Economic Premise

121 items available

Permanent URI for this collection

http://hdl.handle.net/10986/9402

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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Now showing 1 - 10 of 13

Can Trade Reduce Poverty in Africa?

(World Bank, Washington, DC, 2013-04) Le Goff, Maëlan ; Singh, Rajun Jan

While 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.
The Brazilian Competitiveness Cliff

(World Bank, Washington, DC, 2013-02) Canuto, Otaviano ; Reis, Jose Guilherme ; Cavallari, Matheus

Brazilian exports of goods and services have grown sharply in recent years, with sales nearly three times higher in 2010 than in 2000. However, Brazil faces considerable competitiveness challenges: its export performance depends mostly on favorable geographical and sector composition effects. Such challenges increased after the recent global economic crisis. A recent slowdown in industrial exports, production, and investments seems related to supply-side difficulties stemming from a wide range of inefficiencies and rising costs, rather than insufficient demand. Although a stronger currency is one of the factors behind the lower competitiveness of Brazil's manufacturing exports, sluggish productivity performance, lack of dynamism at the firm level, and a real wage uptrend seem to explain a significant part of the overall loss of competitiveness. This diagnostic reinforces the urgency of resuming the agenda of microeconomic reforms, increasing the investment-to-Gross Domestic Product (GDP) ratio, and advancing toward better-skilled human capital.
Trade Costs and Development : A New Data Set

(World Bank, Washington, DC, 2013-01) Arvis, Jean-François ; Shepherd, Ben ; Duval, Yann ; Utoktham, Chorthip

The World Bank and the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP) jointly prepared a new global data set of bilateral trade costs based on trade and production data. Accessible on the World Bank Open Data Web site, it opens new analytical possibilities for policy makers and researchers working on trade integration. The data stress the importance of supply chains and connectivity constraints in explaining the higher costs and lower levels of trade integration observed in developing countries. To measure trade costs in the developing world over the 1995-2010 period, UNESCAP and the World Bank embarked on a joint data collection exercise. In addition to data on export and import flows, calculation of trade costs using the inverse gravity methodology also requires information on domestic production in each country. Usage can then be calculated as domestic production less total exports. The result of the data collection exercise is a database covering up to 178 countries, two sectors, and the 1995-2010 period. Based on the available data, trade costs data are calculated for as many bilateral pairs as possible, and interpolation used to fill in missing country- year combinations when feasible.
Avoiding Middle-Income Growth Traps

( 2012-11) Agénor, Pierre-Richard ; Canuto, Otaviano ; Jelenic, Michael

Since the 1950s, rapid growth has allowed a significant number of countries to reach middle-income status; yet, very few have made the additional leap needed to become high-income economies. Rather, many developing countries have become caught in what has been called a middle-income trap, characterized by a sharp deceleration in growth and in the pace of productivity increases. Drawing on the findings of a recently released working paper (Agenor and Canuto 2012), as well as a growing body of research on growth slowdowns, this note provides an analytical characterization of 'middle-income traps' as stable, low-growth economic equilibrium where talent is misallocated and innovation stagnates. To counteract middle-income traps, there are a number of public policies that governments can pursue, such as improving access to advanced infrastructure, enhancing the protection of property rights, and reforming labor markets to reduce rigidities all implemented within a context where technological learning and research and development (R&D) are central to enhancing innovation. Such policies not only explain why some economies particularly in East Asia were able to avoid the middle-income trap, but are also instructive for other developing countries seeking to move up the income ladder and reach high-income status.
Service with a Smile

(World Bank, Washington, DC, 2012-11) Ghani, Ejaz ; Goswami, Arti Grover ; Kharas, Homi

Can service be a growth escalator? The world is experiencing its third industrial revolution, and services are at the forefront of this revolution. Services have already surpassed industry as a source of economic growth and job creation, in both developed and developing economies. In the industrial sector, technologies have matured and employment is shrinking. However, services are getting more sophisticated and jobs are expanding. Services growth is also more inclusive and sustainable. It increases the participation of women in the labor force and places a lighter burden on natural resources. The promise of the services revolution is that countries do not need to wait to get started with rapid development. There is a new boat that development latecomers can take.
The WTO and the Doha Round : Walking on Two Legs

(World Bank, Washington, DC, 2011-10) Hoekman, Bernard

The Doha Round of the World Trade Organization (WTO) negotiations has been ongoing for 10 years, and given political cycles in major countries, there is not much hope for a rapid conclusion. The topics on the table are important, and in principle there is enough substance for all countries to gain from an agreement, but, unfortunately, too much emphasis has been placed on gains through market access alone. The Doha Round is about much more than market access. Concluding the talks arguably requires greater recognition of the value of trade policy disciplines that will be part of any agreement. The WTO is not just a market access negotiating forum; it is also a multilateral umbrella through which governments can agree on rules of the game for other trade-related policies. Given the slow progress of the Round, greater emphasis could be put on leveraging existing WTO bodies to enhance the transparency of nontariff measures, address regulatory concerns that impede liberalization of trade in services, and launch a dialogue on domestic economic policies that can create negative spillover effects for trading partners.
Sophistication in Service Exports and Economic Growth

(World Bank, Washington, DC, 2011-04) Mishra, Saurabh ; Lundstrom, Susanna ; Anand, Rahul

Services can now be stored and traded digitally, and they are not subject to many of the trade barriers that physical exports have to overcome. Services are no longer exclusively an input for trade in goods, but have become a 'final export' for direct consumption. It is important to note that services not only have become more tradable, but also can be increasingly unbundled: a single service activity in the global supply chain can now be fragmented and done separately at different geographic locations. This has led to a new channel of growth-what we call service exports sophistication.
Uncovering Developing Countries’ Performance in Trade in Services

(World Bank, Washington, DC, 2010-11) Saez, Sebastian ; Goswami, Arti Grover

Services play a broad and strategic role in the economy. Trade in services has been expanding rapidly because technological improvements have reduced the cost of cross-border exchange from infinity to virtually zero, thereby allowing for new export activities. Trade in services, particularly business services, has become an element of export diversification for many developing countries. Besides traditional activities such as tourism, activities such as health and information and communication services are among the most successful services exports. This note focuses on the determinants of trade in services for developing countries.
Russia 1998 Revisited : Lessons for Financial Globalization

(World Bank, Washington, DC, 2010-10) Pinto, Brian ; Ulatov, Sergei

In 1998, the Russian Federation experienced one of the most severe emerging market crises of the 1997-2001 periods. It occurred less than six months after the attainment of single-digit inflation, which was supposed to launch the economy onto a sustainable growth path. This note sets out why that occurred and discusses the lessons learned.
Aid for Trade : An Action Agenda Looking Forward

(World Bank, Washington, DC, 2010-08) Hoekman, Bernard ; Wilson, John S.

The current post-crisis environment and fragile economic recovery increases the importance of aid for trade. Global rebalancing and tightened fiscal budgets in the short to medium term also place renewed emphasis on aid effectiveness. This note identifies four options to enhance the effectiveness of the multilateral aid for trade initiative: (i) expanding market access for least-developed countries (LDCs) through leadership by middle-income G-20 members; (ii) creating a mechanism to identify good practices in domestic regulation of service markets and other 'behind-the-border' trade-related policies; (iii) leveraging the dynamism and knowledge of the private sector to improve trade facilitation and build capacity; and (iv) but a renewed 'activism' by government in the trade and growth agenda need not mean.