World Institute for Development Economics Research

About: World Institute for Development Economics Research is a facility organization based out in Helsinki, Finland. It is known for research contribution in the topics: Poverty & Population. The organization has 110 authors who have published 525 publications receiving 17316 citations.

Efficiency Frontier and Matching Process on the Labour Market: Evidence from Tunisia

Abstract: This paper studies the determinants of the inefficient functioning of the Tunisian labour market. The study takes advantage of recent developments in the stochastic frontier techniques and estimates the matching function for Tunisia using disaggregated data. We include control variables as determinants of matching efficiency and regional disparities. We confirm that the persistently high rate of unemployment is the result of not only excess labour supply but is also related to a shortfall between supply and demand, i.e. sector, location, qualification.

Political Constraints and Economic Reform: Empirical Evidence from the Post-Communist Transition in the 1990s

Abstract: Using data from transition economies, this paper examines linkages between political constraints and economic reforms. Estimation results suggest that progress in reform is positively associated with public support for reforms, which is affected by income inequality and expected individual performance during future reforms. These findings support influential theories that both ex post and ex ante political constraints are instrumental in determining the extent of progress in welfare-enhancing reforms. We also find evidence to support reform sequencing starting with a reform that is both popular and stimulatory to other reforms.

What is the Aggregate Economic Rate of Return to Foreign Aid

Abstract: Does foreign aid promote aggregate economic growth? In contrast to widespread perceptions, academic studies of this question have been rapidly converging towards a positive answer. We employ a simulation approach to (i) validate the coherence of recent empirics and (ii) calculate plausible ranges for the rate of return to aid. Our results highlight the long-run nature of aid investments and indicate the return to aid falls in ranges commonly accepted for public investments. We find no basis for the view that aid has a pernicious effect on productivity.

Quantifying the Impacts of Expanding Social Protection on Efficiency and Equity: Evidence from a Behavioral Microsimulation Model for Ghana

Abstract: A key challenge facing developing countries when they are gradually building up their social protection system is the presence of a large informal sector. Social safety nets should be expanded to reduce poverty, but financing social protection through higher taxes may reduce the number of formal-sector jobs available. The aim of this paper is to quantify the impacts of a revenue-neutral expansion of social protection in a developing country on both income distribution and efficiency which we measure via the impacts on formal sector work. Results from a new tax-benefit microsimulation model for Ghana, GHAMOD, are combined with the extensive margin elasticity of the share of formal work with respect to the tax wedge on formal labour, derived from repeated cross-section econometric estimates. The size of the estimated formality elasticity is modest and therefore the distributional gains of expanding cash transfer programmes are considerable, even when taking into account behavioural impacts.