Journal Issue:World Bank Economic Review, Volume 39, Issue 3
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Volume
39
Number
3
Issue Date
2025-08
Journal Title
Journal ISSN
1564-698X
Journal
World Bank Economic Review
1564-698X
Journal Volume
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Articles
Poverty and Prices
(Published by Oxford University Press on behalf of the World Bank, 2025-08-05) Jolliffe, Dean; Mahler, Daniel Gerszon; Lakner, Christoph; Atamanov, Aziz; Kofi Tetteh-Baah, Samuel
Purchasing power parities (PPPs) are used to estimate the international poverty line (IPL) in a common currency and account for relative price differences across countries when measuring global poverty. This paper assesses the impact of the 2017 PPPs on the nominal value of the IPL and global poverty. Updating the 1.90 dollars IPL in 2011 PPP dollars to 2017 PPP dollars results in an IPL of 2.15 dollars, a finding that is robust to various methods. Based on an updated IPL of 2.15 dollars, the global extreme poverty rate in 2017 falls from the previously estimated 9.3 to 9.1 percent, reducing the count of people who are poor by 15 million. This is a modest change compared with previous updates of PPP data. The paper also assesses the methodological stability between the 2011 and 2017 PPPs, scrutinizes large changes at the country level, and updates alternative, complementary poverty lines with the 2017 PPPs.
International Commodity Prices Transmission to Consumer Prices in Africa
(Published by Oxford University Press on behalf of the World Bank, 2025-08-05) Lemaire, Thibault; Vertier, Paul
In this paper, the global commodity prices' pass-through to consumer prices is estimated in Africa. The estimation sample includes monthly data for 48 countries over the period 2002m02–2021m04. Sixteen commodity prices are considered separately, rather than aggregate indices that use weights unrepresentative of consumption in Africa. Using local projections in a panel data set, the maximum estimated pass-through is 23 percent, and the long-run pass-through is about 20 percent, higher than usually found in the literature. Country-specific regressions are also considered: in the latter, the estimated pass-through is lower for countries with a higher GDP per capita, a lower share of food and energy in the consumption basket, a better quality of transport infrastructure, and a higher openness to trade. Finally, commodity-specific pass-throughs are correlated with the share of corresponding goods in the consumer basket and with the import dependency ratio for this commodity.
Leaving the Shadows Behind?
(Published by Oxford University Press on behalf of the World Bank, 2025-08-05) Boruchowicz, Cynthia
What happens when new labor regulations are implemented and enforced while a welfare cash transfer program is already in place? Argentine National Law 26.844 of 2013 aimed to increase formalization rates in the domestic work sector by increasing access to benefits for workers and enforcement mechanisms for household employers. Compared to those with older children, a five percentage–point lower increase in formalization among domestic workers with children under 18 years of age (a key eligibility criterion for welfare) is found after the introduction of the regulation. Moreover, there is suggestive evidence that this may stem from domestic workers’ concerns about losing welfare payments, although it is unclear whether this fear arises from misunderstanding, lack of information, or distrust in the reform. These findings underscore the importance of policy designs that mitigate potential disincentives and ensure that they do not undermine efforts to increase formal sector participation.
Watering the Seeds of the Rural Economy
(Published by Oxford University Press on behalf of the World Bank, 2025-08-06) Boudot-Reddy, Camille; Butler, André
This study explores the impact of private investment in groundwater extraction for irrigation on the spatial and sectoral distribution of rural economic activity in India. Exploiting a kink in access to groundwater, generated from an absolute technological constraint on the operational capacity of irrigation pumps with depth of the water table, there is evidence of a significant improvement in agricultural production accompanied with modest consumption gains. Groundwater extraction causes a substantial increase in population density, but has no effect on the employment rate or labor reallocation between sectors of the economy. Furthermore, irrigated agriculture appears to provide additional employment opportunities for waged labor from surrounding non- irrigated villages.
