REPORT THEWORLDBANK ON RESEARCH PROGRAM FISCAL 2000 AND 2001 AND FUTURE DIRECTIONS ResearchAdvisory Staff Washington, D.C. Bankresearch--objectives anddefinition TheBank's researchprogramhasfour basic goals: Tosupportallaspectso fBankoperations, includingthe assessmento f developmentprogress inmembercounties. Tobroadenunderstanding o fthe developmentprocess. To improvethe Bank's capacityto givepolicyadvice to itsmembers. To assistindevelopingindigenous researchcapacity inmember counties. This Report's definition o fresearch, like that usedinrecentyears, encompassesanalytic work designedtoproduceresultswithwide applicabilityacrosscountriesor sectors. Bankresearch, in contrastto academicresearch,isdirectedtowardanalyzingrecognizedandemergingpolicyissues andimprovingthe quality o fpolicy advice. Althoughmotivatedbypolicyproblems, Bankre- search addresses longer-tenn concerns rather than the immediateneeds o fa particular Bank lendingoperationor o faparticularcountry or sector report. Itsdefinition does not, therefore, include the economic andsectorwork andpolicyanalysiscarriedoutbyBankstaffintendedonly to support specific operations inparticular countries. Economic and sector work andpolicy studies taketheproducto fresearchandadaptittoparticular projects or country settings, whereas Bankresearchcontributes to thebroader understanding o fdevelopmentprocessesthat underlies future lendingoperations andpolicyadvice. Bothactivities-research andeconomic andsector work-are criticalto thedesigno fsuccessfulprojectsandeffective policy. CONTENTS ExecutiveSummary 3 NewPartnershipModelfor CapacityBuilding 3 ResearchFundingandtheResearchCommittee Role 4 FutureDECResearchProgramsandPriorities 6 Chapter1. SpecialTheme:TheWorldBank'sRoleinCreatingPartnershipsfor CapacityBuilding 9 PreviousReportonResearchCapacityBuilding 9 FlexiblePartnershipModelfor Capacity Building 9 NineWorldBank-Supported Institutions 10 Accomplishments 11 FutureNeedsandChallenges 13 Chapter2. ResearchFundingandtheResearchCommitteeRole 15 ResearchResources 15 ResearchBankwide 15 ResearchFundedbythe ResearchSupport Budget 15 The ResearchCommittee: CommitmenttoChange 16 ResearchDemandi sHighandResourcesareLow 17 AnalyticalCapacityintheDevelopingWorld 17 The Coherenceofthe Bank's ResearchAgenda 18 The Quality ofBankResearch 19 Access acrossDistanceandtheDigitalDivide 19 Chapter 3. FutureDECResearchProgramsandPriorities 21 InvestmentClimate ($3.6m) 21 Basic ServiceDelivery($3m) 21 Trade($4.4m) 22 PovertyDynamics ($1Am) 23 RuralDevelopment ($1*9m) 24 Environment andUrbanDevelopment ($1.7m) 24 FinancialSector($1.3m) 24 Annex A-1. Partnershipsfor EconomicCapacityBuilding 29 AcademicInstitutions 30 NewEconomic School-Moscow 30 Economics Departmentatthe CentralEuropeanUniversity-Budapest 30 Center for EconomicResearchandGraduateEducation-Economic Institute-Prague 30 EconomicEducationandResearchConsortium-Kyiv 31 ChinaCenterfor Economic Research-Beijing 31 ResearchCenters andNetworks 32 African Economic ResearchConsortium-Nairobi 32 LatinAmericanandCaribbeanEconomicAssociation-Buenos Aires 32 EconomicResearchForumforArab Countries, Iran, andTurkey-Cairo 33 EconomicEducationandResearchConsortium-Moscow 33 Annex A-2. Questionnairefor CapacityBuilding:EconomicsEducationandResearch 39 TeachingFaculty 47 Researchers 48 Students 48 Alumni 49 Finances(US$) 50 ResearchOutput 51 CollaborationwithOtherInstitutions andNetworks 52 Additional Questionsfor Economic ResearchNetworksandAssociations 52 AnnexB.ResearchExpenditures,F Y O O andFYOl 47 EXECUTIVE SUMMARY Eachbiennial researchreport to the Board o f Directors re- The partnership model has brought together a growing views both the World Bank'sresearch andprogress toward circle o fdonors, includinggovernments, corporations, and one featured objective. The objective consideredinthe the- foundations such as the Carnegie Corporation o f New matic chapterofthis volume isresearchcapacity buildingin York, Citigroup, Eurasia, Ford, John D.and Catherine T. the Bank'sclient countries.Differentinitiatives arediscussed MacArthur, Starr, Soros, and others. The "centers o f ex- andthe findings o fanextensive survey o fnine supported- cellence" ineconomics educationandresearch supported WorldBankinstitutionsandnetworkspointsto strongprogress by these efforts have been extended and strengthened. inbuildingpartnershpswithpublicandprivateinstitutions They now include centers in Beijing, Buenos Aires, and foundations. Chapter 2 provides a review o f research Budapest, Cairo, Kyiv,Moscow, NairobiandPrague.And andfunding, andthe ResearchCommitteerolewhle plans anew generationo fwell-trained economists is spreading for future research are described inchapter 3. throughout these countries, influencing economic policy andinstitutions. 1. New Partnership Model for Capacity Building The last research report that dealt with capacity building The new partnership model is only one aspect o fresearch was presented to the Board o f Directors in FY92-93. capacity building but one on which important new initia- This report updatesprogress incapacity buildingineco- tives havebeenbuiltinrecentyears. The WorldBankworks nomics education andresearch andprovides guidance on throughpartnershipswithpublicandprivateinstitutionsand sustainabilityandfuture directions. RegionalChiefEcono- foundations to buildcapacity for sound economic policy mists were surveyed to assess the World Bank's current research. Partnerships-with private foundations, donor and proposed activities in capacity building.And inthe agencies, governments, civil society, andeducation andre- fall o f 2001 an extensive quantitative and qualitative searchinstitutions-not only canprovideadditional finan- survey was conducted o f nine World Bank-supported cial resources but also canbringimportant experience and academic institutions and research centers and net- perspectives to bear infostering capacitybuilding. works to detect trends inthe evolution o f these institu- tions over the period 1995-2000 and to identify future The Bankcontributes to researchcapacity buildinginmany needs. This survey provided information on resource other ways. It administers several research fellowship use, outcome and impact. Asummary o f the question- programs, designed to bring promising researchers from naire used for this survey i s given inAnnex A-2. developing countries to the Bank. The World Bank Insti- tute offers short-term training for policymakers, and the The broad conclusion i s that the flexible partnership Development Economics Research Group increasingly model i s an efficient and sustainable approach to ca- conducts collaborative research projects with research- pacity building that has produced tangible results at ers and research institutions inclient countries. relatively low cost. The recipient countries have ben- efited from institutions that can turn out an ongoing Another major initiative, the Global Development Net- stream o fwell-trained economists and domestic policy work (GDN), started at the Bank and now exists as an analysts who can produce research meeting high in- independent nonprofit organization with a secretariat in ternational standards o f quality and peer review. Cost- Washington, D.C. The GDNwas establishedto promote sharing spreads the financial burden and builds local the generation, sharing, and application to policy o f ownership, a regular flow o f new partners helps to multidisciplinary knowledgefor development. Ithasplayed maintain sustainability, and best practice and knowl- an important role in strengthening indigenous economic edge sharing are advanced by the broad array o f ideas research capacity, promoting interactions between re- andrich experience that partners bring. While the needs searchers and policymakers within and across regions. remain enormous, replication o f this model offers the (The GDNreports directly to the Boardo f Directors and greatest potential for meeting the future demand for so is not examined further inthis report.) capacitybuilding. 4 Report on the World Bank Research Program, Fiscal 2000 and 2001 2. Research Funding and the Research Committee cess an awareness o f pressing and emerging develop- Role mentproblems. The Committee's most specific responsi- bilityisadvisingthe ChiefEconomist onthe allocation of A. Research Resources the Bankwide Research Support Budget. The majority o f research funding, however, comes from the depart- The Bank is committed to the generation o f knowledge, mental budget o f DEC's Research Group. Unlike de- an activity in which selective and rigorous research i s partmental funds, use o f the Research Support Budget is central. Research can provide a foundation for more rel- not programmed inadvance, and its funds are allocated evant and focused economic and sector work and year-round, allowing research to respond to newly rec- strengthen the lendingprogram it supports. ognizedproblems andopportunities. Yet the share o f the Bank's operational budget used in Formal evaluations have found the Research Committee analytical work reached a low point o f 10percent (about to be strikinglysuccessful inachieving its goals. Though $80 million) in FYOl. The research share o f analytical stronglypositive, the evaluations have also generatedcriti- work (about $18 million) is evensmaller, remainingat less cisms and comments that the Research Committee uses than 3 percent o f the Bank's operational budget over the to adjust its policies and procedures. The Committee i s past five years. Development Economics' (DEC) share planningchanges inresearch funding, topic selection, ca- increased from 77percent inFY97to 89 percent inFYO1, pacitybuilding, meansto improveproject quality, anddis- while that o fthe sectors (representing the mainNetworks) semination. The programandpolicy changes includethe and Regions has declined. newly funded RegionalandNetworkResearchInitiative, Research Committee meetings to advise DEC on its re- Some 25-30 percent o fthe $18 million for research tasks search program, revision o f the pilot Research Program is funded through the Bankwide Research Support Bud- Grants, a new class o f Chief Economist Initiatives for get (RSB). As inresearch overall, DEC's share in RSB urgent studies, an African Scholars Program to expand funding has increased over the past five years (from 60 research on African development policy, and new col- percent to 76 percent), while that of the Regions and laborative approaches to research dissemination. Networks has fallen (from 36 percent to 22 percent). Research Demand is High and Resources are Low Since FY98 about 3040 percent o f RSB research fimd- While demand for Bank research has grown, Bank fund- inghasbeenspent on studies inthe poverty and economic ingfor research declined 30percent during the 1990s. In management category. InFYOl this share declined to 23 FYO1, the Bank's Management and Board o f Directors percent as environmentally and socially sustainable de- approvedanadditional $1.5 million for the ResearchSup- velopment research gained momentum, reaching 60 per- port Budget, responding to demand reflected inthe Re- cent o f RSB resources. gional and Network Research Initiative (RNRI). The RNRIwill focusresearchonoperational andsectoralpri- B. The Research Committee: orities, to offset the decline in research in the Regions Commitment to Change and Networks and to encourage collaborative research. Bymid-year o fFY02, $900,000 o f$1.5 millionincrease The Research Committee's broad mandate is oversight hadbeen allocated to the Regions andNetworks through o fthe Bank's research to ensure its quality and relevance the RNRI. The Research Committee has proposed to the Bank's mission. To assess the value o f Bank re- cofinancing a small amount o f staff time (one to four search, the Research Committee goes to its primary cli- weeks) to enable operations and sector staff to finalize ents-developing country policymakers, operationsstaff, and submit RNRIproposals. and the education and research community-in addition to relying ontraditional peer review. The Research Com- A second initiative to generate the resources to meet de- mittee adapts its policy inresponse to these evaluations. mand for research is a proposal for a Public-Private Re- search Alliance. This approach evolved from the Because Research Committee members are Regional ResearchCommittee's support o fthe African Economic Chief Economists and managers o f the Networks, Inter- Research Consortium and the Economic Education and national Finance Corporation, World Bank Institute, and Research Consortiumfor the transition economies. These Operations EvaluationDepartment, they bringto the pro- consortiums create synergies between the activities o f Executive Summary 5 the Bank and a host o f public and private agencies and the relevance o f a broadrange o f research topics. Expert foundations. The Research Committee is developing a review and Committee consideration also improve the broaderpartnership o fdevelopment community members quality and coherence o f the programs. that will draw on such alliances for information, collabo- ration, cofinancing, andjoint initiatives. ChiefEconomist Initiatives willprovideavehxle for rapid planning, funding, andinitiationofresearch inresponseto Analytical Capacity in the DevelopingWorld urgent institutionalcommitments. The initiativeswill be Analyhc capacity isa critical inputinto development policy, joint programs o fthe ChiefEconomistand a Regionalor which leads directly into growth and poverty alleviation. NetworkVice President, bothtaking financial andmana- Enhancing analytic capacity in client countries is one o f gerialresponsibilities. the major mandates o f the Research Committee. The proposed Public-Private Research Alliance i s expected The Quality of Bank Research to become a major source o f support for researchcapac- While evaluators praise the Research Committee's ex ity building worldwide. The proposedAfrican Scholars ante and ex post review, they identify a need to increase Programwill also enhance research capacitybybringing oversight during the conduct o f research to reduce prob- African scholars to the Bank to conduct research, fol- lems inaccomplishing seemingly feasible analytical tasks lowed by research intheir home country. Scholars will as well as variance betweenpromise andproduct. Inre- widen their contacts in the international research com- sponse, the Research Committee has encouragedthe use munity and learnto access Bank data. This broader net- o fresearch project advisory committees and requires in- work o f contacts and information will increase the terim reviews o f the larger Research Program Grants effectiveness o f their teaching and the influence o f their andupdatedplans for completion, reporting, anddissemi- policy advice at home. The program is also expected to nation. After expert external review o f these reports, the improve the Bank's research agenda by increasing the Research Committee will consider whether the project share o fAfrican studies, now at a low level. warrants continued funding or revisions. The Coherence of the Bank's Research Agenda Access across Distance and the Digital Divide While evaluatorshave foundthat the Bank leads the field Policymakers and operations surveys acknowledge efforts inempiricalresearch, many saw aneedfor aclearer pro- to bringresearchresultsto Bank clients, butthey also focus cess for setting the research agenda. There are five new onhow muchmore mustbedone to overcome geographc, initiatives that would increase the coherence o f the re- linguistic, techcal, andprofessionalobstaclesto dissemina- search agenda: the Regional and Network Research Ini- tion. Distribution channels are weaker andmore expensive tiative (discussed above), the ResearchCommittee's direct indevelopingcountries.PostinginformationontheIntemet involvementinsettingDECRG's work program, new Re- is regressive, favoring high-income countries rather than search Program Grants, the Chief Economist Initiatives, Bank clients. And "accessibility" mustalso meanthat writ- and the African Scholars Program (discussed above). ingisclear anddrawsoutthepolicyrelevanceo ffindings.In response, the ResearchCommittee has required exposition The Research Committee will now have a formal role in directed to policy audiences, dissemination to client coun- setting the Bank's research agenda. The Bank's Chief tries, identificationoftargetaudiencesto indicatewhere trans- Economist proposed that the Committee act as a council lations areneeded, andbroadpromotiono fresearchoutput representing the views and interests o f the Bank and its anddistribution inpaper or diskette format. clients. Informationfromthe RNRIandCommittee mem- bers' discussions withtheir managers willprovidethe basis This Process of Assessment and Improvement will for discussions o f DECRG work programs that reflect Continue the priorities and needs o f Bank operations and clients. The policy changes described here are invarious stages o fdevelopment. But one thingis certain. As the results o f The Chief Economist has also proposed a category o f the various initiatives emerge-in current selectiono fre- Research Program Grants to fund broad programs o f re- search topics and longer-term research findings-they search fromthe RSB. This will allow the implementation willbecontinuously assessed.Thisprocess o fadaptation o f a strategic approach to research while allowing flex- andadjustment, which has worked sowell over theyears, ibility to developing priorities These Research Program will continue to ensure that the Bank's researchremains Grants allow the Research Committee to comment on relevant and valuable. 