03. Journals

2,963 items available

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http://hdl.handle.net/10986/2210

These are journal articles published in World Bank journals as well as externally by World Bank authors.

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How to Target Households in Adaptive Social Protection Systems? Evidence from Humanitarian and Development Approaches in Niger

(Taylor and Francis, 2019-12-06) Schnitzer, Pascale

The methods used to identify the beneficiaries of programs aiming to address persistent poverty and shocks are subject to frequent policy debates. Relying on panel data from Niger, this report simulates the performance of various targeting methods that are widely used by development and humanitarian actors. The methods include proxy-means testing (PMT), household economy analysis (HEA), geographical targeting, and combined methods. Results show that PMT performs more effectively in identifying persistently poor households, while HEA shows superior performance in identifying transiently food insecure households. Geographical targeting is particularly efficient in responding to food crises, which tend to be largely covariate. Combinations of geographical, PMT, and HEA approaches may be used as part of an efficient and scalable adaptive social protection system. Results motivate the consolidation of data across programs, which can support the application of alternative targeting methods tailored to program-specific objectives.
Predicting Entrepreneurial Success is Hard: Evidence from a Business Plan Competition in Nigeria

(Elsevier, 2019-11) McKenzie, David ; Sansone, Dario

We compare the absolute and relative performance of three approaches to predicting outcomes for entrants in a business plan competition in Nigeria: Business plan scores from judges, simple ad hoc prediction models used by researchers, and machine learning approaches. We find that i) business plan scores from judges are uncorrelated with business survival, employment, sales, or profits three years later; ii) a few key characteristics of entrepreneurs such as gender, age, ability, and business sector do have some predictive power for future outcomes; iii) modern machine learning methods do not offer noticeable improvements; iv) the overall predictive power of all approaches is very low, highlighting the fundamental difficulty of picking competition winners.
Competing Priorities: Women’s Microenterprises and Household Relationships

(Elsevier, 2019-09) Friedson-Ridenour, Sophia ; Pierotti, Rachael S.

Recent studies have suggested that women’s business decisions are influenced by members of their household, especially their spouse, and that these intrahousehold dynamics contribute to gender gaps in entrepreneurship outcomes. This in-depth qualitative study among microentrepreneurs in urban Ghana sought to understand the connections between women’s businesses and their households’ management of economic resources. The findings show that women’s business decisions are influenced by: 1) a desire to reinforce their partner’s responsibilities as a primary provider; 2) attempts to fulfil normative expectations of meeting the daily basic-needs of the family; and 3) a need to prepare for long-term security. To reinforce their husband’s responsibilities as a provider, women hid income and savings, and sometimes explicitly limited business growth. To ensure their ability to smooth household consumption and respond to emergencies, women prioritized savings over business investment. And, to plan for their long-term security, women opted for cautious business investment, instead maintaining pressure on their partner to meet current needs and investing in children and property for the future. Previous studies document gender differences in microenterprise business management. This research builds on those studies by examining how intrahousehold inequalities affect women’s business decisions. The findings demonstrate the contextual importance of social relations for understanding women’s business decisions. More broadly, the findings illustrate that interpersonal interactions concerning the management of economic resources are an integral part of how household members negotiate their rights and responsibilities in relation to each other.
Dictators Walking the Mogadishu Line: How Men Become Monsters and Monsters Become Men

(Published by Oxford University Press on behalf of the World Bank, 2018-10) Larcom, Shaun ; Sarr, Mare ; Willems, Tim

History offers many examples of dictatorswho worsened their behavior significantly over time (like Zimbabwe’s Mugabe) as well as dictators who displayed remarkable improvements (like Rawlings of Ghana).We show that such mutations can result from rational behavior when the dictator’s flow use of repression is complementary to his stock of wrongdoings: past wrongdoings then perpetuate further wrongdoings and the dictator can unintentionally get trapped in a repressive steady state where he himself suffers from ex-post regret. This then begs the question why such a dictator would ever choose to do wrong in the first place. We show that this can be explained from the dictator’s uncertainty over his degree of impunity in relation to wrongdoing, which induces him to experiment along this dimension. This produces a setting where any individual rising to power can end up as either a moderate leader, or as a dreaded tyrant. Since derailment is accidental and accompanied by ex-post regret, increasing accountability can be in the interest of both the public and the dictator.
Does Inducing Informal Firms to Formalize Make Sense?: Experimental Evidence from Benin

(Elsevier, 2018-01) Benhassine, Najy ; McKenzie, David ; Pouliquen, Victor ; Santini, Massimiliano

