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Kenya

Bad incentives put the brakes on firm growth: Evidence from Kenya's matatus: Guest post by Erin Kelley

David McKenzie's picture

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.

Lessons from China: Vocational education for economic transformation in Africa

Girma Woldetsadik's picture
“African participants visit modern container port in Ningbo, China. Photo credit World Bank”

This September I traveled to Beijing and Ningbo, China, to participate in the second Africa China World Bank Education Partnership Forum on Technical and Vocational Education and Training (TVET). The Forum--co-hosted by the China Institute for Education Finance Research, Peking University, Ningbo Polytechnic and the World Bank Group-- served as a platform for discussion and knowledge exchange to encourage stronger partnership efforts between African TVET institutions and some of China’s best ranking TVET centers and industries.

Partnering for green growth in water and sanitation: Lessons for Kenya from Korea

Lewnida Sara's picture

 Magnificent. Splendid. That was the only way to describe the intricate web of waterways, bridges, road, and rail transport that we gazed out on as our bus transported us from Incheon International Airport in Seoul, South Korea, to our hotel. The learning from our Knowledge Exchange had started even before the event had officially begun! All along our winding drive, the infrastructure on display demonstrated an appreciation and understanding of the importance of working with, rather than against, nature. Green Growth, they call it.
 
It was an apt introduction. That’s because the Korean Green Growth Trust Fund, in collaboration with the World Bank Water Global Practice, had organized a Knowledge Exchange event that would focus on water-related issues; how to mainstream green growth concepts in water resource management; and water and sanitation service provision.
 

Soyang Dam, Korea

How antimicrobial resistance (AMR) stewardship is a critical part of strong health systems

Uzo Chukwuma's picture


Under the East Africa Public Health Laboratory Networking Project, diagnostic capacity has been strengthened through the construction of state of the art laboratories. © Miriam Schneidman / World Bank Group 2018


My interest in public health began in childhood and was marked by my experiences growing up in a low-income country with limited public health infrastructure. I felt firsthand the impact of an inadequate public health system when a beloved cousin succumbed to AIDS. My mother suffered a prolonged, resistant infection with complications after invasive surgery, and my family constantly battled malaria due to drug resistance or counterfeit drugs.

Women rise to unlock opportunities for SDG implementation

Mahmoud Mohieldin's picture
Lucy Odiwa, an entrepreneur in Tanzania whose firm, promotes safer and more sustainable methods for handling menstrual health hygiene management (MHM) won the first place in the SDGs&Her competition. © Womenchoice Industries

Visit any community and you will see women breathing life into every part of the economy and society, be it in agriculture, healthcare, marketing, sales, manufacturing, or invention. Through their presence in every walk of life, women make significant contributions to the 2030 Agenda, including its 17 Sustainable Development Goals (SDGs), the most ambitious set of goals that the international community has ever set for itself
 
However, despite representing 50% of the population, women remain over-represented among the world’s poorest and most vulnerable groups and under-represented as leaders and drivers of change. The lack of recognition of women’s contributions, particularly through their businesses and economic activities, has severely limited their access to finance, new markets and knowledge – necessary for economic growth and poverty reduction.

Operationalizing gender based violence risk prevention and mitigation under Kenya DRDIP

Varalakshmi Vemuru's picture
Somali refugee women gather at Dadaab's Women's Centre, Kenya. They receive training and social support here, through a gender-based violence prevention programme implemented by the International Red Cross. © UNHCR/Georgina Goodwin


When considering support for refugees and their host communities, gender based violence (GBV) is a great concern that requires special care and attention.

Unfortunately, violence against women and girls is all too common in many countries across the globe. Drivers of GBV include entrenched social norms that perpetuate power imbalances between men and women, and more generally circumscribe women’s agency and voice in communities and in the home. Despite a recent increase in reporting, data suggest that 45 percent of women who have experienced GBV did not seek help or tell anyone, and there are striking regional differences.

Solving for water security at the source

Andrea Erickson's picture

Aerial view looking south toward the Gulf of Mexico down the Wax Lake Delta, Louisiana.
Photo © Carlton Ward Jr.
 

New York City faced a challenge in the 1990s: the city needed a new water filtration system to serve its nearly 8 million people. But the prospect of spending $6 to 10 billion on a new water treatment plant, and another $100 million on annual operating costs, was daunting. So, city officials took a closer look at the source of their water—the Catskill Mountains.
 
Water from the Catskills flows through 120 miles of forests, farmlands and towns to reach New York City. When that landscape is healthy, it acts as a natural purifying system, but certain development and agricultural practices can result in impaired water quality. For city officials, reaching out to local farmers and landowners and compensating them to restore and conserve their lands in the watershed, combined with some land acquisition, proved to be significantly cheaper than building and operating a new treatment plant.
 

Creating new opportunities for young women in the digital economy

Mamadou Biteye's picture
Developing gender-inclusive digital jobs programs for youth is the subject of a new report, Digital Jobs for Youth: Young Women in the Digital Economy. Photo Credit: © Visual News Associates / World Bank 

Young people struggle to find jobs. Landing that first job is particularly challenging even for youth with quality education. In 2016, 100 young women under 25 in the Gjakova and Lipjan municipalities in Kosovo were seeking their first opportunity after completing university-level education. They  enrolled in the World Bank’s Women in Online Work (WoW) pilot, a training program that aims to equip beneficiaries with the skills they need to find work in the online freelancing market. Within three months of graduation, WoW’s online workers were earning twice the average national hourly wage in Kosovo. Some graduates even went on start their own ventures and hire other young women to work with them.

Congratulations to the First Recipients of the Certificate in Development Journalism

Haleh Bridi's picture

When I was based in the field, I often noticed that many of the journalists working in Africa had not been specifically trained to report on development-related matters, which at times hobbled their ability to effectively identify development issues and, by extension, inform the public of the choices and activities implemented in various countries.

So, we came up with the idea of helping journalists receive the best training we could give on the development challenges facing their continent, thus paving the way for “changing the narrative on Africa.”

The World Bank Africa Region introduced a successful, innovative approach to training journalists – a free, online course for 100 journalists from Francophone Africa, who were selected through an application process.

When elephants fight, it is the grass that suffers

Mark Moseley's picture


Photo: shplendid | Flickr Creative Commons

Talk of trade tariffs and heightened geopolitical tensions are dominating news headlines recently. As developed economies consider escalating protectionist policies, it’s easy to forget about the situation many emerging markets face.

As outlined in the World Bank’s Global Economic Prospects report released in June this year, protectionist policies would affect emerging market and developing economies (EMDEs) more severely than advanced economies. And this is at a time where increased investment and spending in EMDEs, including in infrastructure, is sorely needed.


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