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The role of sectoral growth patterns in labor market development

This paper investigates the relationship between sectoral growth patterns and employment outcomes. A broad cross-country analysis reveals that in middle-income countries, employment responds more to growth in less productive and more labor-intensive sectors. Employment in middle-income countries is susceptible to a resource curse, and grows rapidly in response to manufacturing and export manufacturing growth. Within Brazil, Indonesia, and Mexico, the effects of different sectoral growth patterns are context dependent, but differences in sectoral growth effects on employment and wages are substantially reduced in states or provinces with higher measured labor mobility. Consistent with this, aggregate employment and wage effects of growth by sector are close to uniform when examined over longer time horizons, after labor has an opportunity to adjust across sectors. The results reinforce the importance of growth in more labor-intensive sectors, and suggest that job mobility may be an important mechanism to diffuse the benefits of capital-intensive growth.

Source: The role of sectoral growth patterns in labor market development

School quality, labor markets and human capital investments : long-term impacts of an early stage education intervention in the Philippines

This paper examines the long-term impacts of improved school quality at the elementary school stage on subsequent schooling investments and labor market outcomes using unique data from a recent survey that tracked students in the Philippines. The empirical results, which are based on a comparison of students who graduated from schools located in adjacent treatment and control areas before and after a school intervention, show significant differences in subsequent schooling investments, migration, and labor market earnings between females and males. That is, females study more (relative to males) and tend to migrate and earn more if they receive high-quality educational investments at an early stage. The above results are consistent with females' greater incentives to study, driven by their higher returns to schooling, especially after high school completion, observed in the labor market.

Source: School quality, labor markets and human capital investments : long-term impacts of an early stage education intervention in the Philippines

Small vs. young firms across the world : contribution to employment, job creation, and growth

This paper investigates the contribution of small firms to employment, job creation, and growth in developing countries. While small firms (< 20 employees) have the smallest share of aggregate employment, the SME sector's (

Source: Small vs. young firms across the world : contribution to employment, job creation, and growth

Visualizing Uncertainties, or how Albert Hirschman and the World Bank disagreed on project appraisal and development approaches

Since its birth in 1944, the World Bank has had a strong focus on development projects. Yet, it did not have a project evaluation unit until the early 1970s. An early attempt to conceptualize project appraisal had been made in the 1960s by Albert Hirschman, whose undertaking raised high expectations at the Bank.  Hirschman's conclusions -- published first in internal Bank reports and then, as a book in 1967 -- disappointed many at the Bank, primarily because they found it impractical. Hirschman wanted to offer the Bank a new vision by transforming the Bank's approach to project design, project management and project appraisal. What the Bank expected from Hirschman, HOWEVER, was not a revolution but an examination of the Bank's projects and advice on how to make project design and management more measurable, controllable, and suitable for replication. The history of this failed collaboration provides useful insights on the unstable equilibrium between operations and evaluation within the Bank. In addition, it shows that the Bank actively participated in the development economics debates of the 1960s. This should be of interest for development economists today who reflect on the future of their discipline emphasizing the need for a non-dogmatic approach to development. It should also be of interest for the Bank itself, which is stressing the importance of evaluation for effective development policies. The history of the practice of development economics, using archival material, can bring new perspectives and help better understand the evolution of this discipline.

Source: Visualizing Uncertainties, or how Albert Hirschman and the World Bank disagreed on project appraisal and development approaches

What does debt relief do for development ? evidence from India's bailout program for highly-indebted rural households

This paper studies the impact of a large debt relief program, intended to attenuate investment constraints among highly-indebted households in rural India. It isolates the causal effect of bankruptcy-like debt relief settlements using a natural experiment arising from India's Debt Relief Program for Small and Marginal Farmers -- one of the largest debt relief initiatives in history. The analysis shows that debt relief has a persistent effect on the level of household debt, but does not increase investment and productivity as predicted by theories of debt overhang. Instead, the anticipation of future credit constraints leads to a greater reliance on informal financing, lower investment and a decline in productivity among bailout recipients. The results suggest that one-time settlements may be insufficient to incentivize new investment, but can have significant real effects through their impact on borrower expectations.

Source: What does debt relief do for development ? evidence from India's bailout program for highly-indebted rural households

Foreign firm characteristics, absorptive capacity and the institutional framework : the role of mediating factors for FDI spillovers in low- and middle-income countries

Using a cross-section of more than 25,000 domestic manufacturing firms in 78 low and middle-income countries from the World Bank's Enterprise Surveys, this paper assesses how mediating factors influence intra-industry productivity spillovers to domestic firms from foreign direct investment. It identifies three types of mediating factors: (i) foreign direct investment spillover potential, (ii) domestic firm absorptive capacity, and (iii) the host country's institutional framework. It finds that all three affect the extent and direction of foreign direct investment spillovers on domestic firm productivity. However, the impact of mediating factors depends significantly on the level of domestic firms' productivity and the structure of foreign ownership.

Source: Foreign firm characteristics, absorptive capacity and the institutional framework : the role of mediating factors for FDI spillovers in low- and middle-income countries

The surprising effects of the great recession : losers and winners in Thailand in 2008-2009

In 2009, buffeted by the great recession, Thai gross domestic product fell by 2.3 percent. Using monthly data from the socio-economic surveys of 2007-2010, this paper finds, after controlling for household variables, that real consumption per capita rose in 2009 relative to 2008 for most groups, including the poor, urban and rural households, men, women, and children. The losers were residents of Bangkok, especially those aged 20-29, and those working in sales and services. During the recession year of 2009, school enrollment rates did not fall, and durable goods purchases actually rose; households probably reduced their savings, and also benefitted from the lower food prices that prevailed in 2009. A simulation exercise based on the slowdown in growth of gross domestic product would have missed these effects, as would models based solely on readily-available data series. This points to the importance of country-specific policy analysis, rooted in timely local evidence, including household survey data.

Source: The surprising effects of the great recession : losers and winners in Thailand in 2008-2009

The great recession and the future of cities

This paper describes the serious fiscal crisis faced by cities around the world following the Great Recession of 2008. Five years later, the after-effects of this major crisis continue to be felt and limit economic opportunities in cities. Section 1 summarizes how the crisis was triggered and how it unfolded in the US, then spread to the rest of world -- highlighting the links between financial sector and housing sector. Section 2 discusses the impact of the crisis on urban revenue and expenditure, and the stimulus programs and recovery plans devised as a short term response by cities around the world.  Section 3 then discusses longer term strategies to ensure the financial, social and environmental sustainability of cities. The authors make the point -- and back up our assertions with specific examples -- that urban decision-makers must take a long view and find ways to create opportunities for their citizens, making sure that their decisions are financially sustainable in the long term. Today's decisions should not lock cities out of options tomorrow, and cities must be managed with flexibility so as to adapt to unforeseen new circumstances. The authors also argue that, while there has been a lot of talk about "smart cities" and new technologies among urban specialists and urban planners, it is ultimately the focus on basic economics (sustainable financing, providing good services to consumers and  incentives for providers), good governance and good institutions that will create sustainable, dynamic and livable cities.

Source: The great recession and the future of cities

Gross inflows gone wild : gross capital inflows, credit booms and crises

The main goal of the paper is to examine whether surges in private capital inflows lead to credit booms. The authors built a quarterly database on gross capital inflows, credit to the private sector, and other macro-financial indicators for a sample of 71 countries from 1975q1 to 2010q4. Identifying credit booms is not trivial: they use different criteria implemented in the literature. The estimates suggest that: (i) Surges in gross private capital inflows are overall good predictors of credit booms. (ii) The likelihood of credit booms is higher if the surges in foreign flows are driven by private other investment inflows and, to a lesser extent, portfolio investment inflows. (iii) Surges in gross inflows are also good predictors of credit booms that end up in a financial crisis -- "bad" credit booms. This finding holds even after controlling for the appreciation of the local currency and the build-up of leverage. (iv) Bad credit booms are more likely to occur when surges are driven by other investment inflows. At best, foreign direct investment inflow-driven surges help mitigate the incidence of this type of credit boom. (v) The predictive ability of gross other investment inflows is primarily driven by bank inflows. (vi) Consistent with the literature, the analysis finds that the build-up of leverage and the real overvaluation of the currency help predict credit booms that are followed by a systemic crisis. Controlling for these factors, capital flows are still a significant predictor of credit booms.

Source: Gross inflows gone wild : gross capital inflows, credit booms and crises

Is India's manufacturing sector moving away from cities ?

This paper investigates the urbanization of the Indian manufacturing sector by combining enterprise data from formal and informal sectors. It finds that plants in the formal sector are moving away from urban and into rural locations, while the informal sector is moving from rural to urban locations. Although the secular trend for India's manufacturing urbanization has slowed down, the localized importance of education and infrastructure has not. The results suggest that districts with better education and infrastructure have experienced a faster pace of urbanization, although higher urban-rural cost ratios cause movement out of urban areas. This process is associated with improvements in the spatial allocation of plants across urban and rural locations. Spatial location of plants has implications for policy on investments in education, infrastructure, and the livability of cities. The high share of urbanization occurring in the informal sector suggests that urbanization policies that contain inclusionary approaches may be more successful in promoting local development and managing its strains than those focused only on the formal sector. Cities are evolving in India from places of goods production to forges of human capital and coping mechanisms for survival.

Source: Is India's manufacturing sector moving away from cities ?

Infrastructure policy : basic design options

The paper lays out basic design options for infrastructure policy. It first sketches mechanisms to asses demand. Then it sets out a hierarchy of issues starting with choice of market structure followed by conduct regulation. Ownership options are largely a function of market structure choices. The implications for finance -- the topic of much day-to-day discussion in infrastructure policy-making -- follow from these various prior choices. The discussion naturally circumscribes the role for so-called public-private partnerships -- their uses and pitfalls. Annexes provide checklists for choices of market structure and for diagnosing and benchmarking policies.

Source: Infrastructure policy : basic design options

The World Bank and governance : the Bank's efforts to help developing countries build state capacity

This paper examines historically the World Bank's twin features: lending to developing economies to achieve tangible results and advocating specific development policies. Section 1 provides some conceptual underpinnings for the view that an effective state is essential for development. It asks whether development can be engineered, and state capacity increased, with large aid flows. Section 2 sketches the historical evolution of what characterizes the World Bank: lending to developing economies and advocacy of development policy. It concludes that, while the Bank discourse explicitly recognizes that developing countries need to improve their governance and build the capacity of the public sector to improve living standards, the Bank's performance in assisting governments in building state capacity and achieving better governance outcomes has been disappointing. Section 3 proposes an interpretation of why this has been the case. The interpretation is structural, and related to the way the Bank is organized. This concerns in particular (1) how its research is prioritized and used for decision-making, (2) how its leadership achieves a consensus between shareholders who hold different views on the role of government in the economy, and (3) how incentives for its staff emphasize disbursement and short-term success, and not capacity building and longer-term institutional sustainability.

