The World Bank Research Observer

• Evidence on Policies to Increase the Development Impacts of International Migration

  McKenzie, D., Yang, D., 2015-09-24 16:36:06 PM

  International migration offers individuals and their families the potential to experience immediate and large gains in their incomes and offers a number of other positive benefits to the sending communities and countries. However, there are also concerns about the potential costs of migration, including concerns about trafficking and human rights, a desire for remittances to be used more effectively, and concerns about a loss of externalities from skilled workers. As a result, there is increasing interest in policies that can enhance the development benefits of international migration and mitigate these potential costs. We provide a critical review of recent research on the effectiveness of these policies at three stages of the migration process: pre-departure, during migration, and directed towards possible return. The existing evidence base suggests some areas of policy success: bilateral migration agreements for countries whose workers have few other migration options, developing new savings and remittance products that allow migrants more control over how their money is used, and efforts to provide financial education to migrants and their families. Suggestive evidence, together with theory, offers support for a number of other policies, such as lowering the cost of remittances, reducing passport costs, offering dual citizenship, and removing exit barriers to migration. Research offers reasons to be cautious about some policies, including policies enforcing strong rights for migrants, such as high minimum wages. Nevertheless, we find the evidence base to be weak for many policies, with no reliable research on the impact of most return migration programs or whether countries should attempt to induce communal remitting through matching funds.
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• Child Development in a Changing World: Risks and Opportunities

  Boyden, J., Dercon, S., Singh, A., 2015-09-24 16:36:06 PM

  This review explores current understandings of child development and the consequences for children of risk exposure in low- and middle-income countries by integrating empirical evidence from development economics with insights from allied social science disciplines. It provides a holistic perspective that highlights the synergies between children's developmental domains, drawing particular attention to dimensions such as self-efficacy, self-esteem and aspirations, which have had only limited treatment in the economics literature to date, especially in developing countries. It concludes that there is strong evidence of dynamic relationships between risk factors in early childhood and later outcomes across multiple developmental domains, emphasizing the heightened effect of shocks to the care environment and the cumulative effect of multiple shocks. It also concludes that risk is distributed unevenly, with children who are both in poverty and disadvantaged socially according to, for example, their ethnicity bearing the greatest burden; within a household, gender, birth order and other factors mean that some suffer disproportionately from shortfalls and incomplete protection. However, this review finds that low endowments in early childhood can be at least partially compensated for through improved environments and investments in later childhood, emphasizing the resilience of some children. The review goes on to explore the impact on children of dramatic socio-economic changes that have occurred in recent years with rapid growth across most developing countries. It highlights four key forces for change—fall in absolute poverty, increased access to services, changing household incentives for investing in children, and changing social and cultural values—and stresses the ambiguous effects on the welfare of children and their long-term prospects. In so doing, the review aims to consolidate emerging evidence on how risks and opportunities for child development may have changed in these dynamic contexts.
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• Can You Help Someone Become Financially Capable? A Meta-Analysis of the Literature

  Miller, M., Reichelstein, J., Salas, C., Zia, B., 2015-09-24 16:36:06 PM

  This paper presents a systematic and comprehensive meta-analysis of the literature on financial education interventions that focuses on financial education studies designed to strengthen the financial knowledge and behaviors of consumers. The analysis identifies 188 papers and articles that present impact results of interventions designed to increase consumers' financial knowledge (financial literacy) or skills, attitudes, and behaviors (financial capability). These papers are diverse across a number of dimensions, including objectives of the program intervention, expected outcomes, intensity and duration of the intervention, delivery channel used, and type of population targeted. However, there are a few key outcome indicators where a subset of papers are comparable, including those that address savings behavior, defaults on loans, and financial skills such as record keeping. The results from the meta-analysis indicate that financial literacy and capability interventions can have a positive impact in some areas (e.g., increasing savings) but not in others (e.g., reducing loan defaults).
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• Diet Quality, Child Health, and Food Policies in Developing Countries

  Bhargava, A., 2015-09-24 16:36:06 PM

  Although the importance of diet quality for improving child health is widely recognized, the roles of environmental factors and the absorption of nutrients for children's physical growth and morbidity have not been adequately integrated into a policy framework. Moreover, nutrient intakes gradually affect child health, so it is helpful to use alternative tools to evaluate short-term interventions versus long-term food policies. This article emphasizes the role of diet quality reflected in the intake of nutrients such as protein, calcium, and iron for children's physical growth. Vitamins A and C are important for reducing morbidity. Children's growth and morbidity affect their cognitive development, which is critical for the future supply of skilled labor and economic growth. Evidence on these issues from countries such as Bangladesh, India, Kenya, the Philippines, and Tanzania is summarized. The supply of nutritious foods is appraised from the viewpoint of improving diet quality. Finally, the roles of educational campaigns and indirect taxes on unhealthy processed foods consumed by the affluent in developing countries are discussed.
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• Drivers of Entrepreneurship and Post-entry Performance of Newborn Firms in Developing Countries

