Doing Business Indicators and Country Reforms (Approach Paper)
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Doing Business is recognized as highly influential in business regulatory reform worldwide, and it is the most used set of indicators on business regulation. Its indicators are widely used and analyzed in the academic literature. They are a component of many other influential indexes, including the World Economic Forum’s Global Competitiveness Index, the Heritage Foundation Index of Economic Show MoreDoing Business is recognized as highly influential in business regulatory reform worldwide, and it is the most used set of indicators on business regulation. Its indicators are widely used and analyzed in the academic literature. They are a component of many other influential indexes, including the World Economic Forum’s Global Competitiveness Index, the Heritage Foundation Index of Economic Freedom, and the Fraser Institute Economic Freedom Index. It is cited by many countries in their reform plans and in many World Bank Group project documents and country strategies. Although popular, the DB indicators have also been the subject of controversy regarding their methodology, accuracy, and potential biases and the way they are used in shaping and assessing country policy reforms. The Bank Group and the Independent Evaluation Group (IEG) have been called on several times to review DB, largely to respond to such criticisms.
In this report, IEG has committed to examine the relevance and effectiveness of the use of DB indicators in guiding client country business environment reforms—both those supported by the Bank Group and those undertaken without its support. This includes an initial stocktaking of literature and existing evaluative evidence to inform an Issues Paper, which will be followed by a Focused Evaluation to assess the DB’s strategic relevance to countries’ reform priorities and to the Bank Group’s strategic agenda. This request came just before the late-August 2020 suspension of the DB report to probe alleged irregularities in the underlying data.
Pakistan: First and Second Programmatic Fiscally Sustainable and Inclusive Growth Development Policy Credit (PPAR)
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This Project Performance Assessment Report evaluates a programmatic series of two development policy operations for Pakistan. The series was the World Bank’s first policy-based operation in Pakistan in more than a decade. The project development objective was to (a) foster private and financial sector development to bolster economic growth, and (b) mobilize revenue while expanding fiscal space to Show MoreThis Project Performance Assessment Report evaluates a programmatic series of two development policy operations for Pakistan. The series was the World Bank’s first policy-based operation in Pakistan in more than a decade. The project development objective was to (a) foster private and financial sector development to bolster economic growth, and (b) mobilize revenue while expanding fiscal space to priority social needs”. The objective was matched by two policy areas. The first policy area covered reforming trade tariffs, privatizing state-owned enterprises, improving business registration, developing the microinsurance sector, and improving the availability of credit information. The second policy area covered improving revenue performance and enhancing the social safety net program.
Ratings for the First and Second Programmatic Fiscally Sustainable and Inclusive Growth Development Policy Credits are as follows: Outcome was moderately satisfactory, Risk to development outcome was high, Bank performance was moderately satisfactory, Borrower performance was moderately unsatisfactory, and Quality of M&E was modest. This PPAR offers the following lessons: (i) In Pakistan, the World Bank reengagement with development policy lending after a long break benefited from a longer-term strategy (or program) that provides for several interrelated DPCs, a large and relevant technical assistance program, and close cooperation with the IMF. (ii) Dividing important sectoral issues among separate operations could be an effective strategy when the government is facing multiple reform challenges. (iii) Political economy analysis and communication support related to politically sensitive reforms were insufficient.
World Bank Group Support to International Development Association Countries for Integration into Global Value Chains (Approach Paper)
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The rise of global value chains (GVCs) in the past two decades has dramatically altered the world economy. Lower transport and communication costs and falling barriers to trade have allowed firms to organize production processes into discrete tasks that can be performed in different countries. This has given rise to a finer international division of labor and greater gains from specialization, Show MoreThe rise of global value chains (GVCs) in the past two decades has dramatically altered the world economy. Lower transport and communication costs and falling barriers to trade have allowed firms to organize production processes into discrete tasks that can be performed in different countries. This has given rise to a finer international division of labor and greater gains from specialization, which opens opportunities for developing countries to participate in global production networks without having to master the entire production process. About 80 percent of global trade occurs through GVCs (UNCTAD 2013). Integration into GVCs helped many fast-growing economies increase exports, create jobs, acquire technologies, develop skills, and improve productivity. These countries have experienced the steepest declines in poverty (WTO 2017). The purpose of this evaluation is to shed light on what worked and why in Bank Group support to IDA countries’ efforts to enhance integration into GVCs. To this end, the evaluation will (i) take stock of Bank Group engagement with IDA countries on GVCs, (ii) assess the contribution of Bank Group support to enhancing GVC participation and benefits, and (iii) identify the main factors that have influenced the Bank Group’s ability to contribute to GVC-related outcomes.
