48388 ResearchDigest WorldBank Volume 3 l NumbeR 1 l fall 2008 Food Price Crisis in Africa Rising food prices mean higher Poverty mapping techniques show In ThIs Issue poverty in Africa. Which policy that impacts vary within countries. food Price Crisis in africa ... page 1 responses most benefit the poor? This poses a dilemma in focusing African governments have tried varying R policy responses, since the hardest- policy responses to rising food prices. Which ising food prices generate hit areas in a country often are not is most promising? higher poverty in Africa the poorest. because the adverse impact To deal with the crisis, govern- foCuS on households that are net food ments have first reduced food taxes. The Doha Development agenda ... page 2 consumers outweighs benefits to Yet such tax cuts have large fiscal Negotiations under the Doha Development net food producers. This is one costs and are poorly targeted. For ex- Agenda have been under way for almost finding of a series of recent papers ample, the share of rice consumed by seven years. What's on the table? assessing the potential impact the poorest 40 percent of the popula- When Is Deposit Insurance of higher food prices. The series tion ranges from 11 percent in Mali a Good Idea? ... page 3 also examines common policy to 32 percent in Sierra Leone. Thus Do the benefits of deposit insurance always responses, to see which are likely to on average only about 20 cents out outweigh its costs? Empirical evidence have the largest benefit for the poor. of every dollar of tax cut might ben- suggests not Data from a dozen countries are efit this group. In addition, if markets used to simulate the poverty im- are dominated by a few traders, tax Returns to Capital pact of higher food prices. Poverty cuts may not be fully passed on to in microenterprises ... page 4 impacts obtained when considering consumers. And lowering import Capital can have big returns in microfirms, only the effect on consumers are tariffs may hurt domestic producers suggesting that firms can start small--and considered as upper-bound esti- if prices of locally produced foods grow mates. Those also factoring in pro- adjust to international prices. New Global Poverty estimates ... page 4 ducer gains are considered as lower- Expanding social protection bound estimates, because producers programs shows more promise. In New estimates show that extreme poverty is more pervasive than previously thought may not reap the full benefit of price Burundi and Liberia household sur- increases (market intermediaries vey data suggest that the poor are Ports and maritime Transport in West may keep part of the higher food roughly as likely as the nonpoor to and Central africa ... page 5 prices to boost their margins or pay benefit from food aid. This does not Proposed reforms for ports in West and for higher transport costs, while pro- constitute good targeting, but it is Central Africa could sharply reduce ducers face higher input costs that better than tax cuts. As for labor- transport costs limit their profits). With a 50 percent intensive public works, simulations increase in selected food prices, suggest that geographic targeting is The Consequences upper-bound increases in poverty required to avoid high leakage. The of Child labor ... page 6 measures range from 1.8 percentage reason is that most African countries Working as a child has significant effects on points in Ghana to 9.6 points in Sen- have large populations working with- outcomes as an adult egal. The average impact, consider- out pay or at very low pay--so even Gender and asset ownership ... page 7 ing both upper- and lower-bound among the nonpoor, participation estimates, is around 3.5 percentage in public works could be high even Collecting data on individual as well as household ownership of assets could have big points. For Africa as a whole, this if wages are low. In addition, part of benefits would mean 30 million more poor the wages paid through public works people. (continued on page 8) 2 WorldBankResearch Digest FOCUS The Doha Development Agenda What does Doha offer? The complexity and detail of the rates. In agriculture, for example, the percent in the United States. New rules proposals make it hard to judge. larger developing countries would still may not lead to significant cuts from A new paper takes stock have a margin of about 30 percentage current subsidy levels, which are at N points (compared with the actual tariff historically low levels because of high egotiations under the Doha of 13 percent) to reverse liberalization; commodity prices. But the rules are Development Agenda have in manufacturing this margin would likely to constrain industrial country now been under way for almost be 6.2 percentage points, slightly more subsidies, especially for such products seven years. In the areas where they than the actual tariff. as cotton, peanuts, and sugar, which are most advanced, the negotiations The negotiations on trade in ser- are of particular export importance for have generated complex and detailed vices have yielded offers that would many developing countries. proposals