metadata: authors: 0: author: Kanbur,Ravi
count: Ghana
docna: 0: docna: The links between economic policy and
            research : three examples from Ghana and some general thoughts
docty: Policy Research Working Paper
subtopic: Macro-Fiscal Policy,Economic Conditions and Volatility,Taxation & Subsidies,Economic Adjustment and Lending,Oil Refining & Gas Industry,Public Sector Economics,Economic Development,Public Finance Decentralization and
            Poverty Reduction,Inequality
teratopic: Poverty Reduction
abstracts: cdata!: The author gives examples of research
            recently published in professional journals that directly
            helped, or could help, in formulating policy advice (and
            perhaps even policymaking). An article by Younger (1992) was
            helpful in analyzing a problem in Ghana, where aid flows to
            government crowded out the private sector (especially
            private investment), which competed for scarce domestic
            resources. Younger suggested that tighter fiscal policy
            combined with looser monetary policy would promote more
            investment. Younger's analysis helped frame thinking in
            an area where muddleheadedness is common, and provided the
            author with analytical ammunition when he supported
            budgetary restraint. In another example, research based on
            the Ghana Living Standards Survey helped identify the
            poverty consequences of alternative revenue instruments. The
            link between economic policy and research can be made, says
            the author, but that does not mean it will be made. Usually
            such a link relies on the change placing of a researcher in
            the policymaking and advising trenches. One problem is that
            policymakers face highly specific, timebound problems and
            are interested only in answers to particular questions. But
            what matters to researchers is the generality of results or
            the methodological innovations in analysis. Journals turn
            down papers that answer very specific policy questions. The
            appropriate dissemination of research results requires that
            researchers speak the language of policymakers. The author
            proposes the following. Professional researchers should do
            highly country-specific and policy-specific studies that use
            the best-practice methodological tools plus a detailed
            institutional knowledge of the country. There should be a
            continuous attempt at synthesizing the findings of
            professional research for the benefit of the policy
            community, as is done in the World Bank Research Observer.
            "We need single-page or double-page flysheets
            summarizing research results," says the author,
            particularly those that are country-specific and
            policy-specific. Research should be presented in short,
            pithy summaries that policymakers and their top advisors can
            understand, setting out the policy question addressed and
            the answer provided (the latter are not so common,
            especially for Africa). "A basic rule of thumb I have
            developed is that anything longer than two pages is unlikely
            to be read by the most senior policymakers, the limit for
            the next most senior is four pages, then eight pages, and 16
            pages. If it is longer than 16 pages, do not bother to send
            it to the policy fraternity (unless it is prefaced by a
            two-page summary)."
geo_reg_key: 1927320,517191
repnme: repnme: The links between economic policy and
            research : three examples from Ghana and some general thoughts
display_title: The links between economic policy
            and research : three examples from Ghana and some general thoughts
listing_relative_url: /research/1993/10/698801/links-between-economic-policy-research-three-examples-ghana-some-general-thoughts
topicv3: Macroeconomic Vulnerability and Debt
            m1326057 1104,Poverty m1326687 695,Taxation m1327615 1121,Dutch Disease m1583679 4708,Petroleum Industry m1583790 4710
publishtoextweb_dt: 2010-07-01T00:00:00Z
historic_topic: Poverty Reduction
origu: UNKNOWN
no_of_pages: 20
author_keys: 0: author_key: 94124
model_extractions: # WPS 1212

Thi-s paper -a produJct of the Ghana Resident Mission - was prepared for presentation at the Eastern Economic Associati.,n meetings, Wasvhington, DC. March 19-21, 1993. Copies of this papr are available free from the World _kbank.,_ P.O. Box M27, Accra, Ghana. Please contact Phyllis-Maile Attipoe, Ghana Resident Mission, extension _526-3003_ (October 1993, 15 pages).

Kanbur gives examples of rese&rch recently published in professional joumnals that directly helped, or could help, in formulating policy advice (and perhaps even poflcymaldng). An article by Younger (I 992) was helpful in analyzing a problem in Ghana, where aid flows to govemnment crowded out the private sector (especially private inve3tmnent), which competed for scarce domestc resources. Younger suggested that tighter fiscal policy combined with looser monetary policy would promote more investment. Younger's analysis helped frame "thinking in an area where muddleheadedness is common," and provided Kanbur with analytical ammunition when he supported budgetary restraint. In another example, research based on the Ghana Living Standards Survey helped identify the povertv consequences of altemnative revenue instruments.

