37331 WORLD BANK * RESEARCH NEWS Volume 1 Number 2 May 1980 CONTENTS Transport Research in the World Bank I ( .' C. Ilirral Completed Research Short-Run and Long-Run Influences on Income Distribution 9 Growth, Employment, and the Size Distribution of Income 11 The Labor Mlarket in Malaysia 12 Effects of Health and Nutrition Standards on Workers' Productivity 12 Evaluation NMethodology for Education Projects 14 New Research A Statistical Analysis of the Efliciency of Indonesian Nlanufacturing 1 5 National Spatial Policies 16 Health and Rural Development in Nepal 16 NMass NMedia and Rural Development 17 A Framework for Agriculture Sector Analysis 17 Better Software for NMathematical NModeling: The General Algebraic NModeling System 18 Econometric NModels of the Supply of Perennials: A Case Study of Rubber and Tea in Sri Lanka 20 Land Tenure and Labor Mlarkets in Indonesia 21 New and Forthcoming Publications 22 RESEARCII NEWS MAY 1980 World Bank Research News will be issued three times a year. It supplements the descriptions of socioeconomic research projects in progress given in the annual World Bank Research Program: Abstracts of Current Studies and the annual Catalog of World Bank Publications. Research News is available free of charge to institutions and individuals with a professional interest in development. To be placed on the mailing list or to receive additional copies, please send a complete address, including your title, to the Publications Unit,World Bank, 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. Enquiries on particular research projects should be addressed to the individuals or departments cited. Other enquiries, comments, and suggestions for future issues will be welcomed and should be addressed to the Editor, Office of the Vice President, Development Policy, World Bank, 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. EI WORLD BANK \1- k 198(1 RESI`%R(- I NIVi TRANSPORT RESEARCH IN to base the pricing of' port services has stimulated TRAN POR RES ARC INa great deal of controversy within the Bank and THE WORLD BANK caused a reexamination of attitudes toward the Clell C. Harral Transportation, Water, and Tele- role of pricing in services that generate revenue. communications Department, Central Projects Staff Bank research on railways has been quite limited in scale. Work recently began on the second phase of a project on the ecornmic role of railways. Transport projects have traditionally formed an Highway Design and Maintenance important part of the World Bank's lending pro- gram. A total of US$14,600 million, or some 21 Standards Study percent of all World Bank lending, has gone to this sector and, currently (1977-79), annual Developing countries are estimated to spend at transport lending averages about 16 percent of least US$10,000 million annually on constructing total Bank assistance. More than in most other and maintaining their highway systems, and much sectors, the Bank's research on transport has been larger amounts on operating the vehicles that use closely linked with operations. It began in the them. World Bank assistance for highways is di- early 1960s with a series of studies of operational rected to countries where capital is scarce, while issues in the planning, design, pricing, and evalua- incomes and the values attached to travel time tion of transport investments. These studies were savings are low. Hence, the trade-offs between small enough to be conducted by Bank staff, with the initial costs of road construction and the sub- the help of an occasional individual consultant. sequent maintenance and road user costs may dic- The research program later expanded to include tate quite different strategies for design and broad-ranging and speculative research on a large maintenance from those prevailing in Europe and scale-including projects of 8 and 12 years' dura- North America. Research that would indicate tion-that could only have been undertaken in an how managers can minimize the sum of construc- environment giving reasonable assurances of tion costs, maintenance costs, and vehicle operat- continuity. ing costs could potentially pay high dividends. In several important areas of transport research, The Highway Design and Maintenance Standards the state of methodology had been advancing well research project (Ref. No. 670-27) is now in its beyond the scope of the data available. As the tenth year. It is expected to yield a series of ma- Bank's program evolved, therefore, much of the jor publications in about two years' time, once research was designed to bridge the gap between the large-scale field studies under way in Brazil theoretical models and relationships that can be and India have been completed. Though initiated established empirically. Having adopted this guid- and coordinated by the Bank, its total cost of ing principle, the researchers were increasingly roughly US$18 million is being financed mainly by forced into primary data collection. These larger other donor institutions and member country gov- projects of a later generation have relied primarily ernments,' and by the United Nations Develop- on external agencies for their execution and ment Programme (UNDP). A large number of financing. leading research institutions and road authorities have participated. The aim has been to develop a Virtually all the Bank's transport research has new decision-making framework for evaluating al- been managed by the Central Projects Staff in ternative road design and maintenance standards, what is now the Transportation, Water, and based on the total costs incurred over the life cy- Telecommunications Department. The two larg- cle of the road, and to validate this model scien- est studies, on the Economics of Highway Design tifically so as to ensure that the underlying rela- and Maintenance Standards and on the Substitu- tionships conform to the real world. The field tion of Labor and Equipment in Civil Construc- data gathered by the project give a much more tion, are both engineering-economic studies ad- rigorous account of the physical and economic in- dressed to the choice of appropriate standards and terrelations among highway design, deterioration, technology. Both have involved the collection of maintenance and costs to users, and cover a much very large volumes of data, and both have been wider range of the road conditions typical of de- developing new analytical tools. Other important research has examined the socioeconomic effects of rural roads. Part of the research on ports has fo- cused on the construction of planning models; a The Governments of Brazil, India, Kenya, United Kingdom, seminal study of the economic principles on which and United States. (ORl.l) B XN K L 2 RESEARC(11 NEWS MAY 1980 veloping countries, than the information