Eric Werker is Associate Professor in the Business, Government, and the International Economy Unit and a Marvin Bower Fellow at Harvard Business School. His research explores the political economy, macroeconomics, and business environments of emerging and frontier economies, particularly in Africa.
Professor Werker has written on fragile states, foreign aid, foreign investment, non-governmental organizations, conflict, and governance. His work has been featured in the Financial Times, Washington Post, BBC, NPR, and publications across the developing world.
Outside of academia, Werker is the Lead Academic for the International Growth Centre's program in Liberia and economic advisor to the President of Liberia. He has worked with the US Government’s Millennium Challenge Corporation on foreign aid projects and with the NGO Conservation International on low-carbon development. He serves on the Advisory Group of the Center for Global Development, is a Fellow at Harvard Kennedy School's Center for International Development, and has worked with corporations and nonprofits on their decisions and activities in emerging markets.
Werker earned his Ph.D. and AB in economics from Harvard University. In his spare time, he enjoys family, skiing, climbing, mountain biking. He lives in Somerville with his wife Alana and son Jonathan, 1.
Featured Work
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Do Voters Demand Responsive Governments?
Evidence from Indian Disaster Relief
Using rainfall, public relief, and election data from India, we examine how governments respond to adverse shocks and how voters react to these responses. The data show that voters punish the incumbent party for weather events beyond its control. However, fewer voters punish the ruling party when its government responds vigorously to the crisis, indicating that voters reward the government for responding to disasters. We also find evidence suggesting that voters only respond to rainfall and government relief efforts during the year immediately preceding the election. In accordance with these electoral incentives, governments appear to be more generous with disaster relief in election years. These results describe how failures in electoral accountability can lead to suboptimal policy outcomes.
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How Much Is a Seat on the UN Security Council Worth?
Foreign Aid and Bribery at the United Nations
Ten of the fifteen seats on the U.N. Security Council are held by rotating members serving two-year terms. We find that a country's U.S. aid increases by 59 percent and its U.N. aid by 8 percent when it rotates onto the council. This effect increases during years in which key diplomatic events take place (when members' votes should be especially valuable) and the timing of the effect closely tracks a country's election to, and exit from, the council. Finally, the U.N. results appear to be driven by UNICEF, an organization over which the United States has historically exerted great control.
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How Is Foreign Aid Spent?
Evidence from a Natural Experiment
We use oil price fluctuations to test the impact of transfers from wealthy OPEC nations to their poorer Muslim allies. The instrument identifies plausibly exogenous variation in foreign aid. We investigate how aid is spent by tracking its short-run effect on aggregate demand, national accounts, and balance of payments. Aid affects most components of GDP though it has no statistically identifiable impact on prices or economic growth. Much aid is consumed, primarily in the form of imported noncapital goods. Aid substitutes for domestic savings, has no effect on the financial account, and leads to unaccounted capital flight.
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Innovations in Governance
In this paper we explore the innovations in governance that have promoted investment and growth. Some policymakers have tinkered with their country's institutions, some have undertaken wholesale changes, while others have attempted to influence the rules in other countries. We survey past attempts at governance innovation, from private governance in India's industrial cities to cross-border government efforts, like Singapore's Suzhou Park, outside of Shanghai, from norm-changing mimes in Bogota to rule-of-law enforcing anti-corruption authorities in Hong Kong. From these recent experiences, we try to extract a few key principles that characterize governance innovations that encourage investment and growth. These include competition, which puts pressure on policymakers to improve institutions; information, which provides necessary knowledge to citizens that can help them push for improved governance; trade in institutions, which allows effective institutions to move across borders; and shifting culture, that is, the jolting of norms to be rule compliant. Finally, we use these principles combined with historical precedent to describe the potential consequences of some recent proposals for governance innovation.
Publications
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Article
| Innovations: Technology, Governance, Globalization
| Forthcoming
South Sudan: The Birth of an Economy
Eric D. Werker, Kelly Wyett and Shannon Ding
We discuss the birth of a new economy in a society that has only recently emerged from a 22-year-long civil war. The pace of growth so far has been fast but uneven. We find that aid and oil money are flowing rapidly into certain sectors, while other employment-generating areas of the economy, particularly agriculture, have barely changed their centuries-old ways. As a result, the recent windfall of wealth has yet to translate into tangible development benefits for the majority of the population. In order to achieve growth in these other sectors, there is a need for more innovation in both government policy and business strategy.
Keywords: Sudan;
developing markets;
Foreign aid;
conflict;
oil prices;
private sector development;
Citation: Werker, Eric D., Kelly Wyett, and Shannon Ding. " South Sudan: The Birth of an Economy." Innovations: Technology, Governance, Globalization (forthcoming). (This is a manuscript version of the article - it has been accepted for publication.)
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Article
| Journal of Development Economics
|
Do Voters Demand Responsive Governments? Evidence from Indian Disaster Relief
Shawn Cole, Andrew Healy and Eric Werker
Using rainfall, public relief, and election data from India, we examine how governments respond to adverse shocks and how voters react to these responses. The data show that voters punish the incumbent party for weather events beyond its control. However, fewer voters punish the ruling party when its government responds vigorously to the crisis, indicating that voters reward the government for responding to disasters. We also find evidence suggesting that voters only respond to rainfall and government relief efforts during the year immediately preceding the election. In accordance with these electoral incentives, governments appear to be more generous with disaster relief in election years. These results describe how failures in electoral accountability can lead to suboptimal policy outcomes.
