Economic Premise
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The Economic Premise series summarizes good practices and key policy findings on topics related to economic policy. They are produced by the Poverty Reduction and Economic Management (PREM) Network Vice-Presidency of the World Bank.
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Publication Can Trade Reduce Poverty in Africa?(World Bank, Washington, DC, 2013-04) Le Goff, Maëlan; Singh, Rajun JanWhile most economists accept that, in the long run, open economies fare better in aggregate than closed ones, many fears that trade could harm the poor. African countries, for example, have realized significant improvements in trade liberalization in recent decades, yet Africa remains the poorest continent in the world. It seems that the large gains expected from opening up to international economic forces have been limited in Africa, especially for poor people. Drawing on the findings of a recently published working paper (Le Goff and Singh 2013), this note argues that the benefits of trade are not automatic, but rather depend on accompanying policies aimed at developing the financial sector, promoting primary education, and improving governance. This accompanying policy agenda allows people to take advantage of the opportunities offered by freer trade, by reallocating resources away from less productive activities to more promising ones. Trade liberalization therefore should not be implemented on its own, but with the necessary complementing policies.Publication Collecting High-Frequency Data Using Mobile Phones : Do Timely Data Lead to Accountability?(World Bank, Washington, DC, 2013-01) Croke, Kevin; Dabalen, Andrew; Demombynes, Gabriel; Giugale, Marcelo; Hoogeveen, JohannesAs mobile phone ownership rates have risen dramatically in Africa, there has been increased interest in using mobile telephones as a data collection platform. This note draws on two largely successful pilot projects in Tanzania and South Sudan that used mobile phones for high-frequency data collection. Data were collected on a wide range of topics and in a manner that was cost-effective, flexible, and rapid. Once households were included in the survey, they tended to stick with it: respondent fatigue has not been a major issue. While attrition and nonresponse have been challenges in the Tanzania survey, these were due to design flaws in that particular survey, challenges that can be avoided in future similar projects. Ensuring use of the data to demand better service delivery and policy decisions turned out to be as challenging as collecting the high-quality data. Experiences in Tanzania suggest that good data can be translated into public accountability, but also demonstrate that just putting data out in the public domain is not enough. This note discusses lessons learned and offers suggestions for future applications of mobile phone surveys in developing countries, such as those planned for the World Bank's "Listening to Africa" initiative.Publication Why Cargo Dwell Time Matters in Trade(World Bank, Washington, DC, 2012-05) Refas, Salim; Raballand, Gael; Beuran, Monica; Isik, GozdeThe international community has been increasing investment in projects that promote trade facilitation and improve logistics in the developing world, including in ports. In Africa, a key motivation for such projects has been a presumption that poor infrastructure and inefficient border control agencies are the major causes of extended delays in sub-Saharan Africa (SSA) ports. Based on new data and analysis, this note argues that collusion between controlling agencies, port authorities, private terminal operators, logistics operators, and large shippers is an important part of the problem. Decreasing dwell times in ports requires governments to combat collusive practices between the private sector and public authorities and recognize that large-scale investments in infrastructure are not sufficient to reduce logistics delays.Publication The Drought and Food Crisis in the Horn of Africa : Impacts and Proposed Policy Responses for Kenya(World Bank, Washington, DC, 2011-11) Demombynes, Gabriel; Kiringai, JaneAs the world begins to feel the effects of climate change, the frequency of droughts is increasing in the Horn of Africa. In Kenya, the drought and food crisis affect welfare through two main channels. The first channel is the increased mortality of livestock in drought-affected areas, which are home to 10 percent of the country's population. The second channel is by exacerbating increases in food prices, which are largely driven by worldwide price trends. Considering these two channels, this note identifies four broad policy changes that can reduce Kenya's future vulnerability to such shocks: (i) investment in people in the arid and semiarid lands; (ii) reform of Kenya's maize policy; (iii) review of the East African Community grain trade policy; and (iv) formulation of a unified social protection system.Publication Developing an African Offshoring Industry—The Case of Nigeria(World Bank, Washington, DC, 2010-10) Strychacz, Nicholas; Radwan, IsmailThe purpose of this note is to raise awareness of Nigeria's potential as an African offshoring hub, and it is aimed primarily toward policy makers, potential private sector investors, and development partners. This note addresses the following questions: what can Nigeria do to take advantage of the benefits of global trade in services; how can the country brand itself as an offshoring destination for international investors; and what government policies are required to ensure that Nigeria plays a role in the growing Information communication technology (ICT) offshoring sector.Publication Reform and Regional Integration of Professional Services in East Africa(World Bank, Washington, DC, 2010-09) Dihel, Nora; Fernandes, Ana Margarida; Mattoo, Aaditya; Strychacz, NicholasProfessional services matter for development in East Africa. Business services, including professional services, are among the most dynamic services sectors; and are a key input for other sectors. Greater use of professional services by East African firms is associated with higher labor productivity. But there is a large gap between the potential contribution these services could make and the meager contribution they make today. National markets for professionals and professional services in East Africa remain underdeveloped, whereas regional markets are fragmented by restrictive policies and regulatory heterogeneity. An effective reform agenda will require policy action in four areas: education, regulation of professional services, trade policy, and labor mobility at both the national and international levels.Publication Facilitating Cross-Border Mobile Banking in Southern Africa(World Bank, Washington, DC, 2010-08) Saranga, Tania; Maimbo, Samuel; Strychacz, NicholasThe use of mobile banking is an increasingly important component of national and regional economic development in Southern Africa. Mobile banking can help bring the large unbanked population into the formal financial sector, and can facilitate cross-border trade by easing the difficulty for small businesses and traders to make financial transactions. For mobile banking to reach its full potential in Southern Africa, however, African governments must establish more efficient regulatory frameworks and implement well-designed pilot programs to gain more insight into the challenges facing a full rollout of mobile banking.Publication China’s Investment in African Special Economic Zones : Prospects, Challenges, and Opportunities(World Bank, Washington, DC, 2010-03) Brautigam, Deborah; Farole, Thomas; Xiaoyang, TangChina's recent moves to establish special economic zones (SEZs) in several African countries can make a significant contribution to industrialization in Africa. But the success of these projects is by no means guaranteed. Meeting the objectives of both China and African countries will require an active partnership and a framework for collaboration that includes engagement from host governments, processes for phasing-in local control, communication and enforcement of standards, and support for integration with local economies.