T'he link between economic policy and research _can_ be made, says Kanbur, but that does not mean it _will_ be made. Usually such a link relsies on the chance placing of a researcher in the policymaking and advising trenches.

One problem is that policymakers face highly specific, timebound problems and are interested only in answers to particular questions, But what matters to researchers is the genierality of results or the methodological innvations in analysis. Journals tumn down papers that answer very specific polcy questons.

The appropriate dissemination of research results requires that researchers speak the language of po!icymakers. Kanbur proposes that:

*Professional researchers should do highly country-speciflc and policy-specific studies that u.,'e the best-practice methodological tools plus a detaled institutional knowledge of the country.

* There should be a continuous attempt at synthesizing the findings of professional research for the benefit of the policy community, as is done in the _World Bank Research Observer._ "We need single-page or double-page flysheets summarizing rcsearch results," says Kanbur, particularly those that are country-specific and policy-specific.

*Research should be presented in short, pithy summaries that policymakers and their top advisors can understand, setting out the policy question addressed and the answer provided (the latter are not so common, especially for Africa). "A basic rule of thumb I have developed is that anything longer than two pages is unlikely to be read by the most senior policymakers, the limit for the next most senior is four pages, then eight pages, and 16 pages. If it is longer than 16 pages, do not bother to send it to the policy fraternity (unless it is prefaced by a two-page sumrmary)."

T'he Policy Research Working Paper Series disseminates the findings of work under way in the Bank. An objective of the series is to get these fmd- igs out quickly, even if presentations are less than fully polished. The findings, interpretations, and conclusions in these papers do not necess&iily represent official Bank policy.

Pr-duced by the Policy Research Dissemination Cem~~t
The Links Between Economic Policy and Research: Three Examples from Ghana and Some General Thoughts* _by_

# Ravi Kanbur The World Bank

# Contents

1. Introduction

2. Interest Rates on Lines of Credit 3. The Dutch Disease Literature 4. Fuel Taxation and Income Distribution _5._ Fostering Links between Economic Policy and Resrarch

*This paper **Aas** prepared forprcsenuttion a' the Eastem Economic Association meetings, Washington D. C., March 19 -21, 1993
# 1. **Introduction**

This paper is about how papers published in professional economic journals might (or might not) have an impact on economic policy. I have in mind, in particular, development economics journals such as the **Journal of Development Economics,** Journal of African &onomies, Wgrld Development, or World Bank Economic Review. I write from the perspective of someone who has been in the policy trenches for the past year, as the World 3ank's Resident Representative in Ghana, and as someone who has been involved in, and continues to he involved in, academic research and publication.

Rather than talk in very general terms about policy making and research, I will simply give three examples where I feel academic research has helped, or could help, me in formulating policy advice. l7ne concluding section does, however, offer some general thoughts on fostering links between policy and research.

# 2. Reference Interest Rates on **Linies** of **Credit**

When I arrived in Ghana, one of the first issues to cross my desk was the slow disbursement of a line of credit in our Rural Finance Project. The line of credit is from the Bank of Ghana (BoG) to Participating Financial Institutions (PFI's) for onlending to the agricultural sector. The instruments available in the design of the project are (i) monitoring to ensure that onlending is indeed to agriculture and (ii) the interest rate charged by BoG to the PFI's. Notice, in particular, that the interest rate for onlent funds is not controlled.

**1**
The interest rate to the PFI's was based on a formula (also part of the original design), which took the interest rate on 180-day deposits minus 2%. The rate was adjusted eve,y six months. The problem we faced was that the line of credit was not being used because the interest rate thrown up by the formula was too high to induce PFI's to come in and borrow in order to onlend. This was only partly becaus - twice yearly adjustments were too infrequent in a period of rapidly declining interest rates (as was the case at that time). So, what formula ought to be used?

The professional literature on credit markets, for example the special issue (September 1990) of the W'orld Bnk Economic Review on this topic, helped in thinking th:ough the issues invol ved. It should be stated, however, that I did not question the basic objectives of the project, which were to ensure that credit got into the hands of those engaged in the agricultural sector, although the credit markets literature would help in addressing this question as well.

