scispace - formally typeset
Search or ask a question

Showing papers by "World Bank published in 2008"


Journal ArticleDOI
TL;DR: The anti-self-dealing index as mentioned in this paper is a measure of legal protection of minority shareholders against expropriation by corporate insiders, which is calculated for 72 countries based on legal rules prevailing in 2003, and focuses on private enforcement mechanisms such as disclosure, approval, and litigation, that govern a specific selfdealing transaction.

2,447 citations


Journal ArticleDOI
TL;DR: Payments for environmental services (PES) have attracted increasing interest as a mechanism to translate external, non-market values of the environment into real financial incentives for local actors to provide environmental services as mentioned in this paper.

2,130 citations


Journal ArticleDOI
TL;DR: To eliminate stunting in the longer term, existing interventions that were designed to improve nutrition and prevent related disease could reduce stunting at 36 months by 36%; mortality between birth and 36 monthsBy about 25%; and disability-adjusted life-years associated with stunting, severe wasting, intrauterine growth restriction, and micronutrient deficiencies by about 25%.

2,114 citations


Journal ArticleDOI
TL;DR: A new data set on national poverty lines is combined with new price data and almost 700 household surveys to estimate absolute poverty measures for the developing world as discussed by the authors, finding that 25% of the population lived in poverty in 2005.
Abstract: A new data set on national poverty lines is combined with new price data and almost 700 household surveys to estimate absolute poverty measures for the developing world We find that 25% of the population lived in poverty in 2005, as judged by what “poverty” typically means in the world's poorest countries This is higher than past estimates Substantial overall progress is still indicated—the corresponding poverty rate was 52% in 1981—but progress was very uneven across regions The trends over time and regional profile are robust to various changes in methodology, though precise counts are more sensitive

1,352 citations


Journal ArticleDOI
TL;DR: In this article, the authors synthesize the information presented, according to case characteristics with respect to design, costs, environmental effectiveness, and other outcomes, and conclude that user-financed PES programs were better targeted, more closely tailored to local conditions and needs, had better monitoring and a greater willingness to enforce conditionality, and had far fewer confounding side objectives than government-funded programs.

1,157 citations


BookDOI
Donald O. Mitchell1
TL;DR: The authors examined the factors behind the rapid increase in internationally traded food prices since 2002 and estimated the contribution of various factors such as the increased production of biofuels from food grains and oilseeds, the weak dollar, and the increase in food production costs due to higher energy prices.
Abstract: The rapid rise in food prices has been a burden on the poor in developing countries, who spend roughly half of their household incomes on food. This paper examines the factors behind the rapid increase in internationally traded food prices since 2002 and estimates the contribution of various factors such as the increased production of biofuels from food grains and oilseeds, the weak dollar, and the increase in food production costs due to higher energy prices. It concludes that the most important factor was the large increase in biofuels production in the U.S. and the EU. Without these increases, global wheat and maize stocks would not have declined appreciably, oilseed prices would not have tripled, and price increases due to other factors, such as droughts, would have been more moderate. Recent export bans and speculative activities would probably not have occurred because they were largely responses to rising prices. While it is difficult to compare the results of this study with those of other studies due to differences in methodologies, time periods and prices considered, many other studies have also recognized biofuels production as a major driver of food prices. The contribution of biofuels to the rise in food prices raises an important policy issue, since much of the increase was due to EU and U.S. government policies that provided incentives to biofuels production, and biofuels policies which subsidize production need to be reconsidered in light of their impact on food prices.

1,148 citations


Journal ArticleDOI
TL;DR: In this article, the authors investigate how financial and institutional development affects the financing of large and small firms and find that protection of property rights increases external financing of small firms significantly more than of large firms, mainly due to its effect on bank finance.

1,109 citations


Journal ArticleDOI
TL;DR: This paper found that companies that provided contributions to elected federal deputies experienced higher stock returns than firms that did not around the 1998 and 2002 elections, suggesting that contributions help shape policy on a firm-specific basis.

