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September 2017 — Promoting Effective Governance
Arrow-bullet The easy part of development is over (and the easy part wasn’t actually that easy)
Arrow-bullet Why politics are vital to effective governance
Arrow-bullet Civil servants face many challenges in serving the poor
Arrow-bullet Horizontal pressure from civic leaders can improve governance
Arrow-bullet Improving procurement systems so smaller firms can participate
Arrow-bullet Exploring failure to implement
Arrow-bullet Small-scale health interventions are poor predictors of wider service delivery
Arrow-bullet Improving public financing for service delivery and health outcomes
Arrow-bullet Some pay-for-performance schemes do not increase coverage of targeted health services
Arrow-bullet Upcoming Events
Arrow-bullet Announcements
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The easy part of development is over (and the easy part wasn’t actually that easy)

In this talk, Michael Woolcock, a social scientist at the World Bank, argued that the relatively easy part of the development process is over. Between 1990 and 2013, nearly 1.1 billion people moved out of extreme poverty. The next stage of development involves more complex challenges. Education spending is up, schools are built, but children do not learn. Clinics are built, drugs are bought, but sickness persists. Governments adopt reforms but too little changes for their citizens. Woolcock and his colleagues devised a measure of state capability that shows most developing countries are ill-prepared to meet these increasingly complex tasks. Development aid partners need to help developing countries achieve these capabilities. A new approach spear-headed by Woolcock and colleagues — problem-driven iterative adaptation (PDIA) — is gaining momentum in development institutions. For example, the World Bank is moving in this direction in its country programs in Indonesia, Nigeria, Sierra Leone, and elsewhere. Also Woolcock and colleagues are supporting policy makers, civil society, and citizens experimenting with this approach by supplying examples, case studies, and tools focused on problem driven work in Building State Capability: Evidence, Analysis, Action, which is aimed primarily at domestic reformers and their supporters. These principles are also guiding a growing global community of practice under the banner of Doing Development Differently.

Story | Video | Presentation | Brief | New book: Building State Capability |  Doing Development Differently Manifesto  | Related blogs

GOVERNANCE
Why politics are vital to effective governance

A research report on governance argues that building effective institutions requires changes in political behavior — investments in formal "capacity building" initiatives and innovative technologies are not enough. Politics is typically underplayed in development policy not only because of prohibitions on some international agencies to engage in it, but also because it is removed from the day-to-day functions of appointed bureaucrats and service delivery professionals. The report shows the inseparable links between political behavior, such as at election times, and behavior in the public sector in between elections. Processes by which leaders in government are selected and sanctioned cast a long shadow on incentives and behavioral norms in government agencies. For example, if leaders gain power by buying votes, they also tend to provide jobs to teachers as patronage and not hold them accountable for teaching. Case studies of how depoliticized and professional bureaucracies came about in developed countries, starting from the same initial conditions of patronage politics, show that the fundamental driving force was a shift in political contestation toward broad public goods. The report distils policy lessons for how apolitical organizations can leverage their independence and technical expertise to bring about the needed changes in political behavior for effective governance.

World Bank. 2016. Making Politics Work for Development: Harnessing Transparency and Citizen Engagement. Washington, DC: World Bank Group | Related blogs: Making politics work for developmentPolitics and governance: calling for evaluation of “atypical” interventions | A politically incorrect observation about political governance.

Civil servants face many challenges in serving the poor

Understanding how the civil service works is a window into the determinants of state capacity. This study goes beyond basic personnel surveys to understand the daily experiences, challenges, and motivations of the professional body of administrators who manage and execute national policy. It provides snapshots of public service life in six countries (Ethiopia, Ghana, Indonesia, Nigeria, Pakistan and the Philippines), making comparisons where possible. It documents country characteristics, the bureaucratic environment, characteristics of civil servants, productivity in the civil service, and more. Civil servants in the developing world face myriad challenges to serving the world’s poor, from limited facilities to significant political interference in their work. While there are many commonalities across service environments, the challenges they face also vary, sometimes substantially across and within countries and regions. For instance, some local governments have computer and internet access most of the time, others do not have electricity any of the time, which shows how “local” the public sector can be. As the underlying data show, homogenous stereotypes of public service life are not a good guide for policy.

Who Serves the Poor? Surveying Civil Servants in the Developing World, Daniel Rogger, World Bank Policy Research Working Paper 8051, May 2017.