that seek to balance the reduce the average gap between offers Trade problems of poor countries. Two interests of the 153 members of the and actual policies by almost half-- key elements for poor countries are en- World Trade Organization (WTO). But from 84 percent to 43 percent. hanced access and assistance. The pro- this complexity and detail make it Some new market opening. Today's posed "duty free and quota free" initia- difficult to judge what precisely Doha legal ceilings are in tive will lock in existing offers. Drawing on the results of a many cases much access to foreign markets recent research project, a new paper higher than applied Proposals on for the least developed by Martin and Mattoo takes stock of levels of protection countries. But the initia- the proposals on the table at the WTO --so even drastic the table in the tive will add significantly ministerial meeting in July 2008. cuts in bound rates Doha negotiations to existing access only if The proposals point to a potential frequently result in industrial and develop- Doha agreement that would include only modest cuts in imply significant ing country members do three key benefits: applied protection. reductions in legally not exclude vital prod- · More secure market access in But there are likely ucts such as garments. goods and services to be some real ben- bound levels of In most of the potential · Some new market opening in efits for developing protection in goods markets considered, just agriculture and manufacturing country exporters. 3 percent of tariff lines · More resources to deal with the The average farm and services with the highest burden trade problems of poor countries tariffs they face of tariffs account for 90 Reduced scope for protection. The pro- would fall from 14.2 percent of the tariffs paid posals imply significant reductions percent to 11.5 percent. The tariffs on by the poor countries. in legally bound levels of protection their exports of manufactures would The "aid for trade" initiative is play- in goods and services. These cuts in drop from 2.9 percent to 2.1 percent, ing a valuable catalytic role in promot- bound rates are valuable because they with cuts in tariffs on highly protected ing reform and mobilizing assistance. limit the scope for future restrictive products such as textiles and clothing Trade-related assistance has already measures. Proposals under discus- being particularly important. increased--to about $24 billion in sion would reduce the world average Exporters of agricultural products 2006, according to WTO-OECD figures. bound tariff for agricultural products from industrial countries would see The Enhanced Integrated Framework from 40 percent to 30 percent, and the tariffs they face fall from 14.9 for Least Developed Countries is also that for nonagricultural goods from 8 percent to 12.1 percent. Exporters of slowly taking shape, with $240 million percent to 5 percent. nonagricultural products from these earmarked in 2007 for technical assis- The tiered formula under discus- countries would see tariffs decline tance programs. But substantial effort sion for agriculture involves larger from 3 percent to 2.4 percent. is still needed to translate these com- cuts in the higher tariffs and would, if Disciplines on agricultural subsidies. mitments into actual benefits. implemented without exceptions, cut Agricultural export subsidies--a long- average bound tariffs almost in half-- standing concern of developing coun- from 40.3 percent to 20.7 percent. But tries--will be banned. This is impor- exceptions for "sensitive" and "spe- tant because it rules out the reemer- cial" products reduce the tariff cuts gence of wasteful and price-depressing and allow many higher tariffs to be export subsidies in the future. subjected to smaller cuts. The proposed rules on domestic Will Martin and Aaditya Mattoo. 2008. "The For most developing countries, subsidies involve sharp reductions in Doha Development Agenda: What's on the Table?" bound rates would on average still be permitted aggregate support--by 70 Policy Research Working Paper 4672, World much higher than currently applied percent in the European Union and 60 Bank, Washington, DC. WorldBankResearch Digest 3 When Is Deposit Insurance a Good Idea? Whether deposit insurance benefits or harms a country depends on how An extensive body of economic well it is designed and administered. well it is designed and administered theory analyzes the benefits and costs Deposit insurance can be a useful part R of deposit insurance and explores how of a country's overall system of bank ecent financial turmoil and the balancing these benefits and costs can regulation and financial markets, but bank runs in Germany and the produce an optimal deposit insurance research emphasizes the importance of United Kingdom have pushed system. Starting from the premise that promptly identifying and eliminating deposit insurance systems back to the main benefit of deposit insurance bank insolvencies, fostering informa- the center of debates on regulatory is to prevent wasteful liquidations of tive accounting standards, and estab- policy in