Estimating the Impact of Weather on Agriculture

This paper quantifies the significance and magnitude of the effect of measurement error in remote sensing weather data in the analysis of smallholder agricultural productivity. The analysis leverages 17 rounds of nationally-representative, panel household survey data from six countries in Sub-Saharan Africa. These data are spatially linked with a range of geospatial weather data sources and related metrics. The paper provides systematic evidence on measurement error introduced by (1) different methods used to obfuscate the exact GPS coordinates of households, (2) different metrics used to quantify precipitation and temperature, and (3) different remote sensing measurement technologies. First..

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Infrastructure and Structural Change in the Horn of Africa

Access to infrastructure supports economic development through both capital accumulation and structural transformation. This paper investigates the links between investments in electricity, Internet, and road infrastructure, in isolation and bundled, and economic development in the Horn of Africa, a region that includes countries with different levels of infrastructure and economic development. Using data on the expansion of the road, electricity, and Internet networks over the past two decades, it provides reduced-form estimates of the impacts of infrastructure investments on the sectoral composition of employment. Bundled infrastructure investments cause different patterns of structural tr..

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In Someone Else’s Shoes : Promoting Prosocial Behavior Through Perspective Taking

Can taking the perspective of an out-group reduce prejudice and promote prosociality? Building on insights from social psychology, this paper studies the case of Colombian natives and Venezuelan immigrants. This was done by conducting an online experiment in which natives were randomly assigned either to play an online game that immersed them in the life of a Venezuelan migrant or to watch a documentary about Venezuelans crossing the border on foot. Relative to a control group, both treatments increased altruism towards Venezuelans and improved some attitudes, but only the game significantly increased self-reported trust.

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Getting Real The Uneven Burden of Inflation across Households in Turkey

Inflation is typically measured using aggregate price indices that are based on bundles of goods and services sold or consumed by the “median” agent. In the case of households, in particular, budget shares vary substantially across income and demographic groups. Assessing how inflation behaves at the household level requires understanding how heterogenous changes in consumer prices affect household choices and well-being differently. In recent years, price increases have been particularly high in Turkey, with double-digit inflation starting in 2017 and intensifying in 2018 and 2020 due to exchange rate volatility, macroeconomic instability, and the economic disruption brought about by Co..

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What Has Been the Impact of COVID-19 on Debt Turning a Wave into a Tsunami

This paper presents a comprehensive analysis of the impact of COVID-19 on debt, puts recent debt developments and prospects in historical context, and analyzes new policy challenges associated with debt resolution. The paper reports three main results. First, even before the pandemic, a rapid buildup of debt in emerging market and developing economies—dubbed the “fourth wave” of debt—had been underway. Because of the sharp increase in debt during the pandemic-induced global recession of 2020, the fourth wave of debt has turned into a tsunami and become even more dangerous. Second, five years after past global recessions, global government debt continued to increase. In light of this ..

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Does Race and Gender Inequality Impact Income Growth

Using Integrated Public Use Microdata Series–United States micro-census data from 1960 to 2010, this paper examines whether racial and gender income disparities beget inequality by differentially impacting the growth prospects of the poor, the middle class, and the rich. Racial and gender inequality is found to be bad for income growth of the poor, but not for that of the rich. An investigation into the channels of this effect suggests that higher racial and gender inequality is associated with lower human capital accumulation among the poor and a reduction in the quality of their jobs.

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Does Competition from Informal Firms Impact R&D by Formal SMEs Evidence Using Firm-Level Survey Data

The informal sector is an important source of livelihoods and jobs for a vast majority of people in developing countries. However, there is concern that it may undermine growth and development of the formal sector. For instance, the growth literature indicates that research and development activity and innovation are a key driver of long-term growth. How does the competition that formal sector firms face from informal sector firms affect research and development activity by the formal firms? The present paper attempts to answer this question using firm-level survey data for small and medium-size enterprises in a large cross-section of mostly developing countries. The results show that higher..

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Measuring Systemic Banking Resilience : A Simple Reverse Stress Testing Approach

Reverse stress tests can be a useful tool to evaluate bank resilience to a credit shock, especially in environments where financial data are limited or opaque. This paper develops a simple and transparent country-level banking sector resilience indicator that focuses on tail risks, the Consolidated Distance to Breakpoint. Based on individual bank reverse stress test results, this novel metric quantifies the increase in nonperforming loans needed to deplete capital buffers for a subset of the most fragile banks that collectively represent at least 20 percent of total banking system assets, a level commonly associated with a systemic banking crisis. The paper calculates the Consolidated Distan..