Horizontal pressure from civic leaders can improve governance

Village-level political leaders remain the main government contact for citizens in many countries. However, the quality of village-level governance is very uneven, remaining patrimonial in many places. Debates on reforming patrimonial village governance have focused largely on pressure from above (superordinate leaders) or below (citizens). Can horizontal pressures from civil society leaders reform local governance in a context where neither of these mechanisms operates effectively? This study analyzes an experimental intervention in Zimbabwe intended to reduce abuse of power by village heads. The 270 study villages were randomly assigned to two variants of an intervention, one in which only village heads were trained on the framework governing village leadership, and one in which civil society leaders were trained alongside village heads. The results suggest that horizontal pressure from civil society leaders increased village heads’ knowledge of and compliance with regulated procedures, improved their management of issues, and raised citizens’ trust in their leadership. The analysis suggests the civil society leaders accomplished this by applying social pressure on village heads to abide by regulations.

Reforming Village-Level Governance via Horizontal Pressure: Evidence from an Experiment in Zimbabwe, Kate Baldwin, Shylock Muyengwa, and Eric Mvukiyehe, World Bank Policy Research Working Paper 7941, January 2017.

Improving procurement systems so smaller firms can participate

Not much is known about the link between procurement systems and outcomes such as competition and corruption levels. Using data from the World Bank’s Enterprise Surveys for 34,000 firms in 88 countries that have procurement systems data from Public Expenditure and Financial Accountability (PEFA) assessments, the analysis finds firms in countries with more transparent procurement systems, where exceptions to open competition in tendering must be explicitly justified, are more likely to participate in public procurement markets. Moreover, firms report paying fewer and smaller kickbacks to officials in countries with more transparent procurement systems, effective and independent complaint mechanisms, and more effective external auditing systems. These findings — particularly on kickbacks — pass a range of sensitivity tests. Also, better procurement systems attract smaller firms, consistent with the view that information and transactions costs for learning about bidding opportunities and fulfilling bidding requirements are more onerous for smaller firms. It is possible to make a causal argument from procurement systems to outcomes that is consistent with effects by firm size. But, arguments for reverse causation cannot easily predict stronger relationships for smaller firms. 

Deterring Kickbacks and Encouraging Entry in Public Procurement Markets:  Evidence from Firm Surveys in 88 Developing Countries, Stephen Knack, Nataliya Biletska, and Kanishka Kacker, World Bank Policy Research Working Paper 8078, May 2017.

IMPLEMENTATION
Exploring failure to implement

Why does the quality of implementation often worsen as projects expand? Four years of qualitative data was gathered for a participatory anti-poverty project in India as it scaled up from its first phase (covering 400,000 households) to its second phase (covering 800,000 households). At the village level, facilitators in the first phase used an approach that was carefully “co-produced” with its beneficiaries. Through careful groundwork and creative improvisation, facilitators incorporated the interests of multiple stakeholders on the ground while bringing beneficiaries into the project. However, as the project scaled up, participants were mobilized quickly with a homogenous and fixed script that lacked the kind of improvisation that characterized the first phase, and which failed to include diverse stakeholder interests, objectives, and voices. These differences reduced the intensity of participation and its related social impacts. Tracing these differences back at every level between the village and the capital city, the work of facilitators was embedded in a larger shift in organizational priorities within the project, which in turn was responding to a shift in the political climate. This forced the project to scale up with high numerical targets and without adequate monitoring and learning mechanisms in place, which had an adverse impact on the quality of implementation. 

On the Frontlines of Scaling-Up: A Qualitative Analysis of Implementation Challenges in a CDD Project in Rural India, Shruti Majumdar, Vijayendra Rao, and Paromita Sanyal, World Bank Policy Research Working Paper 8039, April 2017.

Small-scale health interventions are poor predictors of wider service delivery

Unsafe water and inadequate sanitation and hygiene kill over one million people a year. In Sub-Saharan Africa, most of these deaths are children under five. The current evidence on handwashing and sanitation programs finds improved health effects in small-scale researcher- or NGO-led interventions, but limited health effects for at-scale interventions tested in isolation. This work explores potential complementarities from combining sanitation and hygiene interventions. In Tanzania, one year after the three treatments and control — sanitation promotion, handwashing promotion, both interventions together, or neither — ownership of improved latrines increased from 50 to 65 percent and open defecation decreased from 23 to 11 percent in sanitation promotion-only wards. Households in handwashing promotion-only wards showed marginal improvements in hygiene awareness and handwashing related to food preparation. The combined intervention did not improve diarrhea, anemia, stunting or wasting in children. The contrast in results between small-scale, tightly controlled experiments and largescale effectiveness studies suggest the importance of unpacking the determinants of effective delivery before going to scale. The biological reasoning behind promoting sanitation and hygiene interventions is theoretically sound, but closing the gap between objectives, intervention design and delivery, particularly when working at scale, should be considered by researchers, policymakers, and implementers.

