Showing papers by "World Bank published in 2010"

The Worldwide Governance Indicators: Methodology and Analytical Issues

Abstract: This paper summarizes the methodology of the Worldwide Governance Indicators (WGI) project, and related analytical issues. The WGI cover over 200 countries and territories, measuring six dimensions of governance starting in 1996: Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. The aggregate indicators are based on several hundred individual underlying variables, taken from a wide variety of existing data sources. The data reflect the views on governance of survey respondents and public, private, and NGO sector experts worldwide. The WGI also explicitly report margins of error accompanying each country estimate. These reflect the inherent difficulties in measuring governance using any kind of data. Even after taking these margins of error into account, the WGI permit meaningful cross-country and over-time comparisons.

The Worldwide Governance Indicators : Methodology and Analytical Issues

Abstract: This paper summarizes the methodology of the Worldwide Governance Indicators (WGI) project, and related analytical issues. The WGI cover over 200 countries and territories, measuring six dimensions of governance starting in 1996: Voice and Accountability, Political Stability and Absence of Violence/Terrorism, Government Effectiveness, Regulatory Quality, Rule of Law, and Control of Corruption. The aggregate indicators are based on several hundred individual underlying variables, taken from a wide variety of existing data sources. The data reflect the views on governance of survey respondents and public, private, and NGO sector experts worldwide. The WGI also explicitly report margins of error accompanying each country estimate. These reflect the inherent difficulties in measuring governance using any kind of data. Even after taking these margins of error into account, the WGI permit meaningful cross-country and over-time comparisons. The aggregate indicators, together with the disaggregated underlying source data, are available at www.govindicators.org.

World Health Organization reference values for human semen characteristics

Abstract: BACKGROUND Semen quality is taken as a surrogate measure of male fecundity in clinical andrology, male fertility, reproductive toxicology, epidemiology and pregnancy risk assessments. Reference intervals for values of semen parameters from a fertile population could provide data from which prognosis of fertility or diagnosis of infertility can be extrapolated. METHODS Semen samples from over 4500 men in 14 countries on four continents were obtained from retrospective and prospective analyses on fertile men, men of unknown fertility status and men selected as normozoospermic. Men whose partners had a time-to-pregnancy (TTP) of < or =12 months were chosen as individuals to provide reference distributions for semen parameters. Distributions were also generated for a population assumed to represent the general population. RESULTS The following one-sided lower reference limits, the fifth centiles (with 95th percent confidence intervals), were generated from men whose partners had TTP < or = 12 months: semen volume, 1.5 ml (1.4-1.7); total sperm number, 39 million per ejaculate (33-46); sperm concentration, 15 million per ml (12-16); vitality, 58% live (55-63); progressive motility, 32% (31-34); total (progressive + non-progressive) motility, 40% (38-42); morphologically normal forms, 4.0% (3.0-4.0). Semen quality of the reference population was superior to that of the men from the general population and normozoospermic men. CONCLUSIONS The data represent sound reference distributions of semen characteristics of fertile men in a number of countries. They provide an appropriate tool in conjunction with clinical data to evaluate a patient's semen quality and prospects for fertility.

Islamic vs. Conventional Banking: Business Model, Efficiency and Stability

Abstract: This paper discusses Islamic banking products and interprets them in the context of financial intermediation theory. Anecdotal evidence shows that many of the conventional products can be redrafted as Sharia-compliant products, so that the differences are smaller than expected. Comparing conventional and Islamic banks and controlling for other bank and country characteristics, the authors find few significant differences in business orientation, efficiency, asset quality, or stability. While Islamic banks seem more cost-effective than conventional banks in a broad cross-country sample, this finding reverses in a sample of countries with both Islamic and conventional banks. However, conventional banks that operate in countries with a higher market share of Islamic banks are more cost-effective but less stable. There is also consistent evidence of higher capitalization of Islamic banks and this capital cushion plus higher liquidity reserves explains the relatively better performance of Islamic banks during the recent crisis.

Risk and time preferences: linking experimental and household survey data from Vietnam

Abstract: We conducted experiments in Vietnamese villages to determine the predictors of risk and time preferences. In villages with higher mean income, people are less loss-averse and more patient. Household income is correlated with patience but not with risk. We expand measurements of risk and time preferences beyond expected utility and exponential discounting, replacing those models with prospect theory and a three-parameter hyperbolic discounting model. Comparable risk parameter estimates have been found for Chinese farmers, using our method.

