Other Poverty Study

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    Capacity Building in Fiscal Incidence Analysis: Lessons and Reflections from the Field
    (Washington, DC: World Bank, 2022-03-28) World Bank
    Fiscal Incidence Analysis (FIA) is the study of how fiscal policies benefit (or burden, in the case of taxes) people and households at different parts of the income distribution. The objective of this note is to highlight lessons learned in capacity building and skill transfer for FIA, including Commitment to Equity (CEQ) assessment. The goal is to uncover effective strategies for transferring the skills and capacities to government officials and other fiscal experts in countries around the world to enable them to carry out this type of analysis themselves. The note is based on interviews with experts, both within and outside of the World Bank who have been conducting FIA assessments and building and using microsimulation tools, often in close collaboration with officials from the government. The rest of this note: (i) describes the common engagement models and capacity building approaches that have been taken; (ii) assesses the extent to which these have been successful and distils lessons learned from some of these efforts, and (iii) identifies a few concrete ways in which similar efforts in the future could be made more effective.
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    Inequality in Southern Africa: An Assessment of the Southern African Customs Union
    (Washington, DC, 2022) World Bank
    The Southern African Customs Union (SACU) is the most unequal region in the world. While there has been some progress in recent years, inequality has remained almost stagnant in the most unequal countries. Using an innovative framework, this report provides a systematic and comprehensive analysis of inequality in the region. The main conclusions are as follows: first, inherited circumstances over which an individual has little or no control (i.e., inequality of opportunity) drive overall inequality, and their contribution has increased in recent years. This is an important concern particularly because this type of inequality is not the result of people’s efforts. Second, lack of access to jobs and means of production (education, skills, land, among others) by disadvantaged populations slows progress towards a more equitable income distribution. In a context where jobs are scarce, having post-secondary or tertiary education is key to both accessing jobs, and obtaining better wages once employed. Third, fiscal policy helps reduce inequality through the use of targeted transfers, social spending, and progressive taxation, but results are below expectation given the level of spending. Fourth, vulnerability to climate risks and economic shocks makes any gains towards a more equal society fragile. Looking ahead, accelerating inequality reduction will require concerted action in three policy areas: (a) expanding coverage and quality of education, health, and basic services across subregions and disadvantaged populations to reduce inequality of opportunity; (b) strengthening access to and availability of private sector jobs. It is important to accompany structural reforms with measures that facilitate entrepreneurship and skills acquisition of disadvantaged populations, and to improve land distribution and productivity in rural areas; and (c) investing in adaptive social protection systems to increase resilience to climate risks and economic vulnerability, while enhancing targeting of safety net programs for more efficient use of fiscal resources.
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    The Middle Class in the Philippines: An Exploration of the Conditions for Upward Mobility
    (World Bank, Washington, DC, 2020-06-19) World Bank
    A decade of rapid economic growth has supported upward mobility and the expansion of the middle class in the Philippines. While the Philippines’ record of economic growth has been sound, many East Asian countries have performed better, resulting in higher levels of economic mobility and more rapid middle-class expansion. This study aims to inform these efforts through an in-depth examination of varying factors that affect upward mobility and middle-class expansion in the Philippines.
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    Using Remittance Transaction Data for Timely Estimation of the Foreign Worker Population in Malaysia
    (World Bank, Washington, DC, 2020-06-06) Ahmad, Zainab Ali ; Simler, Kenneth ; Yi, Soonhwa
    Malaysia has been grappling with understanding how many foreign workers reside in the country and thus faces challenges in formulating evidence-based foreign worker policies. This paper investigates how to use micro-level remittance transaction data collected from money transfer service providers to estimate the number of foreign workers. Most foreign workers remit a large portion of their earnings to support family members back home. They are low-income earners, are sensitive to remittance costs, and thus opt for money transfer service providers to remit money rather than regular banks, where transfer services are more expensive. Therefore, the remittance data provide a useful source to conduct the investigation. Existing estimates range from two to five million foreign workers; our results narrow that range considerably, estimating a total of 2.99 million to 3.16 million foreign workers in Malaysia as of 2017–18. State and nationality distributions of foreign workers in our estimates are consistent with the Ministry of Home Affairs data, lending support to the validity of our estimates. Nevertheless, authors note that the Bank Negara Malaysia remittance data could potentially underestimate the number of workers in states with low access to money service providers, as well as nationalities that have access to alternative money transfer mechanisms such as commercial banking and informal transfer channels.
