Publication: Data Transparency and Growth in Developing Economies during and after the Global Financial Crisis
Loading...
Date
2024-07-01
ISSN
Published
2024-07-01
Author(s)
Editor(s)
Abstract
The study explores the effects of data transparency on economic growth for developing economies over a unique time period — at the onset of the 2007–2009 global financial crisis and thereafter. Data transparency is defined as the timely production of credible statistics as measured by the Statistical Capacity Indicator. The paper finds that data transparency has a positive effect on real gross domestic product per capita during a period of considerable uncertainty. The estimates indicate an elasticity of the magnitude of 0.03 percent per year, which is much larger than the elasticity of trade openness and schooling in the estimation sample. The empirics employ a variety of econometric estimators, including dynamic panel and cross-sectional instrumental variables estimators, with the latter approach yielding a higher estimated elasticity. The findings are robust to the inclusion of several factors in addition to political institutions and exogenous commodity-price and external debt-financing shocks.
Link to Data Set
Citation
“Islam, Asif Mohammed; Lederman, Daniel. 2024. Data Transparency and Growth in Developing Economies during and after the Global Financial Crisis. Policy Research Working Paper; 9493. © World Bank. http://hdl.handle.net/10986/41802 License: CC BY 3.0 IGO.”
Associated URLs
Associated content
Other publications in this report series
Publication Geopolitics and the World Trading System(Washington, DC: World Bank, 2024-12-23)Until the beginning of this century, the GATT/WTO system worked. Economic research provided a compelling explanation. It showed that if governments maximize the well-being of their own countries broadly defined, GATT/WTO principles would facilitate mutually beneficial cooperation over their trade policy choices. Now heightened geopolitical rivalry seems to have undermined the WTO. A simple transposition of the previous rationalization suggests that geopolitics and trade cooperation are not compatible. The paper shows that this is only true if rivalry eclipses any consideration of own-country well-being. In all other circumstances, there are gains from trade cooperation even with geopolitics. Furthermore, the WTO’s relevance is in question only if it adheres too rigidly to its existing rules and norms. Through measured adaptation to the geopolitical imperative, the WTO can continue to thrive as a forum for multilateral trade cooperation in the age of geopolitics.Publication Innovative Financial Instruments and Their Role in the Development of Jurisdictional REDD+(Washington, DC: World Bank, 2025-05-08)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.Publication Disentangling the Key Economic Channels through Which Infrastructure Affects Jobs(Washington, DC: World Bank, 2025-04-03)This paper takes stock of the literature on infrastructure and jobs published since the early 2000s, using a conceptual framework to identify the key channels through which different types of infrastructure impact jobs. Where relevant, it highlights the different approaches and findings in the cases of energy, digital, and transport infrastructure. Overall, the literature review provides strong evidence of infrastructure’s positive impact on employment, particularly for women. In the case of electricity, this impact arises from freeing time that would otherwise be spent on household tasks. Similarly, digital infrastructure, particularly mobile phone coverage, has demonstrated positive labor market effects, often driven by private sector investments rather than large public expenditures, which are typically required for other large-scale infrastructure projects. The evidence on structural transformation is also positive, with some notable exceptions, such as studies that find no significant impact on structural transformation in rural India in the cases of electricity and roads. Even with better market connections, remote areas may continue to lack economic opportunities, due to the absence of agglomeration economies and complementary inputs such as human capital. Accordingly, reducing transport costs alone may not be sufficient to drive economic transformation in rural areas. The spatial dimension of transformation is particularly relevant for transport, both internationally—by enhancing trade integration—and within countries, where economic development tends to drive firms and jobs toward urban centers, benefitting from economies scale and network effects. Turning to organizational transformation, evidence on skill bias in developing countries is more mixed than in developed countries and may vary considerably by context. Further research, especially on the possible reasons explaining the differences between developed and developing economies, is needed.Publication Economic Consequences of Trade and Global Value