Journal Issue: World Bank Research Observer, Volume 33, Issue 1
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Privatization in Developing Countries
(Published by Oxford University Press on behalf of the World Bank, 2018-02-01) Estrin, Saul; Pelletier, Adeline
This paper reviews the recent empirical evidence on privatization in developing countries, with particular emphasis on new areas of research such as the distributional impacts of privatization. Overall, the literature now reflects a more cautious and nuanced evaluation of privatization. Thus, private ownership alone is no longer argued to automatically generate economic gains in developing economies; pre-conditions (especially the regulatory infrastructure) and an appropriate process of privatization are important for attaining a positive impact. These comprise a list which is often challenging in developing countries: well-designed and sequenced reforms; the implementation of complementary policies; the creation of regulatory capacity; attention to poverty and social impacts; and strong public communication. Even so, the studies do identify the scope for efficiency-enhancing privatization that also promotes equity in developing countries.
The Whys of Social Exclusion
(Published by Oxford University Press on behalf of the World Bank, 2018-02-01) Hoff, Karla; Walsh, James
All over the world, people are prevented from participating fully in society through mechanisms that go beyond the structural and institutional barriers that rational choice theory identifies (—poverty, exclusion by law or force, taste-based or statistical discrimination, and externalities from social networks differentiated by socioeconomic status). This paper discusses four additional mechanisms that can be explained by bounded rationality: (a) implicit discrimination, (b) self-stereotyping and self-censorship, (c) rules of thumb adapted to disadvantaged environments that are dysfunctional in more privileged settings, and (d) “adaptive preferences,” in which an excluded group comes to view its exclusion as natural. Institutions, if they are stable, come to have cognitive foundations---concepts, categories, social identities, and worldviews---through which people mediate their perceptions of themselves and the world around them. Abolishing or reforming a discriminatory institution may have little effect on the social categories it created; groups previously discriminated against by law may remain excluded through custom and habits of the mind. Recognizing new forces of social exclusion, behavioral economics identifies ways to offset them. Some interventions have had very consequential impacts.
Public-Private Partnerships in Developing Countries
(Published by Oxford University Press on behalf of the World Bank, 2018-02-01) Leigland, James
Advocates of public-private partnerships (PPPs) for infrastructure services in developing
countries have long battled criticism of these arrangements by civil society groups. The
view among PPP advocates generally has been that these criticisms are mostly ideological polemics thatmix opinion with selected but often misinterpreted facts. But over the last two decades, as the experience with PPPs has increased in both developed and developing countries, a different kind of critique has emerged, one that is based on non-ideological empirical research, and is sometimes expressed by PPP advocates. These studies often focus on individual aspects of PPPs, and usually do not claim to be “PPP evaluations” or express opinions on the overall value of PPPs. Taken together, a powerful, evidence-based critique of PPPs is emerging, but one that ismoremeasured thanmuch of the criticism of the last two decades. This new critique recognizes many cases in which PPPs have not been successful, but also some situations in which PPPs can generate value for money. Because of its critical tone, some of this research is now regularly cited by the civil society critics of PPPs, giving their arguments more weight than was the case a decade ago. This paper attempts to summarize some of the most compelling examples of this kind of emerging critique, and uses the summary to assess the practicality of the G20’s recent advocacy of large, “transformational” PPPs as tools for dealing effectively with infrastructure challenges in low-income countries.
Generalization in the Tropics – Development Policy, Randomized Controlled Trials, and External Validity
(Published by Oxford University Press on behalf of the World Bank, 2018-02-01) Peters, Jorg; Langbein, Jorg; Roberts, Gareth
When properly implemented, Randomized Controlled Trials (RCT) achieve a high degree of internal validity. Yet, if an RCT is to inform policy, it is critical to establish external validity. This paper systematically reviews all RCTs conducted in developing countries and published in leading economic journals between 2009 and 2014 with respect to how they deal with external validity. Following Duflo, Glennerster, and Kremer (2008), we scrutinize the following hazards to external validity: Hawthorne effects, general equilibrium effects, specific sample problems, and special care in treatment provision. Based on a set of objective indicators, we find that the majority of published RCTs does not discuss these hazards and many do not provide the necessary information to assess potential problems. The paper calls for including external validity dimensions in a more systematic reporting on the results of RCTs. This may create incentives to avoid overgeneralizing findings and help policy makers to interpret results appropriately.