48381 ResearchDigest WorldBank VOLUME 1 NUMBER 2 WINTER 2006 Who Gets Debt Relief? Nicolas Depetris Chauvin and Aart Kraay Countries receiving debt relief people and repaying impossible IN THIS ISSUE are likely to receive repeated debts." Who Gets Debt Relief? ... page 1 rounds--because of persistent Which countries are mostly likely to Are the countries that are most indebted also characteristics driving the receive debt relief? In a new paper Depetris and Kraay explore the deter- those most likely to receive debt relief? Not reaccumulation of debt necessarily D minants of debt relief, about which ebt relief has formed a highly surprisingly little is known. A basic FOCUS: visible part of the aid to low- problem has been that existing data on Improving Access to Finance ... page 2 income developing countries debt relief from standard data sources Developing better indicators of access over the past decade. In 1996 the do not provide reliable estimates of to financial services is the first step in World Bank and International Mone- the time profile or valuation of debt evaluating how broader access leads to tary Fund launched the Heavily Indebt- relief. The absence of reliable data has growth and poverty reduction ed Poor Countries (HIPC) Initiative, also limited our understanding of the Getting Girls into School: which in the past decade has provided effects of debt relief. In a companion Evidence from Cambodia ... page 3 $59 billion in nominal debt service paper (2005) the authors provide a Evidence suggests that cash incentives for reductions to 30 eligible countries, new set of estimates of debt relief to families can help keep girls in school in low- mostly in Africa, on public debt owed fill the data gap. They also use these income countries, just as in middle-income to bilateral and multilateral creditors. new estimates to perform a systematic ones In 2005 the G-8 governments agreed analysis of the effects of debt relief in to pay off the remaining debts owed low-income countries, and find little Diffusing New Knowledge to the International Development As- evidence of its purported benefits. among Farmers: The Role sociation (the World Bank's soft loan In the new paper Depetris and of Opinion Leaders ... page 4 window) by 19 countries that have Kraay study the allocation of debt relief Opinion leaders can help spread new "graduated" from the HIPC debt relief across a sample of 62 low-income de- knowledge among farmers, but how they are process, further reducing their total veloping countries and contrast it with selected matters debt by $37 billion. Before these high- the allocation of other forms of aid. Infrastructure and Regional profile efforts, the Paris Club of bilat- This comparison reveals interesting Growth in India ... page 5 eral official creditors began providing differences and similarities. While for- Can investing in public infrastructure help concessional restructurings to low- eign aid is significantly higher in poor lagging states catch up to leading ones? income countries in the late 1980s. countries, the same is not true for debt The accompanying rhetoric has relief. But aid and, even more so, mul- Measuring Corruption: been as expansive as the sums of tilateral debt relief in recent years have A Critique of Cross-Country money involved. United Nations eco- been significantly higher for countries Indicators ... page 6 nomic adviser Jeffrey Sachs has argued with good policies and institutions. How much progress has been made in that "no civilized nation should try Interestingly, however, when the reducing corruption? It depends on how it's to collect the debts of people who authors control for policy performance measured are dying of hunger and disease and and per capita incomes, they find only poverty." World Bank President Paul weak evidence that debt relief goes to Reversing Premature Mortality and Ill Health in the Wolfowitz heralded the latest round countries with higher levels of indebt- Russian Federation ... page 7 of debt relief with the statement that edness--and no evidence that it goes "leaders in 38 countries around the to countries that have had difficulties Russia's growing burden of premature mortality and ill health calls for a shift in its world will no longer have to choose in servicing their debts as reflected public health policy between spending to benefit their (continuedonpage8) 2 WorldBankResearch Digest FOCUS: average size of these accounts relative maintain. Survey data also suggest to income, as of 2003­04. that minimum consumer and small- Improving Access Results show large differences in enterprise loans, days to process loan to Finance access and use, with developing coun- applications, and costs to transfer tries far behind. For example, some funds domestically and internationally developing countries have less than also vary significantly across countries. Thorsten Beck, Asli Demirgüç-Kunt, one bank branch per 100,000 people; Barriers to finance are lower in and Maria Soledad Martinez Peria some industrial countries, 50 or more. countries with better physical infra- The outreach indicators are posi- structure, contract enforcement, and tively correlated with traditional mea- credit information sharing systems. Expanding access to finance can sures of