Keywords: Political Elections;
System Shocks;
Natural Disasters;
Policy;
Motivation and Incentives;
Public Opinion;
India;
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Article
| World Bank Economic Review
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Corporate Governance at the World Bank and the Dilemma of Global Governance
Ashwin Kaja and Eric Werker
Most major decisions at the World Bank are made by its Board of Executive Directors. While some countries enjoy the opportunity to serve on this powerful body, most countries rarely, if ever, get that chance. This gives rise to the question: does board membership lead to higher funding from the World Bank's two main development financing institutions, the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA)? Empirical analysis shows that developing countries serving on the board can expect more than double the funding from the IBRD as countries not on the board. In absolute terms, countries on the board receive an average $60 million "bonus" in IBRD loans, an amount that rises in years when IBRD loans are in high demand, particularly for countries in the most influential seats. This effect is more likely driven by informal rules and norms in the boardroom than by the power of the vote itself. No significant effect is found in IDA funding. These results point to challenges of global governance through representative institutions.
Keywords: Corporate Governance;
Decisions;
Governing and Advisory Boards;
Banks and Banking;
Financing and Loans;
Management Analysis, Tools, and Techniques;
Governing Rules, Regulations, and Reforms;
Voting;
Globalized Economies and Regions;
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Article
| American Economic Journal: Macroeconomics
|
How Is Foreign Aid Spent? Evidence from a Natural Experiment
Eric D. Werker, Faisal Z. Ahmed and Charles Cohen
We use oil price fluctuations to test the impact of transfers from wealthy OPEC nations to their poorer Muslim allies. The instrument identifies plausibly exogenous variation in foreign aid. We investigate how aid is spent by tracking its short-run effect on aggregate demand, national accounts, and balance of payments. Aid affects most components of GDP though it has no statistically identifiable impact on prices or economic growth. Much aid is consumed, primarily in the form of imported noncapital goods. Aid substitutes for domestic savings, has no effect on the financial account, and leads to unaccounted capital flight.
Keywords: Foreign aid;
Money;
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Article
| Journal of Conflict Resolution
|
The Political Economy of 'Natural' Disasters
Charles Cohen and Eric D. Werker
Natural disasters occur in a political space. Although events beyond our control may trigger a disaster, the level of government preparedness and response greatly determines the extent of suffering incurred by the affected population. We use a political economy model of disaster prevention, supported by case studies and preliminary empirics to explain why some governments prepare well for disasters and others do not. We show how the presence of international aid distorts this choice and increases the chance that governments will under-invest. Policy suggestions that may alleviate this problem are discussed.
Keywords: History;
Demographics;
Natural Disasters;
Policy;
Economy;
Government and Politics;
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Article
| Policy Review
|
A Better Approach to Foreign Aid
Justin Muzinich and Eric D. Werker
Frustration with U.S. foreign aid is widespread. At the same time, flows of private development finance—including foreign direct investment and remittances—have begun to dwarf official aid. We suggest a new approach that harnesses the power of private development finance to direct it towards developmental and foreign policy goals. Specifically, we argue that tax credits for companies, and tax breaks for individuals, can be used to incentivize productive investments while being a positive force for meaningful reform in the developing world.
Keywords: Developing Countries and Economies;
Foreign Direct Investment;
International Relations;
Taxation;
Welfare or Wellbeing;
United States;
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Article
| Journal of Economic Perspectives
|
What Do Nongovernmental Organizations Do?
Eric D. Werker and Faisal Z. Ahmand
Nongovernmental organizations are one group of players who are active in the efforts of international development and increasing the welfare of poor people in poor countries. Nongovernmental organizations are largely staffed by altruistic employees and volunteers working towards ideological, rather than financial, ends. Their founders are often intense, creative individuals who sometimes come up with a new product to deliver or a better way to deliver existing goods and services. They are funded by donors, many of them poor or anonymous. Yet these attributes should not be unfamiliar to economists. Development NGOs, like domestic nonprofits, can be understood in the framework of not-for-profit contracting. It is easy to conjure up a glowing vision of how the efforts of NGOs could focus on problem solving without getting bogged down in corruption or bureaucracy. But the strengths of the NGO model have some corresponding weaknesses—in agenda setting, decision making, and resource allocation. We highlight three factors in explaining the increased presence of NGOs in the last few decades: a trend towards more outsourcing of government services; new ventures by would-be not-for-profit "entrepreneurs"; and the increasing professionalization of existing NGOs.
Keywords: Non-Governmental Organizations;
Growth and Development;
Welfare or Wellbeing;
Poverty;
Service Delivery;
Crime and Corruption;
Social Entrepreneurship;
Decision Making;
Resource Allocation;
Product Development;
Framework;
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Book Review
| Journal of Economic Literature
|
Review of Transforming the Development Landscape: The Role of the Private Sector, edited by Lael Brainard
Eric D. Werker
Keywords: Information;
Transformation;
Growth and Development;
Private Sector;
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Journal Article
| Journal of Refugee Studies
|
Refugee Camp Economies
Eric D. Werker
This paper describes the economy of a refugee camp. Key distortions to the economy of Kyangwali Refugee Settlement in Uganda are noted and the findings are used to construct a generic model of a refugee camp economy. Camp economies are influenced by host country policies, such as restrictions on refugees' movement and work, as well as by the physical and economic isolation of the site. Moreover, market outcomes interact with the nature of humanitarian assistance and the special demographic composition of the refugees to determine the prices and quantities that characterize the market. An awareness of the dynamics of the refugee camp economy has important implications for practitioners and scholars alike.
