The research projects described here are directed by World Bank staff and funded by the Bank's central Research Support Budget (RSB). Research proposals being prepared with RSB funding are listed on below. For information about the research projects described here, contact the researchers at the Bank's main address (see back page).
Research Starts
- Privatization of Telecommunications in Sub-Saharan Africa
- Long-Term Impacts of Microcredit Programs
- Economic Analysis in Education Projects
- Fiscal Decentralization in Latin America
- Primary Financial Markets: Macroeconomic Conditions
- Democracy, Redistribution, and Inequality
- Making Long-Term Development More Sustainable
- Dynamism of Rural Sector Growth Takamasa
- Intrahousehold Decisionmaking, Literacy, and Child Labor
- The Challenge of Sustainable Financial Policies: The Case of Turkey
- Dreams of the Market: Agricultural Policy Adoption and Implementation in Present-Day Russia
- An Assessment Instrument for Childhood Cognitive and Socio-emotional Development
- Pricing of Bonds and Bank Loans in the Market for Developing Country Debt
Research Proposals Under Preparation
- Measuring the Efficiency and Productivity of National Agricultural Research
- Dynamics of the Urban Poor: Implications for Public Policy
- City Performance and Economic Development: Applications of Urban Indicators for Policy Analysis and Program Design
- Integrated Water Resources Management in Latin America
- Financing Health Care in Developing Countries: Addressing the Problems of Incentives, Insurance, and Regulation
- Intellectual Property Rights Related to Agriculture
Much of the policy advice on privatizing and regulating telecommunications is based on the experience of high- and middle-income countries. For Sub-Saharan African countries, which face very different market and institutional characteristics, the relevance of that experience is questionable. As more of the region's countries reform their telecommunications sectors, gaining a better understanding of their experience will become increasingly important in order to avoid a "one-size-fits-all" approach.
This study will analyze Sub-Saharan African countries' experience with telecommunications reform in depth and track changes in the sector over the next four years. It will explore three key questions faced by policymakers in the region: How can greater competition be encouraged by facilitating efficient entry? How can the incumbent provider be motivated to use its existing assets better and to invest in additional capacity? And how can reform be structured so that it gains the support of key stakeholders and fits well with the country's institutional structure? The study will analyze these questions using a comprehensive database to be compiled on the sector and through detailed case studies of countries that have tried a mix of reform approaches.
The study will be carried out in close
partnership with African research institutes, with the aim of creating
an institutionalized regional capacity to advise on telecommunications
reform and on infrastructure regulation more broadly.
RSB support: $226,506
Staff weeks: 172
Through a 1991-92 household and community survey in Bangladesh, an earlier World Bank study (ref. no. 676-59) found that microcredit programs have a substantial effect in reducing poverty and that credit given to women has a substantially larger effect than credit given to men. The study's reliance on cross-sectional data meant that several important questions remained unanswered. By resurveying the households and communities covered in 1991-92, this research will address some of those questions econometrically.
The research will explore these issues: How sustainable are microcredit programs-and how sustainable are their benefits? Are there diseconomies of scale as programs expand? Do the programs have spillover effects? What are the effects of programs' noncredit services, such as literacy, skills training, and consciousness-raising? And does the group in group-based microcredit play an essential part, or would providing credit through other mechanisms, such as individual borrowing, achieve similar results?
The follow-up survey will try to revisit all 1,798
households initially surveyed, in 72 program villages and 15 control
villages. New control villages will be added if programs have moved
into the original control villages, and new program villages will be
added to allow comparison between old and new program villages. And in
each program village new participants will be added to allow
comparison of impacts between old and new participants.
RSB support: $245,500
Staff weeks: 36
Evaluating investments in education has always been challenging because the direct benefits are difficult to quantify. This study aims to provide guidance for the economic analysis of education investments and to develop methods for improving such analysis. It will review current practice, compare the approaches used in education with those used in other sectors, and assess the appropriateness of approaches used in other sectors for evaluating education projects.
Through a statistical analysis of World
Bank-supported education projects and their evaluation ratings, the
study will examine the relationship between the results of economic
analysis and the success of projects in achieving their objectives. It
will also look at other considerations critical to proper project
appraisal, such as the potential for private sector provision, the
fiscal impact of the project, and the fungibility of lending. And it
will look at the role that demand for education plays in the analysis
of education investments.
RSB support: $30,000
Staff weeks: 5
This study will investigate whether decentralization of government has led to the expected outcomes-both positive and negative-using case studies of Argentina, Brazil, and Colombia and econometric analysis of panel data on a broader sample of industrial and developing countries. The study will focus on three broad questions.
First, does decentralization lead to unsustainable fiscal deficits? Early arguments for decentralization presumed that rules or market discipline would put a hard budget constraint on subnational governments, but in many countries the softness of the constraints seems to be a problem.
