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.

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Now showing 1 - 10 of 28

Measuring National Income and Growth in Resource-Rich, Income-Poor Countries

(World Bank, Washington, DC, 2010-08) Hamilton, Kirk ; Ley, Eduardo

In the decade leading to the recent commodity boom, which peaked in 2007-08, several resource-rich, low-income countries displayed high rates of gross domestic product (GDP) growth while social indicators did not improve significantly. It is well known that, in itself, the widely tracked GDP may not be the most relevant summary of aggregate economic performance in all places at all times. This note suggests that for countries with significant exhaustible natural resources and important foreign-investor presence, adjusted net national income (aNNI), can usefully complement GDP to assess economic progress.
Natural Resources and Development Strategy after the Crisis

(World Bank, Washington, DC, 2010-01) Brahmbhatt, Milan ; Canuto, Otaviano

Recent events have rekindled interest in the role of primary commodities in development. Was the boom in commodity prices from around 2003 through 2008 just a cyclical event, or does it suggests that prices have entered on a period of secular strength, driven by factors such as demand in big, fast growing developing countries like China? It is notable that, while commodity prices fell sharply from their peak in 2008 with the onset of the global recession, they generally remained much higher than previous recession lows, often as high as in 2005-07, a period of robust world growth. Furthermore, prices have also rebounded smartly over the course of 2009. If a period of sustained commodity strength is imminent, what are the implications for development policies? Development economists have long debated the problems associated with the traditionally high specialization in production and export of primary commodities of most developing countries. Many argue that dependence on primary commodities has proved to be a poisoned chalice or curse for development, which, given this view, necessarily entails structural change and rapid industrialization. Others, however, suggest that sustained high commodity prices could reduce the relevance of an industrialization-focused development strategy for commodity-dependent, low-income countries (LICs). In this note authors briefly review four questions: how dependent are developing countries on primary commodity exports? What is the outlook for primary commodity prices? Is there a natural resource "curse" (or blessing)? What policies can help poor countries best manage commodity resources for long-run development?
The Pattern of Antidumping and Other Types of Contingent Protection

(World Bank, Washington, DC, 2009-10) Bown, Chad P.

Many of the major economies in the multilateral, rules-based trading system find themselves in a situation in which their applied tariff rates are quite close to the tariff binding levels that form their legal commitments at the World Trade Organization (WTO). This implies that they cannot simply raise applied tariff rates to respond to domestic industry demands for additional trade barriers to protect them from imports. One of the fundamental and potentially WTO-legal ways in which national governments can respond to domestic industry calls for additional protection from imports is by resorting to trade 'remedy' policy instruments such as antidumping, safeguards, and countervailing duty (anti-subsidy) policies. This note, which describes newly collected data made available through the World Bank-sponsored global antidumping database, reports on the combined use of such policies, comprehensively collected across the major WTO member economies.
Breaking into New Markets, Raising Quality, and Improving Services : Neglected Avenues for Export Diversification

(World Bank, Washington, DC, 2009-09) Brenton, Paul ; Walkenhorst, Peter

Expanding international trade is an important avenue for growth and development in low-income countries. In addition to increasing the quantity of existing export flows, many countries seek to diversify into production and export activities that provide a higher return to the labor and capital resources employed. Export diversity also reduces a country's vulnerability to pronounced price swings in international markets. This note reviews the findings of a series of papers on the diversification process contained in Newfarmer, Shaw, and Walkenhorst (2009). The analysis suggests that there has been too much focus on simply adding new products to export portfolios, which often underscores the use of industrial policies. While such actions are important, a more comprehensive view of diversification, and hence a more comprehensive trade policy, is needed that improves the quality of existing exports, breaks into new geographic markets, and increases services exports.
On the Marriage Between Public Spending and Growth : What Else Do We Know?

