World Bank Economic Review Research Articles

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Journal Article Contents Page Get access The World Bank Economic Review, Volume 26, Issue 2, 2012, Page NP, https://doi.org/10.1093/wber/lhs015 Published: 01 January 2012

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Journal Article Contents Page Get access The World Bank Economic Review, Volume 26, Issue 1, 2012, Page NP, https://doi.org/10.1093/wber/lhs006 Published: 01 January 2012

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Journal Article Contents Page Get access The World Bank Economic Review, Volume 26, Issue 3, 2012, Page NP, https://doi.org/10.1093/wber/lhs027 Published: 01 January 2012

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Cover Page Get access The World Bank Economic Review, Volume 26, Issue 3, 2012, Page NP, https://doi.org/10.1093/wber/lhs024 Published: 01 January 2012

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Cover Page Get access The World Bank Economic Review, Volume 26, Issue 1, 2012, Page NP, https://doi.org/10.1093/wber/lhs003 Published: 01 January 2012

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Journal Article Subscription Page Get access The World Bank Economic Review, Volume 25, Issue 1, 2011, Page NP, https://doi.org/10.1093/wber/lhr029 Published: 01 January 2011

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Journal Article Cover Page Get access The World Bank Economic Review, Volume 25, Issue 2, 2011, Page NP, https://doi.org/10.1093/wber/lhr032 Published: 01 January 2011

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Journal Article Contents Page Get access The World Bank Economic Review, Volume 25, Issue 2, 2011, Page NP, https://doi.org/10.1093/wber/lhr035 Published: 01 January 2011

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Contents Page The World Bank Economic Review, Volume 24, Issue 2, 2010, Page NP, https://doi.org/10.1093/wber/lhq014 Published: 01 January 2010

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Contents Page Get access The World Bank Economic Review, Volume 24, Issue 3, 2010, Page NP, https://doi.org/10.1093/wber/lhr008 Published: 01 January 2010

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Journal Article Subscription Page Get access The World Bank Economic Review, Volume 24, Issue 2, 2010, Page NP, https://doi.org/10.1093/wber/lhq013 Published: 01 January 2010

The Political Agenda During Different Periods of Estonian Transformation: External and Internal Factors

Click to increase image sizeClick to decrease image sizeKeywords: post-communist transitionpolitical agendaEU accessionEstonia Acknowledgements The research was supported by grants from the Estonian Ministry of Education and Science (0180017s07) and the Estonian Science Foundation (6526). Notes Notes 1. We shall return to problems of inter-ethnic integration later on in this essay. These problems are in the focus of three other essays published in the current volume (Ehala 2009 De Melo, M, Denizer, C and Gelb, A. 1996. Patterns of Transition from Plan to Market. World Bank Economic Review, 10(3): 397–424. [Crossref], [Web of Science ®] , [Google Scholar]; Korts 2009 Kersting, N and Cronquist, L (eds). 2005. Democratization and Political Culture in Comparative Perspective, Wiesbaden: Verlag Für Sozialwissenschaften. [Crossref] , [Google Scholar]; Vihalemm & Kalmus 2009 Vetik, R (ed.). 2002. Kaks Eestit. Artiklite, ettekannete ja analüüside kogumik, Tallinn: TPÜ Kirjastus. [Google Scholar]). 2. The ‘Tiger Leap’ program has been a priority for all governments since 1997, and has brought Estonia into the group of the leading ICT countries in Europe. A detailed elaboration of the development of information society in Estonia is provided in the essay of Pille Runnel, Pille Pruulmann-Vengerfeldt and Kristina Reinsalu, published in the current volume. 3. See the essay in the current volume by Veronika Kalmus, Margit Keller and Maie Kiisel on the rising consumer culture and environmentalism in Estonia. 4. See the other essays in the current volume where Triin Vihalemm and Veronika Kalmus focus on the differences in value structures (Vihalemm & Kalmus 2009 Vetik, R (ed.). 2002. Kaks Eestit. Artiklite, ettekannete ja analüüside kogumik, Tallinn: TPÜ Kirjastus. [Google Scholar]), Külliki Korts elaborates on the issue of contacts and tolerance (Korts 2009 Kersting, N and Cronquist, L (eds). 2005. Democratization and Political Culture in Comparative Perspective, Wiesbaden: Verlag Für Sozialwissenschaften. [Crossref] , [Google Scholar]), and Martin Ehala explores the political crisis related to the replacement of a Soviet military monument in the context of Estonian and Russian identity changes (Ehala 2009 De Melo, M, Denizer, C and Gelb, A. 1996. Patterns of Transition from Plan to Market. World Bank Economic Review, 10(3): 397–424. [Crossref], [Web of Science ®] , [Google Scholar]). 5. Integration Strategy 2008–2013, available at: www.rahvastikuminister.ee/?id=11104, accessed 20 April 2008. 6. Details illuminating spread of consumerist attitudes in Estonia are presented in the essay by Veronika Kalmus, Margit Keller and Maie Kiisel in the current volume (Kalmus et al. 2009 Kallas, S. 1998. 1992. aasta rahareform ja selle mõju Eesti arengule Edited by: Ant, J. (1998) [Google Scholar]).