Promoting Handwashing and Sanitation: Evidence from a Large-Scale Randomized Trial in Rural Tanzania, Bertha Briceño, Aidan Coville, Sebastian Martinez, World Bank Policy Research Working Paper 7164, January 2015 | Questionnaires | Data.  

Improving public financing for service delivery and health outcomes

Results-based financing in the health sector seeks to improve health care systems and prioritize health outcomes. To better understand the role of specific mechanisms in a package of interventions, an impact evaluation in Cameroon isolated the role of explicit financial incentives as opposed to additional funding not linked to performance, as well as the separate impact of enhanced supervision and monitoring. The results show significant increases in the performance-based financing arm for some services (child and maternal vaccinations and use of modern family planning), but not others (antenatal care visits and facility-based deliveries). However, for many of those outcomes, the differences between the performance-based financing group and the additional financing group performed were insignificant. In terms of quality, performance-based financing affected the availability of essential inputs and equipment, qualified health workers, reduction in formal and informal user fees, and increased satisfaction among patients and providers. Additional financing, irrespective of whether it was linked to an incentive or not, had a clear effect in combination with reinforced supervision through performance-based financing which suggests that enhanced supervision and monitoring on their own are not sufficient to improve maternal and child health outcomes. 

Looking into the Performance-Based Financing Black Box: Evidence from an Impact Evaluation in the Health Sector in Cameroon, Damien de Walque, Paul Jacob Robyn, Hamadou Saidou, Gaston Sorgho, and Maria Steenland, Policy Research Working Paper 8162, August 2017.

Some pay-for-performance schemes do not increase coverage of targeted health services

A pay-for-performance scheme was designed to reward the collective performance of volunteer community health workers (CHW) in Rwanda. Cooperatives of CHWs received financial rewards depending on the timely reporting of health indicators in their catchment areas and on the utilization of targeted health services: child growth monitoring, antenatal care for women in the first four months of their pregnancy, in-facility deliveries, and family planning consultations. The incentivized services are provided at the health centers and the CHWs serve as a link between the communities and the health system. The intervention was evaluated by a randomized control trial that took place in 19 districts between 2010 and 2014. Comparing cooperatives under the scheme to those who received the same average financial support that was not tied to performance, the scheme was found to have no impact on utilization of targeted services, and did not change the motivation, satisfaction or behaviors of CHWs, or the way the cooperatives are run. It may be that transferring financial incentives through cooperatives is not an optimal platform for increasing individual effort by the CHWs in their respective villages. It is also possible that the reward amounts were simply too low for the CHWs to exert greater effort.

Effects of Performance Incentives for Community Health Worker Cooperatives in Rwanda, Gil Shapira, Ina Kalisa, Jeanine Condo, James Humuza, Cathy Mugeni, Denis Nkunda, and Jeanette Walldorf, World Bank Policy Research Working Paper 8059, May 2017.

UPCOMING EVENTS

All upcoming events

ANNOUNCEMENTS

Call for Abstracts for 19th Annual World Bank Conference on Land and Poverty
The Agriculture and Rural Development Research Team of the Development Research Group is organizing the 19th Annual World Bank Conference on Land and Poverty, which has steadily become the key international forum to present and discuss research on land governance, and connect with policy makers and other partners to foster innovation. The conference brings together the analytical capacity of Development Economics Vice Presidency and its research on land governance, impact evaluation and global indicators, with the global practices operational capacity to implement projects and support institutional changes via development policy lending, and together enhance the impact of our work. The call for abstracts is out. The conference will be held from March 19–23, 2018 in Washington, DC. The theme is “Land Governance in an Interconnected World.” Please submit an abstract by October 13, 2017 via Conftool (Submission Guidelines). 

World Bank and the African Economic Research Consortium (AERC) to develop a Course on Land Economics and Governance
Together with AERC and the University of Cape Town (UCT), the Agricultural and Rural Research Team of the Development Research Group at the World Bank is organizing a 6-week intensive course for African PhD level students in Economics, Agricultural Economics, and Development Economics with an interest in continuing research on a land-related topic. The course will be delivered by UCT and international land experts from the George Washington University, Hunter College, University of California Davis and the World Bank.

