Abstract MotivationThe question of industrial policy has gained prominence in the policy agenda over the last decade, despite its persistently ambiguous and incomplete definition. The lack of a firm definition is problematic because it prevents scholars and policy‐makers from comparing and monitoring the impact of industrial policy across developing countries. This vague definition also fails to account for issues that are relevant to the impact and usefulness of industrial policy in the process of economic development.Research QuestionWhat is the effect of an inadequate definition and implementation of industrial policy for structural transformation in underdeveloped economies?MethodsWe undertake both a critical literature review of industrial policy and a policy review, and use insights from 86 structured interviews with manufacturing businesses and government officials in Ethiopia, to illustrate how industrial policy could be more effective.FindingsThe article finds that there is no clear and exhaustive understanding of what the definition of industrial policy entails. In part this is also a result of a limited and incoherent use of the concept of structural transformation in the definition and policy formulation of industrial policy.ConclusionsUsing a case study of Ethiopia, we show how an inadequate and incoherent definition and implementation of industrial policy can lead to limited upgrading, learning and innovation in an underdeveloped economy.Policy ImplicationsFor Ethiopia, and for other underdeveloped economies, the findings imply a reconfiguration of industrial policy, rather than more industrial policy.

Abstract MotivationThe European Union (EU) and the US have specific trade preference programmes in place directed towards developing countries in general and, primarily in the case of the EU, towards least developed countries (LDCs) in particular. This article examines the relative merits of these programmes.PurposeThe article compares the trade policies of the EU and the US with respect to LDCs and the countries eligible for the US African Growth and Opportunity Act (AGOA) and examines the relative success of the two donors’ trade policies vis‐à‐vis these two groups of beneficiaries in terms of increasing imports from them.Approach and methodsEconometric evidence from a gravity model is used to compare the effects of EU and US preferential trade policy on imports from the beneficiary countries. First, regressions are carried out using total EU and US imports as dependent variables and, second, EU and US duty‐free imports are used.FindingsThe descriptive part of the article shows that (a) a larger share of EU imports benefits from duty‐free MFN tariffs; (b) the EU offers preferences on all imports from the LDCs (except arms and ammunition), while the US extends preferences to three quarters of all imports; (c) EU preferences are better utilized; and (d) the EU imports more goods duty free. The econometric analysis shows that EU trade policy towards the LDCs and the AGOA beneficiaries has generated approximately twice as much in imports as US policy, when imports of mineral fuels are excluded from the analysis.Policy implicationsEU trade policy is found to outperform US trade policy in terms of generating imports from the LDCs and the AGOA beneficiaries. Hence, if any trade policy ought to be copied by other countries, as suggested by some observers, it should be EU trade policy rather than US trade policy.

Abstract MotivationAcross the world, rapid‐onset disasters caused by natural hazards such as storms and floods return with seemingly greater force every year. Many disaster hot spots are particularly vulnerable because of already fragile humanitarian and political situations, some having been affected by armed conflict for decades. These phenomena augment the need for long‐term aid, but do they influence the distribution of aid projects?PurposeThis article revisits the long‐standing debate over whether donor interests or recipient needs best predict the distribution of development aid. It disaggregates the analysis down to province level in the Philippines, and includes local hazards when assessing an area’s need for aid.Approach and methodsMaking use of geocoded data on aid projects, rapid‐onset disasters caused by natural hazards and armed conflict in Philippine provinces between 1996 and 2012, this article provides an exhaustive assessment of the within‐country determinants of World Bank development aid projects.FindingsThe article finds that need to some extent influences the distribution of aid projects across Philippine provinces but that, in general, domestic political alliances bias projects in favour of the politically dominant group. Previous exposure to conflict is associated with increased likelihood of new projects, but only in dominant group‐majority provinces. While previous disaster exposure is a weak predictor of aid in all provinces, low Human Development Index (HDI) levels significantly predict aid inflow in excluded group‐majority provinces.Policy implicationsIn sum, the article challenges the idea that (international) donors’ priorities override the interests of the recipient/local governmesnt in the distribution of aid projects. It also shows that even if the donor’s explicit policy is disaster mitigation and relief, there is still some way to go before these considerations are effectively incorporated into development aid efforts.

