PREM Notes

176 items available

Permanent URI for this collection

http://hdl.handle.net/10986/9424

This note series is intended to summarize good practices and key policy findings on poverty reduction and economic management (PREM) topics.

Items in this collection

Now showing 1 - 10 of 15

Rethinking Civil Service Reform

(World Bank, Washington, DC, 1999-10) Nunberg, Barbara

A gnawing critique of civil service reform efforts persists, intimating that these civil service reform operations of the World Bank have boosted neither efficiency nor effectiveness. The outlines of the problem are fairly clear: civil service pay and employment reforms have had only limited achievements, and there have been difficulties with government ownership and oversight--especially in Africa. At the same time, an emerging agenda for government reform includes standard personnel management and pay and employment reforms, but also tries to link these activities with fundamental tasks of transforming the state. The main problem with the Bank's conventional approach to civil service reform is that it has tried to use palliative measures to solve problems that require major surgery. Technical administrative fixes have been applied to fundamental problems of political economy. And even the technical side of the focus has been narrow, ignoring crucial links with other parts of the larger system. Overcoming the limitiations of this approach will require a more comprehensive and realistic framework for reform--as well as new instruments of support.
Private Participation in Port Facilities : Recent Trends

(World Bank, Washington, DC, 1999-09) Sommer, Dirk

The private sector has become increasingly involved in the operation of common-user port facilities during the 1990s, following public sector dominance of the sector since the 1940s. During the past decade the reform of port administration has gained momentum in industrial and developing countries alike. Between 1990 and 1998, 112 port projects with private participation reached financial closure in twenty-eight developing countries, with investment commitments totaling more than US$9 billion. Most projects are in East Asia and Latin America, and most are long-term concessions. This Note provides an overview of the emerging trends in developing countries and outlines the main issues for the future. These issues include sustaining competition at a regional level, across networks, and with other transport sectors, such as road and rail.
Lessons from Large Adjustment Loans

(World Bank, Washington, DC, 1999-08) Morrow, Daniel

This note presents the lessons from the assessments that are likely to be most useful to country directors, and task teams preparing new adjustment operations. The five adjustment loans (two in Argentina, and one each in Korea, Malaysia, and Russia) show that applying basic lessons is not always straightforward, however, and, sometimes involves making tradeoffs among Bank objectives. It is stipulated policy objectives are more likely to be achieved, if there is substantial borrower ownership. To this end, support for new policies should be established, towards generating broad political ownership, including engaging key players in incoming administrations, to help build ownership of reforms. Moreover, combined, the Bank's country knowledge and global expertise, can generate quality operations, that forge local partnerships, draws on prior experience, and maintains a minimum knowledge base. This is to say, setting priorities, and sequencing reforms should be carefully included during the design phase, with particular attention to avoid excessively broad conditionality, which may reduce the probability of real progress on key reforms.
Saving - What Do We Know, and Why Do We Care?

(World Bank, Washington, DC, 1999-08) Servén, Luis ; Loayza, Norman ; Schmidt-Hebbel, Klaus

In principle, there is little reason people, and countries facing different shocks, and income streams should strive for optimal saving rates. But in practice, the inter-temporal choices that underlie saving, are subject to externalities, market failures, and policy distortions, that can cause saving rates to differ from welfare-maximizing levels. The social value of saving could also exceed its private value, because of imperfections in global financial markets. Still, a national saving rate broadly in line with an economy's investment rate, reduces vulnerability to sudden shifts in international capital flows, driven by uncontrollable behavior, or self-fulfilling investor expectations. Yet, as shown by the recent East Asia crisis, high saving alone does not provide complete insurance against the consequences of weak financial systems, or unsustainable exchange rate policies. This is the subject analyzed in this note, through a recent Bank research project, that shows savings has important interactions with income and growth, with resulting implications for policy. Such policies that spur development are an indirect, but effective way to raise private saving. The note further examines this private saving, and public policy, outlining fiscal issues, financial liberalization, and the impact of pension reform. The note reflects on situations where reforms both invite aid, and induce higher investment and growth - so that aid and saving rise together - concluding that aid need not invariably crowd out national saving.
Looking for More from Adjustment : Africa's Experience

(World Bank, Washington, DC, 1999-05) Pape, Elizabeth

By the mid-1990s, after more than 15 years of adjustment lending, it had become clear that adjustment programs in Africa had not accelerated growth or reduced poverty, except in a handful of countries. The main reasons? Recipient governments did not "own" the reform programs, and they perceived the conditionality attached to the programs as being imposed on them. Adjustment programs were often unresponsive to country conditions and changes in external circumstances. In most cases the World Bank and recipient governments did not have a shared vision of what adjustment programs were supposed to achieve. In response to this diagnosis, in 1995 the Bank's Africa Region introduced the Higher Impact Adjustment Lending (HIAL) initiative. The initiative aimed to achieve a quicker, stronger, broader, and longer supply response from structural adjustment programs by: 1) increasing country selectivity and strengthening government ownership; 2) allowing more flexibility in adjustment operations--in particular, introducing new tranching mechanisms; and 3) introducing performance indicators to define expected results and assess actual outcomes. This note describes how the approach and design of these operations were adapted to achieve higher impact.
Does Debt Management Matter? YES

(World Bank, Washington, DC, 1999-02) Kiguel, Miguel A.

