Research has provided robust evidence for the use of GPS technology to be the scalable gold standard in land area measurement in household surveys.
... See More + Nonetheless, facing budget constraints, survey agencies often seek to measure with GPS only plots within a given radius of dwelling locations. Subsequently, it is common for significant shares of plots not to be measured, and research has highlighted the selection biases resulting from using incomplete data. This study relies on nationally-representative, multi-topic household survey data from Malawi and Ethiopia that exhibit near-negligible missingness in GPS-based plot areas, and validates the accuracy of a multiple imputation model for predicting missing GPS-based plot areas in household surveys. The analysis (i) randomly creates missingness among plots beyond two operationally relevant distance measures from the dwelling locations; (ii) conducts multiple imputation under each distance scenario for each artificially created data set; and (iii) compares the distributions of the imputed plot-level outcomes, namely, area and agricultural productivity, with the known distributions. In Malawi, multiple imputation can produce imputed yields that are statistically undistinguishable from the true distributions with up to 82 percent missingness in plot areas that are further than 1 kilometer from the dwelling location. The comparable figure in Ethiopia is 56 percent. These rates correspond to overall rates of missingness of 23 percent in Malawi and 13 percent in Ethiopia. The study highlights the promise of multiple imputation for reliably predicting missing GPS-based plot areas, and provides recommendations for optimizing fieldwork activities to capture the minimum required data.
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Policy Research Working Paper WPS8138 JUL 06, 2017
Program evaluations often focus on average treatment effects. However, average treatment effects miss important aspects of policy evaluation, such as the impact on inequality and whether treatment harms some individuals.
... See More + A growing literature develops methods to evaluate such issues by examining the distributional impacts of programs and policies. This toolkit reviews methods to do so, focusing on their application to randomized control trials. The paper emphasizes two strands of the literature: estimation of impacts on outcome distributions and estimation of the distribution of treatment impacts. The article then discusses extensions to conditional treatment effect heterogeneity, that is, to analyses of how treatment impacts vary with observed characteristics. The paper offers advice on inference, testing, and power calculations, which are important when implementing distributional analyses in practice. Finally, the paper illustrates select methods using data from two randomized evaluations.
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Policy Research Working Paper WPS8139 JUL 06, 2017
Bedoya Arguelles,Guadalupe; Bittarello,Luca; Davis,Jonathan Martin Villars; Mittag,Nikolas KarlDisclosed
The potential for pension funds to contribute to capital markets and thereby economic growth has been argued on a theoretical basis and demonstrated empirically.
... See More + However, reforms fostering the development of funded pension systems have not had the economic impact hoped for in some countries. Pension fund portfolios in some cases have remained highly exposed to shorter-term assets, such as bank deposits and shorter-term government bonds. This, in turn, has led to relatively low investment returns, thereby potentially affecting income adequacy in retirement. This paper looks at the potential regulatory hurdles to long-term investment by pension funds, while also proposing international diversification and the creation of domestic investment opportunities to help portfolio diversification and ultimately improve the delivery of secure, adequate pensions.
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Policy Research Working Paper WPS8136 JUL 05, 2017
Seminal arguments in political economy hold that citizens will more readily demand accountability from governments for taxes than for non-tax revenue from oil or aid.
... See More + Two identical experiments on large, representative subject pools in Ghana and Uganda probe the effects of different revenue types on citizens' actions to monitor government spending. Roughly half of all subjects willingly sign petitions and donate money to scrutinize all three sources. However, neither Ghanaians nor Ugandans are more likely to take action for tax revenues than for oil or aid. The results also suggest no differences among taxes, oil, and aid in citizens' perceptions of transparency, misappropriation risk, or public goods provision. The results are robust to several alternative specifications and subgroup partitions, including the better educated, wealthier, and taxpaying population, suggesting a need for rethinking the axiom that taxation strengthens citizens' demands for accountability in developing countries.
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Policy Research Working Paper WPS8137 JUL 05, 2017
de la Cuesta,Brandon; Milner,Helen V.; Nielson,Daniel Lafayette; Knack,StephenDisclosed
This paper revisits the decades-old puzzle of the inverse plot-size productivity relationship, which states that land productivity decreases as plot size increases.