One possibility that the recent IJterature alerts us to is that of rationing in credit markcis. Even if there is excess demand for credit at the going interest rate, price adjustment may not take plAace because at a higher interest rate the composition of loan applicants may change adversely. Such adverse selection can explain non-market clearing equilibria. In such a setting, it seenis clear that making an additional line of credit available to financial intermediaries, at the same cost as the current marginal cost of funds to them, will alleviate the credit rationing and achieve the objective of getting credit into the hands of those who did not previously get any. The right formula for the interest rate to the PFI's seems to be one which approximates the PFI's marginal cost of funds.

However, suppose that the market is characterized not by rationing because the interest rate is being used as an indirect screening mechanism (to use the terminology of Hoff and Stiglitz, 1990), 2
but by the use of direct screening mechanisms which identify and exclude high risk borrowers in the agricultural sector. Suppose that we are nevertheless determined to ensure that credit does flow from the PFI's to these borrowers, perhaps because we feel that part of the perceived risk by the rFl's will be removed once they start interacting with these traditionally excluded borrowers, or that once these borrowers acquire credit and invest, a virtuous circle will set in. Then it seems clear that a subsidy will be needed for the PFI's, the exact extent of which will depend on what sort of a spread they will demand in ordor to lend to the target group. In this case the formuia should use the marginal cost of funds to the PFI's as a base, and then subtract a certain amo.,nt (say 2%) to determine the lending rate from the BoG to the PFI's, on condition that onlending from the PFI's will be monitored to ensure that it is indeed to the target group (otherwise the subsidy is a straightforward transfer of ;ent to the PFI's).

In the case of Ghana, the consensus is that the second of the two settings described above obtains. The "reference interest rate" formula is thus clear in principle. Of course, operationalising this in practice is not easy. If all PFI's were identical we could simply identify the marginal cost of funds. But in reality there is a range of PFI's, some of which rely primarily on savings deposits, while others take in time deposits. The clientele is segmented as between rural and urban banks. In principle, we could segrnent the PFI's into aifferent categories, but the project design did not allow for this. So, how to calculate the marginal cost of funds? One operational answer is to take a weighted average of interest rates offered on various types of deposits by the range of PFI's, the weights being the proportion of all deposits accounted for by each type (i.e. to estimate the average cost of funds). Bu. the formula needs to be monitorable and easily implementable, anJ information on deposit shares is not easily and openly available. Information on interest rates is indeed available, so that finally, practicaily, it was decided to take a simple average of the highest time deposit rate and the lowest savings deposit rate. Even this can be justified, it seems to me, on the principle of insufficient reason, since what we are really after is the 3
interest rate on the marginal source of funds for the PFI's, and we cannot easily find out which is **the** marginal source and it can in any case change over time and across PFI's.

# **2. The** Dutch **Disease Literature**

Aid plays a major role in Ghana's economy. In recent years aid flows have been running at 7 to 8 per cent of GDP. In a (now) largely liberalized foreign exchange market, the implications of this aid for different sectors needs to be thought through. Clearly, the Dutch disease literature has been of immense help. I have found particularly useful the article by Younger (1992), in developing a strong argument to convey to policy makers in favour of larger budget surpluses.

Younger (1992) summarizes the issue as follows: " 'Dutch Disease' refers to the problems that a booming export sector causes the rest of the economy. In Ghana's case, the boom sector is capital from aid (and perhaps repatriations). As this capital hits the economy, it is spent either **oil** imports or domestic goods and services ... If the expenditure i; on imports, then there is no direct effect on the money supply or aggregate demand in the economy: the balance of payments shows an off-setting current account deficit. But when the demand is for domestic goods and services, it creates problems for macroeconomic management. First the increase in aggregate demand for Ghanaian goods will begin tc drive prices up, and this helps to explain the persistence of inflation in Ghana. At the same time, foreign exchange must be changed to cedis to make local purchases, so the money base increases." 4
The response to inflation and monetary expansion has been a tight cred.t policy, which explains to some extent the fact that private-sector investment has not taken off in Ghana. Since most of the aid flows to government his beneficiary of the boom sector has crowded out the private sector in competition for scarce domestic resources. In particular, private investment has been crowded out. Younger's solution is that the government shnuld run budget surpluses (perhaps with the aid of a VAT), over and above grant inflows to the treasury and should at the same time make more credit available to the private sector. "This move toward tighter fiscal policy together with looser monetary policy would promote more investment." I have found Younger's (1992) anal)sis perceptive. Clearly, it draws on earlier academic literature (e.g. Corden and Neary, 1982), but its app,ication to Ghana is novel and insightful. It helps to frame one's thinking in an area where muddle headedness is common. It has also provided me with analytic ammunition when I argue in favour of budgetary restraint.

