World Bank Research E-Newsletter [August-September 2009]
***********************************************************************
• Poorer countries tend to have less capacity for redistribution
• World Bank Research Program: Abstracts of Current Studies 2008-2009
• Crisis likely to increase infant deaths (especially of girls) in Sub-Saharan Africa in 2009
• World Development Report (WDR) 2010: Development and Climate Change
• Carbon finance: Mix of positive and negative macroeconomic side effects likely in poor countries
• Countering the lock-in effect of road expansion on CO2 emissions
• Natural disasters: Always painful but sometimes an impulse for economic growth
• Why promoting school enrollment may not result in learning: Cambodia's experience
• Research Conference on International Migration and Development
• New issue of Research Digest leads with article on trade and the current crisis
• New book: Reforming China’s Rural Health System
• From the blogs *********************************************************************
Poorer countries tend to have less capacity for redistribution
*********************************************************************
Development aid and policy discussions often assume that poorer countries have less internal capacity for redistribution in favor of their poorest citizens. In a new paper, Martin Ravallion tests this assumption using data for 90 developing countries. He measures the capacity for redistribution by the marginal tax rate on those who are not poor by rich-country standards. The tax revenue is either sufficient to cover the poverty gap or to provide a poverty-level of basic income, judged by developing-country standards. For most (but not all) countries with annual consumption per capita under $2,000 (at 2005 purchasing power parity), the required tax burdens are found to be prohibitive—often calling for marginal tax rates of 100 percent or more. By contrast, the required tax rates are quite low (1 percent on average) among all countries with consumption per capita over $4,000, as well as some poorer countries. Most countries fall into one of two groups: those with little or no realistic prospect of addressing extreme poverty through redistribution from the "rich" and those that appear to have ample scope for such redistribution. Economic growth tends to move countries from the first group to the second. Ravallion concludes that the appropriate balance between growth and redistribution strategies can be seen to depend on the level of economic development.
Policy Research Working Paper 5046 ***********************************************************************************
World Bank Research Program: Abstracts of Current Studies 2008-2009
************************************************************************************
This new volume presents a brief overview of the World Bank's research program for 2010 and a compendium of all new and ongoing research projects undertaken by the institution over the past two years. A total of 248 research abstracts are grouped into thirteen broad categories. For each research project, the volume summarizes the questions being addressed, the analytical methods used, findings, and policy implications. Each abstract also identifies the research team and lists publications related to the project. Finally, the volume lists nearly two thousand research publications issued during this period, including articles in peer-reviewed journals, policy research working papers, books, and reports.
Download volume
****************************************************************************************************
Crisis likely to increase infant deaths (especially of girls) in Sub-Saharan Africa in 2009
*****************************************************************************************************
The human consequences of the current global financial crisis for the developing world are presumed to be severe, yet few studies have quantified such impact. Using Demographic and Health surveys from 30 countries as well as IMF growth shortfall projections, Jed Friedman and Norbert Schady estimate that 30,000 to 50,000 more infant deaths will occur in Sub-Saharan Africa this year. Most of these additional deaths are likely to be poorer children born to women in rural areas with lower education levels, and are overwhelmingly female. If the crisis continues to worsen the number of deaths may grow much larger, especially of girls. Policies that protect the income of poor households and that maintain critical health services during times of economic contraction should be considered. Interventions targeted at female infants and young girls may be particularly beneficial.
Policy Research Working Paper 5023 ****************************************************************************************************
World Development Report (WDR) 2010: Development and Climate Change
*****************************************************************************************************
Developing countries can shift to lower-carbon paths while promoting development and reducing poverty, but this depends on financial and technical assistance from high-income countries, says the latest WDR. Released in advance of the December meetings on climate change in Copenhagen, the report stresses that advanced countries must use their economic and technical capacities to promote a “climate smart” world. If they act now to reduce their own emissions and boost development of cost-competitive alternative energy sources, the cost of reaching a climate-smart world would be high but still manageable. A key step is to ramp up funding for mitigation in developing countries, where most future growth in emissions will occur and where expanded energy use for development is most urgent. Developing countries also need help to step up their own actions on the adaptation front, in order to cope with the impacts of future climate change on agriculture, water resources, coastal zones, health, and other key areas.
