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IMF News

Blog: Three Steps to Avert a Debt Crisis

3 min 31 sec ago

Blog: Building Defenses Against the Next Economic Downturn

3 min 31 sec ago

IMF Executive Board Completes Seventh Review under the Policy Support Instrument (PSI) for Senegal and Concludes 2018 Article IV Consultation

1 day 12 hours ago

IMF Staff Concludes Visit to Guinea-Bissau

1 day 18 hours ago

Innovation and Corporate Cash Holdings in the Era of Globalization

2 days 4 hours ago
Working Paper No. 19/17

Global Value Chains: What are the Benefits and Why Do Countries Participate?

2 days 4 hours ago
Working Paper No. 19/18

IMF Executive Board Concludes 2018 Article IV Consultation with the Republic of Belarus

2 days 9 hours ago

Blog: Countries in the IMF Financial Spotlight in 2019

2 days 10 hours ago

Panama: 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Panama

2 days 12 hours ago

Transcript of IMF Press Briefing

2 days 12 hours ago

List of IMF Member Countries with Delays in Completion of Article IV Consultations or Mandatory Financial Stability Assessments over 18 Months

2 days 16 hours ago

Blog: How Much Should You Save for Retirement?

2 days 21 hours ago

Republic of Belarus : 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Republic of Belarus

3 days 4 hours ago
Country Report No. 19/9

Republic of Belarus : Selected Issues

3 days 4 hours ago
Country Report No. 19/10

Gross National Happiness and Macroeconomic Indicators in the Kingdom of Bhutan

3 days 4 hours ago
Working Paper No. 19/15

China’s Digital Economy: Opportunities and Risks

3 days 4 hours ago
Working Paper No. 19/16

Panama : Selected Issues

3 days 4 hours ago
Country Report No. 19/12

Blog: Chart of the Week: Japan Grows Older

3 days 12 hours ago

IMF Executive Board Concludes 2018 Article IV Consultation with Finland

3 days 19 hours ago

Finland : 2018 Article IV Consultation-Press Release; Staff Report; and Statement by the Executive Director for Finland

3 days 19 hours ago
Country Report No. 19/7

Malta—Concluding Statement of the 2019 Article IV Mission

3 days 20 hours ago

The Future of Saving: The Role of Pension System Design in an Aging World

3 days 20 hours ago

Corporate Tax Reform: From Income to Cash Flow Taxes

4 days 4 hours ago
Working Paper No. 19/13

Covered Interest Parity Deviations: Macrofinancial Determinants

4 days 4 hours ago
Working Paper No. 19/14

The Present Value of Corporate Profits: A Forecasters' Survey Perspective

4 days 4 hours ago
Working Paper No. 19/12

Statement by IMF Managing Director Christine Lagarde on Meeting with Sri Lanka’s Finance Minister Mangala Samaraweera and Governor Indrajit Coomaraswamy

4 days 13 hours ago

Blog: Top 10 Charts of the Week for 2018

4 days 13 hours ago

Pakistan Implements the International Monetary Fund’s Enhanced General Data Dissemination System

4 days 14 hours ago

How Much Should You Save for Retirement?

4 days 16 hours ago

Finland : Selected Issues

5 days 4 hours ago
Country Report No. 19/8

The Future of Saving : The Role of Pension System Design in an Aging World

5 days 4 hours ago
Staff Discussion Note 19/01

World Economic Outlook Update, January 2019

1 week 1 day ago

A Governance Dividend for Sub-Saharan Africa?

1 week 2 days ago
Working Paper No. 19/1

Does an Inclusive Citizenship Law Promote Economic Development?

1 week 2 days ago
Working Paper No. 19/3

Bank Profitability and Financial Stability

1 week 2 days ago
Working Paper No. 19/5

The Impact of Bailouts on the Probability of Sovereign Debt Crises: Evidence from IMF-Supported Programs

1 week 2 days ago
Working Paper No. 19/2

Countercyclical Fiscal Policy and Gender Employment: Evidence from the G-7 Countries

1 week 2 days ago
Working Paper No. 19/4

Blog: Top 10 Blogs of 2018

1 week 2 days ago

IMF Managing Director Christine Lagarde Meets Prime Minister of Jordan Omar Al-Razzaz

1 week 2 days ago

Extension of the Periods for Consent to and Payment of Quota Increases

1 week 2 days ago

Lao People’s Democratic Republic : Technical Assistance Report-Report on National Accounts Statistics Mission

1 week 3 days ago
Country Report No. 19/6

Vietnam : Technical Assistance Report-Report on Residential Property Price Statistics Capacity Development Mission

1 week 3 days ago
Country Report No. 19/5

Ukraine : Request for Stand-By Arrangement and Cancellation of Arrangement Under the Extended Fund Facility-Press Release; Staff Report; and Statement by the Executive Director for Ukraine

1 week 5 days ago
Country Report No. 19/3

IMF Executive Board Concludes 2018 Article IV Consultation with Burkina Faso

1 week 5 days ago

Seychelles : Second Review Under the policy coordination Instrument and Request for Modification of Targets-Press Release; and Staff Report

1 week 6 days ago
Country Report No. 19/4

Michal Rutkowski: Industrial-Era Welfare Policies are Falling Short

1 week 6 days ago

OECD News - Corruption

Strengthening the Anti-Bribery Convention: Review of the 2009 OECD Anti-Bribery Recommendation

5 weeks 4 days ago
The OECD Anti-Bribery is the first and only international anti-corruption instrument focused on the ‘supply side’ of the bribery transaction. To ensure that it continues to respond to the challenges of fighting foreign bribery, the OECD has launched a review of the 2009 OECD Recommendation for Further Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Anti-Bribery Recommendation).

2018 OECD Consultation on Fighting Foreign Bribery

5 weeks 4 days ago
This Working Group on Bribery consultation with the private sector and civil society will focus on topics suggested by the stakeholders themselves and launch the OECD study, 'Foreign Bribery Enforcement: What Happens to the Public Officials on the Receiving End?'.

2018 OECD Consultation on Fighting Foreign Bribery

5 weeks 4 days ago
This Working Group on Bribery consultation with the private sector and civil society will focus on topics suggested by the stakeholders themselves and launch the OECD study, 'Foreign Bribery Enforcement: What Happens to the Public Officials on the Receiving End?'.

Internship opportunities working on anti-corruption at the OECD

6 weeks 5 days ago
The OECD Anti-Corruption Division offers short-term internships of 2-6 months for qualified students. These internships provide students with the experience of working in an international organisation on anti-corruption issues and more specifically the OECD Anti-Bribery Convention.

OECD launches project to support Uzbekistan’s anti-corruption reforms

7 weeks 3 days ago
The OECD and the Uzbekistan Government, with the support of the U.S. Department of State Bureau of International Narcotics and Law Enforcement Affairs (INL), has launched a project to strengthen Uzbekistan’s capacity to fight corruption and boost its implementation of OECD Istanbul Anti-Corruption Action Plan (IAP) recommendations.

Monitoring the OECD Anti-Bribery Convention: Call for contributions

8 weeks 2 days ago
In 2018, the OECD Working Group on Bribery launched its fourth phase of monitoring of Hungary and Japan's implementation of the OECD Anti-Bribery Convention. To assist this evaluation process, the OECD calls for interested parties to provide written submissions on the evaluated countries.

OECD News - Economy

GDP Growth - Third quarter of 2018, OECD

8 weeks 5 days ago
OECD GDP growth slows to 0.5% in third quarter of 2018

Regulatory framework for the loan-based crowdfunding platforms

8 weeks 5 days ago
In a growing number of OECD countries policymakers are designing specific regulations for lending-based crowdfunding platforms.

To what extent do policies contribute to self-employment?

8 weeks 5 days ago
Using cross-country time series panel regressions for the last two decades, this paper seeks to identify the main policy and institutional factors that explain the share of selfemployment across European countries.

OECD, BSR and Danone launch 3-year initiative to strengthen inclusive growth through public-private collaboration

9 weeks 5 days ago
Business and government should work more closely together to reduce inequality and foster inclusive growth. To help achieve this, at the Paris Peace Forum, Gabriela Ramos, OECD Chief of Staff, G7/G20 Sherpa and leader of the OECD’s Inclusive Growth Initiative, and Emmanuel Faber, Chairman & CEO of Danone, launched the Business for Inclusive Growth (B4IG) Platform.

Composite Leading Indicators (CLI), OECD, November 2018

9 weeks 6 days ago
CLIs continue to signal easing growth momentum in the OECD area

Growth and economic well-being: second quarter 2018, OECD

10 weeks 3 days ago
OECD household income growth slows to 0.3%, lagging behind GDP growth in second quarter of 2018

OECD News - Finance

2019 OECD Global Forum on Public Debt Management

0 sec ago
23-24 April 2019, Paris - Discussions at the 2019 Global Forum will focus on the funding environment, the role of borrowing instruments in broadening the investor base, technological advances in finance for government bond markets and challenging debt dynamics.

OECD Sovereign Borrowing Outlook

0 sec ago
This report provides updates of trends and developments associated with sovereign borrowing requirements and debt levels from the perspective of public debt managers for the OECD area and country groupings.

OECD Global Forum on Public Debt Management 2019

0 sec ago
23-24 April 2019, Paris - Discussions at the 2019 Global Forum will focus on the funding environment, the role of borrowing instruments in broadening the investor base, technological advances in finance for government bond markets and challenging debt dynamics.

IOPS International Conference on Pension Supervision and Regulation 2019

0 sec ago
7 March 2019 - The International Conference on Pension Supervision and Regulation this year will focus on Options for creating sustainable pension systems in emerging markets and will take place in New Delhi, India.

IOPS International Conference on Pension Supervision and Regulation 2019

0 sec ago
7 March 2019 - The International Conference on Pension Supervision and Regulation this year will focus on Options for creating sustainable pension systems in emerging markets and will take place in New Delhi, India.

19th OECD-ADBI Tokyo Roundtable on Capital Market and Financial Reform in Asia

0 sec ago
The Roundtable offers a forum for regulators, policy makers, experts, practitioners, scholars and international organisations in Asia. This year’s edition will focus on recent developments in capital markets, future capital markets facing the challenge of new financial technology and responsible, viable, and lifecycle infrastructure investments.

2019 Workshop of the G20/OECD Task Force on Long-term Investment

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30 January 2019, Singapore - This Workshop will bring together academics, public stakeholders and industry experts to discuss data collection and benchmarks for quality infrastructure investment and blockchain and innovation in sustainable infrastructure.

2019 Workshop of the G20/OECD Task Force on Long-term Investment

0 sec ago
30 January 2019, Singapore - This Workshop will bring together academics, public stakeholders and industry experts to discuss data collection and benchmarks for quality infrastructure investment and blockchain and innovation in sustainable infrastructure.

Initial Coin Offerings (ICOs) for SME Financing

4 days 20 hours ago
This report analyses the emergence and potential of ICOs as a financing mechanism for start-ups and small and medium-sized enterprises (SMEs), examines the benefits and challenges of this mechanism for small businesses and investors, and discusses policy implications of ICO activity for inclusive financing of SMEs and the real economy.

The World Bank - Blog

Bracing for climate change – a matter of survival for the Maldives

1 hour 6 min ago

For low-lying island states, the impacts of global warming and climate change can be a matter of survival. The irony is that while these states have not contributed much to greenhouse emissions, as they produce very little, they may face some of the worst consequences. 
The Maldives is no stranger to the risks from climate change. It is already witnessing an increase in intense rainfall and resultant flooding, cyclonic winds and storm surges. As one of the lowest-lying countries in the world, with all its people living a few meters above sea level and over two thirds of its critical infrastructure lying within 100 meters of the shoreline, a sea level rise of just a few meters will put the nation further at risk, endangering its relative prosperity. 
Thankfully Maldives is beginning to turn the tide. Yesterday I visited Fuvahmulah, in the one of the southernmost atolls where the Mayor and the Ministry of Environment, have been working closely with local communities to manage the wetlands, critical for reducing climate change impacts. I saw scores of young Maldivians enjoying the facilities and learning about conservation. A true win win. Community participation has helped enhance the design and acceptability of this initiative. Scaled up, such initiatives can have transformational impact and it is imperative that the Government of Maldives take the lessons from this Bank supported initiative to 19 other atolls.
Creating a safer archipelago
The Indian Ocean tsunami that battered the islands in 2004 provided a glimpse of what can happen – a clear wake-up call. The government responded by [[tweetable]]increasing its emphasis on building resilience in infrastructure and providing its people with early warnings in the event of an underwater earthquake[[/tweetable]].
Today, in the Greater Malé region, the reclaimed island of Hulhumalé is being developed with better sea defenses and elevated buildings from where people can be evacuated as needed.  The government is also raising people’s understanding of the causes and effects of natural disasters, particularly those that come on suddenly, such as tsunamis and flooding.

It is also realizing that concentrating its citizens in Male has its own negative impacts, leading to over-crowding in a very small space with limited amenities.  As a result, it is now looking to develop regional centers that allow people to move from fragile and high-risk islands and atolls into more manageable enclaves where they can also benefit from access to jobs, services and resilient infrastructure. 
Regional development is being complemented by large scale infrastructure development in the Greater Malé region. But, as in other small states, [[tweetable]]building resilient infrastructure in the Maldives is expensive[[/tweetable]].  It is expected to cost the country around 35 percent of Gross Domestic Product (GDP) to ensure that the expanded international airport, the proposed network of bridges between Greater Malé’s islands, and relocation of the port are up to desired standards.
Building fiscal resilience
To support the cost of constructing high resilience infrastructure, the country needs to be fiscally robust.  Low fiscal strength significantly reduces a country’s ability to recover from disasters, provide its citizens with a safety net and prepare for future disasters.  For the Maldives, protecting the tourism sector, which generates 33 percent of GDP, will be paramount.  It’s safe to say that the Maldives is on many a bucket list – but that will stay the case [[tweetable]]only if those natural resources are protected and remain accessible[[/tweetable]]. 
Like many countries of its size, the Maldives has had to borrow heavily to sustain its development.  But while its debt to GDP ratio of about 60 percent is not alarming, it will only remain so as long as tourism revenues don’t fall, disasters don’t hit, and the country does not need to reinvest at an even higher cost to remain resilient. 
But the country is not without options.  [[tweetable]]Fiscally, it can reduce its expenditures on imported diesel by replacing it with renewable energy. [[/tweetable]]The Maldives is endowed with abundant sunshine and is overcast only a few times in the year.  And solar energy has become cheap to generate and store.  Estimates show that rooftop solar power alone can meet 30 percent of the electricity needs on some islands, and as much as 80 percent on others. The Bank has been working with the Maldives to increase the use of renewables and has invested in a $16 million solar power project on the islands of Male and Hulhumale in the Greater Malé region. This is the future for the Maldives.
Providing safe drinking water and protecting the pristine environment
An additional existential risk is access to freshwater – again not limited to the Maldives alone.  Water shortages on the outer islands are a norm, even before things get worse.  A 10-day water crisis in 2014, from failed desalination in Male, cost the country a staggering US$20 million in relief operations. With limited groundwater reserves and climate change leading to longer dry seasons, water resources are likely to deplete further, especially in the outer islands where little land is available for storing rainwater.  While the World Bank is partnering with the government to prepare and implement an urban development project that increases access to water, more will still need to be done. 
With higher standards of living - Maldives’ GDP increased from $268 in 1980 to more than $11,000 in 2017 - the scourge of waste is not far.  While solid waste is a growing challenge worldwide, its management is particularly acute on small islands where it can’t be hidden – oftentimes from the very resorts that entice tourists to the Maldives in the first place.  The resort islands that house well over 1 million guests annually and the growing number of guest houses have a flip-side - poor [[tweetable]]management of waste water and solid waste. This is the next frontier that the Maldives will need to tame[[/tweetable]].  The Bank is working in partnership with the government to help address these issues; but the solutions largely lie in reducing the amount of waste, particularly plastic waste, as well as composting the high-volume household waste.
Greater citizen engagement
A poignant lesson learnt for surviving on small islands is how well one can get citizens to own the problems and the solutions.  People need to understand their exposure and vulnerability, and what they can do to help not only prevent the worst catastrophes but also build their own resilience to them.  Together, the Bank and the government are looking at various options to help the Maldives plan better for eventualities, recover quicker and prevent a recurrence.  But without citizen involvement these investments will amount to naught. [[tweetable]]Giving citizens a voice is critical to help any government manage climate risks[[/tweetable]].
In the end, it comes down to a partnership between technical gurus, the government making the right policies and putting the right incentives in place, the private sector understanding its role and seeing itself as part of the solution, and all stakeholders embracing the issues and the solutions.  Ultimately, the existential challenge is for everyone.    

How many computers are in schools can depend on who's asking

1 day 15 hours ago
counting the beans can sometimes
be rather difficult --
and what you brew may depend
on how you count
A recent EduTech blog post explored how issues related to ownership and liability can impact the use of computers in schools. This issue of 'who owns the computer equipment' is a challenge in many education systems, and attempts to work through related issues can sometimes give rise to another rather basic, seemingly simple-to-answer question:
  How many computing devices are in our schools?

In many cases, the answer is: It depends on who's asking!

I once spent an entire day with a team responsible for submitting data to the education minister about how many computers were in that country's schools, and what the related student-computer ratio was. The minister wanted to promote a new policy proposing a target 'student-computer ratio', and wanted to know how practical (or outlandish) her initial thoughts in this regard might be.

Thankfully, team members did have access to pretty reliable data about how many schools the country had, and how many students were in these schools (a shocking number of countries don't have reliable data on these counts). Led by a statistician, who liked to be rather more exact about things than a number of the politicans she worked for, the team was wrestling with questions like:

What constitutes a 'computer'?
Is it important if it is a PC, or a laptop, or a tablet? Do graphing calculators count? How about mobile phones?

Does it have to be in use, and if so, what constitutes 'use'? 
Or should we considering all computers that are functioning, even if not currently in use? Many schools have computers that no longer worked -- or are so old that they don't work all that well. Others have computers that are brand new, but which are still in their boxes.

Does the purpose for which the computer is meant to be used, and the user, and the location of this use, matter?
Is the goal to measure any device on school grounds, or just those used for teaching and learning -- or by students?

Does it matter who owns the equipment?
What about equipment owned by the school itself, equipment owned by national ministries (including the IT ministry or national edtech agency), or equipment 'on loan', or equipment not fully paid for yet? Does donated equipment count?

Reasonable people can (and did, in this case) disagree on the answers to these sorts of questions -- but it can be useful to pose them (and many more), especially where doing so can help provide clarity about why you are asking the original question in the first place.

As an observer of this process, I was struck by the fact that there were, in practice, multiple sets of books kept at various levels of the education system about how much computer equipment was in a given school, depending on who was doing the inventory, and to whom the related inventory report was being submitted.

Here's basically how this was explained to me (by a school principal, by a person working in a local municipal education authority, and by someone in the national statistical agency):

  1. The 'computer person' at a school kept a master list of the equipment in that school. This was shared with the principal, but not typically shared with others outside the school.
  2. A school maintained a separate list of the equipment that the national government supplied to it, as well as a list of equipment provided by the local municipal education authority. Usually, this related to what a school had in its computer lab, and what was in its administrative office.
  3. A school also maintained separate lists of equipment that had been donated to it (e.g. by local companies, or the parent association) and what it had purchased itself, through its own discretionary funds.

The reason for keeping 'multiple books' was pretty straightforward, as a principal explained to me:

  • If we tell the national government (or charitable groups) about everything that we have, we are unlikely to get more equipment, as many other schools have fewer computers than we do.
  • If other schools report on their computer inventory like we do, we are afraid that, if we report fully, and other schools don't, we would be at a competitive disadvantage, as schools that have more computers than we do but report having fewer computers would probably receive new equipment before we do.
  • This is an open secret: Our district education office knows we keep multiple books, but they want us to be able to get as many computers as we can, from whatever sources, so they sort of look the other way.
  • We get donations from a local company, and if something breaks, we report it to them immediately, as they will repair or replace it.
  • When we are contacted by charitable groups, we always say we need more computers and accept the computers they offer to us, pretty much no matter the condition (although we are rethinking this, as most of what we get is junk).

The local municipal education person added that the introduction of BYOT/BYOD (bring your own technology or device) policies were further complicating his organization's attempts to inventory the number of devices in schools. Some schools that he suspected had more devices than they were reporting had begun to request that they receive support for improved connectivity and in-school networking instead of just being supplied with more devices.

The person from the national statistical agency noted that vendors were starting to propose changes to the country's laws to enable the leasing of computers for use in schools, which was starting to happen in the country's corporate sector. Leased computers might not be reported, he speculated, given the way that current information requests to schools were formulated.

You might say that these are all details for the bean counters (i.e. accountants) to argue about, and you'd probably be right. But there can be real world consequences to how the beans are counted, by whom, and which beans are included in the count.

Efforts to define and construct a big picture to guide the implementation of large scale national initiatives to promote the use of new technologies in education can often falter if insufficient attention is paid to individual pixels. As famed American computer scientist (and high altitude free-fall jumper) Alan Eustace is quoted in The Friendship That Made Google Huge, a fascinating recent article in The New Yorker: “To solve problems at scale, paradoxically, you have to know the smallest details.”

This is why, when I am asked how many computing devices are in schools in a given country, and how many more need to be purchased, I usually reply:

What do you mean by a 'device', why do you need this information -- and who's asking?
The answers to these question can provide the some of the key talking points for a more fundamental conversation, anchored by some more fundamental questions, like:
  • What do you intend to do with all of these devices?
  • What are the educational goals you hope to achieve as a result of their use?
  • How will you know if you've been successful?

You may also be interested in the following posts from the EduTech blog:  
Note: The image used at the top of this post ("counting the beans can sometimes be rather difficult -- and what you brew may depend on how you count") comes via Pixabay and is in the public domain.

Weekly links January 18: an example of the problem of ex-post power calcs, new tools for measuring behavior change, plan your surveys better, and more...

