This paper examines de jure and de facto measures of regulations, finding the relationship between them is neither one for one, nor linear. "Doing Business" provides indicators of the formal time and costs associated with fully complying with regulations.
... See More + Enterprise Surveys report the actual experiences of a wide range of firms. First, there are significant variations in reported times to complete the same transaction by firms facing the same formal policy. Second, regulatory compliance appears "under water" as firms report actual times much less than the Doing Business reported days. Third, the data reveal substantial differences between favored and disfavored firms in the same location. Favored firms show minimal variation, so Doing Business has little predictive power for the times they report. For disfavored firms, the variation is greater, although still not significantly correlated with Doing Business. Fourth, where multiple Enterprise Surveys are available, there is little association over time, with reductions in Doing Business days as likely to be accompanied by increases in Enterprise Surveys days. Comparing these two types of measures suggests very different ways of thinking about policy versus policy implementation, what "a climate" for firms in a country might mean, and what the options for "policy reform" really are.
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Policy Research Working Paper WPS5563 FEB 01, 2011
This paper addresses some of the challenges facing fragile states. The paper has four sections, each of which introduces an odd phrase. The first takes the odd phrase of isomorphic mimicry from evolutionary theory via sociologists of organizations to fragile states.
... See More + It is much easier to create an organization that looks like a police force-with all the de jure forms organizational charts, ranks, uniforms, buildings, weapons-than it is to create an organization with the de facto function of enforcing the law. The second section focuses on wishful thinking; in particular, distinguishing between optimism, which can be a powerful positive force, and wishful thinking, which is not. The third section describes a key danger of wishful thinking: pre-mature load bearing. If an athlete has been injured then there has to be a period in which he/she does not put stress onto the injury. The fourth section examines whether there is a middle way out of the big stuck. The 'big stuck' is the combination of unfavorable domestic conditions plus unhelpful external factors that can create an environment in which fragile states remain fragile, with low capability and at risk of recurrent conflict, for a very long time. In this note authors focused on the parts of development related to administrative transformation, which is a distinct, but intertwined component of development, and particularly the administrative capability of the state.
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Firms in Africa report "regulatory and economic policy uncertainty" as a top constraint to their growth. This paper argues that often firms in Africa do not cope with policy rules, rather they face deals: firm-specific policy actions that can be influenced by firm actions (such as bribes) and characteristics (such as political connections).
... See More + Using Enterprise Survey data, the paper demonstrates huge variability in reported policy actions across firms notionally facing the same policy. The within-country dispersion in firm-specific policy actions is larger than the cross-national differences in average policy. The analysis shows that variability in this policy implementation uncertainty within location-sector-size cells is correlated with firm growth rates. These measures of implementation variability are more strongly related to lower firm employment growth than are measures of "average" policy action. The paper shows that the de jure measures such as Doing Business indicators are virtually uncorrelated with ex-post firm-level responses, further evidence that deals rather than rules prevail in Africa. Strikingly, the gap between de jure and de facto conditions grows with the formal regulatory burden. The evidence also shows more burdensome processes open up more space for making deals; firms may not incur the official costs of compliance, but they still pay to avoid them. Finally, measures of institutional capacity and better governance are closely associated with perceived consistency in implementation.
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Policy Research Working Paper WPS5321 MAY 01, 2010
The global moving out of poverty study is unique in several respects. It is one of the few large-scale comparative research efforts to focus on mobility out of poverty rather than on poverty alone.
... See More + The study draws together the experiences of poor women and men who have managed to move out of poverty over time and the processes and local institutions that have helped or hindered their efforts. It is also the first time that a World Bank report draws on people's own understanding of freedom, democracy, equality, empowerment, and aspirations-and how these affect poor people in different growth, social, and political contexts. By giving primacy to people's own experiences and how they define poverty, the study provides several new insights to develop more effective strategies to reduce poverty. The study finds that poor people take lots of initiative, in many cases even more than those who are better off. There are millions and millions of tiny poor entrepreneurs. The investment climate of these tiny entrepreneurs has not been a centerpiece of poverty strategies. Too often, poor people do not face a level playing field. Despite the micro credit revolution, poor people remain outside of most financial services; and large lenders remain reluctant to lend to micro enterprises and micro entrepreneurs. New institutional models and financial instruments are needed to serve poor people's financial needs and give them the capital they need to expand their businesses and connect to markets.
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This paper compares the wages of workers inside the United States to the wages of observably identical workers outside the United States-controlling for country of birth, country of education, years of education, work experience, sex, and rural-urban residence.