Download the report and related materials
Join the discussion on the report’s blog
**************************************************************************************************************
Carbon finance: Mix of positive and negative macroeconomic side effects likely in poor countries
***************************************************************************************************************
Some poor countries are likely to benefit from increased access to carbon finance, which is the revenue obtained from selling emissions offsets, energy-related foreign investments, and potential financial transfers in future mitigation agreements. In a new paper, Jon Strand finds that such financial inflows are likely to result in a mix of positive and negative macroeconomic consequences. On the positive side, it is possible that expanded fiscal space can facilitate better overall public revenue management, and lead to public infrastructure investments that yield higher growth. On the negative side, competitiveness in tradable goods sectors may erode due to unwanted exchange rate appreciation, inflation may grow due to excessive domestic public and private spending, and ascertaining that funds are being productively used may cause governance problems. Carbon finance revenues from offset markets and donor-sponsored programs are likely to be small in the short run, and the macroeconomic impacts manageable. However, as broader-ranging global emissions control mechanisms expand, the macroeconomic consequences may strain the capacity of many countries to adjust. Countries in Sub-Saharan Africa and South Asia might be especially vulnerable.
Policy Research Working Paper 5053
****************************************************************************
Countering the lock-in effect of road expansion on CO2 emissions ****************************************************************************
Ongoing urban sprawl in large cities can lead to development patterns that are unsustainable in the long run. Of particular concern are continued extensive road investments that promote automobile use over public transit systems. In a new paper, Alex Anas and Govinda Timilsina suggest that in the case of Beijing, investing in more peripheral roads would be likely to lock in traffic congestion and growing CO2 emissions. Their model also suggests that investments in public transportation from the city center to surrounding areas would reduce average travel times, lower overall CO2 emissions, accommodate more travelers, and reduce air pollution. Road expansion into peripheral areas would lead to higher suburbanization, more fuel consumption, and higher emissions. These findings hold for a wide range of assumptions, such as location choice with respect to travel time and other aspects of consumer preferences. The practical challenge is, however, in designing policies and incentives to promote increased use of mass transit and reduced sprawl, as well as meeting the necessary infrastructure investments for public transportation.
Policy Research Working Paper 5017
**********************************************************************************************
Natural disasters: Always painful but sometimes an impulse for economic growth
**********************************************************************************************
A new study by Thomas Fomby, Ikeda Yuki, and Norman Loayza describes the macroeconomic aftermath of natural disasters. It traces the yearly response of GDP growth—both aggregated and disaggregated into its agricultural and non-agricultural components—to four types of natural disasters: droughts, floods, earthquakes, and storms. The authors pool the experiences of developed and developing countries to investigate how economies adjust after each type of disaster. They find a wide range of effects along various dimensions. First, the effects of natural disasters are stronger, for better or worse, on developing than on rich countries. Second, while the impact of some moderately intense natural disasters can be beneficial, severe disasters never have positive effects. Third, not all natural disasters are alike in terms of the growth response they induce, and, perhaps surprisingly, some can entail benefits for economic growth. Thus, droughts are found to negatively affect both agricultural and non-agricultural growth, while floods tend to positively affect growth in both major sectors. Earthquakes have a negative effect on agricultural growth but a positive one on non-agricultural growth. Storms tend to have a negative effect on GDP growth but the effect is short-lived and small. The mechanisms behind these heterogeneous effects need to be studied further.
Policy Research Working Paper 5002
**************************************************************************************************
Why promoting school enrollment may not result in learning: Cambodia's experience
**************************************************************************************************
There is a strong association between schooling attained and test scores in many settings. If this association is causal, one might expect that programs like conditional cash transfers or scholarships that increase school enrollment and attainment would also improve test scores. However, if there is self-selection based on expected learning gains, marginal children brought into school by such programs may be drawn disproportionately from among lower-ability children—limiting the extent to which additional schooling translates into learning. A new study by Deon Filmer and Norbert Schady examines results from a program that provides scholarships to poor students. The program boosted school enrollment and attendance by about 25 percentage points, but there was no evidence 18 months after the scholarships were awarded that recipient children did any better on mathematics and vocabulary tests than they would have in the absence of the program. Complementary results suggest that the self-selection of lower-ability students into school in response to the program is an important part of the explanation. Overall education quality always stands to be improved, but these findings suggest that scholarship programs would be more effective if they were complemented with initiatives that improve the quality of education received by low-ability students in particular.
