Person:
Kraay, Aart

Development Research Group, The World Bank

Fields of Specialization

Macroeconomics, Debt management, Economic growth, Inequality and shared prosperity

Departments

Development Research Group, The World Bank

Last updated: November 7, 2024

Biography

Aart Kraay is Director of Research in the Development Research Group at the World Bank. He joined the World Bank in 1995 after earning a Ph.D. in economics from Harvard University (1995), and a B.Sc. in economics from the University of Toronto (1990). His research interests include international capital movements, growth and inequality, governance, and the Chinese economy. His research on these topics has been published in scholarly journals such as the Quarterly Journal of Economics, the Review of Economics and Statistics, the Economic Journal, the Journal of Monetary Economics, the Journal of International Economics, and the Journal of the European Economic Association. He is an associate editor of the Journal of Development Economics, and co-editor of the World Bank Economic Review. He has also held visiting positions at the International Monetary Fund and the Sloan School of Management at MIT, and has taught at the School of Advanced International Studies at Johns Hopkins University.

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Publication Search Results

Now showing 1 - 10 of 66

The Worldwide Governance Indicators: Methodology and 2024 Update
(Washington, DC: World Bank, 2024-11-07) Kaufmann, Daniel; Kraay, Aart
This paper provides an overview of the data sources and aggregation methodology for the Worldwide Governance Indicators (WGI). The WGI report six aggregate governance indicators measuring Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption in a sample of 214 economies over the period 1996–2023. The aggregate indicators combine information from 35 different existing data sources, capturing subjective perceptions of the quality of various dimensions of governance reported by experts and survey respondents worldwide. The paper briefly discusses how to use reported margins of error when interpreting cross-country and over-time differences in the aggregate indicators. The paper also updates and extends earlier analysis on three key issues relating to the WGI methodology: (a) the effect of correlated perception errors, (b) the robustness of the aggregate indicators to alternative weighting schemes, and (c) the existence on trends in global averages of governance.
The World Bank Human Capital Index: A Guide
(Published by Oxford University Press on behalf of the World Bank, 2019-02) Kraay, Aart
This paper provides a guide to the new World Bank Human Capital Index (HCI), situating its methodology in the context of the development accounting literature. The HCI combines indicators of health and education into a measure of the human capital that a child born today can expect to achieve by her 18th birthday, given the risks of poor education and health that prevail in the country where she lives. The HCI is measured in units of productivity relative to a benchmark of complete education and full health, and ranges from 0 to 1. A value of x on the HCI indicates that a child born today can expect to be only x×100 percent as productive as a future worker as she would be if she enjoyed complete education and full health.
The Worldwide Governance Indicators : Methodology and Analytical Issues
(2010-09-01) Kaufmann, Daniel; Kraay, Aart; Mastruzzi, Massimo
This paper summarizes the methodology of the Worldwide Governance Indicators (WGI) project, and related analytical issues. The WGI cover over 200 countries and territories, measuring six dimensions of governance starting in 1996: Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. The aggregate indicators are based on several hundred individual underlying variables, taken from a wide variety of existing data sources. The data reflect the views on governance of survey respondents and public, private, and NGO sector experts worldwide. The WGI also explicitly report margins of error accompanying each country estimate. These reflect the inherent difficulties in measuring governance using any kind of data. Even after taking these margins of error into account, the WGI permit meaningful cross-country and over-time comparisons. The aggregate indicators, together with the disaggregated underlying source data, are available at www.govindicators.org.
Fiscal Policy as a Tool for Stabilization in Developing Countries
(World Bank, Washington, DC, 2013-02) Kraay, Aart; Serven, Luis
The financial crisis of 2007/2008, the subsequent great recession in rich countries and its propagation to developing countries has sparked a renewed interest in the role of fiscal policy as a potential countercyclical tool among policymakers and researchers. This paper reviews the state of empirical evidence on the effectiveness of discretionary countercyclical fiscal policy by placing a particular emphasis on developing countries. On the whole, successful fiscal interventions of this type have been rare in the developing world. This note also briefly reviews contrasting experiences of success and failure in industrial and developing countries. It concludes with several recommendations motivated by past experiences policymakers should consider before adopting any fiscal responses to the current crisis.
Corruption and Conﬁdence in Public Institutions : Evidence from a Global Survey
(World Bank, 2011-05-31) Clausen, Bianca; Kraay, Aart; Nyiri, Zsolt
