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

A general equilibrium analysis of alternative scenarios for food subsidy reform in Egypt:

This paper uses a Computable General Equilibrium (CGE) model to simulate the short-run effects of alternative food- subsidy scenarios. Savings from reduced subsidy spending are used to reduce direct taxes uniformly for all household types. The model uses a 1996/97 database with detailed household information. The simulated impact of targeting or eliminating oil and sugar subsidies is small: disaggregated real household consumption changes by �0.3 percent. It is progressive if the subsidy is targeted to "the needy" (the bottom two quintiles in rural and urban areas) and regressive if it is eliminated. The targeting of all food subsidies is pro-needy, in part due to important indirect effects. It raises the consumption of the needy by 0.5 percent with, on average, little change for the nonneedy. The strongest gains are recorded for the rural needy (consumption increase by 1.0 percent). Food subsidy elimination is regressive: the needy suffer a consumption loss of 1.1 percent. If the government savings instead are transferred to the needy, the impact is reversed: consumption increases by 4.2 percent for needy households while the nonneedy register a small loss. The overall policy implication of the paper is that there is scope for reducing food subsidy spending without hurting the low-income groups.Food policies., Subsidies Egypt., Equilibrium (Economics) Models., Consumption (Economics),

The Post-2015 Global Agenda: A Framework for Country Diagnostics

With the 2015 deadline for the current Millennium Development Goals (MDGs) drawing near, the global community is shaping a new set of international development goals for the longer term. The process has involved consultations led by the UN Open Working Group guided by the 2013 report, "A New Global Partnership" of the UN High-level Panel. The work so far indicates that the post-2015 development agenda will encompass goals for social, economic, and environmental sustainability with broader coverage than the current MDGs. This paper refers to these post-2015 development goals as Sustainable Development Goals, or SDGs.The World Bank Group is developing a diagnostic framework to assess the implications of implementing the post-2015 global development agenda at the country level. This framework has been applied to a pilot case study on Uganda, and some of the results of this study are highlighted here for illustrative purposes. The WBG has also developed a multi-country database that provides a starting point for similar diagnostics in other countries. Subject to data availability, the framework may be used to analyze likely progress in SDGs and their determinants and to discuss policy and financing options to accelerate their progress. This work has been shared with the Intergovernmental Committee of Experts on Sustainable Development Financing.The purpose of this paper is to demonstrate the application of this framework, drawing on the pilot study of Uganda

Trade reform and the poor in Morocco: a rural-urban general equilibrium analysis of reduced protection

Morocco is currently about to start reducing industrial protection in the context of its association agreement with the European Union. However, agriculture, which represents the major income source for the disfavored rural population, is the sector that is most strongly protected. In this study, a general equilibrium model of Morocco is used as a laboratory for analyzing the short-run equilibrium effects of alternative scenarios for reduced protection for agriculture and industry. The model, which is calibrated to a Social Accounting Matrix for 1994, is distinguished by an explicit separation of activities, factors, and households into rural and urban. It has a detailed treatment of agricultural and other rural production, the labor market, and households (disaggregated into four types: rural poor, rural non-poor, urban poor, urban non-poor). The simulation results indicate that reduced agricultural protection would generate significant aggregate welfare gains at the same time a significant part of the disadvantaged rural population would lose strongly. The impact of industrial tariff cuts is small. The outcome is less unfavorable for rural households over a slightly longer time frame where labor migration between agriculture, the rest of the rural economy and urban areas is feasible. The results for simulations that introduce compensatory measures targeting the rural population suggest that the dilemma presented by the tradeoff between aggregate and rural welfare can be overcome: in simulations introducing trade liberalization together with government transfers to owners of rainfed agricultural resources, or moderate improvements in rural skill levels or productivity in rural non-agriculture, the gains from trade liberalization are shared relatively evenly among all household groups.Social accounting., Equilibrium (Economics), Welfare economics., Morocco., Tariff Mathematical models., Trade liberalization.,