Second, does decentralization make the provision of public services less equal, with wealthier districts buying more services in the decentralized regime? The case studies will investigate how the distribution of spending changed with decentralization and whether the changes correlate with the geographic distribution of per capita income and poverty.
Third, does decentralization come through on its promise to increase the efficiency of service delivery? Here the project will focus on education, looking at the effect of decentralization on such key factors as parents' empowerment, teacher absenteeism, and the share of spending on salaries.
The study will also look at how the
design of decentralization influences its effects. And it will use the
tools of political economy and new institutional economics to explain
the successes and failures of decentralization.
RSB support: $147,000
Staff weeks: 75
Much of the growing body of research on emerging markets has focused on secondary markets, where securities are traded after issuance. While secondary markets are important, it is in primary markets that firms raise capital, by issuing debt or equity. This research will examine primary debt and equity markets in developing countries with the aim of beginning to understand how and why these markets develop.
The research will
investigate the links between primary market activity, macroeconomic
factors, and financial market structure; the determinants of the
relative growth of debt and equity issues; and the determinants-and
economic growth implications-of decisions to raise capital overseas
rather than purely domestically. It will also look at the role of
privatization activity. And it will consider whether any of its
findings on the determinants of debt and equity issuance suggest
policy prescriptions for stimulating the growth of primary markets.
The research will draw on a database on primary market activity in 24
developing countries and, for comparative purposes, data on a set of
industrial countries and four East Asian economies.
RSB support: $33,000
Staff weeks: 4
Current thinking about the relationship between the distribution of political power and the distribution of economic resources seems invariably to lead to the conclusion that when the poor acquire political power, they use it to massively redistribute economic resources in their favor. This study will test that conclusion by looking at the link between democracy and economic inequality and at the mechanisms (such as more accessible education) through which democracy affects income distribution.
The study will undertake cross-country analysis using indicators of democratization, redistribution, and inequality. In more detailed analysis of several countries that have experienced a recent transition to democracy (Greece, the Republic of Korea, Portugal, and Spain), it will examine how the political change has affected income transfer and education policies as well as income inequality. And it will investigate the anomaly in formerly socialist countries, where the introduction of democracy has been accompanied by significant increases in inequality.
The study will draw on existing data on
democracy, inequality, educational achievement, and social spending,
including the 1996 income distribution database created in an earlier
World Bank study (ref. no. 679-78) and its recent update.
RSB support: $30,000
Staff weeks: 6
Development strategies generally emphasize sustained growth as a means of raising average incomes. But failure to account for environmental degradation can erode the capital base for future development. This research project aims to improve the understanding of the links between economic development and the environment and to identify policies that will help to maintain long-term growth prospects. The research will center on case studies of five countries: Brazil, Chile, India, Nepal, and Sri Lanka.
The case studies will examine the circumstances under which growth-inducing, economywide policies (such as liberalization), and the ensuing growth, might exacerbate the environmental harm caused by policy distortions (such as subsidized prices for natural resources). And they will identify conditions under which growth would worsen the adverse environmental effects of market failures.
The case studies will also identify the circumstances underlying win-win outcomes, in which economywide policies promote growth while not significantly degrading-or even improving-the environment. Four case studies will look at the incidence of environmental costs and benefits among different income groups. And two will investigate whether adjusting the sequencing of economywide policy reforms could change their environmental effects.
The research will use a variety of
approaches. Each case study will prepare an action impact matrix, a
cost-effective approach that uses existing data to show the key
environmental impacts of development policies. Other approaches range
from fairly simple models to quite complex (and thus costly) ones, and
the study will compare their usefulness and cost-effectiveness in
modeling the links between growth and the environment.
RSB support: $359,400
Staff weeks: 69
The rapid growth in recent years of the industrial sectors in many developing countries, particularly in East Asia, and the long-term decline in agricultural commodity prices have raised uncertainties for many policymakers about what role the agricultural sector should play in the future and what policies should be pursued to achieve high growth in the sector. This research project will examine the underlying mechanisms of rural sector development and the interactions between rural growth and government policies in three countries-Indonesia, the Philippines, and Thailand- that have already achieved significant economic and rural sector development and thus may offer lessons for others. The study will use both quantitative and institutional analysis.
The study will first review government
policies that have affected the rural sector either directly or
indirectly in the past three decades, the political, social, and
economic conditions prompting these policies, and the effects on rural
income. It will also quantify the relative importance of different
policies in affecting rural development outcomes. In a cross-country
comparative analysis the study will then examine the dynamics of two
components of the agricultural sector -investment and productivity,
and export and domestic markets-the links between these components,
and the effects of policies on them. Finally, the study will
synthesize its findings.
