Economics: Research Guide

This paper develops a classification of investor risks and surveys 51 private investors and financiers in the power sector in Sub-Saharan Africa. ... See More + The paper aims for a better understanding of what can be done to attract private solutions to fill the investment gap. It finds that the average investor assigns more weight to power sector policy and regulatory framework risks than to the wider sector and country context risks. And, despite many challenges, investors perceive three segments as ready for private solutions in Sub-Saharan Africa: power generation, off-grid electrification, and mini-grids. Investors see lower readiness in distribution, transmission, and retail. The pape..

China’s economy grew by an impressive 10 percent per year over four decades. Productivity improvements within sectors and gains from resource reallocation between sectors and ownership groups drove that expansion. ... See More + However, productivity growth has declined markedly in recent years. This paper extends previous macro and firm-level studies to show that domestic factors and policies contributed to the slowdown. The analysis finds that limited market entry and exit and lack of resource allocation to more productive firms were associated with slower manufacturing total factor productivity growth. Earlier reforms led to state-owned enterprises catching up to private sector producti..

This paper argues for a transformation of finance to support the economic and social transformation of the Middle East and North Africa. The paper first documents the existing financial system in the region. ... See More + The system is heavily skewed toward banking, relative to non-banking services, such as stock and corporate bond markets, with significant heterogeneity across countries. Second, the paper discusses the stance of macroeconomic policy in the region, which has had important implications for the destination, profitability, and quality of bank lending and the limited evolution of the financial system. Third, the paper explores the impact of technology on financial development, ..

Fiscal policy is central to not only macroeconomic stability and growth, but also to poverty and inequality reduction. This paper provides the most comprehensive assessment of the distributional incidence of Turkey’s fiscal policy to date. ... See More + It analyzes the combined and individual incidence of direct and indirect taxes, transfers, and social spending and benchmarks Turkey’s achievements against peer countries. The results show that fiscal policy significantly reduces income inequality in Turkey, driven by social spending on education and health, and complemented by direct taxes and transfer schemes that countervail the inequality-increasing impact of indirect taxes. At the b..

This paper studies the cross-country patterns of risky innovation and growth through the lens of international trade. It uses a simple theoretical framework of risky quality upgrading by firms under varying levels of financial development to derive two predictions. ... See More + First, the mean rate of quality growth and the corresponding cross-sectional variance of quality growth in a country are positively correlated. Second, both the mean and variance of quality changes are positively correlated with the country's level of financial development. The paper tests these two hypotheses using data on disaggregated (Harmonized System 10- digit) bilateral exports to the United States. The patte..

Nearly one in three children under age five in the Philippines is stunted, a key marker of undernutrition. This rate is high for the country's level of income. ... See More + This paper provides the first detailed multivariate analysis of potential drivers of stunting in the Philippines, using data from the 2015 National Nutrition Survey. Potential drivers are analyzed individually and grouped in major categories. The analysis finds that stunting between 24-60 months is principally associated with suboptimal prenatal conditions and inadequate food security and diversity. If the results are given a causal interpretation, they imply that if all Filipino newborns had adequate prenatal condition..

What is the efficiency cost of rent-seeking activities in Argentina? This paper quantitatively shows that rent-seeking activities in the form of bribes have aggregate effects through two channels. ... See More + First, they generate misallocation of resources across firms because they prevent resources from flowing to the most productive firms, reallocating resources instead to those that succeed at rent-seeking. Second, such activities affect the allocation of resources within firms because rent-seeking drives resources away from innovation. These two channels can help in understanding why Argentina has more misallocation across firms and less investment in research and development, compare..

The unemployment and labor force participation gender gaps narrowed in Mexico after the 2008 global economic crisis, when female labor force participation increased. ... See More + This paper aims to understand female labor force participation growth and identify its main determinants. For that purpose, the paper estimates a probit model with data from the National Employment Survey of 2007 and 2017, when the unemployment rate returned to the pre-crisis level. Broadly, the results show that increasing labor force participation of women ages 36 to 65 sustained the growth of overall female labor force participation, women's educational attainment can offset any individual or household obstacle..

