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Complements or Substitutes? State Presence and the Power of Traditional Leaders -- Guest post by Soeren J. Henn

Development Impact Guest Blogger's picture

This is the twentieth in this year's series of posts by PhD students on the job market.

When we study how institutions affect development, we often focus on the characteristics of national institutions, such as whether a country is democratic, protects property rights, or has inclusive institutions. Yet villages in many developing countries contain almost no trace of these national institutions. Instead, life in rural villages is typically shaped by local leaders. In Sub-Saharan Africa, traditional leaders (namely village chiefs) are an important local institution. They control resources – most notably land – collect informal taxes, influence voting, and implement local development projects. The local importance of traditional leaders also concerns the nation-state. As national institutions attempt to increase their presence in the countryside, traditional leaders could act as complements or substitutes to state presence. They could either cooperate or compete with the public good provision by the state and thus enhance or weaken it.
 
In my job market paper, I study how local leaders and the national state interact. Specifically, I estimate the effect of state presence on the power, legitimacy, and effectiveness of village chiefs. In other words, do village chiefs become more or less influential when the national state is absent (or present) and how does this affect their public good provision? A key institutional feature in this context is that African states have used different strategies of dealing with traditional leaders that primarily vary on one dimension: whether chiefs are formally integrated into the state apparatus. I investigate how this institutional choice shapes the relationship between state presence and chiefs.

Breaking down the barriers to mobilizing sustainable investment

Ceyla Pazarbasioglu's picture
Closing Plenary of the Investor Forum. © World Bank

“Private capital is often an important source of sustainable finance. Public finance alone may not be sufficient to meet the demands for sustainable finance as the global economy continues to grow and poses increasing burdens on our resources and ecosystems. Mobilizing private investment in areas such as sustainable infrastructure, sustainable technologies and business model innovations, among others, can deliver substantive environmental, social, and economic benefits.”

This summary from the G20’s Sustainable Finance Synthesis Report was at the heart of the discussion at the Investor Forum, which was held on the sidelines of the G20 Summit in Buenos Aires in November. The event – hosted by the World Bank and the Government of Argentina – brought together investors holding over $20 trillion of assets as well as stakeholders and representatives from G20 governments. The goal was to identify steps for boosting long-term, sustainable, private-sector investments that tackle development challenges and promote economic growth in parts of the world that need it most.

Adding energy data to the World Bank’s data catalog

Tim Herzog's picture

The World Bank data catalog is an ongoing effort to provide a “one-stop shop” for all Bank data related to development. That aspiration took a big step forward this week as we completed the addition of datasets from the World Bank’s ENERGYDATA.INFO platform. ENERGYDATA.INFO continues to provide public access to hundreds of datasets from over a dozen organizations on topics such as solar and wind measurement data, electricity transmission networks and energy access. Users may now search for and download those same datasets from the Bank-wide catalog.

This integration is similar to previous efforts to provide greater data access. The World Bank’s finances platform, microdata platform, and open data catalog have all been added to the data catalog. For data users and Bank staff alike, there is a clear benefit in being able to search and access all available data from a single online location. The data catalog also provides a consistent approach to data licensing, so users can understand which datasets are open data, which are subject to third-party terms, and which may carry other restrictions.

Precious metals outlook: regaining lustre?

Wee Chian Koh's picture

This blog is the ninth in a series of ten blogs on commodity market developments, elaborating on themes discussed in the latest edition of the World Bank’s Commodity Markets Outlook. Earlier blogs are here.
 
The World Bank’s Precious Metals Price Index is forecast to decline marginally in 2019, following an expected 2 percent loss in 2018. Gold prices are projected to edge marginally lower and silver prices to tick slightly higher, while platinum prices are anticipated to rebound moderately. Key risks to this outlook are U.S. monetary policy, the strength of the U.S. dollar, and global demand.
 
Precious metals price index

Sandbox or Quicksand?

Sharmista Appaya's picture
The financial system is going through a period of rapid innovation that is disintermediating the financial services value chain. This can have significant benefits for financial inclusion- providing access to, and enabling active usage of, affordable financial products and services to all individuals while supporting a diverse and competitive marketplace.

Financial regulators around the world are looking for more flexible ways to engage with fintech companies while being mindful of the inherent risks. Although the importance of interacting with this sector is widely accepted, the most appropriate instrument to do so is still being determined.

A tool that has become increasingly popular and synonymous with innovation is the ‘Regulatory Sandbox’. While nuances exist, they are fundamentally a regulator-controlled environment that allows participants to test their products, services and business models. However, Sandboxes are only one of several tools that regulators can use and have both benefits and challenges associated with them.
Depiction of some of the different tools available to regulators to enable Fintech
Depiction of some of the different tools available to regulators to enable Fintech

What’s keeping Pakistan in the dark?

Fan Zhang's picture
 $18 billion in fiscal year 2015—that is 6.5 percent of the country’s economy.
Nearly  50 million Pakistanis still lack access to grid electricity. Power distortions cost Pakistan’s economy much more than previously estimated: $18 billion in fiscal year 2015—that is 6.5 percent of the country’s economy.

From 1990 to 2010, 91 million people In Pakistan received electricity for the first time.
 
And power outages across the country have gone down drastically over the past few years.
 
Clearly, Pakistan has achieved much progress in expanding its electricity access and production in recent decades.
 
However, nearly  50 million Pakistanis still lack access to grid electricity and the country ranks 115th among 137 economies for reliable power.
 
