Journal Issue: World Bank Research Observer, Volume 20, Issue 2
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2
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Publication
Data and Dogma : The Great Indian Poverty Debate
(Oxford University Press on behalf of the World Bank,
2005-09-01)
What happened to poverty in India in the
1990s has been fiercely debated, both politically and
statistically. The debate has run parallel to the wider
debate about globalization and poverty in the 1990s and is
also an important part of that debate. The economic reforms
of the early 1990s in India were followed by rates of
economic growth that were high by historical standards. The
effects on poverty remain controversial, however. The
official numbers published by the government of India,
showing acceleration in the rate of poverty reduction from
36 percent of the population in 1993 to 1994 to 26 percent
in 1999 to 2000, have been challenged for showing both too
little and too much poverty reduction. The various claims
have often been frankly political, but there are also many
important statistical issues. The debate, reviewed in this
article, provides an excellent example of how politics and
statistics interact in an important, largely domestic
debate. Although there is no consensus on what happened to
poverty in India in the 1990s, there is good evidence both
that poverty fell and that the official estimates of poverty
reduction are too optimistic, particularly for rural India.
The issues covered in this article, although concerned with
the measurement of poverty in India, have wide international
relevance discrepancies between surveys and national
accounts, the effects of questionnaire design, reporting
periods, survey nonresponse, repair of imperfect data,
choice of poverty lines, and interplay between statistics
and politics.
Publication
Infrastructure Privatization and Regulation : Promises and Perils
(Oxford University Press on behalf of the World Bank,
2005-03-01)
Infrastructure is crucial for generating
growth, alleviating poverty, and increasing international
competitiveness. For much of the twentieth century and in
most countries, the network utilities that delivered
infrastructure services such as electricity, natural gas,
telecommunications, railroads, and water supply were
vertically and horizontally integrated state monopolies. But
this approach often resulted in extremely weak services,
especially in developing and transition economies and
especially for poor people. Common problems included low
productivity, high costs, bad quality, insufficient revenue,
and shortfalls in investment. Over the past two decades many
countries have implemented far-reaching institutional
reforms restructuring, privatizing, and establishing new
approaches to regulation. This article identifies the
challenges involved in this massive policy redirection
within the historical, economic, and institutional context
of developing and transition economies. It also reviews the
outcomes of these policy changes, including their
distributional consequences especially for poor households
and other disadvantaged groups. Drawing on a range of
international experiences and empirical studies, it
recommends directions for future reforms and research to
improve infrastructure performance.
Publication
Housing Policy in Developing Countries : Conjectures and Refutations
(Oxford University Press on behalf of the World Bank,
2005-09-01)
This housing policy in developing
countries, conjectures and refutations article discusses
housing policy in developing economies. It examines recent
research findings in light of earlier arguments as to the
benefits of more market-oriented approaches. It also looks
at whether the recommendations of earlier work have been
refuted or developed in subsequent analyses and policy
measures. In particular, it reviews the empirical analysis
of the effects of policy on housing supply, the richer
understanding of the effects that land market regulations
have on housing affordability and the functioning of urban
areas, and the alleged mysterious effects that researchers
claim effective property rights have on housing policy and
on development more generally. It also examines the effects
of the increased emphasis on community participation,
showing how it helps to more fully reconcile the incentives
faced by beneficiaries of housing policy and donors.
Finally, it examines recent literature on the welfare
effects of rent control. The article shows that some of the
conjectures as to the likely benefits of more market-based
policy have been refuted, but large welfare gains for poor
people can still be realized by adapting this approach.
Furthermore, this approach appears to be gaining ground as
the consensus approach to effective housing policy.
Publication
Globalization, Poverty, and Inequality since 1980
(Oxford University Press on behalf of the World Bank,
2005-09-01)
One of the most contentious issues of
globalization is the effect of global economic integration
on inequality and poverty. This article documents five
trends in the modern era of globalization, starting around
1980. The first trend is that growth rates in poor economies
have accelerated and are higher than growth rates in rich
countries for the first time in modern history. Developing
countries per capita incomes grew more than 3.5 percent a
year in the 1990s. Second, the number of extremely poor
people in the world has declined significantly. The share of
people in developing economies living on less than dollar 1
a day has been cut in half since 1981, though the decline in
the share living on less than dollar 2 per day was much less
dramatic. Third, global inequality has declined modestly,
reversing a 200-year trend toward higher inequality. Fourth,
within-country inequality in general is not growing, though
it has risen in several populous countries (China, India,
and the United States). Fifth, wage inequality is rising
worldwide. This may seem to contradict the fourth trend, but
it does not because there is no simple link between wage
inequality and household income inequality. Furthermore, the
trends toward faster growth and poverty reduction are
strongest in developing economies that have integrated with
the global economy most rapidly, which supports the view
that integration has been a positive force for improving the
lives of people in developing areas
Publication
Insights on Development from the Economics of Happiness
(Oxford University Press on behalf of the World Bank,
2005-09-01)
The literature on the economics of
happiness in developed economies finds discrepancies between
reported measures of well-being and income measures. One is
the so-called Easterlin paradox: that average happiness
levels do not increase as countries grow wealthier. This
article explores how that paradox and survey research on
reported wellbeing in general can provide insights into the
gaps between standard measures of economic development and
individual assessments of welfare. Analysis of research on
reported wellbeing in Latin America and Russia finds notable
discrepancies between respondent assessments of their own
wellbeing and income or expenditure based measures.
Accepting a wide margin for error in both types of measures,
the article posits that taking such discrepancies into
account may improve the understanding of development
outcomes by providing a broader view on wellbeing than do
income or expenditure based measures alone. It suggests
particular areas where research on reported well-being has
the most potential to contribute. Yet the article also notes
that some interpretations of happiness research psychologist
set point theory, in particular may be quite limited in
their application to development questions and cautions
against the direct translation of results of happiness
surveys into policy recommendations.
Publication
Public Debt Management and Macroeconomic Stability : An Overview
(Oxford University Press on behalf of the World Bank,
2005-09-01)
Recent research suggests that management
of the public sector debt can have important effects on a
country macroeconomic performance. This Public debt
management and macroeconomic stability article provides an
overview of the factors that the recent literature has
identified as important in determining the optimal
composition of the public debt. Based on this analysis, it
attempts to establish general guidelines for public debt
management in emerging economies. To retain market access
and promote domestic financial market development,
governments should generally finance themselves at market
rates using a wide variety of securities. Beyond this
general principle, the optimal composition of the public
debt involves a tradeoff between enhancing the government
anti-inflationary credibility and reducing the vulnerability
of its budget to macroeconomic shocks. Consequently, the
optimal composition of the debt depends on a country
circumstances. Debt should be heavily weighted toward
long-term nominal securities for governments that have
anti-inflationary credibility and toward long-term indexed
debt for those that do not.