38435 Report on the World Bank Group Research Program Fiscal Years 2004 and 2005, and Future Directions PreparedbyDECRS Table of Contents EXECUTIVE SUMMARY ..................................................................................................................... 5 INTRODUCTION ............................................................................................................................... 11 CHAPTER 1 WORLDBANKRESEARCHACTIVITIES ANDRESOURCES . .......................................... A THERESEARCHPROGRAM, FY04ANDFY05 ...................................................................... . 13 Research Projects and Outputs.............................................................................................. 13 Overview o f the Program...................................................................................................... 14 14 The FY04-FY05 ResearchProgramby Theme ..................................................................... 17 Poverty.............................................................................................................................. 17 Human Development and Public Services........................................................................ Growth and Investment ..................................................................................................... 20 Finance.............................................................................................................................. 22 24 Infrastructure and Environment ........................................................................................ Rural Development........................................................................................................... 26 27 B. RESEARCHDISSEMINATION OUTREACH...................................................................... Trade and International Integration................................................................................. -29 Data & Research Website ................................................................................................. AND 31 32 World Bank Research Digest............................................................................................ Policy Research Working Paper Series ............................................................................ 32 33 World Bank Economic Review (WBER)......................................................................... World Bank Research E-newsletter.................................................................................. 33 World Bank Research Observer (WBRO)........................................................................ 33 ABCDE andRBCDEConferences................................................................................... 33 DEC Conferences ............................................................................................................. 34 34 PREMLecture Series ....................................................................................................... 35 Villa Borsig Workshops ................................................................................................... 35 c.RESEARCHCAPACITYBUILDING......................................................................................... Abstracts o f Current Studies ............................................................................................. 35 D RESEARCHRESOURCES........................................................................................................ . 36 36 CHAPTER2 USEOF WORLDBANKRESEARCH A.USEOFBANKRESEARCHBY OTHERRESEARCHERS:CITATIONS........................................ . ............................................................................. -43 43 B. USEOFRESEARCHINBANKANALYTICWORK .................................................................... C. THELENDING - LEARNING - KNOWLEDGE ............................................................... 47 48 Investment Climate Surveys............................................................................................. Measurement o f Poverty................................................................................................... CYCLE 48 Tracking the Flow o f Public Spending............................................................................. 48 50 Teacher and HealthWorker Absenteeism ........................................................................ Public Disclosure as an Instrument for ControllingPollution.......................................... 51 51 D. LearningfromOperations: The `DIME' Initiative Deposit Insurance inDeveloping Countries .................................................................... ............................................................. - 5 2 53 CHAPTER3. EVALUATIONOF WORLDBANKRESEARCH ............................................................... A. ORGANIZATIONOFTHEINDEPENDENTEVALUATION .......................................................... 55 B. MAINFINDINGSOFTHEINDEPENDENTEVALUATION 55 c. .......................................................... 56 RESPONSEOF THE CHIEF ECONOMIST THE WORLDBANK OF .............................................. 61 3 CHAPTER4 FUTURE A CONSULTATIONSON RESEARCH THE REGIONSAND NETWORKS . . DIRECTIONS .................................................................................................. 65 Infrastructure..................................................................................................................... WITH .............................. 65 Labor Markets................................................................................................................... 66 66 Analysis o f Fiscal Space and Fiscal Policy ...................................................................... The Informal Sector.......................................................................................................... 67 Emergence o f China and India inthe Global Marketplace............................................... 68 69 B. FUTUREDIRECTIONS THERESEARCHPROGRAM............................................................ LaggingRegions............................................................................................................... 69 THEDECRESEARCHGROUP...................................................................................... OF 70 70 Finance and Private Sector Development Growth and Macroeconomics........................................................................................... ......................................................................... 71 International Economic Integration .................................................................................. 73 Poverty: Equityand Development.................................................................................... 75 Sustainable Rural and UrbanDevelopment...................................................................... 80 81 Human Development Network......................................................................................... REGIONS,NETWORKS ANDWBI ...................................................................................... 84 Poverty Reductionand Economic Management Network................................................ 84 85 Financial and Private Sector Development Network ........................................................ Africa Region.................................................................................................................... 87 Sustainable Development Network .................................................................................. 85 85 East Asia and Pacific Region ............................................................................................ 88 Europe and Central Asia Region ...................................................................................... ......................................................................... 89 Middle East andNorthAfrica Region.............................................................................. Latin America and the Caribbean Region 89 South Asia Region............................................................................................................ 91 90 World Bank Institute......................................................................................................... 91 CONCLUSION: STEPSTOWARDS STRENGTHENINGRESEARCHMANAGEMENT ............................... 93 ANNEXES ..................................................................................................................................... 95 Annex A. Annex Tables................................................................................................... Annex Table 1.1. Expenditures on Bank Research and Other Services. FY02-FY05 .........95 Annex Table 1.2. Expenditures o f Researchby Unit.FY02-FY05 ..................................... 96 97 Annex Table 1.3. Expenditures on Research by Theme. FY02-FY05................................. 98 Annex Table 1.4. Trust Funds for ResearchbyTheme. FY02-FY05 .................................. ..................100 99 Annex Table 1.6. Research Support Budget. Allocations byUnit.FYO1-FY05 ............... 101 Annex Table 1.5. Research Support Budget Fundingby Theme. FY02-FY05 Annex Table 1.7. Research Support Budget Allocations by Project Size .......................... Annex Table 2.1. Publications and CitationRates by Institution. by Topic. 1998-2005 ...102 Annex Table 2.2. Top 10Articles inTerms o fTotal Citations. 1998-2005 ...................... 103 104 Annex Table 2.3. Top 10Articles interms o fTotal Citations. 1981-2005........................ Annex Table 2.4. Top 25 Journals that PublishedArticles by WB Staff 1998-2005. ........ 105 106 Annex Table 2.5. Citations o f World Development Reports inPeer-Reviewed Journals. 1990- ..................................................................................................................................... Annex B.ResearchProjects. FY04 and FY05 2005 107 Annex C Research Fundedby the Research Support Budget. ByUnit.FY04-FY05 ...........108 119 Annex D ResearchCapacity-Building Grants Since 1993 .. ....................................................................... .................................................... 125 Annex E. Visiting Research Fellows Program. FY04-FY06 .................................................. Annex F.Flagship Reports. Policy Research Reports and...................................................... 126 127 World Development Reports published inFY04-FY05 .......................................................... 127 4 EXECUTIVE SUMMARY This report discusses research at the World Bank duringFY04and FY05, describingthe content o f the research program and the budget for research, and reviewing its uses. A central component o f each biennial research report to the Board o f Executive Directors i s evaluation o f the services provided to a client group. The special focus this year i s the quality and relevance o f research produced by the Bank, and the report summarizes the findings o f an independent evaluation o f Bank research. The objectives o f World Bank research are to support operations, to improve the Bank's policy advice to its member countries, to broaden the understanding o f the development process, and to assist indeveloping research capacity inthe Bank's member countries. Research i s done throughout the World Bank. The bulk i s produced by the Research Group in the Development Economics Vice-Presidency (DECRG) but research i s also produced by the Regions and Networks. A sizeable amount o f research i s financed by the Research Committee. ResearchActivitiesand Resources Chapter 1 describes Bank research activities, organization and funding. The research agenda responds to the demands outlined above. It i s set through two mechanisms: the decentralized responses o f staff throughout the Bank inconjunction with their managers and answering primarily to regionalhetwork requirements, and a coordinated program o f studies by DECRGresponding to Bank-wide needs which evolves from on-going discussions with colleagues inside and outside the Bank and which tackles issues of broad interest including fundamental questions o f development. The research themes during this period are first described. Compared to the FY02-03 program, there was a move away from macro studies and towards more emphasis on the country-specific micro foundations o f growth and development. Research on the investment climate and on mechanisms o f delivering public services has been paramount, with a particular emphasis on the role o f institutions in shaping governance, on aid effectiveness and on policies to achieve the Millennium Development Goals. Research on global issues analyzed trade policy reform, particularly the Doha Round negotiations, and initiated a program on the role o f international migration indevelopment. Other research areas with important global externalities included climate change, and security and development. Last but not least, a major program o f impact evaluation has been launched, responding to the increasing importance o f improving the effectiveness o f Bank projects and assessingresults. Researchcapacity-buildingindeveloping countries i s a mechanism that strengthens development research, its dissemination to appropriate audiences and its impact on government policy. The ResearchCommittee has had an active program o f research capacity-building support for more than 15 years, and that program was reviewed in the FYOO-01 report on research to the Board o f Executive Directors. This report briefly summarizes that support and the new policy questions that have arisen and will be addressedina plannedneeds assessment. 5 Two major resource issues are discussed: the declining share o f the Bank budget allocated for research, and the appropriate allocation o f researcher time. Most demand for research comes from within the Bank itself, and the greater the Bank's activities-particularly Economic and Sector Work-the greater the demand for research (as shown in chapter 2). Yet researchhas fallen to 1.1 percent o f total Bank service expenditures-its lowest share in the last 25 years. For an institution positioning itselfas the Knowledge Bank, this decline i s not propitious. The second challenge inmanaging Bank research resources i s the appropriate balance o f researcher time across the conduct o f research, its dissemination, research capacity-building and expert assistance to operations. Only DEC's Research Group has an explicitresearchmandate, and its staff give an average o f 30 percent o f their time incross-support to operations. UsingBankResearch The majority o f Bank research has its impact through lending operations. Drawing on the existing body o f knowledge, governments and the Bank design the projects and programs that constitute the core o f Bank operations. Systematic observation and analyses o f the processes and outcomes o f those projects over countries and time increase the base o f knowledge. Research and evaluation lie at the heart o f this cycle o f lending, learning and knowledge creation, described inchapter 2. Examples o f research that have had a significant impact on research illustrate this process: poverty measurement, investment climate surveys, public expenditure tracking, public sector absenteeism, pollution disclosure and deposit insurance studies. The integration o f research in Bank operations illustrated here is typical o f a larger fact: more than 70 percent o f economic and sector (ESW) reports draw on Bank research, with an average o f more than eight research documents cited. As demonstrated inthe last research report to the Board o f Executive Directors, greater use o f research i s associated with higher ESW quality and impact. A major new approach even more directly integrates research and operations. The Development Impact Evaluation (DIME) initiative i s a Bank-wide effort to (i) increase the number o f lending projects with impact evaluation components; (ii) raise staff capacity to design and undertake such evaluations; and (iii) create a systematic process to learn from development interventions based on these evaluations. A series o f independent program evaluations are underway in education and early childhood development, health services, social protection and infkastructure. Bank research i s disseminated in the development community. Publication in a peer-reviewed journal signals that a research report i s analytically sound, and the number o f references to an article i s one measure o f its importance. Analysis for FY04-05 uncovered a significant rise in the number o f Bank research papers published inpeer-reviewed journals. And with an average o f 5.0 citations of each article, Bank research compares well with the International Monetary Fund (3.2) Brookings Institution (3.7), Centre for Economic Policy Research (4.2), Princeton University (6.0) and the National Bureau o f Economic Research (8.5). These data confirm the analytic rigor and importance o f Bank research. 6 Evaluationof Bank Research, 1998 - 2005 An independent evaluation o f World Bank research was commissionedby the Chief Economist. A panel o f four academics was asked to conduct an evaluation o f the research over 1998-2005 focusing on how research was selected, its topics, analytic quality and relevance, and how it could best serve the World Bank. In addition to receiving reports from 24 thematic experts who read a sample o f output from 186 research projects and a further 50 pieces o f nominated research, the evaluators also interviewed current and past Bank staff, policymakers and academics in developing counties. The evaluation process, the executive summary o f the evaluation report and a summary o f the Chief Economist's response are provided inchapter 3. The panel concluded that the World Bank needs a research department, and that its research i s crucial for improvingthe quality o f its development work, especially ifthe institution claims to be a Knowledge Bank. The Bank already spends too little on research and the demand for high-quality, research-based advice will grow as the need for Bank lending diminishes. The panel gives research management and staff considerable credit for continuing to produce innovative and important new research that has maintained the Bank's position as an intellectual leader among development agencies at a time when new hiring i s severely limited, and salaries have fallen rapidly relative to those inacademia. Duringthis time Bank researchers have continued to provide extensive support to colleagues in operations and regularly published in leading academic journals. The evaluators and the panel generally found Bankresearch well-targeted to important topics. They noted some outstanding work inthe Bank's portfolio. But they also felt that too higha proportiono f Bank research was "undistinguished," inthe sense that it had neither great relevance for policy nor claim to academic distinction, or that it was weak on execution and technique. These are subjective judgments, but the evaluators are distinguished development economists, and their views were similar to one another. The panel criticized the use that was made o f some research (on aid effectiveness, on globalization, growth and poverty) to proselytize on behalf o f Bank policy, often without providing a balanced view of the evidence. Itbelieves that inthese cases there was a failure o f the checks and balances separating advocacy and research. It also expressed concern that the large number o f flagship reports from throughout the Bank precludes quality control where it i s most needed. Among other recommendations were that there be more central control over consultant appointments, since some were o f insufficient quality, that more use should be made o f researchers from developing counties, that links with academia be strengthened, that web-sites should be improved and that the Bank should be more systematic in its collection, archiving, and dissemination o f data. They propose a "central statistical office" to ensure coherent and unified quality control o f data used institution-wide andbeyond. Despite the centrality o f research to the Bank's mission, the research department must continually lobby from year to year to protect basic research on development issues, especially where the payoffs are not immediately obvious. The panel believes that there would be great benefits to endowing Bank research, usinga small fraction o f the Bank's earnings. The Chief Economist's response acknowledges the report's praise for Bank research and thanks the panel for its advice on aspects o f Bank research and managementthat can be improved. Itpoints to corroborating measures that paint a generally favorable picture o f Bank research and says it finds 7 no objective evidence o f an excess of undistinguished output. (See also the citations analysis in Chapter 2 o f this report.) The response supports the panel's recommendation aimed at strengthening research quality, including reviews of large ongoing research projects and o f completed programs, wider consultation on strengthening the Chief Economist's advisory role, increased use o f impact evaluations in the Bank and other development operations via the DIME program, and continued efforts to ensure the balancedreview o f research inareas inwhich the Bank has an advocacy role. The Chief Economist agrees to revisit the objectives and scope o f Bank flagship reports-although many flagships included in the evaluation are not designated as research products. Greater central control over the quality o f research consultants i s difficult, however, as many factors shape consultant selection, including capacity-building. The response notes that to encourage research in underserved areas, Bank-wide research consultations have recently been undertaken, as well as follow-on reviews to encourage research. The panel's recommendations to strengthen outreach, including improving the visitor program and the accessibility o f the DEC website, are useful. In some cases they require more study to develop specific plans. Buildingresearch capacity through collaborative work i s important and the Chief Economist vows to increase efforts to do so, continuing the prior efforts o f the Research Committee. The ambitious recommendations on data would require endorsement from senior management. Consultations on the recommendations o f the Evaluation are proceeding withinDEC, as well as with the Research Committee. The full Evaluation Report as well as the detailed reports on some two hundredresearch products from the evaluators i s posted on the Bank's research website. The complete response o f the Chief Economist i s also included. FutureDirectionsfor BankResearch To set the Bank's research agenda, the Chief Economist meets with Operations and Network management each year. Responding to expressions o f interest generated by the research report presented to the Board o f Executive Directors in 2005, the Research Committee requested an expansion o f consultations to enhance information, transparency and accountability inthe process. These enhancements and the continuing programfor research are describedinchapter 4. A summary o f the consultations was circulated throughout the Bank, along with the six major priorities identified in the consultation process: infrastructure; labor markets; the informal sector; fiscal space and fiscal policy; the global impact o f growth inChina and India; and lagging regions. Survey papers are commissioned on some o f those topics. The final enhancement to the consultation process i s a system for monitoring and reporting on research conducted on those priorities insubsequent years. The Development Research Group (DECRG) i s the principal locus o f Bank research and the only unitwith a mandate to conduct research across regions and sectors. Its future programis presented in section 4B. A recent restructuring of the Group has aligned it with the Bank's new network structure and also with its own declining budget. The number o f DECRGresearchers has been cut and the number o f research teams reduced from seven to six. The DECRGresearch agenda i s very broad, includingongoing research inareas such as landreform, agricultural protection, governance, poverty measurement, debt, FDI, impact evaluation and the performance o f firms. Among new areas o f focus are the following: Finance and Private Sector Development research will focus on access to financial services, risk management and firm dynamics. Growth and Macroeconomics research will analyze the policy and institutional effects on growth and macroeconomic stability, 8 building on earlier work exploring the covariates o f growth. The International Economic Integration team will collect and provide public access to data on policies affecting integration. This research program will focus on the impacts of economic policies affecting international transactions on efficiency, equity, and growth. Buildingon last year's World Development Report, Equity and Development, the Poverty team will provide better data for describing inequity and research on understanding andbreakingpoverty and inequality traps. The Human Development and Public Services team will add new directions for research on employment and the functioning o f labor markets, and aid effectiveness. The new Sustainable Rural and UrbanDevelopment team will add to its program research on spatial dimensions o f development climate change and the role o f infrastructure instimulating economic development. The research program o f Regions and Networks i s tailored to their specific needs. Future research conducted inthe HDNetworkwill focus on governance-related topics, on various aspects o f health system development, measurement o f learning outcomes, labor market mobility, pension performance, leakage in safety nets. Impact evaluations across the sectors also will be conducted. PREM Network future research on economic policy and debt will investigate the links between growth and public finance, technology, labor markets, competitiveness and globalization- combining development o f general models and country case studies. On poverty reduction, PREM will focus on helping countries design more effective and prioritized strategies for shared growth and poverty reduction. In addition, a program on disaster prevention to guide investment planning will be initiated. Future research on the public sector will address issues o f taxable capacity expansion to reach revenue potential, and revenue administration reform. The Sustainable Development Network has future research plans in agriculture and rural development; environment; and infrastructure. In the latter area, SDN i s conducting innovative research in several "micro" and "macro" areas, including fiscal costs, and governance and regulatory issues, as well as impact evaluations inseveral infrastructure areas. The six Regionsalso have future research plans. The largest research program i s inLCR, attributable to strong demand by both lending staff and their country counterparts, but Africa, East Asia, South Asia, MNA and ECA also have active research programs. Finally, the World Bank Institute plans to work on governance and anticorruption issues, on strategies for the knowledge economy, on various human development issues, in particular education. Incollaboration with IEG, WBI i s also managing a project on the quality aspects o f growth. Against the backdrop o f a strong research program and continuing demand for high-quality research, measures to strengthen the management o f research are being considered. Further consultations are taking place with the regions and networks and also within DEC. Some measures can be undertaken in DEC and through a process o f consultation with the Research Committee. Otherproposalsrequire more discussionacross the Bank. 9 10 INTRODUCTION This report provides an overview o fresearchactivities at the World Bank duringFY04 and FY05. Itdescribes the researchprogram, setting out the substance ofthe projects andtheir content, andthe resource dimensions, and reviews the uses o f research. Eachbiennial Research Report to the Board evaluates a particular aspect o f research. The special focus this year is the quality and relevance of research produced by the Bank.' This report includes the summary o f an independent evaluation exercise by leading external experts in development economics covering all research publications and `flagship' reports published by Bank staff and consultants inthe past eight years. Research-which i s a crucial part o f the World Bank's ongoing process o f lending, learning, and knowledge, and an essential input to IBRD and IDA lending-is defined by the Bank as analytic work designed to produce results with wide applicability across countries or sectors, distinct from economic and sector work (ESW). In practice, it is not always easy to distinguishresearch from ESW. The Bank's analytical work i s conducted along a spectrum o f learning that ranges from narrow research issues specific to a particular country project to research exploring broad patterns and relationships only beginning to be seen as important for development processes. Along this spectrum, ESW has at times provided findings o f broad and profound importance. However, the definition that has long separated ESW from research lies in both intention and design. Research encompasses analytical work designed to produceresults with wide applicability across countries or sectors. Economic and sector work and policy studies take the product o f research and adapt it to particular projects or country settings. The Bank's research program produces outputs-publications, data, and analytical tools-that are widely used by internal and external clients inESW, policy dialogue, and technical assistance and advice. A wide range o f products has been created to serve the Bank's diverse audiences and purposes. This includesjournal articles, books andbook chapters, Policy Research Working Papers, two acclaimed international journals, World Development Reports, Policy Research Reports, `flagship reports' from the Regions andNetworks, andnumerous conferences andworkshops. The FY02-03 research report focused on the impact of research onBank operations and showed that Bank research i s used extensively in ESW: 65 percent o f the 309 ESW tasks assessed by the Quality Assurance Group used research findings, with the average ESW citing 12 research reports. The FYOO-01 research report examined research capacity building. It included a survey o f Bank-supported institutions and indicated that the Bank's catalytic role in flexible partnerships was well-directed to the needs o f beneficiary countries and regions. A survey o f policymakers in client countries was conducted for the FY98-99 research report. The 27 1high-level policymakers said they rely o n the Bank for data and analysis and regard Bank researchas objective, relevant, and o f high quality. But they asked for greater participation inBank research and greater access to its data and findings. The FY96-97 research report, using surveys o f operations staff, found that research contributes to the country dialogue, to the preparation of Economic and Sector Work, and to all phases o f the project cycle. The FY94-95 research report assessed the contribution o f Bank research to the understanding of development, primarily as reflected inthe education and research community. It found that Bank research more than adequately fulfilled this objective. 11 Since the Boarddiscussed the FY02-FY03 Report on the WorldBank Group ResearchProgram and Future Directions, important steps have been taken. First, the dissemination o f research results, which-as emphasized in a previous discussion with the Board-is essential for learning from development and for a better focus on results, has been improved. In particular, more research products are now available on the internet including a new Research Digest, and a larger number o f working papers. Second, responding to a request from the Board, consultations were held by the Chief Economist and the Research Committee with the Regions and Networks to identify research priorities and assist in supporting such studies, especially in operations. The consultations revealed that there was a significant unmet demand for research in a number o f areas. Researchers in the Bank have responded to this demand and many of the under-researched topics identified by the Regions and Networks are now being actively researched. Finally, even though the budget for research has declined, the volume o f research projects and publications has increased significantly while continuing to be o f highquality. The objective o f this document i s to report on all research activities at the Bank during FY04 and FY05, with special emphasis on their quality and relevance for Bank operations and for the development community. This report i s organized as follows. Chapter 1 describes Bank research activities, including research projects, dissemination vehicles andresearch capacity-building, as well as resources for research over FY04-05. Chapter 2 provides some quantitative measure o f the uses o f Bank research. It examines the academic influence o f Bank research by counting citations o f research publications and comparing these citations with those o f other institutions. The chapter also examines the internal use o f research, including in economic and sector work, and its contribution to the "lending-leaming-knowledge" cycle-one o f which is the recently launched Development Impact Evaluation Initiative (DIME). At the Chief Economist's request, an independent panel evaluated the quality and relevance o f research carried out by the World Bank-both inDECand inother Bank units-between 1998 and 2005. Chapter 3 describes the evaluation process and summarizes the findings o f the independent evaluation panel and the response o f the Chief Economist to these findings. Chapter 4 discusses the future directions o f research in the Bank. The first section covers the consultation process with the Regions and the Networks undertaken by the Chief Economist, the Research Committee and DECRG to better understand which areas were insufficiently researched. The second section presents a forward-looking summary o f the research program o f DECRGand o f other Bank unitswhere research i s carried out. The conclusion o f the report notes directions under consideration for further strengthening research management. The FY02-03 ResearchReport (Report No. 30110, October 5,2004) brought to the Board attention the fact that a large amount o f Bank research was done outside o f DEC. The executive summary states that "DECRG accounts for over half o f Bank research published in professional journals" and the report indicated that Regions and Networks produce more than what was expected (about 40 percent). Onthe input side, the report stated that 496 staff was engaged in research during 1998-2003-f which 65 percent (325) were located outside o f DEC (Table 2.8, p. 66). The report made clear that the distribution o f staff is an indicator o fhuman capital and,not an indicator o f resources spent on research (p. 26). On the output side, the report indicated that regions and networks accounted for 40 percent o f working papers and 43 percent o f peer-reviewed articles, while DEC accounts for 60 percent o f working papers and 57 percent o f peer-reviewed articles (Tables 2.2 p.60 and A.2 p. 81). During FY02-03, 462 policy research working papers were published, with DECRG producing 57 percent o f those, the regions 21 percent, and the networks 5 percent. The Bank published more than 1,000 articles inpeer-reviewed professional journals during FY98-03, withDECRG accounting for half o f those, the regions and networks for 18 and 16 percents, respectively, and WBI and other Bank units for 8 percent, Regarding journal articles, the report also mentions that many regional and network staff (who published inpeer-review journals) had worked inDEC(p. 27-28). 12 CHAPTER1. WORLD BANKRESEARCHACTIVITIES AND RESOURCES A. THERESEARCHPROGRAM,FY04AND FY05 World Bank research has four basic objectives: to support all aspects of the Bank's operations, 0 to improve the Bank's policy advice to its member countries, 0 to broaden the understandingo f the development process, and 0 to assist in developing research capacity inthe Bank's member countries. Research i s done throughout the World Bank under the general direction o f the Bank's Senior Vice President and Chief Economist. 0 The bulk o f the research i s conducted by the Research Group in the Development Economics Vice-presidency (DECRG), overseen by a Director and a Management Team. DECRGresearch is closely aligned withthe Bank's research priorities. DEC's activities are overseen by the Senior Vice President and Chief Economist. 0 A substantial amount o f research is financed by the Research Support Budget (RSB) overseen by the Research Committee. This Bank-wide institution, chaired by the Chief Economist, has been in operation since 1971. The Chair appoints up to 18 members who are senior staff and economists from all parts o f the Bank with a demonstrated interest in research. The Committee has three main functions: (1) it assesses and advises on requests for RSB funding; (2) it oversees evaluation o f RSB-funded research conducted by the Bank staff and others, and (3) it advises Bank research managers on areas where research i s needed (Research Committee Funding Guidelines). Policy and procedures for the use o f RSB funds are detemined by the Research Committee. DECRS i s the secretariat o f the Research Committee. 0 Finally, research i s also produced by the Regions and Networks under the Operational and Network Vice Presidents, typically overseen by Regional Chief Economists. Bank research i s financed by both internal funds, including the RSB, and external Trust funds. Research i s carried out by Bank staff in collaboration with external consultants. RSB grant recipients are especially encouraged to engage consultants from developing countries in their research. The Bank also supports capacity building initiatives in Bank member countries, mostly financed by the RSB, by financing economics education, and supporting research capacity building institutions like the AERC inAfrica, and research networks like GDN. With limited resources, the Bank's research program generates a wide range o f products that include journal articles, books and book chapters, Policy Research Working Papers, World Development Reports, Policy Research Reports, two acclaimed journals, and proceedings o f conferences and workshops. To facilitate development economics research where comparable and 13 reliable data i s not easily available, the Bank also generates and publishesresearch databases on the internet that are used by policy analysts, educators and researchers in the development research community all over the world. ResearchProjects and Outputs As shown intable 1, inFY04 and FY05, there were 617 ongoing research projects invarious Bank units. Annex B presents the complete list of these projects, categorized by theme.3 The Bank published 1264journal articles, book chapters, flagship reports, working papers and other research publications in 2004 and 2005.4 Both the number o f research projects and the number o f research publications increased by more than 20 percent compared to FY02-FY03. The remainder o f this chapter presents a brief overview o f research inthe Bank inFY04-FYOS-in DEC, inthe Regions, Networks and other departments-followed by a short synopsis ofresearch by theme. Table 1. World BankResearch-Comparative Indicators,FY02-FY03 and FY04-FY05 Number of ResearchPublications Number of ResearchProjects Theme FY02-FY03 FY04-FY 05 FY02-NO3 FY04-FY 05 Poverty 90 178 54 75 Growth & Investment 148 168 83 121 HumanDevelopment & 202 237 87 109 Public Services Finance 110 120 43 47 Infrastructure & 95 117 81 94 Environment Rural Development 82 98 74 70 Trade & International 249 346 65 101 Integration Total 976 1264 487 617 Source: DEC Overview of the Program The emphasis o f Bank research has shifted in several ways relative to the FY02-FY03 program. Considering first country-level work, there has been a move away from macroeconomic (aggregate) studies and towards more emphasis on the country-specific micro foundations o f growth and development. The aim o f this research i s to better understand poorly functioning markets and market failures, how institutions arise at micro level to cope with such failures and the implications for policy. Research programs on the investment climate and on mechanisms o f delivering public services are core components o f this work. There has also been a growing interest in the role o f institutions in shaping governance. Research continued on aid effectiveness and on policies to achieve the Millennium Development Goals. This work focused on the political economy o f development assistance, on the consistency betweenpublic expenditure programs and development goals and on "scaling up" assistance to meet the MDGs. O f these ongoing projects, 161 were projects initiated inFY04 or FY05 (The breakdownby theme i s the following: 19 new projects for poverty; 24 for growth and investment; 47 for human development and public services; 10 for finance; 21 for infrastructure and environment; 16 for rural development; and 24 for international trade and migration). The complete list ofBankresearchpublicationsin 1998-2005 is at http://econ,worldbank.ordresearch 14 Second, the Bank has long been undertaking research on global issues. Responding to the Doha Round, research addressed trade policy reform, includingthe Doha Round negotiations, the impact o f WTO and regional trade arrangements, agricultural trade, and the abolition o f the textile quotas. DEChas launcheda major research program on the role o f international migrationindevelopment. Climate change, and security and development, includingthe interactionbetween conflict and post- conflict and development, are other areas with important global externalities. This research has focused more specifically than before on low-income fragile states and has also examined new approaches to aid inpost-conflict countries. Finally, a major program o f impact evaluation has been launched, responding to the increasing importance o f improvingthe effectiveness o f Bank projects and assessingresults. The investment climate is central to the growth agenda, and recognized as fundamental for achieving the MDGs. As analyzed in the 2005 WDR, a better investment climate widens opportunities. It energizes the main sources o f growth: encourages investment, and enhances productivity. Research concentrated on generating informationthrough investment climate surveys and analyzing the microeconomic relationships between growth and industrial organization, infrastructure, governance, institutions, and financial services. This allows a better assessment o f the benefits of investment climate reforms, and of their sequencing. Studies suggest, for example, that addressing differences in access to power, transportation and curtailing bribes could explain half o f the productivity gaps o f firms in Africa relative to those in China. Leveling up Pakistan's investment climate indicators to those o f China would raise the average annual sales growth o f Pakistan firms by 8.5 percentage points, and raise the employment growth rate by 3.1 percentage points. The priority o f ongoing work i s now to measure the gains from actual policy changes. Several countries are just launching their second round o f surveys. Following firms over time and measuring actual changes inthe investment climate will enable more specific testing o f the impact o f reforms. Research has also examined the distributional impacts o f reform across different types o f firms. With the informal sector accounting for the majority o f employment and even GDP in many developing countries, understanding the dynamics within this sector i s essential. The costs associated with regulatory burdens, bribes, weak property rights, poor infrastructure, and access to finance are up to a third higher for smaller firms than for larger or foreign firms. Inresponse, many small firms rationally decide to remain informal. Likewise formality often fails to bring expected benefits. To encourage formality and firm growth, policies must address the relative costs and benefits o f remaining informal. Public Service Delivery. Past research on public services was often constrained to use only data on spending, but led to the empirical insight that there i s little statistical relationship between overall public spending and outcomes in sectors such as education and health. The research focus widened in the 1990s when new work began to examine governance issues in countries that were decentralizing and privatizing service provision. The research showed weak incentives and accountability for the delivery o f vital services. The FY04-05 researchprogram strengthened this work by developing school and clinic-based surveys o f providers and users o f public services and applied these inmany countries. Buildingon previous research, the 2004 WDR drew much-needed attention to two critical issues for development: how to improve service provider behavior, especially for the poor, and how to ensure that the country's political economy allows poor people's voices to be heard. 15 Provider Behavior. Several research projects have used the frontline provider surveys to measure and understand service-delivery problems such as teacher absenteeism, the "capture" o f public funds, and the performance and quality o f medical doctors. The research primarily covers public providers, but has included some private for-profit and nonprofit service providers, such as religious NGOs. Political Economy. Even indemocracies, where politicians depend on poor people's votes, public spending often fails to deliver basic services to them. Better understanding i s needed on the conditions under which political arrangements increase or decrease accountability. One set o f studies asked whether and how decentralization improves service delivery to poor people; another looked at the effect o f different political institutions and electoral rules. A third line o f research has explored how providing information to citizens about service quality improves their ability to demand better services. The Bank organized a conference on the political economy o f service delivery in April 2004 and has initiated research on the politics o f public finance and on impact evaluation o f accountability tools (including citizen report cards and the role o f informationand the press). Progress toward the MDGs. Research on accelerating progress towards the MDGs includes improvements inpoverty data and studies on the economics o f pro-poor growth and related issues, including whether developing countries can effectively `absorb' much higher levels o f aid for the purpose o f achieving the MDGs. A team from the World Bank and the UNMillennium Project has been assisting the Ethiopian government to design a methodology for their medium term MDG- focused forecasts. One o f the instruments developed for this purpose i s DEC's "Maquette for MDG Simulations" (MAMS)designed to examine capacity constraints and potential policy tradeoffs. Trade Policy Reform. Turning to global issues, the objectives o f trade research have been to understand the choices o f policies, to measure impacts, and to analyze possible reforms. Researchers worked with UNagencies and other partners to improve and extend data on trade and protection and to develop measurement tools and methods to track the impact o f policy. Agricultural trade barriers have been the subject o f a major project. Textiles and clothing are the next most important areas, and research focuses on identifying pro-active policies to help developing countries adjust to the abolition o f quotas. Developing countries have recently become the largest users o f antidumping safeguards; case-studies and a new database on these have been produced., Research has also addressed the contribution o f services trade and trade facilitation to longer-term growth through productivity improvements. Econometric studies have examined the linkages between trade reform, productivity and growth, and have used firm-level data to explore how FDI can be attracted without creating distortions or making excessive payments to foreign investors. Research has also considered links between trade and poverty reduction, to better understandhow to boost the impact o freforms. Migration has emerged as a high-profile yet under-researched topic. DEC launched a programto better understand the role o f international migration in development. Bank-wide migration work i s coordinated through a steering committee which involves HD, FSE, PREM, and DEC and i s chaired by the Chief Economist and the PREM VP. The program includes improving the database on migration andremittances usingexisting and new householdsurveys with specific migration and remittances modules. Research has focused on quantifying the determinants o f migration and the flows o f remittances; on assessing whether migration o f skilled workers ("brain drain") i s good or bad for developing countries; on the diaspora and returning migrants; on temporary movement o f persons, including Mode IV o f the GATS, on interrelations between trade, FDIand migration; and on mechanisms to protect migrant workers from abuse and transfer their social rights (such as pensions and health benefits) between countries. 