Chain Integration(World Bank, Washington, DC, 2025-04-04)This paper introduces a new approach to measuring Global Value Chains (GVC), crucial for informed policy-making. It features a tripartite classification (backward, forward, and two-sided) covering trade and production data. The findings indicate that traditional trade-based GVC metrics significantly underestimate global GVC activity, especially in sectors like services and upstream manufacturing, and overstate risks in early trade liberalization stages. Additionally, conventional backward-forward classifications over-estimate backward linkages. The paper further applies these measures empirically to assess how GVC participation mediates the impact of demand shocks on domestic output, highlighting both the exposure and stabilizing potential of GVC integration. These new measures are comprehensively available on the World Bank’s WITS Platform, providing a key resource for GVC analysis.Publication Labor Market Scarring in a Developing Economy(Washington, DC: World Bank, 2025-05-08)This paper estimates the magnitude of labor market scarring in a developing economy, a setting that has been understudied by the labor scarring literature dominated by advanced economies. The paper assesses the contributions of “stigma” versus “lost human capital,” which cause earnings losses among displaced workers relative to non-displaced workers. The findings indicate that job separations caused by plant closings result in sizable and long-lasting reductions in earnings, with an average decline of 7.5 percent in hourly wages over a nine-year period. The estimate for one year after a plant closing is larger, at a decline of 10.8 percent. In a common sample, after controlling for unobserved, time-invariant individual characteristics, the impact of a plant closing declines from 11.9 to 8.2 percent. These results imply that stigma in the labor market due to imperfect information about workers (captured by unobservable worker characteristics) accounts for 30.8 percent of the average earnings losses, whereas lost employer-specific human capital explains the remaining 69.2 percent. The paper explores the effects of job separations due to plant closings on other labor market outcomes, including hours worked and informality, and provides estimates across genders and levels of education.
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Data Transparency and Growth in Developing Economies during and after the Global Financial Crisis(World Bank, Washington, DC, 2020-12)The study explores the effects of data transparency on economic growth for developing economies over a unique time period—at the onset of the 2007–2009 global financial crisis and thereafter. Data transparency is defined as the timely production of credible statistics as measured by the Statistical Capacity Indicator. The paper finds that data transparency has a positive effect on real gross domestic product per capita during a period of considerable uncertainty. The estimates indicate an elasticity of the magnitude of 0.03 percent per year, which is much larger than the elasticity of trade openness and schooling in the estimation sample. The empirics employ a variety of econometric estimators, including dynamic panel and cross-sectional instrumental variables estimators, with the latter approach yielding a higher estimated elasticity. The findings are robust to the inclusion of several factors in addition to political institutions and exogenous commodity-price and external debt-financing shocks.Publication Data Transparency and GDP Growth Forecast Errors(World Bank, Washington, DC, 2023-04-19)This paper examines the role of a country’s data transparency in explaining gross domestic product growth forecast errors. It reports four sets of results that have not been previously reported in the existing literature. First, forecast errors—the difference between forecasted and realized gross domestic product growth—are large. Globally, between 2010 and 2020, the average same-year forecast error was 1.3 percentage points for the World Bank’s forecasts published in January of each year, and 1.5 percentage points for the International Monetary Fund’s January forecasts. Second, the Middle East and North Africa region has the largest forecast errors compared to other regions. Third, data capacity and transparency significantly explain forecast errors. On average, an improvement in a country’s Statistical Capacity Index, a measure of data capacity and transparency, is associated with a decline in absolute forecast errors. A one standard deviation increase in the log of the Statistical Capacity Index is associated with a decline in absolute forecast errors by 0.44 percentage point for World Bank forecasts and 0.49 percentage point for International Monetary Fund forecasts. The results are robust to a battery of control variables and robustness checks. Fourth, the role of the overall data ecosystem, not just those elements related to gross