... See More + Existing empirical studies on the inverse plot-size productivity relationship define land productivity or yields as self-reported production divided by plot size. This paper considers an alternative approach to estimating yields based on crop cuts. The crop-cut method entails measuring and harvesting randomly selected subplots by trained technicians, and is recommended by the Food and Agriculture Organization for the accurate measurement of crop production. Using data representative of rural Ethiopia, the analysis indicates that the inverse relationship is strong when based on self-reported production, but disappears when based on crop-cut estimates. The inference from these findings is that the inverse relationship is an artifact of systematic overreporting of production by farmers on small plots, and underreporting on larger plots. The paper also discusses how rejecting the inverse plot-size productivity relationship has significant implications for the inverse farm-size productivity relationship.
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Policy Research Working Paper WPS8134 JUL 03, 2017
This paper assesses the potential impact of antimicrobial resistance on global economic growth and poverty. The analysis uses a global computable general equilibrium model and a microsimulation framework that together capture impact channels related to health, mortality, labor productivity, health care financing, and production in the livestock and other sectors.
... See More + The effects spread across countries via trade flows that may be affected by new trade restrictions. Relative to a world without antimicrobial resistance, the losses during 2015–50 may sum to $85 trillion in gross domestic product and $23 trillion in global trade (in present value). By 2050, the cost in global gross domestic product could range from 1.1 percent (low case) to 3.8 percent (high case). Antimicrobial resistance is expected to make it more difficult to eliminate extreme poverty. Under the high antimicrobial resistance scenario, by 2030, an additional 24.1 million people would be extremely poor, of whom 18.7 million live in low-income countries. In general, developing countries will be hurt the most, especially those with the lowest incomes.
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Policy Research Working Paper WPS8133 JUN 30, 2017
In developing countries, younger and better-educated cohorts are entering the workforce. This developing world-led education wave is altering the skill composition of the global labor supply, and impacting income distribution, at the national and global levels.
... See More + This paper analyzes how this education wave reshapes global inequality over the long run using a general-equilibrium macro-micro simulation framework that covers harmonized household surveys representing almost 90 percent of the world population. The findings under alternative assumptions suggest that global income inequality will likely decrease by 2030. This increasing educated labor force will contribute to the closing of the gap in average incomes between developing and high income countries. The forthcoming education wave would also minimize, mainly for developing countries, potential further increases of within-country inequality.
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Policy Research Working Paper WPS8135 JUN 30, 2017
Ahmed,Amer; Bussolo,Maurizio; Vargas Da Cruz,Marcio Jose; Go,Delfin Sia; Osorio-Rodarte,IsraelDisclosed
Uses of main primary energy resources, such as coal, oil, and solid biomass, are directly linked with adverse impacts on human health. Air pollution emitted from various activities in the energy supply chains is the main risk factor to human health, along with accidental and occupational risk exposures.
... See More + Estimates of premature deaths are over four million per year for ambient air pollution (2015) and household or indoor air pollution (2012). More than 80 percent of the mortality from ambient air pollution emitted from the energy supply chains occurs in developing countries. The impact of household air pollution, mainly from traditional biomass used for cooking and space heating, disproportionately falls on women and children under age five years. Acute respiratory infections, mainly caused by household air pollution, are one of the largest categories of deaths (64 percent) of children under age five years in developing countries. These statistics indicate the deep nexus between the energy supply chain and human health. Yet, the negative implications for human health from energy use often receive inadequate consideration. It is critically important to take account of these human health impacts in developing energy supply plans and energy policies in developing countries.
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Policy Research Working Paper WPS8129 JUN 29, 2017
Power shortages present a significant challenge to manufacturers, who rely on power as a key input to production. In Pakistan, power shortages are commonplace, but empirical evidence on the impact of shortages is still lacking.