After peaking in 2006, per capita electricity consumption failed to grow for almost a decade, remaining only one-fifth the average for other middle-income countries in 2014.
 
To boost sustainable energy supply, Pakistan’s power sector needs urgent investments and reforms to target inefficiencies in the entire electricity supply chain.
 
Fittingly, my new report In the Dark analyzes what lies behind these inefficiencies and suggests relevant actions to improve the operation of power plants, cut down on waste and costs, and increase electricity supply in a cost-effective manner.
 
The study sheds new light on the overall societal costs — not merely the fiscal costs as in previous research — of subsidies, blackouts and other distortions in the power sector.
 
To that end, my team and I surveyed Pakistan's entire supply chain from upstream fuel supply to electricity generation, transmission and distribution, and eventually, down to consumers.
 
Put simply, the numbers we found are dire.
 
Power distortions cost Pakistan’s economy much more than previously estimated: $18 billion in fiscal year 2015—that is 6.5 percent of the country’s economy.
 
Problems begin upstream, where gas underpricing encourages waste and reduces incentives for gas production and exploration.
 
And with no recent significant gas discoveries, higher gas usage has widened the gap between growing demand and low domestic supply.
 
On top of that, the volume of gas lost before reaching consumers reached 14.3 percent in fiscal year 2015. By comparison, this number is about 1 to 2 percent in advanced economies.
 
Public power plants use 20 percent more gas per unit of electricity produced than private producers.
 
Poor transmission contributed to 29 percent of the electricity shortfall in fiscal year 2015, while weak infrastructure, faulty metering and theft cause the loss of almost a fifth of generated electricity.
 
Electricity underpricing and failure to collect electricity bills have triggered a vicious “circular debt” problem, leading to power outages.
 
A lack of grid electricity also leads to greater use of kerosene lamps that cause indoor air pollution and its associated respiratory infections and tuberculosis risks.
 
Lack of access to reliable electricity also adversely impact children’s study time at night, women’s labor force participation, and gender equality.
 
Connecting all of Pakistan’s population to the grid and increasing the supply of electricity to 24 hours a day would increase total household income by at least $4.5 billion a year and avoid $8.4 billion in business losses.

Missing in action: Where is the “demand” for jobs when we prepare for jobs?

Federica Saliola's picture

Are robots, friends or foes of the future of work? Automation is eliminating some routine jobs but, on the positive side, robots are good partners for workers engaged in tasks that demand analytical, interpersonal, and creative skills, as well as manual physical skills involving dexterity.

Higher education institutions as drivers of innovation and growth in Azerbaijan

Igor Kheyfets's picture
Azerbaijan Education

It’s a cold spring day in Baku, and several students from Azerbaijan State Oil and Industry University (ASOIU) are huddled around a laptop trying to project an image onto their classroom wall.
 
Once the image is projected, one of the students “writes” on the surface of the classroom wall – as he would on the computer screen – using customized software called CamTouch, which allows the user to turn any surface into an interactive “smartboard”. The student also selects an icon and virtually opens a document with the help of a special stylus.

Do Sociable or Higher-Achieving Peers Matter? Guest post by Román Andrés Zárate

Development Impact Guest Blogger's picture

This is the nineteenth in this year's series of posts by PhD students on the job market.

While sociable peers increase your social skills, higher-achieving peers do not improve your academic performance. That is the main conclusion of my job market paper.
 
As the world bends closer towards automation, social skills take a lead role on individuals' well-being and labor market success. According to Deming (2017), between 1980 and 2012, jobs demanding high levels of social interaction grew by nearly 12 percentage points as a share of the U.S. labor force. Similarly, a recent column by the Washington Post highlights the importance of social skills for team productivity and employment opportunities. It describes the results of Google’s Project Aristotle, which concludes that the best teams at Google exhibit high levels of soft skills, and particularly social skills. These include emotional safety, equality, generosity, curiosity towards the ideas of your teammates, empathy, and emotional intelligence
 
While there is extensive research on policies that improve academic learning, little is known about how social skills form. My job market paper addresses this challenge. I present the results of a large-scale field experiment at boarding schools in Peru. The intervention was designed to estimate social and cognitive peer effects. While other studies have exploited random assignment to dormitories and classrooms, I use a novel experimental design to generate large variation in peer skills. Specifically, I assign students to two cross-randomized treatments in the allocation to beds in a dormitory: (1) less or more sociable peers, and (2) lower- or higher-achieving peers. This design surmounts many of the challenges with traditional approaches to the study of peer effects (Manski, 1993; Angrist, 2014; Caeyers and Fafchamps, 2016).

Risk models and storytelling – learning from past disasters for a more resilient future

Emma Phillips's picture



In the early afternoon of September 3, 1930, the San Zenon Hurricane struck Santo Domingo, the capital city of the Dominican Republic. With winds of up to 250 kilometers per hour, one of the deadliest hurricanes ever recorded in the Atlantic pummeled the coastal city, destroying entire neighborhoods and claiming the lives of as many as 8,000 people.
 
What would happen if a hurricane of a similar magnitude hit Santo Domingo today? Nearly 90 years on, only the oldest Dominicans have any direct recollection of the devastation. For most residents of present-day Santo Domingo, the consequences of another cataclysmic hurricane making landfall near their city are hard to imagine.
 
Be it hurricanes like San Zenon or volcanic eruptions such as that of Mount Vesuvius, analyzing natural events that led to the major disasters of yesteryear can help us get a fuller grasp of how similar events might impact today’s more populous, urbanized, and connected world. 


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