6 Report on the World Bank Research Program, Fiscal 2000 and 2001 3. Future DEC Research Programs and Priorities tional andregulatory reforms affect trade andinvestment liberalization indeveloping countries; to provide an ana- The findings o f the World Bank research program feed lyticalframeworkto support authorities indeveloping coun- into the evolution o f the Bank's strategic agenda, andthe tries insetting their priorities for reform and multilateral program then adjusts to those changing strategic priori- trade negotiations; to analyze howpro-competitive policy ties. Following from the Bank's prioritization o f the in- reforms and domestic institutions may be combined to vestment climate and empowerment as central to its reduce poverty andpromote growth; to studymechanisms strategy for development, as highlighted inthe Strategic for improvingtheoperation o ftherules-basedglobaltrading Framework Paper 2001 and its update o f 2002. Accord- system in order to make it more transparent and more ingly, DECRGhasreorganized its work programto focus attunedto the needs o fdeveloping countries; andto build more resources on these critical area. research capacity inpartner institutions inpoor countries throughaprogramo fcollaboration, training, and support Investment Climate ($3.6million). The strengtho fgrowth o f research networks and think tanks. andpoverty reductiondepends critically onthe quality o f the investment climate. With many macroeconomic re- Poverty Dynamics ($1.8 million). In the next two to forms completed, the Bank's agenda is movingto a more three years the Poverty Group will focus on two main microeconomic levelto investigate the investmentclimate. issues: improving the tools usedinthe Bank for monitor- This is an area where empirical research is critical, be- ing, describing, and forecasting income poverty and in- cause intheory any number o f institutions and policies equality; and developing a deeper understanding o fwhat canaffect the quantity andquality o finvestment. Follow- makes growth pro-poor and the role played by govem- ing on the success o f DECRG's firm-survey work inIn- ment. Data problems hampering comparability between diaandother countries, DEChasestablished ajoint venture countries, and discrepancies between the growth rates with the Private Sector and Infrastructure Vice Presi- implied by household surveys and national accounts re- dency to promote standardized investment climate sur- quire new research on basic measurement issues hand- veys in developing countries. Another strand o f the in-hand with survey design work. Research will explore investment climate work is focusing on the lessons from newtechniques for increasingthe detail available inpov- two decades o freformo fthe regulation o finfrastructure. erty profiles, including census-based poverty maps. Re- searchintowhat makes growth pro-poor will explore what Basic Service Delively ($3 million). Many developing makes some growth processes more pro-poor than oth- countries have stabilized and restructured their econo- ers. This requires a deeperunderstanding o ftheroleplayed mies but are still not seeing strong economic growth or by initial conditions and what drives the distributional poverty reduction. One reason is limited access to and changes seen in survey data. Studies will explore aggre- the poor quality o fbasic services. DECRGcreated a new gate distributional change and micro-macro linkages, research team in2001to focus onpublic services. A core household incomedynamics and economic geography o f task is to collect data at the level o fthe service-providing poverty, and social exclusion andpoverty. unit,suchas the clinic or the school. The focus ofmuch o f the research is on governance and service delivery in Rural Development ($1.9 million). The rural develop- health, education, and socialprotection. ment research program will focus onthree themes, corre- spondingto areas highlighted inthe Bank's emergingrural Trade ($4.4 million). The World Trade Organization development strategy: rural nonfarm development, which (WTO) MinisterialConference inDohabrokenew ground is so important to growth inruralareasyet the policy and inrecognizing development as a goal for trade negotia- investment implications o f the sector are not sufficiently tions. The outcome o fthese negotiations will have a deep understood; the development impact o fcommunity-based impact onpolicyindeveloping countries andontheir ex- rural organizations, whose potentials andrisksrequire de- ternal environment. The research program on trade will tailed empirical analysis; andinsurance andriskmitigation seek to improve the understanding o fthese issues andthe inagnculture, whichwillanalyzethecausesofmarketfail- quality o f advice that the Bank can provide, by bringing ures and the potential for overcoming them. In addition together the insights o f developing country practitioners, researchis continuing onlandpolicy issues. leading academic experts, and Bank staff. The research program intrade has five essential objectives: to develop Environment and Urban Development ($1.7 million). a fuller understanding o fhow "behind theborder" institu- Duringthe next two years work onpollutionbysmall en- Executive Summary 7 terprises willculminate inpapersrelyingonextensive sur- Operations andNetworksinextending the work on infor- vey work onChina's townshp-village industrial enterprises. mationand development. Rapidlyexpanding work onenvironmental issues inagri- culture will focus on policies for optimal pesticide and Financial Sector ($1.3 million). Numerous emerging mar- fertilizer use in conventional agriculture, economic and ket financial system areina"low intermedation" trap, with environmental cost-benefit analysis o forganic agriculture, lowor diminishedpenetrationo ffinancethatespeciallyhurts and environmental issues related to trade inagricultural small and medium-size firms. This pattern lowers growth products. The urban development program will focus on and increases poverty. The key questions for the next two determinants o fagglomeration economies andurbanser- years are how best to regulate the financial sector int h ~ s vice delivery, with a particular emphasis on South Asia. changingenvironment; what issuesarisefor themarketstruc- Two cross-cutting exercises will include spatially disag- ture o fbankingrelatedto bankprivatization, entry o fforeign gregated empirical researchon determinants o fpollution banks, andthe optimal level ofbankconcentration; how to and natural resource depletion and integrated research tax the financial sector; how small financial systems can on urban congestion and other negative externalities o f survive inane-finance world; andconcems about corporate urban development. DECRG will also collaborate with govemance andhow this affects risk andriskmanagement. CHAPTER 1. SPECIAL THEME: THE WORLD BANK'S ROLE INCREATING PARTNERSHIPSFOR CAPACITY BUILDING 1. Previous Report on Research Capacity Building tionable. Itseemsreasonable to surmise that the Bank, at the very least, substantially accelerated the process o f Eachyear the Research Report chooses a special theme. developingregional institutions capable o fprovidinghgh- This year the theme is the World Bank's role increating quality training and producing economic research that partnerships for capacity buildingfor economic research. meets international standard^.^ The last Research Report to the Board o f Directors o f the World Bank to examine this theme was written al- Intheinterveningperiodattentiontocapacitybuildinghas most 10years ago.' That report focused on five ways to growntremendously, andnewprioritieshaveevolved. The buildresearch capacity: financing organizations to spur present report seeks to describe these changes and sug- domestic research capacity, sponsoring conferences, sup- gest some future directions, drawing onthe experience o f porting collaborative research, inviting scholars from the past decade. This chapter reviews capacity building aroundthe worldtojoinongoingresearch, andsponsoring activities, most o f them supported at some stage by Re- training programs, It provided a general overview o f the searchCommittee funding. I t draws on in-depth informa- Bank's relatively new involvement in these activities. tion about nineresearch and training institutions inclient Central to the report was a description o fregional initia- countries. It seeksto explore the progress made since the tives, such as the African Economic Research Consor- Bank's early adventures inthis field, noting the particular tium (AERC), the newlyestablishedEconomic Research advancesincapacity buildingpartnerships evolving inboth Forum for Arab Countries, Iran, andTurkey (ERF), and regional and international networks. Much of the initial anoutline o fanew initiative for East-Central Europe and effort was focused onEasternEuropeaneconomies where countries o fthe former Soviet Union, whichwould even- there was a great need to provide Western style econom- tually become the Economic Education and Research ics. Consortium (EERC) inKyiv andMoscow. 2. FlexiblePartnershipModel for Capacity Inoutlining future directions, the report identified four Building themes: transition from central planning to market, eco- nomic growth, the role o f public andprivate sectors, and Theultimate objective o fthe Bank's support o feconomic the international economy. The institutes discussedinthat research capacitybuildingis not researchitself(although report are still inoperation andhave largely met their ex- that is important), butto help create and reinforce appro- pected goals. A recent survey assessed this progress in priate, sustainable institutions withindeveloping countries terms o f students, faculty, and the quantity and quality o f to foster the emergence of a corps o f well-trained pro- researchoutput. Specific details byinstitutionare givenin fessionals readyto contribute to policymakmg andteach- annex A. ingat home-to help compensate for the "brain drain" o f professionals from poor countries. More difficult to assess is the counterfactual. George Soros, commenting onhis experience ingoing solo to set Many approaches havebeentaken to meetthis objective, upthe Central EuropeanUniversity, concluded that ifhe with their degree o f success depending on the particular were to do it again he would move ahead only with the country circumstances and needs4 In recent years the benefit o fpartners. Also, client countries tend to view the Bank has found some success with a flexible partnership World Bank asrelatively objective, andanumber o fpart- approach (box 1.1). ners have indicated that the participation o fthe Bank has giveninitiatives a widely recognizedsealo fapproval.* In This kindo fbroad, flexible partnership requires a strong countries with a tradition o f think tanks, it is likely that catalyst, a role the Bank has successfully filled. Some similar academic and research institutions would have activities are advancedthrough small (one on one) meet- developed without theWorld Bank's intervention, butonly ings, some through large meetings o f current and poten- withconsiderabledelay. For other countries, that is ques- tial donor^.^ These donors oftenhave strong preferences 10 Report on the World Bank Research Program, Fiscal 2000 and 2001 about the activities they are willing or able to support. can support. This has led to the adoption o f the flexible Many prefer, or are restricted by their mandate, to work partnership model. The evolution o f this program is high- inspecific geographic regionsorcountries. Somearewill- lightedbydescriptions belowo fninecapacity buildingac- ing to fund infrastructure, some to provide financing for tivities, five involved primarilywith graduate economics faculty, andsome to support foreign studentsintheir coun- education and four with research networks or centers.8 try o f choice.6 In all instances every effort is made to avoid"aid dependence." The Bank seeksto reinforce the 3. Nine World Bank-Supported Institutions needs o f research institutions, rather than encourage do- nors that have strong preferences about what "they are The nine institutions discussed inthis report include five willingto support" byfindingactivities inresearchinstitu- institutions ofhigher education, offeringeconomics train- tions they can support. ing at the graduate or postgraduate level, and four re- searchnetworks or centers, fundingresearchprojects and The Bank has conducted several studies to assessoverall buildinglinksbetweenindividualresearchersandresearch needs for capacity buildingin economics higher educa- institutions primarily intheir respective regions. The train- tion and re~earch.~Bank staff and foundation executives ing institutions includethe Economics Department at the have offered suggestions. The Bankis involvedinavari- Central European University (CEU) inBudapest, Center ety o f ways. These range from informal visits by senior for Economic Research and Graduate Education-Eco- staff including the President and Chief Economist re- nomic Institute (CERGE-EI) in Prague, the China Cen- gional chief economists and also Bank staff acting as re- ter for Economic Research (CCER) in Beijing, the sources for work shops and conferences. In some Economic Education and Research Consortium's M.A. instances Bank staffactually sit on the boardo fdirectors program at the Mohyla Academy (EERC) in Kyiv, and o f these institutions and also conduct collaborative re- the New Economic School (NES) inMoscow. The four search. The whole enterprise seeks to strike a balance research networks and centers are the African Economic between demand and supply. Inmost instances the part- Research Consortium (AERC) inNairobi, the Economic nership starts with the research institutions themselves Education andResearchConsortium(EERC) inMoscow, andhelpsthemdevelopa strongprogramrather than start- the Economic Research Forum for Arab Countries, Iran, ingat the other endbyhelping donors findactivities they and Turkey (ERF) inCairo, and the LatinAmerican and Box 1.1 Flexible Partnership Model The flexiblepartnership modelseeks to adapt to varyingcountryneeds tained basis. Some o f these institutions have grown, some have throughcollaborative problemsolving andimplementation. Themodel consolidated. Butnonehave closed. Their quality has improved. has four steps: generation o f an idea, assessment o f needs, feasibility Most still need further financial and intellectual support. The study, and implementation. The Bank collaborates with all partners at Bank and foundations have benefited enormously from their each stage, from idea generation throughjoint discussion, assessment interaction with each other. Recipient countries have benefited studies, andimplementation. Partnersonthedonor sideincludemultilat- from an efficient, low-cost approach to producing institutions eral andbilateralinstitutions, foundations, andcorporations, andonthe that can turn out an ongoing stream o f well-trained economists recipientside they includecountrieswithawide variety o fneeds. and domestic policy analysts who can produce research that meets high international standards o f quality and peer review. The Bank plays a flexible, catalytic role inpartnerships for capacity Perhaps more important, their needs are reflected at the core, building, participating financially, intellectually,andthroughitsconven- especially at the idea stage, rather than being chosen to fit the ingpower. Insome instancesthe partnerships take the form o f a struc- desires o f donors. turedconsortiumwithaboardo fdirectors; inothersalooseassociation o fdonorsmaysuffice. Thecapacitybuildingitselfhasalsotakenseveral These partnerships have supported capacity buildinginacademic different forms: strengtheningresearch, trainingeconomists inWestern institutions, research centers and networks, fellowship programs, economics athomeandabroad, supportingconferencesanddissemina- and conferences. Sometimes these are new activities, but often tion activities, and supporting networks amongindigenous and foreign they are ongoing activities that need to be supported and