Policy Research Working Papers
8,218 items available
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The Policy Research Working Paper Series disseminates findings of work in progress to encourage the exchange of ideas about development issues. Titles are submitted from units around the World Bank for internal review and inclusion in this series which is managed by the Development Economics Research Support unit. These are pre-print drafts prior to review and publication in formal journals.
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Publication
Reassessing the Impacts of Exports on Local Labor Market Outcomes: A Supply Chain Perspective — Evidence from the Arab Republic of Egypt
(World Bank, Washington, DC, 2023-11-28)This paper examines the overall impact of exports while accounting for supply chain linkages on local labor market outcomes in the Arab Republic of Egypt between 2007 and 2018. The paper assesses the effects not only on directly exporting industries, but also on industries indirectly affected by rising export demand. Furthermore, it examines potential impacts on specific groups of workers, such as high-skilled individuals and female workers. The results show that trade does not lead to the same connection with domestic labor markets in Egypt as observed in other countries, as highlighted in the existing literature explaining the adverse effects of imports on developing countries. Despite being more open to trade, trade-intensive industries in Egypt have not experienced a significant increase in their share of employment within the overall workforce. To harness the benefits of trade, Egypt must undertake deeper reforms aimed at significantly expanding the export sector. -
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Trade and Infrastructure Integration in Africa
(World Bank, Washington, DC, 2023-11-28)Economic integration of the African continent rests on two pillars: the ratification of an ambitious trade agreement and massive investment in transportation infrastructure. Leveraging a newly created city-level database on African exporters’ transport times, transport route optimization and general equilibrium modeling of international trade, the paper quantifies the impact of greater trade and transport integration in Africa. A pan-African agreement, such as the African Continental Free Trade Area, would increase African countries’ exports by an average of 3.4 percent and increase gross domestic product by 0.6 percent. Complementing trade integration by reducing transportation time on roads, ports and border posts would increase exports by 11.5 percent and increase gross domestic product by 2 percent. Major transport investments are necessary to reap the full benefits of the African Continental Free Trade Area. -
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Improving Consumption-Based Tax Compliance: Evidence from Point of Sale Usage in Subnational Governments in Indonesia
(World Bank, Washington, DC, 2023-11-28)This paper studies the impact of point of sale technology adoption on local tax compliance by firms. The paper exploits administrative data on monthly restaurant and hotel tax payments in the Indonesian districts of West Manggarai and Gorontalo and combines this with information on the point of sales distribution timeline from 2018 to 2022. The findings show that certain point of sales treatments led to a substantial increase in restaurant tax payments, ranging from 55 to 180 percent, while others did not increase tax revenues. The paper discusses the underlying drivers of the results and argues that the effectiveness of point of sales technology is conditional on (i) the devices’ ease of use, (ii) the recipients’ technological aptitude, and (iii) the presence of information accessible by third parties. -
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Too Rare to Dare?: Leveraging Household Surveys to Boost Research on Climate Migration
(World Bank, Washington, DC, 2023-11-28)Reliable microeconomic data to understand the climate-migration nexus are virtually nonexistent. Nationally representative multitopic household surveys are rarely, if ever, explicitly designed for studying migration issues. Despite this limitation, most countries have no alternatives to the use of household surveys when it comes to analyzing complex multidimensional phenomena such as the interrelationship between climate change and migration. This paper offers a critical reflection on current challenges faced by multi-topic household surveys in responding to this need, but also, more importantly, on the many opportunities embedded in their use. Specifically, using the Living Standards Measurement Study as a case study, a conceptual framework, practical empirical guidance, and a methodological agenda are proposed to address data gaps and contribute to a more solid understanding of the climate-migration nexus. -
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Impacts of Extremist Ideologies on Refugees' Integration: Evidence from Afghan Refugees in Tajikistan
(World Bank, Washington, DC, 2023-11-28)This paper examines the effect of exposure to extremist ideologies on the integration of Afghan refugees in Tajikistan, using a 2023 census following the Taliban's takeover in Afghanistan. It finds that Afghan refugees born in provinces with increased Taliban territorial control between 2017 and 2021, despite having comparable pre-migration characteristics, are less integrated into their host communities than other refugees. They also show lower educational levels and more mental health problems. However, there is no observed impact of this exposure on their income, consumption, or employment. -
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Forecasting Industrial Commodity Prices: Literature Review and a Model Suite
(World Bank, Washington, DC, 2023-11-28)Almost two-thirds of emerging market and developing economies rely heavily on resource sectors for economic activity, fiscal and export revenues. In these economies, economic planning requires sound baseline projections for the global prices of the commodities they rely on and a sense of the risks around such baseline projections. This paper presents a model suite to prepare well-founded forecasts for the global prices for oil and six industrial metals (aluminum, copper, lead, nickel, tin, and zinc). The model suite adapts six approaches used in the literature and tests their forecast performance. Broadly speaking, futures prices or bivariate correlations performed well at short horizons, and consensus forecasts and a large-scale macroeconometric model performed well at long horizons. The strength of Bayesian vector autoregression models lies in generating forecast scenarios. The sizable forecast error bands generated by the model suite highlight the need for policy makers to engage in careful contingency planning for higher or lower prices. -