China CLR Review FY13-17
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China, with a population of 1.4 billion, is an upper middle-income country with a GNI per capita of $8,690 in 2017. During 2013-2017, the economy grew annually at 7.1 percent on average, slower than the previous CPS period of 11.0 percent. A long period of economic growth put pressure on the environment and raised serious sustainability challenges. China is now contributing around 30 percent to Show MoreChina, with a population of 1.4 billion, is an upper middle-income country with a GNI per capita of $8,690 in 2017. During 2013-2017, the economy grew annually at 7.1 percent on average, slower than the previous CPS period of 11.0 percent. A long period of economic growth put pressure on the environment and raised serious sustainability challenges. China is now contributing around 30 percent to the world’s GHG emissions, partly because it is the largest consumer of carbon for electricity. Significant gains in poverty reduction continued during the CPS period. Absolute poverty, measured at $1.90 per day (2011 PPP), dropped from 1.9 percent in 2013 to 0.5 percent in 2018. Poverty and vulnerability in China are concentrated in rural areas and lagging regions in Central and Western China. The welfare of the bottom 40 percent of the income distribution has increased steadily. The Gini coefficient dropped to .46 in 2015 after having risen to a high of .5 in 2008. China’s Human Capital Index (HCI) stands at 0.67 and ranks 45th amongst 158 countries. The CPS had two focus areas: (i) supporting greener growth; and (ii) promoting more inclusive development as well as a cross-cutting theme of advancing mutually beneficial relations with the world.
Guatemala - Enhanced Fiscal and Financial Management for Greater Opportunities DPL Series
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This Project Performance Assessment Report (PPAR) evaluates a series of two development policy loans (DPLs) to Guatemala: Fiscal Space for Greater Opportunities ($200 million, P131763), and Enhanced Fiscal and Financial Management for Greater Opportunities ($340 million, P133738). The assessment aims to verify whether the operation achieved its intended outcomes, to understand what worked well Show MoreThis Project Performance Assessment Report (PPAR) evaluates a series of two development policy loans (DPLs) to Guatemala: Fiscal Space for Greater Opportunities ($200 million, P131763), and Enhanced Fiscal and Financial Management for Greater Opportunities ($340 million, P133738). The assessment aims to verify whether the operation achieved its intended outcomes, to understand what worked well and what did not, and to draw lessons for the future. The objectives of the series were to (i) strengthen tax administration and tax policy, (ii) strengthen budget management and increase the results orientation of public spending, and (iii) improve the management and coordination of social policies.
Ratings are as follows: Outcome was moderately satisfactory, Risk to development outcome was high, Bank performance was moderately unsatisfactory, and Borrower performance was moderately unsatisfactory. This Project Performance Assessment Report offers the following lessons: (i) Tax administration and tax policy reforms in the face of major governance issues and long-standing opposition from influential interest groups are unlikely to be successful, even if backed by the World Bank’s analytical support, policy dialogue, and financing. Under these conditions, directly and indirectly targeting the governance issues over a longer period is necessary. (ii) Achieving progress on results budgeting requires strengthening of capacity, political commitment, sound monitoring and evaluation indicators, and cross-agency collaboration. (iii) Achieving results in policy lending requires a sound results framework, a credible theory of change, close linking of objectives with policy actions, and outcome-oriented target indicators.
Jamaica - Economic Stabilization and Foundations for GrowthDevelopment Policy Loan (DPL)
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This Project Performance Assessment Report (PPAR) reviews the Economic Stabilization and Foundations for Growth Development Policy Loan (DPL), approved on December 12, 2013.
