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Policy Research Working Paper Series publication roundup for the weeks of March 15 and 22

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This blog is a biweekly feature highlighting recent working papers from around the World Bank Group that were published in the World Bank’s Policy Research Working Paper Series. This entry introduces nine papers published during the weeks of March 15 and 22 on various topics, including data research that contributed to the WDR2021, deforestation and trade liberalization, labor market impacts of COVID-19 in India, and others. Here are the highlights of select findings. 

To mark the launch of the World Development Report 2021: Data for Better Lives, we highlight three data research works. The Statistical Performance Indicators (SPI), a tool for countries and donors to assess the national statistical capacity, was released as part of the WDR2021. The SPI builds on the Statistical Capacity Indicators (SCI), which the World Bank has regularly published since 2004. Statistical Performance Indicators and Index by Dang and coauthors lays out the conceptual foundation regarding data usage and data production behind the SCI and proposes a new, more comprehensive index. Next, as the digital economy depends on a proper legal framework that protects privacy, Achieving Privacy by Chander and coauthors provides one of the first assessments of how much data privacy laws cost to implement and enforce. Additionally,  Demand-Side View of Mobile Internet Adoption in the Global South by Chen examines how socioeconomic variables affect mobile internet adoption using nationally representative household data from 22 developing countries. 

  • Statistical Performance Indicators and Index: Owing to a large-scale data collection effort, the SPI offers the most complete coverage of country statistical capacity to date, in terms of a combination of a larger number of indicators, more time periods, and more country coverage. Figure 1 maps the SPI scores for all countries, which shows much heterogeneity for countries at different income levels or in different geographical regions. 

    Figure 1: SPI Overall Score

SPI Score Map

Source: Dang et al. 2021.

  • Achieving Privacy compares the costs of private sector implementation and public sector enforcement for the United States, European Union, and China. The analysis concludes that data privacy is not outside the reach of developing countries. The cost of data privacy compliance can be quite high, but at the same time, the cost of not having data privacy protection can be quite high as well. 
  • Demand-Side View of Mobile Internet Adoption in the Global South finds that demand-side factors are critical for mobile internet adoption. Across the developing world, females, the elderly, those who live in rural areas, and those who have a relatively low level of income or education are less likely to adopt mobile internet. Moreover, those who have more close friends using an online social network are more likely to adopt mobile internet. Additionally, the author compares differences in mobile internet adoption across different countries and regions. 

Next, we introduce three papers on trade agreements. There are growing concerns over environmental degradation from trade liberalization. The Effectiveness of Environmental Provisions in Regional Trade Agreements (RTAs) by Abman, Lundberg, and Ruta explores the effectiveness of environmental provisions in RTAs in mitigating deforestation. Another paper, Trade Barriers in Government Procurement by Mulabdic and Rotunno, estimates trade barriers in government procurement. It analyzes whether (and how much) trade agreements can contribute to reducing those barriers. Bridging Bangladesh and India by Dappe, Lebrand, and Van Patten explores the effects of the Motor Vehicles Agreement between Bangladesh, Bhutan, India, and Nepal—which was signed in 2015 but not yet implemented—on the distribution of population and real income within Bangladesh and India.  

  • The Effectiveness of Environmental Provisions in RTAs shows that forest-related RTA provisions reduce forest loss resulting from trade liberalization. Back-of-the-envelope calculations indicate that the forest and biodiversity provisions studied in this paper prevented approximately 7,500 square kilometers of deforestation from 2003 to 2014. Additionally, there was no evidence that forest exports were significantly affected by environmental provisions. 
  • Trade Barriers in Government Procurement confirms larger home bias in government procurement than in the private markets, while the home bias in government procurement has been shrinking over time. Results also indicate that trade agreements with nondiscriminatory provisions specific to government procurement increase cross-border flows of services. 
  • Bridging Bangladesh and India shows that the Motor Vehicles Agreement (MVA) significantly reduces the cost of transport and trade between Bangladesh and India, thus lowering the prices of final goods and intermediate inputs. As a result of these changes, real wages increase and standards of living improve in almost all states. The largest increases in real income are expected in the west of Bangladesh, such as West Bengal, Uttar Pradesh, and Maharashtra, a main industrial state in India. 

Finally, we feature three studies. Workers at Risk by Bussolo, Kotia, and Sharma estimates the differential post-COVID-19 shock between formal and informal wage workers in India using data from a large household panel survey covering. Aspirations and Financial Decisions by Mckenzie, Mohpal, and Yang examines “aspirations failure” (i.e., if aspirations are set too high, people may fail to reach their goals and will become frustrated, which could lead to lower economic investments.). The Effect of Information and Subsidy Measures on the Adoption of Solar Lanterns by Mekonnen and coauthors examines the slow adoption of solar lanterns in rural Ethiopia. Solar lanterns are relatively inexpensive renewable-energy lightings for people living in remote areas; however, the uptake rate remains low.   

  • Workers at Risk: Results suggest that informal wage employment was inherently more vulnerable during the early COVID-19 shock, even after controlling for industry and district-fixed effects. However, strikingly, the labor market shock informal workers experienced during the lockdown did not persist for long. After April 2020, the informal workers’ labor market outcomes began recovering toward their pre-COVID-19 levels faster than did those of their formal counterparts. The income gap between informal and formal-headed households was significantly lower by June 2020 than it used to be in the pre-COVID-19 period. This suggests that informal workers were quick to catch up once the lockdown was lifted.
  • Aspirations and Financial Decisions: Authors conducted a randomized experiment of the financial aspirations treatment with small-scale entrepreneurs in the Philippines. Encouraging small-scale entrepreneurs to increase their financial aspirations led participants to set higher savings goals, but most people failed to achieve their goals. Two years after the treatment, the treated individuals did not have higher savings, and they had substantially less borrowing, and lower business investment. This result provides empirical support for aspiration failures, suggesting that aspirations are better to be set high, but not too high.
  • The Effect of Information and Subsidy Measures on the Adoption of Solar Lanterns: Authors conducted a randomized field experiment in rural Ethiopia to investigate the effectiveness of both information provision and subsidies for adopting solar lanterns. Results show that an increase in the amount of subsidy increased the adoption rate. However, provisioning information about the private and public benefits of the solar lantern alone did not significantly affect adoption rates and the willingness to pay for solar lanterns. Combining information with subsidies increases adoption only when the subsidy levels are high. This suggests that the goal of universal electricity access may not be achieved without subsidizing even relatively lower-cost, off-grid technologies. 

The following are other interesting papers published during the past few weeks. Please check out these articles as well! 

The Policy Research Working Paper Series encourages the exchange of ideas on development and quickly disseminates the findings of research that is in progress.

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