rein- researchinstitutes. forced invarious ways. For donors that seek to contribute to the overall development effort, this partnership model offers a way. Capacity buildingineconomics education and research is a long- And as their priorities change, this model also affords them anexif term process. Domestic efforts need to be nurtured on a sus- strategy that does not put the entire endeavor at risk. The World Bank's Role in Creating Partnerships for Capacity Building 11 Caribbean Economic Association (LACEA) in Buenos The number o ffaculty has doubled(from 71to 143), and Aires. East Asia and Southeast Asia are covered by re- the number o fstudents hasmore than tripled (from 663 to search networks created in 1998 bythe Global Develop- 2,324). Institutions that focus predominantly on training ment N e t ~ o r k . ~ future policymakers, educators, and researchers have in- troduced new programs: a double-major B.A. program As experience with t h s approach increases, it is expected and a new MBA program at CCER in Beijing, a new that these programs can be extended to address needs in Ph.D. programineconomics at theAERC inNairobi and other countries. A recent review o f lugher education has CEU inBudapest, and an economic policy research pro- suggestedanumber o fareas that couldbenefit from similar gram at EERC in Kyiv. NES in Moscow also plans to programs.'O While these capacity buildingprograms share introduce a Ph.D. program soon. the samelong-termobjective-strengthening indigenousca- pacity to conduct sound economicpolicy research-the ac- Data on graduates o fthese institutions are a good indica- tivities designedto llfillthisobjectivevary,reflectingdiffering tor o f program quality. Many M.A. graduates continue needsinthe recipient countries andthe availability o fdonor their studies at top universities inthe W e s t 4 0 percent support.Abriefoverview summarizes progressover thepast from bothEERC-Kyiv andNESinMoscow. Others have five years infaculty development, the student body, place- found employment inlarge domestic corporations, think ment o f graduates, researchactivity, and research output.'' tanks, andresearch institutions. Andstill others have cho- Further details are given inannex A. sen to influence policymaking by working inthe public sector-about 40 percent o f AERC graduates and 19 4. Accomplishments percent o fCCER's M.A.graduates (table 1.1).Far fewer graduates have entered public service in the transition Both the academic institutions and the research centers economies o fEast-Central Europe and the former Soviet and networks supported through partnerships for capac- Union; this should improve as the incentives, especially itybuildingarethriving. There are extensivelinks within salaries inthe public sector, become more attractive. the Bank to ensure relevance. These links operate prima- rily through the Research Committee which consists of Graduates hold high-level positions inthe public sector. Bank wide representation. The results to date show that ManyAERC alumni, for example, are now prominent in the overall program has been extremely effective, with the administrations o ftheir countries: the Deputy Gover- highreturns at a very low cost to the Bank andrecipient nor, BankofUganda; Senior Economist, the Treasury in countries. South Africa; and Director o f Research, Bank o f Mozambique, to name a few. Education and Training Regional coverage o f students and faculty remains un- The five academic institutions highlighted in this report equal, but is improving. NES has entered into a partner- are progressingwell. They are expanding and scaling up. shpwithanumber o fregional universities(Voronezh State Table 1.1Alumni Employment by Type of Institution(percent) ore. Alumni record since the inception o f the institution The data sum to more than 100 percent because many graduates are employed In more than one sector. Other includes nongovernmental organizations, business owners, consultancies, and the like 12 Report on the World Bank Research Program, Fiscal 2000 and 2001 University and Ural State University in Ekaterinburg, Moscow and the Economic Research Forum for Arab among others) to upgradeandmodernizeeconomics teach- Countries, Iran, and Turkey (ERF) inCairo organize and ing and research. Through a series o f intensive work- fundperiodic country-level meetings with policymakers shops, the partnership has already helped to provide on specific topics. training in modern economics and econometrics to 200 Researchers affiliated with the research centers and economists, mostly from outside Moscow. networks also holdprominent government positions. ERF members, for example, havebecome ministerso feconomy, Research finance, economic development, economic planning, and Boththe amount o fresearchandits quality haveimproved education andhigher education intheir countries. at academic institutions and research centers and net- Aspart ofits outreach to policymakers, AERC hasheld works. For example, in five years the number o f com- five Senior Policy Seminars. The latest, heldinDar es Sa- pleted research projects has increased from about 45 to laaminFebruary2002, brought together approximately 80 200 and the number o f in-house publications has more policymakers from 19 countries (8 Francophone), includ- than doubled, from about 108 to 265. There are some ingseveralministers.Thisprovidedanopportunity forAf- notable differences betweeninstitutes. For instance, both ricanpolicymakers (manyinvolvedinthePovertyReduction EERC inKyiv andNES inMoscow focus ontraining, so Strategy Paperprocess) to interact withtheir ownresearch their researchoutput i sprimarilystudents' theses.AERC's and analytical communities. One o f the five days o f the researchoutput innumber ofprojects completedmayseem seminar was devoted to reviewing the study Can Africa smallrelative to the institution's budget, butAERC works Claim the 21st Centu~y,'~ produced jointly by the Bank on a number o f large, collaborative projects. Thus far, (including DEC as a partner) and a number o fAfrican in- AERC hascarried out four largeprojects ongrowth, trade stitutions, including AERC. Aid and Reform in AfricaI4 policy (Africa inthe world trading system), poverty, and was also presented. aid effectiveness. Standards at institutions and networks have improved as well, with rigorous peer review and Regional coverage o f researchers and network member- methodology workshops. The number o farticles published shipremains unequal. Some countries continue to lag in ininternational, refereedjournals has increasedfrom 85 developing indigenous capacity for economic research. to 317-a good indication o f the high quality o f the re- AmongthemareDjibouti, Mauritania, Somalia, andYemen search being produced. Researchers and faculty are at- intheMiddleEastandNorthAfhcaRegionandtheKyrgyz tending more international conferences and presenting Republic, Tajikistan, andTurkmenistan inthe Europe and papers. Central Asia Region. Coverage remains particularly un- even inEurope and CentralAsia, where three subregions Institutions are also producing policy-relevant research (the Caucasus, Central Asia, and Southeast Europe) are that isreaching domestic economic policymakers. For in- not adequately served by existing academic institutions stance: and research networks.'5 Since its establishment in 1994, CCERhas beena key EERC inMoscow continues to progress as it strength- participant inalmost all policy dialogue inChina. It was ens the research skills o f less experienced research- invitedto submit anindependent version o fthe lothFive- ers. Quarterly methodology seminars provide intensive Year Plan, which was used as a reference during the training inspecific research techniques. Both the sum- drafting o f the official five-year plan. Much o f CCER's mer school and seminars aimto strengthen the research research, such as on the Yellow River Irrigation Project resources available to network members and aspiring and the Rural Poverty Alleviation Project, has contrib- research applicants. To date, approximately 400 Rus- uted to Chinesepolicy.'* sian economists have been trained. In2000 EERC be- 0 In 1994 the Prague Center for Economic Research gan to provide participants with modest research and Graduate Education-Economic Institute (CERGE- development grants and to put them through an annual EI) was chosen over six other institutions to become the cycle o f intensive training inresearch methodology, in- official advisory bodyto the Czech government on entry ternships at leading research andhigher education insti- into the European Union. Over the years, CERGE-E1 tutions, and specifically designed research development has provided advisory and consultation services to gov- workshops. With the support o f the Global Develop- ernment officials andmembers o f parliament. ment Network, EERC also created the Transition Eco- 0 The EconomicEducation andResearch Consortium in nomics ResearchNetwork, which i s gradually drawing The World Banki Role in Creating Partnerships for Capacity Building 13 scholars from other countries inthe regioninto EERC's ners at all stages. The Research Committee's role inthe research and training activities. process is that o f incubator and review board for grant renewals. Typically, the early stages o f the process are Networking and Dissemination funded by the Chief Economist's Office, and results are During the past five years membership in the networks reviewedby the Research Committee. Formalproposals hasgrownprodigiously, with individualmembershipsris- have been cofunded through the Research Committee's ingfrom 550to2,770 andinstitutional membershipsfrom budget (Research Support Budget), which allocates upto 127 to 280. Networks have introducednew information 10 percent o f its annual budget for capacity buildingac- technology to help reach out to an ever-increasing num- tivities. Combined, institutions likeAERC, EERC, ERF, ber o feconomists, educators, students, andpolicymakers andCCERhave receivedResearch Support Budget fund- ineachregion. ingo faround $500,000 ayear. Funding Some institutions may need ongoing help, but the main Faced with ongoing financial constraints, institutions have role o f the Research Committee is to get these institu- begunto diversify funding andrevenuesources ininnovative tions up and running, by conducting studies, organizing ways.Fundmgfor thenineacademicinstitutionsandresearch meetings o f potential donors, and rigorously reviewing centersandnetworkscomesfrom alargenumbero fsources, fundingproposals andrecommendationsfor implementa- with private foundations contributing the largest amounts, tion. As the institutions mature, financing may be trans- followedby extra-regional government agencies. ferred to the Global Development Facility (GDF), as has been the case with AERC inrecent years. Inaddition to Institutions are preparing business plans to achieve a sus- financing, the Bankprovides ongoingintellectual support tainablebalancebetweenoverall aims andresourceavail- through collaborative research, internship programs, and ability. Some are setting up endowments (CERGE-EI, lecture series (box 1.2). CEU, ERF, and NES) or implementing tuition and loan schemes (CCER, NES, and others), and a few have in- Challenges and Suggested Responses creasedtheir fund-raising capacitybycreating US.-based The academic institutions and research centers and net- tax-exempt private foundations. Survey responses indi- works reviewed in this report are at different stages o f cate that when institutions mature, there is an increased development-some have a decade o f experience, while focus on raisingmoney locally. Several institutionshave others are just starting out. They also face different po- beenparticularly successful insecuring revenue from an litical, economic, and social conditions, so future needs ever-increasing number o f sources. CCER, for example, and challenges differ. The two key challenges inmoving raised 78 percent o fitsrevenue from four sources: tuition forward are ensuring sustainability for these institutions ($156,000), eveningcourses ($5 l,OOO), research contracts and helping them maintain a strong intellectual relation- ($116,000), and an individual donation o f $2 million. ship with the Bank-a desire expressed by all o f them. CERGE-E1 has financed regular increases in its opera- tionalbudgetthroughsupport from the Czechgovernment Ensuring Sustainability (40percent o fits annualbudget), foundations, andcorpo- Securing long-term financial sustainability is crucial for rations. Itis one o fthe few institutions that have success- the survival and growth o fthe institutions and networks fully raisedmoney from the private sector at home and discussed in this report. Private U.S. foundations- abroad-23 percent o f revenue in 2000. the major source o f funding for this type o f activity- tend to change their funding priorities over time. They 5. Future Needs and Challenges also tend to have a three-year horizon intheir budget- ing cycle. Survey responses indicate that institutions The Bank has done muchto shape the partnership model and networks are concerned about the growing ten- for buildingcapacity ineconomics higher education and dency to attach strict conditions to relatively small research, a model that has proved very effective and at grants and the declining number o f grants that can be low cost to the Bank and recipient countries. Additional used for core activities. While institutions are responding challenges lie ahead. increative ways-setting up endowments, increasing cost-recovery activities, increasing domestic fund-rais- Moving Forward ing efforts-the need for external assistance remains A keyfeature o fthis modelis collaboration betweenpart- in most cases.I6 14 Report on the World Bank Research Program, Fiscal 2000 and 2001 The Bank's convening power within the donor com- viewed here has also involved intellectual support, from munity and its catalytic role in capacity building are collaborating on Bank research to drawing on Bank staff widely acknowledged. I t has helped to raise a large for assistanceinpreparingbusiness plans and grant appli- portion o f the total revenue needed to run the institu- cations, organizing donor meetings, preparingbackground tions described inthis report-$24 millionin2000 (fig- material, cosponsoring regional conferences, and work- ure 1.1). The Bank's contribution to this total was about ingwiththeWorldBankInstituteto develop distancelearn- $1.5 million, or 6.25 percent. Much creative leverage ingprograms. has come from this small amount o f Bank funds. And much capacity buildinghas taken place inso many re- Survey responses indicate that there i s a critical need for gions for so little. increasing such collaboration. With the increaseddecen- tralizationo f the Bank, consideration should be given to Improving Intellectual Interaction temporary assignments o f research staffto country insti- The Bank's relationship with many o fthe institutions re- tutions or Bank country offices. This could be encour- agedbyextending the fellowship programs, for instance, or providingdevelopmentalassignments. The Bank might also consider making staff available for short periods to participate inresearch centers' workshops by presenting recentresearchfindings, conductingmethodological semi- nars, or giving guest lectures. The benefits o f continued andstrengthened intellectual interactionaccrue to every- one involved. Ifsustainability andintellectualinteractioncanbestrength- ened during the coming years, under DEC's continuing leadership, there is every reasonto expect that these suc- cessesincapacitybuildingwillbemaintainedandstrength- ened. 15 CHAPTER 2. RESEARCHFUNDINGAND THE RESEARCHCOMMITTEE ROLE 1. Research Resources Elgut22 `Itpshare ofresearchino p t a ~ mbulpelshas l lenainedbebw3percent The Bank is a recognized leader in the field o f develop- Researchasapercentageofoperational budget 3 l...*"... ................................................. "" ment knowledgeandretains aninstitutional commitment !1 Y 23 24 to the generation o fknowledge-an activity inwhich se- 2.5 - *\ , lective and rigorous research plays a central role. Re- 2 - search can provide a foundation for more relevant and i focused economic and sector work and strengthen the 1 lending program it supports. Yet the share o f the Bank's 1 operational budget usedinanalytical work (research, eco- 0.5 - I nomic andsectorwork, andsector policy analysis) reached I a low point o f 10 percent (about $80 million) in FYOl 0 - (figure 2.1). increase understanding o f development processes and policy, improve the Bank's capacityto advise client coun- tries, and increase research capacity inclient countries. n , _" The distribution o fresearch activities funded bythe RSB 21.6 \19.5 w.7 18.6 19.2/21.5 i s similar to that o f overall Bank researchactivities. Five 20- P Y 13.8 13.9 years ago DEC had a 60 percent share; by FYOl this 121 share had increased to 76 percent, with the combined 10- .