A healthy mix of innovation, continuous engagement, and effective implementation can bring about sustained transformation in public procurement. A more effective and transparent procurement system frees up public money for achieving more and better development outcomes and improving the delivery of public services.
This blog is the third 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 can be found here.
Recent developments and outlook: coal
Coal prices rose 12 percent in the third quarter—the fifth straight quarterly increase—and are up 23 percent relative to the same quarter of 2017. Weather patterns in Asia and Europe have been the main drivers of the rise in prices. Low winter temperatures at the start of the year raised demand for fuel for heating, while unusually hot summer temperatures boosted electricity demand for air conditioning. In addition, low hydro availability and supply constraints in the two largest markets--China and India—increased coal imports.
Prices are projected to decline from current elevated levels as China is expected to reduce coal imports by stimulating domestic production, as well as by lowering the share of coal in energy consumption. Upside risks include continued strong growth in electricity demand in other emerging markets that will be met to some extent by coal. Production shortfalls in China and India could also raise import demand and support prices.
This is the third in this year's series of posts by PhD students on the job market.
A firm’s success rides heavily on the performance of its employees. It is therefore important that firms design employment contracts that properly incentivize hard work. This becomes more challenging when firms cannot observe the amount of effort employees invest, nor the amount of output they produce. In theory, firms can use monitoring technologies that reveal the performance of their workers more accurately to overcome this constraint (Holmstrom, 1979). In practice, however, the impact of such monitoring technologies on contracts and employee performance is unclear. Managers may not know how to leverage the additional information monitoring technologies reveal. Moreover, weak legal institutions, which prevent companies from credibly sanctioning bad behavior, may limit how useful the new information actually is.
In my job market paper - co-authored with Gregory Lane and David Schönholzer – we study the impact of moral hazard on labor contracting, employee behavior, and the extent to which improved monitoring affects firm operations. We also establish whether any gains to companies come at the expense of their workers, or society at large. To this end, we implement a randomized control trial where we introduce a monitoring device to 255 firms (vehicle owners) operating in Kenya’s transit industry. We design a novel mobile application that provides information to 125 treatment firms regarding: the location of the vehicle, number of kilometers driven, number of hours the ignition was on, and the number of safety violations incurred (sharp-braking, sharp-turning, over-acceleration and speeding). We confirm that 70% of owners consult the app weekly. This information provides treatment owners with a more precise estimate of what revenue should be, and whether drivers are engaging in behavior that damages the vehicle. This has implications for the owners’ choice of contract and drivers’ behavior, which ultimately impact firm profits/growth. We use daily surveys from vehicle owners and drivers over six-months to track the impact of reducing asymmetric information on these outcomes.
Co-author: Héctor Alexander Serrano, Water Resources Specialist, World Bank Water Global Practice
Also available in Español
Water Security is the new buzzword in the water sector… but what does it mean, really? And how is it applied to real life?
For countries and governments, the term national water security means having adequate water, both in quantity and quality, to meet all demands of the population, the productive sectors and the environment, but also dealing well with extremes, and overall managing the resource adequately and efficiently.
In Latin America, home for 650 million people, those changes are not an exception, and the term “Water Security” is becoming more and more relevant. In the most urbanized continent of the developing world, cities grow fast, vulnerability is latent in vast and fragile large peri-urban areas, and enhanced climate phenomena put high stress on water resources management, delivering of water services and means of production. About 227 million people still do not have access to safely managed water supply and more than 500 million do not have access to safely managed sanitation systems. In the Caribbean region, 26 million people fall into poverty each year because of natural disasters. Urban rivers and waterways in the region are among the most polluted in the world, since 70 percent of the wastewater discharged in the region receives no treatment.
Machine learning algorithms are excellent at answering “yes” or “no” questions. For example, they can scan huge datasets and correctly tell us: Does this credit card transaction look fraudulent? Is there a cat in this photo?
But it’s not only the simple questions – they can also tackle nuanced and complex questions.
Today, machine learning algorithms can detect over 100 types of cancerous tumors more reliably than a trained human eye. Given this impressive accuracy, we started to wonder: what could machine learning tell us about where people live? In cities that are expanding at breathtaking rates and are at risk from natural disasters, could it warn us that a family’s wall might collapse during an earthquake or rooftop blow away during a hurricane?
Over the past 10 years Russia has made great progress in increasing the life expectancy of its people. Back in the mid-2000s, we documented the dramatic decrease in life expectancy in the post-Soviet period in the report “Dying Too Young,” due especially to high mortality among working-age men. Behavioral risk factors, such high rates of cigarette smoking and alcohol abuse, economic and social dislocation, a shift in the predominant diseases and the deterioration of the health care system, including access to it, all contributed to premature death and a dramatic shrinking of the Russian population that hadn’t been seen since World War II.
- A lovely remembrance of TN Srinivasan by Abhijit Banerjee – T.N. was a professor at Yale when I studied, and then also a visitor at Stanford when I was first there as an assistant professor. He had a well-deserved reputation as tough but kind – and was the co-founder of the JDE, co-editor of the Handbooks in Development Economics, and given his work in pushing India to open up, likely helped to lift more people out of poverty than most development economists.
- Andrew Gelman on why robustness tests can be a joke, especially if used for confirmation rather than exploration.
- Annette Brown on what not to do in a replication study
- development impact links
My parents didn’t know that the name they chose for me meant “transparent” in Spanish. But they did know the importance of transparency, honesty and integrity, and passed on to me these values when I was growing up in Bulgaria. I hold them dear in my work at the World Bank.
Its effects are very real. Corruption stops medicine and drugs from reaching the sick, stops schools from being built, leads to roads washing away in the rain, and empties the public coffers.
The poorest country in the Middle East and North Africa even prior to the conflict, Yemen has through violence and subsequent economic freefall landed at the epicenter of a series of interrelated emergencies that the United Nations describes as the “world’s worst humanitarian crisis.” This is the first of a three-part blog series on the Bank’s response in Yemen.
In July of this year, I assumed the role of Country Manager for Yemen. Much has happened in my first 100 days as CM.