Journal Articles
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World Bank Journal Articles
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Publication
Corruption as a Self-Reinforcing Trap: Implications for Reform Strategy
(Published by Oxford University Press on behalf of the World Bank, 2020-07)Corruption is widely believed to be a self-reinforcing phenomenon, in the sense that the incentive to engage in corrupt acts increases as corruption becomes more widespread. Some argue that corruption's self-reinforcing property necessarily implies that incremental anticorruption reforms cannot be effective, and that the only way to escape a high-corruption equilibrium “trap” is through a so-called “big bang” or “big push.” However, corruption's self-reinforcing property does not logically entail the necessity of a big bang approach to reform. Indeed, corruption's self-reinforcing property may strengthen the case for pursuing sustained, cumulative incremental reforms. While there may be other reasons to prefer a big bang approach to an incremental approach, this conclusion cannot be grounded solely or primarily on corruption's self-reinforcing character. -
Publication
Human Capital and Macroeconomic Development: A Review of the Evidence
(Published by Oxford University Press on behalf of the World Bank, 2020-07)The role of human capital in facilitating macroeconomic development is at the center of both academic and policy debates. Through the lens of a simple aggregate production function, human capital might increase output per capita by directly entering in the production process, incentivizing the accumulation of complementary inputs, and facilitating the adoption of new technologies. This paper discusses the advantages and limitations of three approaches that have been used to evaluate the empirical importance of these channels: cross-country regressions, development accounting, and quantitative models. The key findings in the literature are reviewed and some of them are replicated using updated data. The bulk of the evidence suggests that human capital is an important determinant of cross-country income gaps, especially when its measurement is broadened to go beyond simple proxies of educational attainment. The paper concludes by highlighting policy implications and promising avenues for future work. -
Publication
External Validity and Policy Adaptation: From Impact Evaluation to Policy Design
(Published by Oxford University Press on behalf of the World Bank, 2020-07)With the growing number of impact evaluations worldwide, the question of how to apply this evidence in policy making processes has arguably become the main challenge for evidence-based policy making. How can policy makers predict whether a policy will have the same impact in their context as it did elsewhere, and how should this influence the policy’s design and implementation? This paper suggests that failures of external validity (both in transporting and scaling up policy) can be understood as arising from an interaction between a policy’s theory of change and a dimension of the context in which it is being implemented. The paper surveys existing approaches to analyzing external validity, and suggests that there has been more focus on the generalizability of impact evaluation results than on the applicability of evidence to specific contexts. To help fill this gap, the study develops a method of “mechanism mapping” that maps a policy’s theory of change against salient contextual assumptions to identify external validity problems and suggest appropriate policy adaptations. In deciding whether and how to adapt a policy, there is a fundamental informational trade-off between the strength of evidence on the policy from other contexts and the policy maker’s information about the local context. -
Publication
Out-of-Pocket Expenditures on Health: A Global Stocktake
(Published by Oxford University Press on behalf of the World Bank, 2020-07)This paper provides an overview of research on out-of-pocket health expenditures by reviewing the various summary measures and the results of multi-country studies using these measures. The paper presents estimates for 146 countries from all World Bank income groups for all summary measures, along with correlations between the summary measures and macroeconomic and health system indicators. Large differences emerge across countries in per capita out-of-pocket expenditures in 2011 international dollars, driven in large part by differences in per capita income and the share of GDP spent on health. The two measures of dispersion or risk—the coefficient of variation and Q90/Q50—are only weakly correlated across countries and not explained by our macroeconomic and health system indicators. Considerable variation emerges in the out-of-pocket health expenditure budget share, which is highly correlated with the incidence of “catastrophic expenditures”. Out-of-pocket expenditures tend to be regressive and catastrophic expenditures tend to be concentrated among the poor when expenditures are assessed relative to income, while expenditures tend to be progressive and catastrophic expenditures tend to be concentrated among the rich when expenditures are assessed relative to consumption. At the extreme poverty line of $1.90-a-day, most impoverishment due to out-of-pocket expenditures occurs among low-income countries. -
Publication
Saving Water with a Nudge (or Two): Evidence from Costa Rica on the Effectiveness and Limits of Low-Cost Behavioral Interventions on Water Use
