103568 To rki W o p ng Po P lic ap ResearchDigest y er s R World Bank es of ea 2 rc 01 h 5 VOLUME 10 NUMBER 2 WINTER 2016 Measuring Financial Inclusion around the World Measurement is key to 2014. In developing economies only 54 IN THIS ISSUE understanding financial inclusion percent did. There are also enormous Measuring Financial Inclusion and identifying opportunities to disparities among developing regions, around the World … page 1 where account penetration ranges from expand it The second edition of the Global Findex 14 percent in the Middle East to 69 database shows great progress in expanding F percent in East Asia and the Pacific. financial inclusion. But large gaps remain inancial inclusion is critical in Globally, nearly all adults who re- reducing poverty and achieving ported owning an account in 2014 said A New Global Count of the inclusive growth. Studies show that they have an account at a finan- Extreme Poor … page 2 that when people can participate in cial institution: 60 percent of adults Defining and measuring poverty remain the financial system, they are better reported having a financial institution challenging endeavors, subject to much able to start and expand businesses, account only, 1 percent having both a debate about concepts, methods, and data invest in their children’s education, financial institution account and a mo- Economic Effects of the Syrian War and the and absorb financial shocks. The bile money account, and 1 percent a Spread of ISIS … page 3 Global Financial Inclusion (Global mobile money account only. But while The Syrian war has transformed the Levant Findex) database provides in-depth only 2 percent of adults worldwide region in ways previously unimaginable. A data showing how people save, bor- have a mobile money account, in Sub- new paper measures its economic effects row, make payments, and manage Saharan Africa 12 percent do—half of risk. First launched in 2011, it is the them a mobile money account only. All Identifying and Spurring High-Growth world’s most comprehensive set of 13 countries around the world where Entrepreneurship … page 4 data providing consistent measures the share of adults with a mobile Can business plan competitions successfully of people’s use of financial services money account is 10 percent or more pick winners? And do they spur more growth across economies and over time. The are in Sub-Saharan Africa. In 5 of these than would otherwise have occurred? second edition of the Global Findex 13 countries—Côte d’Ivoire, Somalia, database provides more than 100 indi- Tanzania, Uganda, and Zimbabwe— How Syrian Refugees Have Affected the Turkish Labor Market … page 5 cators, including by gender, age group, more adults reported having a mobile and household income. The indicators money account than an account at a Refugees pose moral, political, and economic are based on interviews with about financial institution. challenges for host countries. Some come through their effects on the labor market 150,000 nationally representative and The 2014 Global Findex database randomly selected adults age 15 and shows great progress in expanding Uncompetitive Devaluations? … page 6 above in more than 140 economies financial inclusion around the world. Recent research offers new evidence on during the 2014 calendar year. But large gaps remain. Many people how global value chains have affected the Globally, 62 percent of adults re- around the world, particularly women responsiveness of manufacturing exports to ported having an account in 2014, up and poorer adults, still do not have an exchange rate depreciations from 51 percent in 2011. The share of account. Among adults in the poor- adults with an account increased in est 40 percent of households within Top 35 Policy Research Working Papers nearly every economy. Not surprisingly, individual developing economies, of 2015 … page 7 however, the extent of account owner- more than half (54 percent) remain un- Of the Policy Research Working Papers ship continues to vary widely around banked. Among adults in the richest 60 issued from December 2014 to December the world (figure 1). In high-income percent of households, by contrast, 40 2015, these are the top 35 by number of OECD economies account owner- percent are unbanked. downloads ship is almost universal: 94 percent of adults reported having an account in (continued on page 7) 2 World Bank ResearchDigest A New Global Count of the Extreme Poor New data and analysis yield a new Comparison Program (ICP). Since 2008 the previous line. For 2011 the new line international poverty line. But global extreme poverty had been measured and method yield a global poverty rate poverty levels and trends remain using a poverty line of $1.25 a day at of 14.1 percent, compared with 14.5 2005 PPPs. In 2014 new price data from percent under the $1.25 line (at 2005 similar to