Do Gender Quotas Affect Long-Term Political Outcomes?

Some 100 countries have in place gender quotas, the practice of reserving political positions for women, to overcome long-standing gender inequalities, yet little is known about its long-term impact. A working paper by Klaus Deininger, Songqing Jin, Hari Nagarajan, and Xia Fang fills the gap.

Drawing on 15 years of data from individual respondents in India, the authors explore how reservations affect leader qualifications, service delivery, political participation, local accountability, and individuals’ willingness to contribute to public goods, both during the "reserved" period and in the long term.

India is particularly suitable for this analysis: in the early 1990s, it implemented policies to reserve leadership positions in one-third of its villages -- randomly chosen in each period -- along with far-reaching decentralization policies. As the reservation policy aims to bring to office women who would not have qualified otherwise, the short-term impact on leader quality is often negative. But gender quotas increase the level and quality of women's political participation, the ability to hold leaders to account and the willingness to contribute to public goods in the long term. The full impact often materializes only after a time delay, highlighting the importance of considering the longer-term impact to gain a full appreciation of the policy.

Extracted from World Bank 

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Cambodia Will Export More Milled Rice to Chinese

Cambodia is expected to increase rice export not only in quantity but also in price, as importer will search elsewhere for more competitive supplies. In Phnom Penh this week in particular, Chinese agricultural company Sino Grain was researching the possibility of importing Cambodian milled rice. Although the exact amount of import was on consideration, it could also be expected the demand is high, since the company’s director general Xu Ge Fei said that Guangdong requires 1 million tons of milled rice per month. Last month moreover, Cambodia’s SOMA Group signed a cooperative MoU with China’s Yunnan Provincial Overseas Investment to build a rice-processing mill facility in Cambodia. Therefore, more Cambodian milled rice is expected to directly export to China, and the growth will be significant.

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In Tokyo, Donors Reaffirm Commitment to MDGs

• Japan hosts global donors to take stock of MDG progress since the September 2010 U.N. summit.
• World Bank has already committed half of its $600 million pledge for health, made last fall, to help countries reach the 2015 goals.
• Bank financing is helping expand programs in health, nutrition, education and agriculture; public-private partnerships also a focus.

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Tokyo, June 5, 2011—Ten weeks after its devastating earthquake and tsunami, Japan hosted its first international summit here since the disaster, with a global stocktaking of progress toward achieving the 2015 Millennium Development Goals (MDGs).
Welcoming ministers and officials to Tokyo from more than 30 countries—in addition to development groups, civil society groups, and universities--Japanese Prime Minister Naoto Kan said that he had been deeply moved by the international outpouring of concern and solidarity for his country after its ‘Great East Japan Earthquake.’ He spoke as aftershocks continued to rattle the summit venue.

“This has made Japan all the more determined to act with the rest of the world and contribute to the achievement of the MDGs. Thus, I … reconfirm my unwavering determination to continue to faithfully implement the international commitments we have made,” he said.

At the United Nations MDG Summit in September 2010, Japan launched its ‘Kan Commitment,’ pledging a total of $8.5 billion from 2011 until 2015 to help improve the health of mothers and infants as well as education services in poor countries.

Bank Progress ‘Faster than Anticipated’
Japan joins the World Bank in putting its full weight behind helping countries meet the 2015 MDGs. World Bank Managing Director Mahmoud Mohieldin said the Bank was already making significant progress in delivering on new financial pledges, announced by Bank President Robert Zoellick at last September’s summit.

“I’m pleased to announce that this scale-up is moving even faster than we had anticipated,” Mohieldin said in Tokyo, slated to be the site of the 2012 Annual Meetings of the Bank Group and International Monetary Fund.