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    Georgia Indebtedness Poverty Note: Analysis Based on Integrated Household Survey
    (World Bank, Washington, DC, 2018-11-05) Nozaki, Natsuko Kiso ; Fuchs Tarlovsky, Alan ; Cancho, Cesar A.
    There is considerable public concern about the level of household indebtedness in Georgia. The new regulation expected to come into force on November 1, 2018 addresses this concern by enforcing the responsible credit framework targeting commercial banks. The objective of this note is twofold. First, the note presents micro-level evidence using the nationally representative household survey to understand households’ borrowing patterns with supporting evidence from perceptions surveys. Second, the note examines plausible causal effects of over-indebtedness on household’s welfare. This paper is structured as follows. Section 2 provides macroeconomic indicators and findings from perception survey as the background evidence. Section 3 illustrates the prevalence of borrowing among the households and identifies type of households that borrow from different sources. Section 4 shows results from the causal impact analysis of bank loans on household welfare. Section 5 concludes with directions for future research.
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    Braving the Storm: Poverty and Inequality in Bosnia and Herzegovina 2007-2011
    (World Bank, Washington, DC, 2015-05) World Bank ; Agency for Statistics of Bosnia and Herzegovina ; FBiH Institute for Statistics ; RS Institute for Statistics ; AGe
    This note describes the trends in, and composition of, absolute poverty based on household expenditures, and is thus concerned, as a matter of policy objectives, with access of the population to a particular minimum standard of living. This should be viewed as complementary to the companion note on social exclusion based on Europe 2020 indicators including the relative at-risk-of-poverty (AROP) rate, focuses on low income in relation to other residents in a given country. In addition to the analysis of absolute poverty, the note also presents an analysis of inclusive growth, aimed at assessing whether income growth (losses) benefit (impact) differentially the lowest part (here, bottom forty percent) of the distribution. Other approaches, such as those including measures of poverty based on current income, or self-reported measures of affordability, or approached that differ in the way they set the poverty threshold exist. The choice of World Bank’s methodology for purposes of this report is primarily on pragmatic grounds: (i) it allows for the analysis of trends during 2007-2011; (ii) the same methodology was adopted in the previous report (World Bank 2009) to analyze poverty trends during 2004-2007, thus providing a longer trend; (iii) it allows for comparisons of trends across the entities of BiH.
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    More Jobs, Better Jobs : A Priority for Egypt
    (Washington, DC, 2014-06) World Bank
    Much of the current debate around the recent economic crisis in the Arab Republic of Egypt has focused on unemployment. Although unemployment is an important marker of labor market health, the jobs problem in Egypt precedes the recent crisis and is manifested markedly in other labor market metrics. Indeed, the link between growth and unemployment in Egypt is weak, particularly for men. This chapter argues that the reason for this weak link is partly related to decades of flawed industrial policies that have discouraged investment in employment-generating activities. Industrial policies, including those implemented in the mid-2000s, were never focused on mitigating market failures to promote the emergence of fast-growing, high-productivity firms. Instead, they have worked to preserve insider privileges, leading to growth in sectors that are not labor intensive. Policy makers therefore need to look beyond supply-side focused labor market policies to accelerate employment growth.