# **4.** Fuel Taxes and Income Distribution

Taxes on fuel are at centre stage in any discussion of Ghanaian public finances. In 1988 the petroleum tax accounted for 8.9% of total tax revenue, in 1991 and 1992 the figures wer4 2A 7% and 23.4%. The 1993 budget, in response to large increases in rer..rent expenditure, announced significant increases in petroieum taxation which led to an immediate 60% jump in prices at the petrol pump. It is expected that petroleum taxation will account of 38.0% of total tax revenue in 1993.

Such steep increases in petroleum product prices have generated considerable controversy, and many observers have based their critique on the assertion that fuel taxes are regressive. How true C
**is** this assertion? In order to analyze this issue, we need information on fuel consumption patterns in the Ghanaian economy. We also need a conceptual framework fiom which to develop rules of thumb for assessing the "regressiveness" of alternative revenue raising measures.

Besley and Kanbur k1'o9) develop a theoretical fiamework for evaluating the poverty consequences of zlternative commodity taxes. In the framework of modern public finance theory and using a recently suggested class of poverty measures by Foster, Greer and Thorbecke (1984), they derive rules for when shifting the pattern of commodity taxation will reduce poverty. It .urns out ilia a crucial indicator is the fraction of total expenditure on a commodity accounted for by the poor. T}e intuitive reasoning is straightforward. A unit increase in excise taxation raises revenue in proportion to total consumption of the commodit in the economy (as a first order of approximation). By the same token, the income equivalent of utility loss to a poor household is proportional to its consumption of the commodity, so that if the poverty measure is additively separable in the appropriate sense, the impact on poverty will be proportional to the total expenditure on the commodity by the poor. It follows then that the efficacy of taxing a particular commodity is proportional to the ratio of the poverty impact to revenue raised - hence the indicator. Besley and Kanbur (1988) show the precise assumptions required and how the indicator can be generalized when these assumptions do not hold. But the indicator can serve as a useful and implementable benchmark in policy discussions. Notice, for example, that it is different from another indicator that is often used - the fraction of total expenditure of the poor accounted for by the commodity.

One important point that emerges from the above, and which is drilled irto those trained in molern public finance theory, is to focus on "equal revenue" comparisons. The regressivity of a tax cannot be coherently discussed in isolation - the formulation always has to be one of relative regressivity

**6**
in raising the same revenue. **There** may, however, be some comparators that could **be** candidates for providing a g,.neral benchmark. One e"ample is a proportional consumption tax. Here the indicator is clearly the fraction of total consumption of all commodities accounted for by the poor. Another example is a poll tax. Here the indicator is simply the head count ratio - the fraction of tde population below the poverty line (see Besley and Ka,ibur, 1988).

Armed with this conceptual framework, we can now proceed to assess the regressivity, or otherwise, of petroleum taxation in Ghana. What we need to implement the rules of thumb is a "poverty profile" for Ghana, which gives us consumption patterns of the poor and of the economy as a whole. Such a poverty profile is presented in Boateng et al (1992), based on the Ghana Living Standards Survey. I will not here go into the details of the survey and how it was used to construct the poverty profile. Suffice it to say that the survey was conducted in 1987-88, and a poverty lin. of two thirds of mean per capita household consumption expenditure was used. On this basis, the survey showed that 36% of Ghanaians were below the poverty line, and their consunmption was 16% of total consumption hy all Ghanaians.