(Published by Oxford University Press on behalf of the World Bank, 2020-06)The study uses a randomized controlled trial to test the impact of simple, inexpensive, and nonpersonalized behavioral interventions (or “nudges”) on water consumption in the context of a developing country. A descriptive social norm intervention using neighborhood comparisons reduces average water consumption in the first two postintervention months by 4.9 percent relative to the control group, while a planning postcard intervention reduces consumption by 4.8 percent. A descriptive social norm intervention using a town-level comparison also reduces water consumption by 3.2 percent, but this effect is not statistically significant. Finally, the study's one-time interventions continue to generate statistically significant reductions in water use for up to four months after they are implemented. -
Publication
Migration and Urbanization in Post-Apartheid South Africa
(Published by Oxford University Press on behalf of the World Bank, 2020-06)Although Africa has experienced rapid urbanization in recent decades, little is known about the process of urbanization across the continent. This paper exploits a natural experiment, the abolition of South African pass laws, to explore how exogenous population shocks affect the spatial distribution of economic activity. Under apartheid, black South Africans were severely restricted in their choice of location, and many were forced to live in homelands. Following the abolition of apartheid they were free to migrate. Given a migration cost in distance, a town nearer to the homelands will receive a larger inflow of people than a more distant town following the removal of mobility restrictions. Drawing upon this exogenous variation, this study examines the effect of migration on urbanization in South Africa. While it is found that on average there is no endogenous adjustment of population location to a positive population shock, there is heterogeneity in the results. Cities that start off larger do grow endogenously in the wake of a migration shock, while rural areas that start off small do not respond in the same way. This heterogeneity indicates that population shocks lead to an increase in urban relative to rural populations. Overall, the evidence suggests that exogenous migration shocks can foster urbanization in the medium run. -
Publication
Exploring the Heterogeneous Effects of Export Promotion
(Published by Oxford University Press on behalf of the World Bank, 2020-06)A semiparametric varying coefficient model is used to explore the heterogeneity in returns to export promotion across countries. Differences in characteristics of export-promotion agencies drive the heterogeneity in returns. Interestingly, characteristics that matter for export growth do not necessarily matter for GDP per capita growth. A 1 percent increase in export-promotion budgets is associated with an average increase in exports of 0.10 percent and an average increase in GDP per capita of 0.06 percent. However, these average returns hide a lot of heterogeneity. Returns in terms of exports vary from 0 percent in Cyprus and Vietnam to 0.22 percent in Portugal. Returns in terms of GDP per capita show less heterogeneity, varying from 0.05 in Malawi to 0.10 percent in Portugal and Nicaragua. -
Publication
Gender, Informal Employment and Trade Liberalization in Mexico
(Published by Oxford University Press on behalf of the World Bank, 2020-06)This paper studies how import liberalization affects formal employment across gender. The theory offers a mechanism to explain how male and female formal employment shares can respond differently to trade liberalization through labor reallocation across tradable and nontradable sectors. Using Mexican data over the period 1993–2001, we find that Mexican tariff cuts increase the probability of working formally for both men and women within four-digit manufacturing industries. The formalization of jobs within tradable sectors is driven by large firms. Constructing a regional tariff measure, we find that regional exposure to import liberalization increases the probability of working formally in the manufacturing sector for both men and women, and especially for men. However in the service sectors, the probability of working formally decreases for low-skilled women. -
Publication
Do Information Technologies Improve Teenagers’ Sexual Education? Evidence from a Randomized Evaluation in Colombia
(Published by Oxford University Press on behalf of the World Bank, 2020-06)This study reports results from a randomized evaluation of a mandatory six-month Internet-based sexual education course implemented across public junior high schools in 21 Colombian cities. Six months after finishing the course, the study finds a 0.4 standard deviation improvement in knowledge, a 0.2 standard deviation improvement in attitudes, and a 55 percent increase in the likelihood of redeeming vouchers for condoms as a result of taking the course. The data provide no evidence of spillovers to control classrooms within treatment schools. However, the analysis provides compelling evidence that treatment effects are enhanced when a larger share of a student's friends also takes the course. The low cost of the online course along with the effectiveness the study documents suggests this technology is a viable alternative for improving sexual education in middle-income countries. -
Publication
Education Spillovers in Farm Productivity: Revisiting the Evidence
(Published by Oxford University Press on behalf of the World Bank, 2020-06)This paper exploits the social organization of India to revisit the question of education spillovers in farm productivity. The fact that social interactions mainly occur within castes in rural India provides tools to show that the observed correlation between farm productivity and neighbors’ education is likely to be a spillover effect. In particular, there are no cross-caste and no cross-occupation effects, which underlines that, under specific assumptions, which are stated and explored in the paper, the education of neighbors does not capture the effect of group unobservables. This evidence is complemented by separate estimations by crops, which show results that are consistent with education spillovers. The strategy used in this paper helps understand and interpret previous findings from the literature.