World Bank

Finance matters. The level of a country's financial development helps predict its rate of economic growth for the following 10 to 30 years. The data are consistent with Schumpeter's view that the services provided by financial intermediariestimulate longrun growth. Policy Resecnh WorkingPapers disseminat thte findings of work in pogrmsa nd enauogcthecxchaegofidas amngBank aaffand al othe intaesd in devlopnent isses.7hesepaper. disbutedbytheResearchAdvisoy Staff.caythenamesofthe autOaos,rlect orlytbeirviewdaotdshoedWreused and citedarofingly.T findins,itaepgettie ons. ndooncysionsammthbercautr t'own.ieyshould not be antnbuted to the Wosid Bank, its Board of Din ccurs, its managanaa, or anty of its member countries. Polley Research

BACKGROUND: The Global Burden of Diseases, Injuries, and Risk Factors Study 2015 provides an up-to-date synthesis of the evidence for risk factor exposure and the attributable burden of disease. By providing national and subnational assessments spanning the past 25 years, this study can inform debates on the importance of addressing risks in context. METHODS: We used the comparative risk assessment framework developed for previous iterations of the Global Burden of Disease Study to estimate attributable deaths, disability-adjusted life-years (DALYs), and trends in exposure by age group, sex, year, and geography for 79 behavioural, environmental and occupational, and metabolic risks or clusters of risks from 1990 to 2015. This study included 388 risk-outcome pairs that met World Cancer Research Fund-defined criteria for convincing or probable evidence. We extracted relative risk and exposure estimates from randomised controlled trials, cohorts, pooled cohorts, household surveys, census data, satellite data, and other sources. We used statistical models to pool data, adjust for bias, and incorporate covariates. We developed a metric that allows comparisons of exposure across risk factors-the summary exposure value. Using the counterfactual scenario of theoretical minimum risk level, we estimated the portion of deaths and DALYs that could be attributed to a given risk. We decomposed trends in attributable burden into contributions from population growth, population age structure, risk exposure, and risk-deleted cause-specific DALY rates. We characterised risk exposure in relation to a Socio-demographic Index (SDI). FINDINGS: Between 1990 and 2015, global exposure to unsafe sanitation, household air pollution, childhood underweight, childhood stunting, and smoking each decreased by more than 25%. Global exposure for several occupational risks, high body-mass index (BMI), and drug use increased by more than 25% over the same period. All risks jointly evaluated in 2015 accounted for 57·8% (95% CI 56·6-58·8) of global deaths and 41·2% (39·8-42·8) of DALYs. In 2015, the ten largest contributors to global DALYs among Level 3 risks were high systolic blood pressure (211·8 million [192·7 million to 231·1 million] global DALYs), smoking (148·6 million [134·2 million to 163·1 million]), high fasting plasma glucose (143·1 million [125·1 million to 163·5 million]), high BMI (120·1 million [83·8 million to 158·4 million]), childhood undernutrition (113·3 million [103·9 million to 123·4 million]), ambient particulate matter (103·1 million [90·8 million to 115·1 million]), high total cholesterol (88·7 million [74·6 million to 105·7 million]), household air pollution (85·6 million [66·7 million to 106·1 million]), alcohol use (85·0 million [77·2 million to 93·0 million]), and diets high in sodium (83·0 million [49·3 million to 127·5 million]). From 1990 to 2015, attributable DALYs declined for micronutrient deficiencies, childhood undernutrition, unsafe sanitation and water, and household air pollution; reductions in risk-deleted DALY rates rather than reductions in exposure drove these declines. Rising exposure contributed to notable increases in attributable DALYs from high BMI, high fasting plasma glucose, occupational carcinogens, and drug use. Environmental risks and childhood undernutrition declined steadily with SDI; low physical activity, high BMI, and high fasting plasma glucose increased with SDI. In 119 countries, metabolic risks, such as high BMI and fasting plasma glucose, contributed the most attributable DALYs in 2015. Regionally, smoking still ranked among the leading five risk factors for attributable DALYs in 109 countries; childhood underweight and unsafe sex remained primary drivers of early death and disability in much of sub-Saharan Africa. INTERPRETATION: Declines in some key environmental risks have contributed to declines in critical infectious diseases. Some risks appear to be invariant to SDI. Increasing risks, including high BMI, high fasting plasma glucose, drug use, and some occupational exposures, contribute to rising burden from some conditions, but also provide opportunities for intervention. Some highly preventable risks, such as smoking, remain major causes of attributable DALYs, even as exposure is declining. Public policy makers need to pay attention to the risks that are increasingly major contributors to global burden. FUNDING: Bill & Melinda Gates Foundation.