Islamic vs. conventional banking: Business model, efficiency and stability

Abstract: This paper discusses Islamic banking products and interprets them in the context of financial intermediation theory. Anecdotal evidence shows that many of the conventional products can be redrafted as Sharia-compliant products, so that the differences are smaller than expected. Comparing conventional and Islamic banks and controlling for other bank and country characteristics, the authors find few significant differences in business orientation, efficiency, asset quality, or stability. While Islamic banks seem more cost-effective than conventional banks in a broad cross-country sample, this finding reverses in a sample of countries with both Islamic and conventional banks. However, conventional banks that operate in countries with a higher market share of Islamic banks are more cost-effective but less stable. There is also consistent evidence of higher capitalization of Islamic banks and this capital cushion plus higher liquidity reserves explains the relatively better performance of Islamic banks during the recent crisis.

Impact Evaluation in Practice

Abstract: Development programs and policies are typically designed to change outcomes such as raising incomes, improving learning, or reducing illness. Whether or not these changes are actually achieved is a crucial public policy question, but one that is not often examined. Impact evaluations are part of a broader agenda of evidence-based policy making. This growing global trend is marked by a shift in focus from inputs to outcomes and results, and is reshaping public policy.The first part of the book presents an overview of impact evaluation. Chapter 1 discusses why impact evaluation is important and how it fits within the context of ethical, evidence-based policy making. The authors contrast impact evaluation with monitoring, introduce the defining features of impact evaluation, and discuss complementary approaches, including cost-benefit analysis and cost-effectiveness analysis. The authors introduce a core focus of the book: namely, how a program’s available resources, eligibility criteria for selecting beneficiaries, and timing for mplementation serve to structure options in the selection of impact evaluation methods. Finally, the authors introduce different modalities of impact evaluation, such as prospective and retrospective evaluation, and efficacy versus effectiveness trials and conclude with a discussion on when to use impact evaluations. Chapter 2 discusses how to formulate evaluation questions and hypotheses that are useful for policy. These questions and hypotheses determine the focus of the evaluation. The authors also introduce the fundamental concept of a theory of change and the related use of results chains and performance indicators. Chapter 2 provides the first introduction to the fictional case study, the Health Insurance Subsidy Program (HISP), that is used throughout the book and in the accompanying material found on the Impact Evaluation in Practice website (www.worldbank .org/ieinpractice).

Shadow economies all over the world : new estimates for 162 countries from 1999 to 2007

Abstract: This paper presents estimations of the shadow economies for 162 countries, including developing, Eastern European, Central Asian, and high-income countries over the period 1999 to 2006/2007. According to the estimations, the weighted average size of the shadow economy (as a percentage of"official"gross domestic product) in Sub-Saharan Africa is 38.4 percent; in Europe and Central Asia (mostly transition countries), it is 36.5 percent, and in high-income OECD countries, it is 13.5 percent. The authors find a clear negative trend in the size of the shadow economy: The unweighted average of the 162 countries in 1999 was 34.0 percent and in 2007 31.0 percent; hence a reduction of 3 percentage points!.The driving forces of the shadow economy are an increased burden of taxation (both direct and indirect), combined with labor market regulations and the quality of public goods and services, as well as the state of the"official"economy.

Caesarean section without medical indications is associated with an increased risk of adverse short-term maternal outcomes: the 2004-2008 WHO Global Survey on Maternal and Perinatal Health