financial depth, such as total Banks also impose lower barriers in reduce poverty and inequality. But credit to the private sector divided by economies that are more open, trans- knowing how to do that requires GDP, and related to the quality of the parent, and competitive. better data legal and institutional environment. Foreign banks seem to charge F But even after controlling for financial higher fees than other banks. But in inancial sector development pro- depth, the authors find that firms in foreign dominated banking systems motes long-term growth by con- countries with greater outreach report fees are lower, and opening bank ac- tributing to a dynamic economy. facing lower barriers to financing. This counts and applying for loans easier. Recent research has shown that it suggests that outreach matters inde- Fees are also lower in predominantly also reduces income inequality. And pendent of depth. government-owned systems, though many case studies have shown that In the second study, "Banking applying for loans is more difficult. All direct access to financial services can Services for Everyone?" the authors these findings have important impli- reduce poverty. So financial exclusion assess the relative importance of bar- cations for policy reforms to broaden is likely to act as a brake on develop- riers to access based on surveys of the access. ment by retarding growth and increas- top five banks in a large number of Future World Bank research on ac- ing poverty and inequality. Evidence countries. The surveys cover such is- cess to finance will include country that could guide public policy remains sues as the costs associated with dif- case studies combining detailed sup- thin and tentative, however, mostly ferent types of accounts and payment ply and demand data from financial because of serious gaps in the data on services, application procedures, and institutions, firms, and households financial access. costs for different types of loans. with randomized field experiments. To improve the data, the World Some results are fascinating. For The results should shed more light on Bank's Development Research Group example, the minimum amount re- how removing barriers affects growth has been developing more compre- quired to open a checking account in and poverty alleviation. hensive indicators of access to finan- some African countries can exceed 100 cial services, particularly for small percent of GDP per capita (figure 1). An- Beck, Thorsten, Asli Demirgüç-Kunt, and Maria firms and poor households. Getting nual fees on these checking accounts Soledad Martinez Peria. 2006. "Banking Services better data is the first step in evaluat- in some African countries are more for Everyone? Barriers to Bank Access and Use ing which types of financial services do around the World." Policy Research Working than 20 percent of GDP per capita. Paper 4079. World Bank, Washington, D.C. most to promote growth and reduce So for households and small firms ------. Forthcoming. "Reaching Out: Access to poverty and whether policies aimed at in developing countries, checking ac- and Use of Banking Services across Countries." improving access are working. counts can be very costly to open and Journal of Financial Economics. Measuring access and use. In most countries knowledge about the extent to which effective, low-cost financial services reach small enterprises, low- Figure 1. Minimum Balance Required to Open a Checking Account, Percentage of GDP per capita and middle-income households, and 150 other less privileged parts of society is very limited. Two new studies, both Cameroon part of the World Bank's research pro- GDPPC)of (% Nigeria gram on access to finance, yield inter- 100 esting findings. Account In the first, "Reaching Out: Access to and Use of Banking Services across Checking Countries," Beck, Demirgüç-Kunt, and Opento Leone Ethiopia Sierra Uganda Martinez Peria gathered information 50 on banking sector outreach. Through Balance Madagascar a c surveys of bank regulators in 99 coun- Mozambique Ghan Lanka a a Republi obagoT tries, they collected data on branch Minimum BoliviaJordan Sri Rep. PhilippinesKenya Armeni Rep. Herzegovina and IndonesiaIndia Colombi a Arab Republic y Republic and a Africa and ATM penetration, the number of Chile Lebanon Korea, DominicanBangladeshuPerPakistan T Mexicoinidadr Albani Greece Bulgaria Egypt, Czech Malta Hungar Slovak Bosnia Romania Slovenia Algeria Australia Belarus Belgium Brazil Croati Denmark Georgia Germany Israel Lithuania Malawi Moldova South Spain Swaziland Sweden Switzerland Turkey deposit and loan accounts, and the 0 Sample size: 56 countries WorldBankResearch Digest 3 Getting Girls into School: The program effects are robust to a variety of concerns. Regression Evidence from Cambodia discontinuity estimates are similar, suggesting that the results are not Deon Filmer and Norbert Schady driven by unobservable differences between scholarship recipients and nonrecipients. And bounds analysis Cash incentives for families to Third, the authors use regression shows that selective attrition cannot enroll girls in school can work discontinuity analysis. Though they account for the pattern of program even in low-income countries with do not consider selection bias due to effects