16 Conflict and Security. One out of every five people insub-Saharan Africa i s directly affected by civil war. DECRGhas undertaken substantial research on security issues, particularly civil war and crime, but pressing issues remain. Two o f these were the focus o f research: international policies towards post-conflict countries including the role of assistance and the challenge o f creating credible and inclusive government, .and understanding the roots o f violence by non-state actors, including the roles o f weak institutions, poverty, ethnic conflict and drug trafficking and efforts to combat it.. Impact Evaluation. New evaluation tools, often based on randomized trials, are becoming available for evaluating the development impact o f projects in education, health or infrastructure, and delivery mechanisms such as cash transfers. Impact Evaluation i s part o f a renewed research agenda on aid effectiveness and results, an area critical to the Bank's mission, and aims to strengthen the "Learning-Lending-Knowledge" cycle and to establish causal links between interventions and outcomes. Rigorous impact evaluations have been rare in most developing countries and, untilrecently, in World Bank programs, but this i s beginning to change. The Chief Economist has initiated a concerted effort-the Development Impact Evaluation Initiative (DIME)-to support and coordinate the impact evaluations o f Bank-financed programs. (DIME i s further discussed inChapter 2). DEChas collaborated with the HDand INFNetworks to identify a few strategic interventions to be evaluated: conditional cash transfers, school-based management, the role o f information in promoting accountability, teacher contracting schemes and slum upgrading programs. This focused approachwill enable systematic comparison o f the effectiveness o f interventions in different settings and following alternative designs (for example, private vs. public service provision). It provides a unique opportunity to identify `what works and when' and obtain robust measures o f performance to be expected from successful programs. DEC has helped to develop techniques, and i s working with operational Bank teams to evaluate programs. The FY04-FY05 Research Programby Theme This section presents a synopsis o f Bank research-in DEC as well as in the Regions, Networks and other departments-by thematic groups. Some significant publications are mentioned for each theme. The complete list o f research projects i s in Annex B. The complete list o f publications is available on the web page on evaluation on the intranet (under Units > DEC > Research Committee). Poverty The Bank produced research on several important poverty-related topics over the last two years. Household-level data were used to monitor trends in poverty and inequality (this includes the Bank's official global poverty counts). Survey and census data were combined to develop reliable "poverty maps." Several studies attempt to understand the economic and social processes which determine the extent o f poverty and inequality. Some focus on the transmission o f poverty through generations, on cultural factors andor on dimensions o f empowerment. A major theme o f many research projects has been pro-poor growth, i.e. the extent to which growth processes in different countries have differential impacts on poverty. Finally a number o f projects developed methods to assess the effectiveness o f specific poverty-reduction policies. 17 The Geography of Poverty Thisresearch produced finely disaggregated spatial profiles o fpoverty and inequality indeveloping countries, or "poverty maps.'' The methodology centers on using statistical techniques to combine census data with household survey data. The project also devoted resources to training activities (both training trainers and training technical staff) to respond to the strong interest in developing countries in acquiring the technical skills to produce poverty maps. The methodology has been extended to downstream research investigating such issues as the effect o f nutrition programs, the ex ante welfare effects o f government programs, and the links between deforestation, infrastructure, and poverty. The South Africa poverty map was usedto investigate the relationship between local inequality and crime. In Uganda, poverty mapping produced the first-ever estimates o f poverty among disabledpeople. Some 30 countries have completed or launchedpoverty mapping activities. Inmostoftheseexercisestheroleoftheprojectteamwastoprovideadviceandqualitycontrol. Elbers, Chris, Jean 0. Lanjouw, and Peter Lanjouw. 2003. "Micro-Level Estimation of Poverty and Inequality." Econonzetrica71(1 ): 355-64. Denionibynes, Gabriel, Chris Elbers, Jean 0. Lanjouw, Peter. Lanjouw, Johan. Mistiaen and Berk bzler. 2004. "Producing a Better Geographic Profile of Poverty: Methodology and Evidence from Three Developing Countries." In Anthony Shorrocks and Rolph van der Hoeven, eds., Growth, Inequality, and Poverty: Prospects for Pro-Poor Economic Development. Oxford: Oxford University Press. Impact Evaluation of Antipoverty Programs There i s growing demand for rigorous impact evaluations o f World Bank lending operations that aim to reduce poverty. This demand has presented an important research challenge, to develop methodologies that are both rigorous and applicable to the constraints routinely faced inoperational work. For example, in many instances, pre-intervention baseline data are unavailable, often because safety-net interventions have to be set up quickly in response to a macroeconomic or weather-related crisis. A study shows that it i s nonetheless possible to identify impacts by following up ex-participants over time. It spells out the conditions under which the average gains to current participants can be identified insuch settings and provides an application to a safety-net programin Argentina. The results show sizable income losses ii-om leavingthe program when it i s cut, but with partial recovery o f the losses over time. Galasso, Emanuela, and Martin Ravaliion. 2005. ``Decentralized Targeting of an Anti-Poverty Program." Journal of Public Economics 89(4): 705-27. . 2004. "Social Protection in a Crisis: Argentina's Plan Jefes y Jefas."World Bank Economic Review 18(3): 367- 99. Bourguignon, Franqois and Luiz A. Pereira da Silva, eds., The Impact of Economic Policies on Poverty arid Income Distribution: Evaluation Techniques and Tools.New York: Oxford University Press. WorldI nconieDistribution This is the most comprehensive empirical analysis to date o f inequality in the world. This study used several hundred household surveys from 120 countries to measure global inequality among individuals. It shows that inequality i s shaped by complex forces often working in different directions. The study explores the main approaches to the problem o f measuring inequality among countries and individuals, and discusses the relevant policies o f industrial countries and international organizations. Milanovic, Branko. 2005. WorldsApart. Measuring Global and InternationalInequality. PrincetonUniversity Press. 18 Microeconomics of Income Distribution Dynamics Risingreturns to education, experience, and unobserved skills have beenassociated with substantial increases in inequality in Latin America and East Asia. Using counterfactual income distributions to decompose changes inpoverty and inequality over time, a new study provides the most detailed investigation yet into the dynamics o f income distributions in the developing world. The study presents case studies for Argentina, Brazil, Colombia, Indonesia, Malaysia, Mexico, and Taiwan (China). The decompositions shed light on the respective contributions o f changes inprices; in the distribution o f education; in labor force structure; and in demographics to the evolving income distribution. The approach provides policymakers with detailed information on the forces shaping poverty and inequality, andhas been influentialbothinside and outside the Bank. Bourguignon, Franpois, Francisco Ferreira, and Nora Lustig. 2005. The Microeconomics of Income Distribution Dynamics in East Asia and Latin America. Washington, D.C.:World Bank; andOxfordUniversityPress. Rio Restudy: IntergenerationalPoverty Returning to the favelas o f Rio a generation after the first intensive survey, this descriptive study finds that education levels o f the poor have risen, and that Brazil has made great strides in providingwater and sanitation, and insome places, shelter. Physical infrastructure has been widely introduced, and i s nearly universal inmost o f the surveyed communities. While these interventions undoubtedly improve standards o f living, they cannot be fully exploited, for instance by conversion into liquidassets. This is because property values are suppressed by stigma and there i s prevalence o f the drug trade inthe favelas. Social mobility i s still low. Standards for labor market entry have risen faster than gains in education. And the poor face daunting threats-drugs, violence, and racism-that remain largely unaddressedby Bank interventions. Mercedes GonzBlezde la Rocha, ElizabethJelin, JanicePerlman,BryanRoberts,Helen Safa, andPeter Ward. 2004. "From the Marginalityofthe 1960sto the `New Poverty'ofToday: A LARR ResearchForum." Latin American Research Review 39(1). WhyAre Some Growth ProcessesMore Pro-Poor Than Others? Answering this question requires a deeper understanding o f what drives the distributional changes seen insurvey data andthe role played by initial conditions, including initial inequalities. A number o f research projects address the question from different perspectives, focusing on areas where new research appears to offer high value added. A series o f country case studies analyzed the determinants o f the rate of pro-poor growth inIndia, Indonesia and other countries, and the welfare impacts o f China's accession to the World Trade Organization. Another strand o f research has examined the important role o f social and cultural factors indetermining inequality andpoverty and access to public services by the poor. Socio-cultural factors have an important effect on the distribution o f and access to public services. Other work has tried to unpack how community-driven development-widely advocated as a pro-poor growth strategy-really works and how it i s driven by social networks andthe quality offacilitation Chen, Shaohua, and Martin Ravallion.2004. "Welfare Impacts of China's Accession to the World Trade Organization." WorldBank Economic Review 18(1): 29-57. Friedman, Jed. 2005. "Measuring Poverty Change in Indonesia, 1984-99: How Responsive I s Poverty to Growth?" In RaviKanbur andAnthonyJ. Venables, eds., Spatial Inequality and Development. NewYork: OxfordUniversityPress. Ravallion, Martin, and Gaurav Datt. 2003. "Why Has Economic Growth Been More Pro-Poor in Some States of India ThanOthers?"Journal of Development Economics 68: 381-400. 19 Growth andInvestment Research on growth and investment has focused on the investment climate, on identifying policies conducive to sustained growth and understanding the factors behind the diversity in growth performance in different countries, as well as their heterogeneous response to seemingly similar policy measures and institutional changes. Building on earlier work identifying the main policy determinants o f growth, research explores the role o f complementarity among reforms and country- specific initial conditions and institutional features in shaping the effectiveness o f policies. New research also assesses the consequences o f microeconomic distortions and constraints for aggregate performance, expanding on previous work on the firm-level effects o f regulation, infrastructure services, property rights, and the availability o f finance. The research continues to emphasize the linksbetweengrowth andpoverty alleviation, with attentionto the potentially long-livedimpacts of inequality and poverty traps as deterrents for growth and welfare. Another area o f research is concerned with the consequences o f international financial integration for aggregate stability and growth. There has also been research on governance, including on the institutional and economic factors that determine whether strife reemerges or peace i s sustained after a civil conflict. Microeconomic determinants of growth Over the last few years, the Bank has invested heavily in the collection o f survey data on the Investment Climate faced by firms in developing countries. The available information now comprises more than 70,000 firms in some 90 countries. Several comparative papers examine the impact o f different dimensions o f the investment climate on growth, innovation, productivity, and job creation. These studies allow a better understanding o f the microeconomic foundations o f growth. Their results were prominently featured in the 2005 World Development Report, A Better Investment Climatefor Everyone. Dollar, David, Mary Hallward-Driemeier, and Taye Mengistae. 2005. "Investment Climate and Firm Performance in Developing Economies."Economic Development and Cultural Change 51: 131. .2006. "Investment Climate andInternational Integration."WorldDevelopment. vol. 34(9): 1498-1516. Regulation, Institutions, and Growth The research explores the links between microeconomic regulation and macroeconomic performance. A broad array o f indicators o f regulation shows that developing countries have the harshest regulatory environments, with the exception o f taxes. These regulations hamper economic performance. Firms shift into informal markets in response to regulation, and informality i s negatively associated with long-term growth. However, better institutions mitigate, and even eliminate, the adverse impact o f regulation on informality, macroeconomic volatility, and growth, presumably by improving the quality o f regulation. Improving governance i s thus a priority in a highlyregulatedenvironment, andwhere weak governance prevails, regulation mayneedto be cut. Loayza, Norman, Luis Servtn and Ana M. Oviedo. 2005. "The Impact of Regulationon Growth and the Informal Sector: Cross-Country Evidence." In B. Guha-Khasnobis, ed., Unlocking Human Potential: Linking the Formal and Informal Sectors. Oxford University Press. Schiantarelli, Fabio. 2005. "Product Market Regulation andMacroeconomicPerformance:a Review of the Cross-Country Evidence." PolicyResearch Working Paper3770. World Bank, Washington, D.C. Inequality and Discrimination The effects o f discrimination and inequality may persist even when their immediate causes (such as legal barriers) have been removed. Low- and high-caste Indian students solved mazes with equal success when their positions were anonymous. But when caste identity was publicly revealed, the 20 performance o f low caste students dropped by 20 percent. Making public the social identity o f an individual can change that individual's behavior even when that information i s irrelevant to payoffs. Dismantling discriminatory policies against a historically oppressed social group i s no guarantee that the group will forge ahead. Hoff, Karla, and PriyankaPandey. 2006. "Discrimination, Social Identity, and Durable Inequalities." American Economic Review Papers arid Proceedings 96 (May). Growth and Poverty Few doubt the key role o f growth for sustained poverty alleviation, and research focuses on understanding the factors that determine the magnitude o f growth's poverty-reducing impact. But the link between the two can go in both directions, and new research looks for sources o f self- perpetuating poverty traps that may prevent poor countries from growing - one o f the key arguments offered for scaling up aid. However, from a macroeconomic perspective, there i s little empirical evidence ofpoverty traps arising from poor countries' limited capacity to save and invest. Kraay, Aart, and Claudio Raddatz. 2005. "Poverty Traps, Aid, and Growth." Policy Research Working Paper 3631. World Bank, Washington, D.C. Kraay, Aart. 2006. "When I s Growth Pro-Poor?Cross-country Evidence."Journal of Development Economics Capital Flows and Financial Globalization International financial integration impacts on countries' ability to access external financing and thereby undertake productive investments, as well as their opportunities to diversify riskand reduce macroeconomic instability. Until recently, however, financing to developing countries has been modest in size and has taken mostly the form o f loans. Research assesses the role o f risk and return differentials betweenindustrial and developing countries inshaping the composition o f financing. It finds that global forces, as opposed to country-specific factors, play an increasing role inthe boom inFDIto developing countries. However, access of large domestic firms to international financial markets inthe context o f rising world financial integration also has potentially adverse side-effects for smaller firms, due to the associated decline inliquidityindomestic financial markets. Albuquerque, R., Norman Loayza and Luis Semen. 2005. "World Market Integration through the Lens of Foreign Direct Investors." Journal of International Economics 66: 267-95. Kraay, Aart, Norman Loayza, Luis Semen, and Jaume Ventura. 2005. "Country Portfolios." Journal of the European EconoinicAssociation 3: 914-45. Fiscal Policy and Growth Public investment to expand the quantity and quality o f public services can make an important contribution to sustained growth. But it can also serve as a vehicle for rent-seeking, and this may become the dominant force behind investment decisions in countries with weak institutions. The evidence shows that public investment levels are observed to be substantially higher in countries that possess a deficient institutional framework - in terms o f risks o f expropriation and contract repudiation, law and order, corruption, and bureaucratic quality. Public investment i s also much higher in countries with few political checks and balances. The implication i s that efforts to increase public investment under conditions o f weak governance should be undertaken with caution. Keefer, Philip, and Stephen Knack. 2006. "Boondoggles, Rent-Seeking, and Political Checks and Balances: Public InvestmentunderUnaccountableGovernments."Review of Economics and Statistics. 21 HumanDevelopmentandPublicServices Human development and the delivery o f basic services are at the core o f the Bank's strategy o f investing in people. Research in these areas, building on the 2004 World Development Report, Making Services Work for Poor People, has focused on deepening our understanding o f the factors affecting human development in developing countries, improving the analysis o f service delivery and related political and economic institutions, and examining the effectiveness o f aid in developing countries. Using household survey data, research continued to document patterns o f human development across a wide range o f countries and population groups. Efforts have focused on developing measures o f harder-to-quantify dimensions o f human development such as learning, good health, and vulnerability. Survey data were used to examine a variety o f factors that explain demand for services, dimensions o f service quality, outcomes, and the sources o f vulnerability for different people. Using a variety o f evaluation methods, research has evaluated the impact o f programs andreforms on demand and outcomes, whether or not they are funded by the Bank. Teacher and Health WorkerAbsenteeism More resources do not necessarily improve services when service workers, such as teachers and health workers, are missing in action. Until this study, there was no systematic cross-country evidence on the extent o f worker absenteeism. Instead o f relying on official records, researchers used an innovative method o f unannounced visits to primary schools and health clinics in Bangladesh, Ecuador, India, Indonesia, Peru, Uganda, and Zambia to measure absenteeism. They found that 19 percent o f teachers and 35 percent o f health workers, on average, were absent from their facilities, and that within countries, absenteeism i s higher in poorer areas than in wealthier areas. Follow-up research i s exploring ways to reduce absence, such as better infrastructure quality, higher pay, and more frequent monitoring. InZambia where the HIV/AIDS epidemic has severely affected the health o f service workers and o f their families, the solution may lie in creating excess worker capacity infacilities to substitute for sick workers. Chaudhury, Nazmul et al. 2005. "Missing in Action: Teacher and Health Worker Absence in Developing Countries." Joiirnal of Econornic Perspectives 19(4). Quality of Health Care The quality o f health care i s difficult to assess but recent research in India has revealed some alarming shortcomings: about one-half o f New Delhi's doctors seem unable to recognize some common life-threatening diseases. The research uses medical cases to determine how a doctor would evaluate the symptoms presented in terms of history, examination, and treatment, and observed about 4,000 doctor-patient interactions. Similar studies are under way in Indonesia, Mexico, Paraguay, and Tanzania. In all countries, the studies found a significant gap between competence and practice. But while all doctors do less in practice than they say they would do when faced with the same patient, the doctors' effort increases with their level o f competence. Doctors who know more ask patients more questions, so greater competence also leads to better practice. The gap between competence and practice responds to incentives: doctors in the public sector spend less time per patient and conduct only 60 percent as many examinations. JishnuDas and Jeffrey Hanuner.2005. "Which doctor?Combining Vignettesand ItemResponseto MeasureClinical Competence.'' Journal of Development Economics 78: 348-83. Child Growth,Income Shocks, and GovernmentPrograms Young children in poor countries suffer from profound deficits in health, nutrition, and cognitive and socio-emotional development that have both immediate and lifelong consequences and contribute to the intergenerational transmission o f poverty and inequity. Several studies have 22 provided evidence on these linkages. Young children are among the most vulnerable to food and income shocks: increased crop damage in Ethiopia i s associated with reduced child growth, especially among children below the age o f two. In the late 1980s, Peru's economic crisis increased infant mortality, an effect partly o f declines in health services. But moderate income growth that increases household incomes and improves diets does not seem sufficient to eradicate malnutrition. Food aid has protected child growth from droughts and income shocks, with greater impact when targeted according to need. A combination o f income growth and nutrition programs for young children i s most effective. Supplementary feeding programs have yielded gains in some countries, but the evidence i s limitedwhen such programs are implemented on a large scale. Alderman, Harold, Luc Christiaensen, and Takashi Yamano. 2005. "Child Growth, Shocks, and Food Aid in Rural Ethiopia." American Journal of Agricultural Economics87: 273288. Christina Paxson and Norbert Schady. 2005. "Child Health and Economic Crisis in Peru." WorldBank Economic Review 19(2): 20323. Poverty and Health Methods for addressing a range o f policy and operational questions relating to inequalities in the health sector between poor and nonpoor, the factors that give rise to such inequalities, and the effects o f health programs and policies were developed and applied to data from the Vietnam LivingStandards Survey and the China HealthandNutrition Survey. InVietnam, inequalities inthe incidence o f health subsidies largely reflect the fact that richer provinces have more subsidy per capita than poorer provinces-rather than interpersonal inequalities in the amount o f subsidy captured across the income distribution. Inrural China, inequalities in health insurance coverage largely reflect the fact that less poor villages have been more likely to keep their cooperative medical system in place-rather than that the better-off within villages are more likely to be enrolled in the scheme. Wagstaff, Adam, Eddy van Doorslaer, and Naoko Watanabe. 2003. "On Decomposing the Causes of Health Sector hequalities with an Application to Malnutrition inequalities in Vietnam." Journal of Econometrics 112(1): 207- 23. Wagstaff, Adam. 2005. "Inequality Decomposition and Geographic Targeting with Applications to China and Vietnam." Health Economics 14: 649663. TheEconomics of AIDS This research project focusedprimarily onprojectingthe costs andbenefits o f antiretroviral therapy inIndiaandThailand. Epidemiological projectionmodels were applied to predict the course ofthe HIV/AIDS epidemic until 2023. The projections include the rate o f new infections, the number o f years o f orphanhood, and government financing requirements. They also include the implications o f three alternative AIDS treatment financing policies for the health burden o f AIDS and total health expenditures inIndia. The lower prices o f antiretroviral therapy today, and the fact that therapy can reduce transmission by the treated patient, imply that such therapy could save healthy years o f life at a cost o fbetween $146 and $280 a year. Over, Mead, Peter Heywood, Julian Gold, Indrani Gupta, SubhashHira, and Elliot Marseille. 2004. HIV/AIDS Treatment and Preventionin India: Modeling the Cost and Consequences.Health, Nutrition, and Population Series. Washington, D.C.: World Bank. InteractionsamongHealth, Education, andEmployment in China Detailed information on physical and psychosocial health outcomes, educational attainment, and ' labor market outcomes underpins research to identify potential health risks and educational underperformance in China's poor areas. The study investigates causal or correlative processes relating to the effects o f poor health and educational underperformance on labor and economic 23 productivity. A randomized intervention providing eyeglasses to primary school students i s one example, with direct implications for a specific public program. Sargent, T., and Emily Hannum. 2005. KeepingTeachers Happy: Job Satisfaction among Primary School Teachers in RuralNorthwestChina. ComparativeEducation Review 42(2): 173-204. Yu, S., and Emily Hannum. 2006. Poverty, Health, and Schooling in China. In G. A. Postiglione, ed., Education, Strat@cation, and Social Change in China. h o n k , N.Y.:M.E. Sharpe Teacher Incentives and Local Accountability: Service Quality in Decentralized Schools School-based management and teacher compensation reforms are explored in several Latin American case studies. InChile, the National System o f Performance Assessment (SNED) offers bonuses to schools with excellent student achievement. Given these high standards, only a small share o f schools responded, and only in the third o f three applications o f the SNED did student performance improve. Nonetheless, aggregating achievement across the three SNED applications does show improvement in student performance. In response to urgent educational needs, El Salvador, Honduras and Nicaragua implemented reforms to strengthen community accountability o f teachers and schools. The reforms lowered teacher absenteeism, raised work hours and homework assigned and strengthened parent-teacher relationships. But teachers also need to be knowledgeable intheir subjects andteaching methods -- incentivesandprograms are also needed to raise teacher skills. EmilianaVegas, ed. 2005.Incentivesto Improve Teaching: Lessonsfrom Latin America. Washington, D.C.: WorldBank. Effects of UnemploymentInsurance Transition and developing countries rely heavily on public unemployment insurance (UI) systems for income support to the unemployed. Research examined the effects o f Slovenia's 1998 UI reform, which drastically cut access to unemployment benefits while improving employment services. Job-finding rose sharply a month prior to the drop in benefits and spiked when benefits were exhausted and in the following month. Post-unemployment wages were not affected, suggesting that UI recipients are not forced into lower-paying positions but searched more effectively when benefits lapsed. More effective job-search also may be attributed partly to strengthened services o f employment offices. Modest benefits-short potential duration and moderatereplacementrates-also maintain the UIfiscal balance. Milan Vodopivec. 2005. Unemployment Insurance and Duration of Unemployment : Evidence from Slovenia's Transition. World BankPolicyResearchWorkingPaper 1552, Washington, D.C. Finance Financial sector research at the Bank focuses on understanding how an effective financial system contributes to economic development and poverty reduction, and on identifying which policies work best to improve the effectiveness, stability and reach o f the financial system in developing countries. Over the last years much work has gone into answering policy questions relating to how best to regulate and supervise the financial sector in a changing environment characterized by privatization and globalization. The research continues to emphasize growth-promoting financial policies by focusing on access to finance, a crucial part o f the investment climate facing firms and households. Another area o f focus, risk management, i s important for ensuring the sustained effectiveness o f financial systems and financial stability over the longrun. 24 Bank Concentrationand Competition Drawing on results which included ten cross-country and case study papers, one o f the messages o f this project is that contrary to conventional wisdom, there are no difficult trade-offs when it comes to bank competition. Greater competition - as captured by lower entry barriers, fewer regulatory restrictions onbank activities, greater bankingfreedom, andbetter overall institutional development -isgoodfor efficiency, goodfor stability, andgoodfor firms' accessto finance. Finally,results also highlight the importance o f removing impediments to foreign entry and provide further justification for bank privatization policies. The special issue on bank concentration and competition i s an important source o f informationon this topic. Berger, Allen N.,Asli Demirguc-Kunt,Joseph Haubrich, and Ross Levine.2004. "Introduction: Bank Concentrationand Competition:An Evolutioninthe Making." SpecialIssue of the Journal of Money, Credit, and Banking 36(3): 433-53. Bank Privatization Although controversial, bank privatization usually improves bank efficiency and profitability. Gains are greater when the government relinquishes full control, when banks are privatized to strategic investors (rather than through share issues), when foreign banks are allowed to participate, and when government does not restnct banking sector competition. These results come from research evaluating the success o f bank privatization in 12 countries using panel data. The study also includes a handful o f innovative cross-country studies o f the determinants and effects o f bank privatization. The special issue on bank privatization in which these results appear is the most comprehensive source o f policy advice on when and how to privatize banks in developing countries. Clarke, George R., Robert Cull, and Mary Shirley. 2005. "Bank Privatizationin DevelopingCountries: A Summary of Lessons andFindings." SpecialIssue of the Journal ofBanking andFinance 29(8-9): 1905-30. Small and Medium Enterprises (SMEs) A large SME sector may not be the engine o f growth; to the contrary itmay reflect a poor business environment which prevents SMEs from growing. The World Bank has spent more than $10 billion on SME-related projects, and SME access to finance is a constant theme in discussions with policymakers. This study shows a positive relationship between the share o f SMEs in manufacturing and growth in GDP per capita, but no causal relationship. SMEs face higher growth obstacles than larger firms and are affected to a greater extent by them. Restrictions and market imperfections reduce firm entry, dampen competition, slow firm growth, and may lead to a larger SME sector, illustrating why a large SME sector may not be associated with faster growth. Financial development benefits small firms more, relaxing their financing constraints. The results emphasize the importance o f strengthening the business environment and leveling the playing field for all firms. Promoting financial sector development, which benefits small firms the most, i s much more effective than subsidizing SME activities. Beck, Thorsten, Asli Demirguc-Kunt, and Ross Levine. 2005. "SMEs, Growth and Poverty: Cross-Country Evidence." Journal ofEconomic Growth 10: 197-227. Beck, Thorsten,Asli Demirguc-Kunt,andVojislav Maksimovic.2005. "Financialand Legal Constraintsto FirmGrowth: Does FirmSize Matter?"Journal of Finance 60(1): 137-77. Bank Regulation and Supervision Following the Basel I1recommendations and strengthening supervisory powers may do more harm than good indeveloping countries. The latter should focus instead on strengthening the incentives and ability o f market participants to monitor and discipline financial institutions. As Basel 11i s about to be introduced inmany countries, this i s an important finding since the banking system i s 25 the core of the financial system and its effectiveness is crucial to the development agenda. These are the findings o f a multi-year research project which assembled and analyzed data on bank regulation and supervision in over 150 countries. Thus what works for advanced countries may not be best practice for developing countries. This is an important warning to policymakers and Bank staff working on supervision issues. Barth, James, GerardCaprio, and RossLevine, eds. 2006. RethinkingBank Regulation. CambridgeUniversity Press. Access to Finance InEthiopia there is less than one bank branch per 100,000 people, while in Spain there are 96. In Albania, there are four bank loans per 1,000 people, while inPoland there are 774. Data from bank regulators around the world were used to create the first cross-country database and analysis on access to and use o f banking services. Firms in countries with greater financial outreach report lower financing obstacles, suggesting that reach matters independent o f depth. Addressing serious data gaps in this area, research will continue to develop better indicators o f access to financial services, particularly for small firms and poor households, and study the impact o f access on growth and poverty alleviation. Beck, Thorsten, Asli Demirguc-Kunt, and Maria Soledad Martinez Peria. 2006. "Reaching Out: Access to and Use of Banking Services across Countries." Journal of Financial Economics. Developmentof StockExchanges An important prerequisite for increasing globalization has been the widening o f securities market activities. Research shows that firm size, growth, valuation, and exports are important determinants o f access to international equity markets, but less so for developing country firms. This suggests that firms' incentives to list in foreign markets could be reduced by improved disclosure standards and investor protection. Firms also may internationalize to lower their cost o f capital, overcome market segmentation, and access more liquid, better-diversified capital markets. Listing abroad i s associated with increased sales, valuation and return on assets though these effects diminish in subsequent years. Many firms cannot access international equity markets and must issue capital, trade, and list domestically. Thus tailoring local capital market development to these firms i s important. Research continues on the securities laws that matter for access to international markets. The LAC flagship, mither Latin American Capital Markets? drew on this study, which also was usedina project on capital market development inEast Asia. Claessens, Stijn, Daniela Klingebiel, and Sergio L. Schmukler. 2006. "Stock Market Development and Internationalization: Do EconomicFundamentals Spur Both Similarly?" Journal of Empirical Finance. Infrastructureand Environment Indoor Air Pollution Acute respiratory infections from indoor air pollutionproducedby burningwood, animal dung, and other biofuels are estimated to kill a million children in developing countries every year. Natural gas and kerosene are significantly cleaner than biomass fuels, but they are too expensive for many poor families, and improved stoves have not been accepted by most poor families. Research on indoor air pollution using the latest air monitoring technology and a national household survey in Bangladesh identified a more promising option. Varying construction materials, space configurations, cooking locations and ventilation through doors and windows provided acceptable and affordable means for poor families to affect large improvements in indoor air quality. These findings underlie a proposal to the Bangladesh government for a national action plan to reduce health damage from indoor air pollution and are also being incorporated into a program o f Non- LendingTechnical Assistance to help reduce the impact o fthis major healthrisk. 26 Dasgupta S., M. Huq M. Khaliquzzaman, K. Pandey and D. Wheeler. 2004. "Indoor Air Quality for Poor Families: EvidenceformBangladesh ." WorldBankPolicyResearchWorking Paper3393, Forthcomingin Indoor Air. Dasgupta S., M. Huq, M. Khaliquzzaman, K. Pandey and D. Wheeler. 2004. "Who Suffers from Indoor Air Pollution: Evidence fromBangladesh", World Bank Policy Research Working Paper 3428, ForthcominginHealth Policy and Planning. Truffle Fatalities and Economic Growth Indeveloping countries, traffic fatalities ranked as the 9th highest cause of death in 1990 and are expected to be the thirdby 2020. Research based on panel data for 88 countries from 1963 to 1999 indicates that traffic death rates increase with per capita income up to $8,600 (in 1985 international prices) and fall thereafter. Although fatalities-per-vehicle do decline as countries develop, that drop i s not as fast as the increase in vehicles per person at initial stages o f development. Without policies to address this imbalance, this suggests that the global road death toll will grow by approximately 66 percent between 2000 and 2020. Cropper, Maureen L., and Elizabeth Kopits. 2005. "Traffic Fatalities and Economic Growth." Accident Analysis and Prevention 37(1): 169-78. Measuring Quantity-Quality Tradeoffs in RegulatedIndustries Tradeoffs between volume and quality o f service can be highlighted inefficiency measures used in regulatory assessments. Assessments can be quite sensitive to the output indicators chosen. Where "quality" i s safety-often the case in transport-this i s a critical trade-off. In this approach, an indicator integrates outputs and quality (here, accidenvton-km). The indicator was tested in Brazil in collaboration with the regulator (ANTT),drawing on information operators were required to provide to ANTT, and on data available from the pre-"privatization" period. All private operators improved quality, but those who performed the best on the demand side also made some quality adjustments on the supply side o f their businesses. The main lessons may be that if operators are allowedto adjust quality along one dimension, they will do so ifthey need to; and regulators should make the direction o f required changes explicit inthe design o f regulatory regimes. The work has facilitated a research network betweenregions (Latin America, Brazil and FrancophoneAfrica). .Estache,Antonio, SergioPerelman, andLourdesTrujillo. 2004. "MeasuringEfficiency-QualityTradeoffs: An Applicationto Brazil's FreightRailways." RuralDevelopment An Evaluation of the Farmer Field SchoolExtensionApproach This research used three country studies (Indonesia, Peru and the Philippines) to investigate the effectiveness o f the farmer field school extension approach inimproving the knowledge o f farmers, boosting yields, and reducing pesticide use. It also assessed the fiscal sustainability and economic viability o f the approach. All studies showed that trained farmers' knowledge o f improved farming practices increased. But results from Indonesia and the Philippines showed that knowledge did not diffuse from trained farmers to other members o f their community, apparently because the information i s complex and not amenable to diffusion through informal communication. The study inIndonesiaconcludedthat there were no significant effects onyield andpesticide use attributable to the farmer field school. Results suggest that as long as the costs are as highas inthe past decade, the economic viability o f the farmer field school approach i s questionable. Anderson, Jock R., and Gershon Feder. 2004. "Agricultural Extension: Good Intentionsand HardRealities." WorldBank Research Observer 19(1): 41-60. 27 Feder, Gershon, Rink Murgai, andJaime Quizon. 2004. "The Acquisition andDiffusion ofKnowledge: The Case ofPest ManagementTraining inFarmer Field Schools, Indonesia."Journal of Agricultural Economics 55(2): 221-43. China's Liberalized Land Markets The land market debate inChina has been hamperedby lack o f reliable information on the impacts o f liberalized policies particularly in poor regions where land markets were thought to be inactive. The use o f detailed household data in recent research resulted in more reliable analysis. Even in some o f China's poorest regions, market-based land transfers (essentially through rental a transactions) induce significant efficiency gains, by allowing participation in non-farm labor markets which have higher payoffs for some. The research found that those renting in land generally have higher productivity than those renting out, yielding an overall gain in efficiency. Reduction inrental transaction costs will provide further productivity benefits. Deininger, Klaus and Songqing Jin. 2005. "The Potential of Land Rental Markets in the Process o f Economic Development:Evidencefrom China." Journal of Development Economics 78(1): 241-70. Private Sector Participation in WaterResourceManagement Although governments and the Bank have sought to implement public-private participation (PPP) in water management inthe Middle East and NorthAfrica, few relevant precedents are available. This researchproject designed a PPPprocess to fully account for technical and economic factors in capital and operations and maintenance cost recovery. The project provided farmers in Egypt's West Delta with Nile water to augment declining groundwater reserves, sustain employment opportunities, and support related sunk investment costs. The study included a concept for water delivery by a private operator and willingness-to-pay assessment o f stakeholders. The Bank used this study's findings for application in Iran, Yemen, and other countries in the region, and it has become an input into an IntegratedWater Resource Management action plan for the region. Macro-Micro Linkages of Irrigated WaterManagement Where irrigated agriculture i s important, micro-water policies affect the rest o f the economy, and macroeconomic policies may have unintended effects on irrigated agriculture. A model o f these relationships was applied to Morocco. Trade reform illustrated links from macro policies to the farm level, where water was shifted from previously protected crops. And micro policy reform reducedwater allocated to soft wheat production and sugarcane, releasing water for other crops and suggesting high supply elasticities where farmers can shift into other crops. The model also was used to examine the effects of frequent droughts and increased water transfers to urban and industrial sectors, resulting in groundwater over-pumping. The effects o f governance structure and institutional arrangements were considered including (i) removal o f domestic subsidies on inputs and outputs and using direct farm income payments instead, and (ii) allowing revenue generation and investment at the regional level. Based on the Moroccan analyses, a refined model i s being applied to other countries, includingTurkey and SouthAfrica. Roe, Terry, Ariel Dinar, Yacov Tsur, and XinshenDiao. 2005. "Feedback Links betweenEconomywide and Farm-Level Policies: Application to Irrigation Water Management in Morocco." Policy Research Working Paper 3550. World Bank,WashingtonD.C. Methodsfor Allocating Water among Competing Uses Water resource investments and flow allocation are subject to stochastic water supply patterns, which affect the performance, sustainability, and stability o f any use and investment arrangement among users o f the same source. This research develops a stochastic cooperative game theory model to demonstrate the implications o f the attitude toward risk aversion among potential users and the cost function o f the water project. The study also takes into account hierarchical and power relationships between parties (such as control and mandate) The models are applied to watersheds 28 in river basins in Bulgaria, including the Maritza Basin, to identify conditions under which cooperative allocation arrangements could yield sustainable solutions. Dinar, Ariel, Stefano Moreti, Fioravante Patrone, and Stefano Zara. 2006. "Application o f Stochastic Cooperative Game Theory inWater Resources." InRenanGoetz and Dolors Braga, eds., New Frontiers in Water Resource Economics. NewYork Springer. Climate Changeand Rural Poverty To the extent that long-term climate change marginalizes local productivity, many o f the world's poor may be the direct victims. But monitoring the impact o f climate change and natural disasters on poor rural communities i s difficult in many areas. Remote sensing continuously measures weather and its impact, so it can help to determine the influence o f climate variability on agriculture production and vegetation. The study investigates these relationships in Argentina, Brazil, Chile, Colombia, Paraguay, Uruguay, and Venezuela-using detailed ground data on economic performance and socioeconomic conditions and remote sensing from defense satellites for climate data. Household surveys provide information on farm performance across a broad range o f climates. The study measures the full net cost o f climate change, including the costs and the benefits o f adaptation. Land Policy, Land Market Reforms and TheirEffects on thePoor A comprehensive review of land policy issues and ways o f addressing them indifferent situations was undertaken. It summarized existing operational and researchexperience relating to landpolicy, conducted new research in areas where significant gaps existed (particularly on land taxation, the operation o f land markets, and the impact o f land conflict), and held regional workshops to obtain feedback, disseminate results, and discuss how these can inform policy. Findings are reported in a Policy Research Report. A research project investigates how recent property rights reforms aimed at improving the functioning o f rural factor markets in Honduras, Mexico, and Nicaragua have affected agricultural productivity and the lives o f the rural poor. It showedthat liberalization o f land markets, together with efforts to increase the security o f land tenure, had a significant and positive impact on the operation o f land markets, the ability o f the poor to obtain access to land through such markets, and the incentives for land-related investment. While significant, the impact was not, however, large enough to overcome the high levels o f inequality and inefficiency in land use present insome o f the countries studied. World Bank. 2003 Policy Research Report: Land Policies for Growth and Poverty Reduction. New York: Oxford University Press. Deininger,Klaus, andJuan SebastianChamorro.2004. "Investment andIncome Effects ofLandRegularization: The Case o fNicaragua." Agricultural Economics 30(2): 101-1 6. Deininger, Klaus, Eduardo Zegarra, and Isabel Lavadenz. 