Source: The World Bank and governance : the Bank's efforts to help developing countries build state capacity

Sexual behavior change intentions and actions in the context of a randomized trial of a conditional cash transfer for HIV prevention in Tanzania

Information, education, communication and interventions based on behavioral-change communication have had success in increasing the awareness of HIV. But these strategies alone have been less successful in changing risky sexual behavior. This paper addresses this issue by exploring the link between action and the intention to change behaviors. In Africa, uncertainty in the lives of those at risk for HIV may affect how intentions are formed. Characterize this uncertainty by understanding the reasons for discrepancies between intentions and actions may help improve the design of HIV-prevention interventions. Based on an incentives-based HIV prevention trial in Tanzania, the longitudinal dataset in this paper allows the exploration of intended strategies for changing sexual behaviors and their results. The authors find that gender, intervention groups and new positive diagnoses of sexually transmitted infections can significantly predict the link between intent and action. The paper examines potential mediators of these relationships.

Source: Sexual behavior change intentions and actions in the context of a randomized trial of a conditional cash transfer for HIV prevention in Tanzania

The law's majestic equality ? the distributive impact of litigating social and economic rights

Optimism about the use of laws, constitutions, and rights to achieve social change has never been higher among practitioners. But the academic literature is skeptical that courts can direct resources toward the poor. This paper develops a nuanced account in which not all courts are the same. Countries and policy areas characterized by judicial decisions with broader applicability tend to avoid the potential anti-poor bias of courts, whereas areas dominated by individual litigation and individualized effects are less likely to have pro-poor outcomes. Using data on social and economic rights cases in five countries, the authors estimate the potential distributive impact of litigation by examining whether the poor are over or under-represented among the beneficiaries of litigation, relative to their share of the population. They find that the impact of courts varies considerably across the cases, but is positive and pro-poor in two of the five countries (India and South Africa), distribution-neutral in two others (Indonesia and Brazil), and sharply anti-poor in Nigeria. Overall, the results of litigation are much more positive for the poor than conventional wisdom would suggest.

Source: The law's majestic equality ? the distributive impact of litigating social and economic rights

Gender inequality in the labor market in Serbia

This paper presents a broad overview of labor market indicators for men and women in Serbia with a focus on employment patterns, entrepreneurship and career advancement as well as earnings differentials. The analysis relies primarily on the results of the Labor Force Surveys conducted in Serbia in April 2008 and October 2009. The findings show that although the overall labor market situation in Serbia is difficult, women are in a much more disadvantageous position than men. Women are much less likely to be employed, start a business or advance in the political arena. Furthermore, there is a significant wage gap between men and women in a number of sectors and occupational groups with low educated women being particularly disadvantaged. The results of the Oaxaca-Blinder decomposition demonstrate that the wage gap is indicative of discrimination of women in the labor market as earnings differentials cannot be explained by differences in observed characteristics of male and female employees. Based on the obtained results, the paper outlines four broad areas that require the attention of policy-makers: employment generation; enhancement of education outcomes; improvement of the regulatory environment and support to women's business and political careers; and promotion of transparent performance setting mechanisms.

Source: Gender inequality in the labor market in Serbia

When do donors trust recipient country systems ?

The 2005 Paris Declaration on Aid Effectiveness sets targets for increased use by donors of recipient country systems for managing aid. The target is premised on a view that country systems are strengthened when donors trust recipients to manage aid funds, but undermined when donors manage aid through their own separate parallel systems. This study provides an analytical framework for understanding donors' decisions to trust or bypass country systems. Empirical tests are conducted using data from three OECD-DAC surveys designed to monitor progress toward Paris Declaration goals. Tests show that a donor's use of the recipient country's systems is positively related to: (1) the donor's share of aid provided to the recipient (a proxy for the donor's reputational stake in the country's development); (2) perceptions of corruption in the recipient country (a proxy for the trustworthiness or quality of the country's systems); and (3) public support for aid in the donor country (a proxy for the donor's risk tolerance). Findings are robust to corrections for potential sample selection, omitted variables or endogeneity bias.

Source: When do donors trust recipient country systems ?

Aid quality and donor rankings



Source: Aid quality and donor rankings

Equality of opportunities and fiscal incidence in Cote d'Ivoire

This study analyzes opportunities for children in Cote d'Ivoire, where opportunities refer to access to basic services and goods that improve the likelihood of a child maximizing his or her human potential. The principle that guides this analysis is one of equality of opportunity, which is that a child's circumstances at birth should not determine his or her access to opportunities. The analysis computes the Human Opportunity Index, which measures the extent to which access to basic services is universal and evenly distributed among children of different circumstances. Opportunities are limited in Cote d'Ivoire, despite some improvements in access to electricity and timely access to primary education. Otherwise, trends on access remain stagnant. Scale effects (variations across the board) are behind these trends, with little improvement observed from equalizing interventions. Circumstances such as region and household head characteristics affect a child's access to opportunities, while household incomes and a child's gender and ethnicity play a relatively small role in access differentials. Public spending on education opportunities is shown to be regressive and pro-rich, especially when analyzed across the distribution of circumstances rather than acroos income level.The groups of children that are particularly behind in terms of educational opportunities are those whose household heads lack primary education and reside in rural areas. Closing the enrollment gap of these children should be a priority for targeted educational interventions. However, improving opportunities may require more than a single type of intervention: opportunities with low coverage may need to be scaled up, while those with large inequalities of access may require equalizing interventions.

Source: Equality of opportunities and fiscal incidence in Cote d'Ivoire

The contribution of African women to economic growth and development : historical perspectives and policy implications -- Part I : the pre-colonial and colonial periods

Bringing together history and economics, this paper presents a historical and processual understanding of women's economic marginalization in Sub-Saharan Africa from the pre-colonial period to the end of colonial rule. It is not that women have not been economically active or productive; it is rather that they have often not been able to claim the proceeds of their labor or have it formally accounted for. The paper focuses on the pre-colonial and colonial periods and outlines three major arguments. First, it discusses the historical processes through which the labor of women was increasingly appropriated even in kinship structures in pre-colonial Africa, utilizing the concepts of "rights in persons" and "wealth in people." Reviewing the processes of production and reproduction, it explains why most slaves in pre-colonial Africa were women and discusses how slavery and slave trade intensified the exploitation of women. Second, it analyzes how the cultivation of cash crops and European missionary constructions of the individual, marriage, and family from the early decades of the 19th century sequestered female labor and made it invisible in the realm of domestic production. Third, it discusses how colonial policies from the late 19th century reinforced the "capture" of female labor and the codification of patriarchy through the nature and operation of the colonial economy and the instrumentality of customary law. The sequel to this paper focuses on the post-colonial period. It examines the continuing relevance and impact of the historical processes this paper discusses on post-colonial economies, and suggests some policy implications.

Source: The contribution of African women to economic growth and development : historical perspectives and policy implications -- Part I : the pre-colonial and colonial periods

Recent labor market performance in Vietnam through a gender lens

This paper provides an overview of the recent performance of the labor market in Vietnam during the Great Recession. The analysis uses data from the Labor Force Survey and the Vietnam Household Living Standard Survey. The author finds that, notwithstanding the global crisis and domestic volatility, job creation has been sustained in Vietnam, especially in the formal sector, but that the overall quality of employment has suffered. Gender differentials are found to affect older women especially, while educated women benefit from a skills wage premium. Reassuringly given the large youth share of the total workforce, the youth labor market is dynamic and outcomes for youths have improved. Meanwhile, participation in poverty alleviation programs and labor market programs has not changed, and few workers use the newly created employment services and unemployment benefits.

Source: Recent labor market performance in Vietnam through a gender lens

Gender and rural non-farm entrepreneurship

Despite their increasing prominence in policy debates, little is known about gender inequities in non-agricultural labor market outcomes in rural areas. Using matched household-enterprise-community data sets from Bangladesh, Ethiopia, Indonesia and Sri Lanka, this paper documents and analyzes gender differences in the individual portfolio choice and productivity of non-farm entrepreneurship. Except for Ethiopia, women are less likely than men to become nonfarm entrepreneurs. Women's nonfarm entrepreneurship isn't strongly correlated with household composition or educational attainment, but is especially prevalent amongst women who are the head of their household. Female-led firms are much smaller and less productive on average, though gender differences in productivity vary dramatically across countries. Mean differences in log output per worker suggest that male firms are roughly 10 times as productive as female firms in Bangladesh, three times as those in Ethiopia and twice as those in Sri Lanka. By contrast, no significant differences in labor productivity were detected in Indonesia. Differences in output per worker are overwhelmingly accounted for by sorting by sector and size. They can't be explained by differences in capital intensity, human capital or the local investment climate, nor by increasing returns to scale.

Source: Gender and rural non-farm entrepreneurship

Is the baby to blame ? an inquiry into the consequences of early childbearing

Teenage pregnancy has been a cause of concern for policy makers because it is associated with a complex and often adverse social context for women. It is seen as the cause of lower social and economic achievement for mothers and their children, and as the potential determinant of inter-generational poverty traps. However, the question of whether pregnancy -- and the subsequent rearing of a child -- is actually the trigger of poverty, higher dependence on social welfare and/ or other undesirable social and economic consequences has not been studied in developing countries with enough rigor to establish a causal relation. This paper follows a methodology previously applied in the United States, using Mexican data from the National Survey of Demographic Dynamics, to exploit information about miscarriages as an instrument to identify the long-term consequences of early child bearing. Thus, the paper takes the advantage of a natural experiment: it compares the outcomes of women who became pregnant in adolescence, and gave birth, to outcomes of women who became pregnant in adolescence and miscarried. This approach only allows for estimating the costs of adolescent childbearing for teenagers in a risk group, that is, teenagers who are likely to experience a pregnancy. The results are consistent with findings in the United States, suggesting that, contrary to popular thinking, adolescent childbearing does not hamper significantly the lifelong opportunities of the young mothers.  Actually, women who gave birth during their adolescence have on average 0.34 more years of education, and are 21 percentage points more likely to be employed, compared with their counterparts who miscarried. The results also suggest, however, greater dependence on social welfare among women who gave birth during adolescence: their social assistance income is 36 percent higher, and they are more likely to participate in social programs, especially the conditional cash transfer program Oportunidades.

Source: Is the baby to blame ? an inquiry into the consequences of early childbearing

Who is deprived ? who feels deprived ? labor deprivation, youth and gender in Morocco

One of the recurrent explanations of the Arab spring is that governments were disconnected from their populations and that public policies were simply not in line with people's sentiments and expectations.  This paper provides a methodology to better understand how objective conditions of deprivation are translated into subjective feelings of deprivation using a strand of the recent literature on relative deprivation. The authors apply this methodology to better understand the question of gender and youth deprivation in the context of the Moroccan labor market. They find that the reference group (the people with whom people compare themselves) plays a pivotal role in understanding how feelings of labor deprivation are generated. This can explain the apparent mismatch between objective conditions and subjective feelings of deprivation related to joblessness among young men and women. The methodology can help us understand why greater discontent may be exhibited by a group of individuals who are in fact less deprived in a material sense. It can also potentially help governments design public policies that address objective conditions of deprivation, such as unemployment, with a better understanding of subjective implications.

