rafmacalaba/datause-encoder-data huggingface dataset:
Incentives to learn
## WPS 3546

# Incentives to Learn

Michael Kremer<sup>*</sup> Edward Miguel<sup>**</sup> Rebecca Thornton<sup>***</sup> Owen Ozier<sup>****</sup> World Bank Policy Research Working Paper 3546, March 2005 _The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent. Policy Research Working Papers are available online at_ _<u>http://econ.worldbank.org</u>_

* Department of Economics, Harvard University, The Brookings Institution, and NBER. Department of Economics, Littauer 207, Harvard University, Cambridge, MA 02138, USA; 1 (617) 495-9145, <u>mkremer@fas.harvard.edu.</u>

** Department of Economics, University of California, Berkeley and NBER. Department of Economics, 549 Evans Hall #3880, University of California, Berkeley, CA 94720-3880, USA; 1 (510) 642-7162, <u>emiguel@econ.berkeley.edu.</u>

*** Department of Economics, Harvard University, Littauer 207, Cambridge, MA 02138, USA; <u>rlthornt@fas.harvard.edu.</u>

**** ICS Africa, Box 599, Busia, Kenya; <u>owen@ozier.com.</u>

The authors thank ICS Africa and the Kenya Ministry of Education for their cooperation in all stages of the project, and would especially like to acknowledge the contributions of Elizabeth Beasley, Pascaline Dupas, James Habyarimana, Sylvie Moulin, Robert Namunyu, Petia Topolova, Peter Wafula Nasokho, Maureen Wechuli, and the PSDP field staff and data group, without whom the project would not have been possible. The project benefited greatly from a collaborative process between ICS Africa, the researchers, the World Bank team in Nairobi, and PREM researchers. Gratitude is also extended to the teachers and school children of Busia for participating in the study. George Akerlof, David Card, Brian Jacob, Victor Lavy, Antonio Rangel, Joel Sobel, and Doug Staiger have provided valuable comments. We are grateful for financial support from the World Bank, the Young Green Foundation, and the MacArthur Foundation. All errors are our own.
Are external shocks responsible for
            the instability of output in low income countries
External shocks, such as commodity price
            fluctuations, natural disasters, and the role of the
            international economy, are often blamed for the poor
            economic performance of low-income countries. The author
            quantifies the impact of these different external shocks
            using a panel vector autoregression (VAR) approach and
            compares their relative contributions to output volatility
            in low-income countries vis-à-vis internal factors. He finds
            that external shocks can only explain a small fraction of
            the output variance of a typical low-income country.
            Internal factors are the main source of fluctuations. From a
            quantitative perspective, the output effect of external
            shocks is typically small in absolute terms, but significant
            relative to the historic performance of these countries.
Productivity, ownership, and the
            investment climate : international lessons for priorities in Serbia
The authors use data on 27,000 firms
            from 50 countries, half of which are transition economies,
            together with the case of Serbia to examine the relationship
            between productivity, the investment climate, and private
            ownership of firms. As government capacity to address
            investment climate constraints is limited, the
            prioritization of the constraints is critical.
            Identification of the relative effects of various investment
            climate constraints and ownership on productivity should
            serve as a guide for such prioritization. Although ownership
            has recently received less attention in policy decisions
            than before, according to the econometric analysis of
            productivity reported by the authors, private ownership is
            an equally or more important determinant of productivity
            than other components of the investment climate. The
            importance of ownership shows that an unfinished
            privatization and restructuring agenda might have negative
            effects on productivity, in parallel to poor investment
            climate. Another important finding is that countries in
            which firms complain more about infrastructure tend to have
            less productive firms.
The poverty and distributional
            impact of macroeconomic shocks and policies : a review of
            modeling approaches
The importance of distributional issues
            in policymaking creates a need for empirical tools to assess
            the social impact of economic shocks and policies. This
            paper reviews some of the modeling approaches that are
            currently in use at the World Bank and other international
            financial institutions. The specification of these models is
            dictated by the issues at stake, the knowledge about the
            nature of the process involved, and the availability and
            reliability of relevant data. Furthermore, shocks and
            policies have macroeconomic, structural, and distributional
            implications. This creates interdependence between such
            policy issues. Finally, the distributional impact of shocks
            and policies hinges on the heterogeneity of socioeconomic
            agents with respect to endowments and behavior. In the end,
            each modeling approach should be judged on how well it
            handles the interdependence between policy issues and the
            heterogeneity of the stakeholders, given other constraints.
The poverty and distributional
            impact of macroeconomic shocks and policies : a review of
            modeling approaches
WPS3682

**The Poverty and Distributional Impact of Macroeconomic Shocks and Policies: A Review of Modeling Approaches**

# B. Essama-Nssah

Poverty Reduction Group The World Bank Washington, DC

# **Abstract**

The importance of distributional issues in policy making creates a need for empirical tools to assess the social impact of economic shocks and policies. This paper reviews some of the modeling approaches that are currently in use at the World Bank and other international financial institutions. The specification of these models is dictated by the issues at stake, the knowledge about the nature of the process involved, and the availability and reliability of relevant data. Furthermore, shocks and policies have macroeconomic, structural, and distributional implications. This creates interdependence between such policy issues. Finally, the distributional impact of shocks and policies hinges on the heterogeneity of socioeconomic agents with respect to endowments and behavior. In the end, each modeling approach should be judged on how well it handles the interdependence between policy issues and the heterogeneity of the stakeholders, given other constraints.