observed. relatively low-quality schools unobservable characteristics to be a Moreover, the analysis finds that S major concern, it is nevertheless pos- effects are largest among girls who chooling attainment remains sible: girls were not chosen randomly come from poorer households, have low in many developing and in some cases beneficiaries were parents with less education, and live countries--and is often lower selected by people who might have farther away from a secondary school. for girls than for boys. This is espe- known the applicants. Regression dis- The program thus appears to have cially so in Cambodia, a country with continuity analysis arguably accounts substantially reduced socioeconomic a tragic recent past. for unobserved differences between differences in enrollment and atten- A government-run scholarship treatment and control groups by ex- dance. program there aims to increase the ploiting the discontinuous jump in These findings suggest that even enrollment of girls in secondary the probability of receiving a scholar- in low-income countries with weak school. Launched in 2002­03 and ship above and below the eligibility public institutions and relatively low- funded through the Japan Fund for threshold in each school. That is, in quality schooling, a demand-side Poverty Reduction, the program func- each school applicants were ranked, incentive can effectively increase girls' tions much like the conditional cash and the 45th-ranked applicant re- enrollment and attendance. Earlier transfer programs used in many Latin ceived a scholarship while the 46th evaluations of conditional cash trans- American countries. did not. Regression discontinuity es- fer programs have typically come In each of 93 participating schools, timates are based on the fact that the from middle-income countries and a committee identified the 45 needi- 45th and 46th applicants are similar have typically found smaller effects est girls through an application form in almost every way except scholar- than Filmer and Schady do. But the that included indicators of socioeco- ship receipt. authors' finding of a larger effect is nomic status and awarded them a The evaluation focuses on two perhaps not surprising: since enroll- scholarship of $45 (Cambodia's gross main outcomes: school enrollment ment rates tend to be much lower in national income per capita was about and attendance as measured through low-income than in middle-income $300 in 2002). The program transfers an unannounced school visit. The countries, the scope for improvement cash to the girls' families as long visit could not establish the status is larger. as their daughter enrolls in school, of a small percentage of applicants The paper leaves some important maintains a passing grade, and miss- who have effectively dropped out of questions unanswered. One such es no more than 10 days a year with- the sample. Correcting for the poten- question is the effect of the scholar- out a good reason. tial ensuing bias is difficult without ship on other schooling outcomes, Filmer and Schady evaluate the a credible instrument, a variable that including repetition rates and mea- program's effectiveness. Their em- predicts the probability of attrition but sures of performance (such as test pirical strategy compares scholarship is not correlated with the error term scores). Another is whether the size recipients (treatment group) and non- in the enrollment regressions. Since of the scholarship was too big or too recipients (control group), accounting no such variable was available in small to induce the impact that it did. in various ways for the fact that ap- their data set, the authors calculated Moreover, lacking empirical evidence plicants with a higher socioeconomic program effects under alternative as- on the effectiveness of other interven- status were less likely to receive a sumptions about the enrollment sta- tions to improve schooling outcomes scholarship. tus of girls whose status could not be in Cambodia, the paper does not at- The authors use three main ap- definitively established. tempt any cost-effectiveness compari- proaches for estimation. First, they The estimates suggest that the sons. Nevertheless, given the paucity use a linear probability model that program has had large positive effects. of evidence from low-income coun- includes all the characteristics on the The linear probability estimates indi- tries, these estimates of large program application form plus school fixed cate that enrollment and attendance effects may be cause for optimism. effects. Second, they use propensity at eligible schools has increased score matching, which measures the by about 30 percentage points, and Deon Filmer and Norbert Schady. 