Journal Issue: World Bank Economic Review, Volume 18, Issue 3

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On the Unequal Inequality of Poor Communities
(World Bank, 2004-09-01) Elbers, Chris ; Lanjouw, Peter F. ; Mistiaen, Johan A. ; Özler, Berk ; Simler, Ken
Communities differ in important ways in their needs, capacities, and circumstances. Because central governments are not able to discern these differences fully, they seek to achieve their policy objectives by relying on decentralized mechanisms that use local information. Household and individual characteristics within communities can also vary substantially. A growing body of theoretical literature suggests that inequality within communities can influence policy outcomes in ways that are either harmful or helpful, depending on the circumstances. Until recently, empirical investigations into the impact of inequality have been held back by a lack of systematic evidence on community-level inequality. This study uses household survey and population census data to estimate per capita consumption inequality within communities in three developing economies. It finds that communities vary markedly in their degree of inequality. It also shows that there should be no presumption that inequality is less severe in poor communities. The kind of community-level inequality estimates generated here can be used in designing and evaluating decentralized antipoverty programs.
Trade Policy and Poverty Reduction in Brazil
(Washington, DC: World Bank, 2004-09) Harrison, Glenn W. ; Rutherford, Thomas F. ; Tarr, David G. ; Gurgel, Angelo
A multi-region computable general equilibrium model is used to evaluate the regional, multilateral, and unilateral trade policy options of Mercosur from the perspective of the welfare of all potential partners in several proposed agreements. The focus for Brazil is on poverty impacts. The results show that the poorest households in Brazil experience gains of 1.5-5.5 percent of their consumption, which are about three to four times the average gains for Brazil. Protection in Brazil favors capital-intensive manufacturing relative to unskilled labor-intensive agriculture and manufacturing. So trade liberalization raises the return to unskilled labor relative to capital and disproportionately helps the poor.
Trade Liberalization and Industry Wage Structure : Evidence from Brazil
(Washington, DC: World Bank, 2004-09) Pavcnik, Nina ; Blom, Andreas ; Goldberg, Pinelopi ; Schady, Norbert
Industry affiliation provides an important channel through which trade liberalization can affect worker earnings and wage inequality between skilled and unskilled workers. This empirical study of the impact of the 1988-94 trade liberalization in Brazil on the industry wage structure suggests that although industry affiliation is an important component of worker earnings, the structure of industry wage premiums is relatively stable over time. There is no statistical association between changes in industry wage premiums and changes in trade policy or between industry-specific skill premiums to university graduates and trade policy. Thus trade liberalization in Brazil did not significantly contribute to increased wage inequality between skilled and unskilled workers through changes in industry wage premiums. The difference between these results and those obtained for other countries (such as Colombia and Mexico) provides fruitful ground for studying the conditions under which trade reforms do not have an adverse effect on industry wage differentials
Lobbying, Counterlobbying, and the Structure of Tariff Protection in Poor and Rich Countries
(Washington, DC: World Bank, 2004-09) Cadot, Olivier ; Melo, Jaime de ; Olarreaga, Marcelo
A political economy model of protection is used to determine endogenously the intersectoral patterns of protection. Three propositions are derived that are consistent with the stylized patterns of tariff protection in rich and poor countries: Nominal protection rates escalate with the degree of processing, protection is higher on average in poor countries, and rich countries protect agriculture relatively more than they protect manufacturing, whereas poor countries do the reverse. Numerical simulations for archetypal rich and poor economies confirm that the endogenously determined structure of protection is broadly consistent with observed patterns of protection.
Small-Scale Industry, Environmental Regulation, and Poverty : The Case of Brazil
(Washington, DC: World Bank, 2004-09) Jayaraman, Rajshri ; Lanjouw, Peter F.
Governments and international development agencies have intensified efforts to promote small-scale enterprises as an engine of pro-poor growth. In Brazil, however, small scale industries may also be responsible for the bulk of air pollution emissions. Although employees of polluting small-scale industries in Brazil are not disproportionately poor, simulations suggest that stringent environmental regulation resulting in widespread closures of pollution-intensive small-scale industries would result in a non-negligible increase in poverty among employees of these firms. The results suggest that the enthusiasm for small-scale enterprises needs to be tempered by awareness of the potential environmental costs imposed by this sector.
Social Protection in a Crisis : Argentina's Plan Jefes y Jefas
(Washington, DC: World Bank, 2004-09) Galasso, Emanuela ; Ravallion, Martin
The article assesses the impact of Argentina's main social policy response to the severe economic crisis of 2002. The program was intended to provide direct income support for families with dependent sand whose head had become unemployed because of the crisis. Counter factual comparisons are based on a matched subset of applicants not yet receiving program assistance. Panel data spanning the crisis are also used. The program reduced aggregate unemployment, though it attracted as many people into the workforce from inactivity as it did people who otherwise would have been unemployed. Although there was substantial leakage to formally ineligible families and incomplete coverage of those who were eligible, the program did partially compensate many losers from the crisis and reduced extreme poverty.
Ghost Doctors : Absenteeism in Rural Bangladeshi Health Facilities
(Washington, DC: World Bank, 2004-09) Chaudhury, Nazmul ; Hammer, Jeffrey S.
Unannounced visits were made to health clinics in Bangladesh to determine what proportion of medical professionals were at their assigned post. Averaged over all job categories and types of facility, the absentee rate was 35 percent. The absentee rate for physicians was 40 percent at the larger clinics and 74 percent at the smaller sub-centers with a single physician. Whether the medical provider lives near the health facility, the opportunity cost of the provider's time, road access, and rural electrification are highly correlated with the rate and pattern of absenteeism.