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From Micro to Macro: Entry Barriers, Misallocation, and Aggregate Productivity

February 23, 2021




  • Differences in living standards around the world are substantial, with income per worker in the richest countries up to 60 times higher than in the poorest. Even as measures of the stock of physical and human capital have become more reliable over time, aggregate productivity still remains the biggest contributor to these striking income gaps. What, then, could explain these vast productivity differences across countries?

    In this Policy Research Talk, World Bank economist Roberto N. Fattal Jaef will discuss the role of distortions in firms’ business environment that reduce competition, innovation, and allocative efficiency. Following a micro-to-macro approach, Roberto will introduce a methodology that combines theory with firm-level data to infer entry barriers and allocative distortions. Applying this methodology to 21 countries, he finds that these type of distortions are pervasive in less developed countries and able to account for a significant fraction of the observed gaps in Total Factor Productivity.

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    Roberto Fattal Jaef (Speaker)

    Senior Economist

    Roberto N. Fattal Jaef is a Senior Economist in the Macroeconomics and Growth team of the World Bank’s Research Department. His research interests cover various areas of macroeconomics, with a special emphasis on economic growth. Current and recent research topics include: 1) understanding the role of market distortions for firm level behavior, entrepreneurship, and long run macroeconomic outcomes; 2) investigating the micro and macro patterns of transition growth paths, 3) studying the role of credit for business cycle. Prior to joining the Bank, he worked at the International Monetary Fund’s Research department (2011-2013). He holds a Ph.D. in Economics from UCLA.


    Mary Hallward-Driemeier (Discussant)

    Senior Economic Adviser, Finance, Competitiveness & Innovation Global Practice

    Mary Hallward-Driemeier is a Senior Economic Adviser in the Finance, Competitiveness & Innovation (FCI) Global Practice at the World Bank Group, overseeing the analytical agenda on issues of private sector development, technology and productivity. A Canadian national, she joined the World Bank in 1997 as a Young Professional. She has published widely on entrepreneurship, firm productivity and firm dynamics, the impact of financial crises, and women's economic empowerment.


    Deon Filmer (Chair)

    Director of Research

    Deon Filmer is Director of the Research Group at the World Bank. He has previously served as Acting Research Manager in the Research Group, Co-Director of the World Development Report 2018: Learning to Realize Education’s Promise, and Lead Economist in the Human Development department of the Africa Region of the World Bank. He works on issues of human capital and skills, service delivery, and the impact of policies and programs to improve human development outcomes—with research spanning the areas of education, health, social protection, and poverty and inequality. He has published widely in refereed journals, including studies of the impact of demand-side programs on schooling and learning; the roles of poverty, gender, orphanhood, and disability in explaining education inequalities; and the determinants of effective service delivery.

  • The monthly Policy Research Talks showcase the latest findings of the World Bank’s research department, challenge and contribute to the institution’s intellectual climate, and re-examine conventional wisdom in current development theories and practice. These talks facilitate a dialogue between researchers and operational staff and inform World Bank operations both globally and within partner countries. Read More »