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111. Rethinking the Financial Design of the World Bank

Author:
Devesh Kapur and Arjun Raychaudhuri
Publication Date:
01-2014
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
Since their inception, through 2012, the institutions comprising the World Bank group have been involved in lending nearly a trillion dollars. In this paper, we focus on the IBRD, which is the core of the World Bank. The IBRD has the potential to continue to grow and be an important player in official financial flows, supporting critical long-term development projects with large social returns, in sectors ranging from infrastructure, social sectors, or environment.
Topic:
Development, Economics, Environment, Foreign Aid, Infrastructure, and World Bank
Political Geography:
Europe

112. The Median Is the Message: A Good-Enough Measure of Material Well-Being and Shared Development Progress

Author:
Nancy Birdsall and Christian J. Meyer
Publication Date:
01-2014
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
We argue that survey-based median household consumption expenditure (or income) per capita be incorporated into standard development indicators, as a simple, robust, and durable indicator of typical individual material well-being in a country. Using household survey data available for low- and middle-income countries from the World Bank's PovcalNet tool, we show that as a measure of income-related well-being, it is far superior to the commonly used GDP per capita as well as survey-based measures at the mean. We also argue that survey-based median measures are "distributionaware", i.e. when used as the denominator of various widely available indicators such as mean consumption expenditure per capita they provide a "good-enough" indicator of consumption (or income) inequality. Finally, as a post-2015 indicator of progress at the country-level in promoting shared development and reducing inequality, we propose that the rate of increase in median consumption per capita after taxes and transfers exceed the rate of increase in average consumption in the same period.
Topic:
Development, Diplomacy, Poverty, and World Bank
Political Geography:
United Nations

113. Results-Based Payments Reduce the Real Costs of Corruption in Foreign Aid

Author:
Charles Kenny and William Savedoff
Publication Date:
01-2014
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
Why don't foreign aid programs simply pay recipients for attaining agreed upon results? The idea has been around for decades, but it continues to meet resistance. Some donors worry that programs that pay for outputs or outcomes would not be able to control how funds are used and would thus be vulnerable to corruption. This brief explains why results-based payment systems are actually likely to be less vulnerable to corruption than traditional input-tracking approaches by making the effects of corruption-the failure of programs to deliver results-more visible.
Topic:
Corruption, Development, and Foreign Aid

114. Development as Diffusion: Manufacturing Productivity and Sub-Saharan Africa's Missing Middle

Author:
Vijaya Ramachandran, Alan Gelb, and Christian J. Meyer
Publication Date:
02-2014
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
We consider economic development of Sub-Saharan Africa from the perspective of slow convergence of productivity, both across sectors and across firms within sectors. Why have "productivity enclaves", islands of high productivity in a sea of smaller low-productivity firms, not diffused more rapidly? We summarize and analyze three sets of factors: First, the poor business climate, which constrains the allocation of production factors between sectors and firms. Second, the complex political economy of business-government relations in Africa's small economies. Third, the distribution of firm capabilities. The roots of these factors lie in Africa's geography and its distinctive history, including the legacy of its colonial period on state formation and market structure.
Topic:
Development, Economics, Industrial Policy, and Markets
Political Geography:
Africa

115. What Drives Deforestation and What Stops It? A Meta-Analysis of Spatially Explicit Econometric Studies

Author:
Jonah Busch and Kalifi Ferretti-Gallon
Publication Date:
04-2014
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
We have constructed a comprehensive database of 117 spatially explicit econometric studies of deforestation published in peer-reviewed academic journals from 1996-2013. We present a metaanalysis of what drives deforestation and what stops it, based on the signs and significance of 5909 coefficients in 554 multivariate analyses. We find that forests are more likely to be cleared where economic returns to agriculture and pasture are higher, either due to more favorable climatological and topographic conditions, or due to lower costs of clearing forest and transporting products to market. Timber activity, land tenure security, and community demographics do not show a consistent association with either higher or lower deforestation. Population is consistently associated with greater deforestation, and poverty is consistently associated with lower deforestation, but in both cases endogeneity makes a causal link difficult to infer. Promising approaches for stopping deforestation include reducing the intrusion of road networks into remote forested areas; targeting protected areas to regions where forests face higher threat; tying rural income support to the maintenance of forest resources through payments for ecosystem services; and insulating the forest frontier from the price effects of demand for agricultural commodities.
Topic:
Development, Economics, Environment, and Industrial Policy
Political Geography:
United Nations