those implied by the the 2011 ICP became available, neces- PPPs). The regional distribution of pov- previous one sitating yet another revision to the erty also remains largely unchanged, T international poverty line. with Sub-Saharan Africa having both he number of extreme poor, Incorporating the new informa- the highest incidence of poverty and measured as those living below tion on relative price levels across the largest absolute number of poor an international poverty line, has countries that is contained in new PPP people (figure 1). The achievement of become one of the most prominent data has implications for measures of the first Millennium Development Goal indicators of economic develop- global poverty and, more specifically, of halving global poverty between 1990 ment—used by the World Bank, the for the definition of the international and 2015 is maintained, and simple United Nations, and others to track poverty line. In deciding how best to projections suggest that the goal of progress toward goals of ending update the line, the authors followed ending extreme poverty by 2030 re- extreme poverty by 2030. Despite the three key principles: First, interna- mains ambitious. strong policy focus on ending extreme tional comparisons of living standards One reason that the new line yields poverty globally, the definition and should be based on the most recent relatively small changes to measures measurement of poverty remain chal- and reliable information on relative of global poverty is that the meth- lenging endeavors, subject to much price levels—the 2011 PPPs. Second, odological choices were intended to debate about the most appropriate changes to the real value and the defi- preserve the real purchasing power of concepts, methods, and data. A new nition of the poverty line should be the previous $1.25 line in some of the paper by 12 economists and statisti- minimized, so as to avoid “shifting the world’s poorest countries. Another is cians from across the World Bank lays goalposts.” Third, when maintaining that changes to estimated price levels out the data and methods used to the “real value” of the line, the price in these countries between the 2005 update global poverty measures with levels that matter most for measuring and 2011 ICP rounds were not atypical the latest price data from around the global poverty are those faced by the of those in other poor countries. world while aiming to keep the goal- world’s poorest countries. To ensure transparency and full rep- post for ending poverty unchanged. The international poverty line has licability of the new poverty estimates, For ease of communication, the always been anchored in the national the authors describe in detail all the international poverty line has always poverty lines of some of the world’s other methodological choices and data been expressed in U.S. dollars. But poorest countries. The $1.25 line was used in the update. In particular, they it is converted into local currencies estimated by taking the average of the discuss how choices relating to within- through purchasing power parity national lines of 15 of these countries. country spatial and intertemporal price (PPP) exchange rates to ensure that In following the three principles, the adjustments can affect global poverty its value reflects the same purchasing authors anchor the new international estimates, and document the choices power in every country. The interna- line in the same 15 national poverty they made. The authors conclude that tional poverty line has therefore been lines, and reestimate the average value to enhance the international compara- updated each time new PPPs have be- using 2011 prices and PPPs. This yields bility and accuracy of poverty numbers, come available from the International a line of $1.90 a day. A number of alter- a number of issues remain to be ad- native methods for dressed by the commission—led by Sir Figure 1. Regional Trajectories of Extreme Poverty, 1990–2011 updating the poverty Anthony Atkinson—that was recently Poverty headcount rate (%) line produce values convened to advise the World Bank on 70 2015 estimates (2011 PPPs, $1.90) 2014 estimates (2005 PPPs, $1.25) very similar to the how to take global poverty measure- 60 $1.90 line, providing ment forward. 50 reassurance that it is a robust choice. 40 Despite the 30 higher nominal Francisco H. G. Ferreira, Shaohua Chen, Andrew Dabalen, Yuri Dikhanov, Nada Hamadeh, Dean 20 value of the $1.90 Jolliffe, Ambar Narayan, Espen Beer Prydz, Ana 10 line in U.S. dollars, Revenga, Prem Sangraula, Umar Serajuddin, the resulting global and Nobuo Yoshida. 