Policy Research Working Papers

8,089 items available

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http://hdl.handle.net/10986/9

The Policy Research Working Paper Series disseminates findings of work in progress to encourage the exchange of ideas about development issues. Titles are submitted from units around the World Bank for internal review and inclusion in this series which is managed by the Development Economics Research Support unit. These are pre-print drafts prior to review and publication in formal journals.

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Welfare and Climate Risks in Coastal Bangladesh: The Impacts of Climatic Extremes on Multidimensional Poverty and the Wider Benefits of Climate Adaptation

(World Bank, Washington, DC, 2023-03-23) Verschuur, Jasper ; Becher, Olivia ; Schwantje, Tom ; van Ledden, Mathijs ; Kazi, Swarna ; Urrutia, Ignacio

It is widely recognized that climate hazards impact the poor disproportionately. However, quantifying these disproportionate hazard impacts on a large scale is difficult given limited information on households’ location and socioeconomic characteristics, and incomplete quantitative frameworks to assess welfare impacts on households. This paper constructs a household-level multidimensional poverty index using a synthetic household dataset of 43 million people residing in the coastal zone of Bangladesh. Households are spatially linked to the critical infrastructure networks they depend on, including housing; water, sanitation, and hygiene; electricity; education; and health services. Combined with detailed cyclone hazard data, the paper first quantifies risks to households, agriculture, and infrastructure. It then presents a novel framework for translating critical infrastructure impacts into the temporary incidence of service deprivations, which can contribute to temporary deprivations and hence multidimensional poverty. The paper uses this framework to evaluate the benefits of various adaptation options. The findings show that asset risk due to flooding is US$483 million per year at present, increasing to US$750 million per year in 2050 under climate change. Households face an average infrastructure service disruption of two days per year, which is expected to increase to 4.6 days per year in 2050. This, in turn, would incur a temporary increase in multidimensional poverty (7.2 percent of people are multidimensionally poor at the baseline) of up to 94 percent (2.9 million people) 30 days after an extreme cyclone event (a 1-in-100 years event) at present and 153.9 percent (4.8 million people) in the future. The paper quantifies the large welfare benefits of upgrading embankments, showing how apart from significant risk reduction, these interventions reduce service disruptions by up to 70 percent in some areas and can help up to 1.6 million (0.23 million under current and proposed programs) people from experiencing some form of temporary poverty. Overall, the paper identifies poor households exposed to climate impacts, as well as those prone to falling into poverty temporarily, both of could help to mainstream equity considerations in new adaptation programs.
Institutional Trust, Perceptions of Distributive Unfairness, and Income across Salvadoran Municipalities

(World Bank, Washington, DC, 2023-03-23) Depetris-Chauvin, Emilio

Using multiple waves of two public opinion surveys and a two-way fixed effect model, this paper analyzes how people’s perceptions and attitudes towards public institutions shifted with the business cycle in El Salvador during 2004–2018. It finds that individuals’ levels of trust toward both the president and the municipal government are positively associated with higher levels of income at the municipality level. Income is also a strong predictor of trust in mass media, confidence in the judicial system and, to a lesser extent, trust in the national legislature but income does not affect trust in the Catholic Church. The relationship between income and trust toward the president and municipalities masks a relevant heterogeneity from a rural-urban divide as well as from differences in municipal state capacity. Further, views of income distribution fairness as well as preferences for democracy are positively shaped by municipality-specific business cycles. In contrast, neither generalized trust nor satisfaction with democracy is empirically associated with income at the municipality level.
Leaning in at Home: Women's Promotions and Intra-household Bargaining in Bangladesh

(World Bank, Washington, DC, 2023-03-23) Uckat, Hannah

It is established that entering employment improves a woman's bargaining position in the household. This paper investigates whether a woman's career advancement further improves her intra-household bargaining power. The analysis exploits quasi-random participation in a career promotion program in Bangladesh's garment industry to causally estimate the impact of women's promotion on household decision-making. The findings show that women who participate in the promotion program gain bargaining power as measured by higher expenditures on women (51%) and girls (74%), and on remittances (58%). The promotion-related income effect only partially explains these increases, suggesting that women gain more agency over household income more generally. Further, these new female managers now serve as role models to their staff. The paper finds that the direct effects spill over to women who are quasi-randomly exposed to the new female managers, who also report more say in household decisions. Complementarities between women's positions in the workplace and in the household appear important.
Offshoring Response to High-Skilled Immigration: A Firm-Level Analysis

