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May 2014

Friday round up: Syria, Piketty pushes back, Universal Health Coverage, GMOs to fight hunger, and Brazil

LTD Editors's picture

Syria's economy is heading into ruin, warns a Reuters news story based on a new study by the Damascus based-Syrian Centre for Policy Research. Commissioned by the United Nations and the International Monetary Fund (IMF) the study estimates that there was a 40 percent contraction in GDP since the start the conflict in 2011 and two-thirds of the nation's population is estimated to be living in extreme poverty.

Thomas Piketty, author of 'Capital in the 21st Century,' has responded in detail to the FT's recent assertion that his blockbuster book used erroneous computations.

A development e-story: Estonia

Swati Mishra's picture

"Once upon a time in the faraway Baltic region was a tiny nation of Estonia. Newly independent, with a population of 1.3 million, and with 50 percent of its land covered in forests, it was saddled with 50 years of under development. While it was operating with a 1938 telephone exchange, it’s once comparable neighbor across the gulf, Finland, had a 30 times higher GDP per capita and was waltzing its way into new technological advances. Estonia was faced with the challenge of catching-up with the rest of the world. It too embarked upon the technology bandwagon, but revolutionized it’s progression, by creating identity, secured digital Identity for its citizens. And finally, Estonia became a country teeming with cutting-edge technology. The end. “

Son preference, fertility and family structure: Evidence from reproductive behavior among Nigerian women

LTD Editors's picture

Strong boy-bias and its consequences for young and unborn girls have been widely documented for Asia. A new World Bank policy research working paper considers a country in Sub-Saharan Africa and finds that parental gender preferences do affect fertility behavior and shape traditional social institutions with negative effects on adult women's health and well-being. Using individual-level data for Nigeria, the paper shows that, compared to women with first-born sons, women with first-born daughters have (and desire) more children and are less likely to use contraceptives. Women with daughters among earlier-born children are also more likely to have shorter birth intervals, a behavior medically known to increase the risk of child and maternal mortality. Moreover, they are more likely to end up in a polygynous union, to be divorced, and to be head of the household. The preference for sons is also supported by child fostering patterns in which daughters are substitutes for foster girls, while the same does not hold for sons and foster boys. These results can partly explain excess female mortality among adult women in Sub-Saharan Africa.

Cash transfers and temptation goods: A review of global evidence

LTD Editors's picture

Cash transfers have been demonstrated to improve education and health outcomes and alleviate poverty in various contexts. However, policy makers and others often express concern that poor households will use transfers to buy alcohol, tobacco, or other "temptation goods." The income effect of transfers will increase expenditures if alcohol and tobacco are normal goods, but this may be offset by other effects, including the substitution effect, the effect of social messaging about the appropriate use of transfers, and the effect of shifting dynamics in intra-household bargaining. The net effect is ambiguous. A new paper by David K. Evans and Anna Popova reviews 19 studies with quantitative evidence on the impact of cash transfers on temptation goods, as well as 11 studies that surveyed the number of respondents who reported they used transfers for temptation goods. Almost without exception, studies find either no significant impact or a significant negative impact of transfers on temptation goods. In the only (two, non-experimental) studies with positive significant impacts, the magnitude is small. This result is supported by data from Latin America, Africa, and Asia. A growing number of studies from a range of contexts therefore indicate that concerns about the use of cash transfers for alcohol and tobacco consumption are unfounded.

Global income distribution: From the fall of the Berlin Wall to the Great Recession

Christoph Lakner's picture

The period between the fall of the Berlin Wall and the Great Recession saw probably the most profound reshuffle of individual incomes on the global scale since the Industrial Revolution. This was driven by high growth rates of populous and formerly poor or very poor countries like China, Indonesia, and India; and, on the other hand, by the stagnation or decline of incomes in sub-Saharan Africa and post-communist countries as well as among poorer segments of the population in rich countries.

​Friday Roundup: Tackling Inequality, Ushahidi on crisis data, Technology and Africa, Gates on Sachs, and ABCDE sign up

LTD Editors's picture

Ana Revenga, soon to be the head of the Bank's Poverty Global Practice, blogs on the importance of starting early when tackling inequality and also links to a new user-friendly inequality dashboard.

From his days as an MIT professor, to his stint as World Bank Chief Economist, #2 at the IMF, and head of Israel's central bank, Stan Fischer is a towering figure in economics circles. He's just been appointed by Fed Chairwoman Janet Yellen to be her deputy. Read Dylan Matthew's profile of Stan here.

Of report downloads and impact: Tales of a trending working paper

Merrell Tuck-Primdahl's picture

A recent Policy Research Working Paper “Which World Bank Reports are Widely Read?” garnered a flurry of online coverage over the past week and a half.