Source: Who is deprived ? who feels deprived ? labor deprivation, youth and gender in Morocco

Women's access to labor market opportunities, control of household resources, and domestic violence

While there are many positive societal implications of increased female labor force opportunities, some theoretical models and empirical evidence suggest that working can increase a woman's risk of suffering domestic violence. Using a dataset collected in peri-urban Dhaka, this analysis documents a positive correlation between work and domestic violence. This correlation is only present among women with less education or who were younger at first marriage. These results are consistent with a theoretical model in which a woman with low bargaining power can face increased risk of domestic violence upon entering the labor force as a husband seeks to counteract her increased bargaining power. By contrast, husbands of women who have higher baseline bargaining power cannot resort to domestic violence since their wives have the ability to leave violent marriages. These findings are inconsistent with the models of assortative matching in the marriage market, expressive violence, work in response to economic shocks, or underreporting of domestic violence. The results on age at marriage are also inconsistent with the implications of a reverse causality model in which women enter the labor force to escape violent situations at home, although the results on education are consistent with that story.

Source: Women's access to labor market opportunities, control of household resources, and domestic violence

Accounting for gender production from a growth accounting framework in Sub-Saharan Africa

This paper draws on an expanded growth accounting framework to estimate the relative contribution of women to growth in Sub-Saharan Africa. Empirical results show a consistently positive contribution of women to growth in gross domestic product in the region, both during economic downturns and growth spurts. This is despite the absence of any valuation of home-produced goods and informal sector production, which accounts for the bulk of womens production, in national product and income accounts. Women's positive contribution is largely attributed to their increased rates of labor force participation in wage employment and the reduction in the gender gap in education in recent years.

Source: Accounting for gender production from a growth accounting framework in Sub-Saharan Africa

Internal migration in Egypt : levels, determinants, wages, and likelihood of employment

This paper describes stylized facts about internal migration and the labor force in Egypt, and shows how internal migration in the country is low compared with international standards. Using aggregate labor force survey data, the paper shows how individuals migrate to governorates with higher wages. With a Mincerian equation, the analysis finds that migrants earn premiums with respect to non-migrants, except for those migrants with low education levels. The aggregate labor statistics reveal lower unemployment rates among migrants, a phenomenon that is verified by an employment equation. According to the econometric results, migrants are more likely to be employed, even after controlling for other observable individual characteristics.  Finally, the paper estimates a Probit model for the decision to migrate, finding that more educated individuals are more likely to migrate, agricultural workers have a lower probability of migrating, and individuals from governorates in which food production for own consumption is higher are less likely to migrate. These results suggest that low educational attainment and the "food problem", which ties resources to food production to meet subsistence requirements, are at the root of low migration in Egypt.

Source: Internal migration in Egypt : levels, determinants, wages, and likelihood of employment

Equity in tertiary education in Central America : an overview

This paper analyzes the evolution in socio-economic and ethnic disparities in tertiary education attainment, participation, and completion and labor market outcomes in the six countries of Central America. There is evidence of differential progress, with Costa Rica, a middle-income country, and Nicaragua, a low-income country, having improved participation of low-income students in tertiary education, while this continues to be negligible in Guatemala, El Salvador, and Honduras. Wide differentials in salaries linked to socio-economic background can signal differences in the quality of tertiary education or prior educational experiences. The analysis distinguishes between long-term and short-term constraints and the key transitions in the education cycle that impede access to tertiary education. The main obstacle to accessing tertiary education for poor students is the failure to either start or complete secondary education, suggesting different priorities for different countries in addressing long-term constraints. However, problems also arise within tertiary education, as in all countries the average tertiary education completion rate is below 50 percent, with even lower rates for students from low-income families and indigenous backgrounds. The paper uses an OECD framework for public policies for promoting equity in tertiary education to assess policies in Central American countries and concludes that many of them currently lack the policies, instruments, and institutional mechanisms to promote greater equity in tertiary education. The paper highlights how valuable insights can be obtained from analysis of household survey data in the absence of comprehensive data on tertiary education which is typical of many developing countries.

Source: Equity in tertiary education in Central America : an overview

Migration and the transition to adulthood in contemporary Malawi

In many African countries, the timing of important life events -- such as school-leaving, first marriage, and entry into the labor market -- is thought to be strongly tied to migration. This paper investigates the relationship between major life events, household characteristics, and migration among adolescents and young adults in contemporary Malawi. The specific research questions are twofold. First, what are the socio-economic and demographic determinants of migration? Second, how do school attendance, first marriage, and employment-seeking relate to migration patterns? The study uses panel data collected from a survey designed specifically to explore socioeconomic and demographic aspects of youth transitions to adulthood and which tracked respondents as they moved to new dwellings. Among the sample, they find that moves are not uncommon, and the predominant reasons for moves are non-economic. Although historically ethnic traditions in this area have held that girls and women usually did not move upon marrying, the data show that women were more likely to move between survey rounds than boys and men, and that marriage was the main reason for doing so. Closer ties to the head of the household are associated with less movement for both women and men.

Source: Migration and the transition to adulthood in contemporary Malawi

Making up people -- the effect of identity on preferences and performance in a modernizing society

It is typically assumed that being hard-working or clever is a trait of the person, in the sense that it is always there, in a fixed manner. However, in an experiment with almost 600 boys in India, cues to one's place in the traditional caste order turn out to influence the expression of these traits. The experiment assigned students to different treatments with respect to the salience of caste and had them solve mazes under incentives. It turned out that making caste salient can reduce output by about 25 percent, which is equivalent to twice the effect on output of being one year younger. The channels through which this occurs differ by caste status. For the upper castes, the decline in performance under piece rates can only be explained by a shift in preferences regarding the provision of effort. When the ascriptive caste order is cued, upper-caste individuals may think, "I don't need to excel." In contrast, for the lower castes, which were traditionally "untouchables," publicly revealing caste identity impairs the ability to learn and may lead individuals to think, "I can't (or don't dare to) excel." This paper provides a measure of the impact that ascriptive, hierarchized identities can have on preferences and performance after a society -- in its public pronouncements and legislation -- has adopted norms of equality in a formal sense. The findings are important because they suggest that when contexts cue identities founded on the superseded rules of a hierarchical institution, the effects on human capital formation and development can be first-order. Contexts that make traditional identities salient are an underemphasized source of impediments to institutional change.

Source: Making up people -- the effect of identity on preferences and performance in a modernizing society

What explains big gender disparities in India ? local industrial structures and female entrepreneurship

Despite rapid economic growth, gender disparities in women's economic participation have remained deep and persistent in India. What explains these huge gender disparities? Is it poor infrastructure, limited education, and gender composition of the labor force and industries? Or is it deficiencies in social and business networks and a low share of incumbent female entrepreneurs?This paper analyzes the spatial determinants of female entrepreneurship in India in the manufacturing and services sectors. Good infrastructure and education predict higher female entry shares. There are strong agglomeration economies in both manufacturing and services, where higher female ownership among incumbent businesses within a district-industry predicts a greater share of subsequent entrepreneurs will be female. Moreover, higher female ownership of local businesses in related industries (similar labor needs, input-output markets) predicts greater relative female entry rates. Gender networks thus clearly matter for women's economic participation. However, there is a need to develop a better understanding of how gender networks influence aggregate efficiency. There is no doubt that gender empowerment can be the escalator to realizing human potential and for creating a robust platform for growth and job creation.

Source: What explains big gender disparities in India ? local industrial structures and female entrepreneurship

Empowering women : evidence from a field experiment in Afghanistan

In societies with widespread gender discrimination, development programs that encourage female participation in local governance can potentially redress gender imbalances in economic, political, and social outcomes. Using a randomized field experiment encompassing 500 Afghan villages, this study finds that a development program which incorporates mandated female participation increases female mobility and involvement in income generation, but does not change female roles in family decision-making or attitudes toward the general role of women in society.

Source: Empowering women : evidence from a field experiment in Afghanistan

The impact of wealth on the amount and quality of child labor

This paper analyzes to what extent, and under what conditions, an increase in household wealth affects the use of child labor in poor households. It develops a simple theoretical model, which uses child labor, training, and schooling to maximize household income over time, subject to resource constraints. Then, it conducts an empirical analysis using randomized trial data, which were collected for the evaluation of the 2006 Nicaragua conditional cash transfer program. This social program transfers wealth to poor families in rural areas, conditional on children's school attendance and health check-ups. In addition, for one third of the beneficiaries, there is a further wealth transfer to start a non-agricultural business. The paper finds that the conditional cash transfer program affected the volume and quality of child labor, reducing it in the aggregate and steering it towards skill-forming activities. Specifically, the program appears to have reduced the use of child labor for household chores and farm work, while increasing it for the non-traditional, skill-forming activities related to commerce and retail. Moreover, the paper finds that the source behind the increase in skill-forming child labor is not the basic component, which provides a transfer for paying for schooling and health services, but it's the business-grant component, which provides a household grant for the creation of a micro business or a new economic activity.

Source: The impact of wealth on the amount and quality of child labor

Child labor, schooling, and child ability

Using data collected in rural Burkina Faso, this paper examines how children's cognitive abilities influence households' decisions to invest in their education. To address the endogeneity of child ability measures, the analysis uses rainfall shocks experienced in utero or early childhood to instrument for ability. Negative shocks in utero lead to 0.24 standard deviations lower ability z-scores, corresponding with a 38 percent enrollment drop and a 49 percent increase in child labor hours compared with their siblings. Negative education impacts are largest for in utero shocks, diminished for shocks before age two, and have no impact for shocks after age two. The paper links the fetal origins hypothesis and sibling rivalry literatures by showing that shocks experienced in utero not only have direct negative impacts on the child's cognitive ability (fetal origins hypothesis), but also negatively impact the child through the effects on sibling rivalry resulting from the cognitive differences.

Source: Child labor, schooling, and child ability

Governance and public service delivery in Europe and Central Asia : unofficial payments, utilization and satisfaction

Using data from the 2010 Life in Transition Survey, this paper examines the levels of citizens' satisfaction with public service delivery in Europe and Central Asia and identifies some factors that may help explain variation in utilization and levels of satisfaction with service delivery. It finds satisfaction with public service delivery in Europe and Central Asia to be relatively high, and, despite the adverse economic and social impact of the recent global economic crisis, to have risen since 2006 in most countries in the region. However, the level of satisfaction with public service delivery in Eastern European and Central Asian countries in 2010 remains lower than in Western European comparator countries. Although the Life in Transition Survey does not provide specific objective measures of service delivery quality and efficiency, the data provide three important clues that may help explain why satisfaction is lower in transition countries than in western comparators: (i) relatively higher utilization of public services in Eastern European and Central Asian countries, (ii) relatively higher reported prevalence of unofficial payments, and (iii) relatively underdeveloped mechanisms for grievance redress.

Source: Governance and public service delivery in Europe and Central Asia : unofficial payments, utilization and satisfaction

Autonomy with equity and accountability : toward a more transparent, objective, predictable and simpler (TOPS) system of central financing of provincial-local expenditures in Indonesia

During the past decade, Indonesia has transformed itself from centralized governance to decentralized local governance. Local governments were given extensive expenditure responsibilities while keeping the tax system centralized. To finance decentralized provincial-local expenditures, Indonesia implemented a new system of intergovernmental finance. This paper provides a review of the equity and efficiency implications of the current system of central-provincial-local transfers. It finds that the system of intergovernmental finance represents one of the most complex systems ever implemented by any government in the world. The system is primarily focused on a gap-filling approach to provincial-local finance to ensure revenue adequacy and local autonomy but without accountability to local residents for service delivery performance. This is done through a great degree of academic rigor using highly complex procedures.  The complexity leads to a lack of transparency, inequity and uncertainty in allocation as well as creating incentives for jurisdictional fragmentation and reducing own-tax effort. Simpler alternatives are available that have the potential to address equity objectives while also enhancing efficiency and citizen-based accountability. Such alternatives would represent a move away from complex gap filling and special allocation approaches to simple, output based transfers to finance operating expenditures. These would be complemented by capital grants to deal with infrastructure deficiencies, and fiscal capacity equalization as a residual program with an explicit standard to ensure that all local jurisdictions have adequate means to deliver reasonably comparable levels of public services at reasonably comparable levels of tax burdens across the country. The paper argues that such an alternative system of intergoveernmental finance would preserve autonomy, while enhancing equity, simplicity, objectivity, transparency and accountability.