+ RegionalandNetwork share declining from 36percent to 22 percent (figure 2.4). The decline inthe Regional share is the more severe be- cause o f a concentration o f resources inthree Regions- EastAsia and Pacific, Europe andCentralAsia, andLatin America and the Caribbean. A breakdown o f RSB fund- ingamongsectors, representing themainNetworks, shows Research Bankwide that since FY98 about 3 0 4 0 percent o f research funds The research shareo fanalytical work (about $18 million) have been spent on poverty and economic management i s even smaller, remaining at less than 3 percent o f the Bank's operational budget over the past five years (fig- ure 2.2). Of these research activities, DEC's share has Figure2.3 Thedistributionof researchfunding increased substantially, from 77 percent in FY97 to 89 intheBankisshifting percent in FYO1, while that o f the sectors (representing Millionsof dollars the mainNetworks) andRegionshasdeclined(figure 2.3). 20 Research Funded by the Research Support 15 Budget 10 Ofthe $18 millionfor research tasks, about 25-30 per- 5 cent i s funded through the Research Support Budget (RSB). This budget was established to support (con- 0 ceptually andanalytically) the Bank'slending operations, FY98 FY99 FYOO F Y O l 16 Report on the World Bank Research Program, Fiscal 2000 and 2001 describes the recent findings o f these various review Figure 2.4 The distribution ofRSB funding o f research shows a similar pattern mechanismsandthe newpoliciesandprograms that have Millions ofdollars 5 7 resulted. Because Research Committee members are Regional Chief Economists and managers o f the Networks, Inter- national Finance Corporation (IFC), WorldBank Institute (WBI), and Operations Evaluation Department (OED), they bring to the process an awareness o f pressing and emerging development problems. The Committee's most FY98 FY99 FYOO FYOl specific responsibility is advising the ChiefEconomist on the allocation o f the Bankwide Research Support Bud- issues, althoughthat share declined to 23 percent inFYOl get. Unlike departmental funds, use o fthe Research Sup- (figure 2.5). Environmentallyand socially sustainable de- port Budget is not programmedinadvance, and its funds velopment issues, however, have gained momentum over are allocated year-round, allowing research to respondto the past two years, reaching 60 percent o ftotal resources newlyrecognizedproblems and opportunities. inFYO1. The remappingof projects to the Bank's the- matic objectives inFY02willpermitanalysis o fhowRSB- The ResearchCommittee i s anunusualinstitution: through funded research is aligned with the Bank's strategy. reorganizations and retrenchments, the Committee has continued to function for 30 years, with only short-term Responsibility for allocation o fRSB funding lies with the variations inmandate andtitle. This longevity testifies to Bankwide Research Committee. Described below are the flexibility o fthe instrument, the foresight and dedica- the newpolicies andprogramsthe committee has adopted tion o f its members, and the success o f its activities. inresponse to itsvarious evaluation activities and to the emerging disparities revealed here. Several evaluation instruments have found the Commit- tee to be strikinglysuccessful inachieving its goals. That 2. The Research Committee: success may be due in part to the assessments them- Commitment to Change selves: by responding constructively to the evaluations, the Committee has adapted to changing demands and re- The Research Committee's broad mandate is oversight sources. o fthe Bank's research to ensure its quality and relevance to the Bank's mission. To assess the value o f Bank re- Inaninternational survey of270policymakers in36client search, the Research Committee goes to its primary cli- countries,anoverwhelmingshareo fpolicymakers described ents-developing country policymakers, operations staff, theBank's researchas "technically sound,'' "relevant," and and the education and research community-in addition "obje~tive."'~Surveys, interviews, andtracking o f opera- to relyingontraditionalpeer review. The Research Com- tional useofresearch showthat operations staffvalue Bank mittee adapts its policy inresponse to these evaluations. research, mosto fwhichis usedinmorethantwo phaseso f This chapter illustrates how this process has worked: it operations activities.'* ARegionalandNetwork Research Initiative survey identified strong demand for research on Figure 2.5 A growing share of RSB funding is devotedto nearly 100topics that operations and sector managers and environmentally and socially sustainable development issues staffbelieverequire analysis. Educatorswho evaluateBank research laudtheproposalreview, the choiceo ftopics, and the dissemination o f research findings by the Research Committee.I9Arecent investigation o f Intemational Mon- etary Fund (IMF) research described the form and prac- tice o f the Research Committee as a model for the IMF's program.20AndOEDhascommended the Research Com- mittee for maintainingthe best evaluation o fa nonlending 1 activity inthe Bank.21Inorder to strengthen management FY98 FY99 FYOO FYOl 1 capability the Research Committee has also agreed to ex- post rating o f DEC research output using an appropriate Research Funding and the Research Committee Role 17 pertinence scale. Preliminary feedback suggeststhat DEC Regional and Network Research Initiative researchmanagers are findingthis tool to be o f consider- The Regional and Network Research Initiative (RNRI) able value to strengthen operational andpolicy relevance. was proposedto focus researchonoperationalandsectoral priorities, to reverse the decline in research in the Re- While thegeneralassessmentsarestronglypositive, they also gions and Networks, and to encourage collaborative re- generate criticisms and comments that the ResearchCom- search within the Bank and among the Bank, its clients, mittee usesto adjust its policies andprocedures.The Com- and other donors. Starting inFY02, the ManagingDirec- mitteeisplanningchangesinresearchhdmg,topic selection, tors approved an increase o f$1.5 millioninthe Research capacitybuilding, meansto improveprojectquality,anddis- Support Budget, equivalent to a quarter o f the RNRIre- semination.Theprogramandpolicychangesincludethenewly quests. Initial evidence suggests a positive response to h d e d Regional andNetwork ResearchInitiative, periodic the RNRI:bymid-year o fFY02, $900,000 hadbeenallo- ResearchCommitteemeetingstoadviseDEConitsresearch cated to the Regions and Networks in the RNRI. program, revisionofthepilotResearchProgramGrants,new CluefEconomist Initiativesforurgentstudies,anAtkcanSchol- The ResearchCommittee recognized, however, that itmust ars Program to expand research on Afican development findaway to free stafftime for RNRIstudies ifRegional policy, andnewcollaborative approachesto researchdissemi- and Network managers, generally focused on lending, nation(all are discussedbelow). were to support such work by their staff. Thus the Re- search Committee has proposed cofinancing a small The following sections review the comments and re- amount o f staff time-one to four weeks per project. sulting program changes, moving from the first-stage Without such support, operations and sector staff would demand for research through final dissemination o f beunableto finalize and submitlarge RNRIresearchpro- findings. posals (greater than $75,000). Evaluation: Research Demand is High Public-Private Research Alliance and Resources Are Low The proposal for the Public-Private Research Alliance Policymakers in client countries, the Regions and Net- evolved from the Research Committee's support o f the works, andtheBank'sStrategic Framework haveall dem- AfricanEconomicResearchConsortium (AERC) andthe onstrated strong and increasing demand for research on Economic Education and Research Consortium (EERC) development issues. Bankresearchcancover only a small for the transition economies o f the former Soviet Union shareo fdevelopment questions. Inaddition to usingBank (described inchapter 1). These consortiums emerged as research, more than 80 percent o f policymakers in the models for creating synergies between the activities o f international survey reported that their agencies con- the Bank and a host o f public and private agencies and tracted with others to conduct research and 75 percent foundations. that their agencies also undertook research. Strong de- mand also exists within the Bank. Following an FYOl AERC and EERC demonstrated the flexibility and survey o fregions and operations that generated requests replicability o f the consortium structure. The Research for research on nearly 100 issues, operations units sub- Committee is involved in developing a broader partner- mitted28 research proposals andthe networks 11, under shipo fdevelopment communitymembers that will draw theRegionalandNetwork ResearchInitiative. Andimple- on such alliances for information, collaboration, mentation o f the Bank's Strategic Framework empha- cofinancing, andjoint initiatives. The diversity o f donor sizes knowledge services and generation to improve the membership will allowmembersto benefit andcontribute effectiveness o f Bank lending and meet demand by cli- according to their current and expected interests and re- ent groups. sources. While internalandexternalanalytical demand has grown, Evaluation: Analytical Capacity Bank funding for research declinedby30 percent during in the DevelopingWorld the 1990s. Inresponse, the Research Committee has de- Inthe international surveyo fpolicymakers, respondents veloped two new mechanisms to generate the financial cited nationalandregionalresearch centers anduniversi- and human resources needed to meet that demand: the ties as the thirdandfourthmost important sources o fana- Regional and Network Research Initiative and a pro- lyticalreports, behindonlytheWorldBankandthe United posed Public-Private ResearchAlliance. Nations Development Programme. Respondents praised 18 Report on the World Bank Research Program, Fiscal 2000 and 2001 the involvement o f researchers from developing coun- expertise, knowledge o flocalconditions andpolicies, and tries in Bank research, but asked that the Bank involve contacts with other African researchers, Promisingjun- localresearchersevenmoreoften. Evaluators, too, praised ior researcherswouldalso widen their contacts andaware- the involvement o f researchers from developing coun- ness o fBankresourcesand, inaddition, benefitfrom Bank tries inBank research and also indicated that more was training and experience, which will improve the rigor o f needed. The responses at the international and regional their future work. levels, outlined in chapter 1, are recognized inmuch o f the development community. And the proposed Public- Evaluation: The Coherence of the Bank's Private ResearchAlliance, mentionedabove, is expected Research Agenda to become a major source o f support for research capac- Both external evaluators and respondents in the opera- itybuildingworldwide. tions staff surveys point out some shortcomings in the Bank's selection o f research projects. While the evalua- Policymakers are unlikely to be aware, however, o f Re- tors have stated that the Bank leads the field inempirical searchCommittee policies supporting capacitybuildingat research, many see a need for a better-defined research theproject level. The Committee believes that each coun- agenda. Some believe that the research agenda in some trycasestudyorcross-country comparisonshouldinvolve fields i s producer-driven, while others note a lack o fcol- local researchers from the countries. This involvement laboration or links among projects. The Research benefits theproject byimprovingknowledge o flocalcon- Committee's own discussions and its surveys o f opera- ditions, enhancing access to data and information, and tions reveal a strong desire by Regional staff to be in- making the results more relevant to the subject countries volved in setting the overall research agenda and in andmorewidely disseminated.Thislocalinvolvementmay commenting on the work program o f the research units. require a training period, thus marginally increasing the project term, but lower local salaries may offset the in- Fivenewinitiatives beingplannedandimplementedwould crease intime costs. Thus the Research Committee pro- increase the coherence o f the research agenda. The Re- posed that a l l such research teams include local gional and Network Research Initiative addresses prior- researchers. ityoperationaltopics; theResearchCommitteewill advise on DECRG's work program; new Research Program The Regional and Network ResearchInitiative revealed Grants allow Research Committee involvement inbroad insufficient research onAfrican development issues. An areas o f Bank research; the Chief Economist Initiatives African Scholars Program i s being developed with the willsupporturgent, externally linkedstudies inwhichthe support o fthe ResearchCommittee, bothto increase Bank Bank might otherwise not participate; and the African researchonAfrica andto support research capacity build- Scholars Program addresses the deficiency in Bank re- ing. TheAfrica Regionsupports linkingtheprogramwith search on Africa. the AERC Ph.D. program, AERC has agreed to nomi- nate candidates, the WE31may link this program with its Regional and Network Research Initiative broader visiting scholars program, andthe Global Devel- Development o fthe RegionalandNetwork Research Ini- opment Network has expressed interest in participating tiative program was informed by a survey seeking the in the nomination process ina way that gives potential opinions o foperations andNetworkmanagers onresearch African scholarsadditionalopportunities outside the Bank. priorities. Because many issues are important across The program will involve an initial research term at the Regions, further discussion and refinement consolidated Bank, followed byaperiodo fresearch inthe homecoun- the nearly 100 responses into 57 research briefs. About try, with discussions, final revisions to the research re- 25 research proposals have been funded to date. The port, and dissemination ina briefer period at the end o f R"willcontinuetoconductsuchsurveysannuallyto the scholarshipperiod. identify priorities, advise on and support development o f researchproposals, andcoordinate relatedresearchacross Inconducting studies at the Bank, senior scholars widen theinstitution. their contacts inthe international researchcommunity and learnhow to access Bank data and reports. This broader Research Committee Role in Setting the Bank's network o fcontacts and information will increase the ef- Research Agenda fectiveness o f their teaching and the influence o f their The Research Committee will now have a direct andfor- policy advice athome. The Bankgains from the scholars' malrole insettingDECRG'sresearch agenda.The Bank's Research Funding and the Research Committee Role 19 ChiefEconomistproposed that the Research Committee and ex post review, they identify a need to increase lack act as a council representing the views and interests o f o f oversight during the conduct o f research to reduce the Bank and its clients. To that end, the Chief Econo- problems inaccomplishing seemingly feasible analytical mist-both Chairman o f the Research Committee and tasks ando fvariance betweenpromise andproduct. They Senior Vice President o f DEC-invited the director o f suggestthat the omissionisparticularly important inlarger DECRG to meetings o f the Research Committee. Infor- researchprojects inwhichinitialwork conditions the suc- mation from the RNRIand Committeemembers' discus- cess o f subsequent stages. sions with their managers will provide the basis for discussions o f DECRG work programs that reflect the Inresponse, the ResearchCommitteeencouragesproject priorities and needs o f Bank operations and clients. The advisory committees andrequires interim reviews o f the procedures for this process are being developed. larger ResearchProgramGrants. Eachresearch program team will report on program status, midterm results, Research Program Grants changes inthe analysis and work program to respond to The Chief Economist also proposed-and the Research events and findings, and updated plans for completion, Committee has developed-a category o fresearch grants reporting, anddissemination. After expert externalreview to fund broad programs o f research from the Research o f these reports, the Research Committee will consider Support Budget. These Research Program Grants allow whether the research program warrants continued fund- the Research Committee to suggest improvements inthe ingor revisions inlighto fcurrent findings that woulden- broader strategy o f DECRG's research program. Expert