Equitable Growth, Finance, and Institutions
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Fields of Specialization
Private sector development, Firm dynamics, Firm Productivity, Entrepreneurship, Women's economic empowerment, Investment climate, Gender, Development Economics
Equitable Growth, Finance, and Institutions
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Last updated January 31, 2023
Mary Hallward-Driemeier is Senior Economic Adviser in the Equitable Growth, Finance and Institutions Vice Presidency at the World Bank, overseeing its analytical agenda on private sector development. She joined the World Bank in 1997 as a Young Professional. She has published widely on firm productivity, the economics of technological change and the impact of crises. She leads the Jobs and Economic Transformation special theme for the International Development Association (IDA). She has served as advisor to two World Bank’s Chief Economists, co-manager of the Jobs Group, and Deputy Director for the World Development Report 2005: A Better Investment Climate for Everyone. Her previous books include Trouble in the Making? The Future of Manufacturing-Led Development (with Gaurav Nayyar) and Enterprising Women: Expanding Economic Opportunities in Africa. Mary received her AB from Harvard, her MSc in Development Economics from Oxford as a Rhodes Scholar, and her PhD in Economics from MIT.
Publication Search Results
Now showing 1 - 10 of 32
Publication(World Bank, Washington, D.C., 2004-06) Dollar, David ; Hallward-Driemeier, Mary ; Mengistae, TayeDrawing on recently completed firm-level surveys in Bangladesh, Brazil, China, Honduras, India, Nicaragua, Pakistan, and Peru, this paper investigates the relationship between investment climate and international integration. These standardized surveys of large, random samples of firms in common sectors reveal how firms experience bottlenecks and delays in hard infrastructure such as power and telecom as well as in soft infrastructure such as customs administration. The authors focus primarily on measures of the time or monetary cost of different bottlenecks (e.g., days to clear goods through customs, days to get a telephone line, sales lost to power outages). For many of these costs, the obstacles are lower in China than in the South Asian or Latin American countries. There is also systematic variation across cities within countries. The authors estimate a probit function for the probability that a randomly chosen firm is foreign-invested and a separate probit for the probability that a randomly chosen firm is an exporter. These measures of international integration are higher where investment climate is better. For locations to take advantage of opportunities in the international market, they need good infrastructure and a sound regulatory environment. The interaction of openness and sound investment climate creates a good environment for investment and production. This paper helps explain why China has been so successful over the past decade, both in terms of integration and of rapid growth, while other countries have had varied success.
Publication(World Bank, Washington, D.C., 2013-09) Hallward-Driemeier, Mary ; Hasan, Tazeen ; Bogdana Rusu, AncaThis study uses a newly compiled database of women's property rights and legal capacity covering 100 countries over 50 years to test for the impact of legal reforms on employment, health, and education outcomes for women and girls. The database demonstrates gender gaps in the ability to access and own property, sign legal documents in one's own name, and have equality or non-discrimination as a guiding principle of the country's constitution. In the initial period, 75 countries had gender gaps in at least one of these areas and often multiple ones. By 2010, 57 countries had made reforms that strengthened women's economic rights, including 28 countries that had eliminated all of the constraints monitored here. In the cross-section and within countries over time, the removal of gender gaps in rights is associated with greater participation of women in the labor force, greater movement out of agricultural employment, higher rates of women in wage employment, lower adolescent fertility, lower maternal and infant mortality, and higher female educational enrollment. This paper provides evidence on how the strengthening of women's legal rights is associated with important development outcomes.