both developing and devel- bank assets caused by deposit runs, lishing reliable procedures for contract oped countries. A new book edited the theoretical debate centers on the enforcement before adopting explicit by Demirgüç-Kunt, Kane, and Laeven question of how effectively hypotheti- deposit insurance. Research also un- contributes powerfully to these de- cal variations in deposit insurance ar- derlines the importance of building in bates by bringing together a collec- rangements can curtail capacity and incentives tion of papers that construct and ana- voluntary risk taking for deposit insurance lyze a worldwide database on deposit (that is, moral hazard). Deposit insurance managers to adapt dy- insurance and assess the impact of In contrast, em- namically to financial deposit insurance and its design in pirical evidence on the systems have been changes. individual developing countries. efficiency of real-world multiplying rapidly For countries in Deposit insurance systems have deposit insurance sys- the process of adopt- been multiplying rapidly in the devel- tems has been scarce, in the developing ing deposit insurance, oping world. Although many recent and the analysis world. This does not the book identifies six adopters are transition economies limited to the experi- guiding principles of of Eastern Europe that are seeking ences of developed mean that designing good design: limiting to comply with the European Union countries. Because and operating an insurance coverage, directive on deposit insurance, adopt- of lack of data, there making membership ers can be found in every region of the has been little empiri- efficient deposit compulsory, involving world. cal evidence on what insurance system the private sector in The book argues that this is an factors determine the overseeing the scheme, alarming trend--one that should adoption and design are straightforward ensuring that pricing not be interpreted as evidence that of deposit insurance or tasks is appropriate, restrict- designing and operating an efficient their impact on bank ing the fund's ability to deposit insurance system are straight- stability, market disci- shift losses to the tax- forward tasks. To the contrary, the pline, and financial development. payer, and assigning explicit responsi- analysis it presents confirms that offi- The book's unified collection of bility for resolving bank insolvencies. cials in many countries would do well papers mitigates some of the weak- The book's message complements to delay the implementation of a de- nesses in the literature. Drawing on its and contributes to the broader debate posit insurance system. The message worldwide data set on deposit insur- on how adopting regulations consid- is timely: despite the rise of deposit ance systems and design features, the ered appropriate in advanced econo- insurance in recent decades, holdouts book examines the impact of deposit mies often proves ineffective or even still outnumber adopters. insurance on banking behavior and counterproductive in weak institution- One reason for the surge in explicit assesses the policy complications that al environments. deposit insurance schemes is that emerge in developing countries. Chap- having such a scheme has come to be ters cover decisions about adopting, seen as one of the pillars of modern designing, and pricing deposit insur- financial safety nets. Establishing ex- ance and review individual country plicit deposit insurance has become a experiences with deposit insurance-- principal feature of the policy advice including issues raised by the Euro- on financial architecture that outside pean Union's directive, banking reform experts give to countries undergo- in the Russian Federation, and policy ing reform. The book challenges the efforts to protect depositors in China. wisdom of encouraging countries to The evidence and analysis pre- Asli Demirgüç-Kunt, Edward J. Kane, and Luc adopt deposit insurance without first sented confirm that deposit insurance Laeven, eds. 2008. Deposit Insurance around remedying observable weaknesses in is strong medicine. Whether it benefits the World: Issues of Design and Imple- their institutional environment. or harms a country depends on how mentation. Cambridge, MA: MIT Press. 4 WorldBankResearch Digest Returns to Capital in Microenterprises Small amounts of capital have products to better serve these enter- Extreme poverty--as judged by big payoffs in microfirms--at prises. But the low average returns what poverty means in the world's least for those owned by men. It's earned by female-owned enterprises poorest countries--is found to be a different story for those owned are a puzzle, one that ongoing re- more pervasive than previously by women search is attempting to understand. thought. Yet the data also provide robust evidence of continual decline S in the incidence and depth of poverty mall, informal firms provide em- Suresh de Mel, David McKenzie, and Christopher since the early 1980s. In 2005, 1.4 bil- ployment for half or more of the Woodruff. Forthcoming. "Returns to Capital in lion people, or a quarter of the popu- Microenterprises: Evidence from a Field Experi- labor force in most developing ment." Quarterly Journal of Economics. lation of the developing world, lived countries. A central question for poli- below an international line of $1.25 cy makers is whether these firms hold a day in 2005 prices; 25 years earlier the potential for income growth for there were 1.9 billion poor, or half the their owners--or whether they merely population (figure 1). represent a source of subsistence in- New Global Progress was uneven across re- come for low-productivity workers un- gions. The poverty rate in East Asia fell able to find alternative employment. Poverty Estimates from 80 percent to less than 20 percent Assessing the extent to which lack in 1981­2005. By contrast, the rate in of capital is a constraint on business Sub-Saharan Africa stayed at around profitability is complicated by the fact Poverty rates are higher than 50 percent, though with signs of prog- that firms that have more capital stock previously thought. But there is also ress since the mid-1990s. or greater access to credit are likely evidence of continual decline in Because of lags in the availability to also differ in many other ways from poverty since the early 1980s of survey data, these estimates do not firms with less capital stock. Firms yet reflect the sharp rise in food prices T with more capital may earn higher since 2005. profits simply because their owners he last issue of the Research Digest have better entrepreneurial skills than (vol. 2, no. 4) reported on the those owning firms with less capital new data on the cost of living in Shaohua Chen and Martin Ravallion. 2008. "The or because they have increased their developing countries from the Inter- Developing World Is Poorer Than We Thought, capital investments in response to national Comparison Program. This But No Less Successful in the Fight against growing demand for their products. new set of consumption purchasing Poverty." Policy Research Working Paper 4703, A recent randomized experiment power parities (PPPs), estimated from World Bank, Washington, DC. in Sri Lanka provides a way to resolve the 2005 round of price surveys, has this problem and credibly identify the been used by Chen and Ravallion to return to capital. Grants of $100­200 undertake a major overhaul of the were given to randomly selected mi- World Bank's past estimates of global croenterprises, making it possible to poverty. compare the profits of these firms with those of similar firms that did Figure 1. People Living on Less Than $1.25 a Day, 1981­2005 not receive this additional capital. 2,000 The research finds real returns of 5 Rest of the percent a month, much higher than 1,800 developing world market interest rates. But while re- 1,600 turns to male-owned businesses are 1,400 high, the average return to female- owned businesses is close to zero. snoilliM1,200 East Asia and Pacific The results imply that, on aver- 1,000 age, microenterprises do have the Sub-Saharan Africa ability to pay the high interest rates 800 charged by some microfinance orga- 600 nizations--and that firms can start 400 small, reinvest profits earned, and South Asia grow. The high returns to male-owned 200 microenterprises suggest a need for 0 the microfinance industry to develop 1981 1984 1987 1990 1993 1996 1999 2002 2005 WorldBankResearch Digest 5 Ports and Maritime Transport in West and Central Africa Challenges in maritime transport imbalances of many West and Central emphasize the need for remedial mea- in West and Central Africa offer an African countries; carriers are forced sures, to guarantee social stability. opportunity for reforms that could to leave the region with much empty The recent reform of the Nigerian yield long-term benefits space on their ships. port sector offers an example for other S These factors have led to high trad- West and Central African countries. hipping remains the dominant ing costs. Shipping lines levy high The reform created autonomous port mode of transport, accounting freight rates, and to these they add authorities, reducing meddling by the for almost two-thirds of world significant inefficiency (congestion) central government. Responsibility trade by value. In West and Central surcharges for many West and Central for superstructure, equipment, and Africa, where road and air links re- African ports. marine and terminal operations was main weak, sea transport accounts for The potential consequences of the transferred to private operators. Labor up to 90 percent of foreign trade by shortfalls in port administration and redundancies with severance packages volume. Efficient maritime transport infrastructure are serious. Pálsson, reduced the Nigerian Port Authority is therefore critical to Harding, and Rabal- staff from 13,000 to 3,000. While it is the region's trade and land warn that if port still too soon to judge the long-term income growth. But as Shipping and efficiency is not im- effects of the reform, the first few Pálsson, Harding, and ports in West and proved, several coastal months saw productivity rise and de- Raballand show in a countries in West and lays