Publication: Quality of Government and Living Standards
Loading...
Published
2012-09
ISSN
Date
2014-02-18
Author(s)
Editor(s)
Abstract
It is generally acknowledged that a government's output is difficult to define and its value is hard to measure. The practical solution adopted by national accounts systems is to equate output value to input costs, but well-documented inefficiencies in government activities make this approximation questionable. One solution is to purge from gross domestic product (GDP) the fraction of government inputs that is wasted. This note illustrates such a correction, computing corrected per capita GDP on the basis of two studies that estimate efficiency scores for several dimensions of government activities. Results show that the correction could be significant and reorder the rankings of living standards.
Link to Data Set
Citation
“Grigoli, Francesco; Ley, Eduardo. 2012. Quality of Government and Living Standards. Economic premise;no. 89. © http://hdl.handle.net/10986/17093 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Public Expenditure and Growth(World Bank, Washington, DC, 2007-10)Given that public spending will have a positive impact on GDP if the benefits exceed the marginal cost of public funds, the present paper deals with measuring costs and benefits of public spending. The paper discusses one cost seldom considered in the literature and in policy debates, namely, the volatility derived from additional public spending. The paper identifies a relationship between public spending volatility and consumption volatility, which implies a direct welfare loss to society. This loss is substantial in developing countries, estimated at 8 percent of consumption. If welfare losses due to volatility are this sizeable, then measuring the benefits of public spending is critical. Gauging benefits based on macro aggregate data requires three caveats: a) considering of the impact of the funding (taxation) required for the additional public spending; b) differentiating between investment and capital formation; c) allowing for heterogeneous response of output to different types of capital and differences in network development. It is essential to go beyond country-specificity to project-level evaluation of the benefits and costs of public projects. From the micro viewpoint, the rate of return of a project must exceed the marginal cost of public funds, determined by tax levels and structure. Credible evaluations require microeconomic evidence and careful specification of counterfactuals. On this, the impact evaluation literature and methods play a critical role. From individual project evaluation, the analyst must contemplate the general equilibrium impacts. In general, the paper advocates for project evaluation as a central piece of any development platform. By increasing the efficiency of public spending, the government can permanently increase the rate of productivity growth and, hence, affect the growth rate of GDP.Publication Uzbekistan - Living Standards Assessment : Policies to Improve Living Standards, Volume 2. Full Report(2003-05-01)Since independence, Uzbekistan has followed a distinct economic strategy, entailing gradual transformation of the economy, while emphasizing social stability. The "Uzbek Model" of development has focused on developing industrial and manufacturing capacity in a predominantly agricultural economy, using direct and substantial state guidance. An important objective of the strategy has been to raise living standards and expand employment opportunities, while protecting vulnerable groups against abject poverty. Has this approach alleviated the problems of poverty inherited by the country? This report provides the first national level picture of living standards in Uzbekistan since independence. It has three main goals: (i) to examine the current status of living standards in Uzbekistan (ii) to identify key challenges and constraints to improving living standards, and (iii) to suggest priority policy actions that are needed for broad based improvements in living standards in the country. The report was prepared in close collaboration with a working group from the Government of Uzbekistan, to ensure the relevance of the findings and to build capacity for analytical evaluation of living standards using household survey data. The report is based on the recently improved and nationally representative Family Budget Survey (FBS) (2000/01) carried out by the Uzbek statistical authorities. Since 2000/01 was the first year of implementation of the revised nationally representative survey, the new survey is considered by the Statistical Authorities to be a pilot. This is also the first time the data have been used for poverty analysis, and the exercise has yielded important feedback for further strengthening the survey. Despite these important caveats, the FBS does provide the first comprehensive information on living standards in the country, and represents the best available information at this time. Results that appear to contradict conventional wisdom cannot be rejected a priori, since they represent the responses of about 10,000 households. They must be verified with future rounds of the survey as well as special studies. In addition to the FBS, the report uses other sources of information, including surveys of firms, farms, institutions and individuals, as well as administrative data. The study also uses international evidence to compare and contrast Uzbekistan's living standards and policy outcomes relative to other countries, including CEE (Central and Eastern European) countries and other CIS (Commonwealth of Independent States) countries. This report comprises two volumes. This first volume provides a summary of the findings and key policy recommendations of the report, preceded first by a brief overview of the key messages. The second volume contains the more detailed technical analysis on which this first volume is based.Publication Azerbaijan : Living Conditions Assessment Report(World Bank, 2010-03-01)Azerbaijan saw a substantial reduction in poverty during the 2000s, owing to significant economic growth and policies and programs that improved the distribution of wealth. Seizing the opportunity afforded by the oil boom, Azerbaijan initiated large public sector investment programs and supportive policies to increase wages and social protection transfers to the population, and institutional reforms aimed at modernizing the economy. These efforts translated into double-digit growth and an impressive reduction in poverty. The report underscores that the government's targeted social assistance program has been successful in channeling public transfers to the most needy. On the other hand, high dependence on oil revenues, compounded by the current global economic crisis, presents challenges to maintaining growth and could jeopardize the gains made in poverty reduction. Moreover, while Azerbaijan has made significant progress in building capacity to redistribute the benefits of growth, significant challenges remain in developing the human capital of the population to participate actively in future growth and to close the productivity gap with its comparators in the post crisis world.Publication Do High and Volatile Levels of Public Investment Suggest Misconduct? The Role of Institutional Quality(2011-07-01)This paper investigates the impact of institutional quality on public investment levels over the period 1984-2008. Moreover, it studies how the volatility of public investment and the quality of infrastructure are affected by institutional quality, and explores the contribution of other critical factors. The findings suggest an inverse relationship between public investment levels and institutional quality, supporting the idea that governments use public investment as a vehicle for rent-seeking or to compensate for the fall in private investment due to the poor business environment. In addition, aid flows, revenues and abundance of natural resources contribute positively to the level of capital spending. The author also finds that high volatility of public investment is associated with a lower quality of governance. An increase in revenues is associated with a reduction in the volatility of capital spending, suggesting that proper macroeconomic management smoothes the investment cycle. Finally, the paper provides some tentative evidence of a positive relationship between institutional quality and the quality of infrastructure.Publication Pro-Poor Growth: A Primer(World Bank, Washington, D.C., 2004-03)These days it seems that almost everyone in the development community is talking about "pro-poor growth." What exactly is it, and how can we measure it? Is ordinary economic growth always "pro-poor growth" or is that some special kind of growth? And if it is something special, what makes it happen? The author first reviews alternative approaches to defining and measuring "pro-poor growth." He then analyzes evidence on whether growth is pro-poor, what factors make it more pro-poor (including the role played by both initial inequality and changing inequality), and whether the factors that make the distribution of the gains from growth pro-poor come at a cost to growth. The author identifies some priorities for future research.
Users also downloaded
Showing related downloaded files
Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Lebanon Economic Monitor, Fall 2022(Washington, DC, 2022-11)The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.