Tax law changes, income-shifting and measured wage inequality: Evidence from India

We examine the effects of a 1992 income tax law change in India that eliminated the tax penalty on wages paid to partners in partnership firms using a large dataset covering all registered plants in the manufacturing sector over the period 1986 to 1995. This tax law change provides a unique opportunity to identify the effects of tax policy changes on firm behavior in a developing country context. We find an immediate and pervasive response by partnership firms to the tax law change, reflected in a significant shifting of income from profits to managerial wages. Because about 50% of registered manufacturing plants operate in the form of partnerships (including most family-run businesses), income-shifting by these firms could have a significant impact on measured wage inequality. We find a sizeable jump in the mean and median relative wage of skilled workers (which includes managers and partners) following the tax law change in 1992. Although this sudden increase in measured wage inequality follows major trade liberalization and deregulation reforms announced earlier (in July 1991), we find that the income-shifting induced by the tax law change explains almost all of the observed increase in measured wage inequality following these reforms. This finding is robust to inclusion of controls for a number of other potential sources of post-liberalization increases in wage inequality. Our results show that firms respond strongly to tax incentives for income-shifting, and highlight the need to control for the potential effects of tax incentives in studies of wage inequality. Because wages received by partners were reported as business income on tax returns, the finding of an increasing share of top wage earners in total wages in India in the 1990s, documented by Banerjee and Piketty [Banerjee, Abhijit, and Thomas Piketty. 2005. “Top Indian Incomes, 1922–2000.” The World Bank Economic Review 19 (1): 1–20.] using tax return data, is unlikely to be much affected by the tax reform we analyze here.

Empirics of hills, plateaus, mountains and plains: A Markov-switching approach to growth

Most economic growth research has been aimed at explaining cross-country differences in average growth rates. However, it is well known that growth experiences differ over time within a country almost as much as they differ among countries. This paper builds on Pritchett's (2000) [Pritchett, Lant, Understanding patterns of economic growth: searching for hills among plateaus, mountains, and plains, World Bank Economic Review, May 2000, 14 (2), 221–250.] observation that the growth process can be thought of as transitions between different growth regimes and proposes a framework for systematic analysis of such regimes and the dynamics of the transitions. I estimate a Markov-switching regression to characterize four distinct growth regimes and transitions between them. The results show that countries switch among regimes of stable growth, “miracle” catch-up, stagnation and crisis with the transition probabilities determined by the quality of institutions. Better institutions appear to improve long-run growth by making episodes of fast growth more persistent. Low average growth rates in countries with weak institutions are a result of these countries spending more time in stagnation regimes rather then being incapable of fast growth at all. Weak institutions do not rule out growth takeoffs but limit their sustainability. The approach directs attention to shifts in growth performance and highlights the fact that identical average growth rates can mask very distinct growth paths.

Agricultural Productivity Growth, Rural Economic Diversity, and Economic Reforms: India, 1970–2000

A salient theme in D. Gale Johnson’s work is the importance of agricultural development for general prosperity and for economic diversification (e.g., Johnson 2000). Johnson has also noted that most of the world’s poor are engaged in farming, so that a key focus of development policy is to raise the incomes of farmers. From a global perspective, increasing the productivity of agriculture, given the fixity of land, is necessary for both poverty reduction and the development of the nonagricultural sector. At the level of the world, agricultural productivity gains, poverty reduction, and the growth of the nonfarm sector are complements. However, the question remains whether these observations imply that every poor country should focus its public resources on agricultural development in order to raise the incomes of people now engaged in farming and whether such a policy is necessary for obtaining economic diversity. In this article, we use the experience of India over the past 30 years to address the issue of whether agricultural technical change actually leads to economic diversification and income growth within the rural sector in the context of an open-economy country in which there are cross-area trade and capital flows. We focus in particular on the rural sector because this is the sector in which linkages between agricultural and nonagricultural sectors are thought to be the strongest. We exploit the fact that India has maintained a policy of openness with respect to agricultural technology over this period, permitting and actively supporting agricultural development, and has moved to a reformed regime in which goods are traded and capital is more mobile in the 1990s. Evidence on the relationship between agricultural growth and nonfarm