Source: Autonomy with equity and accountability : toward a more transparent, objective, predictable and simpler (TOPS) system of central financing of provincial-local expenditures in Indonesia

Do middle classes bring institutional reforms ?

The paper examines the link between poverty, the middle class and institutional outcomes using a new cross-country panel dataset on the distribution of income and expenditure. It uses an econometric methodology to gauge whether a larger middle class has a causal effect on policy and institutional outcomes in three areas: social policy in health and education, market-oriented economic structure and quality of governance. The analysis find that when the middle class becomes larger (measured as the proportion of people earning more than US$10 a day), social policy on health and education becomes more progressive, and the quality of governance (democratic participation and official corruption) also improves. This trend does not occur at the expense of economic freedom, as a larger middle class also leads to more market-oriented economic policy on trade and finance. These beneficial effects of a larger middle class appear to be more robust than the impact of lower poverty, lower inequality or higher gross domestic product per capita. That may be linked to the evolution of the middle class: they are more enlightened, more likely to take political actions and have a stronger voice. They also share preferences and values for policy and institutional reforms, as well as higher stakes in property rights and wealth accumulation.

Source: Do middle classes bring institutional reforms ?

Why quality matters : rebuilding trustworthy local government in post-conflict Sierra Leone

A broad consensus has emerged among practitioners and researchers that failure to build accountable and legitimate institutions is a critical risk factor associated with vicious circles of repeated violence. Despite this consensus, very few studies have tested the extent to which local government performance and decentralized service provision shape citizens' beliefs toward political authorities. This paper contributes to fill this gap by examining the antecedents of trustworthy local government authorities in a post-conflict and fragile setting, Sierra Leone. Taking advantage of a unique longitudinal survey, the National Public Services, it examines the impact of sub-national variation in local government performance on citizens' beliefs about the trustworthiness of local government authorities. To test the hypothesis, it uses multilevel models to exploit variation over time and within and across sub-national units in Sierra Leone. The results suggest that improvements in the quality of decentralized service delivery, as well as perceptions of local councillors' honesty, are positively associated with perceptions of local government officials as trustworthy political authorities. These findings speak to the possibility that local service provision can play a role in shaping the relationships between citizens and the state and in overcoming the root causes of fragility and conflict.

Source: Why quality matters : rebuilding trustworthy local government in post-conflict Sierra Leone

Participatory accountability and collective action : evidence from field experiments in Albanian schools

There is general agreement that the existence of participatory institutions is a necessary condition for accountability, especially where top-down institutions are malfunctioning or missing. In education, the evidence on the effectiveness of participatory accountability is mixed. This paper argues that participation is a social dilemma and therefore depends, at least partly, on individuals' propensity to cooperate with others for the common good. This being the case, the mixed evidence could be owing to society-level heterogeneities in individuals' willingness and ability to overcome collective action problems.  The authors investigate whether individuals' propensity to cooperate plays a role in parents' decisions to participate in both a school accountability system -- a "short route" to accountability -- and parliamentary elections -- a "long route" to accountability -- by combining survey data on 1,800 individuals' participation decisions with measures of their willingness to contribute to a public good in the context of a very simple, clearly defined laboratory experiment. They conduct a study in a new democracy, Albania, involving parents of children enrolled in primary schools. The findings confirm that, both across individuals within communities and across communities, the decision to hold teachers and school directors accountable directly through participation at the school level, and indirectly through political participation correlates with cooperativeness in a simple public goods game.

Source: Participatory accountability and collective action : evidence from field experiments in Albanian schools

General purpose central-provincial-local transfers (DAU) in Indonesia : from gap filling to ensuring fair access to essential public services for all

Indonesia has come a long way from centralized governance to decentralized local governance, and today Indonesia ranks among the most decentralized developing countries. The Government of Indonesia is revisiting all aspects of local governance to make appropriate legal and institutional adjustments based on lessons leaarned during the past decade. An important area of this re-examination and possible reform is the central financing of subnational expenditures. The system of intergovernmental finance represents one of the most complex systems ever implemented by any government in the world. The system is primarily focused on a gap-filling approach to provincial-local finance in an objective manner to ensure revenue adequacy and local autonomy but without accountability to local residents for service delivery performance. This paper takes a closer look at Dana Alokasi Umum -- the most dominant program of unconditional central transfers to finance provincial-local government expenditures in Indonesia. The paper also presents illustrative simulations of alternative programs and compares these with the existing Dana Alokasi Umum allocations. The paper concludes that super complexity leads to lack of transparency, inequity, and uncertainty in allocation. Simpler alternatives are available that have the potential to address autonomy and equity objectives while also enhancing efficiency and citizen-based accountability. Such alternatives would represent a move away from the complex gap-filling approach to simple output-based transfers to finance operating expenditures. Capital grants would deal with infrastructure deficiencies. And the alternatives would institute fiscal capacity equalization as a residual program with an explicit standard to ensure that all local jurisdictions have adequate means to deliver reasonably comparable levels of public services at reasonably comparable levels of tax burdens across the country.

Source: General purpose central-provincial-local transfers (DAU) in Indonesia : from gap filling to ensuring fair access to essential public services for all

Patterns and correlates of intergenerational non-time transfers : evidence from CHARLS

Using the China Health and Retirement Longitudinal Study 2008 pilot, this paper analyzes the patterns and correlates of intergenerational transfers between elderly parents and adult children in Zhejiang and Gansu Provinces. The pilot is a unique data source from China that provides information on the direction as well as amount of transfers between parents and each of their children, and clearly distinguishes transfers between parents and children from those among other relatives or friends. The paper shows that transfers flow predominantly from children to elderly parents, with transfers from children playing an important role in elderly support. Taking advantage of the rich information available in this survey, the authors find strong evidence that transfers are significantly affected by the financial capabilities of individual children. Educated and married children have a higher tendency to provide transfers to their parents; and oldest sons are less likely to provide transfers than their younger brothers. With future continued rapid economic growth in China, the income disadvantage of the elderly will persist and upward generational transfers will likely remain the most common form of private transfers. In the absence of some other source of elderly support (such as a public pension or own savings), the dwindling number of children implies that the financial burden associated with supporting the elderly is likely to increase.

Source: Patterns and correlates of intergenerational non-time transfers : evidence from CHARLS

Direct democracy and resource allocation : experimental evidence from Afghanistan

Direct democracy is designed to better align public resource allocation decisions with citizen preferences. Using a randomized field experiment in 250 villages across Afghanistan, this paper compares outcomes of secret-ballot referenda with those of consultation meetings, which adhere to customary decision-making practices. Elites are found to exert influence over meeting outcomes, but not over referenda outcomes, which are driven primarily by citizen preferences. Referenda are also found to improve public satisfaction, whereas elite domination of allocation processes has a negative effect. The results indicate that the use of direct democracy in public resource allocation results in more legitimate outcomes than those produced by customary processes.

Source: Direct democracy and resource allocation : experimental evidence from Afghanistan

Matching reforms to institutional realities : a framework for assessing social service delivery reform strategies in developing countries

The paper is based on the premise that effective institutional reforms for service delivery require a carefully-considered institutional "fitting" process as opposed to transplantation of "international best practices." The paper asks how the specific institutional contexts of a given country limit options for service delivery reforms, and therefore how a feasible set of reform options may vary systematically across countries.

Source: Matching reforms to institutional realities : a framework for assessing social service delivery reform strategies in developing countries

How close is your government to its people ? worldwide indicators on localization and decentralization

This paper is intended to provide an assessment of the impact of the silent revolution of the last three decades on moving governments closer to people to establish fair, accountable, incorruptible and responsive governance. To accomplish this, a unique data set is constructed for 182 countries by compiling data from a wide variety of sources to examine success toward decentralized decision making across the globe. An important feature of this data set is that, for comparative purposes, it measures government decision making at the local level rather than at the sub-national levels used in the existing literature.  The data are used to rank countries on political, fiscal and administrative dimensions of decentralization and localization. These sub-indexes are aggregated and adjusted for heterogeneity to develop an overall ranking of countries on the closeness of their government to the people. The resulting rankings provide a useful explanation of the Arab Spring and other recent political movements and waves of dissatisfaction with governance around the world.

Source: How close is your government to its people ? worldwide indicators on localization and decentralization

Are natural resources cursed ? an investigation of the dynamic effects of resource dependence on institutional quality

This paper examines whether natural resource dependence has a negative influence on various indicators of institutional quality when controlling for the potential effects of other geographic, economic and cultural initial conditions. Analysis of a panel of countries from 1996 to 2010 indicates that a high degree of resource dependence, measured as the share of mineral fuel exports in a country's total exports, is associated with worse government effectiveness, as well as with reduced levels of competition across the economy. Furthermore, estimation of long-run elasticities suggests that government effectiveness and the intensity of domestic competition decrease over time as the dependence on natural resources increases. An illustration of the Russian case shows that the negative effects accumulate in the long run, leading to a worse deterioration of government effectiveness in Russia than in Canada, a country with a comparable resource endowment but far better overall institutional quality. This result is corroborated by a significant negative correlation found between regional resource dependence and an indicator of regulatory capture in Russian regions, which indicates that the regulatory environment is more likely to be subverted in regions that are more dependent on extractive industries. Overall, the findings would be consistent with a situation in which a generally weak institutional environment would allow resource interests to wield the bidding power accruing from export revenues to subvert the content of laws and regulations, as well as their enforcement. The fact that this is associated with negative externalities for the rest of the economy, notably by undermining a level playing field across non-resource sectors, sheds light on a potential channel for the resource curse.

Source: Are natural resources cursed ? an investigation of the dynamic effects of resource dependence on institutional quality

Working with the grain for reforming the public service : a live example from Sierra Leone



Source: Working with the grain for reforming the public service : a live example from Sierra Leone

Can donors and non-state actors undermine citizens' legitimating beliefs ?

This paper addresses the conditions under which donor and non-state actor service provision is likely to undermine or strengthen citizens' legitimating beliefs. On the one hand, citizens may be less likely to support their government with quasi-voluntary compliance when they credit non-state actors or donors for service provision. On the other hand, the provision of goods and services by donors and non-state actors might strengthen citizens' confidence in their government and their willingness to defer to governmental laws and regulations if citizens believe that the government is essential to leveraging and managing these resources. The author assesses these competing hypotheses using multi-level analyses of Afrobarometer survey data. The sample, drawn from a continuum of developing societies in Africa, allows for analysis of associations between donor and non-state actor service provision and the sense of obligation to comply with the tax authorities, the police and courts. The findings yield support for the hypothesis that the provision of services by donors and non-state actors is strengthening, rather than undermining, the relationship between citizens and the state.