Rural Road Infrastructure and Women’ s Empowerment in India
(Published by Oxford University Press on behalf of the World Bank, 2025-08-06) Nandwani, Bharti; Roychowdhury, Punarjit
The paper examines the impact of a rural road construction program in India on a range of outcomes that capture women’s empowerment comprehensively. While spatial integration can ease mobility constraints and provide women with increased education and employment opportunities, the extent of benefits might be limited by underlying gender norms. The paper identifies the impact of the policy by exploiting the program rule that assigned roads based on the village population in a two-way fixed effect framework. The results suggest that the policy reduces mobility restrictions faced by women and improves norms around domestic violence and intra- household agency. It also finds a positive impact of the policy on female education; however, there is limited impact on female employment. Additionally, the study documents gendered impact of the policy, men benefit more in terms of employment than women. The paper offers important policy prescription on how investment in rural roads can affect women’s lives.
Disclosure of Violence against Women and Girls in Senegal
(Published by Oxford University Press on behalf of the World Bank, 2024-09-06) Peterman, Amber; Dione, Malick; Le Port, Agnes; Briaux, Justine; Lamesse, Fatma; Hidrobo, Melissa
Measures of violence against women and girls (VAWG) are widely collected in surveys, yet estimates are acknowledged to be lower bounds of the true prevalence. This study reports on a survey experiment randomly assigning 3,400 women and girls to either face-to-face interviews or audio computer-assisted self-interviews (ACASI), a modality that increases privacy and confidentiality of responses. Results show the ACASI group discloses higher prevalence of lifetime intimate partner violence by 4 to 7 percentage points compared to face- to-face interviews. Differences in disclosure for non-partner VAWG are even larger, ranging from 6 to 12 per- centage points. Tests for correlates of characteristics that might lead to increased disclosure show few notable patterns. Overall results suggest ACASI are a promising way to encourage disclosure, however trade-offs include limits in the complexity of questions that can be asked and higher time costs associated with development and implementation of surveys.
Firms and Labor in Times of Violence
(Published by Oxford University Press on behalf of the World Bank, 2024-09-11) Utar, Hale
This paper examines the impact of violence resulting from drug trafficking on manufacturing firms in an emerging economy. By utilizing comprehensive longitudinal data spanning all of Mexico from 2005 to 2010 and employing an instrumental variable strategy that leverages plausibly exogenous spatiotemporal variations in the homicide rate during the outbreak of drug violence, the analysis reveals a significant negative effect of violence on plant output, employment, product scope, and capacity utilization. The negative effect on employment is entirely driven by blue-collar employment and concentrated among low-wage, female-intensive firms. Further, consistent with a violent-environment-induced blue-collar labor-supply shock, the results show positive effects on blue-collar wages and negative effects on white-collar wages at the firm level. Output resilience to violence is also shown to be lower among labor-intensive, domestically selling and sourcing, less diversified firms. These findings show that the rise of drug violence has a significant negative effect on the development of domestic industrial capability in Mexico and shed light on the characteristics of the most affected firms and the channels through which they are affected.
Does the Source of FDI Matter? The Case of Tax Havens
(Published by Oxford University Press on behalf of the World Bank, 2024-09-09) Shpak, Solomiya
This paper estimates the benefits of FDI for firm performance, differentiating source countries between tax havens and non–tax havens. Using longitudinal data on more than 300,000 initially domestic firms in Ukraine between 1999 and 2013 and employing propensity score matching and panel data methods, this study finds that firms acquired by non–tax haven foreign investors experience substantial increases in employment, productivity, exports, and wages, but the gains are much lower and shorter-lived for firms receiving FDI from tax havens. These findings, based on econometric analysis of nearly the universe of Ukrainian businesses, are consistent with macroeconomic studies and anecdotal evidence that much of the tax-haven FDI in Ukraine actually represents domestic ownership channeled through offshore companies. This round-trip FDI results in negligible effects on firm performance and, at a macro level, it overstates the amount of genuine FDI flows into Ukraine.
A Measurement of Aggregate Trade Restrictions and Their Economic Effects
(Published by Oxford University Press on behalf of the World Bank, 2024-10-15) Estefania-Flores, Julia; Furceri, Davide; Hannan, Swarnali A.; Ostry, Jonathan D.; Rose, Andrew K.