DEFAULT COSTS, WILLINGNESS TO PAY, AND SOVEREIGN DEBT BUYBACKS

The arguments put forward by Bulow and Rogoff [Brookings Papers on Economic Activity, 2 (1988) 675; Quarterly Journal of Economics, 106 (1991) 1219] against sovereign debt buybacks are re-examined in a willingness-to-pay framework. This paper argues that the Bulow–Rogoff framework treats default by a debtor as an event with no dead-weight loss, and, as such, underestimates the potential gains from a buyback. The willingness-to-pay framework allows dead-weight costs of default to be introduced in a consistent and simple fashion into the buybacks calculus. Two versions of this framework are considered. First, a model in which the default costs induce an all-or-nothing default decision is analyzed. In this case, an ambiguous result is derived in which the variability of the debtor's income determines whether (small) buybacks are beneficial to the debtor, even though expected total transfers to the creditor increase, consistent with Bulow–Rogoff. In a second version, default costs are modeled so as to induce at most a partial default. This model corresponds most closely, in terms of the repayment behavior of the sovereign debtor, to the models used by Bulow and Rogoff. It is shown that small buybacks are always beneficial to the debtor in this case. The second version is extended to include an investment opportunity. Only if the country has sufficiently scarce resources when the investment can be made will a buyback be harmful to the interests of the debtor.

Title Index to Volume 18

Journal Article Title Index to Volume 18 Get access The World Bank Economic Review, Volume 18, Issue 3, 2004, Pages 467–468, https://doi.org/10.1093/wber/TitleIndex Published: 01 October 2004

Author Index to Volume 17

Journal Article Author Index to Volume 17 Get access The World Bank Economic Review, Volume 17, Issue 3, December 2003, Pages 437–440, https://doi.org/10.1093/oxfordjournals.wber.a007509 Published: 01 December 2003

Child Labor and Development: An Introduction

Journal Article Child Labor and Development: An Introduction Get access Kaushik Basu, Kaushik Basu Search for other works by this author on: Oxford Academic Google Scholar Zafiris Tzannatos Zafiris Tzannatos Search for other works by this author on: Oxford Academic Google Scholar The World Bank Economic Review, Volume 17, Issue 2, December 2003, Pages 145–146, https://doi.org/10.1093/wber/lhg019 Published: 01 December 2003

Understanding Children's Work: An Interagency Data and Research Cooperation Project

Journal Article Understanding Children's Work: An Interagency Data and Research Cooperation Project Get access Alec Fyfe, Alec Fyfe Alec Fyfe is Senior Adviser, Child Labour, Child Protection Section, New York HQ at the United Nations Children's Fund (unicef). Frans Roselaers is Director at the International Programme on the Elimination of Child Labour (ipec). Zafiris Tzannatos was (at the time of the preparation of this work) Advisor to the Managing Director for Human Development at the World Bank and is currently Professor of Economics and Chairman of the Economics Department, American University of Beirut, Lebanon; e-mail: zafiris.tzannatos@aub.edu.lb. Furio Rosati is Project Coordinator at Understanding Children's Work (ucw). Search for other works by this author on: Oxford Academic Google Scholar Frans Roselaers, Frans Roselaers Alec Fyfe is Senior Adviser, Child Labour, Child Protection Section, New York HQ at the United Nations Children's Fund (unicef). Frans Roselaers is Director at the International Programme on the Elimination of Child Labour (ipec). Zafiris Tzannatos was (at the time of the preparation of this work) Advisor to the Managing Director for Human Development at the World Bank and is currently Professor of Economics and Chairman of the Economics Department, American University of Beirut, Lebanon; e-mail: zafiris.tzannatos@aub.edu.lb. Furio Rosati is Project Coordinator at Understanding Children's Work (ucw). Search for other works by this author on: Oxford Academic Google Scholar Zafiris Tzannatos, Zafiris Tzannatos Alec Fyfe is Senior Adviser, Child Labour, Child Protection Section, New York HQ at the United Nations Children's Fund (unicef). Frans Roselaers is Director at the International Programme on the Elimination of Child Labour (ipec). Zafiris Tzannatos was (at the time of the preparation of this work) Advisor to the Managing Director for Human Development at the World Bank and is currently Professor of Economics and Chairman of the Economics Department, American University of Beirut, Lebanon; e-mail: zafiris.tzannatos@aub.edu.lb. Furio Rosati is Project Coordinator at Understanding Children's Work (ucw). Search for other works by this author on: Oxford Academic Google Scholar Furio Rosati Furio Rosati Alec Fyfe is Senior Adviser, Child Labour, Child Protection Section, New York HQ at the United Nations Children's Fund (unicef). Frans Roselaers is Director at the International Programme on the Elimination of Child Labour (ipec). Zafiris Tzannatos was (at the time of the preparation of this work) Advisor to the Managing Director for Human Development at the World Bank and is currently Professor of Economics and Chairman of the Economics Department, American University of Beirut, Lebanon; e-mail: zafiris.tzannatos@aub.edu.lb. Furio Rosati is Project Coordinator at Understanding Children's Work (ucw). Search for other works by this author on: Oxford Academic Google Scholar The World Bank Economic Review, Volume 17, Issue 2, December 2003, Pages 311–314, https://doi.org/10.1093/wber/lhg022 Published: 01 December 2003