World Bank Research E-Newsletter [March 2009]
*********************************************************************** Research Highlights 2008 from the World Bank’s Development Research Group To improve access to financial services, better data collection is key How financial markets view debt relief for firms in recipient countries What is obstructing wind power expansion? Microfinance: Additional capital is not enough to lift women out of poverty New book: Distortions to Agricultural Incentives in Asia World Bank economic forecasts sharply revised New posts from our blogs
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Research Highlights 2008 from the World Bank’s Development Research Group
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Research Highlights 2008 reports on the research activity of the Development Research Group (DECRG), the World Bank’s principal research unit. DECRG's research program spans the gamut of development policy, including access to finance, human development and public services, sustainable development, macroeconomic stabilization, and trade reform. A note from the Director, Martin Ravallion, reflects on the food, fuel, and financial crises and the implications for the research program looking forward. The report highlights selected findings from work published in 2008, during which the department’s country-specific research spanned 45 developing countries, in addition to cross-country comparative work. In addition, a complete list of DECRG's publications in 2008, comprising books, journal articles, working papers, online datasets, and more, is available online. Limited copies of the print report are available; please send an email request to Hedy Sladovich at research@worldbank.org and put "Request for Research Highlights 2008" in the subect line.
http://econ.worldbank.org/research/highlights2008 ***********************************************************************
To improve access to financial services, better data collection is key
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The ongoing financial crisis has exacerbated the financing constraints of households and small and medium enterprises, further emphasizing the importance and challenges of making financial services accessible to an already underserved population. But too much access to finance in the absence of the right regulations can be counter-productive, as the ongoing crisis also illustrates. A prerequisite for well-informed policies is better data from the national to the household level on how poor people currently use financial services. In March 2009, a World Bank conference emphasized issues of measurement, promotion, and impact of access to financial services. Conference participants agreed that having high-quality, comparable data on access to financial services is important for three reasons: it helps identify priorities for policies; it allows researchers to monitor the effectiveness of policies over time; and it provides them a platform to better understand the impact of financial access on poverty reduction. Much of the discussion focused on a coordinated data collection strategy between the World Bank, the International Monetary Fund, the Consultative Group to Assist the Poor, and the Inter-American Development Bank to ensure comparability across surveys and countries. Papers presented discussed new ways of collecting this data and ways of furthering access.
Conference Summary
Papers and presentations ***********************************************************************
How financial markets view debt relief for firms in recipient countries
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The economic benefits of debt relief for recipient countries have been difficult to ascertain, partly because expected economic performance itself may drive the decision to grant relief. In a new study that helps resolve this question, Claudio Raddatz examines how the stock prices of South African multinationals with subsidiaries in recipient countries respond to the announcement of debt relief initiatives. The study shows that the stock prices of these companies exhibited a significant increase above those of other firms, especially around the launching of the recent Multilateral Debt Relief Initiative (MDRI). This indicates that financial markets view debt relief as beneficial for firms operating in recipient countries, which is consistent with an expected improvement in economic conditions and lower future taxation.
Policy Research Working Paper 4872 ***********************************************************************
What is obstructing wind power expansion?
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The technical potential of wind power significantly exceeds global energy demand, and installed capacity has grown by 40 percent annually over the past 25 years. Yet wind power accounts for only 1 percent of global electricity supply—with almost all that capacity in developed countries plus China and India. In a new paper, G. Cornelis van Kooten and Govinda Timilsina assert that further growth will require overcoming a number of technical, economic, and other barriers. Many countries have already promoted the use of sometimes costly wind power through various policy mandates and subsidies. Climate change mitigation commitments in rich countries and investments in developing countries through the Clean Development Mechanism (CDM) have also helped to scale up the use of wind power. However, taking wind power further would require sound domestic policies backed by strong political will, increased demand for low-carbon energy investments to mitigate climate CO2 emissions, and realistic targets for wind power use.
