Showing papers by "World Bank published in 1994"
TL;DR: In this paper, the authors discuss methodological issues surrounding those estimates and confirm that primary education continues to be the number one investment priority in developing countries, and also show that educating females is marginally more profitable than educating males, and that the academic secondary school curriculum is a better investment than the technical/vocational tract.
3,182 citations
01 Oct 1994
TL;DR: The relationship between income and the costs and benefits associated with any given level of environmental quality is complex because it operates through a number of different channels, such as preferences, technology, and economic structure.
Abstract: THE RELATIONSHIP between economic growth and environmental quality has been a source of great controversy for a very long time. At one extreme has been the view that greater economic activity inevitably leads to environmental degradation and ultimately to possible economic and ecological collapse. At the other extreme is the view that those environmental problems worth solving will be addressed more or less automatically as a consequence of economic growth. The longevity and passion of this debate has, in part, been a reflection of the lack of substantial empirical evidence on how environmental quality changes at different income levels. Compilation of such evidence has been constrained by the absence of data for a large number of countries. While data remain a problem, the situation is much improved and this paper takes a first step at systematic analysis of what data are available (see Appendix I for details). A number of caveats are in order. The data on environmental quality are patchy at best, but are likely to improve over time with better monitoring. Comparability across countries is affected by definitional differences and by inaccuracies and unrepresentative measurement sites. At this stage of knowledge, this paper has the modest objective of opening up the empirical debate using a relatively simple modeling technique applied on a consistent basis to a large number of environmental quality indicators and countries. The relationship between income and the costs and benefits associated with any given level of environmental quality is complex because it operates through a number of different channels, such as preferences, technology, and economic structure. The types of environmental degradation that occur depend on the composition of output, which changes with income. Some income levels are often associated with increases in certain polluting activities such as the development of heavy industry whereas economies with large service sectors may generate less pollution. There is a view that rising incomes imply that the cost of environmental degradation is greater because the wages used to value the opportunity cost of illness or work days lost are higher. This would imply increases in marginal benefits as incomes rise. But the poor are often the most exposed and vulnerable to the health and productivity losses associated with a degraded environment. There are some environmental problems where thresholds like survival are at stake. Here, the willingness to pay to avert damage is close to infinity and the level of per capita income only affects the capacity, not the willingness, to pay. With other environmental issues, most of
1,523 citations
TL;DR: The authors analyzes the origins of this tax haven activity and its implications for the US and foreign governments, showing that American companies report extraordinarily high profit rates on both their real and their financial investments in tax havens.
Abstract: The offshore tax haven affiliates of American corporations account for more than a quarter of US foreign investment, an nearly a third of the foreign profits of US firms. This paper analyzes the origins of this tax haven activity and its implications for the US and foreign governments. Based on the behavior of US fins in 1982, it appears that American companies report extraordinarily high profit rates on both their real and their financial investments in tax havens. We calculate from this behavior that the tax rate that maximizes tax revenue for a typical haven is around 6%. The revenue implications for the US are more complicated, since tax havens may ultimately enhance the ability of the US government to tax the foreign earnings of American companies.
804 citations
TL;DR: In this article, a panel of manufacturing firms in the Cote d'Ivoire was used to measure changing profit margins and productivity following a 1985 trade reform, and cross-section differences in protection, using data on tariffs and import penetration.
659 citations
TL;DR: The authors reviewed various strategies for insuring consumption against income fluctuations, and examined evidence on how effectively these strategies work and found that households in developing countries make use of a wide variety of mechanisms, often informal, to at least partially limit consumption risk.
Abstract: Income risk is a central feature of rural areas of developing countries. A major topic in development economics is how well households are able to mitigate the adverse effects of income risk. There are several sensible reasons why households will not be able to fully insure consumption against income fluctuations. The well-known problems of moral hazard, information asymmetries, and deficiencies in the ability to enforce contracts may result in incomplete or absent insurance markets. The dearth of formal insurance markets in developing countries is evidence that these problems are considerable. However, a large body of literature indicates that households in developing countries make use of a wide variety of mechanisms, often informal, to at least partially limit consumption risk. A key piece of information required to guide policy design is how, and how well, different households mitigate risk. This paper reviews various strategies for insuring consumption against income fluctuations, and examines evidence on how effectively these strategies work.
541 citations
TL;DR: The establishment of tradable water rights could play an important role in improving the efficiency, equity, and sustainability of water use in developing countries as discussed by the authors, and the institutional requirements, potential and feasibility of developing markets in tradable Water rights should receive increased attention from researchers and policy makers.
