Journal Issue: World Bank Research Observer, Volume 16, Issue 2
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The Politics of Russian Enterprise Reform : Insiders, Local Governments, and the Obstacles to Restructuring
(World Bank, Washington, DC, 2001-10) Desai, Raj M.; Goldberg, Itzhak
Russia and other countries in the
commonwealth of independent states that have implemented
voucher privatization programs have to account for the
puzzling behavior of insiders manager-owners-who, in
stripping assets from the firms they own, appear to be
stealing from one pocket to fill the other. This article
suggests that asset stripping and the absence of
restructuring result from interactions between insiders and
subnational governments in a particular property rights
regime, in which the ability to realize value is limited by
uncertainty and illiquidity. As the central institutions
that govern the Russian economy have ceded their powers to
the provinces, regional and local governments have imposed a
variety of distortions on enterprises to protect local
employment. To disentangle these vicious circles of control,
this article considers three sets of institutional changes:
adjustments to the system of fiscal federalism by which
subnational governments would be allowed to retain tax
revenues generated locally; legal improvements in the
protection of property rights; and the provision of
mechanisms for restructuring and ownership transformation in
insider-dominated firms. The aim of these reforms would be
to change the incentives that local governments, owners, and
investors face; to convince subnational governments that a
more sustainable way of protecting employment lies in
protecting local investment; to raise the cost of theft and
corruption by insiders and local officials; and to allow
investors to acquire controlling stakes in viable firms.
The World Bank Research Observer 16(2)
(Cary, NC: Oxford University Press and the World Bank, 2001-09) World Bank; Devarajan, Shantayanan
Counting the world's poor: problems
and possible solutions; by Angus Deaton. Comments on
"counting the world's poor"; by Martin
Ravallion, and T. N. Srinivasan. Ecology, history, and
development : a perspective from rural Southeast Asia; by
Yujiro Hayami. Productivity growth and sustainability in
post-green revolution agriculture: the case of the Indian
and Pakistan Punjab; by Rinku Murgai, Mubarik Ali, and Derek
Byerlee. The politics of Russian enterprise reform:
insiders, local governments, and the obstacles to
restructuring; by Raj M. Desai and Itzhak Goldberg.
Comment on 'Counting the World's Poor' by Angus Deaton
(Washington, DC: World Bank, 2001-10) Srinivasan, T.N.
Deaton s analysis of the problems with
poverty counts and suggestions for improvement, including
issues needing further research, are based on two distinct
stages in counting the poor. At the first or international
stage, a world poverty line is set and used to derive
comparable poverty lines for each country. At the second or
domestic stage, the poverty lines are used to count the
number of poor people in each country, and the others are
added up over countries. He finds disquieting evidence about
both stages of counting. The data for poverty counts in the
second stage come from household surveys, whereas data on
aggregate economic growth are from National Accounts
Statistics (NAS). Deaton finds that in many countries there
are large and growing disparities between survey data and
national accounts so that there is no consistent empirical
basis for conclusions about the extent to which growth
reduces poverty. It is scandalous that even after nearly
half a century of pursuing national and international
programs for the eradication of mass poverty, the empirical
foundations for assessing the success or failure of the
programs and drawing lessons from them are so weak as to be
deemed nonexistent. Abandoning them and focusing on national
and subnational poverty analysis that goes beyond headcounts
will be the sensible course to follow. The author focuses
only on consumption-based poverty lines. The reason is the
challenge of defining household income in a theoretically
satisfactory manner and collecting data on income based on
that definition through household surveys in any country
(developed or developing). Deaton (1989) discusses the
difficulties in meeting the challenge. Poverty counts based
on income-based poverty lines are even more problematic than
consumption-based ones.