Keywords: Refugees;
Economy;
Policy;
Civil Society or Community;
Human Needs;
Societal Protocols;
Uganda;
Citation: Werker, Eric D. " Refugee Camp Economies." Journal of Refugee Studies 20, no. 3 (September 2007): 461–480.
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Article
| Capitalism and Society
|
Local Company Politics: A Proposal
Raymond Fisman and Eric D. Werker
Corrupt politicians, and poor government more generally, are commonly viewed as a primary
barrier to economic progress. The roots to these problems run deep in many political systems across the developing world, and attempts at reform have rarely found much success. To combat this impasse, we suggest a radical new approach to local politics that, instead of proposing reforms to the electoral process, focuses on the political actors that might enter into this process. Specifically, we suggest that private firms be allowed to compete in elections to hold public office. That is, a corporate entity (e.g., Ernst and Young), rather than an individual representative of the firm, would be permitted to contest a local election. We argue that this is feasible: sufficient economic
incentives could be put in place to induce firms to run for office, particularly if company officeholders prove to be competent in revenue collection. More importantly, we claim that there are many channels through which company politics should improve government, from breaking up entrenched old boys' networks to leveraging a company's existing organizational expertise. Private firms have realized efficiency and performance gains in areas such as infrastructure and many bureaucratic functions; we argue that the private sector can also attain results in politics, the most public of all realms.
Keywords: Behavior;
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Article
| Journal of Political Economy
|
How Much Is a Seat on the Security Council Worth? Foreign Aid and Bribery at the United Nations
Ilyana Kuziemko and Eric D. Werker
Ten of the fifteen seats on the U.N. Security Council are held by rotating members
serving two-year terms. We find that a country's U.S. aid increases by 59 percent and its
U.N. aid by 8 percent when it rotates onto the council. This effect increases during years
in which key diplomatic events take place (when members' votes should be especially
valuable) and the timing of the effect closely tracks a country's election to, and exit from, the council. Finally, the U.N. results appear to be driven by UNICEF, an organization over which the United States has historically exerted great control.
Keywords: Foreign aid;
Governance;
Value;
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Article
| Rationality and Society
|
Portrait of a Failed Rebellion: An Account of Rational, Sub-optimal Violence in Western Uganda
Lucy Hovil and Eric D. Werker
While newspaper reports typically describe anti-civilian violence in civil war as resulting from hatred or anarchy, there is an emerging literature that interprets these processes as calculated, strategic actions of war makers. We argue that this literature overestimates the strategic value of violence by focusing on conflicts where this strategy is used deliberately and on a massive scale. Our analysis examines the violence in a failed, peripheral rebellion in western Uganda and finds that the brutality was premeditated; however the gains to the Allied Democratic Forces (ADF) rebels were not military. Instead, we argue that anti-civilian violence in western Uganda stems from the financier-insurgent relationship that promoted a high level of violence in response to divergent interests, unequal access to information, and contracting limitations. In other words, civilians were victimized in order that the ADF could keep their outside funding.
Keywords: civilian violence;
civil war;
insurgency;
war financing;
Uganda;
Failure;
Society;
Uganda;
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Chapter
| The Globalization of Cost-Benefit Analysis in Environmental Policy
| 2013
Assessing Potential Carbon Revenues from Reduced Forest Cover Loss in Liberia
Jessica Donovan, Keith Lawrence, Christopher Neyor, Eduard Niesten and Eric Werker
We conducted an analysis that explores the merits of a low-carbon development strategy for Liberia. This chapter describes both our cost-benefit analysis initiative and a plausible policy process for Liberia. We proposed a simple approach that models the costs and benefits of land placed under different uses. Policy scenarios then determine the amount of land under each land use and the implications for costs, benefits, and carbon emissions. A "low-carbon development strategy" for Liberia would include a number of cost beneficial policies, the most obvious being a transition to more efficient agriculture. Other beneficial policies include accelerating the establishment of Protected Areas, ensuring that tree crop plantations are located on degraded land rather than forest areas, and introducing energy-efficient stoves for charcoal and fuel wood.
Keywords: carbon revenue;
Liberia;
deforestation;
climate change;
Citation: Donovan, Jessica, Keith Lawrence, Christopher Neyor, Eduard Niesten, and Eric Werker. "Assessing Potential Carbon Revenues from Reduced Forest Cover Loss in Liberia." Chap. 19 in The Globalization of Cost-Benefit Analysis in Environmental Policy, edited by Michael A. Livermore, and Richard L. Revesz, 293–304. Oxford University Press, 2013.