1,061 citations


Journal ArticleDOI
TL;DR: In this article, the impact of ambiguous and contested land rights on investment and productivity in agriculture in Akwapim, Ghana is examined and it is shown that individuals who hold powerful positions in a local political hierarchy have more secure tenure rights and as a consequence they invest more in land fertility and have substantially higher output.
Abstract: We examine the impact of ambiguous and contested land rights on investment and productivity in agriculture in Akwapim, Ghana. We show that individuals who hold powerful positions in a local political hierarchy have more secure tenure rights and that as a consequence they invest more in land fertility and have substantially higher output. The intensity of investments on different plots cultivated by a given individual corresponds to that individual’s security of tenure over those specific plots and, in turn, to the individual’s position in the political hierarchy relevant to those specific plots.

1,031 citations


Journal ArticleDOI
Stefano Pagiola1
TL;DR: Costa Rica pioneered the use of the payments for environmental services (PES) approach in developing countries by establishing a formal, countrywide program of payments, the PSA program as discussed by the authors.

866 citations


Posted Content
TL;DR: In this paper, the authors test these theories by regressing measures of loan risk, bank risk and bank equity capital on several measures of market power, as well as indicators of the business environment, using data for 8,235 banks in 23 developed nations.
Abstract: Under the traditional "competition-fragility" view, more bank competition erodes market power, decreases profit margins, and results in reduced franchise value that encourages bank risk taking. Under the alternative "competition-stability" view, more market power in the loan market may result in greater bank risk as the higher interest rates charged to loan customers make it more difficult to repay loans and exacerbate moral hazard and adverse selection problems. But even if market power in the loan market results in riskier loan portfolios, the overall risks of banks need not increase if banks protect their franchise values by increasing their equity capital or engaging in other risk-mitigating techniques. The authors test these theories by regressing measures of loan risk, bank risk, and bank equity capital on several measures of market power, as well as indicators of the business environment, using data for 8,235 banks in 23 developed nations. The results suggest that - consistent with the traditional "competition-fragility" view - banks with a greater degree of market power also have less overall risk exposure. The data also provide some support for one element of the "competition-stability" view - that market power increases loan portfolio risk. The authors show that this risk may be offset in part by higher equity capital ratios.

Posted Content
TL;DR: The authors showed that the short-run impacts of higher staple food prices on poverty differ considerably by commodity and by country, but, that poverty increases are much more frequent, and larger, than poverty reductions.
Abstract: In many poor countries, the recent increases in prices of staple foods raise the real incomes of those selling food, many of whom are relatively poor, while hurting net food consumers, many of whom are also relatively poor. The impacts on poverty will certainly be very diverse, but the average impact on poverty depends upon the balance between these two effects, and can only be determined by looking at real-world data. Results using household data for ten observations on nine low-income countries show that the short-run impacts of higher staple food prices on poverty differ considerably by commodity and by country, but, that poverty increases are much more frequent, and larger, than poverty reductions. The recent large increases in food prices appear likely to raise overall poverty in low income countries substantially.

Journal ArticleDOI
TL;DR: In this article, the authors show that market power increases loan portfolio risk, but this risk may be offset in part by higher equity capital ratios, and that banks with a higher degree of market power also have less overall risk exposure.
Abstract: Under the traditional “competition-fragility” view, more bank competition erodes market power, decreases profit margins, and results in reduced franchise value that encourages bank risk taking. Under the alternative “competition-stability” view, more market power in the loan market may result in higher bank risk as the higher interest rates charged to loan customers make it harder to repay loans, and exacerbate moral hazard and adverse selection problems. The two strands of the literature need not necessarily yield opposing predictions regarding the effects of competition and market power on stability in banking. Even if market power in the loan market results in riskier loan portfolios, the overall risks of banks need not increase if banks protect their franchise values by increasing their equity capital or engaging in other risk-mitigating techniques. We test these theories by regressing measures of loan risk, bank risk, and bank equity capital on several measures of market power, as well as indicators of the business environment, using data for 8,235 banks in 23 developed nations. Our results suggest that—consistent with the traditional “competition-fragility” view—banks with a higher degree of market power also have less overall risk exposure. The data also provides some support for one element of the “competition-stability” view—that market power increases loan portfolio risk. We show that this risk may be offset in part by higher equity capital ratios.