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Economic Sentiments and Expectations in Sub-Saharan Africa in a Time of Multiple Shocks
(World Bank, Washington, DC, 2023-11-21)Against the background of high inflation, climate shocks, and concerns about rising food insecurity, this study documents the state of economic sentiments and expectations of households in five African countries—Burkina Faso, Ethiopia, Malawi, Nigeria, and Uganda—that are home to 36 percent of the Sub-Saharan African population. Leveraging nationally representative phone survey data, 57 percent of households across the five countries report that their financial situation and their country’s economic situation have worsened significantly in the past 12 months. While expectations for the future are more positive, there are marked differences across countries that suggest uneven recovery prospects and nonnegligible uncertainty about the future. Households overwhelmingly report prices to have increased considerably over the past 12 months and expect prices to increase faster, or at the same rate, over the next 12 months. Close to 54 percent of households—home to 206 million individuals—further expect that climate shocks will have adverse impacts on their finances in the next year. Economic sentiments are closely related to livelihood outcomes such as food insecurity, lack of access to staple foods, income loss, and unemployment, and sentiments about the household financial situation, country economic situation, price increases, and climate shocks are also interdependent. Households whose financial situation has worsened in the past year are consistently more pessimistic about their financial future. Food insecure households, in particular, are not only more likely to report a worsening financial situation in the recent past and pessimism about the future, but also more likely to expect to be adversely impacted by climate shocks. -
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How Have Gender Gaps in the Colombian Labor Market Changed during the Economic Recovery?
(World Bank, Washington, DC, 2023-11-21)This paper analyzes gender gaps in the Colombian labor market, with a particular focus on the impact of the COVID-19 shock and the economic recovery. Using household survey and administrative data, the analysis finds significant and persistent gender gaps in favor of men in terms of participation, unemployment, and income. These gaps are heterogeneous at the regional level in Colombia, and are exacerbated among women with children, particularly young children, and those with low levels of education. The COVID-19 pandemic widened these gaps, including from higher female concentration in the most affected sectors and potentially associated with the disproportionate burden of care on women. Moreover, using decomposition techniques, the paper finds that the decline observed in the hourly gender wage gap results from two offsetting effects: the explained gap, which favors women due to their endowments, primarily education level, and the unexplained gap, which favors men and may be associated with discriminatory biases. Moreover, the gender wage gap widens significantly when considering monthly income, showing variations in hours worked between men and women. Given the poorer labor market outcomes among women with children, policies toward the reduction and redistribution of care work within households could contribute to increase women’s opportunities in the labor market. -
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Herder-Related Violence, Agricultural Work, and the Informal Sector as a Safety Net
(World Bank, Washington, DC, 2023-11-21)Violent conflict between nomadic herders and settled—mostly agricultural—communities in Nigeria occurs as both groups clash over the use of land and resources, in part, due to a changing climate. This paper uses panel data from 2010 through 2019 to study the labor responses of individuals to exposure to herder-related violence during the post-planting and post-harvest seasons. Specifically, it considers a “shadow of violence” channel, where recent exposure to a violent event alters labor-related responses to a subsequent event. Results find that in the post-planting season, exposure to a herder-related violent event leads to an increase in informal work for both men and women, a decrease in agricultural work for men, and an increase in total hours worked for women among households that have previously been exposed to herder-related violence in the preceding six months. The paper also considers two other specific forms for a “shadow of violence” channel—namely, raised tensions over open-grazing bans enacted in 2016 and 2017 within three states and a drastic peak in violence in the first half of 2018— and find similar results. Lastly, findings show how household exposure to violence can have so-called knock-on effects. Households exposed to herder-related violence in the previous post-planting season shift consumption and crop selling patterns in the post-harvest season. These findings highlight the gender-specific labor response to violence and document the role of the informal sector as a partial safety net for individuals in the presence of adverse shocks. -
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Endogenous Institutions and Economic Policy
(World Bank, 2023-11-21)This paper proposes a new framework to model institutions and institutional change. It shows how moral agents, who strive to cooperate with others, can form institutions that facilitate cooperation. The framework makes it possible to model informal as well as formal institutions as games played by moral agents: when the quality of the government is low and agents are not willing to use its services they will create informal institutions that allow them to cooperate outside the official channels. It is also possible to conceptualize institutions as inclusive or extractive and model institutional change as a consequence of the choice of moral agents among available institutions as time unfolds. With a series of examples of clientelistic networks, the paper shows that the framework can be useful for understanding how and why such networks form and persist. The framework can be used to model any interactions among moral agents, thus giving rise to a wide variety of possible institutional settings.