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Chapter
| Handbook of Safeguarding Global Financial Stability: Political, Social, Cultural, and Economic Theories and Models
| 2012
The Political Economy of Bilateral Foreign Aid
Eric D. Werker
Despite its developmental justification, aid is deeply political. This paper examines the political economy of aid allocation first from the perspective of the donor country, and then the political economy of aid receipt and implementation from the perspective of the recipient country. When helpful, it draws from studies of multilateral aid. Following those discussions, the paper explores solutions, employed by the development community, to the distortions brought about by the political economy of bilateral aid—distortions that steer aid away from achieving economic development in the recipient country. As it turns out, none of these solutions can shield foreign aid from the heavy hand of politics. Developing countries heavily influenced by foreign aid end up with a different, and novel, governing apparatus.
Keywords: Foreign aid;
bilateral foreign aid;
political economy;
Citation: Werker, Eric D. " The Political Economy of Bilateral Foreign Aid." In Handbook of Safeguarding Global Financial Stability: Political, Social, Cultural, and Economic Theories and Models, edited by G. Caprio, 47–58. U.K.: Academic Press, 2012.
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Chapter
| Innovation Policy and the Economy
| 2011
Innovations in Governance
Raymond Fisman and Eric Werker
In this paper we explore the innovations in governance that have promoted investment and growth. Some policymakers have tinkered with their country's institutions, some have undertaken wholesale changes, while others have attempted to influence the rules in other countries. We survey past attempts at governance innovation, from private governance in India's industrial cities to cross-border government efforts, like Singapore's Suzhou Park, outside of Shanghai, from norm-changing mimes in Bogota to rule-of-law enforcing anti-corruption authorities in Hong Kong. From these recent experiences, we try to extract a few key principles that characterize governance innovations that encourage investment and growth. These include competition, which puts pressure on policymakers to improve institutions; information, which provides necessary knowledge to citizens that can help them push for improved governance; trade in institutions, which allows effective institutions to move across borders; and shifting culture, that is, the jolting of norms to be rule compliant. Finally, we use these principles combined with historical precedent to describe the potential consequences of some recent proposals for governance innovation.
Keywords: Economic Growth;
Investment;
Governance;
Governing Rules, Regulations, and Reforms;
Policy;
Government and Politics;
Innovation and Invention;
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Chapter
| Creative Capitalism: A Conversation with Bill Gates, Warren Buffett, and Other Economic Leaders
| 2008
Yes, But Weak States Can Be Coaxed Creatively
Eric D. Werker
Keywords: Government and Politics;
International Relations;
Negotiation;
Creativity;
Power and Influence;
Citation: Werker, Eric D. "Yes, But Weak States Can Be Coaxed Creatively." In Creative Capitalism: A Conversation with Bill Gates, Warren Buffett, and Other Economic Leaders, edited by Michael Kinsley, and Conor Clark, 170–171. Simon & Schuster, 2008.
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Editorial
| Politico
|
Natural Disasters Hurt Incumbents
Shawn A. Cole, Andrew Healy and Eric Werker
Keywords: natural disasters;
election outcomes;
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Article
| Harvard International Review
|
Disaster Politics: International Politics and Relief Efforts
Eric D. Werker
Keywords: Government and Politics;
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Article
| Forbes.com
|
The End of Foreign Investment in Russia?
Raymond Fisman and Eric D. Werker
Keywords: Foreign Direct Investment;
Russia;
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Article
| Atlantic.com
|
How Globalization's Losers Win
Eric D. Werker
Keywords: Globalization;
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Article
| Foreign Policy
|
Power to the People
Eric D. Werker
Every nongovernmental organization has a mission statement. For example, CARE, one of the world's largest and best-funded NGOs, explains its mission as serving "individuals and families in the poorest communities in the world. Drawing strength from our global diversity, resources and experience, we promote innovative solutions and are advocates for global responsibility." Indeed, CARE has teams of experts with years of experience in more than 70 countries, and its efforts to tackle the "underlying causes of poverty" are impressive. Implicit in its mission statement, like those of most NGOs, is the notion that CARE is exceptionally knowledgeable about how to meet the needs of the world's poor. But does it know best? Take one of the most confounding global problems today: the skyrocketing cost of food. Prices for staple crops such as rice and wheat have more than doubled since 2006, putting an enormous strain on the 1.2 billion people living on a dollar a day or less. In 2004, a typical poor farmer in Udaipur, India, was already spending more than half his daily dollar of income on food—and that was before grain prices went through the roof. NGOs and relief agencies are on the front lines of this global crisis, distributing food and other forms of assistance to the hardest-hit victims. But food handouts may be the last thing that poor countries need right now. In many of the worst-stricken places, agriculture is the top employer. High food prices are offering a rare opportunity for farmers in these countries to make a tidy profit. Dumping imported food onthe market will cut into many farmers' incomes and thus might do more harm than good. Low-wage work programs could help people avoid hunger, but they might also take farmers away from their fields just when farming is becoming lucrative. Keywords: Non-Governmental Organizations;
Service Operations;
Innovation and Invention;
Economic Slowdown and Stagnation;
Agribusiness;
Mission and Purpose;
Poverty;
Diversity Characteristics;
Experience and Expertise;
Knowledge;
Inflation and Deflation;
Food;
India;
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Article
| Forbes
|
KPMG for Mayor!
Eric D. Werker
Keywords: Government and Politics;
Citation: Werker, Eric D. " KPMG for Mayor!" Forbes 179, no. 6 (March 26, 2007): 40.