... See More + Using a survey of 4,500 manufacturing firms for the year 2010-11, this paper estimates the impact of electricity shortages on firm productivity in Pakistan. The analysis finds that a 10 percent increase in the duration of outages on average leads to a 0.14 percent decrease in a firm's total revenue and a 0.36 percent decrease in the value added, all else being equal. There is heterogeneity in the impacts of shortages across sectors: the industries that are most energy-intensive, such as manufacturers of metal, wood, and paper, are affected the most severely by shortages.
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Policy Research Working Paper WPS8130 JUN 29, 2017
In many parts of the developing world, access to electricity is uneven and inconsistent, characterized by frequent and long hours of power outages.
... See More + Many countries now engage in systematic load shedding because of persistent power shortages. When and where electricity is provided can have important impacts on welfare and growth. But quantifying those impacts is difficult because utility-level data on power outages are rarely available and not always reliable. This paper introduces a new method of tracking power outages from outer space. This measure identifies outage-prone areas by detecting excess fluctuations in light outputs. To develop these measures, the study processed the complete historical archive of sub-orbital Defense Meteorological Satellite Program's Operational Linescan System (DMSP-OLS) nighttime imagery captured over South Asia on every night since 1993. The analysis computes annual estimates of the Power Supply Irregularity index for all 600,000 villages in India from 1993 to 2013. The Power Supply Irregularity index measures are consistent with ground-based measures of power supply reliability from the Indian Human Development Survey, and with feeder-level outage data from one of the largest utilities in India. The study’s methods open new opportunities to study the determinants of power outages as well as their impacts on welfare.
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Policy Research Working Paper WPS8131 JUN 29, 2017
This paper measures the impact of low-cost transport by rail in Malawi on the dispersion of agricultural commodities prices across markets by exploiting the quasi-experimental design of the nearly total collapse of domestic transport by rail in January 2003 due to the destruction of a railway bridge at Rivirivi, Balaka.
... See More + Estimations are based on monthly market prices of four agricultural commodities (maize, groundnuts, rice, and beans) in 27 local markets for the period 1998–2006. Market pairs connected by rail when the railway line was operational are intervention observations. Railway transport services explain a 14 percent to 17 percent reduction in price dispersion across markets. Geographical reach of trade varies by crop, most likely related to storability and geographical spread of production. Perishability appears to increase impact reflecting limited scope for arbitrage. Overall, impacts are remarkably similar in size across commodities.
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Policy Research Working Paper WPS8132 JUN 29, 2017
This paper proposes a new interpretation of the farm size-productivity relationship. Using two rounds of the Ethiopian Rural Household Survey, and drawing on earlier work on five countries in Sub-Saharan Africa, the paper shows that the relationship between farm size and productivity is neither monotonic nor univocal.
... See More + Most previous studies that tested the inverse farm size-productivity relationship used ordinary least squares estimation, therefore reporting parameter estimates at the conditional mean of productivity. By expanding these important findings to consider the entire distribution of agricultural productivity, the analysis finds sign switches across the distribution, pointing to a “direct-inverse-direct” relationship. Less productive farmers exhibit an inverted U-shape relationship between land productivity and farm size, while more productive farmers show a U-shape relationship that reverses the relationship. In both cases, the relationship points toward a threshold value of farm size; however, the threshold is a minimum for the less productive farmers and a maximum for the more productive ones. To the left of the threshold, for very small farmers, the relationship between productivity and farm size is positive; for the range of middle farm size, the relationship is negative; and to the right of the threshold, the relationship is direct (positive) again. From a policy perspective, these findings imply that efficiency-enhancing and redistributive land reform should consider farm size in the proper context of the present and potential levels of agricultural productivity. The results and their policy implications underline the relevance of the most recent efforts of the international development community to collect more reliable georeferenced data on farm size and agricultural productivity.
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Policy Research Working Paper WPS8127 JUN 28, 2017
This paper investigates the dynamics between the exchange rate and consumer price inflation in Zambia. The analysis uses a structural vector autoregression, with quarterly data for 1995-2014 and a combination of short-run sign- and zero-restrictions to identify relevant global and domestic shocks.