1 day 19 hours ago
  • The Science of Behavior Change Repository offers a repository of measures of stress, personality, self-regulation, time preferences, etc. – with instruments for both children and adults, and information on how long the questions take to administer and where they have been validated.
  • Andrew Gelman on post-hoc power calculations – “my problem is that their recommended calculations will give wrong answers because they are based on extremely noisy estimates of effect size... Suppose you have 200 patients: 100 treated and 100 control, and post-operative survival is 94 for the treated group and 90 for the controls. Then the raw estimated treatment effect is 0.04 with standard error sqrt(0.94*0.06/100 + 0.90*0.10/100) = 0.04. The estimate is just one s.e. away from zero, hence not statistically significant. And the crudely estimated post-hoc power, using the normal distribution, is approximately 16% (the probability of observing an estimate at least 2 standard errors away from zero, conditional on the true parameter value being 1 standard error away from zero). But that’s a noisy, noisy estimate! Consider that effect sizes consistent with these data could be anywhere from -0.04 to +0.12 (roughly), hence absolute effect sizes could be roughly between 0 and 3 standard errors away from zero, corresponding to power being somewhere between 5% (if the true population effect size happened to be zero) and 97.5% (if the true effect size were three standard errors from zero).”
  • The World Bank’s data blog uses meta-data from hosting its survey solutions tool to ask how well people plan their surveys (and read the comments for good context in interpreting the data). Some key findings:
    • Surveys usually take longer than you think they will: 47% of users underestimated the amount of time they needed for the field work – and after requesting more server time, many then re-request this extension
    • Spend more time piloting questionnaires before launching: 80% of users revise their surveys at least once when surveying has started, and “a surprisingly high proportion of novice users made 10 or more revisions of their questionnaires during the fieldwork”
    • Another factoid of interest “An average nationally representative survey in developing countries costs about US$2M”
  • On the EDI Global blog, Nkolo, Mallet, and Terenzi draw on the experiences of EDI and the recent literature to discuss how to deal with surveys on sensitive topics.

The challenges of informality

1 day 20 hours ago

Download the January 2019 Global Economic Prospects report.

The informal sector — labor and business that is hidden from monetary, regulatory, and institutional authorities — accounts for about a third of GDP and 70 percent of employment (of which self-employment is more than a half) in emerging market and developing economies. While offering the advantage of employment flexibility in some economies, a large informal sector is associated with low productivity, reduced tax revenues, poor governance, excessive regulations, and poverty and income inequality.

Addressing the challenge of pervasive informality will require comprehensive policies that take into account country-specific conditions.  Initiatives to boost long-term development might include measures aimed at reducing regulatory and tax burdens, expanding access to finance, improving education and other public services, and strengthening public revenue frameworks.
One-half of the world’s informal output and 95 percent of its informal employment is in emerging market and developing economies. Both informal output and employment have declined since 1990, particularly in countries with higher output growth, rapid physical capital accumulation, and larger improvements in governance and business climates.

Share of informal output and employment

The informal economy tends to employ lower-skilled and less productive workers. As a result, workers in the formal economy earn, on average, about 19 percent more than workers in the informal economy.

Informality, poverty, and income inequality

The average informal firm in emerging market and developing economies is only one-quarter as productive as the average firm operating in the formal sector. This is only in part explained by informal firm characteristics such as their younger age, less experience, and smaller size. Moreover, firms in the formal sector that face informal competition are, on average, only three-quarters as productive as those that do not. Better business climates can mitigate some of these productivity differentials.

Average productivity in formal and informal firms

Addressing informality requires well-coordinated policies that take into account country-specific conditions. Policy changes that could affect vulnerable groups can be balanced by stronger safety nets, greater labor and product market flexibility, and better access to resources for informal firms. In addition, policies to spur economic development in general can help reduce informality. Specific measures include streamlining of tax codes and enhanced enforcement of revenue collection; easing firm and labor regulations to create a level playing field for both formal and informal participants; as well as greater access to finance and public services to help increase productivity in the informal sector.

Credit enhancement: a boost to private capital in infrastructure?

2 days 16 hours ago

A strange irony persists in today’s infrastructure investment market: private capital waiting to be deployed into the sector is at an all-time high, yet investors seem reluctant to commit. Even in developed countries, few investors are willing to partake in transactions with merchant or construction risks without taking a higher risk premium.

This can make the financing of infrastructure projects more costly—a challenge particularly acute in emerging markets where further investment risks abound.

But many such risks could be transferred to a third party. Indeed, [[tweetable]]the use of the balance sheets of financial institutions, sovereigns, and multilateral lending institutions could be improved by providing credit enhancement and risk mitigation instruments on top or alongside the traditional lending instruments.[[/tweetable]] Risk mitigation instruments encourage the private sector to deploy capital into much-needed infrastructure projects—and across a broader spectrum of project types and, crucially, geographies.

The appeal to investors

But it’s a long road ahead. Though infrastructure remains a favorable asset class for institutional investors, more than the lion’s share of capital is channeled to the developed world. By some estimates, approximately 97 percent of total private capital investments mobilized by multilateral lending institutions occurred in high- and middle-income countries. Heightened investment risk compounds the problem. Elevated risks in developing markets include political and regulatory uncertainty, embedded risks in government concessions, exchange rate risk, as well as underdeveloped and unpredictable policy frameworks.

With these drawbacks in mind, creating an investment environment that mitigates these risks—and encourages investment for the most needy projects—is high on the priority list. Credit enhancements could serve this purpose. In short,[[tweetable]] credit enhancements aim to mitigate the specific risks of a project that either weigh on its overall credit profile or decrease its appeal to the private sector.[[/tweetable]] Their effective use can lead to project debts receiving a higher rating compared to a scenario where enhancements are absent.

Credit enhancements can take various forms: cash flow stabilization, for instance, can prevent or delay potential distress and default; recovery enhancement can reduce losses in the event of default. Also in use are combined instruments that provide both of these enhancements. We also see the use of credit substitution: a guarantee that serves to fully transfer the risk of timely debt repayments from the project finance issuer to a guarantee provider.

Partial guarantees for recovery can be an attractive feature for investors as they give enhanced visibility on recovery, while the experience and influence of a multilateral lending institution can be another significant draw—known as “the halo effect.” Though it’s difficult to quantify its impact on an asset’s creditworthiness, their involvement may have a positive impact in numerous areas including the design of the relevant public-private partnership (PPP) scheme, the quality of project selection and preparation, and the governance of the relationship between the project and the municipal actor.

This can go far to reduce the operational risk of doing business in emerging economies. For instance, the World Bank recently provided a $500 million partial guarantee to Argentina’s RenovAr program to develop the country’s renewables sector. Though not a full guarantee, such an instrument can help a project rating withstand sovereign stress.

Far from the silver bullet

It’s crucial to remember that the involvement of multilateral lending institutions, though influential, is not enough to solve financing gaps alone. Their mere presence cannot make a non-bankable project bankable, nor can it transform the prospects for poorly planned projects. Then there’s the sheer scale of infrastructure financing gaps: meeting the UN’s Sustainable Development Goals (SDGs), which aim to improve the social and economic well-being of every citizen worldwide, will require annual investment between $5 trillion to $­7 trillion until 2030.

Nonetheless, the role of the multilateral lending institution as a credit enhancement provider could become an important factor for institutional investors deciding whether or not to deploy capital—most notably in emerging markets. And, in this light, sovereign owners have called on them to ramp up their assistance for resource mobilization on a far broader scale across the private sector.

Among other advantages, their involvement serves to match investors to projects better suited to their risk-return profiles, while keeping investors interested in infrastructure—which typically enjoys higher yields compared to investment-grade sovereign and corporate debt.

Against this backdrop, multilateral lending institutions could become an increasingly important fixture in financing global infrastructure.

Disclaimer: The content of this blog does not necessarily reflect the views of the World Bank Group, its Board of Executive Directors, staff or the governments it represents. The World Bank Group does not guarantee the accuracy of the data, findings, or analysis in this post.


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Scaling up World Bank guarantees to move the needle on infrastructure finance

Which sectors have attracted most private investments in infrastructure in 2017?

Subtle but significant changes to private infrastructure investment in first half of 2018


How do we help cities breathe better? Introducing the Clean Bus Project

2 days 17 hours ago
Buses, cyclist, and car traffic in Santiago de Chile. Photo: Claudio Olivares Medina/Flickr Earlier this month, Santiago de Chile took delivery of 100 brand-new electric buses. The event was a first in the region, and impressive images of the state-of-the-art buses driving in convoy toward their new home in Chile’s capital city were shared by global media. These buses are part of a broader effort to tackle smog and revolutionize the city’s public transport system. By 2022, Chile aims to increase the number of electric vehicles in the country tenfold, which would put it in the vanguard of clean mobility in Latin America and the Caribbean (LAC), and amongst developing countries worldwide. These changes are expected to help the country meet its Nationally Determined Contributions (NDCs) target, set in the wake of the Paris Agreement on climate change. The target calls for a 30% reduction in GHG emissions per unit of GDP by 2030, with transportation being one of the main sectors for mitigation.

The story of Santiago, however, remains an exception in the region. Though Latin American countries, as signatories to the Paris Agreement, have signaled their concrete intention to embrace a low-carbon future, the transition to low and zero-emissions vehicles has been slow. To better understand the challenges in accelerating the adoption of clean technologies in LAC, the World Bank has recently implemented the Clean Bus project, funded by the NDC Support Facility, a contribution to the NDC Partnership.

The project included five cities across the continent: São Paulo, Mexico City, Mexico, Santiago de Chile, Buenos Aires, and Montevideo. A city-by-city diagnostic that compared life cycle costs and GHG emissions of technologies ranging from clean diesel (Euro VI equivalent) and compressed natural gas (CNG) to battery-electric (BEB) and hydrogen buses was completed. Not surprisingly, BEBs emerged as the most energy-efficient option across technologies. BEBs typically also have the lowest lifecycle GHG emissions when considering the footprint of both fuel production and vehicle operation (well-to-wheel analysis). 

Though the urban air quality benefits of BEBs are undisputed, their uptake continues to be challenged by two factors. First, the carbon intensity of electric production which directly impacts the environmental benefits of BEBs. However, hope lies in the growing share of renewables in grid electricity, which is making the environmental case for electric buses stronger than ever.  Second, the high upfront costs of these technologies pose a significant challenge to cash-strapped public agencies and private operators, most of which do not have access to affordable financing options. Thankfully, the cost of battery technology—the main cost component of an electric bus—has dropped sharply in recent years, lowering the lifecycle cost of electric buses.

The project also looked at the marginal cost of reducing a ton of CO2 emissions when switching from diesel buses (Euro V) to clean bus technologies. To evaluate this, we computed the total cost of ownership for each technology as well as the externality costs of air pollution (NOx and PM). BEB’s, we found, offer the highest CO2 reduction potential of the technologies analyzed, and that cost effectiveness is highly dependent on bus acquisition prices and financing costs. The comparison across technologies yields different results for each city due to variations in purchase price, diesel subsidies, and interest rates. Other important factors are corridor characteristics, nature of concession arrangements, and the all-important ingredient: political will. With the lowest interest rates in the region and competitive tendering processes, Santiago is leading the way in BEBs implementation in the region. Rethinking diesel subsidies and supporting green financing could help other LAC cities follow suit.

Beyond technical aspects, the Clean Bus project connected a range of stakeholders to serve as a cross-country community of leaders committed to the clean mobility agenda. The group brings together representatives from Ministries of Transport, Energy, Environment and Finance, as well as private bus manufacturers, operators, public transport management companies, and commercial financial institutions. With NDC Support Facility funding, the World Bank recently co-organized the “Green Your Bus” workshop in Brazil, in partnership with the World Resources Institute (WRI) and the German Organization for Development Cooperation (GIZ). Focused on Latin America’s sustainable transport agenda, 83 participants from 12 cities and 9 countries, including financiers, manufacturers, national associations of operators, transit agencies and think tanks from Europe, the US, China and India, showcased city-specific experiences and discussed policy and implementation challenges to wider adoption of e-mobility.

There are many obstacles that stand in the way of clean mobility, yet the example of Santiago and other cities shows that change is possible. Building on this first phase of research and policy discussion, the World Bank Group will now work closely with cities across Latin America to create the right conditions for scaling up clean vehicle technology, always keeping in mind the opportunities and constraints specific to the local context.

How do we help cities breathe better? Introducing the Clean Bus Project

2 days 17 hours ago
Buses, cyclist, and car traffic in Santiago de Chile. Photo: Claudio Olivares Medina/Flickr Earlier this month, Santiago de Chile took delivery of 100 brand-new electric buses. The event was a first in the region, and impressive images of the state-of-the-art buses driving in convoy toward their new home in Chile’s capital city were shared by global media. These buses are part of a broader effort to tackle smog and revolutionize the city’s public transport system. By 2022, Chile aims to increase the number of electric vehicles in the country tenfold, which would put it in the vanguard of clean mobility in Latin America and the Caribbean (LAC), and amongst developing countries worldwide. These changes are expected to help the country meet its Nationally Determined Contributions (NDCs) target, set in the wake of the Paris Agreement on climate change. The target calls for a 30% reduction in GHG emissions per unit of GDP by 2030, with transportation being one of the main sectors for mitigation.

The story of Santiago, however, remains an exception in the region. Though Latin American countries, as signatories to the Paris Agreement, have signaled their concrete intention to embrace a low-carbon future, the transition to low and zero-emissions vehicles has been slow. To better understand the challenges in accelerating the adoption of clean technologies in LAC, the World Bank has recently implemented the Clean Bus project, funded by the NDC Support Facility, a contribution to the NDC Partnership.

The project included five cities across the continent: São Paulo, Mexico City, Mexico, Santiago de Chile, Buenos Aires, and Montevideo. A city-by-city diagnostic that compared life cycle costs and GHG emissions of technologies ranging from clean diesel (Euro VI equivalent) and compressed natural gas (CNG) to battery-electric (BEB) and hydrogen buses was completed. Not surprisingly, BEBs emerged as the most energy-efficient option across technologies. BEBs typically also have the lowest lifecycle GHG emissions when considering the footprint of both fuel production and vehicle operation (well-to-wheel analysis). 

Though the urban air quality benefits of BEBs are undisputed, their uptake continues to be challenged by two factors. First, the carbon intensity of electric production which directly impacts the environmental benefits of BEBs. However, hope lies in the growing share of renewables in grid electricity, which is making the environmental case for electric buses stronger than ever.  Second, the high upfront costs of these technologies pose a significant challenge to cash-strapped public agencies and private operators, most of which do not have access to affordable financing options. Thankfully, the cost of battery technology—the main cost component of an electric bus—has dropped sharply in recent years, lowering the lifecycle cost of electric buses.

The project also looked at the marginal cost of reducing a ton of CO2 emissions when switching from diesel buses (Euro V) to clean bus technologies. To evaluate this, we computed the total cost of ownership for each technology as well as the externality costs of air pollution (NOx and PM). BEB’s, we found, offer the highest CO2 reduction potential of the technologies analyzed, and that cost effectiveness is highly dependent on bus acquisition prices and financing costs. The comparison across technologies yields different results for each city due to variations in purchase price, diesel subsidies, and interest rates. Other important factors are corridor characteristics, nature of concession arrangements, and the all-important ingredient: political will. With the lowest interest rates in the region and competitive tendering processes, Santiago is leading the way in BEBs implementation in the region. Rethinking diesel subsidies and supporting green financing could help other LAC cities follow suit.

Beyond technical aspects, the Clean Bus project connected a range of stakeholders to serve as a cross-country community of leaders committed to the clean mobility agenda. The group brings together representatives from Ministries of Transport, Energy, Environment and Finance, as well as private bus manufacturers, operators, public transport management companies, and commercial financial institutions. With NDC Support Facility funding, the World Bank recently co-organized the “Green Your Bus” workshop in Brazil, in partnership with the World Resources Institute (WRI) and the German Organization for Development Cooperation (GIZ). Focused on Latin America’s sustainable transport agenda, 83 participants from 12 cities and 9 countries, including financiers, manufacturers, national associations of operators, transit agencies and think tanks from Europe, the US, China and India, showcased city-specific experiences and discussed policy and implementation challenges to wider adoption of e-mobility.

There are many obstacles that stand in the way of clean mobility, yet the example of Santiago and other cities shows that change is possible. Building on this first phase of research and policy discussion, the World Bank Group will now work closely with cities across Latin America to create the right conditions for scaling up clean vehicle technology, always keeping in mind the opportunities and constraints specific to the local context.

By when would universal social protection be achieved?

2 days 18 hours ago

I am 41 years old and, with business as usual, I would be 106 when universal social protection (USP) is realized.

The drive for USP – a definition of which is to  ensure that everyone is covered by some form of social assistance or insurance – lies at the heart of various efforts at country and global levels.

But where are we with attaining such goal, exactly? Here are some back-of-the-envelope calculations.

Based on the World Bank’s ASPIRE database, latest estimates show that average social protection coverage in low and middle-income countries is 36.8% of the population. This includes data for 114 countries with household surveys, which leaves us with 63.2 percentage points to get to 100% coverage (that is, USP).

Now, how much progress has been achieved in recent years?

I examined data from a subset of 70 countries for which at least two surveys exist over time. With an average of 6.5 years between surveys, and average increase in coverage of 6.2 percentage points during such a period, the average yearly increase is a little less than a percentage point, or 0.9.

If we project this rate into the future, it would take us about 65 years to increase coverage by 63.2 percentage points required to attain USP – that is, we’ll get there in 2084.

In fragile states, which have an average lower coverage to start with (17% of the population) and a much slower rate of progress over time (0.3 percentage points per year), the finish line would be reached in 240 years –– i.e., 2259!

While akin to Star Wars, the estimated dates are actually optimistic: ‘business as usual’ comes with a negative connotation, but in the case of social protection, progress in recent years has often been remarkable. So not only do we need to sustain the momentum, but even accelerate decisively.

Just like universal health care is getting closer to the universality goalpost, social protection could follow suit. And to get there, we need nothing less than the vision, investment, dedication, ingenuity and ownership of all social protection actors.

Let’s see if USP may be realized sooner than my 106th birthday…

Paraguay: Sharing student assessment results to help schools improve

2 days 18 hours ago
In 2015, the Ministry of Education and Sciences in Paraguay implemented a census-based standardized student assessment through the National Student Achievement Assessment System.

One of us – Diana – grew up in Paraguay and never encountered a standardized test in all the years that she went to school. Nor does she know any fellow Paraguayans of her generation who have taken one. Her parents relocated often, so she attended many different schools and, consequently, she experienced a wide range in the quality of schools and teachers. While many of the schools repeatedly failed to achieve the ambitious goals of the national curriculum, some were able to better nurture students. The quality of teaching and the way in which schools are run determine what students learn. Unfortunately, the marked quality differences are generally not evident to students, families, or even teachers, school directors or supervisors because it is difficult to compare learning outcomes in a consistent manner.

Student standardized assessments allow learning outcomes between schools to be compared in a consistent way. In 2015, for the first time, the Ministry of Education and Sciences (MEC) in Paraguay implemented a census-based standardized student assessment through the National Student Achievement Assessment System (SNEPE). Census-based standardized student assessments are tests that are applied to all students in the country from a specific grade rather than to just a random representative sample. Before SNEPE (2015), the country only administered sample-based standardized assessments. The census-based standardized assessments were applied for both math and language (Spanish and Guaraní) and targeted all Paraguayan students in grades 3, 6, 9, and 12. These assessments were a massive undertaking and a landmark in the country’s education evaluation efforts. Almost 500,000 Paraguayan students from 10,000 public and private schools in the country participated in SNEPE (2015), and 4,000 independent test administrators were hired by the government for the application. Because it was done manually, digitizing the results of the 1,500,000 answer sheets took almost two years!
Beginning in January 2018, MEC, with the technical support from the World Bank, designed a dissemination strategy to share the results of SNEPE (2015) with schools and enable them to use the information for the preparation of their school improvement plans. Between April and June 2018, the government rolled out the strategy, which consisted of two parts: (i) the design of dissemination materials and (ii) the organization of workshops with local education authorities and pedagogical supervisors to discuss the dissemination materials.

The dissemination materials included the following:

A school result report that presents the SNEPE (2015) results at the school, district, department, and country level, organized in four sections: (1) average score; (2) box-and-whisker plots summarizing the distribution of the scores; (3) results by performance level; and (4) percentage of correct answers.
An animated short video to help local education stakeholders understand the content of the school result report. The video explains the four sections of the school report card through illustrative examples and on-screen texts. The video has been shared with schools and the school communities via WhatsApp and YouTube.

Four training modules aimed at supporting pedagogical supervisors and school directors in the use of the school report for the preparation and monitoring of their school improvement plans. Module 1 describes what standardized tests are and how schools can use the results to design, evaluate, and monitor school improvement plans. Module 2 offers guidelines for the design of school improvement plans. Module 3 discusses strategies for the evaluation of school improvement plans. Finally, Module 4 explores class observation as an instrument for monitoring school improvement plans.

To introduce the materials to local education stakeholders, the team held a series of workshops across the country. These included seven regional workshops targeting 640 pedagogical supervisors, as well as six departmental workshops in the departments of Alto Paraná and Misiones to cover the training material in more detail.
The workshops served as key dissemination platforms for the SNEPE (2015) results and revealed the vastly different perceptions of the local education stakeholders related to student learning outcomes. During the workshops, participants enthusiastically welcomed the rare opportunity to exchange experiences and collectively reflect on the challenges they face in their daily work. Furthermore, even though many of the technical people from central MEC were under the assumption that the SNEPE standardized evaluation was well understood, it became clear that many participants knew very little about SNEPE’s objective, design, and procedures. Some of the technical people from central MEC were also very interested to hear about the daily challenges faced by the local education stakeholders and how more frequent evaluation might help them monitor their school improvement plans.
A pedagogical supervisor expressed her appreciation during one of the workshops, and said that “in the past, standardized assessments were occasionally administered to our students but then we never heard about the results again.” With the second round of the census-based student standardized assessments administered by MEC in late 2018, we are optimistic that all schools across Paraguay will soon benefit from regular student standardized assessments and the timely dissemination of their results to improve learning for all.

