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HDQU Q4 2013

hd quarterly
Human Development Quarterly Update — Q4 2013



Latest research findings

Is workfare cost-effective against poverty in a poor labor-surplus economy?

Workfare schemes impose work requirements on beneficiaries. This has seemed an attractive idea for self-targeting transfers to poor people. But as Rinku Murgai, Martin Ravallion and Dominique van de Walle [1] argue, this incentive argument does not imply that workfare is more cost-effective against poverty than even poorly-targeted options, given hidden costs of participation. In particular, even poor workfare participants in a labor-surplus economy can be expected to have some forgone income when they take up such a scheme. Murgai and coauthors use a survey-based method to assess the cost-effectiveness of India's Employment Guarantee Scheme in Bihar. Participants are found to have forgone earnings, although these fall well short of market wages on average. Factoring in these hidden costs, the authors find that for the same budget, workfare has less impact on poverty than either a basic-income scheme (providing the same transfer to all) or uniform transfers based on the government's below-poverty-line ration cards.

Getting incentives right: An impact evaluation of district hospital capitation payment in Vietnam

Vietnam's social health insurance agency recently shifted from reimbursing hospitals on a fee-for-service basis to making a capitation payment to the district hospital where the enrollee lives. Ha Thi Hong Nguyen, Sarah Bales, Adam Wagstaff and Huyen Dao [2] analyze panel data on hospitals over the period 2005-2011 and multiple cross-section data sets from the Vietnam Household Living Standards Surveys to estimate the impacts of this policy shift on efficiency, quality, and equity. They find that capitation increases hospitals' efficiency, as measured by recurrent expenditure and drug expenditure per case, but has no effect on surgery complication rates or in-hospital deaths. In response to the policy shift, hospitals scaled back service provision to the insured, and increased provision to the uninsured (who continue to pay out-of-pocket on a fee-for-service basis).

Admission is free only if your dad is rich! Distributional effects of corruption in schools in developing countries

In the standard model of corruption, the rich are more likely to pay bribes for their children's education, reflecting higher ability to pay. However, as M. Shahe Emran, Asadul Islam and Forhad Shilpi [3] argue, this prediction is driven by the assumption that the probability of punishment for bribe-taking is invariant across households. In many developing countries lacking in rule of law, this assumption is untenable, because the enforcement of law is not impersonal or unbiased, and the poor have little bargaining power. In a more realistic model where the probability of punishment depends on the household's economic status, bribes are likely to be regressive, both at the extensive and intensive margins. Using rainfall variations as an instrument for household income in rural Bangladesh, Emran and co-authors find strong evidence that corruption in schools is doubly regressive: (i) the poor are more likely to pay bribes, and (ii) among the bribe payers, the poor pay a higher share of their income. The results indicate that progressivity in bribes reported in earlier studies may be due to identification challenges.

Incentives and teacher effort: further evidence from a developing country 

Few would contest that teachers are a very important determinant of whether students learn in school. Yet, in the face of compelling evidence that many students are not learning what they are expected to learn, how to improve teacher performance has been the focus of much policy debate in rich and poor countries. Hai-Anh H. Dang and Elizabeth M. King [4] examine how incentives, both pecuniary and non-pecuniary, influence teacher effort. Using school survey data from Lao PDR, they estimate new measures of teacher effort, including the number of hours that teachers spend preparing for classes, and teacher provision of private tutoring classes outside class hours. Their results indicate that teachers increase effort in response to non-pecuniary incentives, such as greater teacher autonomy over teaching materials, and to monitoring mechanisms, such as the existence of an active parent-teacher association and the ability of school principals to dismiss teachers.

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New articles and books

Political ideology, quality at entry and the success of economic reform programs

Lodewijk Smets, Stephen Knack and Nadia Molenaers [5] investigate how government ideology matters for the  success of World Bank economic policy loans, which typically support market-liberalizing reforms. A simple model predicts that World Bank staff will invest more effort in designing an economic policy loan when faced with a left-wing government. Smets and co-authors find that the “quality at entry” of an economic policy loan is significantly higher for governments with a left-wing party orientation. This result is robust to changes in the sample, alternative measures of ideology, different estimation techniques, and the inclusion of additional control variables. The authors also find that leftist governments comply more fully with loan agreements, and that World Bank resources are more productive—in terms of reform success—in the design of policy operations than in their supervision. Anecdotal evidence from several country cases is presented that is consistent with the econometric finding that left-wing governments receive higher quality loans.

U.S. and them: The geography of academic research

Using a database of 76,046 empirical economics papers published between 1985 and 2005, Jishnu Das, Toan-Do Quy, Karen Shaines and Sowmya Srinivasan [6] find that research output on a given country increases with the country's population and wealth, yielding a strong correlation between per-capita research output and per-capita GDP. Regressions controlling for data quality, governance and the use of English give an estimated research–wealth elasticity of 0.32; surprisingly, the U.S. is not an outlier. Das and co-authors also find that papers written about the U.S. are 2.5 percentage-points more likely to be published in the top five economics journals after accounting for authors' institutional affiliations and the field of study. This is a large effect because only 1.5% of all papers written about countries other than the U.S. are published in first-tier journals. No similar premium for research on the U.S. is detected in second-tier general interest journals, where papers from the UK and Europe command a substantial premium instead.

