General Economy, Macroeconomics, and Growth Study

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  • Publication
    Hiking Market Research and Opportunities in Cabo Verde
    (Washington, DC: World Bank, 2023-08-29) World Bank
    The World Bank, in coordination with the Government of Cabo Verde, has partnered with the Adventure Travel Trade Association (ATTA) to develop a research study about the current status of the adventure tourism sector in Cabo Verde, particularly the hiking segment. The purpose of this research is to understand the potential of Cabo Verde as an adventure travel destination and the island of Santo Antão as a world-class hiking hotspot. The methodology followed a four-pronged approach to incorporate the vision of travelers visiting the country, the trade industry and international tour operators, a technical expert analysis, and secondary research of the hiking sector globally. The analysis provides a roadmap to advise the country's stakeholders in taking the relevant decisions to accelerate the path to achieve this objective.
  • Publication
    The Future of Pacific Tourism
    (Washington DC, 2023-04-25) World Bank
    Over the two decades preceding the Coronavirus disease 2019 (COVID-19) pandemic, tourism became one of the most important drivers of economic growth across the Pacific. The COVID-19 crisis had a devastating impact on tourism activity in the Pacific, with severe and potentially durable economic and social consequences. This study takes a fresh look at tourism’s role for development in the Pacific, its future after COVID-19, and the scope to foster a greener, more resilient, competitive, and inclusive sector. It complements and builds on the 2016 Pacific possible report, which assessed specific opportunities to increase arrivals in a context of rapid tourism growth, by considering the changes to the industry’s model that could maximize tourism’s economic, social, and environmental benefits for Pacific Islanders. It does this by: (i) taking stock of the evidence on tourism’s historical contribution to development in the Pacific Island Country (PICs) and of the COVID-19 crisis’ impacts, (ii) analyzing current obstacles and potential opportunities for a more competitive and sustainable Pacific tourism, focusing on selected issues key to target higher value markets, and (iii) recommending policy priorities and investment needs to (re)position the Pacific tourism model for the future and broaden its benefits, focusing on competitiveness, environmental sustainability, resilience and inclusiveness. Given the scarcity of data on Pacific tourism and frequent discrepancies across sources, one of the study’s main contributions is to provide a detailed quantitative assessment of the sector and its economic impacts, for instance on jobs, poverty, and public revenue, based on an extensive data collection, cross-checking and integration exercise.
  • Publication
    Expecting the Unexpected: Tools and Policy Considerations to Support the Recovery and Resilience of the Tourism Sector
    (Washington, DC, 2022-06) World Bank
    Tourism has been, and continues to be, one of the most affected sectors by the pandemic, resulting in negative socio-economic consequences for host communities in destinations as well as for underlying endowments that rely on tourists’ expenditure for maintenance and management. The aim of this report is to provide insights regarding the types of interventions governments have already implemented and policy considerations for supporting the recovery and resilience of the tourism sector going forward, particularly in light of structural demand and supply-side transformations precipitated or accelerated by Coronavirus disease 2019 (COVID-19). The report studies the challenges for recovery faced by governments and the sector from the context of preexisting market and government failures that have been exacerbated by the crisis, as well as those emerging from the pandemic. The report includes several key findings and recommendations.
  • Publication
    The RISE Framework
    (World Bank, Washington, DC, 2022-01-17) Balseca, Esteban; Cuesta, Jose Antonio; Damania, Richard; Feng, Shenghui; Moon, Jisung; Rentschler, Jun; Russ, Jason; Triyana, Margaret; Balseca, Esteban
    The world has witnessed unparalleled economic progress in the last three decades. But success is not preordained, and several headwinds threaten this hard fought progress. Inequality is leaving many people and subgroups behind and excluding them from enjoying the benefits of this great economic expansion. More recently, the world has awakened to the reality of a new type of risk. The coronavirus disease 2019 (COVID-19) struck at a time when the world was healthier and wealthier than ever before. There is little disagreement over the need to enable a recovery that is fairer, safer, and more sustainable. This report describes how these ambitious objectives can be achieved by providing evidence based tools and information to guide countries to spend better and improve policies. It is in this context that this document presents policy guidance to identify and diagnose key development challenges and develop solutions to help countries build better.
