doi:http://dx.doi.org/10.1596/39784

Person:
Hanusch, Marek

Fields of Specialization

Macroeconomics, economic growth, inequality, climate change, natural resources, infrastructure investment, structural reforms, fiscal policy, political economy

External Links

World Bank Blogs
ResearchGate
Google Scholar

Last updated: May 8, 2025

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.

Full item page

Publication Search Results

Now showing 1 - 10 of 14

Could Sustainability-Linked Bonds Incentivize Lower Deforestation in Brazil’s Legal Amazon?
(Washington, DC: World Bank, 2023-09-04) Wang, Dieter; Gurhy, Bryan; Hanusch, Marek; Kollenda, Philipp
This paper proposes a new relative evaluation and benchmarking framework for performance linked financing instruments. It argues that the carrots and sticks of sustainability-linked bonds should not use key performance indicators which are solely tied to outcomes. Instead, they should be based on its issuer’s level of performance with respect to a target. The paper defines performance as the part of the outcome that the issuer can influence. Otherwise, the issuer may be rewarded or penalized for factors outside their control. In such a case, principal-agent theory would predict a dilution of the performance-based instrument’s incentives. This framework is then applied to deforestation in Brazil’s Legal Amazon and estimate performance by accounting for the real effective exchange rate, global commodity prices, and prevalent deforestation trends. The results show that policy efforts helped lower deforestation in the 2000s, even after accounting for external factors. The trend reversal and acceleration in deforestation since 2012 are partly due to weaker policy and macroeconomic factors. Based on these results, the paper proposes an Amazon sustainability-linked bond, which could allow for a more effective mechanism to incentivize policy efforts. The paper also introduces the feasibility and ambitiousness matrix to set sustainability performance targets. The matrix is used to define the terms low-hanging fruits and long shots and to discuss why such targets are subject to the risk of greenwashing.
Innovative Financial Instruments and Their Role in the Development of Jurisdictional REDD+
(Washington, DC: World Bank, 2025-05-08) Golub, Alexander; Hanusch, Marek; Bardal, Diogo; Keith, Bruce Ian; Simon, Daniel Navia; Fleischhaker, Cornelius
Achieving global net zero carbon emissions requires stopping deforestation and making full use of tropical forests as carbon sinks. Market instruments for the sale and purchase of emission outcomes coming from Reducing Emissions from Deforestation and Forest Degradation framework programs could play a very significant role in achieving this goal. The development of these markets has been insufficient so far: their scale as of today is much lower than what would be required to generate meaningful resources for the countries that host tropical forests, and the quality of existing instruments is generally insufficient to allow a scaling up in demand. However, efforts to improve the transparency and integrity of these instruments are accelerating, particularly around jurisdictional Reducing Emissions from Deforestation and Forest Degradation framework programs. In parallel with these efforts, innovations in financial instruments suited for the framework’s carbon markets are also taking place, but their scale is limited so far. This paper looks beyond the current state of the framework’s carbon markets to consider a set of innovative financial instruments that would allow completing the infrastructure of emissions trading, enhancing its utility for both issuers and buyers of carbon credits in the framework’s jurisdictional programs. The paper shows how a combination of forest carbon bonds, where countries sell forward (or commit) their emission reduction outcomes, as well as call and put options can be used to de-risk and encourage early investment in jurisdictional Reducing Emissions from Deforestation and Forest Degradation framework programs. To quantify the value of these innovations, the paper evaluates the potential scale of these instruments for the case of Brazil. The estimates suggest that the amounts that could be mobilized would represent a critical contribution to effective forest conservation. The proposed instruments and methods can be used by other tropical nations that are prepared to implement a large-scale jurisdictional program. Although the paper acknowledges that the current state of carbon markets would still not allow their deployment in the short term, the conclusion is that these instruments have significant potential, and their future development could be an important contribution to the establishment of successful markets for the conservation of tropical forests.