previ- overseas users in implementing and applying the ously available. model. This service has been found essential to wide-scale acceptance of the model, whose complex In the initial phase of the research, Professor Fred program takes at least several weeks to master. Moavenzadeh and colleagues at the Massachu- setts Institute of Technology (MIT) developed a HDM predicts the life-cycle costs of different project planning model in which construction, highway design and maintenance options, includ- maintenance, and vehicle operating costs are in- ing different time-staging strategies, either for a terrelated, in order to evaluate alternative strat- given road project on a specific alignment, or for egies for project design and maintenance.2 How- some or all the links of an entire highway net- ever, a review of the engineering literature re- work. It indicates how the road surface will de- vealed that, at that time, very little sound em- teriorate over time, depending on the pavement pirical evidence on physical and cost relationships design standards, maintenance policy, traffic, and existed that could be used to validate the model. climate. Having predicted the conditions of the To test whether the hypothesized relationships road, the model then calculates vehicle operating held in different environments and under different costs and road maintenance costs; costs of any traffic conditions, a series of field studies in Af- new construction or reconstruction are also added rica, Latin America, and South Asia was planned in. HDM can quickly estimate the total costs for to collect primary data on vehicle speeds and op- large numbers of alternative designs and mainte- erating costs and on how roads deteriorate under nance policy combinations on a year-by-year basis various standards of design and maintenance. and can thus be used to search for the alternative with the lowest cost. The model gives the results The first of these studies was conducted in Kenya of economic analysis (total discounted transport during 1971-74, by the Transport and Road Re- search Laboratory (TRRL) in the United King- dom, in collaboration with the Bank and the Fred Nloavenzadeh and others, "Hlighway Design Study Kenya Ministry of Works. TRRL published final Phase I the Model," World Bank Staff Working Paper No. 96 reports in three volumes,3 and has also prepared (January 1971). "Tables for Estimating Vehicle Operating Costs ' H. Hide and others, The K'enva Road Iransporl Cost Study: on Rural Roads in Developing Countries."4 Long- Research on l'ehicle Operating Costs. TRRL Laboratory Re- port 672 (Crowthorne, England: Transport and Road Research term observations on the deterioration of paved Lahoratory, 1975). J.W. Htodges and others, The Kenya Road roads will be continued in Kenya and elsewhere for Transport (ost Study: Research on Road Deterioration, TRRL several years.> Laboratory Report 673 (Crowthorne, England: Transport and Road Research Laboratory, 1975). R. Robinson and others, A The Kenya work has supplanted the earlier litera- Road Tranmport Investinent ModelJor Developing Countries, ture on road user cost savings coefficients. For the TRRL Laboratory Report 674 (Crowthorne, England: Trans- first time, quantitative relationships were estab- port and Road Research Laboratory, 1975). lished for the effects of road surface conditions, s.W. Ahaynayaka and others, TRRL Laboratory Report 723 particularly roughness, on speeds vehicle mainte- (Crowthorne, England: Transport and Road Research l r h , . s s, v m Laboratory, 1976). nance, and tire wear-relationships that have 'J.N Bulman, "Research on Road Deterioration in Kenya," proved to be of primary importance in determin- paper presented at the Second International Conference on ing economic levels of expenditure on maintenance. Low Volume Roads, Ames, Iowa, August 1979. The study also investigated the patterns and ' Thawat Watanatada and others, "Highway Design and causes of deterioration of different types of road NMaintenance Standards NModel: Model Description and User's surface, both paved and unpaved. NManual" (World Bank: Transportation, Water, and Telecommunications Department, revised January 1980). Based on the empirical work in Kenya, teams from Separately from the main research program, Pedro N. Ta- MIT and TRRL, in collaboration with the Bank, borga and associates in the Transportation, Water, and MITelopd TRRLa new collaoay sion with Mthe- BTelecommunications Department developed a Road Analysis developed a new Highway Design and Mainte- Nodel (RAM). RANI is designed to perform benefit-cost cal- nance Standards Model (HDM).5' Though it has culations using exogenous estimates of road user savings, to re- yet to be fully validated for different environments, duce staff time in traditional project evaluation procedures; it the HDM has already been used to plan highway has the advantage of being considerably simpler to use than projects in 18 countries, and is being used as a the HDNM. See "RANI: User's NManual" (World Bank: Trans- teaching tool in many universities in developed portation, Water, and Telecommunications Department, and developing countries. The Transportation, 1976). Water, and Telecommunications Department pro- vides a user service to assist the Bank's staff and W()RLI) BANK -IV.2' ' _ __4__ 1 "I \IRe I1 NI St costs, rate of return, net present value, and first- one in Kenya. It is based on an elaborate statisti- year benefits), to allow comparison of any combi- cal design and has collected a much larger body of nation of two alternatives as desired by the user. data, based on more closely controlled and exten- All estimates are made in physical quantities, and sive measurements. Preliminary analyses indicate costs are obtained by applying unit cost rates and that the results, when published in 1981, will do prices to these; shadow prices and rates may be much to fill the gap in knowledge of vehicle oper- applied, if desired. ating costs for conditions typical of Latin Amer- ica, as well as providing important new informa- Applications of the model have yielded several new tion on pavement deterioration and how this is insights.8 The model has demonstrated that, in affected by maintenance." most countries, incremental expenditures on high- way maintenance yield economic returns of an or- The Bank and the Government of India, through der of magnitude higher than for new construc- the Central Road Research Institute in New tion. This finding has encouraged authorities in Delhi, embarked on a study of vehicle operating several countries to increase their budgetary allo- costs in 1977. India's traffic patterns-with sin- cations for maintenance. Applications of the gle-lane roads serving a diversity of traffic in two model to pavement design and strengthening