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    Trends and Determinants of Foreign Direct Investment in South Asia
    (Washington, DC, 2013-06-16) World Bank
    Like many other developing countries, South Asian nations have been experiencing increased Foreign Direct Investment (FDI) inflows over the past decade as developing countries get a larger share of cross-border investments once sent to developed countries. Nonetheless, South Asia's FDI inflows remain the lowest relative to Gross Domestic Product (GDP) among developing country regions. Over the next 20 years, more than one million new workers will be entering the South Asian labor market each month as the region's youth bulge matures and seeks employment. To absorb these workers and provide higher living standards and reduce poverty, South Asian countries will have to rely on more than just public investment. This report looks into the historical patterns of FDI in South Asia, examines its sectoral composition, and evaluates current policies and policy options that may help create an environment for increasing FDI flows. The launching point for this study is the substantial empirical literature that suggests that FDI is associated with growth, development, and productivity enhancement. The goal of the study is modest in that it does not seek to estimate the size of FDI spillovers on productivity growth, or address whether governments should actively subsidize FDI inflows over domestic investment as a means to enhance growth, but rather to understand whether the level of FDI flows as a share of GDP, its sectoral composition, and intra-regional flows are comparable to other developing regions and, if not, what might be some of the impediments to these flows. While FDI flows have increased over the past decade to South Asia, particularly from developed countries to South Asian service sectors, it has lagged in other sectors and remains relatively low overall. Overall, positive changes have taken place over the past few decades, while restrictions on FDI differ substantially among countries in South Asia. India's progress on FDI promoting policies has accelerated in recent years to make FDI policies more transparent, predictable, and simpler. Many other countries have also taken steps to improve transparency in regulations and reassure investors about the security of their investments in the country. Finally, the paper examines the determinants of FDI growth in South Asia.
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    Analysis and Options for Namibia's Medium-Term Debt Strategy
    (Washington, DC, 2013-06) World Bank
    Since gaining its independence 23 years ago, Namibia has established an enviable track record of political stability, prudent macroeconomic policies, moderate growth, poverty reduction, and natural resource conservation. The country has achieved these gains while facing constraints imposed by geography, legacies of apartheid and colonialism, and the challenges of constructing a national government. Daunting challenges remain, however. Namibia suffers from chronic high unemployment, the ravages of HIV/AIDS, and one of the world most skewed distributions of income. The structure of the economy has remained fundamentally unchanged since Independence: minerals and metals make up the majority of exports; the public sector remains the largest employer; and there has been little investment in labor-intensive manufacturing, which in many countries has absorbed low-skilled labor exiting traditional agriculture. This report uses the Medium-Term Debt Management Strategy (MTDS) framework developed by the International Monetary Fund (IMF) and the World Bank to analyze options facing the GRN as it prepares the new Sovereign Debt Management Strategy (SDMS). This framework emphasizes the explicit analysis of relative costs and risks in a debt management strategy, the linkages between the debt strategy and other macroeconomic policies, and the strategy's consistency with debt sustainability. The report opens with a review of the GRN's current debt management strategy, the sources of financing available to the government, and the macroeconomic environment. The report then applies the MTDS analytical tool to analyze costs and risks of alternative debt management strategies that were developed by MOF participants in the November 2012 capacity-building exercise. It also examines domestic debt market development and contingent liabilities arising from government guarantees, two issues of special concern to the GRN. Finally, it discusses institutional arrangements and implementation issues.
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    Market Accessibility and Regional Maps : Kyrgyz Republic
    (World Bank, Washington, DC, 2013-04-01) Blankespoor, Brian
    Access to markets is argued to have a significant role in development. In order to quantify the access of places to markets, policy makers are showing increasing interest in accessibility indicators (Yoshida and Deichmann 2009). This paper seeks to examine the spatial relationship of access to market in the Kyrgyz Republic using a recent census and household survey in order to identify possible linkages with rates of poverty and other micro (spatial) information. This analysis uses the market accessibility index that measures the potential connectivity of population or expenditures between village/towns and big cities via the transport network. Results show that high market accessibility is located near the large cities with a concentration of infrastructure, while low access is more in the rural areas. Future work will use this indicator in economic models to statistical identify its significance with regards to per capita expenditure and poverty.