116. The Health Financing Transition: A Conceptual Framework and Empirical Evidence

Author:
William Savedoff and Victoria Fan
Publication Date:
03-2014
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
Almost every country exhibits two important health financing trends: health spending per person rises and the share of out-of-pocket spending on health services declines. We describe these trends as a "health financing transition" to provide a conceptual framework for understanding health markets and public policy. Using data over 1995-2009 from 126 countries, we examine the various explanations for changes in health spending and its composition with regressions in levels and first differences. We estimate that the income elasticity of health spending is about 0.7, consistent with recent comparable studies. Our analysis also shows a significant trend in health spending - rising about 1 percent annually - which is associated with a combination of changing technology and medical practices, cost pressures and institutions that finance and manage healthcare. The out-of-pocket share of total health spending is not related to income, but is influenced by a country's capacity to raise general revenues. These results support the existence of a health financing transition and characterize how public policy influences these trends.
Topic:
Development, Economics, Health, and Governance
Political Geography:
United States

117. Costing a Data Revolution

Author:
Gabriel Demombynes and Justin Sandefur
Publication Date:
10-2014
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
The lack of reliable development statistics for many poor countries has led the U.N. to call for a “data revolution” (United Nations, 2013). One fairly narrow but widespread interpretation of this revolution is for international aid donors to fund a coordinated wave of household surveys across the developing world, tracking progress on a new round of post-2015 Sustainable Development Goals. We use data from the International Household Survey Network (IHSN) to show (i) the supply of household surveys has accelerated dramatically over the past 30 years and that (ii) demand for survey data appears to be higher in democracies and more aid-dependent countries. We also show that given existing international survey programs, the cost to international aid donors of filling remaining survey gaps is manageable--on the order of $300 million per year. We argue that any aid-financed expansion of household surveys should be complemented with (a) increased access to data through open data protocols, and (b) simultaneous support for the broader statistical system, including routine administrative data systems.
Topic:
Development, Human Welfare, and Infrastructure
Political Geography:
Asia and United Nations

118. To Charge or Not to Charge: Evidence from a Health Products Experiment in Uganda

Author:
Dean Karlan, Pia Raffler, Greg Fischer, and Margaret McConnell
Publication Date:
11-2014
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
In a field experiment in Uganda, we find that demand after a free distribution of three health products is lower than after a sale distribution. This contrasts with work on insecticide-treated bed nets, highlighting the importance of product characteristics in determining pricing policy. We put forward a model to illustrate the potential tension between two important factors, learning and anchoring, and then test this model with three products selected specifically for their variation in the scope for learning. We find the rank order of shifts in demand matches with the theoretical prediction, although the differences are not statistically significant.
Topic:
Development and Health
Political Geography:
Uganda and Africa

119. The Political Economy of Bad Data: Evidence from African Survey Administrative Statistics

Author:
Amanda Glassman and Justin Sandefur
Publication Date:
07-2014
Content Type:
Working Paper
Institution:
Center for Global Development (CGD)
Abstract:
Across multiple African countries, discrepancies between administrative data and independent household surveys suggest official statistics systematically exaggerate development progress. We provide evidence for two distinct explanations of these discrepancies. First, governments misreport to foreign donors, as in the case of a results-based aid program rewarding reported vaccination rates. Second, national governments are themselves misled by frontline service providers, as in the case of primary education, where official enrollment numbers diverged from survey estimates after funding shifted from user fees to per pupil government grants. Both syndromes highlight the need for incentive compatibility between data systems and funding rules.
Topic:
Development, Foreign Aid, Foreign Direct Investment, Governance, and Developing World
Political Geography:
Africa

120. Delivering on a Data Revolution in Sub-Saharan Africa

Author:
Amanda Glassman and Alex Ezeh
Publication Date:
07-2014
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
Despite improvements in censuses and household surveys, the building blocks of national statistical systems in sub-Saharan Africa remain weak. Measurement of fundamentals such as births and deaths, growth and poverty, taxes and trade, land and the environment, and sickness, schooling, and safety is shaky at best. The challenges are fourfold: (1) national statistics offices have limited independence and unstable budgets, (2) misaligned incentives encourage the production of inaccurate data, (3) donor priorities dominate national priorities, and (4) access to and usability of data are limited. The Data for African Development Working Group's recommendations for reaping the benefits of a data revolution in Africa fall into three categories: (1) fund more and fund differently, (2) build institutions that can produce accurate, unbiased data, and (3) prioritize the core attributes of data building blocks.
Topic:
Development
Political Geography:
Africa