Journal Issue: World Bank Economic Review, Volume 23, Issue 2
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Volume
23
Number
2
Issue Date
Journal Title
Journal ISSN
1564-698X
Journal
World Bank Economic Review
1564-698X
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Articles
Dollar a Day Revisited
(World Bank, 2009-06-30) Sangraula, Prem; Ravallion, Martin; Chen, Shaohua
The article presents the first major update of the international $1 a day poverty line, proposed in World Development Report 1990: Poverty for measuring absolute poverty by the standards of the world's poorest countries. In a new and more representative data set of national poverty lines, a marked economic gradient emerges only when consumption per person is above about $2.00 a day at 2005 purchasing power parity. Below this, the average poverty line is $1.25, which is proposed as the new international poverty line. The article tests the robustness of this line to alternative estimation methods and explains how it differs from the old $1 a day line.
Does Education Affect HIV Status? Evidence from five African Countries
(World Bank, 2009-06-30) de Walque, Damien
Data from the first five Demographic and Health Surveys to include HIV testing for a representative sample of the adult population are used to analyze the socioeconomic correlates of HIV infection and associated sexual behavior. Emerging from a wealth of country relevant results, some important findings can be generalized. First, successive marriages are a significant risk factor. Second, contrary to prima facie evidence, education is not positively associated with HIV status. However, schooling is one of the most consistent predictors of behavior and knowledge: education level predicts protective behaviors such as condom use, use of counseling and testing, discussion of AIDS between spouses, and knowledge about HIV/AIDS, but it also predicts a higher level of infidelity and a lower level of abstinence.
Evidence on Changes in Aid Allocation Criteria
(World Bank, 2009-06-30) Claessens, Stijn; Cassimon, Danny; Van Campenhout, Bjorn
Have donors changed their aid-allocation criteria over the past three decades toward greater selectivity, a frequently stated goal of the international development community? Using data on how 22 donors allocated their bilateral aid among 147 countries over 1970–2004, the article finds that after the fall of the Berlin wall in 1989 and especially in the late 1990s, bilateral aid responded more to poverty and the quality of the policy and institutional environment in the recipient countries. Furthermore, the sensitivity of aid allocation to the country's size and its debt burden has declined over time. These results are robust to different samples and model specifications, various econometric techniques, and alternative measures of institutional quality. While the specific factors causing these changes cannot be identified—these presumably include geopolitical and economic concerns and the many changes in the international aid architecture—donors still differ greatly in their selectivity. This suggests that further, multifaceted reforms are needed to ensure even greater selectivity of aid.
Do Exporters Pay Higher Wages? Plant-level Evidence from an Export Refund Policy in Chile
(World Bank, 2009-06-30) Kandilov, Ivan T.
The impact of increased export activity on plant wages is estimated in a developing country context. To avoid potential endogenous selection problems, the empirical analysis benefits from exogenous variation in exports induced by a policy experiment—an export subsidy system implemented in Chile in 1986. Analyses using data from a panel survey of Chilean manufacturing establishments show that while the export subsidy had only a modest positive impact on the industrywide relative high-skilled wage, it significantly increased the plant-level relative high-skilled wage in medium-size establishments, which are most likely to take advantage of the subsidy and enter the export market.
The Determinants of Funding to Ugandan Nongovernmental Organizations
(World Bank, 2009-06-30) Fafchamps, Marcel; Owens, Trudy
Original Ugandan data collected by the authors are used to examine the determinants of funding to local nongovernmental organizations (NGOs). Success in attracting grants from international donors depends mostly on network effects. NGOs that raise in-kind resources locally tend to be young and managed by someone who is simultaneously employed elsewhere. There is some evidence of crowding out: NGOs that receive grant funding are less likely to obtain resources locally, whether in cash or in kind. But this seems to be primarily the result of selection. Once NGO-fixed effects are controlled for, there is no evidence that NGOs receive less revenue from fees and donation after obtaining a grant. These results suggest that donors regard Ugandan NGOs as subcontractors of their development efforts, not as charitable organizations in their own right.
A Cost–Benefit Analysis of Cholera Vaccination Programs in Beira, Mozambique
(World Bank, 2009-06-30) Jeuland, Marc; Lucas, Marcelino; Clemens, John; Whittington, Dale
Economic and epidemiological data collected in Beira, Mozambique, are used to conduct this first social cost–benefit analysis for cholera vaccination in Sub-Saharan Africa. The analysis compares the net economic benefits of three immunization strategies with and without user fees: school-based vaccination for school children only (age 5–14), school-based vaccination for all children (age 1–14), and a mass vaccination campaign for all people older than one year. All options assume the use of a low-cost new-generation oral cholera vaccine. The analysis incorporates the latest knowledge of vaccine effectiveness, including new evidence on the positive externality associated with the resulting herd protection (both protection of unvaccinated individuals and enhanced protection among vaccinated individuals arising from vaccination of a portion of the population). It also uses field data for incidence, benefits (private willingness to pay, public cost of illness), and costs (production, shipping, delivery, private travel costs). Taking herd protection into account has important economic implications. For a wide variety of parameters values, vaccination programs in Beira pass a cost–benefit test. Small school-based programs with and without user fees are very likely to provide net benefits. A mass vaccination campaign without user fees would result in the greatest reduction in the disease burden, but the social costs would likely outweigh the benefits, and such a program would require substantial public sector investment. As user fees increase, mass vaccination becomes much more attractive, and the reduction in disease burden remains above 70 percent at relatively low user fees.
Liquidity Constraints and Firms' Linkages with Multinationals
(World Bank, 2009-06-30) Javorcik, Beata S.; Spatareanu, Mariana
Using a unique data set on the Czech Republic for 1994–2003, this article examines the relationship between a firm's liquidity constraints and its supply linkages with multinational corporations (MNCs). The empirical analysis indicates that Czech firms supplying multinationals are less credit constrained than are nonsuppliers. Closer inspection of the timing of the effect, however, suggests that the result is due to self-selection of less constrained firms into supplying multinationals rather than to the benefits derived from the supplying relationship. As the recent literature finds that productivity spillovers from foreign direct investment (FDI) are most likely to take place through contacts between MNCs and their local suppliers, this finding suggests that well-developed financial markets may be needed to take full advantage of the benefits associated with FDI inflows.