pro- directions, and pavements that are apt to be very grams have also suggested that time-staging rough-make it unlikely that conclusions drawn strategies designed to economize on initial pave- in other countries will be directly applicable in ment strength may be misguided, unless there is Indian planning. A major effort is being planned in quite a high probability that subsequent mainte- the India study to measure the effects of conges- nance and strengthening will be adequate and tion on vehicle speeds and operating costs. timely. This finding has encouraged a reexamina- tion of current pavement design practices. The Among the attempts to ensure that the results model is increasingly being used to plan highway from the three primary research studies are trans- programs under budget constraints, to determine ferable to other countries is the development of a allocations among maintenance, strengthening, simple system to enable practitioners to survey and new construction.' road surface conditions and relate the findings to 40 those of the primary studies. Though the mea- The extent to which the physical and cost rela- surement of road roughness remains so far a com- tionships underlying the HDM are true of envi- plex and difficult area of research, Professor W.R. ronments very different from Kenya's is still being Hudson (Technical Director of the Brazil UNDP tested. Additional studies have been undertaken study) has prepared "A Generalized Roughness In- in Latin America (Brazil) and South Asia (India) dex for Worldwide Use,"" under the sponsorship to ensure that the finished model is broadly rep- of the Bank. resentative of conditions in the developing world. In the meantime, in the absence of better tools, For further information on highway design and the present version of the model is being applied maintenance standards research, contact Clell G. in many different parts of the world and some ef- Harral, Raymond S. Millard, or Thawat forts by the Bank's staff are required to ensure Watanatada. that it is used with appropriate judgment. The research in Brazil was undertaken at the ini- Clell G. Harral, Per E. Fossberg, and Thawat Watanatada, tiative of the Brazilian Government, which annu- "Evaluating the Economic Priority of Highway Maintenance," ally spends more than US$1,000 million for high- paper presented at the Pan African Conference on Highway way construction and maintenance. The research Maintenance, Accra, November 1977. is funded by the Government and UNDP. The ex- tion of Economically Balanced HCiehw G Harral, E Determina- ecuting agency is GEIPOT, the Brazilian Trans- under Budget Constraints: An Integrated Approach," paper port Planning Agency, assisted by the Texas Re- to be presented at the World Conference on Transport Re- search and Development Foundation and the Uni- search, London, April 1980. versity of Texas. (The Bank is not financing this "' See E. Costa C'onto, "A Major Hlighway Research Project in research directly, but has helped to supervise it on Brazil and its Role in the Planning Process," paper to be pre- behalf of UNDP, and has lent funds for an exten- sented at the World Conference on Transport Research, Lon- sion of the UNDP project, as well as for a further don, April 1980. four-year program of research on the design of ' World Bank: Transportation, Water, and Telecommuni- pavement overlays-which are making increasingly rations Department, 1977. important demands on investment funds in Bra- zil.) The study in Brazil is much larger than the -- -.~ - -- ----- -- -HD 4 RESE %RCH11 NI '.. '1AY 1980 Substitution of Labor and Equipment identify tasks for which it is appropriate to use in Civil Construction more labor. However, to determine whether it is more economical to use labor, it is necessary to A high proportion of developing countries have establish the relative costs of labor-based and abundant supplies of labor, while capital resources equipment-based methods, which vary under dif- are scarce. In extending these countries' infra- ferent conditions. At that time, not enough em- structure, a desirable strategy would be to use la- pirccal informathon was avalable to draw definite bor-intensive methods wherever these are produc- conclusions on the scope for subst.tution possi- tive and appropriate, so that capital can be con- bilities. centrated in activities where labor would be less Over the next two years, during Phase II, 30 productive. Labor-intensive construction methods road dam and irri ation construction sites were may also be used to help strengthen community rg involvement, reduce unemployment, and promote studied In Indt a andr idites of different methods a more equitable distribution of income through under different mag l, ds employing local people in construction and main- under different physecal, managorcal, and socfal tenance. In many developing countries the pur- conditions, and the economic feasobulity of the chase and maintenance of equipment must be paid methods was assessed. It was found that three for in foreign exchange, but wages paid to laborers types of factors were critical to the success of la- will remain largely near the project area and will bor-based constructlon: clhmate, sot l and terrain, stimulate demand in the local economy. Neverthe- and other physical characteristics whose ifluences less, development planners in many countries are hitherto been identified i detail; the or- reluctant to rely on what they may perceive as ganization of work and its supervision at the job risky, outmoded, or socially unacceptable site; and the health and nutritional status of the technologies. workers. The principal conclusion was that, as traditionally practiced, labor-based construction This recently completed research project (Ref. No. methods were not competitive with modern 670-26) was undertaken to help resolve contro- equipment-based methods. However, the research versy as to whether and in what circumstances la- suggested that labor could be made substantially bor-based methods for civil construction would be more productive, if organization and management technically and economically viable. The project were better, tools and hardware were improved, also designed and demonstrated improved labor- and if workers were to enjoy better nutrition and intensive and intermediate technologies. The health. eight-year study was executed under the Bank's Phase III of the research, completed in August leadership, with financial support from nine gov- 1976, largely consisted of experiments in applying ernments.'2 As the project originated from concern modfied work procedures tools and light equip- about the construction of roads, it has been man- t t tols and I eup aged by the Transportation, Water, and ment at road and irrigation sites in India. It