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Forced Displacement, Gender, and Livelihoods : Refugees in Ethiopia

This study uses the Ethiopia Skills Profile Survey (2017) to examine the gender differences in livelihood opportunities and activities between refugees and host communities. The results show that refugees are significantly less likely to be in employment, and that household characteristics influence women’s economic opportunities. While having a female household head, access to agricultural land, and the number of female adults increased female participation in economic activities, conversely, higher numbers of children in the household significantly reduce women’s opportunities. Higher education attainment boosts both male and female refugees’ participation in wage employment. Among r..

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Mangroves as Coastal Protection for Local Economic Activities from Hurricanes in the Caribbean

In recent decades, hurricane frequency and intensity have increased in the Caribbean Basin. From 2000 to 2012, more than 100 hurricanes impacted lives, infrastructure, and economic activity along the region’s shorelines. Studies suggest that mangrove forests’ dense root systems might mitigate the impact of hurricanes, which would help stabilize the coastline and prevent erosion from waves and storms. Although many tropical mangroves are found on Caribbean coasts, climatic and anthropogenic events have been clearing these wetland ecosystems at an annual rate of 1 percent since the 1990s. This study quantifies the effects of hurricane windstorms on economic activity using nightlight as a p..

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Urban Agglomeration and Firm Innovation: Evidence from Developing Asia

This paper examines the relationship between urban agglomeration and firm innovation using a recently developed dataset that consistently measures city boundaries across Asia together with geo-referenced firm-level data. It finds that the spatial distribution of innovation by firms is highly concentrated within countries. Further, firms in larger cities have substantially higher propensities to introduce product and process innovations and undertake R&D activities, a result that holds for subgroups of countries and even when the largest cities are excluded from the analysis. Finally, the presence of high quality universities and highly ranked engineering departments in cities is positively a..

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Nowcasting Global Poverty

This paper evaluates different methods for nowcasting country-level poverty rates, including methods that apply statistical learning to large-scale country-level data obtained from the World Development Indicators and Google Earth Engine. The methods are evaluated by withholding measured poverty rates and determining how accurately the methods predict the held-out data. A simple approach that scales the last observed welfare distribution by a fraction of real GDP per capita growth—a method that departs slightly from current World Bank practice—performs nearly as well as models using statistical learning on 1,000+ variables. This GDP-based approach outperforms all models that predict pove..

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Inequality under COVID-19 : Taking Stock of High-Frequency Data for East Asia and the Pacific

While the distributional impacts of the COVID-19 pandemic have been well-documented in high-income countries, studies in low- and middle-income countries have been relatively rare due to data limitations. This paper uses pre-pandemic household welfare data and high-frequency household phone survey data from seven middle-income countries in East Asia and the Pacific, spanning May 2020 to May 2021, to analyze the distributional impacts of the pandemic and their implications for equitable recovery. The results indicate that employment impacts at the extensive margin have been large and widespread across the welfare distribution during times of stringent mobility restrictions (low mobility). Whe..

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Corridors without Borders in West Africa

This paper estimates the welfare gains from upgrading several major regional corridors in West Africa. It uses a quantitative economic geography framework with trade within and across countries and mobility of people within countries to assess the economic impacts of the reduction in trade costs from road and border infrastructure investments. The findings show that the upgrade of Dakar-Lagos regional road corridor brings sizable economic benefits relative to investment costs, with a benefit-cost ratio estimated around 3. The economic benefits of road corridor upgrades are doubled and more widely spread when combined with measures to reduce current massive border delays. The benefits are neg..

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Demographic and Spatial Disparities in Labor Market Outcomes within the Kinshasa Urban Landscape

This paper examines the labor market and jobs in urban Kinshasa, by drawing on a recently collected household survey and other data sets. It particularly focuses on labor supply and employment patterns, job characteristics, and their spatial nexus. The analysis first shows that female and young workers are more likely to experience unemployment and underemployment than other workers in Kinshasa. Second, the availability of good quality jobs is still limited in Kinshasa. Third, in addition to the scarcity of good jobs, which are concentrated in the city core, poor accessibility due to the limited connective infrastructure and transport system further reduces job opportunities for people livin..