444 citations
Abstract: This paper examines empirically the effects of multimarket contact on pricing in the U. S. airline industry. The analysis of the time-series and cross-sectional variability of airline fares in the 1000 largest domestic city-pair routes reveals the presence of statistically significant and quantitatively important multimarket effects—fares are higher in city-pair markets served by carriers with extensive interroute contacts. These findings are consistent with the claims of industry experts that airlines live by the "golden rule"; i.e., that they refrain from initiating aggressive pricing actions in a given route for fear of what their competitors might do in other jointly contested routes. During his testimony, Mr. Steven B. Elkins (Senior Director of marketing systems development for Northwest Airlines) cited an example in which Northwest lowered fares on night flights that were flying with empty seats in a number of routes from Minneapolis and Upper Midwest cities to various West Coast cities. He said that Continental Airlines swiftly responded by cutting prices in important Northwest markets … Mr. Elkins's memo advises Northwest pricing analysts: "We Will Live by the Golden Rule!" In his testimony, he explained that, "the Golden Rule in that context was that I did not want my pricing analyst initiating actions in another carrier's market like Chicago for fear of what that other carrier might do to retaliate" [Wall Street Journal, October 9,1990, p. B1].
396 citations
TL;DR: In this paper, the role of variable capital utilization rates in propagating shocks over the business cycle was analyzed and an equilibrium business cycle model was formulated in which cyclical capital utilization rate was viewed as a form of factor hoarding.
Abstract: This paper analyzes the role of variable capital utilization rates in propagating shocks over the business cycle. To this end we formulate and estimate an equilibrium business cycle model in which cyclical capital utilization rates are viewed as a form of factor hoarding. We find that variable capital utilization rates substantially magnify and propagate the impact of shocks to agents' environments. The strength of these propagation effects is evident in the dynamic response functions of various economy wide aggregates to shocks in agents' environments, in the statistics that we construct to summarize the strength of the propagation mechanisms in the model and in the volatility of exogenous technology shocks needed to explain the observed variability in aggregate U.S. output. Other authors have argued that standard Real Business Cycle (RBC) models fail to account for certain features of the data because they do not embody quantitatively important propagation mechanisms. These features include the observed positive serial correlation in the growth rate of output, the shape of the spectrum of the growth rate of real output and the correlation between the forecastable component of real output and various other economic aggregates. Allowing for variable capital utilization rates substantially improves the ability of the model to account for these features of the data.
322 citations
TL;DR: A review of the literature on medical compliance showed that compliance with iron therapy is a specific case of medical compliance, and unavailability of iron supplements was the most common reason why women did not take iron supplements.
280 citations
TL;DR: A review of the green national accounts literature shows that there is little agreement on whether to adjust gross or net product, or on the sign of some of the adjustments proposed as mentioned in this paper.
255 citations
TL;DR: The state created an unusual sense of calling among the program's workers, new prestige in the communities where they worked, and an informed citizenry that both monitored the workers and trusted them.
TL;DR: In this paper, the authors describe and evaluate different tests of capital mobility, surveys existing evidence, and applies four tests to assess the degree to which the many developing countries tested have achieved integration with the world financial markets.
Abstract: An economy's financial integration with the outside world (the extent of capital mobility across its borders) is a key determinant of some of its most important macroeconomic properties. Yet little is known about this characteristic of many developing economies. An important stumbling block in the empirical assessment of financial integration (openness) is the many approaches to measuring it. The author describes and evaluates different tests of capital mobility, surveys existing evidence, and applies four tests of capital mobility - to assess the degree to which the many developing countries tested have achieved integration with the world financial markets. The four tests are the: (1) magnitude of gross capital flows; (2) uncovered interest rate parity; (3) strength of saving-investment correlations; and (4) behavior of domestic consumption over time. The evidence suggests that most developing countries can be considered to be financially open - in only 18 of the 57 developing countries classified did the data fail to show financial openness - and that many countries may be experiencing an increased degree of integration with world financial markets.
TL;DR: A model with family fixed effects is developed which explains transfers better than either individual heterogeneity or observed parent and child characteristics withoutFamily fixed effects.
TL;DR: The authors showed that geographic targeting is a useful mechanism for transferring benefits to the poor and that the more narrowly defined the geographic region, the greater was the reduction in poverty in Mexico, while the level of geographic unit does not seem to have a notable impact on targeting outcomes.
