Policy Research Working Paper series publication roundup for the weeks of March 29 and April 5

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 seven papers published during the weeks of March 29 and April 5 on various topics, including papers by Chief Economist of the World Bank, an assessment of the quality of primary care services in sub-Saharan African countries, methodological research on data collection, and others. Here are the highlights of select findings.

First, we introduce two papers by World Bank Chief Economist Carmen Reinhart. A paper From Health Crisis to Financial Distress provides insights on the post-COVID-19 recovery by reviewing historical episodes of default and restructuring of sovereign external debts. Another paper, Coping with Disasters co-authored with Sebastian Horn and Christoph Trebesch, provides a novel comprehensive long-run data historical set of official international lending. The data covers the lending transactions of 134 creditor countries and 56 international and regional financial organizations over 200 years.

• From Health Crisis to Financial Distress: Historical crisis episodes demonstrate that sovereign debt crises have often been “conglomerate crises” involving multiple types of crises, such as banking and currency crises, and recoveries from such crises have taken time. Most of the top 25 worst financial crises took more than a decade for recovery. It also highlights a slow-moving nature of debt crisis resolution, as the process involves multiple intermediate debt restructurings. Under the current COVID-19 pandemic, many countries are facing a growing risk of a conglomerate crisis. To speed up debt restructuring processes, important factors include (1) realistic economic forecasts, (2) new legislation to support orderly debt restructurings, and (3) more transparency on debt data and debt contract.
• Coping with Disasters: Figure 1 demonstrates that official sovereign lending is heavily concentrated in times of major wars. In peacetime, development finance and financial crises are the main drivers of official cross-border finance. Moreover, official finance picked up in the 2000s, led by China and other emerging donor countries. In this paper, the authors further analyze determinants of bilateral lending using a gravity model. 

Figure 1. The purpose of official sovereign lending 1790 – 2015

_{Source: Horn, Reinhart, and Trebesch (2021)}

Next, we present The Realities of Primary Care by Andrews and coauthors, which examines the quality of primary health care services for nine sub-Saharan African countries using Service Delivery Indicators surveys. At the onset of the COVID-19 crisis, massive investment was made in the health care sector to build a resilient health care system. This paper provides guidance on how to optimize investments in the health sector to strengthen the health care systems.  

• The Realities of Primary Care: The quality of primary care delivery in the nine sub-Saharan African countries remains suboptimal. Results highlight substantial heterogeneity in the quality of primary care between and within countries. The availability of basic equipment, infrastructure, and essential medicines varies—public facilities, facilities in rural areas, and non-hospitals are more lacking compared with private facilities, urban facilities, and hospitals. In terms of patient care, health care providers’ ability to correctly diagnose and treat common health conditions is low and variably distributed.

Two papers conducted impact evaluations—a paper on workfare programs in Cote d’Ivoire and a study on a quality ratings system for business services providers in Nigeria. Do Workfare Programs Live Up to Their Promises? by Bertrand and coauthors measures immediate and long-lasting impacts of a public works program in Cote d’Ivoire on youth employment, earnings, and behavior. What Prevents More Small Firms from Using Professional Business Services? by Anderson and Mckenzie examines whether providing information on quality ratings of service providers is enough to get most firms to use professional business services. Hiring expertise, such as accounting or marketing specialists, is an effective alternative to in-house training programs, yet small firms in developing countries barely use such professional business services.

• Do Workfare Programs Live Up to Their Promises?: The workfare program in Cote d’Ivoire showed limited effects on the likelihood of employment, but it shifted toward wage jobs, increased earnings and savings, and improved work habits and behaviors during the program periods. However, in the fifteen months after the program completion, there were no lasting impacts on employment or behaviors besides savings, which remained high, and only limited impacts on earnings. In the paper, the authors additionally examined program performance under different targeting approaches. 
• What Prevents More Small Firms from Using Professional Business Services?: The authors set up a business services marketplace and a website containing information about different providers and used mystery shopper visits to develop a quality ratings system. Randomized experiments were implemented in Lagos and Abuja in Nigeria. Results show that providing quality ratings services does change firm preferences on service providers. However, the information and quality ratings treatments have no significant impact on use of professional business services, suggesting that alleviating information and quality concerns alone does not seem to be sufficient to get more firms to use professional business services.

Finally, we introduce two survey methodological research studies on the structure of survey questionnaires and a data collection approach. A Cautionary Tale by Islam and Rodriguez Meza explores the effects of question order in the Enterprise Surveys. In particular, it examines the vulnerability of perception-based questions, as such questions encompass broader dimensions and thus may lead to biases or misinterpretations more than experienced-based or objective questions do. As satellite-based monitoring of smallholder agricultural outcomes has been gaining momentum lately, Understanding the Requirements for Surveys to Support Satellite-Based Crop Type Mapping by Azzari and coauthors provides recommendations on how large-scale household surveys should be conducted to generate the data needed to train models for satellite-based crop type mapping.  

• A Cautionary Tale: The study takes advantage of randomized ordering of the perception-based questions in the Venezuela 2006 Enterprise Survey. The experiment revealed that the question order matters for two business environment elements—business licensing and permits and corruption. The insights of this study recommend that analysis in these two areas should go beyond and complement perception-based questions with experience-based or objective questions.
• Understanding the Requirements for Surveys to Support Satellite-Based Crop Type Mapping: By experimenting with satellite-based monitoring in maze cultivation in Malawi and Ethiopia, the study shows that smallholder plots with maize cultivation can be identified with up to 75 percent accuracy. However, the predictive accuracy varies with the approach to georeferencing plot locations and the number of observations in the training data. The authors further discuss the required volume of and approach to ground data collection for training and validating remote sensing models.

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

• Damaged by the Disaster: The Impact of COVID-19 on Firms in South Asia (Brucal, Grover, and Ortega) 
• Integration of Venezuelan Refugees and Migrants in Brazil (Shamsuddin et al. ) 
• Deep Services Trade Agreements and their Effect on Trade and Value (Borchert and Di Ubaldo) 
• Natural Capital and Sovereign Bonds (Wang) 
• Welfare Impact of Hosting Refugees in Ethiopia (Ayenew)
• Mapping Data Governance Legal Frameworks Around the World: Findings from the Global Data Regulation Diagnostic (Chen) 
• Long-Term Impacts of Short Exposure to Conditional Cash Transfers in Adolescence: Evidence from the Philippines (Dervisevic, Perova, and Sahay) 
• The Evolution of City Form: Evidence from Satellite Data (Lall, Lebrand, and Soppelsa) 
• Does Participation in Global Value Chains Reduce Spatial Inequalities within Countries? (Grover and Lall)

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