Date: January 7–February 11, 2018 in Cape Town. 
Contact: Klaus Deininger (kdeininger@worldbank.org)

MEDIA AND BLOGS

Measuring the ups and downs of governance

Future Development, 22 September 2017

For the past two decades, the World Governance Indicators (WGI) have contributed to informing and quantifying the consensus that good governance is a vital ingredient in development. Governance is, after all, the process by which governments are selected and replaced; it is about the policy choices they make and implement; and it is about the respect of citizens and the state for the laws and traditions that govern their interactions.  Each of these aspects of governance matters for development, and so unsurprisingly rich countries on average rank higher in the WGI than poor countries do. But this association is by no means set in stone.  For example, developing and emerging countries such as Botswana, Costa Rica, and Uruguay rank higher on Control of Corruption than do some richer economies such as Italy and Greece.

The 2017 update of the Worldwide Governance Indicators (WGI) was published today. The WGI are a set of composite indicators covering six dimensions of governance for over 200 countries over the two decades from 1996 to 2016: Voice and Accountability; Political Stability and Absence of Violence/Terrorism; Government Effectiveness; Regulatory Quality; Rule of Law; andControl of Corruption.  The WGI bring together information from over 30 different data sources, capturing the experiences and perceptions of thousands of experts and survey respondents worldwide. The data sources include well-known surveys of households and firms, as well as a variety of expert assessments produced by the private sector, nongovernment organizations, and public sector agencies. The WGI website provides interactive access to the six aggregate indicators, the data sources on which they are based, and complete documentation of the methodology.

Read the blog by Daniel Kaufmann and Aart Kraay.

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What to do when markets and governments fail poor people

IFPRI blog, 21 September 2017

How to overcome market failures was once the key question underlying development research. A primary conclusion of this research was that governments had to step in to resolve these market failures, for example by providing free public services or protecting infant industries. However, many of these interventions have themselves failed the poor people they were intended to help. At the recent IFPRI RISE Research Day, Shanta Devarajan, the Senior Director for Development Economics at the World Bank, discussed these complex issues in a keynote address and outlined several key directions for future development research.

Read the blog | Watch the video.

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Six Questions with Chris Udry

Development Impact blog, 18 September 2017

This is the first in a potential new series of posts of short interviews with development economists. Chris Udry was one of the pioneers of doing detailed fieldwork in development as a grad student and has continued to be one of the most respected leaders in the profession. While at Yale he taught David, and advised both David and Markus, and is famous for the amount of time he puts into his grad students. Most recently he has moved from Yale to Northwestern. We thought this might be a good time for him to reflect on his approach to teaching and advising, and to share his thoughts on some of the emerging issues/trends in development economics.

Read the blog by David McKenzie and Markus Goldstein.

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Global poverty revisited

VoxEU, 14 September 2017

Underlying any poverty measure, one finds some concept of individual welfare – how we decide whether one household is better off than another. Existing poverty measures tend to opt for one of two very different assumptions about what matters to people’s welfare. These are that either people do not care at all about relative income (this gives the widely used absolute measures, such as found in most developing countries and the US; see Chetty et al. 2017), or that people only care about relative income, which gives the poverty measures favoured by Eurostat and the OECD in which the poverty line is set at a constant proportion of the mean or median for that country and date. This is also incorporated in the UN’s latest Sustainable Development Goals.

Surely neither assumption can be right. People are clearly concerned about their relative incomes, which a fixed line cannot capture. But they also care about their absolute standard of living. The use of any fixed proportion of the mean or median in measuring poverty runs into a serious concern when the mean changes, such as due to economic growth. Consider what happens when all incomes grow at the same rate (leaving inequality unchanged). Any sensible measure of poverty would surely fall. That does not hold when one sets the poverty line as a constant proportion of the mean or median. This concern can be addressed by what we term ‘weakly relative measures’. These measures rise with the current mean, but not proportionately, i.e., with a positive elasticity less than unity.

In a new paper, we propose a set of what we term welfare-consistent poverty measures, and provided new global measures spanning 1990-2013 (Ravallion and Chen 2017). There are a number of differences to past measures.

Read the blog by Martin Ravallion and Shaohua Chen.