Telecommunications Department, but its scope demonstrated that improved procedures on indi- was broadened early on to include other civil vidual sites can raise labor productivities signifi- works, particularly irrigation canals. Its overall cantly. But it also showed that, for labor-based aim was to formulate guidelines for planningt construction methods to be competitive with the evaluating, executing, and monitoring labor-based use of equipment on a large scale, improved proce- civil construction programs in the developing dures for planning, financing, training staff, and world. In evaluating labor-based technologies, the monitoring progress must be implemented study emphasized not their potential to absorb throughout a whole program, encompass.g a unemployed labor to improve workers' welfare, number of construction sites. but their capacity to employ labor productively. C' Canada, Denmark, Finland, Federal Republic of Germany, Phase I of the project was a desk study completed Japan, Norway, Sweden, United Kingdom, and United States. in 1971. It found that, technically, labor-based The following government agencies collaborated in the study: construction work can be as good as work exe- India-Border Roads, Nlinistry of Transport, Central Water cuted by machines for a wide range of construc- and Power C'ommission, State Public Works Departments; In- tion activities, and that it is not difficult to donesia-Directorate of Water Resources Development, High- ways Department (Bina Nlarga); Kenya-Nlinistry of Works; Honduras-Ministry of Communications, Public Works, and Transport. The Overseas Development Administration (United Kingdom) provided additional specialists to the Bank- sponsored Technology Unit conducting the project in Kenya. V ORIL) B XNIx \1A t 19X11 RiiL kll( 11 MI.A,s The final phase of the research involved planning Economic and Social Analysis and implementing labor-based demonstration proj- ects in Benin, Dominican Republic, Honduras, of Rural Roads Kenya, Lesotho, and the Philippines. Improved techniques were introduced both at the program Investments in rural roads are an important com- level and at experimental pilot sites. The work ponent of strategies against rural poverty. Reach- concentrated largely on issues of organization and ing small farmers in remote areas with agricul- management, improvements in site planning, oper- tural assistance, education, health, or safe water, ations and control, and training of site supervi- and enabling them to market their production, sory staff. Other aspects of this phase of the normally requires access by road. In each of the study investigated the characteristics of labor three fiscal years 1977-79, the World Bank lent supply under different socioeconomic conditions. about US$300 million for the construction and Means of intervention were developed to improve improvement of some 50,000 kilometers of lower- the health and nutritional status of workers, and cost rural roads. tools and hardware were devised that could fur- ther help to improve workers' productivity. Rural roads have sometimes failed to live up to expectations of the changes they would stimulate The research and implementation work indicates that for a country to apply labor-based construc- tion methods on a large scale requires the full commitment of its technical and political leader- " Samir S. Basta and Anthony Churchill, "Iron Deficiency ship. Introducing such activities is likely to re- World Bank Staff Working Paper No. 175 (April 1974). Swa- quire a host of small administrative and organiza- desh R. Bose, "Some Aspects of Unskilled Labor Markets for tional changes. In addition to the costs of wages, Civil Construction in India: Observations Based on Field In- salaries, and tools, labor-intensive projects require vestigation," World Bank Staff Working Paper No. 223 (No- resources for planning and administration and, vember 1975). Darwin Karyadi and Samir S. Basta, "Nutri- frequently, for such other support activities as tion and Health of Indonesian Construction Workers: Endur- the development and domestic manufacture of ance and Anemia," World Bank Staff Working Paper No. 152 good-quality tools, and the supply of medicines or (April 1973). "Scope for the Substitution of Labor and Equip- food to improve the health and nutrition of work- ment in Civil Construction-A Progress Report" (New Delhi: ers. Since 1976, six developing countries-Benin, Indian Roads Congress, December 1976). "Some Aspects of the ers.Sine 176,sixdevlopng ounrie-Bein,Use of Labor-intensive Miethods for Road Construction (New Chad, Honduras, Kenya, Lesotho, and Malawi- Delhi: Indian Roads Congress, December 1976). "The Study of have introduced labor-intensive civil works pro- Labor and Capital Substitution in Civil Engineering Con- grams on a pilot basis. These have generally struction: Report on the World Bank-sponsored Seminars in proved successful, and most have been expanded Washington, Cologne, London and Tokyo" (World Bank, Sep- substantially. Feeder road and irrigation projects tember 1978). to be constructed using labor-based methods are Technical Mlemoranda Nos. 1-28 (January 1975-February being planned in the Dominican Republic, Haiti, 1978) are available from the office of Helmut S. Kaden, Trans- Peru, and the Philippines. portation, Water, and Telecommunications Department, cov- ering such civil construction concerns as wheelbarrow design, The research phases of the project are now com- compaction, excavation, spreading and loading activities, ani- plete. Interim findings have been reported in occa- mal work output and haulage, aerial ropeway haulage, rail sys- sional papers and a series of technical memo- tem and tractor/trailer use, aggregate production, hand tools, randa.3 An overview of the results recently ap- and productivity and health. peared in Finance & Development.'4 Currently, Prepared independently of the project but with the collabora- the research team is producing a planning and tion of the study team members is "A Guide to Competitive management handbook, summarizing the lessons Bidding on Construction Projects in Labor-Abundant Econo- learned, that is intended for managers in develop- mies" (Washington and London: World Bank and Scott, Wil- ing countries and aid agencies contemplating the son, Kirkpatrick and Partners, 1978). ing the" Basil P. Coukis and Orville F. Grimes, "Labor-based Civil large-scale use of labor in improving rural infra- Construction," Finance & Development (March 1980): 32-36. structure. For further information, contact Basil P. Coukis. NN ORI D) it \ N h h lI'i9I: xK('II Ni:'\ R ..E_ __C_ __ _ _ __ . MAY 1980 in the economies they serve. There is little sys- Part of the search for a better basis for invest- tematic knowledge of the processes of rural