... See More + This is made possible by new and uniquely rich microdata on the wages of over two million individual formal-sector wage-earners in 43 countries. The paper then uses five independent methods to correct these estimates for unobserved differences and introduces a selection model to estimate how migrants' wage gains depend on their position in the distribution of unobserved wage determinants. Following all adjustments for selectivity and compensating differentials, the authors estimate that the wages of a Bolivian worker of equal intrinsic productivity, willing to move, would be higher by a factor of 2.7 solely by working in the United States. While this is the median, this ratio is as high as 8.4 (for Nigeria). The paper documents that (1) for many countries, the wage gaps caused by barriers to movement across international borders are among the largest known forms of wage discrimination; (2) these gaps represent one of the largest remaining price distortions in any global market; and (3) these gaps imply that simply allowing labor mobility can reduce a given household's poverty to a much greater degree than most known in situ antipoverty interventions.
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Policy Research Working Paper WPS4671 JUL 01, 2008
Clemens, Michael A.; Montenegro, Claudio E.; Pritchett, LantDisclosed
Are the requirements for effective learning in place in the rural Indian setting today? The answer is an unequivocal no. Looking at any metric of educational effectiveness, the picture suggests that these requirements are not in place and quality of government schooling is low.
... See More + Given that primary education in rural India suffers from systemic failures that need to be addressed, how does decentralization fit into the picture. It is important to distinguish that there are two distinct questions that arise. First, given that India has embarked on an ambitious process of decentralization, what is the best way to reform primary education in this decentralizing context. Second, given that rural primary education needs reform, is a well-designed decentralization proposal the right way to go about it. The facts that India's decentralization has been unbalanced, and that decentralization is not a magic bullet, together suggest that if we are to reform primary education in the current decentralizing framework, the exact design of the proposal becomes critically important - the details on what should and what should not be decentralized, and how this should be done, becomes fundamental to designing an effective proposal. The paper concludes with a concrete proposal for reform that is focused on teachers.
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Working Paper (Numbered Series) 36965 JUN 01, 2006
When the World Bank dreams of 'a world free of poverty,' what should it be dreaming? In measuring global income or consumption expenditure poverty, the World Bank has widely adopted the $1 a day standard as a lower bound.
... See More + Because this standard is based on poverty lines in the poorest countries, anyone with income or expenditures below this line will truly be poor. But there is no consensus standard for the upper bound of the global poverty line: above what level of income or expenditures is someone truly not poor? This article proposes that the World Bank compute its lower and upper bounds in a methodologically equivalent way, using the poverty lines of the poorest countries for the lower bound and the poverty lines of the richest countries for the upper bound. The resulting upper bound global poverty line will be 10 times higher than the current lower bound and at least 5 times higher than the currently used alternative lower bound of $2 a day. And in tracking progress toward a world free of poverty, the World Bank should compute measures of global poverty using a variety of weights on the depth and intensity of poverty for a range of poverty lines between the global lower and upper bounds. For instance, rather than trying to artificially force the global population of 6.2 billion (a billion is 1,000 million) into just two categories 'poor' and 'not poor,' with the new range of poverty lines the estimates would be that 1.3 billion people are 'destitute' (below $1 a day), another 1.6 billion are in 'extreme poverty' (above $1 a day but below $2 dollar a day), and another 2.5 billion are in 'global poverty' (above extreme poverty but below the upper bound poverty line).
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Who is not poor? Dreaming of a World truly free of poverty by Lant Pritchett; reducing the incidence of low birth weight in low-income countries has substantial economic benefits by Harold Alderman, and Jere R.
... See More + Behrman; choosing a system of unemployment income support: guidelines for developing and transition countries by Milan Vodopivec; corporate governance and development by Stijn Claessens; enforcement and good corporate governance in developing countries and transition economies by Erik Berglof and Stijn Claessens.
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Many oil, mineral, and plantation crop-based economies experienced a substantial deceleration in growth following the commodity boom and bust of the 1970s and early 1980s.
... See More + This article illustrates how countries dependent on point source natural resources (those extracted from a narrow geographic or economic base, such as oil and minerals) and plantation crops are predisposed to heightened economic and social divisions and weakened institutional capacity. This in turn impedes their ability to respond effectively to shocks, which previous studies have shown to be essential for sustaining rising levels of prosperity. Analysis of data on classifications of export structure, controlling for a wide array of other potential determinants of governance, shows that point source and coffee and cocoa exporting countries do relatively poorly across an array of governance indicators. These governance effects are not associated simply with being a natural resource exporter. Countries with natural resource exports that are diffuse relying primarily on livestock and agricultural produce from small family farms do not show the same strong effects and have had more robust growth recoveries.