Efforts to bring informal firms into the formal sector are often based on a view that this will bring benefits to the firms themselves, or at least benefit governments through increasing the tax base. A randomized experiment based around the introduction of the entreprenant legal status in Benin is used to test these assumptions, along with supplementary efforts to enhance the presumed benefits of formalizing to firms. Few firms register when just given information about the new regime, but our full package of supplementary efforts boosts formalization by 16.3 percentage points. However, this formalization does not bring firms higher sales or profits, and the cost of formalizing these firms exceeds the added taxation they will pay over the next decade. We show how better targeting of these policies towards firms that look more like formal firms to begin with can increase the formalization rate and improve cost-effectiveness.
Identifying Gazelles: Expert Panels vs. Surveys as a Means to Identify Firms with Rapid Growth Potential

(Published by Oxford University Press on behalf of the World Bank, 2017-10-01) Fafchamps, Marcel ; Woodruff, Christopher

We conduct a business plan competition to test whether survey instruments or panel judges are able to identify the fastest growing firms. Participants submitted six- to eight-page business plans and defended them before a three- or four-judge panel. We surveyed applicants shortly after they applied and one and two years after the competition. We use follow-up surveys to construct measures of enterprise growth and baseline surveys and panel scores to construct measures of enterprise growth potential. We find that a measure of ability correlates strongly with future growth, but that the panel scores add to predictive power even after controlling for ability and other survey variables. The survey questions have more power to explain the variance in growth. Participants presenting before the panel were given a chance to win customized management training. Fourteen months after the training, we find no positive effect of the training on growth of the business.
No Condition Is Permanent: Middle Class in Nigeria in the Last Decade

(Taylor and Francis, 2017-09-21) Corral Rodas, Paul Andres ; Molini, Vasco ; Oseni, Gbemisola

The economic debate on the existence and definition of the middle class has become particularly lively in many developing countries. Building on a recently developed framework called the Vulnerability Approach to Middle Class (VAMC) to define the middle class, this paper tries to estimate the size of the Nigerian middle class in a rigorous quantitative manner and to gauge its evolution over time. Using the VAMC method, the middle class group can be defined residually from the vulnerability analysis as those for which the probability of falling into poverty is below a certain threshold. The results show that there has been considerable improvement in the size of the Nigerian middle class from 13 per cent in 2003/4 to 19 per cent in 2012/13. However, the rate has been slower than expected given the high growth rates experienced in the country over the same period. The results also paint a heterogeneous picture of the middle class in Nigeria with large spatial differences. The southern regions have a higher share and experienced more growth of the middle class compared with the northern regions.
Identifying and Spurring High-Growth Entrepreneurship: Experimental Evidence from a Business Plan Competition

(American Economic Association, 2017-08) McKenzie, David

Almost all firms in developing countries have fewer than ten workers, with a modal size of one. Are there potential high-growth entrepreneurs, and can public policy help identify them and facilitate their growth? A large-scale national business plan competition in Nigeria provides evidence on these questions. Random assignment of US$34 million in grants provided each winner with approximately US$50,000. Surveys tracking applicants over five years show that winning leads to greater firm entry, more survival, higher profits and sales, and higher employment, including increases of over 20 percentage points in the likelihood of a firm having ten or more workers.
Algeria–Mali Trade: The Normality of Informality

(Taylor and Francis, 2017-07-03) Bensassi, Sami ; Brockmeyer, Anne ; Pellerin, Mathieu ; Raballand, Gaël

This paper estimates the volume of informal trade between Algeria and Mali and analyzes its determinants and mechanisms, using a multi-pronged methodology. In addition to mirror statistics analysis, we provide evidence of the importance of informal trade, drawing on satellite images and surveys with informal traders in Mali and Algeria. We estimate that the weekly turnover of informal trade fell from approximately US$2 million in 2011 to US$0.74 million in 2014, but that trade continues to play a crucial role in the economies of northern Mali and southern Algeria. We also show that official trade statistics are meaningless in this context because they capture less than 3% of total trade. Meanwhile, profit margins of 20–30% on informal trade help to explain the relative prosperity of northern Mali. Informal trade probably plays a strong role in poverty reduction, especially in the Kidal region.
Can Business Owners Form Accurate Counterfactuals?: Eliciting Treatment and Control Beliefs about Their Outcomes in the Alternative Treatment Status

(Taylor and Francis, 2017-06-20) McKenzie, David

A survey of participants in a large-scale business plan competition experiment, in which winners received an average of U.S. $50,000 each, is used to elicit ex-post beliefs about what the outcomes would have been in the alternative treatment status. Participants are asked the percent chance they would be operating a firm, and the number of employees and monthly sales they would have, had their treatment status been reversed. The study finds the control group to have reasonably accurate expectations of the large treatment effect they would experience on the likelihood of operating a firm, although this may reflect the treatment effect being close to an upper bound. The control group dramatically overestimates how much winning would help them grow the size of their firm. The treatment group overestimates how much winning helps their chance of their business surviving and also overestimates how much winning helps them grow their firms. In addition, these counterfactual expectations appear unable to generate accurate relative rankings of which groups of participants benefit most from treatment.