03. Journals

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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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Now showing 1 - 10 of 120
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    The Poverty Reduction Strategy Approach Six Years On: An Examination of Principles and Practice in Uganda
    ( 2011) Canagarajah, Sudharshan ; van Diesen, Arthur
    It is over six years since the World Bank and the IMF started promoting a PRS approach to development management in low-income countries. The 2005 review endorsed the approach, but highlighted the need for a renewed focus on the principles underpinning it: country ownership; results orientation; comprehensiveness; partnership focus; and long-term outlook. Uganda is often hailed as one of the best PRS performers. This article finds that Uganda's Poverty Eradicaton Action Plan (PEAP) has brought significant gains to development management, but that its performance against several of the PRS principles is disappointing. A return to these principles could improve the practice of the government and development partners around the PEAP--a finding likely to be applicable to many countries implementing a PRS.
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    Trade Liberalization, Antidumping, and Safeguards: Evidence from India's Tariff Reform
    ( 2011) Bown, Chad P. ; Tovar, Patricia
    This paper is the first to use product-level data to examine empirically whether countries use antidumping and safeguard exceptions to unwind commitments to lower tariffs in the face of domestic political-economic pressure. We focus on the case of India, a country that underwent a major exogenous tariff reform program in the early 1990s and subsequently initiated substantial use of safeguard and antidumping import restrictions. We first estimate structural determinants of India's import protection using the Grossman and Helpman (1994) model and provide evidence from its pre-reform tariff data of 1990 that is consistent with the theory. We then re-estimate the model on the Indian tariff data after the trade liberalization is complete and find that the model no longer fits, a result consistent with theory and evidence provided in other settings that India's 1991-1992 IMF arrangement can be interpreted as resulting in an exogenous shock to India's tariff policy. However, when we re-estimate the model on data from 2000-2002 that more completely reflects India's cross-product variation in import protection by including both its post-reform tariffs and its additional non-tariff barriers of antidumping and safeguard import protection, the significance of the Grossman and Helpman model determinant estimates is restored. We interpret these combined results as evidence that India unwound its commitment to reduce tariffs through use of antidumping and safeguard protection in the face of political-economic pressure. The estimates are also economically important and provide one explanation for separate results in the literature that the magnitude of import reduction associated with India's use of antidumping is similar to the initial import expansion associated with its tariff reform. Finally, we interpret the implications of our results for the burgeoning research literature examining the effects of liberalization on India's micro-level development.
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    Trade Liberalization and 'Export Response': Whither Complementary Reforms?
    ( 2011) Correa, Paulo ; Dayoub, Mariam ; Francisco, Manuela
    What enables Ecuadorian manufacturing firms to start exporting? And what are the determinants of the share of total sales exported by a firm, once the decision of becoming an exporter has been made? We apply a Heckman selection model to the Ecuador's Investment Climate Survey (ICS) to investigate supply-side constraints to export performance at the firm level. We estimate export propensity (the probability of exporting) and export intensity (the share of total sales that are exported). The application of the Heckman selection model to a rich dataset as the ICS is a major contribution as previous applications of the Heckman selection model used much limited datasets, limiting the range of hypotheses to be tested. Furthermore, other studies on export performance based on ICS data use either Tobit or Probit models, incurring important methodological limitations. We find robust and stable relationships for export propensity and intensity with firm size, import of inputs, labor regulations, in-house R&D, quality certification, Web use, and foreign ownership. Capacity utilization and trade with the US positively affect export intensity, while trade within the Andean Community has the opposite effect in our outcome variable. No significant relationship was found with the infrastructure variables.
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    Remittances and Banking Sector Breadth and Depth: Evidence from Mexico
    ( 2011) Demirguc-Kunt, Asli ; Cordova, Ernesto Lopez ; Martinez Peria, Maria Soledad ; Woodruff, Christopher
    Despite the importance of remittances to developing countries, their impact on banking sector breadth and depth in recipient countries has been largely unexplored. We examine this topic using municipality-level data on the fraction of households receiving remittances and on measures of banking breadth and depth for Mexico. We find that remittances are strongly associated with greater banking breadth and depth, increasing the number of branches and accounts per capita and the amount of deposits to GDP. These effects are significant both statistically and economically, and are robust to the potential endogeneity of remittances, inclusion of a wide range of controls and even municipal fixed effects specifications using an alternative panel data set from a sample of municipalities.