(World Bank, Washington, DC, 2023-03-23) Ghose, Devaki ; Wang, Zhiling

Using a policy change in the Netherlands in 2012 that made it easier and less costly for firms to employ high-skilled short-stay non-European Union workers and a matched employer-employee data, this paper shows that firms in high-skill industries respond by both employing a higher share of non-European Union immigrants and increasing the total amount of offshoring to non-European Union countries. With reduced costs of hiring short-stay non-European Union workers, small firms hire and fire more non-European Union workers in a given year. Many of these workers return to their home countries, establishing direct connections that boost offshoring to firms in the Netherlands. By contrast, large firms absorb some of the workers leaving the small firms. These workers also establish connections between their host and origin countries, boosting offshoring.
Potential Growth Prospects: Risks, Rewards, and Policies

( 2023-03-10) Kilic Celik,Sinem ; Kose, M. Ayhan ; Ohnsorge,Franziska

Potential output growth around the world slowed over the past two decades. This slowdown is expected to continue in the remainder of the 2020s: global potential growth is projected to average 2.2 percent per year in 2022–30, 0.4 percentage point below its 2011-21 average. Emerging market and developing economies (EMDEs) will face an even steeper slowdown, of about 1.0 percentage point to 4.0 percent per year on average during 2022–30. The slowdown will be widespread, affecting most EMDEs and countries accounting for 70 percent of global GDP. Global potential growth over the remainder of this decade could be even slower than projected in the baseline scenario—by another 0.2–0.9 percentage point a year—if investment growth, improvements in health and education outcomes, or developments in labor markets disappoint, or if adverse events materialize. A menu of policy options is available to help reverse the trend of weakening economic growth, including policies to enhance physical and human capital accumulation; to encourage labor force participation by women and older adults; to improve the efficiency of public spending; and to mitigate and adapt to climate change, including infrastructure investment to facilitate the green transition.
Citizen Participation and Political Trust in Latin America and the Caribbean: A Machine Learning Approach

(World Bank, Washington, DC, 2023-03) Pecorari, Natalia ; Cuesta, Jose

This paper advances the understanding of the linkages between trust in government and citizen participation in Latin America and the Caribbean, using machine learning techniques and Latinobarómetro 2020 data. Proponents of the concept of stealth democracy argue that an inverse relationship exists between political trust and citizen participation, while deliberative democracy theorists claim the opposite. The paper estimates that trust in national governments or other governmental institutions plays neither a dominant nor consistent role in driving political participation. Instead, interest in politics, personal circumstances such as experience of crime and discrimination, and socioeconomic aspects appear to drive citizen participation much more strongly in the Latin America and the Caribbean region. This is true across models imposing simple linear trends (logit and lasso) and others allowing for nonlinear and complex relations (decision trees). The results vary across the type of participation—signing a petition, participation in demonstrations, or involvement in a community issue—which the paper attributes to increasing net costs associated with participation.
Poorer than Adults and Deprived in Almost All Counts: Welfare Status of Children in Nigeria