vanish. In response, shipping lines recent paper, shipping Central Africa lag Central Africa will for- reduced their congestion surcharges and ports in this re- behind global trends feit much of the benefit by more than 85 percent. gion lag behind global they derive from access However successful port reforms trends and standards. and standards. to the sea, in effect may be, ports are not self-contained This manifests The result is high becoming landlocked. entities but nodes in larger logistics itself in several ways. The authors emphasize systems. Thus reforms need to go be- First, port concentra- trading costs. the pernicious negative yond improving the efficiency of ports tion remains com- Reforms could feedback effects that alone and work toward integrating the paratively limited. No can result from high ports more efficiently into the broader West or Central Afri- sharply reduce shipping tariffs: the economy. This means, most important- can port ranks among those costs costs keep traffic low, ly, guaranteeing well-functioning, mul- the top 70 worldwide. which in turn discour- timodal (road, rail, air) transport links And there are no ages trade and pre- to the port and easing restrictions on large ports serving vents the economies of commerce on the main trade corridors as regional hubs, in part because of scale that have been shown to play a in its catchment area. the limited land transport links and crucial role in reducing costs. If reforms are successfully imple- security risks. Second, unlike in most The authors outline a series of mented, transport costs for West of the world's regions, in West and reforms aimed at increasing the ef- and Central African countries should Central Africa ports are predominantly ficiency of port and maritime transport drop significantly. The region's larger owned and run by the national public operations in West and Central Africa. ports might compete successfully for sector. Since efficiency problems are often international trade as regional hubs Third, port equipment is often port specific, the authors urge authori- and transshipment centers. And the inadequate or poorly maintained. ties to carry out careful cost-benefit increasing differentiation between the The region's ports lack modern gan- analyses of particularly costly harbors. hub ports attracting global megacar- try cranes, for example, hindering More generally, they recommend riers and the smaller ports for local the use of efficient container ships. streamlining procedures and controls distribution could create opportuni- Moreover, most ports cannot receive to reduce handling costs, turnaround, ties for national shipowners to provide ships exceeding 2,500 twenty-foot and dwell times. The authors also "feeder" services between the two. equivalent units (TEUs), even though encourage public port authorities to ships of more than 6,000 TEUs are increase private participation in cargo now common on international routes. terminal operations in order to stimu- This has contributed to costly delays late market discipline, the transfer of and congestion in ports. The share of know-how, and private investment in Gylfi Pálsson, Alan Harding, and Gaël Rabal- total transport time spent in port is new installations and equipment. A land. 2007. "Port and Maritime Transport Chal- up to four times as large in Africa as shift toward greater private involve- lenges in West and Central Africa." Sub-Saharan in East Asia. Such inefficiencies are ment should lead to a reduction in Africa Transport Policy Program Working Paper exacerbated by the persistent trade overstaffing, for which the authors 84, World Bank, Washington, DC. 6 WorldBankResearch Digest The Consequences of Child Labor Evidence from longitudinal data The population of the overwhelm- in childhood causes a loss of nearly in rural Tanzania shows that child ingly rural Kagera region depends pri- half a year of schooling 10 years later. labor has consequences that carry marily on agriculture for income. Re- And working at an average level (16.8 over into adulthood flecting the region's economic reali- hours a week) as a child reduces the W ties, and following the ILO standard probability of completing primary hile the popular perception for defining child labor, the study mea- school by as much as 20 percentage of child labor is strongly sures child labor as the total hours points. In addition, the more children negative, it is unclear from a spent working in economic activities work, the more likely they are to marry theoretical perspective to what extent and chores in the previous week. Eco- at an earlier age. A one-standard- child labor is harmful. Most of the nomic activities for children consist deviation increase in child labor in- world's child labor occurs in the rural mainly of farming, including tending creases the probability of being mar- areas of developing countries, where crops in the field, processing crops, ried 10 years later by 21 percentage it tends to involve moderate-intensity and tending livestock. Chores consist points. activities rather than the "hazardous" of fetching water and firewood, pre- The