  • Publication
    Unleashing Central America’s Growth Potential: Guatemala
    (World Bank, Washington, DC, 2021-10-01) Ulku, Hulya; Zaourak, Gabriel
    The objective of this study is to investigate the drivers and constraints of growth and productivity in Guatemala and explore areas with high growth potential. Drawing on the historical growth experience of Guatemala and employing a range of analytical tools, this country analysis aims to provide an in-depth study of the drivers and constraints of the country’s economic growth. The report first takes stock of the historical growth and macro performance of the country, before moving to a growth accounting exercise to understand the past drivers of the country’s growth. In the same vein, the subsequent section analyzes aggregate trends in productivity, the engine of long-term growth, and its relation to the process of structural transformation. The study then uses a cross-country benchmarking and panel data regression analysis based on the growth diagnostic developed by Hausmann et al. (2005) to identify the binding constraints to growth. Finally, the analysis presents the links between growth, diversification, and exports. This analysis relies on a wide range of analytical tools, which are applied to each of the six countries in the study to enable cross-country comparisons. Several quantitative methods are employed to provide an objective assessment of the drivers and constraints of growth in Guatemala, including the long-term growth model (LTGM), the computable general equilibrium model (CGE), growth diagnostics, and product space analyses. This same framework, analytical tools, and data are used for each Central American country to conduct a parallel analysis that enables meaningful cross-country comparisons. Therefore, given the wide breadth of the study, in terms of the methodologies used, subjects analyzed, and countries covered, it does not aim to analyze in depth each driver and constraint of growth and provide granular policy recommendations. The core objective of this study is to inform the policy makers and other interested parties about the country’s strengths and weaknesses related to its growth, and to establish the analytical basis for subsequent investigations of specific areas.
  • Publication
    Unleashing Central America’s Growth Potential: Panama
    (World Bank, Washington, DC, 2021-08-06) Ulku, Hulya; Zaourak, Gabriel
    Panama’s growth model is at crossroads and the country must be prepared for the new growth model. The objective of this study is to investigate the drivers and constraints of growth and productivity in Panama and explore areas with high growth potential. The value added of the study is to provide an in-depth analysis of the drivers and constraints of Panama’s growth using a wide range of analytical tools. The analysis employs several quantitative methods to provide an objective assessment of the drivers and constraints of growth in Panama, including the long-term growth model (LTGM), computable general equilibrium model (CGE), growth diagnostics and product space analyses. The novelty of this study is to employ the same framework, analytical tools, and data to conduct a parallel analysis for each Central American country to allow for a meaningful cross-country comparison. Therefore, given the wide breadth of the study, in terms of the methodologies used, themes analyzed, and countries covered, it does not envisage to deep dive into each driver and constraint of growth and provide granular policy recommendations. The core objective of this study is to inform the policy makers and other interested parties about the country’s strengths and weaknesses for its growth, and to establish the analytical basis for a subsequent investigation of specific areas.
  • Publication
    Unleashing Central America’s Growth Potential: Nicaragua
    (World Bank, Washington, DC, 2021-07-30) Ulku, Hulya; Zaourak, Gabriel
    As the smallest economy in Central America, Nicaragua has undergone a structural transformation that has enabled the country to grow at a high pace since the mid-1990s. The objective of this study is to investigate the drivers and constraints of growth and productivity in Nicaragua and explore areas with high potential. The value added of this study is to provide an in-depth analysis of the drivers and constraints of Nicaragua’s growth using a wide range of analytical tools. Using these tools, the report finds that boosting growth and reducing poverty requires raising productivity growth and facilitating the entry of women to the labor market. According to the growth diagnostics methodology, this report finds that the areas preventing faster growth are: (i) corruption, (ii) financial development, (iii) governance, (iv) lack of innovation, and (v) property rights. Addressing the identified growth constraints can help the country in the path towards diversification, which will increase the resilience to external shocks, create job opportunities, generate sustainable growth, and reduce dependence on remittances. This report has identified several key areas where policy reforms can help boost productivity and growth over the medium to long term. They include: implementing measures to boost female labor force participation; increasing the access of small firms to finance and addressing collateral laws, credit information coverage, and competition; coordinate with the private sector to identify missing public goods and to design mechanisms to provide them; creation of an enabling environment for innovation; strengthening public institutions through reducing bureaucracy, promoting transparency and rule of law, and strengthening the capacity of the public sector; improving the property titling regime and the land administration system; and strengthening the institutional framework, including tackling corruption.