Journal ArticleDOI
Miriam Bruhn1, David McKenzie1
TL;DR: In this article, the authors present new evidence on the randomization methods used in existing randomized experiments, and carry out simulations in order to provide guidance for researchers, and find that many researchers are not controlling for the method of randomization in their analysis, leading to tests with incorrect size, and can result in lower power than if a pure random draw was used.
Abstract: Randomized experiments are increasingly used in development economics, with researchers now facing the question of not just whether to randomize, but how to do so Pure random assignment guarantees that the treatment and control groups will have identical characteristics on average, but in any particular random allocation, the two groups will differ along some dimensions Methods used to pursue greater balance include stratification, pair-wise matching, and re-randomization This paper presents new evidence on the randomization methods used in existing randomized experiments, and carries out simulations in order to provide guidance for researchers Three main results emerge First, many researchers are not controlling for the method of randomization in their analysis The authors show this leads to tests with incorrect size, and can result in lower power than if a pure random draw was used Second, they find that in samples of 300 or more, the different randomization methods perform similarly in terms of achieving balance on many future outcomes of interest However, for very persistent outcome variables and in smaller sample sizes, pair-wise matching and stratification perform best Third, the analysis suggests that on balance the re-randomization methods common in practice are less desirable than other methods, such as matching

Journal ArticleDOI
TL;DR: This paper found that if the foreign aid over Gross Domestic Product (GDP) that a country receives over a period of five years reaches the 75th percentile in the sample, then a 10-point index of democracy is reduced between 0.5 and almost one point, a large effect.
Abstract: Foreign aid provides a windfall of resources to recipient countries and may result in the same rent seeking behavior as documented in the 'curse of natural resources' literature. In this paper the author discusses this effect and documents its magnitude. Using panel data for 108 recipient countries in the period 1960 to 1999, the author found that foreign aid has a negative impact on institutions. In particular, if the foreign aid over Gross Domestic Product (GDP) that a country receives over a period of five years reaches the 75th percentile in the sample, then a 10-point index of democracy is reduced between 0.5 and almost one point, a large effect. For comparison, we also measure the effect of oil rents on political institutions. The author found that aid is a bigger curse than oil.

Posted Content
TL;DR: In this paper, the authors take a closer look at firm financing patterns and growth using a database of 2,400 Chinese firms and find that a relatively small percentage of firms in the sample utilize formal bank finance with a much greater reliance on informal sources.
Abstract: China is often mentioned as a counter-example to the findings in the finance and growth literature since, despite the weaknesses in its banking system, it is one of the fastest growing economies in the world. The fast growth of Chinese private sector firms is taken as evidence that it is alternative financing and governance mechanisms that support China's growth. This paper takes a closer look at firm financing patterns and growth using a database of 2,400 Chinese firms. The authors find that a relatively small percentage of firms in the sample utilize formal bank finance with a much greater reliance on informal sources. However, the results suggest that despite its weaknesses, financing from the formal financial system is associated with faster firm growth, whereas fund raising from alternative channels is not. Using a selection model, the authors find no evidence that these results arise because of the selection of firms that have access to the formal financial system. Although firms report bank corruption, there is no evidence that it significantly affects the allocation of credit or the performance of firms that receive the credit. The findings suggest that the role of reputation and relationship based financing and governance mechanisms in financing the fastest growing firms in China is likely to be overestimated.

Posted Content
TL;DR: This paper analyzed the tensions and opportunities of micro finance as it embraces the market, drawing on a data set that includes 346 of the world's leading micro-finance institutions and covers nearly 18 million active borrowers, finding that profit-maximizing investors would have limited interest in most of the institutions that are focusing on the poorest customers and women.
Abstract: Microfinance institutions have proved the possibility of providing reliable banking services to poor customers. Their second aim is to do so in a commercially-viable way. This paper analyzes the tensions and opportunities of microfinance as it embraces the market, drawing on a data set that includes 346 of the world's leading microfinance institutions and covers nearly 18 million active borrowers. The data show remarkable successes in maintaining high rates of loan repayment, but the data also suggest that profit-maximizing investors would have limited interest in most of the institutions that are focusing on the poorest customers and women. Those institutions, as a group, charge their customers the highest fees in the sample but also face particularly high transaction costs, in part due to small transaction sizes. Innovations to overcome the well-known problems of asymmetric information in financial markets were a triumph, but further innovation is needed to overcome the challenges of high costs.