Unfortunately, several reports misunderstood the paper’s conclusions. As fellow blogger David Evans pointed out yesterday, a few Tweets and stories implied that most Bank reports are not being used at all. That’s clearly not true. In fact, people across the world downloaded World Bank reports millions of times over the past two years. It is true, however, that certain technical, country-specific, and sector-specific reports (the only ones studied by the working paper) are much less widely read, or were not downloaded via the Documents and Reports database that the authors analyzed. Even if not downloaded, these reports were certainly delivered to the clients who commissioned them, and were often emailed to others, or disseminated the old-fashioned way by printing and hand distribution -- a common practice in many parts of the developing world where we work and where internet access is limited.

If I live long, will we prosper?

Harun Onder's picture

Thankfully, we enjoy longer lives than any generation before us. We also have fewer siblings, on average. All of these things add to our quality of life – we have more time to have fun, and we get more attention from mom. But are these changes, which are good for each of us, also good for all of us?

When people live longer and have fewer babies, the average age of the population increases. According to UN calculations, the world’s median age – currently about 29 – is 7 years higher than it was in 1970. 

Urbanization as opportunity

LTD Editors's picture

Urbanization deserves urgent attention from policy makers, academics, entrepreneurs, and social reformers of all stripes. Nothing else will create as many opportunities for social and economic progress. The urbanization project began roughly 1,000 years after the transition from the Pleistocene to the milder and more stable Holocene interglacial. In 2010, the urban population in developing countries stood at 2.5 billion. The most important citywide projects -- successes like New York and Shenzhen -- show even more clearly how influential human intention can be. The developing world can accommodate the urban population growth and declining urban density in many ways. One is to have a threefold increase in the average population of its existing cities and a six fold increase in their average built-out area. Another, which will leave the built-out area of existing cities unchanged, will be to develop 625 new cities of 10 million people -- 500 new cities to accommodate the net increase in the urban population and another 125 to accommodate the 1.25 billion people who will have to leave existing cities as average density falls by half.

Risks and Opportunities of Participation in Global Value Chains

Xubei Luo's picture

Since the first industrial revolution, waves of technological improvement have changed the boundary of production and redefined the role of the state. The information and communication technology revolution has not only increased productivity, but has also reinterpreted the function of time and distance—billions of activities are now linked with “one-click,” and new transactions become possible with “just-in-time” delivery. If the technological revolution has made participation in Global Value Chains (GVCs) somewhat inevitable, it has also accentuated both the risks and opportunities associated with this involvement. On the one hand, participation in GVCs creates new opportunities for profits and expands the market horizon; but on the other hand, it exposes the enterprise sector to risks previously shielded by market boundaries and geographic distances, while increasing the scale of information asymmetry.

Is it time we shifted our attention and research to the informal sector’s firm size?

Mohammad Amin's picture

Looking at the literature on informality, one thing that stands out is the small size of the informal firms. In fact, firm-size is one of the criteria used by ILO and individual researchers to draw the line between formal and informal firms. Many informal firms, however defined, are operated by the owner herself or himself and without any other employees, with few having more than five employees.

The effect of aid on growth: Evidence from a quasi-experiment

LTD Editors's picture

The literature on aid and growth has not found a convincing instrumental variable to identify the causal effects of aid. A new World Bank policy research working paper exploits an instrumental variable based on the fact that since 1987, eligibility for aid from the International Development Association (IDA) has been based partly on whether or not a country is below a certain threshold of per capita income. The paper finds evidence that other donors tend to reinforce rather than compensate for reductions in IDA aid following threshold crossings. Overall, aid as a share of gross national income (GNI) drops about 59 percent on average after countries cross the threshold. Focusing on the 35 countries that have crossed the income threshold from below between 1987 and 2010, a positive, statistically significant, and economically sizable effect of aid on growth is found. A one percentage point increase in the aid to GNI ratio from the sample mean raises annual real per capita growth in gross domestic product by approximately 0.35 percentage points. The analysis shows that the main channel through which aid promotes growth is by increasing physical investment.

Saving Lives with a Bucket of Yellow Paint

Sana Rafiq's picture

The following post is a part of a series that discusses 'mind and mindsets,' the theme of the World Bank’s upcoming World Development Report 2015.

If you had to guess, what would you say is the leading cause of unnatural deaths in Mumbai, one of India’s largest cities? Fire? Car wrecks? Suicide? In fact, the number one cause of unnatural deaths in Mumbai is railway track accidents.
 
According to India Railroad, in Mumbai, 10 people die everyday crossing the railway tracks. This amounts to more than 3,500 people a year, only in Mumbai. In fact, 15,000 people are killed every year while crossing rail tracks in India. But what causes these accidents? Is it because the individuals don’t know when the train is coming? Do they have poor visibility?

How is Ukraine's Private Sector Performing?