2003. "Determinants and Impacts of Rural Land Market Activity: Evidence from Nicaragua." WorldDevelopment 3l(8): 1385404. Trade and InternationalIntegration Bolstering the Casefor Agricultural TradeReforms Agricultural trade accounts for almost two-thirds o f the estimated global welfare gains from merchandise trade and subsidy reform and i s key to the Doha Development Agenda. Studies based on aggregated data miss the details needed to capture the effects o f proposed policies, whereas Bank research incorporates these critical details. It finds that improved market access would generate about 90 percent o f the gains from global agricultural reform and a sharp reduction o f agricultural tariff bindingsand domestic subsidy commitments inthe WTO. Excludingeven a small 29 percentage o f "sensitive" and "special" agricultural tariff lines may greatly reduce the gains from the Doha Round. Reforms are needed inboth developing and OECD countries. Aksoy, Ataman, and John Beghin, eds. 2004. Global Agricultural Trade and Developing Countries. Washington, D.C.: World Bank. Hoekman, Bernard and Marcel0 Olarreaga. 2004. Agricultural Tariffs or Subsidies: What's More Important for DevelopingEconomies?" WorldBank Economic Review 1S(2): 175-204. Ingco, MerlindaandJohnNash,eds. 2004. Agriculture and the WTO.Washington, D.C.:World Bank Martin, William and Kym Anderson, eds. 2006. Agricultural Trade Reform and the Doha Development Agenda, Washington, D.C.Palgrave-McMillanand World Bank. Migration: Brain Drains and Brain Gains Some 180 million people live in countries in which they were not born. Many are highly skilled. Although migrants transfer more than $200 billion a year through remittances to their home countries, the increasing mobility o f skilled workers (the so-called brain drain) has policymakers worried. Many small and isolated countries in Sub-Saharan Africa and the Caribbean suffer from massive migration o f educated workers. For example, 89 percent o f Guyanese with education degrees live outside their birthcountry, as do 85 percent o f Jamaicans and 56 percent o f Mauritians. These data come from the most comprehensive and rigorous database on brain drain to date. The study not only provides bilateral measures o f migration by skill level from 195 countries to individual OECD countries, but also presents evidence on the positive and negative development impacts o f migrationandremittances. Ozden, C., and M. Schiff, eds. 2006. International Migration, Remittances & the Brain Drain. The World Bank and PalgraveMacmillan. TradePrejerences and Dijjferential TreatmentPrograms May Not Have the DesiredEffects The erosion o f preferences following trade liberalization in OECD countries i s o f great concern to recipient countries, but in most cases i s likely to be small, although they may be significant for a few countries and products. Inthese cases "aid-for-trade" to assist adjustment may be warranted. The research also shows that developing countries that do not have preferential access to markets have more liberal trade policies than those that remain eligible. This suggests that the interests o f developing countries may be better served by full integration into the trade regime and the adoption o f nondiscriminatory trade policies by rich countries than by unilateral preferences and special and differential treatment provisions that exempt countries from WTO rules. &den, Caglar, and Eric Reinhardt. 2005. "The Perversity of Preferences: GSP and DevelopingCountry Trade Policies, 1976-2000" Journal of DevelopnzentEconomics 78(1): 1-21, Hoekman, Bernard. 2005. "Operationalizing the Concept of Policy Space in the WTO: Beyond Special and Differential Treatment," Journal of International Economic Law, 8 (2): 405-24. Hoekman, Bernardand Susan Prowse. 2005. "Economic Policy Responsesto Preference Erosion:FromTrade as Aid to Aid for Trade," PolicyResearchWorkingPaper3721, World Bank. ServicesMatterfor Trade in Goods International variations in communication and transport costs have a significant influence on trade and trade patterns. Research on this topic shows that the state o f transport and telecommunications services can affect a country's competitiveness and comparative advantage. Estimates o f the impact o f bilateral communication costs show that such costs have a disproportionate impact on trade in differentiated (higher value) products; that the quality and extent o f ICT services and Internet hosts 30 affects the volume o f trade, and that port and related maritime transport costs are a significant determinant of trade flows. This evidence has influenced current thinking on the importance o f trade facilitation and created greater awareness o f the downstream effects o f services reform. Fink, Carsten, Aaditya Mattoo and C. Neagu 2005. "Assessing the Impact of Communication Costs on International Trade," Journal of InternationalEconomics,67: 428-445. Clark, Ximena, David Dollar and Alejandro Micco. 2004. "Port Efficiency, Maritime Transport Costs and Bilateral Trade," Journal of Development Economics 75(2): 417-50. Freund, Caroline andDavidWeinhold. 2004. "The Effect ofthe Interneton International Trade," Journal of International Economics 62:171-89. The WTO, the Doha Round and Poverty The Doha Development Agenda will have mixed effects on poverty. A multicountry study combined global modeling with national, regional, and individual household data to calculate the distributional consequences o f trade reform in greater detail than has been possible previously. It finds that an "ambitious" agreement inthe DohaRound would reducepoverty. Some countries such as Brazil and China-and their poor-would make immediate gains. Others, such as Bangladesh and Mozambique?would need time and, possibly, help to achieve the projected long-term poverty reductions that a trade deal offers them. This research suggests a strong case for aid-for-trade, both to support vulnerable countries and groups duringthe initial riskperiod and to help them exploit the opportunities for longer-run gains inthe future. It also suggests that ifthe Doha Round contained a larger dose o f trade liberalization by developing countries, it would be more effective in reducing poverty. Related research on the impacts o f WTO accession for China, Russia, Vietnam and other countries identif'y the potential poverty and efficiency consequences o f liberalization for these countries. Hertel, Thomas and L. Alan Winters, eds. 2006. Poverty h the WTO: Impacts of the Doha Development Agenda. The World Bank andPalgraveMacmillan. Bhattasali, D., S. Li and W. Martin eds. 2004. China and the WTO: Accession, Policy Reforms and Poverty Reduction Strategies. WashingtonDC: World Bank. B. RESEARCHDISSEMINATION OUTREACH AND Research that is not well disseminated, both inside and outside the Bank, cannot have its full impact. Thus dissemination o f research i s intimately linkedwith impact.' Bank research covers a broadrange o f topics and geographic areas, with different implications for different audiences. The challenges indisseminating researchresults arise because o f this variety, and because o f the often- complex methods that produce researchfindings. Research often requires sophisticated analytic methods to adequately account for multiple factors and effects and the complexities o f the interactions among them and over time. By its very definition, research also has relevance beyond the project or country that i s its subject. Thus a study's findings should be conveyed to audiences across countries and regions. The potential beneficiaries may be politicians with limited time and economic training, to whom the basic issues and evidence must be concisely conveyed. But skeptical policy analysts may also be important recipients, readers who must be convinced of the validity o f the methods and the reliability o f the Dissemination was one of the issues discussed with the Board when the FY02-FY03report was presented. Itwillbe the topic ofthe next ResearchReport, to be issuedin FY08. 31 data. While resources are shifting out o f print and into electronic access, insufficient evidence exists on the effect on access in most developing countries, and particularly the most disadvantaged. These arejust some o f the challenges that underlie dissemination o f Bankresearch. The Bank has created a wide range o f products to serve those diverse audiences and purposes. Research channels and instrumentsinclude World Development Reports, Policy Research Reports, Policy Research Working Papers, two acclaimed internationaljournals, journal articles, books and book chapters, conferences and workshops, and their proceedings. We focus here on some o f the research dissemination and outreach vehicles inthe Bank. Data& ResearchWebsite Since 2005, the Data & Research Website (http://econ.worldbank.ora) has been improved and expanded, interms o f both content and functionality. Its new homepage offers clear points o f entry into the Data, Research, and Prospects websites, with quick links to major publications, databases, and other products. The Research website (httD://econ.worldbank.ordresearch) contains sections for each research program, with feature articles, research briefs, datasets, publications and conference information. The website also contains various resources for researchers around the world, including the World Bank Research E-Newsletter (monthly), the World Bank Research Digest (quarterly) and `Knowledge inDevelopment' Notes. Besides EXT, DEC accounts for the largest web traffic among all VPUs inthe Bank, with over 12 million external page views in FY06. The Data & Research website alone accounted for over 3.6 million external page views while the Research Group's websites contributed close to 1.3 million. DEChas now syndicated (via an automated daily feed) the policy research working papers series to two other websites-the Social Sciences Research Network (SSRN) and Research Papers in Economics (RePEc). Abstracts o f policy research working papers were viewed, on average, over 61,OOO'times a month inFY06. The role o f brief "reader-friendly" content i s well demonstrated by traffic to a single webpage-a synopsis o f ten years' World Development Reports-which was viewed 30,000 times inFY06. And by end-FY06, the World Bank Research E-Newsletter had over 25,000 active voluntary subscribers.* InFY06, DEC conducted a usability study; subsequently, the Data & Research homepage was redesigned. Further improvements to improve online search and presentation are now under consideration. Website: The FY06 DEC Web Report available on DEC's internalwebsite (http://dec) inJanuary 2007. PolicyResearchWorkingPaper Series This is the Bank's most widely read dissemination vehicle. The informal series disseminates the findings o f ongoing or just-completed research to allow the exchange o f ideas about development issues ina rapid (but less-than-polished) form. More than 300 papers are published annually, with some 4,100 papers published since the series inception in 1988. The series was established to encourage the exchange o f ideas on development issues and to disseminate the findings o f work in progress. A quarterly compilation o f working papers abstracts also i s distributed, indexed by topic. Website: http://econ.worldbank.ora/docsearch The papers are among the most widely downloaded economics papers from the internet. The working papers are included in the SSRN (Social Science Research Network), RePEc (Research 32 Papers in Economics) and EconLit databases. In RePEc, 6 the Policy Research Working Paper Series has consistently ranked in the top four working paper series in terms o f hits per paper. The other series comparable in popularity are those of the National Bureau o f Economic Research (NBER), American Economic Review (AER), Centre for Economic Policy Research (CEPR) and Journal o f PoliticalEconomy (JPE). World BankResearchDigest The Digest i s a newlyestablished quarterly newsletter intendedto inform development practitioners about remarkable new findings from Bank research. It features seven brief summaries o f selected research focusing on the implications for government policy and practice. It also lists recently publishedPolicy ResearchWorking Papers. Website:http://econ.worldbank.org/researchdigest World BankResearchE-newsletter The E-newsletter i s an electronic bulletin sent monthly to over 26,000 subscribers interested in World Bank research. Itprovides informationon recent research findings and publications, includes features on important topics and lists the most recent Policy Research Working Papers. Website: http://econ.worldbank.org/research newsletter. In addition, research newsletters on Finance (Interest BearingNotes) and International Trade are distributedregularly. WorldBankEconomicReview (WBER) The KBER, published three times a year by Oxford University Press, i s a scholarly, peer-reviewed economics journal designed to disseminate the findings o f World Bank-sponsored research. Although intended for readers familiar with economic theory and methods, the Review emphasizes policy and operational relevance rather than theoretical and methodological advances. Half the editorial board members are from academia and half from the Bank. Articles from Bank and non- Bank authors need not be consistent with Bank policy but need to be relevant for development policy. The World Bank Economic Review i s the most widely read scholarly economic journal in the world: 14,000 copies are published, and it i s freely distributed to more than 9,500 subscribers innon-OECD countries. InOECD countries, subscriptionsrange from $56 for individuals to $237 for print and on-line corporate access. In 2004, the WBER was among the 25 social science journals with the highest impact factor: The WBER and its sister journal, the WBRO, were rated as having the fifth and sixth highest impact factors among 19 international journals that provide some focus on development economics. Website: http://wber.oxfordioumals.org/ WorldBankResearchObserver (WBRO) The KBRO seeks to inform non-specialist readers about research being undertaken within the Bank and outside the Bank through surveys and overviews o f key issues in development policy. http://logec.repec.org/scripts/seriesstat.pl. RePEc (Research Papers in Economics) is a collaborative effort o f top research institutions and publishers in 57 countries, using a decentralized database o f working papers, $m-nal articles and software components. The journal impact factor (produced by Thomson - Instituteo f Scientific Information) i s a measure o f the frequency with which journal articles are cited. It is computed by dividing the number o f citations by the numbero farticles contained inthejournal so as to eliminate the bias stemming fromajournal's size. 33 Requiring only a minimal background ineconomic analysis, it i s intended for policymakers, project officers, journalists, and teachers and students of development economics and related disciplines. Each article in the WBRO i s peer-reviewed by three members o f the editorial board, and assessed and approved by the editorial board, which includes three to four distinguished economists from outside the Bank. The WBRO, also published by Oxford University Press, has nearly 1,500 subscribers inOECD countries and 10,000 subscribers in developing countries, who subscribe free o f charge. For others, full print and on-line subscriptions are $48 annually for individuals, $127 for academic institutions, and $189 for corporations. Website: htb://wbro.oxfordiournals.org/ ABCDE andRBCDE Conferences The Annual Bank Conference on Development Economics is an international forum on critical issues in development policy. The concept o f the ABCDE was developed in 1988 and the first conference was held at World Bank headquarters inWashington D.C inthe same year. Since then, ABCDE has become an annual event, attracting a broad audience. Since 2003, the format has changed and the World Bank organizes two ABCDE conferences every year, a global conference (ABCDE) and a regional conference (RBCDE). Past global conferences were held in Brussels (2004), Amsterdam (2005) and Tokyo (2006). The 2007 global conference will be held in Ljubliana, Slovenia. Past regional conferences were held in Bangalore (2004), Dakar (2005) and StPetersburg (2006). The next regional conference will be held in Beijing in January 2007. Conference proceedings volumes are organized around three to four major topics and contain a keynote address by an eminent researcher or policymaker. Website: hm://econ. worldbank.orrr/abcde DEC Conferences Several DEC lectures were organized-three inApril 2005, Evaluating Recipes for Development Success (Avanish Dixit); Competing in Capabilities John Sutton), and Growing Public: I s the welfare State Mortal or Exportable? (Peter Lindert); one in November 2005, Evaluating th4e Climate Change and Technology (Michael Grubb and Jae Edmonds) and one in April 2006, Paradoxes o f Accountability: Lessons from Africa (Robert Bates). DEC also or organized a large number o f specialized conferences for researchers during FY04-05, The Finance team organized four conferences inWashington, D.C.: Bank privatization (November 2003); Small and Medium Enterprises: Overcoming constraints (October 2004); Globalization and Financial Services in Emerging Economies (June 2005); and Financial Corporations in Emerging markets (March 2006). The Growth and Macroeconomics team organized the Economics o f Industrial Development Conference (November 2004, LSE, London), a Symposium on China's Economic Development (November 2005, Beijing, China), the Microeconomics o f Growth Conference (May 2006, Washington D.C, and a conference on The Growth and Welfare Effects o f Macroeconomic Volatility (Barcelona, March 2006). The International Trade team organized several conferences: Agriculture Trade Reform and the Doha Agenda: A Preliminary Research Meeting (June 2004, Washington D.C.); Agricultural Trade and (December 2004, The Hague); Tariff Preferences and their Utilization (March 2004, Geneva); Trade and Poverty (workshops inMarch 2005 inGeneva, Paris and Brussels, and April 2005, South Africa); Aid for Trade (March 2005, Yale Center for the Study o f Globalization); The WTO at 10 (June 2005, Brussels); The final steering committee meeting on the Global Trade and Financial Architecture (Toronto July 2005); Seminar on Technical Barriers to Trade and Standards Database (June 2004, Paris World Bank Office); The FifthServices Experts Meetinginconjunction 34 with the OECD (Paris, February 2005); Seminar on China's WTO Accession (Beijing, June 2004); An International Forum on Co-movements of the Economy in China with the World (Beijing, September 2004); Conference on Global Economic Analysis (Washington, June 2004); and a conference on Preference Erosion: Impact and Policy Responses (Geneva, June 2005). The Infrastructure team organized with DFID and the Delhi-based NIPFP a conference on lagging regions entitled The Geography o f Growth and Poverty in India: Implications for the 1lth Plan (Delhi, January 2006) and a regional Asian seminar with the Delhi-based Society for Development Studies on Knowledge Infrastructure: Movement towards Effective UrbanManagement and Good Governance (Mumbai, March 2005). The Rural Development team organized a major conference on Land Policies for Growth and Poverty Reduction, inthe context o f ESSD week (Washington, D.C. March 2004). PREMLectureSeries In2005 thePREMNetworkinitiatedaseriesoflectures, chairedbyDannyLeipziger, PREMVice- President, to update and broaden the knowledge o f Bank economists and other specialists on policy lessons emerging from recent or on-going academic research. The emphasis i s on the microeconomic foundations and social dimensions o f growth and poverty. The speakers are among the top intheir fields and are invitedto make provocative, policy-relevant presentations, rather than technically oriented lectures. The first lectures included Benjamin Friedman (Harvard University) on The Moral Consequences o f Economic Growth; Daron Acemoglu (MIT) on Institutions as the Fundamental Source o f Growth; Philippe Martin (Paris Sorbonne and Ecole Polytechnique) on Policy and Economic Geography: What's New?, and George Akerlof (Berkeley) on Missing Motivation inMacroeconomics. Villa BorsigWorkshops The workshop is co-financed by the Development Policy Forum for International Development (DSE), the German Ministryo f Economic Cooperation and Development, and the World Bank. An annual proceedings volume reports on presentations and discussions among approximately 60 policymakers and scholars on concepts and ideas likely to have enduring relevance for development policy. These discussions form the basis for the next World Development Report. Abstracts of CurrentStudies This compendium o f informationhas been published since 1974. Each abstract describes, for all Bank research projects active in a fiscal year, the research questions, analytical methods and findings to date. It provides the completion date, research team, reports produced, and the project supervisor's email address. An appendix lists all Bank researchreports and publications produced that year. Past abstracts have been produced in annual or biennial volumes and posted on the Bank's website [h~://econ.worldbank.org/research/abstracts], A new format for the Abstracts has been designed by DECRS. It will be web-based, withposting o f abstracts and publications as they become available. The new design will build on the complete 1998-2005 bibliography o f Bank research produced inconjunction with the evaluation (see Chapter 3), available on the web. 35 DECRGResearchHighlights 2005 The first issue o f this report was published in2006. It provides a brief account of the activities of the Bank's Development Research Group during 2005 and contains highlightsto illustrate the scope and nature o f the research and a full list o f 2005 publications. Website: http://econ.worldbank.orp;/research/hiqhliqhts2005 C. RESEARCH CAPACITYBUILDING Since the early 1990s, the Research Committee has co-financed research capacity- building programs, first in Africa, then the Middle East, and then most prominently in the transition economies. For a complete list o f research capacity-building grants, see Annex D. The Research Committee's research capacity-building program was the subject o f the FYOO-01 Report to the Board. The comprehensive survey there indicates the successthat has been achieved by the various recipient institutions. Research Capacity-Building Grants have varied from small stipends to support attendance at on- going meetings (i.e. $10,000 for LACEA, the Latin American and the Caribbean Economist Association) to grants o f nearly $1 million for NES, the New Economic School and for EERC, the Economic Education and Research Consortium inRussia and the Ukraine. The African Economic Research Consortium, AERC, was the first to seek Bank support (in 1989) and it has continued to serve as a role model for most o f the research capacity- building programs that followed. It has been firmly sustained by other donors since the mid-l990's, and has received support from the Research Committee only for special programs thereafter. Intransition countries, economic policy analysis required the whole-scale shift from central planning to market economics. The majority o f Research Committee funds have been devoted to the extensive education and capacity-building efforts required-$4.8 million for ECA and $1.2 million for China since 1993. Although LAC has received several Research Capacity-Building Grants, the region has received only $195,000. (See Annex D for a complete list). Research Capacity-Building Grants are intended to be catalytic. Support from the Research Support Budget may be maintained for several years, but project supervisors are required to provide evidence that recipients are making an effort both to reduce Bank involvement and to increase the contributions o f other donors. Although these objectives remain valid, experience suggests that programs may need to be more flexible and roles reconsidered. Much time and extensive efforts are needed to plan research capacity-building initiatives, to mobilize donors, to implement a program and to establish financial sustainability. Reaching financial independence often takes longer than originally envisaged, and some operations offices have difficulty assuming the costs o f the active participation needed for proposal development and grant monitoring. But continuing participation by the Bank's regional offices may be needed to support some level o f longer term RSB fundingneeded to send a crucial signal to other donors. The Research Committee will be considering a needs assessment for its capacity-building program inthe near future. D. RESEARCHRESOURCES Spending on research declined between FY03 and FY05 after having increasedbetween FY02 and FY03 (see Table 3). The decline i s slight at current prices but significant at constant prices- spending on research declined by 3 percent each year inbothFY04 and FY05. As shown inTable 36 2, as a share o f Bank services, research has been declining since FY03 to reach 1.1 percent -- its lowest share in25 years and half its average level duringthe 1990s [see Annex Table 1.11. * It should be noted that these figures represent expenditures on tasks that are coded as "research" (RF code) inWorld Bank accounts. Spending on research, and particularly on research outside of DEC, is understated by the data since it is well known that muchtime spent by staff doing research i s actually recorded as ESW, TA or project work in the Time Reporting System. The usual Bank definition o f research i s analytic work designed to produce results with wide applicability across countries or sectors, as distinct fkom ESW which take the product o f research and adapt it to particular projects or country settings. However, many would agree that the analytical quality o f a number o f ESW reports i s similar to that of research products-though many would disagree about exactly which reports meet these standards. To get a sense o f the understatement, we have created a category called "ESW assimilated to research:" it includes Poverty Assessments, Public Expenditure Reviews, Investment Climate Assessments, General Economy, Macroeconomics, and Growth Studies, Debt and Creditworthiness Studies, PSD, Privatization and Industrial Policy Studies, Foreign Trade, FDI, and Capital Flows Studies and reports in the categories Other Agricultural, Other Education, Other Environmental, Other Financial Sector, Other Health, Other Infkastructure, Other Poverty, Other Rural, Other Social Protection and Other Urban and excludes all other ESW report types. Using data from Business Warehouse, we then estimate how much was spent on "ESW assimilatedto research" over the period. Table 2. Expenditures on Research and "ESW Assimilated to Research," as a Share of the Bank Budget, FY02-FY05 FY02 FY03 FY04 FY05 Research inpercent of BB 1.2 % 1.3 % 1.2 % 1.1 % Economic and Sector W o r k inpercent of BB 4.7 % 5.5 % 4.9 % 4.6 % o f which E S W assimilated to Research (estimate) inpercent of BB 2.0 % est. 2.2 % est. 2.2 % est. 2.3 % est. See Annex table 1.1 for further details Notes: 1.The Bankbudget (BB) i s equivalentto "Bank Services" inBusiness Warehouse 2. "ESW assimilated to research" = Poverty Assessments, Public Expenditure Reviews, Investment Climate Assessments, General Econ.Macro/Growth Studies, Debt/Creditworthiness Studies, PSDPrivatization Studies, ForeignTrade/FDI/CapitalFlows Studies andreportsinthe categories Other Agricultural, Other Education, Other Environmental, Other Financial Sector, Other Health, Other Infrastructure, Other Poverty, Other Rural, Other SocialProtectionand Other Urban.(Expenditures on all other ESWreport types are excluded). Source: Business Warehouse * We report here on (unaudited) direct costs and use `expenditures' and `costs' interchangeably. Direct costs are based on staff time charged through the Time Reporting System to specific tasks, including other direct charges and omitting management and clerical staff time and other overhead expenses. Figures do not include budget data from other members o f the Bank group, such as IFC. Figures include research grants given to outside institutions from both Trust Fundsand the Bank's own Research Support Budget. 37 ResearchExpendituresby Sourceof Funds Table 3 shows the breakdown o f research expenditures by source o f funds. It has remained relatively stable over the past four fiscal years, with the Bank Budget (BB) covering about 50 percent o f total research expenses excluding the Bank's Research Support Budget, and Trust Funds averaging about a quarter-slightly more than the share from the RSB. The breakdown o f research expenditures inDEC by source o f funds exhibits similar patterns (Table 4). Table 3. Research Expenditures, by Source of Funds, FY02-FY05 (in$ Thousand) N O 2 N O 3 FY04 N O 5 BankBudget 13,109 15,188 15,472 14,255 RSB 6,300 6,811 6,532 6,530 TF 7,218 7,896 7,129 8,345 Total 26,626 29,895 29,133 29,131 (in percent of total) N O 2 N O 3 FY04 N O 5 BankBudget 49% 51% 53% 49% RSB 24% 23% 22% 22% TF 27% 26% 24% 29% Total 100% 100% 100% 100% Source: BusinessWarehouse Table 4. DEC Research Expenditures, by Source of Funds, FY02-FY05, (in$ Thousand) FY02 FY03 FY04 FY05 BankBudget 11,814 13,897 13,896 13,593 RSB 5,296 5,592 4,096 4'454 TF 6,532 7,100 6,453 6,536 Total 23,643 26,590 24,446 24,583 (inpercent of total) FY02 N O 3 FY04 FY05 BankBudget 50% 52% 57% 55% RSB 22% 21% 17% 18% TF 28% 27% 26% 27% Total 100% 100% 100% 100% Source: Business Warehouse ResearchExpenditures byUnit The Development Economics Vice Presidency (DEC) accounted for about 80 percent o f all Bank expenditures on research over the period, with about two-thirds o f that spending concentrated in DEC's Research Group (DECRG) [Annex Table 1.21. The regions and networks each accounted for about 5 percent o f research expenditures. The distribution o f that spending over units and across time i s variable. Inthe EAP region, spending fluctuated widely, ranging from $75,000 in FY02 to more than $1 million in FY04 and in AFR, spending rose four-fold to reach nearly $0.5 million in FY05. InLAC, research funding declined by more than half to $326,000, while ECA recordedno research expenditures inFY05. The smallest research spending over the two years was inSAR. Among the networks, similar shifts canbe observed. ESSD ledthe networks infinancing research in FY02, but INT investment in research rose rapidly to reach $1 million in FY05 and 38 HDNsignificantly increased its research inFY04. Research expenditures recorded by FSE, PRM and PSD, however, were negligible. WBI research spending declined to $154,000 in FY05 from over $200,000 inFY02. Research Expenditures by Theme Expenditures are presented in figure 1 in the mandatory thematic classification introduced by the Bank (see Annex Table 1.3, also tables inAnnexes A and B).The theme and sector coding system was released on July 5, 2002 in SAP R/3 and BW inresponse to shareholder recommendations for standard reporting and, according to OPCS guidelines, provides the basis for analyzing and reporting on the content o f Bank activities. 9 Theme and sector codes are assigned to lending operations, research, economic and sector work, and activities that directly serve the Bank's external clients but not activities that serve the Bank's internal needs-e.g., quality assurance, country assistancestrategies, staff training, etc. The new thematic and sectoral classification precludes project counts by theme since projects can be classified across up to five themes and sectors. The mandatory classification i s not comparable to the classification used inChapter 1, where research activities are catalogued into seven mutually exclusive groups (poverty; growth and investment; human development and public services; finance; infrastructure and environment; rural development; trade and international integration), Even if a network spends little on research, this does not mean that the Bank i s not conducting research on the area concerned. For example, in FY02-FY05, despite the small share o f PREM in total research spending, economic management was the main theme in term o f total research expenditures, with most o f the research on that theme being conducted inDEC. As shown infigure 1, economic management," trade and integration, and finance account for the largest spending. The larger investments in research by INF in FY04-05 are consistent with higher overall research expenses on finance and private sector development (encompassing many infrastructure issues) and those o f HDNinhuman development inthis period. Data for FYOO, the year when SAP was introduced inthe Bank, are unreliable. InFYOO, ACS staff costs were charged to particular projects (i.e. direct costs) accounting for an increase o f about 5 percent. FYOO and 01 used full cost accounting. InFY02, the Bank shifted to direct cost accounting, and staff-time reporting through TRS was de-linked from budget reporting. The concomitant pressure for staff to report time inTRS resulted in increases in staff-time reported-a rise inreporting not actual time costs, against stable reported departmental expenses. Business process realignment consolidated some categories o f activities and attempts were made to implement more accurate time and task reporting. No major accounting changes are expected to affect the reporting for the remainder o f the period. lo setoutintheOPCSwebsite,thecategory"Economic Management"includesinteralia"programsthatfocusonthe As determinants o f long-term economic growth and links between growth and poverty reduction, such as cross- country empirical work, in-depth analysis o f individual country growth experiences and outlook; sources o f growth analysis, saving, investment, productivity; evaluation o f links between development strategies and growth outcomes, such as openness and growth; analysis o f how growth affects poverty linkages with inequality and ways to enhance the pro-poor impact o f growth, but excludes sector-specific growthlprospects analysis. The category "Economic Management" also includes Economic Statistics, Modeling, and Forecasting, i.e., programs that improve economic data management and modeling tools in support o f diagnostic and analytic work. 39 Figure 1:ResearchExpendituresby Theme, FYO2-FYO5 10,000 9,000 8,000 7,000 U I 6,000 0 5,000 FY03 0FY04 H v) FY05 3 4,000 3,000 2,000 1,000 Themes Given the conversion to SAP in FYOO and change in Bank themes in FY02, it i s not possible to fully trace changes inthe Bank's research expenditures by theme since FY02. InFY02, about 15 percent o f research costs were not designated to a particular theme. Over the following three years the classifications became clearer and the share not designated dropped until only 2 percent were unclassified inFY05. Thus any increase (less than 15 percentage points) could merely result from reclassification." Only for increases greater than 15 percent and in themes where absolute spending declined, can we determine with certainty that the investment in research on that topic changed. This is the case for economic management, for which research spending declined by 15 percent innominal terms. InFY04-05,expenditures fell by more than 27 percent from their FY03 level. Research on rural development also declined. To consider other changes approximately, we compare FY04-05expenses to an FY02baseline that compensates for uncategorized studies.12 Trade and integration research spending was important, both in terms o f increase (85 percent from FY02 to FY05) and level (17 percent o f total research spending). Research expenditures on environment and natural resources rose by two thirds, to represent about 10 percent o f research funding by FY05. Spending on human development research rose by 25 percent relative to the baseline. Finally, urban development research, while receiving modest funding (little more than $1 million in FY05), more than doubled in absolute terms, rising by nearly 80 percent relative to the adjustedbaseline. l1 The shift from "unclassified" to a given theme does not constitute an actual increase in research expenditures on that theme. Since we do not know where those 15 percent should have been classified, we do not know to what extent a subsequent increase in reported expenditures on that theme reflect an actual increases rather than appropriate classification o fpreviously undesignated expenses. To offset "unassigned" expenditures, the FY02 amount were reassigned consistent with the distribution o f other expenditures (i.e. according to each category's share o f total classified expenditures).Expenses ineach category inFY05 were compared with this 'baseline' distribution. 40 Allocationof ResearchFundsfrom Trust Fundsandthe ResearchSupport Budget Some o f the changes across themes and units result from the differential allocation o f funds from the Research Support Budget and from Trust Funds. It i s difficult to discern to what extent the Bank's own research program motivates donor funding, and how frequently the Bank follows the lead o f donors. Consistency between Bank and external funding-either as a share o f a particular topic o f research or distributed across all research topics-is not necessarily an indication o f the weight o f donor funds inselecting issues o f study. Some changes are suggestive, however. Donor funding may be catalytic at times, initiating research on an issue which the Bank has not investigated, with financial support from the Bank following with a lag. In FY02, donor funding for urban development research was four times greater than Bank funding. Bank support for research in this area followed donor funding, and by FY04-FY05, donor funding accounted for less than 20 percent o f the total. A similar pattern may be emerging for research on the rule o f law. After three years inwhich donors funded about half o f this research, inFY05, Bank fundingrose significantly and donor fundingfell to less than a quarter o f the total. Insome areas, however, the small share o f donor funding suggests untapped synergies. Human development captured less than 6 percent o f total donor funding for research in FY04-05. Thus trust funds financed less than 20 percent ofBank research onthese issues. [AnnexTable 1.41 The Research Support Budget i s the third source o f research funding. It i s allocatedby the Research Committee, a consultative body comprising members from throughout the Bank which advises the Chief Economist (see page 15). The RSB averages about $7 million annually. RSB funding reflected trends similar to those o f departmental budgets: research on economic management received the largest share in FY02 - FY05, although that share declined from 50 percent to about 30 percent. InFY02-03, finance and private sector development received the second largest share o f RSB grant finds, but even at its peak, less than $1 million was allocated to research inthis area. Human development and trade and integration overtook finance and PSD in funding during FY04 and FY05. [AnnexTable 1.51 Allocation o f the Research Support Budget across units tends to echo departmental research finding. A little less than 10percent o f the total eachyear is spent bythe regions andnetworks. To encourage more proposals, since April 2006 their Bank staff time can be financed by the RSB. The share o f DEC has risen from 35 percent inFY02 to nearly 65 per cent inFY05. [Annex Table 1.61 This is consistent with DEC's shift from many smaller research project grants before FYOl to a lesser number o f large Program Grants and Chief Economist Initiatives [AnnexTable 1.71 Although the great majority o f Research Support Budget funds are distributed as research grants, about $1 million supports activities to improve the value o f Bank research and enhance research dissemination (see Annex E and the previous section). Moreover, up to 10 percent o f the RSB grants may be allocated to support external institutions buildingresearch capacity inPart I1member countries (see Annex D). One program that encompasses both capacity-building and outreach i s the Visiting Research Fellows Program, which brings both eminent scholars and, at times, promising researchers from partner countries (see Annex E). Activities intendedto enhance the value o f Bank research include periodic evaluation and continuing review o fresearch proposals. 41 CHAPTER2. USEOFWORLD BANKRESEARCH World Bank research i s directed towards multiple constituencies, both external and internal to the Bank. This Chapter surveys its external use by the academic community, its internal use in ESW and examples o f how research forms a core component o f the cycle linking Lending, Learning and Knowledge. The DIMEinitiative i s central to this interaction. A. USEOFBANKRESEARCHBY OTHERRESEARCHERS:CITATIONS This section analyzes citations o f World Bank research publications--the number o f times a published article in peer-reviewed journals by a World Bank staff or consultant is referred to or cited by other researchers. We also compare citations of research publications o f the Bank with those o f the International Monetary Fund (IMF), the National Bureau o f Economic Research (NBER), Princeton University, Centre for Economic Policy Research (CEPR), and the Brookings Institution, five institutions which produceresearchthat i s comparable to the Bank's insome respects. Citations symbolize the formal acknowledgment o f a published article as a usehl work and a significant contribution towards advancing kn~wledge.'~The total numbero f citations is a commonly used measureofthe article's importance for current research. Frequency o f citationmay depend on a number o f factors not all signifyinghighquality o f the research. Nevertheless, citation analysis offers one neutral way o f assessingthe quality o f research publications as well as their impact on the global scholarly community. The citation database used in the analysis was compiled by Thomson Scientific, a private fm that gathers and maintains data on over 10,000 scholarly journal^.'^ The dataset is generatedby searching peer-reviewed journals for articles by Bank staff and consultants published during the period 1998- 2005. Data includes all journal articles that have at least one o f the authors identified as Bank staff. The database includes the number o f articles published inpeer reviewed journals and the number o f times those articles are referred to or cited by other researchers. Publications include articles, review articles, and editorials. They exclude conference papers, notes, corrections, replies, letters, and book reviews that commonly appear injo~mals.'~Thomson's database includes the author(s) addresses. For Bank publications, the number o f countries represented i s highbecause many the co-authors o f the papers arenot US.residents. Annex Tables 2.2 and 2.3 show the list o f the ten most cited papers by World Bank authors for the 1998-2005 and 1981-2005 period, respectively. For the last eight years, the most cited paper is by Collier and Gunning, "Explaining African Economic Performance" published in 1999 in the Journal of Economic Literature. Obviously the probability o f being cited i s higher the earlier the l3 See Garfield, E. 1979. Citation Indexing: Its Theory and Application in Science, Technology, and Humanities. New York: Wiley, and Moed, H. F. 2005. Citations Analysis in Research Evaluation. Dordrecht: Springer. l4 The complete list i s available on their website htb:l/www.thomson.com under Academickbrary. Thomson Scientific covers the world's most highly cited, peer-reviewed journals in approximately 200 disciplines. l5For Princeton University, the data are limitedto topics insocial sciences. 43 publication date. But the intrinsic interest o f the paper i s also important. The most cited Bank paper for the 1981-2005 period is "A Sensitivity Analysis o f Cross-Country Growth Regressions" byLevine andRenelt, which was published only in1992. Table 1 shows that World Bank staff and consultants published their research findings in 1,700 research articles in some 400 peer-reviewed journals during 1998-2005. The number o f articles publishedinpeer-reviewed journals has been increasing from an average of 175 papers in the early 1990s (1990-95) to an average o f 220 inthe last 6 years (2000-05). The number ofjoumals inwhich staff7consultantspublishedwent up; the coverage o ftopics also widened. Table 1-PublicationsinPeer ReviewedJournalsbyBankStaff, 1990-2005 Coverage Year Publications 1 Journals Topics Countries 1990-91 279 128 28 34 1992-93 366 144 35 47 1994-95 368 158 29 42 1996-97 379 164 35 40 1998-99 380 175 35 50 2000-01 451 187 37 49 2002-03 457 195 39 63 2004-05 431 188 42 62 1998-2005 1719 420 63 93 Notes: 1. Publications include all journal articles that have at least one author identified as Bank staff or consultant 2. Number o fjournals that publishedpapers written byWorld Bank authors 3. Number o f topics (identified by Thomson Scientific Inc) covered by the research 4. Number o f countries where authors reside. Source: Thomson Scientific Inc. The Thomson database has shortcomings. On the one hand it can lead to an attribution to the World Bank o f articles that it neither financed nor encouraged. For instance, a paper by the Chief Economist and a co-author published inthe American Economic Review, cited 26 times between2002 and 2005, i s listed erroneously as a Bank paper.16 On the other hand, it omits some articles publishedby Bank staff or consultants. There are two main reasons for this. First, the database includes all persons who report an affiliation with the World Bank. Some authors do not properly identify themselves as Bank staff and, in some cases, institutional affiliation is buried inthe acknowledgement. Papers written by l6Bourguignon, Francois and Christian Momsson. 2002. "Inequality among World Citizens, 1820-1992," American EconomicReview,Vol. 92, No.4. 44 academic researchers with Bank staff as co-authors are more likely to be missing. Also not included are articles written by consultants for the Bank who identify themselves as affiliated with another institution to which they belong (e.g. university, research institute, or consulting firm). Second, the coverage o f social sciences journals by Thomson Scientific is not complete. In2004, about 70 percent o f social sciences journals were covered compared to 90 percent of science journals (Moed 2005). Informal discussions with researchers suggest that the majority o f publications in which Bank staff published is covered, butthat many are missing." The consultants who have co-authored World Bank research publications come fi-om66 developing countries and25 developed countries. 18 ComparingResearchOutputsand Citationsacross DifferentInstitutions Citation analysis can be used to compare citation rates o f World Bank research with those of selected institutions. Table 2 presents a comparison for 1998-2005, i.e., citations during 1998-2005 o fjournal articles published in 1998-2005. Comparator institutions include the International Monetary Fund (IMF), the National Bureau of Economic Research (NBER), Princeton University, Centre for Economic Policy Research (CEPR), and Brookings Institution. These institutions are well recognized for their researchprograms inapplied economics andpublications inscholarlyjournals. Table 2 and Annex Table 2.1 must be examined with caution. Firstof all, they present a comparison of citations made during 1998-2005 of journal articles published in 1998-2005. This implicitly puts articles published recently at a disadvantage. Normally an article's citations should be examined over a longperiod. Second, the comparison should not be takentoo literally since each institution has specific functions (e.g., the IMFi s specialized inmacroeconomic andmonetary issues). The table is only meant to indicate that World Bank research publications fare well in terms of citations; journals covered; countries represented by authors, etc. compared to world class institutions producing social science re~earch.'