Journal Issue: World Bank Economic Review, Volume 35, Issue 4
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Volume
35
Number
4
Issue Date
2021-11-01
Journal Title
Journal ISSN
1564-698X
Journal
World Bank Economic Review
1564-698X
Journal Volume
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Articles
Capital Allocation in Developing Countries
(Published by Oxford University Press on behalf of the World Bank, 2020-09-08) David , Joel M.; Venkateswaran, Venky; Cusolito, Ana Paula; Didier, Tatiana
This paper investigates the sources of capital misallocation across a group of developing and developed countries, using the empirical methodology developed in David and Venkateswaran (2019. “The Sources of Capital Misallocation.” American Economic Review 109 (7): 2531–67). The main findings are: (i) technological frictions—namely, adjustment costs and uncertainty—account for only a modest share of the observed misallocation; (ii) heterogeneity in firm-level technologies potentially explains between one-quarter and one-half, but (iii) dispersion in markups is much smaller; (iv) after accounting for these factors, on average, at least 50 percent of misallocation within each country remains unexplained, suggesting a large role for additional—potentially distortionary—factors. These factors are largely attributable to a component that is correlated with firm size/productivity and one that is essentially permanent to the firm. They exhibit strong negative correlations with income per capita and direct measures of the quality of the business environment from the World Bank Doing Business Report. The paper reports a broad set of moments describing firm-level investment dynamics and detailed parameter estimates on a country-by-country basis with an eye towards future work in this area.
Mobilizing P2P Diffusion for New Agricultural Practices
(Published by Oxford University Press on behalf of the World Bank, 2021-05-11) Fafchamps, Marcel; Islam, Asad; Malek, Abdul; Pakrashi, Debayan
This paper uses a randomized controlled experiment in which farmers trained on a new rice cultivation method teach two other farmers. The results show that the intervention increases yields and farm profits among treated farmers. Teacher-trainees are effective at spreading knowledge and inducing adoption relative to just training. Incentivizing teacher-trainees improves knowledge transmission but not adoption. Matching teacher-trainees with farmers who list them as role models does not improve knowledge transmission and may hurt adoption. Using mediation analysis, the study finds that the knowledge of the teacher-trainee is correlated with that of their students, consistent with knowledge transmission. The paper also finds that systems of rice intensification (SRI) knowledge predicts adoption of some SRI practices, and that adoption by teacher-trainees predicts adoption by their students, suggesting that students follow the example of their teacher. With cost-benefit estimates of social returns in excess of 100 percent, explicitly mobilizing peer-to-peer (P2P) transmission of knowledge seems a cost-effective way of inducing the adoption of new profitable agricultural practices.
Caloric Intake and Energy Expenditures in India
(Published by Oxford University Press on behalf of the World Bank, 2020-07-18) Eli, Shari; Li, Nicholas
Total energy expenditures for the Indian population between 1983 and 2012 are estimated to shed light on the debate concerning falling measured caloric intake during the period (A. Deaton and J. Drèze. 2009. “Food and Nutrition in India: Facts and Interpretations.” Economic and Political Weekly 44(7): 42–65). Anthropometric, time-use, and detailed employment surveys are used to estimate the separate components of total energy expenditure related to metabolism and physical activity levels. Despite a significant drop in adult physical activity levels, total energy expenditures are flat overall between 1983 and 2012. Rising metabolic requirements due to increases in weight dampened the effect of falling activity levels on total energy expenditure. In addition, the 10 percent decline in the population share of children in the period raised average total energy expenditures considerably as children have much lower metabolic requirements and activity levels than adults.
Secondary Schools and Teenage Childbearing
(Published by Oxford University Press on behalf of the World Bank, 2020-11-11) Foureaux Koppensteiner, Martin; Matheson, Jesse
This article investigates the effect that increasing secondary education opportunities have on teenage fertility in Brazil. Using a novel dataset to exploit variation from a 57 percent increase in secondary schools across 4,884 Brazilian municipalities between 1997 and 2009, the analysis shows an important role of secondary school availability on underage fertility. An increase of one school per 100 females reduces a cohort's teenage birthrate by between 0.250 and 0.563 births per 100, or a reduction of one birth for roughly every 50 to 100 students who enroll in secondary education. The results highlight the important role of access to education leading to spillovers in addition to improving educational attainment.