RSB support: $38,000
Staff weeks: 48
This study will investigate hypotheses relating to how households make decisions about educating their children, putting their children to work within or outside the household, and having the children's mother work outside the household. It conjectures that while child labor is related to poverty- particularly the parents' income and employment status-it also depends on the nature of decisionmaking within the household and the balance of power between the mother and father.
Several of the hypotheses relate to literacy in the household, both among adults and among children. The study hypothesizes that literate parents are more likely than illiterate parents to desire that their children be literate, and that mothers have a stronger desire than fathers that their children be literate. And it conjectures that there will be declining demand within a household to have literate children once one child is literate.
The study will use several approaches to investigate the
hypotheses: theoretical analysis, use of anthropological and anecdotal
evidence to arrive at initial stylized facts and intuitions, and
formal empirical analysis based primarily on data from India's
National Statistical Survey.
RSB support: $31,800
Turkey has long been plagued by large fiscal deficits and high inflation. Yet it has attracted considerable private capital from abroad, enjoyed buoyant economic growth, and seen fairly modest current account deficits-all of which have eased the pressures for stabilization. This research project will examine the technical and political economy issues that arise in designing stabilization policies in the context of open capital accounts and large private capital movements. While focusing on Turkey, the research will also draw on the experience of other countries, particularly in Latin America.
The research will
investigate the optimal size, composition, and sequencing of fiscal
adjustment in Turkey, focusing on sustainability. Using institutional
and game theoretic analysis, it will analyze the determinants of
interest rates on government debt and issues in public debt
management. Finally, the research will examine issues relating to a
disinflation strategy for Turkey. It will review the lessons of
Brazil's Real plan, examine alternative monetary frameworks for
disinflation, and review the experience with monetary policy
implementation in Turkey. It will also analyze the political economy
of inflation and disinflation in Turkey, focusing on distributional
issues.
RSB support: $40,000
Staff weeks: 6
Individual farming was legalized in Russia in 1991-92. But despite strongly stated federal support for private farms, they have failed to become significant contributors to Russian agricultural production. After an upsurge in 1992-93, the number of individually owned farms has stagnated and then declined. Individual farmers produce less than 2 percent of the country's agricultural output. Meanwhile, the number of collective enterprises has remained virtually unchanged.
Why did the national policy of decollectivization founder? This research project will look for political and economic explanations. It will combine institutional analysis of interactions among agricultural producers, input suppliers, and local administrators with analysis of the distribution of power and the economic incentives for power sharing at the farm, local, and national levels. And it will examine the incentives among political and economic actors for adopting and implementing agricultural reforms as compared with supporting traditional collectivist forms of production.
The findings should
help in understanding the often hidden rationales and strategies of
subnational-level actors in preserving the existing institutional
arrangements in the face of a changing national policy paradigm. And
they should help explain the resilience of collective forms of
production in the former Soviet republics.
RSB support: $34,400
Staff weeks: 33
As the World Bank finances a growing number of projects aimed at improving child development, a need has emerged for reliable assessment instruments to monitor and evaluate these projects. While measuring children's health and nutritional status is fairly straightforward, assessing their cognitive and socio-emotional development is far more complicated. Existing assessment instruments use norms that are inappropriate in different cultures, fail to adequately predict later performance in school and in life, and measure skills that do not match those that Bank-supported programs develop. And even when adapted, tests have not been transferable across cultures.
This research project aims to develop a battery of tests for assessing
children's cognitive and socio- emotional development, with some
elements that would be transferable across countries and cultures and
others that would vary. The research will capitalize on the most
promising items and models used in the traditional standardized tests
and augment them with assessment instruments based on modern theories
of development. The battery of assessment instruments will then be
pilot-tested in several countries, such as Indonesia, Kenya, the
Philippines, and Uganda.
RSB support: $39,500
Staff weeks: 3
Private financial flows to developing countries have increased dramatically since 1990, with most resulting from bond issues or private bank loans. But recent events in emerging markets have heightened long-standing concerns about the efficiency and stability of the market for developing country debt. This project will assemble data on international bonds and bank loans to emerging markets in the 1990s to test hypotheses about the pricing of this debt and the workings of the debt market.
The research will assess whether the
incorporation in loan contracts of new clauses designed to make
restructuring nonperforming loans easier would raise the cost and
reduce the availability of credit. The study will analyze the
determinants of the maturity of bond issues and the effect on spreads
of restrictive covenants, to determine whether short maturities and
restrictive covenants could ease credit constraints faced by borrowers
with weak credit. Finally, the research will compare the behavior of
loans extended by banks with that of loans extended through the
capital market in order to shed light on the efficiency and stability
of bank lending.
RSB support: $40,000