This paper investigates the effects of multiple weather shocks on household welfare in Mozambique, as well as some of the coping responses and price mechanisms at play.
... See More + The analysis employs a triple-difference strategy that exploits variation in the shocks across space, time, and cropping cycles. The findings demonstrate high levels of vulnerability across various weather risks. Experiencing a cyclone, flood, or drought leads to a drop of up to 25-30 percent in per capita food consumption and around 0.4 fewer meals per day per person. Poverty increased by 12 and 17.5 percentage points in two of the three events analyzed. Human capital accumulation, as measured by school participation and morbidity, is disrupted. Households follow risk-coping strategies, such as increasing the labor supply of their children or selling assets, which entail partial protection in the aftermath of the shock at the cost of lower income growth in the future. In disentangling the channels, the paper shows that maize prices exhibit higher volatility in food markets that are spatially close to the most affected areas. The results are robust to several robustness checks, including analysis of bias from selective migration, and indicate that household welfare and economic mobility in low-income environments are constrained by uninsured weather risks.
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Working Paper (Numbered Series) 132800 DEC 01, 2018
In the first half of 2018, the economy continued to expand at a brisk pace, well on track for Rwanda to achieve 7.2 percent growth in 2018. GDP growth was 8.6 percent, following 9.3 percent growth in the second half of 2017.
... See More + Growth in production was again broad-based. As it continued to recover from recent droughts, agriculture expanded by 7.6 percent. Industry has also regained momentum as large construction projects resumed and foodprocessing was strong. Growth in services was a healthy 8.7 percent. On demand side, investments were the main driver of growth. After stagnating for close to two years, private consumption grew 5 percent. Driven by strong domestic demand, imports rose by 12 percent in real terms. Exports continued to grow at a healthy 10.8 percent in real terms, although net exports contributed negatively, being outpaced by growth in imports. Solid growth was coupled with low inflation, and pressures on the exchange rate have dissipated. Headline inflation as of September 2018 was 1.2 percent. The Rwandan franc had by then depreciated by about 2 percent after the major external adjustment of 2017. A supportive macroeconomic environment has allowed the National Bank of Rwanda to keepthe policy rate at 5 percent throughout the year. Nonperforming loans are trending down with the help of a new regulation on credit classification and provisioning. Credit growth, however, is still slow: after seeing their credit portfolios deteriorate in 2016–17, banks have become more risk-averse. The banking sector continues to be well-capitalized—the ratio of capital to risk-weighted assets is well above the minimum requirements.
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Working Paper (Numbered Series) 132832 DEC 01, 2018
In parts of Asia, South Caucasus, and the Balkans, son preference is strong enough to trigger significant levels of sex selection, result in the excess mortality of girls, and skew child sex ratios in favor of boys.
... See More + Every year, 1.8 million girls under the age of five go “missing” because of the widespread use of sex selective practices in these regions. The pervasive use of such practices is reflective of the striking inequities girls face today, and it also has negative implications for efforts to improve women’s status in the long term. Consequently, governmentsof countries in these regions have employed direct measures, such as banning the use of prenatal sex selection technology and providing financial incentives to families that have girls. This paper takes stock of the direct measures used across countries grappling with skewed child sex ratios and compares the efficacy of direct measures with measures that indirectly raise the value of daughters. The stocktaking suggests that there is no conclusive evidence that direct approaches reduce the higher mortality risk for girls. Bans on the use of sex selection technology may inadvertently worsen the status of the very individuals they intend to protect, and financial incentives to families with girls offer short-term benefits at most. Alternatively, indirect measures, such as legal reform to promote gender equity and advocacy efforts, offer more promise by bringing about permanent shifts in the relative value of daughters. The stocktaking also underscores the paucity of causal studies in this literature.
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Working Paper (Numbered Series) 131795 NOV 01, 2018
This paper uses Mongolia’s Household Socio Economic Survey for 2016 to estimate the distributive impact of taxes and transfers. The findings show that the system is progressive and contributes to reductions in poverty and inequality.