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Article
| New York Times
|
A Global Tax Credit
Justin Muzinich and Eric D. Werker
Keywords: Taxation;
Credit;
Citation: Muzinich, Justin, and Eric D. Werker. " A Global Tax Credit." New York Times (October 20, 2007).
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Article
| Financial Times
|
The Search for Security
Raymond Fisman and Eric D. Werker
Keywords: Safety;
Citation: Fisman, Raymond, and Eric D. Werker. " The Search for Security." Mastering Uncertainty Financial Times (March 23, 2006).
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Working Paper
|
Developing the Guts of a GUT (Grand Unified Theory): Elite Commitment and Inclusive Growth
Lant Pritchett and Eric D. Werker
Two key unanswered questions in theories of growth are (a) why some countries successfully initiate episodes of rapid growth while others suffer extended stagnation and (b) why some countries are able to sustain growth episodes over many decades of rapid (or steady) growth while other growth episodes end in reversion to stagnation or collapse. We create an analytical model that is capable of generating both transitory and sustained episodes of accelerated growth. The new feature is a feedback loop from existing economic conditions the pressures on policy implementing 'institutions.' This feedback loop can be positive (with economic growth leading to improved institutions for inclusive growth) or negative (with economic growth leading to worse conditions for further growth by shutting off the inclusiveness of growth and limiting economic opportunity to existing successes). Whether economic elites use their influence activities with political and bureaucratic elites to create more possibilities for economic structural transformation or, conversely, use their power to entrench their privileged position will, to a significant extent, determine whether episodes of rapid growth can be sustained, will peter out, or even be reversed. The mechanisms for elite commitment to sustained inclusive growth are discussed.
Keywords: economic growth;
elite commitment;
inclusive growth;
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Working Paper
| HBS Working Paper Series
| 2012
Unobserved State Fragility and the Political Transfer Problem
Faisal Z. Ahmed and Eric Werker
Autocrats experiencing a windfall in unearned income may find it optimal to donate to other countries some of the windfall in order to make the state a less attractive prize to potential insurgents. We put forward a model that makes that prediction, as well as the additional predictions that the recipients of the aid may themselves become more repressive with high levels of aid and experience conflict with medium levels of aid. We call these joint phenomena the political transfer problem and argue that the largest windfall of the 20th century, the period from 1973 to 1985 during which oil prices were at all-time highs, produced long-run political dynamics consistent with the model. In particular, major oil exporters have been politically repressive, generous with foreign aid when oil prices are high, and free of civil war; in contrast, the recipients of petro aid were relatively repressive (and peaceful) during the period of high oil prices but subject to civil war when oil prices fell and aid was reduced. Surprisingly, the political transfer problem did not seem to materialize when oil prices again began to creep up in the 21st century; this nonexistence of the problem can be explained by the model against the backdrop of evolving geopolitics and economics.
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Working Paper
| HBS Working Paper Series
| 2006
Male Circumcision and AIDS: The Macroeconomic Impact of a Health Crisis
Amrita Ahuja, Brian Wendell and Eric D. Werker
Theories abound on the potential macroeconomic impact of AIDS in Africa, yet there have been surprisingly few empirical studies to test the mixed theoretical predictions. In this paper, we examine the impact of the AIDS epidemic on African nations through 2005 using the male circumcision rate to identify plausibly exogenous variation in HIV prevalence. Medical researchers have found significant evidence that male circumcision can reduce the risk of contracting HIV. We find that national male circumcision rates for African countries are both a strong predictor of HIV/AIDS prevalence and uncorrelated with other determinants of economic outcomes. Two-stage least squares regressions do not support the hypotheses that AIDS has had any measurable impact on economic growth or savings in African nations. However we do find weak evidence that AIDS has lead to a decline in fertility combined with a slow-down in education gains, as measured by youth literacy, and a rise in poverty, as measured by malnutrition.
Keywords: Macroeconomics;
Health Disorders;
Welfare or Wellbeing;
Poverty;
Research;
Education;
Nutrition;
Risk Management;
Africa;
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Case
| HBS Case Collection
|
2013
Pittsburgh
Eric D. Werker, Meg Rithmire, Benjamin Kennedy and Andrew Knauer
The case narrates the development of Pittsburgh from the 1940s to 2012. It analyzes the collapse of the steel industry in the early 1980s, the city's subsequent decline, and the city's later re-emergence as a hub for higher education, the tech sector, and the healthcare industry. Attention is given to the public-private partnerships that emerged in Pittsburgh, as well as the economic development and taxation initiatives pursued by different mayors.
Keywords: google;
population;
city growth;
shale;
PNC;
Tom Murphy;
Luke Ravenstahl;
Public-private partnership;
Tax increment financing;
brownfields;
Renaissance;
Industry Clusters;
Industry Growth;
City;
Business and Government Relations;
Taxation;
Giving and Philanthropy;
Nonprofit Organizations;
Higher Education;
Technology Industry;
Health Industry;
Steel Industry;
Education Industry;
Pittsburgh;
Citation: Werker, Eric D., Meg Rithmire, Benjamin Kennedy, and Andrew Knauer. "Pittsburgh." Harvard Business School Case 713-035, January 2013.