Follow the World Bank Education team on Twitter @wbg_education

Education spending and student learning outcomes

2 days 23 hours ago

How much does financing matter for education? The Education Commission argued that to achieve access and quality education “will require total spending on education to rise steadily from $1.2 trillion per year today to $3 trillion by 2030 (in constant prices) across all low- and middle-income countries.” At the same time, the World Bank’s World Development Report 2004 showed little correlation between spending and access to school, and the World Development Report 2018 (for which I was on the team) shows a similarly weak correlation between spending and learning outcomes. (Vegas and Coffin, using a different econometric specification, do find a correlation between spending and learning outcomes up to US$8,000 per student annually.)

Sources: Left-hand figure is from WDR 2004. Right-hand figure is from WDR 2018

And yet, correlation is not causation (or in this case, a lack of correlation is not necessarily a lack of causation)! Last month, Kirabo Jackson put out a review paper on this topic: Does School Spending Matter? The New Literature on an Old Question. This draws on a new wave of evidence from the United States’ experience, moving beyond correlations to efforts to measure the causal impact of spending changes. (Jackson and various co-authors have contributed significantly to this literature.) I’ll summarize his findings and then discuss what we might expect to be the same or different in low- or middle-income contexts.

Does money matter? Yes.
In the U.S., many states have undergone reforms in how they finance education. Historically, most primary and secondary education was financed by local property taxes, so richer areas had better funded schools. But between 1971 and 2010, more than two dozen states had to reduce inequality in spending due to judicial decisions. This led to changes in school spending that were not related to other variables – like local commitment to education – that normally make it hard to parse out the link between financing and education. Using the variation in spending coming from the first wave of reforms, “a 10% increase in per pupil spending each year for all 12 years of public school leads to 0.31 more completed years of education, about 7% higher wages, and a 3.2 percentage-point reduction in the annual incidence of adult poverty. They also find that the effects are more pronounced for children from low-income families.”

A study of more recent school finance reforms finds that “a one-time $1,000 increase in per-pupil annual spending sustained for 10 years increased test scores by between 0.12 and 0.24 standard deviations.” Another study finds that in states with strong teacher unions, school districts tended to match increases in state funding, which “led to larger increases in student achievement.” Other work looks at the impact of these financing reforms on high school graduation rates: “Seven years after reform, the highest poverty quartile in a treated state experienced an 11.5 percent to 12.1 percent increase in per-pupil spending, and a 6.8 to 11.5 percentage point increase in graduation rates.”

Beyond school finance reforms, the Great Recession (2007 to 2009 in the United States) provides an additional natural experiment. State tax revenues fell much more suddenly than local or national revenues, so states that relied more on state revenues had a disproportionate drop in financing. Researchers found that “a 10 percent school spending cut reduced test scores by about 7.8 percent of a standard deviation.” Another study finds comparable results: “a 10 percent increase in spending improves…student test scores by 0.05 to 0.09 standard deviations.”

In sum, out of 13 multi-state studies, Jackson finds that 12 show a positive, statistically significant relationship between education spending and student outcomes. And remember: these aren’t just correlations. These are all studies that have tried to tease out the actual impact of spending on learning or attainment.

Does how you spend the money matter? Yes.
Jackson then reviews studies on how much different types of spending matter. He finds that unrestricted spending increases led to better student outcomes (8 out of 9 studies show positive results), textbook spending improves outcomes in primary school (just one study), a mixed bag on construction spending (4 out of 7 studies show positive results), and that spending targeted to low-income schools in New York City had unclear (but likely null) effects.

Jackson’s takeaway? “On average, money matters,” but “this is not always so in all settings or in all contexts.” There is much more detail in the review; I recommend reading it in full. There are also lots of ideas for different approaches to making causal estimates, at least some of which could translate to middle- or low-income contexts.

How might these results translate to low- and middle-income environments?
The fact that a range of studies in a high-income country have shown positive impacts might lead us to expect even bigger impacts in countries where fewer resources are currently spent on students. The marginal value of an additional dollar (or shilling or peso) may be higher when students have very few resources to begin with. On the other hand, if resources intended for education are less likely to reach the schools in countries with weaker institutions, then there could be a smaller impact. In a study in Uganda from the 1990s (thus not necessarily representative of current institutions), “less than 30 percent of funding intended for non-salary public spending actually reached the schools in 1991-95.”

Money matters, and it’s impossible to imagine increasing the primary school completion rate in low-income countries from its current 67 percent to every child finishing elementary school without increasing spending, just in terms of construction and teachers for all these additional students. (And that’s without even thinking about middle-income countries or secondary school!) But how we spend the money also matters: Not every form of spending is equally effective in the United States, and the same will be true in lower income environments.

So increase school spending, track its use, measure its impact, and adjust.


2018 in Review: Energy and Extractives at the World Bank

3 days 17 min ago

[[tweetable]]2018 continued to see major shifts in global energy markets and extractive industries, which were reflected in the work done by the World Bank in developing and middle-income countries[[/tweetable]]. From expanding off-grid electricity projects in rural and remote areas, to announcing an ambitious $1 billion battery storage program, to a new initiative to help countries with coal mine closures, the Bank fulfilled existing commitments and announced new plans for 2019 and beyond.

Here are some highlights of the World Bank’s work in energy and extractives over the past year:

Riccardo Puliti, Senior Director and Head of Energy and Extractives at the World Bank, wrote a piece about [[tweetable]]how getting methane – which makes up 16 percent of greenhouse gas emissions -- out of energy production and use could provide a major boost to the fight against climate change[[/tweetable]].

In what is one of the largest programs of its kind in Africa, the World Bank is supporting Ethiopia’s efforts to take electricity to all its citizens by 2024 through the $375 million Ethiopia Electrification Program, which focuses on last-mile connections in addition to strengthening the capacity of the sector. The Program’s ultimate goal is to directly support new connections for over one million households in Ethiopia.
A video shows how investing in solar-powered mini-grids like this one in Ghana, is changing lives. In the towns around the Volta River, nearly 10,000 Ghanaians now enjoy uninterrupted power, which enhances security and brings new economic opportunities to these communities.

The World Bank announced a new project to finance off-grid solar power systems in Yemen to power basic services and improve access to electricity for vulnerable Yemenis in rural and outlying urban areas. The new project will rely on the commercial solar market, which has grown despite the conflict in the region, providing further support to the local economy and helping create jobs.

The World Bank announced $55 million in additional financing to Bangladesh’s already successful renewable energy project, to install 1,000 solar irrigation pumps, 30 solar mini-grids and 4 million improved cookstoves in rural areas. [[tweetable]]The World Bank has been helping Bangladesh expand solar-powered electricity in remote and rural areas since 2003 – and today, the country has one of the world’s largest solar power programs[[/tweetable]], covering nearly 20 million people.

The World Bank is working with China to fight air pollution in the Beijing-Tianjin-Hebei region by encouraging business investments to increase energy efficiency, clean energy and reduce air pollutants and carbon emissions by tightening regulations in the sector.

A new financial instrument -- FinBRAZEEC -- will help Brazil increase its investments in urban infrastructure, make the country more energy efficient and meet its goal of improving energy efficiency in the electricity sector by 10 percent by 2030, set as part of its Nationally Determined Contribution under the Paris Agreement on climate change.

A new $250 million development policy loan for the state of Rajasthan in India aims to support the state improve the performance of its electricity distribution sector under the state’s 24x7 Power for All program, which aims to provide continuous, reliable power to all households in Rajasthan by 2019.

A new, first-of-its-kind $1 billion program - which is expected to leverage $4 billion more in funding - aims to help fast-track investments in battery storage, so it can be deployed affordably and at scale in middle-income and developing countries, including some of the fastest growing economies in the world. [[tweetable]]Battery storage allows for wind and solar energy to be used at a much greater scale by making it possible to store electricity and use it when it is needed most[[/tweetable]].

A first-of-its kind report series on floating solar technologies, “Where Sun Meets Water,” aims to help policymakers, private developers and practitioners understand the market potential, costs and policy implications, as well as the challenges to overcome to get this emerging technology off the ground. [[tweetable]]Floating solar technologies can help significantly scale up the use of solar energy around the world, especially in countries with high population density and scarce land[[/tweetable]].

The latest edition of the Regulatory Indicators of Sustainable Energy (RISE) 2018 finds that the world has seen a huge uptake in sustainable energy policies – a clear indicator that policies are a vital building block of the world’s transition to sustainable energy. However, progress is far from where it needs to be for the world to reach global climate goals and the Sustainable Development Goal on Energy (SDG7).

The World Bank, Canada and the United Kingdom announced financial, technical and advisory support for developing countries that have decided to transition away from coal and accelerate their uptake of clean energy. The announcement came alongside the launch of “Managing Coal Mine Closure: Achieving a Just Transition for All,” which outlines the lessons learned from coal mine closures to date, and key steps governments can take to minimize social conflict and economic distress.

To find out more about the World Bank’s work on energy, visit our website or follow us on Twitter – @WBG_Energy.

On risk and black swans in developing countries

3 days 14 hours ago

In 2014, the World Bank issued a highly relevant and timely report titled Risk and Opportunity:  Managing Risk for Development. This report analyzed the growing number of heterogenous risks and opportunities affecting developing countries.  A clear challenge in finding a consistent risk management strategy stems from the sharp differences in the risks faced by developing countries; for example, commodity price shocks, financial crises, and natural disasters have all different defining characteristics.  While we could tailor risk management strategies to each one of these types of risks, not having the benefit of a unifying framework can lead to mistakes and mismanagement of the scarce resources available to developing nations to deal with these potentially disastrous events.  Five years after the publication of the report, in a time of growing macroeconomic headwinds for emerging markets and higher exposure to natural disasters, understanding the risks faced by these economies and how to effectively manage them continues to be a key policy challenge.

Building upon this important stepping stone, the core of our report From Known Unknowns to Black Swans: How to Manage Risk in Latin America and the Caribbean focuses on setting up a simple but powerful common framework for the risks faced by developing countries.  In our framework, the key characteristic linking heterogenous risks with effective preventive policies is the underlying stochastic distribution of the different risks. Our main message is that while insurance would be the preferred risk management tool, risks whose distributions are characterized by “fat tails” (i.e., relatively large probabilities of extreme events) are difficult and costly to insure, if at all.  In fact, the fatter the tails, the less insurance will countries be able to secure and/or afford.

As Figure 1 shows, our framework starts by distinguishing between risks with known distributions (known unknowns) from those where there is no prior information (unknown unknowns).  This dichotomy immediately allows us to reach an important public policy conclusion:  we cannot insure against all risks.  Large and unpredictable events, also known as “black swans,” provide no opportunity to create an insurance contract.  Hence, black swans can only be managed through the buildup of resilience (for example, improved infrastructure and better financial, economic, and political institutions) and access to ex-post assistance.

On the other hand, risks with known stochastic distributions will, for the most part, offer the opportunity to access at least some kind of partial insurance.  Among these types of risk, we distinguish between those with well-behaved bell curve distributions (Type I risks), and those with distributions characterized by fatter tails (Type II risks).

When it comes to Type I risks, the good news is that they should be fully insurable since their underlying normal distribution makes it highly improbable that any event will deviate substantially from the known mean.  The bad news is that there are very few economically relevant risks that follow normal distributions.  After some effort, we found the rain in Uruguay (see Figure 2.A) as a plausible example.  Since flood or drought years may represent a major problem for a country like Uruguay, heavily dependent on rainfall (both for agricultural and energy production), policymakers should be able to insure against these events through financial derivatives in international markets.  Indeed, with the help of the World Bank, Uruguay has purchased financial options based on the country’s rainfall.

Most economically relevant risks, however, are Type II.  While these risks display an almost continuous degree of fat tails, we concentrate on two extreme cases for the sake of exposition. On the one hand, risks associated to changes in international asset prices and commodities tend to follow bell-shaped distributions.  Observing the distribution of the change in oil prices (Figure 2.B), one may think that these changes follow a normal distribution, which could be a costly mistake.  The key difference in the underlying distribution of oil prices and a normal distribution lies in the fat tails of the former.  In fact, assuming a normal distribution, oil traders in 1979 would have believed that an event of the size of the ensuing oil crisis was literally impossible.  If those traders had assumed a distribution with fatter tails such as a q-gaussian, they would have realized that, while rare, such an event was entirely inside the realm of possibilities and thus would have looked to protect themselves accordingly.

On the other hand, important financial risks affecting emerging markets such as sudden stops of capital inflows (Figure 2.C) or natural disasters such as earthquakes (Figure 2.D) follow distributions with very fat tails such as power law distributions.  These fat tails mean that an extreme event (which comes with a non-negligible probability) could, potentially, change the ex-ante moments of the distribution substantially.  Insuring against this type of uncertainty becomes much tougher.

While precautionary saving in the form of international reserves seem to be the only ex-ante solution to the problem of sudden stops (no insurance is available at this date), a quickly evolving insurance technology has started to provide solutions to natural disasters such as earthquakes in the form of catastrophe bonds (cat bonds).  Albeit partial, cat bonds provide a new form of insurance against these natural phenomena.  If the bond is triggered (i.e., an earthquake occurs), the principal obligation to investors is automatically cancelled and immediately used for relief efforts.  One of the most successful and larger issuances of a cat bond was recently sponsored by the World Bank and covered the four countries of the Pacific Alliance (Chile, Colombia, Mexico, and Peru).  The multi-country structure of the cat bond lowers the cost of insurance as the correlations among events between countries tend to be low.

To sum up, insurance should be an important part of the countries’ arsenal to manage their most significant risks.  The access and cost of insuring against any specific type of risk will be determined by its underlying stochastic nature.  As the tails of the distribution grow, it becomes more difficult and costly to obtain insurance and hence other instruments in the risk management toolbox become more important.  While new technologies such as multi-country cat bonds are allowing us to partially insure against fat tail events, as of today we cannot insure against all risks.  This will always be true in the case of black swans.  Building resilience and improving access to ex-post aid are the only preventive tools available for such unpredictable events.

This is the fourth in a series of blogs commemorating the fifth anniversary of the 2014 WDR on Risk and Opportunity. Read all the blogs here.

Building the Caribbean digital economy bit by bit

3 days 17 hours ago

Imagine disaster early warning systems using the latest tools offered by artificial intelligence and augmented reality. Imagine tourists having ubiquitous access to 1 Gigabit secure wireless hotspots. Imagine students engaged real time in data analytics with environmental scientists across the world via advanced networks. These are just a few examples of the leapfrogging possibilities that three Caribbean islands are signing up for now. Can this imagination become a reality by 2020?

[[tweetable]]The three small island states of Grenada, Saint Lucia, and Saint Vincent and the Grenadines have just punched their tickets to the future.[[/tweetable]] With technical and financial assistance from the World Bank and in partnership with Digicel, they have started the development of a future-proofed broadband infrastructure that will connect homes, schools, government offices, and businesses to each other and the rest of the world by 2020.

In July, the three countries signed contracts with Digicel for the construction of new Government Wide Area Networks (GWANs), educational networks for schools, libraries, and community centers; and a new submarine cable connecting Saint Vincent and the Grenadines and Grenada. These contracts were made possible through the Caribbean Regional Communications Infrastructure Program (CARCIP) with the Caribbean Telecommunications Union (CTU) as coordinator.

Making the lily pad

So how far of a leap is this? When CARCIP was initiated, telecommunications were plagued by low bandwidth, high prices, and poor service quality due to a reliance on legacy copper networks. There were also several large coverage gaps. Governments were often paying high prices for obsolete services and equipment, and citizens had to deal with substandard services and limited access to global networks.

Schools in Grenada and Saint Lucia had serious network capacity problems. Many had limited Internet connection to support up to a thousand students. Weak connections made the service so slow that it was generally unusable. In addition, the existing mobile carriers did not have sufficient capacity to offer 4G mobile services, the building block for eEducation initiatives in most countries.

The Grenadines were becoming uncompetitive in the tourism industry due to slow speed Internet services. Residents also faced a severe "digital divide".

An undersea fiber optic cable could create the lily pad needed for technological leapfrogging, providing higher capacity connections. This submarine fiber is also essential to connect critical government buildings in Carriacou (such as customs offices and health clinics) and to deliver improved Internet services to schools and community centers.

The three governments recognized that an advanced, safe, affordable, and reliable digital infrastructure was essential for economic growth, and opted for a complete fiber optic makeover of GWANs, with a special focus on adequate Internet services to the education community.
  A new fiber optic network will better connect 3 Caribbean islands: Saint-Lucia, Saint Vincent and the Grenadines and Grenada.

Infrastructure for the future

Fiber optic connectivity to Carriacou and outlying Grenadines islands will introduce modern telecommunications services for the first time, enabling affordable Internet services.

More than 500 government buildings will be connected, an advanced data centers will be installed in Grenada and Saint Lucia, and approximately 300 schools will have access to high-speed Internet. Security will be ensured, as contracts include technology updates.
But building the digital economy is not just about providing connectivity. CARCIP focused first on creating an updated policy and regulatory environment managed by the CTU and the regional regulatory authority, ECTEL. The program also includes skills development for women and youth employability and digital entrepreneurship.  Digicel will simultaneously roll out advanced networks to provide a broad range of services, including high speed broadband.

Innovative approaches demand time and effort

The innovative contracting process and resulting PPP (Public Private Partnership) structure is a first for digital infrastructure in the region. It is also the first of this magnitude, requiring approximately US$45 million from governments and private partners.

This is possibly the first joint tender by three countries for such wide-ranging infrastructure, including both new construction, then transferred upfront to the governments, and service provision over a 15-year service period.

The unique contracting approach allowed all three governments to obtain substantial economies of scale, allowing lower pricing and better quality of service than if they had purchased the networks separately. In addition, governments will own the GWAN networks upon completion and have guaranteed access to large amounts of capacity.

This approach provided significant gains, but included risks: the three governments had no experience with PPPs, nor with complex digital infrastructure contracts. So how was it put together? There are five key success factors:
  1. Vision and passion to make this very complex project happen.
  2. Support from the World Bank to deal with crisis moments and complex administrative procedures.
  3. Partnership to address both technical and PPP sides of the project.
  4. Win – Win approach to onboard all parties.
  5. Patience, patience and patience exhibited by all participants.
Time has come to make the Caribbean’s digital economy happen.

Competition and the rise of the machines: Should the AI industry be regulated?

3 days 17 hours ago

A multinational conglomerate uses artificial intelligence (AI) algorithms to gather intelligence about the news you peruse, social media activity, and shopping preferences. They choose the ads you passively consume on your newsfeed and throughout your social media accounts, your internet searches, and even the music you hear, creating an incrementally increasingly customized version of reality specifically for you. Your days are subtly influenced by marketers, behavioral scientists, and mathematicians armed with cloud supercomputers. All of this is done in the name of maximizing profit to influence what you’re thinking, buying, and whom you will be electing…

Sound familiar? Apocalyptic prognoses of the impact of AI on the future of human civilization have long been en vogue, but seem to be increasingly frequent topics of popular discussion. Elon Musk, Bill Gates, Stephen Hawking, Vint Cerf, Raymond Weil, together with a host of other commentators and—of course—all the Matrix and Terminator films, have expressed a spectrum of concerns about the world-ending implications of AI. They run the gamut from the convincingly possible (widespread unemployment[1]) to the increasingly plausible (varying degrees of mind control) to the outright cinematic (rampaging robots). François Chollet‏, the creator of a deep neural net platform, sees the potential for “mass population control via message targeting and propaganda bot armies.” Calls for study, restraint, and/or regulation typically follow these remonstrations.

There is a rationale for government intervention. The AI industry could benefit from safeguards against the potential for monopolistic behavior by any of the primary actors in the space, particularly as several of them are increasingly capitalizing on their ability to predict and influence human behavior. But as more corporate competitors enter this space, the relative risk may be lowered. Increased corporate competition is generally accepted as an effective way to promote consumer well-being.

Imagine a bank that develops an AI algorithm to predict a prospective client’s likelihood of defaulting on a loan. The algorithm is trained on a database containing extensive data collected through social media, health insurance, phone and credit card records, as well as by tracking the clients’ movements, analysis of his or her purchasing patterns, and more. The bank can then offer interest rates that are customized for each client, minimizing lending risks and maximizing both profits and efficiency. This hypothetical bank would likely gain monopolistic power—and quickly, too.

Now, a second bank develops its own AI algorithm. It predicts—equally well—the risks of clients defaulting on a loan using a similar range of each client’s characteristics. Using the algorithm, this second bank increases its market share. To attract clients, the first bank lowers rates by refining the AI algorithm and bringing in more data. The second bank responds. This “AI arms race” soon eats into both banks’ profit margins, nearly up to cost recovery, and as a result, neither bank will have any power over their potential clients (we ignore, for simplicity, the Cournout duopoly).

One can envision similar scenarios playing out across contexts, which adds fuel to the ‘fire’ of popular concern about the impact of AI: firms push their products; political parties compete for voters; interest groups promote their causes; etc. In the long run, the competition would reduce the ability of any group to consistently affect the outcomes of their interests and control the behavior of people.

However, meaningful corporate competition in the AI space is not happening. In fact, we may be well on our way to monopolies the likes of Standard Oil. Google now owns about 81% of all online searchers and 85% of search ad revenue; Google also owns YouTube and Chrome, which accounts for 60% of the browser market. Facebook controls 77% of mobile social traffic for more than 2 billion users around the world. And in different corners of the globe, antitrust crusaders are making the case that certain of the AI tech giants may be engaged in anticompetitive behavior, for which traditional antitrust law is a suitably blunt instrument. European antitrust regulators most recently fined Google €4.34 billion (in July 2018, which followed a 2017 fine of €2.4 billion for anticompetitive behavior concerning its online shopping search service) and ordered the company to stop using its Android mobile operating system to block rivals. It remains to be seen whether the company’s efforts to comply with the ruling (despite its appeal of the ruling) will be sufficient. More efforts like this are afoot, but movements like that led by Open Market Institute are still in their infancy.