Mohammad Amin's picture

Information on the situation prior to the outbreak of the crisis is critical for understanding the current situation in Ukraine. As far as economics is concerned, macro-economic data--such as income per capita and unemployment rates-- is definitely important but it does not necessarily capture various dimensions of the business climate and the actual experiences of private agents in dealing with the government. Other factors play a big role, for example, how often do firms pay bribes to obtain licenses and permits in Ukraine? Have these unofficial payments increased over time? In order to answer these questions, we must zero in on what actual firms really experience.

Too Small to Regulate – A Blog

Kaushik Basu's picture

Informal industries and markets, with many small producers and suppliers, are generally more difficult to regulate than their organized counterparts, dominated by larger corporations. 

Adulteration of food, for instance, is more common in small, informal outlets than when sold by large, branded firms. It was part of the lore in South Asia that milk bought from small, informal cattle owners would be adulterated with water (which on charitable days may be viewed as traditional technology for converting 4%-fat milk to 2%). A recent study in Barisal District of Bangladesh  found that while small percentages of milk samples had different kinds of adulteration, when it came to added water, 100% of the samples had it. 

Friday Roundup: Data on Maternal Mortality, Best and Worst Places to be a Mother, Rewarding Careers, and Mom Magnet

LTD Editors's picture

The World Health Organization, the United Nations, and the World Bank jointly released data and a report on new maternal mortality estimates (1990-2013). Using illustrative charts, the Bank's Development Data Group demographer Emi Suzuki blogs about how the data shows meaningful progress in reducing maternal mortality.

Doing Business methodology updates

LTD Editors's picture

The World Bank Group’s Doing Business project provides objective measures of business regulations and their implementation across economies worldwide and selected cities at the subnational and regional level. The first Doing Business report, published in 2003, covered five indicator sets and 133 economies. The most recent report published in late 2013 covered 11 indicator sets and 189 economies.

As with most key international indicator sets, Doing Business has come a long way since its inception in 2002/2003 and continues to be a work in progress. The report team works to improve the methodology each year and to enhance their data collection, analysis and output. 

Playing with and Understanding Purchasing Power Parities

Kaushik Basu's picture

A fascinating feature of purchasing power parity (PPP) is more people hold an opinion on it than know what it means. This was in ample display last week, when the Global Office of the International Comparison Program (ICP), hosted by the World Bank, announced the latest PPP data for the world, pertaining to 2011. 

Putting aside complexities, PPPs may be viewed as an estimate what one US dollar can buy in different countries. In case a dollar in Ghana can buy three times what it can buy in the United States, then a person who earns 1,000 dollars each month in Ghana is said to earn 3,000 in terms of ‘PPP-adjusted dollars’. 

The role of changes in income distribution

Jos Verbeek's picture

There is a lot of public discussion about Thomas Piketty’s book on capital and its implications for inequality. His work strikes a chord with many of us because it outlines a future where basically your own or inherited wealth matters and where wage income and apparently your human capital does not matter that much for your income generation. So how do we escape such a one-sided and unequal world? Well, maybe one way is to understand better the interaction between growth, changes in the income distribution, and their implications for shared prosperity.  

Gary Becker: In Memoriam

Indermit Gill's picture

On September 23rd 2013, Gary Becker spoke about inequality and government policy here at the World Bank.  In introducing him, Kaushik Basu, the Chief Economist at the World Bank, paid him the highest tribute, calling him one of the most towering figures in our profession. “There are people who describe themselves as Beckerian and that is important,” Kaushik said. “But Gary Becker is much more than that. Many years ago at a conference, someone came to me and said, ‘You know, I am non-Beckerian’. It is one thing to have a school. But to have a school that is identified as ‘non-you’ is truly remarkable. We do hear of the non-Euclidean school and a few others, but this puts you in a special category.”

Friday Roundup: ​Sources of Humanitarian Aid, Stolen Girls, First Thousand Days, South Sudan, and New Kaushik Basu Paper

LTD Editors's picture

An April briefing paper from 'Global Humanitarian Assistance' analyzes where humanitarian aid comes from and finds that private donors contributed US$4.1 billion in 2012, representing 24% of the total international response. Over a quarter of all international humanitarian assistance came from private donors between 2008 and 2012. The role of these private donors clearly goes beyond purely financial donations. There is an acknowledged rise for example in corporate partnerships, where expertise, human resources and goods are a given.

The ABCs of PPPs in an FT video

Merrell Tuck-Primdahl's picture

Yesterday the International Comparison Program released the summary results and findings of the 2011 ICP covering 199 economies. FT economics editor Chris Giles explains the uses and limitations of PPPs in this video, plus he discusses the results of his own calculations regarding the estimated standing of the US and other big economies for 2014. Clearly the world is changing fast. There is also a useful 'explainer' blog by Data Group Director Haishan Fu on the Open Data blog.