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Teaching Note
| HBS Case Collection
|
2012
Liberia (TN)
Eric Werker and Ian Cornell
From 1989 to 2003 civil war raged in Liberia, causing GDP per capita to drop an unprecedented 90% from peak to trough. The roots of Liberia's conflict and economic decline are complex and intertwined, resting on over a century of discriminatory elite rule and twisted by ethnic politics during a military dictatorship. By late 2011, eight years of post-conflict government have restored basic order, re-opened the country to foreign investors, and jump-started the small economy. But the country's business model may unsettle its political stability. As Africa's first democratically elected female head of state (and a recipient of the Nobel peace prize) Ellen Johnson Sirleaf goes into her reelection campaign for Liberia's presidency, she must decide how to keep the country on its fragile but quick recovery, sowing the seeds for peace and prosperity rather than renewed conflict. Liberia examines the transition of a country from violent military rule, through devastating conflict, to post-conflict recovery and stable democratic governance. Liberia is a useful country in which to examine the rebuilding of an economy after a war, particularly since the country's economic structure and its politics are so inter-connected.
Citation: Werker, Eric, and Ian Cornell. " Liberia (TN)." Harvard Business School Teaching Note 713-001, October 2012.
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Teaching Note
| HBS Case Collection
|
2012
Angola and the Resource Curse (TN)
Aldo Musacchio, Eric Werker and Ian Cornell
Keywords: Resource management;
African history;
angola;
dutch disease;
least developed countries;
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Supplement
| HBS Case Collection
|
2012
(Revised from original 2012 version)
Privatization of the Power Sector in Nigeria (B)
Eric Werker, Onyechi Ezekwueche, Olatomiwa Igun and Alice Wei
Keywords: privatization;
Energy;
Nigeria;
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Technical Note
| HBS Case Collection
|
2012
(Revised from original 2012 version)
4M: Four-Markets Analysis for Emerging Economies
Eric Werker
Keywords: emerging markets;
frontier markets;
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Technical Note
| HBS Case Collection
|
2012
(Revised from original 2012 version)
GEM 15: Country Development Strategies in 15 Statistics
Aldo Musacchio and Eric Werker
Keywords: country analysis;
country development strategies;
macroeconomics;
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Teaching Note
| HBS Case Collection
|
2012
Kaesong Industrial Complex (A) and (B) (TN)
Eric Werker and Dante Roscini
Keywords: foreign investment;
country risk;
bilateral trade;
special economic zones;
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Supplement
| HBS Case Collection
|
2012
(Revised from original 2012 version)
Foreign Direct Investment and South Africa (B)
Eric D. Werker and Ian McKown Cornell
Incoming and outgoing foreign direct investment in an environment of politics, geography, globalization, and history. Updates the 2006 case to 2012. The subsequent six years only reinforce the message of the original case. Since the end of apartheid, South Africa had undertaken substantial economic reforms in order to attract more foreign direct investment, but it was slow in coming. At the same time, South African firms had become major players in sub-Saharan Africa and beyond. Collectively, these investment decisions could have a major long-run impact on South Africa's economic growth and political stability. South African policymakers needed to decide what they wanted from the private sector, and how to achieve it.
Keywords: global business;
developing countries;
foreign direct investment;
business government relations;
South Africa;
Citation: Werker, Eric D., and Ian McKown Cornell. "Foreign Direct Investment and South Africa (B)." Harvard Business School Supplement 712-054, June 2012. (Revised from original June 2012 version.)
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Case
| HBS Case Collection
|
2012
(Revised from original 2011 version)
Liberia
Eric Werker and Jasmina Beganovic
Keywords: Liberia;
Citation: Werker, Eric, and Jasmina Beganovic. " Liberia." Harvard Business School Case 712-011, February 2012. (Revised from original September 2011 version.)
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Teaching Note
| HBS Case Collection
|
2012
Hermitage's Russian Quandary (TN) (A) and (B)
Eric Werker and Ray Fisman
Keywords: Russia;
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Supplement
| HBS Case Collection
|
2012
(Revised from original 2010 version)
The Kaesong Industrial Complex (B): Global Manufactures GmBH's Dilemma
Dante Roscini, Eric D. Werker and Han-koo Yeo
Keywords: North Korea;
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Case
| HBS Case Collection
|
2011
(Revised from original 2009 version)
Barack Obama and the Bush Tax Cuts (A)
Matthew C. Weinzierl and Eric D. Werker
As his inauguration approached, President-elect Obama faced a financial sector meltdown, a costly bailout, and massive government deficits. With the economy in recession, interest rates near zero, and joblessness on the rise, Obama needed to decide whether, and how much, to use fiscal stimulus to resuscitate the economy. To help students understand Obama's options, the case reviews both the recent tax cuts under President George W. Bush, including the supply-side and demand-management justification given for them, and the broad history of fiscal policy in the United States.
Keywords: Decision Choices and Conditions;
Financial Crisis;
Borrowing and Debt;
Financial Management;
Policy;
Government Administration;
Taxation;
United States;
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Teaching Note
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2011
(Revised from original 2009 version)
Barack Obama and the Bush Tax Cuts (A) (TN)
Matthew C. Weinzierl and Eric D. Werker
Teaching Note for 709037.