The COVID-19 pandemic has disrupted economic activity in India. Adjusting policies to contain trans- mission while mitigating the economic impact requires an assessment of the economic situation in near real-time and at high spatial granularity. ... See More + This paper shows that daily electricity consumption and monthly nighttime light intensity can proxy for economic activity in India. Energy consumption is compared with the predictions of a consumption model that explains 90 percent of the variation in normal times. Energy consumption declined strongly after a national lockdown was implemented on March 25, 2020 and remained a quarter below normal levels throughout April. It recovered so..

This paper proposes a new decomposition method to understand how gender pay gaps arise within firms. The method accounts for pipeline effects, nonstationary environments, and dynamic interactions between pay gap components. ... See More + This paper assembles a new data set covering all employees at the World Bank Group between 1987 and 2015 and shows that historical differences in the positions for which men and women were hired account for 77 percent of today's average salary difference, dwarfing the roles of entry salaries, salary growth, or retention. Forward simulations show that 20 percent of the total gap can be assigned to pipeline effects that would resolve mechanically with time. S..

This study analyzes impacts on the power sector in the Middle East and North Africa region of three policies: removal of fuel subsidies, cross-border electricity trade, and reduction of carbon dioxide emissions in line with commitments under the Paris Agreement. ... See More + The analysis uses a power system planning model that minimizes the total electricity supply cost over 2018–35 by satisfying specified technical, economic, environmental, and policy constraints. The study shows that the region would save between US$26.3 billion and US$27.5 billion, measured in 2018 prices, by removing subsidies of natural gas used for power generation. It would save US$83.6 billion to US$90.9 billion ..

This paper explores the effect of oil shocks on electoral outcomes. Using a new polling and election data set for 207 elections across 50 democracies, the paper shows that oil price increases systematically lower the odds of reelection for incumbents. ... See More + The analysis verifies that these shocks -- which reduce consumption growth -- are associated with worsening performance for incumbents in the runup to reelection and a reversal in the leaning of the political party in power post-election. See Less -

This paper studies the impact of a computer-assisted learning program on learning outcomes among high school students in The Gambia. The program uses innovative technologies and teaching approach to facilitate the teaching of mathematics and science. ... See More + Since the pilot schools were not randomly chosen, the study first used administrative and survey data, including a written test, to build a credible counterfactual of comparable groups of control students. It used these data to conduct a pre-analysis plan prior to students taking the high-stakes certification exam. The study later used the certification exam data on the same students to replicate the results. The findings show tha..

Payments of bribes and the expenses incurred on rent-seeking activities impose a significant financial burden on private firms, which is compounded when they do not have enough funds of their own or find it costly to borrow externally. ... See More + This paper hypothesizes that financial constraints magnify the harmful effects of corruption. It applies this idea to the impact of corruption on employment growth among private firms. Using firm-level survey data for 109 countries, the analysis finds that corruption has a much larger negative impact on employment growth for firms that are financially constrained compared with firms that are not financially constrained. For the baseline specific..

Emerging markets and developing economies (EMDEs) weathered the 2009 global recession relatively well. However, the impact of the global recession varied across economies. ... See More + EMDEs with stronger pre-crisis fundamentals -- such as large foreign exchange reserves, sound fiscal positions, and low inflation -- suffered milder growth slowdowns, in part due to their greater capacity to engage in monetary and fiscal stimulus. Low-income countries were also resilient, as foreign aid and inflows of remittances remained relatively stable. In contrast, EMDEs that were heavily dependent on short-term capital flows -- such as portfolio investment and cross -- border bank lending—fared less ..