Policy Research Working Paper 4948
***************************************************************************
Research Conference on International Migration and Development
****************************************************************************
A two-day conference organized by the World Bank and the Agence Française de Développement (AFD) in September brought together leading academics and development practitioners to discuss the development-migration nexus. George Borjas of Harvard University presented a unified theoretical framework to analyze the wage effects of migration. L. Alan Winters, Chief Economist of the Department of International Development (UK) and the former Director of Research at the World Bank, addressed the impact of past and present economic crises on migration patterns and presented fascinating historical information to guide current policy dilemmas. Chris Parsons introduced the Global Bilateral Migration Database, 1960-2000, an output of the World Bank’s Development Research Group. Topics explored in the six sessions included migration and institutions, illegal migration, links between poverty and migration, human capital formation and migration, self-selection, migrant networks, and social externalities. The conference concluded with a panel discussion on how the policy environment changed during the crisis and on the relationship between migration policy and research.
Download conference papers *******************************************************************************************
New issue of Research Digest leads with article on trade and the current crisis
*******************************************************************************************
Trade is one of the more visible victims of the current global crisis. The lead article in the latest issue of the Research Digest discusses three new World Bank research papers exploring the sensitivity of trade to changes in income and access to finance. The first, by Caroline Freund, demonstrates that the responsiveness of trade to income has risen over time, and tends to be higher during global downturns. Another, by Leonardo Iacovone and Veronika Zavacka, finds that financial crises can exacerbate downturns in trade flows through adverse supply-side effects on exporters. Finally, Ingo Borchert and Aaditya Mattoo show that services trade has weathered the crisis much better than goods trade. The other Digest articles cover impact assessments in finance and private sector development; sovereign rents and the quality of tax policy and administration; globalization and international capital raisings; and the link between climate change and vulnerability to poverty.
Research Digest, Volume 3, Number 4 ************************************************************
New book: Reforming China’s Rural Health System
************************************************************
In this new book, Adam Wagstaff, Magnus Lindelow, Shiyong Wang, and Shuo Zhang trace the origins of the recent spate of health reforms in China to the unraveling of the health system and the subsequent deterioration in its performance to the market liberalization policies of the early 1980s where the entire economy — including the social sectors — was reorganized on market principles. The book examines and where possible assesses the impacts of recent reforms, and sets out some options for further reforms that would build on those already rolled out.
Order | Download **********************************
From the blogs
**********************************
Economix (New York Times)
“…Some argue that it is irresponsible for economists to continue making forecasts. But are these critics right? Should policy makers rely on forecasts using less than ideal data, or should they wait and see?...”
Martin Ravallion is Director, Development Research, World Bank.
Read Martin’s post From Poverty to Power (Oxfam)
“When can a country end poverty by redistributing wealth from its rich people, and when must it instead rely on aid or growth? That’s a question Martin Ravallion, head of the World Bank’s research department, seeks to answer in a new paper. Essentially he is trying to put precise numbers on the relatively obvious point that the richer a country becomes, the more potential it has to redistribute wealth.”
Duncan Green is Head of Research, Oxfam.
Read Duncan’s post Growth and Crisis (World Bank Group)
“… Milan Brahmbhatt and Luiz Pereira da Silva point to several structural differences between the global economy today and in the 1930s that tend to differentiate the current crisis from the Great Depression. The larger weight of faster-growing developing countries in the current world economy is among those differences, one that bodes well for recovery prospects…”
Otaviano Canuto is Vice President, Poverty Reduction and Economic Management, World Bank.
Read Otaviano’s post Crisis Talk (World Bank Group)
“After five months of severely depressed world trade, there is finally some good news…”
Caroline Freund is a lead economist with the World Bank's Development Research Group; Matias Horenstein a consultant with the same group.
Read Caroline’s and Matias’s post Development in a Changing Climate (World Bank Group)
“In April 2009, I blogged on a paper co-authored with David Wheeler (Center for Global Development) on the impact of sea-level rise and storm surges in developing countries. David has extended this work further to include the potential future impact of sea-level rise for more than 500 cities, given changes in population. The results are stunning, and show a huge potential impact concentration in a few hot-spot cities.”
Susmita Dasgupta is a Lead Economist with the World Bank's Development Research Group.
Read Susmita’s post “At the same time that we urgently need to decarbonize the global economy, we also need to plan for a very different and much more unstable climate. It’s adaptation time too…”
Neil Adger is Professor of Environmental Economics in the School of Environmental Sciences at the University of East Anglia, Norwich, and leads the research program on adaptation in the Tyndall Centre for Climate Change Research.
Read Neil’s post AfricaCan (World Bank Group)
“Most studies [on the effects of HIV/AIDS in Africa] focus on the consequences for orphaned children – their schooling and health. We know less about how older adults are impacted. In our study, we track individuals and their households in northwest Tanzania, an area of high HIV prevalence in the 1990s, over a 13-year period.”