This paper presents evidence that “social capital” matters for measurable economic performance, using indicators of trust and civic norms from the World Values Surveys for a sample of 29 market economies. Memberships in formal groups—Putnam's measure of social capital—is not associated with trust or with improved economic performance. We find trust and civic norms are stronger in nations with higher and more equal incomes, with institutions that restrain predatory actions of chief executives, and with better-educated and ethnically homogeneous populations.

Many panel data sets encountered in macroeconomics, international economics, regional science, and finance are characterized by cross-sectional or “spatial” dependence. Standard techniques that fail to account for this dependence will result in inconsistently estimated standard errors. In this paper we present conditions under which a simple extension of common nonparametric covariance matrix estimation techniques yields standard error estimates that are robust to very general forms of spatial and temporal dependence as the time dimension becomes large. We illustrate the relevance of this approach using Monte Carlo simulations and a number of empirical examples.

Explaining cross-country differences in growth rates requires not only an understanding of the link between growth and public policies, but also an understanding of why countries choose different public policies. This paper shows that ethnic diversity helps explain cross-country differences in public policies and other economic indicators. In the case of Sub-Saharan Africa, economic growth is associated with low schooling, political instability, underdeveloped financial systems, distorted foreign exchange markets, high government deficits, and insufficient infrastructure. Africa's high ethnic fragmentation explains a significant part of most of these characteristics.

Using data from India, we estimate the relationship between household wealth and children's school enrollment. We proxy wealth by constructing a linear index from asset ownership indicators, using principal-components analysis to derive weights. In Indian data this index is robust to the assets included, and produces internally coherent results. State-level results correspond well to independent data on per capita output and poverty. To validate the method and to show that the asset index predicts enrollments as accurately as expenditures, or more so, we use data sets from Indonesia, Pakistan, and Nepal that contain information on both expenditures and assets. The results show large, variable wealth gaps in children's enrollment across Indian states. On average a "rich" child is 31 percentage points more likely to be enrolled than a "poor" child, but this gap varies from only 4.6 percentage points in Kerala to 38.2 in Uttar Pradesh and 42.6 in Bihar.

The impact of property rights on economic growth is examined using indicators provided by country risk evaluators to potential foreign investors. Indicators include evaluations of contract enforceability and risk of expropriation. Using these variables, property rights are found to have a greater impact on investment and growth than has previously been found for proxies such as the Gastil indices of liberties, and frequencies of revolutions, coups and political assassinations. Rates of convergence to U.S.‐level incomes increase notably when these property rights variables are included in growth regressions. These results are robust to the inclusion of measures of factor accumulation and of economic policy.

and respecting all workers to deliver the best care possible. Fourth, governments and civil society should ignite demand for quality in the population to empower people to hold systems accountable and actively seek high-quality care. Additional targeted actions in areas such as health financing, management, district-level learning, and others can complement these efforts. What works in one setting might not work elsewhere, and improvement efforts should be adapted for local context and monitored. Funders should align their support with system-wide strategies rather than contribute to the proliferation of micro-level efforts.

This paper uses a new database on foreign aid to examine the relationships among foreign aid, economic policies, and growth per capita GDP. We find that aid has a positive impact on growth in developing countries with good fiscal, monetary, and trade policies but has little effect in the presence of poor policies. Good policies are ones that are themselves important for growth. The quality of policy has only a small impact on the allocation of aid. Our results suggest that aid would be more effective if it were more systematically conditioned on good policy.

Many countries strive to attract foreign direct investment (FDI) hoping that knowledge brought by multinationals will spill over to domestic industries and increase their productivity. In contrast with earlier literature that failed to find positive intraindustry spillovers from FDI, this study focuses on effects operating across industries. The analysis, based on firm-level data from Lithuania, produces evidence consistent with positive productivity spillovers from FDI taking place through contacts between foreign affiliates and their local suppliers in upstream sectors. The data indicate that spillovers are associated with projects with shared domestic and foreign ownership but not with fully owned foreign investments.

protection of health in the near and long term. Several essential steps need to be taken to transform the economy to support planetary health. These steps include a reduction of waste through the creation of products that are more durable and require less energy and materials to manufacture than those often produced at present; the incentivisation of recycling, reuse, and repair; and the substitution of hazardous materials with safer alternatives.

