Journal Issue: World Bank Economic Review, Volume 36, Issue 3
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Volume
36
Number
3
Issue Date
2022-08-01
Journal Title
Journal ISSN
1564-698X
Journal
World Bank Economic Review
1564-698X
Journal Volume
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Articles
Investment Treaties, Local Institutions and Policies in the Global Land Rush
(Published by Oxford University Press on behalf of the World Bank, 2022-04-29) Anti, Sebastian
Large-scale land acquisitions (LSLAs) are large tracts of land purchased or leased in low- and middle-income countries by multinational firms. This study examines whether these firms respond to the presence of bilateral investment treaties (BITs), whether BITs reinforce or undermine institutions in this process, and whether these firms respond to recipient-country environmental regulations. It analyzes data on LSLAs, BITs, and environmental policies from 2002 to 2012 in a gravity framework controlling for country-pair and time fixed effects. It finds a BIT is associated with a 96 to 149 percent increase in land deals and a 1 point increase in a recipient country's environmental protection index is associated with around a 36 percent decrease in the total amount of land investors lease or purchase in a country. Interactions between BITs and institutional measures in recipient countries yield large relationships with the number of LSLA deals between countries, although these are statistically insignificant.
The Role of Income Inequality for Poverty Reduction
(Published by Oxford University Press on behalf of the World Bank, 2022-01-07) Bergstrom, Katy
This paper approximates the identity
that links growth in mean incomes and changes in the
distribution of relative incomes to reductions in absolute
poverty and examines the role of income inequality for
poverty reduction. Under the assumption that income is
log-normally distributed, we show that we can approximate
this identity well. We find that the inequality elasticity
of poverty reduction is larger, on average, compared to the
growth elasticity of poverty reduction and that the growth
elasticity declines steeply with a country’s initial level
of inequality. However, we find that prior changes in
poverty were, in large part, explained by changes in mean
incomes. This is a consequence of changes in income
inequality being an order of magnitude smaller than changes
in mean incomes. Overall, our results highlight the
important role income inequality can play in reducing
poverty despite prior poverty changes being, in large part,
a consequence of economic growth.
Unambiguous Trends Combining Absolute and Relative Income Poverty
(Published by Oxford University Press on behalf of the World Bank, 2022-01-22) Decerf, Benoit; Ferrando, Mary
Over the period 1990–2015, many countries experienced a reduction in extreme absolute poverty and an increase in relative poverty. As a result, the global trend of “overall” income poverty, which combines absolute and relative poverty, may depend on arbitrary normative choices such as the priority given to the absolutely poor over the relatively poor. This article proves that, if one assumes that an individual who is absolutely poor is poorer than an individual who is only relatively poor, the overall poverty trend is sometimes independent of the priority parameter, even for cases for which absolute and relative poverty follow opposite trends. A survey conducted for this study suggests that this normative assumption collects broad support. This article applies overall poverty measures satisfying this assumption to assess the evolution of global poverty from 1990 to 2015. Results show that global overall poverty has been (at least) halved, regardless of the value chosen for the priority parameter.
What Do Local Government Education Managers Do to Boost Learning Outcomes?
(Published by Oxford University Press on behalf of the World Bank, 2022-03-29) Cilliers, Jacobus; Dunford, Eric; Habyarimana, James
Recent public sector reforms have
shifted responsibility for public service delivery to local
governments, yet little is known about how their management
practices or behavior shape performance. This study reports
on a comprehensive management survey of district education
bureaucrats and their staff that was conducted in every
district in Tanzania and employs flexible machine-learning
techniques to identify important management practices
associated with learning outcomes. It finds that management
practices explain 10 percent of variation in a district’s
exam performance. The three management practices most
predictive of performance are (a) the frequency of school
visits, (b) school and teacher incentives administered by
the district manager, and (c) performance review of staff.
Although the model is not causal, these findings suggest the
importance of incentives and active monitoring to motivate
district staff, schools, and teachers, that include frequent
monitoring of schools.
Structural Reforms and Labor Productivity Growth in Developing Countries
(Published by Oxford University Press on behalf of the World Bank, 2022-03-22) Konte, Maty; Kouamé, Wilfried A.; Mensah, Emmanuel B.
This paper employs sectoral data to draw conclusions on how structural reforms—implemented during the period 1975–2005—affected differences in cross-country aggregate labor productivity growth in developing countries. Most important, it explores how the effects of reforms on productivity growth are distributed between the intrasectoral and intersectoral components of labor productivity growth. The findings indicate that most of the trade, product market, and financial sector reforms have increased productivity growth. Looking at the subcomponents of labor productivity growth, the results show that structural reforms work mainly through the intra-allocative efficiency channel but not through the interallocative efficiency channel. The intrasectoral component is the main driver of the impacts of reforms on productivity growth, with a contribution that ranges from 76 percent to 96 percent depending on the reform measure considered. The paper also examines the role of labor market regulations and finds that labor market rigidity/flexibility matters for how specific reforms induce reallocation of resources within and across sectors.