~ " For instance, thejournal Economics and Politics inwhich one of the most cited Bank article was published in 1995 (Knack and Keefer's "Institutions and Economic Performance: Cross-CounQ Tests using Alternative InstitutionalMeasures,") is not part ofthe list. 18 Thomson's database includes the author(s) addresses. For journal articles published by World Bank authors, the number of countries represented is high because many co-authors are not resident of the US. Authors from the following Part I1 countries have published for the World B a r k Algeria, Argentina, Bangladesh, Barbados, Benin, Bolivia, Botswana, Brazil, Brunei, Bulgaria, Burkina Faso, Cameroon, Chad, Chile, Colombia, Costa Rica, Cote d'Ivoire, Czech Republic, Egypt, Estonia, Ethiopia, Ghana, Guatemala, Honduras, Hong Kong, Hungary, India, Indonesia, Iran, Israel, Jamaica, Jordan, Kenya, Laos, Lebanon, Malaysia, Mali, Mexico, Morocco, Mozambique, Nepal, Nicaragua, Nigeria, Pakistan, PR China, Peru, Philippines, Poland, Republic of Georgia, Saudi Arabia, Senegal, Singapore, Slovakia, Solomon Islands, South Korea, Sri Lanka, Sudan, Tanzania, Thailand, Tunisia, Turkey, Uganda, Ukraine, Vietnam, Zambia and Zimbabwe. The Part Icountries that are represented include Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Russia, Slovenia, South Africa, Spain, Sweden, Switzerland, China (Taiwan), UnitedKingdom and UnitedStates. l9 Citations using the Thomson database differ greatly from Google Scholar citations. While Thomson i s suited for looking only at academic journals, Google is better at looking at the impact on a wider variety of publications since it also indexes books, working papers, etc. Which one is better depends on your purpose. Thomson-IS1 is more consistent and follows clearly defined rules, while the criteria followed by Google Scholar are not always clear. 45 As showninTable 2, the citationrate for the Bank(5.04) compares well with other institutions-3.19 for IMFpapers, 8.54 for NBERpapers, 6.02 for Princeton Universitypapers, 4.20 for CEPR papers, and 3.74 for Brookings Institution papers. Bank authors published in a larger number o fjournals and covered more topics than the other institutions (Table 2). The distribution o f citation rates o f Bank publications also compares well with other institutions. For example, the share o f publications with zero citations i s 34 percent for the World Bank, compared to 27 percent for the NBER(lowest) and41 percent for Brookings Institution (highest). The "percentage with more thanits own average citations" intable 2,represents the share of papers on the right side of the mean and a long left tail. For all institutions intable 2, about a quarter o f papers have citations more than the average of the institution they represent meaning that 75 percent of papers are on the left side o f the distribution, suggesting a long left tail. Table2 -ResearchOutputsandCitationRatesinFiveInstitutions,1998-2005 Institutions' WB IMF Princeton Brookings NBER University2 Institution Total No. of Publications3 1719 682 2437 1209 720 189 Cites/Publication Mean 5.04 3.19 8.54 6.02 4.20 3.74 Median 2.00 1.00 3.00 2.00 1.oo 1.oo Distribution (of publications) YOof Publicationswith Zero Cites 34% 44% 27% 34% 39% 41% YOof Publicationswith one Cite 15% 18% 13% 13% 16% 12% YOof Publicationswith morethan its own Average Cites 25% 23% 27% 25% 23% 25% YOof Publicationswith More than 50 Cites 1% 1Yo 3% 1% 1% 2% Number of JournalsCovered 420 165 259 367 127 93 Numberof TopicsCovered 63 29 41 NA 15 21 Numberof CountriesRepresentedby Authors 93 46 39 37 38 12 Number of Publicationsin Select Topics4 1111 623 2196 1111 691 158 YOof PublicationsCovered 65% 91% 90% 92% 96% 84% CiteslPublication 5.47 3.26 8.88 6.38 4.31 3.38 Notes: 1. Institutions includethe World Bank (WB), International Monetary Fund (IMF), National Bureauof Economic Research (NBER), Princeton University, Centre for Economic Policy Research (CEPR), and Brookings Institution. 2. For Princeton University, the data is limited to topics insocial sciences; 3, Publications include articles, review articles, and editorials; Publications include all those papers that have at leastone of the authors identified as Bank staff; 4. Select topics include Economics; Education; Management; Political Science & Public Administration; and Public Health & Health Care Science. Source: Thomson Scientific Inc. 46 The citation rates were also compared restricting topics to Economics; Education; Management; Political Science & Public Administration; and Public Health & Health Care Science. The reason for restricting the field is to allow a better comparison o f Bank research outputs with comparable institutions (IMF,NBER, PrincetonUniversity,Brookings Institution, CEPR) since these are the topics common to all the institutes. When the topics are restrictedto core areas of interest, the citation rates go up slightly for all institutions, except for the Brookings Institution (see Table 2). Annex Table 2.1 compares citation rates by topic categories. Economics is by far the largest topic in terms o f the number of publications in scholarlyjournals. Since these institutions are recognized for their publications inthe field o f economics, the citation rates ineconomics are higher relative to other topics. Annex tables 2.2, 2.3, 2.4 and 2.5 present respectively the top 10 publications for the periods 1998-2005 (evaluation period), 1981-2005 (all time), the top 25 journals that published articles written by World Bank staff and citations of World Development Reports inPeer-Reviewed Journals for the period 1990-2005. The WDR 1993, Investing in Health is the most cited with over 1800 citations. This publication introducedthe concept o f disability-adjusted life year (DALY), an indicator o f burden o f disease that reflects the total amount o f healthy life lost to all causes, whether from premature mortality or from some degree o f disability duringaperiod o ftime. This WDR hasbeen acknowledged byBillGatesas influencinghisdecision to createthe GatesFoundation. B. USEOFRESEARCHINBANKANALYTIC WORK Research becomes embedded in Economic and Sector Work (ESW) in many ways, including the involvement o f researchers in operational work, peer review and advice, seminars and workshops provided for operational staff, and the migration o f staff between research and operations. The FY02-03 Report on Bank Research concluded that the greater the use of research in ESW the higher the quality at entry and impact scores o f that ESW. Given this positive association, continued use o f research in ESW i s to be encouraged. To determine if ESW use o f research continues to be strong, a random sample o f 198 Economic and Sector reports for FY03-05 was drawn. All citations o f reports by Bank researchers were identified usingthe same techniques as in the 1998-2002 sample used in the previous Research Report. The results indicate that research i s quite widely used to underpin ESW. Seventy one percent of ESW draws on Bank research, with 76 percent o f the Economic Reports doing so and 68 percent o f Sector Reports. On average, there were 8 research citations per report. This suggests continuing strong use o f research inESW Table 3. Citations of Bank Research in a Sample of Bank Economic and Sector W o r k (FY03-FY05) E S W Citations Average Average Share of Total E S W Documents of citation citation in E S W ReportType Documents citing Research per E S W documents citing Research Documents document citing research research Economic Report 72 55 706 10 13 0.76 Sector Report 126 86 913 7 11 0.68 Total 198 141 1,619 8 12 0.71 Notes: CAS and PRSP reports (representing 15 percent of ESW) are not included inthis table Source: Image Bank documents; DECRSsurvey 47 C. THELENDINGLEARNINGKNOWLEDGE - - CYCLE Bank lending provides opportunities for learning about development. Key to such learning i s the evaluation o f programs in a rigorous way that isolates their effects from those o f other factors. Ex post, research thus strengthens the lending-, learning-, knowledge cycle by drawing lessons from lending operations. Ex ante, research is designed to explore the likely outcomes o f different policy options, by applying historically derived knowledge to current development challenges. This section surveys a number o f examples showing the contribution o fresearch inthis cycle. MeasurementofPoverty Without the efforts o f Bank researchers to measure poverty using income or consumption surveys, the international community's understanding o f the extent and causes o f poverty would be poorer, and its efforts to mitigate poverty and set measurable targets for progress less effective. Statistical offices in almost all developing country governments have designed and implemented household income and consumption surveys, often with help from the World Bank, that are essential tools for quantitative poverty analysis and policy. Surveys are based on nationally representative samples, and to compare consumption or income levels across countries they are adjusted for purchasing power parity (PPP).~' The World Bank's latest international poverty estimates cover almost 100 countries. With a total o f over 500 nationally representative surveys, the data cover over 90 percent o f the population inlow and middle income countries. Bank researchers put considerable effort into assuring that the data set usedreaches certain standards, but there are still problems o f comparability over time and across countries arising from problems inboth the survey data and the data on PPPs. Data have improved over time interms o f both coverage and quality, inpart because o f feedback from researchers and data users. The most recent update about poverty at the global level can be found in Chen and Ravallion, 2004.21Bank researchers have also created a user-friendly web site that allows anyone to replicate their calculations and try their own calculations under different assumptions (see http://iresearch.worldbank.org/povcalnet). InvestmentClimateSurveys The Bank's Investment Climate Surveys (ICs), launched in 2001, were designed to collect and analyze information that influences firms' decisions to invest and expand. There i s now new data on some 70,000 firms in90 countries. The data i s usednot only for benchmarking indicators across locations (countries and sub-national regions), but also for evaluating the impact o f different investment climate policies on firm performance, including growth, innovation, productivity, and job creation. Results show that microeconomic determinants o f growth are crucial for creating better opportunities and more incentives for firms to invest and expand. The ICs i s the only standardized instrument from the World Bank - and for many countries the only instrument - that enables this type o f analysis. 2o The PPP estimates currently in use are based on price data generated by the International Comparison Program (ICP) now based in the World Bank. The ICP Program now covers 140 countries and a comprehensive set of commodities. The internationally comparable lines test for the ability to purchase a basket of commodities that is roughly similar across the world. New PPP estimates are in the process of beingproduced. 21 Chen, Shaohua and Martin Ravallion. 2004. "HOW Have the World's Poorest Fared Since the Early 198Os?" World Bank ResearchObserver, Vol. 19, No.2, Fall2004, pp. 141-170. 48 Box 1. WorldDevelopment Reports as Transmission Belt betweenResearchand Operations World Development Reports (WDRs) consolidate existing knowledge on a particular aspect o f development and stimulate policy debate o n new directions for development policy. They are an important "transmission belt" synthesizing the knowledge produced by researchers and channeling new operational approaches to Bank staff. For example, the 2000/2001 WDR, which focused on poverty reduction, launched what would become the World Bank Group's corporate strategy based on the twin pillars o f investment climate and empowerment. The 2004 and 2005 WDRs discussed the implementationo f these two pillars. The WDR 2004, Making Services Work for Poor People, had a four-fold impact. First, the report has focused attention on the problem of service delivery and public-expenditure efficiency, more generally, as critical to achieving the MillenniumDevelopment Goals. Second, its analytical framework, built around the notion that improving service delivery requires strengthening the relationships o f accountability between policymakers, service providers and poor people has been applied in regional and operational activities, including several programmatic operations inAfrica and South Asia (reduction inteacher absenteeism was a trigger for a development policy credit inAndhra Pradesh, India) and inthe Indonesia CAS. Third, the WDR had an impact not just inthe Bank but also inother donor agencies, especially DFID.Finally, the WDR2004 made a strong pitch for increasing impact evaluation o f service-delivery innovations inorder to learn what to scale-up. The WDR 2005, A Better Investment Climate for Everyone, focused o n investment climate, has been well received globally. The report's strong focus on the empirical reality o f business's investment decisions, for both large and small firms, is serving well interms o f opening the eyes o f policy makers to the reforms that need to be undertaken to spur investment and growth. By early 2006, the I C s findings had been incorporated into 17 out o f 21 Country Assistance Strategy documents prepared following investment climate assessment completion. These countries include Algeria, Cambodia, Ethiopia, Guatemala, India, Kenya, Moldova, Morocco, Mozambique, Nepal, Nicaragua, Nigeria, Pakistan, Peru, Poland, Serbia & Montenegro, and Zambia. These inturn have been incorporated into numerous Poverty Reduction Support Credits (PRSCs). A few examples will illustrate the usehlness of such data. InEgypt, the Alexandria Growth Pole Project builds on the findings in the investment climate survey. The project addresses the need to reduce business licensing procedures, to increase access to land and property rights, and expand private sector participation in the management o f industrial areas and municipal assets. A panel database o f firms established to monitor the impact o f changes inpolicy shows that members o f the private sector are respondingto the changes inpolicy regimes. InAlgeria, anICsfoundthatthe accessto landisoneofthebiggesthurdlesforprivatefirms, with 37 percent o f firms spending an average o f five years in search o f land. The survey also found that land availability determined the location choice for 62 percent o f firms. The analysis o f the survey showed that inadequate titling and property rightswere key reasons for land scarcity, with less than 50 percent o f industrial land titled, and widespread corruption reported inallocation o f government land. Following these findings, the CAS recommended that supply o f land be increased by reforming industrial land markets, increasing availability o f public land for industrial uses, and reviewing the institutional setup o f industrial land development and management to increase participation o fprivate actors. InPakistan, the analysis ofinvestment climate surveys identifiedthe needto addresslabormarket regulations. In response, the government introduced wide ranging labor market reforms. Infrastructure was highlighted as an important bottleneck, with power supply losses leading to 49 average sales loss o f 5.6 percent. The efficiency o f government services was also weak, e. g. it averaged 6-7 weeks to get a new phone line. Delays in clearing customs, on average 17 days, also led to calls for better trade facilitation. The 2004 CAS Progress Report and PRSP drew on this work to call for opening new sectors to private sector competition; privatizing large public enterprises to boost efficiency; increasing public investment in infrastructure; modernizing and improvingthe administration o fregulations; and continuing reformo f labor regulations. InMalaysia, the investment climateanalysis emphasizedtheimportanceofskills andtechnology in productivity and growth. The study finds that 50 percent o f firms rate skill shortages as a top concern, with 70 percent identifying the supply o f university graduates as the chief factor behind the shortages. Relaxing skill constraints could raise sales o f an average Malaysian firm by 11 percent. The government requested follow-up technical assistance and additional analytical work to audit the "skills supply infrastructure," to review skills and technology development institutes, and to address fiscal incentives andregulatory burdens. Mozambique's investment climate data allowed the identification o f three key reasons for the poor performance o f private sector: the high cost o f finance; regulatory barriers in labor and taxes; and inadequate infrastructure. These results were presented at the annual private sector conference attended by the President, key ministers, 300 private sector participants, and donors. Inresponse, a new financial institutions law was submitted to Congress; consultations to revise labor laws were launched; a task force on VAT reimbursement was established; and commitments were made to revise telecom laws and to unbundlegovernment-managed power companies. The Bank's research on microeconomics o f growth allows a better understanding o f institutions and regulations and in relating them to firms' decisions to invest, create jobs, and expand. The Investment Climate Surveys are crucial for the generation o f such information. The findings o f these surveys have been utilized to create better opportunities and incentives for firms to invest and expand. Trackingthe Flow ofPublicSpending Policymakers in developing countries seldom have information on actual public spending at the provider or facility level or by activity. Public Expenditure Tracking Surveys (PETS), developed by Bankresearchers, track the flow o fresources through layers o f government inorder to determine how much reaches each level. Such surveys are a useful way to locate and quantify political and bureaucratic capture, leakage o f funds and problems in the deployment o f human and other resources. A typical PETS consists o f a survey o f frontline service providers (e.g., schools and clinics) and local governments (politicians and public officials) complemented by central government financial and other data. These surveys bring together data on inputs, outputs, user charges, quality, and other characteristics o f the service providing unit. The information generated from the survey i s used to improve our understanding o f the linkages among the layers o f bureaucracy, identify and improve the efficiency in the use o f public resources. PETS have sometimes also had a powerful impact on the climate o fpublic opinion. Uganda was the f i s t country to do a PETS in 1996. It compared budget allocations with spending through various tiers o f government. On average, only 13 percent o f the annual grant from central government reachedprimary schools during 1991-95, implyinga leakage o f 87 percent. Following publication o f the findings, the Ugandan government began publishingmonthly intergovernmental 50 transfers in the main newspaper and requiring primary schools to post information on receipts for all to see. This not only made information available to parent-teacher associations, but also signaled local governments that the center had resumed its oversight function. By 2001, average leakage had fallen to 18percent. Several other countries have implemented PETS in education and healthcare, including Ghana, Honduras, Papua New Guinea, Peru, Tanzania, and Zambia. Leakage o f non-wage funds was found to be a major issue in all cases. Some studies also quantified the share o f "ghosts" on payrolls. InHonduras, 5 percent o f teachers on the payroll were found to be ghosts in2000, while in healthcare, the percentage was 8 percent for general practitioners. InPapua New Guinea, a recent survey showed that 15 percent o f the teacher payroll consisted o f ghost teachers. Teacher and HealthWorker Absenteeism Developing-country governments spend 80 to 90 percent o f their recurrent education budgets on teachers-but getting teachers to show up at work i s hard. The Bank's research on absenteeism was the first to measure the absence o f teachers and health workers systematically. Instead o f relying on official records, researchers used an innovative method o f unannouncedvisits to primary schools and health clinics in Bangladesh, Ecuador, India, Indonesia, Peru, Uganda, and Zambia to measure absenteeism. This new method improved understanding o f the patterns and causes o f provider absence and allowed the benchmarking of countries and states against each other. On average, 19 percent o f teachers and 35 percent o f health workers were absent from their facilities, and o f those present, not all were actually `working'. InIndia, for example, only half the teachers present were actually teaching when the survey teams arrived. The findings o f this research were widely noted in the countries and elicited strong reactions from government officials. In Bangladesh, for example, the Ministry o f Health cracked down on absent doctors after newspaper reports highlighted the results o f the health survey describedin The Daily Star. Faced with such high absence rates in vital services, policymakers have two challenges: how to adapt education and health policy to minimize the cost o f absence, and how to reduce absence? Research i s continuing to address these questions. Preliminary analysis provides tentative guidance. The absenteeism data reveal that provider absence is higher in poorer areas, so greater attention to absenteeism and its consequences i s warranted especially there. The data also show that higher-ranking and more powerful providers, such as headmasters and doctors, are absent more often than lower-ranking ones, leading to the conclusion that the monitoringo f absence rates should not be left mainly to supervisors. One approach would be to increase local control, for example by giving local institutions such as school committees new powers; another is to encourage more surveys that monitor absence and to publicize results. Failures in "street-level" institutions and governance have received much less notice from development thinkers and policymakers than have weaknesses inmacro institutions like democracy and high-level governance. Yet, for many people, one o f the most important indicators o f their country's level o f economic and social development i s the quality o f their day-to-day transactions with those delivering public services. PublicDisclosureas an Instrumentfor ControllingPollution Environmental agencies in developing countries often face an uphill battle in regulating industrial pollution. While the agencies set standards, monitoring and enforcing compliance can be extremely difficult. Some regulators have turned to financial incentives by charging polluters for emissions. Recent experiences with pollution charges inColombia, China, Indonesia, and the Philippines have shown that they improve pollution control. Public disclosure has particular appeal in developing 51 countries, where corruption and weak enforcement have often made it difficult for regulatory institutions to control pollutionbymore conventionalmeans. An innovative public disclosureprogram inIndonesia, developed withassistance from World Bank researchers, has made significant improvements in reducing pollution. This new approach combines market-based incentives, commitment to public environmental information, and assistance to managers who are trying to improve environmental performance. The program's success has inspired similar programs in China, Colombia, India, Mexico, the Philippines, and Vietnam. All o f these programs have adopted the basic performance rating model pioneered by Indonesia. Assessments completed for pilot results in four o f these countries have indicated significant improvements inthe polluters' performance. The pilot programs have been expanded to national programs inIndonesia, the Philippines, and China. Allprograms adoptedlocallyrecognizedbenchmarks for grading performance. Inmost cases, local standards provide the criteria for acceptable performance, and I S 0 14000-type standards provide the criteria for excellent performance. The programs compare audited factory emissions reports withbenchmark standards and grade the results ina few overall categories: 1. Above-standard (significantly better than legal requirements, often intwo classes, with the highest class conforming to I S 0 14000requirements); 2. Acceptable (compliance with all legalrequirements); and 3. Below-standard (generally intwo classes: non-compliance with some requirements, but not flagrant; flagrant non-compliance). Performance categories are then assigned color codes or other graphic symbols, so that they can be easily disseminated by the media and understood by the public. The performance rating agencies maintain close communication with audited facilities throughout the process. Results suggest important gains, and that the programs have sharply reduced pollution from hundreds of factories, which had successfully resisted conventional regulation. Before the implementation o f performance rating, compliance rates were 37 percent inIndonesia, 8 percent in Philippines, 10 percent in Vietnam, 75 percent in Zhenjiang, China and 23 percent in Hohhot, China. After implementation o f performance ratings, the compliance rate increased by 24 percent in Indonesia, 50 percent in Philippines, 14 percent in Vietnam, 10 percent in Zhenjiang, China (even from the previous highbase), and 39 percent inHohhot, China. Disclosure can also promote usefullearning across firms. A good rating for one firm in a field o f competitors establishes the feasibility o f cleaner production, encouraging the other firms to invest more resources inimproving environmental performance. DepositInsuranceinDevelopingCountries Duringthe last two decades waves of systemic banking crises have affected most of the countries around the globe. These crises are costly and disruptive, particularly for developing countries. The cost o f the 1997 Asian financial crisis, for example, exceeded 30 percent o f GDP for several countries includingIndonesia, Korea, andThailand. The full cost o f these crises goes beyond direct fiscal costs to include derailed stabilization programs, growth slowdowns, unemployment, and increased poverty. In the end, tax payers are presented with a large bill for mitigating these disruptions. Untilrecently, establishing an explicit deposit insurance system was a common feature o f the policy advice given to developing countries. Between 1980 and 1996, the number of countries offering explicit deposit insurance guarantees almost tripled. But their success depends critically on the level of institutional development in the country. While the theoretical finance literature identifies alternative strategies for balancing benefits and costs, there i s little empirical 52 evidence on the impact o f various deposit insurance designs. To plug this gap, researchers analyzed the impact o f deposit insurance on bank fragility and other aspects o f financial systems. Results indicated that for many countries with undeveloped institutions, poor financial and legal systems and weak regulation and supervision, explicit deposit insurance would do more harm than good, and that poorly designed deposit-insurance arrangements tend to increase the probability of bankingcrises. For countries with weak institutions, adopting explicit deposit insurance promises, at best, to assist financial development only inthe very short run. Over longer periods, it i s more likely to undermine market discipline in a way that reduces bank solvency for countries that have installed or were in the process o f adopting explicit deposit-insurance schemes. Research also offered lessons about program design. The Bank's policy advice in many developing countries has been shaped by this research. In China, the Bank advised the authorities against rushing into adopting explicit deposit insurance. The government followed the Bank's advice and focused its energy andresources on other methods to safeguard financial markets. In Namibia, a small country with few (mostly foreign-owned) banks, the advice o f Bank staff was also to delay such a decision and focus on improving the institutional environment underpinning the financial system. The Bank has also advised Brazil, Chile, Russia, and Pakistan on this issue. D. Learningfrom Operations: The `DIME' Initiative The Development Impact Evaluation Initiative (DIME) 22 i s a Bankwide collaborative effort that aims to (i) increase the number o f Bank projects with impact evaluation components, particularly in strategic areas and themes; (ii) enhance staff ability to design and carry out evaluations; and (iii) build a process of systematic learning on development interventions based on completed evaluations. Alignment i s sought between this evaluation agenda and the Bank's research program to exploit all possible synergies. Through close collaboration among DEC, the Regions and Networks, DIME supports comparative analyses o f results as critical inputs to Bank management and policy advice. The Research Committee, Trust Funds (inparticular, the Knowledge for Change Program) and the Regions are supporting specific impact evaluations with highresearch content. Under the DIME initiative, the Bank supports the systematic evaluation of programs across a number o f strategic priority areas A series o f coordinated but independentprogram evaluations are being undertaken in education (school-based management, teacher contracting, role o f information inenhancing school performance), social protection(conditional cash transfers), and infrastructure (urban slum upgrading programs). Based on demand, the list o f themes i s being expanded to include health service delivery (alternative contracting schemes, community-run clinics), HIV/AIDS programs, early childhood development programs, and other infrastructure services (transport, roads, and water). 22 Impact evaluation differs from the internal evaluation efforts inthe Bank carried out by QAG (for quality at entry) and IEG (ex post evaluation). While the latter evaluate processes, assess if Bank projects have reached their intended objective and document changes in specific outcomes, the impact evaluations supported by DIME evaluate the development impact o f the project on the population (e.g. on poverty or health outcomes) by comparing the observed outcomes to a counterfactual (i,e,, what the situation would have been if the program had not been undertaken). In doing so, impact evaluations are a findamental means o f establishing causal links between interventions and outcomes and constitute a key input to determining cost- effective approaches to development. 53 Impact evaluations have become a critical component o f development programs. Over the past few years, efforts to evaluate the impact o f specific Bank-financed development programs have expanded, often through collaboration between the World Bank, governments, and local research institutes. Duringthe past year, two dozen impact evaluations o f government interventions, most o f them receiving Bank financing, have been initiated. The results are beginning to provide a picture o f the relative effectiveness o f alternative policy instruments and programs. Box 2: EvaluatingConditionalCashTransferPrograms Conditional cash transfer (CCT) programs have become one o f the most popular interventions seeking to alleviate poverty for poor households while improving the health and educational status o f poor children. A growing number o f countries in Latin America and Asia have implemented such programs. While the details o f program design vary, all o f these programs transfer resources to households conditional on these households enrolling their children inschool and taking them for regular visits to healthcare providers. There is a growing literature on the social and economic impact o f CCT programs-in particular in Mexico and Brazil. It has documented clear evidence o f success from the first generation o f programs (such as Progresa/Oportunidades in Mexico and Bolsa Escola inBrazil) as measured by increasing enrollment rates, improving preventive health care, and raising household consumption. The Bank has been involved inthe evaluation o f CCT programs for many years and its researchers have made significant contributions inthis area. Several important lessons have emerged. First, in making transfers conditional, CCT programs encourage the accumulation o f human capital and break a vicious cycle whereby poverty i s less likely to persist across generations. Second, in transferring resources to poor households, CCT programs provide an additional benefit to recipients inthat they act as a safety net against income shocks. Third, CCTprograms arejustifiableboth on efficiency grounds (to alleviate market failures) and on equity grounds (to redistribute resources). Finally, evaluations and the subsequent analytical work facilitated the inclusion o f various "packages" o f interventions-credit or cash transfers, nutrition interventions, and early childhood stimulation interventions. The evaluations o f CCT programs also revealed that this innovative design has been quite successful in addressing a number o f issues related to poverty targeting. Evaluations have shown that these programs are both technically and politically feasible. Several more "first generation" evaluations are currently underway in low-income countries (Bangladesh, Burkina Faso, Cambodia, Chile, Nicaragua and Pakistan.). InBurkina-Faso, for example, the evaluation involves a cash transfer conditioned on school enrolment within a project targeting communities affected by HIV/AIDS, while in Bangladesh, Cambodia, and Pakistan the programs being evaluated involve scholarships for girls. Ina number o f middle income countries such as Brazil, Chile, Colombia, Ecuador, El Salvador, Honduras, Mexico, and South Africa where various forms o f CCT programs have been inplace, researchers have moved to "second generation evaluations." A synthesis o f these evaluations will allow an assessment o f CCT programs in different contexts and help to assess the robustness o f the approach in different institutional settings. A synthesis study i s planned for FY08. 54 CHAPTER 3. EVALUATION WORLD BANKRESEARCH OF At the Chief Economist's request, an independent evaluation was commissioned o f all research activities carried out by the World Bank-both inDEC and outside of DEC-between 1998 and 2005. This evaluation was mainly concerned with the quality and relevance o f Bank research. A panel o f external experts was asked to assess whether and how World Bank research has achieved two objectives (1) to generate new knowledge on development and (2) to contribute to broadening the understandingo f development policy. Only two similar exercises have taken place inthe history o f the World Bank, in 1978 (chaired by Arthur Lewis) and in 1983 (chaired byAssar Lindbeck). Partial evaluations of some DECresearch insome areas have also beencarriedout byexternalreviewers, the last one datingfrom 1998.23 The remainder o f this chapter describes in section A the independent evaluation process and gives the list of panel members and evaluators. Section B presents the executive summary of the main evaluation report submitted by the panel. The complete text o f the main report and o f the 24 individual reports o f the evaluators i s posted on the Bank's research website http://econ.worldbank.orqtogether with the Chief Economist's response.24Section C provides a summary o f the response. A. ORGANIZATIONOFTHE INDEPENDENTEVALUATION The evaluation was carried out by Prof. Angus Deaton, Princeton University (Panel Chair); Prof. Kenneth Rogoff, Harvard University, former Chief Economist at the MF; Prof. Abhijit Banerjee, Massachusetts Institute o f Technology, and Nora Lustig, Director o f the Poverty Group at the United Nations Development Program. The Research Support Unit (DECRS) provided support to the EvaluationPanel. The Panel was asked to evaluate 1. The process o f selection o fWorld Bankresearch; 2. The topical coverage and emphasis o fthat research; 3. The analytic quality and reliability o f the findings; 4. The relevance o fresearchreports for Bank operations and its clients; and 5. How future Bank researchcouldbest serve World Bank objectives. 23 This includes, for instance, evaluation o f RSB-fbnded Bank research on agriculture by C. Peter Timmer; on domestic finance and capital markets by Albert0 Giovannini; on poverty and social welfare by Nanak Kakwani, Ronald J. Vogel, and Satya Chakravarty. 24 See the Intranet under Units > DEC > Research Committee > Evaluation o f World Bank Research (in "What's New?" box on the right o f the Research Committee screen). This page contains the report and the annexes (including the 24 reports o f the various evaluators), the Chief Economist's Response and the complete list o f researchpublications. 55 The Panel selected thematic evaluators, many o f whom are world class researchers intheir field, in order to prepare reviews o f a random sample o f 180research projects. The evaluators are 1. Macroeconomics and Growth: DaronAcemoglu (MIT) and Francesco Caselli (LSE) 2. Fiscal Policy, Public Sector Management and Governance: TimBesley (LSE) 3. Trade and International Economics: Sebastian Edwards (UCLA), Gordon Hanson (UC San Diego), and NinaPavcnik (Dartmouth College). 4. Poverty and Social Welfare: Esther Duflo (MIT), and Murray Leibbrandt with Martin Wittenberg (Uof Cape Town). 5. Human development (Education; Health; Population): Nancy Birdsall (CGD), Josh Angrist (MIT) and Sebastian Galiani (Ude San AndrCs, Argentina). 6. Finance and Private Sector Development: Jonathan Morduch (NYU) and Marianne Bertrand (Uo f Chicago). 7. Agriculture and Rural Development: Justin Lin (Beijing U.), Chris Udry (Yale) and Marcel Fafchamps (Oxford). 8. Infrastructure and UrbanDevelopment: Edward Glaeser and MichaelKremer (Harvard). 9. Environment: Andrew Foster (Brown U.)and Geoffrey Heal (Columbia U.). 10. Other topics: Peter Diamond (MIT) on pensions and insurance; Antoinette Schoar (MIT) onDoing Business reports, and Jan Sjvenar (U.of Michigan) on transition. The thematic evaluators were asked to evaluate the outputs o f sample projects assigned to them payingparticular attention to reliability, rigor, completeness, and relevance and, in addition, to give their overall assessment o f the strengths and weaknesses o f Bank research intheir area o f expertise basedon the sample andtheir general knowledge o f Bank research. The panel drew on information about the full range o f research activities in the World Bank. Evaluated were the outputs (publications, databases, etc) o f researchprojects4efined as activities that have an RF budget code, in contrast to economic and sector work-as well as the World Development Reports, Policy Research Reports and Regional Flagship Reports. Overall, this represents inexcess o f 4,000 journal articles, books, and databases. The sample which the thematic evaluators reviewed was chosen randomly from the universe o f Bank research publications from DEC and outside o f DEC. The sample was chosen with a bias towards more recent and ongoing projects, in order to better evaluate the current direction o f the Bank's research. The sample also includes 50 o f the best DECRG outputs selected by the Development Research Group itself. This is to ensure that the Thematic Evaluators and the Evaluation Panel give full consideration to what researchers themselves consider to be their best research. The EvaluationPanelalso conductedinterviews ofBank staffandmanagement; developing country policymakers, NGOs and other users o f Bank research. B. MAIN FINDINGS THEINDEPENDENTEVALUATION OF This sectionpresents, verbatim, a summary o fthe report preparedbythe Panel. Based on the evidence it assembled, the interviews it conducted, and its own consideration, the Panel concluded that the World Bank needs a research department, and that its research needs cannot be fidly met by hiringin from the outside. Research i s a central part o f quality control inthe Bank, and i s crucial to its claim to be a "Knowledge Bank." Without a research-based ability to 56 learn from its projects and policies, the Bank could not maintain its role as the world's leading development agency. The [small percentage] o f its administrative budget that the Bank spends on research i s surely too low given the multiplicity o f tasks that research i s expected to fulfill, includingthe generation o f new knowledge about development, the collection and dissemination o f data, the generation o f knowledge to support guide Bank strategy, operational support, and capacity buildinginclient countries. As the world becomes richer, and already today among middle income countries, the need for high-quality, research-based advice will only become stronger as the need for Bank lending diminishes. The multiple tasks o f Bank research are not always consistent with one another, and the Panel believes that the Bank's Chief Economists and their research staffs deserve considerable credit for the way that they have fulfilled their obligations over the past seven years. They have done so ina period when new hiringhas been severely limited, and where the salaries o f Bank economists have fallen rapidly relative to those in academia. Bank researchers have produced innovative and important new research that has maintained the Bank's position as the intellectual leader among development agencies. At the same time they have providedextensive support to their colleague in operations; indeed researchers inthe Bank's research department devote 30 percent o f their time to such operational "cross-support." Bank researchers and their consultants produced nearly 4,000 papers, books, and reports between 1998 and 2005. Bank researchers regularly publishinthe leading academic journals in economics, and more extensively in the leading field journals in development. The Development Economics group (DEC) i s also responsible for the annual World Development Report, which i s widely read by the development community, and which has sometimes had a major effect on development thinking.The Bank also publishes a largenumbersofpolicy documents andreports that summarize the state o f the art in various policy areas and that are designed to communicate and disseminate research to policymakers and their advisors. Research i s done throughout the Bank, by economists working in the regions and in the Bank's networks, as well as, most importantly, in the research group o f DEC. The evaluators and the Panel found some outstanding work in the Bank's portfolio. Bank economists have led the world inthe measurement o f poverty and inequality, including inequality inhealth. Pioneeringresearch onthe organization ofanddelivery ofeducational andhealthservices i s changing the way we think about these issues and the way that the Bank lends money for such projects. There i s important work on monitoring the environment. The Bank has been a world leader in the collection o f new data, including the long-established Living Standards Measurement Surveys, the joint household survey project with the Inter American Development Bank called MECOVI, as well as the more recent Business Environment and Economic Performance surveys in the transition countries, and the Investment Climate and Doing Business surveys. The Bank's data group collates the World Development Indicators, which i s the most important single database for development research, and it has recently taken on board the International Comparison Project, which i s central for the measurement o f economic growth, for poverty, and comparative measures o f development around the world. Bank researchers have also done extremely visible work on globalization, on aid effectiveness, and on growth and poverty. Inmany ways they have beenthe leaders on these issues. But the panel had substantial criticisms o f the way that this research was usedto proselytize on behalfof Bank policy, often without taking a balanced view of the evidence, and without expressing appropriate skepticism. Internal research that was favorable to Bank positions was given great prominence, and unfavorable research ignored. There were similar criticisms o f the Bank's work on pensions, which produced a great deal that was useful, but where balance was lost in favor o f advocacy. In these 57 cases, the Panel believes that there was a serious failure o f the checks and balances that should separate advocacy and research. The Panel endorses the right o f the Bank to strongly defend and advocate its own policies. But when the Bank leadership selectively appeals to relatively new and untested research as hard evidence that its preferred policies work, it lends unwarranted confidence to the Banks' prescriptions. Placing fragile selected new researchresults on a pedestal invites later recrimination that undermines the credibility and usefulness o f all Bank research. Data collection and dissemination i s another area where the Bank has many great achievements but there are also many problems. The Panel sees the Bank's data work as central to its mission o f learning from development. It i s not only the basis o f most Bank research, but it automatically scales up Bank work by permittingresearch by others, an increasingly large number o f whom are in developing countries. Yet data activities are organized haphazardly, whether in collection, archiving, or dissemination. The Development Economics data group i s not as centrally involved with researchers inthe collection and dissemination o fBank data as is desirable. The Bank website i s often o f poor quality and difficult to use, not only for accessing data, but even for the relevant publications and reports. The Bank has no coherent policy for data release, for its own researchers, nor for client countries to which it provides support in data collection. Too little has been done to build on the early success of the Living Standards Measurement Surveys to help build internationally comparable data on such central topics as poverty or mortality. Without improvements here, there is a long term threat to the Bank's (and the world's) ability to monitor the income and health dimensions o f world poverty. Bank research has become predominantly empirical, with routine use o f econometric and statistical methods. This is as it should be; learning from experience requires statistical analysis. Yet the Panel, while recognizing that there has already been substantial movement in the right direction, believes that Bank could still make more use o f randomized experiments inthose cases where they are possible, for example, for many projects inthe social sector. With or without randomized trials, Bank researchers are not often enough involved inthe early stages o f project planning, where they can be instrumental inlaying the foundations for successful learning after completion. Without such efforts, the Bank cannot routinely learn from its own experience. The Panel welcomes the initiatives inthese areas that are underway inthe Bank, but presses the need for more. The problem o f keeping abreast o f new approaches applies to a broad range o f applications, notjust new uses o f randomized experiments. The Panel suspects that management has not always kept ahead o f researchers intheir understanding and familiarity with statistical and econometric methods, and that this has sometimes contributed to the failure to appropriately interpret and manage researchresults. The Bank's misplaced confidence incross country regressions on growth, poverty and aid, is a case in point. Another is its lack of a full understanding of the limitations of the innovative methods developed by Bank researchers to estimate poverty for small areas; once again, results were sold without appropriate caution and qualification. Although the quality o f statistical work i s a Bank wide issue, DEC (and within it, perhaps the DEC data group) i s the obvious home for statistical and econometric leadership. The Bank needs a "central statistical office" and should consider whether it needs a chief statistician to head it. Our evaluators generally found that Bank research was well-targeted towards important topics, but was often weak on execution and technique. While it i s desirable for Bank technique to be behind the frontier, there has often been too large a gap. Some technically-flawed projects have run for years, and have been incorporated into country work without appropriate certification and review. The evaluators repeatedly found that too large a fraction o f Bank research was undistinguished, in the sense that it had neither great relevance to policy nor claim to academic distinction. These are subjectivejudgments, but the evaluators are distinguished development economists, and their views were very similar to one another, Their judgments did not refer to the lack o f good papers ingood 58 journals, many o f which were innovative and important by any standard. Nor were any o f them counting citations. The concern was with the large fraction o f papers that, on reading, did not seem to be very useful from the perspective o f either an academic or a policymaker. Bank researchers in the Development Economics Group (DEC) are expected to publish two academic papers a year, and this mechanism helps guarantee quality and protect the Bank's intellectual standing. But the cost, at least within DECRG, i s a large number o f less than outstanding papers driven too much by the concerns ofjournals and their referees and too little by the policy needs o f the Bank. Nor do these papers make use o f the Bank's comparative advantages o f local knowledge and a constant stream o f important new problems. At the same time, there i s great pressure for researchers to demonstrate policy relevance, which frequently leads to drawing conclusions that are not supported by the evidence. There i s too much self-citation. Some o f the very best and very worst work was done jointly with outside consultants whose quality was clear in advance. The evaluators generally gave higher scores to research in DEC than to research done elsewhere in the Bank, although they scored the non-DEC flagships as highly as they did regular DEC research. The World Development Reports have sometimes been instrumental in changing the way that the world thinks about some aspect o f development, such as poverty, health, or population. Inrecent years, they have, to an extent, become the victims o f their own success. Because they are seen as so important, they must incorporate the views o f large numbers o fpeople, inside and outside the Bank. Inconsequence, they oftenseektominimizeconflictandtoemphasize "win-win" situationsinstead o f trade-offs. They often lack sharpness and focus, and are sometimes incoherent, especially when itproves impossible to reconcile the views of the various commentators and authors. They are also extraordinarily expensive, absorbing about ten percent o f the resources o f the research department. Even so, the Panel thinks they should probably continue. They provide the Chief Economist with a highly visible vehicle for summarizing and disseminating research on issues that he or she considers to be important, and their regular appearance contributes to the Bank's standing in the development community even if,to some extent, they are trading on their past reputation. The Panel gave considerable thought to what should be expected o f Bank researchers in terms o f academic publication. Satisfying the requirements o f academic editors and their reviewers i s not the main business o f the Bank. But without an expectation o f publication, the Bank could not maintain its reputation as the leading thinker in economic development. Nor would it be able to attract the high quality researchers that it needs to think about and to help address the many problems o f development. Yet too much pressure to publishleads researchers to ignore important policy issues infavor of an academic style that is sometimes oflimitedvalue. The Panelbelieves that the tension here i s a fundamental one that will always be faced by the research managers inthe Bank. The "two publications a year" norm seems to be a reasonable mechanism, as i s the requirement that researchers inDEC spend 30 percent o f their time inoperational support. The Panel also recognizes that the publication rule will lead to a substantial body o f work o f the kind noted above, that i s successful neither academically, nor in policy relevance. This i s perhaps the inevitable cost o f an imperfect quality-control mechanism. Even so, the Panel believes that there has been too much o f this sort o f work over the review period. Bank research has not been monitored and evaluated as often as is desirable. The fact that this evaluation is the first insevenyears isnot unrelatedto some ofthe problems that the Panelhas found. More regular evaluations would permit early termination o f bad projects, and would help limitthe longtail of undistinguishedwork. The Bankneeds better tracking systems to linkresearch expenditures to research outputs; currently it i s not even tracking outputs so that it i s impossible to know exactly what has been produced. The Bank needs to encourage better links with academics, 59 both in the selection o f outside researchers as consultants, which i s currently too haphazard and decentralized, and in fostering regular interchanges through visitors and conferences around key topics. Researchers should not be hiring consultants whose track records gives clear advance indication that they are unlikely to produce good work; that they do so suggests a failure o f monitoring and management. Box 3. MainRecommendationsof the IndependentEvaluationPanel General 0 The research staff is the main source o f learning from Bank's work. Research staff should be involved in planning policies and projects-setting up randomized trials, establishing platforms to support subsequent evaluation and learning. 