2015. “A Global Count of 0 1990 1999 2011 number of extreme the Extreme Poor in 2012: Data Issues, Methodol- Sub-Saharan Africa South Asia East Asia & Pacific poor is similar to ogy and Initial Results.” Policy Research Working Latin America & Caribbean Europe & Central Asia estimates based on Paper 7432, World Bank, Washington, DC. World Bank Research Digest 3 Economic Effects of the Syrian War and the Spread of ISIS Syria and Iraq have borne the brunt The indirect effect captures the op- But in all cases aggregate output has of the war’s economic costs while portunity cost of forgone deep trade increased less than the population neighboring countries have been integration initiatives aimed at improv- size, so the war has hurt per capita ing transport logistics and liberalizing incomes. The difference between ag- affected to lesser degrees trade in services within the greater gregate and per capita welfare effects T Levant. This effect is an important one is most pronounced in Lebanon, which he Syrian war and the subse- to consider because the war put an has had the greatest increase in the quent emergence and spread end to plans for deepening intra- number of refugees relative to the of the Islamic State (ISIS) have regional trade ties as envisioned by the population. This difference is also siz- transformed the Levant region in ways “Levant Quartet” agreement in 2010. able in Syria, because of the effect of unimaginable before the start of the Deep trade integration was expected Syrian refugees and war casualties on conflict in 2011. Yet until recently to have sizable benefits, reflecting eco- the population count. there had been no systematic evalua- nomic complementarities among the The average welfare effects are not tion of the war’s economic effects. In six Levant countries and possibilities indicative of the war’s effects on differ- a new paper Ianchovichina and Ivanic for modernizing economies, generating ent groups of people within countries. address this lack by quantifying the productivity gains, and attracting for- In Syria almost every economic sector economic effects of the first three eign investment. has been hurt, but real estate owner- years of the conflict. They use a global The authors’ assessment suggests ship particularly so because of the de- computable general equilibrium that Syria’s economy could have been parture of huge numbers of refugees, framework, updated with economic a third larger in real terms, and Iraq’s which has led to a steep decline in and trade data pertinent to the Levant a quarter larger, had they avoided the the demand for land. In Lebanon and economies and accurately reflecting conflict. For Syria most of the costs are Turkey land and business owners are trade preferences on the eve of the associated with the direct costs of war better off, but workers are worse off war. (table 1), with the trade restrictions a because the arrival of Syrian refugees While the analysis is global, it major factor. For Iraq, where the wel- has increased local demand for goods focuses mainly on the countries in fare effects are evenly split between and services, raising prices, and has the greater Levant that have been direct and indirect costs, the direct augmented the labor supply, lowering most affected by the war—the Syrian costs are associated mostly with the wages. Many people across the Levant, Arab Republic, Iraq, Lebanon, Jordan, deteriorating environment and the re- especially the poor and the unskilled, Turkey, and the Arab Republic of sulting decline in productivity. have suffered as the quality of public Egypt. The authors capture both the For other Levant countries losses services has deteriorated and real wag- direct and indirect effects of the war reflect mainly the forgone benefits es have fallen, and poverty rates have on real output. The direct effect stems of deep trade integration, while the increased throughout the region. from the decline in the size and skills direct effects are associated with de- of Syria’s labor force due to loss of clines in average per capita incomes life and refugee outflows; the decline but increases in aggregate incomes. Elena Ianchovichina and Maros Ivanic. 2014. in the size of the capital stock due The inflows of refugees have boosted “Economic Effects of the Syrian War and the to infrastructure destruction; the im- consumption of goods and services, Spread of the Islamic State on the Levant.” Policy position of trade sanctions on Syria; investment, and labor supply and Research Working Paper 7135, World Bank, increases in the cost of conducting therefore the size of these economies. Washington, DC. business; and an overall decline in productivity. Table 1. Welfare Effects of the First Three Years of the Syrian War (percentage change in welfare) Syrian Arab Egypt, Arab Republic Iraq Lebanon Jordan Turkey Rep. Aggregate direct and indirect effects −38.3 −23.4 3.9 −4.7 −1.1 −8.8   Direct aggregate effects of war −30.7 −10.7 6.4 1.0 0.3 0.1   Indirect trade disintegration effects −7.5 −12.7 −2.5 −5.7 −1.4 −8.9 Per capita direct and indirect effects −22.6 −28.1 −12.8 −7.2 −2.0 −9.1 Note: The losses in Lebanon, Jordan, and Turkey may be understated because the analysis does not factor in the distortions associated with the increased consumption of subsidized public services and the changes in the composition of public spending associated with increased military spending. For a description of the welfare measure used, see Thomas W. Hertel, ed., Global Trade Analysis: Modeling and Applications (Cambridge, U.K.: Cambridge University Press, 1997), ch. 2. 