... See More + The Gini coefficient of the pre-tax-and-transfer income is 0.4183 and decreases to 0.3507 after-tax-and transfer. This is a reduction of 6.76 Gini points (around 16 percent). Something similar happens with the poverty rate, which decreases from 47.31 to 31.96 percent. Despite the progressiveness of the whole system, there are some caveats and policy warnings. First, pensions are the most redistributive instrument in the system, but their actuarial and fiscal sustainability is weak. Second, two programs (the child money program and the mortgage subsidy) do little redistribution—the latter is actually regressive—but represent alarge share of the budget (around 2.5 percent of gross domestic product). These two factors, and the fact that up to a 35 percent of total expenditures in monetary and in-kind transfers is funded by corporate taxes and royalties—which are highly dependent on volatile commodity prices—make the redistributive impact of the tax and transfer system susceptible to fiscal unsustainability.
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Working Paper (Numbered Series) 131852 NOV 01, 2018
Boosting convergence and shared prosperity in the European Union achieved renewed urgency after the global financial crisis of 2008. This paper assesses the role of agriculture and the Common Agricultural Program in achieving this.
... See More + The paper sheds light on the relationship between poverty and agriculture as part of the process of structural transformation. It positions each member country on the path toward a successful structural transformation. The paper then evaluates at the regional level where the Common Agricultural Program funding tends to go, poverty-wise, within each country. This approach enables making more informed policy recommendations on the current state of the Common Agricultural Program funding, as well as evaluating the role of agriculture as a driver of shared prosperity. The analysis performed throughout the paper uses a combination of data sources at several spatial levels.
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Working Paper (Numbered Series) 131851 NOV 01, 2018
Azevedo,Joao Pedro Wagner De; Van Den Brink,Rogier J. E.; Corral Rodas,Paul Andres; Avila Acosta,Montserrat; Zhao,Hongxi; Mostafavi Dehzooei,MohammadhadiDisclosed
This paper reports on a rapid assessment of Malawi’s integrated social registry, known as the Unified Beneficiary Registry (UBR). The timing of the assessment was ripe given the upcoming round of continued expansion of the UBR and a planned shift in registration targets (from 50 percent to 100 percent of households).
... See More + As such, the objectives of this assessment are to: (a) review the UBR experience to date; (b) identify strengths and areas for improvement; (c) provide short-term recommendations to support the upcoming expansion, including implementation adaptations that would be needed to accommodate the revised registration targets; and (d) support the longer-term strengthening of the UBR. While primary audience for this paper includes the core stakeholders in Malawi, the report is also of potential interest to other countries interested in developing social registries and/or carrying out social registry assessments.
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Working Paper (Numbered Series) 132144 NOV 01, 2018
Governments in low and middle-income countries are increasingly investing in social protection, and also address many of their own people’s ‘humanitarian’ needs themselves.
... See More + For their international partners, who may have an important role in filling gaps when household needs exceed national capacity to meet them, support for the strengthening of national systems, combined with a shift from short-run to more durable approaches, is becoming a unifying framework for assistance. Some aspects of social protection and humanitarian assistance therefore seem to be on a converging trajectory. ‘Human(itarian) Capital?’ discusses findings from twelve country case studies exploring the linkages between humanitarian assistance, in its various interpretations, and national social protection systems. Specifically, the paper distills lessons on how humanitarian assistance and social protection systems might better coexist, the possible challenges and trade-offs emerging from practical experiences, and how to facilitate, inform, and accelerate future concerted action.
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Working Paper (Numbered Series) 132231 NOV 01, 2018
Whether individuals and job opportunities are well connected is a key determinant or productive urban labor markets. The overall level of job accessibility in a city depends on the locations of jobs and workers' residences, as well as transport networks.
... See More + Moreover, who has good access to job opportunities hinges on the trade-off faced by households in their residential choices over job accessibility, living conditions, and housing costs. This paper empirically analyzes the spatial distributions of job accessibility, housing rents, and poverty in Nairobi, Kenya. It finds that workers and jobs are not well connected in the city: Nairobi residents can on average access fewer than 10 percent of existing jobs by foot within an hour. Even using a minibus, they can reach only about a quarter of the jobs. This paper further shows the poorer households and/or those who live in informal settlements can reach a more limited number of jobs. Living closer to job opportunities is indeed costly in Nairobi, not only because housing quality and living conditions tend to be better in such areas, but also job accessibility itself is valued as a great amenity in the housing markets, which challenges low-income households' residential location choices.