domestic product growth forecasting, is important for the accuracy of gross domestic product growth forecasts. Finally, gross domestic product growth forecasts from the World Bank are more accurate and less optimistic than those from the International Monetary Fund and the private sector.Publication Before and After the Global Financial Crisis(World Bank, Washington, DC, 2016-01)In spite of the United States' recovery, most Caribbean nations are still struggling in the aftermath of the 2007–08 global financial crisis. This paper examines this slow growth recovery through the analysis of how the Caribbean's growth relates to that of key drivers of the global economy. The paper explores whether the region's links with some important global partners could be behind the sluggish post-crisis recovery. The paper analyzes the economic growth of Caribbean countries as a function of the growth in key global partners and of country-specific characteristics. The findings attribute an important role to the European Union and the United States in the outcomes for the region, especially in services-oriented economies. The findings show that when these nations grow, or when they are in an expansionary cycle, the Caribbean's growth responds positively but less than proportionally. Consequently, the slow recovery in the Caribbean region is attributed to the persistent sluggishness in the European Union and the fact that the U.S. recovery is still nascent and not quite robust.Publication Moldova - After the Global Crisis : Promoting Competitiveness and Shared Growth(World Bank, 2011-06-14)This report argues that in the future Moldova will need to develop a second engine of growth from exports of goods and services. We argue that Moldova needs to resurrect agro-based exports, to raise their value by exporting to higher value markets, and develop service exports in order to provide job opportunities for underemployed tertiary graduates. To be successful in doing so, the government will need to implement deep fiscal and structural reforms to break the cycle, while taking advantage of productivity gains. Much needs fixing, and Moldova's public sector does not have the capacity to fix it all. Moldova's leaders need to reach consensus on a comprehensive and sequenced growth and poverty reduction strategy. This report sketches out what such a strategy should contain. The author suggests that geography and the Government's policy stance fundamentally shape Moldova's economic growth potential and the path and priorities that a growth strategy should follow. Government needs to accelerate reforms so that the country can emerge from the global crisis-induced recession with faster and less vulnerable growth. Business as usual will not suffice. The world's capital markets have become tighter, foreign investors more demanding, and export markets more competitive. In April 2009, Moldova's youth indicated that that they can no longer stand aside and watch Moldova fall behind, they have called for a politics of aspiration, and they will demand economic policies consistent with these aspirations.Publication What Drives Short-Run Labor Market Volatility in Offshoring Industries? Evidence from Northern Mexico during 2007–2009(World Bank, Washington, D.C., 2012-11)Recent research shows that employment in Mexico's offshoring maquiladora industries is twice as volatile as employment in their U.S. industry counterparts. The analyses in this paper use data from Mexico's social security records and U.S. customs between the first quarter of 2007 and the last quarter of 2009 to identify four channels through which economic shocks emanating from the United States were amplified when transmitted into Mexico's offshoring labor market of Northern Mexico. First, employment and imports within industries are complements, which is consistent with imports being used as inputs for the assembly of exportable goods within industries. That is, when imports fell during the crisis, employment in Mexico was reduced rather than protected by the fall of imports. Second, contrary to other studies, employment is more responsive than wages to trade shocks. Third, fluctuations in Mexico-U.S. trade were associated with changes in the composition of employment, with the skill level of workers rising during downturns and falling during upswings. This implies that the correlation between average wages and trade shocks is partly driven by labor-force compositional effects, which may obscure individual-worker wage flexibility. Fourth, trade shocks affecting related industries (industries linked by employment flows affect employment at least as much as own-industry trade shocks, thus amplifying employment volatility through the propagation of shocks across industries within Northern Mexico. Furthermore, the data suggest that the observed fluctuations in U.S.-Mexico trade at the onset of the Great Recession in the U.S. were not associated with pre-existing employment trends in Northern Mexico.