4 World Bank ResearchDigest Identifying and Spurring High-Growth Entrepreneurship An experiment in Nigeria shows that business plan applications, selecting Business plan competitions have a business plan competition can be 1,200 winners to receive prizes averag- become increasingly popular around effective in identifying entrepreneurs ing $50,000 each. the world. But with little evidence on Making up the group of winners their effectiveness, questions have with good potential were those with the top 300 scores na- been raised about whether they can T tionally; the 180 with the top score in identify potential high-performance he most common firm size in their region; and 720 chosen randomly entrepreneurs and whether they spur most developing countries is one from a pool of 1,841 semifinalists to al- more growth than would have occurred worker—the owner of the firm. low a rigorous impact evaluation. The naturally. The results of this evaluation Among firms with more workers, most impact evaluation used this random- show that a business plan competi- hire fewer than 10. In Nigeria 99.6 per- ized experiment to compare winners tion can be successful in identifying cent of firms have fewer than 10 work- with the remaining 1,121 semifinalists entrepreneurs with the potential to use ers. Are there entrepreneurs in devel- as the control group. Three rounds of the large amounts of capital offered oping countries who have the ability follow-up surveys were taken one, two, as prizes and that these individuals to grow a firm beyond the 10-worker and three years after the application. appear to be otherwise constrained threshold but face constraints in do- What impact did winning have? For from realizing this potential. The prize ing so? If so, can such individuals be new firms it increased the likelihood of money generated employment and identified in advance—and can pub- survival over three years by 37 percent- firm growth that otherwise would not lic policy help them overcome these age points and the likelihood of having have happened. constraints? 10 or more workers by 23 percentage But the results also highlight In a recent paper McKenzie inves- points (figure 1). For existing firms it the difficulties of picking winners. tigates these questions through an increased the likelihood of survival by Conditional on reaching the semi- evaluation of the impact of a national 20 percentage points and the likeli- finalist stage, neither the scores for business plan competition for young hood of having 10 or more workers by the business plans nor individual and entrepreneurs in Nigeria—the Youth 21 percentage points. Winning led to a business characteristics have much Enterprise With Innovation in Nigeria 23 percent increase in profits for new predictive power for predicting which (YouWiN!) program. Launched by the firms and a 25 percent increase for ex- firms will grow faster or benefit most president of Nigeria in October 2011, isting ones—and to more innovation from the program. This remains an the program is aimed at encouraging for both groups. The implied real return issue for active research, but it also innovation and job creation through on capital was 1.5 percent a month. highlights the inherent riskiness of en- the creation of new businesses and the By the end of year three the 1,200 trepreneurial activity. expansion of existing ones. winners were estimated to have gen- To be eligible, applicants had to be erated more than 7,000 new jobs. On a Nigerian citizen, age 40 or younger, cost per job-year generated, the pro- proposing the creation or expansion gram compares favorably with stimu- of a business venture in Nigeria. Of lus programs in the United States and David McKenzie. 