Working Papers

This paper examines the experience of a set of countries that performed relatively well in coping with the COVID-19 crisis. The goal is to garner insights and lessons that can help countries that may experience initial or second-round outbreaks of the pandemic in the future. The paper finds healthcare, social protection, and overall governance systems as the three main determinants of COVID-19 strategies and their success. Though unique country-specific factors played an important role in confronting the pandemic in some countries, their role was generally mediated through one or the other of the above three main determinants. The findings of the paper suggest that establishing universal…

The COVID-19 pandemic is entailing huge costs worldwide. To help developing countries formulate policy responses to minimize negative impacts of the COVID-19, possible size and duration of the shocks on most vulnerable countries, i.e., least developed countries (LDCs) and Small Island Developing States (SIDS), and their resilience to overcome the shocks need to be assessed. This paper quantitatively examines possible paths of LDCs and SIDS recovering from the impacts of the COVID-19 crisis, using an autoregressive model of income growth and a panel regression model of external demand for LDCs and SIDS. Evidence from the experience of the 2007-08 global financial crisis suggests that the…

While migration and population displacement has always been part of the human experience, the context within which it occurs today has materially changed. Migration has become an important part of economic globalization and closely related to countries´ development process. Conflicts, poverty, natural disasters and climate events are also forcing people to migrate in an ever-increasing number. For many low-income countries with large number of internally-displaced people, on the other hand, the high economic costs are making it more difficult for them to invest in SDG implementation. Developing countries also host most of the externally-displaced people at high economic costs, which…

This paper investigates the role of trade costs in exporter dynamics in Africa. In comparison to exporters from other regions, African exporting firms are fewer, smaller and relatively less diversified in terms of products and destinations. African countries also display the highest rates of entry, exit and turnover of exporting firms, exporting products and export destinations. This suggests that Africa’s exporting activity is volatile and subject to a lot of experimentation, with exporters having difficulties in maintaining trade relationships. The analysis also confirms that trade costs are a crucial factor in explaining exporter performance in Africa vis-à-vis other regions, but also…

The potential of data for supporting development is bounded only by the amount and variety of data that can be collected and analyzed, which is to say it is almost infinite. However, if data’s vast benefits are disproportionately captured by few in the society, leaving no one behind – an overarching principle of the Sustainable Development Goals – would be difficult to attain, even when everyone benefits from the use of data. This paper discusses key data properties and dynamics in data economy that create the tendencies for monopolies to emerge, reinforcing unbalanced power between corporates and other actors and generating negative distributional implications. If mismanaged,…

The objective of this paper is to examine the impact of unconventional monetary policy measures adopted in developed countries (the US, UK, Euro Area and Japan) on developing economies (Brazil, China, India and Russia). First, we analyse the domestic and cross-border financial market impact of unconventional monetary policy announcements by central banks, using a series of event studies. We find that quantitative easing (QE) by the FED, BoE, ECB and BoJ influenced long term yields, equity prices, and possibly exchange rates both in the developed and developing countries (for example we find that QE resulted in decreases in long term yields by about 125 basis points in the US, about 100…

This paper examines the distributional effects of fiscal austerity. Using episodes of fiscal consolidation measures for a sample of 17 OECD countries over the period 1978-2009, we find that fiscal consolidation episodes have typically led to a significant and long-lasting increase in inequality. Tax-based consolidation episodes tend to have a larger and more persistent effect on inequality than spendingbased consolidations. The evidence also shows that while fiscal consolidations have typically led to a fall in wage income, they have not had a significant effect on profit and rent income.

This paper assesses the effectiveness of non-tariff special and differential treatment (SDT) offered exclusively to the least developed countries by WTO agreements. SDTs are inefficient in at least four aspects. First, they are not easily accessed as they require a certain level of institutional capacity. Second, when accessible they either need to be complemented by other policy interventions or are offset by measures taken elsewhere. Third, some do not respond to LDC needs. Fourth, many are too vaguely defined to provide concrete benefits. Effectiveness can be enhanced by increased LDC ownership and improved policy coherence by trading and development partners.

A fundamental shift in macroeconomic policy thinking is taking place. This shift opens a space for implementing policies that promote growth and reduce poverty in developing countries. In this paper, policies for post-conflict and resource-rich economies are outlined. Fiscal policy would focus on revenue mobilization, scaling-up public investment, and preventing over-heating. Monetary policies would revive the financial sector, prevent inflationary pressures and stimulate private sector investment. Exchange rate policies should focus on achieving slow depreciation and maintaining international competitiveness. These policies should not be considered in isolation from each other, but in…

With bank-level data from 81 developing countries, the paper shows that increased foreign bank presence is associated with increased reliance on non-deposit based funding, which leads to higher interest rate spreads, less credit to the private sector, and higher volatility in bank loans. Foreign bank entry significantly reduces domestic banks’ share of deposits while foreign banks typically allocate less of their assets and deposits to lending. As domestic banks lose their deposit base, they rely on non-deposit based funding, but its higher costs and uncertainty force domestic banks to reduce their lending activities.

Recent calls for more intense debate on and reforms to the international monetary system imply that the current system is unable to respond appropriately and adequately to challenges that have appeared, or become more acute, in recent years. This paper focuses on four such challenges: ensuring an orderly exit from global imbalances, facilitating more complementary adjustments between surplus and deficit countries without recessionary impacts, better supporting international trade by reducing currency volatility and better providing development and climate finance. After describing them, it proposes reforms to enable the international monetary system to better respond to these challenges…

This paper uses data from Jordan’s 2007 Demographic and Health Survey to reassess the main determinants of child mortality in this middle-income country. Running different logit estimations to allow for different time windows and sets of variables, we find that behavioural factors have gained importance, compared to the household and community factors that were found to be important in earlier studies. We conclude that once a country has passed a certain threshold in household income, education and access to health care and safe drinking water, policies targeting behavioural changes are the most promising for achieving further reductions in mortality rates.