“To date, the World Bank has already committed about half of the pledged amount, or $300 million, to seven countries – Burkina Faso, Burundi, Ethiopia, Nigeria, Laos, Sri Lanka, and Tajikistan. We are in the process of working with many other countries to help them scale up their efforts over the coming year.”
Mohieldin said the Bank is increasing its results–based financing in health by more than $600 million over the next 5 years to support 35 countries affected by high fertility and child and maternal mortality rates, poor child and maternal nutrition indicators, as well as preventable childhood diseases. These new resources, he said, are helping mothers and children receive the essential health and nutrition services they need to survive and thrive.

Linking Nutrition, Agriculture, Education
With crucial support from Japan and more than 100 other partners, Mohieldin said, the Bank is now implementing the global Scaling Up Nutrition (SUN) Framework. Twelve countries have already agreed to join this initiative, and more are expected to follow shortly.
The Bank has linked its support for nutrition with the rest of its poverty-fighting programs in agriculture, social protection, health, gender, and other fields.

Under the Bank’s Agriculture Action Plan, the World Bank Group is increasing support for agriculture and related sectors to between $6.2 billion and $8.3 billion a year. The Global Food Crisis Response Program, through Bank support and mobilization of external funds, is in place to provide a rapid short-term response to rising food prices. It has already provided $1.5 billion in support to 44 countries, reaching 40 million vulnerable people.

In education, the Bank is making substantial progress on its pledge to mobilize new zero-interest and grant investments in basic education by an additional $750 million over the next five years, for countries that are off-track to reach the education MDGs, especially in sub-Saharan Africa.

Under the guidance of a new 10-year Education Strategy, Learning for All, the Bank will help countries not only achieve their development goals for universal primary school access and completion – but also ensure that their young people don’t just attend school, but stay in school and learn the knowledge and skills they will need later for meaningful jobs.

Mohieldin said the Bank is increasing global access to clean water and sanitation, with financing for water supply alone on track to reach $1.8 billion annually. Over the past decade, he said, the Bank had helped more than 100 million people gain access to clean water and better sanitation.

Private Sector Involvement
Many speakers at the Tokyo summit, which was jointly organized by the World Bank, UNDP, and UNICEF, called for greater involvement by the private sector in helping countries meet the 2015 deadline, especially as they battle ongoing food, fuel, and financial crises.
Several ministers remarked that where governments create the right business environment, private companies —including international firms—were quick to develop new markets while also helping to meet the health and education MDGs.
The Bank’s Mohieldin noted the role of public/private partnerships will be vital in leveraging the potential of the private sector over the next four years, as the MDG deadline nears.
In Bangladesh, for example, he described how one Bank partnership with nongovernmental organizations, called ‘Reaching Out-of- School Children’, has returned more than 700,000 children to the school system—children from the poorest sub-districts of the country, who had either dropped out of school, or who had never enrolled in the first place.

Alternative learning centers set up under the program provide education stipends to children to lessen the cost burden on their families, and distribute free books, school supplies and uniforms.


Extracted from World Bank

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Big Infrastructure Investments Have Uncertain Impact on Greenhouse Gas Emissions

Large-scale investments in energy-intensive infrastructure -- such as power plants, industrial facilities, road systems, and urban development -- can increase energy use and greenhouse gas emissions in the long run. That is, unless the plant, highway network or other facilities are shut down early or undergoes costly retrofit, according to a new working paper by Jon Strand, Sebastian Miller and Sauleh Siddiqui. These investments, of course, initially may be made with cost savings in mind. But they would require costly actions later on, such as replacing the infrastructure or retrofitting, to drastically reduce their long-term greenhouse gas emissions. For efficient planning, policy makers must consider tougher constraints on greenhouse gas emissions and higher energy prices in the long run. Otherwise, infrastructure investment is too energy and carbon intensive to make sense. Lower-cost retrofit options can curb future emissions and reduce costs. But policy makers need to account for a “rebound effect,” since they would encourage more energy intensive options on infrastructure and thus partly offset the impact. Therefore, the key to reducing long-term emissions is through cutting the cost of low-carbon investments.