  Quatraro, F., Vivarelli, M., 2015-09-24 16:36:06 PM

  The aim of this paper is to provide an updated survey of the "state of the art" in entrepreneurial studies with a particular focus on developing countries (DCs). In particular, the concept of "entrepreneurship" is critically discussed, followed by a discussion of the institutional, macroeconomic, and microeconomic conditions that affect the entry of new firms and the post-entry performance of newborn firms. The reviewed literature bears some policy implications for the support of the creation new firms, such as the targeting of policy measures to prospective entrepreneurs who possess high education levels, long previous job experience, and innovative skills. Specifically, for DCs, tailored subsidies and support should be coupled with framework and infrastructural policies that are able to improve the business environment such that new ventures can start and grow.
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The World Bank Research Observer

• Revisiting the "Cash versus Food" Debate: New Evidence for an Old Puzzle?

  Gentilini, U., 2015-09-24 16:36:07 PM

  The longstanding "cash versus food" debate has received renewed attention in both research and practice. This paper reviews key issues shaping the debate and presents new evidence from randomized and quasi-experimental evaluations that deliberately compare cash and in-kind food transfers in ten developing counties. Findings show that relative effectiveness cannot be generalized: although some differences emerge in terms of food consumption and dietary diversity, average impacts tend to depend on context, specific objectives, their measurement, and program design. Costs for cash transfers and vouchers tend to be significantly lower relative to in-kind food. Yet the consistency and robustness of methods for efficiency analyses varies greatly.
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• Measuring Violent Conflict in Micro-level Surveys: Current Practices and Methodological Challenges

  Bruck, T., Justino, P., Verwimp, P., Avdeenko, A., Tedesco, A., 2015-09-24 16:36:07 PM

  This paper reviews current practices and common challenges in the measurement of the causes, functioning, and consequences of violent conflict at the micro-level. We review existing conflict- and violence-related survey questionnaires, with a particular focus on the World Bank's Living Standard Measurement Surveys. We discuss methodological challenges associated with empirical work in conflict-affected and fragile areas—such as operationalizing a definition of conflict, using the appropriate units of analysis, deciding on the timing of the survey, dealing with data biases, and conducting surveys in an ethically sound manner under conditions of insecurity—and propose ways to improve the usefulness of existing surveys to analyze conflict processes at the micro-level. Violent conflict, households, survey methods, questionnaire design.
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• The Economic Effects of Counterfeiting and Piracy: A Review and Implications for Developing Countries

  Fink, C., Maskus, K. E., Qian, Y., 2015-09-24 16:36:07 PM

  Policy makers around the world recognize the potentially harmful consequences of trademark counterfeiting and copyright piracy. Indeed, many countries have recently initiated policy reforms to strengthen the enforcement of intellectual property rights (IPR). Further, minimum standards of enforcement have been incorporated in many international treaties, especially trade agreements. This emphasis on enforcement raises basic questions about the actual impacts of IP rights infringement, which differ across the types of IPR and economic sectors. We review the academic literature and other studies in the public domain to evaluate what has been learned about these socioeconomic effects, with an emphasis on developing countries where possible. We also identify important gaps in our understanding of the consequences of counterfeiting and piracy and develop recommendations on how governments might collect data and conduct studies to better inform IPR enforcement policy.
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• Promoting Women's Economic Empowerment: What Works?

  Buvinić, M., Furst-Nichols, R., 2015-09-24 16:36:07 PM

  A review of rigorous evaluations of interventions that seek to empower women economically shows that the same class of interventions has significantly different outcomes depending on the client. Capital alone, as a small cash loan or grant, is not sufficient to grow women-owned subsistence-level firms. However, it can work if it is delivered in-kind to more successful women microentrepreneurs, and it should boost the performance of women's larger-sized SMEs. Very poor women need a more intensive package of services than do less poor women to break out of subsistence production and grow their businesses. What works for young women does not necessarily work for adult women. Skills training, job search assistance, internships, and wage subsidies increase the employment levels of adult women but do not raise wages. However, similar interventions increase young women's employability and earnings if social restrictions are not binding. Women who run subsistence-level firms face additional social constraints when compared to similar men, thus explaining the differences in the outcomes of some loans, grants, and training interventions that favor men. Social constraints may also play a role in explaining women's outcome gains that are short-lasting or emerge with a delay. The good news is that many of the additional constraints that women face can be overcome by simple, inexpensive adjustments in program design that lessen family and social pressures. These include providing capital in-kind or transacted through the privacy of a mobile phone and providing secure savings accounts to nudge women to keep the money in the business rather than to divert it to non-business uses.
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