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The Varieties of Resource Experience: Natural Resource Export Structures and the Political Economy of Economic Growth by Jonathan Isham, Michael Woolcock, Lant Pritchett, and Gwen Busby; Attaching Workers through In-Kind Payments: Theory and Evidence from Russia by Guido Friebel and Sergei Guriev; Child Health and Economic Crisis in Peru by Christina Paxson and Norbert Schady; Entrepreneurship Selection and Performance: A Meta-Analysis of the Impact of Education in Developing Economies by Justin van der Sluis, Mirjam van Praag, and Wim Vijverberg; Microfinance and Poverty: Evidence Using Panel Data from Bangladesh by Shahidur R.
... See More + Khandker; Participation in wto Dispute Settlement: Complainants, Interested Parties, and Free Riders by Chad P. Bown; Has Rural Infrastructure Rehabilitation in Georgia Helped the Poor? By Michael Lohhin Lokshin and Ruslan Yemtsov.
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This paper is the written version of a lecture that draws principally on research on safety nets and operational experience with the implementation of safety nets, drawing heavily on the crisis of safety net programs in Indonesia from 1998 to 2000.
... See More + As such it provides more views than reviews of the literature on the principal issues in the political economy of targeted safety net programs. The text is followed by a Q&A that clarifies views put perhaps too starkly in the text. Five major issues are reviewed. First, the implications of some simple models of electoral politics which make the budget allocated to programs endogenous to their targeting design highlight the dangers in ignoring political economy. Second, the political economy of safety net versus safety rope programs is reviewed. Third, some of the literature on the perception of fairness of the targeting criteria is reviewed. Fourth, the issue of local versus central targeting of programs is discussed. Fifth, the political economy of program implementation that considers the fit between program targeting and the organizational culture of the implementing organization is considered.
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Working Paper (Numbered Series) 31498 JAN 01, 2005
The World Development Report (WDR) 2004 warns that broad improvements in human welfare will not occur unless poor people receive wider access to affordable, better quality services in health, education, water, sanitation, and electricity.
... See More + Without such improvements, freedom from illness and from illiteracy, two of the most important ways poor people can escape poverty, will remain elusive to many. This report builds an analytical and practical framework for using resources, whether internal or external, more effectively by making services work for poor people. The focus is on those services that have the most direct link with human development, education, health, water, sanitation, and electricity. This presents an enormous challenge, because making services work for the poor involves changing, not only service delivery arrangements, but also public sector institutions, and how foreign aid is transferred. This WDR explores the many dimensions of poverty, through outcomes of service delivery for poor people, and stipulates affordable access to services is low especially for poor people in addition to a wide range of failures in quality. The public responsibility is highlighted, addressing the need for more public spending, and technical adjustments, based on incentives and understanding what, and why services need to be improved. Thus, through an analytical framework, it is suggested the complexity of accountability must be established, as well as instruments for reforming institutions to improve services, illustrated through various case studies, both in developing, and developed countries. The report further outlines that scaling up reforms means sectoral reforms must be linked to ongoing or nascent public sector reforms, in areas such as budget management, decentralization, and public administration reform, stimulated through information as a catalyst for change, and as an input to prod the success of other reforms.
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The World Development Report (WDR) 2004 warns that broad improvements in human welfare will not occur unless poor people receive wider access to affordable, better quality services in health, education, water, sanitation, and electricity.
... See More + Without such improvements, freedom from illness and from illiteracy, two of the most important ways poor people can escape poverty, will remain elusive to many. This report builds an analytical and practical framework for using resources, whether internal or external, more effectively by making services work for poor people. The focus is on those services that have the most direct link with human development, education, health, water, sanitation, and electricity. This presents an enormous challenge, because making services work for the poor involves changing, not only service delivery arrangements, but also public sector institutions, and how foreign aid is transferred. This WDR explores the many dimensions of poverty, through outcomes of service delivery for poor people, and stipulates affordable access to services is low especially for poor people in addition to a wide range of failures in quality. The public responsibility is highlighted, addressing the need for more public spending, and technical adjustments, based on incentives and understanding what, and why services need to be improved. Thus, through an analytical framework, it is suggested the complexity of accountability must be established, as well as instruments for reforming institutions to improve services, illustrated through various case studies, both in developing, and developed countries. The report further outlines that scaling up reforms means sectoral reforms must be linked to ongoing or nascent public sector reforms, in areas such as budget management, decentralization, and public administration reform, stimulated through information as a catalyst for change, and as an input to prod the success of other reforms.
