Aid, service delivery, and the millennium development goals in an economy-wide framework

In many developing countries, achieving the Millennium Development Goals (MDGs) by 2015 will require significant increases in expenditures on social services and in foreign assistance. It will also require careful planning of the sector allocation and sequencing of public spending. Especially for low-income countries, the challenges of the MDGs cannot be well understood unless sector issues are seen in the context of constraints at the macro level and in labor markets. To help countries analyze policies aimed at making progress toward the goals, the World Bank has developed a new tool, the Maquette for MDG Simulations (MAMS). Its originality is to fully integrate government services and their impact on the economy within an otherwise standard economy-wide dynamic framework. In comparison with existing approaches, MAMS offers three main advantages. First, the representation of the production of government services - such as health or education - takes into account demandas well as supply factors and the efficiency of these services. It also allows for interactions across the goals, and between the goals and economic growth. Second, it shows how scaling up these services has economy-wide impacts that may change resource allocation in the non-government sector and relative prices, including the unit cost of government services. Third, it shows the tradeoffs across time, including the relative costs and benefits, of front-loading expenditures versus back-loading. The present paper describes the basic features of MAMS and provides an illustration of its applicability for Ethiopia.Economic Theory&Research,,Population Policies,Health Monitoring&Evaluation,Banks&Banking Reform

Challenges to MDG achievement in low income countries : lessons from Ghana and Honduras

This paper summarizes the policy lessons from applications of the Maquette for MDG Simulations (MAMS) model to two low income countries: Ghana and Honduras. Results show that costs of MDGs achievement could reach 10-13 percent of GDP by 2015, although, given the observed low productivity in the provision of social services, significant savings may be realized by improving efficiency. Sources of financing also matter: foreign aid inflows can reduce international competitiveness through real exchange appreciation, while domestic financing can crowd out the private sector and slow poverty reduction. Spending a large share of a fixed budget on growth-enhancing infrastructure may mean sacrificing some human development, even if higher growth is usually associated with lower costs of social services. The pursuit of MDGs increases demand for skills: while this encourages higher educational attainments, in the short term this could lead to increased income inequality and a lower poverty elasticity of growth.Population Policies,,Achieving Shared Growth,Public Sector Economics&Finance,Public Sector Expenditure Analysis&Management

GridCertLib: a Single Sign-on Solution for Grid Web Applications and Portals

This paper describes the design and implementation of GridCertLib, a Java library leveraging a Shibboleth-based authentication infrastructure and the SLCS online certificate signing service, to provide short-lived X.509 certificates and Grid proxies. The main use case envisioned for GridCertLib, is to provide seamless and secure access to Grid/X.509 certificates and proxies in web applications and portals: when a user logs in to the portal using Shibboleth authentication, GridCertLib can automatically obtain a Grid/X.509 certificate from the SLCS service and generate a VOMS proxy from it. We give an overview of the architecture of GridCertLib and briefly describe its programming model. Its application to some deployment scenarios is outlined, as well as a report on practical experience integrating GridCertLib into portals for Bioinformatics and Computational Chemistry applications, based on the popular P-GRADE and Django softwares.Comment: 18 pages, 1 figure; final manuscript accepted for publication by the "Journal of Grid Computing

Achieving accelerated and shared growth in Ghana : a MAMS-based analysis of costs and opportunities

This paper relies on the recently developed Maquette for Millennium Development Goals Simulations (MAMS) model to assess the consistency of alternative scaling-up and policy packages for growth and achievement of the Millennium Development Goals in Ghana. In the baseline scenario, Ghana's strong near and medium-term growth outlook puts it in a good position to achieve the poverty Millennium Development Goal ahead of schedule, but other goals are likely to remain elusive before 2015. In the accelerated growth scenario-which addresses the major gaps in water and sanitation and other infrastructure-even more rapid growth and poverty reduction are possible, but important targets in the areas of education, health, and environment remain unattainable. Although growth is complementary to achievement of the Millennium Development Goals, the authors also find important growth-human development trade-offs in the near term. The estimates show that the resource requirements for achieving the key Millennium Development Goals by 2015 are large, reaching US$82 per capita in an illustrative foreign-grant financed scenario. Increased intake and retention of students contribute to rising scarcity of unskilled labor, buttressing unskilled wages, while high demand for skills from the sectors related to the Millennium Development Goals raises the returns to human capital. These developments lead to improvements in the welfare of the poorest members of Ghanaian society and contribute to a small reduction in overall inequality.Population Policies,Achieving Shared Growth,,Public Sector Expenditure Analysis&Management,Economic Theory&Research

Scaling up aid or scaling down : the global economic crisis and Rwanda's MDGs

Rwanda is not on track to achieve most of the Millennium Development Goals at a time when hopes for scaled-up aid are mixed with concerns that, in the context of the global economic crisis, aid instead will be scaled down. This paper analyzes the effects of alternative scenarios for grant aid, government spending allocations (between infrastructure, agriculture, and human development), and government efficiency. The authors use an economy-wide model for development strategy analysis, Maquette for Millennium Development Goal Simulations. Under a plausible scenario for increased aid, annual growth in gross domestic product increases by as much as 0.6 percentage points relative to a baseline with a growth rate of 6 percent; by 2020, the headcount poverty rate declines to 32 percent, 3 percentage points lower than for the baseline. A plausible scenario for reduced aid leads to a symmetric growth reduction but a more pronounced increase in poverty, at 40 percent in 2020. When aid increases, the most positive growth and poverty reduction impacts occur if spending increases are allocated to infrastructure and agriculture; progress in human health and education is significant but weaker than if additional spending is focused on these areas. Given synergies and diminishing marginal returns from expansion in a limited area, the scenarios that may appear most attractive and politically feasible have a broad and balanced expansion across government functions, promoting both growth and human development.Population Policies,Economic Theory&Research,,Debt Markets,Achieving Shared Growth