Debt management can reduce financial vulnerability by limiting liquidity, and rollover risks. This note reviews Argentina's debt management strategy, towards improving the country's credit rating to an investment grade, providing flexibility, liquidity, and opportunity. However, the risks of refinancing can be larger for domestic currency debt, than for foreign currency debt. Lessons from Argentina's experience suggest that volatile flows can be dealt with, through prudential regulation in the banking sector, and overall sound policies in capital markets. Furthermore, avoiding the conversion of private debt into public debt, also helped Argentina overcome the crisis; but perhaps, the biggest challenge is to develop new indicators of financial vulnerability, which should put more weight on stocks of debt, and other financial assets, rather than on flow indicators, such as the current account deficit.
Reducing Vulnerability to Speculative Attacks

(World Bank, Washington, DC, 1999-02) Calvo, Sara

The note focuses on the speculative attack on domestic assets, which can occur irrespective of country's fiscal situation, suggesting political economy considerations may be the reason. However, recent events have reopened the debate on how to reduce vulnerability to capital outflows in developing countries, though other risk factors have been identified, which if minimized, can still reduce vulnerability to speculative attacks. It addresses the perils of inconsistent macroeconomic policies, as evidenced in Argentina, where the Central Bank was financing the government's budget deficit by creating money, while trying to keep the exchange rate fixed. Moreover, a speculative attack on bonds, instead of currency, can also lead to a devaluation, such as a sudden shift in perceptions about macroeconomic stability, may lead to a loss in reserves, as in Mexico's 1994 crisis, when high interest rates associated with a currency defense was perceived as intolerable. This is substantiated through case studies, which further include the expectation of realized contingent liabilities, a drop in tax revenues associated with business cycles driven by capital inflows, and investor refusal to roll over debt in countries other than the crisis country, know as contagion. Recommendations include the adoption of consistent macroeconomic policies; reduction of debt rollover risks; strengthening financial regulation; and, capital flows regulation.
Using Markets to Deal with Commodity Price Volatility : What Can Governments and Donors Do to Develop Markets that Ameliorate Commodity Price Volatility?

(World Bank, Washington, DC, 1999-01) Larson, Donald ; Varangis, Panos

Commodities are often at the heart of local and sometimes national economies. Commodity prices are notoriously volatile, creating instability and uncertainty for commodity-dependent developing countries. Commodity price instability undermines economic growth and skews the distribution of income. As a result, nearly every government has tried to manage commodity price risks. This Note discusses different sets of commodity pricing policies and the barriers to their risk management.
Decentralizing Borrowing Powers

(World Bank, Washington, DC, 1999-01) Ahmad, Junaid

The note highlights the importance of sound intergovernmental fiscal relations, and proper regulation for successful sub-national borrowing, and illustrates the potential macroeconomic hazards of decentralizing borrowing powers, arguing that the impact of a possible moral hazard problem, namely, the access to financial markets by sub-national governments, may generate unplanned liabilities for central governments. Yet academia, and country experiences do not suggest adverse links between decentralized borrowing powers, and the central government's ability to maintain fiscal discipline, and macroeconomic stability. Rather the key seems to lie in the design of fiscal decentralization, particularly the regulatory framework under which borrowing powers are decentralized. The note outlines the reasons why sub-national governments require access to financial markets: to finance capital spending, and foster political accountability, which can be achieved through direct borrowing by central government, through a public financial intermediary, or, through direct borrowing. As per designing the regulatory framework, the note suggests better information systems, bankruptcy laws, and access to tax bases, in addition to separate fiscal/financial systems, and sound legislation to impose budget discipline, enabling access to capital markets to complement fiscal powers devolution to regional authorities.
Gender and Transport : A Rationale for Action

(World Bank, Washington, DC, 1999-01) Bamberger, Michael ; Lebo, Jerry ; Gwilliam, Kenneth ; Gannon, Colin

Transport can make a big difference in increasing women's productivity and promoting social equity. Yet, little attention appears to have been paid to women's needs in transport projects. How best can transport policies and projects identify and respond to the needs of women? Making transport policy more responsive to the needs of women requires developing a structured approach to understand their needs, identifying instruments to address those needs, analyzing the costs and benefits of those instruments, and establishing an appropriate policy framework. Moreover, cross-sectoral impacts of transport improvements can serve as a basis for raising gender issues. A first step will be to ensure that at each stage of the planning process, attention is paid to involving women in the planning and implementation of projects that affect them.