TL;DR: In this paper, the authors compared the official and valorem tariff rates (official rates) with the ratio of tariff revenues to import values (collected rates) for Jamaica, Kenya, and Pakistan.
Abstract: This article compares the statutory and valorem tariff rates (official rates) with the ratio of tariff revenues to import values (collected rates) for Jamaica, Kenya, and Pakistan. It identifies four general features of the tariff codes, considers whether these features apply to all developing countries, and discusses four implications of these features for tariff reform. First, the collected rate for any given item in the tariff code is only weakly related to the official rate for the item. Second, the variation of collected rates, on average, increase much less than the official rates. Fourth, the relation between official rates and collected rates is nonlinear, because the slope is lower at higher levels of the official rate.
TL;DR: This article assess the developing world's progress in reducing absolute consumption poverty during 1981-91, using new data on the distribution of household consumption or income per capita for 40 countries (at two points in time for 18 of the countries).
Abstract: The authors assess the developing world's progress in reducing absolute-consumption poverty during 1981-91, using new data on the distribution of household consumption or income per capita for 40 countries (at two points in time for 18 of the countries). They apply dominance tests to the distributions after adjustment to purchasing-power parity. They find that the incidence of aggregate poverty changed little. The number of poor increased at the rate of population growth. The region with the greatest aggregate poverty is either South Asia or sub-Saharan Africa, depending on the poverty line used. The experience was diverse across regions and countries. The only regions with falling poverty measures are South and East Asia.
TL;DR: In this paper, the authors investigate how well the most widely used static welfare indicators perform in identifying the chronically poor and propose a normative measure of performance: the cost of a given impact on chronic poverty when transfers are contingent upon a purely static indicator.
Journal Article•
TL;DR: A minimum package of public health and clinical interventions, which are highly cost-effective and deal with major sources of disease burden, could be provided in low-income countries for about US$ 12 per person per year and in middle-income nations for about $22.
Abstract: A minimum package of public health and clinical interventions, which are highly cost-effective and deal with major sources of disease burden, could be provided in low-income countries for about US$ 12 per person per year, and in middle-income countries for about $22 Properly delivered, this package could eliminate 21% to 38% of the burden of premature mortality and disability in children under 15 years and 10-18% of the burden in adults The cost would exceed what governments now spend on health in the poorest countries but would be easily affordable in middle-income countries Governments should ensure that, at the least, poor populations have access to these services Additional public expenditure should then go either to extending coverage to the non-poor or to expansion beyond the minimum collection of services to an essential national package of health care, including somewhat less cost-effective interventions against a larger number of diseases and conditions
TL;DR: In this paper, the authors discuss the ecological-economic implications of deregulation of trade as promoted by the General Agreement on Tariffs and Trade (GATT) and argue that many environmental problems cannot be resolved equitably, efficiently, or sustainably by unregulated markets.
TL;DR: In this article, a model of intra-household time allocation is proposed and estimates are made using household data over six years, and empirical implementation indicates that the projects induce significant behavioral responses.
Abstract: Current knowledge provides little guidance on one of the key questions in evaluating public employment schemes aimed at directly reducing poverty: What are the net income gains to participating workers? This paper offers an answer for rural public employment in two villages in the state of Maharashtra in India. A model of intrahousehold time allocation is proposed and estimates are made using household data over six years. The empirical implementation indicates that the projects induce significant behavioral responses. Transfer benefits are large and are greatly underestimated using prevailing market wage rates for similar work to estimate forgone incomes. Copyright 1994 by Royal Economic Society.
TL;DR: In this article, the authors used cross-country regressions to investigate the potential sources of very rapid growth in per capita income in a number of Asian countries using a growing body of microeconomic evidence suggesting that the growth of manufactured exports may have allowed the industrial sector in these countries to increase its productivity.
TL;DR: The authors developed a simple model that sheds light on the experience of decade-long growth rates in all countries and found that episodes of rapid growth are limited largely to a middle range of initial income; neither very poor nor very rich countries experienced rapid growth.
TL;DR: In this article, the authors show that if it is desirable for everybody to work, the optimal marginal tax rate on the very poorest individuals is strictly negative, and they argue that the nonwelfarist perspective points toward lower marginal tax rates in the lower part of the income distribution than does the welfarist perspective.