The objectives of the operation were to improve (i) the investment climate and competitiveness, and (ii) public financial management for sustainable fiscal consolidation. Objectives were highly relevant to country Show MoreThis Project Performance Assessment Report (PPAR) reviews the Economic Stabilization and Foundations for Growth Development Policy Loan (DPL), approved on December 12, 2013.
The objectives of the operation were to improve (i) the investment climate and competitiveness, and (ii) public financial management for sustainable fiscal consolidation. Objectives were highly relevant to country conditions and the need to avoid fiscal insolvency and begin implementing a comprehensive program of stabilization and reform. They were closely aligned with the World Bank’s strategy and government priorities. The design of the operation was substantially relevant to challenges, with policy priorities identified based on significant analytical work and nonlending technical assistance. The theory of change was convincing, with clear links among inputs, outputs, and expected results, although some indicators could have been more outcome oriented and clearer in their relation to objectives. One shortcoming of the design was the ambitious time frame for the implementation of some of the reforms related to investment climate and pensions, given the limited institutional capacity and a realistic assessment of the time needed for major legal reforms.
Achievement of both objectives is rated substantial. Under the investment climate objective, reforms targeted improvements in contract enforcement, approval of building permits, and registration of micro, small, and medium enterprises to encourage their participation in the formal sector. Under the public financial management and fiscal consolidation objective, the program targeted progress on pension reform, tax reform, civil service reform, cash management, and public investment management. The impact of all reform actions was measured relative to specific indicator targets, which were substantially achieved or exceeded. These achievements were confirmed by additional quantitative indicators, qualitative gauges, and international benchmarking data. Some reforms, such as those in investment climate and pension reform, took longer than originally envisioned, but they proceeded and deepened over time. Cumulative evidence suggests that the reforms supported by the operation have been sustained and, in several areas, deepened during the past six years. This is reflected in the new development policy financing series supported by the World Bank and the International Monetary Fund Stand-By Arrangement that followed the successful conclusion of the three-year arrangement under the International Monetary Fund’s Extended Funding Facility.
Creating Markets: Drivers of Success
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Join us for a conversation on the factors underlying the success of market creation activities as the IFC implements its new corporate strategy, and the contributing roles of the World Bank and MIGA to that strategy. Join us for a conversation on the factors underlying the success of market creation activities as the IFC implements its new corporate strategy, and the contributing roles of the World Bank and MIGA to that strategy.
Contribution and Effectiveness of Trade Facilitation Measures: Structured Literature Review
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This literature review has two main objectives. The first is to survey the findings on effectiveness of trade facilitation measures on outcomes such as trade flows, and trade costs. The second objective is to gain a detailed understanding of the contributions of different kinds of trade facilitation measures to increasing trade, and trade costs reduction. In doing so, the review provides the Show MoreThis literature review has two main objectives. The first is to survey the findings on effectiveness of trade facilitation measures on outcomes such as trade flows, and trade costs. The second objective is to gain a detailed understanding of the contributions of different kinds of trade facilitation measures to increasing trade, and trade costs reduction. In doing so, the review provides the framework for establishing a causal relationship between trade facilitation support interventions of the World Bank Group thereby informing on the effectiveness of past interventions and improving future ones.
Creating Markets to Leverage the Private Sector for Sustainable Development and Growth
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With a strong learning focus, this evaluation is intended to inform the implementation of IFC’s corporate strategy (IFC 3.0) and the contributing roles of the World Bank and MIGA to that strategyWith a strong learning focus, this evaluation is intended to inform the implementation of IFC’s corporate strategy (IFC 3.0) and the contributing roles of the World Bank and MIGA to that strategy
Why systematic engagement is essential to promoting trade and growth: Lessons from World Bank Group experience
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Findings from IEG's recent evaluation, which examined whether efforts to reduce trade costs for World Bank client countries improved their trade competitiveness.Findings from IEG's recent evaluation, which examined whether efforts to reduce trade costs for World Bank client countries improved their trade competitiveness.