The following table presen., consumption patterns for non-food items, among which are gasoline and kerosene - the key items in fuel taxation (Boateng et al, 1992, present much more information on poverty in Ghana, including consumption patterns for food). The table makes interesting reading. The poor account for only 0.2% of total expenditure on gasoline. There is a clearly a prima facie case for the progressivity of taxing gasoline. However, the poor account for 25.3% of the consumption of kerosene. The poverty consequences of taxing this commodity are clearly more severe. In relation to the two "universal" indicators we see that while taxing kerosene is still more progressive than a uniform poll tax, it is less progressive than a uniform consumption tax. Another issue that has 7
come up in the Ghanaian context is **the** possibility of **taxing** alcohol. **For alcohol, tables** in **Boateng et** al (1992), show that the poor account for **17.4%** of total consumption, so that taxing it is more progressive than taxing gaso'ine, hut less piogressive than taxing kerosene.

One concern that has been -aised about gasol:nu prices is that they will feed into transportation prices. From Table I _we_ see that the transportaticui expenditures of the poor account for 13.3% of total transportation expenditure in Ghana. **Thi --** the second round effects of a gasoline price increase will be more regressive that the first round effects, but overall the total effect is still likely to be less regressive than taxing kerosene or a poll tax, and about as regrescive as a broad based consumption tax.

But these considerations of second round effects, with associated elasticities of substitution in consumption and production lead to an area where further research is needed. We have the methodology, as developed for example by Hughes (1987). What is needed is an application to Ghana, which takes into account the institutional peculiarities and makes best use of the limited information available. Such research, if it is done quickly and if it is kept focussed on the central policy issue will, I can assure you, find its way into the policy dialogue in Ghana instantly.

8
# **Table I**

**Non-Food Expenditure Pattern by Poverty Grouip**

||**Non-poor**||**Poor**||**All**||
|---|---|---|---|---|---|---|
|Cigarettes, Tobacco<br>Cola N.'ts|72.7|3.6|27.3|7.1|100||
|Soap|80.0|8.2|20.0|I23.6|100|8.6|
|Charcoal or Wood|88.1|5.8|11.9|**4.i**|100|_5.5_|
|Other Fuel||4.1||7.3||4.6|
|(Kerosene etc)|74.7||25.3||100||
|Gasoline|99.8|_1.5_|0.2|0.02|'00|.3|
|Shoes and Clo.thing|82.8|20.4|17.2|22.0|100|20.i|
|Public Transport|86.7|5.9|13.3|4.7|100|_5.1_|
|Medicines, Medical||_5.5_||6.3||5 7|
|Services|82.0||18.0||100||
|Education|83.9|8.6|16.1|8.6|100|8.6|
|Housing|78.9|**4.1**|21.1|5.7|100||
|Utiiit-,'s|91.5|2.9|8.5|1.4|100|2.6|
|Other|90.6|24.9|9.4|13.4|100|23.1|
|All|83.9|100.0|16.1|100.0|100|100.0|

Note: in each cell the upper right entry represents the percentage of the column total, and the lower leit entry the percentage of the row total.

# _Zi._ Fostering Links Between Economic Policy and Reearch

I have given three specific examples where research published recently in professionai journals helped or cou!d help in formulating policy advice (and perhaps even policy making) in a fairiv direct manner. This shows that the link between economic policy and research can be made. But j. I.

9
because it can be made does not mean that it will be made. In many, if not most, cases, it seems to me that the occurrence of a linkage relies on chance and serendipity - in the case of the three examples noted here, it relies on the chance placing of a researcher in the policy making and advising trenches. But can we set up channels that will increase the probability of links being made, and of links continuing to be made, without necessarily requiring that all researchers take time off in policy making, and that all policy makers and advisers take time off to write technical pieces in the learned journals? Even as one says this it should become clear that the strategy is not really feasible, except in isolated cases. It may not even be desirable - after all, comparative advantage in research and in policy making should be exploited.

The transition and translation between research and policy is not easy for two reasons. First, the problems faced by policy makers are highly specific and time bound. The policy maker is, understandably, interested only in answers to particular questions - the general applicability or methodological novelty of the answer is not of interest to him or her. But, for the researcher, it is precisely the generality of the results, or of the meth *dological innovations in the analysis, that matters. This is what gets articles published - how many times have referees turned down a paper with the comment: "a competent exercise, but nothing new or exciting."? The three topics cited in this paper rely on publications that were accepted by the journals because tliey raised general issues or presented results for the first time. The fact that they were (or could be) useful in answering very specific policy questions in Ghana seems to be accidental. I am sure the editors of the journals in which they were published - and I was one of them - did not have this consideration in mind. So this seems to be a basic problem given by the very nature of research and publication on the one hand, and policy making on the other.