TL;DR: In this article, the authors analyzed China's macroeconomic performance over the past fifteen years with special attention to factors responsible both for the pace of economic expansion and the periodic fluctuations, identifying four sources of stimuli: administrative decentralization, high levels of fixed capital investment, the elastic supply and quality of the labor force, and the increasing volume of savings supplemented in recent years by a large inflow of foreign direct investment.
Abstract: Since reforms started in 1978, China has combined rapid growth with moderate price stability This paper analyzes China's macroeconomic performance over the past fifteen years with special attention to factors responsible both for the pace of economic expansion and the periodic fluctuations Regarding the former, the author identifies four sources of stimuli: administrative decentralization, high levels of fixed capital investment, the elastic supply and quality of the labor force, and the increasing volume of savings supplemented in recent years by a large inflow of foreign direct investment Future growth with stability calls for controlling and implementing banking and fiscal reform
TL;DR: In this article, the authors compared household income inequality in urban and rural China and decomposes inequality into intra-and interprovincial components, and analyzes the contribution of various income sources to total income equality.
TL;DR: In this paper, the authors examined the impact of exchange rate volatility on trade, using and ARCH-in-mean model, and applied the model to six countries, estimating both bilateral and aggregate exports.
Abstract: The authors examine the impact of exchange rate volatility on trade, using and ARCH-in-mean model. The advantages of this statistical approach over earlier approaches is that it provides more efficient coefficient estimates and it prevents the problem of spurious regressions. They applied the model to six countries, estimating both bilateral and aggregate exports. The results led to the hypothesis that the impact of exchange rate volatility may be influenced by the invoicing of exports. Also, one can argue that the effect of exchange rate volatility on trade is overstated, for the following reasons: exchange rate volatility does not measure the added riskiness of a firm's portfolio; exchange rates can provide a natural hedge in a firm's portfolio; exchange rates may be negatively correlated with each other or with the firm's other assets; and finally, the use of forward markets can provide a useful short-term hedge.
TL;DR: In this paper, it is shown that local monopolies and policy makers permitted market forces to operate sufficiently to achieve improvements in market and pricing efficiency by means of econometric investigation of geographical price differences.
Abstract: constituted genuine price liberalization, i.e., food prices that respond to supply and demand conditions. Two reasons for skepticism are, first, food marketing enterprises were not privatized or significantly restructured, and second, regulation and subsidization of food continued in sub-national jurisdictions. Nonetheless, it is possible that local monopolies and policy makers permitted market forces to operate sufficiently to achieve improvements in market and pricing efficiency. We test for such improvements by means of econometric investigation of geographical price differences.
Posted Content•
TL;DR: Grigorian and Martinez as mentioned in this paper empirically test the link between industrial growth and indicators of institutional quality and find significant evidence that institutional quality affects industrial growth in 27 Asian and Latin American countries.
Abstract: Developing the legal and regulatory framework, improving contract enforcement, and reducing administrative barriers in the business environment increases the amount of investment and improves the efficiency of resource allocation. Grigorian and Martinez empirically test the link between industrial growth and indicators of institutional quality. They find significant evidence that institutional quality affects industrial growth in 27 Asian and Latin American countries. Their results suggest that the development of the legal and regulatory framework works its way to industrial growth through both investment and total factor productivity. The implications for policymakers in transition economies: Institution building should complement privatization, public and private investment in education, research and development, and measures to promote foreign direct investment. Specifically, policymakers should try to reduce corruption, eliminate bureaucratic barriers, and improve the legal environment and contract enforcement. Special attention should also be given to measures to deepen financial intermediation, improve the financial sector infrastructure, and increase the efficiency of financial transactions. This paper - a product of the Private and Financial Sectors Development Unit, Europe and Central Asia Region - is part of a larger effort in the region to study the determinants of private sector growth in transition economies. The authors may be contacted at dgrigorian@worldbank.org or amartinez2@worldbank.org.
TL;DR: The findings indicate that changes in utilization patterns and in the incidence of subsidies have been pro-poor, and public spending on health care is not yet well targeted.
Abstract: Indonesia has made great progress during the past fifteen years in enhancing the command of the poor over privately provided goods, such as food, clothing, and housing. Has similar progress been made in improving their access to publicly provided social services? The article looks at how the use of health services and the incidence of subsidies in the health sector varied across socioeconomic groups in Indonesia in 1987. It also examines how the distributions of utilization and subsidies altered between 1978 and 1987. The findings indicate that changes in utilization patterns and in the incidence of subsidies have been pro-poor. Disparities in access and utilization have diminished. However, public spending on health care is not yet well targeted.