2015. “Identifying and Spurring the 23,844 applicants, the top 6,000 with programs in developing countries High-Growth Entrepreneurship: Experimental were selected for a four-day business to provide vocational training, busi- Evidence from a Business Plan Competition.” plan training course. The program sub- ness training, wage subsidies, or small Policy Research Working Paper 7391, World sequently received and scored 4,510 grants to microenterprises. Bank, Washington, DC. Figure 1. Effect of Winning on the Likelihood of Firms Reaching the 10-Worker Threshold Share of new firms with 10+ workers (%) Share of existing firms with 10+ workers (%) 50 50 Control group Control group 40 Winners 40 Winners 30 30 20 20 10 10 0 0 Round 1 Round 2 Round 3 Round 1 Round 2 Round 3 World Bank Research Digest 5 How Syrian Refugees Have Affected the Turkish Labor Market Among Turkish workers, women informally. This makes their arrival a important is agriculture, which ac- and the less educated have been well-defined supply shock to informal counts for 20 percent of female private most affected by the entry of Syrian labor, which would be expected to low- sector employment. The informality er wages and displace natives in the rate in that industry before the refugee refugees into the labor market informal sector and to have the great- shock was an astonishing 96 percent T est effects on groups with the highest for women, while it was 67 percent for he war in the Syrian Arab propensity to be employed informally. men. Any formal jobs generated in ag- Republic has produced more This is precisely what the authors riculture are therefore unlikely to go to refugees than any other conflict find empirically. The inflow of Syrian women. of the past two decades. Around 4.6 refugees has led to large-scale dis- Unlike most flows of economic im- million Syrians have fled to neighbor- placement of Turkish workers from the migrants, the arrival of Syrian refugees ing countries and now increasingly to informal sector, around 6 natives for in Turkey was relatively sudden and Europe. About 2.5 million have found every 10 refugees. Displacement has not driven by the availability of jobs. refuge in Turkey, making it the largest occurred among all types of informally So it is unsurprising that this paper— refugee-hosting country worldwide. employed Turkish workers, regardless like much of the literature examining By 2014 some 85 percent of Syrians of gender, age, or education, with par- this type of supply-driven immigration in Turkey had left the refugee camps ticularly large job losses among those shock—finds substantial short-run along the Syrian border and entered with no formal education. The wage displacement effects. By contrast, the the Turkish labor market. This influx impacts are entirely consistent with literature examining the impact of has become a major source of concern. the employment impacts: the refugee economic migrants tends to find much A 2014 survey found that 56 percent of inflow had a large, negative impact smaller impacts. Moreover, the nega- Turkish people agree with the proposi- on the earnings potential of Turkish tive impact of the arrival of Syrian refu- tion that “Syrians take our jobs,” with informal sector workers, particularly gees is concentrated among those who that number rising to 69 percent in women and those with low educational were already marginalized, with low provinces close to the Syrian border. attainment. wages and employment. This raises the In a recent paper Del Carpio and In the formal sector things get important question of how to assist Wagner assess this claim by measuring more complicated. Lower wages in the those who bear the economic burden the impact that Syrian refugees have informal sector result in substitution of this refugee inflow. had on Turkish employment and wag- from formal to informal workers. But A key question going forward is how es. The analysis combines newly avail- lower production costs also expand refugees will continue to integrate into able data on the distribution of Syrian output, generating additional formal the Turkish labor market and society. refugees across Turkey and the Turkish jobs. Indeed, the empirical results sug- In a recent development, Turkey de- Labour Force Survey. To deal with the gest that the refugee inflow increased cided in January 2016 to grant Syrian fact that refugees are likely to settle in the propensity of Turkish workers to be refugees increased access to labor parts of Turkey that are doing well eco- formally employed, with around 3 ad- markets. The other major source of un- nomically, the analysis instruments for ditional natives in formal employment certainty is the large-scale onward mi- refugee flows using travel distance be- for every 10 refugees. These increases gration of refugees to Western Europe, tween origin and destination regions in formal employment have all ac- which likely affects not only the num- in Syria and Turkey (using predicted crued to men without a high school ber of refugees in Turkey but also their rather than actual flows for estima- education. composition. tion). It also controls for distance from By contrast, women and high- the Syrian border and thus any con- skilled Turkish workers have experi- founding factors correlated with prox- enced no gains in formal employment. imity to Syria, such as changes in trade High-skilled workers are simply not patterns, the construction of camps, employed in industries with a lot of and policy changes that dispropor- informality and so cannot easily ben- tionately affected border regions. The efit from lower-cost informal labor. authors find net displacement and To some extent this is also true for lower earnings for women and the low- women. Virtually no women work in est educated Turkish workers, but net construction, for example, a sector that gains for men, particularly those with has an informality rate of more than 50 medium educational attainment. percent (and also employs many refu- Ximena V. Del Carpio and Mathis Wagner. 