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Research Highlights 2009: A Note from the Director

2009 Annual Research Highlights Report Cover

 Full Report 

While there is a great deal of new development thinking and experience in the development community outside the World Bank, the Bank’s research department—the Development Research Group (DECRG) in the Development Economics Vice Presidency—has a special role within that community, as well as in the World Bank. DECRG is one of the most productive development economics research groups in the world.

Even by purely academic criteria (based on research publications and their citations by other researchers) we are one of the top few institutions working on development economics globally and, by some criteria, including among all universities. The Bank is a major generator of new knowledge about development problems and solutions, and its research department is rightly at the center of that knowledge generation.

DECRG also has a unique role through its various partnerships. The experience of working closely with colleagues in the World Bank’s operations and networks, and partners in government and civil society, helps the World Bank’s researchers identify key gaps in knowledge, generates an awareness of emerging issues “on the ground,” and provides the testing grounds for new ideas and tools. This influences, and is influenced by, the research done in the development community as a whole—research that is increasingly being done within developing countries.

DECRG’s current research involves direct collaborations in more than 40 developing countries, in addition to cross-country comparative work often spanning many more countries. The continual collaboration with researchers in other parts of the World Bank, and with many colleagues in universities and research institutions throughout the world, helps identify important unanswered questions. And it helps expand the envelope of our capabilities in addressing those questions.

“Research Highlights” is DECRG’s annual report. It provides a concise summary of the main
themes of the department’s work, as well as selected examples of key research findings over the previous year.

The global financial crisis was (naturally) an important focus for our work in 2009

DECRG’s researchers have responded by assessing the causes of the crises, the likely impacts on poverty and human development, and appropriate policy responses. After first taking stock of the gaps in knowledge about the crisis, DECRG mounted many new research projects during the year, relying heavily on a re-deployment of the department’s own resources (especially in the first few months after the crisis hit—to assure rapid response), as well as external sources, including through the support DECRG provides to World Bank operations and networks, and through our direct engagement with donors, notably through the “Knowledge for Change” Trust Fund.

The new topics related to the crisis included international capital flows and portfolio allocations (including studying the behavior of institutional investors), international transmission mechanisms (including through finance, trade and migration), understanding stock market reactions, and assessing the likely impacts on poverty and human development.

The crisis has led to a re-thinking of past policy positions in many countries. There has naturally been a re-focusing of attention on financial sector stability. Our research has highlighted the role of incentives within the financial sector, and the potential trade-offs between better incentives for prudent behavior in the sector and risk-taking and innovation, which matter to long-term growth. We have also studied the international transmission of shocks from the financial sector, including the role of technology diffusion, the structure of debt and the role of wholesale funds in transmitting the shock internationally. In addition to continuing to monitor the impacts of the crisis, including on poverty and child welfare, we have started to learn more about its impacts on important intermediate variables, including trade, financial flows, and development aid.

Social policy responses to crises remain an important part of DECRG’s work. In 2009 we published a very timely Policy Research Report on Conditional Cash Transfers, which provided an authoritative overview of the arguments and evidence for this important class of anti-poverty programs. The report was timely in providing policy makers with guidance on whether the developing countries should adopt this class of interventions as an element of their social protection response to crises.

Crisis responses cannot, of course, ignore longer-term impacts 

The faster the developing world gets back on track toward a sustainable path of poverty reduction the better, and there are encouraging signs that this is underway in 2010. Research continues on our core areas of long-run growth and structural change, distributional change and poverty reduction, inequality of opportunity, climate change, energy, agriculture, finance for development, private sector development, trade reform, migration, governance and delivering better schooling and health care services. This issue of "Research Highlights" provides some examples of our research in each of these areas.

Choosing research topics inevitably involves trade-offs, given limited resources. There are trade-offs in setting priorities for research. Hard choices must often be made, and we cannot cover everything that matters to development.

One key trade-off concerns how we balance short-term flexibility to emerging issues, such as crises, and longer-term goals. This is never easy to manage. While the Bank’s researchers try to address pressing current questions (and they responded rapidly to the latest crisis) they also try to take a longer-term perspective on development problems. For example, there are a number of areas where researchers have invested 10 or more years in survey data collection and analysis focused on what are seen as key development issues, such as the longer-term impacts of rural development projects, and of schooling, health and nutrition interventions.

One of the unusual features of DECRG is the fact that we cover such a wide range of development issues. The seven teams of DECRG span all sectors of the Bank’s work. But our researchers avoid narrow sectoral perspectives; instead we try to understand each sector’s broader development role and the trade-offs against other policy objectives.

DECRG’s research outputs include academic-style books and research papers that must pass external, and typically anonymous, peer review—a process that helps assure that the department’s research meets industry standards for research quality. As in the last two issues of “Research Highlights,” a longer online version is also available that provides a complete list of DECRG’s publications in 2009 at

The research outputs in 2009 included 12 books and edited volumes, 140 journal articles, 57 book chapters, as well as over 177 working papers (that will be published in due course), and 18 new datasets. The full report also gives details on the group’s outreach efforts, which included 7 featured articles, 26 research briefs for the web, 36 outreach print pieces, 21 conferences organized by DECRG or co-organized by staff with other institutions, and well over 500 presentations by staff at seminars and conferences.

There are other outputs that are equally important. DECRG is a major producer of new analytic tools, software, and data products that facilitate analysis and policy making by others, as well as by the World Bank’s own researchers—tools that would almost certainly not exist otherwise and are often directly applicable to operational concerns and analytic work by governments and civil society. There have been a great many examples in the past, and this strand of research products is certain to become more important in the future.

Data are at the core of almost everything DECRG’s researchers do

In the wake of the crisis, we have been actively exploring new ways of monitoring what is happening and evaluating interventions, including new high-frequency data sources. Our estimates of the impacts of the crisis on poverty are closely followed and widely cited. Our efforts to closely monitor trade barriers emerging in response to the crisis have also been closely followed.

Collecting household survey data remains a core activity of the research department—notably as part of the Living Standards Measurement Study. These surveys underlie our efforts to monitor progress against poverty, including impacts of the crisis. We have been putting considerable effort into improving data quality and enhancing the policy relevance of our survey data. This was also the first full year of our new initiative to improve survey data for Sub-Saharan Africa using new panel datasets—a large multi-country effort supported by the Gates Foundation.

Data is a key public good in efforts to know what is happening in the world, and to assess what works and what does not in efforts (public and private) to make the world a better place. DECRG has long been an innovator and leader in efforts to make survey data on households, firms, communities and facilities more relevant to the task of policy analysis and evaluation.

These efforts have recently had large payoffs in all our work on the impact evaluation of development projects and policy reforms. There are examples, some identified in this issue of “Research Highlights.” These include our work on assessing low-cost land titling programs, rural-road improvements, workfare schemes, microenterprise support programs, cash transfer and school-feeding programs, early childhood nutrition and parenting programs, health insurance programs, and HIV/AIDS programs. Our Geographic Information Systems Lab has provided the main technical support for spatial economic work at the World Bank, and thrown new light on a number of issues, including the identification of coastal areas that are likely to be vulnerable to more intense cyclone activity and heightened storm surges from ocean warming.

I very much hope that you enjoy reading this edition of “Research Highlights.” Please tell me what you think about the issues raised in these pages, and bring up topics you think need more research. In the end, it is the active interaction with development thinkers and practitioners that will continue to assure that DECRG’s research remains relevant to our shared goal of achieving inclusive and sustainable economic development.

Martin Ravallion
March 2010

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