Kathleen Beegle is a Senior Economist in the World Bank’s Development Research Group.
Read Kathleen’s post PeopleMove (World Bank Group)
“In identifying topics for future research, the main areas highlighted [at the conference] were the ones where ‘policy change is more likely to occur,’ such as temporary movement of workers, role of networks and analysis of the impact of brain drain.”
Caglar Ozden is a Senior Economist with the World Bank’s Development Research Group.
Read Caglar’s post Marginal Revolution
“Spot checks by the World Bank… indicate that on a typical day 11% of teachers are absent in Peru, 16% are absent in Bangladesh, 27% in Uganda and 25% in India…”
Alex Tabarrok blogs about teacher absence in the developing world and refers to work by Halsey Rogers, a senior economist with the World Bank’s Development Research Group.
Read Alex’s post
***********************************************************************
New Policy Research Working Papers
***********************************************************************
These papers, and all older papers, are also available using the Document Search on the Bank's Development Economics Research website and on the Social Sciences Research Network.
5012. Too Poor to Grow by Humberto Lopez and Luis Servén
5013. Subnational Credit Ratings: A Comparative Review by Lili Liu and Kim Song Tan
5014. Credit Constraints and Investment Behavior in Mexico’s Rural Economy by Inessa Love and Susana M. Sánchez
5015. The Trade Response to Global Downturns: Historical Evidence by Caroline Freund
5016. Banking Crises and Exports: Lessons from the Past by Leonardo Iacovone and Veronika Zavacka
5017. Lock-in Effects of Road Expansion on CO2 Emissions: Results from a Core-Periphery Model of Beijing by Alex Anas and Govinda R. Timilsina
5018. Who Migrates Overseas And Is It Worth Their While? An Assessment of Household Survey Data from Bangladesh by Manohar Sharma and Hassan Zaman
5019. Determinants of Globalization and Growth Prospects for Sub-Saharan African Countries by Hippolyte Fofack
5020. Finance in Africa – Achievements and Challenges by Thorsten Beck, Michael Fuchs, and Marilou Uy
5021. When Do Sudden Stops Really Hurt? by Mehmet Caner, Fritzi Koehler-Geib, and Gallina Andronova Vincelette
5022. Unpacking Youth Unemployment in Latin America by Wendy Cunningham
5023. How Many More Infants Are Likely to Die in Africa as a Result of the Global Financial Crisis? by Jed Friedman and Norbert Schady
5024. Potential Gains from Capital Flight Repatriation for Sub-Saharan African Countries by Hippolyte Fofack and Léonce Ndikumana
5025. Africa and Arab Gulf States: Divergent Development Paths and Prospects for Convergence by Hippolyte Fofack
5026. On Interfuel Substitution: Some International Evidence by Apostolos Serletis, Govinda Timilsina, and Olexandre Vasetsky
5027. Ex-Ante Methods to Assess the Impact of Social Insurance Policies on Labor Supply with an Application to Brazil by David A. Robalino and Helio Zylberstajn
5028. International Grain Reserves: And Other Instruments to Address Volatility in Grain Markets by Brian Wright
5029. Privatization and Nationalization Cycles by Roberto Chang, Constantino Hevia, and Norman Loayza
5030. China: Urban Services and Governance by Hana Brixi
5031. Changes in Cross-Border Trade Costs in the Pan-Arab Free Trade Area, 2001–2008 by Bernard Hoekman and Jamel Zarrouk
5032. Big Constraints to Small Firms’ Growth? Business Environment and Employment Growth across Firms by Reyes Aterido, Mary Hallward-Driemeier, and Carmen Pagés
5033. Measuring the Quality of Education and Health Services: The Use of Perception Data from Indonesia by Basab Dasgupta, Ambar Narayan, and Emmanuel Skoufias
5034. Reshaping the International Monetary Architecture: Lessons from Keynes’ Plan by Nadia F. Piffaretti
5035. The value of vocational education: High school type and labor market outcomes in Indonesia by David Newhouse and Daniel Suryadarma
5036. Revising the Roads Investment Strategy in Rural Areas: An Application for Uganda by Gaël aball, Patricia Macchi, Dino Merotto, and Carly Petracco