2006. "Getting impact of the program as the mean enrollment at any school by about Girls into School: Evidence from a Scholarship difference in enrollment (or atten- 22 percentage points. Estimates of Program in Cambodia." Policy Research Work- dance) between matched pairs of program effects based on propensity ing Paper 3910. World Bank, Washington, recipients and nonrecipients. score matching are larger. D.C. 4 WorldBankResearch Digest Diffusing New that their advice and knowledge and the average trained farmer in the are not quite relevant to the situ- village. They also incorporate other Knowledge ation faced by most community variables, representing individual and among Farmers: members. community characteristics, into the Which of these propositions is analysis. The three hypotheses can be The Role of valid? Feder and Savastano examine subjected to a test because each one this question through empirical work implies a different specification for Opinion Leaders focusing on the gains in knowledge the way the socioeconomic distance about integrated pest management variable is introduced. in a sample of Indonesian farmers The results show that the gains in Gershon Feder and Sara Savastano over the period 1991­98. During those knowledge of integrated pest man- years a special program, the Farmers agement among farmers who did not Field School, provided training on in- receive training depend positively on To bring about broader gains in tegrated pest management for select- the extent to which opinion leaders' farmers' knowledge through opinion ed groups of farmers in many villages socioeconomic status is superior to leaders, they should be selected across Indonesia. that of their would-be followers. That so as not to be too superior in Farmers were selected for par- is, the greater the socioeconomic dis- socioeconomic status ticipation in the program with the tance, the larger the gains--but only O expectation that they would become to a point. If the opinion leaders' sta- pinion leaders, people respect- a source of knowledge for other farm- tus is too superior, their effectiveness ed as knowledgeable about ers in their community. Data relating diminishes at the margin. Indeed, matters important to others, to the training program allow the they may become essentially irrel- can influence the decisions of com- authors to estimate the link between evant to the diffusion of knowledge munity members. In a study using socioeconomic indicators character- beyond a small circle of the higher- data from rural Indonesia, Feder and izing opinion leaders (wealth, educa- status people closely associated with Savastano explore what role opinion tion, and the like) and the selection them. leaders can thus play in the diffusion into the program. That link, estimated These findings have implications of new knowledge--and how relative through a probit equation, facilitates for extension and information pro- socioeconomic status affects the ex- the calculation of imputed selection grams seeking to spread new knowl- tent of their influence. probabilities for all farmers in the edge widely across large populations, The literature of agricultural eco- sample. particularly in areas nomics shows that rural opinion lead- These probabilities where most people lack ers tend to have higher social status serve as an index of so- access to mass media than average community members, cioeconomic status in Farmers sources. are wealthier and better educated, the context of opinion Striking the right and are better connected with the leadership. Farmers with will seek balance in the selection world outside the community. But the a low index (low prob- information of program participants literature is not in agreement about ability of selection) are is conceptually appeal- how the social distance between less likely to have been from those ing but not easy to do. opinion leaders and the rest of the opinion leaders. Using A mix of attributes (with community affects the diffusion of these imputed prob- with a higher unknown aggregation new knowledge. Indeed, three differ- abilities, the authors weights) matters, and ent propositions emerge from the calculate an average socieconomic some of the traits may literature: socioeconomic index of not be readily observed · Farmers are more likely to seek all the sampled trained status by outsiders and re- and acquire information from farmers in a given village. searchers, though often those with similar socioeconomic A subsequent calcula- known to members of attributes, because communica- tion indicates, for each the community. Involv- tion networks are often made up nonselected farmer, his or her socio- ing the community in selecting those of people with similar socioeco- economic distance from the average to be targeted for roles as opinion nomic profiles. profile of the trained group in the leaders can overcome some of these · Farmers are more likely to seek village. difficulties. information from those who have Feder and Savastano then test a higher status as opinion leaders the three hypotheses by relating and thus have superior socioeco- the changes in knowledge of inte- Gershon Feder and Sara Savastano. 