Policy Research Working Paper 4868
More information about the CDM ***********************************************************************
Microfinance for women: Additional capital may not be not enough
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A field experiment in which male and female microenterprise owners in Sri Lanka were given small grants resulted in large profit increases for men but not for women. This is in striking contrast to the emphasis placed by the microfinance industry on lending to women, assuming they are more credit constrained. If this was so, alleviating this constraint should lead to higher returns to women, whereas the results suggest zero return to this additional capital. By testing various explanations, Suresh de Mel, David McKenzie, and Christopher Woodruff find that this gender gap is not due to gender differences in entrepreneurial ability, risk aversion, or reporting behavior. Their results suggest part of the explanation lies in women concentrating in traditional industries with little scope for growth. Ongoing research is exploring the role of business training and better information about income opportunities in different industries in getting female enterprises to grow.
Policy Research Working Paper 4746 ***********************************************************************
New Book: Distortions to Agricultural Incentives in Asia
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Most of the world’s poorest depend on farming for their livelihoods and the majority of the farm-dependent poor live in Asia. A new book by Kym Anderson and William Martin—Distortions to Agricultural Incentives in Asia —is the third in a series that brings together analytical narratives of policy-imposed distortions to farmer incentives and food prices in 80 countries over the past half century. The first two regional studies (on Latin America and Europe’s transition economies) found that direct taxation of export-oriented agriculture, which was common 20 years ago, has almost been eliminated, while indirect taxation through protection in other sectors has declined sharply. The Asian regional study—based on the 12 largest developing economies—shows that, since the 1950s, the region has gradually shifted away from taxing farmers at higher rates than non-agricultural producers. In the most-advanced of these economies, protection in import-competing parts of agriculture has increased, raising the question of whether China and India might do the same in the decades ahead. The data also reveal that the strong tendency for countries to insulate domestic prices of key commodities such as rice from world price volatility has persisted, as seen in 2008 when food prices spiked upward.
Buy the book ***********************************************************************
World Bank economic forecasts sharply revised
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The World Bank has sharply marked down its November 2008 forecast of 4.4 percent GDP growth in the developing world in 2009 to 2.1 percent, noting that there may be a weak recovery in 2010. However, the pace and timing of recovery remain highly uncertain. Global GDP growth, after a robust eight-year stretch, is now set to contract by 1.7 percent this year, the World Bank predicts. This is a historic contraction, with world output set to decline for the first time since World War II. Even if global growth turns positive again in 2010, the level of GDP is expected to remain well below potential, and so economic distress will remain acute for the next two years.
Read story
Download Update(PDF) ***********************************************************************
FROM OUR BLOGS
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Climate Change (Development in a Changing Climate)
In a post on our new climate change blog, hosted by the authors of the upcoming World Development Report (WDR) 2010, Lord Nicholas Stern writes about the challenges of tackling climate change, poverty, and the global economic downturn simultaneously. Read this and other posts at: http://climatechangeblog.worldbank.org
Migration and Remittances (People Move)
The latest World Bank forecasts for remittance flows—a projected decline of 5 to 8 percent in 2009—are now up on the blog. Also, a call for papers for a World Bank International Conference on Diaspora and Development, July 13-14, 2009, Washington DC.
Read these and other posts at: http://peoplemove.worldbank.org
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New Policy Research Working Papers
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These papers, and all older papers, are also available using the Document Searchon the Bank's Development Economics Research website and on the Social Sciences Research Network.
