International Working Group on External Debt Statistics
This issue of Finance & Development examines the good and bad sides of globalization. Sebastian Mallaby notes that after decades of increasing cross-border movements of capital, goods, and people, only migration continues apace. Capital flows have collapsed, and trade has stagnated. However, rather than a sign of retreat, trade and finance may be resetting to a more sustainable level consistent with continued globalization. IMF Chief Economist Maurice Obstfeld takes a closer look at trade. Ismaila Dieng profiles Leonard Wantchekon, a former activist who plans to train the next generation of African economists. Wantchekon, now a professor at Princeton University, is one of the few African economists teaching at a top US university. His research, which has received considerable attention from development economists, focuses on the political and historical roots of economic development in Africa.
This Selected Issues paper examines the effect of political instability on economic growth in Nepal. It uses publicly available data on political economy variables for 167 countries worldwide from 1970–2004 to estimate the impact of political instability on growth. The findings reveal that Nepal has witnessed higher political instability compared with other countries in the region. The paper also presents the salient features of political instability and growth for Nepal and other South Asian countries, and the econometric estimates of growth regressions to measure the effect of political instability on economic growth.