This study develops a new Measure of Aggregate Trade Restrictions (MATR) using data from the IMF’s Annual Report on Exchange Arrangements and Exchange Restrictions . MATR is a measure of direct and indirect official government policy related to the international flow of goods and services. MATR is simple, plausible, quantitative, easily updated, based on relevant measures of trade policy and other international restrictions affecting trade (e.g., payment restrictions), and covers an unbalanced sample of up to 157 countries from 1949 to 2019. MATR is strongly correlated with, and, importantly, more comprehensive, in terms of country and time coverage, than existing measures of de jure openness; it is also granular. As such, MATR empowers empirical analysis to increase coverage in research related to trade restrictions and other trade-related openness policies. MATR is used in the study to show that direct and indirect restrictions to trade are associated with significant contractions in output.
From Workfare to Economic and Sociopolitical Stability? Evidence from a Randomized Trial in Eastern Congo
(Published by Oxford University Press on behalf of the World Bank, 2024-10-24) Brandily, Paul; Mvukiyehe, Eric; Smets, Lodewijk; Windt, Peter van der; Verpoorten, Marijke
Did a workfare program in Eastern Congo have a lasting impact on economic and sociopolitical outcomes? Men and women in Eastern Congo were randomly assigned to 2,674 four-month job offers, or to the job offer plus a savings incentive, hard-skills training, or both. Eighteen months after the program, labor market and savings outcomes have improved, but there is no change across 12 other economic and sociopolitical outcome families. Regarding labor market outcomes, the most intensive treatment, the job offer plus the savings incentive and hard-skills training, outperforms treatments with only one add-on. This indicates that the savings incentive and hard-skills training, when combined, can create a synergistic impact greater than the sum of their individual effects. The results are mainly driven by female beneficiaries, who start at much lower levels of labor market participation and earnings than men.
Impact of Twin Lockdowns on Hunger, Labor-Market Outcomes, and Household Coping Mechanisms
(Published by Oxford University Press on behalf of the World Bank, 2024-10-25) Pörtner, Claus C.; Alam, Shamma A.; Ahmed, Ishraq
Uganda had two of the strictest COVID-19 lockdowns in Sub-Saharan Africa. These severe lockdowns provide a unique case study for understanding the implications of such public-health measures on economic well-being. We use longitudinal data to examine the lockdowns’ short- and medium-term impacts on household food in- security, labor-market outcomes, and coping strategies. Lockdowns significantly exacerbated food insecurity immediately and continued to do so in the medium term. The effect was more pronounced after the second lockdown, likely from a combination of reduced resilience after the first lockdown and lower-than-normal rainfall immediately before. There were substantial decreases in income from various sources, including agriculture, non-farm businesses, and wage employment, contributing to the heightened food insecurity. Notably, agricultural households were less adversely affected, and there was a significant switch to agricultural activities as a coping mechanism. The other coping mechanisms households typically rely on for idiosyncratic shocks, such as remittances and government assistance, failed, contributing to the sizeable increase in food insecurity.
Performance Pay Increases Dog Vaccinations to Reduce Human Rabies
(Published by Oxford University Press on behalf of the World Bank, 2024-09-06) Lankester, Felix; Manian, Shanthi; Yoder, Jonathan
Rural development projects often depend on local community members to coordinate community participation. Using a randomized controlled trial, this paper examines how pay-for-performance for community coordinators affects participation in dog vaccination events to prevent human rabies in Tanzania. Three treatments were implemented: fixed payment only, pay-for-performance only, or a mix of fixed payment and pay-for-performance. Using dog vaccination histories, the experiment equalizes the total expected payment across treatments, isolating the effect of payment type. Mixed payment increases dog vaccinations by 16 percent compared to a fixed payment. Each 10 percent increase in per-dog payment raises vaccinations by 0.4 percent. Changing the fixed payment rate has a negligible effect. Thus, pay-for-performance induces higher effort than the fixed component. The findings suggest that pay-for-performance can improve the effectiveness of rural development projects such as mass immunization events.