Person:
Hanusch, Marek
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Fields of Specialization
Macroeconomics, economic growth, inequality, climate change, natural resources, infrastructure investment, structural reforms, fiscal policy, political economy
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Last updated
September 5, 2023
Biography
Marek Hanusch is currently Senior Economist for Brazil in the World Bank’s Global Practice for Macroeconomics, Trade and Investment, having joined the Bank as a Young Professional in 2011. Previously, he worked as a Senior Policy Adviser at the Ministry of Finance and Planning, Lesotho. He holds a doctorate from the University of Oxford and has published in various economics and development journals, including the European Economic Review, Economics Letters, Public Choice, and Oxford Development Studies. His main professional and academic interests lie in macroeconomics, economic growth, inequality, climate change, natural resources, infrastructure investment, structural reforms, fiscal policy, and political economy. Over the past 20 years, he has worked on a broad range of development issues in Bosnia and Herzegovina, Brazil, Cabo Verde, the Dominican Republic, Guatemala, Guinea-Bissau, Lebanon, Lesotho, Malaysia, Mongolia, the Philippines, South Africa, and Zimbabwe.
Publication Search Results
1 - 10 of 14
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Publication
Why South Africa Is Cheap for the Rich and Expensive for the Poor: Reconsidering the Balassa-Samuelson Effect
(World Bank, Washington, DC, 2019-07)This paper investigates cross-sectoral productivity differentials in South African industry and their distributional consequences. The analysis shows that typically, traded sectors have experienced low productivity growth over the past decade, while skill intensive service sectors have had significant productivity growth. This is the inverse of the traditional Balassa-Samuelson sectoral transformation hypothesis, where high wages in high-productivity traded sectors increase wages throughout the economy, thus increasing prices on non-traded goods and revaluing the country's real exchange rate. Instead, the higher productivity of non-traded sectors experienced in South Africa induces a devaluation of the real exchange rate and a contraction of the traded sectors. The results of the estimation show evidence of this "inverse" Balassa-Samuelson effect for agriculture and manufacturing and in particular mining. This "inverse" Balassa-Samuelson effect has important distributional consequences: the high-productivity sectors are associated with cheaper goods and services for wealthy households. This in turn burdens poor households, which are more dependent on traded goods, with higher prices, which are a consequence of low productivity and high markups. -
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A Balancing Act for Brazil’s Amazonian States: An Economic Memorandum
(Washington, DC: World Bank, 2023-05-18)Brazil's nine Amazonian states, here collectively referred to as Amazônia, include some of the world's richest ecosystems, including the Amazon rainforest and parts of the Cerrado savanna and Pantanal wetlands. The region is also among Brazil’s poorest socioeconomically. As a result, sustainable, inclusive development of Amazônia calls for raising living standards while protecting natural forests. A Balancing Act for Brazil’s Amazonian States: An Economic Memorandum explores how a recalibrated development approach can achieve these goals. In the shorter term, there is an urgent need to halt deforestation--a massive destruction of natural wealth that poses risks to the climate and economy. Amazônia is Brazil’s deforestation hot spot, and the Amazon rainforest is approaching tipping points into broad and permanent forest loss. Reversing the recent increase in deforestation requires stronger land and forest governance, including land regularization and more effective law enforcement. In the longer term, both Brazil and Amazônia need a new growth model. This model would be anchored in productivity rather than resource extraction and it would diversify the export basket beyond commodities. A more balanced structural transformation requires the lagging urban sectors, such as manufacturing and services, to step up to promote economic growth, reduce pressure on the agricultural frontier, and generate jobs for Brazil and Amazônia's largely urban populations. The public-good value of Amazônia's forests could generate conservation finance linked to verifiable reductions in deforestation. Such financing would support a new development approach, combining forest protection, productivity, balanced structural transformation, sustainable production techniques (including the bioeconomy), and other measures to address the needs of Amazônia's urban and rural populations. This approach must also heed the needs and interests of Amazônia's traditional communities. Given both the value and the fragility of Amazônia's ecosystems, coupled with considerable socioeconomic local needs, the stakes are high—for Amazônia, Brazil, and the world. -