Strengthening Economic Rights and Women's Occupational Choice : The Impact of Reforming Ethiopia's Family Law(World Bank, Washington, DC, 2013-11) Hallward-Driemeier, Mary ; Gajigo, OusmanThis paper evaluates the impact of strengthening legal rights on the types of economic opportunities that are pursued. Ethiopia changed its family law, requiring both spouses' consent in the administration of marital property, removing the ability of a spouse to deny permission for the other to work outside the home, and raising women's minimum age of marriage. Thus both access to resources and the removal of restrictions on employment served to strengthen women's bargaining position within the household and their ability to pursue economic opportunities. Although this reform now applies nationally, it was initially rolled out in the two chartered cities and three of Ethiopia's nine regions. Using nationally representative household surveys from just prior to the reform and five years later allows for a difference-in-difference estimation of the reform's impact. The analysis finds that women were relatively more likely to work in occupations that require work outside the home, employ more educated workers, and in paid and full-time jobs where the reform had been enacted, controlling for time and location effects. As the relative increase in women's participation in these activities was 15-24 percent higher in areas where the reform was carried out, the magnitude of the impact is significant too.
Publication(MIT Press, 2013-12) Hallward-Driemeier, Mary ; Rijkers, BobUsing Indonesian manufacturing census data (1991–2001), this paper rejects the hypothesis that the East Asian crisis unequivocally improved the reallocative process. The correlation between productivity and employment growth did not strengthen, and the crisis induced the exit of relatively productive firms. The attenuation of the relationship between productivity and survival was stronger in provinces with comparatively lower reductions in minimum wages, but not due to reduced entry, changing loan conditions, or firms connected to the Suharto regime suffering disproportionately. On the bright side, firms that entered during the crisis were relatively more productive, which helped mitigate the reduction in aggregate productivity.
Publication(World Bank, Washington, DC, 2001-01) Hallward-Driemeier, MaryResearchers have decried the limited supply of objective, comparable firm-level data from developing countries. The author describes a new database that helps fill this information gap. The database has detailed records on 4000 firms operating in Indonesia, the Republic of Korea, Malaysia, the Philippines, and Thailand. A comparable survey instrument and sampling methodology was used in each country, and all five studies were carried out simultaneously. The data cover three years (1996-98), allowing for measurements of firm performance before and immediately after the East Asian financial crisis. The questionnaire focused on measuring the impact of the regional financial crisis at the microeconomic level and understanding the longer-run determinants of productivity, employment practices, and financial structure. This database--the first step in the important Firm Analysis and Competitiveness Surveys initiative that the World Bank is spearheading--will be joined by additional country databases. The aim is to fill the gap in much-needed microeconomic evidence using comparable instruments.
Do Bilateral Investment Treaties Attract Foreign Direct Investment? Only a Bit ... and They Could Bite(World Bank, Washington, DC, 2003-08) Hallward-Driemeier, MaryTouted as an important commitment device that attracts foreign investors, the number of bilateral investment treaties (BITs) ratified by developing countries has grown dramatically. The author tests empirically whether BITs have actually had an important role in increasing the foreign direct investment (FDI) flows to signatory countries. While half of OECD FDI into developing countries by 2000 was covered by a BIT, this increase is accounted for by additional country pairs entering into agreements rather than signatory hosts gaining significant additional FDI. The results also indicate that such treaties act more as complements than as substitutes for good institutional quality and local property rights, the rationale often cited by developing countries for ratifying BITs. The relevance of these findings is heightened not only by the proliferation of such treaties, but by recent high profile legal cases. These cases show that the rights given to foreign investors may not only exceed those enjoyed by domestic investors, but expose policymakers to potentially large-scale liabilities and curtail the feasibility of different reform options. Formalizing relationships and protecting against dynamic inconsistency problems are still important, but the results should caution policymakers to look closely at the terms of agreements.
Publication(World Bank, Washington, DC, 2003-03) Hallward-Driemeier, Mary ; Wallsten, Scott ; Xu, Lixin ColinThe importance of a country's "investment climate" for economic growth has recently received much attention. The authors address the general lack of appropriate data for measuring the investment climate and its effects. The authors use a new survey of 1,500 Chinese enterprises in five cities to more precisely define and measure components of the investment climate, highlight the importance of firm-level data for rigorous analysis of the investment climate, and investigate empirically the effects of this comprehensive set of measures on firm performance in China. Overall, their firm-level analysis reveals that the main determinants of firm performance in China are international integration, entry and exit, labor market issues, technology use, and access to external finance.