Users also downloaded
Showing related downloaded files
Publication Media and Messages for Nutrition and Health(World Bank, Washington, DC, 2020-06)The Lao People’s Democratic Republic (Lao PDR) has experienced rapid and significant economic growth over the past decade. However, poor nutritional outcomes remain a concern. Rates of childhood undernutrition are particularly high in remote, rural, and upland areas. Media have the potential to play an important role in shaping health and nutrition–related behaviors and practices as well as in promoting sociocultural and economic development that might contribute to improved nutritional outcomes. This report presents the results of a media audit (MA) that was conducted to inform the development and production of mass media advocacy and communication strategies and materials with a focus on maternal and child health and nutrition that would reach the most people from the poorest communities in northern Lao PDR. Making more people aware of useful information, essential services and products and influencing them to use these effectively is the ultimate goal of mass media campaigns, and the MA measures the potential effectiveness of media efforts to reach this goal. The effectiveness of communication channels to deliver health and nutrition messages to target beneficiaries to ensure maximum reach and uptake can be viewed in terms of preferences, satisfaction, and trust. Overall, the four most accessed media channels for receiving information among communities in the study areas were village announcements, mobile phones, television, and out-of-home (OOH) media. Of the accessed media channels, the top three most preferred channels were village announcements (40 percent), television (26 percent), and mobile phones (19 percent). In terms of trust, village announcements were the most trusted source of information (64 percent), followed by mobile phones (14 percent) and television (11 percent). Hence of all the media channels, village announcements are the most preferred, have the most satisfied users, and are the most trusted source of information in study communities from four provinces in Lao PDR with some of the highest burden of childhood undernutrition.Publication Economic Recovery(World Bank, Washington, DC, 2021-04-06)World Bank Group President David Malpass spoke about the world facing major challenges, including COVID, climate change, rising poverty and inequality and growing fragility and violence in many countries. He highlighted vaccines, working closely with Gavi, WHO, and UNICEF, the World Bank has conducted over one hundred capacity assessments, many even more before vaccines were available. The World Bank Group worked to achieve a debt service suspension initiative and increased transparency in debt contracts at developing countries. The World Bank Group is finalizing a new climate change action plan, which includes a big step up in financing, building on their record climate financing over the past two years. He noted big challenges to bring all together to achieve GRID: green, resilient, and inclusive development. Janet Yellen, U.S. Secretary of the Treasury, mentioned focusing on vulnerable people during the pandemic. Kristalina Georgieva, Managing Director of the International Monetary Fund, focused on giving everyone a fair shot during a sustainable recovery. All three commented on the importance of tackling climate change.Publication Remarks at the United Nations Biodiversity Conference(World Bank, Washington, DC, 2021-10-12)World Bank Group President David Malpass discussed biodiversity and climate change being closely interlinked, with terrestrial and marine ecosystems serving as critically important carbon sinks. At the same time climate change acts as a direct driver of biodiversity and ecosystem services loss. The World Bank has financed biodiversity conservation around the world, including over 116 million hectares of Marine and Coastal Protected Areas, 10 million hectares of Terrestrial Protected Areas, and over 300 protected habitats, biological buffer zones and reserves. The COVID pandemic, biodiversity loss, climate change are all reminders of how connected we are. The recovery from this pandemic is an opportunity to put in place more effective policies, institutions, and resources to address biodiversity loss.Publication Crypto-Assets Activity around the World(Washington, DC: World Bank, 2022-03-08)On-chain crypto-assets transaction volumes have grown rapidly, particularly during the COVID-19 pandemic. Crypto-assets activity appears to be a global phenomenon, although it still remains modest relative to gross domestic product for most countries. Panel regressions across more than 130 countries show that the variation in countries’ monthly crypto volumes is mostly driven by globally relevant factors such as real U.S. longer-term inflation expectations, U.S. real Treasury yields, and gold and crypto-asset prices, rather than recent country-level macroeconomic developments. Cross-sectional regressions offer tentative evidence that crypto activity is higher in countries with higher information and communications technology adoption and higher reliance on remittances. Taken together, the findings shed new light on the drivers behind crypto activity and offer support to the notions that crypto-assets are perceived as a risk asset, a potential macro hedge, and a potential tool to support cross-border transactions. However, the results come with caveats: a significant portion of the sample period includes extraordinarily loose global financial conditions; the crypto volume data have a short history, rely on important limiting assumptions, and do not represent all crypto activity; and crypto-assets represent a fast-evolving, increasingly diverse asset class and industry.Publication What Is a Civil War? A Critical Review of Its Definition and (Econometric) Consequences(Published by Oxford University Press on behalf of the World Bank, 2013-08-01)We argue that the academic literature, both qualitative and quantitative, has mislabeled most episodes of large-scale violence in Africa as civil wars; these episodes better fit our concept of regional war complexes. Our paper seeks to highlight the fundamental flaws in the conception of civil war in the econometric literature and their implications for econometric specification and estimation, problems that this literature is inherently incapable of rectifying. We advocate the comparative study of regional war complexes in Africa based on historical narratives.