Journal ArticleDOI
TL;DR: In this article, the authors take a closer look at firm financing patterns and growth using a database of 2,400 Chinese firms and find that a relatively small percentage of firms in the sample utilize formal bank finance with a much greater reliance on informal sources.
Abstract: China is often mentioned as a counterexample to the findings in the finance and growth literature since, despite the weaknesses in its banking system, it is one of the fastest growing economies in the world. The fast growth of Chinese private sector firms is taken as evidence that it is alternative financing and governance mechanisms that support China's growth. This paper takes a closer look at firm financing patterns and growth using a database of 2,400 Chinese firms. The authors find that a relatively small percentage of firms in the sample utilize formal bank finance with a much greater reliance on informal sources. However, the results suggest that despite its weaknesses, financing from the formal financial system is associated with faster firm growth, whereas fund raising from alternative channels is not. Using a selection model, the authors find no evidence that these results arise because of the selection of firms that have access to the formal financial system. Although firms report bank corruption, there is no evidence that it significantly affects the allocation of credit or the performance of firms that receive the credit. The findings suggest that the role of reputation and relationship based financing and governance mechanisms in financing the fastest growing firms in China is likely to be overestimated.

Journal ArticleDOI
TL;DR: The first major update of the international $1 a day poverty line, proposed in world development report 1990: poverty for measuring absolute poverty by the standards of the world's poorest countries was presented in this paper.
Abstract: The article presents the first major update of the international $1 a day poverty line, proposed in world development report 1990: poverty for measuring absolute poverty by the standards of the world's poorest countries. In a new and more representative data set of national poverty lines, a marked economic gradient emerges only when consumption per person is above about $2.00 a day at 2005 purchasing power parity. Below this, the average poverty line is $1.25, which is proposed as the new international poverty line. The article tests the robustness of this line to alternative estimation methods and explains how it differs from the old $1 a day line.

Journal ArticleDOI
TL;DR: In this paper, a conceptual framework is proposed to address human vulnerability to climate change, drawing upon social risk management and asset-based approaches, which provides a unifying lens to examine links between risks, adaptation, and vulnerability.
Abstract: This paper presents and applies a conceptual framework to address human vulnerability to climate change. Drawing upon social risk management and asset-based approaches, the conceptual framework provides a unifying lens to examine links between risks, adaptation, and vulnerability. The result is an integrated approach to increase the capacity of society to manage climate risks with a view to reduce the vulnerability of households and maintain or increase the opportunities for sustainable development. We identify 'no-regrets' adaptation interventions, meaning actions that generate net social benefits under all future scenarios of climate change and impacts. We also make the case for greater external support for community-based adaptation, discuss the role of social protection, and propose a research agenda.

Journal ArticleDOI
TL;DR: In this article, a simple scalar measure of inequality of opportunity and applying it to six Latin American countries is presented, which captures betweengroup inequality when groups are defined exclusively on the basis of predetermined circumstances.
Abstract: Building on the existing literature, this paper constructs a simple scalar measure of inequality of opportunity and applies it to six Latin American countries. The measure—which captures betweengroup inequality when groups are defined exclusively on the basis of predetermined circumstances—is shown to yield a lower-bound estimate of true inequality of opportunity. Absolute and relative versions of the index are defined, and alternative parametric and non-parametric methods are employed to generate robust estimates. In the application to Latin America, we find inequality of opportunity shares ranging from one quarter to one half of total consumption inequality. An opportunity-deprivation profile that identifies the worst-off types in each society is also formally defined, and described for the same six countries. In three of them, 100 percent of the opportunity-deprived were found to be indigenous or Afro-descendants.