(World Bank, Washington, DC, 2009-03) Moreno-Dodson, Blanca

While there are strong theoretical arguments for ways in which public spending influences growth, robust empirical links have been difficult to establish. More recently, many of the methodological problems that plagued the earlier literature have been overcome and interesting policy lessons drawn. The number of studies of developing countries using these new approaches is still limited, due to data scarcity and other comparability issues, but overall findings from the new literature are relevant for developing country policy makers and also open new venues for future research. The objective of this note is to present these new empirical results together with the methodological improvements that support them, and to outline some of the issues that need deeper analysis and empirical study, particularly in developing countries.
A Stocktaking of PRSPs in Fragile States

(World Bank, Washington, DC, 2008-11) Dudwick, Nora ; Nelsson, Adam

In 1999, the World Bank and the International Monetary Fund (IMF) introduced poverty reduction strategy papers (PRSPs) as a condition for highly indebted countries to receive debt relief under the HIPC initiative. Since then, PRSPs have become a condition for aid to International Development Association (IDA) countries, for which they are considered instrumental in refocusing attention on poverty, democratizing policy making, and improving donor coordination. While PRSPs may play that role in many IDA countries, their usefulness in fragile states, including those just emerging from conflict, has been questioned. Increased donor attention to the specific problems of such states was the impetus for a Poverty Reduction Group (PRMPR) stocktaking of PRSPs in fragile environments.
Deposit Dollarization : What's Happening, What Can Be Done?

(World Bank, Washington, DC, 2004-09) Honohan, Patrick

Around the world-not just in Latin America -central bankers are looking uneasily at the growing share of foreign currency-denominated deposits in their banking systems. They have a sense that these deposits may not be a good thing, or at least may be a symptom of weaknesses in their financial structures or policies. In some countries spontaneous dollarization of the banking system has long been extensive and well known; in other countries it has been a creeping affair.
Reaching Effective Consensus : Monterrey and the Development Agenda

(World Bank, Washington, DC, 2003-11) Page, John ; Pugatch, Todd

Recent international conferences have reflected a renewed interest in development. Among the most notable have been the 2001 Ministerial Conference of the World Trade Organization in Doha, Qatar, which launched the "development round" of talks on trade liberalization; the 2002 World Summit on Sustainable Development in Johannesburg, South Africa; and the 2002 International Conference on Financing for Development in Monterrey, Mexico, which resulted in the Monterrey Consensus on the international agenda for development. The Monterrey Consensus focuses on increasing international cooperation to reduce poverty in developing countries by: Improving policies and outcomes in these countries. Delivering more-and more effective-aid from donor countries. Improving market access for exports from developing to industrial countries. Advocates of the consensus see it as evidence of a stronger voice for developing countries in issues related to their development and of a renewed commitment by industrial countries to increase aid and market access. But critics claim that the Monterrey Consensus is little more than artifice-and that deep rifts between rich and poor countries prevent tangible progress.
Strengthening Oversight by Legislatures

(World Bank, Washington, DC, 2002-10) Manning, Nick ; Stapenhurst, Rick

About 90 percent of the world's nearly 200 sovereign states have national legislatures or parliaments. With the spread of democracy and the rise of multiparty political systems, these bodies are playing larger roles in government. Increasingly, legislatures and their members perform four important functions of governance: o Making policies and laws. Legislatures are representative bodies for collective decisionmaking, working with the executive branch to deliberate policies and make laws. Representing citizens. Legislators give voice to individual citizens, civil society organizations, and business groups, representing the needs of local constituents in policymaking. Overseeing the executive. Legislatures oversee policy implementation by the executive branch, scrutinizing its work and holding it accountable. Recruiting future leaders. Legislatures are stepping stones and training grounds for senior positions in the executive branch. Transcending these formal functions, legislatures also provide an arena where competing political forces can debate and reach consensus on national policies and laws. This note addresses the oversight function because of its significance for government transparency and accountability, and because the Bank has initiated pilot projects to support this function.
Currency Crises and Government Finances

(World Bank, Washington, DC, 2002-05) Burnside, Craig

Fiscal policy plays a big role in currency crises - before, and after they occur. Thus policymakers should not underestimate the importance of fiscal policy: a) the realization of large contingent liabilities can quickly, and dramatically alter government finances, leading to a currency crisis; b) the effects of a currency crisis on government finances depend on the structure of government revenue, spending, and debt; c) the fiscal policies adopted in response to a crisis, influence economic outcomes, especially inflation, and depreciation. The note reviews the traditional models of currency crises, explained as a consequence of unsustainable fiscal policy, and how debt is accumulated, how currency crisis then develops, and why does fiscal policy matter. Focusing on bank bailouts, it is argued that traditional models of currency crises are applicable to emerging markets, suggesting that deficits after the East Asia financial crises could have been anticipated given the region's deteriorating banking systems, but that economic outcomes largely depend on the mix of financing.