ment decisions was a series of three studies on the change. Nor is there comprehensive understanding socioeconomic effects of rural roads and other in- of the complex relationships between transporta- frastructure investments. Road project areas were tion and rural change. In recent operations, Bank surveyed in Ethiopia, Madagascar, and the Yemen lending for rural road construction has been more Arab Republic (research projects Ref. Nos. 670- closely linked with simultaneous actions in other 71, 671-14, and 670-29, respectively). The studies sectors, such as the delivery of agricultural exten- were designed to identify the key elements of local sion and marketing services, but the effects of society, examine their interrelationships, and such an approach cannot be predicted confidently reach a better understanding of the behavioral until more experience has been gained. Apart from factors that influence development. In the type of the difficulties of analyzing and predicting "non- approach adopted, baseline surveys are taken of quantifiable" social and institutional influences on the project area, and also of a similar control re- a project, lack of empirical information often gion which is to receive no project benefits. As the makes it difficult to predict the effect a road will project is implemented, comparative statistics on have even on such "measurable" entities as the a series of socioeconomic indicators are gathered at quantity of agricultural output and the costs of the household level and at the community level. transport. The impact of the project on the local economy and on different segments of the population can Over the last ten years, the Bank has been be assessed by comparing the time trends of these gradually adopting the "producer surplus" ap- indicators in the project area with those in the proach-familiar in agricultural project analy- control area. sis-for the analysis of rural roads with low traf- fic volumes." The economic merit of a rural road The only study to be completed as planned was project frequently depends on whether or not sub- that on the Andapa Basin in Madagascar. This stantial increases in economic activity and traffic area was the subject of an extensive socioeconomic take place in the area that it serves. The tradi- survey conducted in 1964-66 and financed by the tional method of appraising road projects focuses French Fonds d'Aide et de Cooperation. A road on the demand for transportation and the quan- connecting the Basin with a coastal highway at tification of road user savings. This method is well Sambava was completed in 1970. Four years later suited to cases where the volume of traffic is al- the Bank undertook a follow-up survey in collabo- ready significant and the main justification lies in ration with the Madagascar authorities and the the transport costs to be saved. But where there Swiss Federal Institute of Technology. The study is little or no traffic before the project, the ana- described the socioeconomic changes that occurred lyst may have to make very rough estimates of over the decade studied, and attempted to deter- the likely changes in traffic volume. The producer mine the proportion of these changes that could surplus approach concentrates not on road user be attributed to the road and the improved access savings but on the basic economic changes that it provided to markets and other services. can be attributed to the road and complementary investments. These changes can be used to calcu- In evaluating the contribution of the road to the late changes in the producer surplus or in the in- economy of the Basin, economic analysis showed come of farmers, the main target group of rural that the road was a marginal investment if its road projects. Such an analysis quantifies the ef- benefits were assessed only in terms of road user fects of transport cost savings and complementary savings. But when changes in producer surplus investments on farm output and income. More were realistically assessed, the economic rate of re- work still needs to be done to establish the im- turn was substantially higher and the project ap- portance of personal mobility in rural develop- peared clearly justified in economic terms. The ment and to develop simple analytical tools for study documented a sharp rise in incomes from screening and evaluating rural road projects. The the sale of agricultural products. Changes in con- number of roads initially proposed is typically very sumption patterns included a drop in the share of large, but for most of them the investment ex- food in total per capita expenditures, a rise in ex- penditures are too small to warrant large-scale penditures on travel, and improvements in the feasibility and engineering studies, which are quality of housing, furnishings, and lighting. highly demanding of data and often are very expensive. See Curt Carnemark, Jaime Biderman, and David Bovet, "The Economic Analysis of Rural Road Projects," World Bank Still Working Paper No 241 (1976). W ORIDI) BAXNK_ Almost all occupational groups of households in- Though many ports have a substantial source of creased their incomes significantly, and the distri- income in the land they hold, their financial con- bution of cash income among all households be- dition generally depends on their net earnings came slightly less unequal. Farm households from operations and, in particular, the revenues within five kilometers of Andapa and the road re- from port tariffs. Through the prices of imports alized income gains almost 50 percent higher than and exports, port tariffs also affect foreign trade households less centrally located."' and the standard of living of the population. When the Bank commissioned research from Esra For further information on rural roads research, Bennathan and A.A. Walters on port pricing (un- contact Ossi J. Rahkonen. der research project Ref. No. 671-13), there had been little systematic study of the wide range of tactical and strategic aims that port authorities Port Planning and Pricing may have in setting tariffs. But though judg- ments in individual cases may vary, there are good Typical port projects supported by the World reasons for setting tariffs so as to cover costs. The Bank have concentrated on the expansion of phys- reasons include independence of management and ical capacity and on institution building, though efficiency of operations, the avoidance of overin- emphasis is also being placed increasingly on mak- vestment and overmanning, and the fact that the ing existing assets work better. Early simulation real costs of port subsidies can be very high-per- models designed to determine the optimum num- haps even double their monetary cost. ber of berths and the optimum depth of water were followed by a comprehensive