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The World Development Report (WDR) 2004 warns that broad improvements in human welfare will not occur unless poor people receive wider access to affordable, better quality services in health, education, water, sanitation, and electricity.
... See More + Without such improvements, freedom from illness and from illiteracy, two of the most important ways poor people can escape poverty, will remain elusive to many. This report builds an analytical and practical framework for using resources, whether internal or external, more effectively by making services work for poor people. The focus is on those services that have the most direct link with human development, education, health, water, sanitation, and electricity. This presents an enormous challenge, because making services work for the poor involves changing, not only service delivery arrangements, but also public sector institutions, and how foreign aid is transferred. This WDR explores the many dimensions of poverty, through outcomes of service delivery for poor people, and stipulates affordable access to services is low especially for poor people in addition to a wide range of failures in quality. The public responsibility is highlighted, addressing the need for more public spending, and technical adjustments, based on incentives and understanding what, and why services need to be improved. Thus, through an analytical framework, it is suggested the complexity of accountability must be established, as well as instruments for reforming institutions to improve services, illustrated through various case studies, both in developing, and developed countries. The report further outlines that scaling up reforms means sectoral reforms must be linked to ongoing or nascent public sector reforms, in areas such as budget management, decentralization, and public administration reform, stimulated through information as a catalyst for change, and as an input to prod the success of other reforms.
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The World Development Report (WDR) 2004 warns that broad improvements in human welfare will not occur unless poor people receive wider access to affordable, better quality services in health, education, water, sanitation, and electricity.
... See More + Without such improvements, freedom from illness and from illiteracy, two of the most important ways poor people can escape poverty, will remain elusive to many. This report builds an analytical and practical framework for using resources, whether internal or external, more effectively by making services work for poor people. The focus is on those services that have the most direct link with human development, education, health, water, sanitation, and electricity. This presents an enormous challenge, because making services work for the poor involves changing, not only service delivery arrangements, but also public sector institutions, and how foreign aid is transferred. This WDR explores the many dimensions of poverty, through outcomes of service delivery for poor people, and stipulates affordable access to services is low especially for poor people in addition to a wide range of failures in quality. The public responsibility is highlighted, addressing the need for more public spending, and technical adjustments, based on incentives and understanding what, and why services need to be improved. Thus, through an analytical framework, it is suggested the complexity of accountability must be established, as well as instruments for reforming institutions to improve services, illustrated through various case studies, both in developing, and developed countries. The report further outlines that scaling up reforms means sectoral reforms must be linked to ongoing or nascent public sector reforms, in areas such as budget management, decentralization, and public administration reform, stimulated through information as a catalyst for change, and as an input to prod the success of other reforms.
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As part the Local Level Institutions study of local life in villages in rural Indonesia information was gathered on sampled household's participation in social activities.
... See More + We classified the reported activities into four distinct types of social activity: sociability, networks, social organizations, and village government organizations. Respondents were also asked about questions about their village government: whether they were informed about village funds and projects, if they participated in village decisions, if they expressed voice about village problems, and if they thought the village government was responsive to local problems. Several findings emerge regarding the relationship between the social variables and the governance activities. Not surprisingly, an individual household's involvement with the village government organizations tends to increase their own reports of positive voice, participation, and information. In contrast, the data suggest a negative spillover on other households. There is a strong "chilling" effect of one household's participation in village government organizations on the voice, participation, and information of other households in the same village. The net effect of engagement in village government organizations is generally negative, while the net effect of membership in social organizations is more often associated with good governance outcomes. These findings indicate that existing social organizations have a potentially important role to play in enhancing the performance of government institutions in Indonesia and in the evolution of good governance more generally.
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Policy Research Working Paper WPS2981 MAR 31, 2003
The World Development Report (WDR) 2004 warns that broad improvements in human welfare will not occur unless poor people receive wider access to affordable, better quality services in health, education, water, sanitation, and electricity.
... See More + Without such improvements, freedom from illness and from illiteracy, two of the most important ways poor people can escape poverty, will remain elusive to many. This report builds an analytical and practical framework for using resources, whether internal or external, more effectively by making services work for poor people. The focus is on those services that have the most direct link with human development, education, health, water, sanitation, and electricity. This presents an enormous challenge, because making services work for the poor involves changing, not only service delivery arrangements, but also public sector institutions, and how foreign aid is transferred. This WDR explores the many dimensions of poverty, through outcomes of service delivery for poor people, and stipulates affordable access to services is low especially for poor people in addition to a wide range of failures in quality. The public responsibility is highlighted, addressing the need for more public spending, and technical adjustments, based on incentives and understanding what, and why services need to be improved. Thus, through an analytical framework, it is suggested the complexity of accountability must be established, as well as instruments for reforming institutions to improve services, illustrated through various case studies, both in developing, and developed countries. The report further outlines that scaling up reforms means sectoral reforms must be linked to ongoing or nascent public sector reforms, in areas such as budget management, decentralization, and public administration reform, stimulated through information as a catalyst for change, and as an input to prod the success of other reforms.