Journal ArticleDOI
Maros Ivanic1, Will Martin1
TL;DR: The authors showed that the short-run impacts of higher staple food prices on poverty differ considerably by commodity and by country, but, that poverty increases are much more frequent, and larger, than poverty reductions.

Journal ArticleDOI
TL;DR: The findings provide support to the idea that more resources for combating IAS should be directed at the introduction stage and that novel trade instruments need to be explored to account for this environmental externality.
Abstract: Invasive alien species (IAS) exact large biodiversity and economic costs and are a significant component of human-induced, global environmental change. Previous studies looking at the variation in alien species across regions have been limited geographically or taxonomically or have not considered economics. We used a global invasive species database to regress IAS per-country on a suite of socioeconomic, ecological, and biogeographical variables. We varied the countries included in the regression tree analyses, in order to explore whether certain outliers were biasing the results, and in most of the cases, merchandise imports was the most important explanatory variable. The greater the degree of international trade, the higher the number of IAS. We also found a positive relationship between species richness and the number of invasives, in accord with other investigations at large spatial scales. Island status (overall), country area, latitude, continental position (New World versus Old World) or other measures of human disturbance (e.g., GDP per capita, population density) were not found to be important determinants of a country’s degree of biological invasion, contrary to previous studies. Our findings also provide support to the idea that more resources for combating IAS should be directed at the introduction stage and that novel trade instruments need to be explored to account for this environmental externality.

Posted Content
TL;DR: The recent intensification of bank involvement with SMEs in various emerging markets documented in this article is neither led by small or niche banks nor highly dependent on relationship lending, rather, all types of banks are catering to SMEs and larger, multiple-service banks have in fact a comparative advantage in offering a wide range of products and services on a large scale, through the use of new technologies, business models, and risk management systems.
Abstract: The conventional wisdom in academic and policy circles argues that, while large and foreign banks are generally not interested in serving SMEs, small and niche banks have an advantage in doing so because they can overcome SME opaqueness through relationship lending. This paper shows that there is a gap between this view and what banks actually do. Banks perceive SMEs as a core and strategic business and seem well positioned to expand their links with SMEs. The recent intensification of bank involvement with SMEs in various emerging markets documented in this paper is neither led by small or niche banks nor highly dependent on relationship lending. Rather, all types of banks are catering to SMEs and larger, multiple-service banks have in fact a comparative advantage in offering a wide range of products and services on a large scale, through the use of new technologies, business models, and risk management systems.

Journal ArticleDOI
TL;DR: This article reviewed new indices of trade restrictiveness and trade facilitation developed at the World Bank and compared the trade impact of different types of trade restrictions applied at the border with the effects of domestic policies that affect trade costs.

Book ChapterDOI
TL;DR: This article analyzed the tensions and opportunities of micro finance as it embraces the market, drawing on a data set that includes 346 of the world's leading micro-finance institutions and covers nearly 18 million active borrowers, finding that profit-maximizing investors would have limited interest in most of the institutions that are focusing on the poorest customers and women.
Abstract: Microfinance institutions have proved the possibility of providing reliable banking services to poor customers. Their second aim is to do so in a commercially-viable way. This paper analyzes the tensions and opportunities of microfinance as it embraces the market, drawing on a data set that includes 346 of the world's leading microfinance institutions and covers nearly 18 million active borrowers. The data show remarkable successes in maintaining high rates of loan repayment, but the data also suggest that profit-maximizing investors would have limited interest in most of the institutions that are focusing on the poorest customers and women. Those institutions, as a group, charge their customers the highest fees in the sample but also face particularly high transaction costs, in part due to small transaction sizes. Innovations to overcome the well-known problems of asymmetric information in financial markets were a triumph, but further innovation is needed to overcome the challenges of high costs.