Headship and Poverty in Africa
(Published by Oxford University Press on behalf of the World Bank, 2021-01-29) Brown, Caitlin; van de Walle, Dominique
Standard welfare comparisons between female-headed households (FHHs) and male-headed households (MHHs) have largely ignored two confounding factors: marital status (affecting access to assets and markets) and heterogeneity in household demographics (with bearing on economies of scale in consumption). Both influence welfare and are correlated with sex of headship. As judged by the usual per capita welfare measures, FHHs have lower poverty rates than MHHs in Africa. However, even a modest adjustment for economies of scale in consumption changes the poverty comparisons, with FHHs faring significantly worse overall in East, Central, and Southern Africa. Marital status also matters: the households of female heads are poorer than MHHs except when the female head is married. Taking the head's marital status and the household's demographics into account is critical to the association between female headship and welfare outcomes.
Assessing Opportunities for Solar Lanterns to Improve Educational Outcomes in Off-Grid Rural Areas
(Published by Oxford University Press on behalf of the World Bank, 2021-02-26) Stojanovski, Ognen; Thurber, Mark C.; Wolak, Frank A.; Muwowo, George; Harrison, Kat
Solar lanterns are promoted across rural Sub-Saharan Africa as a way to improve educational outcomes. A randomized controlled trial in Zimba District, Zambia, evaluates whether solar lanterns help children study and improve academic performance. The research design accounts for potential income effects from receiving a lantern and also “blinds” participants to the study's purpose. There is no relationship detected between receipt of a solar lantern and improved performance on key examinations. Impacts on self-reported study habits are also not observed. A cost-effectiveness analysis suggests that solar lanterns are not an efficient way to improve educational outcomes in developing countries relative to other available options. Two phenomena, both of which are likely observed in other developing regions, may explain these results. First, flashlights have become the dominant lighting source in rural Zambia, so solar lanterns may have only limited appeal for prospective users who no longer rely on traditional lighting options like kerosene lamps. Second, improved energy access – whether through solar lanterns or other technologies – appears to be a relatively unimportant educational input in settings like Zimba.
Do Community Water Sources Provide Safe Drinking Water?
(Published by Oxford University Press on behalf of the World Bank, 2021-06-04) Cocciolo, Serena; Ghisolfi, Selene; Habib, Ahasan Md.; Rashid, S.M.A.; Tompsett, Anna
Health, and in turn income and welfare, depend on access to safe drinking water. Although the majority of rural households worldwide obtain drinking water from community water sources, there is limited evidence about how effectively these sources provide safe drinking water. This study combines a randomized experiment with water quality testing to evaluate the impact of a program that provides community deep tubewells in rural Bangladesh. The program reduces exposure to arsenic, a major natural pollutant, but not fecal contamination. Households may use fewer sources with fecal contamination, but any such effects are offset by recontamination through transport and possibly storage. The results suggest that while community deep-tubewell construction programs may reduce exposure to arsenic in Bangladesh, reducing exposure to fecal contamination may require interventions that go beyond community sources.
Effects of a Multi-Faceted Education Program on Enrollment, Learning and Gender Equity
(Published by Oxford University Press on behalf of the World Bank, 2021-02-18) Delavallade, Clara; Griffith, Alan; Thornton, Rebecca
The Sustainable Development Goals set a triple educational objective: improve access to, quality of, and gender equity in education. This paper documents the effectiveness of a multifaceted educational program, pursuing these three objectives simultaneously. Using an experiment in 229 schools in rural Rajasthan (India), the study measures the effects of the program on students’ school participation and academic performance over two years, while also examining heterogeneous impacts across gender and initial learning ability. It finds that the program increased student enrollment, with the largest effects among girls (7.2 percent in the first year, 12.8 percent in the second). There were large learning gains of 0.329 standard deviations (SDs) in the first year and 0.206 SDs at the end of the second year. The learning component of the intervention targeted both boys and girls – boys and girls benefited equally from the program in terms of test score gains.