authors also examine gender- forms emphasized by the Internation- paring meals, and cleaning the house. specific effects of child labor. While es- al Labor Organization (ILO) and the Children in the sample work on aver- tablishing these robustly is more chal- media. The consequences of this type age 16.8 hours a week, 10 of which are lenging, because the empirical frame- of child labor are not self-evident. For spent on chores. Girls spend on av- work emphasizes the whole sample, example, while it may result in less erage 2.5 hours more than boys on some interesting trends emerge. The schooling, it may also provide work household chores. negative effect of child labor on edu- experience that offsets some of the To capture the range of potential cational outcomes appears to be pre- schooling losses. impacts, a number of outcomes are an- dominantly relevant to boys. Working Identifying the consequences of alyzed. The two measures of education in childhood has another occupational child labor is analytically challenging. are years of schooling and an indicator impact for boys: working an average Simply observing a difference in out- variable for having completed seven amount (16.8 hours a week) as a child comes for working children does not or more years of education (primary increases the probability of farming as indicate a causal impact. The decision level). Economic activity indicators the main occupation 10 years later by to send a child to work involves many include having a salaried job (nonfarm 40 percentage points. factors, both observable and unob- income), farming, and growing a cash Earlier marriage occurs for both servable. Moreover, the consequences crop. In the Kagera region, because the working boys and working girls. Strik- of child labor may evolve over time. economy is based mainly on extensive ingly, however, working as a child has A child working today may not attend farming, earning a salary or being in- no significant effects on education less school now, but may be less likely volved in cash cropping (rather than or labor market activities for young to advance to subsequent grades or subsistence farming) is an important women. A possible explanation for this levels later. Assessing this link there- indicator of success. The study also finding is that, in response to shocks, fore requires longitudinal data. examines the probability of migrating girls' time on chores increases rather In a new paper Beegle, Dehejia, from the village, since internal migra- than their time on agricultural work. Gatti, and Krutikova use unique data tion in Tanzania is associated with Chores might pose weaker competi- from a panel survey in Tanzania to large income gains. It is possible that tion for time relative to education than overcome the analytical difficulties child labor contributes to farm-specific agricultural work does (thus the lack in exploring the effects of child labor. experience and improvements in farm of impact on subsequent schooling). The authors use the Kagera Health productivity, in which case child labor And girls might not benefit from ac- and Development Survey, spanning would be associated with a higher like- cumulated experience in agricultural 13 years, to study the relationship lihood of farming and lower individual work that could result in labor market between working as a child in 1991­94 mobility. impacts once an adult. and outcomes as a young adult in Finally, the study explores whether 2004 in a robust causal framework. child labor significantly affects age at In contrast with data used in earlier marriage. Earlier marriage has been studies, these data provide measures shown to be associated with worse of child labor as it occurs, rather than outcomes for women and their chil- retrospectively, and outcomes as dren, including greater health risks. young adults. To tackle the issue of The results show that working in Kathleen Beegle, Rajeev Dehejia, Roberta Gatti, causality, the authors use information childhood has particularly strong ef- and Sofya Krutikova. 2008. "The Consequences of on agricultural shocks and rainfall pat- fects on education level and marriage Child Labor: Evidence from Longitudinal Data in terns in the early years to predict child patterns. A one-standard-deviation Rural Tanzania." Policy Research Working Paper labor. increase in weekly workload (5.7 hours) 4677, World Bank, Washington, DC. WorldBankResearch Digest 7 Gender and Asset Ownership Collecting data on assets at both and vulnerability. Moreover, data on in understanding the process of asset household and individual levels can the value of assets are skimpy and accumulation. help shed light on important policy measured in different ways. For a full analysis of the role of issues Far fewer surveys collect data on assets in reducing vulnerability and O asset ownership at the individual level. poverty, data on the specific individual wnership and control over At a minimum surveys should ask who rights over assets are required, such as assets such as land and hous- owns each major asset and allow for the right to sell, mortgage, rent, and ing provide