Source: Can donors and non-state actors undermine citizens' legitimating beliefs ?

Making public sector reforms work : political and economic contexts, incentives, and strategies

Supporting effective public sector reform is a major challenge that the World Bank and other agencies and stakeholders have been grappling with. It is increasingly recognized that political economy factors play a crucial role. However, beyond this broad proposition, specific questions arise: What country contexts are more/less propitious for public sector reforms and what reforms are likely to succeed where? And can more explicitly taking political economy challenges into account help to pursue public sector reforms even in less propitious contexts? This paper addresses these issues in two ways: first, it draws on the existing literature to identify key propositions about factors that can trigger or facilitate public sector reforms, and those that tend to work against (successful) reforms. Second, it investigates the experience of World Bank public sector operations over the decade 2000-2010. It finds that governments in many developing countries face incentives to initiate public sector reforms, but that at the implementation stage, political costs frequently outweigh potential gains; and hence reforms are abandoned or left to wither. Real breakthroughs have been achieved in countries experiencing major structural shifts and those having political leadership committed to higher-level goals. The review of operations shows that successful projects are significantly more widespread than the literature would lead to assume. Furthermore, it provides tentative evidence that investing in understanding political economy drivers has been associated with better project performance. Key implications are the need to differentiate between country contexts more clearly ex ante, concentrate more on reform implementation during windows of opportunity that are typically of limited duration, and design reforms with a clear plan of engagement with stakeholder incentives.

Source: Making public sector reforms work : political and economic contexts, incentives, and strategies

Collecting high frequency panel data in Africa using mobile phone interviews

As mobile phone ownership rates have risen in Africa, there is increased interest in using mobile telephony as a data collection platform. This paper draws on two pilot projects that use mobile phone interviews for data collection in Tanzania and South Sudan. The experience was largely a success. High frequency panel data have been collected on a wide range of topics in a manner that is cost effective, flexible (questions can be changed over time) and rapid. And once households respond to the mobile phone interviews, they tend not to drop out: even after 33 rounds of interviews in the Tanzania survey, respondent fatigue proved not to be an issue. Attrition and non-response have been an issue in the Tanzania survey, but in ways that are related to the way this survey was originally set up and that are fixable. Data and reports from the Tanzania survey are available online and can be downloaded from: www.listeningtodar.org.

Source: Collecting high frequency panel data in Africa using mobile phone interviews

Conditional cash transfers, political participation, and voting behavior

This paper estimates the effect of enrollment in a large scale anti-poverty program in Colombia, Familias en Accion, on intent to vote, turnout and electoral choice. For identification the analysis uses discontinuities in program eligibility and variation in program enrollment across voting booths. It finds that Familias en Accion had a positive effect on political participation in the 2010 presidential elections by increasing the probability that program beneficiaries registered to vote and cast a ballot, particularly among women. Regarding voter's choice, the authors find that program participants expressed a stronger preference for the official party that implemented and expanded the program. Overall, the findings show that voters respond to targeted transfers and that these transfers can foster support for incumbents, thus making the case for designing political and legislative mechanisms, as the laws recently passed by the Colombian government, that avoid successful anti-poverty schemes from being captured by political patronage.

Source: Conditional cash transfers, political participation, and voting behavior

The World Bank and governance : the Bank's efforts to help developing countries build state capacity

This paper examines historically the World Bank's twin features: lending to developing economies to achieve tangible results and advocating specific development policies. Section 1 provides some conceptual underpinnings for the view that an effective state is essential for development. It asks whether development can be engineered, and state capacity increased, with large aid flows. Section 2 sketches the historical evolution of what characterizes the World Bank: lending to developing economies and advocacy of development policy. It concludes that, while the Bank discourse explicitly recognizes that developing countries need to improve their governance and build the capacity of the public sector to improve living standards, the Bank's performance in assisting governments in building state capacity and achieving better governance outcomes has been disappointing. Section 3 proposes an interpretation of why this has been the case. The interpretation is structural, and related to the way the Bank is organized. This concerns in particular (1) how its research is prioritized and used for decision-making, (2) how its leadership achieves a consensus between shareholders who hold different views on the role of government in the economy, and (3) how incentives for its staff emphasize disbursement and short-term success, and not capacity building and longer-term institutional sustainability.

Source: The World Bank and governance : the Bank's efforts to help developing countries build state capacity

How does India's rural roads program affect the grassroots ? findings from a survey in Orissa

This paper analyzes the effects of all-weather rural roads on households' net output prices, education and health in a poor, drought-prone region of India. Of 30 villages originally surveyed in 2001-02, when two had such roads, a further nine received them between January 2007 and December 2009 under the program Pradhan Mantri Gram Sadak Yojana. Cross-section comparisons involving all villages and 'before and after' comparisons in the nine yielded these findings: (i) net output prices were 5 per cent or more higher; (ii) substantially fewer days of schooling were lost due to bad weather, largely because teachers had fewer absences; (iii) the acutely sick received more timely treatment and were more likely to be treated in a hospital than in the nearest primary health clinic; and (iv) the respondents ranked the resulting benefits in the domains of health and education at least as highly as the 'commercial' ones.

Source: How does India's rural roads program affect the grassroots ? findings from a survey in Orissa

Estimating the social profitability of India's rural roads program : a bumpy ride

India's rural roads program, Pradhan Mantri Gram Sadak Yojana, aims to draw villagers into the mainstream by improving not only their terms of trade, but also their educational attainments and health. Treating each all-weather feeder road as an isolated element within the larger network, and using shadow prices to value the main components of costs and benefits, the paper demonstrates that further investments in the program are, with high probability, socially profitable, especially in poorer and more densely settled regions. Taking the entire set of new individual roads together, qualitative arguments suggest that their external and spill-over effects on the system as a whole probably generate some net additional benefits, but of very uncertain magnitude.

Source: Estimating the social profitability of India's rural roads program : a bumpy ride

The benefits of India's rural roads program in the spheres of goods, education and health : joint estimation and decomposition

All-weather rural roads usually improve not only villagers' terms of trade, but also their educational attainments and health. Obtaining empirical estimates of the benefits generated by the first is straightforward, not so those generated by the others. The object of this paper is to estimate the relative sizes of their respective contributions to total benefits in connection with the all-India rural roads program Pradhan Mantri Gram Sadak Yojana, using an overlapping generations model featuring the production and consumption of goods and the formation of human capital in the presence of both morbidity and mortality. Based on survey evidence from upland Orissa in India and Bangladesh, as well as elements of more usual forms of calibration, the model yields a ratio of commercial to non-commercial benefits of about two-to-one in the first generation, falling to three-to-four in the second. This is broadly consistent with the valuations expressed by respondents in the Orissa survey, who ranked the latter benefits at least on a par with the former.

Source: The benefits of India's rural roads program in the spheres of goods, education and health : joint estimation and decomposition

Protection in good and bad times ? the Turkish green card health program

This paper evaluates the equity and financial protection implications of the expansion of the Green Card (Yesil Kart) non-contributory health insurance program in Turkey during the growth years from 2003 to 2008. It also considers the program's protective impact during the economic crisis in 2009. The authors find that the rapid expansion of the program between 2003 and 2008 was highly progressive. It led to significant gains in coverage of the poor but offered limited financial protection as out-of-pocket expenditures even before the introduction of the program had been limited. Using a specialized welfare monitoring survey, fielded in 2009, the authors estimate the impact of the program on household level health care utilization during the first phase of the economic slowdown in Turkey. Using three different estimation techniques, they find that the Green Card program had a significantly positive impact on protecting health care utilization during the crisis.

Source: Protection in good and bad times ? the Turkish green card health program

Household enterprises in Sub-Saharan Africa : why they matter for growth, jobs, and livelihoods

Despite 40 percent of households relying on household enterprises (non-farm enterprises operated by a single individual or with the help of family members) as an income source, household enterprises are usually ignored in low-income Sub-Saharan-African development strategies. Yet analysis of eight countries shows that although the fast growing economies generated new private non-farm wage jobs at high rates, household enterprises generated most new jobs outside agriculture. Owing to the small size of the non-farm wage job sector, this trend is expected to continue for the foreseeable future. This analysis of enterprises and their owners shows that although it is a heterogeneous sector within countries, there are many similarities across countries, indicating that cross-country learning is possible. For labor force participants who want to use their skills and energy to create a non-farm income source for themselves and their families, household enterprises offer a good opportunity even if they remain small. The paper finds that given household human capital and location, household enterprise earnings have the same marginal effect on consumption as private wage and salary employment. The authors argue that household enterprises should be seen as part of an integrated job and development strategy.

Source: Household enterprises in Sub-Saharan Africa : why they matter for growth, jobs, and livelihoods

MTEFs and fiscal performance: panel data evidence

In the last two decades more than 120 countries have adopted a version of a Medium-Term Expenditure Framework (MTEF). These are budget institutions whose rationale it is to enable the central government to make credible multi-year fiscal commitments. This paper analyzes a newly-collected dataset of worldwide MTEF adoptions during 1990-2008. It exploits within-country variation in MTEF adoption in a dynamic panel framework to estimate their impacts. The analysis finds that MTEFs strongly improve fiscal discipline, with more advanced MTEF phases having a larger impact. Higher-phase MTEFs also improve allocative efficiency. Only top-phase MTEFs have a significantly positive effect on technical efficiency.

Source: MTEFs and fiscal performance: panel data evidence

The persistence of (subnational) fortune : geography, agglomeration, and institutions in the new world

Using subnational historical data, this paper establishes the within country persistence of economic activity in the New World over the last half millennium. The paper constructs a data set incorporating measures of pre-colonial population density, new measures of present regional per capita income and population, and a comprehensive set of locational fundamentals. These fundamentals are shown to have explanatory power: native populations throughout the hemisphere were found in more livable and productive places. It is then shown that high pre-colonial density areas tend to be dense today: population agglomerations persist. The data and historical evidence suggest this is due partly to locational fundamentals, but also to classic agglomeration effects: colonialists established settlements near existing native populations for reasons of labor, trade, knowledge and defense. Further, high density (historically prosperous) areas also tend to have higher incomes today, and largely due to agglomeration effects: fortune persists for the United States and most of Latin America. Finally extractive institutions,  in this case, slavery, reduce persistence even if they do not overwhelm other forces in its favor.

Source: The persistence of (subnational) fortune : geography, agglomeration, and institutions in the new world

Effectiveness of interventions aimed at improving women's employability and quality of work : a critical review

This paper examines the effectiveness of a variety of policy interventions that have been tried in developing and transition economies with the goal of improving women's employability and quality of work. The programs include active labor market programs, education and training programs, programs that facilitate work (such as childcare subsidies, parental leave programs and land titling programs), microfinance programs, entrepreneurship and leadership programs, and conditional cash transfer programs. Some of these policy interventions were undertaken to increase employment, some to increase female employment, and some for other reasons. All of these programs have been subjected to impact evaluations of different kinds and some also to rigorous cost-benefit analyses. Many were found to be effective in increasing women's quantity of work as measured by increased rates of labor market participation and number of hours worked. In some cases, the programs also increased women's quality of work, for example, by increasing the capacity for women to work in the formal rather than the informal sector where wages are higher and where women are more likely to have access to health, retirement, and other benefits.

