Journal Issue: World Bank Economic Review, Volume 24, Issue 2

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Potential Implications of a Special Safeguard Mechanism in the World Trade Organization : The Case of Wheat
(World Bank, 2010-08-30) Hertel, Thomas W. ; Martin, Will ; Leister, Amanda M.
The special safeguard mechanism—both quantity- and price-based—was key in the July 2008 failure to reach agreement in the World Trade Organization negotiations under the Doha Development Agenda. A stochastic simulation model of the world wheat market is used to investigate the effects of the special safeguard mechanism. As expected, the quantity-based safeguard is found to reduce imports, raise domestic prices, and boost mean domestic production in the countries that implement it. However, rather than insulating developing countries in those regions from price volatility, the quantity-based safeguard increases domestic price volatility, largely by restricting imports when domestic output is low and prices are high. The quantity-based safeguard shrinks average wheat imports nearly 50 percent in some regions, and global wheat trade falls by 4.7 percent. The price-based safeguard discriminates against lower price exporters and contributes to producer price instability.
Managing for Results in Primary Education in Madagascar : Evaluating the Impact of Selected Workflow Interventions
(World Bank, 2010-08-30) Lassibille, Gérard ; Tan, Jee-Peng ; Jesse, Cornelia ; Nguyen, Trang Van
The impact of specific actions designed to streamline and tighten the workflow processes of key actors in Madagascar's primary education sector are evaluated. To inform the strategy for scaling up, a randomized experiment was carried out over two school years. The results show that interventions at the school level, reinforced by interventions at the subdistrict and district levels, succeeded in changing the behavior of the actors toward better management of key pedagogical functions. In terms of education outcomes, the interventions improved school attendance, reduced grade repetition, and raised test scores (particularly in Malagasy and mathematics), although the gains in learning at the end of the evaluation period were not always statistically significant. Interventions limited to the subdistrict and district levels proved largely ineffective.
Corporate Governance at the World Bank and the Dilemma of Global Governance
(World Bank, 2010-08-30) Kaja, Ashwin ; Werker, Eric
Most major decisions at the World Bank are made by its Board of Executive Directors. While some countries enjoy the opportunity to serve on this powerful body, most countries rarely, if ever, get that chance. This gives rise to the question: Does board membership lead to higher funding from the World Bank's two main development financing institutions, the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA). Empirical analysis shows that developing countries serving on the board can expect more than double the funding from the IBRD as countries not on the board. In absolute terms, countries on the board receive an average $60 million “bonus” in IBRD loans, an amount that rises in years when IBRD loans are in high demand, particularly for countries in the most influential seats. This effect is more likely driven by informal rules and norms in the boardroom than by the power of the vote itself. No significant effect is found in IDA funding. These results point to challenges of global governance through representative institutions.
Measuring Household Usage of Financial Services : Does it Matter How or Whom You Ask?
(World Bank, 2010-08-30) Cull, Robert ; Scott, Kinnon
In recent years, the number of surveys on access to and use of financial services has multiplied, but little is known about whether the data generated are comparable across countries or within the same country over time. A randomized experiment in Ghana tested whether the identity of the respondent and the inclusion of product-specific cues in questions affect reported rates of use of financial services. Rates of household use are almost identical whether the head reports on behalf of the household or whether the rate is tabulated from a full enumeration of household members. A less complete summary of household use of financial services results when randomly selected informants (nonheads of household) provide the information. For credit from formal institutions, informal sources of savings, and insurance, reported use is higher when questions are asked about specific financial products rather than about the respondent's dealings with types of financial institutions. In short, who is asked the questions and how the questions are asked both matter.
Banking on Politics
(World Bank, 2010-08-30) Braun, Matías ; Raddatz, Claudio
New data are presented for a large number of countries on how frequently former high-ranking politicians become bank directors. Politician-banker connections at this level are relatively rare, but their frequency is robustly correlated with many important characteristics of banks and institutions. At the micro level, banks that are politically connected are larger and more profitable than other banks, despite being less leveraged and having less risk. At the country level, this connectedness is strongly negatively related to economic development. Controlling for this, the analysis finds that the phenomenon is more prevalent where institutions are weaker and governments more powerful but less accountable. Bank regulation tends to be more pro-banker and the banking system less developed where connectedness is higher. A benign, public-interest view is hard to reconcile with these patterns.
Natural Disasters and Human Capital Accumulation
(World Bank, 2010-08-30) Cuaresma, Jesus Crespo
The empirical literature on the relationship between natural disaster risk and investment in education is inconclusive. Model averaging methods in a framework of cross-country and panel regressions show an extremely robust negative partial correlation between secondary school enrollment and natural disaster risk. This result is driven exclusively by geologic disasters. Exposure to natural disaster risk is a robust determinant of differences in secondary school enrollment between countries but not necessarily within countries.