hance its value. review and Committee consideration also improve the quality and coherence o f the programs. To make these Evaluation: Access across Distance and large-budget grants available outside DECRG, the Chief the Digital Divide Economistproposedthat they be developed asjoint pro- Policymakers and operations surveys acknowledge ef- posals with the Networks. forts to bring research results to Bank clients, but they also focus on how much more must be done. There are Chief Economist Initiatives geographic, linguistic, technical, andprofessional obstacles ChiefEconomist Initiatives willprovideavehicle for rapid to such dissemination o f research data andfindings. Dis- planning, fimding, andinitiationo fasmallnumber o fstud- tribution channels are weaker and more expensive inde- ies having urgent institutional commitments. The Chief velopingcountries. Economistwillbringsuchinitiatives to a subcommitteeo f the ResearchCommittee to obtainmembers' advice more A survey o f policymakers and readers o f the Policy quickly than can be provided inthe standard process o f Research Bulletin and information from the Bank's external peer review and Research Committee consider- Web site indicate that posting information o n the ation. Internet i s regressive, favoring high-income countries rather than Bank clients. The few Part I1country us- African Scholars Program ers are concentrated in a very small number o f coun- The proposedAfrican Scholars Program, discussed above, tries. Paper products canbe directly targeted to readers i s expectedto improve the researchagenda by increasing inPart I1countries, avoiding subsidyo faccess for do- the share o fAfrica-focused studies. Although Africa is a nor country nationals. Butthis requires large and well- geographic priority for the Bank, the RNRI survey re- developed readers lists, which are difficult to compile vealed that too few research projects are planned to ad- and maintain. Thus both channels must be enlarged dress African development problems. Top African and broadened. researchers funded by the program would be brought to the Bank to conduct such research, in consultation with And accessibility mustrefernot onlyto distributionbut the Africa Region and DEC. to exposition and language as well. Writingmustbe clear, which sometimes requires interpretation o f complex Evaluation: The Quality of Bank Research econometric models to describe how they represent re- Numerous sources confirmthe value and quality o fBank lationships andwhat their results implyfor the realworld. research, but formal evaluators who assess the review This requires researchers to produce a set o f outputs processes as well as research products note an important different from those that would respond to professional gap. While they praise the ResearchCommittee's ex ante incentives. The reputation (and, in academia, the pay) 20 Report on the World Bank Research Program, Fiscal 2000 and 2001 o f researchers depends primarily ontheir publications in The policy changes described here are invarious stages peer-reviewed journals that are directed to specialist o f development. Funding o f the Regional and Network readers-the great majority inhigh-income countries. Aca- Research Initiative allowed an unprecedented share o f demic journals put a premium on developing theoretical the Research Support Budget to be allocated to studies frontiers and advances in sophisticated methodologies. conductedbyoperations and sectoral staffinthe first half Few suchjournals consider policy relevanceto be an im- o fFY02. The Research Committee recently clarified the portant factor, and fewer are translated from English, criteriaand streamlined the reviewprocedures o fthe Re- French, andSpanishinto local languages. search Program Grants, based on the first year's results. The Public-Private Research Alliance was discussed by The Research Committee's response has been equiva- the Research Committee, and its form and function are lentlymultifaceted, requiringexposition directedtopolicy being revised to incorporate the recommendations. The audiences, disseminationto client countries, identification plans for theAfrican Scholars Programand collaborative o ftarget audiences to indicatewhere translationisneeded, research dissemination are being further developed after andbroadpromotion o fresearch output and distribution acceptance inprincipleby the Committee. inpaper or diskette format. The Research Committee is also developing new distributionmechanisms with Exter- As the results o fthevarious initiatives emerge-in cur- nalAffairs andthe Global Development Network, poten- rent selection o f research topics and longer-term re- tially inconjunctionwiththeAfricanPublishers' Initiative, searchfindings-they willbecontinuously assessed.This to expand and deepen the Bank's networks o f research process o f adaptation and adjustment will ensure that distribution. the Bank's research remains relevant and valuable. 21 CHAPTER 3. FUTURE DEC RESEARCH PROGRAMS AND PRIORITIES The findings o f the World Bank research program feed the poor. Work will continue on building a database on into the evolution o fthe Bank's strategic agenda, and the regulation andmeasuring the impact o fregulatory design program then adjusts to those changing strategic priori- on performance. ties. Following from the Bank's prioritization o f the in- vestment climate and empowerment as being central to 2. Basic Service Delivery ($3m) its strategy for development, DECRGhas reorganizedits work program to focus more resources on these critical Many developing countries have stabilized and restruc- areas tured their economies but are still not seeing strong eco- nomic growth or reduction in poverty. One reason is 1. Investment Climate ($3.6m) limited access to and the poor quality o f basic services. Improving service delivery has thus become a higher Many developing countries have carried out macroeco- policy priority. In response the Development Research nomic and trade reforms and often have gotten good re- Group created a new research team in 2001 to focus on sults. But the strength o f growth and poverty reduction public services. The Public Services researchteam's work dependscriticallyonthe qualityo fthe investment climate. on govemance, education, health, and social protection Withmanymacroeconomic reforms completed, itisnatu- focuses on how best to deliver basic services. A core ral for the Bank's agenda and for the research agenda to task is to collect and analyze new data at the level o f the go downto amoremicroeconomic levelto investigate the service-providing unit, such as the clinic or the school, investment climate-regulation o fentry andexit, govern- linked `downstream' to users, and `upstream' to the pub- ment harassment andcorruption, quality o finfrastructure, lic administration andpolitical processes. finance and business services. This i s an area where empiricalresearch is critical, because intheory, any num- Governance and Service Delivery ber o finstitutions andpolicies can affect the quantityand The Bank has addressed public sector issues from the qualityo finvestment, ofteninquitecomplexorunexpected policypoint o f view, including public spending, with the ways. underlyingassumptionthat thepolicies willbeimplemented as designed. Today we are increasingly asking questions Followingon the success o f DECRG's firm-survey work o f performance. Answers to these questions allow us to inIndiaand other countries, DEChas establishedajoint providebetter advice bothonpolicy and designo finstitu- venture with the Private Sector and Infrastructure Vice tions. Presidency-a new Investment Climate Unit that will promote standardized investment climate surveys inde- Governance failures are believed to be responsible for veloping countries, mainstream this work into Bank ana- the finding that public spendinghas aweak relationship to lytical products and lending operations, and carry out outcomes. This research provides cross-country and research on the investment climate (Surveys in Brazil, within-country statistical evidence on governance prob- China, Ethiopia, Mozambique, Nigeria, Pakistan are al- lems inservice delivery. ready inprogress). These surveys will also feed into in- More and more countries are decentralizing responsi- vestment climate assessments as part o f the Bank's bilities for delivering services The researchon fiscal fed- economic and sector work. eralism and decentralization is linked by a focus on the role that individuals' participationcanhaveon improving Another strand o f the investment climate work i s focus- services delivery. ing on the lessons from two decades o f reform o f the Employment andpay inthe public sector to assist civil regulationo finfrastructure. APolicy ResearchReport on service reforms. regulation and competition ininfrastructure industries is under preparation. Anew initiative will measure the im- Health pact o f infrastructure privatization and deregulation on Incentives for improvinghealthservices. Studies are in 22 Report on the World Bank Research Program, Fiscal 2000 and 2001 progress onthe problem o fprovisiono fhealth services in i s a severe shortage o f evidence at the level o f the ser- rural areas and knowledge andbehavior among medical vice-providing unit.The core task o fthe Public Services professionals inIndia. Major emphasis isbeingplacedon teami sto collect suchevidence, andto organize its analysis aprogramofprovider interviews. Similarly, we have initi- incollaborationwithscholars andinstitutions inthe devel- ated a multi-country study inAfrica to obtain new data oping countries concerned. from frontline service providers inhealthcare, including government, non-profit and private for-profit, to explore 3. Trade (%4.4m) incentives andprovider behavior. These new data will be linkedto other micro surveys. The World Trade Organization (WTO) Ministerial Con- Poverty, equity andhealth, including measurement o f ference inDohabroke new ground inrecognizing devel- health status across the income (or wealth) distributions opment as a goal for trade negotiations. Achieving a o f countries and the construction o f measures o f health pro-development outcome, however, remains amajorchal- inequalities. The research examines the causes o fthe gap lenge-especially because WTO members have agreed inhealthoutcomes betweentherichandthepoor, aswell on an ambitious work program for the next round o f ne- asthe interrelation o fhealth finance andhealth outcomes. gotiations, encompassing traditional market access poli- Control andmitigation o finfectious diseases. Projects cies as well as a range o f new regulatory issues. The are inprogress on several infectious diseases, including outcome o f these negotiations will have a deep impact malaria, and generic issues o fcontrol. Work continues on bothonpolicy indeveloping countries andontheir exter- formulatingpublic policytowardsAIDS,includingresearch nal environment. The researchprogramontrade will seek on orphans and the design o f policies for encouraging to improve the understanding o ftheseissuesandthe quality pharmaceutical research. o f advice that the Bank canprovide, bybringingtogether the insights o f developing country practitioners, leading Education academic experts, and Bank staff. Analysis o f education system reform to improve cost efficiency and quality, including devolution o f authority The research program in trade has five essential andresponsibility to localgovernment levels; school-based objectives: management; community financing o feducation; deregu- lation o f existing and potential suppliers; and increased To develop a much fuller understanding o f how "be- parental and student choice o f which schools to attend. hindthe border" institutionalandregulatory reforms af- Study o f supply, competition, and efficiency aimed at fect the success or failure o f trade and investment understanding various dimensionso fthe supplyo fschool- liberalization indeveloping countries. ing, whether bythepublic or private sector, exploringthe To provide a solid analytical framework to support responsiveness o fprivate providers, and teacher pay and authorities indeveloping countries insetting their priori- performance. ties for undertaking reform andmultilateraltrade negotia- Research on incentives and demand for education, tions involving regulatory issues. investigatinghouseholddecisions and community To analyze how pro-competitive policy reforms and involvement. domestic institutions maybecombinedto reduce poverty and promote growth. Social Protection To study mechanisms for improving the operation o f Understanding who the most vulnerable are and what the rules-based global trading system inorder to make it this means for public intervention. more transparent andmore attunedto the needs o fdevel- 0 Analyzing policies, institutions, and delivery mecha- oping countries. nismsforreducingriskandvulnerabilityinthe formaland To build research capacity in partner institutions in informal sectors. poor countries through a program o f collaboration, train- ing, and support o fresearch networks and think tanks. Data on Service Delivery The Living Standards Measurement Surveys (LSMS). The Ministerial Conference inDoha set the stage for ne- Thisdata is usedto examine issues inbasic service deliv- gotiations to be launched in2004 on such issues as gov- ery, particularly in education, health and nutrition, from ernment procurement, trade facilitation, and investment the household perspective. and competitionpolicies. The WTO has alreadylaunched Quantitative Service DeliverySurveys (QSDS). There negotiations on intellectualproperty rights, trade inser- Future DEC Research Programs and Priorities 23 vices, agricultural policies, antidumping, andthe linksbe- poverty andinequality, andthe poverty researchprogram tween international trade policy and environmental pro- aims to continue this effort. Data problems hampering tection. There areongoingnegotiationsaspart o fthe WTO comparability between countries, and discrepancies be- work programonproduct standards, food safety, andother tween the growth rates impliedbyhousehold surveys and technical barriers. national accounts require new research on basic mea- surement issues hand-in-hand with survey design work. The beginning o f a new roundo ftrade negotiations, with Similarly, whilepovertyprofiles are usedroutinely inthe theprospect o fnegotiations onnewregulatory issuessuch Bank to describe the characteristics of poverty within a as competition policy in two years' time, leaves only a country, research i s needed to develop new techniques small window o f opportunity for serious research about for increasing the detail available inpoverty profiles, in- the implications o fdeep regulatoryreforms andtrade and cluding census-basedpoverty maps. Virtually every com- investment liberalization for developing economies. The ponent o f the proposed research under this program is main objectives o f the trade research program will be to likely to have feedback implications for the LSMS and promote more informedparticipation bydeveloping coun- other household surveys. The research will generate con- tries inthe negotiations and to ensure that the outcomes crete recommendations for better surveys. A feature o f arebetter alignedwith development goals. TheWorldBank this program will be the two-way interaction between willbeincreasinglycalled ontoprovidetechnical analysis analysis and survey design. andpolicy guidance on these complex issues. What Makes Pro-Poor Growth? Unpacking and Inthe coming year trade researchwill place increasing Understanding Distributional Change emphasis on the "behind the border" trade and invest- The central question inthis component will be, Why are ment agenda. Work on services and product standards some growth processes more pro-poor than others? This willbecomplementedbyaprojectfocusing onthe impact requires a deeper understanding o f both the role played anddesignofintellectualpropertyprotectionindeveloping byinitialconditions (including initialinequalities) andwhat countries. Effortswill continueto developanddisseminate drives the distributional changes we see insurvey data. databasesthat can help policymakers andanalysts use in- ternational trade agreementsmore effectively for develop- Aggregate Distributional Change and Micro-Macro ment. Ahandbook ontrade policy andnegotiationswillbe Linkages produced inFY02that will synthesize lessons and output This work utilizes survey data over time andacross coun- generated by the research and capacity building efforts tries to analyze the determinants o fdistributional changes. centering on World Trade Organization issues. Work has Empirical work needs to better recognize the likely beenlaunchedon the impact o f trade, trade liberalization, nonlinearities andinteraction effects; for example, greater andpovertyandisexpectedto