2006. nomic attributes. grated pest management among "The Role of Opinion Leaders in the Diffusion · Farmers tend to obtain informa- untrained farmers between 1991 and of New Knowledge: The Case of Integrated Pest tion from opinion leaders whose 1998--established through interview Management." World Development 34(7): socioeconomic status is some- questions--and the socioeconomic 1287­300. what superior but not so different distance between the respondent WorldBankResearch Digest 5 Infrastructure and supply, and transport and communi- ternalities may lead to a "beggar thy cations) for Indian states in 1981­96. neighbor" type of competition among Regional Growth The empirical analysis sheds light on regions, with each trying to provide in India several questions. more infrastructure than it otherwise First, is publicly supplied infra- would have. By altering investments structure a significant determinant of in infrastructure relative to those of Somik V. Lall subnational growth? neighboring regions, The empirical analysis each region can modify shows that the answer the size of its infrastruc- New infrastructure can bring bigger is yes. Indeed, transport Infrastructure ture stock at the expense gains in growth to lagging states and communication of its neighbor (or to its than to leading ones--but not big infrastructure are the has positive benefit). enough to close the gap most significant drivers The results from the C of regional growth in spatial empirical analysis feed ountries have often used infra- India. into a numerical exami- structure investments to drive externalities Second, do the pro- nation of the dynamics development in particular re- ductivity effects of pub- of regional growth across gions. Think of the projects to develop lic infrastructure differ Indian states. The esti- secondary cities in Malaysia and across regions? Again mated production func- Thailand, build transport capacity the answer is yes. Investments in pub- tions serve as the starting point for in Brazil's lagging Northeast, and lic infrastructure, Lall argues, bring tracing the dynamics of private capital increase connectivity and accessibil- higher returns to lagging states than formation in lagging and other states. ity to reduce isolation in Malaysia's to leading ones. This is particularly The out-of-sample simulated regional northeast peninsula. What motivates true for transport and communication growth predictions show that private these large investments is the view infrastructure. In leading states, which capital formation in lagging and lead- that infrastructure is a public good already have some sort of transport ing states diverges in the short to playing an active part in production. system developed, the benefits of ad- medium term, consistent with trends How much does publicly supplied ditional infrastructure are, not surpris- observed for the past 15 years. In the infrastructure contribute to regional ingly, significantly smaller. early years of Indian economic liberal- economic growth? In a new paper This finding is consistent with ization, most new capital, mainly for- Lall looks at outcomes in India. De- those reported in earlier studies, eign direct investment, was located in veloping a regionally disaggregated, which suggest that added infrastruc- leading states. This has contributed to nonlinear model of economic growth, ture brings smaller benefits to regions growing regional disparities between the author examines relationships that are already developed than to leading and lagging states. between infrastructure endowments, those that are developing or lagging. Through a complementary numeri- infrastructure investment policy, and The reason is that increasing the stock cal exercise, the author examines the regional economic growth. Lall also of infrastructure in lagging regions will dynamics of public and private capi- describes the dynamics between pri- improve the productivity of existing tal in lagging regions. Results show vate capital and public infrastructure firms and attract new ones--just as that public capital in lagging regions in India in the early years of economic increasing any other stock of capital increases as a result of directed gov- liberalization. will do--helping these regions move ernment interventions, but that pri- In the analytic framework Lall closer to more developed ones. vate capital, driven largely by market relaxes assumptions that are typical Third, is there evidence to show mechanisms, tends to stagnate. These of neoclassical regional economic that infrastructure investments have predictions are consistent with private growth models: balanced growth, spatially distributed effects? Here investment data for 1995­2005. constant returns to scale, constant Lall's analysis shows that infrastruc- Lall concludes that although re- proportionate growth of the labor ture has positive spatial externalities, gional convergence in the growth of force or population, and exclusively or spillovers, meaning that invest- public infrastructure is possible, the neutral, labor-augmenting technologi- ments in infrastructure have an impact short- to medium-term divergence cal progress. In particular, he consid- beyond the region where the invest- in private capital formation between ers the possibility that technological ments are made. lagging and leading states suggests progress enhances the performance of These spatial externalities raise that infrastructure endowments, while infrastructure, a realistic assumption the possibility of gaming between possibly very important, are not suf- given the many ongoing innovations regions for the provision of public ficient to stimulate growth in lagging in its design and delivery. infrastructure. Positive externalities, states. To examine the contribution of like those Lall finds, may lead to un- infrastructure to regional growth, Lall derinvestment, with each region ex- Somik V. Lall. Forthcoming. "Infrastructure and uses a pooled data set for output, pecting to benefit from investments in Regional Growth: Growth Dynamics and Policy labor, private capital, and spending other regions in a prisoner's dilemma Relevance for India." Annals of Regional Sci- on public infrastructure (power, water framework. Conversely, negative ex- ence, January 2007. 