An important question is whether traditional antitrust regulations and related legislation are at all sufficient to tackle the broader AI landscape. To some, Google and Facebook have “innocent monopolies” or, “two-sided platforms” (Tirole 2014), which are difficult to break using standard antitrust mechanisms because they offer free services (i.e. Google Maps, Microsoft Skype) and actually lower prices for consumers (Economist, 2016). US antitrust laws were originally designed to prevent monopolies from forcing higher prices on consumers; regulations generally focus on antitrust indicators like the size of a company (rather than its capabilities, the extent of a its data assets, the nature of its data usage, and the quantity of data it possesses) and human intent and action (rather than the functions of automated bots). Investigations into anticompetitive behavior typically are typically traditional affairs, centering on human interactions and manipulation to generate particular outcomes. But bots don’t leave voicemails or email evidence that could bolster a court case. These new realities are already making it more difficult to detect anticompetitive actions.

Amid this challenging legal and regulatory environment, the tech giants are attracting ever more customers and quietly continuing to access and generate ever more data to perfect their AI algorithms. These giants will continue to dominate the AI landscape. Such market concentration—coupled with certain limitations in antitrust legal and regulatory regimes—is a worrisome state of affairs, even for largest world economies. Smaller developing countries are even more vulnerable. The risk that AI algorithms might exert effective control over vulnerable populations in a small country is not only great, it is already happening.

So where do we turn? Multilateral development organizations are uniquely situated to provide some leadership here. Organizations like the World Bank are already guiding clients around the world with policy advice on regulatory governance. Similar support to regulate the international AI markets and promote competition would not be a significant stretch for the institution. The Bank—as an apolitical and public interest multilateral organization known for its technical expertise—occupies a unique position to provide regulatory guidance and should take this role seriously as a further avenue to enable public goods.

[1] Over the last 60 years the computing power increased by 100s of billions of times. That resulted in elimination of a single occupational code from the list of 270 detailed occupations that existed in the 1950 US Census (Bessen 2016). The category that was eliminated was an elevator operator.

What do public officials know? Why do some know more than others?

4 days 12 hours ago

Many people working in development hope to `inform’ public officials.  For example, academic research or the Bank’s own analytical studies often conclude with `policy recommendations’ to be taken on by individuals in charge of translating policies into practice, or public administrators.  Yet what is the baseline level of knowledge of public officials that this work is building on?  What do they already know and not know?
We investigated this question in Ethiopia by surveying a representative sample of 1,831 public officials across 382 organizations spanning all three tiers of government. We compared their estimates of key characteristics of their constituents to objective administrative and survey data to create a direct test of their knowledge.  How did they do?
We start our blog with a quiz to you, the reader, to assess your priors on the accuracy of public officials in guessing the key characteristics of the local citizens that they serve. 

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The Basic Knowledge of Public Officials

In our new paper, we report on the collection of (some of the first) individual-level data on the information that public officials have about their local constituents. In a minority of cases, the public officials we study make relatively accurate claims about their constituents. Of officials’ assessments of the population they serve, 21.5 percent are within 20% of the census-defined population.
However, a large portion of bureaucrats make economically-meaningful mistakes in their tacit beliefs. The mean absolute error in education bureaucrats’ estimates of primary enrollment numbers is 76% of the true enrollment figures. The mean error in estimates of the proportion of pregnant women who attended ANC4+ during the current pregnancy (the ‘antenatal care rate’) was 38% of the benchmark data. Agriculture officials overestimate the number of hectares in their district that are recorded as used for agricultural purposes by almost a factor of 2.
Such large errors are consistent with studies of agents from other settings.  However, in government such errors can have large economic consequences as they skew the distribution of public resources and change the nature of public policy.  In our paper, we provide evidence that this tacit knowledge feeds into the allocation decisions of civil servants and that these errors are correlated with service-delivery outcomes.

Why Do Some Civil Servants Do Better?
Why do we see some civil servants making lower errors in their tacit beliefs than others? First we looked at education, experience in service, and other individual characteristics and find little evidence that this explains the variation we find.  Similarly, characteristics of the local constituency (population, remoteness, poverty rate, topography, and road density) do not effectively explain the variation.  Interestingly, the availability of technology does not explain much of the variation either.  Together, there is little evidence that the cost of acquisition is the problem.
Rather, what we find substantial empirical support for is that civil servants who are given incentives to seek out and absorb information do so irrespective of the nature of that information.  Public service incentives for information acquisition are the dominant determining factor of how informed an individual official is.
This shouldn’t be a surprise.  A substantial economic theory literature (a key reference is Aghion and Tirole (1997)) has outlined for years that since information in the public sector requires effort to acquire, information is likely to be better in organisations that (1) give officials power to make decisions (de facto authority), and, (2) reward the collection and use of accurate information.
In our data, civil servants have significantly better information when they are given de facto authority (they now have an incentive to acquire accurate information as their decisions are not overruled by a superior).  However, the incentives interact. The effect of authority only reduces errors when there are organisational incentives in place to use and collect operational information (see figure 1).  Why bother acquiring information (perhaps at some cost to you) if no one will reward you to use it?

Figure 1: The Effect of De Facto Authority on Absolute Errors by Percentiles of Monitoring Management Practices (OLS Coefficients and 95% Confidence Intervals)

If the public sector doesn’t have the right incentives for acquiring information, is it any surprise that those trying to inform public officials often find it an uphill battle?
Let’s Just Make a Really Cool Policy Brief
The traditional response to struggles to inform public officials is to produce a briefing that is both informative but easy to digest.  To investigate the effectiveness of top-down interventions like these, we ran a field experiment that distributed the exact information that we asked about to a random subset of organisations in a way that exactly mirrored civil service protocols.  The information was sent through government circulars, reflecting the communication system in already place within the bureaucracy.  Providing information in this way significantly reduced the cost of acquisition.
It worked.  We find significant improvements in the information that civil servants have.  However, public sector incentives once again mediated where we found impacts.  Only in organizations where management practices are weak did the information provision have any impacts (figure 2).  When incentives for information acquisition were in place already, officials had the information.

Figure 2: The Effect of the Treatment on Absolute Errors of Civil Servants by Monitoring Management Practices (Left) and by Other Management Practices (Right)

This all matters in how we try and inform public officials.  Fundamentally, if we could get public service incentives right in the first place, civil servants would actively search out information, making the life of a researcher interested in policy impacts easier.  Where incentives for information acquisition are weak, this will understandably limit the information official’s collect.  If we want informed public officials, they need the right organizational incentives to read our policy briefs.

Views from Silicon Valley: Helping client countries keep up with changing technology

4 days 15 hours ago
Graphic: Nicholas Nam/World Bank

It is time to tell you a secret my friends. I am a girl who codes. Before joining the World Bank, I was fluent in ASCII, developing systems and applications to make it easier to get things done.

Nearly 20 years after writing my first lines of code, I stepped onto the Microsoft Campus in Redmond, Washington, representing the World Bank Governance Global Practice and the GovTech Global Partnership task team. Along with a delegation representing leadership across the Bank, we visited Redmond and Silicon Valley to meet with some of the top players in Big Tech.

You can imagine how surreal it was to see firsthand how quickly technology has evolved and what is on the horizon. Artificial Intelligence (AI), smart “things”, robots, machine learning, data aggregations, and visualizations that I only dreamt about back in my early career.

During the visit, our partners said it best: [[tweetable]]change will never be slower than it is today, and governments are falling behind.[[/tweetable]] This is our challenge: how do we help our clients keep up? And, [[tweetable]]how do we use tech to help crack some of the trickiest governance problems that hinder development – from corruption to low tax collection; from poor service quality to unequal access to key services? [[/tweetable]]

For years I’ve said that public sector reforms will require ICT components. From tax administration, financial management and procurement, to service delivery and citizen engagement, technology plays an increasingly important role. Citizens are demanding more from their governments. As a result, the aims of governments around the world are even more ambitious – striving for instant delivery of seamless services to people and businesses, cost savings for taxpayers, and smarter, better government that proactively engages with citizens.

Our private sector partners are developing solutions that can help meet these aims: human-centered design of digital services; Software as a Service (SaaS) and data warehousing for operations; analytics and AI to monitor risk and fraud; clouds to access data anywhere in the world; digital payment systems to increase economic and financial inclusion; digital identities for those without – just to name a few. The applications of these innovations for governance are wide and varied.

The opportunities created by technology raise new questions. Are solutions secure, inclusive, accessible and affordable? How do we ensure our clients have the institutional set-up, capacity, leadership and change-management skills to reap the benefits and realize tangible impacts on poverty reduction? Buying software and systems intelligently requires new procurement approaches. This is necessary, but not sufficient; there is also the human element to governance.

This human element is where we will find the true value and application of technology.

Monitoring the SDGs with purchasing power parities

4 days 19 hours ago

The ICP blog series explores ideas and issues under the International Comparison Program umbrella – including innovations in price and data collection, discussions on purpose and methodology, as well the use of purchasing power parities in the growing world of development data. Authors from across the globe, whether ICP practitioners or researchers making use of ICP data, are encouraged to submit relevant blogs for consideration to

It has been over three years since countries adopted the UN’s 2030 Agenda for Sustainable Development and its 17 Sustainable Development Goals. From the outset, a number of targets were identified to help pinpoint the desired outcomes within these broad areas – 169 in total. Monitoring progress towards each of these targets relies on data originating in countries, and which are often collected in partnership with regional and international organizations. The World Bank’s Atlas of Sustainable Development Goals used such data to visualize trends and comparisons across the globe, drawing on data from World Development Indicators and many other sources.

Purchasing Power Parity (PPP) data, from the International Comparison Program, play an important role in this monitoring: by eliminating the effect of price level differences between countries they allow us to measure living standards and other economic trends in real, comparable terms.  PPPs are utilized in a number of the official SDG indicators, but also in other associated indicators, which help us to explore the underlying issues and impacts of the goals and targets more deeply.  The four charts presented here exemplify the crucial insights PPPs help provide in SDG monitoring and analysis.

Goal 1 seeks to eradicate poverty in all its forms by 2030. Extreme poverty is measured using the international poverty line of $1.90 a day using 2011 PPPs. The use of PPPs ensures that the poverty line represents the same standard of living in every county. Higher poverty lines used by the World Bank better measure poverty in lower-middle and upper-middle income countries.  Using these poverty lines, we can visualize the shifts in population living at various standards of living.

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Goal 3 pursues good health and well-being for all.  The first of its targets seeks a reduction in the proportion of mothers that die in childbirth, and the modelled indicator used to monitor this uses GDP expressed in PPP terms.

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Goal 9 has a broad remit, building resilient infrastructure, promoting inclusive and sustainable industrialization, and fostering innovation.  Expenditure on research and development is one tool used to measure the latter and converting this into PPP dollars allows cross-country comparisons.

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Goal 10 looks to reduce inequalities, both within and among countries.  Assessing the incomes of different parts of society within a country helps us to measure existing inequality, and the two lowest quintiles in terms of income – the “bottom 40 percent” represent the poorest in many analyses.  Growth in the incomes of the poorest against society as a whole is used in SDG 10 to investigate whether the poorest are “catching up” with the rest of the population, and comparable means of income or consumption for different groups are measured in PPP dollars. 

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When it comes to modern contraceptives, history should not make us silent: it should make us smarter.

4 days 19 hours ago

On January 2, 2019, the New York Times ran an Op-Ed piece by Drs. Dehlendorf and Holt, titled “The Dangerous rise of the IUD as Poverty Cure.” It comes from two respected experts in the field, whose paper with Langer on quality contraceptive counseling I had listed as one of my favorite papers that I read in 2018 just days earlier in pure coincidence. It is penned to warn the reader about the dangers of promoting long-acting reversible contraceptives (or LARCs, as the IUD and the implant are often termed) with a mind towards poverty reduction. Citing the shameful history of state-sponsored eugenics, which sadly took place both the U.S. and elsewhere, they argue that “promoting them from a poverty-reduction perspective still targets the reproduction of certain women based on a problematic and simplistic understanding of the causes of societal ills.

What started as an Op-Ed with an important and legitimate concern starts unraveling from there. A statement that no one I know believes and is not referenced (in an otherwise very-well referenced Op-Ed) “But there is a clear danger in suggesting that ending poverty on a societal level is as simple as inserting a device into an arm or uterus” is followed by: “Providing contraception is critical because it is a core component of women’s health care, not because of an unfounded belief that it is a silver bullet for poverty.” In the process, the piece risks undermining its own laudable goal: promoting the right and ability of women – especially adolescents, minorities, and the disadvantaged – to make informed personal decisions about whether and when to have a child to improve their own individual welfare first and foremost.

I believe that the effect of such prominent pieces is to stifle research on the best ways to improve access to all modern contraceptives – including the very effective LARCs that have been around for close to three decades. Of course, individual or patient experience is the most important aspect of the discussion around contraceptive provision. But, so are cost and public health (within the “Triple Aim” framework, as cited in Holt et al. 2017 as the three organizing principles of optimal health systems). And, yes, one can easily add to that framework human capital accumulation among adolescents, labor market participation among adult women, and societal gains from improved infant and child health – all potential effects of a reduction in unintended pregnancies and better birth spacing via improved access to the most suitable contraceptives for each individual. Because of the history of family planning, are policy makers and researchers not supposed to even mention the benefits of reducing unintended pregnancies for the individuals themselves, their children, and the society as a whole? Let alone explore innovative policies to address the myriad of barriers to access, such as cost, provider bias, insufficient provider training and knowledge, lack of information among patients, etc.?

For all we know, a sensible sexual and reproductive health (SRH) policy – targeted to adolescents and completely consistent with a rights-based approach to counseling clients on modern contraceptives – could be more cost-effective in improving human capital accumulation among school-aged populations than providing them with conditional cash transfers (CCTs) to attend school. But, the former is practically non-existent in the developing world while the latter is ubiquitous (the NYT Op-Ed is US-centric and is mum about developing country settings). Should the economist who dared to suggest that governments should consider evidence-based SRH policy as an alternative (or a complement) to CCTs be chastised because of the loaded history of family planning in the US? Pieces like this Op-Ed serve as a deterrent to those who want to carefully explore alternative counseling techniques for contraceptives, optimal subsidies to providers in pay-for-performance schemes to improve access of patients to expensive methods, etc.
One thing that does not come across to the reader from the Op-Ed is the magnitude of the trade-offs we are faced with when trying to strike a balance between “…protecting unfettered access and preventing abuse, and …encouraging and coercing.” (Gold 2014) Here are some facts:

I don’t know about you, but when I read these statistics, my first reaction is disbelief. How can we have methods that are so effective in giving women control over their fertility that are so underutilized? Economists, especially lately with the emergence of RCTs, have been rightly accused of searching for the silver bullet or the magic pill to address a variety of problems in development. But, here is an actual small plastic rod that can improve the lives of many should they choose to adopt it, and we are collectively looking away…

Yes, the matter is complex. Pregnancy intention is not binary. Effectiveness is but one concern women have in choosing a method. Side effects are significant and can vary from merely annoying to painful and unacceptable. It is unlikely that the first method someone chooses will be the method for them – often it will be a search to find the right method for themselves that align with their preferences for side effects, discretion, convenience, etc. and their goals in life.

However, benefits of increased voluntary uptake of long-acting reversible contraception may extend to wider populations than previously thought. It is very unlikely that the current equilibrium of low uptake of LARCs is optimal – both from an individual welfare and a public health perspective. Effectiveness may not be the determining factor in contraceptive choice, but it has to be a factor. It should not be controversial to say that, conditional on other considerations (or all else equal), more effective methods should be more preferable to less effective ones. Especially when the typical-use effectiveness gap between LARCs and other methods is so large. And, that providers can help provide this information and encourage them to consider these methods…

One important thing to note here is that we don’t live in a world that prioritizes LARCs over other methods. In fact, adolescents everywhere live in the opposite world: providers are reluctant to recommend LARCs to adolescents for a variety of reasons: cultural or religious bias about what that implies about a teenager’s sexual behavior; fear of backlash from parents or husbands of adolescent females; urban myths like “LARCs are not suitable for nulliparous women,” etc. Often, LARCs are more expensive than other methods and adolescents (and poor women) are less likely to be able to afford the upfront cost of these methods.

So, if anything, we should be trying to undo a harmful bias that is present in the current status quo that prevents young women anywhere in the world from being able to access a technology that might significantly improve their welfare. And, I do wholeheartedly believe that there is a way to do this, namely to promote LARCs for adolescents and adults, poor and non-poor alike, without sacrificing a rights-based approach to contraceptive policy in general and counseling in particular.

That path starts, however, with researchers and policymakers pushing the boundaries – even if just a bit – to challenge the orthodoxies of the past half century. Almost everyone I know agrees that informed choice and consent is a sine qua non in any quality counseling framework, but at the same time most people also agree that it is not realistic, especially in a busy primary care setting, to present the average client with a large number of options and ask her to choose for herself, which is still the prevailing norm. Even if it were realistic, it would be hard to argue that this is what we want informed choice to mean. Shared decision-making, like the framework that Dehlendorf and Holt advocate, in a setting where the clients’ preferences and goals are being elicited and incorporated into recommendations will inevitably lead to more LARCs being recommended to many people being counseled. And, that should be a good thing…

But, if those clients believe that such recommendations are a result of biased and ill-willed policy makers who want to restrict the fertility of poor and minority women rather than evidence-based recommendations of well-meaning researchers and providers, Op-Eds like this will be partly to blame. It is time to admit to ourselves and everyone else that there is a way to promote LARCs and encourage women to consider them that is conscientious, ethical, deliberate; that is empathetic and trust-building rather than suspicion arousing; that is respectful and rights-based.

When we do so, it is also OK to allow for the fact that the benefits of supporting such approaches extend beyond the individual – that they may improve not only health, but also educational outcomes, incomes, women’s bargaining power, and the like. And those things matter, because we are concerned with allocating limited resources to various human capital accumulation policies. If a sensible and ethical school- or community-based SRH policy is more cost-effective than CCTs in reducing dropouts, we would like to know.

I’d like to finish with the final paragraph from Gold (2014), a paper that is cited in the NYT Op-Ed only in reference to the Norplant controversy of the 1990s in the United States:
In sharp contrast to events of past decades, today’s conversation is motivated primarily by providers and advocates wanting individual women to have unfettered access to the extremely effective methods now available, as opposed to serving some perceived greater social good. The questions on the table now are much more nuanced and complex, and certainly no less important. Given the historical examples of women not having received the information they needed to make free and informed choices, what is the best way for practitioners to convey that some methods are more effective than others, while still ensuring that women are given the full information they need to make decisions about what is most appropriate for them? Because financial incentives have been inappropriately used to influence women’s choices in the past, how can payment systems that financially reward providers when more women opt for the most effective methods, such as LARCs, be structured to avoid undermining the quality of the information and range of choices women receive? This is a conversation that the reproductive health fieldunited as it is in its unshakeable commitment to the basic human right of individuals to make personal choices about childbearing freely and without coercionshould welcome.”

Energy prices fell 15 percent in December–Pink Sheet

1 week 1 day ago
Energy commodity prices plunged more than 11 percent in December, led by oil (-13 percent), the World Bank’s Pink Sheet reported.

Non-energy prices fell marginally as losses in beverages, fertilizers, and metals were balanced by gains in food and precious metals.

Agricultural prices gained less than one percent—a 3.5 percent decline in the beverage price index was offset by a 3.5 percent gain of the food price index in response to grain price increases.

Fertilizer prices declined almost 7 percent, led by a 9 percent decline in Urea.

Metals prices declined 2 percent led by iron ore (-6 percent) and nickel (-4 percent).

Precious metals prices gained more than 3 percent in response to similar gains in gold and silver prices.

The Pink Sheet is a monthly report that monitors commodity price movements.
  Nominal price indexes, percent changes, December over November if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["NsZ9A"]={},window.datawrapper["NsZ9A"].iframe=document.getElementById("datawrapper-chart-NsZ9A"),window.addEventListener("message",function(a){if("undefined"!=typeof["datawrapper-height"])for(var b in["datawrapper-height"])if("NsZ9A"==b)window.datawrapper["NsZ9A"]["datawrapper-height"][b]+"px"});   Major commodity price indexes if("undefined"==typeof window.datawrapper)window.datawrapper={};window.datawrapper["2cLRb"]={},window.datawrapper["2cLRb"].iframe=document.getElementById("datawrapper-chart-2cLRb"),window.addEventListener("message",function(a){if("undefined"!=typeof["datawrapper-height"])for(var b in["datawrapper-height"])if("2cLRb"==b)window.datawrapper["2cLRb"]["datawrapper-height"][b]+"px"});
Nominal prices, percent changes, December over November

How ownership and liability issues can impact the use of computers in schools

1 week 1 day ago
owned! pwned? In many low and lower middle income countries around the world, large scale purchases of computing devices for use in schools are just beginning to happen. Given that efforts of this sort have occurred in other education systems for many years (and in some 'highly developed' countries, for decades), there is a real opportunity for countries new to such efforts to learn from past mistakes made by others -- and not to repeat them.

Let's leave aside, for the moment, the fundamental question of whether or not a country should be investing its scarce resources in, for example, a new program to roll out laptops or tablets to all of its students or teachers. Let's say, for better or for worse, that this decision has already been made (and hopefully that it was a good decision!).

And: Let's leave for another discussion a topic regularly explored on the World Bank's EduTech blog: What might it mean for these devices to be used 'effectively'? Instead, what if we ask:
  What are some of the 'little details' that actually can actually have a big impact on whether the devices supplied to schools are actually used at all?
Past posts on the World Bank's EduTech blog have attempted to document and analyze many of these 'little details'. Here's one that we haven't explored before:
  Who owns the computer equipment in schools, who pays for the stuff that gets broken, who decides, and how is this information communicated?