Source: Effectiveness of interventions aimed at improving women's employability and quality of work : a critical review

Migration and the transition to adulthood in contemporary Malawi

In many African countries, the timing of important life events -- such as school-leaving, first marriage, and entry into the labor market -- is thought to be strongly tied to migration. This paper investigates the relationship between major life events, household characteristics, and migration among adolescents and young adults in contemporary Malawi. The specific research questions are twofold. First, what are the socio-economic and demographic determinants of migration? Second, how do school attendance, first marriage, and employment-seeking relate to migration patterns? The study uses panel data collected from a survey designed specifically to explore socioeconomic and demographic aspects of youth transitions to adulthood and which tracked respondents as they moved to new dwellings. Among the sample, they find that moves are not uncommon, and the predominant reasons for moves are non-economic. Although historically ethnic traditions in this area have held that girls and women usually did not move upon marrying, the data show that women were more likely to move between survey rounds than boys and men, and that marriage was the main reason for doing so. Closer ties to the head of the household are associated with less movement for both women and men.

Source: Migration and the transition to adulthood in contemporary Malawi

Evidence-based implementation efficiency analysis of the HIV/AIDS national response in Colombia

This study on the implementation efficiency of the HIV/AIDS national response in Colombia seeks to examine how it has been implemented -- whether it has been done according to the available evidence about the epidemic and as the response was originally planned. The study approaches three specific dimensions of implementation efficiency: (i) programmatic; (ii) budgetary; and (iii) service delivery. The study uses a range of research techniques, including: (i) documentary analysis of key policies, official publications and reports; (ii) semi-structured interviews with representatives of the central government and territorial entities, international and community-based organizations, insurers, care providers, etc.; and (iii) case-study analysis to visualize the ways in which people are cared for in practice. The available data suggest that the HIV/AIDS response is succeeding in keeping the prevalence low and the epidemic concentrated. In recent years, the level of health coverage has increased and the quality of care services has improved. The identified problems in service delivery (mostly related to coverage and access) are linked to system fragmentation and integration, and to the nature of the coordination mechanisms, both at the national and the territorial level. The effectiveness of the response would benefit from re-energized leadership at both the national and local levels -- articulated through the existing programmatic framework and coordinating mechanisms. The complexity of the system and the lack of budgetary and expenditure information have impeded the evaluation of the budgetary efficiency of the HIV/AIDS response.

Source: Evidence-based implementation efficiency analysis of the HIV/AIDS national response in Colombia

Handwashing behavior change at scale : evidence from a randomized evaluation in Vietnam

Handwashing with soap, which has been shown to reduce diarrhea in young children by as much as 48 percent, is frequently mentioned as one of the most effective and inexpensive ways to save children's lives. Yet rates of handwashing remain very low throughout the world. Handwashing with soap campaigns are de rigueur in developing countries, but little is known about their effectiveness. Few have been rigorously evaluated, and none on a large-scale. This paper evaluates a large-scale handwashing campaign in three provinces of Vietnam in 2010. Exposure to the campaign resulted in a slight increase in the availability of handwashing materials in the household, and caregivers in the treatment group were more likely to report washing hands at some of the times emphasized by the campaign. However, observed handwashing with soap at these times is low, and there isn't any difference between the treatment and control groups. As a result, no impact on health or productivity is found. These results suggest that even under seemingly optimal conditions, where knowledge and access to soap and water are not main constraints, behavior change campaigns that take place on a large scale face tradeoffs in terms of intensity and effectiveness.

Source: Handwashing behavior change at scale : evidence from a randomized evaluation in Vietnam

Demand-side financing for sexual and reproductive health services in low and middle-income countries : a review of the evidence

Demand-side financing approaches have been introduced in a number of low and middle-income countries, with a particular emphasis on sexual and reproductive health. This paper aims to bring together the global evidence on demand-side financing mechanisms, their impact on the delivery of sexual and reproductive health services, and the conditions under which they have been effective. The paper begins with a discussion of modalities for demand-side financing. It then examines 13 existing schemes, including cash incentives, vouchers, and longer term social protection policies. Based on the available literature, it collates evidence of their impact on utilization of services, access for the poor, financial protection, quality of care, and health outcomes. Evidence on costs and cost-effectiveness are examined, along with analysis of funding and sustainability of policies. Finally, the paper discusses the preconditions for effectiveness of demand-side financing schemes and the strengths and weaknesses of different approaches. It also highlights the extent to which results for sexual and reproductive health services are likely to be generalizable to other types of health care. It is clear that some of these policies can produce impressive results, if the preconditions for effectiveness outlined are met. However, relatively few demand-side financing schemes have benefited from robust evaluation. Investigation of the impact on financial protection, equity, and health outcomes has been limited. Most importantly, cost effectiveness and the relative cost effectiveness of demand-side financing in relation to other strategies for achieving similar goals have not been assessed.

Source: Demand-side financing for sexual and reproductive health services in low and middle-income countries : a review of the evidence

Weather and child health in rural Nigeria

The effect of weather shocks on children's anthropometrics is investigated using the two most recent rounds of the Nigeria Demographic and Health Survey. For this purpose, climate data for each survey cluster are interpolated using daily weather-station records from the national network. The findings reveal that rainfall shocks have a statistically significant and robust impact on child health in the short run for both weight-for-height and height-for-age, and the incidence of diarrhea. The impacts of weather shocks on health are of considerable magnitude; however, children seem to catch up with their cohort rapidly after experiencing a shock. The paper does not find any evidence of nonlinear impacts of weather variability on children's health, suggesting that a moderate increase in future rainfall variability is not likely to bring additional health costs. Finally, it appears that the impact of these shocks is the same for young boys and girls, which suggests that there is no gender-based discrimination in the allocation of resources within households.

Source: Weather and child health in rural Nigeria

Conditional cash transfers, political participation, and voting behavior

This paper estimates the effect of enrollment in a large scale anti-poverty program in Colombia, Familias en Accion, on intent to vote, turnout and electoral choice. For identification the analysis uses discontinuities in program eligibility and variation in program enrollment across voting booths. It finds that Familias en Accion had a positive effect on political participation in the 2010 presidential elections by increasing the probability that program beneficiaries registered to vote and cast a ballot, particularly among women. Regarding voter's choice, the authors find that program participants expressed a stronger preference for the official party that implemented and expanded the program. Overall, the findings show that voters respond to targeted transfers and that these transfers can foster support for incumbents, thus making the case for designing political and legislative mechanisms, as the laws recently passed by the Colombian government, that avoid successful anti-poverty schemes from being captured by political patronage.

Source: Conditional cash transfers, political participation, and voting behavior

An analysis of physical and monetary losses of environmental health and natural resources in India

This study provides estimates of social and financial costs of environmental damage in India from three pollution damage categories: (i) urban air pollution; (ii) inadequate water supply, poor sanitation, and hygiene; and (iii) indoor air pollution. It also provides estimates based on three natural resource damage categories: (i) agricultural damage from soil salinity, water logging, and soil erosion; (ii) rangeland degradation; and (iii) deforestation. The estimates are based on a combination of Indian data from secondary sources and on the transfer of unit costs of pollution from a range of national and international studies. The study estimates the total cost of environmental degradation in India at about 3.75 trillion rupees (US$80 billion) annually, equivalent to 5.7 percent of gross domestic product in 2009, which is the reference year for most of the damage estimates.  Of this total, outdoor air pollution accounts for 1.1 trillion rupees, followed by the cost of indoor air pollution at 0.9 trillion rupees, croplands degradation cost at 0.7 trillion rupees, inadequate water supply and sanitation cost at around at 0.5 trillion rupees, pasture degradation cost at 0.4 trillion rupees, and forest degradation cost at 0.1 trillion rupees.

Source: An analysis of physical and monetary losses of environmental health and natural resources in India

Health costs and benefits of ddt use in malaria control and prevention

The Millennium Development Goal of achieving near-zero malaria deaths by 2015 has led to a re-examination of wider use of DDT (dichloro-diphenyl-trichloro-ethane) in indoor residual spraying as a prevention tool in many countries. However, the use of DDT raises concerns of potential harm to the environment and human health, mainly because of the persistent and bio-accumulative nature of DDT and its potential to magnify through the food chain. This paper quantifies the adverse effects of DDT on human health based on treatment costs and indirect costs caused by illnesses and death in countries that use or are expected to re-introduce DDT in their disease vector control programs. At the global level where the total population exposed to DDT is estimated around 1.25 billion, the findings indicate that while the use of DDT can lead to a significant reduction in the estimated $69 billion in 2010 U.S. dollars economic loss caused by malaria, it can also add more than $28 billion a year in costs from the resulting adverse health effects. At the country level, the results suggest that Sub-Saharan African countries with high malaria incidence rates are likely to see relatively larger net benefits from the use of DDT in malaria control. The net health benefits of reintroducing DDT in malaria control programs could be better understood by weighing the costs and benefits of DDT use based on a country's circumstances.

Source: Health costs and benefits of ddt use in malaria control and prevention

"United we stand divided we fall" : maternal social participation and children's nutritional status in Peru

In previous literature, social capital has been hypothesized as a substitute for other forms of capital, such as physical and human capital. This paper contributes to this literature, studying the association between mothers' access to social capital via participation in community organizations and their children's nutritional status at 1 and 5 years. Using the Peruvian sample of the Young Lives project, this study suggests that, where human capital is scarce, social capital might have important implications for child development. Maternal social capital is positively associated with height at 1 year old for those children whose mothers have no formal education. No significant association is found at 5 years of age.

Source: "United we stand divided we fall" : maternal social participation and children's nutritional status in Peru

Promoting handwashing behavior in Peru : the effect of large-scale mass-media and community level interventions

This paper analyzes a randomized experiment that uses novel strategies to promote handwashing with soap at critical times in Peru. It evaluates a large-scale intervention that includes a mass media provincial campaign and a district-level community component. The analysis finds that the mass media intervention alone had no significant effect on exposure to the handwashing promotion campaign messages, and therefore no effect on handwashing knowledge or handwashing behavior. In contrast, the community-level intervention, a more comprehensive intervention that included several community and school activities in addition to the communications campaign, was successful in reaching the target audience with handwashing promotion messages and in improving the knowledge of the treated population on appropriate handwashing behavior. Those improvements translated into higher self-reported and observed handwashing with soap at critical junctures. However, no significant improvements in the health of children under the age of five were observed. The results are consistent with earlier literature, which indicates that substantively changing behavior to improve health is a complex task requiring intensive and more personalized interventions.

Source: Promoting handwashing behavior in Peru : the effect of large-scale mass-media and community level interventions

Is India's manufacturing sector moving away from cities ?