model, PORT- Bennathan and Walters published the results of SINI, for port planning. their research last year." This study breaks new theoretical ground and is widely acknowledged to Applications of queueing theory to port opera- be extremely stimulating. Its main objective is to tions are common in the literature. Unlike previ- find a method of fixing port tariffs that will ous applications, however, the PORTSIM model maximize the benefits both to the port (as net directly addresses some of the problems encoun- revenue) and to domestic nationals. The authors tered in Bank operations, and uses concepts and explore the relationships between shipowners, ex- terminology familiar to port specialists.' The porters and importers, and the port authority, to model is intended more as a tool in project ap- determine the total effects of various port pricing praisal than to guide management decisions. For a policies. They then demonstrate the appropria- given level of traffic, it shows the implications of teness of marginal cost pricing for ports and de- a chosen port configuration and policy on the velop extensions of this principle to cover the cir- assignment of berths. It gives a time-related sum- cumstances of ports in developing countries. mary of operations (showing waiting time, occu- pancy ratios, and total time in port); a cost- The Bank has sponsored applications of the inno- related summary of operations; and information vative pricing principles that the volume proposes, on such aspects as the probability of delays, and first, by Bennathan in the Port of Karachi, and the maximum length of queue. subsequently in Indonesia and Singapore. A joint working group from the Bank's Central Projects PORTSINI has been used in the preparation of Staff and Regional Offices has recentlv produced a Bank projects in several countries, including Bra- zil, Cyprus, the Gambia, Papua New Guinea, and Sudan, and for ex post evaluations in Pakistan. l Brigitta Mitchell and X. Rakotonirina, "TI'he Impact of the The model is freely offered for use by member Andapa-Sambava Road A Socioeconomic Study of the Andapa country institutions. Since the majority of port Basin, Madagascar" (World Bank: Transportation, Water, and authorities in developing countries lack the com- Telecommunications Department, and Government of Mada- puter facilities PORTSIM demands, the United gascar: General Directorate of Planning, 1977). Tradeand eveloment' "PORTSINI: User's Manual" (World Bank: 'Transportation, Nations Conference on Trade and Development Water, and Telecommtinications Department, 1974). (UNCTAD) with Bank assistance has produced a " United Nations Conference on Trade and Development, port planning handbook in which simulations for "Port Development Handbook for Planning in Developing changing port parameters, derived from the model, Countries" (Geneva: UNCTAI), 1978). (The simplifying as- are presented in abacus form.'" sumptions that needed to he made may render the Hlandbook method unsuitable for some applications.) "' Esra Bennathan and A.A. Walters, Prct Pcricig anrd Inest- mnernt P,Illcf Ja,r Dc sloaping (.,,ltric,v (New York: Oxford Ifni- versity Press, 1979). t\iS \k1\\ i9%0 PI.nG I ;tt ' ) 3 types of clones; the relation of yields to age struc- and sharecropping arrangements, and the influence ture in mature stands; tapping and harvesting de- of land tenure patterns on employment patterns. cisions and their relation to prevailing wages and prices; the use of inputs in relation to yields; and Earlier small-scale studies in Indonesia put for- the effect of the price structure of various grades ward several propositions that will be more rigor- of the crop on the composition of output. The ously tested in the present study. It appears, for models will incorporate such policy variables as example, that by conferring individual property subsidies, duties, cesses, and the supply of fertil- rights, where village land had previously been com- izer and planting materials. Hence, they should munally controlled, the Land Reform of 1960 permit a systematic evaluation of the conse- made it easier for farmers to sell land, encouraging quences of alternative incentive schemes. They the concentration of ownership, with adverse ef- will trace the implications of changing current fects on the welfare of poorer groups. This study policy for the output of crops, the associated for- will examine whether concentration of land- eign exchange earnings, and the flow of govern- ownership has been increasing in lowland rice vil- ment revenue for other purposes. lages where, at present, 10-20 percent of the villagers own 60-80 percent of the agricultural It is hoped that the research will be of use to land, while about half of the villagers own none. government planners in Sri Lanka. To assess Only about a fifth of the householders in these whether models such as these could be used in villages own enough land to produce all their own countries that lack such complete data, a series of food; the other 80 percent are landless or marginal experiments will be made. Progressively simpler farmers. The proportion of landless people has versions of the models will be tested, pinpointing been rising faster than the population. As land- the deficiencies and sources of bias in the results ownership becomes more concentrated and ab- they yield. These experiments should also help to sentee ownership increases, welfare institutions establish priorities for the use of resources in that traditionally helped to support the poorest gathering more comprehensive data in other villagers are being destroyed. As a result of these countries. trends, it is feared that the lowland population may become increasingly vulnerable to food short- Results from the project are expected in mid- ages in times of severe drought. 