There are no right or wrong answers to these questions, of course. As with so many things in life, context is king. Tolstoy famously wrote that "Happy families are all alike; every unhappy family is unhappy in its own way." In my experience, the exact opposite is often true when it comes to education systems attempting to introduce new technologies into schools for the first time: All (eventually) unhappy education systems are (too often) alike; every happy education system is happy in its own way.

Here's a quick example of one education system that quickly became 'unhappy' with the initial results of its high profile effort to provide laptops to teachers. I'll call this country 'Laptopia', the generic name I use in training exercises when referring to real-life examples where little would be named by identifying the country specifically. (For what it's worth: When I shared the story below with two colleagues, both of them were sure they knew to which country I was referring. Both named different countries, and both were wrong.)


When they first rolled out laptops for teachers in Laptopia, the local equivalent of the ministry for 'information technology' took the laptops on their books as assets after they were purchased from a vendor via a tender process. In this case, the IT ministry was seen as the most competent institution to assume this initial liability; the ministry of education was seen as much less capable; and there was no natural third party organization (e.g. a national edtech agency) that could perform this function.

(Side note: I know of two countries where there were large scale national purchases of devices where the devices landed in a warehouse ... and no ministry wanted to accept responsibility/liability for them. In one case this was because because they thought that the process by which they were procured was a bit dodgy, the other because they did not feel that the related distribution plan was adequate. So the devices ... lots of them ... just sat there ... for quite a while.)

The IT ministry in Laptopia then oversaw the distribution of the laptops to schools, working in tandem with vendors and in loose coordination with the ministry of education, dealing directly with school principals.

Things quickly became a little tricky.

In Laptopia, a school essentially (I'm oversimplifying) assumed joint responsibility for many of the physical assets in its building (desks, textbooks, etc.) together with a local government authority.

When it came to distributing the laptops for use by teachers, there was no official communication to school principals from any governmental authority about who technically owned these new assets.

Faced with this grey area, and worried about their own potential personal liability, many principals assumed that their schools, or in some cases even they themselves as individuals, would be liable for any damage or replacement costs. When they asked education officials about this, different answers were given. Principals then were left to figure out what to do themselves.

In some cases, principals across Laptopia made teachers sign a note (sort of a contract) that they themselves devised, saying that teachers would be liable for any damage to the laptops.

I saw a few versions of these; the most helpful, in my mind, were ones that vendors gave to principals. I assumed that some of these had been pulled from vendor activities in other countries, for better or worse. In other instances, it looked like they had just been downloaded from the Internet and translated. These may not have been great, and they may not have spoken to specific contexts and circumstances in Laptopia, and they may well have reflected the interests of vendors, but at least they were something that principals could use, absent any other guidance or information.

In other cases, the principals simply never distributed the laptops, leaving them unopened in boxes.

Together with the locked school computer lab, a situation encountered so often over the years as to have almost become a cliche, people who have worked a long time in the edtech field are well familiar with the phenomenon of new computers sitting in their original boxes, piled up and unused in schools.

That said, not all of them remained unopened: Occasionally, some were displayed, plugged in and booted up in exceptional circumstances, e.g. when an international delegation or a high level ministry group stopped by for a school visit to see ‘ICT in action in education’, but afterwards they were returned to their boxes and locked away for safekeeping. 

Given that very few teachers in Laptopia had ever used laptops at that time as part of their professional life, and that few had a computer at home that they used regularly, many were not convinced of their usefulness for their jobs. As a result, and faced with potential damage costs that equaled a few months of their salaries, many teachers, especially those with little experience or confidence in using the technology, simply decided not to use the laptops at all.

It wasn't only the less experienced, less confident teachers in Laptopia who reached this conclusion:

In the pilot stage of the rollout, one teacher had been caught doing something 'inappropriate’ with her laptop and had faced severe sanction as a result. Or so I was told by more than one teacher and school principal. I was never able to get the full story about this – what the transgression was, what happened as a result, etc. – and it might simply have been a rumor. But this story/rumor circulated widely among teachers, a number of whom were using their new laptops to do something they learned about during their initial ICT literacy training: how to use email. Especially among computer-literate teachers, this story/rumor spread pretty quickly. (One teacher rather memorably told me that, in her country, most everything was a rumor, what made something true is if people believed it. I hoped that she wasn't a science teacher.) In many cases, the only people that these teachers knew who had email accounts were other teachers. A number of these teachers decided that, given potential sanctions for undefined ‘inappropriate use’ and the potentially severe monetary penalty that they might have to pay if they were to damage the laptop, it was probably best not to use the laptops at all. It is worth noting that these were often the most computer-savvy teachers, the ones who might be expected to be 'power users' in their schools and, as such, were likely to set the example for other teachers in their schools.

Even if, as I was informed by many senior officials in Laptopia who were upset that the devices were not being used, teachers in their country were 'too traditional' in their approach to trying new things, I found it pretty hard to fault teacher behavior here. Given the risk-reward ratio in such circumstances, where disincentives for use are clear (and quite punitive) and incentives for use are rather murky, it's pretty hard to blame the user if she or he isn't terribly interested in using the shiny new device that's dropped on their desk, especially when if comes weighted down with high expectations and potentially higher personal liability.

I have seen similar sorts of calculations done in other education systems where there have been big initiatives to provide schools, teachers, students and/or families with computing equipment but where issues around ownership and liability were not clearly defined and communicated -- with similiar results.

A follow-up EduTech blog post will explore what policymakers might consider to lessen the chances of the 'Laptopia scenario' occuring in their own countries.

You may also be interested in the following posts from the EduTech blog:

Note: The image used at the top of this blog post ("owned! pwned?") came via Pixabay and is in the public domain as a result of the use of a CC0 1.0 Universal (CC0 1.0) Public Domain Dedication


Weekly links January 11: it’s not the experiment, it’s the policy; using evidence; clustering re-visited; and more...

1 week 1 day ago
  • “Experiments are not unpopular, unpopular policies are unpopular” – Mislavsky et al. on whether people object to companies running experiments. “Additionally, participants found experiments with deception (e.g., one shipping speed was promised, another was actually delivered), unequal outcomes (e.g., some participants get $5 for attending the gym, others get $10), and lack of consent, to be acceptable, as long as all conditions were themselves acceptable.” – caveat to note-  results are based on asking MTurk subjects (and one sample of university workers) whether they thought it was ok for companies to do this.
  • Doing power calculations via simulations in Stata – the Stata blog provides an introduction on how to do this.
  • Marc Bellemare has a post on how to use Pearl’s front-door criterion for identifying causal effects – he references this more comprehensive post by Alex Chino which provides some examples of its use in economics.
  • From the Stanford Social Innovation Review – six ways to support small and growing businesses in emerging markets.
  • The Economist on how equal rights can boost economic growth.
  • The team at Declare Design re-examines the question of whether you should cluster standard errors above the level of treatment. They make the point that if you are interested in the sample average treatment effect, then the advice to cluster at the level of randomization works fine, but if there is treatment heterogeneity, you only sample clusters, and you are interested in the population treatment effect, then you may need to cluster at a higher level. See also my sidenote 2 in this post about when to cluster – basically in all the applications I have done clustered experiments at, we are greedy/constrained and take as many clusters as possible, and so there is never any first-stage cluster sampling, so all we can say something about is the SATE.
  • J-PAL has a report on its lessons from trying to get policymakers to use evidence in Latin America – including a case study discussing the set up and functioning of MineduLAB, a laboratory for innovation within the Peruvian Ministry of Education – which was set up in 2014 and has to date identified 9 innovations to pilot, of which 6 RCTs have been completed, and one with positive impacts already scaled-up.
  • IPA has a trilogy of posts on moving evidence to policy: first, IPA’s strategic ambition, including a set of conditions for research to be incorporated into policy, then “strategies for co-creating research” with decisionmakers in order to maximize impact, and finally, a post on what to do with the research once you’ve done it
  • Funding: Call for expressions of interest -- the World Bank Africa Gender Innovation Lab is looking for teams and projects to work on impact evaluations on programs that aim to improve women’s land tenure security in sub-Saharan Africa.

Taking stock: knowledge sharing as a driver for achieving the Sustainable Development Goals

1 week 2 days ago

Another year has passed, and we are only 11 years away from the goalpost of the 2030 Agenda for Sustainable Development (Agenda 2030). [[tweetable]]It is high time to reflect a bit on where we are today on knowledge sharing for achieving the Sustainable Development Goals (SDGs).[[/tweetable]]

In the past few years, knowledge sharing has moved to the center of global development as a third pillar complementing financial and technical assistance. Agenda 2030 calls for enhancing “knowledge sharing on mutually agreed terms,” while the Addis Ababa Action Agenda on Financing for Development encourages knowledge sharing in sectors contributing to the achievement of the SDGs.

For cities, this means that [[tweetable]]knowledge sharing can be a critical catalyst for achieving SDG11 to “make cities and human settlements inclusive, safe, resilient, and sustainable.”[[/tweetable]]

Throughout 2018, we saw several important peer learning initiatives on sustainable cities, such as the World Bank’s Tokyo Development Learning Center Technical Deep Dives in Japan and the recent Medellin Living Lab, which brought together 10 cities from across the world to learn about approaches to urban transformation.

About this series
More blog posts These exchanges build on the recognition that development practitioners increasingly want to learn from each other. Practitioner exchanges are particularly effective for sharing “how-to” knowledge about solutions – often tested and shared by external experts – as these “tips and tricks” tend not to be codified or recorded in written descriptions and case studies.

So, with all these activities, where do we stand today?

[[tweetable]]Strengthening developing countries’ capacity for knowledge sharing has become ever more critical to achieving the SDGs.[[/tweetable]] Local service delivery institutions, such as transit agencies, disaster risk management agencies, and health ministries, are vital as key contributors of tested, successful solutions and proven good practices in all areas of the SDGs. These solutions and innovations are often local, and they need to be identified, captured, and shared for national and international scale-up, especially in the context of South-South and Triangular Cooperation between and among developing countries.

[Download report: The Art of Knowledge Exchange: A Results-Focused Planning Guide for Development Practitioners in the Social, Urban, Land and Resilience Sectors]
Panel session on knowledge sharing at the 4th High-level Meeting on Country-led Knowledge Sharing (HLM4), held in Bali, Indonesia, in October 2018. (Photo: World Bank) At the 4th High-level Meeting on Country-Led Knowledge Sharing (HLM4), held in Bali, Indonesia in October 2018, participants in the opening panel session on “Knowledge Sharing to Achieve the SDGs” confirmed the importance of knowledge sharing as a key contributing factor to achieving the SDGs.

Indonesia’s Minister of Villages Pak Eko Putro Sandjojo noted that his ministry makes strategic use of large-scale knowledge sharing to increase the quality and diversity of investments, for example, to encourage financing of human capital development by documenting successful investment examples and facilitating peer learning at the district level.

He is not alone in underlining the critical link between knowledge sharing and development. Abul Maal Abdul Muhith, former Finance Minister of Bangladesh, added that “the successful examples that lead to tangible results need to be documented, ideally in writing and through video.”

We agree with him. All too often, valuable tacit knowledge gets lost, as experiences are not captured in time. Public officials and city managers across the world reinvent the wheel instead of benefiting from practical solutions their peers have developed. It is this know-how that needs to be harvested and shared in systematic ways. And often, this knowledge is local. At the panel session, Ede Ijjasz-Vasquez, Senior Director of the World Bank’s Social, Urban, Rural and Resilience Global Practice emphasized the idea that “global knowledge is the accumulation of local knowledge, and innovations happen at the local level. Local action needs to be informed by local experiences to accelerate in very practical ways the implementation and the achievement of the SDGs. (Photo by Ivan Butina via Twitter) 


Through the World Bank’s Organizational Knowledge Sharing (OKS) program, we are offering a range of practical knowledge sharing tools and approaches that country institutions can strategically use on their pathways to accelerating progress toward achieving the SDGs.

[Download publication: Becoming a Knowledge Sharing Organization: A Handbook for Scaling Up Solutions through Knowledge Capturing and Sharing]

[[tweetable]]Investing in both the organizational enabling environment and technical skills can foster the sharing of experiences and lessons learned on critical development processes.[[/tweetable]] It can also make organizations more resilient and effective internally, foster the scaling up of good practice domestically, and inspire adaptation and replication of successful experiences internationally.

As one government official shared at HLM4, “we’ve come quite far with using knowledge sharing more purposefully in our organizational processes… we have started to invest time and resources in weekly peer learning sessions that help us take the learning from practical policy implementation to support our decision making.” More informed decisions lead to better outcomes. If many national and subnational government institutions follow this example, it will take us closer to achieving Agenda 2030.

[[tweetable]]Let’s make 2019 the year that gets us to a breakthrough on how cities and organizations across the world document and share what works to achieve inclusive, resilient, and sustainable communities.[[/tweetable]]
This blog post is part of the World Bank’s “Knowledge Sharing for Sustainable Development” series.   RELATED

Measuring learning to avoid “flying blind”

1 week 2 days ago
Measuring learning outcomes allows countries to plan better, as it shows the magnitude and characteristics of their learning challenges. Photo: Sarah Farhat/ World Bank

Just three weeks after becoming Minister of Education in Peru, my team and I received the results from the 2012 round of PISA. Peru was ranked last. Not next to last, not bottom 10%.  It was last.

Education, which never made headlines in the country, was on the front pages. For some people in the media, the fact that PISA was only administered to a subset of rich and middle-income countries around the world was not important, that was just a footnote. For them, Peruvian students were the worst in the world.

Amid the bad press we could have pointed to countries that would have ranked worse than Peru had they participated in the assessment (almost all low-income countries and many middle-income ones). We could have accused the PISA initiative of being a “rich country” endeavour with little relevance to the culture or national priorities of Peru. We could also have tried to stress the fact that Peru had improved in its scores but because other countries improved more, we fell in the ranking.  Even worse, the government could have taken the decision of not participating anymore -like India and Bolivia did (although India will be participating again in PISA in 2021).

Instead, as the government we recognized that the PISA results made evident an immense learning challenge. That despite past progress, we had not invested enough in education. That the efficiency of educational expenditures had to improve. And that we all had to work together to fix it.

The country embarked on a reform that built on the progress of the previous efforts and looked to accelerate improvements in learning. The meritocratic teachers’ career reform started its implementation, coaching programs were introduced to support teachers and educational expenditures were increased dramatically.

Education became a topic that everyone—from taxi drivers to politicians from all parties—talked about. The assessment, and the understanding that the country was far from where it should be, facilitated a social and political consensus in Peru to implement major reforms that otherwise would have been more difficult to pursue.

This kind of “PISA-shock was not unique to Peru. In 2001, Germany experienced its own PISA-shock realizing that their educational system was not yielding the expected results. As in Peru, data on learning informed policymaking and opened the space for change.

The truth is that learning data is critical to run a complex system like education. Measuring learning outcomes allows countries to plan better, as it shows the magnitude and characteristics of their learning challenges. And it allows systems to internalize that everyone’s goal—from teachers to principals, school administrators, to the minister of education —must be that every child learns. Countries need to know where they stand. And principals and teachers need to know exactly where each, district, school and every student stands.

And yet, some developing countries have still to develop the capacity to implement learning assessments. In fact, during 2018, when constructing the first version of the World Bank’s Human Capital Index (which captures how countries around the world are realizing the potential of their human capital and how effectively they are investing in their people), we observed that around a third of countries have little to no data on how much their children are learning, particularly the poorer countries. Without data, these countries are essentially “flying blind.”

This is where a learning assessment like PISA for Development (PISA-D) comes in.  PISA-D represents a turning point for low- and middle-income countries’ participation in international benchmarking exercises. It is a complement to the PISA initiative -which already measures learning in about 65 high and middle-income countries, and helps address challenges faced by developing countries with two main features:

  • The instruments have been re-designed to better suit the economic and social conditions of lower-income countries. At the same time, the assessment still allows countries to place their results on the general PISA scale.
  • Second, PISA-D was designed to continuously improve the technical capacity of low- and middle-income countries. Participating countries get support to carry out up-front capacity needs assessments with the help of SABER-Student Assessment, a diagnostic tool developed by the World Bank and support to develop their own capacities.
In December 2018, the OECD released the results on learning performance in the first seven countries: Cambodia, Ecuador, Guatemala, Honduras, Paraguay, Senegal and Zambia. In the case of Zambia, for example the results showed immense gaps in learning, and the authorities have seen this as an opportunity to embrace the challenge.

PISA-D is not the only alternative for measurement of learning in developing countries.  There are several other international instruments, and it is an area of thriving research and applied work.   But participating in PISA and other international assessments is a critical step for countries as they develop their own capacity to rigorously measure learning so that they can benchmark progress over time, inform all actors in the educational system about how they are doing, and inform the policy decision making process to improve education quality. Countries cannot afford to fly blind. 

Follow the World Bank Education team on Twitter @wbg_education

Oral democracy

1 week 2 days ago

The challenges of electoral democracy are becoming increasingly visible worldwide. Elite capture, corruption and patronage are serious concerns, and the legitimacy of some elections has come under critical scrutiny. This has led to a revival of the idea of direct democracy – giving power directly to groups of people to make collective decisions.

Direct democracy is organized around the principle of deliberative decision-making which holds that the interests of diverse citizens can be represented by a process of discussion, debate, and dialogue that builds consensus. In the developing world, deliberative and participatory institutions have come into widespread use and have become centrally important (Mansuri and Rao, 2012). These institutions for citizen engagement have been viewed as a way to wrest power from elites and to hold them accountable, to harness the power of collective action, and to improve the efficiency and adaptability of development interventions.
But we know very little about how deliberation works in the real world. There is a large literature in political theory on democratic deliberation which sees it as ideally rooted in equality, rationality, and the free exchange and thoughtful argumentation of ideas. But these preconditions do not exist in most of the developing world, where communities are more likely characterized by low literacy, and high and persistent inequality in income, gender and political power. 
Our new book, Oral Democracy: Deliberation in Rural India (Cambridge University Press, 2018), sheds light on how real-world deliberation works in poor and unequal settings.  It is an analysis of discourse within the largest deliberative institution in human history – the gram sabha (village meeting) in rural India, which affects the lives of 800 million people living in two million villages.  These are constitutionally mandated open assemblies that constitute an integral part of a system of decentralized and participatory local government in India.  They are ideal for understanding how institutionalized deliberation works at a very large scale.   
We have analyzed and interpreted discussions in 300 gram sabhas from four South Indian states that were sampled within the framework of a natural experiment. Indian states were reorganized to make them linguistically homogenous in 1956, and we match villages that were “mistakes” – who speak the same language, and are a few kilometers away from each other, but located across different states.  Linguists tell us that discourse should be similar between such “linguistic communities” that are marked by similarities in language, culture, social structure and geography.  So, differences that we observe across these matched villages can be attributed to policy differences across states implemented after 1956.  This design allows us to tease out the extent to which state policy influences the nature of discourse.   
Our book takes readers deep into the heart of Indian democracy. Within the chapters readers will encounter citizens talking to the state – conversing and arguing with public officials and demanding accountability about village infrastructure and services, expressing their needs and demands, pleading for attention, critiquing the local government, and even directing sarcasm and scorn at elected leaders and public officials. Immersed in these state-citizen deliberations are two of our most important findings, one regarding the role of the state and the other concerning the necessity of literacy for a vibrant deliberative democracy.
We find that the quality of deliberation can be substantially influenced by state policy.   States that prioritize citizen participation in local government have substantially better deliberative quality than states that de-emphasize local decentralization.  For instance, citizens exercise pressure for public accountability much more forcefully in states that play an active role in sharing information and mandating the presence of public officials from line departments. States that adopt a system of selecting government subsidy recipients through the gram sabha significantly improve the volume and quality of public deliberations.
By comparing nearby villages within a state, on the same side of the border but with different levels of literacy, we find that illiteracy does not hamper political discourse as much as it makes it haphazard. It is akin to a blindfold that denies people, who might otherwise have intrinsic oratory skills, from understanding the facts, the issues, and the politics of the gram sabha in a manner that allows them to be coherent participants in the discussion.  As literacy increases the discourse tends to become less noisy and far more knowledgeable on budgets and local government procedures, and citizens have more information about the various kinds of benefits that they can apply for. But higher literacy does not always translate to a more effective gram sabha. The reason for this is state policy.  States that have neglected local government show no difference in deliberative quality between less and more literate villages.  This is because in such states citizens are what we call “passive petitioners” talking to an unresponsive government.
The voices of the poor are often not heard. Governmental systems devised to assist the poor focus on top-down poverty identification through definitions, biometrics, surveys, and measurements, over which people have little say.  And programs to assist the poor are administered through opaque and difficult to navigate bureaucracies.  Gram sabhas have the potential to change that by facilitating what we have termed “oral democracy”, a political system powered by citizens’ voices, where direct verbal engagement is the modality and narratives are the main currency. 

How well can you plan your survey: the analysis of 2,000 surveys in 143 countries

1 week 2 days ago

Our interviewers are still in the field, we need more time to complete the survey, could you extend our server for two more months? We receive such requests every day. Why do so many of our users fail to estimate the timing of their fieldwork?

Survey Solutions is a free platform for data collection developed by the World Bank and used by hundreds of agencies and firms in 143 countries. Many users of the Survey Solutions host data on free cloud servers provided by the World Bank. A user requests a server by filling in a form where he indicates the duration of the planned survey, the number of cases to be collected, and provides other relevant information. We impose no restrictions on how long a user can use the servers. Any survey end date is accepted. Over the last six years we have accumulated data on more than 2,000 surveys. We use information about surveys that collected 50 or more cases for this analysis.

How well can people conducting surveys follow the survey schedule?

Survey duration

Figure 1 shows differences between the survey end dates anticipated by our users and the dates registered in server activity logs. 15% of users finished their surveys on time (within a week of the date they planned the survey would end); about 47% of users underestimated the amount of time they needed for the field work (right tale, positive difference in days), and the rest finished surveys faster than they initially planned (left tale, negative).