0 A newresearchunitshould be established to attempt to replicate promisingnew findings. 0 World Bank research should be endowed to ensure some independence from Board and managementpreconceptions about best practice policies. 0 Research managers need systems that preserve research objectivity. Preliminary and controversial research should not be used as evidence for Bank policy. Managing and EvaluatingResearch Quality control o f the research program needs major improvement, to include regular external reviews, monitoring o f value for money, and output reporting. 0 Management should review the pay-scale and terms o f reference o f research staff to ensure that incentives support top quality research on development issues. 0 Research managers must exert careful and central control over consultant quality. 0 The Research Committee should consider issuing topical requests for proposals. Research needs to better balance analytic quality and policy relevance. Researchthat does not go through the ResearchCommittee needs external review. 0 DEC managers should be as qualified instatistics and econometrics as ineconomics. Data 0 The Bank data collection, archiving, and disseminationprocedures require review. 0 The DEC Data Group should (i) have closer contact with researchers, (ii) statistical advice offer on survey collection, and (iii)lead inarchiving and dissemination o f all Bank data. 0 This would require strengthening its statistical and econometric expertise. 0 International harmonizationand dissemination o f household surveys should be a goal. 0 The Bank needs standard protocols for the release and revision o f data. Publications and flagships 0 The Chief Economist's quality control over all Bank publications should be enhanced. 0 A thorough review of flagships is needed, emphasizing quality. Their profusion strains the capacity o f research leadership to monitor quality and reliability. 0 Flagships must present a balanced picture o f research results and debate among serious policy researchers. External collaboration and support 0 The Bank should foster closer relationships with academic researchers. 0 Greater collaboration between Bank and developing country researchers should be sought, possibly through institutional support in-country. 0 The research function o fthe ABCDE conference shouldbe reviewed. 60 While the Panel does not think it makes sense for the Bank to contract out all or even most o f its research, for example by issuing requests for proposals, it thinks that it should consider using this mechanism on occasions where Bank expertise i s not available. It noted how little o f the research that it saw involves joint work with researchers from developing countries. While the panel is acutely aware o f the difficulties o f doing better, it emphasizes the importance o f attempting to do so, perhaps through greater institutional support, or by supporting highly trained immigrant economists inthe U S and Europe to spend time intheir native countries. The Panel i s also concerned with quality control over the Bank's large number o f "flagship" publications, here taken to be the World Development Reports and the DEC and non-DEC major topic studies to which the term i s applied. These reports are sometimes enormously influential (though the panel suspects that many just gather dust) and they are the vehicles where the line between the Bank's advocacy role and its role in producing new research ideas becomes particularly blurred. The large number o f flagship reports makes it virtually impossible for management to exert sufficient quality control precisely where it i s most needed. The Chief Economist's office, even ifit were vested with sign-off authority on all flagships, lacks the time and resources to adequately vet them. The Panel believes that the Bank produces too many o f these reports. It should find a mechanism for better quality control o f a smaller number, either by extending the Chief Economist's authority, and givinghimor her resources to undertakethe quality control, or by requiring some sort o f outside review, or both. Inspite of the centrality of the research to the Bank's mission, it is continually necessary to lobby for research, and to protect basic research on development issues, especially where the payoffs are not immediate. The Panel believes that there would be great benefits to endowing the Bank's development policy research, which could be done using a small fraction o f the Bank's cumulated retained earnings. Without such insulation, there i s a risk that it will degenerate into pure advocacy o f the type that has become all too prevalent inthe global poverty debate. The Bank must maintain its distinction inresearch. c. RESPONSE OF THE CHIEF ECONOMIST THE WORLD BANK OF This section provides a summary o f the Chief Economist's response which is available in full at http://econ.worldbank.orgunder "Evaluation o fResearch". The Evaluation of World Bank Research: 1998-2005 was initiated by the Chief Economist and agreed with the Senior Management o f the Bank and the Board. This response o f the Chief Economist takes into account the dual responsibilities o f his office, to head DEC and to provide broad oversight over the Bank's overall research program. We are grateful to the Panel and the Evaluators for their work in producing this evaluation. The report will be valuable as an input to DECmanagement, andalso for managers outside DECwho are responsible for research. We are encouraged by many points made inthe report, including its confirmation that much o f the Bank's research i s o f leading quality and its conclusion that "Bank researchers have delivered value to the institution that i s much larger than couldbe reasonably expected from the very small share o f the budget that they command." Various measures, including citation analyses referred to in the Evaluation (and included in this Research Report) paint a generally favorable picture o f Bank research, even when compared with a number o f prominent research institutions. The report demonstrates that research in the Bank requires tradeoffs over a complex set o f objectives and constraints. It must be relevant and useful to Bank operations and to policymakers worldwide, as well as being academically sound. The purpose o f this response i s to help us chart the road ahead; 61 it is not to respond to every aspect of the report. Some issues require consultation, including outside DEC and with the Bank's top management. Strengtheningthe QualityofResearch We support the objectives set out in the Panel's recommendations-to ensure the integrity, credibility and independence o f Bank research, and are encouraged that the Evaluators have scored 61 percent o f the studies they read to be o f above average quality and a hrther 28 percent as average. While we find no objective evidence that the Bank's research "tail" i s longer than that o f other leading institutions, we share the Panel's view that we should try to strengthen the quality o f research. This could include more frequent reviews o f large DEC and RSB-funded projects while under implementation and o f the contribution o f completed programs, as well as wider consultation on how to strengthen the Chief Economist's broader advisory role. We agree with the need to maintain good data on research costs and outputs, and will ensure that the bibliography o f Bank researchproducts i s maintained and made accessible. We also agree with the need to revisit the objectives and scope o f Bank flagship reports. Drawing on evaluations o f other parts o f DEC, we are exploring approaches towards reducing the volume o f DECreports. We should clarify, however, that many o f the Flagships reviewed by this research evaluation may not be formally designated as research products. It is hard to respond concretely to the recommendation to have more central control over the quality o f research consultants without more capacity-building. specifics, .since, in practice, various factors shape the consultant selection process, including Some questions are raised inthe report on the organization o f research and other Bank units.These issues were not part o f the mandate o f the evaluation, in part because the Bank's organizational structure responds to many demands, and not primarily to the needs o fresearch. RestructuringtheBalanceofResearch We share the philosophy o f the Panel that good research starts not with a preferred method, but with an important question, and then looks for appropriate and feasible methods for answering it. We respect the Panel's opinions on the merits o f various approaches, but note that there i s no general agreement within the scientific community on such methodological preferences so we would not wish to be too constraining. The important issue i s that all empirical work should be done well. We are already seeking to greatly increase the coordinated use o f impact evaluations in Bank and other development operations, via the DIMEprogram. We agree that too little weight i s given by the profession to replication but establishing a dedicated replication unit within DEC does not seem optimal. We will respond to the Panel's advice by encouraging staff to undertake replications intheir own areas where these seem to be useful. The DIMEinitiative, for example, encourages independent yet coordinated evaluationsof sets of similar interventions. The Panel suggests that increasing emphasis should be given to encouraging proposals in areas where research i s weak or there i s no ongoing work. The recent Bank-wide research consultation carried out under the auspices o f the Research Committee aims in this direction and has commissioned forward-looking reviews to encourage research. We will consult further to see whether additional steps can be helpful. 62 Strengtheningthe Bank's DataFunction The Panel makes a number o f valuable suggestions for strengthening the Bank's already central role in development data and for centralizing this role, including through the possible creation o f a Chief Statistician position. We are encouraged by the positive view on the Bank's data role and support the thrust o f the recommendations in this area. We note that implementing the ambitious agenda suggested by the report would require senior management to endorse the Bank's central data role, and channel substantial financial andhuman resources into the area over the long term, as well as implementing some changes in our business model. These options will need to be consideredtogether with those o f the recent review o f the data group o f DEC. We continue to encourage more open access to data and are mindful o f the need to develop policies for ethical review o f surveys where needed and for better quality control o f the shared data. A policy for'releasingresearch data sets was recently establishedfor DECRG. ImprovingOutreachandRelationshipswithAcademia The Panel makes a number o f recommendations to improve outreach and relationships with academia, including improving and revitalizingthe visitor program and strengthening the research function o f the ABCDE, and also points to the need to improve the accessibility o f the DEC website. These are useful recommendations, which in some cases require more study to develop specific plans. We will take them up in further management discussions, and with the Research Committee. We agree with the objective to buildresearch capacity through collaborative work and will increase our efforts, but the difficulties experienced in finding suitable collaborators in counties with low research capacity remain a constraint. We note that the RSB has provided research capacity- buildingsupport to a number of institutions and has also supported capacity-building through the GlobalDevelopment Network. Responsesto Observations on the Bank's Research The Evaluators have produced fairly detailedreports on nearly two hundredresearchproducts. We are grateful for their diligence and insight, and while we do not agree with every one o f their comments and criticisms we recognize their reports as a valuable guide for improving ongoing and future research. The Panel has highlighted three major concerns. First, that certain techniques have been over used. Second, that in some areas the methodology used in research has not been sufficiently tested or that researchers have not sufficiently alerted users to possible limitations o f the methodology. Third, that in some cases, research has been used to underpin Bank advocacy, without taking care to ensure that the empirical results were sufficiently robust. A more extensive response to these sometimes technical issues is provided together with the full Evaluation Report. We note, for example, that research on growth, poverty and aid draws on project-level data, case studies, and cross-country regressions, and that the findings were, in fact, critical o f Bank policy at the time. The work on pensions was stimulated by the severity o f the problems faced by many funded systems and took on an area uncharted in developing countries at the time. Subsequent research and operational experience reflects a more balanced view. On the question o f measuringpoverty insmall areas ("poverty mapping"), the main question i s whether the methods developed can be used to improve targeting in poor countries unable to map poverty through more complete census data, The important issue i s to test them empirically-recent work 63 on Mexico has found the approach satisfactory and we expect other ongoing studies to confirm that they are useful. This work was also carefully refereedby the world's leading econometricjournal. Debates about these issues among researchers, both inside and outside the Bank, will continue. Such debates, including on methodology and on how researchcan best be applied to help approach development problems, is an essential part o f the process o f knowledge creation. We agree with the need to ensure balanced research review, especially in contentious areas which are important for policy and particularly where managers' own research i s involved. Internal and external debate is keyto this process, andcouldbe ledbythe ChiefEconomist. We are deeply indebtedto the Panel and the Evaluators and thank them again for their contribution. 64 CHAPTER4. FUTUREDIRECTIONS Section A o f this chapter outlines the conclusions o f Bank-wide consultations on research needs and Section B sets out the research programs planned by DEC, the Regions and the Networks. Even though there i s still "excess demand" in many o f the areas, these work programs have been partly shaped in response to the consultations, This results in some degree o f overlap in the outlines o f research directions, but the overlap in description should not be taken as indicating duplicative research. DECand non-DEC researchers will frequently collaborate on particular areas, or structure work programs to be complementary. The Research Committee i s also addressing some o f the specific issues raisedby Regions andNetworks. A. CONSULTATIONSONRESEARCHWITHTHE REGIONSAND NETWORKS Consultations with the Regions and Networks were held by the Chief Economist, the Research Committee and DECRG to identify research priorities. These consultations began in the second half o f FY05 and ended during the first half o f FY06. Managers and staff in the Regions and Networks were asked to list the research topics which would best meet the needs o f their work programs and suggest how best operations and network staff could participate in research. Subsequently, the suggestions were discussed by the Regional and Network VPs, DEC Management and the Research Committee. The findings o f consultations are indicative, and not prescriptive, but they were useful to reveal where there i s significant demand for research. The Research Committee oversees and monitors the process, and reports on progress made in areas where gaps where identified. A summary o f the consultations is available on the Intranet under Units>DEC >ResearchCommittee. The consultations enabled identification o f topics for which there i s a strong demand for researchin Operations within the Bank, but where insufficient research is being carried out. Six areas were prominentlymentioned: 0 infrastructure (linkages between investments ininfrastructure and economic growth); 0 fiscal space (composition, sequencing, efficiency, and financing o fpublic expenditures); 0 dynamics o f labor markets (structural changes, education, migration, and demographic transition); 0 emergence o f China and India inthe global market place; 0 dominance o f informal sectors inthe developing world; and 0 lagging regions andregional policy. Other areas where there i s a strong demand for research are natural resource management (environment, agriculture, water resources, and land markets); and HTV/AIDS (cost effective treatments and socio-economic dimensions). 65 Infrastructure Infrastructure i s the area inwhich the greatest unmet demand for research was expressed. Several regions (AFR, EM, SAR) and networks (INF, PREM) asked for research on three sets o f issues: the linkages among infrastructure investment, growth and poverty alleviation; the composition, sequencing and efficiency o f alternative infrastructure investments; and the impact on household welfare. A major constraint to such analytic work is the scarcity o f data and indicators. Even the basic descriptive statistics needed to generate baseline standards o f quality, performance and cost for Bank lending activities are often not available. In recent years, infrastructure data initiatives launched inthe Bank have ranged incoverage from global and sector-wide, to a single topic inone region. Although these initiatives respond to operational demands, the need for data on infrastructure finance and costs i s yet unmet and i s particularly pressing. Crucial infrastructure variables for which data is lacking include physical access (e.g. to electricity or water by household); affordability (e.g. household average end-user pricesPPP GNI); cost efficiency (both economic and engineering); quality o f service (perceived by household; technical measures); fiscal status o f public service agencies (revenue, expenditures, subsidies); financial autonomy o f providers (financial ratios, leverage and debt service); and institutionalreform and governance. A standard survey, periodically conducted, would be needed to obtain information from multiple data sources-households, firms, consumers, suppliers, operators and governments. This would be a costly, long-term exercise requiring coordination within the Bank and with outside development partners. Augmenting national statistical capacity would be an important component o f this exercise. This might partly be achieved through coordination o f existing efforts, avoiding duplication and ensuring compatibility o f data, but would also neednew initiatives. In response to the consultations the Sustainable Development Network and DECRG have developed research programs that will examine a range o f micro, macro and institutional issues related to infrastructure (see section B below). The Research Committee has also commissioned a survey paper by an outside expert documenting recent advances in the field and presenting a diagnostic analysis o f the current state o f the art, based on the data and indicators currently available. Inaddition, the study is expected to highlight the gaps in terms o f data and indicators and make specific suggestions on additional data collection that would make further analysis possible. Labor Markets The absorption o f growing populations into labor markets i s a critical challenge inmany developing countries. Bank research on labor markets i s very limited and three areas have been identified as priority topics for research: (1) labor markets and the determinants o f job creation: structural changes in labor markets; demographics (including the share o f women and children in the job market); linkages among labor demand, education and poverty; (2) labor markets and education: quantity versus quality o f education; skill development; the quality o f secondary and tertiary education; decentralization o f education systems; (3) labor market policies and regulation, their impact on the informal sector; implications o f labor market policy for public services (education, healthcare and pension). 66 The HD and PREMNetworks, the ECA, MNA and LCRregions, and DECRGhave respondedby developing research programs on various labor-related issues (see section B below). In MNA, research focuses on labor market dynamics in the formal and informal sectors; on the implications o f cross-border labor movements on employment (seasonal and full time); and on the economic, social and political implications o f emigration o f MENA labor to Europe. The ECA Region has included in its research program work on the impact o f job creation o f changing demographics, migration and structural changes in the economy. Many labor issues are covered in an on-going HDNPREMresearch program, "Labor Market, Job Creation and Growth." Work has begun on some areas butmost await financing. Despite the budget cuts, DECRG has recruited a Senior Economist from outside the Bank to spearhead its research efforts on labor issues. H i s program will cover topics (1) and (3) in the priority list above. Topic (2) i s already part o f the research agenda for the HumanDevelopment and Public Services group. DECRG researchers have undertaken studies to measure the quality o f education ina variety o f settings (e.g., extent o f teacher absenteeism, use o f student performance on international exams), and are conducting impact evaluations o f interventions that improve the accountability o f schools for student learning, includingraising the participation o f the community in schools and increasing the availability of informationon schools. An on-going DEC program also investigates the determinants o f international migration, the socio-economic and political implications for both sending and receiving countries, and the implications for labor markets, public services, andremittances. The Research Committee has also commissioned a review, to document recent advances in theoretical models relevant for middle income countries and summarize empirical evidence in the linksbetweenregulation andbothefficiency and equity. The study will summarizethe mainpolicy findings that have general validity, while recognizing that the optimal institutions might differ across countries. At a later stage, if financing i s available, a further study would focus on low- income countries where the dominance o f rural and informal activities affects the assessment o f labor market outcomes and the policy challenges. The Informal Sector By some estimates, more than 30 percent of the developing world's GDP and 70 percent o f its workers are outside the official economy. Some small firms are trapped in low-productivity operations with little access to finance and public services, and their workers lack safety and social protection. The result can be slower economic growth and a growing social divide between the informal and formal parts o f society. Inother cases informality i s a response to regulatory regimes and i s not particularly associated with poverty. Research will improve our understandingo f the implications o f the shift from informal to formal systems as countries develop. DEC research considers informality as a dimension o f the investment climate. Buildingon existing Bank research, there were several requests to address four topics which are not covered by existing research: (1) the determinants o f informality, the role o f labor market rigidities, and the tradeoffs between competition and regulation; (2) institutional and other constraints to reducing the share o f the informal sector; (3) tax policy, covering tax rates, collection and administration; and (4) the sequencing o f the increase in the tax base over different stages o f development. The HD Network, the LCR Region and the Human Development and Public Services team in DECRG have initiated research addressing the issue of informality (see section B below). The Research Committee has also commissioned a survey on the informal sector in developing 67 countries. The purpose o f this paper i s to describe the current state o f knowledge o f this area, detail important development issues regarding the informal sector, and identify areas where policy- relevant knowledge gaps may remain. DECRGhas also initiated new research on informality from the perspectiveo fthe business climate, including developing new data sources, to assess three broad sets o f policy-relevant questions. Are micro-enterprises high-return growing businesses, or just a source o f low-productivity jobs o f last resort? New surveys approach this question through randomized experiments designed to measure the marginal profitability o f informal firms. What are the policy incentives and constraints to the growth and productivity o f informal firms? New firm-level data covering both formal and informal firms will permit an assessment o f the differences in the investment climate facing them, and the impact on their respective performance. Information on the enforcement o f labor regulation i s used to analyze the effect of stricter enforcement o f labor regulations on firm efficiency, investment, output growth, and job creation. Finally, measures o f informality are used to explore the relationships between informal employment, regulations, the quality o f public services, and the impact on the economy's aggregate performance. New analytical models and empirical experiments will focus onthe direct andindirect spillover effects from informal firms onto formal ones. Analysis of FiscalSpace andFiscalPolicy Constraints on public spending for human development and infrastructure are severe in most developing countries-particularly inAfrica, South Asia and Latin America. This has ledto calls for the creation o f "fiscal space" by reprioritizing expenditure toward more productive sectors and projects, by improving expenditure monitoring systems, accounting rules and fiscal programming, and by increasing absorptive capacity inpriority sectors. New mechanisms are needed to assess the sustainability o f debt burdens, the impact o f higher domestic financing on inflation and private investment, and the productivity o f expenditure. Finally, additional international assistance i s needed together with means to appropriately select and implement aidprojects. Several topics mentioned duringthe consultations, related to the social impact o f poverty-reducing spending and service delivery mechanisms, are being actively researched by DECRG. In these areas, it i s not more research that i s required, so much as more ESW. There are four main areas in which regions and networks perceive gaps in research: (1) debt management: debt sustainability, and the role o f governance indicators; debt restructuring and its consequences for public expenditures, exchange rates, future borrowings, private debt, and FDI; (2) public expenditure management: improving targeting; the composition, sequencing and comparative efficiency o f different types o f public expenditure; (3) institutions: the institutional environment for macroeconomic stability; institutions to ensure transparency, effective expenditure monitoring, and sustainability; accounting for different economic and political objectives and structures in assessing the returns from public expenditures; and corruption; and (4) alternative financing mechanisms for public services; the links between governance and growth; and the political economy o f fiscal reform. The research program o f the PREMNetwork contains a number o f studies aimed at filling these gaps inknowledge. DECRGhas extended its programs in several dimensions o f fiscal policy: (1) the macroeconomic consequences o f debt relief assesses its impact on growth, fiscal and macroeconomic performance, (2) the consequences for growth o f alternative fiscal policy paths, and especially public expenditure composition. Progress on this front i s hampered by the unavailability o f reliable data, which has prevented systematic analysis o f the composition and efficiency o f public spending, and therefore o f its financial and social rates o f return. Several data collection initiatives are under way 68 throughout the Bank. Current research examines the consequences o f alternative fiscal targets for the composition o f public spending and for its long-term effects on growth and public solvency. A volume under preparation will bring together some o f the initial results o f this research, mainly focused on Latin America; (3) the role o f fiscal policy and fiscal institutions in augmenting or mitigating macroeconomic volatility, especially in poor countries; (4) the role o f corruption and weak fiscal institutions on the efficiency o f public expenditures and the enforcement o f fiscal discipline. New work examines the political conditions under which the provision o f public goods can be improved, focusing particularly on the role o f citizen information. The Research Committee has also commissioned a survey paper to describe the state o f knowledge basedon a review o f the relevant economic policy literature and to present the main issues on these topics. The paper will provide a review o f the relevant literature on fiscal and public expenditure policy and institutions from the perspective o f the questions/issues raised inthe consultations. Emergence of China andIndia inthe GlobalMarketplace Fast economic growth in China and India i s having a major impact on the global economy. Their entry into international markets has increased the global labor force and the world's potential growth rate, helped to hold down the prices o f manufactures and services, but raised those o f primary products, and triggered changes in the relative prices o f labor and capital. These developments generate both major challenges and opportunities for developed and developing countries alike. World Bank research has been undertaken to understand the impact o f China's trade and other reforms on the Chinese economy itself, but there has been a deficit o f research on the implications for the competitivenesso f developing countries, international trade, global employment, and natural resource management. There i s also an outstanding demand for research on what other developing countries can learn from the experiences o f China and other large emerging market countries. Among the questions identifiedas relevant for the Bank's operational work were: o What are the implications o f China's and India's growth for the exports of other developing countries? o Will China and India divert FDIfrom other countries and/or provide investment flows to them? o What are the implications for oil and other naturalresources and for globalemissions? o Do China and Indiaprove that governance does not matter for growth? Many external scholars have tackled these questions-for example, OECD, I D S (Sussex) and IADB-as have several units inthe Bank. As noted inSection B, in collaboration with EAP, SAR and the Institute o f Policy Studies, Singapore, DECRGhas produced a book Dancing with Giants: China, India, and the Global Economy, to be published in January, 2007. AFR has already publishedAfrica 's Silk Road: China and India's New Economic Frontier and LCR's Latin America and the Caribbean Respond to the Growth of China and India, i s to be published in2007. All three were discussed extensively at the Annual Meetings in Singapore and have been made available on the web in pre-publication form. In addition, research articles on several aspects o f China and India's growth are under preparation or inpublication. Lagging Regions Regional policy i s increasingly important in the dialogue between Bank staff and client countries, particularly in large countries with a federal structure. Lagging regions are generally landlocked, have outdated industries or lack (or have exhausted) natural resources. Lagging regions are often 69 characterizedby low growth, highunemployment, highpoverty incidence, low productivity, and a weak human capital base. Regional policy aims at addressing critical problems, including insufficient market size, and the lack o f growth poles, concentrated economic activities, and technological spillovers. Large distances reduce the mobility o f goods and factors, and increase infrastructurerequirements and transaction costs. Equityconcerns arise, with marked differences in wages and consumption between regions, andrelatedpoverty and social concerns Specific questions emanating from regions during the consultations include: What policy framework would best promote economic development in small states and lagging regions? Why in some countries do some regions prosper and others lag behind although they have similar policy regimes? D o some regions (provinces in China, or states in India) lag behind others because o f exogenous factors (poor climate, weak human capital, geographic isolation, etc)? What role do regional political factors play (are some regions less democratic, more corrupt and less efficient)? Some DECRGresearchdeals with the debate on how to approach lagging regions and examines the effectiveness o f regional policies in the short to medium run. When they work, regional policies increase economies o f scale (via "growth poles"); enhance technological spillovers, and facilitate mobility which increases access to human capital. Better infrastructure reduces transaction costs which creates larger markets. Although research has shown that regional policies can lower regional income differences and wage differentials for equivalent jobs, findings are mixed on whether they enhance efficiency, jobs and investment. The fiscal cost i s often not trivial-although some o f it can be shared across countries, as attested by the EU experience. Migration i s often inevitable, exacerbating economic and demographic divergences between regions but helping to equalize incomes across households. Recently initiated research seeks to better understand the location decisions o f firms (inMorocco and India); to improve local governance inlagging regions o f India (research coupled with lending operations); and to introduce interventions to help local governance and development, including at the community level. Research in ECA in collaboration with DECRG will consider how geographic dimensions can be included in policymaking to alleviate poverty inlagging regions. B. FUTUREDIRECTIONS THERESEARCHPROGRAM OF THEDECRESEARCHGROUP The DEC Research Group i s the principal locus o f research within the Bank and the only part with a mandate for research across regions and sectors. Inthe previous Research Report to the Board, DECRGreportedhaving 85 professional grade researchers. Since then, this number has fallen to 77 regular and term professional researchers. As a result o f this contraction, a number o f activities have been scaled back or dropped. These include security and development; data work on the Investment Climate Surveys (which has been picked up by the regions) and Investment Climate Assessments (also picked up by the regions); regional trading arrangements; financial stability; public expenditure tracking surveys, service provider surveys; industrial pollution; non-farm rural development; and forestry. Inaddition, fewer resources than previously planned will be devoted to issues such as forest conservation, infectious diseases and firm-level research. These losses to the work program are regrettable but are the natural consequence o f tight budget constraints. They are balancedby increased activity or planned activities on topics such as migration, climate change, aid effectiveness, urban policy and infrastructure, international trade in services, access to finance, the measurement and analysis o f inequality, macroeconomics, and community-driven development (see below). 70 The DECRG structure and Management Team was recently reorganizedto be more closely aligned with the Bank's new Network structure. DECRG's research will continue to be done across team boundaries but this new structure will facilitate the further integration o f research into the Bank's business and improve the impact o f research on Bank operations. The changes entailed: The Infrastructure and Environment and the Rural Development teams were combined to create a team for research on Sustainable Rural andUrbanDevelopment (DECRG-RU); Responsibilities for firm-level research were combined with those o f the former Finance team to create a Finance and Private Sector Development team (DECRG-FP); The Growth and Investment team was renamed Growth and Macroeconomics to signify its renewed focus on macroeconomics and the growth agenda in the aggregate, including macro implications o f micro saving and investmentbehavior (DECRG-GM); The Poverty, Human Development and Public Services and International Economic Integration teams remainunchanged. The research agenda in DECRG i s determined by relevance -- whether it i s likely to produce convincing solutions to development questions that, in turn, are likely to influence policy and outcomes. One consequence o f this i s that most o f DECRG's research i s empirical: it i s concerned with results on the ground, not just theory or methodology. In assessing relevance, DECRG managers consider the needs and priorities o f both Bank Operations and the development community at large. Identifying those needs and the research necessary to meet them relies partly on the judgment o f the researchers and their managers, but colleagues in Bank Operations suggest topics, and research often grows out o f DECRG's joint work with them. Every researcher i s expected to spend 30 percent o f hisher time working with Operations on cross support, and Operations staff are often involved directly or indirectly with research projects. In addition, DECRGmanagers frequently meet their counterparts in Operations, to discuss specific projects or informal meetings such as Network and Sector Boardmeetings. As noted above, inthe summer of 2005 DEC and DECRG senior management met every Regional and Network management team to discuss research priorities. Senior management periodically requests research on specific topics, and interactions with policymakers and researchers outside the Bank are a constant source o f stimulus. Finally, o f course, the SVP and Chief Economist is heavily involved inguidingresearch priorities. Even with such processes, one o f the challenges o f research management i s to anticipate topics sufficiently early to produce research findings that address them when it i s required. Sometimes this i s straightforward-as with research on the Doha Development Roundthat was released inthe run- up to the WTO's Hong Kong Ministerial Meeting in December 2005. Mostly, however, it is difficult and risky and one o f the requirements o f research management i s to create space for researchers to explore `blue skies' issues before any demand for them has been expressed. The remainder o f this section lays out DECRG's anticipated work program in broad terms, concentrating on the way it has changed since the last Research Report. It is laid out interms o f the new research teams, although, as noted above, much activity spans the team boundaries. Finance and Private Sector Development Finance and Private Sector Development research hasjust been brought together in one team. This reflects the centrality o f finance to private sector development and vice versa and the fact that large parts o f both sub-disciplines revolve around the behavior and performance o f firms. The combination is expected to yield both positive spillovers between the two strands o f thinking and the ability to take a more holistic view o f the factors determining the growth o f jobs, output and incomes inthe private sector. 71 Current policy concerns regarding the financial sector in the process o f development revolve around two rather different, albeit not fully independent dimensions, which can be called access to financial services and risk management. DECRG's finance researchprogram i s organized around these two strands. The current research program also has significant private sector development elements and with the recent reorganization, this emphasis will be even stronger going forward. Access refers to the need to ensure that financial services essential for growthreachwidely through the economy, thereby ensuring the foundations for broad-based, inclusive growth. But deepening finance and expanding access are not enough, given the fragility o f finance. Most countries, even including those which have experienced rapid development success underpinned by financial deepening, have suffered from financial crises interrupting the growth process, and sometimes setting it back for a decade or more. Inaddition, heightened risks at the level o f the individual firm and households have reinforced the role o f financial instruments and markets for hedging and managing risk also at the micro level. This i s why risk management, including crisis prevention, remains a central part o f the financial development agenda and hence o f the finance research program.25 Access to Finance The emphasis on access will continue into the next program cycle, as access to finance by both firms and households i s an important determinant o f the development process, promoting growth and alleviating poverty. The work in this area will include documenting and benchmarking differential access to financial services by small firms and the poor, identifying underserved groups and barriers to building inclusive financial systems. The work will also evaluate the channels through which access to finance can contribute to the growth process such as promoting entrepreneurship, innovation and the process o f technology adoption. Ultimately the research seeks to evaluate the impact o f firms' financing constraints and households' inability to access financial services on economic growth and poverty alleviation, and identify different ways to improve this access, that range from microfinance innovations to making improvements in the functioning o f mainstream financial institutions and systems. Risk Management The second area o f focus, risk management, i s important for ensuring the sustained effectiveness o f financial systems and financial stability over the long run. The research will investigate the impact o f supervision strategies as well as impact o f compliance with Base1 Core Principles on bank stability, the interaction o f bank insolvency resolution and deposit insurance policies, and the impact o f financial globalization on bank efficiency and access to financial services. It will also initiate work inthe area o f capital market development and insurance. These two themes o f ensuring broader access to a wide range o f financial services for firms and households, and strengthening institutions for risk management closely reflect the priories elaborated in the Concept Note for the Bank's Financial Sector Strategy (2006) which was the result o f a long consultative process undertaken by the Finance Sector Board, and discussed by CODE in April 2006. These themes also cover all important aspects o f the financial system, allowing the finance team to investigate policies that work best to improve the efficiency, stability 25 The two strands are linked. For example, financial services can safely be extended to a wider clientele only if the associated risks are well managed. And systemic financial risks are heightened by the danger of populist measures such as political interference incredit allocation. 