Journal Issue: World Bank Research Observer, Volume 21, Issue 1

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Reducing the Incidence of Low Birth Weight in Low-Income Countries Has Substantial Economic Benefits
(Oxford University Press on behalf of the World Bank, 2006-01-12) Alderman, Harold ; Behrman, Jere R.
Reducing the incidence of low birth weight not only lowers infant mortality rates but also has multiple benefits over the life cycle. This study estimates the economic benefits of reducing the incidence of low birth weight in low-income countries, both through lower mortality rates and medical costs and through increased learning and productivity. The estimated economic benefits, under plausible assumptions, are fairly substantial, at about $510 per infant moved from a low-birth-weight status. The estimated gains are primarily from increases in labor productivity (partially through more education) and secondarily from avoiding costs due to infant illness and death. Thus there may be many interventions to reduce the incidence of low birth weight that are warranted purely on the grounds of saving resources or increasing productivity.
Choosing a System of Unemployment Income Support : Guidelines for Developing and Transition Countries
(Oxford University Press on behalf of the World Bank, 2006-02-14) Vodopivec, Milan
Mounting evidence suggests that excessive job protection reduces employment and labor market flows, hinders technological innovations, pushes workers into the informal sector, and hurts vulnerable groups by depriving them of job opportunities. Flexible labor markets stimulate job creation, investment, and growth, but they create job insecurity and displace some workers. How can the costs of such insecurity and displacements be minimized while ensuring that the labor market remains flexible? Each of the main unemployment income support systems (unemployment insurance, unemployment assistance, unemployment insurance savings accounts, severance pay, and public works) has strengths and weaknesses. Country-specific conditions, chief among them labor market and other institutions, the capacity to administer each type of system, and the size of the informal sector, determine which system is best suited to developing and transition countries.
Who is Not Poor? Dreaming of a World Truly Free of Poverty
(Oxford University Press on behalf of the World Bank, 2006-01-25) Pritchett, Lant
When the World Bank dreams of 'a world free of poverty,' what should it be dreaming? In measuring global income or consumption expenditure poverty, the World Bank has widely adopted the $1 a day standard as a lower bound. Because this standard is based on poverty lines in the poorest countries, anyone with income or expenditures below this line will truly be poor. But there is no consensus standard for the upper bound of the global poverty line: above what level of income or expenditures is someone truly not poor? This article proposes that the World Bank compute its lower and upper bounds in a methodologically equivalent way, using the poverty lines of the poorest countries for the lower bound and the poverty lines of the richest countries for the upper bound. The resulting upper bound global poverty line will be 10 times higher than the current lower bound and at least 5 times higher than the currently used alternative lower bound of $2 a day. And in tracking progress toward a world free of poverty, the World Bank should compute measures of global poverty using a variety of weights on the depth and intensity of poverty for a range of poverty lines between the global lower and upper bounds. For instance, rather than trying to artificially force the global population of 6.2 billion (a billion is 1,000 million) into just two categories 'poor' and 'not poor,' with the new range of poverty lines the estimates would be that 1.3 billion people are 'destitute' (below $1 a day), another 1.6 billion are in 'extreme poverty' (above $1 a day but below $2 dollar a day), and another 2.5 billion are in 'global poverty' (above extreme poverty but below the upper bound poverty line).
Corporate Governance and Development
(Oxford University Press on behalf of the World Bank, 2006-02-23) Claessens, Stijn
The literature shows that good corporate governance generally pays for firms, for markets, and for countries. It is associated with a lower cost of capital, higher returns on equity, greater efficiency, and more favorable treatment of all stakeholders, although the direction of causality is not always clear. The law and finance literature has documented the important role of institutions aimed at contractual and legal enforcement, including corporate governance, across countries. Using firm level data, researchers have documented relationships between countries corporate governance frameworks on the one hand and performance, valuation, the cost of capital, and access to external financing on the other. Given the benefits of good corporate governance, firms and countries should voluntarily reform more. Resistance by entrenched owners and managers at the firm level and political economy factors at the level of markets and countries partly explain why they do not.
Enforcement and Good Corporate Governance in Developing Countries and Transition Economies
(Oxford University Press on behalf of the World Bank, 2006-02-21) Berglof, Erik ; Claessens, Stijn
More than regulations, laws on the books, or voluntary codes, enforcement is a key to creating an effective business environment and good corporate governance, at least in developing countries and transition economies. A framework is presented to help explain enforcement, the impact on corporate governance when rules are not enforced, and what can be done to improve corporate governance in weak enforcement environments. The limited empirical evidence suggests that private enforcement tools are often more effective than public tools. However, some public enforcement is necessary, and private enforcement mechanisms often require public laws to function. Private initiatives are often also taken under the threat of legislation or regulation, although in some countries bottom-up, private-led initiatives preceded and even shaped public laws. Concentrated ownership aligns incentives and encourages monitoring, but it weakens other corporate governance mechanisms and can impose significant costs. Various steps can be taken to reduce these costs and reinforce other corporate governance mechanisms. But political economy constraints, resulting from the intermingling of business and politics, often prevent improvements in the enforcement environment and the adoption and implementation of public laws.