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A Macroeconomic Perspective of Deforestation in Brazil's Legal Amazon
(World Bank, Washington, DC, 2022-11)Despite policy efforts in recent decades, deforestation remains a pervasive phenomenon in Brazil. Yet deforestation is not only affected by forest governance. It is also driven by global demand for commodities and the relative competitiveness of agriculture, which in turn depends on macroeconomic factors impacting product and factor prices. These macroeconomic mechanisms remain largely unexplored. This paper explores the role of economic productivity in shaping deforestation. It uses an economic model with an empirically founded land use extension to study the macro-structural drivers of land use patterns in Brazil’s Legal Amazon. It demonstrates that productivity gains in the Legal Amazon’s agriculture sector increase deforestation, while such gains in non-land intensive sectors (such as manufacturing) reduce deforestation by attenuating the relative competitiveness of agriculture. Higher productivity in other parts of Brazil also reduces incentives for forest conversion in the Legal Amazon. The paper points to the economic forces that forest protection efforts need to counter, while calling for complementary structural reforms to overcome “Brazilian disease” in the longer-term: addressing the legacy of import substitution industrialization and moving up the value chain will shift economic drivers beyond commodities, thus also reconciling development with standing forests. -
Publication
A Model of Amazon Deforestation, Trade and Labor Market Dynamics
(World Bank, Washington, DC, 2022-11)This paper develops a dynamic spatial equlibrium model of Amazon deforestation, accounting for trade and labor markets dynamics. It uses this model to study the impact of local sectoral shocks and policies on deforestation. Conditional on the assumptions on key parameters, the analysis suggests the following: 1) an increase in external commodity demand increases deforestation; 2) agricultural productivity gains within the Amazon region likely increase deforestation (but reduce deforestation in the rest of the world) 3) manufacturing productivity in urban centers in the Amazon region decreases deforestation, especially if manufacturing firms have short rural value chains and if complemented by investments in education and training and measures to attract skills; 4) reducing transport costs increases deforestation unless it sufficiently supports higher export competitiveness of urban production; and 5) industrial policy focused on raising urban productivity, especially in sectors with short rural value chains, can reduce deforestation. The paper then discusses how policies aimed at increasing local sectoral productivity in the Amazon region could complement other measures specifically aimed at protecting the forest. Among such measures are incentivizing governments to designate undesignated public forests, enforcing forest protection laws (command and control), incentivizing afforestation, and creating alternative livelihoods for farmers in rural and urban areas. -
Publication
Political Budget Cycles and the Organization of Political Parties
(World Bank, Washington, DC, 2013-10)This paper introduces a new explanation for political budget cycles: politicians have stronger incentives to increase spending around elections in the presence of younger political parties. Previous research has shown that political budget cycles are larger when voters are uninformed about politician characteristics and when politicians are less credible. The effects of party age can be traced to organizational differences between younger and older parties that also affect voter information and politician credibility. Parties organized around particular individuals, rather than around policy labels or a party machine, are less likely to survive the departure of party leaders, to adopt organizational attributes that promote voter information and political credibility, and to limit political budget cycles. Previous research has also shown larger political budget cycles in younger democracies. Evidence presented here indicates that party age accounts for this effect. -
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Promises, Promises : Vote-Buying and the Electoral Mobilization Strategies of Non-Credible Politicians
(World Bank, Washington, DC, 2013-10)Vote-buying is pervasive, but not everywhere. What explains significant variations across countries in the greater use of pre-electoral transfers to mobilize voters relative to the use of pre-electoral promises of post-electoral transfers? This paper explicitly models the trade-offs that politicians incur when they decide between mobilizing support with vote-buying or promises of post-electoral benefits. Politicians rely more on vote-buying when they are less credible, target vote-buying to those who do not believe their political promises, and only buy votes from those who would have received post-electoral transfers in a world of full political credibility. The enforcement of a prohibition on vote-buying reduces the welfare of those targeted with vote-buying, but improves the welfare of all other groups in society. -
