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Research Highlights 2006: Director's Note

Research Highlights 2006, is the second of the resumed series of annual reports on the research activity of the Development Research Group (DECRG), the World Bank’s principal research unit. It offers a brief account of the activities of the Group during 2006, a few highlights to illustrate the scope and nature of our research, and a comprehensive list of our publications and new and updated datasets in 2006.

DECRG undertakes high-quality research on the process of development and policies to enhance it. It seeks to address not only Bank Senior Management and colleagues in Operations, but also audiences among national policy makers, other researchers, the broader development community and the general public. Much of our interaction with Operations takes place by working with them, through “cross support,” but to reach wider audiences we need to rely more heavily on formal publication—the subject of this report.

Publishing our work is, in part, a measure of its quality, and opens it to scrutiny and challenge. Although DECRG is organized internally to facilitate the production of high-quality research, peer review of published material and the resulting public debates are also critical. It is precisely because DECRG research meets high public standards that it is credible and precisely because it is credible that it is influential in development policy making. In brief, DECRG’s published work helps the Bank to fulfill its mandate.

A second key tool for assessing the quality of research is through an independent evaluation of the program as a whole. With the support of DECRG, the World Bank’s Chief Economist, Francois Bourguignon, initiated such an evaluation, covering the period 1998–2005. The Panel, which reported in 2006, was chaired by Angus Deaton and included Abhijit Banerjee, Nora Lustig and Kenneth Rogoff, with support from twenty-four senior readers.

The evaluation is generally very favorable, confirming that much of the Bank’s research is of leading quality, that a strong in-house research capacity is necessary for the Bank, and that “Bank researchers have delivered value to the institution that is much larger than could be reasonably expected from the very small share of the budget that they command.” The report also makes a number of detailed criticisms and draws attention to aspects of research management that the panel believes can be improved, even given the complex set of objectives and constraints facing Bank researchers.

These views, some of which we share and some of which we do not, have been important inputs into our consideration of how best to maintain and improve the quality of our research. A staff working party, led by Philip Keefer, weighed staff reactions to the evaluation and made recommendations to DECRG management. Managers also, of course, receive regular feedback from colleagues in Operations, development practition- ers, journal editors, and peer researchers.

Among the issues that emerged from the staff and management reflections on the evaluation are:

  • The need to recruit at least one new Young Economist every year in order to maintain the group’s intellectual vigor and its access to frontier research techniques. A related need is to achieve regular staff turnover to make room for recruits in the context of declining budgets.
  • Reaffirmation that all researchers publish regularly in respected outlets, while recognizing the tradeoffs when researchers embark on new or exceptionally demanding areas, undertake extensive operational or internally driven work or even just have bad luck with journals. 
  • Recognition that, even given our current strong focus on statistical standards and our policy for making data available to other researchers, more might be done in terms of documentation and dissemination and, on occasion, basic methods in data collection. We remain convinced of the indissoluble connection between research and data collection, and see both as key roles for DECRG.
  • The desirability of strengthening links with academia via visitors’ programs, external involvement in our research program, and periodic review and advice. We do not, however, see “outsourcing research” as a viable way of improving the quality, relevance, or impact of Bank research.

In 2006, the Bank reorganized its six networks into four, combining the Finance and Private Sector Development Networks and also the Sustainable Development and Infrastructure Networks. To facilitate the integration of DECRG research into the Bank’s work, we made related changes.

  • The Infrastructure and Environment and the Rural Development teams were combined under Gershon Feder to create a team for research on Sustainable Rural and Urban Development. Zmarak Shalizi, previously Senior Manager of Infrastructure and Environment, retired in December 2006.
  • Research on firm behavior was reassigned from the Growth and Investment team and combined with the Finance team to create a Finance and Private Sector Development team under Asli Demirguc-Kunt. 
  • The Growth and Investment team, managed by Luis Serven, was renamed Macroeconomics and Growth, with a focus on macroeconomics and the growth agenda in the aggregate, including the aggregate implications of firm performance and micro saving and investment behavior.

In 2006, we also increased our efforts at outreach and dissemination. Research Highlights 2005 was issued early in the year; there have been major extensions to our web presence with regular online stories on research themes (see section on outreach and dissemination); we have provided most of the material for the Bank’s Research Digest (see; we have initiated a web-alert system for new Policy Research Working Papers from DECRG; and  the Research E-Newsletter continues to go out every month to over 26,000 active voluntary subscribers.

The highlights featured in this report illustrate the breadth and quality of our research—from providing data (e.g., on World Trade Organization Disputes) and analytical tools (e.g., for poverty analysis) to detailed micro evaluations (e.g., of cash incentives for girls education) and broad macro analysis (e.g., of tropical forests and of aggregate economic volatility).

I hope you find this year’s Research Highlights  both useful and stimulating.

L. Alan Winters, Director
May 2007

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