continuethroughFY02-03. openness and other market-friendly reforms can reduce A major focus of research activities on trade going for- inequalityindistortedhigh-inequality regimes (which have ward is to llnk the work even more to complementary ca- used controls to keep inequality high), but increase it in pacity building efforts undertaken with the WBI and to low-inequality ones (which have done the opposite). The leveragethe researchbyfeeding itinto country-level analy- work also takes account o ftheroleplayedbydiverse initial sis and diagnostic efforts undertaken by the Poverty Re- conditions combiningmicro-simulationtechruqueswithag- duction andEconomic Management Network. gregatefunctions for factor demandandthe supplyo fgoods whichembedsmicroeconomic analysis withina consistent 4. Poverty Dynamics ($l.Sm) aggregateframework. Buildingeconometric modelso fkey behavioralresponsesintodetailedpartialequilibriumanaly- Over the coming two to three years the Poverty Group ses at the household level makes it possible to obtain a will focus on two main issues: how to improve the tools muchricher picture o fdistributional impacts. currently used inthe Bank for monitoring, describing, and forecasting incomepoverty and inequality; and develop- Household Income Dynamics and Economic ingadeeperunderstanding o fwhat makespro-poor growth Geography of Poverty and the role played by government. A numbero fpaneldata studies have suggested consider- able churning (whereby there are gainers and losers at Initiatives for ImprovedPoverty and Inequality Data each levelo fliving) under the surface o faggregate distri- The Bank is the leadingproducer o fhigh-quality data on butional statistics. It is also known from economic theory 24 Report on the World Bank Research Program, Fiscal 2000 and 2001 that riskmarket failures can entail considerable exposure and weather risks are prevalent in many agricultural to uninsured risks, create poverty traps, and mean that economies. The risk mitigation procedures offered by initial inequalities invarious dimensions canimpede over- markets (insurance, forward markets) often arenot avail- all economic growth and poverty reduction. However, an able to all segments o f the farm sector. The research important challenge remains to properly test the links in programwillanalyze the cause o fmarket failures andthe these theoretical arguments and flesh out their implica- potential for overcoming them. tions for development policy. The analysis will also seek to clarify the role o f geographical disadvantages such as Inadditionresearchiscontinuingonlandpolicyissues. poor (physical andhuman) infrastructure inexplaining the differential impact o f growth onpoverty. Questions that 6. EnvironmentandUrbanDevelopment(US$1.7m) willbedealtwithinclude: Does divergencereflectunder- lying geographic poverty traps at the level o f the farm Duringthenexttwo fiscalyearswork onpollutionbysmall household? What are the appropriate policy responses? enterprises will culminate inpapers relying on extensive H o wcanone dealwithproblems o fmobility andprogram survey work on China's township-village industrial enter- placement endogeneity in attempting to identify causal prises. Incoordination withcolleagues inDECRG's Trade effects o f apparent geographic disadvantage? and RuralDevelopment units, rapidly expanding work on environmentalissuesinagriculture will focus onthree top- Social Exclusion and Poverty ics: policies for optimalpesticide and fertilizer use incon- One often finds highandresistantpoverty among certain ventional agriculture; economic and environmental social groups identifiedbyethnicity or culture. Examples cost-benefit analysis o f organic agriculture; and environ- includethe RomainCentral Europe and scheduledcastes mental issuesrelated to trade inagricultural products. The andtribes inIndia. There have also been claims that these urbandevelopment programwill focus ondeterminants o f groups are often left out o f the growth process (even agglomerationeconomies andurban service delivery, with when growth i s pro-poor overall). There is also a set o f a particular emphasis on SouthAsia. poorly understood questions about what should be done to address this type o f poverty. Should the emphasis be Two cross-cutting exercises will also be undertaken: onmainstreaming the excluded groups, addressing their povertythroughaffirmative action programs, or adopting Spatially disaggregated empirical research ondetermi- more innovativepolicies that work withinthe social and nants o fpollutionand naturalresource depletion. culturalcontext o fexclusion? Integratedresearchonurbancongestion, pollution from mobile sources, and other negative externalities o f urban 5. Rural Development ($1.9m) development. The rural development research programwill focus inthe Finally, DECRG will collaborate with Operations and comingyearsonthree themes, corresponding to areashigh- Networks in extending the work on information and de- lightedinthe Bank'semerging ruraldevelopment strategy: velopment. Focal exercises will test information ap- proaches to regulation o f water delivery by private Rural nonfarm development. It is increasingly evi- concessionaires inthe Philippines; assessthebenefits and dent that rural development has to encompass growth o f costs o fpublic interventionto promote Internet accessby both the agricultural and the nonfarm economy in rural rural communities; and develop a work program on the areas. Many o f the rural poor depend on nonfarm em- economics o f"green" certificationfor industrial andagri- ployment for a significant share o f their income. Yet the culturalproducts. policy and investment implicationso fthe nonfarm sector are not fully understood. 7. FinancialSector ($1.3m) Development impact of community-based rural organizations. The Bank, along with other donors, i s Numerous emerging market financial systems-not just increasingly relyingon communities and civil society inAfrica but also inArgentina, Brazil, many transition as active participants and implementers o f develop- economies, andcountries emergingfrom financial crises- ment activities. The potentials and risks o f these ap- are ina "low intermediation" trap, withlowor diminished proaches require detailed empirical analysis. penetration o f finance to the economy. The largest firms Insurance and risk mitigation in agriculture. Price maynot findthisproblematic andmay evenaccess finan- Future DEC Research Programs and Priorities 25 cia1 services in world markets. But small and medium- particular, how to cope with the growth o fnonbank finan- size firms-even large "medium-size'' firms-often are cial intermediation; what issuesarise for the market struc- crowded out. This pattem lowers growth and increases tureofbanlung relatedtobankprivatization, entry o fforeign poverty. Moreover, new risks and new opportunities are banks, andthe optimallevelofbankconcentration; howto emerging, such as-those associated with "e-finance.'' tax the financial sector; how small financial systems can Focusing onunderserved groups, anticipating new risks, survive in an e-finance world (or whether they should); and exploiting new opportunities will be the underlying and concerns about corporate governance and how this principle o f Bank research. affects risk and risk management, both for the corporate sector, giventhe role o f intermediaries, and for intermedi- The key questions for the next two years are how aries themselves. These projects will focus onthe impacts best to regulate the financial sector in this changing onthe accessto credit, the development andstability o fthe environment (this research continues from FYOl), system, and thus the impact on growth and poverty. in NOTES 1"Report on the World Bank Research Program, Fiscal tionandResearchNeeds inTransition Economies," World 1992 and 1993," ReportNo. 12663. Bank,Washington, D.C., 1999). 2 The partnership approach to developing new institu- 8 CEU is discussed inthls report but not included inthe tions has achieved a remarkable progress ina short time survey as ithada secure fundingbase from George Soros. especially inthe former Soviet Union andEasternEurope 9 These are the Southeast Asian Network o f Economic evenwhilethese countries were facing difficulttransition Institutions (SANEI), based inNew D e b , and the East problems. See "Minutes o f March30, 1999, Meeting on AsianDevelopment Network, locatedinSingapore. a Proposed Strategy to Address Critical Economics Edu- 10Jarnil Salmi, "Higher Education Reform," WorldBank, cation and Research Needs in Transition Economies," Washington, D.C. Washington, D.C.: World Bank. 11For additional details see B. Pleskovic, A. Aslund, W. 3 It i s notable, for example, that even after a number o f Bader, andR.Campbell, "Capacity BuildinginEconomics years o f operationAERC attracts limited funds from EducationandResearchinTransition Economies" (Policy African nations. ResearchWorking Paper 2763, World Bank, Washington, 4 These include directly buildingcapacity (through col- D.C., 2002). laborative research projects, visiting fellows, and Bank 12Other CCER researchprojects that contribute to policy staff serving as resource persons in the various regional inChma include China's Future inthe Internet, NewVil- networks), the World Bank Institute, and Bank support lage Movement, Food Security Project, Telecommunica- for the Global Development Network. tions Reform, andExperiment for Private BankingSystem 5 A May 22,200 1 meeting at the World Bank, cochaired inChina. byJamesWolfensohn andGeorge Soros, brought together 13AlanGelb, CanAfrica Claimthe21st Centuly? (Wash- about 50 representatives from foundations, government ington, D.C.: World Bank,2000). agencies, and corporations that pledged contributions or 14 Shantayanan Devarajan, David Dollar, and Torgny matching funds(for adetaileddescriptionsee "Investment Holmgren, eds., Aid and Reform in Africa: Lessonsfrom withaHighReturn: SupportingEconomicsEducationand Ten CaseStudies (Washington, D.C.: World Bank, 2001). Research in Transition Countries. Minutes from a High- 15B.Pleskovic, A. Aslund, W. Bader, andR.Campbell, in PoweredMeetingonBuilding Private-Public Alliances for "Proposed Strategy to Address Critical Economics Edu- Economics Education and Research in Countries o f the cation and Research Needs in Transition Economies" Former Soviet Union and East-Central Europe," Transi- (World Bank,Washmgton, D.C., 1999), identifiedthese three tion 12(2): 1,3-7). regions as beingunderserved andunderfundedandrecom- 6 For example, the Swedishgovernment financed students mended the establishment o f three regional "centers o f from Belarus at EERC inKyiv. excellence." 7 For example, in1995, the EurasiaFoundationandWorld 16An exception is CEU, where George Soros gave $250 Bank sponsored an assessment study o f economics edu- millionthis year to establish anendowment. cationandresearchinRussia andUkraine. (See G.Ingram, 17 World Bank, 2000, Development Knowledge in the B. Pleskovic, K.Wittenben, "Critical Economics Educa- New Bank, p. 21. tion and Research Needs in Russia and Ukraine," 1995.) 18 World Bank, 1998, Report on the World Bank Re- In 1999 the Open Society Institute, Eurasia Foundation, search Program, chapter 1and pp. 43-48. Starr Foundation, and World Bank sponsored a compre- 19WorldBank, 1998,Evaluation o fWorldBank,Research: hensive survey assessingthe state o feconomics education Research Support Budget Projects. and research in 20 transition economies o f East-Central 20 Mishkin, F.S., Extemal Evaluation of IMF Economic Europeandthe former Soviet Union(for more information ResearchActivities (Washington, DC: Intemational Mon- see B.Pleskovic, A. Aslund, W. Bader, and R. Campbell, etary Fund,2000). "Proposed Strategy toAddress Critical Economics Educa- 21OEDAnnual Report 1993, p. 19. ANNEX A-1. PARTNERSHIPSFOR ECONOMIC CAPACITY BUILDING Description o f five academic institutions and four research centers and networks Tables Table A.1Academic Institutions: Descriptive Statistics Table A.2Academic Institutions: Revenue and Funding Sources Table A.3 Research Centers and Networks: Descriptive Statistics 30 Report on the World Bank Research Program, Fiscal 2000 and 2001 1. Academic Institutions Economics Department at the Central European University The five institutions described here offer degreeprograms The CentralEuropeanUniversity (CEU) was established ineconomics atthe graduate level. They also conduct in- in 1991to promoteeducational development throughout house economic research, and a few maintain regional East-Central Europe and the former Soviet Union. The research networks. Four are located in Europe and Cen- university was founded and funded by George Soros. tralAsia andone inChina. Further information, including CEU's Economics Department was started a year later progress, is summarized intables A. 1 andA.2. in1992at its Praguecampus, andin1995 itmovedto the Budapest campus. Today CEU's Economics Department New Economic School-Moscow offers two programs: a two-year M.A. program and a The New Economic School (NES) in Moscow was the new four-year Ph.D. program. first non-state-run graduate school o f economics inRus- sia. It was founded in 1992 as a partnership o f the Cen- Last year the department admitted 50 M.A. and 8 Ph.D. tral Economics andMathematical Institute(CEMI) o fthe students. It plans to increase the number o f Ph.D. stu- RussianAcademy o f Sciences, the Hebrew University in dents to 14in2001/02. Largely due to the extensiveOpen Jerusalem, and Moscow State University, with initial fi- Society Institute network, students are recruited fromvir- nancialsupport from the Soros Foundation. tually all countries inEast-Central Europe andthe former Soviet Union. Before the establishment o f the new doc- The school offers a two-year M.A.program in modem toral program, almost halfthe M.A. graduates continued economics. It admits about 50-60 students a year, with their studies at Ph.D. programs inthe United States and roughlyhalfcoming from Moscow, most o fthe rest from Europe. Roughly halfthe M.A.graduates go straight into other Russian cities, and a few from other former Soviet full-time jobs, largely inthe public andprivate sectors in republics. Nearly 45 percent o f its graduates have gone their home countries. on to pursue Ph.D. studies at top-quality universities in the West, a strong indicator o fprogram strength. A num- The teaching staff has developed from a largely visiting ber o f graduates work for the Russian government, in- faculty to a stable body o fpermanent andreturning visit- cluding the Deputy Minister o f Economics, economic ing faculty (16 permanent and 24 visiting professors in advisers to the Ministryo f Economics, and experts inan 2001). Like the student body, the faculty is diverse; half advisory group for the Ministryo fFinance. Over the past are nationals o f countries in the region-largely due to few years NES hasbeenincreasingly successful inbuild- CEU's active regionalrecruitmentefforts. Inrecent years ingapermanent Russianfaculty. Today 80percento fthe CEU has managed to attract back as professors four faculty isRussian, andthe number o fvisiting faculty from graduates who earned their Ph.D.s abroad after com- the West has declined from 19 to 8 inthe past five years. pleting their M.A.s at CEU. Research is organizedby projects, most focusing on the The aggregate departmental budget i s approximately Russian economy. Over the past five years research ac- $910,000. Fundingcomes froma single source-the Soros tivity andoutput have increasedconsiderably. The num- Foundation.' The World Bank andthe World Bank Insti- ber o f researchers has risen from 6 to 9, and the number tute have been working on helping CEU develop a new o f articles published inrefereedjoumals from 8 to 12. M.A.inpublic policy. The Bank has also been asked to help strengthenthe new Ph.D. program through collabo- The annual operatingbudget is about $1.5 million, andthe rativeresearch, guest lectures, anddisseminationo fBank costperstudentisabout $8,000 for the first year and$12,000 literature. for the secondyear. Currently, NESreceives fmancing from theCiticorp Foundation, EurasiaFoundation, FordFounda- Center for Economic Research and Graduate tion, JohnD.andCatherineT.MacArthurFoundation, Soros Education-Economic Institute-Prague Foundation (through the Higher Education Support Pro- The Center for Economic Research and Graduate Edu- gram), andWorld Bank.Itsbusiness plan, developedwith cation (CERGE) inPrague was established in 1991 and support fromtheEurasiaFoundation, theInternationalCen- became CERGE-E1 in 1993 when it merged with the ter for Higher Education, andthe World Bank, anticipates Economic Institute.Affiliated withCharles Universityand that studentswillpayanincreasingshareo fthe coststhrough the Academy o f Sciences, CERGE-E1 focuses on edu- tuition andstudent