Publication(Washington, DC: World Bank, 2004) Hallward-Driemeier, Mary ; Stewart, DavidDrawing on the World Bank's surveys of over 30,000 firms in 53 developing countries and Doing Business indicators in 130 countries, this paper provide new insights into both the perceptions of local entrepreneurs about constraints they face, but also objective measures of infrastructure quality, regulatory burdens, crime, access to finance, and the security of property rights at the country level. Doing Business indicators give the costs of fully complying with various regulatory procedures. Together, the formal requirements and the actual experience of different types of firms illustrate the scope for investment climate improvements. The potential gains, in terms of increased productivity, investment and job growth are considerable. That smaller firms face costs that are up to a third higher underscores that improving investment climate conditions will disproportionately benefit small firms.
Publication(World Bank, Washington, DC, 2014-06) Freund, Caroline ; Hallward-Driemeier, Mary ; Rijkers, BobThis paper examines whether demands for bribes for particular government services are associated with expedited or delayed policy implementation. The "grease the wheels" hypothesis, which contends that bribes act as speed money, implies three testable predictions. First, on average, bribe requests should be negatively correlated with wait times. Second, this relationship should vary across firms, with those with the highest opportunity cost of waiting being more likely to pay and face shorter delays. Third, the role of grease should vary across countries, with benefits larger where regulatory burdens are greatest. The data are inconsistent with all three predictions. According to the preferred specifications, ceteris paribus, firms confronted with demands for bribes take approximately 1.5 times longer to get a construction permit, operating license, or electrical connection than firms that did not have to pay bribes and, respectively, 1.2 and 1.4 times longer to clear customs when exporting and importing. The results are robust to controlling for firm fixed effects and at odds with the notion that corruption enhances efficiency.
Publication(Washington, DC: World Bank, 2012-10-04) Hallward-Driemeier, Mary ; Hasan, TazeenThis book looks at the effect of legal and economic rights on women's economic opportunities. It focuses on entrepreneurship because women in Africa are active entrepreneurs, and the links between property rights and the ability to enter contracts in one's own name affect entrepreneurial activities. The laws that are the focus of this book are not business laws and regulations, which are generally gender blind and presuppose that individuals can own property or enter into contracts. Instead, the book examines family, inheritance, and land laws, which oft en restrict these rights in ways that hurt women. This book surveys constitutions and statutes in all 47 countries in Sub-Saharan Africa to document where gender gaps in these laws impinge on women's legal capacity, property rights, or both. The book also looks at some labor law issues, such as restrictions on the types of industries or hours of work in which women may engage and provisions for equal pay for work of equal value. These laws affect women as employees and influence the attractiveness of wage employment versus entrepreneurship. They were also selected because they affect the choice of enterprise women may run. The equal pay for work of equal value provisions are also of interest as an indicator of the recognition of women's broader economic rights. This book provides a series of indicators that show whether a country does or does not provide particular legal provisions. Several points are worth emphasizing in interpreting these indicators. First, the indicators are binary; there is no attempt to differentiate between small and large gender gaps. Second, the indicators are not used to generate an index or otherwise aggregate the indicators; no weights are given to differentiate the relative importance of different sets of laws. Third, the indicators reflect whether certain legal provisions are recognized in a country or not; because the link between the indicator and gender gaps is not always straightforward, care must be taken in making value judgments. Although some indicators reveal that women are treated equally or identify gender differences in treatment, others do not. Although recognition of these sources of law can have implications for women's rights, it does not necessarily imply that women's rights are stronger or weaker. Conversely, the inclusion of some protections for women's rights may reflect not the strong standing of women but rather the fact that gender equality is not seen as axiomatic and needs to be explicitly stated. Second and third chapters focus on formal rights and how they have been upheld in court decisions. Fourth chapter examines the gap between laws on the books and practice on the ground. Fifth chapter looks at how both the substance of law and women's access to justice issues can be improved to expand women's ability to pursue economic opportunities.