Person:
Hallward-Driemeier, Mary
Author Name Variants
Fields of Specialization
Private sector development,
Firm dynamics,
Firm Productivity,
Entrepreneurship,
Women's economic empowerment,
Investment climate,
Gender,
Development Economics
Degrees
ORCID
External Links
Departments
Equitable Growth, Finance, and Institutions
Externally Hosted Work
Contact Information
Last updated
January 31, 2023
Biography
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
1 - 10 of 15
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Publication
Investment Climate and International Integration
(World Bank, Washington, D.C., 2004-06)Drawing 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
Strengthening Economic Rights and Women's Occupational Choice : The Impact of Reforming Ethiopia's Family Law
(World Bank, Washington, DC, 2013-11)This 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
The Investment Climate and the Firm : Firm-Level Evidence from China
(World Bank, Washington, DC, 2003-03)The 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
Deals and Delays : Firm-level Evidence on Corruption and Policy Implementation Times
(World Bank, Washington, DC, 2014-06)This 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
Women's Legal Rights over 50 Years : Progress, Stagnation or Regression?
(World Bank, Washington, DC, 2013-09)Using a newly compiled database of women's property rights and legal capacity covering 100 countries over 50 years, this paper analyzes the triggers and barriers to reform. The database documents gender gaps in the ability to access and own assets, to sign legal documents in one's own name, and to have equality or non-discrimination as a guiding principle of the country's constitution. Progress in reducing these constraints has been dramatic -- half of the constraints documented in the 1960s had been removed by 2010. However, some sticky areas persist where laws have not changed or have even regressed. The paper analyzes potential drivers of reforms. A significant finding is that the relationship with a country's level of development and the extent of its reforms is not straightforward. For the first half of the sample, there was no systematic connection; only in the last 25 years have increases in income been associated with higher probabilities for reform, but only in lower-income countries. With the remaining constraints as prevalent in middle- as low-income countries, increased growth is not necessarily going to spark additional reforms. Clearer patterns emerge from the momentum created by international conventions, such as the Committee to Eliminate All Forms of Discrimination against Women (CEDAW), women's political representation at the national level, mobilization of women's networks, and increasing labor force participation in sectors that provide a voice for women, which are positive forces for change. Conversely, conflict and weak rule of law can entrench a discriminatory status quo. And much is at stake; strengthening women's legal rights is associated with important development outcomes that can benefit society as a whole. -
Publication
The Impact of the Investment Climate on Employment Growth : Does Sub-Saharan Africa Mirror Other Low-Income Regions?
( 2010-02-01)Using survey data from 86,000 enterprises in 104 countries, including 17,000 enterprises in 31 Sub-Saharan African countries, this paper finds that average enterprise-level employment growth rates are remarkably similar across regions. This is true despite significant differences in the quality of the investment climate in which these enterprises operate. Objective measures of investment climate conditions (including the number of outages, the share of firms with bank loans, and others) indicate that conditions are most challenging within Sub-Saharan Africa, as well as for smaller enterprises. However, enterprises employment in Sub-Saharan Africa is less sensitive to changes in access to infrastructure and finance relative to other low-income regions. This can be understood by looking at non-linear effects by firm size -- and the finding that these size effects are particularly strong within Sub-Saharan Africa. Although unreliable infrastructure services and inadequate access to finance generally hamper growth, in Sub-Saharan Africa they are actually associated with higher employment growth rates among micro enterprises. Although employment growth is good news in Sub-Saharan Africa, that much of the expanded employment is in small, labor-intensive, less productive enterprises raises longer-run concerns about the efficiency of the allocation of resources and aggregate productivity growth in the region. -
Publication
How Business Is Done and the ‘Doing Business’ Indicators : The Investment Climate When Firms Have Climate Control
( 2011-02-01)This paper examines de jure and de facto measures of regulations, finding the relationship between them is neither one for one, nor linear. "Doing Business" provides indicators of the formal time and costs associated with fully complying with regulations. Enterprise Surveys report the actual experiences of a wide range of firms. First, there are significant variations in reported times to complete the same transaction by firms facing the same formal policy. Second, regulatory compliance appears "under water" as firms report actual times much less than the Doing Business reported days. Third, the data reveal substantial differences between favored and disfavored firms in the same location. Favored firms show minimal variation, so Doing Business has little predictive power for the times they report. For disfavored firms, the variation is greater, although still not significantly correlated with Doing Business. Fourth, where multiple Enterprise Surveys are available, there is little association over time, with reductions in Doing Business days as likely to be accompanied by increases in Enterprise Surveys days. Comparing these two types of measures suggests very different ways of thinking about policy versus policy implementation, what "a climate" for firms in a country might mean, and what the options for "policy reform" really are. -
Publication
Deals versus Rules : Policy Implementation Uncertainty and Why Firms Hate It
( 2010-05-01)Firms in Africa report "regulatory and economic policy uncertainty" as a top constraint to their growth. This paper argues that often firms in Africa do not cope with policy rules, rather they face deals: firm-specific policy actions that can be influenced by firm actions (such as bribes) and characteristics (such as political connections). Using Enterprise Survey data, the paper demonstrates huge variability in reported policy actions across firms notionally facing the same policy. The within-country dispersion in firm-specific policy actions is larger than the cross-national differences in average policy. The analysis shows that variability in this policy implementation uncertainty within location-sector-size cells is correlated with firm growth rates. These measures of implementation variability are more strongly related to lower firm employment growth than are measures of "average" policy action. The paper shows that the de jure measures such as Doing Business indicators are virtually uncorrelated with ex-post firm-level responses, further evidence that deals rather than rules prevail in Africa. Strikingly, the gap between de jure and de facto conditions grows with the formal regulatory burden. The evidence also shows more burdensome processes open up more space for making deals; firms may not incur the official costs of compliance, but they still pay to avoid them. Finally, measures of institutional capacity and better governance are closely associated with perceived consistency in implementation. -
Publication
Do Crises Catalyze Creative Destruction? Firm-level Evidence from Indonesia
( 2011-11-01)Using 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
Does Expanding Health Insurance beyond Formal-Sector Workers Encourage Informality? Measuring the Impact of Mexico’s Seguro Popular
( 2011-08-01)Seguro Popular was introduced in 2002 to provide health insurance to the 50 million Mexicans without Social Security. This paper tests whether the program has had unintended consequences, distorting workers' incentives to operate in the informal sector. The analysis examines the impact of Seguro Popular on disaggregated labor market decisions, taking into account that program coverage depends not only on the individual's employment status, but also that of other household members. The identification strategy relies on the variation in Seguro Popular's rollout across municipalities and time, with the difference-in-difference estimation controlling for household fixed effects. The paper finds that Seguro Popular lowers formality by 0.4-0.7 percentage points, with adjustments largely occurring within a few years of the program's introduction. Rather than encouraging exit from the formal sector, Seguro Popular is associated with a 3.1 percentage point reduction (a 20 percent decline) in the inflow of workers into formality. Income effects are also apparent, with significantly decreased flows out of unemployment and lower labor force participation. The impact is larger for those with less education, in larger households, and with someone else in the household guaranteeing Social Security coverage. However, workers pay for part of these benefits with lower wages in the informal sector.