72 and reach o f the financial systems, i.e. how to facilitate the development o f effective financial systems that contribute to growth and poverty alleviation. Private SectorDevelopment Both the current work program and the proposed one have significant private sector development elements. The current work program covers issues related to small and medium enterprises, corporate governance, bankruptcy, and entrepreneurship using different firm level datasets. Some o f the planned projects include evaluating the importance o f different constraints in the business environment for firm growth; how the business environment affects the process o f technology adoption, innovation, firm organization, governance, entrepreneurship and firm informality. Going forward an overarching theme for the PSD research will be to measure the impact o f the business environment and its reforms on firm performance. Over the long termthe PSD research agenda will strive to identify (a) robust relationships between different business environment features and firm performance; (b) investigate the impact o f changes in business environment, i.e. reforms, on changes on firm performance; and (c) identify business environment reforms with the greatest impact so that reform efforts canbe prioritizedand impact maximized. Growth andMacroeconomics This research program focuses on the effect of policies and institutional factors on growth and macroeconomic stability. It builds on earlier work exploring the covariates o f growth, mostly from an aggregate perspective. Current research combines a variety o f methodological approaches- micro and macroeconomic, single and cross-country, structural and reduced-form. It covers three broad areas: foundations o f growth, macroeconomic and financial issues, and governance and political economy. Foundations of Growth Earlier research at the Bank and elsewhere, based mainly on macroeconomic data, has yielded many valuable insights regarding the mechanics o f growth and the policies and institutional ingredients robustly correlated with long-term growth. Current research seeks to achieve a deeper understanding o f the mechanisms translating policy actions and reforms into growth, and especially o f the role o f country-specific initial conditions and complementarities among different policies - inorder to derive policypriorities tailoredto individualcountries' circumstances. The mainareasof research include the following. Microeconomic Dynamics and Macroeconomic Pe$ormance. Evidence shows that productivity gains account for the bulk o f long-term growth in per capita income. Economy-wide productivity growth reflects the allocation o f existing and new resources across microeconomic units o f heterogeneous efficiency. Research examines the economy-wide dynamics o f resource allocation, to understandhow it is affected by policy and institutional factors. Particular attention i s devoted to assessing the scope, speed and efficiency o f resource reallocation, and identifying policy and other factors shaping them. Informality. Informal and micro firms account for a large share o f economic activity in many developing countries and represent an important source o f income for the poor. But they have attracted relatively little research, largely owing to the lack o f suitable data. Taking advantage o f new data-collection initiatives under way, research focuses on three broad policy-relevant questions. First, the productivity and profitability o f informal and micro-firms: are they high-return, growing business, or just a source o f low-productivity jobs o f last resort? Second, the policy 73 incentives and constraints to the growth and productivity o f informal firms - do they grow to become formal, or do they get caught inpoverty traps? Third, the interplay between the formal and the informal sectors for aggregate economic performance - do informal firms supply cheap inputs to formal ones, or hurt them through low-cost competition and increased public service congestion? Innovation and Technological Upgrading. While technical progress i s widely regarded as essential for growth, relatively little research on its determinants has been done for developing countries, where much technological upgrading takes the form o f adaptation and adoption o f known technologies. Research examines how technological upgrading strategies in developing countries are affected by the policy and institutional environment. Attention i s also paid to how barriers to firmrenewal andturnover influence the macroeconomic pace oftechnological upgrading and catch- up with advanced countries. Finally, the research also examines the role of innovation and technological gaps in shaping the changing growth link between developed and developing countries over the short and the longrun. Fiscal Policy and Growth. Another line o f research i s concerned with the long-term growth consequences o f fiscal policy, and especially public expenditure composition, which until recently have been largely absent from the debate on fiscal targets and rules indeveloping countries-in large part due to the unavailability o f reliable data. Ongoing research assesses the contribution o f public infrastructure to overall growth, and the factors that shape it. Related research examines the consequences o f alternative fiscal targets for the composition o f public spending and for its long-term effects on growth and fiscal sustainability. Other ongoing work assesses the role o f corruption and weak fiscal institutions on the efficiency o f public expenditures and the enforcement o f fiscal discipline. Finally, research on the causes o f aggregate instability examines the role o f fiscal policy and fiscal institutions in augmenting or mitigatingmacroeconomic volatility, especially inpoor countries. Macroeconomic and Financial Issues Under this broad heading, three research themes are pursued. First, work on macroeconomic volatility studies the nature o f the shocks faced by different types o f developing countries, and the role o f country-specific institutional and structural features inamplifying or mitigating their effects and shaping potential policy responses. Inturn, research on financial integration and capital flows examines the benefits and challenges o f financial globalization and financial development for aggregate performance, including growth, key intermediate endogenous variables such as the real exchange rate, aggregate risk diversification, and the propagation mechanism o f financial shocks across countries. Finally, new work focuses on the macroeconomic effects o f aid and debt forgiveness. The latter has attracted surprisinglylittle attention inthe past. Related to this, research also examines various mechanisms o f potential `poverty traps'-ranging from health-related traps to lack o f access to finance-holding back aggregate growth. The research assesses whether these mechanisms-whose presence i s often argued as a rationale for scaling up aid-are at work in preventingpoor countries from taking off. Governance and Political Economy Past research has amply documented the contribution o f good governance to aggregate economic performance and long-term growth. Current research seeks to understand the mechanisms behind such contribution, and identify what concrete steps help attain good governance. The research reexamines the robustness o f the governance-growth link in macroeconomic data, as well as the contribution of governance to microeconomic resource reallocation. Inparticular, it also explores 74 the role o f governance in the success or reversal o f reforms as a potentially important mechanism underlying such links.Concerning the factors behind good governance, researchfocuses on the role o f citizen informationinfostering political accountability and improving governance; the effects o f fundamental characteristics o f the political system on its ability to promote political credibility as a key govemance ingredient; and the role o f redistributive conflict for governance failure. In addition, research also examines governance "anomalies"- seeming mismatches between the quality o f the formal institutional setting and actual governance performance. Building on earlier research on post-conflict economic performance, a separate line o f work i s concerned with the special case o f post-conflict governance. It assesses political and institutional ingredients for successful emergence from conflict. InternationalEconomic Integration This research program focuses on the impacts of economic policies affecting international transactions on efficiency, equity, and growth in developing countries. International economic integration i s defined broadly to span the international exchange o f goods and services, foreign direct investment, knowledge (technology) and people (both temporary movement and longer-term migration). Major objectives are to better understand the "mechanics" o f globalization, inparticular the impacts o f trade, investment and migrationpolicies and other forces (such as technical change) on the pattern and composition o f trade and domestic production; to improve the analytical tools that are used to evaluate policy reforms by extending these to go beyond trade in goods; to work with partners to enhance the quality and coverage o f data on policies affecting international integration; to improve the indicators used to characterize the restrictiveness o f policies affecting international economic integration across countries; and to do more to assess the effectiveness o f "aid for trade" interventions and the implementatiodenforcement o f trade agreements, both regional and multilateral. Among the questions the program will explore are the relative magnitudes o f the potential gains from more liberal trade, investment and migrationpolicies, the relationshipsbetweenthese different types o f international exchanges; the implications o f the coexistence o f relatively liberal regimes for goods trade and investment with relatively more restrictive regimes for services trade and investment, and on labor movements - as seems to be the case inmany countries, and the effects o f foreign investment in markets with different levels o f average barriers to trade. Better data on underlying policies are a precondition for better policy advice and understanding o f the process o f globalization. The research program therefore puts significant emphasis on the collection o f and public access to data on policies affecting integration. Among the major elements o f the research program looking forward are: agricultural trade policies; policies affecting trade and investment in services; and the impact o f regulatory requirements, transactions costs on the international competitivenesso f firms, and migration. Distortions of Agricultural Incentives Research on poverty has concluded that because most o f the poor are located inrural areas and are heavily dependent on agriculture, large-scale poverty reduction requires increasing profitability in farming in addition to the creation o f alternative employment opportunities. Earnings from farming are depressed in many low-income countries partly because national policies have an anti- agricultural bias, andor because richer countries assist their farmers with import barriers and subsidies. This research project i s measuring the changing extent o f policy bias against agricultural production, the effects o f current and alternative policy regimes, and the political economy forces explaining reforms and resistance to reforms. As part o f the latter, there will be a focus on the 75 importance o f international forces relative to domestic political forces in bringing about reform duringthe past two decades. Specifically, the first stage o f this research project i s generating broader and more-complete time series estimates o f distortions to agricultural producer and food consumer prices in developing countries.,In its second stage (from 2007), it will be analyzing the political economy forces behind the evolution o f those policies and those o f developed and transition countries, so as to identify effective unilateral and multilateral reform strategies, and also estimating the distributional and especially poverty consequences o f alternative types o f policies. Expected outputs include country- specific databases for more than 40 countries and four sets o f papers usingthese data (Africa, Asia, ECAandLAC) from stage 1andtwo sets from stage 2 (causes andeffects). Services TradePolicies and Non-tarif Measures A central aspect o f the research program revolves around the collection and compilation of data to characterize and measure the effects o f trade and investment-related policies across countries. This will oftenbe done incollaboration with partners. Existingdatabases on global trade andproduction, antidumping and WTO dispute settlement will be updated. A specific focus area for new work concerns services trade and investmentpolicies. The objective here i s to complement existing firm- level and household data for a set o f developing countries for which data i s available for at least two points in time and develop a detailed picture o f services policy, market structure and performance across sectors and time. This will be done through a cross-country survey to collect information on impediments to international integration that are not captured by existing databases on merchandise trade policies. These "missing policies" are primarily in the areas o f cross-border movements o f services and service providers. The lack o f data has made it difficult to examine the relationship betweenpolicies andperformance, and to identify priorities for domestic reform and international cooperation in services. Better data on underlying policies are a precondition for better policy advice and understanding o f the process o f globalization. Better data are also needed to leverage planned investments inimproved analytical modeling techniques - which will require information on FDIand services policies-as well as to strengthen monitoring o f policies inlight o f the global commitment to attain the MDGs. The large gaps in available information on policies affecting international integration impede comparisons o f country "performance" and assessments o f the direction and magnitude o f policy changes over time. Regulation and Trade Costs: Linkages between theBusinessEnvironment and Trade Despite significant trade liberalization, many developing countries have experienced sluggish economic,growth accompanied by only a modest decline in poverty. Recent research has stressed the importance o f institutions in understanding the linkages among trade, growth, and poverty reduction, as well as the regulatory environment, transactions costs and policies affecting factor markets. All are potentially important in allowing/encouraging resources to move to more productive uses following trade and investment liberalization and the desired increase ingrowth to berealized. Research will center on the broad question o f how regulatory policies such as product standards and their enforcement impact on production and transactions costs. This researcharea will also consider policy reforms to facilitate trade and enhance export competitiveness. A major focus will be an exploration o f both the static (efficiency) and the dynamic (growth) gains associated with lowering trade transactions costs. A specific question to be analyzed i s the net effects on diversification and 76 composition o f exports. While it i s now the conventional wisdom that a good business climate (characterized by a flexible regulatory environment, quality infrastructure, etc.) i s desirable to promote long term economic development, it is much less well understood how it affects the composition o f exports directly and through its interaction with trade policies. Migration Research The migrationresearch programi s organized from withinthe International Trade team, but involves researchers from several units in the Group. The links between migration and fundamental development issues have been neglected in the past, especially as far as the empirical research i s concerned. Diverging demographic trends between developed and developing countries and the large wage gap between them imply that migration forces are likely to strengthen and make it increasingly difficult for government policies to restrain migration pressures and strengthening trends. Among the major advances expectedinthe next two years are: International Migration Policy and Economic Development: Studies across the Globe. (forthcoming, March 2007). This new volume presents some o f the latest round o f research in the migration research program. In addition to presenting the most complete dataset o f bilateral migration stocks, the volume has sections on the impact o f migration on development, and studies on several host country policies andreturnmigration. Surveys: Several surveys are in the field to study in detail the determinants and consequences o f migration: one o f the Japanese descendants inBrazil will be used to study the Japan-Brazil corridor and another as part o f the LSMS in Ghana should be finalized by mid-2007. Finally, the research program i s in the initial stages o f a household survey in Sri Lanka with focus on temporary migrants to the PersianGulf countries. Medical Brain Drain: The preliminary version o f the most complete bilateral migration dataset o f medical doctors has been completed. This i s available on DEC's website along with several papers, the most important o f which analyzes the linkages between medical brain drain, the HrV epidemic and economic growth in Sub-Saharan Africa. Also, an in-depth study i s being conducted o f the determinants o f doctors' migration in Ghana which will include surveys o f hospitals, medical students, as well as practicing doctors abroad and inGhana. Inaddition, work will continue trying to unravel the linksbetween trade, FDIand migration, the gender aspects o f migration and the determinants o f the brain drain in general, drawing on the dataset published by DECRGlast year. HumanDevelopment andPublic Services A year ago, the Public Services Group was renamedthe "Human Development and Public Services Group" inrecognition o f its continuing emphasis on human development; the delivery o f education, health and social protection services, and the political economy issues related to those sectors. The group i s no longer conducting free-standing service provider surveys and public expenditure surveys. The latter are now being undertaken by operational staff though researchers continue to provide substantial advice and guidance to these efforts elsewhere in the Bank. Researchers are also developing new directions for research on employment and the functioning o f labor markets, an area that has not received sufficient attention from Bank researchers in the past few years. Another area o f research that i s growing i s aid effectiveness. Since the policy research report AssessingAid was publishedeight years ago, donors have committed to a substantial increase inaid under the Monterrey Consensus, with many o f thempromising to increase aidto 0.7 percent o f their 77 GNP. As they begin to deliver on these commitments, new research approaches can help inform donor agencies and their constituencies on the effectiveness o f alternative aid strategies. The future research program o f the Human Development and Public Services Group i s devoted to the following four broad components. Describing and UnderstandingLevels and Inequalities in Human Development The group's research continues to document trends, patterns and inequalities inindicators o f human development in a wide range o f countries, and for specific population groups. Efforts emphasize developing measures o f harder-to-quantify dimensions o f human development and relating those to socioeconomic correlates, as well as the magnitude o f "mortality shocks" such as genocide (Cambodia, Rwanda), HIV/AIDS (Sub-Saharan African countries), and large-scale economic shocks (e.g. Peru in the 1980s). This research component also explores the association between human development and various sources o f inequalities. What i s the role o f factors such as access to health insurance schemes, economic crises and political conflicts, and socioeconomic and cultural inequalities in explaining the demand for health care; what are the determinants o f school attendance and learning outcomes, and how are dimensions o f school quality associated with these outcomes; what are the sources o f vulnerability and how do different groups cope withrisks? The latest impact evaluation methods are being used to understand how programs and reforms can shift demand for social services and improve human development outcomes. Examples are evaluations o f programs to raise the demand for education and health services, especially among the poor, such as targeted conditional cash transfers (Ecuador), scholarship programs (Cambodia, Indonesia), improvements in information availability (Pakistan, Philippines), and medical financial assistance (China, Vietnam). Other studies are evaluating changes in how services are delivered, such as community-based nutrition programs (Senegal, Burkina Faso), prevention and new treatment programs for HIV/AIDS (Burkina Faso, Ghana, Mozambique, Rwanda and South Africa), andhome-based child health and parentingprograms (Ecuador and the Philippines). Another focus o f ongoing research i s the impact o f low or unequal human development on individual and family vulnerabilities and on coping strategies. What is the effect o f educational progress on labor productivity and income distribution in an economy like China's which has grown rapidly for well over a decade; what are the effects o f fertility choices on household living standards and other socioeconomic outcomes, including in countries that have suffered from the HIV/AIDSepidemic; what are the effects of increased urbanization and globalization on the work opportunities for men and women in developing countries and their responses in terms o f schooling, work outside the home, and migration? Improving ServiceDelivery and Reforming Institutions in Support of HumanDevelopment This research component aims to understand how to make services work better for the poor. A key challenge i s to understand the incentives that providers face and what goes on inside schools and health clinics in order to assess how resources are being used and how performance can be improved. Teachers, doctors, and other health personnelnot only play a central role inthe delivery o f care and education; they also claim the lion's share o f recurrent expenditures. In this light, DECRG researchers have measured provider absence in health clinics and schools in six developing countries and explored its causes and consequences. That project is now shifting its primary focus to understandinghow better to reduce absenteeism and improve performance. 78 Ongoing impact evaluations o f specific programs are also learning more about how services can be improved at points o f delivery. Some studies are about how service personnel respond to changes inincentives, such as performance-based pay, contract arrangements, and better accountability. A randomized evaluation is being conducted o f information and advocacy campaigns in Indian villages aiming to spark community participation inschools and improve learning outcomes. Other studies are examining how broader institutional reforms, such as a switch to decentralized systems o f provision and governance, affect the effectiveness and equity o f service delivery. Contracting private providers to deliver public services i s another means to expand provisionand use butlittle i s understood about what forms o f contracting work best. The effects o f different forms o f contracting as well as the manner in which the private sector i s affected by the creation o f a regulatory framework are also being examined. Previous research identified particular weaknesses inpolitical incentives o f governments to deliver quality public services. Ongoing research i s examining two institutional responses to overcome political obstacles to serving the poor-fiscal decentralization to local governments, and mass media engagement to promote yardstick competition across political jurisdictions on optimal allocation o f public resources for human development. This research component also looks at a country's larger political context, especially the effect that international social and economic rights norms today have on that context. The enforcement o f those rights by courts will likely affect the delivery o f basic social services indeveloping countries. Does Aid Matter? New Research on Aid Eflectiveness That aid i s likely to work better in a good policy environment continues to have the appeal o f common sense, despite controversy over the existing cross-country evidence. Research planned or inprogressexamines this question at lower levels of aggregation, includingcross-state data within selected countries, and at the project level. Other research will examine the diffusion o f development ideas and their impacts, in contrast to the previous focus on resources in the aid effectiveness literature. DECRG researchers are planning to update and expand research on the impact of: aid on the composition o f public spending, and to investigate the net impact on aid allocations o f performance-based systems such as IDA and MCC. Workers and Labor Markets What can be done to helpmake labor markets work better for poor people: how can we assure more equitable and less risky outcomes for them while preserving incentives for effort and productivity growth? Many o f the labor market regulations and interventions that have emerged in developed and middle-income countries have limited relevance to low income countries (especially rural labor markets inAfrica and South Asia). Regulation o f labor markets i s intended to protect workers but can also hamper job creation, leaving more workers unemployed or unprotected in the informal sector. This may disproportionately affect young workers, women and unskilled workers. Indeed, informality i s pervasive in most low-income countries, labor market regulations apply only to a small proportion o f workers in urban areas, and the non-farm sector in the rural economy i s little understood. DECRG aims to expand research on labor markets on these topics. This work will be led by a Senior Labor Economist who will be joining the department in May 2007. New research will examine the extent to which the poor and excluded groups participate in and benefit from the expansion o f employment opportunities, assess the relative effectiveness o f labor market programs and regulations in improving the welfare of their intended beneficiaries in the short and long term-in order to assure that social protection interventions are adequate and conducive to longer- term poverty reduction. 79 Poverty:EquityandDevelopment It has long been the case that the Bank's flagship publication, the annual World Development Report, both reflects past research and informs priorities for future research. Last year's WDR, Equity and Development, i s no exception. The WDR argued that there are inequalities inthe world that get reproduced across generations and impede overall economic performance. This was based on a body o f past research, including work within the Bank. However, it also posednew challenges for future research. Researchers in the Poverty Group are addressing this challenge by aiming to addrigorous new thinkingand evidence inthose areaswhere the WDR was more speculative, given limitations on the existing stock o f knowledge. This will be done intwo main areas: better data for describing inequity and research on understanding and breakingpoverty and inequality traps. Describing Inequity: Towards Better Poverty and Inequality Data Compilations o f distributional data at the country level lie at the heart o f much o f our current knowledge about both the extent o f inequality in the world and the implications for aggregate economic growth. There i s a pressing need to improve the quality o f existing data and DECRG researchers have identified a number o f specific areas that need attention. The data are also being asked for to throw light on new questions. One example i s the need for poverty and inequality measures for finer socio-geographic groupings than are typically available from household sample surveys. The development o f a credible methodology for finer census and survey-based poverty maps by the DECRGpoverty research group was a response to this need. Another example i s the needto develop operational measures o f the concept o f inequality o f opportunities, which the WDR emphasized as both a key component o f the normative concept o f equity, and as the most appropriate concept o f inequality when discussing the purely positive implications for efficiency and growth. Research at the Bank has always been closely linked to efforts inthe design and implementation o f household surveys, notably through the Living Standards Measurement Study (LSMS) based inthe poverty research group. The emerging concern about equity and development will have implications for the LSMS. Planned future work will be on validating and experimenting inthe area o f welfare measurement (as an input to measuring poverty and inequality) and a range o f other topics including disability, gender, financial services, migration and infrastructure. High priority will also be given to developing better methods o f data collection and analysis, including exploiting new technologies. LSMSI V In2006 a'newprogram was also launched, which will be validating and experimenting inthe area o f money-metric welfare measures, developing and testing new topical modules for the LSMS and investigating methods to exploit new technologies to improve data production. The development o f new modules will be tailored in part to the issues addressed in the Equity and Development research program (including measuring inequalities o f opportunity and inequalities associated with gender and ethnicity). The LSMS IV agenda will also aim to ensure the dissemination o f results. Efforts here include producing tools that provide guidance onbest-practices inintegratedhousehold surveys, and partnering with the international survey community and client counterparts to increase the flow o f informationbothnorth-south and south-south. 80 Investing in Equity: Understandingand Breaking Poverty and Inequality Traps Here the main challenge for future research i s to identify the most important specific dimensions o f inequity that impinge on economic performance and are amenable to policy intervention. There are a number o f topics under study, including: Inequalities in education and health that can severely impede prospects o f participating in the opportunities o f a growing economy, and contributing to that growth. To draw useful lessons for policy we need a deeper understanding o f the sources o f economic gradients in human capital, and their implications for the evolution o f living standards over time. Inequalities in opportunities stemming from location and impediments to mobility. Persistently poor areas have been a concern in many developing countries, including those undergoing sustained aggregate economic growth. Why do we see areas with persistently low living standards, even in growing economies? What are the implications for policy? How much emphasis should be given to poor-area development versus out-migration, or are these in fact complements? Inequalities in voice and power, such as stemming from political institutions, judicial inequalities and constraints on access to social networks that can be crucial to abilities to cease new opportunities. What scope i s there for new policies emphasizing institutional reforms and new modes o f services delivery, such as through greater reliance on local communities? Inall these areas, there is a continuing need to assess the distributional impacts of development programs and policy reforms. All policies affect inequalities inincome and other dimensions, even when that i s not their primary aim. The focus o f the research program i s on a narrower set o f policies that have improving distribution as their primary aim. The specific policies include transfer schemes (workfare and conditional cash transfers), programs for the extreme poor, poor-area development programs, disaster relief, land reforms, judicial reforms, community-driven development, and institutional reforms for promoting local democracy. SustainableRuralandUrbanDevelopment The new team for Sustainable Rural and UrbanDevelopment researches issues of environmentally sustainable development in general, spatial dimensions o f development, infrastructure and urban development as well as issues specific to the rural sector. The programi s extensive, covering topics such as landpolicy, community-driven development, rural finance, the rural investment climate, the economics and institutions o f water resources, the poverty-environment nexus; environmental governance; climate change and natural disasters; infrastructure and economic development; poverty and urban development; and urban and regional economics. Looking forward, the major components are discussed below. Land Policies Land policy has become a significant component o f the Bank's operational and policy agenda in rural development. The work program follows on the 2003 PPR on landpolicies, focusing on three main areas. First, the gender-differentiated impact o f land tenure security and o f efforts (e.g. land titling, tenure security legislation, legal reform) to improve it in China, India, Central America, Ethiopia, and a range o f other Afr-ican countries is evaluated. Second, the research explores the efficiency and equity impact o f land markets (rental and sales), and o f restrictions on operation o f these markets in the context o f a growing non-agricultural economy and large-scale migration o f labor out o f agriculture. Finally, evaluation o f the impact o f different types o f land reform (through 81 market mechanisms or expropriation) on household welfare and productivity o f land use in Brazil, South Africa, and India i s conducted. All o f these are undertaken in close collaboration with local researchers and Bank operations, with integration into the DIMEinitiative. Community-Driven Development The reliance on community-based mechanisms for empowerment and delivery o f development and social services has been growing in the Bank and among donors, not without controversy. The programi s supporting an increasing number o f evaluations o fprograms aroundthe world, a number o f them with fully experimental designs which are expected to provide answers to key questions. D o CDD programs increase the quality or quantity o f public services? D o they make governments, local and national, more accountable? D o they allow for greater transparency inthe disbursement o f funds andare they a more efficient mechanismfor delivering public benefits to a target population? Are investments in community infrastructure better maintained when investments are requested directly by the beneficiary community? D o the most disadvantaged participate in community decision making? Does their participation yield a better allocation of, or access to benefits within the community? Given the time neededto set up and conduct careful evaluations, this program will deliver its major output by end-CY09. However, DECRGwill produce an interim assessment o f the new evidence coming available by the end o f FY08. Macro-Micro Linkages of Irrigated Water Management Where irrigated agriculture i s important, micro-water policies affect the rest o f the economy and macroeconomic policies may have unintended effects on irrigated agriculture. A model o f these relationships was applied to Morocco. Trade reform illustrated links from macro policies to the farm level, where water was shifted from previously protected crops. And micro policy reform reduced water allocated to soft wheat production and sugarcane, releasing water for other crops and suggesting high supply elasticities where farmers can shift into other crops. The model also was used to examine the effects o f frequent droughts and increased water transfers to urban and industrial sectors, resulting ingroundwater over-pumping. The effects o f governance structure and institutional arrangements were considered including (i) removal o f domestic subsidies on inputs and outputs and using direct farm income payments instead, and (ii) allowing revenue generation and investment at the regional level. Based on the Moroccan analyses, a refined model i s being appliedto other countries, includingTurkey and South Africa. Climate Change DECRGplans to explore four major parts o f the climate change agenda: Impact assessment and adaptation to climate change, mitigation o f emissions, sequestration o f emissions, and the Bank's role inthe rapidly-growing carbon finance business. Even though developing countries may not be responsible for them, changes in climate have important implications for developing countries. Climate change and its effects on sea-level, agriculture, forestry and ecosystems have direct and potentially significant implications for a wide range o f investment and expenditure decisions that are being made now in developing countries, for example in agricultural development strategies, water management, infrastructure location and the relative merits o f out migration from the worst affectedregions. But developing countries will also increasinglybe calleduponto help mitigation. The Bank and its client countries need to evaluate how much emissions can be reducedthrough `win-win' strategies, what the trade-offs are beyond that, and how mitigation and sequestration can be financed and implemented. DECRG i s initiating studies on a comparative assessment o f energy resources and 82 abatement options, the efficiency o f renewable energy investments inBangladeshi villages, and the economics o f solar power inrural Africa Part o f the threat o f climate change i s increased volatility. Recent DECRGresearchhas contributed to the development o f a global geographic database o f natural disaster hotspots, which has already had significant influence on hazards policy and strategy development. This will be extended and exploited to offer clearer predications o f the consequences and costs o f disasters, especially in the light of the increased urbanization o fthe developing world's population. Infrastructure and Economic Development Despite recent staff losses, DECRG i s committed to a multi-year research program to provide empirical evidence on the role o f infrastructure in stimulating economic development. The main questions `to be answered are: How and by how much does infrastructure contribute to economic growth? How can the economic returns from infrastructure projects be increased and what i s the overall magnitude o f the benefits? What i s the distributional impact and how can we improve the welfare consequences o f infrastructure investments? Macro analysis will explore the consequences for growth and the overall productivity o f infrastructure investment. This will complement ongoing research on the contribution o f infrastructure to economic performance at the micro (firm) level, which i s generating evidence for Brazil, India, Indonesia and Mexico. This suggests that while improvements in inter-regional transport connectivity have significant impacts on firm productivity, improvements in transport infrastructure by themselves are not sufficient to induce firms to relocate across sub-national regions. A second strand o fresearch focuses on assessingthe economic returns and development impacts of infrastructure investments, with particular emphasis on urban development and transport infrastructure. The proposed research reflects priority areas where solid empirical support would strengthen the quality o f the Bank's policy advice. The research on transport focuses on two issues: (a) to assess the impact o f inter-regional transport accessibility improvements on trade flows and economic performance; (b) to evaluate the impact o f urban transport improvements on the welfare o f the poor. The urban development component focuses on welfare o f slum dwellers and seeks to estimate the investmentgap inupgrading slumareas ina sample o f cities across the world. Separate but related research involves detailed impact evaluations o f issues such as the effects o f information/ communication technologies on rural livelihoods in Bangladesh, and o f urban upgrading schemes ina number o f places. The latter work will initially focus on a number o f urban upgrading projects where a moderate additional investment will allow a relatively quick gain o f useful insights into the performance o f ongoing or completed programs-both Bank and non-Bank. Italso includesplans for more ambitious, butentirely do-able, impact evaluations involvingfollow- up surveys, although due to the complexity of urban upgrading projects, there will be fewer opportunities for randomized experiments than in other types o f Bank operations. This work will depend heavily on collaboration with operational colleagues. 83 REGIONS, NETWORKS WBI AND HumanDevelopmentNetwork Governance-relatedtopics will be a focus o f future research conducted inHDN.Various aspects o f health system development, measurement o f learning outcomes, labor market mobility, pension performance, leakage insafety nets and impact evaluations across sectors also will be investigated. Oneducation, HDNwill examine the impact o f legislation on child labor and schooling, includinga case study o f Pakistan's compulsory primary education act. The relationship between labor demand and education i s addressed in a study collecting experimental evidence on returns to schooling in Mexico. The educational use o f computers i s the subject o f a randomized experiment in Colombia. The network i s also engaged in impact evaluation, including study o f Bogota's conditional cash transfer and user fee reductionprograms. The Safety Nets team in HDN i s conducting research on improved targeting. Their work will identify key design and implementation features critical for targeting insix ECA countries. A study investigates the causes o f mediocre targeting accuracy o f means-tested programs implemented in the Russian Federation. How employment assistance and social assistance policies can be integratedwill be consideredinanother Russian study. Researchon food security also will contrast experiences from South Asian and Sub-Saharan Afkican food policies. The Pensions team will work on severance pay arrangements around the world, one o f the most widely used income protection programs for the unemployed. Research will also involve developing evaluation criteria for a country's ability to support funded pension schemes; examining cross country experience with private pension fund performance; conducting cross country analysis o fpension entitlements usingmicro simulations; setting up a global pensions database o f indicators, pension parameters and regulations; and developing operational parameters for evaluating the governance o fpublicly managedpension schemes. Several labor market research issues are being addressed by HDN. Staff have been working on labor market mobility and its effects across jobs and earnings in the formal and informal sectors, and for the self-employed. They also are looking at child labor and education, and working on a report on LAC labor markets. The social risk management team will focus on building stronger partnerships with international partners, academics and research institutes and with other teams inthe Bank. Some new researchis planned to explore the links between extreme poverty and uninsured risk, to develop ex-ante instruments to decrease the likelihood o f individuals descending into destitution or extreme poverty. A number o f disability related dissemination initiatives will be launched, including a web-based knowledge kit on data collection. The links between disability and poverty indeveloping countries will be explored through review o f recent quantitative and qualitative research across all regions. Other short studies on rehabilitation and inclusion o f people with disabilities (especially infants, children and youth) in the Bank's post-conflict and public health, nutrition, water and sanitation relatedwork are part o f the HDNresearch program. The social funds and quality team, in collaboration with SDV, HRM and AFTH1, will study community-led risk management and safety nets, vulnerability targeting and natural disaster management. 