Unprecedented monetary policy accommodation in advanced economies and a large, coordinated fiscal stimulus by G20 countries helped to support a solid rebound in global output right after the 2009 Global Recession. ... See More + However, global growth subsequently slowed to a sluggish pace by pre-recession standards, and many emerging market and developing economies (EMDEs) have been struggling to unwind their fiscal stimulus and contain a buildup of debt. The experience of the global recession in 2009 highlights the need for well-timed, appropriately calibrated domestic stabilization policies, but also the benefits of international cooperation and coordination in support of strong and susta..

School closures due to COVID-19 have left more than a billion students out of school. This paper presents the results of simulations considering three, five and seven months of school closure and different levels of mitigation effectiveness resulting in optimistic, intermediate and pessimistic global scenarios. ... See More + Using data on 157 countries, the analysis finds that the global level of schooling and learning will fall. COVID-19 could result in a loss of between 0.3 and 0.9 years of schooling adjusted for quality, bringing down the effective years of basic schooling that students achieve during their lifetime from 7.9 years to between 7.0 and 7.6 years. Close to 7 million students..

This paper documents the sources of the Republic of Korea's economic growth, as well as the associated productivity growth and efficiency dynamics during its process of structural transformation from 1970 to 2016. ... See More + The analysis includes land as a separate production factor to sort out the significant effect of changes in intersectoral land allocation, which makes significant differences in measuring the magnitudes and directions of change in sectoral total factor productivity (TFP). Input-based growth and structural changes contributed to the early take-off stage of growth in the 1970s. However, the growth regime switched to a productivity-based one, mainly engineered by the in..

This paper presents the results of a field experiment in rural Sindh, Pakistan, where half of the school-age children (ages 6-10 years) are out of school. ... See More + The study tests simple and low-intensity approaches to strengthen engagement of communities with schools: face-to-face dialogue at externally facilitated community meetings, and ongoing, anonymous dialogue via text messages. The interventions increased communities' interest in education as measured through an improvement in the number of functioning schools and, in the case of the text message treatment, substantial gains in retention of students in grades 2, 3, and 4. On the supply side, the schools significantly increased ..

The empirical evidence on within firm productivity improvements from exports has largely been understated because the measures of revenue productivity used do not account for pricing heterogeneity across firms. ... See More + Using a panel of Indian firms, the analysis in this paper controls for firm variation in prices and uses proxy methods to retrieve measures of productivity that reflect physical productivity. Within-firm productivity changes from export entry are computed using a difference-in-differences matching estimator. The findings show that, over a six-year period, the difference in productivity growth between export entrants and their non-exporter counterparts is about 11 percen..

This paper presents new data on the content of preferential trade agreements. The data contain detailed information on the 18 policy areas most frequently covered in preferential trade agreements, focusing on the stated objectives, substantive commitments, and other aspects such as transparency, procedures, and enforcement. ... See More + Several new stylized facts emerge: (i) preferential trade agreements have reduced trade-weighted average tariff rates to less than 5 percent for more than two-thirds of countries; (ii) the number of commitments in preferential trade agreements has increased over time, particularly since the 2000s and in areas aiming at facilitating flows of services, goods,..

This study seeks to examine gender gaps and disability issues in education in Indonesia, and to suggest policy actions as well as future analytical and operational work to address these differences. ... See More + Field visits were conducted to uncover drivers of gender differences, as well as issues of social inclusion, and to explore policy approaches to improve learning outcomes and educational achievement for all children. Secondary data analysis shows that Indonesia has demonstrated great progress on gender parity in education; however, the national averages mask important variations at the subnational level, including variations of significant male and female disadvantage between and w..

This paper studies economic growth in Malaysia, with the purpose of assessing the potential to attain the status and characteristics of a high-income country. ... See More + Future economic growth is simulated under a business-as-usual baseline, where the growth drivers follow their historical or recent trends, and under different scenarios of reform, using the World Bank Long-Term Growth Model (LTGM). Under the business-as-usual baseline, Malaysia's GDP growth is expected to decline from 4.5 to 2.0 percent over the next three decades, following the country's transition to high income in 2024 (which might be delayed due to the effects of COVID-19). This decline is partly due to demographics,..