Impact of the global crisis on the achievement of the MDGs in Latin America

Progress towards the MDGs is expected to slow as a consequence of the global economic downturn. This study applies an economy-wide framework to analyze the impact of the crisis on MDG achievement in six Latin American countries. It finds significant setbacks towards the goals and, in the case of the region’s low-income countries, the cost of achieving these would rise between 1.6 and 3.4 per cent of GDP per year between 2010 and 2015 as compared with a no-crisis scenario. The additional public spending would contribute to economic growth though not sufficiently for full recovery to pre-crisis growth.computable general equilibrium models, distribution, welfare and poverty, foreign aid, macroeconomic analyses of economic development

Achieving the MDGs in Kenya with some aid and reallocation of public expenditures

Kenya has ascribed to the Millennium Declaration and is already in the process of mobilising resources and instituting measures to achieve Millennium Development Goals (MDGs). A MDGs status report on Kenya indicates that progress has been made towards achieving the goal of universal primary education. However, the Government will need to scale-up its efforts beyond the current momentum, if the other goals are to be realised by 2015. A preliminary conclusion is that the resource requirements are not extremely large to reach the MDGs in Kenya. If the resources are effectively used and targeted to MDG sectors they could have a substantial impact on whether Kenya would reach the MDGs or not. Some targets seem to be easier to reach than others. The target of 100 percent completion in primary school can be achieved with some additional resources targeted to the primary sector. However, a substantial increase of resources is needed at secondary and tertiary level of education to reach other goals set by the Kenyan government. Even if higher investment in all MDGsectors is needed the water sector seems to be requiring a substantial increase compared to what have been invested in the past. With regard to poverty our results show that annual average real GDP growth rate of around 8 percent would be enough to meet the poverty target of reducing the number of poor by half.Millennium; Development; Goals; Kenya; Aid; CGE

Constraints to achieving the MDGs through domestic resource mobilization

The present paper focuses on the role of domestic resource mobilization for financing poverty reduction strategies. Policy makers should be aware of important macroeconomic trade-offs associated with MDG strategies financed from tax increases or domestic borrowing. The trade-offs are largely intertemporal: can poor and middle-income countries absorb the initial financing costs in order to achieve expected gains in productivity and human development over time? This calls for a dynamic economy-wide framework to identify the importance of such trade-offs. The paper presents such a framework and illustrates its usefulness in applications for Costa Rica and Ecuador.computable general equilibrium models; distribution; welfare and poverty; foreign aid; macroeconomic analyses of economic development.

Assessing Development Strategies to Achieve the MDGs in Asia. Macroeconomic Strategies of MDG Achievement in the Kyrgyz Republic

The paper aims at analyzing macroeconomic and financial strategies, which are to ensure achievement of the Millennium Development Goals (MDGs) in the Kyrgyz Republic. The paper is based on results of simulations generated through the application of standard MAMS, a computable general equilibrium model adjusted to the country situation and calibrated with data of Kyrgyzstan. MAMS-model-based simulation results indicate that a continuation of the current policies under the baseline scenario would allow for achieving MDG1 (poverty reduction) only; the country would fall short of the targets for other MDGs. In order to achieve all MDGs, the country needs to increase government spending on MDG-relevant sectors (education, health, water and sanitation) by 7.8-8.1% of GDP per annum in comparison to the baseline scenario. The scenario that combines increased taxes and aid inflows seems to be the most realistic, but it would still require very substantial increases in tax collections and grant aid. The situation is going to be easier, if the economic growth rates 2011-2015 would be higher than 7% per annum. This is possible, if the government would be more successful in implementation of structural reforms, FDI and private domestic investments attraction and mobilization of resources for infrastructure development. Another possible way out is a substantial increase in government spending efficiency allowing for receiving higher social returns for money spent.CGE model, Kyrgyzstan, macroeconomic policies, Millennium Development Goals

How important is the efficiency of government investment ? The case of the Republic of Congo

The Republic of Congo, an oil rich country in Central Africa, has made substantial progress in the past decade in stabilizing the economy and achieving high growth rates. However, despite reaching middle-income country status in 2006, the economy is not diversified, poverty remains pervasive, and social indicators are well below the average for countries with a similar income level. This paper analyzes aspects of an ambitious investment program on which the government has embarked to improve the provision of basic services and promote private sector development. The success of this program, however, is questionable given the low absorptive capacity of the country and in particular the poor efficiency of public investment management. The analysis is based on simulations with an economy-wide model for analysis of development strategies and government policies, MAMS (Maquette for MDG Simulations). The results of the simulations show that slightly delaying large investment projects, while simultaneously improving the efficiency of the investment program, would lead to significantly higher growth rates and lower poverty levels. The analysis therefore confirms the importance of efficient public investment management for the optimal use of the country's resources.Economic Theory&Research,Labor Policies,Debt Markets,Access to Finance,Non Bank Financial Institutions