It’s not all negative: developing countries often emerge stronger from particular shocks. But there is no escaping one reality: the impact on specific groups of poor people is often harsh. Unless the poor are included in the benefits of economic growth, such growth may prove unsustainable – and the social benefits of economic development will not be what they should have been.

ODI supports the development of effective responses to global volatility for low- and middle-income countries, working with partners to promote resilience, sustain growth and employment, support innovation, and achieve poverty reduction.

Our work

The euro zone crisis entered a new and dangerous phase in late 2011, with most eyes focused on the implications for European countries such as Greece and Spain. ODI, however, has focused on the implications for lower-income countries. ODI has provided the only insight to date on how the crisis is playing out in specific developing countries. To weather the crisis, our research suggests that developing countries should spur aggregate domestic demand, promote export diversification in both markets and products, improve financial regulation, endorse long-term growth policies, and strengthen social safety nets. Multilateral institutions should ensure that adequate and coordinated funds and shock facilities are in place to provide effective and timely assistance to crisis-affected countries.

ODI is developing Shockwatch – a unique programme to monitor global volatility changes in capital flows, foreign direct investment, trade, energy prices and the agriculture sector. Shockwatch will examine the lessons of the past for future preparedness. What can be learned from policy responses to previous shocks? What will drive future volatility and its impact? How can policy-makers, from global to local, be prepared? As well as producing regular information and analysis on major global shifts and scoping the future, Shockwatch will inform the work of ODI itself, helping us to be ready with the right research, for the right audience, at the right time.