1982. The project is managed by Michael J. Hart- ley in the Development Economics Department. The research aims to identify the factors that re- sult in landlessness, sale of land to outsiders, and concentration of ownership. Part of the investiga- Land Tenure and Labor Markets tion will review changes, over the past 80 years, in Indonesia in landownership, landlessness, and concentration of land control, and assess the role played by land Ref, No. 672-08 taxation. The project will examine the commerci- alization of land, analyze the institutional The World Bank is providing support for research changes occurring in renting and sharecropping, on land tenure and labor markets in Indonesia and their effects on the concentration of land con- that is being undertaken by the Rural Dynamics trol, and try to determine the effects of the Study Group in East Java. This study addresses growing concentration of landownership and con- issues of considerable interest to both the Gov- trol on the welfare of villagers. ernment of Indonesia and the Bank in their ef- Results from the project are expected in late forts to secure equitable development in rural 1980. For further information, contact Lyn Java. Little is known about land tenure arrange- Squire in the East Asia and Pacific Country Pro- ments in Java, how they have changed over time, grams Department. or how they affect access to employment and standards of living in rural areas. Among the main topics to be investigated by the research team are the process of change in landownership, rental, r - .IAIX 1980 NEW AND FORTHCOMING Rates of migration within and among the West PUBLICA TIONS African countries are among the highest in the PU LICAT IONS world. Though through lack of information migra- tion flows have been difficult to predict,-they can have disruptive economic and social effects and compromise the achievement of development The full range of World Bank publications is de- plans. This study uses methods of population scribed in the Catalog of WVorld Bank Publications, analysis to document migrant flows, trends, and issued annually. The new books listed below, balances, and examines the economic and social which are published by outside publishers for the characteristics of migrants. The findings of the World Bank, are obtainable through booksellers or country studies reported in the volume should by writing to the publishers. Prices are subject to help toward a realistic assessment of the present change. The other items listed, and the Catalog, situation and prospects for the future. are available free of charge from: Publications Unit Models of Growth and Distribution World Bank for Brazil 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. Lance Taylor, Edmar L. Bacha, Eliana Cardoso, and Frank J. Lysy NEW BOOKS Oxford University Press, 1980 (forthcoming). About 384 pages. Income Inequality and Poverty: Methods LC 80-13786 of Estimation and Policy Applications ISBN 0-19-520206-6 $18.95 hardcover 0-19-520207-4 $ 7.95 paperback Nanak C. Kakwani On the basis of its experience in the last 15 or 20 Oxford University Press, 1980. About 432 pages. years, Brazil seems certain to become a classic case study in economic change. Following several years LC 80-14229 of economic stagnation and political unrest, the ISBN 0-19-520126-4 $19.95 hardcover military coup of 1964 inaugurated first a period of 0-19-520227-9 $ 8.95 paperback rigorous economic stabilization and then almost a decade of very rapid growth, accompanied by a This study addresses four main topics: income dis- marked increase in income inequality. There were tribution functions, methods of measuring income simultaneously, rapid expansion in exports and an inequality, government policies affecting the dis- opening up of the economy, and increases in the tribution of personal income, and the measure- depth and sophistication of financial intermedia- ment of poverty. tion. An unprecedented marriage of private capi- talism and state intervention produced a growth spurt unmatched in recent Latin American his- Migration in West Africa: The Demographic tory. Regrettably, most of the population was, in Aspects distributional terms, left behind. K.C. Zachariah and Julien Conde The papers in this volume explore the Brazilian experience from the points of view of political A joint World Bank-OECD study. Oxford Uni- economy and computable general equilibrium in- versity Press, 1980 (forthcoming). About 304 come distribution models. The focus of investiga- pages. tion is on the interactions of growth and income distribution. An early chapter gives an interpre- ISBN 0-19-520186-8 $16.95 hardcover tative review of aggregate Brazilian growth since 0-19-520187-6 $ 6.95 paperback 1964. A later part of the analysis reviews the ex- tensive debate about the causes of the deteriora- tion in Brazilian income equity that has been ob- served since 1960. It combines results from the 0-S S, ,t ;.. , . .... . . . MAY 1980 RESF XR(I11 N[AN `3 model with new statistical evidence to weigh the this book is an integrated analysis of the struc- merits of the various explanations of distribu- tures of the natural and synthetic rubber econo- tional change that have been proposed. mies, with particular emphasis on production costs. It offers an innovative analysis of the deter- minants of competition between natural and syn- State Manufacturing Enterprise in a thetic rubbers, presenting new empirical evidence. Mixed Economy: The Turkish Case Demand forecasts are made within a framework that links rubber demand to its main end-uses. Bertil Walstedt The final chapter reviews likely developments in the natural rubber industry and outlines a strat- The Johns Hopkins University Press (forthcom- egy for natural rubber producers. ing). 384 pages. LC 78-21398 WORLD BANK STAFF WORKING ISBN 0-8018-2226-2 $14.00 (£8.50) hardcover PAPERS 0-8018-2227-0 $ 5.95 (£3.50) paperback No. 366. Paradigms in the Study of Urban La- This study traces the historical roots of "etat- bor Markets in LDCs: A Reassessment in the ism" and reviews the performance of half a dozen Light of an Empirical Survey in Bombay City. major state industries in Turkey. It suggests that Dipak Mazumdar, Development Economics De- the main issues in the manufacturing sector are partment. December 1979. the struggle between ideology and pragmatism in industrial planning, the division of state and pri- No. 367. Incentives for Resource Allocation: A vate industry into separate camps obstructing a Case Study of Sudan. Shankar N. Acharya, De- rational division of labor, and the evolution of velopment Policy Staff. December 1979. state enterprises into enclaves of power where the enterprise and its labor are protected but dy- No. 368. Why the Emperor's New Clothes Are namic management does not thrive. Turkey's Not Made in Colombia. David Morawetz (consul. overall record of industrial growth is above aver- tant), Development Economics Department. Jan- age and the country has made a conscious effort uary 1980. at regional industrialization, but it has paid too high a price for its bias in favor of basic industry No. 369. Economic and Social Analysis of Pro- while missing a unique opportunity for light in- jects and of Price Policy: The Morocco Fourth dustry exports. The challenge under a mixed econ- Agricultural Credit Project. Kevin M. Cleaver, omy is to make state enterprise subservient to Europe, Middle East, and North Africa Projects the discipline of the market. The book suggests Department. January 1980. how institutionally this might be done. No. 370. The Tokyo Round and the Develop- ing Countries. Bela Balassa, Development Re- The World Rubber Economy: Structure, search Center and The Johns Hopkins University. Changes, and Prospects February 1980. Enzo R. Grilli, Barbara Bennett Agostini, and No. 371. Ownership and Efficiency in Urban Maria J. 