Publication
The Doing Business Indicators, Economic Growth and Regulatory Reform
(World Bank, Washington, DC, 2012-08)Improving the investment climate is among the top priorities in development. The World Bank Group's Doing Business reports have become an important guide and benchmark to inform regulatory reforms aimed at unleashing the potential of the private sector. This paper discusses the potential role of the Doing Business Indicators in the reform process. Generally, the Doing Business studies are constrained in their prescriptive power for policy making. However, governments that nonetheless choose to use the Doing Business reports for guidance in the reform process can aim to improve their Doing Business ranking to enhance the visibility of their general reform efforts; or they can aim at maximizing the impact of reform on economic growth. In this case, the evidence suggests that focusing on indicators relating to credit and the enforcement of contracts is the most important. Indicators related to cost have the largest potential for fostering growth. -
Publication
Jobless Growth? Okun's Law in East Asia
(World Bank, Washington, DC, 2012-08)Was economic growth in East Asia jobless? This paper addresses this question using data from eight East Asian countries during the period between 1997 and 2011 to estimate the Okun's Law Coefficient, which captures the relationship between growth and employment. The analysis suggests that growth was not jobless. However, there is considerable variation across countries. Generally, the effect of growth on employment tends to magnify under more flexible hiring and firing rules. Yet even where labor markets are more tightly regulated, economic growth affects employment, not necessarily in the aggregate but in its composition. There is evidence that agricultural employment moves counter-cyclically, as opposed to non-agricultural employment. The effect is particularly pronounced in periods of economic crisis, suggesting that agriculture may serve as a shock-absorber for workers laid off in the industrial sector. Isolating non-agricultural employment reveals a stronger relationship between growth and job creation. -
Publication
Credit Rating Agencies in Emerging Democracies : Guardians of Fiscal Discipline?
(World Bank, Washington, DC, 2013-03)Credit rating agencies have drawn criticism for failing to anticipate and deter root causes of the 2008-2009 financial crisis in the United States. However, this paper presents evidence that credit rating agencies regularly anticipate and deter governments in emerging democracies from opportunistic borrowing and potential financial crises related to elections and the political budget cycle behavior they encourage. The paper considers a sample of 18 such countries holding 32 presidential elections from 1989 to 2004. The analysis shows that credit rating agencies induced greater fiscal discipline during election periods when governments had incentives to borrow opportunistically for short-term electoral gain. Countries with higher credit rating agency sovereign ratings borrowed less than lower-rated countries in election periods, but borrowed more in non-election periods. Credit rating agencies promoted fiscal discipline during increasingly frequent election periods in emerging democracies. -
Publication
The Ghost of a Rating Downgrade: What happens to Borrowing Costs When a Government Loses its Investment Grade Credit Rating?
(World Bank, Washington, DC, 2016-06-28)Since the global financial crisis and the end of the commodity super-cycle, weak growth and countercyclical fiscal policy have contributed to deteriorating public finances in many countries across the globe. As public debt burdens rose, credit ratings deteriorated and a number of countries have been downgraded from investment to sub-investment ('junk') grade. Rating downgrades continue to haunt countries in a world of low growth. This paper examines the effect of such downgrades on short-term government borrowing costs, using a sample of 20 countries between 1998 and 2015. The analysis suggests that a downgrade to sub-investment grade by one major rating agency increased Treasury bill yields by 138 basis points on average. Should a second rater follow suit, Treasury bill rates increase by another 56 basis points (although this effect is not statistically significant). The analysis does not detect any equivalent impacts for local currency ratings, even though T-bills tend to be issued in domestic currency, although this may be due to sample limitations and is therefore not conclusive.