Productivity Growth and Sustainability in Post-Green Revolution Agriculture : The Case of the Indian and Pakistan Punjabs
(Washington, DC: World Bank, 2001-10) Murgai, Rinku; Ali, Mubarik; Byerlee, Derek
This article attempts to determine the
long-term productivity and sustainability of irrigated
agriculture in the Indian and Pakistan Punjabs by measuring
trends in total factor productivity for production systems
in both states since the advent of the green revolution.
These measurements over time and across systems have
resulted in three major findings. First, there were wide
spatial and temporal variations between the two Punjabs.
Although output growth and crop yields were much higher in
the Indian Punjab, productivity growth was higher by only a
small margin. Moreover, the lowest growth in productivity
took place during the initial green revolution period and in
the wheat-rice system in both states. The time lag between
adoption of green revolution technologies and realization of
productivity gains is related to learning induced efficiency
gains, better utilization of capital investments over time,
and problems with the standard methods of productivity
measurement that downwardly bias estimate, particularly
during the green revolution period. Second, input growth
accounted for most of the output growth in both Punjabs
during the period under study. Third, intensification,
especially in the wheat-rice system, resulted in resource
degradation in both Punjabs. Data from Pakistan show that
resource degradation reduced overall productivity growth
from technical change and from education and infrastructure
investment by one-third.
Counting the World's Poor : Problems and Possible Solutions
(Washington, DC: World Bank, 2001-10) Deaton, Angus
As recent discussions have made clear,
the apparent lack of poverty reduction in the face of
historically high rates of economic growth-both in the world
as a whole and in specific countries (most notably
India)-provides fuel for the argument that economic growth
does little to reduce poverty. How confident can we be that
the data actually support these inferences? At the
international level, the regular revision of purchasing
power parity exchange rates plays havoc with the poverty
estimates, changing them in ways that have little or nothing
to do with the actual experience of the poor. At the
domestic level, the problems in measuring poverty are
important not only for the world count but also for tracking
income poverty within individual countries. Yet, in many
countries, there are large and growing discrepancies between
the survey data-the source of poverty counts-and the
national accounts-the source of the measure of economic
growth. Thus economic growth, as measured, has at best a
weak relationship with poverty, as measured.
Comment on 'Counting the World's Poor' by Angus Deaton
(Washington, DC: World Bank, 2001-10) Ravallion, Martin
This issue provides a usefully critical
discussion of the current methods used by the World Bank for
measuring poverty. The author will not address all the
points raised by Deaton- avoiding those on which the author
thinks there is broad agreement that the World Bank s
current methods can be improved. These include the way that
(invariably troublesome) income surveys are handled, the
scope for better use of subjective-qualitative welfare data,
and the need to better acknowledge the limitations of
welfare metrics based solely on consumption of market goods.
This leaves two main issues that are very important for
global poverty measurements- namely, how currency
conversions are done and whether the poverty measures should
be anchored to the national accounts. On both counts, Deaton
makes recommendations for changing current methods. Before
considering his recommendations, the author will briefly
describe how the World Bank measures poverty.
Ecology, History, and Development : A Perspective from Rural Southeast Asia
(Washington, DC: World Bank, 2001-10) Hayami, Yujiro
The process by which different
ecological conditions and historical trajectories interacted
to create different social and cultural systems resulted in
major differences in economic development performance within
Southeast Asia. In the late 19th century, Indonesia, the
Philippines, and Thailand commonly experienced
vent-for-surplus development through exploitation of unused
lands. Nevertheless, different agrarian structures were
created. Indonesia s development was mainly based on the
exploitation of tropical rain forest under Dutch
colonialism. It resulted in the bifurcation of the rural
sector between rice-farming peasant proprietors and large
plantations for tropical export crops based on hired labor.
In the Philippines, exploitation of the same resource base
under Spanish rule resulted in pervasive landlessness among
the rural population. Relatively homogeneous landowning
peasants continued to dominate in Thailand, where delta
plains that were suitable only for rice production formed
the resource base for development. These different agrarian
structures associated with different social value systems
have accounted for differential development performance
across the three economies in the recent three decades.