4856. Market integration and structural transformation in a poor rural economy by Mans Soderbom and Bob Rijkers 4857. Transactional sex as a response to risk in western Kenya by Jonathan Robinson and Ethan Yeh 4858. Poverty decline, agricultural wages, and non-farm employment in rural India : 1983-2004 by Peter Lanjouw and Rinku Murgai 4859. Welfare impacts of rural electrification : a case study from Bangladesh by Shahidur R. Khandker, Douglas F. Barnes, and Hussain A. Samad 4860. Long-term financial incentives and investment in daughters : evidence from conditional cash transfers in north India by Nistha Sinha and Joanne Yoong 4861. The current account as a dynamic portfolio choice problem by Tatiana Didier and Alexandre Lowenkron 4862. Natural disasters and human capital accumulation by Jesus Crespo Cuaresma 4864. How do agricultural policy restrictions to global trade and welfare differ across commodities ?by Peter J. Lloyd, Johanna L. Croser, and Kym Anderson 4865. Global distortions to agricultural markets : new indicators of trade and welfare impacts, 1955 to 2007 by Peter J. Lloyd, Johanna L. Croser, and Kym Anderson 4866. Energy demand models for policy formulation : a comparative study of energy demand models by Subhes C. Bhattacharyya and Govinda R. Timilsina 4867. A review of regulatory instruments to control environmental externalities from the transport sector by Govinda R. Timilsina and Hari B. Dulal 4868. Wind power development : economics and policies by G. Cornelis van Kooten and Govinda R. Timilsina 4869. Firms' productive performance and the investment climate in developing economies : an application to MENA manufacturing by Tidiane Kinda, Patrick Plane, and Marie-Ange Veganzones-Varoudakis 4870. Professional services and development : a study of Mozambique by Ana Margarida Fernandes and Aaditya Mattoo 4871. Wage subsidy and labor market flexibility in south Africa by Delfin S. Go, Marna Kearney, Vijdan Korman, Sherman Robinson, and Karen Thierfelder 4872. Multilateral debt relief through the eyes of financial markets by Claudio Raddatz 4873. Small businesses in south Africa : who outsources tax compliance work and why ? by Jacqueline Coolidge, Domagoj Ilic, and Gregory Kisunko 4874. Natural disasters and the dynamics of intangible assets by Ramon Lopez 4875. Economic modeling of income, different types of capital and natural disasters by Anil Markandya and Suzette Pedroso-Galinato 4876. The performance of Bulgarian food markets during reform by Donald F. Larson and Alexander Sarris 4877. Health investments and economic growth : macroeconomic evidence and microeconomic foundations by William Jack and Maureen Lewis 4878. Local sources of financing for infrastructure in Africa : a cross-country analysis by Jacqueline Irving and Astrid Manroth 4879. The performance of decentralized school systems : evidence from Fe y Alegría in Venezuela by Hunt Allcott and Daniel E. Ortega 4880. Trends in household coverage of modern infrastructure services in Africa by Sudeshna Banerjee, Amadou Diallo, Vivien Foster, and Quentin Wodon 4881. Is low coverage of modern infrastructure services in African cities due to lack of demand or lack of supply ? by Quentin Wodon, Sudeshna Banerjee, Amadou Bassirou Diallo, and Vivien Foster 4882. Natural resources and reforms by Mohammad Amin and Simeon Djankov 4883. Fertility response to natural disasters : the case of three high mortality earthquakes by Jocelyn E. Finlay 4884. Economic and social impacts of self-help groups in India by Klaus Deininger and Yanyan Liu 4885. Determinants of repayment performance in Indian micro-credit groups by Klaus Deininger and Yanyan Liu 4886. Longer-term economic impacts of self-help groups in India by Klaus Deininger and Yanyan Liu 4887. Poverty effects of higher food prices : a global perspective by Rafael E. De Hoyos and Denis Medvedev 4888. Informality in Latin America and the Caribbean by Norman V. Loayza, Luis Serven, and Naotaka Sugawara 4889. Orphanhood and the living arrangements of children in sub-saharan Africa by Kathleen Beegle, Deon Filmer, Andrew Stokes, and Lucia Tiererova 4890. Enabling conditions for second pillars of pension systems by Heinz Rudolph and Roberto Rocha 4891. Career placement of skilled migrants in the U.S. labor market : a dynamic approach by Ileana Cristina Neagu 4892. Implications of WTO disciplines for special economic zones in developing countries by Stephen Creskoff and Peter Walkenhorst 4893. Stockpiles of obsolete pesticides and cleanup priorities : a methodology and application for Tunisia by Susmita Dasgupta, Craig Meisner, and David Wheeler 4894. Does tougher import competition foster product quality upgrading ? by Ana M. Fernandes and Caroline Paunov 4895. Zooming in : from aggregate volatility to income distribution by Cesar Calderon and Eduardo Levy Yeyati 4896. Does higher openness cause more real exchange rate volatility ? by Cesar Calderon and Megumi Kubota 4897. Emerging market fluctuations : what makes the difference ? by Constantino Hevia 4898. Including financial services in preferential trade agreements : lessons of international experience for China by Constantinos Stephanou |
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