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Publications and Data

For information on how to order the World Bank publications reviewed in this issue, see page 16.

• Books
• Journal
• Discussion, Technical and Related Papers
• Policy Research Working Papers
• Electronic Information and Data

BOOKS

Preventing Bank Crises: Lessons from Recent Global Bank Failures

Gerard Caprio Jr., William C. Hunter, George G. Kaufman, and Danny M. Leipziger, editors
EDI Development Studies
This book addresses one of the key issues facing international financial markets today-the risk of banking crises. It examines such problems as unregulated or poorly regulated financial institutions and reforms launched without provisions for sound financial supervision.

The book focuses on ways to avoid major banking crises and on lessons learned through experience. It discusses government guarantees of bank liabilities, market discipline to supplement regulator discipline, transparency of bank and regulator agency activities, independence of bank regulators from political influence, accountability to the public, and bank infrastructure, including the training of both bankers and bank regulators.

Public Finance Reform during the Transition: The Experience of Hungary

Lajos Bokros and Jean-Jacques Dethier, editors
This volume comprehensively describes Hungary's experience with public finance reform. It reviews the history of the reform, analyzes trends in public spending and revenues, and provides evidence of Hungary's ability to move toward accession to the European Union. It also outlines policy reforms in the public welfare system, analyzes reforms in the institutional framework, and examines the tax system.

Global Economic Prospects 1998/99

The ninth edition of this annual report analyzes the short- and long-term prospects for developing countries in the wake of the East Asian crisis, maps out policies to deal with crises once they erupt, and discusses ways to prevent future crises on the scale of East Asia's recent experience. According to the report, the lesson coming out of the East Asian crisis is that developing countries need to strengthen their institutions and deepen their reforms so as to benefit from globalization, not retreat from it. Countries need to build and strengthen their regulatory and institutional capacities to ensure the safety and stability of financial systems, especially where they mesh with international financial markets. The international architecture to prevent crises, and deal with them more effectively, also needs to be strengthened. With the social consequences of the recent crises likely to be protracted, social policy concerns must be an integral part of the selection of overall policy responses to the economic crisis. While never a substitute for sound, pro-growth macroeconomic policies, social safety nets can help mitigate the social effects of crises.

JOURNAL

The articles summarized below appear in the September issue of the World Bank Economic Review, vol. 12, no. 3.

Credibility of Rules and Economic Growth: Evidence from a Worldwide Survey of the Private Sector

Aymo Brunetti, Gregory Kisunko, and Beatrice Weder
A business environment characterized by "incredible" rules-unclear property rights, constant policy surprises and reversals, uncertain contract enforcement-most likely translates into lower investment and growth. This article proposes a new approach to measuring the relevant uncertainties, based on firm-level surveys and an indicator of the "credibility of rules."

Does Economic Analysis Improve the Quality of Foreign Assistance?

Klaus Deininger, Lyn Squire, and Swati Basu
This article examines the impact of the World Bank's country-specific economic analysis and advice on the quality of its lending, using an idealized model of decisionmaking in the allocation of resources between lending services and economic analysis. It finds that economic analysis has a significant positive impact on the quality of Bank loans, and that allocating more resources to it would further improve quality.

Demographic Transitions and Economic Miracles in Emerging Asia

David E. Bloom and Jeffrey G. Williamson
The demographic transition-a change from high to low rates of mortality and fertility-has been more dramatic in East Asia during the twentieth century than in any other region or period. By introducing demographic variables into an empirical model of economic growth, this article shows that this transition has contributed substantially to East Asia's so-called economic miracle.

The Bolivian Social Investment Fund: An Analysis of Baseline Data for Impact Evaluation

Menno Pradhan, Laura Rawlings, and Geert Ridder
The Bolivian Social Investment Fund is a financial institution that promotes sustainable investments in the social sectors. This article shows how to use preintervention data collected for evaluating the fund to improve the targeting of a program, to test the quality of the evaluation design, and to define corrective measures if needed.

International Evidence on the Determinants of Private Saving

Paul R. Masson, Tamim Bayoumi, and Hossein Samiei
This article examines private saving behavior using data for a large sample of industrial and developing countries. Results suggest that there is a partial offset on private saving of changes in public saving and (for developing countries) in foreign saving, that demographics and growth are important determinants of private savings rates, and that interest rates and terms of trade have positive, but less robust, effects.