A solution to this problem seems to me to lie in appropriate dissemination. Before elaborating on this, let me pose the second of the reasons why the link between research and policy is 10
not easy. This is the language problem. If an Englishman does not speak French and a Frenchman English, they will never understand each other. Each will probably get frustrated, blame the other for lack of communication, probably insinuate lack of competence on the part of the other, etc. Policy makers and researchers do indeed, for the most part, speak a different language, and a whole lot of translation is needed. I am referring not just to the obvious fact that a highly technical paper in all its mathematical glory is unlikely to be understood by those in policy making - even those who once had that ability will lose it once they have been in policy making for a while, because survival and advancement in this area needs skills of a different type. I am referring also to the tendency of researchers to be comprehensive in their writings, leading to longish papers that are unlikely to be read by those in the policy making fraternity. A basic rule of thumb I have developed is that anything longer than two pages single space is unlikely to be read by the senior-most policy makers, the limit for the next most senior is four pages, then eight pages and sixteen pages. If it is longer than sixteen pages, do not bother to send it to the policy fraternity (unless it is prefaced by a two-page summary).

Given these twin problems of (i) difference in horizons - specificity and timeliness versus generality and thoroughness, and (ii) language - both length and style of written presentations, what can we do? In answering this question I do, however, want to acknowledge that from time to time, research does impinge on policy making through the "big idea", or through the slow accumulation of evidence from a myriad of experiences.

My first proposition is that the way professional research can help policy making is through highly country specific and policy specific studies which use the best practice methodological tools as well as a detailed institutional knowledge of the country at hand. If in conducting this analysis a new methodological innovation is introduced, this is all well and good (particularly for the researcher), 11
but it nmust be understood that this is not the primary objective. In fact, replicating a methodology first tried elsewhere is a perfectly acceptable exercise and should be rewarded, provided that a specific policy question has been addressed and resolved. The test of excellence here is the specificity of the question asked, the detail of the knowledge marshalled, the appropriateness of the tools used and, finally, the nature of the answer delivered. I feel that such excellence is under-rewarded in the economics profession, relative to contributions where methodological innovations are presented or generalizations are established. However, even if the incentives are right, researchers will have to look for such problems actively - they will not simply land on their desks.

My second proposition is that there has to be a continuous attempt at synthesizing the findings of professional research for the benefit of the policy community. This includes synthesizing the findings of highly country specific research of the type discussed above, or of latest developments in theory. Out of such synthesis can come the themes that could previde the broad framework for policy thinking even as the policy makers struggle with putting out the fires of the here and now.

My third proposition is that there is tremendous value to short, pithy, summaries of research of any of the types noted above, in a langlage and a style that policy makers and their top advisers can understand. While such expositions of "big themes" are useful, even more important are summaries of 'ighly policy and country specific research which sets out the policy question addressed and the answer provided - the latter are not as common, especially in Africa.

These propositions are not new, of course, and I feel that with some modifications, the current system of academic research and publication could be made to serve their purpose. Specialized development journals like the ones mentioned in the introduction do indeed publish country specific 12
research. But perhaps more could be done in nighlighting papers that address, and resolve, highly specific issues through best practice technique,. The development of professional journals at the national level (like recent attempts to revive the Bulletin of the Economic Society of Ghana) will also help in providing an additional outlet for country specific professional research.

On the second proposition, professional journals do go in for surveys from time to time, but so far as I am aware there is only one journal that focusses exclusively on synthesis of professioiA. development economics research - the World **Bank Research Observer.** We could perhaps do with ont or two more journals of this type. Finally, we need single or double page flysheets summarizing thN results of research, particularly the country specific and policy specific variety. I know that I would be very happy to have a compendium of such flysheets for Ghana, in areas where I do not myself have special expertise. The production of such flysheets is not of course research, and researchers themselves may not be good at it (although they should try - they may get to like it). The reward structures in rese^-ch do not encourage such "publication." Yet it is the final step in the link. Many institutions do already produce such policy briefs. But there is room for more, particularly for briefs directed to policy makers in Africa and dealing with very specific policy questions.