(World Bank, Washington, DC, 2023-03) Schimanski, Caroline ; Azad, M. Abul

Analyzing data from four waves of the Nigerian General Household Survey and the Nigerian Multiple Indicator Cluster Survey, covering the period from 2010 through 2019, this study provides evidence that poverty levels of children exceed those of adults. Overall, rural children throughout the country and children in the North face higher poverty and chronic poverty rates than urban children and those living in the South without clear trends of a closing of those gaps. These findings hold for monetary poverty as well as, for severe health, education, food, shelter, water, information deprivation and improved sanitation deprivation across Nigeria’s six regions. One exception is severe sanitation deprivation, for which especially rural areas in the Southwest stand out with higher levels of severe sanitation deprivation than in rural areas in the north and any other region. Large inter-state heterogeneity of estimates within regions, ranging up to 50 percentage points, for all except severe food deprivation however highlight the importance of looking beyond regional poverty estimates and regional differences. Only state specific, but no systematic evidence has been found for a gender difference in severe educational deprivation and school enrollment rates. Existing gender gaps though seem negligible compared to the overall level of deprivation and urban-rural and north-south gaps. Moreover, the parents’ literacy and more so the educational level is highly correlated with the probability of being poor or deprived in any dimension, in particular in rural and northern areas. Interestingly, up to about half of the monetary non-poor children at the top of the consumption distribution still face at least one severe deprivation.
Natural Resource Dependence and Monopolized Imports

(World Bank, Washington, DC, 2023-03) Arezki, Rabah ; Fernandes, Ana ; Merchán, Federico ; Nguyen, Ha ; Reed, Tristan

Countries with greater commodity export intensity have more concentrated markets for imported goods. Within countries over time, import market concentration is associated with higher domestic prices, suggesting that markups due to greater concentration outweigh any potential cost efficiency. Hydrocarbon fuel exporting economies especially have higher tariffs, tariff evasion, and non-tariff measures that concentrate markets. These results suggest a novel channel for the resource curse stemming from the monopolization of imports.
Combatting Forest Fires in the Drylands of Sub-Saharan Africa: Quasi-Experimental Evidence from Burkina Faso

(World Bank, Washington, DC, 2023-03) Nguyen Huy, Tung ; Adjognon, Guigonan Serge ; van Soest, Daan

Forest fires are among the main drivers of deforestation and forest degradation in the drylands of Sub-Saharan Africa. This paper uses remote sensing data on forest fires and remaining tree cover to estimate the effectiveness of a project targeted at reducing fire incidences in twelve protected forests in arid Burkina Faso. The project consisted of two components that were implemented in the villages surrounding the target forests: a campaign aimed at raising community awareness about the detrimental effects of forest fires, and a program to support establishing and maintaining forest fire prevention infrastructures. Using the Synthetic Control Method the paper finds that the project resulted in a 35% reduction in forest fire occurrences in the period of the year when they tend to be most prevalent —in November, at the very end of the agricultural season. However, this impact is short-lived (as the reduction only occurred in the first four years of the program). The reduction in forest fires also did not result in a detectable increase in vegetation cover—because the reduction in November was not sufficiently large to be captured via remote sensing, or because the duration of the reduction was too short for the vegetation to recover. The paper then tries to uncover the underlying mechanisms to shed light on which of the project’s components were effective and to also learn how the program can be improved.
Data Transparency in the Middle East and North Africa

(World Bank, Washington, DC, 2023-03) Islam, Asif M. ; Islam, Asif

Data transparency about critical economic issues may be key to driving growth and enhancing trust in government in the Middle East and North Africa. Several knowledge products and technical analyses on the region have been greatly constrained by the lack of availability of detailed data, and the relatively outdated nature of many available datasets. The goal of this study is to ascertain the state of data systems in the Middle East and North Africa region. Through analysis of several indicators, with their limitations in mind, the study uses descriptive analyses and uncovers six stylized facts of the region: (i) developing economies in the Middle East and North Africa have poor data ecosystems, largely due to the prevalence of conflict; (ii) developing economies in the Middle East and North Africa as a group have experienced the largest deterioration in data systems over time; (iii) data systems in richer economies in the Middle East and North Africa region underperform relative to their income peers; (iv) Gulf Cooperation Council economies underperform in data openness, especially online access, despite having the resources for online features; (v) the regulatory framework for data (data infrastructure) is poor throughout the region, especially in Gulf Cooperation Council economies; and (vi) the dispersion of source data scores – a measure of availability and timeliness of micro data – in the region suggests that national statistical offices in the region could learn from each other. Furthermore, the study summarizes data availability and timeliness for specific macro, micro, and public health indicators for countries across the region. The need for forging a social contract for data is discussed, as well as the role international institutions can play through a statistics compact for the region.