Jobs and Productivity Growth in Global Value Chains
(Published by Oxford University Press on behalf of the World Bank, 2022-04-29) Pahl, Stefan; Timmer, Marcel P.; Gouma, Reitze; Woltjer, Pieter J.
Using newly developed data, the evolution of job and productivity growth in global value chains (GVCs) is analyzed for 25 low- and middle-income countries. GVC jobs are found to be more productive than non-GVC jobs. Their share in the total labor force is small, in particular for low-income countries. Growth in GVC jobs varies widely across countries in the period 2000–2014. Part of this can be accounted for by differences in the type of consumer market served. A bigger part is accounted for by the speed with which countries expand activities within supply chains, measured by their shares in GVC value added. Expansion in GVCs is positively correlated with labor productivity across countries as well as over time within GVCs.
Technology, Skills, and Globalization
(Published by Oxford University Press on behalf of the World Bank, 2022-06-20) Lewandowski, Piotr; Park, Albert; Hardy, Wojciech; Du, Yang; Wu, Saier
The shift from routine work to nonroutine cognitive work is a key feature of labor markets globally, but there is little evidence on the extent to which tasks differ among workers performing the same jobs in different countries. This paper constructs survey-based measures of routine task intensity (RTI) of jobs consistent with those based on the U.S. O*NET database for workers in 47 countries. It confirms substantial cross-country differences in the content of work within occupations. The extent to which workers’ RTI is predicted by technology, supply of skills, globalization, and economic structure is assessed; and their contribution to the variation in RTI across countries is quantified. Technology is by far the most important factor. Supply of skills is next in importance, especially for workers in high-skilled occupations, while globalization is more important than skills for workers in low-skilled occupations. Occupational structure explains only about one-fifth of cross-country variation in RTI.
Child Labor under Cash and In-Kind Transfers
(Published by Oxford University Press on behalf of the World Bank, 2022-05-19) Tagliati, Federico
This paper studies the effects of cash versus in-kind transfers on the time allocation of children exploiting the randomized rollout of a program which transferred either cash or a basket of food to poor households in Mexico. Children in cash-recipient households experience a significantly larger decrease in paid employment and hours of work, and an increase in schooling, as compared to children in in-kind-recipient households. Both transfers are given to a female member of the household to enhance women’s participation in household decision-making. The difference between the cash and in-kind impacts on child time allocation is entirely driven by households presenting characteristics associated with lower female decision-making power. Thus, differences in child employment responses across transfer modalities are likely related to women-targeted transfers having larger effects on female empowerment when provided in cash.
Mobile Money and Economic Activity
(Published by Oxford University Press on behalf of the World Bank, 2022-05-17) Fabregas, Raissa; Yokossi, Tite
This paper estimates the impact of
access to mobile money services on local economic activity.
The analysis combines data from the early expansion of the
mobile agent network in Kenya with a local-level measure of
economic performance proxied by the intensity of nighttime
lights. Leveraging the variation in areas that gained access
to mobile money services at different times and the high
resolution of the data, the paper shows that access to
mobile money services increased local economic activity and
that these effects increased over time. The positive effects
are more pronounced for areas that were initially more
affluent, urban, and better connected to infrastructure.
These results suggest that mobile money can complement,
rather than just substitute for, other alternatives that
enable people to connect, trade, and allocate investments
within their networks.
Food Inflation and Child Health
(Published by Oxford University Press on behalf of the World Bank, 2022-05-26) Woldemichael, Andinet; Kidane, Daniel; Shimeles, Abebe
Malnutrition is one of the most
important early life shocks that have lasting effects on
health. An often-neglected cause of malnutrition and hidden
hunger is high food inflation, particularly in developing
countries. This study uses the Ethiopian Demographic and
Health Survey data, matching each child’s early life age in
months from the time of conception with the corresponding
local monthly food price data to examine the medium-term and
long-term impacts of exposure to food inflation during the
critical early life window, pregnancy and infancy, on child
health. Exposure to one percentage point higher
month-to-month food inflation while in utero increases the
risk of under-five stunting by 0.95 percent. The impacts are
heterogeneous depending on the month of exposure,
highlighting the complicated biological mechanisms through
which malnutrition during early life affects human growth.
The results are robust to various empirical specifications
and potential biases arising from survivor sample selection
and age misreporting.
Do Smaller Local Governments Bring Citizens More? Evidence from Direct Elections in Indonesia
(Published by Oxford University Press on behalf of the World Bank, 2022-06-08) Singhania, Deepak
Do smaller local governments provide
more for their citizens, especially when they are also held
accountable to their citizens This paper extends the
empirical literature on the size of local governments by
explicitly exploring one of the key influencing factors –
direct local elections, a proxy for local accountability.
Using an Indonesian panel of village-level outcomes data,
the paper shows that a reduction in local government size
(due to district splitting) increases public good provision
but that this effect is restricted to districts that had
direct local elections. It also provides suggestive evidence
to show that increased revenue was channeled into
developmental expenditures only in those split districts
that faced direct elections. The identification strategy
relies on a surprise local election announced while the
number of local governments in Indonesia was increasing,
which also abruptly imposed a moratorium on the process of splitting.