2015. Because Syrian refugees in Turkey gees). But there are also many women “The Impact of Syrian Refugees on the Turkish were not issued work permits, virtu- working in industries that have high Labor Market.” Policy Research Working Paper ally all who are working are employed informality and employ refugees. Most 7402, World Bank, Washington, DC. 6 World Bank ResearchDigest Uncompetitive Devaluations? Greater integration into global value weak global demand and may be due more that are aiming to anchor them- chains makes manufacturing exports to some structural determinants. selves to global value chains. less responsive to exchange rate Has the growing importance of First, the impact of exchange rate global value chains in world trade af- depreciations on exports is at the core depreciations fected the REER elasticity of exports? of the process of international adjust- A To understand the role of global value ment and rebalancing. Macroeconomic central pillar of international chains in the transmission of exchange models that do not account for the economics is that an exchange rate changes, the authors decompose presence of cross-border production rate depreciation will boost gross exports into their domestic and linkages may lead to inaccurate policy exports. But the seemingly exportless foreign value added components, with predictions. Specifically, they may depreciation of the yen and other the latter consisting of the imported overestimate the extent to which a de- currencies in recent years has opened inputs embodied in exports. Cross- preciation can contribute to rebalanc- a debate on whether the relationship border production linkages are ex- ing for countries with high participa- between exchange rates and exports pected to lower the REER elasticity of tion in global value chains. has changed and, if so, why. These (gross) exports. In a world where goods Second, currency depreciations are are not just academic questions. This are produced using only domestic in- often viewed as instrumental in en- relationship is at the core of a number puts, a depreciation increases exports hancing growth through exports, par- of policy debates—from international because it makes domestic products ticularly in developing countries. This adjustment to export-led growth to cheaper relative to foreign goods. In a mechanism is less effective for coun- currency wars. world where goods are produced using tries involved in global value chains. In a recent paper Ahmed, both foreign and domestic inputs, a More subtly, policy makers aiming to Appendino, and Ruta address these depreciation improves the competi- boost exports through a depreciation questions in two steps. They explore tiveness of domestic value added in may need to weigh the impact that how the average elasticity (responsive- exports but raises the cost of imported exchange rate changes have on the ness) of export volumes to the real ef- inputs. ability of countries to anchor to global fective exchange rate (REER)—a stan- Consistent with this prediction, the value chains and thus to benefit from dard synthetic measure of countries’ authors find evidence that the rise in cross-border production linkages (such price competitiveness—has changed participation in global value chains as knowledge spillovers). over time and across countries and reduces the REER elasticity of exports Finally, global value chains also sectors. They then study how the for- by 22 percent on average. For coun- change the political economy of ex- mation of global value chains has af- tries with high participation in supply change rate policy. In particular, ex- fected this relationship. chains (those in the 80th percentile), porters that rely on imported inputs The authors use a panel framework this channel lowers the average ex- will view less favorably the use of covering 46 countries over the period change rate elasticity by close to 30 competitive devaluations in times of 1996–2012 to formally investigate the percent. Intuitively, the greater the im- crisis. Just as for trade policy, integra- relationship between exchange rates port content of an economy’s exports, tion into global value chains does not and exports. The period and sample the smaller the impact a depreciation eliminate the incentive to use beggar- size are determined by the availability will have on