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Profiling Living Conditions of the DRC Urban Population : Access to Housing and Services in Kinshasa Province

This paper examines living conditions—mainly access to infrastructure and basic services—in Kinshasa, by focusing on how they vary within the city and how they are related to household characteristics. First, drawing on a household survey conducted in the capital province in 2018, the paper shows that many Kinshasa residents live with substandard housing and inadequate levels of access to infrastructure and basic services. Second, the level and quality of access to basic services are highly correlated with residents’ consumption and education levels, as well as their neighborhood characteristics. Third, despite the presence of negative externalities from the high population density, po..

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Estimating Poverty in Kinshasa by Dealing with Sampling and Comparability Issues

This paper proposes monetary poverty and inequality estimates for Kinshasa using a new Kinshasa household survey implemented in 2018. Given the obsolescence of the sampling frame, the survey was sampled using satellite imagery. However, the collection of data in the field was affected by sampling errors that are likely to compromise the representativeness of the sample. After addressing these sampling issues and dealing with some comparability issues with the 2012 survey, the paper shows that poverty and inequality increased significantly during 2012–18 in Kinshasa. Poverty has increased in the city by 12 percentage points, from 53 to 65 percent, partly due to the loss of purchasing power ..

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The Impact of Digital Infrastructure on African Development

This paper estimates the impact of digital infrastructure on economic growth and its sources. The analysis uses system generalized method of moments and finds evidence of a causal impact from the digital infrastructure variables to economic growth, its sources, income inequality, and poverty. The findings show that mobile connections have an impact on economic growth through the total factor productivity growth channel, while internet users drive it by the capital accumulation channel. Connections have a negative effect on the Gini coefficient, and internet users have a negative effect on the poverty headcount. The analysis also finds that human capital and access to electricity are importan..

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The Macroeconomy After Tariffs

What does the macroeconomy look like in the aftermath of tariff changes? This paper estimates impulse response functions from local projections using a panel of annual data that spans 151 countries over 1963–2014. Tariff increases are associated with persistent, economically and statistically significant, declines in domestic output and productivity, as well as higher unemployment and inequality, real exchange rate appreciation and insignificant changes to the trade balance. Output and productivity impacts are magnified when tariffs rise during expansions and when they are imposed by more advanced or smaller (as opposed to developing or larger) economies; effects are asymmetric, being larg..

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Becoming Legible to the State : The Role of Detection and Enforcement Capacity in Tax Compliance

Tax revenue in many low-income countries is inadequate for funding government investment in infrastructure and public services. This paper examines two dimensions of low state capacity that hinder tax collection: the inability to ascertain the tax base (detection capacity) and the inability to enforce unpaid liabilities (enforcement capacity). A randomized experiment with Liberian property owners finds that using identifying information from a newly developed property database to alert property owners that their noncompliance has been detected quadruples the tax payment rate, but only when the notice includes details on the penalties for noncompliance. A second experiment finds a further inc..

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Helping Families Help Themselves Heterogeneous Effects of a Digital Parenting Program

Parenting practices are crucial for the development of children’s brains and social skills. However, parenting styles may be far from ideal, particularly those of caregivers with high stress levels. Using an individual-level experiment with male and female caregivers of young children in El Salvador, this paper evaluates the impact of a free digital stress management and positive parenting intervention. The results indicate that, for males, the intervention increased stress and anxiety and lowered caregiver-child interactions. The effect on males was concentrated among the poorer and those residing with a partner. In contrast, women’s mental health was not impacted. Yet, their use of phy..

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Competition and Firm Recovery Post-COVID-19

This paper examines the impact of the COVID-19 crisis on the reallocation of economic activity across firms, and whether this reallocation depends on the competition environment. The paper uses the World Bank’s Enterprise Surveys COVID-19 Follow-up Surveys for about 8,000 firms in 23 emerging and developing countries in Europe and Central Asia, matched with 2019 Enterprise Surveys data. It finds that during the COVID-19 crisis, economic activity was reallocated toward firms with higher pre-crisis labor productivity. Countries with a strong competition environment experienced more reallocation from less productive to more productive firms than countries with a weak competition environment. ..

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The Promise and Limitations of Information Technology for Tax Mobilization

Tax revenue in many low-income countries is inadequate for funding investments in public goods and human capital. While tax systems have been adopting new technologies to improve tax collection for many years, limitations to in-person interactions due to COVID-19 have further highlighted the role of information technology in tax mobilization. This paper examines the potential of technology to transform tax administration by helping to identify the tax base, facilitate compliance, and monitor compliance. It also identifies possible limitations to the use of technology arising from inadequate infrastructure and connectivity, lack of adoption (or resistance) by taxpayers and tax collectors, lac..

