Journal Issue: World Bank Economic Review, Volume 17, Issue 3
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Volume
17
Number
3
Issue Date
Journal Title
Journal ISSN
1564-698X
Journal
World Bank Economic Review
1564-698X
Journal Volume
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Articles
Risk Sharing in Labor Markets
(Washington, DC: World Bank, 2003-09) Bigsten, Arne; Collier, Paul; Dercon, Stefan; Fafchamps, Marcel; Gauthier, Bernard; Gunning, Jan Willem; Oduro, Abena; Oostendorp, Remco; Pattillo, Cathy; Soderbom, Mans; Teal, Francis; Zeufack, Albert
Empirical work in labor economics has
focused on rent sharing as an explanation for the observed
correlation between wages and profitability. The alternative
explanation of risk sharing between workers and employers
has not been tested. Using a unique panel data set for four
African countries, Authors find strong evidence of risk
sharing. Workers in effect offer insurance to employers:
when firms are hit by temporary shocks, the effect on
profits is cushioned by risk sharing with workers. Rent
sharing is a symptom of an inefficient labor market. Risk
sharing; by contrast, can be seen as an efficient response
to missing markets. Authors evidence suggests that risk
sharing accounts for a substantial part of the observed
effect of shocks on wages.
Macro and Micro Perspectives of Growth and Poverty in Africa
(Washington, DC: World Bank, 2003-09) Paternostro, Stefano; Christiaensen, Luc; Demery, Lionel
This article reviews trends in poverty,
economic policies, and growth in a sample of African
countries during the 1990s, drawing on the better household
data now available. Experiences have varied. Some countries
have seen sharp drops in income poverty, whereas others have
witnessed marked increases. In some countries overall
economic growth has been pro-poor and in others not. But the
aggregate numbers hide systematic distributional effects.
Taking both macro and micro perspectives of growth and
poverty in Africa, the article draws four key conclusions.
First, economic policy reforms (improving macroeconomic
balances and liberalizing markets) appear conducive to
reducing poverty. Second, market connectedness is crucial to
enable participation in the gains from economic growth. Some
regions and households by virtue of their remoteness were
left behind when growth picked up. Third, education and
access to land emerge as key private endowments to help
households benefit from new economic opportunities. Finally,
rainfall variations and ill health have profound effects on
poverty outcomes, underscoring the significance of social
risk management in poverty reduction strategies in Africa.
Trade Facilitation and Economic Development : New Approach to Quantifying the Impact
(Washington, DC: World Bank, 2003-09) Wilson, John S.; Mann, Catherine L.; Otsuki, Tsunehiro
This article analyzes the relationship
between trade facilitation and trade flows in the Asia
Pacific region. Country specific data for port efficiency,
customs environment, regulatory environment, and e-business
usage are used to construct indicators for measuring trade
facilitation. The relationship between these indicators and
trade flows is estimated using a gravity model that includes
tariffs and other standard variables. Enhanced port
efficiency has a large and positive effect on trade flows.
Regulatory barriers deter trade. Improvements in customs and
greater e-business use significantly expand trade but to a
lesser degree than improvements in ports or regulations. The
benefits of specific trade facilitation efforts are
estimated by quantifying differential improvements in these
four areas among members of the Asia Pacific Economic
Cooperation (APEC). A scenario in which APEC members with
below-average indicators improve capacity halfway to the
average forall members shows that intra-APEC trade could
increase by Dollar 254 billion, or 21 percent of intra-APEC
trade flows.
Water Subsidy Policies : Comparison of the Chilean and Colombian Schemes
(Washington, DC: World Bank, 2003-09) Gomez-Lobo, Andres; Contreras, Dante
Analysis of two water subsidy schemes a
means tested subsidy in Chile and a geographically targeted
subsidy in Colombia shows that the means-tested system is
better able to identify poor households than the
geographically targeted scheme. However, the overall
distributive impact of both schemes is quite similar, at
least for the three lowest income deciles, because the
amount of benefits per household in the geographically
targeted Colombian scheme are differentiated by the
socioeconomic classification of household. Despite the
relative merits of the Chilean means tested scheme,
targeting errors are still quite large. More than 60 percent
of subsidies accrue to households that are above the third
decile of the income distribution. If the policy objective
in Chile is to benefit a significant proportion of
households in the lowest income deciles, then either the
targeting mechanism must be improved or the number of
subsidies has to increase to take into account these
targeting imperfections. In Colombia almost all households
receive some kind of benefit, implying an unnecessarily high
fiscal cost. An improvement in the targeting mechanism could
lower this cost without jeopardizing benefits to
lower-income households. Some suggestions for additional
research and for improving both schemes are discussed.
Policy Selectivity Forgone: Debt and Donor Behavior in Africa
(Washington, DC: World Bank, 2003-09) Birdsall, Nancy; Claessens, Stijn; Diwan, Ishac
Authors assess the dynamics behind the
high net resource transfers by donors and creditors to
Sub-Saharan African countries. Analyzing the determinants of
overall net transfers for a panel of 37 recipient countries
in 1978-98, Authors find that country policies mattered
little. Donors especially bilateral donors actually made
greater transfers to countries with high debt, largely owed
to multilateral creditors, when policies were
'bad'. Authors conclude that comprehensive debt
relief has the potential, though not the certainty, to
restore selectivity in support of good policies. That would
make development assistance more effective going forward and
increase public support in donor countries.