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The Food Crisis Affected Households with HIV the Same as Other Households in Mozambique

The food crisis affected households in Mozambique, with a real deterioration of welfare in terms of income, food consumption and the nutritional status of children between 2007 and 2008, according to a new working paper by Damien de Walque, Harounan Kazianga, Mead Over, and Julia Vaillant. Both HIV and comparison households were affected equally in those measures, despite concerns that HIV households would suffer more. Indeed, although HIV households were worse off before the crisis, they experienced the same reduction in welfare as others did. The initiation of antiretroviral treatment and better services in health facilities seem to have counter-balanced the effect of the crisis by improving the health of patients and their participation in the labor force.

The effect of the change in welfare on adherence to treatment was assessed using the frequency of visits to a health facility of patients and their treatment outcomes, as both variables can proxy for adherence to treatment. This is a crucial issue as it affects both the health of the patient and overall public health, because not following treatment protocols could lead to the development of resistant forms of the virus. The change in welfare did not affect the frequency of visits, but people who experienced a negative income shock also experienced a reduction or a slower progression in treatment outcomes.

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Do We Need Big Banks?

The financial crisis has brought attention to the costs and benefits of large banks. A new working paper by Asli Demirgüç-Kunt and Harry Huizinga finds that banks large in absolute size—measured by assets – tend to be more profitable, but carry higher risk. But banks large in systemic size — measured by the ratio to the economy – tend to be less profitable, but still carry high risk. In addition, despite too-big-to-fail subsidies, systemically-large banks are subject to greater market discipline, suggesting that they are often too big to save. Indeed, a bank’s rate of return on assets tends to decline with systemic size, partly because its interest cost tends to rise with its systemic size. Market discipline, through higher funding costs, should keep systemic size in check. But clearly, it hasn’t prevented the emergence of such banks in the first place. This may be because inadequate corporate governance structures at banks have enabled managers to pursue high-growth strategies at the expense of shareholders. For that reason, the authors say greater government intervention appears to be needed. The research is based on a large sample of banks in 80 countries from 1991 to 2009.

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Does Foreign Aid Address Business Bottlenecks That Companies Care About?

Foreign aid, for the most part, does target the areas identified as obstacles for growth by firms in developing countries, according to a new working paper by Esteban Ferro and John S. Wilson.

In particular, aid that funds trade-related projects effectively targets the right countries, or countries where firms are more likely to identify trade as an obstacle for their operation and growth. But aid doesn’t do much to improve firms’ perception of the areas that aid was set out to improve, unless it is focused on the finance and business environment of the country.

Using World Bank enterprise survey data and OECD aid-flow data, the authors also find that for each targeted area, smaller aid disbursements, rather than large ones, appear to be more effective in improving firm perceptions. In the aftermath of the global financial crisis, these findings suggest the need to further examine the effectiveness of aid for trade aligned with private sector interests in business expansion and other priorities that enhance trade.

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Urbanization and Urban Growth in India Has Helped Reduce Poverty, although Inequality Is on the Rise

India’s structural transformation — from rural to urban and from agriculture to the non-farm sector – has contributed to  the country’s declining poverty rate over the past 30 years, according to a new book by Peter Lanjouw, Rinku Murgai and colleagues at the World Bank.

The traditional engine of aggregate poverty reduction, agriculture, has lost some of its potency: in recent years poverty rates continued to fall while agricultural growth slowed. Since the 1990s, the authors say, urban growth has become a new, and important, driver of poverty reduction. An overwhelming majority of the urban poor live in small and medium-sized towns (rather than large cities) and it is these towns that appear to be most effective in reducing rural poverty because they stimulate rural non-farm diversification.

The expansion of the non-farm sector has driven down poverty not only through job creation and higher wages, but also by pushing up agricultural wages. One caveat: higher inequality seems to be accompanying India’s accelerating economic growth and the highly-visible transformation in its major cities. This raises concerns that significant segments of the population haven’t benefited from India’s economic growth. Indeed, in the face of dramatic economic growth, inequalities along historical lines of caste, tribe and gender have persisted – and even widened in some places.

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