Journal Issue: World Bank Economic Review, Volume 27, Issue 1

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The Impact of the Global Food Crisis on Self-Assessed Food Security
(Oxford University Press on behalf of the World Bank, 2013-01) Headey, Derek D.
We provide the first large-scale survey-based evidence on the impact of the global food crisis of 2007–08 using an indicator of self-assessed food security from the Gallup World Poll. For the sampled countries as a whole, this subjective indicator of food security remained the same or even improved, seemingly owing to a combination of strong economic growth and limited food inflation in some of the most populous countries, particularly India. However, these favorable global trends mask divergent trends at the national and regional levels, with a number of countries reporting substantial deterioration in food security. The impacts of the global crisis therefore appear to be highly context specific.
How Is the Liberalization of Food Markets Progressing? Market Integration and Transaction Costs in Subsistence Economies
(Oxford University Press on behalf of the World Bank, 2013-01) Zant, Wouter
We propose a modification of Baulch's parity bounds model to measure the market integration of food markets in developing countries. Instead of extrapolating a single observation of transaction costs, we estimate transaction costs. Predicted transaction costs compare well with survey data of traders. Probabilities of market regimes, computed on the basis of predicted transaction costs, fluctuate significantly and do not support fixed regime probabilities over time. The probability of market integration with trade decreases consistently during food shortages, increasing either the probability of no trade or loss-making trade or the probability of profitable but unexploited trade opportunities. The data further support a negative trend in market integration with trade.
Decomposing the Labor Market Earnings Inequality : The Public and Private Sectors in Vietnam, 1993–2006
(Oxford University Press on behalf of the World Bank, 2013-01) Imbert, Clement
In contrast with the typical transition to a market economy, earnings inequality in Vietnam between 1993 and 2006 appears to have decreased, and the earnings gap in favor of public employees appears to have widened. We use a comparative advantage model to disentangle the effect of sorting workers across sectors from the effect of the differences in returns to workers' skills. The selection of the best workers into the public sector is clearly an important component of the explanation for the public-private sector earnings gap, but the widening of this gap over time is primarily due to changes in the compensation patterns. We find that in the 1990s, public employees were underpaid compared with their earning potential in the private sector, whereas in the early 2000s, public employees earned similar returns to their comparative advantage in the public and private sectors. The increasing homogeneity in returns to skills in the Vietnamese labor market appears to explain both the increase in the public-private pay gap and the decrease in overall inequality.
Firms Operating under Electricity Constraints in Developing Countries
(Oxford University Press on behalf of the World Bank, 2013-01) Alby, Philippe ; Dethier, Jean-Jacques ; Straub, Stephane
Many developing countries are unable to provide their industrial sectors with reliable electric power, with the result that many enterprises must contend with an insufficient and unreliable supply of electricity. Because of these constraints, enterprises often opt for self-generation of electricity even though it is widely considered a second-best solution. This paper develops a theoretical model of investment behavior in remedial infrastructure in the presence of physical constraints. It then illustrates the model's predictions using a large cross-country sample of enterprises from the World Bank Enterprise Survey database. Electricity-intensive sectors in high-outage countries are characterized by a significantly lower share of small firms.
Antidumping, Retaliation Threats, and Export Prices
(Oxford University Press on behalf of the World Bank, 2013-01) Avsar, Veysel
Utilizing four-dimensional (firm-product-destination-year) Brazilian firm-level export data, we show that antidumping (AD) duties result in a significant and dramatic increase in the unit values of the products that firms export to duty-imposing countries. Furthermore, we examine the effect of potential (retaliatory) AD duties on the unit price of the firms' shipments. Our findings suggest that AD activities in Brazil lead Brazilian exporting firms to increase their unit export prices for the named industries' products to decrease the dumping margin and avoid the threat of retaliation by the target countries.
Information and Participation in Social Programs
(Oxford University Press on behalf of the World Bank, 2013-01) Coady, David ; Martinelli, César ; Parker, Susan W.
Participation in social programs, such as clubs and other social organizations, results from a process in which an agent learns about the requirements, benefits, and likelihood of acceptance related to a program, applies to be a participant, and, finally, is accepted or rejected. We propose a model of this participation process and provide an application of the model using data from a social program in Mexico. Our empirical analysis illustrates that decisions at each stage of the process are responsive to expectations about the decisions and outcomes at the subsequent stages and that knowledge about the program can have a significant impact on participation outcomes.
Chinese Trade Reforms, Market Access and Foreign Competition : The Patterns of French Exporters
(Oxford University Press on behalf of the World Bank, 2013-01) Bas, Maria ; Bombarda, Pamela
A unilateral trade reform generates two opposite effects: market access expansion and strengthening of competitive pressures in the liberalized market. Using detailed trade and firm-level data from France, we investigate how French firms' product scope and export sales changed after Chinese liberalization vis-à-vis Asian liberalization. Our findings suggest that lower Chinese import tariffs account on average for 7 percent of the new products exported by French firms, and for 18 percent of additional French export sales. These results are robust when accounting for foreign competition faced by French firms in the liberalized market.