The losses for agencies conducting surveys are higher if the survey duration is underestimated or if a survey started later than expected. The contracts with interviewers and other actors involved in the fieldwork need to be extended, the interviewers have to be paid for the extra days; the activities that depend on completion of the survey work are shifted, etc. Agencies that finish surveys earlier could also incur some losses, but these are relatively small.

Are people getting better at estimating field work duration the more surveys they conduct? Figure 2 shows that compared to novice users, a higher proportion of users who already conducted at least one survey finished their fieldwork earlier than they reported on the survey request form. But the proportion of users who underestimated the duration of their fieldwork declined only marginally between these two groups.

A user can extend her server if the fieldwork spans past the original survey end date. Figure 3 presents the distribution of the number of requests for server extension for novice and experienced users. About 43% of our users extended their servers more than once, with about 3% requesting 4 and more server extensions. That means some of these users, after underestimating the timing of the survey, repeat the same mistake again and again.

Similar to Figure 2, the assessment of fieldwork duration improves with experience: the share of users who requested only one extension increased from 54% for the new users to 63% for the “experienced” users. However, even among the latter group, about 12% of users revised the end date of their survey three or more times over the course of their fieldwork.

Number of questionnaire revisions during the field work

Another dimension of a proper survey planning is the timely preparation and testing of the survey instruments. CAPI or CAWI surveys simplify the process of questionnaire updates and allow addressing issues undetected during the piloting when the survey is already in the field. For example, the analysis of incoming data might show that some questions take respondents too long to answer, indicating that such questions could be badly formulated. If so, an updated version of the questionnaire with better wording for the problematic questions could be deployed. This, however, comes with a cost of potential loss of data comparability. The best practices of survey management recommend a finalization of the questionnaire before the fieldwork and minimizing the number of questionnaire revisions once a survey is in the field. This is especially important for surveys conducted digitally because, compared to paper questionnaires, digital survey instruments usually contain validation conditions and algorithmic skip patterns that should be carefully tested before the field work.

Figure 4 depicts the frequencies of questionnaire revisions during the fieldwork for all surveys in our sample and for users who conducted two or more surveys. About 20% of our users have used a single version of the questionnaire during their fieldwork. Most of the users revise their survey instruments more often. A surprisingly high proportion of novice users made 10 or more revisions of their questionnaires during the fieldwork. The number of questionnaire revisions declines for more experienced users, but the proportion of users revising their instrument 6 or more times while in the field still seems to be high.


We present here a unique (to our knowledge) analysis of metainformation about a large number of surveys conducted in virtually all developing countries. It is difficult to qualify our results because we are missing the baseline to which to compare our statistics. The survey fieldwork depends on many factors that are beyond the control of people conducting surveys. Political unrest, changes in donor funding policies, delays caused by bureaucratic procedures, etc., all could derail the survey schedule. More formally, we have no information about the actual variances of statistics we are presenting. Theoretically, we could calibrate, for example, the ability of our users to predict duration of their fieldwork or the number of times they modify questionnaires, by similar statistics from the best surveys firms or most advanced national statistical offices. Unfortunately, we have no such information. Nevertheless, we do believe our findings highlight important issues that data collection agencies need to think about during the survey planning processes.

Good quality surveys are expensive. An average nationally representative survey in developing countries costs about US$2M (Kilic et al. 2017). A large part of these costs could be incurred as payments to interviewers, transportation costs, and other time-sensitive expenses. Closely adhering to a survey schedule seems to be critical for managing costs of the surveys and ensuring high data quality. Our findings demonstrate that many agencies involved in data collection are not able to plan their fieldwork properly. This could result in overblown budgets, negatively impact of the quality of collected data, and delay the release of data to the public. The survey planning agenda is often neglected in the capacity building efforts. The international development community might need to rethink the survey training curriculum as the returns on improvements in the ability of data collection agencies to plan and follow survey schedules appear to be high.

Celebrating 40 years of engagement with Maldives

1 week 3 days ago
[[tweetable]]The World Bank Group (WBG) and Maldives have had a trusted partnership for the past 40 years, which has seen tremendous growth and development in the country.[[/tweetable]]

Over this period, [[tweetable]]Maldives has transformed from being among the poorest countries in the world to having a per capita GDP of over $10,000 and boasts impressive human development achievements, with a life expectancy of over 77 years and nearly 100% literacy.[[/tweetable]]

However, vulnerability to environmental sustainability and climate change are among the challenges that the country faces. 

To help respond to them, [[tweetable]]the WBG continues to work closely with Maldives to help realize the aspirations of its people through enhancing employment and economic opportunities[[/tweetable]], strengthening natural resources management and climate resilience, while improving public financial management and policy-making through strengthening institutions.

Here are five milestones of our engagement:

1. Joining the World Bank Photo Credit: World Bank Group Archives [[tweetable]]On January 13, 1978, Maldives became the 131st member of the World Bank and the International Development Association (IDA), the fund that helps the poorest countries through interest-free credits. [[/tweetable]]

The Articles of Agreements were signed by His Excellency Fathulla Jameel, Permanent Representative of the Republic of Maldives to the United Nations. At that time, Maldives had a GDP per capita of just over $200 and had achieved independence only 13 years prior.

2. First project signing Photo Credit: World Bank Group Archives

[[tweetable]] Maldives signed its first project to help increase fisheries production with the World Bank on June 4, 1979. [[/tweetable]]

The project helped mechanize fishing craft, established repair centers, and installed navigational aids to increase the safety of fishing operations.

Those present for the signing from left to right, Said El-Naggar, Executive Director of the World Bank for Maldives, His Excellency Ahamed Zaki, Ambassador and Permanent Representative of Maldives to the United Nations, and Robert Picciottto, Projects Director for South Asia.

3. First education project

Photo Credit: Maldives Times [[tweetable]]Approved in 1989, the $8.2 million Education and Training Project was the first World Bank project supporting the education sector in Maldives. [[/tweetable]]

It helped expand and improve secondary education by broadening access and increasing the planning and management capacity of the Ministry of Education. 

The project financed scholarships for young people to study overseas created Science Education Centers with fellowships and created secondary education opportunities in the atolls.

Since then, the World Bank has continued to be engaged with improving the access and quality of primary, secondary and tertiary education throughout the country, reflected in increasing levels of educational attainment and achievement.

4. Emergency support for tsunami recovery An aerial view of the Village of Kolhuvaariyaafushi, Mulaaku Atoll, the Maldives, after the Indian Ocean Tsunami. Credit: UN Photo/Evan Schneider [[tweetable]]The World Bank helped the people and Government of Maldives rebuild lives affected by the destructive 2004 Indian Ocean Tsunami through an emergency rehabilitation and reconstruction program. [[/tweetable]]

[[tweetable]]Working with the Ministries of Finance and Treasury, the emergency relief and reconstruction project helped restore livelihoods though distributing cash grants to 50,000 affected households[[/tweetable]], provided education to displaced people and enhanced technical skills for the government to more effectively implement other post-tsunami reconstruction programs.

The program also demonstrated how the Bank can convene with other partner and provide emergency support on a combination grant and credit basis through establishing and administering the Tsunami Relief and Reconstruction Fund (TRRF).

5. Preserving and managing the environment Photo Credit: World Bank [[tweetable]]In 1993, the World Bank supported the Government of Maldives to develop a National Environment Action Plan with the aim of helping Maldivians maintain and improve the environment of the country, and to manage the natural resources for the benefit and enjoyment of present and future generations.[[/tweetable]]

The protected areas include the marine area contained within the Exclusive Economic Zone. Since then, the World Bank has continued supporting the preservation and management of the natural environment of the Maldives through technical and lending support as the country contends with increasing population, tourism and solid waste management. 

Now and Toward the Future…

The current active portfolio of the World Bank in the Maldives consists of 4 projects amounting of $82 million. Areas of support include fisheries, solid waste management, renewable energy and public financial management.  The portfolio is supported by three IDA investments and one guarantee; as well as one investment supported by a trust fund from the Strategic Climate Fund - Scaling up Renewable Energy Program.

[[tweetable]]Moving forward, the World Bank Group plans to continue providing greater integrated support to strengthen Maldives’ fiscal sustainability, preparedness and resilience to natural disasters, and human capital development as the country continues to reduce poverty and increase prosperity for its people.[[/tweetable]]

How do Africans’ priorities align with the SDGs and government performance? New results from Afrobarometer

1 week 3 days ago

One of the challenges presented by the ambitious Sustainable Development Goals (SDGs) laid out in the UN 2030 Agenda is where to begin.

Afrobarometer, which conducts public attitude surveys in more than 30 African countries, argues that one critical place to start is by asking the people.

When you do, you get a pretty clear answer: Africans want good jobs and economic growth – and aren’t getting enough of them.

In the first of its Pan-Africa Profiles based on recent public-opinion surveys in 34 African countries, Afrobarometer maps citizens’ “most important problems” onto the SDGs, then examines how Africans rate their governments’ performance on these priority issues.

By far the highest priority for everyday Africans is SDG8, “decent work and economic growth” – an area where governments are widely seen as doing a particularly poor job.

Seven other SDGs capture high popular attention (see Figure 1): SDG2: zero hunger, SDG3: good health and well-being, SDG16: peace, justice and strong institutions, SDG9: industry, innovation and infrastructure, SDG6: clean water and sanitation, SDG1: no poverty, and SDG4: quality education.

Figure 1: Citizens’ prioritization of the SDGs | 34 countries | 2016/2018

(Figure shows % of responses to the question “In your opinion, what are the most important problems facing this country that government should address?” mapped onto the SDGs.

Even in sectors that don’t rank as highly as jobs and food, such as gender equality and climate change, Afrobarometer findings indicate significant support for action. Seven in 10 Africans endorse equality for women as political leaders and landowners. Similarly, among those who have heard of climate change, three-quarters (76%) want action to stop or mitigate it.

Priorities vary by country and region, age, and gender, and are particularly strongly shaped by poverty and low socioeconomic development, both at the individual level and the country level. Jobs and economic growth and good governance are higher priorities for wealthier individuals and for more economically developed countries. Among poorer people and countries, jobs and growth are important, but people place higher priority on fighting hunger and having adequate supplies of clean water and energy.

Unfortunately, the highest-priority sectors often record the worst government performance (see Figure 2). With regard to SDG8, for example, significant majorities across Africa rate their governments poorly on both managing the economy (58%) and creating jobs (73%). Even with the extra incentives for action associated with the 2030 Agenda, citizens do not yet see their governments achieving the successes that will be required to reach SDG targets.

In the coming months, Afrobarometer’s Pan-Africa Profiles series will publish extensive cross-country analyses on a series of critical topics, including many of the individual SDGs. Interested readers may follow our releases online at #VoicesAfrica and

Figure 2: SDG priority vs. government performance | 34 countries | 2016/2018

(Figure shows % of responses to Afrobarometer questions about most important problems (“Priority”) and government performance (“Performance,” “fairly well” or “very well”), mapped onto the SDGs.)

PPP reflections for a new year

1 week 3 days ago

Before diving into a new year, I like to take some time for reflection. This past year, I’ve seen a real shift in how public-private partnerships (PPPs) are perceived and understood—both their benefits and risks. Many governments are considering PPPs to help them deliver infrastructure and services their citizens need. They also better understand the complexity of PPPs as a procurement method and are more strategic in when to use them.

[[tweetable]]Are PPPs an infrastructure procurement method whose moment has come? [[/tweetable]]If so, what must be done to ensure they’re sustainable and deliver on public sector goals? Thinking back on 2018, I saw these developments:

Landscape of renewables as PPPs

With the Scaling Solar program, and renewables more broadly, we’ve seen a decrease in prices, making solar not only a cleaner source of energy but more affordable and accessible. In Senegal, we saw record-breaking low tariffs less than 4 euro cents per KwH—rates unheard of only a few years ago. In Madhya Pradesh, the Rewa Ultra Mega Solar project achieved tariffs low enough to make solar energy as cheap as coal for the first time in India—changing the country’s approach and thinking in the power sector. Renewables have opened up as a sector, and governments are seeing PPPs as a tool to better deliver and maintain infrastructure that’s vital for their economies.

Related to climate, I’ve seen a shift towards private sector involvement in the water, waste-water, and sewage treatment sectors as well. Governments are increasingly looking at new ways to combine public and private financing to solve environmental challenges in fiscally sustainable ways—such as developing a series of PPPs for sewage treatment plants to clean up and rejuvenate the Ganges River in India.

Maximizing finance for development

There’s an acceleration of countries looking to maximize private-sector finance for developing economic and social infrastructure. Governments are actively seeking where they can best use private sector capital and innovation to leverage public funds. And there’s growing recognition of the importance of having national infrastructure plans and governance structures. By looking at the needs of a project—affordability, maintenance, and reinvestment, for example—in the context of an entire sector before deciding on a delivery mechanism, governments can decide where a PPP best fits their needs, or where the public sector is best placed to deliver.

For IFC’s PPP team, we’ve been working in this space for some time. In fact, this month, we will have been helping governments in developing countries maximize private finance and expertise for 30 years.

Taking this to the next level, we can collaborate with the World Bank Group more closely to manage risks related to PPPs, such as fiscal and capacity risk related to the management of contingent liabilities and long-term contracts. [[tweetable]]While PPPs share many of the same risks of other public procurement options, they have their own complexities, and by working holistically we can help governments understand, quantify, and manage these risks from the start. [[/tweetable]]

Programmatic approaches to infrastructure

Lastly, I’ve been very excited by recent successes in 2018 related to delivering PPPs on a programmatic level instead of as individual projects. This involves working closely with governments to assess market failures across a sector and designing sustainable, affordable programs for closing infrastructure gaps with standardized project documents—like what Clean Ganges did in India and Scaling Solar has delivered.

[[tweetable]]Countries are now looking to PPPs to help solve big development challenges by going to scale.[[/tweetable]] For example, in Bhubaneswar, Odisha, a pilot public street lighting project led to the installation of 20,000 lights. By replicating the approach across three states, municipal governments in India have improved lighting for over a million people, reduced greenhouse gas emissions through more efficient lighting, and saved their cities massively on energy bills.

An exciting moment for PPPs

These are just some examples I saw over the last few years that emerged more prominently in 2018. As an organization, we’re committed to helping governments make informed decisions about improving access and quality of infrastructure and services. This includes using PPPs when appropriate.

I note an entrepreneurial spirit towards working with the private sector in traditionally public sectors. Looking forward to this upcoming year, I think we’ll see:

  • The World Bank Group working with governments and other multilateral development banks more and more in this sphere, ideally where we can have the greatest impact, including in fragile and very poor countries.
  • Adapting Scaling Solar’s success along the lines of the trend towards programmatic approaches. This means taking time to develop clear standards for procuring PPPs and template documents for a specific sector in a country (such as wastewater treatment, waste-to-energy, or street lighting) that can enable a city, state, or national government to scale up its impact.
  • Continued demand for renewables, but with increasing emphasis on storage solutions, as well as supporting governments with regulatory changes that encourage the sector to grow.
Parting thoughts

As the IFC PPP team approaches its 30-year anniversary, it’s fascinating to me to see attitudes and dialogues change around PPPs—from fear of the private sector to governments asking how and where the sector can help them reach development goals.

I look forward to seeing what 2019 brings. In the meantime, please leave me any of your thoughts or observations below.

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Renewables, solar, and large size projects trending in new data on private participation in infrastructure  

South Asia: A bright spot in darkening economic skies?

1 week 3 days ago
South Asia is set to remain relatively insulated from some of the rising uncertainties that are looming large on the global economic horizon. The region will retain its top spot as the world’s fastest-growing region. The Siddhirganj Power Project in Bangladesh. Credit: Ismail Ferdous/World Bank

If, like me, you’re a firm believer in New Year’s resolutions, early January ushers in the prospect of renewed energy and exciting opportunities. And as tradition has it, it’s also a time to enter the prediction game.
Sadly, [[tweetable]]when it comes to the global economy, this year’s outlook is taking a somber turn.[[/tweetable]]
[[tweetable]]In the aptly titled Darkening Skies, the World Bank’s new edition of its twice-a-year Global Economic Prospects report shows that risks are looming large on the economic horizon.[[/tweetable]]
To sum up:  [[tweetable]]In emerging market and developing economies, the lingering effects of recent financial market stress on several large economies, a further deceleration in commodity exporters are likely to stall growth at a weaker-than-expected 4.2 percent this year.[[/tweetable]]
[[tweetable]]On a positive note, South Asia is set to remain relatively insulated from some of these rising global uncertainties and will retain its top spot as the world’s fastest-growing region. [[/tweetable]]
[[tweetable]]Bucking the global decelerating trend, growth in South Asia is expected to accelerate to 7.1 percent in 2019 from 6.9 percent in the year just ended, bolstered in part by stronger investments and robust consumption.  [[/tweetable]]

[[tweetable]]Among the region’s largest economies, India is forecast to grow at 7.5 percent in fiscal year 2019-20 while Bangladesh is expected to moderate to 7 percent in fiscal year 2018-19. Sri Lanka is seen speeding up slightly to 4 percent in 2019.[[/tweetable]]
Notably, and despite increasing conflicts and growing fragility, Afghanistan is expected to increase its growth to  2.7 percent rate this year.

In this otherwise positive outlook, Pakistan’s growth is projected to slow to 3.7 percent in fiscal year 2018-19 as the country is tightening its financial conditions to help counter rising inflation and external vulnerabilities.

However, activity is projected to rebound and average 4.6 percent over the medium term.

Bucking the global decelerating trend, growth in South Asia is expected to accelerate to 7.1 percent in 2019 from 6.9 percent in the year just ended, bolstered in part by stronger investments and robust consumption. [[tweetable]]South Asia’s overall robust economic prospects are proof that governments across the region are on the right path to achieving inclusive and sustainable growth.[[/tweetable]]
And to reach that goal, the region is committed to getting its business environment in better shape to create more and better jobs for its people.
That was one of the main takeaways from the latest Doing Business 2019, which shows how South Asia has made further gains to improve the ease of doing business and carried out a total of 19 business reforms in the past year--the second highest number ever.
Specifically, and in a first for South Asia, two of the region’s economies, India and Afghanistan, earned coveted spots as global top improvers.
This strong reform agenda reflects a political commitment across the region to lift barriers affecting businesses, especially local small and medium-sized enterprises, and unleash innovation and technological progress that drive growth.
However, several risks may hamper South Asia’s growth momentum.
First, [[tweetable]]South Asian economies have among the highest levels of public debt in the world. [[/tweetable]] These fiscal burdens could store up trouble for the future and make the region more vulnerable to a faster-than-expected tightening of global financial conditions.
Further to that, tax revenue is consistently low across most South Asian countries and at rates below that of other developing countries with a similar income per capita.
To be true, some countries have expanded their tax bases and curbed tax exemptions and fraud, but their revenue remains lower than government expenditures, creating large fiscal deficits that need to be financed through public borrowing.
But beyond its persistent budget deficits and high levels of debt, [[tweetable]]South Asia faces an even more pressing challenge to sustain its growth progress—namely, the region is not investing enough in the health, skills, and education of its people.[[/tweetable]]
Investing in people early, and often, can lay a strong foundation for the growth and competitiveness of nations.
That is, chiefly, the upshot of the Human Capital Project, a global effort led by the World Bank to accelerate investments in people for greater equity and economic growth.
And in that regard, South Asia – home to 33 percent of the world’s poor – needs to do a much better job.
The Bank’s Human Capital Index which ranks 157 economies on indicators like child mortality, health, and education shows that children born in South Asia still have ways to go to achieve their full potential--especially in Afghanistan (#133), Bangladesh (#106), India (#115), Nepal (#102), and Pakistan (#134).
On the bright side, Sri Lanka is ahead of other South Asian countries and ranks at #74—higher than could be expected for its income level
Stunting in South Asia remains the highest in the world, with 36 percent of children stunted or of low height for their age.

Across the region, almost 13 million children of primary age are still out of school, and even when kids go to school the quality of learning falls behind – for example, many students are not able to read grade-relevant text in their own language.

With technology changing the very nature of work, investing in human capital has never been more critical.
And while progress in building human capital is hard to achieve, South Asia has proven it can pursue challenging reforms to grow its economies, invest in health and education, and spread prosperity more widely.
In that journey, we’re dedicated to continuing our work with governments in the region to secure a brighter future for their people.

Taxing the shadow economy

1 week 3 days ago
Graphic: Nicholas Nam/World Bank

A sub-Saharan African tax commissioner went to buy a bicycle for his son. The seller asked if he would like to get a receipt and pay a 15 percent higher price, or take the bike with no receipt at a lower price. The tax commissioner paused and thought. What would you do?

Tax administrators, and most other people in developing countries, grapple with this issue every day. [[tweetable]]A large shadow economy undermines tax collections; reducing the shadow economy is associated with higher tax collections.[[/tweetable]] Even when controlling for per capita income, a 1 percent smaller shadow-economy-to-GDP ratio is associated with a 0.125 percent higher tax-to-GDP ratio[1].
Complex tax laws, weak tax enforcement, and lack of incentives to make payments through formal banking channels are among the factors affecting the size of the shadow economy. Greater tax complexity imposes heavier compliance burdens on taxpayers, disincentivizes tax compliance, and encourages taxpayers to move into the shadows. Receipt-free cash transactions for goods and services increase the risk of tax evasion.
Despite the availability of banking services and alternative payments, key sectors of the economy remain largely cash-based in almost all developing countries. Not surprisingly, there is a strong negative correlation between the use of electronic or formal payments and the size of the shadow economy. This means that the more people use e-payments, the smaller the shadow economy becomes.
Governance matters
Governance-related factors, such as the quality of regulation and control of corruption, are also associated with a smaller shadow economy. Poor, burdensome regulation acts much like a complex tax system, discouraging compliance with formal economic systems and pushing activities into the dark. [[tweetable]]Corruption leads to lower tax morale and poor trust in government, which in turn leads to larger shadow economies.[[/tweetable]]
Taxpayer trust in government is a fundamental driver of tax morale. Increased trust in tax systems can accrue by improving public benefits from taxation—as taxes and the public goods and services they finance are perceived as fair, equitable, and accountable (the “direct pathway”).