loans. cating businesspeople, policymakers, researchers, and Annex A-I. Partnerships for Economic Capacity Building 31 future educators. Its four-year Western-style Ph.D. pro- ernment, EERC admits 4-6 students from neighboring gram stresses the relationshipbetween education and re- Belarus each year. search-a relativelynewconcept inthispart o fthe world.2 In 2000 CERGE-E1 became the first institution in the EERC's main research output is student M.A. theses. In region to receive U.S. accreditation for its Ph.D. pro- spring2001the school laid the groundwork for a center to gram ineconomics. promote research and teachmg o f economics. The center's activities to date have beenmodest: several faculty-led re- Over the past five years CERGE-E1 has grown innum- searchprojects, aworkshop onlabor economics (organized bers o f faculty (from 13 to 20) and students (from 93 to inconjunctionwiththe Institutefor the StudyofLabor, or 156). Because CERGE-E1 has one o f the better estab- EA, inBonn), asummer school (organizedprimarilybythe lished Western-style PbD. programs in the region, it at- EERC's Moscow-based research network), and a cross- tracts students and faculty from manycountries. Regional regional survey o fUkrainianmanufacturingenterprises.As coverage has remained stable, with some 70 percent o f it develops, the center hopes to reverse the brain drain by studentscomingfrom countries inEast-Central Europe and hiring young Ukrainian economists who have earned their the former Soviet Union, Disseminationactivities havein- Ph.D.3 abroad. creased significantly. The number o f articles published in refereedjournals has more thandoubled (to 37), as hasthe Thebudgetfor theprogramhasaveraged$1.5 millionayear. number o f periodicals and working papers (to 56). Staff The World Bank and the Eurasia Foundation, the initial members present papers at European Union conferences. cohders, continueto supportthis operation,alongwithother As the Global DevelopmentNetwork hubfor Eastern Eu- donors.Additionalresourcesareexpectedto come fromtu- rope, CERGE-E1 also maintains a newly created regional itionpayments andfromnewdonorpartners,m a d yfounda- network, which includes seven research institutes. tions andextraregional government andmultilateralagencies. CERGE-EI's annual budget is approximately $2.5 mil- EERCis funded andgovernedby a consortium o fdonors, lion, and the average cost per student per year is about whichcurrently includes the Carnegie Corporationo fNew $13,000. Domestic and international supporters o f York, EurasiaFoundation, FordFoundation, Government CERGE-E1 are listed on the school's W e b ~ i t e .They ~ o f Sweden, Open Society InstituteJSoros Foundation, include founders, patrons, donors, and contributors. Ma- RoyalNorwegianMinistryo fForeignAffairs, StanFoun- jor founders are the Citigroup Foundation, FordFounda- dation, World Bank, and Global Development Network. tion, Andrew W. Mellon Foundation, Pew Charitable Other major contributors include the Citigroup Founda- Trusts, European Union TempudPhare program, US. tion, Government o fFinland, andPewCharitableTrusts. Agency for International Development, World Bank, and Donors are represented on the governing board. The do- Government o fthe Czech Republic. nor consortium also established and funded the EERC Research Program in Moscow (see section on research Economic Education and Research centers and networks below). Consortium-Kyiv Established in 1996 in Kyiv, the Economic Education China Center for Economic Research-Beijing andResearchConsortium (EERC) was implemented by The China Center for Economic Research (CCER) at the Eurasia Foundation and affiliated with the Kyiv- PekingUniversity was establishedin 1994. Its long-term Mohyla A ~ a d e m y .It~offers a two-year M.A. program objective is to modernize economics education and re- ineconomics similar incontent andquality to programs search andtobecome ahubfor interactions among econo- offered by the best universities in the West. Since its mistsoneconomicreformanddevelopment issuesinChma inception student enrollment has more than quadrupled and other countries. Its activities include education, re- from 22 to 94, close to its predetermined steady-state search, dissemination, andnetworking. CCERoffers B.A., enrollment o f 100. The school has graduated 123 stu- M.A., and Ph.D. programs in economics and an MBA dents, with a significantnumber (40 percent) continuing p r ~ g r a m CCER has grown rapidly over the past five . ~ their education inthe United States, Canada, and West- years; the number o f faculty has tripled from 6 to 18, and ern Europe, attesting to the quality o f EERC's M.A. enrollment has increased from 342 to 1,747.6 program. The school admits students from Ukraine and Belarus, with more than two-thirds coming from cities A major objective o fCCER's researchactivities is to re- other than Kyiv. With financing from the Swedish gov- verse the brain drain by repatriatingChinese economists 32 Report on the World Bank Research Program, Fiscal 2000 and 2001 to teach and conduct research. Three programs are de- AERC conducts researchin-house andadministers a small signed to meet this objective: a visiting fellows research grants program for researchers in academia and program,' a fellowship program for overseas economists policymakmginstitutions. AERC hassupported280research who are Chinese nationals, and special scholarships for projects, and the number o f participating researchers has new CCER professors. CCER i s progressing toward this grown from 40 to 200 since its inception. Ithas carried out objective: the number o f permanent researchers has in- four major collaborativeresearchprojectsongrowth, trade creased from 1 to 9, and it also has the largest concentra- policy (Africa inthe world trading system), poverty, and tion o f Western-trained Ph.D.s in China. trade effectiveness. The work on trade played a consider- able role infurnishing the analysis forAfrica's submission Researchactivityhas increased dramatically over the past to the recentWorldTrade OrganizationMinisterialConfer- five years. In-house publications went from 18 to 118, ence inDoha. articles inrefereedjournals from 21 to 210, and confer- ences and workshops from 40 to 65. CCER's links to the Inacademic year 1992-93 AERC began to administer a ChinaEconomics Network(CEN), whichbrings together two-year collaborative M.A. program with students and 360researchersand218institutions representing 16coun- faculty fiom20universities in15Sub-SaharanAhcancoun- tries, allow its researchto have a greater impactonecono- tries. Over the past five years the number o f faculty and mistsandothers intheregionwho focus onissuesrelevant researchers remained stable, and the number o f students to China's economic development. increasedmoderately from 170to 202(see tableA.1). Since its inception AERC has educated approximately 800 stu- CCERhasbeenvery successful indiversifyingits sources dents. Nearly all o fAERC's faculty andresearchers with o f revenue. In2000 it raised some 11percent o f its oper- Ph.D.3 earned their degrees from universities inSub-Sa- ating budget from three relatively new funding sourcm: haran Afnca. AERC's M.A. program is truly a regional tuition, evening coursesandworkshops, andresearchcon- institution, having increasedits geographic coverage from tracts and consultancies. In 2000 foundations were the 7 countries to 22. At the doctoral level AERC has sup- largest contributor to CCER ($350,000), followed bythe ported students through thesis grants and fellowships and WorldBank ($170,000). mostrecentlyestablishedanewPbD. program, which aims at educating 300 Ph.D.s over the next eight years. 2. Research Centers and Networks InitiallyestablishedbytheRockefellerFoundation, AERC is In regions where research infrastructure is weak, the now fbndedby 16 donors. Thirteen funders are also part o f World Bank supports research centers and networks to the consortium: the Canadian International Development foster the exchange o fknowledge, ideas, andskills among Agency, U.K.Department for International Development, researchers and research institutions. The four research FordFoundation, InternationalDevelopment ResearchCen- centers and networks discussed here support economic tre o f Canada, John D. and Catherine T. MacArthur Foun- policyresearchbyadministering highlycompetitive grant dation, DanishMinistryo fForeignAffairs, DutchMinistry programs, coordinating stringent peer review processes, o fForeignMairs, Governmentomorway, RockefellerFoun- sponsoringregionalconferences andworkshops, anddis- dation, Swedish InternationalDevelopmentAgency, Swiss seminating research findings. Further details on these Agency for DevelopmentCooperation, U.S.Agency for In- centers are provided intable A.3. ternational Development, andWorldBank.Funders that are notconsortium membersincludetheAfican CapacityBuild- African Economic Research Consortium-Nairobi ingFoundation, Ahcan DevelopmentBank, andEuropean The African Economic Research Consortium (AERC) Union.AERC's budget is approximately$7millionayear. was established as a research center in 1988, with a sec- retariat in Nairobi, Kenya. Today, AERC works to The Bank also provides intellectual support to AERC. For strengthen local capacity for conducting rigorous, inde- example, Bank staff act as resource persons at AERC re- pendent inquiryinto issues affecting economies in Sub- search meetings and work closely with AERC researchers SaharanAfrica. AERC focuses onresearch, training, and oncollaborative projects. dissemination. It was a model for the Economic Educa- tion and Research Consortium in Moscow and the Eco- LatinAmerican andCaribbeanEconomicAssociation- nomic Research Forum for Arab Countries, Iran, and Buenos Aires Turkey (described below). The LatinAmerican and Caribbean Economic Associa- Annex A-1. Partnerships for Economic Capacity Building 33 tion (LACEA) was established inBuenos Aires in 1992. Economists' office and cofunded by the Research Com- Withmorethan700members representing 16countriesin mittee o f the World Bank, along with the Arab Fundfor the region, it is the largest organization o fLatinAmerican Economic and Social Development, European Commis- economists. Itsmissionisto encouragegreaterprofessional sion, FordFoundation, andUnitedNations Development interactionamongresearchersandpractitioners whose work Programme. Since the second year o f operation, addi- focuses onthe economies o fLatinAmerica andthe Carib- tional support has come from the International Develop- bean; to encourage research and teaching related to the ment Research Centre o f Canada. Other major sources region; and to support programs, meetings, conferences, o f funding include extraregional government agencies, a andother opportunities relatedto economies intheregion. new endowment fund, and corporate membership fees. Annual conferencesareorganizedjointly withLatinAmeri- canuniversities and attract some 500participants. Economic Education and Research Consortium- Moscow The network hasbeenable to expand its activities mainly The Economic Education and Research Consortium because o f financial support from the Global Develop- (EERC) in Moscow was established in 1996. It fosters ment Network (through the DevelopmentGrant Facility) high-quality, policy-relevant economic researchinRussia and modest grants from the ResearchCommittee. It has andprofessional development for Russian researchers. It receivedabout $500,000 ayear from the Global Develop- offers incentives for Russianeconomists to pursue top- ment Network and $30,000 from the ResearchCommit- qualityoriginalresearchinRussia,providestechtllcaltrain- tee for the past four years to cofinance annual ingto upgradethe skills o fRussianeconomists, andmakes conferences. Recently L A C E A established four research research results publicly available. Activities include bi- networks,8 expanded its capacity building efforts, and annual research grant competitions, researchworkshops, startedpublication o fits biannualjournal, Economia. Itis methodology seminars, summer school programs, devel- also funded by the Inter-American Development Bank, opment researchgrants, anddissemination activities. The World Bank, William and Flora Hewlett Foundation, and World Bank, through the ResearchCommittee, has been FordFoundation. involved with the EERC program in Moscow since the early planning stages. EERC received two three-year Economic Research Forum for Arab Countries, Iran, $750,000 grants from the Bank-ne inFY96andonein and Turkey-Cairo FY99. The Economic ResearchForumfor Arab Countries, Iran, and Turkey (ERF) was founded in Cairo in 1993. ERF The EERC network was originally launched to serve does not conduct in-houseresearch, butacts as a research Russian researchers, but it is working increasingly with network, clearinghouse, andfacilitator. Itsaims are to ini- researchers from throughout the region. Withthe support tiate andfundpolicy-relevant economic research; publish o f the Global DevelopmentNetwork, EERC created the and disseminate the results o f research activity to schol- Transition Economics Research Network, gradually in- ars, policymakers, andthe business community; and serve volving scholars from other countries inthe region inthe as a resource base for researchers through its data bank research and training activities o f the Russiannetwork. and document library. It has some 159 members and af- filiates representing 18 countries. Regional coverage is Since its inception EERC's grants competition has sup- slightly uneven, with some o f the least developed Arab ported 237 research projects (of nearly 1,600 proposals) countries underrepresented (Djibouti, Mauritania, Soma- involving 316 economists from Russia and other former lia, and Yemen) and with a large number o f members Soviet republics. Total directresearchsupport now totals from Egypt, Iran, and Turkey. more than $1.5 million. The grants competition involves peer review o f policy research proposals and works in Over the past five years ERFhas provided an average o f progress. Over the past five years EERC's research ac- 80 research grants per academic year, and membership tivity has increased dramatically: research grant awards has increased from 128 to 159. ERFmembers published increased from 29 to 114, completed research projects 55 articles inrefereedjournals in2000-01. ERF's annual went from 1to 50, and staff attendance at regional and expenditure is approximately $1.6 million. international conferences burgeoned. EERC's compre- hensive publications program-including a working pa- The World Bank has played an active role in ERF from per series, newsletters, annual conference reports, its inception. ERF was initiated by the Regional Chief research abstracts, and an extensive Website-has also 34 Report on the World Bank Research Program, Fiscal 2000 and 2001 grown substantially, with the number o f periodicals and Open Society InstituteISoros Foundation, Royal Norwe- working papers alone increasing from 1 to 29. EERC's gian Ministryo fForeignAffairs, Starr Foundation, World annual expenditure is about $1.4 million. Bank, and Global Development Network. Other major contributors includethe Citigroup Foundation, Government Like the EERC inKyiv, EERC inMoscow is funded and o fFinland, and Pew CharitableTrusts. Donorsare repre- governed by a consortium of donors, which currently in- sentedonthe governing board. The donor consortium also cludes the Carnegie Corporation o f New York, Eurasia established and funded the EERC Research Program in Foundation, Ford Foundation, Government o f Sweden, Kyiv (see section above). APPENDIX A-1 NOTES 1At a meeting inBerlin in 1999 George Soros stressed 26-member Jesuit Business Schools Consortium. The pro- the need for working with partners. H e admitted that gram is the first international MBA program in Beijing "while he hadno regrets about working alone duringthe withthe officialo fthe China State Council. early years o f transition, if he was to start the Central 6 The expansiono fa double-major B.A.programineco- European University today, he would not do so as a sole nomics accounts for this large increase instudent enroll- funder." (See "Minutes o f November 6, 1999, Meeting ment. on Economics Education and Research inthe Countries 7 The program, supported by the World Bank, is mod- o f the Former Soviet Union and East-Central Europe," eledonthe World Bank's VisitingResearch Fellows Pro- Berlin, Germany: WorldBank.) gram, which is administered by DECRA. 