... See More + The findings suggest that the pass-through of exchange rates to consumer prices depends greatly on the shock that originally caused the exchange rate to fluctuate. Although the price of copper is the most important driver of the exchange rate, the fluctuations it caused are associated with a low pass-through of only about 7 percent. Exchange rate fluctuations caused by monetary shocks come with a pass-through of up to 25 percent. Food inflation is equally affected by genuine exchange rate shocks, but appears more reactive to changes in copper prices or the money supply. Historical variance decomposition shows that, across periods, the main drivers of exchange rate fluctuations varied substantially.
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Policy Research Working Paper WPS8128 JUN 28, 2017
Services play a role in global value chains in many ways, similar to goods. But services deserve special attention because of how they are transacted, how they affect downstream sectors, how they are regulated, and how international cooperation can contribute to integrating national markets.
... See More + Databases on trade in value added, which cover only cross-border transactions in services, reveal a high and growing share of services in trade in value added across countries and industries. Although international transactions in services that take place through foreign investment are difficult to measure, their economic impact can be estimated. The resulting improved access to financial, communications, and transport services facilitates the emergence of global value chains, enhances downstream manufacturing firms’ productivity, and shifts the pattern of comparative advantage toward sectors intensive in these services. Despite significant unilateral liberalization, service markets in many countries remain protected by restrictions on the entry of foreign services and service providers, as well as discretionary and discriminatory regulatory requirements. International cooperation in services has attempted to follow the example of reciprocal market opening for goods, but this approach has delivered little incremental liberalization. More could be achieved through greater emphasis on international regulatory cooperation.
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Policy Research Working Paper WPS8126 JUN 27, 2017
Giving power over school management and spending decisions to communities has been a favored strategy to increase school quality, but its effectiveness may depend on local capacity.
... See More + Grants are one form of such a transfer of power. Short-term responses of a grant to school committees in Niger show that parents increased participation and responsibility, but these efforts did not improve quality on average. Enrollment at the lowest grades increased and school resources improved, but teacher absenteeism increased, and there was no measured impact on test scores. An analysis of heterogeneous impacts and spending decisions provides additional insight into these dynamics. Overall, the findings suggest that programs based on parent participation should take levels of community capacity into account: even when communities are willing to work to improve their schools, they may not be able to do so. The short-term nature of the experiment reduces the extent to which the results can be generalized.
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Policy Research Working Paper WPS8125 JUN 27, 2017
Central America is particularly prone to tropical storms and hurricanes. The prevailing conditions of poverty and socioeconomic inequality in most countries of the region make their exposed population especially vulnerable to those adverse natural events.
... See More + This paper quantifies the causal effects of hurricane windstorms on economic growth using night lights in the Central America region at the highest spatial resolution data available (1 square kilometer). The paper uses a unique data set of monthly night lights data to capture the temporal disaggregation of hurricanes. Hurricanes in Central America are often localized events and tend to make landfall during the final months of the year that are better captured through monthly -– rather than yearly -– frequency data. The results suggest that major hurricanes show negative effects up to 12 months after the hurricane strikes (between -2.6 to -3.9 percent in income growth at the local level). After that, the analysis finds positive effects during the second year and the first half of the third year as evidence of post-disaster recovery (from 2.5 to 3.6 percent in income growth). The paper contributes to the literature on natural disasters by providing robust estimates of the causal effects of major hurricane windstorms on Central America, which are negative (in the short term) and positive (two years after hurricanes hit).
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Policy Research Working Paper WPS8124 JUN 27, 2017
Ishizawa Escudero,Oscar Anil; Miranda Montero,Juan Jose; Zhang,HongruiDisclosed
This paper proposes a methodology to approximate individual income distribution dynamics using only time series data on aggregate moments of the income distribution.
