In countries with limited access to finance, firms accumulate retained earnings to finance indivisible investment projects. McKinnon (1973) illustrates that when cash is used as a primary store of value, inflation may discourage investment as it increases the cost of accumulating retained earnings.
... Voir la suite This paper formalizes this argument in a dynamic framework and provides a simple calibration of the model that suggests sizable effects of inflation on investment. The mechanism is particularly relevant for small firms, as firms with lower cash flows must accumulate retained earnings for longer periods of time to meet the price of indivisible investment goods. Consistent with the model, empirical evidence suggests that inflation disproportionately reduces investment in small firms.
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Document de travail de recherche sur les politiques WPS6972 JUL 01, 2014
This report contains the World Bank Group Boards' calendar for the period of July to September 2014, specifying the Boards' engagements, such as meetings and briefings.
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This paper proposes methods to incorporate firm heterogeneity in the standard input-output table-based approach to portray the domestic segment of global value chains in a country.
... Voir la suite The analysis uses Chinese firm census data for the manufacturing and service sectors, along with constrained optimization techniques. The conventional input-output table is split into sub-accounts, which are used to estimate direct and indirect domestic value added in exports of different types of firms. The analysis finds that in China, state-owned enterprises and small and medium domestic private enterprises have much higher shares of indirect exports and ratios of value-added exports to gross exports compared with foreign-invested and large domestic private firms. Based on input-output tables for 2007 and 2010, the paper finds increasing value-added export ratios for all firm types, particularly for state-owned enterprises. It also finds that state-owned enterprises are consistently more upstream while small and medium domestic private enterprises are consistently more downstream within industries. These findings suggest that state-owned enterprises still play an important role in shaping China's exports.
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Document de travail de recherche sur les politiques WPS6960 JUN 01, 2014
Moldova faces the challenge of meeting considerable public investment needs while preserving fiscal sustainability. With a rapidly aging population, high emigration, structural imbalances, and vulnerability to external shocks, Moldova will need to raise investment, productivity, and exports in order to achieve sustained growth and competitiveness.
... Voir la suite The World Bank's recently published Moldova public expenditure review (PER) focuses on capital expenditures and recommends reforms in public investment management and sector policies to raise cost effectiveness and allocative efficiency. Analyses for the PER were conducted using the BOOST public expenditure database developed by the World Bank. It provides recommendations for improving effectiveness and to enhance Moldova's competitiveness and achieve sustained inclusive economic growth.
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This report contains the World Bank Group Boards' calendar for the period May to July 2014, specifying the Boards' engagements, such as meetings and briefings.
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This paper uses a Ramsey model with two types of capital to analyze the optimal transition to clean capital when polluting investment is irreversible.
... Voir la suite The cost of climate mitigation decomposes as a technical cost of using clean instead of polluting capital and a transition cost from the irreversibility of pre-existing polluting capital. With a carbon price, the transition cost can be limited by underutilizing polluting capital, at the expense of a loss in the value of polluting assets (stranded assets) and a drop in income. In contrast, policy instruments that focus on redirecting investments -- such as feebates or environmental standards -- prevent underutilization of existing capital, avoid stranded assets, and reduce short-term losses; but they reduce emissions more slowly and increase the intertemporal cost of the transition. The paper investigates inter- and intra-generational distributional impacts and the political acceptability of climate change mitigation policy instruments.
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Document de travail de recherche sur les politiques WPS6859 MAY 01, 2014
Since the 2008-09 global financial crises, interest among policy makers in promoting innovative, ventures has exploded. The emerging great hubs of entrepreneurial activity, like Bangalore, Dubai, Shanghai, Silicon Valley, Singapore, and Tel Aviv, bear the unmistakable stamp of the public sector.
... Voir la suite Enlightened government intervention played a key role in each region's emergence. But for each effective government intervention, dozens, even hundreds, disappointed, with substantial public spending bearing no fruit. This paper sheds light on how governments can avoid mistakes in stimulating entrepreneurship. In recent decades, efforts have increased to provide the world's poorest with financing and other assistance to facilitate their entry into entrepreneurship or the growth of their small ventures. These are typically subsistence businesses offering services like snack preparation or clothing repair. Such businesses typically allow business owners and their families to get by, but little else. The public policy literature, along with academic studies of new ventures, often does not distinguish among the types of businesses being studied. The author will focus here exclusively on high-potential new ventures and the policies that enhance them. This choice, not intended to diminish the importance of efforts to boost microenterprises, reflects the complexity of the field: the dynamics and issues involving micro firms are quite different from those of their high-potential counterparts. A substantial literature suggests that promising entrepreneurial firms can have a powerful effect in transforming industries and promoting innovation.