export volumes. The find- thy-neighbor policies. But this greater of the value added trade data needed ing that participation in global value interdependence shapes countries’ to assess the role of integration into chains reduces REER elasticity is quite interests in a way that could make un- global value chains at the country and robust and continues to hold when cooperative outcomes such as currency country-sector levels. The analysis industry-level data are used. wars less likely. focuses on manufacturing exports This result has policy implications. because of the importance of cross- The point is not whether exchange border linkages in this sector. rates still matter for trade; the evi- The evidence suggests that the dence clearly shows that they do, be- average REER elasticity of exports cause a depreciation is found to have a has decreased over time, though only positive impact on export volumes on slightly. Specifically, the average REER average. The issue is that global value elasticity of gross real exports fell in chains attenuate this impact, making absolute value from 0.83 at the begin- a depreciation less competitive than it Swarnali Ahmed, Maximiliano Appendino, and ning of the period to 0.68 at the end. was in a world of purely domestic pro- Michele Ruta. 2015. “Depreciations without Ex- This decline preceded the global finan- duction. This fact has consequences ports? Global Value Chains and the Exchange cial crisis, suggesting that it is driven for the countries involved in cross- Rate Elasticity of Exports.” Policy Research Work- only in part by cyclical factors such as border production—and for the many ing Paper 7390, World Bank, Washington, DC. World Bank Research Digest 7 (continued from page 1) Measuring Financial Inclusion around the World The gender gap in account owner- number of adults with an account by financially resilient people are to unex- ship is not narrowing. In 2011, 47 per- up to 280 million. pected expenses. cent of women had an account, while Payments for the sale of agricultural 54 percent of men did. Today 58 per- products offer another opportunity for cent of women have an account, and increasing account ownership among Aslı Demirgüç-Kunt, Leora Klapper, Dorothe 65 percent of men do. This reflects a the unbanked. In developing econo- Singer, and Peter Van Oudheusden. 2015. “The Global Findex Database 2014: Measuring Finan- persistent gender gap of 7 percentage mies overall, 23 percent of unbanked cial Inclusion around the World.” Policy Research points globally. adults—440 million people—receive Working Paper 7255, World Bank, Washington, The 2014 Global Findex data point payments in cash for the sale of agri- DC. to several promising opportunities for cultural products. expanding financial inclusion. These Account ownership is an important The Global Findex database is available at http:// fall into two broad categories: expand- first step toward financial inclusion. www.worldbank.org/globalfindex. ing account ownership among the 2 But once people have an account, billion unbanked and increasing the the next step is to ensure that they use of accounts among those who al- are able to use it in ways that allow ready have one. them to fully benefit from financial Both governments and the private inclusion. In developing economies sector can play a pivotal role in in- more than 1.3 billion adults with an creasing financial inclusion by shifting account—58 percent of account hold- into accounts payments that are now ers—pay utility bills in cash, and made in cash. Globally, more than 20 more than half a billion—24 percent percent of unbanked adults—more of those with an account—pay school than 400 million people—receive fees in cash. Shifting these payments wages or government transfers in to accounts represents an enormous cash. Paying government wages and opportunity for increasing the use of transfers into accounts rather than accounts and making payments more in cash could increase the number of convenient. adults with an account by up to 160 The Global Findex database also million. And doing the same thing for provides insights into how and why private sector wages could increase the people save and borrow and how Figure 1. Account Penetration around the World, 2014 Adults with an account (%) 0–19 20–39 40–64 65–89 90–100 No data available IBRD 41559 | APRIL 2015 Source: Global Findex database. 