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    Determinants and Macroeconomic Impact of Remittances in Sub-Saharan Africa
    ( 2011) Singh, Raju Jan ; Haacker, Markus ; Lee, Kyung-woo ; Le Goff, Maelan
    This paper investigates the determinants and the macroeconomic role of remittances in sub-Saharan Africa. It assembles the most comprehensive data set available so far on remittances in the region; it comprises data for 36 countries for 1990 through 2008, and incorporates newly available data on the size and location of the diaspora. We find that remittances are larger for countries with a larger diaspora or when the diaspora is located in wealthier countries, and that they behave counter-cyclically, consistent with a role as a shock absorber. Although the effect of remittances in growth regressions is negative, countries with well functioning domestic institutions seem nevertheless to be better at unlocking the potential for remittances to contribute to faster economic growth.
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    Fungibility and the Impact of Development Assistance: Evidence from Vietnam's Health Sector
    ( 2011) Wagstaff, Adam
    The apparent fungibility of aid is a challenge to the evaluation of donor-funded development projects, requiring a comparison of the observed outcomes with the outcomes that would have occurred if the project had not gone ahead. Where projects are targeted on specific geographic areas, counterfactual outcomes in each can differ from observed outcomes because the amount of government spending (gross of aid) differs, the productivity of government spending differs, or both. This paper estimates the benefits of two concurrent World Bank health projects in Vietnam targeted on specific provinces. Estimates are derived from a model linking outcomes (under-five mortality) to government spending before and after the project and in project and nonproject provinces, and are presented for different assumptions regarding fungibility of funds (zero and full fungibility) and the impacts of the project on the productivity of government spending (the project modifies productivity in both sectors equally and in neither sector). The estimated mortality reductions are highly insensitive to the assumed degree of fungibility, but highly sensitive to the assumed productivity effects (the estimates range from 1 to 25%). The wide range reflects the uncertainty due to the lack of a genuine control group of provinces.
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    Evaluating the Economic Impact of International Remittances on Developing Countries Using Household Surveys: A Literature Review
    ( 2011) Adams, Richard H., Jr.
    This literature review covers 50 recent empirical studies of the economic impact of international remittances on the developing world that are based on household survey data. It begins by reviewing the considerable methodological problems confronting economic work on international remittances, and then examines the strengths and weaknesses of various economic studies of the impact of remittances in the developing world on such outcomes as: poverty and inequality, health and education, investment and savings, labour supply and participation, and economic growth. It finds that while international remittances generally have a positive impact on poverty and health in the developing world, remittances can have negative effects on labour supply, education, and economic growth.
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    Trade Facilitation and Export Diversification
    ( 2011) Dennis, Allen ; Shepherd, Ben
    This paper shows that improved trade facilitation can help promote export diversification in developing countries. We find that 10 per cent reductions in the costs of international transport and domestic exporting costs (documentation, inland transport, port and customs charges) are associated with export diversification gains of 4 and 3 per cent, respectively, in a sample of 118 developing countries. Customs costs play a particularly important role in these results. Lower market entry costs can also promote diversification, but the effect is weaker (1 per cent). We also find evidence that trade facilitation has stronger effects on diversification in poorer countries. Our results are highly robust to estimation using alternative dependent and independent variables, different country samples, and alternative econometric techniques. We link these findings to recent advances in trade theory that emphasise firm heterogeneity, and trade growth at the extensive margin.
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    Shadow Sovereign Ratings for Unrated Developing Countries
    ( 2011) Ratha, Dilip ; De, Prabal K. ; Mohapatra, Sanket
    We predict sovereign ratings for developing countries that do not have risk ratings from agencies such as Fitch, Moody's, and Standard and Poor's. Ratings are important in determining the volume and cost of capital flows to developing countries through international bond, loan, and equity markets. Sovereign rating also acts as a ceiling for the foreign currency rating of sub-sovereign borrowers and can be important for their access to international debt and equity capital. We generate shadow ratings for several developing countries that have never been rated and find that unrated countries are not always at the bottom of the rating spectrum. Several of them are projected to have a "B" or higher rating, in a similar range to that of the emerging market economies with capital market access.
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    Currency Allocation of Public External Debt and Synchronization Indicators of Exchange Rate Volatility
    ( 2010) Melecky, Martin
    This paper uses synchronization indicators of domestic and foreign fundamentals to choose suitable currency allocation of public external debt. The selection of explanatory variables for exchange rate volatility is motivated using a New Keynesian Policy model that predicts that not only traditional optimum currency area (OCA) variables, but also variables considered by the literature on currency preferences, such as money velocity, should be relevant for explaining exchange rate volatility. I find that measures of inflation synchronization, money velocity synchronization, and interest rate synchronization are useful indicators for deciding on the currency denomination of public external debt.