Journal ArticleDOI
TL;DR: The authors found that spiteful preferences -the desire to reduce another's material payoff for the mere purpose of increasing one's relative payoff -are surprisingly widespread in experiments conducted in one of the least developed regions in India (Uttar Pradesh).
Abstract: In a wide variety of settings, spiteful preferences would constitute an obstacle to cooperation, trade, and thus economic development. This paper shows that spiteful preferences - the desire to reduce another's material payoff for the mere purpose of increasing one's relative payoff - are surprisingly widespread in experiments conducted in one of the least developed regions in India (Uttar Pradesh). In a one-shot trust game, the authors find that a large majority of subjects punish cooperative behavior although such punishment clearly increases inequality and decreases the payoffs of both subjects. In experiments to study coordination and to measure social preferences, the findings reveal empirical patterns suggesting that the willingness to reduce another's material payoff - either for the sake of achieving more equality or for the sake of being ahead - is stronger among individuals belonging to high castes than among those belonging to low castes. Because extreme social hierarchies are typically accompanied by a culture that stresses status-seeking, it is plausible that the observed social preference patterns are at least partly shaped by this culture. Thus, an exciting question for future research is the extent to which different institutions and cultures produce preferences that are conducive or detrimental to economic development.

Journal ArticleDOI
TL;DR: In this paper, the authors make several points based on a review of household survey evidence from Africa, Asia and Latin America and conclude that the evidence is very mixed as to the effect of non-farm employment on rural income inequality.
Abstract: This paper makes several points based on a review of household survey evidence from Africa, Asia and Latin America. (i) In contrast to conventional wisdom, the evidence is very mixed as to the effect of non-farm employment on rural income inequality. The non-farm employment and microenterprise programmes now in vogue will not necessarily resolve rural income inequality problems and attendant social tensions nor automatically benefit the poor. (ii) Policymakers should be worried by substantial evidence of poor people's inability to overcome important entry barriers to many non-farm activities. (iii) The main determinants of unequal access to non-farm activities are the distribution of capacity to make investments in non-farm assets and the relative scarcity of low capital entry barrier activities. Therefore, it is crucial for public investments and policy to favour an increase in the access of the poor to assets that allow them to overcome non-farm employment entry barriers, (iv) It would be an error to assume that one can address asset-poverty and inequality in the non-farm sector without addressing farm-side problems and vice versa.

Journal ArticleDOI
TL;DR: In this article, a randomized experiment that gave cash and in-kind grants to small retail firms, providing an exogenous shock to capital, the shock generated large increases in profits, with the effects concentrated among firms that were more financially constrained.
Abstract: A strong theoretical argument for focusing on access to finance is that financial market imperfections can result in large inefficiencies, as firms with productive investment opportunities underinvest. Lack of access to finance is a frequent complaint of microenterprises, which account for a large share of employment in developing countries. However, assessing the extent to which a lack of capital affects their business profits is complicated by the fact that business investment is likely to be correlated with a host of unmeasured characteristics of the owner and firm, such as entrepreneurial ability and demand shocks. In a randomized experiment that gave cash and in-kind grants to small retail firms, providing an exogenous shock to capital, the shock generated large increases in profits, with the effects concentrated among firms that were more financially constrained. The estimated return to capital was at least 20-33 percent a month-three to five times higher than market interest rates.

Journal ArticleDOI
Deon Filmer1, Kinnon Scott1
TL;DR: The analysis shows that inferences about inequalities in education, health care use, fertility, and child mortality, as well as labor market outcomes, are quite robust to the economic status measure used.
Abstract: This paper compares how results using various methods to construct asset indices match results using per capita expenditures. The analysis shows that inferences about inequalities in education, health care use, fertility, child mortality, as well as labor market outcomes are quite robust to the specific economic status measure used. The measures-most significantly per capita expenditures versus the class of asset indices-do not, however, yield identical household rankings. Two factors stand out in predicting the degree of congruence in rankings between per capita expenditures and an asset index. First is the extent to which per capita expenditures can be explained by observed household and community characteristics. In settings with small transitory shocks to expenditure, or with little measurement error in expenditure, the rankings yielded by the alternative approaches are most similar. Second is the extent to which expenditures are dominated by individually consumed goods such as food. Asset indices are typically derived from indicators of goods which are effectively public at the household level, while expenditures are often dominated by food, an almost exclusively private good. In settings where private goods such as food are the main component of expenditures, asset indices and per capita consumption yield the least similar results, although adjusting for economies of scale in household expenditures reconciles the results somewhat.