# World Bank Policy Research Working Paper 3682, August 2005

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent. Policy Research Working Papers are available online at http://econ.worldbank.org._ This paper is part of a larger effort to provide operational guidance on the analysis of the distributional implications of policy reforms. For further details, please visit www.worldbank.org/psia. The author is grateful to Stefano Paternostro, Aline Coudouel, Vijdan Korman, Moataz Mostafa Kamel El Said, Hans Löfgren, Delfin S. Go, Oleksiy Ivaschenko, David P. Coady, Limin Wang, and Philippe H. Le Houerou for useful suggestions and insightful comments on an earlier draft of this paper. Vijdan also provided excellent support for the preparation of this version of the paper.
Antidumping and safeguard measures
            in the political economy of liberalization : the Mexican case
Mexico's creation and use of
            safeguard and antidumping processes to advance its
            liberalization illustrate three key points: (1) The country
            was able to use the instruments without losing political
            control. In a period of crisis that threatened congressional
            approval of critical steps in the liberalization-brought on
            by currency overvaluation and recession, along with
            unexpected demands from the United States in the North
            American Free Trade Agreement negotiations-the government
            applied a number of trade defense measures. Once the
            problems were addressed with adequate instruments the number
            of measures dropped drastically. The instruments had not
            been captured by protection-seeking interests; (2) The
            country adopted a liberalization-accepting measure of
            international norms. An important innovation that Mexico
            made operational was the use within World Trade Organization
            (WTO) rules of prevailing international prices as the
            measure of competition that industry was expected to meet.
            The WTO rules would also have allowed the use of other
            standards-as in traditional antidumping-using countries-that
            impose less discipline. Moreover, the Mexican standard was
            consistent with the government-industry understanding that
            though Mexican industry would be protected against
            extraordinary circumstances it would be expected to face up
            to international competition; (3) Political judgment and
            political courage are essential. While mastery of the
            technical elements of a safeguard or antidumping
            investigation is mandatory, sustaining liberalization
            depends in significant part on the political skills to know
            when to emphasize the technical elements, when to rely more
            on the discretion the government retains under the rules,
            and on the courage to do it.
Symbolic public goods and the
            coordination of collective action : a comparison of local
            development in India and Indonesia
Most economists think of common property
            as physical-a body of water, a forest-and as bounded within
            geographic space. In this paper, building on work in social
            theory, the author argues that common property can also be
            social-defined within symbolic space. People can be bound by
            well-defined symbolic agglomerations that have
            characteristics similar to common property. He calls these
            "symbolic public goods" (SPGs) and make the case
            that such constructs are central to understanding collective
            action. He illustrates the point by contrasting how
            conceptions of nationalism in Indonesia and India created
            SPGs that resulted in very different strategies of local
            development. Indonesia emphasized collective action by the
            poor that resulted in a form of regressive taxation,
            enforced by the ideology of svadaya gotong royong (community
            self-help) that was both internalized and coercively
            enforced. India emphasized democratic decentralization
            through the panchayat system driven by the Gandhian ideology
            of gram swaraj (self-reliant villages). This has resulted in
            an unusual equity-efficiency tradeoff. Indonesia has
            delivered public services much more efficiently than India
            did, but at the cost of democratic freedoms and voice. The
            author argues that the challenge for these countries is not
            to undermine their existing SPGs but to build on them.
            Indonesia should retain the spirit of svadaya gotong royong
            but channel it in an equitable and democratic direction,
            while India should build the capacity of the panchayat
            system by giving it fiscal teeth, while promoting
            underutilized institutions such as Gram Sabhas (village
            meetings) that encourage accountability and transparency.
Symbolic public goods and the
            coordination of collective action : a comparison of local
            development in India and Indonesia
WPS3685

**Symbolic Public Goods and the Coordination of Collective Action:**

**A Comparison of Local Development in India and Indonesia**

## Vijayendra Rao

Development Economics Research Group The World Bank<sup>1</sup>

# World Bank Policy Research Working Paper 3685, August 2005

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent. Policy Research Working Papers are available online at http://econ.worldbank.org._

