in Stockholm, Sweden, on 16-17 September, 2016, to discuss the challenges faced by today’s economic policymakers. The meeting was hosted by the Swedish International Development Cooperation Agency (Sida) and the World Bank. The group consisted of Professor Sabina Alkire (Oxford), Professor Pranab Bardhan (Berkeley), Professor and former Chief Economist of the World Bank Kaushik Basu (New York), Professor Haroon Bhorat (Cape Town), Professor and former Chief Economist of the World Bank François Bourguignon (Paris), Professor Ashwini Deshpande (Delhi), Professor Ravi Kanbur (Ithaca), Professor and former Chief Economist of the World Bank Justin Yifu Lin (Beijing), Professor Kalle Moene (Oslo), Professor Jean-Philippe Platteau (Namur), Professor Jaime Saavedra (Lima), Nobel Laureate Professor and former Chief Economist of the World Bank Joseph Stiglitz (New York), and Professor Finn Tarp (Helsinki and Copenhagen). At the end of the meeting the group decided to issue a statement of the consensus reached among them: the “Stockholm Statement.” What follows is this statement.

This paper uses panel data at commune, household, and plot levels to study the causes and effects of agricultural land fragmentation in rural Viet Nam. We focus on both inter-farm fragmentation (the division of land into many small farms) and intra-farm fragmentation (the division of each farm into many small plots). In both these dimensions, land holdings in Viet Nam are highly fragmented. Results show strong effects of both inter- and intra-farm fragmentation on labour input per hectare in agriculture. When productivity is measured by profits per hectare, we estimate a positive effect of farm size on productivity. Results on the determinants of fragmentation show that land sales markets reduce inter-farm fragmentation in the south of Viet Nam but not in the north. Administrative land consolidation programmes have some positive impact on land consolidation in the north but not in the south.

We study structural transformation and change in the Vietnamese economy using two Social Accounting Matrices (SAMs), one for the year 2000 and a recently compiled SAM for the year 2012. This period is of particular interest as it features an important shift in terms of more economic integration with the global economy. Several analytical approaches are taken, including comparisons and decomposition of multipliers and a decomposition of structural change. We observe significant changes in economic structure, and the results suggest that the Vietnamese economy has become internally more integrated over the period 2000-12, while moving from primary production (agriculture) towards more value adding manufacturing activities. This transformation has been broad-based and in large measure driven by external demand. We conclude that it will be challenging to sustain growth without bold moves in technological upgrading and measures geared towards even stronger internal economic integration.

Special Economic Zones (SEZs) have been successfully used as an industrial policy tool in many countries. Efforts to create SEZs in Tanzania began in 2002, and were stepped up through the establishment of the Export Processing Zone Authority (EPZA) in 2006. A number of state-run zones are now in existence. Little is known, however, about how successful they have been. This paper aims to help fill this gap by exploring the role of state-owned SEZs in Tanzania. The focus is on understanding the nature and extent of interactions between firms and their employees within zones, the extent to which zones facilitate technology transfers, and the perceived benefits and constraints associated with operating with zones. We also examine the functioning of the EPZA and the bureaucratic structure surrounding the operation of zones.