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Unbundling and targeting the business environment for firm growth

Let’s Talk Development, 12 September 2017

There are many views about how a country develops. Some view institutions as the key determinant, while others emphasize the fundamental importance of human capital. Still others highlight the importance of infrastructure, while the World Bank and other international organizations have argued for improving the overall business environment in which firms operate. Finally, a recent strand of literature has emphasized the importance of agglomeration economies as a source of long-term growth. What, however, are the relative explanatory power of these alternative, though not necessarily-mutually exclusive, views? And are their effects specific to the context such as the level of development, the sector in which a firm operates, firm size and age? Answering these questions is important because governments only have limited resources to deal with key challenges. If there are bottlenecks to a country’s development, it is important to diagnose these to provide a sounder basis for policy.

Read the blog by L. Colin Xu.

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Building cities for innovation and growth

Let’s Talk Development, 8 September 2017

Cities now drive as much as 80% of global GDP.  They also consume close to two-thirds of the world’s energy and produce over 70% of global greenhouse gas emissions. And given the sheer scale of urban growth worldwide, these numbers are only expected to increase. Not surprisingly, cities are rapidly becoming the epicenters of economic growth, spurring innovation, fortifying institutions and nurturing the social fabric of dynamic communities. Recording of session will be available toward the end of September.

Read the blog.

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In Poor Countries It Is Easier than Ever to See a Medic

Economist, 24 August, 2017

But it is still hard to find one who will make you better.
While access to primary care is expanding in many developing countries, less attention has been paid to the quality of care. This Economist article cites research by the World Bank and others demonstrating a startling deficit in the quality of care.

Read the article.

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Understanding the effects of the world’s largest workfare program

Let’s Talk Development, 22 August 2017

As the world’s largest workfare program, India’s Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGS) has attracted much attention. Yet its impacts on agriculture have been relatively neglected. A recent paper by Deininger, Nagarajan, and Singh addresses this gap by focusing on the program’s effects on agricultural productivity as well as labor market outcomes.

Read the blog by Klaus Deininger.

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International asset allocations and capital flows: the benchmark effect

All About Finance blog, 17 August 2017

As financial intermediaries tracking benchmarks grow in importance around the world, the issue of which countries belong to relevant international benchmark indexes (such as the MSCI Emerging Markets) has generated significant attention in the financial world (Financial Times, 2015). The reason is that the inclusion/exclusion of countries from widely followed benchmarks has implications for the allocation of capital across countries.

As institutional investors become more passive, they follow benchmark indexes more closely. These benchmark indexes change over time, as index providers reclassify countries, implying that investment funds have to re-allocate their portfolio among the countries they target. The capital flows generated by these portfolio re-allocations are important because worldwide open-end funds that follow a few well-known stock and bond market indexes manage around 37 trillion U.S. dollars in assets (ICI, 2016).

Read the blog by Sergio Schmukler and Tomás Williams.

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Mobility and growth in top and bottom incomes

VoxEU blog, 15 August 2017

Trends in average incomes at different points in the income distribution have become the subject of considerable popular and policy interest. At the top end of the income distribution, the work of Anthony Atkinson, Thomas Piketty, and their collaborators has drawn attention to trends in average incomes of the top 10% and 1% of the distribution (Atkinson and Piketty 2010, Atkinson et al. 2011). At the other end of the income distribution, the World Bank has promoted the concept of ‘shared prosperity’, defined as the growth rate of average incomes of those at the bottom 40% of the income distribution (World Bank 2013).

While income trends in such groups are often referred to as growth rates of the ‘rich’ or the ‘poor’, an underappreciated point is that membership in these groups is far from stable over time. When there is mobility in the income distribution, over time some of the initially poor will rise out of the bottom 40%, while others will fall from the top 60% into the bottom 40%. The same is true at the top end, with some fortunate individuals ascending into the top 10% while others drop out of this group.

Read the blog by Aart Kraay and Roy van der Weide.

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Unraveling the dynamics of agricultural input subsidies

Let’s Talk Development, 10 August 2017

Inorganic fertilizer use by smallholder farmers is one way to boost soil fertility and associated crop-yields and farm incomes. Yet fertilizer use remains the lowest where yield increase is needed the most. Per the World Development Indicator database , inorganic fertilizer use averages 154 kgs/hectare in middle-income countries, while in low-income countries it is less than one-tenth this level at 13 kgs/hectare.  What is driving this situation? And are at times fiscally expensive programs, such as government subsidies, commonly used in low income countries, the right solution?

Read the blog by Guigonan Serge Adjognon and Anuja Kar.

List of New Policy Research Working Papers
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