Journal Issue: World Bank Economic Review, Volume 20, Issue 1
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Volume
20
Number
1
Issue Date
Journal Title
Journal ISSN
1564-698X
Journal
World Bank Economic Review
1564-698X
Journal Volume
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Articles
The Long-Run Economic Costs of AIDS : A Model with an Application to South Africa
(Published by Oxford University Press on behalf of the World Bank, 2006-04-11) Bell, Clive; Devarajan, Shantayanan; Gersbach, Hans
Primarily a disease of young adults,
Acquired Immuno Deficiency Syndrome (AIDS) imposes economic
costs that could be devastatingly high in the long run by
undermining the transmission of human capital the main
driver of long-run economic growth across generations. AIDS
makes it harder for victims' children to obtain an
education and deprives them of the love, nurturing, and life
skills that parents provide. These children will in turn
find it difficult to educate their children, and so on. An
overlapping generations model is used to show that an
otherwise growing economy could decline to a low level
subsistence equilibrium if hit with an AIDS type increase in
premature adult mortality. Calibrating the model for South
Africa, where the HIV prevalence rate is over 20 percent,
simulations reveal that the economy could shrink to half its
current size in about four generations in the absence of
intervention. Programs to combat the disease and to support
needy families could avert such a collapse, but they imply a
fiscal burden of about 4 percent of Gross domestic product (GDP).
Making Conditional Cash Transfer Programs More Efficient : Designing for Maximum Effect of the Conditionality
(Published by Oxford University Press on behalf of the World Bank, 2006-02-01) de Janvry, Alain; Sadoulet, Elisabeth
Conditional cash transfer programs are
now used extensively to encourage poor parents to increase
investments in their children's human capital. These
programs can be large and expensive, motivating a quest for
greater efficiency through increased impact of the
programs' imposed conditions on human capital
formation. This requires designing the programs'
targeting and calibration rules specifically to achieve this
result. Using data from the Progresa randomized experiment
in Mexico, this article shows that large efficiency gains
can be achieved by taking into account how much the
probability of a child's enrollment is affected by a
conditional transfer. Rules for targeting and calibration
can be made easy to implement by selecting indicators that
are simple, observable, and verifiable and that cannot be
manipulated by beneficiaries. The Mexico case shows that
these efficiency gains can be achieved without increasing
inequality among poor households.
Robust Multidimensional Spatial Poverty Comparisons in Ghana, Madagascar, and Uganda
(Published by Oxford University Press on behalf of the World Bank, 2006-04-06) Duclos, Jean-Yves; Sahn, David; Younger, Stephen D.
Spatial poverty comparisons are
investigated in three African countries using
multidimensional indicators of well-being. The work is
analogous to the univariate stochastic dominance literature
in that it seeks poverty orderings that are robust to the
choice of multidimensional poverty lines and indices. In
addition, the study seeks to ensure that the comparisons are
robust to aggregation procedures for multiple welfare
variables. In contrast to earlier work, the methodology
applies equally well to what can be defined as union,
intersection, and intermediate approaches to dealing with
multidimensional indicators of well-being. Furthermore,
unlike much of the stochastic dominance literature, this
work computes the sampling distributions of the poverty
estimators to perform statistical tests of the difference in
poverty measures. The methods are applied to two measures of
well-being, the log of household expenditures per capita and
children's height-forage z scores, using data from the
1988 Ghana Living Standards Study survey, the 1993 National
Household Survey in Madagascar, and the 1999 National
Household Survey in Uganda. Bivariate poverty comparisons
are at odds with univariate comparisons in several
interesting ways. Most important, it cannot always be
concluded that poverty is lower in urban areas in one region
compared with that in rural areas in another, even though
univariate comparisons based on household expenditures per
capita almost always lead to that conclusion.
An Empirical Analysis of State and Private Sector Provision of Water Services in Africa
(Published by Oxford University Press on behalf of the World Bank, 2006-01-19) Kirkpatrick, Colin; Parker, David; Zhang, Yin-Fang
Under pressure from donor agencies and
international financial institutions such as the World Bank,
some developing countries have experimented with the
privatization of water services. This article reviews the
econometric evidence on the effects of water privatization
in developing economies and presents new results using
statistical data envelopment analysis and stochastic cost
frontier techniques and data from Africa. The analysis fails
to show evidence of better performance by private utilities
than by state owned utilities. Among the reasons why water
privatization could prove problematic in lower-income
economies are the technology of water provision and the
nature of the product, transaction costs, and regulatory weaknesses.
Child Labor and School Achievement in Latin America
(Published by Oxford University Press on behalf of the World Bank, 2006-01) Gunnarsson, Victoria; Orazem, Peter F.; Sanchez, Mario A.
Child labors effect on academic
achievement is estimated using unique data on third and
fourth graders in nine Latin American countries. Cross
country variation in truancy regulations provides an
exogenous shift in the ages of children normally in these
grades, providing exogenous variation in the opportunity
cost of children's time. Least squares estimates
suggest that child labor lowers test scores, but those
estimates are biased toward zero. Corrected estimates are
still negative and statistically significant. Children
working 1 standard deviation above the mean have average
scores that are 16 percent lower on mathematics examinations
and 11 percent lower on language examinations, consistent
with the estimates of the adverse impact of child labor on
returns to schooling.