84 PovertyReductionandEconomicManagementNetwork Networkresearch on economic policy and debt will investigate the linksbetweengrowth and public finance, technology, labor markets, competitiveness and globalization. The strategy combines development o f general models as well as country case studies. A particular area o f focus i s the linkbetween sovereign debt and development, for which a series of country case studies and two cross-country investigations were conducted. Helping countries to design more effective and prioritizedstrategies for shared growth and poverty reduction i s the objective o f the network's current and future research. This work aims to examine (i)growth as a determinant ofjob creation, job quality and access to goodjobs; (ii)the distributional aspects o f migration and the heterogeneity o f migrationprocesses (e.g., South-North, South-South) and their links to household well-being; (iii) how local community institutional characteristics affect household mobility and ability to contribute to and benefit from growth opportunities; (iv) instrumentsto improve governance reforms and public investment policies for poverty reduction (addressing important questions o f fiscal policy raised in the consultations). In addition, a program i s being initiated to assess the poverty-reducing impact o f investments in disaster prevention, and how to combine poverty maps and the Bank's natural disasters hotspots tool to guide investment planning for poverty reduction. Empirical evidence and lessons from cross-country experience will be examined inresearch on the public sector dealing with means to expand taxable capacity and achieving revenue potential, directly addressing the requests o f several Bank units for research on fiscal space. Research also will draw on the Bank's assistance inrevenue administration reformproject since the 1990's. FinancialandPrivateSector DevelopmentNetwork Current financial policy concerns revolve around access to financial services and risk management, and the Network supports and collaborates with the research plans in these areas described in the previous section under Finance and Private Sector Development. In addition it is exploring the possibility o f collecting and disseminating standard indicators o f accessto finance for a broad range o f countries (under the provisional title Getting Finance). Inthe area o f private sector development, the Network also draws heavily on DECRG's research effort described above in areas such as corporate governance, technology adoption, innovation, and firm informality and supports its long term objective o f research to identify robust relationships between firm performance and the different elements o f the business environment in order to prioritize clients' reform efforts. The Network's own recent research in FPD has been built on micro-data systematically collected and compiledto make them comparable across 175 countries. The Doing Business Report, which began publication in 2004, is one o f the most well-known flagship reports o f the Bank. The 2007 Report focuses on policy reform. SustainableDevelopmentNetwork Agriculture and Rural Development Agricultural risks play a predominant role in the vulnerability profile o f developing countries. Exposure to natural disasters and other agricultural risk impedes the development process, pushes households into poverty, and drains fiscal resources o f developing countries. Several Risk and Vulnerability Assessment and Living Standards Measurement Study Surveys have established that 85 weather- and commodity price-relatedrisks are the most important systemic causes o f vulnerability for rural people. Mismanagement o f commodity price volatility can create financial losses for market intermediaries such as traders, producer groups, exporters, and input providers and adverse weather events o f disaster scale canhave devastating impacts beyond agricultural populations. ARD is working on issues of crop and price insurance, with a focus on testing operational applications o f market-based risk management tools. Research to evaluate the operational feasibility and/or impact o fprice and weather riskmanagement strategies implemented at the macro or micro level o f the agricultural supply chain will continue to be a focus o f the group. The main areas o f this research will encompass (i) improving small farm access to finance by linkingcredit with index-based drought or flood insurance, (ii) of commodity derivatives and structuredtrade use solutions (a) to reduce costs/uncertainty in food security/ staple food trade, and (b) to reduce the risk of financial loss associated with intra-seasonal price volatility for export crops. Applied research will also be undertaken inrelated policy, regulatory, and institutional issues, and on risks and profitability in agricultural sectors. Finally, a sub-theme o f research will examine the efficacy o f and lessons learned from donor and other interventions seeking to manage the risks and transaction costs associated with (African) smallholder farmers' participation in higher-value agricultural supply chains. Environment The future topics o f ENV research will encompass improved understanding o f the links between poverty and the environment at the household level. This will be part o f ESW in FY07 and will result inbook publication inFY08. Research also is planned on "Beating the Resource Course" and the economics o f adaptationto climate change at the country level. Infrastructure A range of questions on infrastructure investment and impact were research priorities mentioned during the consultations. The SDN infrastructure team, which has developed a major research agenda, will conduct innovative analytical work as part o f ESW in several areas on "micro" issues: (i) designandassociatedregulatoryneedswithdetailedcasestudiesinwaterandenergy; contract (ii)comparative performance assessment o f public and private providers o f utilities services based on a new data set put together over the last couple o f years in terms o f efficiency, equity, fiscal costs; (iii)performance benchmarking o f infrastructure performance in Africa; (iv) assessment of drivers o f effectiveness inpublic enterprises; (v) optimal size o f providers inwater; (vi) interaction between procurement practice, units costs at the project level and project effectiveness; (vii) the burden o f.energy self generation; and (viii) benchmarking logistics costs. The "macro" issues that are included in SDNresearch agenda are (i) fiscal costs o f infrastructure; (ii)investment needs, (iii) infrastructure and growth inEast Asia and Africa; (iv) benchmarking and impact evaluation o f infrastructure on productivity, exports and FDIbased on I C A surveys; and (v) evaluation o f forms o f Chinese penetrationinAfrica and LAC infrastructure. Impact evaluation at the project level-incorporating monitoring as part o f project desigr-and at the sector policy level-considering, for instance, tariff reform, privatization and restructuring- will be important part o f the SDNresearch program. Finally, future research on infrastructure will investigate a number o f institutional issues including (i)specific governance diagnostics across infrastructure sectors; (ii) interaction between competition and regulation in the stimulation o f effective innovation in network industries; (iii) the payoffs o f a spatial approach to decisions on infrastructure resource allocation; (iv) the political economy o f infrastructure reform; (v) 86 effectiveness o f public-private partnership (PPP) units; and (v) regulatory agency effectiveness surveys ( with Africa, LAC) Africa Region Most research being done in the Africa region i s undertaken in the context o f the economic and sector work on particular countries. In addition, special studies are undertaken in the regional office and various sector units. Some o f the key and plannedresearch studies are as follows: Africa Enterprise Study The Africa Region i s launching a joint research project with Japanese scholars to foster international knowledge sharing on private sector development in Africa. This project will synthesize findings o f firm-level research on economic and socioeconomic factors which facilitate or constrain formation o f viable indigenous firms in African countries. It will link these findings with ongoing research on spatial and vertical dimensions of industrial organization, such as research on industrial clusters and value-chain analysis. The project seeks to suggest pragmatic strategies for building the domestic private sector. Related research underlies the Africa Competitiveness report, ajoint product o f the WBG, WEF and the AfDB. TheEvolvingAid Architecture in Africa and its Impact on Development Efectiveness AFR is planning research by international scholars on aid architecture inAfrica, to examine issues o f aid harmonization and management, inter alia, to enhance the development effectiveness o f aid, its sustainability and country ownership. Country case studies will identify success factors and key constraints. Economic Partnership Agreements betweenAfrican Countries and theEuropean Union This research program will examine the planned Economic Partnership Agreements (EPAs) between the EUand Sub-Saharan Africa. It analyzes alternatives to maintain preferential access to the EU market, the proposed reciprocal preferential liberalization o f imports from the EU under EPAs and accompanying trade and fiscal reforms. Complementary business-climate reforms and aid for trade needed to stimulate a strong supply response to trade liberalization also will be investigated. The research will examine the potential for EPA's to assist regional integration efforts, their risks and alternatives to mitigating them. A related study on the effects o f trade liberalization and regional integration analyzes their effects on food security in Southern and East Africa. Growth, External Shoch and Increasing Aid in Sub-SaharanAfrica A range o f on-going work at the regional level and with DEC and PREM staff assesses issues and challenges to Africa's development. This research will measure and characterize recent and long- term growth in SSA and external flows o f foreign exchange. Historical patterns and volatility in donor andremittance flows, real exchange rate dynamics o f increasingaid and the timing o f aid and borrowing will be assessed. The patterns, consequences and associated risks o f external shocks on African countries will be analyzed. Related topics are explored in a study on migration and remittances for African development. 87 Africa Infrastructure Country Diagnostic Both descriptive and causal analyses o f infrastructure determinants and effects are badly needed in much of the developing world. The Africa Infrastructure Country Diagnostic (AICD) i s a major two-year program to improve knowledge o f infrastructure in Africa (including ICT, irrigation, power, transport, water and sanitation). This study was requested by Regional Institutions o f Africa (AU, NEPAD, RECs) and major donors represented in the Infrastructure Consortium for Africa, and i s closely coordinated with the NEPAD Medium to Long Term Strategic Framework led by the African Development Bank. Twenty-four subject counties provide a representative cross-section o f Sub-Saharan Africa. For each country, the study will document the fiscal costs o f infrastructure, investment needs, and service providers' performance. Survey evidence on enterprise and household demand for infrastructure also are being analyzed. The data platform will be used to support a wide ranging program o f analytical work to address some o f the main policy questions currently being debated including the impact of infrastructure on productivity and growth, the extent o f the financing gap, the prioritizationo f investments, the efficacy o f policy reforms, and the efficiency o f service providers. The resulting databases will be made publicly available to all stakeholders usingeasy accessweb-based tools. Other Studies Research on human development issues will include an impact evaluation o f community based nutition projects inMadagascar and Senegal, and a major comparative impact evaluation on school feeding and take-home rations in Burkina Faso, Uganda and Laos. Both o f these projects are funded by the Research Committee. Research on education will address whether communities should build their schools, the role o f tertiary skills in African competitiveness and growth, and issues o f labor markets and skills inSenegal. Two studies will focus on poverty, one drawing on case studies from West Africa to assess growth and poverty, the second looking at concepts and case studies from Africa and Latin America to examine the role ofpublic finance inpoverty. Management o f oil in Africa and a broader examination o f natural resource management issues are planned. The region i s also tentatively considering a major urban research program that could support development o f a regional flagship report. AFTPS has a research program based on evidence from Investment Climate Surveys, Doing Business indicators and other data sources. This i s collaborative with many partners including the African Development Bank, African researchers and international experts. Topics include education and training at the firm level, the effect o f labor regulation on wages and employment, firm strategies for coping with HIV/AIDS, the impact o f exchange rate stability on exports, the investment climate for tourism, and indigenous owned firms. East Asia andPacificRegion Future EAP research comprises relatively independent studies conducted in response to the work program needs o f individual units, and regional studies addressing issue o f regional concern. A major strand o f EAP research addresses corruption, a Bank-wide priority for research and operations. This work will include an analytic overview o f corruption and governance in the region. Two areas o f particular concern that will be addressed in additional studies are corruption innatural resources management and intrucking in Indonesia. Another major regional theme of 88 research i s vulnerability-both sources and policies for alleviation. Labor skills and their relationship with productivity growth will also be examined regionally. Two other broad areas o f regional research are research on energy and sustainable development and policies to bridge the urban-rural divide. In addition to research arising solely within the VPU, several major pieces of EAP research are being conducted inparticipation with PREM staff and funded by PREM. This research will address trade issues, particularly the restrictiveness o f non-tariff measures in EAP trade, and the standards o f origin and technical barriers to trade. Research on the place and impact o f China in regional trade agreements will provide some broader insights on this important issue. PREM also is cofinancing research on creating economic diversification and improvements in areas o f post- tsunami recovery. Research on security markets also will be conducted withPREM. Europeand CentralAsia Region ECA shares the Bank wide demand identifiedinthe consultationprocess for research inthe area of infrastructure and lagging regions. ECA i s participating in addressing these gaps in research through an upcoming flagship report on energy inECA and through work on regional development. Geographic disparities in growth and poverty were reflected inthe identification o f lagging regions as a priority inthe Regional and Network Research Consultations. ECAresearchwith DECRGwill consider how geographic dimensions can be considered in policymaking to alleviate poverty in lagging regions. This research will consider the available policy instruments for promoting growth poles, and if such growth spills over to the hinterlands. Studies will investigate the effects on poverty and rural emigration o f infrastructure investment in marginal agricultural areas. While infrastructure investment increases local productivity, does it reduce local poverty? Should policy set incentives to bringjobs to people, or people to jobs? If some marginal areas have a high share (but low number) o f very poor people, how can the appropriate balancebe struck betweenpoverty reduction overall and regional equity? These are policy questions to be addressed in ECA research inthe near future. Latin Americaandthe CaribbeanRegion Among the regions LCR has sustained the largest research program, which it attributes to strong demand by both lending staff and their country counterparts. That demand continues and underlies the direction o f future LAC research, which addresses Bankwide research priorities in labor markets and macroeconomic stability. Job Creation in Latin America and the Caribbean: Recent Trendsand Policy Challenges This study examines LAC labor market trends over the past decades and the main factors affecting the demand for and supply o f labor in the Region. It considers how structural transformation affected labor markets and vulnerable groups, and whether the dynamics o f job creation and destruction are conducive to productivity growth and the creation o f "good jobs." Finally, it investigates the key constraints to more and better jobs and how public policy can help promote them. Country Insurance: Reducing Systemic Vulnerabilities in LAC countries One of the most distinctive characteristics o f developing economies i s their macroeconomic volatility, which has deleterious and persistent impacts on social welfare. The stream of financial 89 crises in emerging markets in the late 1990s i s increasingly seen as the result o f self-fulfilling liquidity runs on countries' assets. Against this background, this study would identify the major sources o f systemic risk in LAC countries and estimate expected macroeconomic and social costs. On this foundation, the study would assess the effectiveness for risk mitigation o f existing insurance options, including country self-insurance (i.e. accumulation o f reserves), market and IF1 financial instruments. Micro-determinants of Competitivenessand Growth Strong microeconomic foundations allow firms to compete in global environments. But Latin American productivity growth over the past three decades has been low. This study will review the new Investment Climate (IC) surveys, which cover 15 Latin American countries and more than 10,000 firms and estimate the effect o f IC conditions on firm performance. Four microeconomic growth determinants will be investigated, two o f them research priorities identified in the consultation process: (1) governance and institutions, (2) infrastructure, (3) financial development, and (4) innovation and worker skills. Policy options ineach o f those four areas will be examined. Equality of Opportunities in LAC Buildingon recent advances inthe theory and measurement o f inequality, this regional study will construct the first comparable measures o f inequality o f opportunity in Latin America. It will develop and apply an original inequality index and investigate the consequences o f unequal opportunities, and consider policies to reduce these inequalities ina growth-enhancing and poverty- reducing manner. Early Childhood Development in LAC Building on the above, this study is intended to quantify inequalities o f opportunity at birth and young age inLatinAmerica and the Caribbean andreview regional policies andprograms to reduce them. These include, among others, early childhood education programs, nutritional interventions, health insurance programs targeted at early childhood, and conditionality linked to cash transfer programs. The study will evaluate the effect o f ECD interventions on human development outcomes and poverty reduction; and develop a framework for analyzing the costs and benefits o f alternative ECDinvestments. Competitive Cities, Urban Governance and Decentralization The study i s intended to advance our knowledge on the relation between decentralization and city performance. Itbegins with a descriptive overview o f urban systems and decentralization inthe last two decades and how cities responded to them. It then will examine factors contributing to city growth, which are under city control, and how they compare with their cities in OECD and East Asia countries. The study i s intended to identify the institutional factors and decentralized approaches that explain city competitiveness andproductivity and to provide guidance for policy. Middle East and NorthAfrica Region MNA research, now being completed, aims to show how water is integrated into the wider economic policies o f MENA countries. In doing so, the report addressing a multi-sectoral audience, bringingwater issues to non-water specialists. The study finds that most o f the factors influencing water outcomes - such as energy, agriculture, trade, public finance, land use, social 90 protection - lie outside the purview o f traditional water agencies. Water management in the twenty-first century will require reforms across several sectors. Small pockets o f change within the region indicate potential opportunities to overcome political obstacles. Public accountability i s key to tuming,thispotential into reality. The region i s also undertaking research on education and private sector development. Its major analytic publication, the annual Economic Developments and Prospects report i s under preparation to be delivered inFY07. Topics o f future regional research include migration (on which a report i s under preparation in collaboration withthe EC), governance, gender, youth, natural gas pricing, municipal management, and economic integration inthe Maghreb. SouthAsia Region S A R i s actively working on impact evaluations. The numerous evaluations in the region include the evaluation o f the Nepal Poverty Alleviation Fund (for which baseline data was completed in July, 2006); aMaharashtra study ofthe Total Sanitation Campaign; an evaluationo f several aspects o f decentralization inKarnataka; and the impact o f a randomized Kerala-style "People's Campaign" on the nature o f spending decisions by local governments. A larger project will investigate the relative effects o f increasing intensity o f direct informationcampaigns to people inthe project areas (from nothing to mass media only to visits by mobilizers to the Kerala case). Inaddition, research inSAR will investigate the impact ofenvironmental quality and services on cities' competitiveness in the region; integrated river-basin management through decentralization and HIV/AIDSas an economic development risk to South Asia. S A R will also investigate whether India can attain 'East Asian growth' with 'South Asian saving rates.' WorldBankInstitute One o f the priorities o f the WBIresearchprogram is governance and anticorruption. The work will include continuing efforts on governance indicators and parliamentary strengthening. The Knowledge for Development group has several country studies in process, including a major program on advanced strategies for the knowledge economy and other studies o f China's lifelong learning system. WBI has several studies underway on human development. A project on capacity building in educational assessment will address an important aspect o f educational quality. The study will produce five books, supported by country departments, on enhancing the quality o f national assessments o f educational achievement levels in developing countries. Topics include national and international assessment, instrument development, implementing national assessments, analyzing national assessment data, and using national assessment results to improve educational quality. Additional research will address health for the poor. IncollaborationwithIEG,WBIismanagingaprojecton"more andbettergrowth" whichexamines evidence on government actions that could make growth more pro-poor, equitable, and environmentally sustainable. Empirical work will include case studies on Brazil, Chile, China, India, and Kenya, and a cross-country analysis. 91 92 CONCLUSION: STEPSTOWARDS STRENGTHENINGRESEARCHMANAGEMENT This report has provided an overview o f Bank research activities, resources and uses inFY04-05, and a profile o f hture research directions. It has shown how Bank research contributes to the `lending-learning-knowledge ' cycle-thus improving operations and the policy advice to member countries-and enabling a better understanding o f the development process. It has also provided a picture o f continuing strong demand for research, includingthe use o f research inESW. Since the Board discussion o f the FY02-FY03 Research Report, efforts have beenmade to improve the dissemination o f research results; to better understand the needs o f operational units and identify research priorities through Bank-wide consultations. There has also beena special effort to evaluate the quality and relevance o f research output through an independent Research Evaluation. This confirmed the high quality o f Bank research, and also made a number of suggestions for improving research management which are feeding into discussion in the Bank. The general directions for future action to strengthen research management can be derived from previous chapters. Some o f these actions can be undertaken in DEC and through a process o f consultation with the Research Committee, while other proposals will require wider discussion within the Bank. Three broad areas are emerging: Strengthenthe qualityandpolicyrelevance of research The current approach to managing research quality relies heavily on the ex-ante review o f proposals. Such review could be complemented by or partly supplantedby strengthened mid-term review o f major research projects and also by commissioning more frequent reviews o f completed projects or clusters o f projects inparticular areas. Guidelines for the review o f research proposals could be reviewed, to distinguishbetter the expectations o f research inthe areas o f policy relevance and academic relevance, and referees be selected in a more focused way to specialize within this blend o f objectives. There could also be greater efforts to engage the complementary skills o f DEC and non-DEC staff. Cross-review, by DEC for non-DEC research (for quality) and by non-DEC for DEC research (for relevance) could be made more systematic, while recognizing that different pieces o f research have different objectives. The formal review process could also be used in a more pro-active way to provide methodological support, in particular to staff outside DEC who are less specialized in methodological issues, including in some cases by recommending and financing mentors, and by providing lists o f experts able to offer external review and collaboration. Encourageresearchon underservedareas, strengthendatawork and increasethe openness of researchto a wider spectrum of academics. Steps taken to increase coverage o f underserved areas include the research consultations across all Regions and Networks. These have been followed up with commissioned studies, and in some cases by an increase in research activity. Further measures can include revitalizing the visiting fellows program and making this a more strategic mechanism for strengthening capacity inunder- researched areas while internal capacity i s beingbuiltup. Chief Eco,nomist's Initiatives can be strengthened to encourage under-served areas. As shown by the example o f DIME, they can also be used to encourage research o f a more replicative kind, where this i s needed to build a base o f case-studies to underpin policy on strategic issues. Such 93 efforts to build a stronger base for assessing the results o f policies and programs can be further expanded, subject to increased resources. Especially in Africa data availability and quality has emerged as a major constraint to assessing progress towards the MDGs and the impact of country strategies and donor support. Proposals for enhancing the Bank's role in development data are being considered together with the recently- completed evaluation o f DECDG, and with the recognition that a substantial push in this area would require additional resources as well as some changes inthe "business model" for the Bank. As shown above, Bank researchhas involvedcollaborators from a wide range o f countries, butthis i s an area requiring constant attention and effort. Measures could include wider use o f the visiting fellows program, and also building incentives for efforts to involve new academic collaborators from developing countries into the project assessmentprocess. Strengthen the dissemination of research. Research i s disseminatedinmany ways, includingthrough conferences, websites and flagships and policy papers. Useful actions can include revisiting the objectives and design o f ABCDE workshops (with EXT) and the regional conferences (RBCDE) and revisiting the DEC website to further improve accessibility. Building on work undertaken for the evaluation, the list o f World Bank research publications and databases shouldbe easily accessedby the development community and kept current. The important issues surrounding flagships-their number, size and coverage-needs to be considered separately from that o f research. Only one o f the Bank's flagships, the World Development Report, i s formally a researchproduct, and the other "regional flagships" considered by the External Evaluation o f research are not Bank-wide flagships. Initial measures have been taken to reduce the weight o f DEC Flagships, and further measures are being considered in the context o f two other evaluations, of DECDGand DECPG. Especially inthe context o f an operational institution like the Bank, a dissemination strategy needs to strike an appropriate balance between research and advocacy, and also to recognize the fundamental distinction between them. It should also be recognized that developing a sound basis for policy decisions requires a range o f evidence, which likely will include a suitable wide set o f case experiences as well as statistical analyses. When the need arises to clarify the scope o f knowledge on a particularly important issue, the Chief Economist should have the responsibility to initiate open workshops includingparticipants representing a wide range o f views, and also to offer technical briefings to the Board. 94 ANNEXES Annex A. Annex Tables Chapter 1 1.1 Expenditures on Bank Services, AAA and Research, FY02-FY05 1.2 Expenditures on ResearchbyUnit,FY00-FY05 ($ Thousands) 1.3 Expenditures on Researchby Theme, FY02- FY05, ($ Thousands) 1.4 TrustFunds for Research, byFiscal Year andTheme FY02- FY05, ($ Thousands) 1.5 Research Support Budget, by Theme, FY02-FY05 1.6 Research Support BudgetAllocations by Unit,FYOl-FY05 ($ Thousands) 1.7 Research Support Budget Allocations ($ Thousands) by Project Size Chapter 2 2.1 Publications and Citation Rates across Different Institutions by Topic, 1998-2005 2.2 Top 10 Articles interms o f total Citations, 1998-2005 2.3 Top 10Articles interms o f total Citations, 1981-2005 2.4 Top 25 Journals that Published Articles by World Bank Staff, 1998-2005 2.5 Citations o f World Development Reports inPeer-Reviewed Journals, 1990-2005 Annex B. ResearchProjects,FY04andFY05,by Theme Annex C. ResearchFundedbytheResearchSupport Budget, FY04-FY05 Annex D. ResearchCapacity-BuildingGrantssince 1993 Annex E. VisitingResearchFellows Program,FY04-FY06 Annex F. FlagshipReports, PolicyResearchReportsandWorldDevelopmentReports publishedinFY04-FY05 95 Annex Table 1.1. Expenditureson BankResearchand Other Services, FYO2-FY05 ($ Thousand) FY02 FY03 FY04 FY05 BB + BB + BB + BB + BB Trust BB Trust BB Trust BB Trust Funds Funds Funds Funds TotalBankServices at current price 1,589,691 1,930,046 1,704,218 2,200,858 1,889,394 3,384,627 1,939,690 2,899,112 at constant FY02 price 1,589,691 1,930,046 1,652,976 2,134,683 1,772,325 3,174,911 1,766,509 2,640,271 Client Services at current price 926,759 1,247,240 976,678 1,455,628 1,109,765 2,578,346 1,118,923 2,052,982 at constant FY02 price 926,759 1,247,240 947,3 12 1,411,860 1,041,003 2,418,589 1,019,023 1,869,686 Ofwhich: Lending at current price 119,716 151,930 116,878 142,066 152,561 176,799 146,216 168,688 at constant FY02 price 119,716 151,930 113,364 137,794 143,108 165,844 133,161 153,627 TotalAAA3 at current price 177,620 266,239 201,438 314,373 220,128 355,060 231,017 354,725 at constant FY02 price 177,620 266,239 195,381 304,920 206,489 333,060 210,391 323,055 Of which : Research at current price 19,408 26,626 21,999 29,895 22,004 29,133 20,786 29,131 at constant FY02 price 19,408 26,626 21,338 28,996 20,641 27,328 18,930 26,530 Research in percent of TotalAAA 10.90% 10% 10.90% 9.50% 10% 8.20% 9% 8.20% EconomicandSectorWork at current price 90,335 99,490 112,690 125,781 120,025 144,978 122,304 151,165 at constant FY02 price 90,335 99,490 109,301 121,999 112,588 135,995 111,385 137,668 ESW inpercent of totalAAA 50.90% 37.40% 55.90% 40.00% 54.50% 40.80% 52.90% 42.60% Technical Assistance at current price 37,033 96,426 36,591 118,938 33,041 120,837 35,426 104,733 at constant FY02 price 37,033 96,426 35,491 115,361 30,994 113,350 32,263 95,383 TA inpercent of TotalAAA 20.80% 36.20% 18.20% 37.80% 15.00% 34.00% 15.30% 29.50% Price increase coeficient (in 4 4 3.I 3.I 3.4 3.4 3 3 Notes: 1. BB=BankBudget. 2. Pricecoefficientsprovidedby SFR. 3. Analytical and Advisory Activities (AAA) consist of Donor and Aid Coordination; Economic and Sector Work; Impact Evaluation; ExternalKnowledgeManagement; InternalKnowledgeManagement; PolicyFrameworkPaper; ResearchServices; TechnicalAssistance(Non-Lending) andWorld DevelopmentReport. Source: Business Warehouse 96 Annex Table 1.2. Expendituresof Researchby Unit, N O 2 - N O 5 ($ Thousands)26 FiscalYears FY02 FY03 FY04 FY05 Units DEC27 21,659 24,920 24,446 24,263 o f which DECRG 15,576 18,238 18,032 18,951 Share of DEC, inpercent 81.35% 83.36% 83.91% 83.29% Share of DECRG, inpercent 58.50% 61.01% 61.90% 65.05% Regions AFR 120 212 468 477 EAP 75 281 1,124 247 ECA I76 250 147 0 LCR 703 488 298 326 MNA 33 129 183 83 S A R 87 25 58 56 TotalRegions 1,194 1,386 2,278 1,189 Share of Regions, inpercent 4.48% 4.64% 7.82% 4.08% Networks ESD 479 246 429 554 FSE 395 56 55 INF 153 731 350 1,078 HDN 132 101 303 150 P R M 175 111 219 0 PSD 41 90 105 9 TotalNetworks 1,375 1,335 1,460 I,792 Share of Networks, in percent 5.16% 4.47% 5.01% 6.15% Others Units WBI 224 370 340 154 Othersz8 190 214 159 713 ExternalResearch Capacity Building 1,984 1,670 450 1,02d9 Total ResearchExpenditures, 26,626 29,895 29,133 29,131 all Units Source: Business Warehouse 26Values are direct costs ( Charges directly to products only - staff work, travel, and other expenses charged -excluding costssuchasmanagementandsupportstaffoverhead, officecosts,andinternational staffposted to the field.) 27 These figures are less than those in text table 4 and annex table 1.3 because those tables include the research capacity-building grants that DEC processed for regional institutions. We remove those grants here to depict more accurately the resources DECused for research. OthersUnitsinclude ISG, EXT,LEG, CFP and OPC. 29 A $100,000 SARW research capacity building grant was charged incorrectly as a non-research activity and thus does not appear above. 97 Annex Table 1.3. ExpendituresonResearchby Theme,FY02-FY05 ($ Thousands) FiscalYears FY02 FY03 FY04 FY05 Themes Economic Management 7,598 8,932 7,687 6,525 Public Sector Governance 998 2,088 2,320 1,026 Rule o fLaw 365 159 243 644 Finance and Private Sector 3,053 3,604 4,209 3,228 Trade and Integration 2,608 2,770 3,046 4,815 SocialProtectionand Risk 1,346 1,435 1,584 2,473 SocialDevelopment and Gender 1,689 1,391 909 2,119 HumanDevelopment 1,482 4,027 3,407 2,162 UrbanDevelopment 529 600 1,026 1,108 RuralDevelopment 1,668 2,042 1,514 1,579 Environment and Natural Resources 1,463 1,789 2,308 2,832 Not Assigned' 3,827 1,057 879 621 TotalResearch Funds 26,626 29,895 29,133 29,131 Of which DECRG Economic Management 7,264 8,290 6,744 5,856 Public Sector Governance 669 1,747 1,437 966 Rule of Law 247 49 83 468 Finance and Private Sector 2,802 3,021 3,853 3,109 Trade and Integration 2,554 2,554 2,727 4,122 SocialProtectionand Risk 1,220 1,367 1,516 2,290 SocialDevelopment and Gender 1,485 992 770 1,975 HumanDevelopment 1,330 3,866 2,809 1,842 UrbanDevelopment 473 443 773 741 Rural Development 1,591 1,880 1,349 1,385 Environment and Natural Resources 1,341 1,482 1,764 1,600 Not Assigned 2,666 897 622 228 Total DECRG32 23,643 26,590 24,446 24,583 Source: Business Warehouse 32.These figures are greater than those in annex table 1.2 because the Business Warehouse reporting here includes research capacity-building grants processedby DEC for regional institutions. Those grants are excludedin annex table 1.2. 98 Annex Table 1.4. TrustFundsfor ResearchbyTheme, N O 2 - N O 5 FiscalYear FY02 FY03 FY04 FY05 Themes Economic Management 1,490 2,207 1,591 1,170 Public Sector Governance 68 479 441 301 Ruleoflaw 173 79 135 138 Finance and Private Sector 419 232 295 426 Trade and Integration 939 838 1,165 2,036 Social ProtectionandRisk 453 337 473 694 Social Development and Gender 704 712 211 674 HumanDevelopment 118 914 805 199 UrbanDevelopment 411 292 118 294 RuralDevelopment 696 895 357 507 Environment andNaturalResources 351 301 786 1,343 Not Assigned 1,395 610 752 563 Total ResearchFunds 7,218 7,896 7,129 8,345 Source: Business Warehouse 99 Annex Table 1.5. ResearchSupportBudgetFundingby Theme, N O 2 - N O 5 (In percent of TotalRSB) Theme FY02 FY03 FY04 FY05 Economic Management 50 50 31 29 Public Sector Governance 3 4 5 4 Rule o f Law 0 0 0 0 Finance and Private Sector 8 14 11 12 Trade and Integration 5 7 8 15 Social Protection and Risk 3 4 4 6 Social Development and 2 3 3 3 Gender HumanDevelopment 15 12 UrbanDevelopment 7 7 Rural Development 7 6 Environment and Natural 7 8 Resources Not Assigned 17 1 1 0 Total RSB (in percent) 100 100 100 100 Aggregated Themes PREM 59 61 44 48 Finance 8 15 19 19 HumanDevelopment 7 9 19 17 Sustainable Development 9 14 17 16 Others 17 1 1 0 Total RSB (in percent) 100 100 100 100 Total RSB (%Thousand) 6,300 6,811 6,532 6,530 Notes: PREM: Economic management, public sector governance, rule of law, trade and integration; Finance: Finance and private sector, urban development HumanDevelopment: Human development Sustainable Development: Socialprotection and risk, rural development Source: DECRS 100 Annex Table 1.6. ResearchSupportBudget,Allocations by Unit,FYO1-FYO5 ($ Thousands) FiscalYears FYOl FY02 FY03 FY04 FY05 RSB Allocations DECRG 2,072 1,854 2,767 2,955 3,233 Other DEC,WBI, LEG,ISG and EXT 231 1,05 1 723 661 784 DEC other than DECRG 100 575 132 175 575 WBI, LEG, ISGandEXT 131 476 497 421 199 IFC 94 65 10 Regions Africa 5 34 134 97 70 East Asia and Pacific 66 9 99 369 188 South Asia 35 22 30 20 53 Europe and Central Asia 18 24 131 50 Latin America and Caribbean 198 266 93 225 336 Middle East and NorthAfrica 95 28 Allocations by Region - Total 322 448 487 856 675 Networks Environment and Socially Sustainable Development 439 269 201 380 308 Financial Sector Operations and Policy 110 30 35 50 HumanDevelopment 41 145 107 319 129 Private Sector Development 93 114 25 Poverty Reduction andEconomic Management 3 40 78 86 Infrastructure 8 113 117 Allocations by Network -Total 593 484 522 1,062 579 Research Capacity BuildingGrants (RCBGs) 1,000 1,984 1,670 450 1,120 Dissemination, Outreach and Review 1,084 938 1,100 1,000 1,000 DECRS 180 320 350 DECPO 920 680 650 Total RSB Allocationswith RCBGs 6,022 6,941 7,054 6,942 7,286 Total RSB Allocationswithout RCBGs 5,022 4,957 5,384 6,492 6,166 Sources: BusinessWarehouse,DECRS 101 Annex Table 1.7. Research Support Budget Allocations by Project Size ($ Thousands) FiscalYear FY03 FY04 FY05 Projects Funding Projects Funding Projects Funding ProjectSize' (number) ($,OOO) (number) ($,OOO) (number) ($,OOO) $0 75 - 82 2,103 75 2,304 74 1,637 $75- 150 8 468 10 495 10 654 >$150,000 14 1,927 18 2,734 16 2,659 RCPG 6 1,670 3 450 5 1,120 Total* 104 4,498 103 5,533 100 4,950 Notes: 1- These size categories correspond to the three levels of grant proposal review. 2- ResearchCapacity-Building Grants (external recipients) Source: SAP 102 Annex Table2.1. Publicationsand CitationRatesacross DifferentInstitutionsby Topic, 1998-2005 Institutions' WB IMF NBER Princeton Brookings Uni"ersity2 Institution TotalNo. of Publications3 1719 682 2437 1209 720 189 Cites/Publication 5.04 3.19 8.54 6.02 4.20 3.74 Citationsby Topic Economics NumberofPublications 882 598 1962 527 673 89 % ofPublicationsCovered 51% 88% 81% 44% 93% 47% CitesPublication 5.77 3.33 9.17 7.42 4.30 3.76 EnvironmentalStudies, Geography &Development NumberofPublications 261 16 18 N A 10 N A % ofPublicationsCovered 15% 2% 1% N A 1% N A CitesPublication 3.68 1.63 4.61 N A 1.60 N A AgricultureIAgronomy NumberofPublications 82 2 3 2 2 N A % ofPublicationsCovered 5% 0% 0% 0% 0% N A CitesPublication 2.30 1.50 3.67 0.00 0.00 N A PublicHealth& HealthCare Science NumberofPublications 79 N A 95 116 2 1 % ofPublicationsCovered 5% N A 4% 10% 0% 1% CitesPublication 4.44 N A 8.03 3.82 3.50 5.00 PoliticalScience& Public Administration NumberofPublications 78 18 22 469 6 98 % ofPublicationsCovered 5% 3% 1% 39% 1% 52% CitesPublication 4.71 1.61 5.05 2.42 4.00 1.04 Notes: 1. Institutions include the World Bank (WB), InternationalMonetary Fund (IMF), National Bureauof Economic Research (NBER), Princeton University, and Center for Economic Policy Research (CEPR), and Brookings Institution. 2. For PrincetonUniversity, the data is limited to topics insocial sciences; 3. Publications include articles, review articles, and editorials; Publications include all those papersthat have at least one of the authors identified as bank staff; 4. Select topics include Economics; Education; Management; Political Science and Public Administration; and Public Health and Health Care Science. Source; Thomson Scientific Inc. 103 Annex Table 2.2. Top 10 Articles in Terms of Total Citations, 1998-2005 ~ Rank Title Cites JournalName Year 1stAuthor Co-Author@) Journalof 1 Explaining African Economic Performance 99 Economic 1999 Collier, P Gunning, JW Literature Journal of 2 Financial Intermediation and Growth: Causality Loayza,N.& and Causes 96 Monetary 2000 Levine, R Economics Beck, T 3 Law, Finance,andFirmGrowth 89 Journal of Finance 1998 A Demirguc-Kunt, Maksimovic, V 4 OnEconomic Causes ofCivil War 88 Oxford Economic Papers 1998 Collier, P Hoeffler, A Journal of 5 The Separationof Ownershipand Control in Djankov, S. & East Asian Corporations 85 Financial 2000 Claessens, S Economics Lang, LHP 6 Aid, Policies, and Growth 84 America? Economic Review 2000 Burnside,C Dollar, D Journal of 7 Finance and the Sources of Growth 77 Financial 2000 Beck,T Levine, R. & Economics Loayza,N Estimating Wealth Effects without Expenditure 8 Data - or Tears: An Application to Educational 77 Demography 2001 Filmer,D Pritchett, LH EnrollmentsinStatesof India Journal of 9 Inflation Crisesand Long-Run Growth 75 Monetary 1998 Easterly,W Bruno, M Economics 10 Public Goods and Ethnic Divisions 12 Quarterly Journal Baqir, R. & of Economics 1999 Alesina, A Easterly, W. Source: Thomson Scientific Inc. 104 Annex Table 2.3. Top 10 Articles interms of Total Citations, 1981-2005 Rank Title Cites JournalName Year 1stAuthor Co-Author@) 1 A SensitivityAnalysis of Cross- CountryGrowthRegressions 724 American Economic Review 1992 Levine, R. Renelt,D. Plummer,F.A., Mhalu,F.S., 2 Aids - An InternationalPerspective 350 Science 1988 Piot,P. Lamboray, J.L., Chin, J., & Mann,J.M. 3 A newdata set measuringincome inequality 279 World Bank EconomicReview 1996 Deininger, K. Squire, L. 4 FinanceandGrowth - Schumpeter Might Be Right 259 Quarterly Journalof Economics 1993 King, R. G. Levine, R. 5 Africa's growthtragedy: Policiesand ethnic divisions 244 Quarterly Journal of Economics 1997 Easterly, W. Levine, R. 6 Does social capital have an economic payoff?A cross-countryinvestigation 233 Quarterly Journal of Economics 1997 Knack, S. Keefer, P. 7 Fiscal-Policyand Economic-Growth - An Empirical-Investigation 208 JournalofMonetaryEconomics 1993 Easterly, W. Rebelo, S. 8 AdoptionofAgriculturalInnovations Economic Developmentand Just, R.E. & inDeveloping-Countries- A Survey 193 CulturalChange 1985 Feder, G. Zilberman, D. 9 Returnsto InvestmentinEducation - Psacharopoulos, A GlobalUpdate 180 World Development 1994 G. 10 OnExports andEconomic-Growth 179 JournalofDevelopment Economics 1983 Feder, G. Source: Thomson Scientific Inc. 105 Annex Table2.4. Top 25 Journalsthat PublishedArticles byWB Staff, 1998-2005 Rank JournalName Papers Cites Citesmaper 1 World BankEconomic Review 83 447 5.39 2 World Development 79 366 4.63 3 World BankResearchObserver 52 280 5.38 4 JournalofDevelopmentEconomics 51 302 5.92 5 Economic Developmentand CulturalChange 48 167 3.48 6 JournalofAfrican Economies 36 74 2.06 7 World Economy 34 78 2.29 8 EconomicsofTransition 31 137 4.42 9 JournalofDevelopmentalStudies 28 93 3.32 10 JournalofComparativeEconomics 26 128 4.92 11 JournalofPublic Economics 23 153 6.65 12 American Journal of AgriculturalEconomics 22 37 1.68 13 Agricultural Economics 20 45 2.25 14 American EconomicReview 20 220 11.oo 15 JournalofBankingandFinance 20 59 2.95 16 Social Science andMedicine 20 102 5.10 17 EconomicJournal 17 205 12.06 18 EuropeanEconomicReview 17 101 5.94 19 Environment andDevelopmentEconomics 16 15 0.94 20 FoodPolicy 16 57 3.56 21 Journal of InternationalEconomics 16 46 2.88 22 TransportationResearchRecord 16 0 0.00 23 Lancet 14 254 8.14 24 EconomicsLetters 12 21 1.75 25 HealthEconomics 12 37 3.08 Source: Thomson Scientific Inc. 106 Annex Table 2.5. CitationsofWorldDevelopmentReportsinPeer-ReviewedJournals, 1990-2005 1991 The Challengeof Development 2 30 62 38 30 27 37 35 26 17 27 13 7 11 9 371 23.19 992 Developmentandthe Environment 2 36 55 49 53 59 71 52 52 55 41 37 25 24 12 623 41.53 1993 InvestinginHealth 6 63 89 149 219 235 229 189 171 152 134 127 95 34 1892 135.14 1994 Infrasbucturefor Development 2 16 51 62 57 52 32 29 25 24 30 21 5 406 31.23 1995 Workers inan IntegratingWorld 33 67 51 48 38 15 24 15 16 11 7 325 27.08 1996 FromPlanto Market 2 39 70 73 74 36 23 23 15 9 4 368 33.45 1997 The Statk in a Changing World 4 74 113 115 84 67 60 43 35 15 610 61.00 1998/99 Knowledgefor Development 2 26 34 42 25 22 17 11 3 182 20.22 1999/2000 Entehg the 21st Century 11 54 61 48 53 15 21 7 270 33.75 2000/01 AttackingPoverty 4 74 152 205 147 140 50 772 110.29 2o02 Building Institutions for Markets 8 23 41 55 21 148 24.67 Sustainable 2003 Developmentina 8 32 59 21 120 24.00 DynamicWorld 2o04 MakingServicesWork for PoorPeople 7 27 16 50 12.50 2o05 A BetterInvestment Climatefor Everyone 4 1 5 1.67 Totalcitationsperyear 1 33 77 135 181 214 348 537 636 657 637 611 598 629 541 531 202 6568 Source: ThomsonScientific Inc. 107 Annex B. Research Projects, N O 4 and N O 5 30 Themel Code Title Unit Task Manager Funding N O 4 N O 5 Poverty PO79124 Poverty: LookingBeyond Averages DRGPO BeegleKathleen PO81465 Child Labor andAccess to Credit DRGPO BeegleKathleen 27.0 42.0 PO82486 Impactsof Health Shocks ina c a DRGPO BeegleKathleen 15.7 106.4 PO83458 Thematic Mapping o fNon-Income Poverty DRGPO BeegleKathleen 42.4 PO88182 Migration, Povertyand Income Strategies inAlbania DRGPO BeegleKathleen 61.0 32.0 PO87880 Averting OldAge Poverty DECVP Bourguignon FranGois 0.1 PO90083 Toolkit Volume I1 DECVP BussoloMaurizio 36.0 PO85633 Rio Restudy: IntergenerationalPoverty* WBIFP Campbell Tim E 415.5 94.5 PO86759 Linking RepresentativeHouseholdModels WBIPKD ChenDerekHung 25.6 PO90890 LandandCredit inVietnam DRGPO DOQuy-Toan 42.1 P092867 DIS, Poverty and EconomicDevelopment HDNSP HeumannJudith 15.2 PO74317 The Geographyof Poverty DRGPO Lanjouw Peter 157.4 18.0 PO82528 PovertyMapping DRGPO Lanjouw Peter 24.1 171.3 PO67674 World IncomeDistribution DRGPO Milanovic Branko 9.9 35.6 PO72208 Khat Consumption DRGPO Milanovic Branko 4.3 PO75001 ChangingGender Bias DRGPO Milanovic Branko 1.o 10.2 PO77354 Economicsof Secession DRGPO Milanovic Branko 39.3 5.2 PO85725 Globalization -Middle Income Strata DRGPO Milanovic Branko 6.5 28.4 PO73521 Respondingto the Values of the Poor SDV MillardPatricia 47.1 PO85676 Application of EmpowermentFramework PRMPR NarayanDeepa 1.8 PO85748 Moving Out of Poverty PRMPR NarayanDeepa 129.7 PO86037 Impact of InternationalRemittances on Poverty PRMPR PageJohn 119.2 PO76336 ModelingMicro-Macro Linkages DECVP PereiraDa Silva 521.0 0.7 PO76337 Manual on Tools for Poverty Analysis DECVP PereiraDa Silva 56.1 2.6 PO68214 UrbanPovertyand SocialCapital DRGPO Rao Vijayendra 8.8 26.9 PO72187 PanchayatReform inIndia DRGPO Rao Vijayendra 9.8 77.9 PO72728 ComparativeAnalysis DRGPO Rao Vijayendra 47.6 PO73532 Culture and Development Policy DRGPO Rao Vijayendra 84.7 15.1 PO73795 Book on Culture and DevelopmentPolicy DRGPO RaoVijayendra 18.8 PO88179 Local GovernanceinIndiaand Indonesia DRGPO RaoVijayendra 50.6 PO27088 World PovertyMonitoring DRGPO Ravallion Martin 83.8 168.7 PO27104 PovertyAssessment Methods DRGPO Ravallion, Martin 261.7 7.7 PO44957 Poor Areas DRGPO Ravallion Martin 3.5 118.0 PO76607 Pro-PoorGrowth DRGPO Ravallion Martin 246.0 85.5 PO91363 Visiting ResearchFellow DRGPO Ravallion Martin 58.2 PO95368 LongTerm Impact Evaluation of SW China DRGPO Ravallion Martin 3.7 PO88694 Growth, Redistribution and HumanDevelopment DRGPS Van DeWalle Dominique 60.0 PO27082 LSMSLivingStandardsManagement:SurveysI11 DRGPO Scott Katherine 8.4 54.2 PO53756 SocialCapital DRGPO Woolcock Michael 79.3 59.4 PO83938 Reachingthe Poor Research HDNHE Yazbeck Abdo S 10.7 23.5 PO93893 SoftwareTool for Poverty Mapping DRGDR Zhao Qinghua 14.0 30Complete list of on-going research projects inFY04 and FY05. 