Abstract MotivationDiscussions of good governance often highlight the definitional ambiguity associated with the concept. Recent scholarship on governance is beginning to emphasize the need for more context‐specific interpretations of good governance. Specifically, the literature draws on Douglass North’s institutional framework, but without paying enough attention to the role of “informal constraints.” This article seeks to address this gap by drawing on primary data.PurposeThis article explores the dilemmas or the “informal constraints” facing actors in implementing governance aid, exploring this phenomenon through the case of Australia’s aid for good governance to Myanmar during 2012–2017. The principal question is: what are the informal constraints or dilemmas confronting actors when implementing governance aid?MethodsThe article is based on individual semi‐structured interviews with key informants based in Myanmar and Australia alongside analysis of government reports from development organizations working in Myanmar.FindingsIn Myanmar, the informal constraints facing actors include the inordinate role of the military in political life, the issue of decentralization and problematic nationalist discourses within the education system. This research also argues that Australia’s approach is deeply embedded in the same neoliberal ethos that prominent multilateral institutions have also followed, with little acknowledgement of the context‐specific informal constraints that actors confront when implementing governance aid in Myanmar.Policy ImplicationWhen discussing good governance, there is a need to recognize the informal constraints in implementing governance aid. In the case of Australia’s governance aid to Myanmar, little has been done to address or acknowledge the context‐specific challenges facing Myanmar’s quest for good governance.

Abstract MotivationGermany’s official aid to Middle Eastern and North African (MENA) countries has more than doubled since 2011, ostensibly to support their own responses to development and humanitarian challenges following the Arab uprisings. The dramatic increases in aid have not been accompanied by a public strategy setting out Germany’s objectives in the region, and the role of aid in conjunction with other policy tools in achieving them.PurposeWhat strategic objectives does the German government have for its MENA aid, and have these objectives changed in response to the Arab uprisings? Does the practice of Germany’s aid spending actually address development and humanitarian challenges in the MENA region, as these are defined by MENA countries themselves? In order to address these questions, this article develops key insights from the historical institutionalist and aid effectiveness literature that explain strategic policy‐making in complex decision‐making systems.Approach and MethodsTwo propositions are discussed in a structured review of the policy and practice dimensions of Germany’s MENA aid programme: first, that Germany’s aid and foreign policy system has not been able to articulate a clear strategy due to political differences and bureaucratic inertia; and second that the priorities tend to favour German and European security interests rather than the region’s own development and humanitarian priorities.FindingsThe analysis reveals that, while new priorities for development co‐operation in response to the Arab uprisings have been set, Germany’s MENA aid programme shows signs of policy incoherence and fragmentation. This is unlikely to change without a “whole‐of‐government” strategy for Germany’s MENA engagement. Furthermore, while there is little evidence of purposeful securitization of aid, short‐term stability has been privileged over support for political change.Policy ImplicationsA whole‐of‐government strategy based on the Sustainable Development Goals could balance German interests with the MENA region’s development priorities, ironing out the most problematic incoherencies, and thereby increasing partner country ownership.

Abstract MotivationIn this article, we examine the role of norms in protecting the rights of Indigenous Peoples with regard to hydroelectric dams. We argue that the way large‐scale dams are built and managed—including their impacts on Indigenous Peoples—varies according to the political context of the host country. In more restrictive political contexts, norms may often be neglected or compromised.PurposeThe political system and domestic legislation are crucial factors that need to be considered in more depth in research scholarship on dams. We contribute to filling this research gap by presenting a comparative analysis of the Bakun dam in Malaysia and the Gibe III dam in Ethiopia, demonstrating that norms tend to be ignored or compromised in restrictive and authoritarian political environments.Approach and MethodsWe compare the similarities and differences of these two dam projects systematically drawing on empirical field research comprising interviews, focus group discussions and the analysis of primary and secondary documents.FindingsOur research reveals that international and private norms are often neglected in partly free or unfree political systems. Even domestic legislation can be circumvented by a strong or authoritarian state government, and this can lead to serious delays and neglect of protective standards.Policy ImplicationsInternational standards are often more ambitious than national standards and their implementation in the hydropower dams industry can help to improve the social and environmental sustainability of projects. Active civil society organizations can use norms and standards to strengthen social mobilization within the country and can transmit important information outside the country to build transnational alliances. Pressure and persuasion mechanisms can lead to norm change and norm compliance by state actors.