This paper evaluates the global welfare consequences of increases in mortality and poverty generated by the Covid-19 pandemic. Increases in mortality are measured in terms of the number of years of life lost (LY) to the pandemic. ... See More + Additional years spent in poverty (PY) are conservatively estimated using growth estimates for 2020 and two different scenarios for its distributional characteristics. Using years of life as a welfare metric yields a single parameter that captures the underlying trade-off between lives and livelihoods: how many PYs have the same welfare cost as one LY. Taking an agnostic view of this parameter, estimates of LYs and PYs are compared across countries fo..

The Korean manufacturing sector has undergone active structural transformation in the past few decades. In particular, the composition of core manufacturing products has changed over time. ... See More + In the 1970s, textiles, which are used to produce fabric, clothes, apparel, and shoes, were the main product. Over time, the value added shares have shifted toward electronics, ships, and cars. By analyzing plant-level microdata, this paper documents the patterns of entry, exit, job creation and destruction, and the growth of young plants during the industrial shift. This industrial shift involved active job reallocations, as well as the entry and exit of plants. The paper quantifies the ext..

Fiscal vulnerabilities depend on both the level and composition of government debt. This study examines the role of debt thresholds and debt composition in driving the non-linear behavior of long-term interest rates through a novel approach, a panel smooth transition regression with a general logistic model. ... See More + The main findings are threefold. First, the impact of the expected public debt level on interest rates rises exponentially when the share of foreign private holdings exceeds approximately 20 percent of government debt denominated in local currency. Second, when the share of foreign private investors is 30 percent, an increase in the share of foreign private holdings of gov..

Studies of female business leaders and economic performance are rarely conducted with worldwide observational data, and with considerations on the underlying cultural, institutional, and business environment. ... See More + This paper uses worldwide, firm-level data from more than 100 countries to study how female-headed firms differ from male-headed firms in productivity level and growth, and whether the female leader performance disparity hinges on the underlying environment. Female-headed firms account for about 11 percent of firms and are more prevalent in countries with better rule of law, gender equality, and stronger individualistic culture. On average, female-headed firms have 9 to 1..

This paper analyzes the magnitude and predictors of misreporting on intimate partner and sexual violence in Nigeria and Rwanda. Respondents were randomly assigned to answer questions using one of three survey methods: an indirect method (list experiment) that gives respondents anonymity; a direct, self-administered method that increases privacy; and the standard, direct face-to-face method. ... See More + In Rwanda, intimate partner violence rates increase by 100 percent, and in Nigeria, they increase by up to 39 percent when measured using the list method, compared with direct methods. Misreporting was associated with indicators often targeted in women's empowerment programs, such as gender..

Unexpected adverse events that affect areas or populations widely (covariate shocks) can have major consequences for the welfare of a society. Although the negative effects on households, especially among the poor, are well established in the economics literature, fewer studies have focused on how natural, economic, and social covariate shocks affect individual welfare and particularly child nutrition status. ... See More + This paper reviews the evidence on the effect of covariate shocks on child nutrition status in low- and middle-income countries, the pathways through which the effect operates, and the relationship between the timing of a child's exposure to a covariate shock and the effe..

This paper reports on electronically-monitored improved use of the "Mirt" biomass stove in Ethiopia over a relatively long period of three-and-a-half years, using stove use data collected at five points in time. ... See More + The results show that 62 percent of the households surveyed still retained their stoves after more than three years, which is a low level of abandonment, as the lifetime of the Mirt stove is approximately five years. Dis-adoption of the stove is not correlated with any of three monetary incentives provided at the time of distribution. With and without adjusting for dis-adoption, no longer-run differences in stove retention are found across treatments. Among those who r..