multiple benefits to multiple owners of an asset. In most keep the revenue generated by the as- individuals and households, includ- multipurpose surveys this requires set. It is also important to know who ing a secure place to live, livelihoods, only one additional question. For agri- makes the decisions about the use of protection during emergencies, and cultural land, surveys should ask about assets, such as which crops to plant. collateral. Many studies demonstrate ownership for each plot. For both land Implementing these best practices the important relationship between and housing, questions about whether for data collection can yield answers to asset ownership, poverty reduction, there is an ownership document, such important policy questions. Individual- and growth. Few studies, at either the as a deed, should be asked after own- level information is important for micro or the macro level, examine the ership has been determined and fol- reform of key laws, especially those gender dimensions of lowed by a question on divorce and inheritance. One of asset ownership. about whose names the key sources of vulnerability for To allow a gender To develop policies are on the document. many women is the dissolution of analysis of assets, data to promote the For livestock, it may their household. Women's ability to would have to be col- not always be feasible retain ownership and control over as- lected at the individual accumulation of to collect data on who sets when the household dissolves not level rather than only assets, it is critical owns each animal, but only affects their vulnerability; it also at the household level. at a minimum surveys affects their bargaining power during While individual-level to understand how can ask which house- marriage. Individual-level data on as- income data are now assets are acquired hold members own sets also are essential for programs routinely collected, as- each type of animal. aimed at asset accumulation, such as sets are assumed to be and whether For household land redistribution or titling programs owned collectively by acquisition patterns enterprises, surveys or those promoting homeownership. household members. should identify both Such data also can illuminate other Yet in most modern differ for males and the owner of the en- key development policy issues, such legal systems property females terprise (joint or indi- as the empowerment of women, pov- rights are granted to vidual) and the man- erty reduction, social protection, and individuals, not house- ager. For consumer the promotion of pro-poor economic holds. In addition, because men and durables, while it may not be feasible growth. women often own different assets and to ask individual ownership questions Adding a very few additional ques- acquire them through different chan- about all, surveys should ask about the tions to survey data could allow nels, it is critical to collect data on a ownership of key consumer durables researchers and policy makers to cal- full range of assets. and other physical assets important in culate the gender asset gap, to better From an analysis of numerous the context, such as household appli- understand the patterns of asset accu- instruments used by the Living Stan- ances, vehicles, and jewelry. mulation and use, and to develop poli- dards Measurement Study (LSMS) Including these few questions will cies that recognize the relationships household surveys and others, a new have a high payoff and should be rou- between household formation and paper by Doss, Grown, and Deere tinely done. To obtain data on the val- dissolution and asset accumulation develops a set of best practices for ue of assets owned, the best practice is and poverty. The potential benefits are data collection on assets at both to specify either a potential sales price great, leaving no excuse not to do so. the household and the individual or the replacement price. level. Many LSMS surveys collect To develop policies to promote the household-level data on the incidence accumulation of assets, it is critical to of ownership of consumer durables understand how assets are acquired (including vehicles), housing, land, and whether acquisition patterns dif- and livestock. Fewer collect data on fer for males and females. Adding a Cheryl Doss, Caren Grown, and Carmen Diana farm equipment, business assets, and single question to surveys about how Deere. 2008. "Gender and Asset Ownership: A savings. Without data on the range the asset was acquired (purchased Guide to Collecting Individual-Level Data." Policy of assets, it is not possible to analyze outright, purchased over time, inher- Research Working Paper 4704, World Bank, how they interact to reduce poverty ited, or received as a gift) is a first step Washington, DC. 8 WorldBankResearch Digest (continued from page 1) may not reduce poverty because of Harold Coulombe and Quentin Wodon. 2008. Recent Policy Research substitution effects (participants typi- "Assessing the Geographic Impact of Higher Food Working Papers cally have to give up some sources of Prices in Guinea." Policy Research Working Paper income to enroll in the programs). 