Abstract: There is worldwide debate about the appropriateness of caesarean sections performed without medical indications. In this analysis, we aim to further investigate the relationship between caesarean section without medical indication and severe maternal outcomes. This is a multicountry, facility-based survey that used a stratified multistage cluster sampling design to obtain a sample of countries and health institutions worldwide. A total of 24 countries and 373 health facilities participated in this study. Data collection took place during 2004 and 2005 in Africa and the Americas and during 2007 and 2008 in Asia. All women giving birth at the facility during the study period were included and had their medical records reviewed before discharge from the hospital. Univariate and multilevel analysis were performed to study the association between each group's mode of delivery and the severe maternal and perinatal outcome. A total of 286,565 deliveries were analysed. The overall caesarean section rate was 25.7% and a total of 1.0 percent of all deliveries were caesarean sections without medical indications, either due to maternal request or in the absence of other recorded indications. Compared to spontaneous vaginal delivery, all other modes of delivery presented an association with the increased risk of death, admission to ICU, blood transfusion and hysterectomy, including antepartum caesarean section without medical indications (Adjusted Odds Ratio (Adj OR), 5.93, 95% Confidence Interval (95% CI), 3.88 to 9.05) and intrapartum caesarean section without medical indications (Adj OR, 14.29, 95% CI, 10.91 to 18.72). In addition, this association is stronger in Africa, compared to Asia and Latin America. Caesarean sections were associated with an intrinsic risk of increased severe maternal outcomes. We conclude that caesarean sections should be performed when a clear benefit is anticipated, a benefit that might compensate for the higher costs and additional risks associated with this operation.

Barriers to Household Risk Management: Evidence from India

Abstract: Why do many households remain exposed to large exogenous sources of non-systematic income risk? This paper uses a series of randomized field experiments in rural India to test the importance of price and non-price factors in the adoption of an innovative rainfall insurance product. The analysis finds that demand is significantly price-elastic, but that even if insurance were offered with payout ratios similar to US, widespread coverage would not be achieved. The paper identifies key non-price frictions that limit demand: liquidity constraints, particularly among poor households, lack of trust, and limited salience. The authors suggest potential improvements in contract design to mitigate these frictions.

The Effect of Corporate Taxes on Investment and Entrepreneurship

Abstract: We present new data on effective corporate income tax rates in 85 countries in 2004. The data come from a survey, conducted jointly with PricewaterhouseCoopers, of all taxes imposed on "the same" standardized mid-size domestic firm. In a cross-section of countries, our estimates of the effective corporate tax rate have a large adverse impact on aggregate investment, FDI, and entrepreneurial activity. Corporate tax rates are correlated with investment in manufacturing but not services, as well as with the size of the informal economy. The results are robust to the inclusion of many controls.

Barriers to Household Risk Management: Evidence from India

Abstract: Why do many households remain exposed to large exogenous sources of nonsystematic income risk? We use a series of randomized field experiments in rural India to test the importance of price and non-price factors in the adoption of an innovative rainfall insurance product. Demand is significantly price sensitive, but widespread take-up would not be achieved even if the product offered a payout ratio comparable to US insurance contracts. The author’s present evidence suggesting that lack of trust, liquidity constraints, and limited salience are significant non-price frictions that constrain demand. The authors suggest possible contract design improvements to mitigate these frictions.

Trade Shocks and Labor Adjustment: A Structural Empirical Approach

Abstract: The welfare eects of trade shocks depend crucially on the nature and magnitude of the costs workers face in moving between sectors. The existing trade literature does not directly address this, assuming perfect mobility or complete immobility, or adopting reduced-form approaches to estimation. We present a model of dynamic labor adjustment that does, and is, moreover, consistent with a key empirical fact: that intersectoral gross flows greatly exceed net flows. Using an Euler-type equilibrium condition, we estimate the mean and the variance of workers’ switching costs from the U.S. March Current Population Surveys. We estimate high values of both parameters, implying both slow adjustment of the economy, and sharp movements in wages, in response to a trade shock. Simulations of a trade liberalization indicate that despite the high estimated adjustment cost, in terms of lifetime welfare, the liberalization is Pareto-improving. The explanation for this surprising finding‐which would be missed by a reduced-form approach‐is that the high variance to costs ensures high rates of gross flow; this helps spread the liberalization’s benefits around.

Services Trade and Policy

Abstract: Since the mid-1980s a substantial body of research has taken shape on trade in services. Much of this is inspired by the WTO and regional trade agreements. However, an increasing number of papers focus on the impacts of unilateral services sector liberalization. The literature touches on important linkages between trade and FDI in services and the general pattern of productivity growth and economic development. This paper surveys the literature on services trade, focusing on contributions that investigate the determinants of international trade and investment in services, the potential gains from greater trade, and efforts to cooperate to achieve such liberalization through trade agreements. There is increasing evidence that services liberalization is a major potential source of gains in economic performance, including productivity in manufacturing and the coordination of activities both between and within firms. The performance of service sectors, and thus services policies, may also be an important determinant of trade volumes, the distributional effects of trade, and overall patterns of economic growth and development. At the same time, services trade is also a source of increasing political unease about the impacts of globalization on labor markets, linked to worries about offshoring and the potential pressure this places on wages in high income countries.