Keywords: Government and Politics;
Taxation;
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Supplement
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2011
Hermitage's Russian Quandary (B)
Eric Werker, Ray Fisman and Lauren Weber
Supplements the (A) case.
Keywords: Problems and Challenges;
Russia;
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Case
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2011
Hermitage's Russian Quandary (A)
Eric Werker, Ray Fisman and Lauren Weber
In June 2007, the offices of Russian hedge fund Hermitage Capital were raided by Moscow police; in the months that followed, Hermitage founder Bill Browder found himself banned from Russia and fending off efforts to expropriate the fund's Russian assets. This case describes the challenges faced by Hermitage in responding to these threats, and more broadly discusses the perils of doing business in a business environment with weak legal and political institutions. This case was co-authored with Columbia Business School.
Keywords: Crime and Corruption;
Private Equity;
Investment;
Law Enforcement;
Laws and Statutes;
Crisis Management;
Risk Management;
Business and Government Relations;
Financial Services Industry;
Moscow;
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Case
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2010
Angola and the Resource Curse
Aldo Musacchio, Eric D. Werker and Jonathan Schlefer
Since emerging from decades of conflict in 2002, Angola has been growing at a scorching double-digit rate, led by its oil industry. But the nation remains beset with seemingly intractable problems: immense inequality, low life expectancy, a non-diversified economy, and constant grumblings of corruption. The global financial crisis and subsequent fall in state oil revenue drives a loan-seeking Angola towards either the IMF, who demand extensive reforms, or the Chinese, who seek to take a direct stake in the nation's recovery. The case explores the dynamics of post-conflict recovery as well as the challenges associated with a reliance on oil wealth, including the resource curse and Dutch disease.
Keywords: Crime and Corruption;
Developing Countries and Economies;
Financial Crisis;
Borrowing and Debt;
Financial Institutions;
Globalized Economies and Regions;
Policy;
Government Administration;
Emerging Markets;
Natural Environment;
Angola;
Citation: Musacchio, Aldo, Eric D. Werker, and Jonathan Schlefer. " Angola and the Resource Curse." Harvard Business School Case 711-016, September 2010.
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Supplement
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2009
The World Food Programme during the Global Food Crisis (B)
Anette Mikes, Peter Tufano, Eric D. Werker and Jan-Emmanuel De Neve
Keywords: Crisis Management;
Food;
Non-Governmental Organizations;
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Teaching Note
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2009
The World Food Programme during the Global Food Crisis (TN) (A) and (B)
Eric D. Werker
Teaching Note for [709024] and [709052].
Keywords: Non-Governmental Organizations;
Nutrition;
Food;
Crisis Management;
Problems and Challenges;
Poverty;
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Case
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2009
(Revised from original 2008 version)
The World Food Programme during the Global Food Crisis (A)
Anette Mikes, Peter Tufano, Eric D. Werker and Jan-Emmanuel De Neve
Rising food prices threatened an unprecedented number of people around the world with malnutrition or starvation in 2008. The new Executive Director of the United Nations' World Food Programme (WFP)—the world's largest food relief agency—must not only address this challenge but also must rethink the WFP's strategy in the rapidly changing world of humanitarian assistance.
Keywords: Food;
Globalized Firms and Management;
Nutrition;
Crisis Management;
Business and Government Relations;
Nonprofit Organizations;
Welfare or Wellbeing;
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Teaching Note
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2008
(Revised from original 2007 version)
Aid, Debt Relief, and Trade: An Agenda for Fighting World Poverty (TN) (A) and (B)
Laura Alfaro, Eric D. Werker and Renee Kim
Keywords: Money;
Borrowing and Debt;
Trade;
Poverty;
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Case
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2007
(Revised from original 2007 version)
Foreign Direct Investment and South Africa
Eric D. Werker
Incoming and outgoing foreign direct investment in an environment of politics, geography, globalization, and history. Since the end of apartheid, South Africa had undertaken substantial economic reforms in order to attract more foreign direct investment, but it was slow in coming. At the same time, South African firms had become major players in sub-Saharan Africa and beyond. Collectively, these investment decisions could have a major long-run impact on South Africa's economic growth and political stability. South African policymakers needed to decide what they wanted from the private sector, and how to achieve it.
Keywords: Decision Choices and Conditions;
Macroeconomics;
Foreign Direct Investment;
Governing Rules, Regulations, and Reforms;
Business and Government Relations;
Africa;
South Africa;
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Teaching Note
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2007
Foreign Direct Investment and South Africa (TN)
Eric D. Werker
Teaching Note to 707019.
Keywords: Foreign Direct Investment;
Governing Rules, Regulations, and Reforms;
Investment;
Decisions;
Economic Growth;
Private Sector;
Balance and Stability;
South Africa;
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Case
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2007
(Revised from original 2007 version)
Aid, Debt Relief, and Trade: An Agenda for Fighting World Poverty (A)
Laura Alfaro, Eric D. Werker and Renee Kim
At the 2005 Group of Eight summit, world leaders agreed to relieve the world's poorest countries' debt burdens and double aid to Africa by 2010. The announcement raised questions whether debt relief would really help the poor. By examining past aid trends and policies of multilateral institutions, such as the International Monetary Fund and the World Bank, this case also questions whether aid can allow poor countries to break the vicious cycle of poverty, and/or how aid can be used effectively.