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The World Development Report (WDR) 2004 warns that broad improvements in human welfare will not occur unless poor people receive wider access to affordable, better quality services in health, education, water, sanitation, and electricity.
... See More + Without such improvements, freedom from illness and from illiteracy, two of the most important ways poor people can escape poverty, will remain elusive to many. This report builds an analytical and practical framework for using resources, whether internal or external, more effectively by making services work for poor people. The focus is on those services that have the most direct link with human development, education, health, water, sanitation, and electricity. This presents an enormous challenge, because making services work for the poor involves changing, not only service delivery arrangements, but also public sector institutions, and how foreign aid is transferred. This WDR explores the many dimensions of poverty, through outcomes of service delivery for poor people, and stipulates affordable access to services is low especially for poor people in addition to a wide range of failures in quality. The public responsibility is highlighted, addressing the need for more public spending, and technical adjustments, based on incentives and understanding what, and why services need to be improved. Thus, through an analytical framework, it is suggested the complexity of accountability must be established, as well as instruments for reforming institutions to improve services, illustrated through various case studies, both in developing, and developed countries. The report further outlines that scaling up reforms means sectoral reforms must be linked to ongoing or nascent public sector reforms, in areas such as budget management, decentralization, and public administration reform, stimulated through information as a catalyst for change, and as an input to prod the success of other reforms.
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The World Development Report (WDR) 2004 warns that broad improvements in human welfare will not occur unless poor people receive wider access to affordable, better quality services in health, education, water, sanitation, and electricity.
... See More + Without such improvements, freedom from illness and from illiteracy, two of the most important ways poor people can escape poverty, will remain elusive to many. This report builds an analytical and practical framework for using resources, whether internal or external, more effectively by making services work for poor people. The focus is on those services that have the most direct link with human development, education, health, water, sanitation, and electricity. This presents an enormous challenge, because making services work for the poor involves changing, not only service delivery arrangements, but also public sector institutions, and how foreign aid is transferred. This WDR explores the many dimensions of poverty, through outcomes of service delivery for poor people, and stipulates affordable access to services is low especially for poor people in addition to a wide range of failures in quality. The public responsibility is highlighted, addressing the need for more public spending, and technical adjustments, based on incentives and understanding what, and why services need to be improved. Thus, through an analytical framework, it is suggested the complexity of accountability must be established, as well as instruments for reforming institutions to improve services, illustrated through various case studies, both in developing, and developed countries. The report further outlines that scaling up reforms means sectoral reforms must be linked to ongoing or nascent public sector reforms, in areas such as budget management, decentralization, and public administration reform, stimulated through information as a catalyst for change, and as an input to prod the success of other reforms.
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Weathering the storm : the impact of the East Asian crisis on farm households in Indonesia and Thailand; by Fabrizio Bresciani, Gershon Feder, Daniel O.
... See More + Gilligan, Hanan G. Jacoby, Tongroj Onchan, and Jaime Quizon. The impact of financial crises on labor markets, household incomes, and poverty : a review of evidence; by Peter R. Fallon and Robert E.B. Lucas. Weak links in the chain II : a prescription for health policy in poor countries; by Deon Filmer, Jeffrey S. Hammer, and Lant H. Pritchett. Public intervention in health insurance markets : theory and four examples from Latin America; by William Jack. Urbanization in developing countries; by Vernon Henderson. Developing countries and a new round of WTO negotiations; by Thomas W. Hertel, Bernard M. Hoekman, and Will Martin.
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Publication 24774 MAR 31, 2002
Devarajan, Shantayanan [editor]; Bresciani, Fabrizio; Feder, Gershon; Gilligan, Daniel O.; Jacoby, Hanan G.; Onchan, Tongroj; Quizon, Jaime; Fallon, Peter R.; Lucas, Robert E.B.; Filmer, Deon; Hammer, Jeffrey S.; Pritchett, Lant H.; Jack, William; Henderson, Vernon; Hertel, Thomas; Hoekman, Bernard M.; Martin, Will