One final point. It should be apparent that I have put the onus on the research community to reach out and disseminate to the policy community. I think this is right. While there are some in the policy community who could or would want to interact directly with researchers, I thinK there is a fundamental asymmetry which makes this direction of linkage very difficult except in some isolated cases. It is up to researchers to learn the language of their policy counterparts, to understand policy problems as perceived by policy makers, to translate these into the language of research and analysis, to conduct the analysis using the best available techniques, and then to attempt to translate the findings back into the 13
language of policy makers. No single researcher can do all of this, but researchers as a whole should be able to. At least they should try to. Speaking for myself, I can assure them that it is a satisfying experience.

14
# **Refier!vnces**

Besley, T. and R. Kanbur (1988): "Food Subsidies and Poverty Alleviation," EconomiJcournal Boateng, E., K. Ewusi, R. Kanbur and A. McKay (1992): "A Poverty Profile for Ghana: 1987-1988," Journal **of African** Economies Corden, W. M. and **J.** P. Neary (1982): "Booming Sector and Deindustrialization in a Small Open Economy," Economic Journal Foster, E., **J.** Greer and E. Thorbecke (1984): "A Class of Decomposable Poverty Measures," Econometrica Hoff K. and **J.** E. Stiglitz (1990): "Imperfect Information and Rural Credit Markets - Puzzles and Policy Perspectives, The World Bank Economic Review Hughes, G. (1987): "A New Method for Estimating the Effects of Fuel Taxes: An Application to Thailand", The World Bank Economic Review Younger, S. D. (1992): "Aid and the Dutch Disease: Macroeconomic Management When Everybody Loves You," World Develonment 15
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|WPS1 202|Privatization and Foreign Investmen<br>in the Developing World, 1988-92|t Frank Sader|October 1993|Rose Vo<br>33722|
|WPS1<br>203|Determinants of Value-Added Tax<br>Revenue: A Cross-Section Analysis|Zeljko Bogetic<br>Fareed Hassan|October 1993|F. Smith<br>36072|
|WPS120|4 Structural Adjustment, Economic<br>Performance, and Aid Dependency<br>in Tanzania|Nisha Agrawal<br>Zafar Ahmed<br>Michael Mered<br>Roger Nord|October 1993|K. Rivera<br>34141|
|WPS1 205|Wage and Employment Decisions<br>in the Russian Eoonomy: An Analysis<br>of Developments in 1992|Simon Commander<br>Leonid Liberman<br>Ruslan Yemtsov|Octooer 1993|0. del Cid<br>36303|
|WPS1206|Empirical Perspectives on National<br>Index Funds|Ishac Diwan<br>Vihang Errunza<br>Lemma W. Senbet|October 1993|A. Yideru<br>36067|
|WPS1207|Characteristics and Performance<br>of Settlement Programs: A Review|Bill H. Kinsey<br>Hans P. Binswanger|October 1993|H. Binswanger<br>31871|
Policy Research Working Paper Seris

||This|Author|**Date**|Contact<br>**for**paper|
|---|---|---|---|---|
|WPS12O|8<br>Primary School Achievement<br>In<br>English and Mathematics<br>in<br>Zimbabwe:<br>A Mufti-Level<br>Analysis|Levi M. Nyagura<br>Abby Riddell|October 1993|I. Conachy<br>33669|
|WPS120|9 Should East Asia Go Regional?<br>No, No, and Maybe|Arvind Panagariya|October 1993|D. Ballantyne<br>37947|
|WPS121|0 The Taxation of Natural Resources:<br>Principles and Policy Issues|Robin Boadway<br>Frank Flatters|October 1993|C. Jones<br>37699|
|WPS1<br>211|Savings-investment<br>Correlations<br>and Capital Mobility in Developirg Co|Nlandu<br>Mamini<br>t-.^rs|October 1993|R. Vo<br>31047|
|WPS121|2 The Unks between Economic<br>Policy<br>and Research:<br>Three Examples<br>from<br>Ghana and Some General Thoughts|Ravi Kanbur<br>|October 1993|P. Attipoe<br>526-3003|