The new scenario framework for climate change research envisions combining pathways of future radiative forcing and their associated climate changes with alternative pathways of socioeconomic development in order to carry out research on climate change impacts, adaptation, and mitigation. Here we propose a conceptual framework for how to define and develop a set of Shared Socioeconomic Pathways (SSPs) for use within the scenario framework. We define SSPs as reference pathways describing plausible alternative trends in the evolution of society and ecosystems over a century timescale, in the absence of climate change or climate policies. We introduce the concept of a space of challenges to adaptation and to mitigation that should be spanned by the SSPs, and discuss how particular trends in social, economic, and environmental development could be combined to produce such outcomes. A comparison to the narratives from the scenarios developed in the Special Report on Emissions Scenarios (SRES) illustrates how a starting point for developing SSPs can be defined. We suggest initial development of a set of basic SSPs that could then be extended to meet more specific purposes, and envision a process of application of basic and extended SSPs that would be iterative and potentially lead to modification of the original SSPs themselves.

ResumenEl efecto de la ideología política en el poder sobre el crecimiento económico , la distribución de la renta factorial y la desigualdad: evidencia para 20 países de América Latina, 1975-2017 Este trabajo de grado de maestría tiene como objetivo estimar el efecto de la ideología política en el poder sobre el nivel de ingreso, sus variaciones en el corto plazo, la distribución en la renta factorial y la desigualdad para 20 países de América Latina en el periodo de 1975-2017.Se realiza la revisión bibliográfica sobre la interacción de estas variables y se presentan los principales resultados de los artículos.La metodología econométrica usada es datos paneles dinámicos y se desarrollan tres modelos con múltiples variaciones que en términos generales son: El modelo sobre el nivel de ingreso del PIB per cápita real deflactado a precios del año 2010 usando como denominador la población en edad de trabajar, un modelo de la participación del trabajo en la renta factorial y, otro modelo para la desigualdad medida por el índice de Gini de los ingresos; cada modelo tiene tres grupos de variables: teoría económica, políticas y exógenas.Las fuentes de los datos utilizadas en el trabajo de grado son: Banco Mundial, Banco Interamericano de Desarrollo (BID), Reserva Federal de los Estados Unidos y Transparencia Internacional.Teniendo en cuenta lo anterior, las variables teóricas en el modelo de nivel de ingreso del PIB per cápita real son: la educación, la inversión y el crecimiento demográfico (Mankiw, Romer & Weil;1992); para el modelo de desigualdad las variables teóricas son: los impuestos a las ganancias y el capital, los impuestos a los bienes y servicios, el PIB per cápita, el nivel de desempleo, el gasto en educación, el gasto público en inversión y el índice de percepción de la democracia (Munduch, 2018).Las variables políticas son tomadas de la base de Cruz, Keefer & X significativas en los modelos de desigualdad.Finalmente, los términos de intercambio y los precios de los commodities son favorables para incrementar el nivel de ingreso y reducir la desigualdad, salvo en el modelo de participación del trabajo en la renta factorial donde el aumento de los precios de los commodities reduce la participación del trabajo en la renta.Todas estas conclusiones están basadas en las estimaciones de los modelos

We investigate whether individual experiences of macroeconomic shocks affect financial risk taking, as often suggested for the generation that experienced the Great Depression. Using data from the Survey of Consumer Finances from 1960 to 2007, we find that individuals who have experienced low stock market returns throughout their lives so far report lower willingness to take financial risk, are less likely to participate in the stock market, invest a lower fraction of their liquid assets in stocks if they participate, and are more pessimistic about future stock returns. Those who have experienced low bond returns are less likely to own bonds. Results are estimated controlling for age, year effects, and household characteristics. More recent return experiences have stronger effects, particularly on younger people.

ABSTRACT Using a unique firm‐level survey database covering 54 countries, we investigate the effect of financial, legal, and corruption problems on firms' growth rates. Whether these factors constrain growth depends on firm size. It is consistently the smallest firms that are most constrained. Financial and institutional development weakens the constraining effects of financial, legal, and corruption obstacles and it is again the small firms that benefit the most. There is only a weak relation between firms' perception of the quality of the courts in their country and firm growth. We also provide evidence that the corruption of bank officials constrains firm growth.