4743, World Bank, Washington, DC. The most promising interventions George Joseph and Quentin Wodon. 2008. "As- 4686 Timing and Duration of exposure in evaluations of Social Programs are those boosting agricultural pro- sessing the Potential Impact on Poverty of Rising Elizabeth M. King and Jere R. Behrman ductivity. Mali's rice initiative aims to Cereals Prices: The Case of Mali." Policy Research 4687 Patterns of International Capital Raisings Working Paper 4744, World Bank, Washington, Juan Carlos Gozzi, Ross Levine, and Sergio L. increase production by 50 percent. DC. Schmukler Using a dynamic computable general 4693 financing Rural Development for a Kofi Nouve and Quentin Wodon. 2008. "Impact Harmonious Society in China: Recent Reforms equilibrium model for Mali, analysis of Rising Rice Prices and Policy Responses in Mali: in Public finance and Their Prospects shows that a 15 percent increase in Achim Fock and Christine Wong Simulations with a Dynamic CGE Model." Policy 4700 Rising Income Inequality in China: a Race to productivity could generate a large Research Working Paper 4739, World Bank, the Top increase in rice production that would Washington, DC. Xubei Luo and Nong Zhu 4707 Technology adoption and the Investment ultimately reduce poverty despite the Juan Carlos Parra and Quentin Wodon. 2008. Climate: firm-level evidence for eastern increase in international rice prices. "Comparing the Impact of Food and Energy Price europe and Central asia Paulo G. Correa, Ana M. Fernandes, and By contrast, the model suggests that Shocks on Consumers: A Social Accounting Ma- Chris J. Uregian import tax cuts would not reduce pov- trix Analysis for Ghana." Policy Research Working 4708 Job Creation and labor Reform in latin erty by much. Another finding is that Paper 4741, World Bank, Washington, DC. america David S. Kaplan the general equilibrium effect of the Clarence Tsimpo and Quentin Wodon. 2008. 4712 Infrastructure and economic Development in increase in international rice prices is "Rice Prices and Poverty in Liberia." Policy Re- Sub-Saharan africa César Calderón and Luis Servén about half the impact predicted using search Working Paper 4742, World Bank, Wash- 4719 Trade Costs in africa: barriers and ington, DC. household surveys. This suggests that opportunities for Reform Alberto Portugal-Perez and John S. Wilson without policy interventions, behav- Quentin Wodon and Hassan Zaman. 2008. "Ris- ing Food Prices in Sub-Saharan Africa: Poverty 4720 General Trends in Competition Policy and ioral changes following price increases Investment Regulation in mandatory Defined Impact and Policy Responses." Policy Research Contribution markets in latin america could help offset part, but certainly not Working Paper 4738, World Bank, Washington, Mariam Dayoub and Esperanza Lasagabaster all, of the adverse impact on the poor. DC. 4723 multi-Product exporters: Diversification and micro-level Dynamics Another general equilibrium finding Quentin Wodon, Clarence Tsimpo, and Harold Leonardo Iacovone and Beata S. Javorcik relates to the relative effects on house- Coulombe. 2008. "Assessing the Potential Impact 4724 Simulating the Impact of Geographic holds of oil and food price increases. Targeting on Poverty alleviation in morocco: on Poverty of Rising Cereals Prices: The Case of What are the Gains from Disaggregation? Using social accounting matrices, anal- Ghana." Policy Research Working Paper 4740, Mohammed Douidich, Abdeljouad Ezzrari, and Peter Lanjouw ysis shows that in some countries the World Bank, Washington, DC. 4725 Decentralization, economic Development, and indirect multiplier effect of higher oil Quentin Wodon, Clarence Tsimpo, Prospere Growth in Turkish Provinces prices may be more severe than that of Backiny-Yetna, George Joseph, Franck Adoho, Mehmet Serkan Tosun and Serdar Yilmaz 4726 The Sub Prime Crisis: Implications for higher food prices. This suggests that and Harold Coulombe. 2008. "Potential Impact emerging markets even though the food price crisis has of Higher Food Prices on Poverty: Summary William B. Gwinner and Anthony Sanders Estimates for a Dozen West and Central African recently attracted more attention, the Countries." Policy Research Working Paper 4745, effects of the oil price crisis must also World Bank, Washington, DC. be dealt with. Working Papers can be downloaded at http://econ.worldbank.org To download the World Bank Research E-Newsletter, go to Data & Research at http://www.worldbank.org The World bank Research Digest is a quarterly publica- The Research Digest is financed by the bank's editorial Committee: Jean-Jacques Dethier (managing tion disseminating findings of World bank research. Research Committee and managed by DeCRS, the editor), asli Demirgüç-Kunt, and alan Gelb. Research The views and interpretations in the articles are those research support unit of the Development economics assistance: maximilian Hirn; editor: alison Strong; pro- of the authors and do not necessarily represent the Vice Presidency (DeC). The Research Digest is not duction: Roula I. Yazigi. 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