't Hooft Welvaars Buses. Charles Feibel and A.A. Walters, Urban Projects Department. February 1980. World Bank Staff Occasional Papers, Number 30. The Johns Hopkins University Press, 1980 (forth- No. 372. The Tokyo Round: Results and Impli- coming). About 200 pages. cations for Developing Countries. Ria Kemper (consultant), Economic Analysis and Projections LC 80-554 Department. February 1980. ISBN 0-8018-2421-4 $5.00 (£3.00) paperback A product of joint research by the World Bank and the UN Food and Agriculture Organization, * WORI) BANK N oxi sut 11 \i.' MAY 1980 No. 373. Malnutrition: Some Measurement and Number 107. Economic Forces Underlying Ur- Policy Issues. T.N. Srinivasan, Development Re- ban Decentralization Trends: A Structural search Center. February 1980. Model for Density Gradients Applied to Korea. J.R. Follain, B. Renaud, and G-C. Lim. From En- No. 374. The Prevalence of Calorie-Deficient vironment and Planning A, vol. 11 (1979), Diets in Developing Countries. Shlomo Reutlin- pp. 541-51. ger and Harold Alderman (consultant), Develop- ment Economics Department. February 1980. Number 108. Distributional Weights, Shadow Wages, and the Accounting Rate of Interest: Es- No. 375. The Design of Organizations for Ru- timates for India. Deepak Lal. From Indian Eco- ral Development Projects-A Progress Report. nomic Review, vol. 12 (New Series), no. 2 (Octo- William E. Smith (consultant); Francis J. ber 1977), pp. 99-131. Lethem, Projects Advisory Staff; and Ben A. Thoolen, Agriculture and Rural Development De- Number 109. An Econometric Application of partment. January 1980. the Theory of the Farm Household. Howard Barnum and Lyn Squire. From Journal of Develop- No. 376. Fostering the Capital-Goods Sector in ment Economics, vol. 6 (1979), pp. 79-102. LDCs: A Survey of Evidence and Requirements. Howard Pack (consultant), Development Econo- Number 110. Book Review of "Advances in mics Department. March 1980. Maritime Economics." Alan A. Walters. From Journal of Political Economy, vol. 87, no. 3 (June No. 377. Macroeconomic Implications of Factor 1979), pp. 656-59. Substitution in Industrial Processes. Howard Pack (consultant), Development Economics De- Number 111. Why Impoverished Children Do partment. March 1980. Well in Ugandan Schools. Stephen P. Heyneman. From Comparative Education, vol. 15, no. 2 (June No. 378. Household Income or Household In- 1979), pp. 175-85. come per Capita in Welfare Comparisohs. Gau- tam Datta and Jacob P. Meerman, Development Number 112. Economic Criteria for Optimizing Economics Department. February 1980. Power System Reliability Levels. Mohan Muna- singhe and Mark Gellerson. From The Bell Jour- nal of Economics, vol. 10, no. I (Spring 1979), WORLD BANK REPRINT SERIES pp. 353-65. Number 113. Intra-Industry Trade and the In- The following recent articles, arising from research tegration of Developing Countries in the World undertaken at or for the WVorld Bank, have been re- Economy. Bela Balassa. From Herbert Giersch printed with permission: (ed.), On the Economics of Intra-Industry Trade: Symposium 1978 (Institut fur Weltwirtschaft an Number 104. Indicators of Development: The der Universitat Kiel) (Tubingen: J.C.B. Mohr Search for a Basic Needs Yardstick. Norman [Paul Siebeck] 1979), pp. 245-70. Hicks and Paul Streeten. From World Develop- ment, vol. 7 (1979), pp. 567-80. Number 114. The Changing International Di- vision of Labor in Manufactured Goods. Bela Number 105. Indian Export Incentives. Deepak Balassa. From Banca Nazionale del Lavoro Quar- La6. From9), Joual0 oterly Review, no. 130 (September 1979), 6 (1979), pp.103-17. pp. 243-85. Number 106. Models of Employment and In- Number 115. Priorities of Developing Coun- come Distribution. Constantino Lluch. From tries in Weather and Climate. Raaj Sah. From Journal of Development Economics, vol. 6 (1979), World Development, vol. 7 (1979), pp. 337-47. pp. 31-45. -v J4 OR il) B .NI _ _A_ _ v___ __ RF .SU , i't l 9 \[ N Number 116. Industrialization and Employ- Industrial Development Strategy and Policies in ment: The Role of Small and Medium-Sized the Philippines. Barend A. de Vries, Chief of Mis- Manufacturing Firms. Barend A. de Vries. From sion, et al. East Asia and Pacific Regional Office International Economic Development and Resource (forthcoming). i'ransfer: Workshop 1978. (Institut fUr Weltwirt- schaft an der Universitat Kiel) (TUbingen: J.C.B. The Solomon Islands: An Introductory Eco- Mohr [Paul Siebeck], 1979), pp. 47-62. nomic Report. Edward K. Hawkins, Chief of Mis- sion, and Nizar Jetha, Deputy Chief, et al. East Number 117. The Use of DRCs to Evaluate In- Asia and Pacific Regional Office (forthcoming). digenization Programs: The Case of the Ivory Coast. Terry D. Monson and Garry G. Pursell. Thailand: Toward a Development Strategy of From Journal of Development Economics, vol. 6 Full Participation. E.R. Lim, Chief of Mission, et (1979), pp. 119-39. al. East Asia and Pacific Regional Office. March 1980. Number 118. Growth and Poverty in Develop- ing Countries. Montek S. Ahluwalia, Nicholas G. Turkey: Policies and Prospects for Growth. Carter, and Hollis B. Chenery. From Journal of Vinod Dubey, Chief of Mission, et al. Europe, Development Economics, vol. 6 (1979), Middle East, and North Africa Regional Office pp. 299-341. (April 1980). Number 119. The Oil Price Revolution of The Economy of Zaire: Current Situation and 1973-74. From 7he Journal of Energy and Devel- Constraints. Bension Varon, Chief of Mission, et opment, vol. 4, no. 2 (Spring 1979), pp. 273-90, by al. Eastern Africa Regional Office (forthcoming). permission of the International Research Center for Energy and Economic Development (ICEED), University of Colorado. WORLD BANK COUNTRY STUDIES World Bank country studies are prepared mainly for the Bank's own use, with distribution restricted to member governments and znternational organiza- tions that deal with development problems. Where the issues studied have attracted a wide interest, where it appears that the Bank's study could con- tribute substantially to knowledge and understand- ing of these issues, and where the authorities of the country concerned are agreeable, such reports are made available to a wider audience. Potential read- ers are advised that these are working documents, not prepared with a view to broad distribution. The Philippines: Aspects of the Financial Sector. Report of a joint International Monetary Fund- World Bank mission. Edward K. Hawkins, Chief of Mission, et al. East Asia and Pacific Regional Office (forthcoming). 0----- - -- -LD B _NK 0 . World Bank Headquarters 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. 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