Moreover, forthcoming World Bank research argues that where fairness, equity, reciprocity, and accountability feature prominently in tax reform, taxpayers are empowered to make more successful demands of governments for improved outcomes (the “empowerment pathway”).
Finally, pursuing these same goals can strengthen the state-building role of taxation—more competence and greater political ability of governments to deliver benefits to taxpayers. In other words, tax is a lot more than just tax.
Ready for technology
The technological readiness of an economy also has a significant bearing on the shadow economy and taxation. Technology can shine a light into the shadows. In the digital world, Information and Communication Technology (ICT) platforms and modern technology that enforces tax compliance increasingly drive tax administration.
Today’s ICT systems allow tax administrators to access data on taxpayers’ financial transactions with banks and other institutions on a regular and automated basis. These data can be analyzed via algorithms to generate taxpayer risk profiles and to aid in risk management. Electronic invoicing systems allow reconciliations that test sales and profits to ensure they do not go underreported or unreported.

In Tajikistan, for example, where the Tax Administration Reform Project is financing a number of reforms, including establishing e-invoicing systems, the total number of individual (small) taxpayers has doubled to 273,000 in 2018 from 137,000 in 2012; the VAT productivity has increased from 37 percent to 40 percent; and, adjustment per auditor has increased from 184 million somoni to 712 million somoni over 5 years.
Altogether, potential taxes get forced out of the shadow economy and into systems of tax compliance, allowing services to be delivered. The higher an economy’s technological readiness, the better and more effective such compliance measures can be.
Some advice
In this context, we would like to offer a couple of pieces of advice:

  1. Use ICT-based technological solutions to stop underreporting or non-reporting of sales, or inflating expenses, through false invoices.
  2. Make formal payments for business transactions through banking channels—including electronic payments and “plastic money”—more attractive than using cash. (This is sometimes called “incentivizing.”)
There are other effective ways to improve tax enforcement: mandating limits on cash use; taxing cash withdrawals and deposits; mandating issuance of tax invoices, including e-invoices; requiring that point-of-sale systems be installed; applying withholding taxes; accessing third-party data; and matching data with tax declarations.

Measures to incentivize the use of formal payments range from taxpayer education and moral persuasion to invoice lotteries and actual tax rebates (for insisting on receipts and using formal payment methods[2]).

In Tanzania a taxpayer education campaign coupled with tax infrastructure improvements resulted in a total of 376,666 taxpayers registered with a newly introduced mobile tax payment for property taxes. In Punjab, Pakistan, a receipt lottery system has had a positive impact on revenues and the World Bank project is supporting tax audit improvements to further the gains.
Moreover, a successful strategy to tax cash-economy businesses and transactions requires a holistic approach to compliance. Traditional monitoring and enforcement tools—such as enabling tax administrators to access taxpayer data and match information from various public and private sources—play a key role.
As for our tax commissioner and the cash-or-receipted bike purchase, what do you think he did? He thought about the dilemma, paid the higher price, got a receipt—and unleashed a mighty fury on the shadow economy, from which we are still learning.   [1] Rajul Awasthi and Michael Engelschalk, “Taxation and the Shadow Economy: How the Tax System Can Stimulate and Enforce the Formalization of Business Activities,” World Bank Policy Research Working Paper, 2018 [2] For a detailed description, see Awasthi and Engelschalk, 2018

Half of the world’s poor live in just 5 countries

1 week 3 days ago

Of the world’s 736 million extreme poor in 2015, 368 million—half of the total—lived in just 5 countries. The 5 countries with the highest number of extreme poor are (in descending order): India, Nigeria, Democratic Republic of Congo, Ethiopia, and Bangladesh. They also happen to be the most populous countries of South Asia and Sub-Saharan Africa, the two regions that together account for 85 percent (629 million) of the world’s poor. Therefore, to make significant continued progress towards the global target of reducing extreme poverty (those living on less than $1.90 a day) to less than 3 percent by 2030, large reductions in poverty in these five countries will be crucial.

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However, we mustn’t lose sight of the numerous other countries with high poverty rates. As poverty projections to 2030 for these five countries reveal, uneven outcomes are likely (see figure 2). When projections are based on countries growing in line with past growth rates (the regional average over the last ten years), extreme poverty in India and Bangladesh approaches zero by 2030 but extreme poverty in Nigeria, DRC, and Ethiopia remains quite elevated. The uneven progress across these 5 countries is indicative of the broader uneven progress globally. An outcome where extreme poverty is nearly eliminated throughout the world except in one region, sub-Saharan Africa, certainly does not portray a picture of a world free of poverty. As emphasized in the Poverty and Shared Prosperity Report 2018, we should go beyond the focus on reducing the global poverty rate to below 3 percent and strive to ensure that all countries and all people can share in the benefits of economic development.

To learn more, read the recently released Poverty and Shared Prosperity report 2018, “Piecing Together the Poverty Puzzle.”

Changing gender attitudes, one teenager at a time

1 week 3 days ago
I’ve been trying to figure out how to get my kids to do more household chores.   Luckily, help was forthcoming from a recent paper by Diva Dhar, Tarun Jain, and Seema Jayachandran.   They take to Indian secondary schools with an intervention designed to increase support for gender equality among adolescents.   And yes,  it does work, including getting boys to do more chores.  
The program takes place in the state of Haryana in India.   It is implemented by an NGO called Breakthrough and consisted of 45 minute discussion sessions every three weeks over 2 and a half years of school.    The discussions focused on gender equality and included gender stereotypes, roles, and women’s employment, as well as some communication skills.    The target population here was secondary school students.
Dhar and co. randomize the intervention at the school level and collect data from around 14,000 students who are in the 7th and 8th grades at the start of the intervention.    They look at three main types of outcomes.
First up are gender attitudes.   These are questions about roles and rights, e.g. views on whether women should work outside the home.    At the start of the program, things are fairly bleak.  As Dhar and co. note, 80% of boys and 60% of girls believe that a woman’s most important role is being a good homemaker.   But the program changes this.  Students who participated in the program have a 0.25 standard deviation higher (i.e. more progressive) gender attitudes index than those in the control group.    To put this in perspective, the effect is about one third of the girl-boy gap in attitudes.   
These are results on an index.  Dhar and co. look at the different components and the biggest effects seem to be coming from attitudes towards employment, gender roles and education.  
The second set of outcomes covers aspirations.   Here the questions look at things like what level of education they would like to achieve and what kind of occupation they envision having when they are 25.     The program has a small impact on this, moving the index by 0.05 standard deviations.  
The third set of outcomes is behaviors.   Here the index includes things like doing household chores, mobility (for girls), and talking with people of the opposite sex.   The intervention moves the needle by 0.2 standard deviations for girls and 0.46 standard deviations for boys.   Dhar and co. speculate that girls have a (significantly) smaller effect because they face more constraints translating changes in attitudes into practices.   
For behaviors, unpacking the index shows some interesting patterns.   Both boys and girls are interacting more with the opposite sex.   Girls also see an increase in mobility, but no change in their decision-making power.   For boys, there is a significant increase in the household chores that they do but this isn’t matched by a decline in what girls do.   Boys are also more likely to encourage female family members to pursue higher education and careers.   
So, this intervention changes individual attitudes and behaviors.  Does it change what these adolescents think the social norms are?   Dhar and co look at two norms:  women’s employment and women pursuing a university education.   As with the results above, they find that individual attitudes improve.  They also find a positive and significant improvement in what individuals think the community thinks.   Finally, they look at whether individuals hold the progressive attitude AND they think that society won’t oppose them if they act on it.   Here the effect is positive, but smaller than the holding of the attitudes alone.   So clearly there are a bunch of folks who are more progressive but do think it won’t be smooth sailing.   
Now given that a lot of these results are about self-reported attitudes and behaviors and the program tried to change this, a reasonable concern would be that there is some kind of social desirability bias coloring the answers.   To deal with this, Dhar and co. administer a Marlowe-Crowne set of questions.   These questions capture whether the respondent is inclined to give a (unrealistic) socially desirable answer (e.g. they always admit it when they make a mistake).     To test whether this is driving responses,  Dhar and co. interact this with treatment to look at all three main sets of outcomes.   And the results are encouraging – the interaction isn’t significant (and is quite small) for all of the indices.   Interestingly (and encouraging – in an empirical sense), the lower the respondent scores on social desirability in these questions, the lower s/he scores on progressive gender attitudes or behavior.  
All in all, this is a promising set of results and shows that we can move these norms, in line with a set of results from Norwegian boot camps that I blogged about awhile back.   Excitingly, Dhar and co. close with the promise that they’ll follow these folks as they graduate and settle in families.   It will be interesting to see how this plays out when folks get married.  

The Global Economic Outlook: Darkening Skies

1 week 4 days ago

Download the January 2019 Global Economic Prospects report.

Global growth sputtered in 2018 amid weakening trade and manufacturing, tighter financing conditions, and elevated policy uncertainties. 

Growth decelerated in almost 80 percent of advanced economies and in nearly half of emerging market and developing economies in 2018. This year, it is expected to slow further in a majority of advanced economies and in about a third of emerging market and developing economies. 

In all, global growth is predicted to moderate from 3.0 in 2018 to 2.9 percent in 2019 and an average of 2.8 percent in 2020-21, below previous forecasts. 

Risks of even slower-than-expected growth have become more acute. Financial market pressures and trade tensions could escalate, denting confidence and further setting back growth prospects in emerging market and developing countries. 

Here is a look at global economic prospects in five figures:

1. Global growth is moderating as trade and manufacturing lose momentum. The deceleration in global activity was more pronounced than previously expected in 2018, as reflected in softening export orders and industrial production growth. The slowdown in global trade came against the backdrop of ongoing trade tensions involving major economies. A. Global industrial production andnew export orders

A. Global industrial production and new export orders

2. Headwinds are intensifying for emerging markets and developing economies. The global environment has become more challenging as external demand has weakened, financing conditions have tightened, commodity prices have softened, and several emerging markets have faced financial stress. Energy prices fluctuated in the second half of 2018 and fell sharply toward the end of the year. Prices of most metals and, to a lesser extent, agricultural commodities, also weakened.

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3. Growth in the near term is expected to slow in advanced economies and to stall in emerging market and developing economies. As global investment and trade lose further momentum, global growth is projected to moderate in 2019 to 2.9 percent, down from 3 percent in 2018. Activity is predicted to decelerate this year in more than two-thirds of advanced economies, as capacity constraints become binding and policy easing is unwound.

C. Global growth

(Shaded area denotes forecast.)

4. The recovery in emerging market and developing economies has stagnated. Growth in emerging market and developing economies is projected to stall at 4.2 percent this year, with a weaker-than-expected rebound in commodity exporters accompanied by deceleration in commodity importers. Forecast downgrades are in some cases significant, reflecting external financing pressures, slowing external demand, policy uncertainty, and commodity price declines. 

D. Growth in EMDEs

(Shaded area denotes forecast.)

5. The risk of slower-than-expected growth has intensified. The risk of disorderly financial market developments remains elevated and could spread through emerging market and developing economies. An escalation of trade restrictions also remains a possibility and would be highly disruptive given globally interconnected value chains. Although unlikely in the near term, the simultaneous occurrence of a severe U.S. downturn and a sharper-than-expected deceleration in China would significantly increase the likelihood of an abrupt global slowdown. 

E. Global per capita growth scenarios: Impact of growth slowdowns in the United States and China
(Blue and red bars show scenarios assuming a 1-percentage-point growth shock in China, the United States, and the combination of the two. Negative shocks are applied in the second half of 2019.) 

Innovations in satellite measurements for development

1 week 4 days ago

Bottom line

Combinatorial innovation is driving innovation in satellite-based economic measurements at unprecedented resolution, frequency and scale. Increasing availability of satellite data and rapid advancements in machine learning methods are enabling a better understanding into the fundamental forces shaping economic development.

Why satellite data innovations matter

The desire of human beings to “think spatially” to understand how people and objects are organized in space has not changed much since Eratosthenes—the Greek astronomer best known as the “father of Geography”—first used the term “Geographika” around 250 BC. Centuries later, our understanding of economic geography is being propelled forward by new data and new capabilities to rapidly process, analyze and convert these vast data flows into meaningful and near real-time information.

The increasing availability of satellite data has transformed how we use remote sensing analytics to understand, monitor and achieve the 2030 Sustainable Development Goals. As satellite data becomes ever more accessible and frequent, it is now possible not only to better understand how the Earth is changing, but also to utilize these insights to improve decision making, guide policy, deliver services, and promote better-informed governance. Satellites capture many of the physical, economic and social characteristics of Earth, providing a unique asset for developing countries, where reliable socio-economic and demographic data is often not consistently available. Analysis of satellite data was once relegated to researchers with access to costly data or to “super computers”. Today, the increased availability of “free” satellite data, combined with powerful cloud computing and open source analytical tools have democratized data innovation, enabling local governments and agencies to use satellite data to improve sector diagnostics, development indicators, program monitoring and service delivery.

Drivers of innovation in satellite measurements
  • Big (geo)dataSatellites in Global Development are improving every day, creating new opportunities for impact in development. They capture millions of images from Earth in different spatial, spectral and temporal resolutions, generating data in ever increasing volume, variety and velocity.
  • Open Source Open source annotated datasets, the World Bank’s Open Data, and other publicly available resources allow to process and document the data (e.g. Cumulus, label maker) and perform machine learning analysis using common programming languages such as R or Python.
  • Crowd – crowdsource platforms like MTurk, Figure-eight and Tomnod are used to collect and enhance inputs (reference data) to train machines to identify automatically specific objects and land cover on Earth.
  • High Quality Ground Truth Robust algorithms that analyze the entire planet require diverse training data, and traditional development Microdata for use in machine learning training, validation and calibration, for example, to map urbanization processes.
  • Cloud – cloud computing and data storage capabilities within platforms like AWS, Azure and Google Earth Engine provide scalable solutions for storage, management and parallel processing of large volumes of data.
Satellite measurements in development operations

As petabytes of geo data are being collected, novel methods are developed to convert these data into meaningful information about the nature and pace of change on Earth, for example, the formation of urban landscapes and human settlements, the creation of transportation networks that connect cities or the conversion of natural forests into productive agricultural land. New possibilities emerge for harnessing this data for a better understanding about our changing world.

Take for example urbanization processes. Urbanization has been one of the most fundamental trends of the past two centuries. Between 1950 and 2014, the share of the global population living in urban areas increased from 30% to 54%, and by 2050 it is projected to expand by an additional 2.5 billion urban dwellers. Traditional approaches for measuring economic development, such as census counts and demographic surveys are costly, time-consuming and labor-intensive, and often involve measurement. These constraints mean they are produced infrequently and can offer only limited insight into economic drivers and development. As new sources of satellite data become available, urban and economic research are combining data collected by means of traditional survey-based methods with digital, multispectral images that are almost instantly analyzed to capture those visible characteristics of development, for example, the pace and extent of urbanization, the intensity of light emitted at night or the conversion of vegetation into man-made structures. Earth observation data provides valuable information about the nature, evolution and drivers of economic development as well as insights about what cannot directly be observed in an image – the number of people living in cities, the level of non-agricultural employment or production, the pace of resource consumption, or the presence of traffic congestion.

In recent years, satellite-based measurements have been used to enhance the World Bank’s Systematic Country Diagnostics. The 2018 Former Yugoslav Republic of Macedonia Systematic Country Diagnostic led by Marco Hernandez and Cesar Cancho, was the first to use night light and satellite imagery and machine learning algorithms to develop proxy measurements for economic growth, urbanization, and land use from 2000-2018. The satellite measurements of economic growth were overlaid with enterprise survey data to approximate relationships between economic growth and the number of firms (FYR Macedonia SCD, Pg.55, Box 3.3). The algorithms underlying these measurements are open for easy reuse.

FYR Macedonia: changes in nighttime light intensity

Several World Bank initiatives, including a study of over 50 projects in the World Bank Web of Transport Corridors in South Asia, are using this approach to monitor economic impact of past, current, and future projects.

Changes in built-up land cover along the Golden Quadrilateral.
Credit: the Big Pixel Initiative, UC San Diego Using Landsat satellite to detect urbanization in India
Credit: Goldblatt, R., You, W., Hanson, G. and Khandelwal, A. (2016), Detecting the Boundaries of Urban Areas in India: A Dataset for Pixel-Based Image Classification in Google Earth Engine, Remote Sensing,8, 634. Summary

As satellite data becomes increasingly accessible and frequent, it is now possible not only to better understand how Earth is changing, but also to utilize these insights to improve decision making, guide policy and promote a better-informed governance.

In recent years, the World Bank Group has been working with partners through open source collaborations to put satellite measurements and tools in action to monitor and achieve the 2030 Global Goals. From predicting crop yields in small-holder farms, to measuring the impacts of transportation projects in South Asia and India, to measuring spatial development, monitoring rural electrification and mapping land cover and land use dynamics. These innovations have been incubated through support by the Innovations in Big Data program and the geospatial operations support team in the Development Economics Vice Presidency of the World Bank.

Additional Learning Resources

Developing jobs-focused lending operations

1 week 4 days ago

We spoke with David Robalino, former Manager of the Jobs Group of the Social Protection and Jobs Global Practice. He discusses his report “Lending for Jobs Operations” that describes a general framework to inform the design of a new generation of World Bank lending operations. These operations have explicit objectives to either create jobs, improve the quality of existing jobs, or increase access to jobs for vulnerable populations.
He also describes tools that the Jobs Group has built to support jobs focused lending operations including the “Monitoring and Evaluation of Jobs Operations Guide,”  and “Economic Analysis of Jobs Investment Projects.”

Follow the World Bank Jobs Group on Twitter @wbg_jobs.

What happens to women when men leave the farm? Sharing Evidence from Nepal and Senegal

1 week 5 days ago
Smallholder female farmer in Nepal: Poverty Alleviation Fund II Project, Government of Nepal.

Kofi Annan once said that ‘There is no tool more effective than the empowerment of women.’ This is definitely true in the agriculture sector: [[tweetable]]Empowered women are critical to sustainable agricultural growth and equitable rural transformation.[[/tweetable]]  In June 2018, we published a report on “Male Outmigration and Women’s Work and Empowerment in Agriculture, which explores the impacts of rural outmigration on the lives and livelihoods of women who stay behind on the farms. The first in what will be a series of publications, this report uses innovative survey data to produce rigorous evidence on the gendered impacts of rural outmigration.  

Why does it matter? [[tweetable]]Globally, migration is an important development agenda and is closely connected with agriculture in many countries.[[/tweetable]] The available evidence suggests that across the globe, migration originating from rural areas is predominantly male, which could potentially lead to significant socioeconomic changes in rural areas, including changes in traditional gender norms. Using data from two comparable, surveys for Nepal and Senegal collected between August and November 2017, we studied the effects of male outmigration from rural, primarily agricultural areas on women’s work and empowerment--both in agriculture and in the household.

Here’s what we found: first, as men migrate, women do not drop out of the labor force but continue to farm. Their roles in agriculture, however, may change. This is very clear in the case of Nepal, but not in Senegal. [[tweetable]]In Nepal, when men migrate, women are no longer seen as contributing family workers, but rather as primary farmers.[[/tweetable]] In Senegal, women do not seem to assume new roles. This might be linked to the greater prevalence of extended families and also because often the sons rather than husbands migrate.
Second, depending on the context and the characteristics of migration, male outmigration can have significant effects on women’s empowerment. In Nepal, as women become primary farmers, they increase decision-making on the farm, get more actively involved in local groups (thus building social capital) and are more likely to have access to a bank account. These effects are stronger when migration is accompanied by remittances.  Despite these gains in empowerment, women continue to be disempowered in other domains. Relative to men, women continue to experience higher time burdens which are linked to their domestic and care work demands. [[tweetable]]Relative to men, women also have lower access to inputs and assets (including ownership of land).[[/tweetable]] In Senegal, male outmigration is linked to women’s disempowerment in several domains including decision-making about agricultural production, control of income from agriculture and access to agricultural information. The effects seem to be driven by households in which migrants do not send remittances back home.   

Small holder female farmers in Senegal. © Daniella Van Leggelo-Padilla/World Bank

Thus, contrary to some beliefs, migration does not automatically lead to women’s empowerment. As male family members migrate and as women take on primary responsibility for the farm, women gain autonomy and decision-making authority, but may continue to be constrained by inadequate access to inputs and assets, extension services, agricultural and market information, credit, and mobility. In fact, in the absence of adequate remittances, migration might lead to women’s disempowerment. The women who are left behind often experience financial, physical and psychological stress due to the consequences of lost family labor and income due to migration. [[tweetable]]Reducing the costs of international and internal remittance transfers could enable migrants to send back more remittances.[[/tweetable]] This is especially pertinent for countries where temporary outmigration for work is a widespread phenomenon. However, more importantly, women’s roles and work in agriculture need to be supported through well-designed and targeted policies and programs. Agriculture extension services need to take account of the new managers on the farms and provide solutions tailored to their needs. Moreover, opportunities should be created for women farmers to move their production beyond the subsistence stage. Women farmers need access to higher-earning, downstream activities in agricultural value chains.
What’s next? The issue of women’s empowerment requires exploration beyond the Abbreviated Women’s Empowerment in Agriculture Index (WEAI) , which remains heavily focused on agriculture. [[tweetable]]Future research needs to expand on other dimensions that are important to understanding the situation of women and migration dynamics such as reverse migration, climate change, and conflict.[[/tweetable]] Similarly, social norms and customary and legal frameworks may dictate employment as well as empowerment outcomes in developing countries. There are also implications for agricultural production and food security. Are production and productivity negatively affected by male outmigration? How about food security? [[tweetable]]Male outmigration from rural agricultural regions is growing, so there is a need to better understand the consequences for the people who stay behind—as well as for food security overall.[[/tweetable]]

Making extractives work for the people

1 week 5 days ago

In many countries, natural resources and extractive minerals are lucrative state assets that fail to contribute to economic prosperity. In resource-rich Africa, regulatory mismanagement, corruption and theft of natural resource and extractive commodities have contributed to illicit financial flows, poverty, instability and in some cases financed civil wars linked to conflicts over control of state assets. 