6 WorldBankResearch Digest Measuring Corruption: A Critique of the loss of conceptual precision. Ag- gregating sources of corruption data Cross-Country Indicators also probably leads to far smaller gains in statistical precision than of- Stephen Knack ten claimed, because measurement error among many of the data sources is likely highly correlated. Indicators of corruption differ in provide objective measures, such as Comparisons across countries or important ways, and no single one is share of firm revenues paid as bribes over time based on composite in- best for all purposes to public officials. And they allow firm- dexes can also be misleading because C level analyses, such as which types of of differences in the data sources orruption, the abuse of public firms pay more in bribes. available and in their definitions of office for private gain, covers Changes over time in corruption corruption. To be valid, comparisons a range of acts--theft, bribes, ratings should be interpreted with between two countries, or between influence peddling, misappropriation great caution. For example, changes two years for a single country, should of funds, patronage in civil service, in perceptions indicators from one be based only on data sources com- and dispensation of state benefits. year to the next are often intended to mon to both. Measuring corruption is challenging correct ratings regarded in hindsight What can be done to improve our because it is typically hidden, and as incorrect. Changes over time in cor- understanding of existing corruption because it is a multi-dimensional ruption as measured by firm surveys indicators? The paper calls for more concept. can produce valid inferences if the research on the impact of optimism, The region with the richest set of survey questions and sample design recent economic performance, and data on corruption is Eastern Europe remain identical and other factors are recent corruption scandals on coun- and Central Asia. In a recent paper controlled for where necessary. For try-level corruption indicators, both Knack compares corruption levels and example, perceptions of corruption as those based on expert assessments trends across countries in that region an obstacle to doing business can be and those based on firm and house- using a range of indicators and data affected by optimism or by economic hold surveys. It also recommends sources: conditions. more research into the actual (rather · Enterprise data from the Business Subject to these caveats, nearly all than purported) content of commonly Environment and Enterprise Per- the data sources show that corrup- used indicators. For example, several formance Survey (BEEPS). tion is declining in Eastern Europe sources place roughly equal weight on · Executive opinion surveys by the and Central Asia. The sources differ on state capture and administrative cor- World Economic Forum. the size of the decline, however, with ruption in their criteria but appear to · Household surveys by Transpar- BEEPS showing the biggest change. be measuring mainly administrative ency International. Both BEEPS and the World Economic corruption. · Expert assessments such as those Forum show improvement in most What can be done to improve the produced by Freedom House or types of administrative corruption, quality and data coverage of corrup- the International Country Risk with less bribe paying in several areas, tion assessments? Here the paper Guide. little or no change in public procure- calls for more data collection to: · The World Bank's Country Policy ment, and greater corruption in deal- · Replicate BEEPS for other regions. and Institutional Assessment ing with courts. But they show little The World Bank is already work- index. change in the capture of the state by ing toward this goal in partnership All these have important differenc- powerful interest groups. with regional development banks. es--in the aspects of corruption they Broader perceptions indicators of · Complement enterprise surveys purport to measure, in the clarity and corruption also tend to show more with more systematic household breadth of their definitions, and in the improvement in the region than surveys measuring experiences methods and transparency of their as- elsewhere. But all the data sources with corruption. sessments. For these reasons no one disagree on which countries had the · Strengthen efforts aimed at provid- indicator or data source is best for most progress. While BEEPS shows ing "actionable" indicators, such all purposes. And apparent progress a dramatic improvement in Georgia as the Public Integrity Index, the in reducing corruption depends on between 2002 and 2005, for example, International Budget Project, and which cross-country data set is used. no other source corroborates this. the Public Expenditure and Finan- Enterprise surveys such as BEEPS But because of the differences in how cial Accountability Program. measure only corrupt transactions sources define corruption, discrepan- between public officials and business cies do not necessarily mean inaccu- firms. While they give a more limited racy in any of them. Stephen Knack. 