World Bank

About: World Bank is a other organization based out in Washington D.C., District of Columbia, United States. It is known for research contribution in the topics: Population & Poverty. The organization has 7813 authors who have published 21594 publications receiving 1198361 citations. The organization is also known as: World Bank, WB & The World Bank.

Informal Regulation of Industrial Pollution in Developing Countries: Evidence from Indonesia

Abstract: The pollution intensity of emissions is much higher for plants located in poorer, less-educated communities than in richer, better educated ones. This difference appears to be too large to reflect preferences alone. Differential ability to pressure polluting firms may also be important. Pargal and Wheeler test a model of supply-demand relations in an implicit market for environmental services when formal regulation is absent. They use plant-level data from Indonesia for 1989 - 90, before the advent of nationwide environmental regulation. Treating pollution as a derived demand for environmental services, their model relates emissions of biological oxygen demand to the price (expected cost) of pollution; to prices of other inputs (labor, energy, materials); and to enterprise characteristics that may affect pollution demand, including scale, vintage, ownership, and efficiency. The price of pollution is determined by the intersection of plant-level demand and a local environmental supply function, enforced by community pressure or informal regulation. Environmental supply is affected by community income, education, the size of the exposed population, the local economic importance of the plant, and its visibility as a polluter. Their results are strongly consistent with the existence of an informal pollution equilibrium. Pollution intensity declines with increases in plant size, efficiency, and local materials prices. Older plants and publicly owned facilities are more pollution-intensive; multinational ownership has no independent effect. The results also suggest that the price of pollution is higher when plants are particularly visible and is far lower in poorer, less-educated communities. Thus, the intensity of pollution is far higher in such communities. While it would be premature to generalize from these results, they suggest that the model of optimal pollution control in environmental economics is more relevant for developing countries than many have believed. Community-factory interactions seem to reflect environmental supply-demand considerations even when formal regulation does not exist. In addition, the apparent power of informal regulation implies that cost-effective formal systems should be designed to complement, not supplant, community control. In particular: ° Local communities should not be forced to rely so heavily on visibility when judging environmental performance. Formal regulation should include publication of audited emissions reports from factories. ° Environmental injustice may be real and important. Many poor, uneducated communities may need extra support from national regulators. ° However, appropriate regulation should strike the right balance between equity and efficiency. Uniform national standards go too far because they eliminate all the natural and legitimate regional diversity that is also reflected in informal arrangements. This paper - a product of the Environment, Infrastructure, and Agriculture Division, Policy Research Department - is part of a larger effort in the department to understand variations in pollution across firms. The authors may be contacted at spargal@worldbank.org or dwheeler1@worldbank.org.

What Drives Private Saving Around the World

Abstract: Saving rates vary considerably across countries and over time. Policies that spur development are an indirect but effective way to raise private saving rates - which rise with the level and growth rate of real per capita income. Loayza, Schmidt-Hebbel, and Serven investigate the policy and nonpolicy factors behind saving disparities, using a large panel data set and an encompassing approach including several relevant determinants of private saving. They extend the literature in several dimensions by: · Using the largest data set on aggregate saving assembled to date. · Using panel instrumental variable techniques to correct for endogeneity and heterogeneity. · Performing robustness checks on changes in estimation procedures, data samples, and model specification. Their main empirical findings: · Private saving rates show considerable inertia (are highly serially correlated even after controlling for other relevant factors). · Private saving rates rise with the level and growth rate of real per capita income. So policies that spur development are an indirect but effective way to raise private saving rates. · Predictions of the life-cycle hypothesis are supported in that dependency ratios generally have a negative effect on private saving rates. · The precautionary motive for saving is supported by the finding that inflation - conventionally taken as a summary measure of macroeconomic volatility - has a positive impact on private saving, holding other facts constant. · Fiscal policy is a moderately effective tool for raising national saving. · The direct effects of financial liberalization are largely detrimental to private saving rates. Greater availability of credit reduces the private saving rate; financial depth and higher real interest rates do not increase saving. This paper - a product of Macroeconomics and Growth, Development Research Group - is part of a larger effort in the group to understand the determinants of saving in developing countries. The study was funded by the Bank`s Research Support Budget under the research project Saving in the World: Puzzles and Policies (RPO 681-36). The authors may be contacted at nloayza@worldbank.org or lserven@worldbank.org.

Rebellion as a Quasi-Criminal Activity

Abstract: Economic models of rebellion usually treat it as a form of crime or banditry. However, the analogy is not developed. This article treats rebellion as a distinctive form of organized crime that differs from other crime in its objective, which is the predation of the rents on natural resource exports. Because such rents can be defended by government forces, rebel forces must be sufficiently large to defend themselves. This introduces a survival constraint that affects whether a rebellion is financially viable and how it reacts to increases in government forces and introduces an entry threshold. This threshold gives rise to a problem for the rebellion of attracting sufficient start-up finance. The predictions of the model are shown to be consistent with four stylized facts.

Patterns of rainfall insurance participation in rural India

Abstract: Take-up of an innovative rainfall insurance policy offered to smallholder farmers in rural India decreases with basis risk between insurance payouts and income fluctuations, increases with household wealth, and decreases with binding credit constraints. These results are consistent with the predictions of a simple neoclassical model with borrowing constraints. Other patterns are less consistent with the benchmark model. For example, participation in village networks and measures of familiarity with the insurance vendor are strongly correlated with insurance take-up decisions, and risk-averse households are less, not more, likely to purchase insurance. These results may reflect household uncertainty about the product, given their limited experience with it.