... See More + Under the assumption that individual incomes follow a lognormal autoregressive process, this paper shows that the evolution over time of the mean and standard deviation of log income across individuals provides sufficient information to place upper and lower bounds on the degree of mobility in the income distribution. The paper demonstrates that these bounds are reasonably informative, using the U.S. Panel Study of Income Dynamics where the panel structure of the data allows us to compare measures of mobility directly estimated from the micro data with approximations based only on aggregate data. Bounds on mobility are estimated for a large cross-section of countries, using data on aggregate moments of the income distribution available in the World Wealth and Income Database and the World Bank's PovcalNet database. The estimated bounds on mobility imply that conventional anonymous growth rates of the bottom 40 percent (top 10 percent) that do not account for mobility substantially understate (overstate) the expected growth performance of those initially in the bottom 40 percent (top 10 percent).
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Policy Research Working Paper WPS8123 JUN 27, 2017
Two competing conceptualizations of corruption in the literature allow viewing it either as efficient or burdensome from firms' perspective. Using data on the prevalence and nature of firms' interactions with tax authorities in 28 countries in Europe and Central Asia, this paper contributes to the evaluation of competing ideas in the literature about firms’ experience of corruption in tax administration.
... See More + The findings presented in the paper provide provisional support for the second line of reasoning, that corruption in taxation is a burden, rather than a type of efficiency. Special emphasis is given to examination of taxation-related determinants of corruption prevalence (frequency and magnitude of bribery), as well as the effect of the interaction with tax authorities on perception of tax and overall corruption. Regardless of country context, it appears that, more than anything else, perceived corruption in tax administration and actual experiences with bribery during interactions with tax officials, affect the overall perceptions of corruption.
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Policy Research Working Paper WPS8122 JUN 27, 2017
The role of innovation in improving productivity might vary according to a country's relative position in technology advancement. Frontier countries might benefit more from policies that promote firms' internal innovation (create), while follower countries would gain more from policies favoring the adoption of existing technologies through innovation outsourcing (buy).
... See More + However, in many countries, the government policies to promote innovation narrowly focus on "creating," regardless of considerations of the level of a country's technological advancement. This paper investigates the effect of different sources of innovation on output via productivity with representative manufacturing firms in Tunisia from 1997 to 2007. It finds that "buying" has a positive effect on productivity whereas "creating" does not, which might imply that Tunisian firms do not invest sufficiently in "creating," or that "creating" is more difficult for Tunisian firms because they might be too far from the technology frontier. Meanwhile, there is no synergy from using both sources of innovation simultaneously –- a finding that counters literature suggesting that "creating" could enhance firms' absorptive capacity. The paper considers the possibility that "creating" and "buying" substitute for each other in Tunisia, where resources are limited, assuming the effect of innovation is not linear or requires a certain amount of investment (threshold) to positively affect productivity. The estimation result using the Tobit model supports this assumption. The findings suggest that innovation policy in Tunisia should emphasize adoption and adaptation, rather that creation and innovation. To encourage firms' "buying," the government can promote exports and workers' skills, whereas incentives that encourage firms to hire more technicians or to acquire foreign investment might not be efficient ways to encourage "buying." Moreover, the fact that there is a minimum requirement (threshold) for innovation investment suggests that policies that aim to reduce this threshold or support firms around this threshold could catalyze the innovation investment.
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Policy Research Working Paper WPS8121 JUN 27, 2017
Deliberative institutions have gained popularity in the developing world as a means by which to make governance more inclusive and responsive to local needs.
... See More + However, a growing body of evidence suggests that persistent gender inequality may limit women's ability to participate actively and influence outcomes in these forums. In response, policy makers have tried to induce women's participation by leveraging the group-based format of self-help groups, which can build women's social capital and develop their sense of political efficacy and identity. This paper evaluates the impact of one such intervention, known as the Pudhu Vaazhvu Project, on women's civic participation in rural Tamil Nadu. Using text-as-data methods on a matched sample of transcripts from village assembly meetings, the analysis finds that the Pudhu Vaazhvu Project significantly increases women's participation in the gram sabha along several dimensions -- meeting attendance, propensity to speak, and the length of floor time they enjoy. Although women in the Pudhu Vaazhvu Project villages enjoy greater voice, the study finds no evidence that they are more likely than women in control villages to drive the broader conversational agenda or elicit a relevant response from government officials.
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Policy Research Working Paper WPS8120 JUN 27, 2017