Poverty Alleviation and Interhousehold Transfers
(Published by Oxford University Press on behalf of the World Bank, 2020-11-23) Gulesci, Selim
Poor households often rely on transfers from their social networks for consumption smoothing, yet there is limited evidence on how antipoverty programs affect informal transfers. This paper exploits the randomized rollout of BRAC’s ultra-poor graduation program in Bangladesh and panel data covering over 21,000 households over seven years to study the program’s effects on interhousehold transfers. The program crowds out informal transfers received by the targeted households, but this is driven mainly by outside-village transfers. Treated ultra-poor households become more likely to both give and receive transfers to/from wealthier households within their village; and less likely to receive transfers from their employers. As a result, the reciprocity of their within-village transfers increases. The findings imply that, within rural communities, there is positive assortative matching by socio-economic status. A reduction in poverty enables households to engage more in reciprocal transfer arrangements and lowers the interlinkage of their labor with informal insurance.
Efficiency, Legitimacy, and Impacts of Targeting Methods
(Published by Oxford University Press on behalf of the World Bank, 2020-09-08) Premand, Patrick
The methods to select safety net beneficiaries are the subject of frequent debates. Targeting assessments usually focus on efficiency by documenting the pre-program profile of selected beneficiaries. This study provides a more comprehensive analysis of targeting performance through an experiment embedded in a national cash transfer program in Niger. Eligible villages were randomly assigned to have beneficiary households selected by community-based targeting (CBT), proxy-means testing (PMT), or a formula to identify the food-insecure (FCS). The study considers targeting legitimacy and the impact of targeting choice on program effectiveness based on data collected after program roll-out. PMT is more efficient in identifying households with lower consumption per capita. Nonbeneficiaries find formula-based methods (PMT and FCS) more legitimate than CBT. Manipulation and information imperfections affect CBT, which can explain why it is not the most legitimate. Program impacts on some welfare dimensions are larger among households selected by PMT than CBT.
Better Policies from Policy-Selective Aid?
(Published by Oxford University Press on behalf of the World Bank, 2020-06-26) Annen, Kurt; Knack, Stephen
The increased policy selectivity of aid allocations observed in recent years provides aid-recipient countries with an incentive to improve policies. The paper estimates that a change in the World Bank’s Country Policy and Institutional Assessment policy index from 1.5 to 2 for a recipient is associated with an increase of about 13 percent in aid. The analysis also finds a modest but statistically significant positive relationship between the global level of policy-selective aid and policy, suggesting that policy-selective aid improves policies in aid-recipient countries. This effect is properly identified, as the level of policy-selective aid in the global aid budget is exogenous to a recipient country’s policy choice. Furthermore, the paper provides a game-theoretic model that establishes the link between the policy selectivity of the global budget and better recipient-country policies in equilibrium.
Gender Bias in Agricultural Child Labor
(Published by Oxford University Press on behalf of the World Bank, 2020-10-02) Galdo, Jose; Dammert, Ana C.; Abebaw, Degnet
Agricultural labor accounts for the largest share of child labor worldwide. Yet, measurement of farm labor statistics is challenging due to its inherent seasonality, variable and irregular work schedules, and the varying saliencies of individuals’ work activities. The problem is further complicated by the presence of widespread gender stratification of work and social lives. This study reports the findings of three randomized survey design interventions over the agricultural coffee calendar in rural Ethiopia to address whether response by proxy rather than by self-report has effects on the measurement of child labor statistics within and across seasons. While the estimates do not report differences for boys across all seasons, the analysis shows sizable self/proxy discrepancies in child labor statistics for girls. Overall, the results highlight concerns on the use of survey proxy respondents in agricultural labor, particularly for girls. The main findings have important implications for policymakers about data collection in rural areas in developing countries.
Development Research at High Geographic Resolution
(Published by Oxford University Press on behalf of the World Bank, 2021-03-18) Asher, Sam; Lunt, Tobias; Matsuura, Ryu; Novosad, Paul
The SHRUG is an open data platform describing multidimensional socioeconomic development across 600,000 villages and towns in India. This paper presents three illustrative analyses only possible with high-resolution data. First, it confirms that nighttime lights are highly significant proxies for population, employment, per capita consumption, and electrification at very local levels. However, elasticities between night-lights and these variables are far lower in time series than in cross section, and vary widely across context and level of aggregation. Next, this study shows that the distribution of manufacturing employment across villages follows a power law: the majority of rural Indians have considerably less access to manufacturing employment than is suggested by aggregate data. Third, a poverty mapping exercise explores local heterogeneity in living standards and estimates the potential targeting improvement from allocating programs at the village—rather than at the district—level. The SHRUG can serve as a model for open high-resolution data in developing countries.