Recognizing this, 24 African countries are among the 51+ countries globally that have committed to improve transparency, integrity and accountability in extractive sectors by complying with transparency obligations of the Extractive Industries Transparency Initiative (EITI). These requirements call for the systematic public disclosure of critical regulatory information, the concealment of which allows corruption to flourish, such as:

  • Identity of beneficial owners (i.e. the persons that own and control licensed companies)  
  • Systematic reports on exploration and extractives activities, and 
  • Financial data and transactions related to state investment in state-owned extractive companies  


Improving regulatory transparency through disclosure of critical information need not be overly complicated or expensive. The biggest hurdle is overcoming the interests of those opposed to public disclosure of information, the concealment of which makes corruption largely invisible. Corrupt elites will try to impede progress, however, compliance assessments of countries that have committed to comply with EITI requirements will reveal whose commitments to extractive transparency are genuine.

Effective regulatory transparency begins with the laws. In many countries, laws lack adequately enforceable provisions to hold officials accountable for compliance with transparency and integrity safeguards. Thus, accountability for poorly implemented regulatory systems and processes which conceal corruption, is obscured.

Improvements to underlying legal and regulatory frameworks are needed that place legal obligations for disclosure of critical information on regulatory officials–rather than licensed companies. Laws should obligate companies applying for critical licenses to provide full and complete beneficial ownership identity details to regulatory officials who should be obligated to check and verify completeness and accuracy using credible independent sources. And regulatory officials should be responsible for public disclosure of required information. Companies that fail to provide full and complete information should not be licensed. As the names of those seeking to conceal beneficial ownership roles, are not likely to be found on licensing applications or in company or beneficial ownership registries, independent verification by regulatory officials is absolutely critical.

Thus, legal frameworks that support effective implementation of beneficial ownership disclosure principles should expressly: (a) prohibit officials from granting critical licenses where full and accurate beneficial ownership information is lacking; (b) mandate suspension of licenses where complete information is not provided; and (c) hold officials responsible for non-disclosure of requisite information. For countries serious about meeting EITI’s January 2020 target for compliance, such amendments should already be in progress.  

Implementation: devil in the details

To support efforts by countries to improve extractives transparency, the World Bank has released a new publication – License to Drill:  Manual on Integrity Due Diligence for Extractives Licensing, which provides good practice options to strengthen regulatory integrity in licensing processes.

Recently, the World Bank organized a series of public panel discussions in three West African countries where extractives and natural resources are critical to economic growth, and corruption vulnerabilities remain a challenge: Ghana, Liberia and Sierra Leone.  Officials presented plans to improve extractive sector transparency, so stakeholders and donors could consider how best to support those efforts. While initial progress has been made in all three countries, more remains to be done:  

  • Ghana: Following some progress in the oil/gas sectors, implementation in mineral sectors is commencing. The Company Act was amended (2016) to require the Registrar-General to collect and maintain beneficial ownership information on registered companies. However, policies on extent of public access to the data, and whether access should be free of charge have yet to be resolved.  
  • Liberia: The Ministry of Mines and Energy has announced plans to consider adoption of a new mining law. Political and capacity challenges still impede commencement of integrity due diligence checks in licensing, as well as disclosing beneficial ownership and other critical information.  
  • Sierra Leone: The public cadaster has been modified to accommodate beneficial ownership information, and officials are working toward verifying identity of current licensees. The Government has adopted a Minerals Policy, Artisanal Mining Policy and Geodata Policy that are informing amendments to relevant laws to clarify disclosure obligations, improve efficiency and effectiveness of licensing and other regulatory processes.  

Stepping Up

Extractive sectors represent important state assets which, if well managed could significantly contribute to and improve economic growth and prosperity. If sufficient political will exists to meet public commitments to disclose critical information, the regulatory systems that legitimize and conceal corruption, and impede accountability will begin to crumble. Which country will lead the way and step up to effectively comply with its public commitments?

Contributors include World Bank Program Leader and Lead Economist Errol Graham, Lead Financial Management Specialist Donald Mphande and Lead Public Sector Specialist Roland Clarke. 

Backhaul to the future – Can digital technology make Central Asia’s agriculture competitive?

1 week 5 days ago

Whether matching drivers with riders or landlords with lodgers, digital platforms like Uber and AirBnB push the marginal cost of matching supply and demand to an unprecedented low. Large infrastructure projects like China’s One Belt, One Road Initiative - which aims at more closely linking the two ends of Eurasia, as well as Africa and Oceania - could create an opportunity to alter the future of Central Asia’s agriculture, if food supply and demand can be matched more efficiently.

The key to this future? The backhaul.

In transportation, backhaul is defined as cargo that is hauled back from its destination to its origin. Since it costs almost as much to move an empty vehicle as a fully loaded one, filling a vehicle on the return trip makes a lot of economic sense. Consider the wasted space of approximately 8 million 20-foot equivalent containers that made the return trip to Asia - mostly to China – between 1995 and 2015 (see graph below). They were largely filled with air. The way things are going, a lot more air will be moved back to China in the next decade.

China’s food demand is rising and will continue to do so in the years to come. A recent study shows that, as China’s population increases in size and wealth, demand for high quality meats, dairy, fruits, and vegetables is rapidly outpacing domestic production. By 2030, Chinese meat demand will increase by 20% to 110 million tons. Meanwhile, demand for dairy will rise by 66 % to 116 million tons, and fruits and vegetables by 30% to 590 million tons.

This has substantial implications for Central Asia’s agriculture. Central Asia’s land per capita endowment is 5 times higher than China’s - 0.5 versus 0.1 hectares per capita. Furthermore, Central Asia’s agricultural productivity is on the rise as antiquated farming practices are modernized and new trade policies unlock the region’s potential as a prolific agricultural exporter. Add to that, people say that it is cheaper to ship wheat from Vancouver to Urumqi (9,233km) than from Almaty to Urumqi (869 km), and the challenges and opportunities become clear. Yet, digital technologies can potentially reduce the costs of matching Central Asian farmers with Chinese consumers along the new Silk Road and make Central Asia’s agriculture more competitive.

Can a global Uber Eats-like service fill all the empty containers and offer Central Asia new opportunities to reach China’s markets? This idea is not new.

In 2014, Alibaba launched its rural integration initiative, based on a simple principle: loaded trucks go out to the countryside, loaded trucks come back from the countryside. In this case, Rural Taobao gave 150,000 villages access to a dynamic online marketplace through which farmers could purchase manufactured goods from the urban centers of the east and sell back agricultural goods. Alibaba’s “Cainiao” platform optimizes the distribution of parcels, substantially decreasing transportation costs. Last November on Singles Day, one of China’s largest shopping holidays, rural farmers sold 450-million-yuan worth of agricultural goods through the platform, whereas 3 years ago that amount was close to zero.

If used strategically, China’s One Belt, One Road Initiative could present an opportunity for Central Asia’s 10.7 million farmers. What role does the public sector have in making this simple concept a reality and in helping Central Asian agriculture flourish? Rather than wait and wish we could travel back in time to change the future, stakeholders should seize the opportunity and act now. Come join the debate (in the comments section below).


We hope to crowd-in some of the world’s best minds to participate in a global conversation on food and technology through the “What’s cooking? Rethinking farm and food policy in the digital age” blog series. We invite people with diverse backgrounds and perspectives to join us and share their comments.


Three for the price of two, 30% off, special offer – the importance of capital efficiency

1 week 5 days ago

In our daily lives we are bombarded by offers to get more for less.  And we respond accordingly as we strive to balance our household budgets. This saves us a few dollars here and there, perhaps hundreds of dollars on a big-ticket item, and we get to feel good about ourselves and our financial skills.

[[tweetable]]But when it comes to the millions of dollars invested in infrastructure around the world do we have the same attitude towards buying more for less?[[/tweetable]] It is a question that is difficult to answer.

As practitioners we often focus our attention on operational efficiency. What were this year’s costs compared to last year’s?  Is efficiency increasing or decreasing? There are suites of tools to give technical comfort to back up such assessments – from simple ratio analyses through to more sophisticated approaches such as econometric modeling and Data Envelope Analysis.

But what about capital efficiency? The assessment is not so simple as, in most cases, this is a prospective assessment – that is to say, a comparison of what was spent compared to a hypothetical of what might have been spent. It is rare to have a side by side comparison. Yet in the water sector annualized capital costs can be equal to the annual operating costs. So, when we focus on operational efficiency, we are in fact only looking at half the story.

At the same time, we talk about mobilizing more finance to fill the gap between historic investment levels and projected investment needs. Yes, there will always be a financing gap in all countries around the world. However, whilst thinking about bridging that financing gap (“Maximizing Finance for Development” comes to mind), shouldn’t we also be thinking about how to reduce the financing gap by being more efficient in our use of capital?

In this recently published report, part-funded by the Global Water Security & Sanitation Partnership (GWSP) we highlight international examples from the water and sanitation sector where results have been delivered for less money – capital efficiency. By focusing on capital efficiency, we can reduce the sector’s future financing gap and thus make filling that gap somewhat easier. The report looks at eight broad categories where potential capital efficiency gains can be made:

  • Strategic planning, including design standards
  • Technological innovation
  • Use of simple, robust, and low-cost technology
  • Optimized project design and management
  • Efficient procurement
  • Effective and efficient capital maintenance
  • Incentive-based approaches toward capital expenditure efficiency
  • End-use water demand management
The report highlights many technical alternatives that can deliver more for less. Most show savings in excess of 25% compared to traditional solutions. Or, put the other way around, we could get 30% more benefit from the same investment.

Unfortunately, one of the challenges in delivering greater capital efficiency comes from the way many donor funds are passed to end users. If funding is provided at zero cost to the end user (e.g. a utility) then they are agnostic as to whether it costs $50m or $70m to provide a new facility. If they were contributing to debt service costs it is very likely they would pay closer attention!

[[tweetable]]In a capital scarce world don’t we need to challenge ourselves to focus more on better use of the capital allocations that we receive? And we need tools to help us do that.[[/tweetable]]

Surprisingly, whilst investing in infrastructure is our core business it is hard to find information on capital costs. In the Water GP we have a massive database on operating costs and performance data from hundreds of utilities around the world, yet a counterpart for capital costs has yet to be developed. It may be the same in other sectors.

[[tweetable]]As practitioners, therefore, we should perhaps start to think more carefully about how we encourage capital efficiency. Yes, let’s mobilize more financing into the sector – but let’s also make sure that the investments made are the minimum to achieve the required outputs.[[/tweetable]]

So next time you get excited by all those “special offers” on display in shops and online stores – please spare a thought for how we can develop our own “special offers”. For sure no-one would complain if they can get three for the price of two!

A personal perspective from the medical care frontlines

1 week 5 days ago
Image courtesy Patricio Marquez

Despite health-promotion and disease-prevention efforts, we are all at risk of catastrophic health events, which can strike at any moment, in the form of a traffic injury, a newly discovered tumor, a brain hemorrhage, or another sudden affliction affecting us or someone we love.  When such events occur, we may abruptly face life-and-death situations that teach us first-hand the critical importance of timely access to medical care.

A recent event of this kind nearly ended the life of my wife, Lani.  This experience has shown me with utmost clarity the value of universal health coverage—a familiar phrase in health policy, but whose meaning for me has now become intensely personal.
For our family, when affliction struck, being covered by a comprehensive health insurance plan through my work gave us rapid entry to the medical system.  Yet we know well that our privileged situation differs from the reality faced by large segments of the global population.  Too many people have limited or no access to quality medical services when they face similar crises, due to weak health care organization, financing, and delivery mechanisms.  The randomness of disease and injury, and the enormous financial costs often associated with their treatment, can spell both medical and financial catastrophe—especially when care can only be obtained by out-of-pocket payments.  This makes effective financial protection and health service coverage a moral and social imperative.  This must be codified as a legal right or mandate to guarantee access to health care as a social good available to all on equal terms. 

We’ve also learned that, while financial protection matters, equally important is the organization of the health care system along a care continuum.  On the night of Lani’s emergency, we saw the life-saving capacity of an integrated system in action.  As soon as he noticed his mother’s condition, our younger son Alejandro had the presence of mind to call 911, the nationwide emergency response number in the United States. Within seconds, he reached a command center that dispatched a well-equipped ambulance.  As paramedics implemented practiced protocols, the ambulance sped her to the emergency room of the local community hospital, where she benefited from care coordination involving nurses, technicians, and physicians supported by imaging technology and medicines.  In that community hospital, ER teams are equipped to stabilize patients, establish diagnoses, and define comprehensive response plans, including referral to specialized centers via an emergency medical service helicopter.  This combination of resources is crucial to take advantage of emergency medicine’s “golden hour”: the short period following severe acute injury, during which there is the highest likelihood that prompt treatment will prevent death. 

At the tertiary care hospital where my wife was admitted, we experienced the top level of the care continuum.  It became clear to me that the quality and effectiveness of care at the neurosurgical critical care unit largely depended on the knowledge and skills of health personnel. In our case, this included specialized physicians, who coordinated the process, as well as the indispensable cadre of nurses and technicians, who worked around the clock at bedside.  Available technology and medicines are important supportive tools, but the capacity of the medical and nursing team to use them following evidence-based guidance is essential for proper diagnosis, treatment, monitoring, and ongoing evaluation of patients.  

Among other lessons, this means that medical and nursing education cannot remain static—it needs to continuously change in accordance with evolving evidence-based medical knowledge and the introduction of new technologies, drugs, and procedures.  Continuing education serves as the conduit for channeling new knowledge and technological development to constantly improve medical practice.

During Lani’s hospital stay, I also observed with amazement the critical role now played by electronic medical record (EMR) systems in helping coordinate the flow of patients’ medical, administrative, and financial information among health care facilities, hospital units, and health insurance agencies, all now virtually interconnected.  We experienced in a direct, personal way the remarkable progress that EMRs embody.  These systems enhance clinical decision-making and coordination, help reduce medical errors, facilitate performance measurement, and enable continuity of care as patients move across the health system.  

A related feature that has also consistently drawn my attention is the hospital’s emphasis on patient safety.  This begins with correctly identifying patients (e.g., using at least two identifiers, such as name and date of birth) to make sure that each patient receives the correct medicine and treatment.  The safety focus also encompasses attention to effective communication among caregivers (e.g., reporting critical test and diagnostic results within a defined timeframe); proper labeling of medications, syringes, and other essential supplies; management of clinical alarm systems to alert caregivers to potential problems; and measures to reduce the risk of health care-associated infections, particularly ensuring that all medical staff wash their hands between patient visits.  In my wife’s case, great value was placed on systematic efforts to reduce the risk of falls, which account for a significant portion of injuries in hospitalized patients. 

Both at the hospital and the brain injury rehabilitation center where Lani was transferred as an inpatient, the open and respectful interaction between the provider teams and our family has been invaluable in my wife’s care and rehabilitation. Including medical and nursing staff, together with occupational, speech, and physical therapists, care teams have furnished complete information about Lani’s treatment and rehabilitation plan, and kept us informed about the evolution of her condition.  This has helped address our questions and minimize anxiety and fear.  Providers have patiently educated us about different aspects of the care process, explained patients’ and family members’ rights, and even clarified mundane health insurance benefit provisions.  Since, for Lani, care and rehabilitation will not end upon discharge from the facility, we are also relying on our daily discussions with providers to learn how best to care for Lani once she moves home, and her rehabilitation shifts to the ambulatory setting.
I am ever more grateful to my other two kids who, along with Alejandro, have been bulwarks of support over the past eight weeks: Carlos, the oldest, Laura, the youngest, and my daughter in law, Heather.  Together, we’ve been on a long, mentally and physically taxing journey through the health system.  On that road, I’ve witnessed first-hand the promise of science and new technologies to revolutionize medical care.  New discoveries are enabling Lani to recover cognitive capacity and steadily improve her physical function and mobility.  They are helping her refine the skills she’ll need to independently perform daily activities at home, at work, and in the community—all this within an astonishingly short time after a brain hemorrhage.  At the same time, I have become a deep believer of the complementarity of science and spirituality, and the empowering force derived from the daily support provided by my two sons and daughter and the rest of our family network.  Indeed, the combination of clinical excellence, deep religious faith, and family solidarity are helping us manage this family ordeal with hope rooted in our commitment to each other. We shall overcome!

Attrition rates typically aren’t that different for the control group than the treatment group – really? and why?

1 week 5 days ago

When I start discussing evaluations with government partners, and note the need for us to follow and survey over time a control group who did not get the program, one of the first questions I always get is “Won’t it be really hard to get them to respond?”. I often answer with reference to a couple of case examples from my own work, but now have a new answer courtesy of a new paper on testing for attrition bias in experiments by Dalia Ghanem, Sarojini Hirshleifer and Karen Ortiz-Becerra.

As part of the paper, they conduct a systematic review of field experiments with baseline data published in the top 5 economics journals plus the AEJ Applied, EJ, ReStat, and JDE over the years 2009 to 2015”, covering 84 journal articles. They note that attrition is a common problem, with 43% of these experiments having attrition rates over 15% and 68% having attrition rates over 5%. The paper then has discussion over what the appropriate tests should be to figure out whether this is a problem. But I wanted to highlight this panel from Figure 1 in their paper, which plots the absolute value of the difference in attrition rates by treatment and control. They note “64% have a differential rate that is less than 2 percentage points, and only 10% have a differential attrition rate that is greater than 5 percentage points.” That is, attrition rates aren’t much different for the control group.

Why is this?
This raised a bunch of questions for me, including:

  • Is this just publication bias? – good journals might not publish studies where the treatment-control difference is really high
  • Does this come from including a lot of studies with administrative data? – we usually won’t expect attrition rates to differ if using administrative data (so long as treatment does not affect entry into the administrative data, as can be the case with e.g. labor treatments that affect whether workers enter into the social security records).
  • Does it largely reflect overall response rates being high, so there is not much room to move? If you are in a setting where almost everyone responds easily (so overall attrition rates even for the control group are 95+%), then there isn’t much room for a large difference.
  • Does the timing of follow-up matter and how many surveys have already been taken? Perhaps people don’t hold a grudge for long about missing out on treatment, or perhaps in the short-run they are eager to answer because they somehow think they might still get treated, and it is only after long periods of time or multiple survey rounds that the gap opens up.
  • Maybe people didn’t even know (or care) they were being treated? While it may be obvious to people whether they get a big grant or a training program or not, for more subtle treatments (e.g. getting offered a new interest rate, or a particular text message or advertising offer), people may not even realize if they have missed out on treatment, so have no reason to be more likely to refuse surveys.
To explore these questions a bit, I took my last 5 years of impact evaluations (either published post 2014, or currently in working paper stage). These are experiments on firms (grants, training, formalization assistance, wage subsidies), workers (vocational training, migration assistance, wage subsidies, matching assistance) and on financial education, and one RD study on grants. This yielded 57 rounds of surveys from 21 different impact evaluation papers covering 19 countries. Nine of these were published (or in R&R status) in the 9 journals Ghanem focus on. In all cases I focus only on survey data, and when multiple treatments were used, choose the treatment which has the biggest attrition rate difference relative to the control group to provide an upper bound on the problem. Exploring my thoughts above:
  1. Probably not a big publication bias effect: my mean absolute attrition differential between treatment and control groups is 3.1% both for papers published in the 9 journals they consider, and is 3.1% for papers published in other journals or not yet published.
  2. Higher control group attrition rates ARE associated with higher differential rates: The figure below plots the control minus treatment attrition rate against the control rate. Note there are a few negative values (where the treated are actually less likely to respond). A regression of the absolute differential rate on the control attrition rate has a coefficient of 0.13 (p=0.003, clustered at the study level) – so that a 10% increase in the control group attrition rate is associated with a 1.3% increase in the differential rate.

3.  Treatment-Control Differential Attrition rates are NOT associated with either the length of time between treatment and surveying, NOR with the number of survey rounds. This is seen in the graph below (regressions have p-values of 0.54 for time since treatment, and 0.47 for survey round).

4. Does it matter what the treatment was?  I have a lot of different types of interventions here, and can’t separate this completely from effects of country and other factors. But the differential rates do seem to be highest when the treatment group are given large grants and the control group is not – the highest positive differentials among my studies come from my matching grants ($10,000) evaluation in Yemen (10%), large grants ($660,000) to research consortia in Poland (10%), and the first survey round of my large grants ($50,000)  to firms in a business plan competition in Nigeria paper (9.5%). These are programs where the value of the treatment is large and clear, so missing out might be really disappointing. In contrast, differential attrition rates are really low in financial education, wage subsidy, vocational training, and macroinsurance evaluations where treatment effects are often very small. The figure below shows this relationship against the log value of the program in USD – with a slope coefficient of 0.017 (p=0.000) – so moving from a program worth $100 to one worth $10,000 is associated with a 3.4 percentage point increase in the treatment-control response gap

That is, it may be precisely the most effective treatments that are at most risk of differential attrition making it hard to measure this effectiveness. The good news at least is that even in these cases, a bit more effort can often dramatically reduce attrition rates – this was the case in Nigeria, where after a big treatment-control gap in round 1 (the top point at log(50K) in the figure), additional effort reduced this gap in subsequent rounds (the other points for log(50K)).
Final Reminder: while the focus in this post is on the differential attrition rate between treatment and control group, it is neither the case that equality of treatment rates is enough not to have to worry about attrition (the attritors might still be selected differently in the two groups), nor that a treatment-control gap in response rates must doom all hopes of evaluation (attrition may still be unrelated to the outcome of interest).


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