Journal Issue: World Bank Economic Review, Volume 22, Issue 1

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Disability, Poverty, and Schooling in Developing Countries : Results from 14 Household Surveys
(World Bank, 2008-01-30) Filmer, Deon
Analysis of 14 household surveys from 13 developing countries suggests that 1–2 percent of the population have disabilities. Adults with disabilities typically live in poorer than average households: disability is associated with about a 10 percentage point increase in the probability of falling in the two poorest quintiles. Much of the association appears to reflect lower educational attainment among adults with disabilities. People of ages 6–17 with disabilities do not live in systematically wealthier or poorer households than other people of their age, although in all countries studied they are significantly less likely to start school or to be enrolled at the time of the survey. The order of magnitude of the school participation deficit associated with disability—which is as high as 50 percentage points in 3 of the 13 countries—is often larger than deficits related to other characteristics, such as gender, rural residence, or economic status differentials. The results suggest a worrisome vicious cycle of low schooling attainment and subsequent poverty among people with disabilities in developing countries.
The Impact of Decentralized Data Entry on the Quality of Household Survey Data in Developing Countries:
(World Bank, 2008-01-30) Glewwe, Paul ; Dang, Hai-Anh Hoang
Computers were provided to randomly selected districts participating in a household survey in Vietnam to assess the impact on data quality of entering data within a day or two of completing the interview rather than several weeks later in the provincial capital. Provision of computers had no significant effect on the observed distribution of household expenditures and thus no effect on measured poverty. Provision of computers reduced the mean number of errors per household by 5–23 percent, depending on the type of error. Given the already low rate of errors in the survey, however, the goal of increasing the precision of the estimated mean of a typical variable can be achieved at a much lower cost by slightly increasing the sample size. Provision of additional computers did substantially reduce the time interviewers spent adding up and checking the data in the field, with the value of the time saved close to the cost of purchasing desktop computers.
Short- and Long-Term Effects of United Nations Peace Operations
(World Bank, 2008-01-30) Sambanis, Nicholas
In an earlier study Doyle and Sambanis (2000) [Doyle, Michael W., and Nicholas Sambanis. 2000. "International Peacebuilding: A Theoretical and Quantitative Analysis." American Political Science Review 94(4):779–801.] showed that United Nations (UN) peace operations have made positive contributions to peacebuilding in the short term, helping parties implement peace agreements. But are the effects of UN peace operations lasting? Because the UN cannot fight wars, such operations should not be used to enforce a peace. Peacekeeping operations contribute more to the quality of the peace—that is, to securing more than the mere absence of war—than to its duration, because the effects of such operations dissipate over time. For peace to be self-sustaining, countries must develop institutions and policies that generate economic growth. UN peacebuilding lacks a strategy for fostering self-sustaining economic growth that could connect increased participation with sustainable peace. The international community would benefit from an evolution that uses economic reforms to plug the gap between peacekeeping and humanitarian assistance on the one hand and development on the other.
The Aftermath of Civil War
(World Bank, 2008-01-30) Chen, Siyan ; Loayza, Norman V. ; Reynal-Querol, Marta
Using an event-study methodology, the article analyzes the aftermath of civil war in a cross-section of countries. It focuses on cases where the end of conflict marks the beginning of relatively lasting peace. The analysis considers 41 countries involved in internal wars over the period 1960–2003. To provide a comprehensive evaluation of the aftermath of war, a range of social areas is considered: basic indicators of economic performance, health and education, political development, demographic trends, and conflict and security issues. For each indicator the post- and pre-war situations are compared and their dynamic trends during the post-conflict period are examined. The analysis is conducted in both absolute terms and relative to control groups of countries that are similar except for conflict. The findings indicate that even though war has devastating effects and its aftermath can be immensely difficult, when the end of war marks the beginning of lasting peace, recovery and improvement are achieved.
Foreign Aid, the Real Exchange Rate, and Economic Growth in the Aftermath of Civil Wars
(World Bank, 2008-01-30) Elbadawi, Ibrahim Ahmed ; Kaltani, Linda ; Schmidt-Hebbel, Klaus
Foreign aid, the real exchange rate (RER), and economic growth are three key variables that shape the aftermath of civil wars in many developing countries. Panel estimations drawn from a sample of 39 conflict and 44 nonconflict countries between 1970 and 2004 indicate that although postconflict countries receive larger aid flows and exhibit moderate RER overvaluation after peace is attained, overvaluation cannot be traced to aid. Yet foreign aid is among the significant determinants of the equilibrium RER. Aid is also an important determinant of economic growth, particularly after peace is reached. Aid exhibits decreasing returns, however, and interacts negatively with RER overvaluation. RER overvaluation reduces growth, but this effect is ameliorated by financial development. Postconflict policies should therefore aim to use aid prudently, avoid RER misalignment, and support financial and capital market development to achieve high and stable growth in the aftermath of war and beyond.
Postconflict Monetary Reconstruction
(World Bank, 2008-01-30) Adam, Christopher ; Collier, Paul ; Davies, Victor A.B.
During civil wars governments typically resort to inflation to raise revenue. A model of this phenomenon is presented, estimated, and applied to the choices and constraints faced during the postconflict period. The results show that far from there being a fiscal peace dividend, postconflict governments tend to face even more pressing needs after than during war. As a result, in the absence of postconflict aid, inflation increases sharply, frustrating a more general monetary recovery. Aid decisively transforms the path of monetary variables in the postconflict period, enabling the economy to regain peacetime characteristics. Postconflict aid thus achieves a monetary "reconstruction" analogous to its more evident role in infrastructure.
Insurgency and Credible Commitment in Autocracies and Democracies
(World Bank, 2008-01-30) Keefer, Philip
The inability of political actors to make credible promises to broad segments of society—a previously unexplored determinant of civil war—causes both elected and unelected governments to pursue public policies that leave citizens worse off and more prone to revolt. Noncredible political actors are also less able to build counterinsurgency capacity. Popular dissatisfaction with rulers reduces the costs to counterinsurgents of overthrowing regimes, discouraging rulers from building counterinsurgency capacity in the first place; lack of credibility prevents rulers from writing contracts with counterinsurgents that maximize counterinsurgency effort. Empirical tests across numerous subsamples using various measures of political credibility support the conclusion that broad political credibility ranks at least as high as social fractionalization and natural resource rents as a cause of conflict.
Postconflict Transitions
(World Bank, 2008-01-30) Elbadawi, Ibrahim Ahmed
In the two to five years immediately following end of conflicts, UN peacekeeping operations have succeeded in maintaining peace, while income and consumption growth rates have been higher than normal and recovery on key education and health indicators has been possible. Aid also has been super-effective in promoting recovery, not only by financing physical infrastructure but also by helping in the monetary reconstruction of postconflict economies. However, sustaining these short-term gains was met with two difficult challenges. First, long-term sustainability of peace and growth hinges primarily on the ability of postconflict societies to develop institutions for the delivery of public goods, which, in turn, depends on the capacity of post-conflict elites to overcome an entrenched culture of political fragmentation and form stable national coalitions, beyond their immediate ethnic or regional power bases. Second, after catch-up growth runs its course, high levels of aid could lead to overvalued real currencies, at a time when growth requires a competitive exchange rate and economic diversification. Successful peace-building would, therefore, require that these political and economic imperatives of postconflict transitions be accounted for in the design of UN peacekeeping operations as well as the aid regime.