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Document de travail de recherche sur les politiques WPS6880 MAY 01, 2014
A fundamental goal of any pension system is to ensure that members receive an adequate income when they retire. Although traditional defined benefit pension plans set out how pension income will be determined in advance and then strive to deliver this, the growing number of defined contribution plans accumulate a sum of assets which can then be turned into a pension income on retirement.
... Voir la suite However, the amount of this retirement income is not predefined This frequently leads to a focus by not only most pension providers, but also regulators and pension plan members themselves on the short-term accumulation of pension assets rather than the longer-term goal of securing an adequate retirement income. This paper discusses a possible solution to this challenge: the use of benchmarks to encourage pension funds to invest with the longer-term goal of delivering adequate retirement income in mind. Examples are provided of leading pension funds that already work with long-term, outcome-based benchmarks. The paper suggests a methodology for pension regulators to use in order to incentivize pension funds in their jurisdictions to adopt a similar approach.
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Document de travail de recherche sur les politiques WPS6885 MAY 01, 2014
A data set of key macro-sustainability indicators, constructed after several fact-finding missions, and World Bank methodologies on estimating wealth accounting are used to study Mauritania's wealth, which is estimated to be between USD50 and USD60 billion.
... Voir la suite The country's produced wealth represents roughly 12 percent of total wealth, much less than in lower-middle-income countries; by contrast, natural wealth represents approximately 45 percent of the total figure. Renewable resources account for slightly less than two-thirds of natural wealth, with fisheries alone equaling about one-fourth of natural wealth. This is good news for Mauritania, as sound management of these resources may ensure a constant flow of resources in the future and therefore -- with adequate policies -- the achievement of the same or higher levels of welfare for future generations. On the negative side, however, the ratio of net adjusted savings over gross national income is estimated to have been negative since 2006, meaning that the wealth of the country is being depleted. Mauritania has recently joined the ranks of lower-middle-income countries, largely thanks to its considerable natural resources endowment. Over time the mining sector's contribution to gross domestic product has grown significantly and important discoveries continue to be made. The overarching objective of this wealth accounting exercise is thus to support Mauritania to measure its assets better and achieve a more complete picture of the prospects for future income, with a view to better orienting public policies toward sustainable growth and shared prosperity. The paper concludes with several indicative policy recommendations.
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Document de travail de recherche sur les politiques WPS6887 MAY 01, 2014
Weaknesses in the public investment management (PIM) system may limit the gains from higher public sector investments in the Kyrgyz Republic. Capital spending has averaged 6.4 percent of GDP since 2010, up from 4.6 percent of GDP between 2005 and 2009, with significant investment in the energy sector and roads.
... Voir la suite Still, it remains unclear to what extent these investment decisions reflect the country's and sector priorities. Few projects, with the exception of donor-financed projects are subject to rigorous appraisal and there is no systematic procedure in place to monitor implementation progress. As a result, projects are often delayed or stalled and cost over-runs are frequent. Donor-financed projects, which comprise the bulk of public investment, are subject to relatively more rigorous project cycle management; however, they too face some of the same weaknesses. The rest of the note is structured as follows: section two provides a diagnosis of the public investment portfolio, including the structure of expenditures, the quality of the data, and a quantitative assessment of the efficacy and effectiveness of the public investment portfolio. The assessment builds on previous work on public investment in the Kyrgyz Republic, in particular the Public Investment Diagnostic undertaken in 2012 under the Capacity Building in Economic Management (CBEM) project. Section three reviews the institutional and administrative framework of PIM in Kyrgyz Republic. This draws largely from the draft Investment Diagnostic Report prepared in December 2012 using the eight key 'must-have' features of a well-functioning public investments framework proposed in Rajaram et.al. (2011). Finally, section four includes a summary of the findings and detailed recommendations on improving PIM.
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Examen des dépenses publiques 89008 MAY 01, 2014
Harnett, Paul; Najdov, Evgenij; De Silva, K. Migara O.