Self-Selection Patterns in Mexico-U.S. Migration: The Role of Migration Networks

Abstract: The authors examine the role of migration networks in determining self-selection patterns of Mexico-U.S. migration. They first present a simple theoretical framework showing how such networks impact on migration incentives at different education levels and, consequently, how they are likely to affect the expected skill composition of migration. Using survey data from Mexico, the authors then show that the probability of migration is increasing with education in communities with low migrant networks, but decreasing with education in communities with high migrant networks. This is consistent with positive self-selection of migrants being driven by high migration costs, and with negative self-selection of migrants being driven by lower returns to education in the U.S. than in Mexico.

Bank Capital: Lessons from the Financial Crisis

Abstract: Using a multi-country panel of banks, the authors study whether better capitalized banks fared better in terms of stock returns during the financial crisis. They differentiate among various types of capital ratios: the Basel risk-adjusted ratio; the leverage ratio; the Tier I and Tier II ratios; and the common equity ratio. They find several results: (i) before the crisis, differences in capital did not affect subsequent stock returns; (ii) during the crisis, higher capital resulted in better stock performance, most markedly for larger banks and less well-capitalized banks; (iii) the relationship between stock returns and capital is stronger when capital is measured by the leverage ratio rather than the risk-adjusted capital ratio; (iv) there is evidence that higher quality forms of capital, such as Tier 1 capital, were more relevant. They also examine the relationship between bank capitalization and credit default swap (CDS) spreads.

The Worldwide Governance Indicators: Six, One, or None?

Abstract: Aggregate indexes of the quality of governance, covering large samples of countries, have become popular in comparative political analysis. Few studies examine the validity or reliability of these indexes. To partially fill this gap, this study uses factor, confirmatory factor and path analysis to test both measurement and causal models of the six Worldwide Governance indicators. They purportedly measure distinct concepts of control of corruption, rule of law, government effectiveness, rule quality, political stability, and voice and accountability. Rather than distinguishing among aspects of the quality of governance, we find that they appear to be measuring the same broad concept.

High Food Prices and the Global Financial Crisis Have Reduced Access to Nutritious Food and Worsened Nutritional Status and Health

Abstract: A global economic and financial crisis is engulfing the developing world, coming on top of high food and fuel prices. This paper assesses the impact of the crises on food consumption, nutrition, and health. Several methods were applied, including risk analysis using the cost of the food basket, assessment surveys, simulations, regression analysis using a food consumption score (FCS), reflecting diet frequency and diversity, and a review of the impact of such dietary changes on nutritional status and health. The cost of the food basket increased in several countries, forcing households to reduce quality and quantity of food consumed. The FCS, which is a measure of diet diversity, is negatively correlated with food prices. Simulations show that energy consumption declined during 2006-2010 in nearly all developing regions, resulting potentially in an additional 457 million people (of 4.5 billion) at risk of being hungry and many more unable to afford the dietary quality required to perform, develop, and grow well. As a result of the crises, large numbers of vulnerable households have reduced the quality and quantity of foods they consume and are at risk of increased malnutrition. Population groups most affected are those with the highest requirements, including young children, pregnant and lactating women, and the chronically ill (particularly people with HIV/AIDS and tuberculosis). Because undernutrition during the first 2 y of life has life-long consequences, even short-term price rises will have long-term effects. Thus, measures to mitigate the impact of the crises are urgently required.

Regional Trade Agreements

Abstract: This paper reviews the theoretical and empirical literature on regionalism. The formation of regional trade agreements has been, by far, the most popular form of reciprocal trade liberalization in the past 15 years. The discriminatory character of these agreements has raised three main concerns: that trade diversion would be rampant, because special interest groups would induce governments to form the most distortionary agreements; that broader external trade liberalization would stall or reverse; and that multilateralism could be undermined. Theoretically, all of these concerns are legitimate, although there are also several theoretical arguments that oppose them. Empirically, neither widespread trade diversion nor stalled external liberalization has materialized, while the undermining of multilateralism has not been properly tested. There are also several aspects of regionalism that have received too little attention from researchers, but which are central to understanding its causes and consequences.