Abstract MotivationYouth employment has risen to the top of Africa's development agenda. But there is an often‐ignored tension between the current focus of policy and implementation on self‐employment and entrepreneurship, and the ability of employment in the informal economy to meet the commitment of the Sustainable Development Goals (SDGs) to “decent work for all”. Formal‐sector employment is more likely to offer decent work, but a policy focus on it can be dismissed as unrealistic, if not elitist.PurposeThis paper aims to review and synthesize evidence about formal‐sector employment in countries in sub‐Saharan Africa (SSA) and young people's engagement with it, for the purpose of bringing such employment more centrally into policy and interventions to address the continent's youth employment crisis.Approach and methodsThe article reviews evidence provided by selected labour‐market surveys and recent research studies from SSA on formal‐sector employment and informal employment within the formal sector.FindingsFormal‐sector employment is concentrated in urban areas, as are the vast majority of young Africans who have completed secondary school, and it is more likely to provide decent work than other forms of employment. These facts make it a serious mistake to underestimate the role of employment in the formal sector in addressing Africa's youth employment challenge.Policy implicationA long‐term commitment to (a) the creation of new employment opportunities within the formal sector and (b) improving the governance of labour markets should be central to the co‐ordinated response to Africa's youth employment crisis. Building on the existing base of educated young people and formal‐sector employment in urban areas is likely to be the most effective way of creating a “decent work economy”.

Abstract MotivationIn the last decade, economic and political ties between China and African countries grew fast, fuelling a heated debate about the implications for the latter and for the global system of China's engagement in Africa.PurposeThe article reviews the existing evidence on the nature, causes and impact of China's economic engagement in Africa.Approach and methodsThe review focuses mainly on the economic literature with a quantitative focus.FindingsChina's reasons to engage with Africa are not so different from those of western countries: securing natural resources and seeking new export markets. However, there is evidence that China is less interested in the quality of governance and institutions of its African partners. The literature tends to agree on the positive growth effects for African countries of Chinese interest, but also suggests that their already thin manufacturing sector could be adversely affected by Chinese competition and that the increasing natural resource specialization of African countries might hamper diversification, structural transformation and future growth prospects. At the same time Chinese investments are building valuable infrastructure and linkages with local firms, which are growing although still very limited. The emergent trend of increasing presence of small and medium Chinese firms in Africa is promising in this respect.Policy implicationsIncreased Chinese interactions with African countries present opportunities as well as threats for African countries. A key aspect will be the capacity of Chinese presence in Africa to spread to the local economy through spillover effects and linkages to the domestic economy. Both sides should introduce policies aimed at strengthening these linkages and spillovers.

Abstract MotivationProliferating regional trade agreements (RTAs) in East Asia since the region’s financial crisis in 1997 have been hotly debated. To date, however, no research has comprehensively examined the desirability of East Asian RTAs based on such factors as membership and evolutionary paths.PurposeWe assess, retrospectively and prospectively, East Asian countries’ efforts to liberalize the regional market through co‐operation. We investigate (i) why RTAs have proliferated in East Asia; (ii) the main characteristics of East Asian RTAs; (iii) whether East Asian countries are desirable trading partners for one another; and (iv) the prospects of East Asian RTAs.Approach and methodsWe conduct a qualitative analysis on the desirability of East Asian partnership and examine quantitative studies of the likely impacts of East Asian RTAs on members, non‐members, and the global economy.FindingsWe verify that East Asian neighbours are appropriate trading partners for the formation of RTAs.Policy implicationsWe recommend that East Asian RTAs should follow an expansionary path such as the five ASEAN+1 RTAs to the Regional Comprehensive Economic Partnership (RCEP) to the Free Trade Area of the Asia‐Pacific (FTAAP). Moreover, the region must co‐operate with major external trading partners by forming cross‐regional RTAs with the European Union (EU) and United States (US). Two priority changes must also be implemented: the harmonization or simplification of the rules of origin and cumulation of value contents among East Asian RTA members.