> 1Please address correspondence to vrao@worldbank.org.  I am indebted to Rukun Advani, Arjun Appadurai, Pranab Bardhan, Kaushik Basu, Scott Guggenheim, David Mosse, Menno Pradhan, Isha Ray, Sita Reddy, Mike Walton, participants in the Goa conference on Conversations Between Economists and Anthropologists, and my DECRG colleagues for extremely helpful suggestions.
For public service or money :
            understanding geographical imbalances in the health workforce
Geographical imbalances in the health
            workforce have been a consistent feature of nearly all
            health systems, especially in developing countries. The
            authors investigate the willingness to work in a rural area
            among final year nursing and medical students in Ethiopia.
            Analyzing data obtained from contingent valuation questions,
            they find that household consumption and the student's
            motivation to help the poor, which is their proxy for
            intrinsic motivation, are the main determinants of
            willingness to work in a rural area. The authors investigate
            who are willing to help the poor and find that women are
            significantly more likely to help than men. Other variables,
            including a rich set of psycho-social characteristics, are
            not significant. Finally, the authors carry out some
            simulations on how much it would cost to make the entire
            cohort of starting nurses and doctors choose to take up a
            rural post.
Re-interpreting sub-group inequality decompositions
The authors propose a modification to
            the conventional approach of decomposing income inequality
            by population sub-groups. Specifically, they propose a
            measure that evaluates observed between-group inequality
            against a benchmark of maximum between-group inequality that
            can be attained when the number and relative sizes of groups
            under examination are fixed. The authors argue that such a
            modification can provide a complementary perspective on the
            question of whether a particular population breakdown is
            salient to an assessment of inequality in a country. As
            their measure normalizes between-group inequality by the
            number and relative sizes of groups, it is also less subject
            to problems of comparability across different settings. The
            authors show that for a large set of countries their
            assessment of the importance of group differences typically
            increases substantially on the basis of this approach. The
            ranking of countries (or different population groups) can
            also differ from that obtained using traditional
            decomposition methods. Finally, they observe an interesting
            pattern of higher levels of overall inequality in countries
            where their measure finds higher between-group contributions.
Re-interpreting sub-group inequality decompositions
WPS3687

# Re-Interpreting Sub-Group Inequality Decompositions

Chris Elbers, Peter Lanjouw, Johan A. Mistiaen, and Berk Özler<sup>1</sup>

## **Abstract**

We propose a modification to the conventional approach of decomposing income inequality by population sub-groups. Specifically, we propose a measure that evaluates observed between-group inequality against a benchmark of maximum between-group inequality that can be attained when the number and relative sizes of groups under examination are fixed. We argue that such a modification can provide a complementary perspective on the question of whether a particular population breakdown is salient to an assessment of inequality in a country. As our measure normalizes between-group inequality by the number and relative sizes of groups, it is also less subject to problems of comparability across different settings. We show that for a large set of countries our assessment of the importance of group differences typically increases substantially on the basis of this approach. The ranking of countries (or different population groups) can also differ from that obtained using traditional decomposition methods. Finally, we observe an interesting pattern of higher levels of overall inequality in countries where our measure finds higher between-group contributions.

## World Bank Policy Research Working Paper 3687, August 2005

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the view of the World Bank, its Executive Directors, or the countries they represent. Policy Research Working Papers are available online at http://econ.worldbank.org._

> 1 Elbers is at Vrije (Free) University of Amsterdam.  Lanjouw, Mistiaen and Özler are at the World Bank.  We are grateful to Tony Atkinson, Francois Bourguignon, Sam Bowles, Valentino Dardanoni, Jean-Yves Duclos, Francisco Ferreira, Gary Fields, Ravi Kanbur, Jenny Lanjouw, Branko Milanovic, Adam Przeworski, Martin Ravallion, Tony Shorrocks, and Jacques Silber for comments and/or helpful discussions.  We are particularly indebted to Marta Menéndez for numerous contributions to this project. Correspondence: <u>planjouw@worldbank.org, jmistiaen@worldbank.org, or bozler@worldbank.org.</u>
Preference utilization and tariff
            reduction in European Union imports from African, Caribbean,
            and Pacific countries
Despite the long relationship between
            the European Union and the African, Caribbean, and Pacific
            (ACP) countries aimed at encouraging their exports while
            stimulating growth and investment, the ACP states still face
            difficulties in integrating into the world economy. The
            author examines the non-least developed ACP countries'
            preferential trade with the EU. Her objective is to explain
            the determinants of preferential exports of ACP countries
            toward the EU and to assess the impact of preferences on
            trade volumes. The author also investigates the existence of
            a threshold in the offered duty reduction under which
            traders have no incentives to ask for preferences.
Private participation in
            infrastructure projects in the Republic of Korea
In the aftermath of the 1997 East Asian
            financial crisis, the government of the Republic of Korea
            published a Private Participation in Infrastructure (PPI)
            Act to remove the main impediments to private investment in
            infrastructure sectors. The implementation of the Act was
            followed by a steady increase in the number of PPI projects,
            thus spurring the modernization of the main infrastructure
            facilities in transport, water, electricity, and
            telecommunications. Despite this progress, the Korean PPI
            market still faces critical challenges that are probably
            related to its nascent stage of development. The market is
            dominated by five construction and engineering firms, but
            lacks world-class project developers. At the same time, the
            procurement of PPI projects takes on average four years, and
            competition in tenders is limited. The number of unsolicited
            proposals is abnormally high, whereas the number of
            solicited proposals remains flat. The participation of
            foreign firms is very limited despite the size of the market
            and the number of projects awarded. Although local financing
            is available, the maturity of financing instruments does not
            exceed five years for most corporate papers, and 10 years
            for government bonds. This paper reviews the procurement of
            PPI projects in Korea and benchmarks it to international
            best practices before proposing options for its improvement.