  • Publication
    Unleashing Central America’s Growth Potential: Cross-Cutting Themes - Strengthening Productive Links and Managing Volatility
    (World Bank, Washington, DC, 2021-07-30) Ulku, Hulya; Zaourak, Gabriel; Ulku, Hulya; Zaourak, Gabriel
    Central America comprises a diverse set of countries, including two high-middle-income countries (Costa Rica and Panama), two of the poorest countries in Latin America and the Caribbean (Honduras and Nicaragua), and two middle-income economies (Guatemala and El Salvador). Low productivity and weak institutions are behind the modest economic growth in Central America in recent years. Both the common features and striking differences among Central American countries provide a fertile ground for exploiting complementarities. Common features include: (i) strong economic links to the United States; (ii) high labor mobility across countries and a high level of informality; (iii) the relatively poor quality of infrastructure, including border crossings; (iv) a concentration of poverty in rural areas, with a low provision of public services, that affect particularly vulnerable groups such as indigenous and Afro-descendent populations; and (v) a high exposure to natural disasters and economic and financial volatility. The economies of each of the six countries in the sub-region were heavily affected by Coronavirus disease 2019 (COVID-19). In order to restore economic activity in the short run and increase potential output over the long run, Central America should launch coordinated policy action in five areas: (i) global value chain (GVCs); (ii) trade integration; (iii) formalization; (iv) management of volatility; and (v) remittances (for the northern Central American countries). The findings and recommendations emerging from the analyses are presented in the report.
  • Publication
    Unleashing Central America’s Growth Potential: Honduras
    (World Bank, Washington, DC, 2021-07-30) Ulku, Hulya; Zaourak, Gabriel
    Despite advances in the growth reform agenda in the last decade, Honduras remains the second-poorest country in Central America, with one of the lowest growth rates in income per capita. The objective of this study is to investigate the drivers and constraints of growth and productivity in Honduras and explore areas with high growth potential. The value added of this study is to provide an in-depth analysis of the drivers and constraints of Honduras’s growth using a wide range of analytical tools. According to the growth diagnostics methodology, this report finds that the areas preventing faster growth are: (i) corruption; (ii) security; (iii) property rights; (iv) innovative activities; and (v) access of small firms to finance. Tackling the identified growth constraints can help Honduras in the transition from an exporter of low-complexity products to an economy with higher share complex products. This report has identified several key areas in which Honduras lags its comparator and aspirational countries, but which can help boost productivity and growth over the medium to long term. They include: improving transparency, accountability, and rule of law; reducing crime and violence; creating an enabling environment for innovation; improving the rule of law to better protect property rights and reduce expropriation risk; increasing the access of finance to small firms; and coordinating with the private sector to identify missing public goods and design mechanism to provide them.
  • Publication
    Unleashing Central America’s Growth Potential: El Salvador
    (World Bank, Washington, DC, 2021-07-16) Ulku, Hulya; Zaourak, Gabriel
    Although El Salvador’s modest pace of growth has reduced poverty and inequality in recent years, it has not been sufficient to move the country toward the income levels of wealthier economies. The objective of this study is to investigate the drivers and constraints of growth and productivity in El Salvador from 1990 to 2017 and explore areas with high growth potential. The value added of this study is to provide an in-depth analysis of the drivers and constraints of El Salvador’s growth using a wide range of analytical tools. Historically, El Salvador’s growth is driven by factor accumulation, both labor and capital, and not overall productivity. The binding constraints for growth are identified as: (i) security, (ii) innovation, (iii) human capital, (iv) property rights, (v) limited access to finance for small firms, and (vi) corruption. Higher productivity and output growth can be achieved through quality upgrading and an export diversification strategy focused on metal, plastic, and chemical products. The country’s strategic location with access to many markets, a growing labor force, and a solid industrial base can support the expansion of the tradable sector to achieve higher and more inclusive growth. Development goals can be achieved with a long-term commitment to structural reform and investment.