How should economists interpret current trade wars and the recent U.S. trade actions that have initiated them? This paper offers an interpretation of current U.S. trade actions that is at once more charitable and less forgiving than that typically offered by economic commentators.
... See More + More charitable, because under this interpretation it is possible to see a logic to these actions: the United States is initiating a change from "rules-based" to "power-based" tariff bargaining and is selecting countries with which it runs bilateral trade deficits as the most suitable targets of its bargaining tariffs. Less forgiving, because the main costs of these trade tactics cannot be avoided even if they happen to "work" and deliver lower tariffs. Rather, the paper shows that the main costs will arise from the use of the tactics themselves, and from the damage done by those tactics to the rules-based multilateral trading system and the longer-term interests of the United States and the rest of the world.
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Policy Research Working Paper WPS8829 APR 22, 2019
This paper characterizes the trade-off between the income gains and the inequality costs of trade using survey data for 54 developing countries.
... See More + Tariff data on agricultural and manufacturing goods are combined with household survey data on detailed income and expenditure patterns to estimate the first-order effects of the elimination of import tariffs on household welfare. The paper assesses how these welfare effects vary across the distribution by estimating impacts on the consumption of traded goods, wage income, farm and non-farm family enterprise income, and government transfers. For each country, the income gains and the inequality costs of trade liberalization are quantified and the trade-offs between them are assessed using an Atkinson social welfare index. The analysis finds average income gains from import tariff liberalization in 45 countries and average income losses in nine countries. Across countries in the sample, the gains from trade are 1.9 percent of real household expenditure on average. We find overwhelming evidence of a trade-off between the income gains (losses) and the inequality costs (gains), which arise because trade tends to exacerbate income inequality: 45 countries face a trade-off, while only nine do not. The income gains typically more than offset the increase in inequality. In the majority of developing countries, the prevailing tariff structure thus induces sizable welfare losses.
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Policy Research Working Paper WPS8825 APR 22, 2019
This report contains the World Bank Group Boards' calendar for the period of April to June 2019, specifying the Boards' engagements, such as meetings and briefings.
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This issue focuses on Urbanization and Infrastructure Development and features the following articles:Building Sustainable Cities and Efficient Infrastructure; Who Benefits from Investments in Bus Rapid Transit Systems?
... See More + Evidence from Colombia; Beyond Faster Travel: Assessing the WiderEconomic Benefits of Transport Corridors; A Big Push or a Backwash? Economic Effects of Connecting a Hinterland; Highway Politics in Mexico; How Does the Shape of Latin American Cities AffectTheir Productivity? Getting to Jobs in Nairobi; Public Infrastructure and Structural Transformation; Buses, Houses, or Cash? Choices and Consequences in Reforming Public Transport Subsidies; Improving the Resilience of Peru’s Road Network to Climate Events; and The Vulnerability of Manufacturing Firms to Unreliable Water Infrastructure.
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This evaluation assesses the Bank Group’s effectiveness and comparative advantage in fostering regional integration during FY2003–17 and draws lessons that can be used to inform future regional integration operations.
... See More + Client countries of the World Bank Group have turned to regional integration as one of the pathways toward faster economic development and peace, and to help overcome development challenges. Main findings of the report include: (i) Overall, the Bank Group’s efforts to foster regional integration have led to mostly positive development outcomes in the Sub-Saharan Africa Region and in infrastructure sectors. (ii) Though the IDA Regional Window program has also contributed to regional integration (mainly in the Africa Region), the development outcomes of its interventions are not significantly different from similar projects co-financed outside the program.
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The evaluation examines the development effectiveness of the World Bank Group’s support for trade facilitation and identifies lessons for future engagement.
... See More + The World Bank Group has played a leading role in trade facilitation reform over the past 12 years, having identified lowering trade costs as a crucial means to promote its development agenda. Among its contributions, the Bank Group has been a leading technical partner to the WTO during the Trade Facilitation Agreement (TFA) process throughout the evaluation period. Main findings of the report include: (i) Over the evaluation period, the World Bank Group has demonstrated leadership in facilitating trade through its broad scope of work: (893 interventions of all types) in addition to Advisory and Analytic work, generally targeting countries with the greatest bottlenecks, results, in its contribution to a substantial reduction of international trade costs, and its creation of global public goods through thought leadership, convening power, and its trade facilitation indicators - which contributed to a positive dynamic in reforms. (ii) Most World Bank Group projects supporting trade facilitation reforms achieved their development objective, and all three institutions exceeded their corporate scorecard targets. The World Bank’s investment lending appears to be substantially more effective than its policy operations. At the trade facilitation intervention level, the overall success rate averaged 79 percent.
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In the spring of 2018, the World Bank Treasury's Reserves Advisory and Management Program (RAMP) concluded its inaugural survey on central banks' reserve management practices.
... See More + RAMP sought to assess whether there had been a significant evolution in this activity over the past two decades given: 1. The substantial increase in global foreign exchange reserves over that time period; and 2. The extraordinary policy responses to the unprecedented macroeconomic and investment environment during and after the global financial crisis. The survey results show that most central banks continue to employ a traditional approach: their reserve holdings are concentrated in high-quality fixed-income assets, and the minimum credit rating for their investments remains conservative. At the same time, the data suggest important changes are under way as a material number of central banks reported more diversified portfolios with exposure to nontraditional asset classes: a third of respondents hold corporate credit, most of which are investment grade, and almost one in five own mortgage-backed securities or equities, although mostly in limited allocations. Our analysis of this information did not find a relationship between respondents' measures of reserve adequacy and the size of their exposure to nontraditional asset classes. The data do show considerable cross-country differences in the way central banks manage their reserves and, in some circumstances, our analysis suggests these differences correlate with respondents' country income groups.
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More than two-thirds of world trade occurs through global value chains (GVCs), in which production crosses at least one border, and typically many borders, before final assembly.
... See More + The phenomenal growth in GVC-related trade has translated into significant economic growth in many countries across the globe over the last two decades, fueled by reductions in transportation and communication costs and declining trade barriers. But, at the same time, it has contributed to distributional effects that mean that the benefits of trade have not always accrued to all, which has, at least in part, been a driver in the backlash against globalization and the rise of protectionism and threats to global and regional trade agreements. In addition, new technological developments such as robotics, big data, and the Internet of Things (IoT) are beginning to reshape and further transform GVCs. This second GVC development report takes stock of the recent evolution of GVC trade in light of these developments.
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The report discusses key policy issues that enable and constrain digital savings market development and offers policy considerations within the context of the G20’s High-Level Principles for Digital Financial Inclusion.
... See More + Based on current market observations, three policy considerations seem most important for facilitating digital savings account deployments: Enable banking institutions to pursue digital savings partnerships with nonbank entities. Support the development of interoperability between banks and nonbank e-money issuers. Harmonize customer due diligence standards for emoney wallets and low-risk bank deposits.
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