Lasting welfare effects of widowhood in Mali

Widows and their children are largely hidden from view in the data used to inform social policy discussions in Africa. Dominique van de Walle [7] finds that in Mali, households headed by widows have significantly lower living standards than other households in rural and urban areas. Furthermore, the welfare difference persists even after widows are absorbed into male headed households. An examination of individual measures of well-being further reveals that, relative to other women, worse outcomes for ever-widowed women persist through remarriage. These detrimental effects are passed on to children, suggesting an intergenerational transmission of poverty stemming from widowhood.

Risking your health: Causes, consequences, and interventions to prevent risky behaviors

Choices by individuals to engage in risky behaviors that endanger their health include using illicit drugs, smoking, overconsuming alcohol, overeating that can lead to obesity, and practicing unsafe sex. The consequences of these choices go beyond the individuals and constitute important threats for public health. Traditionally associated with high-income countries, these behaviors have become increasingly prevalent in low- and middle-income countries. A new book edited by Damien de Walque [8] explores how those choices are formed and what their consequences are.

In the news

Damien de Walque’s new book [8] Risking your Health: Causes, Consequence and Interventions to Prevent Risky Behaviors is picked up by various newspapers including The Bangkok Post.

James Tooley, writing in The Spectator, argues that what Pakistani student Malala’s story also highlights is the growth of low-cost private education in south Asia; he cites Jishnu Das’s data to indicate its extent.

Berk Ozler’s work on CCTs is picked up The Economist in “Pennies from heaven” piece; Ozler is quoted as arguing that “CCTs work better when the problems go beyond mere shortage of cash”.

And on the blogs

In a post on the Bank’s new Future Development blog, Jishnu Das takes issue with The Economist’s “Pennies from heaven” piece. He argues that “Does giving cash work well?” is a well-defined question only if you are willing to say that “well” is something that WE, the donors, want to define for families whom we have never met and whose living circumstances we have probably never spent a day, let alone a lifetime, in. Dylan Matthews cites Das’s post in his Wonkblog Guide to Holiday Giving that appeared in the Washington Post’s Wonkblog.

In a post that appeared on the Washington Post’s The Monkey Cage blog, Jennifer Keister writes about the political dysfunction in the Philippines in the wake of Typhoon Haiyan, and mentions Stuti Khemani and Phil Keefer’s 2005 article from the World Bank Research Observer [9].

In a post on Investing in Health, Damien de Walque blogs about his new book [8].

On Let’s Talk Development, Dominique van de Walle has a post about her paper on the benefits of electrification in India [10]. She notes that the study found significant effects of electrification on schooling, but only for girls.

On Development Impact, Jed Friedman has a post on the relevance of impact evaluation to the “science of delivery”. IE methods can help us find out not only what to deliver but how to deliver it. Friedman gives some examples from recent studies.

Adam Wagstaff has a series of posts on Let’s Talk Development. In one he presents comparable data from around the world suggesting that the private sector in health is much smaller than is often claimed. In another, he presents another set of data showing the worldwide variation in use of outpatient and inpatient care; he finds, for example, that much of Asia visits doctors more regularly than both the developing world and the entire world, and that global variations are only partly explained by differences in doctors and hospital beds per capita. In a third post, Wagstaff reports on three recent sting operations in research – operations that exposed unscrupulous profit-driven low standards in parts of open-access publishing, poor quality medical care in India, and demand-inducement by doctors in China. Finally, Wagstaff gives his usual annual ranking of World Bank blogs and blog posts.
 

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References

  1. Murgai, R., M. Ravallion, and D. van de Walle, Is workfare cost-effective against poverty in a poor labor-surplus economy?, 2013, Washington, DC: The World Bank, Policy Research Working Paper 6674.
  2. Nguyen, H.T.H., S. Bales, A. Wagstaff, and H. Dao, Getting Incentives Right: An Impact Evaluation of District Hospital Capitation Payment in Vietnam, 2013, Washington, DC: The World Bank, Policy Research Working Paper 7609.
  3. Emran, M.S., A. Islam, and F. Shilpi, Admission is free only if your dad is rich! distributional effects of corruption in schools in developing countries, 2013, Washington, DC: The World Bank, Policy Research Working Paper 6671.
  4. Dang, H.-A.H. and E.M. King, Incentives and teacher effort: further evidence from a developing country, 2013, Washington, DC: The World Bank, Policy Research Working Paper 6694.
  5. Smets, L., S. Knack, and N. Molenaers, Political ideology, quality at entry and the success of economic reform programs. The Review of International Organizations, 2013. 8(4): p. 447-476.
  6. Das, J., Q. Toan-Do, K. Shaines, and S. Srinivasan, U.S. and Them: The Geography of Academic Research. Journal of Development Economics, 2013. 105: p. 12-130.
  7. van de Walle, D., Lasting Welfare Effects of Widowhood in Mali. World Development, 2013. 51: p. 1-19.
  8. de Walque, D., Risking Your Health: Causes, Consequences, and Interventions to Prevent Risky Behaviors. Human Development Perspectives. 2013, World Bank Publications,Washington, DC.
  9. Keefer, P. and S. Khemani, Democracy, Public Expenditures, and the Poor: Understanding Political Incentives for Providing Public Services. World Bank Research Observer, 2005. 20 1: p. 1-27.
  10. van de Walle, D., Long term impacts of household electrification in rural India, in Let's Talk Development, T.W.B.-. blogs.worldbank.org, Editor 2013, The World Bank: Washington, DC.

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Human Development and Public Services Team
Development Research Group
World Bank
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HD & Public Services Team




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