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Preparation, Practice, and Beliefs : A Machine Learning Approach to Understanding Teacher Effectiveness

This paper uses machine learning methods to identify key predictors of teacher effectiveness, proxied by student learning gains linked to a teacher over an academic year. Conditional inference forests and the least absolute shrinkage and selection operator are applied to matched student-teacher data for math and Kiswahili from grades 2 and 3 in 392 schools across Tanzania. These two machine learning methods produce consistent results and outperform standard ordinary least squares in out-of-sample prediction by 14–24 percent. As in previous research, commonly used teacher covariates like teacher gender, education, experience, and so forth are not good predictors of teacher effectiveness. In..

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What Types of Capital Flows Help Improve International Risk Sharing

Cross-border capital flows are expected to lead to increased international risk sharing by facilitating borrowing and lending in global financial markets. This paper examines risk-sharing outcomes of various types of capital flows (foreign direct investment, portfolio equity, debt, remittance, and aid flows) in a large sample of emerging market and developing economies. The results suggest that remittances and aid flows are associated with increased international risk sharing. Other types of capital flows are not consistently correlated with better risk-sharing outcomes. These findings are robust to the use of different econometric specifications, country-specific characteristics, and other ..

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Rural Poverty Reduction and Economic Transformation in China : A Decomposition Approach

Rural poverty in China fell from 96 percent in 1980 to less than 1 percent of the population in 2019. Using PovcalNet data for China and a set of comparable countries, this paper estimates growth-poverty elasticities. It finds that China stands out for its record of sustained, fast growth, rather than because of an unusually high growth-poverty elasticity. In addition, changes in mean consumption, rather than changes in the distribution, drive poverty reduction. Furthermore, until 2010, changes in inequality attenuated the impact of growth on poverty. The paper also studies which channels mattered the most for rural poverty reduction by applying a decomposition framework to multiple rounds o..

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Urban CO2 Emissions : A Global Analysis with New Satellite Data

This paper estimates an urban carbon dioxide emissions model using satellite-measured carbon dioxide concentrations from 2014 to 2020, for 1,236 cities in 138 countries. The model incorporates the global trend in carbon dioxide concentration, seasonal fluctuations by hemisphere, and a large set of georeferenced variables that incorporate carbon dioxide–intensive industry structure, emissions from agricultural and forest fires in neighboring areas, demography, the component of income that is uncorrelated with industry structure, and relevant geographic conditions. The income results provide the first test of an Environmental Kuznets Curve relationship for carbon dioxide based on actual obse..

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Fair and Welfare-Consistent Global Income Poverty Measurement : Theory and Application

There is growing support for the idea that global income poverty should be assessed with a measure accounting for both own income and relative income. The trade-off that such a measure makes between own income and relative income is the key question. Non-paternalism requires that this trade-off be welfareconsistent, that is, related to individual preferences. This paper studies the implications of requiring that the poverty measure makes a fair and welfare-consistent aggregation of individual preferences. The results provide support for the absolute and relative global lines proposed in the literature but rule out the use of classical poverty indexes. In particular, the paper finds that the ..

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The Pass-Through of International Commodity Price Shocks to Producers’ Welfare : Evidence from Ethiopian Coffee Farmers

International commodity price shocks may have large impacts on producers in developing countries. In this paper, a unique household panel data from Ethiopia is utilize to show that a decrease in international coffee price has strong pass-through to the consumption of households that rely on coffee production as a main source of livelihood. It also results in decreases in on-farm labor supply (particularly male labor supply) and induces reallocation of labor towards non-coffee fields, but has negligible effect on off-farm labor supply. The decline in consumption has significant consequences on child malnutrition: children born in coffee-producing households during low coffee price periods hav..

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Impacts of Energy Efficiency Projects in Developing Countries : Evidence from a Spatial Difference-in-Differences Analysis in Malawi

Spatial difference-in-differences analysis is used to study the impacts of a large-scale development intervention aimed at improving energy efficiency in Malawi. The estimation strategy takes advantage of the geographical variation in the implementation of different project components and is based on a combination of remote-sensing (satellite) data and national household survey data. The results suggest that a combination of demand-side and supply-side interventions was associated with a statistically significant increase in electricity access, a decrease in the frequency of blackouts, and a switch from traditional fuels to electricity as the main source of energy for lighting (but not for c..

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