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171. Pricing and Access: Lessons from Randomized Evaluations in Education and Health

Author:
Michael Kremer and Alaka Holla
Publication Date:
01-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper surveys evidence from recent randomized evaluations in developing countries on the impact of price on access to health and education. The debate on user fees has been contentious, but until recently much of the evidence was anecdotal. Randomized evaluations across a variety of settings suggest prices have a large impact on take-up of education and health products and services. While the sign of this effect is consistent with standard theories of human capital investment, a more detailed examination of the data suggests that it may be important to go beyond these models. There is some evidence for peer effects, which implies that for some goods the aggregate response to price will exceed the individual response. Time-inconsistent preferences could potentially help explain the apparently disproportionate effect of small short-run costs and benefits on decisions with long-run consequences.
Topic:
Development, Economics, Education, Health, Human Welfare, and Markets

172. Do Regulatory Reforms Stimulate Investment and Growth? Evidence from the Doing Business Data

Author:
Benjamin P. Eifert
Publication Date:
01-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The role of regulatory barriers in inhibiting entrepreneurship, investment and employment creation is an old topic in economics. This study utilizes a five-year panel of data on regulations and procedures from the World Bank's Doing Business project, along with Arellano-Bond dynamic panel estimators, looking for evidence that regulatory reforms lead to higher aggregate investment rates (roughly, factor demand) or GDP growth conditional on investment rates (roughly, factor productivity). It looks both at individual regulatory indicators and more aggregate measures of the incidence of reforms, finding some evidence of positive impacts of regulatory reforms in countries which are relatively poor (conditional on governance) and relatively well-governed (conditional on income). Relatively poor and relatively well-governed countries grow about 0.4 and 0.2 percentage points faster in the year immediately following one or more reforms, respectively. In both subsets of countries, investment rates accelerate by about 0.6 percentage points in the subsequent year.
Topic:
Development, Economics, Markets, Poverty, and Third World

173. Beyond the ABCs: Higher Education and Developing Countries

Author:
Megan Crowley and Devesh Kapur
Publication Date:
02-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper analyzes a relatively neglected facet of the complex debate regarding human capital – higher (or tertiary) education. It addresses five broad questions examining higher education in developing countries. One, are the economic effects of higher education on developing countries different from those in industrialized countries, with its links with labor markets of lesser importance than its impact on institutional development? Two, how does the impact of higher education depend on the type of education and its beneficiaries? Three, with the state unable to meet growing demand pressures, what should be the proper role of the state to ensure not just quality but also equity and access? Four, how should countries rethink the provision of higher education in an “open economy” from seeking education abroad or encouraging foreign providers into the country or simply linking domestic institutions with foreign quality assurance mechanisms? And five, do new technologies offer developing countries a new paradigm to expand the provision of high quality but low cost higher education? The aim is not to provide categorical answers to these complex questions, but rather highlight the analytical and empirical lacuna with regard to each of these question.
Topic:
Development and Education
Political Geography:
Africa

174. How Soon Can Donors Exit From Post-Conflict States?

Author:
Satish Chand and Ruth Coffman
Publication Date:
02-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
When can a donor (successfully) exit from an on-the -ground presence in a post-conflict state? The answer, according to the analysis presented here, is in decades: figures well beyond what was originally envisioned when peacekeeping troops were first deployed. In the specific cases of Liberia, Mozambique, Solomon Islands, and Timor-Leste considered here, the best case scenario for successful exit ranges from 15 to 27 years. Successful exit, for the purposes of this paper, entails the creation of the necessary fiscal space to fund the recurrent budget from internally generated revenues. This is a necessary, albeit, not sufficient condition for donor exit. Of essence, however, is the time rather than the dollar value of support provided. An extended donor presence, it is argued, provides the space for the creation, sustenance, and maturation of institutions that are finally able to undergird the state from rolling back into state failure on donor exit.
Topic:
Conflict Resolution, Development, and Peace Studies
Political Geography:
Africa, Asia, Liberia, Mozambique, Solomon Islands, and Timor-Leste

175. Income Per Natural: Measuring Development for People rather than Places - Working Paper 143

Author:
Michael Clemens and Lant Pritchett
Publication Date:
03-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
It is easy to learn the average income of a resident of El Salvador or Albania. But there is no systematic source of information on the average income of a Salvadoran or Albanian. We create a first estimate a new statistic: income per natural—the mean annual income of persons born in a given country, regardless of where that person now resides. If income per capita has any interpretation as a welfare measure, exclusive focus on the nationally resident population can lead to substantial errors of the income of the natural population for countries where emigration is an important path to greater welfare. The estimates differ substantially from traditional measures of GDP or GNI per resident, and not just for a handful of tiny countries. Almost 43 million people live in a group of countries whose income per natural collectively is 50% higher than GDP per resident. For 1.1 billion people the difference exceeds 10%. We also show that poverty estimates are very different for national residents and naturals; for example, 26 percent of Haitian naturals who are not poor by the two-dollar-a-day standard live in the United States. These estimates are simply descriptive statistics and do not depend on any assumptions about how much of observed income differences across naturals is selection and how much is a pure location effect. Our conservative, if rough, estimate is that three quarters of this difference represents the effect of international migration on income per natural. This means that departing one's country of birth is today one of the most important sources of poverty reduction for a large portion of the developing world. If economic development is defined as rising human well being, then a residence-neutral measure of well-being emphasizes that crossing international borders is not an alternative to economic development, it is economic development.
Topic:
Demographics, Development, Economics, Migration, Poverty, and Population
Political Geography:
United States and Albania