2006. "Measuring Corruption picture than broader measures, they Aggregating corruption indica- in Eastern Europe and Central Asia: A Critique also have advantages. They provide tors does not always produce a more of Cross-Country Indicators." Policy Research narrow, specific indicators, such as reliable measure than using a single Working Paper 3968. World Bank, Washing- bribes paid in tax collection. They indicator or data source. One cost is ton, D.C. WorldBankResearch Digest 7 Reversing Premature Mortality and share of jobs in response to higher mortality, injuries, and alcoholism Ill Health in the Russian Federation rates among men. The much higher male mortality rate, leading to dispar- Patricio V. Marquez and team ity in the number of women and men, has probably also contributed. The economic and social conse- The devastating rise in premature cancer) and injuries caused nearly 80 quences are fewer workers, destabi- mortality in Russia calls for a new percent of deaths in 2003, and the loss lization of families, growing regional focus on disease prevention of 15.2 million years of potential life. disparities, as well as high medical T What risk factors underlie this burden treatment costs, high rates of work- he Russian Federation is among of disease? The top three--high blood ers absenteeism due to ill health, the few countries where life ex- pressure, high cholesterol, and to- job losses, and significant losses in pectancy is falling--even though bacco--are estimated to contribute to household incomes that hinder pov- its economy continues to grow. High more than 75 percent of the country's erty reduction efforts. mortality combined with below- deaths. How should public health policy replacement fertility rates has shrunk But there is growing recognition respond to the rise in mortality rates? the population by 0.3 percent a year that alcohol also plays an important While the Russian health care system since 1990. If mortality rates had in- part in Russia's health crisis. The fluc- concentrates on acute medical care, stead followed the patterns in the 15 tuations in life expectancy since the the demographic data point to an countries of the pre-2004 European mid-1980s have been driven by causes urgent need to focus on preventing Union since the mid-1960s, the Rus- of death known to be associated with noncommunicable diseases and inju- sian population would be 17 million hazardous drinking. And ongoing re- ries. Research underlying the report people larger today. This demographic search suggests that alcohol's true suggests that the biggest gains may be devastation is unprecedented among contribution may be even greater than achieved by combining a broad industrial countries. previously suspected. approach--to change environmental Dying Too Young, a World Bank re- Russia's birthrate has also col- factors, lifestyle choices, and their so- port that analyzes health issues in lapsed. It had risen slowly since 1965, cial and economic determinants--with Russia, describes tragic, preventable slightly exceeding that of France, a much narrower targeting of clinical deaths that seem predictable in retro- Germany, Italy, the United Kingdom, interventions to high-risk groups. spect given common Russian lifestyles and the United States by 1985. But Actions aimed at the broad popula- exacerbated by the social, economic, then it plunged, dropping below that tion might include information cam- and political turmoil of the transition. of the other five by 2000. Great eco- paigns about the health risks of smok- Mortality in Russia is three times nomic, social, and political uncertain- ing and drinking, bans on advertising that in the other G-8 countries. Life ties contributed to decisions to delay tobacco and alcohol, and excise taxes expectancy at birth, at 66 years, lags childbearing. Russian family support on these products. Enforcing laws behind Japan's by 16 years and the EU programs are some of the weakest in against drinking while driving and average by 14 (figure 1). Male life ex- the industrial world. Taking time for liquor and tobacco sales to minors has pectancy was only 58 years in 2003, far pregnancy and childcare became more been relatively effective in many G-8 behind female life expectancy at 72. difficult as women took on a growing countries. For targeted groups, coun- The working-age population, typically seling and treatment for individuals the healthiest, had death identified as high risk, and subsequent rates exceeding those Figure 1. Life Expectancy at Birth in the Russia Federation and acute care, are necessary but much of both the young (0­14 European Union, 1970­2005 more expensive per patient. years) and the old (those 80 For the international community, over 75). Russian adults the lessons from Russia call into are also experiencing question its focusing of aid on com- lower healthy life expectan- 75 Pre-2004 European Union countries municable diseases without adequate cy--a measure that cap- assessment of the relative weight of tures mortality, ill