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Working Paper (Numbered Series) 132529 NOV 01, 2018
The six land corridors that are the ‘Belt’ part of the Belt and Road Initiative (BRI) connect more than sixty countries. As the initiative progresses, policy makers, analysts and researchers are trying to answer a few open questions of which the most common are: How can a country best benefit from the BRI?
... See More + How should projects be prioritized and sequenced? What opportunities emerge as a result of participating in the initiative? The authors use a network economics approach to answer some of these questions and others. Our hypothesis is that the ability of countries to maximize the benefits of BRI will depend on the position of each country in the new connectivity maps that are emerging. Ultimately, an initiative such as the BRI will change the way economic centers, as the most productive nodes in each country, are connected. Productivity, competition, market opportunities, and transport and logistics costs are all likely to be impacted. However, the magnitude of the effects will depend on where along the Belt corridors a city is located relative to all other countries and economic centers. Ultimately, the difference in outcomes will depend on whether a center intermediates trade flows in the network or serves as an end node that generates inbound and outbound flows. Centers that are not well connected in the new BRI maps may not experience much positive impact. Emphasis should therefore be on the weak links within the networks.
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Working Paper (Numbered Series) 130490 OCT 01, 2018
Derudder,Ben Joseph Romain; Liu,Xingjian; Kunaka,CharlesDisclosed
This paper analyses the role of good governance in fostering pro-poor and inclusive growth. Using a sample of 112 countries over 1975–2012, it shows that growth is generally pro-poor.
... See More + However, growth has not been inclusive, as illustrated by a decline in the bottom 20 percent of the income distribution. While all features of good governance support income growth and reduce poverty, only government effectiveness and the rule of law are found to enhance inclusive growth. The investigation of the determinants of pro-poor and inclusive growth highlights that education, infrastructure improvement, and financial development are the key factors in poverty reduction and inclusive growth. Relying on the panel smooth transition regression (PSTR) model following Gonzalez, Tersvirta and Dijk (2005), the paper identifies a nonlinear relationship between governance and pro-poor growth, while the impact of governance on inclusive growth appears to be linear.
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Working Paper (Numbered Series) 130402 OCT 01, 2018
South Africa's weak post-apartheid trade performance has been a significant factor in its inability to create more jobs and achieve higher growth and productivity.
... See More + Exports and inbound foreign direct investment as a share of gross domestic product have lagged other middle-income countries and both have declined in absolute terms in the past five years. South Africa is losing market share in many of its core export products, both because it is being outcompeted by more dynamic economies in East Asia and owing to its own supply-side and institutional constraints. This loss of global competitiveness in manufacturing has meant that more South African firms have turned to the domestic economy and to less demanding export markets in the rest of sub-Saharan Africa. While South Africa can continue growing through a primarily regionally focused strategy, these markets are small, and defaulting to the lower levels of productivity required to compete in the rest of Africa could undermine South Africa's competitiveness in the long term. This paper provides an overview of South Africa’s recent trade outcomes, as well as its trade policy framework, and assesses the causes of its disappointing performance. In turn, it suggests changes to trade-related policies as well as the governance and management of these policies. The paper focuses in depth on three specific trade-related constraints: transport costs, the institutional governance of trade tariffs and export promotion, and overall economic policy uncertainty. The paper proceeds to argue that the South African government would benefit from aligning its trade strategy, commercial and economic diplomacy and industrial policy with the dual objective of providing both the engine for a "Factory Southern Africa" that encompasses the rest of the SADC region, and of being the region's gateway to the rest of the world. Since South African firms will not be able to drive this approach on their own, this necessarily means forging policies and institutions that encourage investments into South Africa and the SADC region, and working with neighbors to maximize the development of regional value chains that result from such investments.
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Working Paper (Numbered Series) 130966 OCT 01, 2018
The Kenyan Economy is on a rebound in 2018. Reflecting improved rains, better business sentiment and easing of political uncertainty, economic activity is rebounding after the slowdown in activity in 2017.
