Journal Issue: World Bank Economic Review, Volume 20, Issue 3
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Volume
20
Number
3
Issue Date
Journal Title
Journal ISSN
1564-698X
Journal
World Bank Economic Review
1564-698X
Journal Volume
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Articles
Microenterprise Dynamics in Developing Countries : How Similar are They to Those in the Industrialized World? Evidence from Mexico
(Oxford University Press on behalf of the World Bank, 2006-09-01) Fajnzylber, Pablo; Maloney, William; Montes Rojas, Gabriel
A rich panel data set from Mexico is
used to study the patterns of entry, exit, and growth of
microenterprises and to compare these with the findings of
the mainstream theoretical and empirical work on firm
dynamics. The Mexican self-employment sector is much larger
than its counterpart in the United States, which is
reflected in higher unconditional rates of entry into the
sector. The evidence for Mexico points to the significant
presence of well-performing salaried workers among the
likely entrants into self-employment, as opposed to the
higher incidence of poorer wageworkers among the entrants
into the U.S. self-employment sector. Despite these
differences, however, the patterns of entry, survival, and
growth with respect to age, education, and many other
covariates are very similar in Mexico and the United States.
These strong similarities suggest that mainstream models of
worker decisions and firm behavior are useful guides for
policymaking for the developing-country microenterprise
sector. Furthermore, they suggest that, as a first
approximation, the developing-country microenterprise should
probably be viewed as they are in the advanced countries as
offering potentially desirable job opportunities to
low-productivity workers.
When Is External Debt Sustainable?
(Oxford University Press on behalf of the World Bank, 2006-09-01) Nehru, Vikram; Kraay, Aart
The article empirically examines the
determinants of debt distress, defined as periods in which
countries resort to any of three forms of exceptional
finance: significant arrears on external debt, Paris Club
rescheduling, and non-concessional International Monetary
Fund lending. Probit regressions show that three factors
explain a substantial fraction of the cross-country and
time-series variation in the incidence of debt distress: the
debt burden, the quality of policies and institutions, and
shocks. The relative importance of these factors varies with
the level of development. These results are robust to a
variety of alternative specifications, and the core
specifications have substantial out-of-sample predictive
power. The quantitative implications of these results are
examined for the lending strategies of official creditors.
How Endowments, Accumulations, and Choice Determine the Geography of Agricultural Productivity in Ecuador
(Oxford University Press on behalf of the World Bank, 2006-09-01) Leon, Mauricio; Larson, Donald F.
Spatial disparity in incomes and
productivity is apparent across and within countries. Most
studies of the determinants of such differences focus on
cross-country comparisons or location choice among firms.
Less studied are the large differences in agricultural
productivity within countries related to concentrations of
rural poverty. For policy, understanding the determinants of
this geography of agricultural productivity is important,
because strategies to reduce poverty often feature
components designed to boost regional agricultural incomes.
Census and endowment data for Ecuador are used to estimate a
model of endogenous technology choice to explain large
regional differences in agricultural output and factor
productivity. A composite-error estimation technique is used
to separate systemic determinants from idiosyncratic
differences. Simulations are employed to explore policy
avenues. The findings suggest a differentiation between the
types of policies that promote growth in agriculture
generally and those that are more likely to assist the rural poor.
Will African Agriculture Survive Climate Change?
(Oxford University Press on behalf of the World Bank, 2006-08-23) Kurukulasuriya, Pradeep; Mendelsohn, Robert; Hassan, Rashid; Benhin, James; Deressa, Temesgen; Diop, Mbaye; Eid, Helmy Mohamed; Fosu, K. Yerfi; Gbetibouo, Glwadys; Jain, Suman; Mahamadou, Ali; Mano, Renneth; Kabubo-Mariara, Jane; El-Marsafawy, Samia; Molua, Ernest; Ouda, Samiha; Ouedraogo, Mathieu; Sene, Isidor; Maddison, David; Seo, S. Niggol; Dinar, Ariel
Measurement of the likely magnitude of
the economic impact of climate change on African agriculture
has been a challenge. Using data from a survey of more than
9,000 farmers across 11 African countries, a cross-sectional
approach estimates how farm net revenues are affected by
climate change compared with current mean temperature.
Revenues fall with warming for dryland crops (temperature
elasticity of -1.9) and livestock (-5.4), whereas revenues
rise for irrigated crops (elasticity of 0.5), which are
located in relatively cool parts of Africa and are buffered
by irrigation from the effects of warming. At first, warming
has little net aggregate effect as the gains for irrigated
crops offset the losses for dryland crops and livestock.
Warming, however, will likely reduce dryland farm income
immediately. The final effects will also depend on changes
in precipitation, because revenues from all farm types
increase with precipitation. Because irrigated farms are
less sensitive to climate, where water is available,
irrigation is a practical adaptation to climate change in Africa.
The Primacy of Institutions Reconsidered : Direct Income Effects of Malaria Prevalence
(Oxford University Press on behalf of the World Bank, 2006-06-08) Carstensen, Kai; Gundlach, Erich
Some recent empirical studies deny any
direct effect of geography on development and conclude that
institutions dominate all other potential determinants of
development. An alternative view emphasizes that geographic
factor such as disease ecology, as proxied by the prevalence
of malaria, may have a large negative effect on income,
independent of the quality of a country's institutions.
For instance, pandemic malaria may create a large economic
burden beyond medical costs and forgone earnings by
affecting household behavior and such macroeconomic
variables as international investment and trade. After
controlling for institutional quality, malaria prevalence is
found to cause quantitatively important negative effects on
income. The robustness of this finding is checked by
employing alternative instrumental variables, tests of
over-identification restrictions, and tests of the validity
of the point estimates and standard errors in the presence
of weak instruments. The baseline findings appear to be
robust to using alternative specifications,
instrumentations, and samples. The reported estimates
suggest that good institutions may be necessary but not
sufficient for generating a persistent process of successful
economic development.
The 'Glass of Milk' Subsidy Program and Malnutrition in Peru
(Oxford University Press on behalf of the World Bank, 2006-07-10) Stifel, David; Alderman, Harold
This study of the Vaso de Leche
('glass of milk') feeding program in Peru looks
for evidence that this in-kind transfer program aimed at
young children furthers nutritional objectives. The study
links public expenditure data with household survey data to
substantiate the targeting and to model the determinants of
nutritional outcomes. It confirms that the social transfer
program targets poor households and households with low
nutritional status. Nevertheless, the study fails to find
econometric evidence that the nutritional objectives are
being achieved.