176. The Place Premium: Wage Differences for Identical Workers across the U.S. Border - Working Paper 148

Author:
Michael Clemens, Lant Pritchett, and Claudio E. Montenegro
Publication Date:
07-2008
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
We compare the wages of workers inside the United States to the wages of observably identical workers outside the United States—controlling for country of birth, country of education, years of education, work experience, sex, and rural-urban residence. This is made possible by new and uniquely rich microdata on the wages of over two million individual formal-sector wage-earners in 43 countries. We then use five independent methods to correct these estimates for unobserved differences between the productivity of migrants and non-migrants, as well as for the wage effects of natural barriers to international movement in the absence of policy barriers. We also introduce a selection model to estimate how migrants' wage gains depend on their position in the distribution of unobserved wage determinants both at the origin and at the destination, as well as the relationship between these positions. For example, in the median wage gap country, a typical Bolivian-born, Bolivian-educated, prime-age urban male formal-sector wage worker with moderate schooling makes 4 times as much in the US as in Bolivia. Following all adjustments for selectivity and compensating differentials we estimate that the wages of a Bolivian worker of equal intrinsic productivity, willing to move, would be higher by a factor of 2.7 solely by working in the United States. While this is the median, this ratio is as high as 8.4 (for Nigeria). We document that (1) for many countries, the wage gaps caused by barriers to movement across international borders are among the largest known forms of wage discrimination; (2) these gaps represent one of the largest remaining price distortions in any global market; and (3) these gaps imply that imply allowing labor mobility can reduce a given household's poverty to a much greater degree than most known in situ antipoverty interventions.
Topic:
Development, Economics, and Industrial Policy
Political Geography:
United States, Nigeria, and Bolivia

177. Performance-Based Incentives for Health: Six Years of Results from Supply-Side Programs in Haiti - Working Paper 121

Author:
Rena Eichler, Paul Auxila, Uder Antoine, and Bernateau Desmangles
Publication Date:
04-2007
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
USAID launched a project in 1995 to deliver basic health services in Haiti. The project began by reimbursing contracted NGOs for documented expenditures or inputs. In 1999, payment was changed to being based partly on attaining performance targets or outputs. The project also provided technical assistance to the NGOs, along with opportunities to participate in an NGO network and other cross-fertilization activities. Remarkable improvements in key health indicators have been achieved in the six years since payment for performance was phased in. Although it is difficult to isolate the effects of performance-based payment on these improved indicators from the efforts aimed at strengthening NGOs and other factors, panel regression results suggest that the new payment incentives were responsible for considerable improvements in both immunization coverage and attended deliveries. Results for prenatal and postnatal care were less significant, perhaps suggesting a strong patient behavioral element that is not under the influence of provider actions.
Topic:
Development, Education, Health, and Poverty
Political Geography:
Haiti

178. It's One World Out There: The Global Consensus on Selecting the World Bank's Next President

Author:
David Wheeler
Publication Date:
06-2007
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
In May 2007 CGD launched an online survey of the global development community on three issues: the selection process for the next World Bank president; criteria for rating the candidates; and actual ratings for nine candidates who had been named by the international media. Between May 22 and May 31, CGD received nearly 700 responses from people whose characteristic s reflect the diversity of the international development community. Survey participants represent 71 nations; all world regions; high-, middle- and low-income countries; a variety of professional affiliations; and all adult age groups. About 30% of respondents are women.
Topic:
Development, Economics, International Organization, and Politics
Political Geography:
United States

179. The Provision of Banking Services in Latin America: Obstacles and Recommendations

Author:
Liliana Rojas-Suarez
Publication Date:
06-2007
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The depth of and access to financial services provided by banks throughout Latin America are extremely low in spite of its recognized importance for economic activity, employment and poverty alleviation. Low financial depth and access hurts the poor the most and is due to a variety of obstacles that are presented in this paper in four categories, along with recommendations to overcome them. The first category groups socio-economic obstacles that undercut the demand for financial services of large segments of the population. The second category identifies problems in the operations of the banking sector that impedes the adequate provision of financial services to households and firms. The third category captures institutional deficiencies, with emphasis on the quality of the legal framework and the governability of the countries in the region. The fourth category identifies regulations that tend to distort the provision of banking services. Recommendations to confront these obstacles include innovative proposals that take into consideration the political constraints facing individual countries. Some of the policy recommendations include: public-private partnerships to improve financial literacy, the creation of juries specialized in commercial activities to support the rights of borrowers and creditors, and the approval of regulation to allow widespread usage of technological innovations to permit low-income families and small firms to gain access to financial services.
Topic:
Development, Economics, International Trade and Finance, and Poverty
Political Geography:
Latin America

180. Aiding Transparency: What We Can Learn About China Exim Bank's Concessional Loans

Author:
Paul Hubbard
Publication Date:
09-2007
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The Chinese government, through the China Exim Bank, is pledging billions of dollars worth of concessional lending to the developing world. More information on these lending practices can be gleaned from Chinese language sources than is readily available in English. However, this material is insufficient to draw more than tentative conclusions about the real nature and scope of China's concessional lending. Over 48 countries have agreements with China for concessional loans. An average loan of US$20-30 million is made available to Chinese exporting firms to develop infrastructure and facilities in developing countries. While these loan sizes are not huge when compared to other aid flows, China's status as the dominant lender of concessional loans amongst some recipients makes this program significant. Finally, it is still not clear if the loans could be considered Official Development Assistance according to the DAC definition.
Topic:
Agriculture, Development, Emerging Markets, and International Trade and Finance
Political Geography:
China and Asia