... See More + According to official statistics, the economy expanded from 4.7 percent in H1 of 2017 to 6.0 percent in H1 of 2018 supported by improved harvest in agriculture, steady recovery in industrial activity, and still robust performance in the services sector. As a result, real GDP growth is projected to reach 5.7 percent in 2018, an upward revision of 0.2 percentage points from the April 2018 Economic Update. Growth in private consumption and investment are driving the rebound. Private consumption picked up in 2018 fueled by rising household incomes from improved agricultural harvests, lower food prices, and strong remittance inflows. A recovery in private sector investment activity is also underway, partly reflected in increased imports of raw materials and chemicals and more positive investor sentiment with the Purchasing Managers’ Index remaining in expansionary territory (above the 50- mark) for H1 2018 at 55.1 points compared to 49.7 points over the same period in 2017. The recovery in private sector activity (consumption and investment) is expected to off-set potential drag in growth due to unwinding of fiscal stimulusat a time when fiscal consolidation is gathering momentum. Net exports continued to weigh on growth owing to faster expansion in imports relative to Kenya’s exports. There are three key policy recommendations from this analysis. First, the government could consider expanding direct cash transfer programs. Cash transfer programs are well-targeted so that a large fraction of the benefits are captured by the poor. These programs could further be expanded in order to increase their poverty-reducing effect. However, this will require enhancing revenue mobilization for the coverage to increase significantly. Second, exemptions granted within Kenya’s VAT regime appear to benefit the poor only marginally. The variation in consumption shares of exempt and zero-rated items across the welfare distribution is small. A review of the VAT law might help remove exemptions and increase revenue that could then be spent in well-targeted and progressive cash transfer programs. However, a more detailed follow-up analysis of exemptions and zero-rates would be necessary to determine item-level incidence. Third and finally, shifting public resources from higher-level health facilities to lower-level facilities is likely to benefit the poor. Conditional on uptake, public health spending on outpatient care is pro-poor while the associated user fees and over the counter purchases are regressive. The results suggest that redirecting spending from higher-level public health facilities to primary care facilities has the potential to benefit the poor and might increase access.
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Working Paper (Numbered Series) 130556 OCT 01, 2018
This paper presents a new family of Stata functions devoted to small area estimation. Small area methods attempt to solve low representativeness of surveys within areas, or the lack of data for specific areas/subpopulations.
... See More + This is accomplished by incorporating information from outside sources. Such target data sets are becoming increasingly available and can take the form of a traditional population census, but also large scale administrative records from tax administrations, or geospatial information produced using remote sensing. The strength of these target data sets is their granularity on the subpopulations of interest, however, in many casesthey lack the ability to collect analytically relevant variables such as welfare or caloric intake. The family of functions introduced follow a modular design to have the flexibility with which these can be expanded in the future. This can be accomplished by the authors and/or other collaborators from the Stata community. Thus far, a major limitation of such analysis in Stata has been the large size of target data sets. The package introduces new mata functions and a plugin used to circumvent memory limitations that inevitably arise when working with big data. From an estimation perspective, the paper starts by implementing a methodology that has been widely used for the production of several poverty maps.
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Working Paper (Numbered Series) 131550 OCT 01, 2018
Nguyen,Minh Cong; Corral Rodas,Paul Andres; Azevedo,Joao Pedro Wagner De; Zhao,QinghuaDisclosed
With a large share of the population dependent on agriculture and high exposure to natural disasters and other food price shocks, the welfare impacts of food price inflation in Mozambique cannot be ignored.
... See More + This paper performs incidence analysis exploiting the spatial location of households to match data on consumption with production from agricultural activities to simulate the welfare effects of food price changes. The analysis focuses on maize, rice, and cassava, which form a substantial part of the Mozambican diet, as a source of calories and budgetary allocation. The results show large net negative welfare effects of food price rises in rural areas and small, negative effects in urban areas. A 10 percent increase in maize prices is associated with areduction of 1.2 percent in consumption per capita in rural areas and 0.2 percent in urban areas. The effects from changes in the prices of rice and cassava are lower but qualitatively equal. Overall, the negative effects are larger for the bottom half of the distribution and imply that the price spike in 2016–17 may have translated into a poverty increase of 4-6 percentage points, with some of the poorest provinces bearing much of the brunt. The results hold to changes in some of the underlying assumptions of the simulations.