Well-functioning institutions matter for economic development. In order to operate effectively, public institutions must also inspire confidence in those they serve. We use data from the Gallup World Poll, a unique and very large global household survey, to document a quantitatively large and statistically significant negative correlation between corruption and confidence in public institutions. This suggests an important indirect channel through which corruption can inhibit development: by eroding confidence in public institutions. This correlation is robust to the inclusion of a large set of controls for country and respondent-level characteristics. Moreover we show how it can plausibly be interpreted as reflecting at least in part a causal effect from corruption to confidence. Finally, we provide evidence that individuals with low confidence in institutions exhibit low levels of political participation, show increased tolerance for violent means to achieve political ends, and have a greater desire to “vote with their feet” through emigration.
Governance Matters VIII : Aggregate and Individual Governance Indicators 1996–2008
(2009-06-01) Kaufmann, Daniel; Kraay, Aart; Mastruzzi, Massimo
This paper reports on the 2009 update of the Worldwide Governance Indicators (WGI) research project, covering 212 countries and territories and measuring six dimensions of governance between 1996 and 2008: Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. These aggregate indicators are based on hundreds of specific and disaggregated individual variables measuring various dimensions of governance, taken from 35 data sources provided by 33 different organizations. The data reflect the views on governance of public sector, private sector and NGO experts, as well as thousands of citizen and firm survey respondents worldwide. The authors also explicitly report the margins of error accompanying each country estimate. These reflect the inherent difficulties in measuring governance using any kind of data. They find that even after taking margins of error into account, the WGI permit meaningful cross-country comparisons as well as monitoring progress over time. The aggregate indicators, together with the disaggregated underlying indicators, are available at www.govindicators.org.
Methodology for a World Bank Human Capital Index
(World Bank, Washington, DC, 2018-09) Kraay, Aart
This paper describes the methodology for a new World Bank Human Capital Index (HCI). The HCI combines indicators of health and education into a measure of the human capital that a child born today can expect to obtain by her 18th birthday, given the risks of poor education and health that prevail in the country where she lives. The HCI is measured in units of productivity relative to a benchmark of complete education and full health, and ranges from 0 to 1. A value of x on the HCI indicates that a child born today can expect to be only x x100 percent as productive as a future worker as she would be if she enjoyed complete education and full health. The methodology of the HCI is anchored in the extensive literature on development accounting.
Toward Successful Development Policies: Insights from Research in Development Economics
(World Bank, Washington, DC, 2020-01) Artuc, Erhan; Cull, Robert; Dasgupta, Susmita; Fattal, Roberto; Filmer, Deon; Gine, Xavier; Jacoby, Hanan; Jolliffe, Dean; Kee, Hiau Looi; Klapper, Leora; Kraay, Aart; Loayza, Norman; Mckenzie, David; Ozler, Berk; Rao, Vijayendra; Rijkers, Bob; Schmukler, Sergio L.; Toman, Michael; Wagstaff, Adam; Woolcock, Michael
What major insights have emerged from development economics in the past decade, and how do they matter for the World Bank? This challenging question was recently posed by World Bank Group President David Malpass to the staff of the Development Research Group. This paper assembles a set of 13 short, nontechnical briefing notes prepared in response to this request, summarizing a selection of major insights in development economics in the past decade. The notes synthesize evidence from recent research on how policies should be designed, implemented, and evaluated, and provide illustrations of what works and what does not in selected policy areas.
Government Matters III : Governance Indicators for 1996-2002
(World Bank, Washington, DC, 2003-08) Kaufmann, Daniel; Kraay, Aart; Mastruzzi, Massimo
The authors present estimates of six dimensions of governance covering 199 countries and territories for four time periods: 1996, 1998, 2000, and 2002. These indicators are based on several hundred individual variables measuring perceptions of governance, drawn from 25 separate data sources constructed by 18 different organizations. The authors assign these individual measures of governance to categories capturing key dimensions of governance and use an unobserved components model to construct six aggregate governance indicators in each of the four periods. They present the point estimates of the dimensions of governance as well as the margins of errors for each country for the four periods. The governance indicators reported here are an update and expansion of previous research work on indicators initiated in 1998 (Kaufmann, Kraay, and Zoido-Lobat 1999a,b and 2002). The authors also address various methodological issues, including the interpretation and use of the data given the estimated margins of errors.
Predicting Food Crises
(World Bank, Washington, DC, 2020-09) Spencer, Phoebe; Kraay, Aart; Wang, Dieter; Andree, Bo, Pieter Johannes
Globally, more than 130 million people are estimated to be in food crisis. These humanitarian disasters are associated with severe impacts on livelihoods that can reverse years of development gains. The existing outlooks of crisis-affected populations rely on expert assessment of evidence and are limited in their temporal frequency and ability to look beyond several months. This paper presents a statistical forecasting approach to predict the outbreak of food crises with sufficient lead time for preventive action. Different use cases are explored related to possible alternative targeting policies and the levels at which finance is typically unlocked. The results indicate that, particularly at longer forecasting horizons, the statistical predictions compare favorably to expert-based outlooks. The paper concludes that statistical models demonstrate good ability to detect future outbreaks of food crises and that using statistical forecasting approaches may help increase lead time for action.