This paper investigates the urbanization of the Indian manufacturing sector by combining enterprise data from formal and informal sectors. It finds that plants in the formal sector are moving away from urban and into rural locations, while the informal sector is moving from rural to urban locations. Although the secular trend for India's manufacturing urbanization has slowed down, the localized importance of education and infrastructure has not. The results suggest that districts with better education and infrastructure have experienced a faster pace of urbanization, although higher urban-rural cost ratios cause movement out of urban areas. This process is associated with improvements in the spatial allocation of plants across urban and rural locations. Spatial location of plants has implications for policy on investments in education, infrastructure, and the livability of cities. The high share of urbanization occurring in the informal sector suggests that urbanization policies that contain inclusionary approaches may be more successful in promoting local development and managing its strains than those focused only on the formal sector. Cities are evolving in India from places of goods production to forges of human capital and coping mechanisms for survival.

Source: Is India's manufacturing sector moving away from cities ?

Burkina Faso's infrastructure : a continental perspective

Infrastructure contributed 1.3 percentage points to Burkina Faso's annual per capita gross domestic product (GDP) growth over the past decade, much of it due to improvements in information and communication technology (ICT). Raising the country's infrastructure endowment to that of the region's middle-income countries (MICs) could boost annual growth by more than 3 percentage points per capita. Burkina Faso has made significant progress developing its infrastructure in recent years, especially in the ICT sector. The country has also moved forward in the areas of road maintenance and water and sanitation, but still faces challenges in these sectors, as well as in the electricity sector. As of 2007, Burkina Faso faced an annual infrastructure funding gap of $165 million per year, or 4 percent of GDP. That gap could be cut in half by the adoption of more appropriate technologies to meet infrastructure targets in the transport and the water and sanitation sectors. Even if Burkina Faso were unable to increase infrastructure spending or otherwise close the infrastructure funding gap, simply by moving from a 10- to 18-year horizon the country could address its efficiency gap and meet the posited infrastructure targets.

Source: Burkina Faso's infrastructure : a continental perspective

Senegal's infrastructure : a continental perspective

Infrastructure contributed 1 percentage point to Senegal's improved per capita growth performance between 2000 and 2005, placing it in the middle of the distribution among West African countries. Raising the country's infrastructure endowment to that of the region's middle-income countries (MICs) could boost annual growth by about 2.7 percentage points. Senegal has made significant progress in some areas of its infrastructure, including the transport, electricity, water, and information-and-communication-technology (ICT) sectors. But looking ahead, the country faces important infrastructure challenges, including improving road conditions, boosting air and rail traffic, updating electricity infrastructure, and boosting the pace of expansion of the water-and-sanitation network. Senegal currently spends around $911 million per year on infrastructure, with $312 million lost annually to inefficiencies. Comparing spending needs with existing spending and potential efficiency gains leaves an annual funding gap of $578 million per year. Senegal has the potential close this gap by bringing in more private-sector investment.

Source: Senegal's infrastructure : a continental perspective

South Sudan's infrastructure : a continental perspective

Newly independent South Sudan faces a challenge in making its own way in infrastructure development. Despite earning $6 billion in oil revenues since 2005, South Sudan's spending has not been proportional to its income, but rather has lagged behind North Sudan's development of infrastructure and social support. South Sudan benefitted from strong donor support during 2004-10, the interim period defined by the Comprehensive Peace Agreement. It focused on reestablishing regional transport links and access to seaports as well as rehabilitating its ports, airstrips, and single rail line. South Sudan also successfully liberalized the ICT sector. Nonetheless, the new country's infrastructure remains in such a dismal state that it is difficult to pinpoint a single most pressing challenge. The transport sector accounts for half of the country's spending needs, and water and sanitation account for a further quarter of the total. But so many improvements are needed that the nation cannot realistically catch up with its neighbors within 10 years, or even longer. South Sudan's annual infrastructure funding gap is $879 million per year. Given that the country's total needs are beyond its reach in the medium term, it must adopt firm priorities for its infrastructure spending. It also must attract international and private-sector investment and look to lower-cost technologies to begin to close its funding gap. Although South Sudan loses relatively little to inefficiencies, redressing those inefficiencies will be vital to creating solid institutions to attract new investors and get the most out of their investments.

Source: South Sudan's infrastructure : a continental perspective

Sudan's infrastructure : a continental perspective

Improvements in infrastructure across Sudan in recent years have contributed 1.7 percentage points to the country's per capita growth. Consistent with trends in other countries, the ICT revolution that swept Africa contributed more than any other sector to growth in Sudan. Raising the infrastructure endowment of all parts of Sudan to that of the region's best performer -- Mauritius -- could boost annual growth by about 3.5 percentage points. Sudan has heavily invested in infrastructure in recent years. Notable achievements include tripling power-generation capacity, liberalizing the ICT sector, and connecting to an undersea fiber-optic cable. Looking ahead, Sudan's most pressing infrastructure challenges lie in the water and transport sectors. In the water sector, the country needs to dramatically improve access to safe sources of water and sanitation while improving utility efficiency. In the transport sector the country needs to vastly expand rural and international connectivity and improve quality across the network. Sudan presently spends about $1.5 billion per year on infrastructure, with $580 million a year lost to inefficiencies. Even if the inefficiencies were eliminated, however, Sudan would face an infrastructure funding gap of $2.9 billion per year. This gap could be reduced by half by choosing lower-cost water, sanitation, and road-surfacing technologies, and could be bridged by continuing to capture financing from the private sector and abroad.

Source: Sudan's infrastructure : a continental perspective

Cameroon's infrastructure : a continental perspective

The poor state of Cameroon's infrastructure is a key bottleneck to the nation's economic growth. From 2000 to 2005, improvements in information and communications technology (ICT) boosted Cameroon's growth performance by 1.26 percentage points per capita, while deficient power infrastructure held growth back by 0.28 points per capita. If Cameroon could improve its infrastructure to the level of Africa's middle-income countries, it could raise its per capita economic growth rate by about 3.3 percentage points. Cameroon has made significant progress in many aspects of infrastructure, implementing institutional reforms across a broad range of sectors with a view to attracting private-sector participation and finance, which has generally led to performance improvements. But the country still faces a number of important infrastructure challenges, including poor road quality, expensive and unreliable electricity, and a stagnating and uncompetitive ICT sector. Cameroon currently spends around $930 million per year on infrastructure, with $586 million lost to inefficiencies. Removing those inefficiencies would leave an infrastructure funding gap of $350 million per year. Given Cameroon's relatively strong economy and natural-resource base, as well as its success in attracting private financing, the country should be able to close that gap and meet its infrastructure goals within 13 years.

Source: Cameroon's infrastructure : a continental perspective

The republic of Congo's infrastructure : a continental perspective

Infrastructure contributed half a percentage point to the Republic of Congo's annual per capita GDP growth from 2001 to 2006. If the country's infrastructure were improved to the level seen in Mauritius, the regional leader, it could contribute more than 3 percentage points to annual per capita growth. The Republic of Congo's existing infrastructure is concentrated in the developed south, reflecting the country's urbanization patterns. Links spread from there to the less-developed north, where there are vast areas of underexploited dense forest. The Republic of Congo's power sector offers the greatest potential for infrastructure-based economic growth, but major inefficiencies need to be addressed. Transit improvements would also make significant contributions to growth by improving connections to the north and to neighboring countries. Additional opportunities include rehabilitating the fixed-line telephone operator to spread Internet access. The country's water and sanitation infrastructure is in relatively good shape. Spending on infrastructure was $460 million per year in the Republic of Congo during the mid-2000s. Based on these spending levels, if all inefficiencies were eliminated, the country would face an infrastructure funding gap of $270 million a year and would not meet infrastructure targets for 31 years. Spending rose to $550 million per year in 2008-09.  If the Republic of Congo could maintain these higher spending levels, the funding gap would essentially disappear. The nation could further reduce the funding gap by adopting lower-cost technologies to meet infrastructure targets.

Source: The republic of Congo's infrastructure : a continental perspective

Zimbabwe's infrastructure : a continental perspective

Despite general economic decline and power-supply deficiencies, infrastructure made a modest net contribution of just less than half a percentage point to Zimbabwe's improved per capita growth performance in recent years. Raising the country's infrastructure endowment to that of the region's middle-income countries could boost annual growth by about 2.4 percentage points. Zimbabwe made significant progress in infrastructure in its early period as an independent state, building a national electricity network with regional interconnections, an extensive and internationally connected road network, and a water and sewer system. But the country has been unable to maintain its existing infrastructure since it became immersed in economic and political turmoil in the late 1990s. Zimbabwe now faces a number of important infrastructure challenges, the most pressing of which lie in the power and water sectors, where deteriorating conditions pose risks to the economy and public health. Zimbabwe currently spends about $0.8 billion per year on infrastructure, though $0.7 billion of this is lost to inefficiencies of various kinds. Even if these inefficiencies were fully captured, Zimbabwe would still face an infrastructure funding gap of $0.6 billion per year. That staggering figure can be reduced, however, to $0.4 billion if the country adopts a more modest spending scenario, or even to $0.1 billion under a minimalist, maintenance-only scenario. To close the gap, Zimbabwe needs to raise additional public, private-sector, and international funding, which, when coupled with the prospect of economic rebound and prudent policies, would allow the country to regain its historic infrastructure advantages.

Source: Zimbabwe's infrastructure : a continental perspective

East Africa's infrastructure : a regional perspective



Source: East Africa's infrastructure : a regional perspective

ECCAS's infrastructure : a regional perspective

Sound infrastructure is fundamental for growth across the Economic Community of Central African States (ECCAS). During 1995-2005, improvements in infrastructure boosted growth in Central Africa by 1 percentage point per capita annually, primarily due to the introduction and expansion of mobile telephony. Improved roads also made a small contribution. Conversely, inadequate power deterred growth to a greater degree than elsewhere in Africa. ECCAS must address a complex set of challenges. Economic activity takes place in isolated pockets separated by vast distances. Two countries are landlocked and dependent on regional corridors; seven countries have populations of under 10 million; and eight have economies that are smaller than $10 billion/year. This difficult economic geography demands a regional approach to developing infrastructure. Yet Central Africa's infrastructure has the poorest performance record in all of Africa on most aggregate indicators. Transportation is slow and the most expensive in Sub-Saharan Africa, with poor road conditions, border delays, port delays, time-consuming administrative processes, no integrated railway network, and inefficient air transport. The ICT backbone is still in its early stages; access rates are low and the prices of critical services are the highest in Africa. ECCAS has the least-developed power sector on the continent despite significant hydropower resources. If Central Africa's infrastructure could be improved to the level of Mauritius, regional growth performance would be boosted by some 5 percentage points, with power making the strongest contribution. The cost of such an improvement is estimated at $1.8 billion/year for a decade and will require external assistance.

Source: ECCAS's infrastructure : a regional perspective

Mozambique's infrastructure : a continental perspective

In the last 10 years, Mozambique's economy has grown steadily at an impressive rate of 7.7 percent per year, driven by the service sector, light industry, and agriculture. This pace is expected to continue or even increase with the massive influx of already-planned investment on the order of $15-20 billion. Mozambique's infrastructure is well developed in some sectors, including its east-west transport infrastructure, power grid, and water and sanitation networks. But the nation still faces critical challenges in these and other areas, including developing north-south transport connections, properly managing the water system, and expanding hydroelectric generation to meet potential. Mozambique spent about $664 million per year on infrastructure during the late 2000s, with as much as $204 million lost annually to inefficiencies. Comparing spending needs with existing spending and potential efficiency gains leaves an annual funding gap of $822 million per year. Mozambique could reduce inefficiency losses by positioning itself as a key power exporter. The country could reach infrastructure targets in 20 years through a combination of increased finance, improved efficiency, and cost-reducing innovations.