Unfair Trade? The Increasing Gap between World and Domestic Prices in Commodity Markets during the Past 25 Years

Jacques Morisset
This article looks at the spreads between international and domestic prices for major commodities and explains why they have increased over time. Its main finding is that declines in world prices were not transmitted or were imperfectly transmitted to domestic consumer prices, while upward movements were clearly passed on to domestic prices.

A New Development Database

A Database of World Stocks of Infrastructure, 1950-95

David Canning
This article describes an annual database of physical infrastructure stocks for a cross-section of 152 countries for 1950-95. The database contains estimates of six measures of infrastructure: number of telephones, number of telephone main lines, kilowatts of electricity-generating capacity, and kilometers of roads, paved roads, and railway lines. Some measures of infrastructure quality are included.

DISCUSSION, TECHNICAL, AND RELATED PAPERS

Hard Lessons: Primary Schools, Community, and Social Capital in Nigeria

Paul Francis with others
Technical Paper 420 Working in Nigeria in conjunction with the National Primary Education Commission, the World Bank supported consultations among teachers, parents, education administrators, and community leaders to develop a strong foundation for primary education. The innovative work documented in this paper illustrates the potential for partnership not only between the users and providers of primary education but also between the World Bank and its clients.

Reducing Poverty in India: Options for More Effective Public Services

Country Study
This report finds that success in India in reaching the poor in education and public health depends not only on increasing spending on services but also on improving the quality of the services. It suggests the most useful methods in reducing poverty, such as targeting government spending to primary education, reducing communicable diseases, and improving water and sanitation. And it recommends ways to target public funds more efficiently and effectively.

Rethinking Decentralization in Developing Countries

Jennie I. Litvack, Junaid Ahmad, and Richard M. Bird
Sector Studies Series Political pressure drives most decentralization efforts in developing countries. Regardless of its origins, decentralization can have serious repercussions for resource mobilization and allocation and, ultimately, for macroeconomic stability, service delivery, and equity. This volume describes the complexity of the decentralization process, presents lessons learned about its design, and draws implications for future research agendas.

POLICY RESEARCH WORKING PAPERS

Working Papers disseminate the findings of work in progress and encourage the exchange of ideas among Bank staff and all others interested in development issues. Working Papers can be downloaded from the Website http://www.worldbank.org/html/dec/Publications/ Workpapers/home.html or requested from the contact person indicated at the Bank's main address.

Promoting Better Logging Practices in Tropical Forests
Marco Boscolo and Jeffrey R. Vincent
WPS 1971 * Contact Tourya Tourougui,
room MC2-522, fax 202-522-3230.

Why Privatize? The Case of Argentina's Public Provincial Banks
George R. G. Clarke and Robert Cull
WPS 1972 * Contact Paulina Sintim-Aboagye,
room MC3-422, fax 202-522-1155.

The Economic Analysis of Sector Investment Programs
Sethaput Suthiwart-Narueput
WPS 1973 * Contact Cynthia Bernardo,
room MC2-501, fax 202-522-1154.

Volatility and the Welfare Costs of Financial Market Integration
Pierre-Richard Agénor and Joshua Aizenman
WPS 1974 * Contact Sheilah King-Watson,
room G4-014, fax 202-676-9810.

Acting Globally while Thinking Locally: Is the Global Environment Protected by Transport Emission Control Programs?
Gunnar S. Eskeland and Jian Xie
WPS 1975 * Contact Cynthia Bernardo,
room MC2-501, fax 202-522-1154.

Capital Flows to Central and Eastern Europe and the Former Soviet Union
Stijn Claessens, Daniel Oks, and Rossana Polastri
WPS 1976 * Contact Rose Vo,
room MC10-628, fax 202-522-2031.

Economic Reforms in Egypt: Emerging Patterns and Their Possible Implications
Rania A. Al-Mashat and David A. Grigorian
WPS 1977 * Contact Shirley Dy,
room H6-372, fax 202-522-0073.

Behavioral Responses to Risk in Rural China
Jyotsna Jalan and Martin Ravallion
WPS 1978 * Contact Patricia Sader,
room MC3-632, fax 202- 522-1153.

Banking on Crises: Expensive Lessons from Recent Financial Crises
Gerard Caprio Jr.
WPS 1979 * Contact Paulina Sintim-Aboagye,
room MC3-422, fax 202-522-1155.

The Effect of Household Wealth on Educational Attainment: Demographic and Health Survey Evidence
Deon Filmer and Lant Pritchett
WPS 1980 * Contact Sheila Fallon,
room MC3-638, fax 202-522-1153.