In a dynamic model of moral hazard, competition can undermine prudent bank behavior. While capital-requirement regulation can induce prudent behavior, the policy yields Pareto-inefficient outcomes. Capital requirements reduce gambling incentives by putting bank equity at risk. However, they also have a perverse effect of harming banks' franchise values, thus encouraging gambling. Pareto-efficient outcomes can be achieved by adding deposit-rate controls as a regulatory instrument, since they facilitate prudent investment by increasing franchise values. Even if deposit-rate ceilings are not binding on the equilibrium path, they may be useful in deterring gambling off the equilibrium path. (JEL G2, E4, L5)

Many countries strive to attract foreign direct investment (FDI) in the hope that knowledge brought by multinationals will spill over to domestic industries and increase their productivity. In contrast with earlier literature that failed to find positive intra-industry spillovers from FDI, this study focuses on effects operating across industries. The analysis, based on a firm-level panel data set from Lithuania, produces evidence consistent with positive productivity spillovers from FDI taking place through contacts between foreign affiliates and their local suppliers in upstream sectors. The data indicate that such spillovers are associated with projects with shared domestic and foreign ownership but not with fully owned foreign investments. There is no indication of spillovers occurring within the same industry or through domestic firms sourcing inputs from multinationals.

We investigate the regulation of labor markets through employment, collective relations, and social security laws in 85 countries. We find that the political power of the left is associated with more stringent labor regulations and more generous social security systems, and that socialist, French, and Scandinavian legal origin countries have sharply higher levels of labor regulation than do common law countries. However, the effects of legal origins are larger, and explain more of the variation in regulations, than those of politics. Heavier regulation of labor is associated with lower labor force participation and higher unemployment, especially of the young. These results are most naturally consistent with legal theories, according to which countries have pervasive regulatory styles inherited from the transplantation of legal systems.

The Lancet Commission on pollution and health reported that pollution was responsible for 9 million premature deaths in 2015, making it the world's largest environmental risk factor for disease and premature death. We have now updated this estimate using data from the Global Burden of Diseases, Injuriaes, and Risk Factors Study 2019. We find that pollution remains responsible for approximately 9 million deaths per year, corresponding to one in six deaths worldwide. Reductions have occurred in the number of deaths attributable to the types of pollution associated with extreme poverty. However, these reductions in deaths from household air pollution and water pollution are offset by increased deaths attributable to ambient air pollution and toxic chemical pollution (ie, lead). Deaths from these modern pollution risk factors, which are the unintended consequence of industrialisation and urbanisation, have risen by 7% since 2015 and by over 66% since 2000. Despite ongoing efforts by UN agencies, committed groups, committed individuals, and some national governments (mostly in high-income countries), little real progress against pollution can be identified overall, particularly in the low-income and middle-income countries, where pollution is most severe. Urgent attention is needed to control pollution and prevent pollution-related disease, with an emphasis on air pollution and lead poisoning, and a stronger focus on hazardous chemical pollution. Pollution, climate change, and biodiversity loss are closely linked. Successful control of these conjoined threats requires a globally supported, formal science-policy interface to inform intervention, influence research, and guide funding. Pollution has typically been viewed as a local issue to be addressed through subnational and national regulation or, occasionally, using regional policy in higher-income countries. Now, however, it is increasingly clear that pollution is a planetary threat, and that its drivers, its dispersion, and its effects on health transcend local boundaries and demand a global response. Global action on all major modern pollutants is needed. Global efforts can synergise with other global environmental policy programmes, especially as a large-scale, rapid transition away from all fossil fuels to clean, renewable energy is an effective strategy for preventing pollution while also slowing down climate change, and thus achieves a double benefit for planetary health.

This paper reports on the 2009 update of
\n the Worldwide Governance Indicators (WGI) research project,
\n covering 212 countries and territories and measuring six
\n dimensions of governance between 1996 and 2008: Voice and
\n Accountability, Political Stability and Absence of
\n Violence/Terrorism, Government Effectiveness, Regulatory
\n Quality, Rule of Law, and Control of Corruption. These
\n aggregate indicators are based on hundreds of specific and
\n disaggregated individual variables measuring various
\n dimensions of governance, taken from 35 data sources
\n provided by 33 different organizations. The data reflect the
\n views on governance of public sector, private sector and NGO
\n experts, as well as thousands of citizen and firm survey
\n respondents worldwide. The authors also explicitly report
\n the margins of error accompanying each country estimate.
\n These reflect the inherent difficulties in measuring
\n governance using any kind of data. They find that even after
\n taking margins of error into account, the WGI permit
\n meaningful cross-country comparisons as well as monitoring
\n progress over time. The aggregate indicators, together with
\n the disaggregated underlying indicators, are available at www.govindicators.org.