Information, Direct Access to Farmers, and Rural Market Performance in Central India

Abstract: This paper estimates the impact of a change in procurement strategy of a private buyer in the central Indian state of Madhya Pradesh. Beginning in October 2000, internet kiosks and warehouses were established that provide wholesale price information and an alternative marketing channel to soy farmers in the state. Using a new market-level dataset, the estimates suggest a significant increase in soy price after the introduction of kiosks, supporting the predictions of the theoretical model. Moreover, there is a robust increase in area under soy cultivation. The results point towards an improvement in the functioning of rural agricultural markets.

Placing the 2006/08 Commodity Price Boom into Perspective

Abstract: The 2006-08 commodity price boom was one of the longest and broadest of the post-World War II period. Apart from strong and sustained economic growth, the recent boom was fueled by numerous factors, including low past investment in extractive commodities, weak dollar, fiscal expansion, and lax monetary policy in many countries, and investment fund activity. At the same time, the combination of adverse weather conditions, the diversion of some food commodities to the production of biofuels, and government policies (including export bans and prohibitive taxes) brought global stocks of many food commodities down to levels not seen since the early 1970s. This in turn accelerated the price increases that eventually led to the 2008 rally. The weakening and/or reversal of these factors coupled with the financial crisis that erupted in September 2008 and the subsequent global economic downturn, induced sharp price declines across most commodity sectors. Yet, the main price indices are still twice as high compared to their 2000 real levels, begging once more the question about the real factors affecting them. This paper concludes that a stronger link between energy and non-energy commodity prices is likely to be the dominant influence on developments in commodity, and especially food, markets. Demand by emerging economies is unlikely to put additional pressure on the prices of food commodities. The paper also argues that the effect of biofuels on food prices has not been as large as originally thought, but that the use of commodities by financial investors (the so-called"financialization of commodities") may have been partly responsible for the 2007/08 spike. Finally, econometric analysisof the long-term evolution of commodity prices supports the thesis that price variability overwhelms price trends.

Bringing the Tiger Back from the Brink—The Six Percent Solution

Abstract: The Tiger Summit, to be hosted by Prime Minister Vladimir Putin in Russia in November 2010—the Chinese Year of the Tiger and the International Year of Biodiversity—promises to be the most significant meeting ever held to discuss the fate of a single non-human species. The Summit will culminate efforts by the Global Tiger Initiative (GTI), launched in 2008 by Robert Zoellick, World Bank President. Leaders of 13 tiger range states, supported by international donors and conservationists attending the summit, are being asked to commit to substantive measures to prevent the unthinkable: extinction of the world's last wild tiger populations. Wild tiger numbers are at an historic low. There is no evidence of breeding populations of tigers in Cambodia, China, Vietnam, and DPR Korea. Current approaches to tiger conservation are not slowing the decline in tiger numbers [1]–[3], which has continued unabated over the last two decades. While the scale of the challenge is enormous, we submit that the complexity of effective implementation is not: commitments should shift to focus on protecting tigers at spatially well-defined priority sites, supported by proven best practices of law enforcement, wildlife management, and scientific monitoring. Conflict with local people needs to be mitigated. We argue that such a shift in emphasis would reverse the decline of wild tigers and do so in a rapid and cost-efficient manner.

Are Banks Too Big to Fail or Too Big to Save? International Evidence from Equity Prices and CDS Spreads

Abstract: Deteriorating public finances around the world raise doubts about countries’ abilities to bail out their largest banks. For an international sample of banks, this paper investigates the impact of government indebtedness and deficits on bank stock prices and CDS spreads. Overall, bank stock prices reflect a negative capitalization of government debt and they respond negatively to deficits. We present evidence that in 2008 systemically large banks saw a reduction in their market valuation in countries running large fiscal deficits. Furthermore, the change in bank CDS spreads in 2008 relative to 2007 reflects countries’ deterioration of public deficits. Our results suggest that some systemically important banks can increase their value by downsizing or splitting up, as they have become too big to save, potentially reversing the trend to ever larger banks. We also document that a smaller proportion of banks are systemically important - relative to GDP - in 2008 than in the two previous years, which could reflect these private incentives to downsize.