health, non-communicable diseases and in- and severity of illness. The 70 juries. In some regions these play a healthy life expectancy years major role in premature mortality, ill in Russia is less than 60 health, and disability and thus have a years while it is higher major economic and social impact. than 70 years on average 65 in other G-8 countries. Russian Federation Patricio V. Marquez and team. 2005. Dying Too Among the working- Young: Addressing Premature Mortality and Ill age population, non- 60 Health Due to Non-Communicable Diseases and communicable diseases 1970 1980 1990 2000 Injuries in the Russian Federation. Washington, (cardiovascular disease, Source: World Health Organization, European "Health for All" Database. D.C.: World Bank. 8 WorldBankResearch Digest (continuedfrompage1) serially unlucky in the sense of receiv- Recent Policy Research ing repeated adverse shocks to which Working Papers in the accumulation of arrears. This donors have responded with debt re- suggests that alleviating debt burdens lief? Does the initial granting of debt WPS4070 Assessing Job Flows across Countries: The may not be the primary motivation for relief trigger a sequence of subsequent Role of Industry, Firm Size, and Regulations John Haltiwanger, Stefano Scarpetta, debt relief. Consistent with this, the rounds? Alternatively, does the persis- Helena Schweiger data also suggest that large debtors tence of debt relief result from persis- WPS4064 Public Infrastructure and Growth: New (countries accounting for a large share tent country characteristics, such as Channels and Policy Implications Pierre-Richard Agénor, Blanca Moreno- of the portfolio of lenders) are some- weak institutions or poor fiscal effort, Dodson what more likely to receive debt relief. that drive debt accumulation and force WPS4059 The Impact of Policies to Control Motor A striking feature of debt relief is its subsequent debt relief? Vehicle Emissions in Mumbai, India Akie Takeuchi, Maureen Cropper, Antonio persistence over time. In the sample of Depetris and Kraay study these alter- Bento 62 low-income countries that Depetris native possibilities and conclude that WPS4058 Learning through Monitoring: Lessons from and Kraay study, 23 never received persistent country characteristics are a Large-Scale Nutrition Program in Madagascar debt relief during 1989­2003, while the most likely explanation for the per- Emanuela Galasso, Jeffrey Yau another 20 had six or more rounds of sistence in debt relief. This observation WPS4055 The Investment Climate in Post-Conflict debt relief during the same 15-year leads to an important policy conclu- Situations Rob Mills, Qimiao Fan period. Together, these 20 frequent sion: unless debt relief also somehow WPS4050 The Demographic Benefit of International recipients of debt relief account for 71 alters these country characteristics, it Migration percent of the debt relief episodes ob- is unlikely that these countries will be Philippe Fargues served in the data. Another way to see able to "exit" from repeated cycles of WPS4049 Trade Reforms and Welfare: An Ex-Post Decomposition of Income in Vietnam this persistence: of the 25 countries debt reaccumulation and debt relief. Aylin Isik-Dikmelik receiving debt relief during the five- WPS4030 Liberalizing Trade in Services: A Survey year period 1989­93, fully 23 received Bernard Hoekman debt relief at least once during the Nicolas Depetris Chauvin and Aart Kraay. Forth- WPS4023 What is the Real Impact of Schooling on Age of First Union and Age of First Parenting? next five years, and 22 received debt coming. "Who Gets Debt Relief?" Journal of the New Evidence from Guatemala relief in the five years after that. European Economic Association. Jere R. Behrman, Alexis Murphy, Agnes Quisumbing, Usha Ramakrishnan, Kathryn This observed persistence in debt Nicolas Depetris Chauvin and Aart Kraay (2005). "What Has 100 Billion Dollars Worth of Yount relief raises several policy-relevant Debt Relief Done for Low-Income Countries?" questions: Are frequent recipients of Papers can be downloaded at http://econ.worldbank.org http://ideas.repec.org/p/wpa/wuwpif/0510001.htm To download the World Bank Research E-Newsletter, go to Data debt relief countries that have been & Research at http://www.worldbank.org The World Bank Research Digest is a quarterly publica- The Research Digest is financed by the Bank's Editorial Committee: Jean-Jacques Dethier (man- tion aimed at disseminating findings of World Bank Research Committee and managed by DECRS, the aging editor), Asli Demirgüç-Kunt, and Alan Gelb. research. The views and interpretations in the articles research support unit of the Development Economics Editor: Alison Strong; research assistance: Thi are those of the authors and do not necessarily repre- Vice Presidency (DEC). The Research Digest is not Trang Linh Phu; production: Evelyn Alfaro-Bloch. sent the views of the World Bank, its Executive Direc- copyrighted and may be reproduced with appropriate Information or free subscriptions: send email to tors, or the countries they represent. source attribution. researchdigest@worldbank.org or visit http://econ.worldbank.org/research_digest The World Bank 1818 H Street, N.W. Washington, D.C. 20433, U.S.A Printed on Recycled Paper