Keywords: Developing Countries and Economies;
Borrowing and Debt;
Capital;
International Relations;
Nonprofit Organizations;
Poverty;
Welfare or Wellbeing;
Africa;
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Supplement
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2007
(Revised from original 2007 version)
Aid, Debt Relief, and Trade: An Agenda for Fighting World Poverty (B)
Laura Alfaro, Eric D. Werker and Renee Kim
Keywords: Money;
Borrowing and Debt;
Trade;
Poverty;
Research Summary
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Research Summary
Overview
by
Eric D. Werker
My research aims to understand how prosperity is created in poor countries. My first “chapter” in this larger quest has focused on how rich-country actors have managed to be a force for change in poor-country economies. I have investigated the various attempts of governments and non-profits to reduce poverty and effect change in the developing world. Some of my findings and views are summarized in "The Political Economy of Bilateral Foreign Aid," found below; on the whole, I find that rich-country efforts to alleviate poverty in the developing world are often self-serving, can deeply affect the economy but not necessarily generate top-line growth, and initiate a number of distortions to the domestic political economy—not all of them good.
My second “chapter,” which will focus on the role of domestic policymakers and local business in generating private sector development in poor countries, is only beginning. I kicked this stage off in 2009 when I took a 2-year leave from HBS to advise the Liberian government. I have developed the material for this chapter in the field and in the classroom, and am presently working on a book on developing and investing in frontier markets as well as a series of papers on the political economy of the business environment in developing countries.
Keywords: Foreign aid;
Africa;
private sector development;
emerging markets;
economic development;
political economy;
non-governmental organizations;
fragile states;
governance;
natural disasters;
Private Sector;
Emerging Markets;
Development Economics;
Non-Governmental Organizations;
Natural Disasters;
Africa;
Liberia;
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Research Summary
The Political Economy of Bilateral Foreign Aid
by
Eric D. Werker
Despite its developmental justification, aid is deeply political. This paper examines the political economy of aid allocation first from the perspective of the donor country, and then the political economy of aid receipt and implementation from the perspective of the recipient country. When helpful, it draws from studies of multilateral aid. Following those discussions, the paper explores solutions, employed by the development community, to the distortions brought about by the political economy of bilateral aid - distortions that steer aid away from achieving economic development in the recipient country. As it turns out, none of these solutions can shield foreign aid from the heavy hand of politics. Developing countries heavily influenced by foreign aid end up with a different, and novel, governing apparatus.
Related Link:
The Political Economy of Bilateral Foreign Aid
Teaching
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Teaching Interest
Overview
by
Eric D. Werker
I taught for five years in the first-year course, Business, Government, and the International Economy. This year I have joined Aldo Musacchio in teaching Globalization and Emerging Markets to second-year MBAs. I have written a number of cases about frontier- and emerging-market businesses, economies, organizations, and public-private partnerships in Africa, Asia, and Europe. I have enjoyed the challenge of bringing theoretical and conceptual frameworks to the study of business analysis in emerging markets, while remaining faithful to the case method of teaching.
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Teaching Interest
Globalization and Emerging Markets
by
Eric D. Werker
Globalization and Emerging Markets is designed for students who will be investing, managing a business or nonprofit, or working for a government in an emerging market. The unit of analysis of the course ranges from countries to multinational and domestic companies in emerging markets. Therefore, students are asked to take the perspective of different decision-makers, such as politicians, investors, and managers. For instance, students may have to take the perspective of the manager of an American company operating abroad, of an investor in Dubai bonds, of a shareholder in Brazil's oil company Petrobras, the manager of Indian Railways, or chairman of the central bank of China. As such the course should appeal to anyone considering a career in emerging markets or who will be doing business or investing in emerging markets. Keywords: emerging market;
globalization;
BRICS;
N11;
Resource Allocation;
Pakistan;
Angola;
Dubai;
South Korea;
South Africa;
Turkey;
Liberia;
China;
Brazil;
Nigeria;
Related Links: HBS Course Description, Course Website (by Professor Aldo Musacchio)
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Teaching Interest
Business, Government, and the International Economy
by
Eric D. Werker
Business, Government, and the International Economy (BGIE) is a course about the broad economic and political context in which business operates. Throughout their careers business leaders are asked to formulate and lead their firm's responses to the external environment. They may also have the chance to shape that environment by influencing government policies. In BGIE we will learn about the key economic, political, and social factors that affect this business environment: in other words, the institutional foundations of capitalism. BGIE examines management and leadership on a grand scale. The decisions we study have widespread implications and fundamental importance for business and society. We will look at policies that affect millions of people - and, often, have implications for every firm doing business in a country.
Keywords: international economy;
macroeconomics;
Awards & Honors
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Eric D. Werker: Awarded the 2010 Marvin Bower Fellowship to support research by outstanding scholars.
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Eric D. Werker: Received an Open Society Institute Grant for Economic Advising in Liberia for 2010-2011.
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Eric D. Werker: Awarded a Pre-doctoral Fellowship in the Economics of National Security from the National Bureau of Economic Research for 2004-2005.
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Eric D. Werker: Awarded a Harvard Department of Economics Fellowship for 2000-2002.
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Eric D. Werker: Member of Phi Beta Kappa, 2000.
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