Journal Issue: World Bank Research Observer, Volume 29, Issue 1
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Population, Poverty, and Climate Change
(Oxford University Press on behalf of the World Bank, 2014-01-24) Das Gupta, Monica
This literature review focuses on the relationships between population, poverty, and climate change. Developed countries are largely responsible for global warming, but the brunt of the fallout will be borne by developing countries in forms such as lower agricultural output, poorer health, and more frequent natural disasters. Although carbon emissions per capita have leveled off in developed countries, they are projected to rise rapidly in developing countries because of economic growth and population growth. Unfortunately, the latter will rise most notably in the poorest countries, combining with climate change to slow poverty reduction. These countries have many incentives to lower fertility. Previous studies indicate that in high fertility settings, fertility decline facilitates economic growth and poverty reduction. It also reduces the pressure on livelihoods and frees resources that can be used to cope with climate change. Moreover, slowing population growth helps avert some of the projected global warming, which will benefit the poorest countries far more than it will benefit developed countries that lie at higher latitudes and/or have more resources to cope with climate change. Natural experiments indicate that family-planning programs are effective and highly pro-poor in their impact. While the rest of the world wrestles with the complexities of reducing emissions, the poorest countries will benefit from simple programs to lower fertility.
Orderly Sovereign Debt Restructuring
(Oxford University Press on behalf of the World Bank, 2014-01-24) Pinto, Brian; Canuto, Otaviano; Prasad, Mona
An orderly sovereign debt restructuring should place the debtor nation's public debt on a sustainable trajectory while minimizing procrastination and contagion. However, the experiences with the debt crisis of the 1980s, Russia 1998, Argentina 2001, and Greece 2010 indicate that orderly debt restructurings remain elusive, even with high-powered official intervention. When solvency problems are present, the chances of success increase if official money is lent at the risk-free rate, reflecting its low risk, and if private creditors receive an upfront haircut. The paper examines the obstacles, which include moral hazard, difficulty in distinguishing between solvency and liquidity crises, and the “political economy” resistance to upfront haircuts. Orderly sovereign debt restructurings are likely to remain elusive notwithstanding recent evidence that the official mindset may be changing.
Inequality in China
(Oxford University Press on behalf of the World Bank, 2014-01-24) Knight, John
This paper provides an overview of research on income inequality in China over the period of economic reform. It presents the results of two main sources of evidence on income inequality and, assisted by various decompositions, explains the reasons income inequality has increased rapidly and the Gini coefficient is now almost 0.5. This paper evaluates the degree of income inequality from the perspectives of people's subjective well-being and government concerns. It poses the following question: has income inequality peaked? It also discusses the policy implications of the analysis. The concluding comments of this paper propose a research agenda and suggest possible lessons from China's experience that may be useful for other developing countries.
What Are We Learning from Business Training and Entrepreneurship Evaluations around the Developing World?
(Oxford University Press on behalf of the World Bank, 2014-01-24) Woodruff, Christopher; McKenzie, David
Business training programs are a popular policy option to improve the performance of enterprises around the world, and the number of rigorous impact evaluations of these programs is growing. A critical review reveals that many evaluations suffer from small sample sizes, measure impacts only within a year of training, and experience problems with survey attrition and measurement that limit the conclusions one can draw. Over these short time horizons, there are relatively modest effects of training on the survivorship of existing firms. However, there is stronger evidence that training programs help prospective owners launch new businesses more quickly. Most studies find that existing firm owners implement some of the practices taught in training, but the magnitudes of the improvement to practices is often modest. Few studies find significant impacts on profits or sales, although some studies with greater statistical power have done so. There is little evidence to guide policymakers regarding whether any identified effects are due to trained firms drawing sales from competing businesses rather than through productivity improvements or to guide the development of the provision of training at market prices. We conclude by summarizing some directions and key questions for future studies.
Can Civil Society Overcome Government Failure in Africa?
(Oxford University Press on behalf of the World Bank, 2014-01-24) Khemani, Stuti; Devarajan, Shantayanan; Walton, Michael
Government failures are widespread in Africa. Symptoms include absentee teachers, leakage of public funds, monopolized trucking, and employment-restricting regulations. Can civil society do anything about these failures? Would external donor support to civil society help? We argue that the challenge for civil society is to improve government functioning by strengthening political incentives—the underlying cause of government failure—rather than bypassing or supplanting the state. This paper reviews the available evidence on civil society interventions from this perspective. Although the current increase in political competition and extensive citizen engagement in Africa seems to create the potential for civil society influence, we find that there are large knowledge gaps regarding what works, where, and how. Some rigorous evaluations find significant impacts of civil society involvement on development outcomes, but these studies typically pay insufficient attention to the mechanisms. For example, are impacts due to overcoming government failure or to changing private household behavior, leaving the wasteful allocation of public resources untouched? We conclude that donor support to civil society should take an approach of learning by doing through ongoing experimentation backed by rigorous, data-based evaluations of the mechanisms of impact.