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Challenges to MDG achievement in low income countries : lessons from Ghana and Honduras

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  • Bussolo, Maurizio
  • Medvedev, Denis

Abstract

This paper summarizes the policy lessons from applications of the Maquette for MDG Simulations (MAMS) model to two low income countries: Ghana and Honduras. Results show that costs of MDGs achievement could reach 10-13 percent of GDP by 2015, although, given the observed low productivity in the provision of social services, significant savings may be realized by improving efficiency. Sources of financing also matter: foreign aid inflows can reduce international competitiveness through real exchange appreciation, while domestic financing can crowd out the private sector and slow poverty reduction. Spending a large share of a fixed budget on growth-enhancing infrastructure may mean sacrificing some human development, even if higher growth is usually associated with lower costs of social services. The pursuit of MDGs increases demand for skills: while this encourages higher educational attainments, in the short term this could lead to increased income inequality and a lower poverty elasticity of growth.

Suggested Citation

  • Bussolo, Maurizio & Medvedev, Denis, 2007. "Challenges to MDG achievement in low income countries : lessons from Ghana and Honduras," Policy Research Working Paper Series 4383, The World Bank.
  • Handle: RePEc:wbk:wbrwps:4383
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    Cited by:

    1. Pedercini, Matteo & Barney, Gerald O., 2010. "Dynamic analysis of interventions designed to achieve millennium development goals (MDG): The case of Ghana," Socio-Economic Planning Sciences, Elsevier, vol. 44(2), pages 89-99, June.
    2. Lofgren, Hans & Cicowiez, Martin & Diaz-Bonilla, Carolina, 2013. "MAMS – A Computable General Equilibrium Model for Developing Country Strategy Analysis," Handbook of Computable General Equilibrium Modeling, Elsevier.
    3. Sayeed, Yeasmin, 2014. "Trade-offs in Achieving Human Development Goals for Bangladesh," Working Papers 2014:6, Örebro University, School of Business.

    More about this item

    Keywords

    Population Policies; Achieving Shared Growth; Public Sector Economics&Finance; Public Sector Expenditure Analysis&Management;

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