Evaluating Public Expenditures When Governments Must Rely on Distortionary Taxation
James E. Anderson and Will Martin
WPS 1981 * Contact Lili Tabada,
room MC3-333, fax 202-522-1159.

Analyzing Financial Sectors in Transition: With Special Reference to the Former Soviet Union
Alan Roe, Paul Siegelbaum, and Tim King
WPS 1982 * Contact Diana Cortijo,
room H2-023, fax 202-477-3288.

Pension Reform in Small Developing Countries
Thomas Charles Glaessner and Salvador Valdés-Prieto
WPS 1983 * Contact Miguel Navarro,
room I5-076, fax 202-522-2106.

NAFTA, Capital Mobility, and Mexico's Financial System
Thomas Charles Glaessner and Daniel Oks
WPS 1984 * Contact Miguel Navarro,
room I5-076, fax 202-522-2106.

The Optimality of Being Efficient: Designing Auctions
Lawrence M. Ausubel and Peter Cramton
WPS 1985 * Contact Sandra Vivas,
room Q7-005, fax 202-522-2029.

Putting Auction Theory to Work: The Simultaneous Ascending Auction
Paul Milgrom
WPS 1986 * Contact Sandra Vivas,
room Q7-005, fax 202-522-2029.

ELECTRONIC INFORMATION AND DATA

The World Bank not only collects and makes available large amounts of data. It also draws on its broad experience in working with data across countries to develop analytical tools that can be applied in any country using widely available data. And it assists individual countries in developing and refining survey instruments and in applying the resulting data to the analysis of policy questions. Two examples illustrate the Bank's efforts in developing universal tools and in assisting with specific applications.

The 1-2-3 model

World Bank researchers have developed a simple yet flexible model that policy analysts can use to project the broad macroeconomic effects of proposed policy changes. The basic model refers to one country with two producing sectors and three goods-thus the name "1-2-3 model." This general equilibrium model of an open economy allows users to estimate, for example, how trade liberalization would affect the real exchange rate or what tax rate would generate a given amount of revenue. An experiment using data for Sri Lanka shows how the model can be used to estimate how much domestic indirect taxes would have to be raised following tariff cuts in order to keep the current account deficit from deteriorating while maintaining the same level of investment. In this experiment the tariff collection rate is reduced from 13 percent to 5 percent, and the model is run again. The results show that sales and excise taxes would need to be raised by about 33 percent. Designed for easy use, the model is formatted as an Excel spreadsheet and requires little more than national accounts data widely released by governments. Users can input data themselves, or load data for one of more than 100 countries from a database included with the model. Add-in programs allow users to extend the model, for example, by incorporating an exogenous shock or uncertainty about a key parameter such as trade elasticities. The model is described in a paper by Shantayanan Devarajan and others ("Policy Lessons from a Simple Open-Economy Model," Policy Research Working Paper 1375, World Bank, Washington, DC, 1994). Copies of the model on diskette and the paper can be obtained at no charge by contacting Mr. Devarajan (sdevarajan@worldbank.org) or Delfin Go (dgo@worldbank.org) by email or at the World Bank's main address.

The Tirana workshop

In some countries what is needed even more than simple computer modeling tools is assistance in building the capacity to use them. In Albania, for example, a household survey designed and implemented with World Bank assistance was followed by a workshop aimed at teaching government officials about the use of a large household survey for policy analysis. The survey was undertaken by the Albanian Ministry of Labor and Social Protection primarily to assess the effect of decentralization on the cost-effectiveness of social assistance programs. World Bank staff worked with the ministry to adapt the household survey, based on the Living Standards Measurement Survey model, to the country's needs and circumstances. The survey, which covered 1,400 households, collected information on household expenditures, labor force participation, job seeking behavior, public and private transfers, housing, consumer durables, land, livestock, and other productive assets. In collaboration with the ministry, the Bank then organized a workshop to teach ministry officials how to write simple computer programs to analyze survey data using Stata, a statistical analysis package. The workshop was tailored to the needs of the participants and began with instruction in the basics of using computers and the fundamentals of statistics. Participants also discussed the formulation of policy questions amenable to investigation using household survey data, and the interpretation and validity of the results. By the end of the two-week course participants were able to create and analyze simple data sets about employment and social assistance in Albania. Information about the workshop or the statistical analysis package, and copies of the data set resulting from the survey, can be obtained by contacting Harold Alderman at the Bank's main address or by email (halderman@worldbank.org). Information about the data can also be found on the World Bank's Website, at www.worldbank.org/lsms (click on "LSMS Documents, Questionnaires, and Data Sets").