8 World Bank ResearchDigest Top 35 Policy Research Working Papers of 2015 7255 The Global Findex Database 2014: Measuring 7198 Behavioral Economics and Social Exclusion: 7257 You Are What (and Where) You Eat: Financial Inclusion around the World Can Interventions Overcome Prejudice? Capturing Food Away from Home in Welfare Aslı Demirgüç-Kunt, Leora Klapper, Dorothe Karla Hoff Measures Singer, and Peter Van Oudheusden 7405 Business Practices in Small Firms in Gabriela Farfan, Maria Eugenia Genoni, and 7432 A Global Count of the Extreme Poor in 2012: Developing Countries Renos Vakisi Data Issues, Methodology and Initial Results David McKenzie and Christopher Woodruff 7304 Is the WTO Passé? Francisco H. G. Ferreira, Shaohua Chen, 7243 Program Evaluation and Spillover Effects Kyle Bagwell, Chad P. Bown, and Robert W. Andrew Dabalen, Yuri Dikhanov, Nada M. Angelucci and V. Di Maro Staiger Hamadeh, Dean Jolliffe, Ambar Narayan, 7366 Transport Policies and Development 7353 Capital Market Financing, Firm Growth, and Espen Beer Prydz, Ana Revenga, Prem Claudia N. Berg, Uwe Deichmann, Yishen Liu, Firm Size Distribution Sangraula, Umar Serajuddin, and Nobuo and Harris Selod Tatiana Didier, Ross Levine, and Sergio L. Yoshida Schmukler 7403 The Middle-Income Trap Turns Ten 7135 Economic Effects of the Syrian War and the Indermit S. Gill and Homi Kharas 7157 Impact Evaluation Helps Deliver Spread of the Islamic State on the Levant Development Projects Elena Ianchovichina and Maros Ivanic 7470 Measuring Progress towards Universal Health Coverage: With an Application to 24 Arianna Legovini, Vincenzo Di Maro, and 7391 Identifying and Spurring High-Growth Developing Countries Caio Piza Entrepreneurship: Experimental Evidence from Adam Wagstaff, Daniel Cotlear, Patrick 7363 Global Liquidity and External Bond Issuance a Business Plan Competition Hoang-Vu Eozenou, and Leander R. Buisman in Emerging Markets and Developing David McKenzie Economies 7298 Do Capital Inflows Boost Growth in 7402 The Impact of Syrian Refugees on the Turkish Developing Countries? Evidence from Erik Feyen, Swati Ghosh, Katie Kibuuka, and Labor Market Sub-Saharan Africa Subika Farazi Ximena V. Del Carpio and Mathis Wagner César Calderón and Ha Nguyen 7294 Toward a New Definition of Shared 7390 Depreciations without Exports? Global Value 7158 The Global Trade Slowdown: Cyclical or Prosperity: A Dynamic Perspective from Chains and the Exchange Rate Elasticity of Structural? Three Countries Exports Cristina Constantinescu, Aaditya Mattoo, and Hai-Anh H. Dang and Peter F. Lanjouw Swarnali Ahmed, Maximiliano Appendino, Michele Ruta 7406 Are Large Firms Born or Made? Evidence and Michele Ruta from Developing Countries 7245 Good Countries or Good Projects? Comparing 7203 What Really Works to Improve Learning Macro and Micro Correlates of World Meghana Ayyagari, Aslı Demirgüç-Kunt, and in Developing Countries? An Analysis of Bank and Asian Development Bank Project Vojislav Maksimovic Divergent Findings in Systematic Reviews Performance 7217 Equality of Opportunity: Theory and Evidence David K. Evans and Anna Popova David Bulman, Walter Kolkma, and Aart Francisco H. G. Ferreira and Vito Peragine 7228 The Curious Case of Brazil’s Closedness to Kraay 7240 Global Experiences with Special Economic Trade 7435 Formalizing Rural Land Rights in West Africa: Zones: Focus on China and Africa Otaviano Canuto, Cornelius Fleischhaker, Early Evidence from a Randomized Impact Douglas Zhihua Zeng and Philip Schellekens Evaluation in Benin 7252 Data Deprivation: Another Deprivation to End Markus Goldstein, Kenneth Houngbedji, Umar Serajuddin, Hiroki Uematsu, Christina Florence Kondylis, Michael O’Sullivan, and Wieser, Nobuo Yoshida, and Andrew Dabalen Harris Selod 7282 How Much of the Labor in African Agriculture 7334 Quality and Accountability in Healthcare Is Provided by Women? Delivery: Audit Evidence from Primary Care Amparo Palacios-Lopez, Luc Christiaensen, and Providers in India Talip Kilic Jishnu Das, Alaka Holla, Aakash Mohpal, 7256 Global Poverty Goals and Prices: How and Karthik Muralidharan Purchasing Power Parity Matters 7270 Poverty Dynamics in India between 2004 and Dean Jolliffe and Espen Beer Prydz 2012: Insights from Longitudinal Analysis 7336 Political Connections and Tariff Evasion: Using Synthetic Panel Data Evidence from Tunisia Hai-Anh H. Dang and Peter F. Lanjouw Bob Rijkers, Leila Baghdadi, and Gael 7367 The Impacts of Trade Facilitation Measures Raballand on International Trade Flows 7414 Infrastructure Investment Demands Paulo C. de Sá Porto, Otaviano Canuto, and in Emerging Markets and Developing Cristiano Morini Economies Fernanda Ruiz-Nuñez and Zichao Wei Working Papers can be downloaded at http://econ.worldbank.org To download the World Bank Research E-Newsletter, go to http://econ.worldbank.org/research_newsletter The World Bank Research Digest is a quarterly publica- The Research Digest is financed by the Bank’s Editorial Committee: Indermit S. Gill (managing editor), tion disseminating findings of World Bank research. Research Committee and managed by DECDP, the Aslı Demirgüç-Kunt, and Shiva S. Makki. Editor: Alison The views and interpretations in the articles are those research support unit of the Development Economics Strong; production: Roula Yazigi. 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