108 Growth andInvestment PO82376 Diffusion ofTechnologyamongFirms CICIC BatraGeeta 50.9 PO90668 Formalizingthe InformalSector: AFTP4 BenjaminNancy 10.7 PO52851 TE: Ownership/CorporateGovernance DECRG Caprio Gerard 27.9 PO78055 Seeking EqualCitizenship:Democracy SASES ChatterjeeMeera 0.3 PO82208 PRR - War, Crime andViolence DECRG Collier Paul 77.4 PO86760 RPGKnowledge and Economic Development WBIPKD DahlmanCarl 0.9 PO36757 MakingAid Work DRGIC Dollar DavidR 1.8 PO63219 FACSResearch DRGGI Dollar DavidR 54.5 35.3 PO63220 FACS Survey DRGGI Dollar DavidR 4.6 8.1 PO75710 China ResearchProgram DRGGI Dollar DavidR 40.1 30.8 PO79096 Pakistan Survey DRGGI Dollar DavidR 16.1 PO79100 Ethiopia IC: Surveys -- IC: DRGIC Dollar DavidR 20.4 PO79122 Peru - IC: Surveys DRGIC Dollar DavidR 4.3 PO72927 Organizational Space SDV DuerKreszentia 10.0 PO72931 CulturalChange, Community Development SDV DuerKreszentia 6.3 PO72976 Innovations inthe InternationalCrafts SDV DuerKreszentia 14.9 PO58654 War, Crime andViolence DRGGI ElbadawiIbrahim 139.1 139.2 PO73600 Evaluationofthe Community-Development DRGIC ElbadawiIbrahim 47.7 PO84190 Economic Factorsandthe PoliticalEnvironment DRGIC ElbadawiIbrahim 13.0 PO93994 EconomicsandPoliticsofPost Conflict DRGGI ElbadawiIbrahim 30.0 PO94688 RealExchangeRate and Competitiveness DRGGI ElbadawiIbrahim 45.7 PO94690 Post ConflictTransition DRGGI ElbadawiIbrahim 57.7 PO94691 Qualityof Aid DRGGI ElbadawIbrahim 14.0 PO49731 Corruption DRGGI GattiRoberta 9.3 13.7 PO89700 Bargainingfor Bribes DRGGI GattiRoberta 5.1 8.9 PO81412 PolicyInstitutesinAfrica. Prof.Wangwe (VRF) AFRCE GelbHarold 5.3 PO89060 DevelopmentImpact Evaluation DECVP Gevers Coralie 69.0 PO87592 Social Status inIndia,Political Economy DRGGI HoffKarla -18.4 18.0 PO91384 Legacyof SocialInequality DRGGI HoffKarla 35.1 PO92963 Social Identityand Behavior (VRF) DRGGI HoffKarla 24.9 PO93865 The EconomicsofReciprocityNetworks DRGGI HoffKarla 15.0 PO83750 InvestmentClimate Dissemination DRGIC IarossiGiuseppe 60.1 PO85544 Infrastructureand GrowthinIndianManufacturing DRGGI IarossiGiuseppe 39.0 53.0 PO85615 InvestmentClimate Surveys and Research DRGGI IarossiGiuseppe 331.O 363.5 PO85726 Chile - InvestmentClimate Survey DRGGI IarossiGiuseppe 27.9 21.4 PO85730 Ecuador - InvestmentClimate Survey DRGIC IarossiGiuseppe 21.9 PO85732 El Salvador - InvestmentClimate Survey DRGIC IarossiGiuseppe 10.0 PO85757 Honduras - InvestmentClimate Survey DRGIC IarossiGiuseppe 11.5 PO85760 Nicaragua InvestmentClimate Survey DRGIC IarossiGiuseppe 1.1 PO85803 Sri Lanka InvestmentClimate Survey -- DRGIC IarossiGiuseppe 3.7 PO87496 Mexico - InvestmentClimate Survey DRGIC IarossiGiuseppe 19.5 PO87503 Tanzania - InvestmentClimateStudy DRGGI IarossiGiuseppe 8.6 11.7 PO90399 InvestmentClimate SurveyData DRGGI IarossiGiuseppe 24.6 PO90536 InvestmentClimate Extension DRGGI IarossiGiuseppe 55.6 PO53639 InternationalCapitalFlows DRGGI Keefer, Philip 196.2 235.3 PO60358 Importanceof Institutional DRGRC Keefer Philip 78.1 PO76484 InvestmentClimate Assessment DRGGI Keefer Philip 956.3 487.2 PO78329 InvestmentClimate ResearchProgram DRGGI Keefer Philip 123.5 131.3 PO79095 India-IC Surveys DRGIC Keefer Philip 5.0 109 PO79098 China-IC Surveys DRGGI Keefer Philip 249.3 212.1 PO79099 Vietnam-IC Surveys DRGIC Keefer Philip 33.5 PO79107 Tanzania-IC Surveys DRGIC Keefer Philip 11.2 PO79110 Brazil-IC Surveys DRGGI Keefer Philip 7.5 0.2 PO82352 InvestmentClimate inEcuador DRGIC Keefer Philip 1.4 PO82353 InvestmentClimate inNicaragua DRGGI Keefer Philip 6.7 0.1 PO82647 InvestmentClimate inHonduras DRGGI Keefer Philip 4.3 0.1 PO94727 Security andDevelopment DRGGI Keefer Philip 328.0 PO70151 Regulation PRR DRGGI Kessides Ioannis 81.5 28.1 PO81965 Researchin Industrial Organization DRGGI Kessides Ioannis 216.2 60.8 PO81966 InvestmentClimate inthe Balkans DRGIC Kessides Ioannis 52.8 PO89730 Reforming Infrastructure DRGGI Kessides Ioannis 12.9 PO89775 Entrepreneurshipand Competition-Balkans DRGGI Kessides Ioannis 21.1 PO95191 Infrastructure Regulationand CompetitionPolicy DRGGI Kessides Ioannis 6.8 PO45085 Fiscal DecentralizationinDCS DRGPS Khemani Stuti 7.2 PO86338 Political Economy DRGPS Khemani Stuti 74.5 PO76813 Governance DRGPS Knack Stephen 74.2 PO87295 Evaluating Public Policies ESDVP KnudsenOdin 149.0 PO80354 Economic Evaluation ofNational Resources ESDVP KnudsenOdin K 5.4 PO84164 VRFP Prof. Rigobon DRGIC Kraay Aart C. 22.3 PO93788 Debt, Debt Relief, and Growth DRGGI Kraay Aart C. 11.8 PO80834 Reforms and Growth DRGGI LoayzaNorman 54.3 69.1 PO83218 MacroeconomicVolatility and RealExchangeRate DRGIC LoayzaNorman 41.3 PO93761 Caribbeanto the Pacific - Lessons EASPR LuthriaManjul 14.9 PO72337 Justiceand Governance PRMPS Messick Richard 98.1 PO77836 Low Returnsto Reformsin Global Economy DECVP PereiraDa Silva Luiz 8.4 I521167 Global BusinessSchoolNetwork Capacity CEIED PfeffermanGuy 65.0 PO89886 Financeand Macroeconomics DRGGI RaddatzKiefer 64.1 PO75294 International DevelopmentGoals(IDGs) DRGPS Reinikka Ritva 42.5 PO76949 Information andVoice DRGPS Reinikka Ritva 162.7 PO78162 Micro Survey Approach DRGPS ReinikkaRitva 101.3 PO87202 QSDS Uganda:Client DRGPS Reinikka, Ritva 8.0 PO89386 Impact Evaluation of Citizen ReportCard DRGPS Reinikka Ritva 9.5 PO93730 Internationalization DRGGI Schmukler Sergio 12.1 PO50955 Chinese SOES inthe 80s DECRG Shirley Mary 1.3 PO82882 Database: Logistics and Costs CICIC SubramanianUma 53.8 PO82229 Mexico SME Evaluation WBIHD Tan Hong W. 19.3 0.5 PO86068 Networkingfor Innovation ECSPE Verbee, Jos 30.0 PO76485 China Economic Reform DRGGI Wang Shuilin 71.7 32.0 PO80619 Capital Subsidiesand Quality of Growth WBIPR wang Yan 21.8 PO80544 DecentralizationFlagship Study-EAP EASPR White Roland 696.1 21.1 PO77520 Ownership Changesand CorporateGovernance DRGRC Xu L.Colin 5.0 PO87657 China Rural Healthcare DRGGI Xu L.Colin 30.2 36.8 PO70727 East Asia Prospects DRGDR YusufShahid 743.4 697.1 PO89631 ImplementingAffirmative Action PRMPS ZhouYongmei 14.0 HumanDevelopment andPublicServices PO52067 Early Childhood Development DRGPS Alderman Harold 73.9 41.9 PO83953 Food for Education DRGPS Alderman Harold 47.4 26.5 PO87558 CommunityNutrition AFTHD Alderman Harold 47.7 62.2 110 PO83268 Albania Migration DRGPO BeegleKathleen 3.8 PO86430 Albania Migration DRGPO BeegleKathleen 67.5 PO86431 Albania PanelDataEntry - Supervision DRGPO BeegleKathleen 41.9 PO94082 Evaluating Impact of HIV/AIDS Prevention HDNED BundyDonald A 103.0 PO86098 Determinantsof Schooling Ethiopia DECWD ChaudhuryNazmul 35.3 2.8 PO86760 Knowledge and EconomicDevelopment WBIKD ChenDerekHung 17.4 PO78242 Maternal/ ChildHealth SASHD Chowdhury Sadia 20.0 20.0 PO85211 ReproductiveHealthof Womenwith Disabilities SASHD Chowdhury, Sadia 17.5 PO83766 Youth Strategyand Civil Society AFTS2 CorreiaMaria 17.8 110.5 PO95179 Measurementand Evaluation LEGKM Dakolias Maria 5.0 PO76797 Governance of Public Health DRGPS Das GuptaMonica 27.5 PO78144 Public Health Services DRGPS Das GuptaMonica 61.4 93.3 PO79785 Poverty and Environment DRGPS Das GuptaMonica 91.9 75.7 PO75480 HumanCapital and Growth inTransition ECSPE Denizer Cevdet 20.0 PO89071 HIVIAIDS Interventions SARVP DevarajanShanta 17.0 PO91760 HIV/AIDS Interventions SARVP DevarajanShanta 19.0 PO89095 Mental Healthand Economic Outcomes DRGPO DOQuy-Toan 7.9 Labor Market Policies, Unemploymentand Poverty in PO85862 Morocco AFTP2 ElAynaoui 15.9 PO58297 Economicsof Malaria DRGPS Filmer Deon P. 1.o PO76766 EquityinHDOutcome DRGPS Filmer Deon P. 24.5 22.8 PO91362 Impact Evaluation of EducationIntervention DRGPS Filmer Deon P. 53.5 PO94396 Cambodia-EvaluationImpact of CashTransfers DRGPS FilmerDeonP. 34.4 PO95662 Impact Evaluation inCambodia DRGPS FilmerDeonP. 9.4 PO71458 Public Policy Toward NGOs DRGPS Gauri Varun 20.0 PO74573 Immunization Program DRGPS Gauri Varun 4.1 1.4 PO92076 HumanRights and Services DRGPS Gauri Varun 53.2 PO89060 DevelopmentImpact Evaluation DECVP Gevers Coralie 200.7 PO94033 Impact Evaluation Conditional Cast Transfers DECVP Gevers Coralie 38.4 PO53591 Health Reform DRGPS Hammer Jeffrey 29.8 26.4 PO75922 Health Care Providersand Markets inDelhi DRGPS HammerJeffrey 46.1 50.9 PO76782 HNP Service Provision DRGPS HammerJeffrey 16.5 6.6 PO72725 Cultural, Social Status and Demandfor Education DECRG HoffKarla 47.4 PO58863 Datafor GovernmentDecision-Making DRGRC Keefer Philip 17.1 PO60358 Impact of Institutions DRGRC Keefer Philip 63.1 PO83621 Successful Adaptation to Systemic Change HDNHE Marshall Katherine 15.0 PO70007 QSDS Improving Learning inPublic Schools DRGPS Khemani Stuti 99.3 135.8 PO86338 PoliticalEconomyof Public Services DRGPS Khemani Stuti 81.1 PO90904 Information Campaign DRGPS Khemani, Stuti 101.6 PO60137 Gender PRR DRGPS KingElizabeth 4.2 PO85710 Health StudyCambodia EASHD King Elizabeth 54.7 19.5 PO76813 Public service delivery and governance DRGPS Knack Stephen 55.9 PO83112 Health, Education,EmploymentinW China EASRD LiGuo 144.0 117.9 PO89231 Impact EvaluationBolsa EscolaCashTransfers LCSHS Lindert Kathy 72.0 PO83522 Pollution and Health AFTS1 Margulis Sergio 1.2 PO86911 PG-HD Sector Review EASHD Moms IanP. 29.8 PO83321 The Economicsof AIDS DRGPS Over A. Mead 88.6 77.8 PO88316 Impact Evaluation of HIV/AIDS Intervention DRGPS Over A. Mead 6.4 51.3 PO90173 Impact of AIDS and of ART in SA, Prep DRGPS Over A. Mead 28.5 PO92890 Evaluation of Antiretroviral Delivery DRGPS Over A. Mead 57.5 PO94088 Argentina: SocialSecurityand Elderly Welfare LCSHS Packard, Truman 45.5 111 PO87890 Preparednessfor the Knowledge Economy LCSHE Patrinos, Harry 32.4 8.1 PO88048 Remittancesand Migration DECPG RathaDilip 45.3 PO75294 InternationalDevelopmentGoals DRGPS ReinikkaRitva 41.4 PO78162 Micro-surveyapproach DRGPS ReinikkaRitva 8.1 PO78938 Educationand SocialCohesion DRGPS ReinikkaRitva 109.4 PO86512 Making Services Work DRGPS ReinikkaRitva 180.0 399.1 PO85691 Welfare ImpactsofFirst Pillar Reforms MNSHD RobalinoDavid 46.7 PO82372 AbsenteeismSurvey o f Schools andClinics DRGPS RogersF. Halsey 104.7 101.3 PO86028 Teacher Incentives DRGPS Rogers, F. Halsey 83.0 31.6 PO90505 Crises and HumanCapital DRGPS SchadyNorbert 53.2 PO90730 Evaluationof Impact DRGPS SchadyNorbert 102.8 PO94728 Globalizationand SchoolingAttainment DRGPS SchadyNorbert 7.4 PO86972 Economic Costs ofMentalHealthAilments DRGPO ScottKatherine 274.1 64.1 PO76949 Informationandvoice DRGPS Svensson Jakob 86.7 PO89386 ImpactEvaluationof CitizenReportCard DRGPS Svensson, Jakob 155.1 PO53675 Safetynets inTransition:Vietnam DRGPS Van DeWalle, Dominique 3.1 PO74050 Non-MarketLandAllocation inVietnam DRGPS Van De Walle, Dominique 23.2 PO84251 Girls' EducationOutcomes inMorocco DRGPS Van De Walle, Dominique 43.5 5.8 PO88694 Growth, RedistributionandHD - MoroccoNietnam DRGPS Van DeWalle, Dominique 72.0 PO85855 Decentralization andTeacher Behavior LCSHE Vegas, Emiliana 50.5 -2.9 PO73894 UnemploymentBenefits HDNSP Vodopivec,Milanovic -2.1 PO87059 EffectsoNnemploymentprograms HDNSP Vodopivec, Milanovic 18.4 10.5 PO70134 Poverty andhealth DRGPS Wagstaff, Adam 22.8 23.2 PO91397 HealthFinancingandDelivery, EastAsia DRGPS Wagstaff, Adam 112.0 PO77208 Tax Policy DRGPS Wane, Waly 29.4 PO94472 Chad Service Delivery DRGPS Wane, Waly 68.9 PO83863 InequalityinHealthand Education WBIPR wang, Yan 17.7 PO78101 HealthPolicyResearch SARVP Yazbeck, Abdo 15.1 PO89631 ImplementingAffirma AFTPR Zhou, Yongmei 17.9 PO86648 MassEducation:Economies, Policies DRGPS Zou, Heng-Fu 77.9 45.5 PO92778 BeijingConf. OfGuanghuaSchoolofMgmt DRGPS Zou, Heng-Fu 20.0 Finance 1,367.5 PO82611 AnalyticalTools for FinancialAnalyst EWDWS BaiettiAldo 25.5 PO52854 BankPrivatization DRGFI Caprio Gerard 147.6 82.6 PO57790 SME finance DRGFI Caprio Gerard 272.0 142.9 PO73873 BankSupervisionandRegulation DRGFI Caprio Gerard 4.4 PO81983 SME - OvercomingGrowthObstacles DRGFI Demirguc-KuntAsli 169.5 28.1 PO82012 Micro Indicatorsof FinancialDev. DRGFI Demirguc-KuntAsli 86.2 39.4 PO76512 Bank Concentration DRGFI Demirguc-KuntAsli 43.8 PO76963 FirmLevelFinance DRGFI Demirguc-KuntAsli 40.8 PO76964 CorporateGovernance DRGFI Demirguc-KuntAsli 4.9 PO88338 Access to FinanceandPovertyAlleviation DRGFI Demirguc-KuntAsli 23.0 PO89138 FinancialSector Research DRGFI Demirguc-KuntAsli 677.4 PO75852 Sub-NationalCapitalMarkets LCSFU FreireMaria 53.2 PO85253 Impact ofAgricultural Extension, CreditPeru DRGFI GineXavier 34.4 12.2 PO86550 Joint vs. IndividualLiability DRGFI GineXavier 43.9 4.0 PO89768 Weather Insurance DRGFI GineXavier 30.4 PO92644 Surveyon Weather-Based Insurance DRGFI GineXavier 75.0 PO93504 Impactof Agricultural Services DRGFI GineXavier 17.5 112 PO94277 Educationwith Credit DRGFI GineXavier 1.5 PO74265 Taxationof FinancialIntermediation DRGFI HonohanPatrick 4.5 PO86229 FinancialSectorPolicyandthe Poor DRGFI HonohanPatrick 54.3 26.8 PO86233 Financialstability DRGFI HonohanPatrick 52.4 9.0 PO40274 Bank Insolvency DRGRC Keefer Philip 4.9 9.7 PO60917 Micro-credit - Bangladesh DRGRD Khandker Shahidur 13.5 PO45085 FiscalDecentralization andFinance DRGPS Khemani Stuti 13.2 PO87188 PortfolioPreference DRGFI KlapperLeora 19.9 30.2 PO93617 FirmTurnover and Survival DRGFI Klapper Leora 27.5 PO78496 Developmentof Stock FSEGP KlingebielDaniela 20.0 PO80369 CreditInformationandRiskMeasurement LCSFF Majnoni Giovanni 14.3 PO75950 ForeignBank Entryand Contagion DRGFI MartinezPeria 49.3 35.7 TransactionsCosts inthe IssuanceofDebtandEquity PO82538 inEmergingMarkets OPD McNevinValerie 34.9 PO86093 Contractual Savings MNSHD MusalemAlbert 50.1 5.5 PO89230 DeterminantsofAccess to Credit CICIC Nasir John L. 6.6 PO85691 Welfare ImpactsofFirstPillar Reforms MNSHD Robalino David 10.9 PO84861 FSE: FX-BanksIssues LCSFF SanchezSusana 50.7 PO88196 FSE BR Microfinance - LCSFF Sanchez Susana 36.6 PO95149 CrediAmigo: ExpandedAccess to Finance LCSPP Skoufias Emmanuel 21.8 PO77208 Tax Policy DRGPS Wane Waly 87.5 InfrastructureandEnvironment PO82403 RedSea - Dead Sea Water Conveyance MNSRE AlavianVahid 34.7 67.6 PO42676 Environment DataAccounting DECDG BelkindasMisha 3.0 PO88147 UrbanGrowthMgmt Initiative-Research TUDUR BuckleyRobert 113.0 117.8 PO87551 ElectricTechnologyCharacterization EWDEN Cabraal R. Ani 24.0 215.9 PO53633 EcosystemPreservationandHabitat Viability DRGIE Chomitz Kenneth 97.1 29.3 PO72962 FunctionalValue ofBiodiversity DRGIE Chomitz Kenneth 288.9 14.6 PO82224 Environmental andNaturalResourcesManagement DRGIE Chomitz Kenneth 30.1 55.3 PO93926 SpatialDevelopment DRGIE Chomitz Kenneth 58.3 PO27270 Healthandthe Environment DECRG CropperMaureen 5.5 UnderstandingandMeasuringMotorization PO52854 Externalities DRGIE CropperMaureen 41.8 UnderstandingandMeasuringMotorization PO53608 Externalities DRGIE CropperMaureen 0.0 PO70055 Armenia's Lake Sevan DRGIE CropperMaureen 17.0 PO81190 UrbanTransport and Welfare ofthe Poor DRGIE CropperMaureen 122.2 73.8 PO87587 Valuing Mortality RiskReductions DRGIE CropperMaureen 11.0 9.6 PO93247 Valuing Improvements DRGIE CropperMaureen 97.4 PO77423 Incentivesfor PollutionControl DRGIE Dasgupta Susmita 0.4 PO82436 Benefitsand Costs ofOrganic Agriculture DRGIE Dasgupta Susmita 47.9 71.9 PO82454 Pollutionfrom ChemicalUse inAgriculture DRGIE Dasgupta Susmita 89.2 55.4 PO88889 Impact of Sea Level DRGIE Dasgupta Susmita 71.3 PO89559 BangladeshToxic Targeting 'DRGIE DasguptaSusmita 17.0 PO93044 Evaluationof IntegratedPestManagement DRGIE DasguptaSusmita 5.0 PO93601 ImprovingIndoorAir DRGIE DasguptaSusmita 38.4 PO89739 IdentificationofFloodHazardHotspots DRGIE DeichmannUwe 55.0 PO89740 GeographicImpactsof GlobalChange DRGIE DeichmannUwe 65.8 PO94022 LandUse, Forests, andRuralPoverty DRGIE DeichmannUwe 2.0 PO91805 CooperativeArrangements for Allocation DRGIE DinarAriel 14.6 113 PO83320 MeasuringQuality-Quantity Trade-offs WBIFP EstacheAntonio 34.3 24.8 PO73901 BNPP ConnectingCities with Macro Concerns LCSFU Freire Maria 1.o PO91205 Dynamics of UrbanPoverty:Rio's Favelas LCSFU Freire Maria E 127.6 PO93990 Impact Evaluation for Urban Upgrading DECVP Gevers Coralie 24.6 PO56108 Africa: Privatization Of Telecommunications Haggarty Luke 0.0 PO83005 FocusCountry EWDWS JanssensJan 0.8 PO77029 Urban Growth ManagmentInitiative TUDUR Kessides Christine 0.4 PO89730 Reforming Infrastructure DRGGI Kessides Ioannis 4.4 PO82247 RegulatoryRoadmap EWDEN KingdomWilliam 11.2 PO82623 Mandate for the Water Sector EWDWS KingdomWilliaM 2.3 PO77960 EconomicGeographyandPolitical Economy DRGIE La11Somik 9.7 PO72882 Effective Urban Strategies DRGIE La11Somik V. 169.1 197.2 PO89203 Rural-Urban Internal DRGIE La11Somik V. 28.5 PO92207 Assessing RegionalDevelopmentPolicies DRGIE La11Somik V. 69.5 PO84595 International andNational Climate Mitigation DRGIE LecocqFranck 41.1 59.5 PO80292 Nature Tourism, Conservation, and Development AFTS2 Lutz Ernst 13.1 PO80292 Pollution andHealth AFTS1 Margulis Sergio 18.4 PO88599 Analysis of EnvironmentalProblemsinAfrica AFTS1 Margulis Sergio 23.5 PO87295 EvaluatingPolicies under Uncertainty ARD NashJohnD. 258.9 PO85746 Information Technology DECRS NduluBenno J. 38.4 PO79969 EmissionQuotaAllocation Rules DRGIE Shalizi Zmarak 11.5 PO83639 Urbanization and Quality of Life DRGIE Shalizi Zmarak 436.5 286.8 PO86101 Institutional and SpatialAspects of Sustainability DRGIE Shalizi Zmarak 43.2 33.1 PO82310 Million ConnectionsFund EWDEN Spencer Richard 12.6 PO77958 Infrastructureand Costs o fDoingBusiness DRGIE SubramanianUma 2.2 PO82882 InfrastructureLogistics, Costs ofBusiness CICIC SubramanianUma 2.9 PO82031 BaselineStudy for Climate Change Fund EWDEN TakahashiMasa 50.0 450.0 PO82032 Biomassand Coal Utilization for Energy EWDEN TakahashiMasa 110.5 289.5 PO83164 Landfill Gas Utilization inSub-SaharanAfrica EWDEN TakahashiMasa 1.9 PO82244 RegulationbyContract EWDEN Tanenbaum Bernard 2.9 PO81469 TelecommunicationSector Development DRGIC Wallsten Scott 21.5 PO81716 Foreign Direct Investmentand PollutionHavens DRGIE Wang, Hua 32.2 1.5 PO82287 Water ResourceProtection DRGIE Wang Hua 14.9 67.2 PO86358 GhanaEnvironment.Performance DRGIE Wang Hua 51.7 46.7 PO65614 ReducingPollution: TVIE's DRGIE WheelerDavid 5.9 5.0 PO66003 Pollution from ChemicalUse inAgriculture DRGIE Wheeler David 28.3 39.0 PO70367 Information Technologyand Development DRGIE Wheeler David 60.1 139.5 PO76644 UrbanPollution DRGIE Wheeler David 27.2 35.6 PO76657 EnvironmentalIndicators DRGIE Wheeler David 251.3 54.7 PO77806 ChinaPublic Disclosure DRGIE Wheeler David 125.0 144.8 RuralDevelopment PO77567 Private Sector Participation inWRM-MNA MNSRE Abu-Taleb Mahe 51.6 -0.9 PO79452 FarmSector Structure DRGRD Amelina Maria 0.8 4.2 PO50542 LandReform DRGRD Deininger Klaus 12.0 PO53319 LandMarkets DRGRD Deininger Klaus 58.7 2.3 PO54160 Landtenure DRGRD Deininger Klaus 51.6 238.4 PO76763 Land institutions andpolicy DRGRD Deininger Klaus 137.5 134.1 PO78125 ParticipatoryPovertyMonitoring DRGRD Deininger Klaus 35.0 74.6 PO83545 Land managementinIndia DRGRD Deininger Klaus 10.9 114 PO86499 LandPolicyfor Growth andPovertyReduction DRGRD Deininger Klaus 61.3 65.0 PO87932 Land policy issues inEasternEurope DRGRD Deininger Klaus 20.8 27.5 PO89581 Displacement DRGRD Deininger Klaus 6.3 17.3 PO89584 LandLaw DRGRD Deininger Klaus 7.8 44.9 PO81240 Macro-Micro Linkages:Water Issues DRGRD Dinar Ariel 60.0 55.9 PO87312 Methods for Allocation o fWater DRGRD Dinar Ariel 65.1 63.7 PO87597 Climate Changeand Rural poverty ARD Dinar Ariel 87.8 151.2 PO54106 FarmerFieldSchool: IntegratedPestMgmt. DRGRD Feder Gershon 71.7 42.4 PO56743 Rural Sector EconomicDev. DRGRD FederGershon 28.3 PO77290 ProgramGrant "Rural DevelopmentResearch" DRGRD Feder Gershon 231.3 PO85454 VRFP ProfDavidMosse DRGRD Feder Gershon 45.2 PO85969 FarmerField School Impact DRGRD Feder Gershon 20.3 9.6 PO92636 Weather and Price InsuranceinRural Afiica AFa Hess UlrichC. 26.0 PO79864 Mauritariia - TechnologyFostersTradition LEGAF HudesKaren A1 56.9 48.1 PO77760 Inequality and Investment DRGRD JacobyHananG 245.7 241.0 PO77499 River Basin Management ARD KemperKarinE 124.3 113.0 PO79623 Group IncentivesinMicro Finance DRGRD Khandker Shahidur 54.1 120.2 PO85643 Impact of Rural Roads on Poverty DRGRD Khandker Shahidur 25.1 70.8 PO77768 Non-Farm Rural Development DRGRD Lanjouw Peter 29.3 PO36802 Commodity Marketing Systems DRGRD LarsonDonald 40.1 PO43136 Rural Growth Experiences DRGRD LarsonDonald 34.1 43.8 PO55915 PriceReform Experience DRGRD LarsonDonald 6.1 PO70527 Risk and Insurance DRGRD LarsonDonald 16.7 56.2 PO81180 Markets for environment DRGRD LarsonDonald 35.1 22.0 PO94759 Contributions of Governance to Growth inAgriculture DRGRD LarsonDonald 13.8 PO74341 Competition, Symbiosisand Credit DRGRD Mansuri Ghazala 12.9 36.3 PO77725 Community Driven Dev DRGRD Mansuri Ghazala 124.0 PO84150 Gender andRuralPoverty DRGRD Mansuri Ghazala 49.4 164.2 PO67632 Agricultural ResearchExtension ECAVP NacevAleksand 97.0 PO75842 Promoting Agricultural Growth and ARD PehuEija 67.6 PO63054 Emergencefrom Subsistence DRGRD ShilpiForhad 62.8 106.0 PO74050 Non-Market Land Allocation inVietnam DRGPS Van DeWalle Dominique 6.6 Impact Evaluation of a Rural RoadsRehab.Projectin PO59436 Vietnam DRGPS Van De Walle Domiq 195.5 39.4 Trade and International Integration 4,297.9 6,036.9 PO93929 Distortions to Agricultural Incentives DRGTR AndersonKym 2.4 PO94625 GEF Adaptation Count WBIEN CadmanCary An 16.8 How Do USMultinationals Respondto Strengthened PO82334 Intellectual Property Rights Abroad? DRGTR Fink Carsten 24.0 PO82424 Geography, Trade and Growth DRGTR FreundCaroline 34.4 PO82870 DoesRegionalismHelpor Hinder Multilateralism? DRGTR FreundCaroline 41.2 PO83584 Doha DevelopmentAgenda DRGTR FreundCaroline 257.9 176.3 PO88066 International Migration DRGTR GeversCoralie 125.3 549.0 PO83152 RegionalInvestmentClimate EASPR GhoshSwati R. 54.5 40.3 PO89835 Standardsand Rules EASPR GhoshSwati R. 13.0 PO89836 Services Liberalization EASPR GhoshSwati R. 19.9 PO96574 Singapore"The Rise of China and India" EASPR Gill Indermit 500.0 PO80479 RegionalTrade and Poverty Research EASPR Goh Chorching 96.0 PO55163 Millenniumroundoftradenegotiation DRGTR HoekmanBernard 51.7 72.0 PO62764 Intellectual Property DRGTR HoekmanBernard 20.1 115 PO77507 TradePolicy Development DRGTR HoekmanBernard 222.8 114.4 PO77820 DohaTrade facilitation andmarket access DRGTR HoekmanBernard 91.4 50.7 PO82017 Agricultural TradePolicy DRGTR HoekmanBernard 125.4 76.9 PO86752 Behindthe BorderPolicyReforms DRGTR HoekmanBernard 138.3 388.5 PO86834 WTO Dispute Settlement DRGTR HoekmanBernard 30.1 50.0 PO91490 Global TradeArchitecture DRGTR HoekmanBernard 269.0 PO82628 Estimating TradeElasticities DRGTR Kee Hiau Looi 55.3 6.8 PO94655 MeasuringReal GDP DRGTR Kee Hiau Looi 6.4 PO95496 RulesofOrigin andFirmHeterogeneity DRGTR Kee Hiau Looi 10.0 PO88048 RemittancesandMigration DECPG Lewis Jeffrey 51.3 PO86299 Openness, IncomeRisk and Welfare LCRCE Maloney William 47.9 7.1 PO78142 TradeEconomistGenevaOffice DRGTR Martin William 116.5 PO82845 TradePolicy Development DRGTR MartinWilliam 3.2 44.9 PO83210 Agricultural TradeReform DRGTR Martin William 116.5 341.8 PO83214 Analytical Tools for Trade Policy DRGTR MartinWilliam 235.6 144.2 PO88137 World IntegratedTrade Solution (WITS) DRGTR MartinWilliam 37.2 179.2 PO89139 Implications of Doha DRGTR MartinWilliam 12.5 424.9 PO89577 Option for ReforminJapan's Agriculture DRGTR Martin William 20.0 PO92606 AgriculturePoverty and Antidumping DRGTR Martin William 9.7 PO70477 Services Database DRGTR Mattoo Aaditya 102.6 PO83482 Services Trade Policy DRGTR Mattoo Aaditya 423.9 493.6 PO83356 TradePolicyData Support/Dissemination DRGTR NgFrancisK. 76.7 54.0 PO65308 Politicaleconomyof trade policy DRGTR OlarreagaMarcelo 70.1 51.3 PO76441 Trade, Trademarksand Reputation DRGTR OlarreagaMarcelo 46.6 PO87859 Determinantsof Trade Policy DRGTR OlarreagaMarcelo 40.0 30.0 PO89214 Agric. WTO TradeRef DRGTR OlarreagaMarcelo 88.4 PO92134 Agric. TradeReforms DRGTR OlarreagaMarcelo 177.1 PO94071 Tradeand Production DRGTR OlarreagaMarcelo 10.0 PO94072 Tradeliberalization DRGTR OlarreagaMarcelo 15.0 PO94653 DohaandPoverty inLow Income Countries DRGTR OlarreagaMarcelo 26.6 PO77310 RegionalTrade Patterns DRGTR SchiffMaurice 106.0 59.2 PO77506 Trade and Technical Change DRGTR SchiffMaurice 83.1 125.9 PO79557 RegionalIntegration DRGTR SchiffMaurice 9.8 0.1 PO80614 Int'lTechnologyDiffusion: Trade andRI DRGTR SchiffMaurice 15.2 1.o PO92159 Brain Drain, Gain, Waste and Circulation DRGTR SchiffMaurice 4.0 PO92160 RemittancesandHouseholdSurveys DRGTR Schiff Maurice 238.4 PO94995 Serbia-MontenegroMigrationto Switzerland DRGTR SchiffMaurice 25.3 PO96157 HHSurveysofIntlMigrationandRemittances DRGTR SchiffMaurice 2.2 PO76326 Corruption, Pollution andFDI DRGTR SmarzynskaBeata 22.2 20.3 PO82440 Implementationof WTO Obligations DRGTR SmarzynskaBeata 39.9 29.4 PO82617 TradeBasedIndex of Corruption DRGTR SmarzynskaBeata 4.5 24.5 PO85090 Anti-Dumping inDeveloping Countries DRGTR SmarzynskaBeata 124.5 66.0 PO74752 Trade andPoverty DRGTR Tarr David 346.3 187.2 PO77509 WTO and Developing Countries DRGTR Tarr David 183.3 36.2 PO83251 RussianWTO Accession DRGTR Tarr David 121.7 163.4 PO86587 TradeCapacityBuilding DRGTR Tarr David 54.1 118.7 PO87609 Trade and FDIReform DRGTR Tarr David 20.0 48.3 PO72424 TradeFacilitation DRGTR Wilson John 156.1 PO77455 TradeFacilitation and APEC DRGTR Wilson John 53.1 PO70569 Trade, Standards, andRegulatoryReform DRGTR Wilson John S. 199.4 116 PO83360 Standardsand Trade DRGTR Wilson John S. 280.9 72.4 PO88127 Standardsand Trade DRGTR Wilson John S. 57.8 PO94802 3A-MFA QuotaRemoval AFTp1 Yagci Fahretti 5.6 ResearchCapacityBuilding 517.6 801.7 PO87363 CapacityBuilding EERCKyiv ECAVP MitraPradeep 300.0 200.0 PO87364 CapacityBuilding EERCRussia -- ECACE MitraPradeep 50.0 PO87972 Global DevelopmentNetwork - MIIR' DECVP Deverajan 100.0 100.0 I02033013 African EconomicResearchConsortium DECVP Gelb 300.0 PO79829 CapacityBuildingiPartnership DECPO PleskovicBoris 67.6 91.4 PO94961 CEU -ScalingUp Capacity-Building DECPO PleskovicBoris 110.3 Disseminationand OutreachActivities PO72095 Economic Review DECPO PleskovicBoris 0.2 0.5 PO72097 ResearchObserver DECRS PleskovicBoris 5.2 17.1 PO72100 BerlinWorkshop'01 DECPO PleskovicBoris 14.1 PO78194 Fourth EuropeanABCDE EXTEU BasJean-Christophe 23.9 -0.3 PO79791 ResearchAbstracts DECRS Ndulu Benno J. 55.2 31.3 PO79821 ResearchReport DECRS Ndulu Benno J. 178.5 145.5 PO79827 Visiting ResearchFellow DECPO PleskovicBoris 4.2 PO79830 ABCDE Europe (Con0 DECPO PleskovicBoris 23.2 53.5 PO79832 ABCDE May 2003 India DECPO PleskovicBoris 60.6 -1.8 PO79833 ABCDE HQ Proceedings DECPO PleskovicBoris 26.8 66.0 PO79834 World Bank EconomicReview DECPO PleskovicBoris 160.5 192.8 PO79835 World Bank ResearchObserver DECPO PleskovicBoris 80.0 63.0 PO79836 ResearchBulletin DECRS NduluBenno J. 0.1 PO79837 Working Papers DECRS NduluBenno J. 209.6 369.6 PO79839 TransitionNewsletter DECPO PleskovicBoris 101.0 1.o PO82281 MunichLectures DECVP StemNicholas 20.6 PO82640 ChineseLanguageWebsite DRGGI Wang Shuilin 43.7 0.1 PO82989 Paris Conferenceon Migration DECVP Garcia-ThoumiInes 8.0 PO86002 BerlinWorkshop DECPO PleskovicBoris 84.5 -2.9 PO86121 BerlinWorkshop DECPO DECPO PleskovicBoris 21.8 41.9 PO86333 ABCDE HQ Conference DECPO PleskovicBoris 128.1 57.2 PO88757 Sixth EuropeanABCDE EXTEU Bas Jean-Chris 53.5 0.1 PO89497 ABCDE Workshop Proceedings SASPR DasguptaParamita 5.4 PO90300 BerlinWorkshopSept DECPO PleskovicBoris 39.0 PO92659 ABCDE Senegal DECPO PleskovicBoris 122.1 PO93188 LCRCE Dissemination LCRCE ServenLuis 26.0 PO93526 DEC Lectures April 2005 DECPO PleskovicBoris 25.2 PO94389 SevenABCDE EuropeConference EXTEU Bas Jean-Chris 75.4 World DevelopmentReport DECWD Walton Michael 4,241.7 3,211.2 Website DECRS BennoNdulu 5.0 Review andSupport of BankResearch PO72049 Review ofRSB proposals DECRS NduluBenno J. 24.4 15.6 PO72055 Researchprocess DECPO PleskovicBoris 60.2 PO79823 ResearchCommittee DECRS NduluBenno J. 139.5 131.5 PO79825 Small Grants Review DECRS NduluBenno J. 71.8 73.1 PO79826 ResearchEvaluation DECRS NduluBenno J. 7.3 25.1 117 PO79827 VRFP Administration DECPO Pleskovic Boris 5.9 PO85746 DECRS Own Research DECRS NduluBennoJ. 24.2 PO88737 DECPOOwnResearch DECPO Pleskovic Boris 26.4 PO92148 RegionalandNetworkResearchInitiative DECRS NduluBennoJ. ,34.0 NonRFResearchActivities FI: GeneralConf. DRGFI Demirguc-KuntAsli 13.4 FI: NewInitiatives DRGFI Demirguc-KuntAsli 17.6 IC:NewInitiatives DRGIC Keefer Philip 171.5 PS: New Initiatives DRGPS RitvaReinikka 87.9 IE:NewInitiatives DRGIE Zmarak Shalizi 91.5 HN Electrification - LCC2C 2.8 2018240 PO:New Initiatives DRGPO RavallionMartin 138.9 GirlsEducation AFTHE FredriksenB 94.3 RD:NewInitiatives DRGRD Feder Gershon 5.5 Grand Total 28,136.6 27,773.8 118 Annex C. ResearchFundedbythe ResearchSupportBudget,ByUnit, lW04-FY05 Grant Allocation Allocation Date of Closing Responsible (8 ($) Approval Date Unit PROJECT TITLE T$re FY04 FY05 Africa Region Nature Tourism, Conservation, and Development D 13,145 0 28-May-03 30-Jun-04 AFTS2 Formalizing the Informal Sector: Policiesfor the Productive Regulation PP 9,960 29-Jun-04 31-Dec-04 AFTP4 CommunityNutrition: Evaluation of ImpactsinAfrica R 63,000 60,000 8-Jan-04 31-Dec-06 AFTHD Labor MarketPolicies, UnemploymentandPoverty in Morocco: A QuantitativeAnalysis R 15,210 0 16-Dec-02 30-Jun-04 AFTPZ Firms, Households, Governmentand Growth inNigeria: Towards Evidence-BasedEconomicPolicy Making R 30-Mar-05 AFRVP EastAsia and PacificRegion Contractingwith the Private Sector for the Deliveryof Health Services: RandomizedEvaluation inCambodia R 55,000 19,807 23-Jul-03 30-Sep-04 EASHD HumanDevelopment Sector Review inPapuaNew Guinea PP 29,800 0 6-Oct-03 30-Apr-04 EASHD EastAsian and Pacific Region: Trade andPoverty R 75,000 0 7-Apr-03 15-Jun-04 EASPR InvestmentClimate andProductivity R 35,000 0 8-May-03 30-Sep-04 EASPR The InteractionofHealth, Education, and Employment in Western China R 144,000 127,000 8-May-03 30-Jun-05 EASRD EastAsia and Pacific Region Decentralization PP 30,000 10-Apr-03 31-Dec-03 EASPR Decentralization,GovernanceandPublic Service:An Assessment of the IndonesianExperience R 29-NOV-04 30-Jun-05 EASPR Fromthe Caribbeanto the Pacific: Some Lessonsof Experienceof Small Economies PP 15,000 30-NOV-04 30-Jun-05 EASPR Liberalization of Services PP 13,000 1-Jul-04 31-Dec-04 EASPR Rulesof Origin and Standards PP 13,000 15-Jul-04 15-Jan-05 EASPR SouthAsia Region Analyzing the Effects of Quality of Health Care and Family Planning Services on Fertility and Infant Mortality inIndia R 20,000 20,000 1-Nov-O2 31-Dee04 SASHD -HIV/AIDS: Behavior, Causes and Interventions - Module 6 13,000 14-Jul-04 30-Jun-06 SARVPO The Human Capital of Africa's Orphans R Water, Sanitation, Hygiene and Communities:An Integrated 9-May-05 30-Jun-06 Multi-Regional Evaluation R SASES HIV/AIDS: Behavior, Causes and Interventions - Module 4- 20,000 14-Jul-04 30-Jun-06 SARVPO Responseto SexualRisk ina High HIV/AIDS Environment R Europeand Central Asia Region Networking for Innovation ina Transition Country: Potential, OpportunitiesandPolicyRecommendations PP 30,000 0 1-Dec-03 31-May-04 ECSPE HumanCapital inTransition: NewTechnologies, Institutions, and Returnsto Skills inPost-Communist R 20,000 0 12-Aug-02 31-Mar-04 ECSPE Economies 31 Grant Types: R Research; PP - ProposalPreparation;PG - -ProgramGrant;D-Dissemination;DC-DataCollection; CE- Chief EconomistInitiative. 119 LatinAmerica and CaribbeanRegion Teacher Incentivesand Local Accountability: Raising ServiceQuality inDecentralizedSchools R 55,000 - 13-Aug-02 30-Juri-04 LCSHE Evaluating the Impact of DecentralizedConditional Cash Transfer Programs:A Study of Brazil's Bolsa Escola R 20,000 52,000 24-May-04 30-Jun-05 LCSHS Program Assessing Argentina'sPreparednessfor the Knowledge Economy: Measuring Student Knowledge and Skills in Reading,Mathematical and Scientific Literacy Evidence - R 40,000 8,000 19-Dec-03 31-Dec-04 LCSHE from PISA 2000 Openness, IncomeRiskand Welfare R 54,000 21,000 8-Aug-03 3 1-Dec-04 LCRCE Credit Information, Credit RiskMeasurementand Solvency Ratios inEmergingCountries R 56,000 0 13-Mar-03 30-Jun-04 LCSFF An Evaluation ofthe Impact of CrediAmigo andthe Expansionof Financial Services inBrazil R 29,000 14-Apr-05 30-Jun-07 LCSPP Social Security and Elderly Welfare inLower Middle Income Countries R 50,000 6-Dec-04 30-Jun-05 LCSHS LACEA Dissemination D 30,000 3-Nov-04 30-Jun-05 LCRCE Middle East and North Africa Region ContractualSavings Institutions andNational Saving R 47,040 11,820 12-Aug-03 30-Sep-04 MNSHD Evaluating Welfare andRiskImpactsof Alternative First Pillar ReformsinMENA Countries: Are NDCs Worth the R 48,150 16,350 23-Jul-03 31-Dec-04 MNSHD Trouble? Finance and Developmentinthe MENA Region: Three 10-Feb-05 RelatedQuestions R International Mobilityof the Highly-Skilled: Policies and 10-Dec-04 MNSIF Institutions to Maximize Benefits for Countriesof Origin PP Environmentallyand Socially SustainableDev. Network Climate Change and RuralPoverty: Incorporating Climate into Rural Development Strategies R 88,500 146,000 3-Oct-03 31-Dec-06 ARD Evaluating Public Policies andProjectsUnder Uncertainly 85,000 30,000 5-NOV-03 ESDVP through the Application of RealOptions R IntegratedRiver Basin Managementandthe Principle of Managing Water Resources at the LowestAppropriate R 139,050 54,700 21-Feb-02 31-Dec-04 ARD Level-When andWhy Does It (Not) Work inPractice Cultural Diversity, DecentralizationandPublic Service 20-May-05 30-Jun-06 SDV Delivery PP CanWeather andPriceInsuranceReduceRural Poverty in 26,000 30-Jun-04 30-Jun-06 ARD Africa? The Roles of Self-Insurance, Mutual Insurance, and R Market Insurance Evaluating Public Policies andProjectsUnder Uncertainly through the Application of Real Options R 51,300 22-Feb-05 30-Jun-06 ESDVP FinancialSector Operations and Policy TransactionsCosts inthe Issuance of Debt and Equity in EmergingMarkets PP 30,000 0 26-Aug-03 28-Feb-04 OPD/INTG What Typesof EmergingMarket Companies Migrate 20,000 0 23-Jul-02 31-Dec-03 OPD Abroad? R Human DevelopmentNetwork Effects of UnemploymentInsurance? R 18,500 10,500 24-Jul-03 31-Mar-05 HDNSP Benefit Incidence inHealth, Nutrition, andPopulation 1 ~00,000 0 24-Oct-02 30-Jun-04 HDNHE Activities CE 120 PerformanceBasedContracts inthe Health Sector in 0 20-May-05 31-Dec-05 HDNVP Rwanda PP Evaluatingthe Impact of HIV/AIDS PreventionEducation 103,000 15-Apr-05 30-Jun-07 HDNED inPrimary Schools R Disability, Poverty and Economic Development PP 15,000 7-Oct-04 30-Apr-05 HDNSP PovertyReductionandEconomic ManagementNetwork Measuringthe Impact ofInternational Remittanceson 71,000 0.00 1-Aug-03 30-Jun-04 PRMPR PovertyinDeveloping Countries R Moving Out of Poverty PP 15,000 0 10-Dec-03 30-Jun-04 PRMPR InfrastructureNetwork The Urban Growth ManagementInitiative R 113,000 117,000 22-Sep-03 30-Jun-05 TUDUR PrivateSector DevelopmentNetwork Infrastructureand the Costs of DoingBusiness:Physical, Policy and Institutional Barriers R 54,000 18,700 8-Apr-03 30-Jun-05 CICIC Determinantsof Access to Credit inDeveloping and Emerging Economies:The DifferentialRole of R 0 6,576 21-May-04 30-Jun-05 CICIC Relationships,FirmSize and Trade Credit The Diffusionof Technology Among Firms inDeveloping Countries:The Role of Foreign Contacts, FirmCapacity, R 60,005 0 21-Mar-03 30-Jun-04 CICIC PhysicalProximity and ProfessionalAssociations DECRG CanWeather andPrice InsuranceReduceRural Poverty in 0 30-Jun-04 DRGRD Africa? The Roles of Self-Insurance,Mutual Insurance, and R Market Insurance Assessingthe Impact of Alternate Policies for Development 0 60,000 DRGIE for LaggingRegions R Infrastructure,Location and DevelopmentinNepal R 0 15,000 DRGRD Assessingthe Impact of AIDS and of Care and Support Programson IncomeDynamics and Household PP 0 30,000 10-Jun-04 31-Jan-05 DRGPS ConsumptioninFree StateProvince, SouthAfrica Understandingthe RelationshipbetweenMacroeconomic 0 37,500 4-Jun-04 DRGPS Crisesand Child Health R 30-Jun-06 ProgramGrant on Finance PG 0 260,000 8-Apr-04 30-Jun-07 DRGFI Bargaining for Bribes: The Role of Institutions R 5,900 11,200 26-Feb-04 30-Jun-06 DRGIC Growth, Redistribution and HumanDevelopment:A DecompositionMethod with Applications to Schoolingin R 0 50,000 17-Feb-04 30-Jun-06 DRGPS Morocco and Vietnam Determinantsof TradePolicy inDeveloping Countries R 40,000 30,000 18-Dec-03 30-Jun-05 DRGTR The Impact of Health Shocks onHouseholdIncome Capability inRural China R 16,330 36,570 8-Dec-03 30-Jun-05 DRGIC The Economic Costs of MentalHealthAilments inPost- Conflict Bosnia and Herzegovina R 30,400 34,481 8-Oct-03 3 1-Dec-04 DRGPO Beyond Openness:Trade and Behindthe Border Policy 135,000 361,653 30-Jun-06 DRGTR Reforms PG A Micro-Finance MechanismTest: Joint versus Individual 29,570 0 22-Sep-03 30-Mar-04 DRGFI Liability PP LandPolicyfor Growth andPovertyReduction D 29,000 40,000 11-Sep-03 30-Juri-05 DRGRD What Drives MassEducation: Economy, Policies, 50,000 23,000 26-Sep-03 31-Dec-04 DRGPS Institutions R Making Services Work for PoorPeople PG 279,000 431,000 3-Oct-03 30-Juri-05 DRGPS SendingFarmers Back to School: An Econometric 19,000 8,000 DRGRD Evaluation ofthe FarmerField SchoolExtensionApproach D 29-Aug-03 30-Jun-04 121 The Impact of RuralRoads on Poverty: The Case of 23,500 41,500 23-Jul-03 31-Mar-05 DRGRD Bangladesh R InvestmentClimate Surveys andResearch R 319,160 340,840 30-Sep-03 30-Jun-05 DRGIC The Impact of Agricultural ExtensioninPeru PP 12,200 11-J~l-03 31-Jan-04 DRGFI Economic Factorsandthe Political Environment in UnderstandingSocial Conflict and Civil War PP 15,000 0 9-Jun-03 31-Jan-04 DRGIC How Does Globalization Affect Middle-Income Strata? Evidencefrom HouseholdBudget Surveys R 16,000 28,000 8-Apr-03 30-Jun-05 DRGPO Impact Evaluation of Food for Education PP 30,000 1-0ct-03 30-Jun-04 DRGPS InvestmentClimate ResultsinDeveloping Countries D 58,587 27-Jw-03 30-Jun-04 DRGIC Urbanization and Quality of Life- Micro and Macro Perspectives PG 193,000 135,000 10-Apr-03 30-Jun-05 DRGIE DoesRegionalismHelpor Hinder Multilateralism? An Empirical Evaluation 40,000 20-Mar-03 30-Jw-04 DRGTR Chinese LanguageWebsite 58,092 0 17-Oct-02 30-Jun-04 DRGIC Corruption inCustoms: Grease or Sandinthe Wheels of International Trade 4,500 24,500 11-Feb-04 31-Dee05 DRGTR Economicsof PesticideContaminationinBangladesh 54,900 0 13-Sep-02 30-Sep-04 DRGIE Benefits and Costs of Organic Agriculture: Evidencefrom Cuba 19,000 45,400 30-Jan-03 31-Dee04 DRGIE Geography,Tradeand Growth 40,000 0 29-Jan-03 31-Mar-04 DRGTR Estimating TradeElastic ties 55,000 6,745 12-Feb-03 30-Jun-05 DRGTR How Do U.S.Multinationals Respondto Strengthened IntellectualPropertyRights Abroad?A Firm-Level Panel R 25,000 0 28-Jan-03 30-Jun-04 DRGTR Data Analysis Small and MediumEnterprises:Financing Constraintsto Growth R 55,000 19,920 22-Oct-02 28-Feb-05 DRGFI Industrial OrganizationPolicy for Development PP 181,188 6-NOV-02 30-Jun-04 DRGIC Foreign Direct InvestmentandPollution Havens:Evaluating the Evidencefrom China R 15,906 0 8-NOV-02 30-Jun-04 DRGIE The Origins of the TelecommunicationsRegulation: Monopoly, Competition, and Regulationinthe United R 21,385 0 29-Mar-02 30-Jun-04 DRGIC States, 1900-1913 Child Labor andAccess to Credit: Evidencefrom Rural 0613012004 Tanzaniaand Vietnam R 26,718 9,000 18-Oct-02 1213112004 DRGPO Infrastructure andRegional Growth inIndian Manufacturing R 38,990 53,010 23-Dec-02 31-Dec-05 DRGIC Macro-Micro Linkagesof IrrigatedWater Management(co- managedwith ARD) R 38,800 35,000 20-Sep-02 1-Dee03 DRGRD Urban Transportandthe Welfare ofthe Poor R 57,8 18 16,882 27-Au~-03 31-Dec-04 DRGIE Urban Transportandthe Welfare ofthe Poor PP 12,650 1-Nov-02 30-Sep-03 DRGIE The Effects of Inventoriesof TradablePermitson Technology and Abatement:An Empirical Analysis of R 19,850 0 11-0ct-02 30-Jun-04 DRGRD Markets for TradablePollution Permits Teachers, Incentives, and StudentPerformance R 57,600 13,192 28-Oct-02 31-Dee04 DRGPS International TechnologyDiffusion: The Impact of Trade and Regional Integration R 18,500 0 14-Aug-02 31-Dee03 DRGTR Towards GreenhouseGases EmissionReduction Commitmentsby Developing Countries: Costs and Benefits R 11,532 0 9-Aug-02 31-Mar-04 DRGIE of Various OptionsUnderUncertainty Individual and GroupDefault IncentivesinMicro-Finance: A Proposalto Studythe Role of GroupsinGrameenBank? R 20,000 55,953 4-Dec-03 30-Sep-05 DRGRD Looking BeyondAverages: A ResearchProgramon Poverty and Inequality PG 213,750 193,750 27-Feb-02 30-Jun-05 DRGPO The Public Disclosureof Industrial PollutioninChina: Assessingthe Impact of 'ThirdWave' Regulation R 8,000 0 4-Mar-02 31-Dec-03 DRGIE Inequality and Investment:LandTenure and Soil Degradationinthe IndusBasin R 26,500 30,000 4-Mar-02 3 1-Dec-03 DRGRD 122 ProgramGrantProposal: RuralDevelopmentResearch PG 134,750 45,000 2-Oct-01 31-Dec-04 DRGRD Ownership Changes andCorporateGovernance inChinese Firms: Causes and Effects R 5,000 0 12-Feb-02 30-Jw-04 DECRG ProductVariety inTrade and FactorPrices R 5,000 0 16-Aug-02 31-Mar-04 DRGTR ProgramGrant: FinancialSector Research PG 41,640 0 1-0ct-01 31-Dec-03 DRGFI ImprovingPublic ServiceDelivery: The Roleof InformationandVoice R 50,000 80,750 14-May-02 30-Apr-05 DRGPS GreeningIndustryin Latin America D 0 0 14-Au~-02 30-Jun-04 DRGIE Trade, Trademarks, and Reputation R 13,200 0 26-Apr-02 30-Jw-04 DRGTR ChangingGender BiasinMalaysia R 21,000 10,000 4-Jun-01 30-Jun-03 DRGPO The Taxation o f FinancialIntermediation R 0 0 21-Mar-O1 30-Jun-03 DECRG The Impact of LocalGovernance in India: An Empirical Investigation R 24,128 0 3-Aug-01 30-Jun-04 DECRG InformatiodCommunication TechnologiesandPoverty Reduction(CITPO) R 31,761 109,189 13-NOV-02 30-Jw-05 DRGIE ImprovingLearning inPublicSchools:Impact Evaluationof an InnovativePolicyInitiative inIndia PP 25,000 0 22-Sep-03 30-Jw-04 DRGPS ImpactEvaluationofaRuralRoadsRehab. Project in Vietnam R 127,800 0 28-Jw-02 30-Jun-05 DRGPS Violenceand Crime: A Cross-CountryPerspective R 2-May-02 30-Jun-05 DECRG TechnologyTransfer thruVerticalRelationshipsbetween 0 30-Jw-05 DRGTR MultinationalsandLocal Suppliers R AssemblingandDisseminatingPesticideUse Datafrom 0 28-Jw-05 DRGIE DevelopingCountries D HumanRightsand Basic Services PP 0 12-May-05 DRGPS Rulesof Origin andFirmHeterogeneity PP 10,000 5-May-05 30-NOV-05 DRGTR Long-TermImpactsof aWB Poor-AreaDevelopment R 0 26-Apr-05 31-Mar-07 DRGPO ReformingInfrastructure:Privatization,Regulationand 6,758 11-Jan-05 30-Jun-06 DRGGI Competition D FarmProductivityand MarketStructure: Evidencefrom 0 15-Mar-05 30-Jun-06 DRGTR CottonReformsinZambia The Contributionof Governanceto Growth inAgriculture 13,750 5-Oct-04 30-Jun-06 DRGRD MeasuringRealGDP and Trade Distortions 7,000 19-Apr-05 30-Jun-07 DRGTR Estimatingthe Returnto CapitalandInvestmentPropensity 14-Feb-05 DRGFI inMicro Enterprises Evaluatingthe Impact ofConditionalCashTransfers [CCT] 30,000 9-Mar-05 30-Jun-06 DRGPS on SchoolOutcomes inCambodia R The Impact of Trade Liberalizationand International Exposureon Labor andCapitalAdjustment Functionsin R 15,000 1-Dec-04 30-Dec-05 DRGTR Uruguay Trade andProduction11, 1976-2003 R 10,000 3-Jan-05 30-Jun-06 DRGTR SoftwareTool for PovertyMapping PP 15,000 22-Dec-04 30-Jun-05 DECRG The Economicso f ReciprocityNetworks PP 15,000 6-Oct-04 30-Juri-05 DRGGI ImprovingIndoorAir Qualityfor PoorFamilies: Proposal for aControlledExperimentinBangladesh R 30,000 23-NOV-04 30-Juri-06 DRGIE The Impact of AccessingInternationalCapitalMarketson Firm'sValue 12,000 11-NOv-04 30-Jun-06 DRGGI The EconomicsandPoliticsofPost-ConflictTransitions 30,000 1-Nov-O4 30-Jw-06 DRGGI The Impact ofAgricultural Services 17,500 14-Oct-04 30-Jw-06 DRGFI ValuingImprovementsinRoadSafety:A Case Study in 56,550 29-Oct-04 30-Jw-06 DRGIE Delhi,India Extensionofthe DatabaseonPoliticalInstitutions: 1-NOv-04 DRGGI Understandingthe InstitutionalDriversof Government DC Performance(DPI) Evaluationof the Female Secondary StipendAssistance Proj (FSSAF') inBangladesh PP 15,000 16-Mar-04 30-Apr-05 DRGRD 123 The Legacyof Social Inequality inExpectations,Norms and Governance: An Experimental Investigation R 35,100 12-Oct-04 30-Jun-07 DRGGI CooperativeArrangements for Allocation of Water among Production and Environmental Uses under Stochastic PP 15,000 9-Aug-04 30-Jun-05 DRGIE Supply Conditions Formal and InformalCredit Markets inVietnam R 39,270 13-Jul-04 30-Jun-06 DRGPO Impact of cashtransferson child health and cognitive development: Evidencefrom a randomizedevaluationin R 0 22-Jun-05 31-Dec-06 DRGPS Ecuador CrossingBoundaries, SocialDistanceand the Gender Gap R 24,000 22-Dec-04 30-Jun-07 DRGRD Adult Mortality and the Long-Run Impact on Households R 0 30-Jun-05 30-Jun-04 DRGPO Universities as Drivers ofUrban EconomiesinAsia R 29,000 4-Mar-05 30-Jun-06 DECRG Turning the Tide for Biodiversity Hotspots:Policiesto Implement Low Cost Sustainable Landscapes D 4,670 6-Dec-04 30-Jun-06 DRGIE Other DEC Can Good PolicyReformYield Low Returns? R 20,000 30,000 24-Ju1-03 30-Jun-05 DECVP BerlinWorkshop FY2004 85,000 29-Aug-03 31-Dec-03 DECPO BerlinWorkshopFY2005 "WDR 2006 Equity and - Development" 0 85,000 22-Jun-04 31-Dec-04 DECPO Householdsand Schools:Demandand Supply Side Determinantsof Child SchoolinginEthiopia R 40,000 10,000 23-Jul-03 30-Sep-04 DECWD ScalingUpthe Success of CapacityBuilding inEconomic Educationand Research: Budapest, June 14-15,2005 CB 150,000 18-Apr-05 30-Jun-05 DECPO WBI, LEGand EXT Measuring Quality-Quantity Trade-offs inthe Regulationof Privatized Railways R 40,000 25,000 30-Jun-03 30-Dec-04 WBIFP Knowledge and Economic Development:An Empirical Study PP 15,000 0 10-Oct-03 30-Jun-06 WBIPKD Linking RepresentativeHouseholdModelswith Household Surveys: Implications for Quantifylng PovertyReduction R 26,000 0 29-Aug-03 30-Jun-04 WBIPKD Strategies The Metamorphosisof Marginality: Fragmentation,Fear and Hope inthe Favelasof Rio DeJaneiro, 1968-2004 R 180,000 94,000 21-Jul-03 30-Juri-05 WBIFP HowWell Do SME ProgramsWork? EvaluatingMexico's SMEProgramsUsingPanelFirmData R 30,000 0 23-Dec-02 31-Dec-03 WBIHD Labor Market Policies, Unemployment,andPovertyin Morocco: A QuantitativeAnalysis R 0 16-Dec-02 31-Mar-04 WBIPR Inequality inHealth andEducationOutcomes PP 15,000 0 17-Jun-03 31-Dec-03 WBIPR Capital Subsidiesand the Quality of Growth R 24,563 0 19-Aug-02 30-Jan-04 WBIPR The Amazon Estuary R 0 0 22-Jan-01 31-Jan-03 WBIEN Legal and Judicial Reform ProjectsinDevelopingNations: 5,000 12-Aug-03 1-NOV-O5 LEGLR Measurementand Evaluation PP ABCDE Brussels (May 10-11,2004) 75,000 EXTEU Successhl Adaptation to SystemicChange PP 15,000 0 4-Mar-03 31-Dec-03 EXTSP Global BusinessSchoolNetwork CapacityandNeeds Assessments - Six Countriesof SSA CE 65,000 11-Apr-03 30-Jun-04 CEIED ABCDE Europe/Amsterdam(May 23-24,2005) 75,000 28-Mar-05 30-Jun-05 EXTEU The Contribution of BusinessEducationto Development" PP _ - 10,000 9-Jul-04 30-Jun-05 CBNDR Source: DECRS 124 Annex D. ResearchCapacity-BuildingGrants fromthe ResearchCommittee Since 1993 ResearchCapacity-BuildingInitiatives Unit Supervisor Grant Approved Encouraging Economic Researchinthe Middle East MNAVP L.Squire $150,000 and NorthAfrica LatinAmerican Econometric Society LACVP M.Selowsky $120,000 African Economic ResearchConsortium AFRCE I. Husain $750,000 5/27/93 Initiative to Encourage Economic Research inthe MNAVP I. Diwan $150,000 7/27/93 Middle East and NorthAfrica International Conference on African Economic AFRCEI I. and Husain $110,000 3/1/94 Issues PRDPE S. Devarajan Strengthening Economic Policy Analysis and EC3DR J. Holsen $30,000 4/1/94 ResearchinFSU Economic ResearchForumfor the Arab Countries, MNAVP N.Shafik $430,000 4/7/95 Iranand Turkey China Center for Economic Research EA2DR N.Hope $410,000 5/12/95 Economics Education and Research Capacity RAD G. Ingramand $750,000 9/12/95 BuildinginRussia andUkraine M.Selowsky LatinAmerican Econometric Society LATEA S. Bery $15,000 4/12/96 International Conference onAfrican Economic Issues PRDPEI S. Devarajan $55,000 11/7/96 AFTM5 and P. Harrold LatinAmerican and the Caribbean Economist LACCE G. Perry $30,000 4111/97 Association Fifteenth LatinAmerican Meetingo f the LACCE G.Perry $10,000 4111/97 Econometric Society China Center for Economic Research EASPR P. Bottelier $510,000 3110198 Latin America and the Caribbean Association LCSPR G.Perry $20,000 3120198 South Asia Beyond 2000 SARVP J. Williamson $60,000 5111/98 Workshop on the Central Economic ReformIssues EASPR P. Bottelier $40,000 4110198 Facing China Economic Educationand Capacity Buildingin D E C K 4 B.Pleskovic $40,000 4/10/98 Transition Economies Enhancing Economics Education and Researchin ECAVP M.Selowsky $750,000 5111/99 Ukraine and Russia The Twelfth World Congress - Buenos Aires DECVP L.Squire $25,100 4/1/99 Chinese TransitionNewsletter DECRG R.Hirschler $25,000 6/9/99 China Center for Economic Research EASPR H.Kharas $234,000 511102 Economics Education and Research Consortium ECAVP P. Mitra $800,000 4/30/02 African Economic ResearchConsortium AFRCE A. Gelb $500,000 5/1/02 Center for Economic and Financial Research ECAVP P. Mitra $70,000 7/24/02 Center for Economic Researchand Graduate ECAVP P. Mitra $300,000 4/25/02 Education African Economic ResearchConsortium: Ph. D. AFRCEI A. Gelb and $450,000 6/12/02 Program and DECRGVisiting ResearchFellows DECRG P. Collier Economics Educationand ResearchConsortium- ECAVP P. Mitra $900,000 5/1/03 Ukraine N e w Economic School ECAVP P. Mitra $900,000 5/1/03 Global Development Network SARVPI S. Ahmed and $228,500 5121/03 ECAVP P. Mitra Center for Economic Researchand Graduate ECAVP P.Mitra $300,000 10111/05 Education-Economics Inst. Source: DECRS Annex E. VisitingResearchFellows Program,FY04-FY06 Ali, Mubarak Pakistani Asian Vegetable Researchand ARD 7 Months, Development Center, Taiwan FY03-04 Wangwe, Samuel Tanzanian University of Dar-es-Salaam and AFRCE 7 Months, London School o f Economics FY03 Mosse, David British University o f London DRGRDIARD 4 Months, FY03-04 126 Annex F. FlagshipReports, PolicyResearchReportsand WorldDevelopmentReportspublishedinFY04-FY05 EastAsia and Pacific East Asia Integrates 2003 Connecting East Asia 2005 East Asia Decentralizes 2005 Latin America and Caribbean Inequality inLatinAmerica 2004 Keeping the Promise o f Social Security 2005 Lessons fromNAFTA 2004 Beyondthe City: Rural Contribution to Development 2005 Europeand CentralAsia Anti-Corruption inTransition 2004 Transition:'The FirstTen years 2002 MiddleEast andNorthAfrica Unlocking the Employment Challenge inMENA 2004 Gender and Development inMENA 2004 Better Governance for Development inMENA 2003 Trade, Investment, and Development inMENA 2003 SouthAsia South Asia pension systems 2005 PSD Network Doing Business 2004 2004 Doing Business 2005 2005 PREMNetwork Economic Growth inthe 1990s: Learning from a Decade o f Reform 2005 HDNetwork OldAge Income Support inthe 21st century 2005 Income Support Systems for Unemployed 2004 Targeting o f Transfers inDeveloping Countries 2004 ESSDNetwork Agricultural Growth for the Poor: An Agenda for Development 2005 DEC PolicyResearchReports(PRRs) - Reforming Infrastructure: Privatization, Regulation and Competition 2004 Land Policies for Growth and Poverty Reduction 2003 Breaking the Conflict Trap: Civil War and Development Policy 2003 DEC World DevelopmentReports - Sustainable Development ina Dynamic World 2003 Making Services Work for Poor People 2004 A Better Investment Climate for Everyone 2005 127