5037. The Long-Run Impacts of Adult Deaths on Older Household Members in Tanzania by Achyuta R. Adhvaryu and Kathleen Beegle
5038. Toward a Theory of Optimal Financial Structure by Justin Yifu Lin, Xifang Sun, and Ye Jiang
5039. The Wrath of God: Macroeconomic Costs of Natural Disasters by Claudio Raddatz
5040. Caste and Punishment: The Legacy of Caste Culture in Norm Enforcement by Karla Hoff, Mayuresh Kshetramade, and Ernst Fehr
5041. Agent Orange and the prevalence of cancer among the Vietnamese population 30 years after the end of the Vietnam War by Quy-Toan Do
5042. Causality between External Debt and Capital Flight in Sub-Saharan Africa by Hippolyte Fofack
5043. Technology Adoption and Factor Proportions in Open Economies: Theory and Evidence from the Global Computer Industry by Ana P. Cusolito and Daniel Lederman
5044. Global Inequality and the Global Inequality Extraction Ratio: The Story of the Past Two Centuries by Branko Milanovic
5045. Assessing the Adjustment Implications of Trade Policy Changes Using TRIST (Tariff Reform Impact Simulation Tool) by Paul Brenton, Christian Saborowski, Cornelia Staritz, and Erik von Uexkull
5046. Do Poorer Countries Have Less Capacity for Redistribution? by Martin Ravallion
5047. Criss-Crossing Globalization: Uphill Flows of Skill-Intensive Goods and Foreign Direct Investment by Aaditya Mattoo and Arvind Subramanian
5048. Measuring Household Usage of Financial Services: Does it Matter How or Whom You Ask? by
Robert Cull and Kinnon Scott
5049. The Euro-Mediterranean Partnership: Trade in Services as an Alternative to Migration? by Bernard Hoekman and Çağlar Özden
5050. Smoke in the Water: The Use of Tariff Policy Flexibility in Crises by Liliana Foletti, Marco Fugazza, Alessandro Nicita, and Marcelo Olarreaga
5051. The Global Resort to Antidumping, Safeguards, and other Trade Remedies Amidst the Economic Crisis by Chad P. Bown
5052. FDI protectionism is on the rise by Karl P. Sauvant
5053. “Revenue Management” Effects Related to Financial Flows Generated by Climate Policy by
Jon Strand
5054. Comparing Apples with….Apples: How to Make (More) Sense of Subjective Rankings of Constraints to Business by Mary Hallward-Driemeier and Reyes Aterido
5055. Endowment Structures, Industrial Dynamics, and Economic Growth by Jiandong Ju, Justin Yifu Lin, and Yong Wang
5056. The Long and the Short of Emerging Market Debt by Luis Opazo, Claudio Raddatz, and Sergio L. Schmukler
5057. Welfare Impacts of Rural Electrification: Evidence from Vietnam by Shahidur R. Khandker, Douglas F. Barnes, Hussain Samad, and Nguyen Huu Minh
5058. Climate change and individual behavior: Considerations for policy by Andrea Liverani
5059. Exchange Rates during the Crisis by Sebastian by Weber and Charles Wyplosz
5060. Crisis and Protection in the Automotive Industry: A Global Value Chain Perspective by Timothy J. Sturgeon and Johannes Van Biesebroeck
5061. Global inequality recalculated: The effect of new 2005 PPP estimates on global inequality by
Branko Milanovic
5062. The Complementarity of MDG Achievements: The Case of Child Mortality in Sub-Saharan Africa by Jann Lay and Anne-Sophie Robilliard
5063. Climate change and the economics of targeted mitigation in sectors with long-lived capital stock by Zmarak Shalizi and Franck Lecocq
5064. Aid for Trade Facilitation by Matthias Helble, Catherine Mann, and John S. Wilson
5065. Exchange Rate and Output Fluctuations in the Small Open Economy of Mauritius by
Fabiano Bastos, and Jose Angelo Divino
5066. Do Value-Added Estimates Add Value? Accounting for Learning Dynamics by Tahir Andrabi
Jishnu Das, Asim Ijaz Khwaja, and Tristan Zajonc
5067. Cyclical Effects of Bank Capital Requirements with Imperfect Credit Markets by Pierre-Richard Agénor, and Luiz A. Pereira da Silva
5068. An Analysis of Various Policy Instruments to Reduce Congestion, Fuel Consumption and CO2 Emissions in Beijing by Alex Anas, Govinda R. Timilsina, and Siqi Zheng
5069. The Pattern of Growth and Poverty Reduction in China by Jose G. Montalvo and Martin Ravallion
5070. Distributional Impact Analysis of Past Climate Variability in Rural Indonesia by Outi Korkeala, David Newhouse, and Mafalda Duarte
|
RSS