2 Inthe Soviet tertiary education system research activi- 8 The four research networks-Network on Inequality ties were usually not based at universities. and Poverty, Political Economy Group, Network on In- 3 http:Ilwww.cerge-ei.czlfoundationlour-support ers. ternational Finance, and Network on Trade and Integra- 4 EERC is becomingan independent organization. tion-handle research, training, and capacity building 5 Established in 1998, the Beijing International MBA initiatives and provide research grants. Some try to ad- (BiMBA) isajointprogramwithBeijingUniversityanda hereto amultidisciplinary approach. Annex A-I. Partnerships for Economic Capacity Building 35 I 36 Report on the World Bank Research Program, Fiscal 2000 and 2001 Table 2 Academic Institutions: Revenue and Funding Sources (All values in US%) CCER CERGE-EI EERC-KYIV NES Academic Institutions" t-5b t t-5 t t-5 t t-5 t Revenue/ Funding Sources 797,200 3,003,000 2,060,000 2,256,000 1,300,000 1,555,000 900,00Od 1,378,500 World Bank' 170,000 170,000 7.000 250,000 Other international financial institutions 14,000 0 Domestic/regional govemment agencies 44000 87,000 857,000 1,031,000 0 Extra-regional govemment agencies 500,000 225,000 0 Foundations 240,000 350,000 343,000 205,000 1,300,000 1,330,000 975,000 Domestic/regional corporations 56,500 73,000 3,000 165,000 Extra-regional corporations - 350,000 UnitedNations agencies 16,000 Tuition 8,700 156,000 Evening courses, workshops and other outreach activities 51,000 - 37,000 138,500 Alumninetwork 15,000 Research contracts/ consultancies 25,000 116,000 200,000 250,000 Total Other 223,000 2,000,000 150,000 218,000 EuropeanCommission 150,000 EamedIncome 188,000 Off-sets 30,000 Endowment Cost-recovery aData are presented for 4 out o f 5 academic institutions. Central European Universitywas not includedinthe initial survey. bTotalsare givenfor the academic year 1995-96 or date ofinception ifafter 1996. WorldBank fundingincludes GDNfundingthrough the DGF. dMajor funders included Eurasia Foundation, Ford Foundation, and Soros Foundation. Annex A-1. Partnerships for Economic Capacity Building 37 Table 3 ResearchCenterdNetworks (All values in US$) ~~ ~~~ ~ ~ ~ ~~~ ~~~ ~ AERC EERCRUSSIA ERF LACEA Research Institutions t-5" t t-5 t t-5 t t-5 t FINANCES Total revenue 7,302,455 6,950,489 700,000 1,931,000 599,908 2,387,043 Total expenditure 6,867,566 6,294,017 601,533 1,446,989 1,363,000 1,632,359 WorldBankb 50,000 505,000 250,000 681,000 150,000 750,000 500,000 Global DevelopmentNetwork Other international financial institutions 83,000 Domesticlregional govemment agencies Extra-regionalgovernment agencies 5,323,9 12 4,482,s 19 325,000 221,328 172,584 Foundations 1,786,597 1,651,543 450,000 925,000 145,000 Domesticlregional corporations Extra-regional corporations UnitedNations agencies 5,000 Research contractslconsultancies Total Other 141,946 311,427 RESEARCHOUTPUT Periodicals and working papers" 22 15 1 29 41 43 Articles inrefereedjoumals 3 40 55 Research grants received by institution Research grants awarded by institution 40 25 29 114 60 100 Researchprojects completed 19 10 1 50 35 Workshop and conferences organized 6 5 3 12 10 11 Regional conferences attended by staff 1 6 20 Int'l conferences attended by staff 41 3 6 10 Papers presented at regional conferences 4 Papers presented at intemational conferences 2 3 NETWORKSANDASSOCIATIONS Numberofmembers(Individuals) 360 608 128 159 737 Number o fmembers (Institutions) 95 Regional 0 95 Extra-regional 0 Number of countries represented 1 12 18 18 16d 20 "Totals are givenfor theacademic year 1995-96or date ofinception ifafter 1996. WorldBank funding includes GDNfundingthrough the DGF. Published in-house. 'Four GDN-sponsored Global Research Projectsthematic papersprovided; Six Country Studies were presented in2001. Wumber ofcountriesinLACrepresented innetwork. 38 Report on the World Bank Research Program, Fiscal 2000 and 2001 Table4 PreliminaryAlumniEmploymentStatisticsa AERC CCER CERGE-EI EERC-Kyiv NES' MA PhD BA M A PhD M A MA Governmentagenciedministries 40% 8.0% 19.0% 3.9% 3.0% .3% Finance 7.50% 6.0% 70.0% 15.4% 20.0% 6.0% Corporations 32.0% 9.0% 7.7% 14.0% 10.5% Academic institutions 1OYO 87% 4.0% 1.O% 26.9% 3.0% 0.0% Policy think-tankshesearch centers 3% 1.O% 23.1% 34.0% 26.0% Regional development banks (Le. EBRD,ADB) 11.5% 2.0% International financial institutions (Le. WB, IMF) 2% 7.7% 6.0% 5.2% Otherb 39% 11% 50.0% 3.9% 18.0% 18.0% "Alumnirecord since inception ofthe institution. includes NGOs, business owners, consultancies, etc. The total adds up to 122 percent because many graduates are employed in one or more sectors. 39 ANNEX A-2. QUESTIONNAIRE FOR CAPACITY BUILDING: ECONOMICS EDUCATION AND RESEARCH As part o fthe World Bank effort to evaluate its involve- Soviet Union, and Eastern Europe; and "extra-regional" ment ineconomics education andresearch capacitybuild- refers to any country outside o f the region where the in- ing initiatives indeveloping and transition countries, we stitution is located. ask that you assist us by completing the attached ques- tionnaire. Pleaseomit line items that do not apply to your Please return the completed questionnaire and any addi- institution. Throughout the form "domestic" refers to the tional information aboutyour institutionto Boris Pleskovic, countrywhere your institution is located andor your stu- World Bank Research Administrator, via e-mail dents and faculty's country o f origin; "regional" refers to (bpleskovic@worldbank.org)or fax (1-202-522-0304) by geographic regions: Africa, EastAsia and the Pacific (in- Friday, November 2. For additional information, please cluding China), LatinAmerica and the Caribbean, Middle contact us by telephone at 1-202-473-1062. Thank you EastandNorthAfrica, SouthAsia, countries o fthe former for your assistance. Part I: NameofInstitution/Network: DateEstablished: 1.Total faculty Full-time Part-time 2. Visiting faculty 3. Total number of faculty withPh.D.s* ...,ofwhichfromdomestic academicinstitutions , ...ofwhich fromextra-regional academic fromregionalacademic institutions .ofwhich institutions "Please indicate regional andextra-regional institutions andtheir location. 'Totalsfor * Totals academicyear 1995-96or dateofinception ifafter 1996. for academicyear 2000-01 or the mostrecentone-year period for which youhavecomplete data. Projectedtotalsfor academicyear 2005-06. 40 Report on the World Bank Research Program, Fiscal 2000 and 2001 I I 3. Total number of researcherswith Ph.D.s* ...of which from domestic academicinstitutions ...of which from regional academicinstitutions ...of which from extra-regional academicinstitutions *Please indicate extra-regional institutions andtheir location. Undergraduate 12. Total number of domestic students I I I I Students from the region Students from countries outside ofthe region 3. Total number o f degrees awarded ...ofwhich BAS Annex A-2. Capacity Building: Economics, Education and Research 41 2. Since the inceptionofyour institution, approximately how many graduates havefoundemployment.. .* Domestically? Regionally? Extra-regionally? 3. Please estimate what percentageo fyour graduatesto date are working inthe following areas: Government aeencieslministries I Finance Corporations Academic institutions Policy think-tanksiresearch centers Regionaldevelopmentbanks (i.e. EBRD, ADB, etc.) Intemationalfinancial institutions (i.e. World Bank,IMF,etc.) Other *Please list other major sourceso f employment for your graduates. 4. Total number ofgraduateswho returned to country oforiginafter earningPh.D.s inextra-regional academic institutions ...ofwhich currently worlunginacademia ofwhich workingin government agenciesiministries 42 Report on the World Bank Research Program, Fiscal 2000 and 2001 2. Total revenue Of which...(pleaseindicate nominal values in US$) World Bank Other intemational financial institutions Domestichegionalgovernment agencies Extra-regional govemment agencies Domestic/regional corporations Extra-regional corporations UnitedNations agencies Tuition Evening courses, workshops and other outreach activities Alumni network Researchcontractskonsultancies Other* *Please specify any other sources ofrevenue. 3. Total expenditure Ofwhich...(pleaseindicate nominal values in US$) Faculty salaries Researcher salaries General administration Student costs (Le. financial assistance) Workshops and conferences ~ Publications and reports Researchgrants Computers and libraries Other* *Please specify "other" expenditures. Annex A-2. Capacity Building: Economics, Education and Research 43 1.Number o fperiodicalsand working papers published in-house *Please list the types o f in-house publicationspublished byyour institution. 3. Number o f articles by faculty/researcherslstudents publishedinrefereedjournals 3. Number o fresearchgrants awardedbyyour institution .....internal .externalrecipients recipients (students, faculty, and researchers) 4. Number o fresearchgrants received by your researcherslstafffrom external sources 5. Number o f research, Ph.D., andlor visiting scholar fellowships awarded 6. Number o f researchprojects completed 7. Number o fresearchandtraining workshops organized 8. Number o fregional conferences attendedby staff ..internationalconferencesattendedbystaff 9. Number o fpapers presented at regional conferences ...atinternational conferences 10.Number o f conferences organized 44 Report on the World Bank Research Program, Fiscal 2000 and 2001 ......ofwhch domestic .ofwhich regional * Pleaselist , .ofwhich extra-regionaUgloba1 the names and locationo fregional and extra-regional institutions andnetworks withwhich your institution collaborates. 2. Numberof collaborative researchprojects (completed or on-going inacademicyear 2000-01)with...* .. .domesticinstitutions , , ...regional institutions .extra-regional institutions *Please list examplesof collaborative projects andactivities. The term "institutional links" may encompass a rangeof activities, includingstudent and faculty exchangeprograms,researchcollaboration, co-sponsorship of conferencesandworkshops, membershipin associations, etc. Annex A-2. Capacity Building: Economics, Education and Research 45 1. Number o f members (Individuals) 2. Number of members (Institutions) Regional Extra-regional 3. Number o f countries represented Part11: 1. Briefly describe your institution's main accomplishments over the last five years interms o f the following: research; funding; faculty; and students (Please focus on categories applicable to your institution or network). 2. What are the major plans for your institution for next five years interms o fthe following: research; funding; faculty; and students (Please focus on categories applicable to your institution or network). 3. What challenges do you expect to encounter infulfilling these plans? 4. Briefly describe the nature and outcomes o fyour collaboration with the WorldBank. What further collabora- tion is envisioned during the next five years? What would you suggest needs to be changed to strengthen this relationship? 5. Briefly describe how the institution's research andlor graduates contribute to or affect domestic and regional economic policy. Please list policy-relevant research completed or being conducted. Please list policy-influencing positions heldby graduates o f your institution, such as government agency manager, advisor or staff, private sector lobbyist andeconomic analyst. 6. Briefly describe the administrative and decision-making processes o fyour institutionhetwork. Ifapplicable, please specify the roleo fthe following: governing board, presidentlexecutive, facultylresearchers, donors, association members, etc. Thank you for providing us with this information. Please feel free to send us any additional information about your institution that you feel might help us in preparing our report to the World Bank Board of Directors. ANNEX B. RESEARCHEXPENDITURES, FISCAL 2000 AND FISCAL 2001 Tables Table B.1 World Bank Resources Devoted to Research in Relation to Other World Bank Analytical Work and the Administrative Budget, F Y 9 6 01 Table B.2 World Bank Resources Devoted to Research, by Management Unit, FYOO and FYOl Table B.3 World Bank Resources Devoted to Research, by Sectoral Network, FYOO and FYOl Table B.4 N e w Research Projects Funded by the Research Support Budget, by Size, F Y 9 6 0 1 Table B.5 World Bank Visiting Research Fellows Program, FYOO-0 1 Table B.6a Research Projects Funded by the Research Support Budget, by Department, FYOO Table B.6b Research Projects Funded by the Research Support Budget, by Department, FYOl 48 Report on the World Bank Research Program, Fiscal 2000 and 2001 -c. h c. -w 0 -w 0 h h Annex B. Research Expenditures, FYOO and FYOI 49 Table B.2 Bankresources devotedto research, by managed unit,fiscal years 2000-01 2000 Exuenditures 2001 Exaenditures RSB Other Unit Total RSB Other Unit Total $m % $m % $m % $m % $m % $m % Development Economics 3,498 76.3 16,057 90.5 19,555 87.6 3,256 71.6 17,271 89.5 20,527 86.0 World Bank Institute 63 1.4 101 0.6 164 0.7 113 2.5 321 1.7 434 1.8 Regional offices 374 8.2 1,378 7.8 1,752 7.9 581 12.8 781 4.0 1,362 5.7 Africa 61 1.3 202 1.1 263 1.2 5 0.1 46 0.2 51 0.2 East Asia and Pacific 217 4.7 0 217 66 1.5 9 0.0 75 0.3 South Asia 20 0.4 35 0.2 55 0.2 35 0.8 0 0.0 35 0.1 Europe and Central Asia 52 1.1 238 1.3 290 1.3 277 6.1 0 0.0 277 1.2 Latin America and Carribean 11 896 5.1 907 4.1 198 4.4 726 3.8 924 3.9 Middle East and North Africa 13 0.3 8 0.0 21 0.1 0 0 Sectoral Networks 610 13.3 201 1.1 811 3.6 597 13.1 276 1.4 873 3.7 Environmentally and Socially Sustainable Development 366 8.0 138 0.8 504 2.3 441 9.7 206 1.1 647 2.7 Financial Sector Development 78 1.7 4 0.0 82 0.4 112 2.5 13 125 0.5 Human Development 23 0.5 0 23 0.1 41 0.9 0 41 0.2 Operational Policy and Country Services 0 0 0 12 0.1 12 0.0 Poverty Reduction & Economic Management 56 1.2 0 56 0.3 3 0.1 39 0.2 42 0.2 Private Sector Development 87 1.9 59 0.3 146 0.7 0 0.0 7.0 0 7.0 0.0 Others 40 0.9 0 40 1 0.0 658 3.4 659 2.8 Total 4,585 100 17,737 100 22,322 99.8 4,548 100 19,308 100 23,856 100 50 Report on the World Bank Research Program, Fiscal 2000 and 2001 Annex B. Research Expenditures, FYOO and FYOi 51 52 Report on the World Bank Research Program, Fiscal 2000 and 2001 TableB.5 TheWorldBankVisitingResearchFellowsProgram,fiscal2000-2001 Name and Nationality Affiliation Nominating division(s)/research area Duration Alain de Janvry University of DECRG & LCSPR: Rural July 1, 1999 - FrenchIAmerican California, Berkeley development, technology progress, December 31, 1999 and poverty Jungyoll Yun Ewha University, DECVP: Unemployment insurance in March 1, 2000 - Korean Seoul, Korea Korea; its labor market impacts and August 31,2000 optimal structure Jennifer Widner University of Michigan AFTMI: An investigation of local- January 1,2000 - American level variation inperformance of June 30,2000 police, courts, and prisons. Frederic Mishkin Columbia Univeristy FSP: Financial and banking crises; September 1,2000 - American banking supervision and deposit May 31,2001 insurance; and financial liberalization Gudrun German Foundation for ENVDR: Global water politics; the November 6,2000 - Kochendorfer-Lucius International political economy of cooperation on November 5,2001 German Development trans-boundary rivers Jere Behrman University of DECRG: The impact of human August 21,2000 - American Pennsylvania resourcepolicies on development February 20, 2001 Jeffrey G. Williamson Harvard University DECRG: Globalization, inequality and February 1, 2001 - American development May 31,2001 William Bader US.Department of DECRA: A review of present Feb. 12,2001 - American State approachesand the development of November 15,2001 new concepts for public-private funding alliances for capacity building . . and development research Annex B. Research Expenditures, FYOO and FYOl 53 0 8 v1 u J 54 Report on the World Bank Research Program, Fiscal 2000 and 2001 z Annex B. Research Expenditures, FYOO and FYOl 55 n 56 Report on the World Bank Research Program, Fiscal 2000 and 2001 Annex B. Research ExpendituresFYOO and FYOl 57 0 m 0 ? m 9` 9` 0 9 2 88 2 W 8 - 8 2, 8 $1 $1 e9 - e N N m m m N r- 00 lci 2 M r-0 0 0 0 m 00 2 g 2 - 9 2 e N 0 0 0 0 0 0 0 8 : 9 w 2m 8 2 8 zP 0 N m * % d d d d e: a n t; 3 2 m G. 2 58 Report on the World Bank Research Program, Fiscal 2000 and 2001 Annex B. Research Expenditures, FYOO and FYOl 59 N 4 2m &. 0 2 N & a 3 a 60 Report on the World Bank Research Program, Fiscal 2000 and 2001 3 N N 0 N N 0 ? z e 24 0 - 2T W 2$ W W W W 0 vl t: G t- t- W iD W -? -8 -2 t- 0r- v, W 2 8 h! z2 0 r- 0 0 v! 9 0 0 W v! N W 8 z m W iD N e: n? d e: e: Annex B. Research Expenditures, FYOO and FYOl 61 ? -98 m 0 2 ti m g o 0 0 0 8 % 2 0 8 0 a d d e : & z d d e: z d Ez z0 0 P0E 62 Report on the World Bank Research Program, Fiscal 2000 and 2001 0 e 4 q4 - 64 0 N c 0 0 0 48 4rl 0 4 4 4 48 98 4- 4 9 m 7 N 0 0 3 W 0 W W W m m m -2 m r- 2 0 -8 0 m 0 0 0 4 4 W 2 N 2 N 0 0 0 -8 0 0 0 0 0 0 0 9 m 2 8m 8 8 W 0 W 29 e! a e! E Z e: e: 82 2zY Annex B. Research Expenditures, FYOO and FYOl 63 d d d L 64 Report on the World Bank Research Program, Fiscal 2000 and 2001 2 N 0 4 4 0 4 2 4 e 7 m m m m 4 N Ch s 0 w 2 0 00 N 0 0 - 9 vi0 0 s 0 0 2 Lc! s N P d a d d d d P d 0 z 0 2 8 3n