Source: Mozambique's infrastructure : a continental perspective

Botswana's infrastructure : a continental perspective



Source: Botswana's infrastructure : a continental perspective

ECOWAS's infrastructure : a regional perspective

Infrastructure improvements boosted growth in the Economic Community of West African States (ECOWAS) by one percentage point per capita per year during 1995-2005, primarily thanks to growth in information and communication technology. Deficient power infrastructure held growth back by 0.1 percent. Raising the region's infrastructure to the level of Mauritius could boost growth by 5 percentage points. Overall, infrastructure in the 15 ECOWAS countries ranks consistently behind southern Africa across many indicators. However, there is parity in access to household services -- water, sanitation, and power. ECOWAS has a well-developed regional road network, though sea corridors and ports need attention. Surface transport is expensive and slow, owing to cartelization, restrictive regulations, and delays. There is no regional rail network. Air transport has improved despite the lack of a strong hub-and-spoke structure. Safety remains a concern. Electrical power, the most expensive and least reliable in Africa, reaches 50 percent of the population but meets just 30 percent of demand. Regional power trading would bring substantial benefits if Guinea could become a hydropower exporter. Prices for critical ICT services are relatively high. Recent panregional initiatives have improved roaming. New projects are underway to provide access and improved services to unconnected countries. Completing and maintaining ECOWAS's infrastructure will require sustained spending of $1.5 billion annually for a decade, with one-third going to power. Although the necessary spending is only 1 percent of regional GDP, some countries' share is between 5 and 25 percent of national GDP. Clearly, external assistance will be needed.

Source: ECOWAS's infrastructure : a regional perspective

The SADC's infrastructure : a regional perspective

Infrastructure improvements boosted growth in the Southern African Development Community (SADC) by 1.2 percentage points per capita per year during 1995-2005, mainly from access to mobile telephony. Road network improvements made small growth contributions, while power sector inadequacy had a negative impact. Infrastructure improvements that matched those of Mauritius, the regional leader, could boost regional growth performance by 3 percentage points. SADC's 15 member countries include small, isolated economies with island states, a mix of low- and middle-income countries, and larger countries with potentially large economies. The economic geography reinforces the importance of regional infrastructure development to create a larger market and greater economic opportunities. The region's infrastructure indicators are high for Africa. The regional road network is well-developed, and surface transport is comparatively cheap, but subject to delays and long-haul fees. An extensive railway system competes directly with road transport. With integration and improvements, SADC's ports could form an effective transshipment network. Air transport, dominated by South Africa, is the best in Africa. Electricity in southern Africa is well developed; the region leads Africa in generation capacity and low rates, but access is limited. ICT services are the most accessible among the regions, though expensive. Landlocked countries still need to be connected, and greater competition is needed to reduce costs. Completing and maintaining SADC's infrastructure will require $2.1 billion annually for a decade. For small countries, and large countries with small revenues, the burden may be insurmountable without external assistance.

Source: The SADC's infrastructure : a regional perspective

Power tariffs : caught between cost recovery and affordability

This is the first paper to build a comprehensive empirical picture of power pricing practices across Sub-Saharan Africa, based on a new database of tariff structures in 27 countries for the years 2004-2008. Using a variety of quantitative indicators, the paper evaluates the performance of electricity tariffs against four key policy objectives: recovery of historic power production costs, efficient signaling of future power production costs, affordability to low income households, and distributional equity. As regards cost recovery, 80 percent of the countries in the sample fully recover operating costs, while only around 30 percent of the countries are practicing full recovery of capital costs. However, due to the fact that future power development may be based on a shift toward more economic technologies than those available in the past, existing tariffs look as though they would be consistent with Long Run Marginal Costs in nearly 40 percent of countries and hence provide efficient pricing signals. As regards affordability, today's average effective tariffs are affordable for 90 percent of today's customers. However, they would only be affordable for 25 percent of households that remain unconnected to the grid. Tariffs consistent with full recovery of economic costs would be affordable for 70 percent of the population. As regards equity, the highly regressive patterns of access to power services, ensure that subsidies delivered through electricity tariffs are without exception also highly regressive in distributional incidence. The conclusion is that achieving all four of these policy objectives simultaneously is almost impossible in the context of the high-cost low-income environment that characterizes much of SSA today. Hence most countries find themselves caught between cost recovery and affordability.

Source: Power tariffs : caught between cost recovery and affordability

Tanzania's infrastructure : a continental perspective

Infrastructure contributed 1.3 percentage points to Tanzania's annual per capital GDP growth during the 2000s. If the country's infrastructure endowment were improved to the level of the African leader, Mauritius, annual per capita growth rates could increase by 3.4 percent. Tanzania has made great progress in reforming its trunk roads, improving the quality of the road network. The country has also seen significant gains in ICT networks, and has one of the most competitive domestic air transport sectors in Africa. The power sector poses Tanzania's most serious infrastructure challenge. Despite significant improvements in pricing and operational performance in recent years, inefficiency still absorbs about 1.4 percent of GDP. Moreover, due to heavy reliance on hydro-power the sector remains vulnerable to climate variability. The port of Dar es Salaam also suffers from performance problems as rapid traffic growth has increasingly exposed deficiencies in storage and access to the port. Poor access to safe water is another challenge, exacerbated by poor budget execution in the sector. Tanzania would need to invest $2.4 billion annually for 10 years to meet its infrastructure targets. Spending at that level would absorb just over 20 percent of the country's GDP. Existing spending stands at $1.2 billion a year. Tanzania loses $0.5 billion each year to inefficiencies such as underpricing, undercollection of revenue, overstaffing, and lack of budget prioritization. But even if inefficiencies could be fully captured, an annual funding gap of $0.7 billion would remain. That gap could be shrunk to $0.4 billion if lower-cost technologies were adopted and if regional power trade could be further developed.

Source: Tanzania's infrastructure : a continental perspective

Uganda's infrastructure : a continental perspective

Uganda has made substantial progress on its infrastructure agenda in recent years. The early and successful ICT reform detonated a huge expansion in mobile coverage and penetration resulting in a highly competitive market. Power sector restructuring has paved the way for a rapid doubling of power generation capacity. Uganda is doing well on the water and sanitation MDGs, and has made effective use of performance contracting to improve utility performance. However, a number of important challenges remain. Despite reforms, the power sector continues to hemorrhage resources due to under-pricing and high distribution losses, while electrification rates are still very low. Providing adequate resources for road maintenance remains a challenge, and further investment is needed to increase rural connectivity and improve road safety. Addressing Uganda's infrastructure challenges will require sustained expenditure of around $1.4 billion per year over the next decade, strongly skewed towards capital expenditure. Uganda already spends approximately $1 billion per year on infrastructure, equivalent to about 11 percent of GDP. A further $0.3 billion a year is lost to inefficiencies, the bulk of which are associated with underpricing and distribution losses in the power sector. Uganda's annual infrastructure funding gap is about $0.4 billion per year, most of which is associated with irrigation as well as water and sanitation infrastructure.

Source: Uganda's infrastructure : a continental perspective

Understanding the business environment in South Asia : evidence from firm-level surveys

This paper examines the relationship between firm performance and growth and the business environment in the countries of the South Asia Region -- Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka -- using firm-level data from the World Bank's Enterprise Surveys. The analysis uses an approach in which the responses of firms to questions about the quality of the business environment can be interpreted as shadow prices: estimations by managers of the cost imposed on the firm by inadequacies of an aspect of the business environment -- public inputs such as regulation, physical infrastructure, availability of skilled labor, macroeconomic conditions, rule of law, etc. -- for the growth of their firm.  The analysis finds, in line with this approach, that higher-productivity and better-performing firms in the region, and in particular firms that recently expanded their employment and created jobs, report significantly higher constraints in terms of the supply of public inputs.  The authors discuss the differences across countries in the importance of various industries, how they relate to various firm characteristics, how informal and rural sector firms are constrained by public inputs, and how firms in the South Asia Region countries compare with firms in the rest of the world.

Source: Understanding the business environment in South Asia : evidence from firm-level surveys

What makes cities more competitive ? spatial determinants of entrepreneurship in India

Policy makers in both developed and developing countries want to make cities more competitive, attract entreprepreneurs, boost economic growth, and promote job creation. The authors examine the spatial location of entrepreneurs in India in manufacturing and services sectors, as well as in the formal and informal sectors, in 630 districts spread across 35 states/union territories. They quantify entrepreneurship as young firms that are less than three years old, and define entry measures through employment in these new establishments. They develop metrics that unite the incumbent industrial structures of districts with the extent to which industries interact through the traditional agglomeration channels. The two most consistent factors that predict overall entrepreneurship for a district are its education and the quality of local physical infrastructure. These patterns are true for manufacturing and services. These relationships are much stronger in India than those found for the United States. The authors also find strong evidence of agglomeration economies in India's manufacturing sector. This influence is through both traditional Marshallian economies like a suitable labor force and proximity to customers and through the Chinitz effect that emphasizes small suppliers. India's footprints in structural transformation, urbanization, and manufacturing sector are still at an early stage.  At such an early point and with industrial structures not yet entrenched, local policies and traits can have profound and lasting impacts by shaping where industries plant their roots.

Source: What makes cities more competitive ? spatial determinants of entrepreneurship in India

Infrastructure policy : basic design options

The paper lays out basic design options for infrastructure policy. It first sketches mechanisms to asses demand. Then it sets out a hierarchy of issues starting with choice of market structure followed by conduct regulation. Ownership options are largely a function of market structure choices. The implications for finance -- the topic of much day-to-day discussion in infrastructure policy-making -- follow from these various prior choices. The discussion naturally circumscribes the role for so-called public-private partnerships -- their uses and pitfalls. Annexes provide checklists for choices of market structure and for diagnosing and benchmarking policies.

Source: Infrastructure policy : basic design options

KWD/JPY

1 Japanese Yen = 0.00343 Kuwaiti Dinar

Source: KWD/JPY

LAK/JPY

1 Japanese Yen = 97.06882 Lao Kip

Source: LAK/JPY

LBP/JPY

1 Japanese Yen = 18.29473 Lebanese Pound

Source: LBP/JPY

LKR/JPY

1 Japanese Yen = 1.58007 Sri Lankan Rupee

Source: LKR/JPY

LTL/JPY

1 Japanese Yen = 0.03229 Lithuanian Litas

Source: LTL/JPY

LVL/JPY

1 Japanese Yen = 0.00657 Latvian Lats

Source: LVL/JPY

MAD/JPY

1 Japanese Yen = 0.10413 Moroccan Dirham

Source: MAD/JPY

MDL/JPY

1 Japanese Yen = 0.15082 Moldovan Leu

Source: MDL/JPY

MGA/JPY

1 Japanese Yen = 27.25604 Malagasy Ariary

Source: MGA/JPY

MKD/JPY

1 Japanese Yen = 0.57902 Macedonian Denar

Source: MKD/JPY

MUR/JPY

1 Japanese Yen = 0.37744 Mauritian Rupee

Source: MUR/JPY

MVR/JPY

1 Japanese Yen = 0.18629 Maldivian Rufiyaa

Source: MVR/JPY