The big questions: Do under-25s need housing benefit and should unpaid work schemes be legal?

Answered this week by Dambisa Moyo

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Should middle-income countries such as India still be receiving overseas aid?

It depends on what type of aid. There is a clear moral imperative for countries to receive humanitarian or emergency aid in times of crisis. The evidence I present in Dead Aid suggests that short, sharp and finite flows can help increase growth and reduce poverty. In contrast, long-term, open-ended aid flows tend to be associated with corruption, conflict and discouraging government accountability. At a time of serious economic constraints in donor economies such as the UK, we should listen to policy-makers in countries such as India, whose finance minister said: "We do not require the aid." Trade and foreign direct investment remain the most efficient way to support emerging economies.

Britain in Europe: in or out?

Globalisation is here to stay, and Britain has a lot to lose if it isn't engaged with Europe. The challenge for Britain is to avoid making far-reaching political and economic decisions based on short-term factors, such as the current and ongoing challenges facing continental Europe. Instead she ought to focus on the longer-term dynamics. In fact, Britain has a great opportunity to provide the leadership that has been missing throughout the crisis and play a central role in deciding what Europe will look like in the coming decades.

Would you cut housing benefits for people under 25?

At a time when young people face higher unemployment than the average rate and the jobs outlook is bleak, cutting these benefits could have a very negative impact on living standards. Policy-makers need to strike the delicate balance between incentivising young people to seek employment through pay schemes, grants and bonuses, and disincentivising them from living relatively unproductive lives by overreliance on benefits.

Is the Bank of England chief right to predict five more years of economic pain?

Viewed through an economic lens, there are three key ingredients that drive economic growth: capital, labour and productivity. In terms of capital, governments and households in developed economies such as the UK are characterised by debts and deficits. Demographic forecasts point to shrinking labour pools and, according to the OECD, education standards in the UK are dramatically slipping. And finally, productivity declined in every single sector in the UK between 2000 and 2010. Hence the negative economic outlook.

Is there a place for unelected legislators in a modern democracy?

One advantage is that they can get past the myopia that pervades elected politics. The Simpson-Bowles proposal in the US is a good example: through the US National Commission on Fiscal Responsibility and Reform, unelected legislators were able to draft ways to shift US tax policy, unconstrained by politics. More generally, China shows that unelected officials can deliver on economic growth and move people out of poverty.

Should government unpaid work schemes be illegal?

There are 75 million unemployed people between the ages of 18 and 25 years around the world. Countries such as Spain and Greece have youth unemployment rates above 50 per cent. Meanwhile, companies report difficulties finding skilled workers. Given the mismatch between the supply of workers and demand for skilled labour, the training and work experience offered by unpaid work schemes can help to build the skills people need to compete in this economic environment.

How do we put an end to tax avoidance?

Governments need to strike a balance between over- and undertaxation. Of course, they need to raise tax revenue to fund such things as infrastructure, healthcare, national security and education, but overtaxation can discourage investment and this can ultimately undermine economic growth. In managing fiscal affairs it is not only efficient tax management that matters; public expenditure is also central to sustainable and well-managed government finances over the long term.

Dambisa Moyo is the author of 'Winner Take All: China's Race for Resources and What It Means for Us' (Allen Lane)

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