A Macroeconomic Perspective of Deforestation in Brazil's Legal Amazon
(World Bank, Washington, DC, 2022-11) Ferreira Filho, Joaquim Bento De Souza; Hanusch, Marek
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.
A Model of Amazon Deforestation, Trade and Labor Market Dynamics
(World Bank, Washington, DC, 2022-11) Porcher, Charly; Hanusch, Marek
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.
Exchange Rate Volatility and FDI Inflows: Evidence from Cross-Country Panel Data
(World Bank, Washington, DC, 2018-06) Nguyen, Ha; Algu, Yashvir; Hanusch, Marek
Using a panel of 80 developing and developed countries for the period 1990-2015, this studyanalyses the relationship between exchange rate volatility and foreign direct investment (FDI)inflows. The results reveal a negative relationship between de facto exchange rate volatility andFDI. Reducing exchange rate volatility by 10 percent over one-year can boost FDI inflows—ceterisparibus—by an estimated 0.48 percentage points of GDP while the same reduction over the pastfive years can boost FDI inflows by 0.27 percentage points over the long-run. The results areapplied to the case of South Africa, which has been experiencing high volatility of the rand inrecent years. Reducing the rand's volatility to that of developing country peers, South Africa could boost FDI inflows by a potential of 0.25 percentage points of GDP.
Why South Africa Is Cheap for the Rich and Expensive for the Poor: Reconsidering the Balassa-Samuelson Effect
(World Bank, Washington, DC, 2019-07) Dadam, Vincent; Viegi, Nicola; Hanusch, Marek
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.
When the Cycle Becomes the Trend: The Emerging Market Experience with Fiscal Policy during the Last Commodity Super Cycle
(World Bank, Washington, DC, 2019-01) Amra, Rashaad; Jooste, Charl; Hanusch, Marek
Fiscal buffers have shrunk across the world. This paper argues that limited fiscal room in emerging market economies today is partly due to the commodity super cycle of 2000-15. The super cycle created the mirage that economic performance had structurally improved, mistaking a long, commodity-fueled uptick in the business cycle for higher trend growth. This thinking supported fiscal expansions. When the commodity boom ended, it became apparent that countries had saved less than they should have, and that fiscal policy had, perhaps inadvertently, been pro-cyclical. It left countries with depleted fiscal buffers and large budgets when the cycle came to an end, limiting room for fiscal stimulus when needed. The paper illustrates the argument with reference to the South African experience.
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) Hassan, Shakill; Algu, Yashvir; Soobyah, Luchelle; Kranz, Alexander; Hanusch, Marek
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.
Credit Ratings and Fiscal Responsibility
(2015-06) Vaaler, Paul; Hanusch, Marek
The authors build on the findings from an earlier analysis, adding to the evidence base for the notion that credit rating agencies contribute to fiscal sustainability. To do so, the authors focus on election periods when political pressures for fiscal expansions are heightened. The literature on political budget cycles documents the tendency for budget deficits to increase in election years as governments attempt to appear economically competent by strategically providing additional publicly financed goods or services, or by cutting taxes. A rating downgrade, however, signals the opposite of competence as it implies an increase in the probability of sovereign default. Since credit ratings are widely observed - by financial markets as well as voters - they in effect serve as a disciplining device for fiscal policy not to submit to short-term spending pressures, thus keeping it responsible. The authors find that: (1) governments going into an election year immediately after a rating downgrade are 27 percentage points more likely to lose at the polls; and (2) governments going into an election year with a negative rating outlook (indicating a higher likelihood of a near-term downgrade) run smaller budget deficits compared to cases with positive or stable outlooks. Ratings act like fiscal rules disciplining governments when they are more vulnerable to political pressures on the budget - as opposed to fiscal policies supporting longer-term economic growth and development objectives.
The Doing Business Indicators, Economic Growth and Regulatory Reform
(World Bank, Washington, DC, 2012-08) Hanusch, Marek
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.