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Working Paper (Numbered Series) 131467 OCT 01, 2018
This paper intends to inform the effort of the Sri Lankan government to reform the targeting efficacy of its social protection programs, in particular, Samurdhi, which currently distributes benefits based on self-reported income.
... See More + The paper develops a proxy means test for Sri Lanka based on the Household Income and Expenditure Survey 2016 and evaluates its performance for targeting benefits of Samurdhi. The paper considers a range of models and policy parameters that could be applied depending on data availability and country preferences. The results indicate that switching to a proxy means test could considerably improve the targeting performance of Samurdhi and would significantly improve the poverty impact of the program. The analysis finds that the performance of the proposed proxy means test model suffers when the coefficients are estimated from samples smaller than 1,000 households. However, the analysis does not find a similar loss ofmodel performance when the model is estimated from seasonal data, provided the sample size is sufficiently large. The proposed model could be applied to targeting a variety of safety net programs after validating and refining the model by conducting a pilot survey.
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Working Paper (Numbered Series) 131470 OCT 01, 2018
This paper estimates the profitability of fertilizer and hybrid seeds in Uganda, using agronomic evidence on the yield returns to inputs from experimental fields, as well as output price data from local markets between 2000 and 2012.
... See More + The results suggest that the returns to fertilizer are positive across the entire price range for beans, maize, and matooke and positive for the top 75 percent of prices for coffee. Commonly available improved seed varieties for maize and beans increase gains by 32 percent on average. However, accounting for the quality of the inputs available to farmers in the market, the sizeable positive returns become negative for most of the price distribution, possibly explaining the low adoption of inputs in Uganda. The paper also examines the impact of other factors that could affect input adoption, using a relatively long panel data set spanning 12 years. The analysis finds evidence that enhanced access to economic markets and past weather conditions have small effects on input use, and positive correlations between the use of extension services and knowledge and input use.
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Working Paper (Numbered Series) 131553 OCT 01, 2018
Despite the well-known positive effect tobacco taxes on health outcomes, policy makers avoid relying on such taxes because of their possible regressive impact.
... See More + Using an extended cost-benefit analysis to estimate the distributional effect of cigarettes in the Russian Federation, this paper finds that the long-run impact may in face be progressive. The methodology applied incorporates the negative price effect cause by an increase in tobacco taxes, combines with a presumed future reduction in medical expenditures and a rise in working years caused by a reduction in the rate of smoking among the population. The analysis includes estimates of the distributional impacts of price rises on cigarettes under various scenarios, based on information taken from the Russia Longitudinal Monitoring Survey--Higher School of Economics for 2010-16. One contribution is the qualification of impacts by allowing price elasticities to vary across consumption deciles. Overall, cigarette taxes exert long-term effect on household incomes, although the magnitude depends on the structure of the conditional price elasticity. If the population is more responsive to tobacco price changes, then it would experience greater gains from the health and extended work-life benefits.
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Working Paper (Numbered Series) 131554 OCT 01, 2018
This paper identifies the factors that affect the location of firms in Tanzania. Using a binomialeconometric strategy to address data gaps in firm location at the ward level, the paper groups factors into firm characteristics, market features, and two types of agglomeration economies that capture economies of scale external to the firm.
... See More + The benefits of agglomeration may stem from specialization within and among firms (referred to in the literature as localization economies) or from diversification across firms (referred to as urbanization economies). The distinction between these two lies at the heart of the discussion on firm location. Regression results indicate that, of the various factors tested, the most important determinant driving firm location is the jobs diversification aspect of urban economies. Other contributing factors are localization economies (jobs specialization), competitive markets, and market access. Based on these findings, policymakers seeking to foster agglomeration could orient policies toward promoting firm entry within cities, complementary investments in urban infrastructure and the urban pool of labor, regulations that support competition, and improvements in market access for large cities. But localization economies are also significant in Tanzania, and could be encouraged through investment in smaller population centers and increasing competition and market access beyond the primary urban centers of Dar-es-Salaam and Arusha.
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Working Paper (Numbered Series) 131290 OCT 01, 2018
