When instability increases the effectiveness of aid projects

The authors assess the effect of economic instability on the success of projects funded by the World Bank using the outcome of the projects, which is a notation of their overall success determined by the Bank's Independent Evaluation Group. It has been argued in macroeconomic studies that aid effectiveness is higher in vulnerable countries because it dampens the negative effects of shocks. The authors show that this finding is not inconsistent with the observation that the success of the projects is lower in an unstable environment. Instability, in particular the instability of exports, harms aid projects as it harms the rest of the economy, while the success of projects decreases when the total amount of aid received increases, due to absorptive capacity limitations. But this decrease is slower when instability is higher, showing a positive effect of aid through its stabilizing impact. The authors find the same results keeping only the projects funded by nonconcessionary loans, which suggests that the cushioning effect of aid extends not only to aid funded projects but to whole sets of projects. Corroborating macroeconomic findings, their results lead to the same conclusion that more aid should be allocated to more vulnerable countries, in spite of the lower success of the projects in an unstable environment: project evaluations cannot include the macrostabilizing effect of the aid delivered through projects.Development Economics&Aid Effectiveness,Banks&Banking Reform,School Health,Poverty Monitoring&Analysis,Economic Theory&Research

When instability increases the effectiveness of aid projects

This paper assesses the effect of economic instability on the success of the projects funded by the World Bank, using the outcome of the projects, which is a notation of their overall success determined by the Independent Evaluation Group. It has been argued in macro economic studies that aid effectiveness is higher in vulnerable countries, because it dampens the negative effects of shocks. We show that this finding is not inconsistent with the observation that the success of the projects is lower in an unstable environment. Indeed instability, in particular the instability of exports, harms aid projects as it harms the rest of the economy, while the success of projects decreases when the total amount of aid received increases, due to absorptive capacity limitations. However this decrease is slower when instability is higher, showing a positive effect of aid through its stabilizing impact. We find the same results keeping only the projects funded by non concessionary loans, which suggests that the cushioning effect of aid extends not only to aid funded projects but to whole sets of projects. Corroborating macro economic findings, our results lead to the same conclusion that more aid should be allocated to more vulnerable countries, in spite of the lower success of the projects in an unstable environment: project evaluations cannot include the macro-stabilizing effect of the aid delivered through projects.

When instability increases the effectiveness of aid projects

This paper assesses the effect of economic instability on the success of the projects funded by the World Bank, using the outcome of the projects, which is a notation of their overall success determined by the Independent Evaluation Group. It has been argued in macro economic studies that aid effectiveness is higher in vulnerable countries, because it dampens the negative effects of shocks. We show that this finding is not inconsistent with the observation that the success of the projects is lower in an unstable environment. Indeed instability, in particular the instability of exports, harms aid projects as it harms the rest of the economy, while the success of projects decreases when the total amount of aid received increases, due to absorptive capacity limitations. However this decrease is slower when instability is higher, showing a positive effect of aid through its stabilizing impact. We find the same results keeping only the projects funded by non concessionary loans, which suggests that the cushioning effect of aid extends not only to aid funded projects but to whole sets of projects. Corroborating macro economic findings, our results lead to the same conclusion that more aid should be allocated to more vulnerable countries, in spite of the lower success of the projects in an unstable environment: project evaluations cannot include the macro-stabilizing effect of the aid delivered through projects

Assessing Pandemic Preparedness, Response, and Lessons Learned From the Covid-19 Pandemic in Four South American Countries: Agenda for the Future

INTRODUCTION: The COVID-19 pandemic emerged in a context that lacked adequate prevention, preparedness, and response (PPR) activities, and global, regional, and national leadership. South American countries were among world\u27s hardest hit by the pandemic, accounting for 10.1% of total cases and 20.1% of global deaths. METHODS: This study explores how pandemic PPR were affected by political, socioeconomic, and health system contexts as well as how PPR may have shaped pandemic outcomes in Argentina, Brazil, Colombia, and Peru. We then identify lessons learned and advance an agenda for improving PPR capacity at regional and national levels. We do this through a mixed-methods sequential explanatory study in four South American countries based on structured interviews and focus groups with elite policy makers. RESULTS: The results of our study demonstrate that structural and contextual barriers limited PPR activities at political, social, and economic levels in each country, as well as through the structure of the health care system. Respondents believe that top-level government officials had insufficient political will for prioritizing pandemic PPR and post-COVID-19 recovery programs within their countries\u27 health agendas. DISCUSSION: We recommend a regional COVID-19 task force, post-pandemic recovery, social and economic protection for vulnerable groups, improved primary health care and surveillance systems, risk communication strategies, and community engagement to place pandemic PPR on Argentina, Brazil, Colombia, and Peru and other South American countries\u27 national public health agendas

How do farmers learn from extension services? Evidence from Malawi

Though extension services have long since proved their value to agricultural production and farmer prosperity, their record in sub‐Saharan Africa has been mixed. To study the impact of such programs on farmers' learning about agricultural technologies, we implemented a quasi‐randomized controlled trial and collected detailed panel data among Malawian farmers. Based on those findings, we develop a two‐stage learning framework, in which farmers formulate yield expectations before deciding on how much effort to invest in learning about these processes. Using data centered on farmer beliefs, knowledge, and constraints, we find evidence that beliefs about potential yields hinge on first‐hand and local experience, and that these beliefs significantly impact learning efforts. Consistent with this, we find that farmers who participated in season‐long, farmer‐led demonstration plot cultivation plan to adopt more components of new multi‐component technology, compared to farmers who were invited to attend only field‐day events

Assessing pandemic preparedness, response, and lessons learned from the COVID-19 pandemic in four south American countries: agenda for the future

IntroductionThe COVID-19 pandemic emerged in a context that lacked adequate prevention, preparedness, and response (PPR) activities, and global, regional, and national leadership. South American countries were among world’s hardest hit by the pandemic, accounting for 10.1% of total cases and 20.1% of global deaths.MethodsThis study explores how pandemic PPR were affected by political, socioeconomic, and health system contexts as well as how PPR may have shaped pandemic outcomes in Argentina, Brazil, Colombia, and Peru. We then identify lessons learned and advance an agenda for improving PPR capacity at regional and national levels. We do this through a mixed-methods sequential explanatory study in four South American countries based on structured interviews and focus groups with elite policy makers.ResultsThe results of our study demonstrate that structural and contextual barriers limited PPR activities at political, social, and economic levels in each country, as well as through the structure of the health care system. Respondents believe that top-level government officials had insufficient political will for prioritizing pandemic PPR and post-COVID-19 recovery programs within their countries’ health agendas.DiscussionWe recommend a regional COVID-19 task force, post-pandemic recovery, social and economic protection for vulnerable groups, improved primary health care and surveillance systems, risk communication strategies, and community engagement to place pandemic PPR on Argentina, Brazil, Colombia, and Peru and other South American countries’ national public health agendas

Closing the Eyes on a Gloomy Future: Psychological Causes and Economic Consequences

This paper analyzes the impact of economic prospects on one’s time preference. Research in psychol- ogy has shown how individuals modify their preferences in order to reduce their cognitive dissonance, which is the uncomfortable tension felt when simultaneously holding conflicting thoughts. It occurs among the poor when simultaneously caring about their future welfare while having gloomy economic prospects. Hence closing their eyes on the future can reduce their psychological distress at the cost of worsening their future economic wellbeing. This paper offers a new theoretical approach that decom- poses time discounting and analyzes the endogenous determination of one’s time horizon. The model predicts that, below a certain wealth, the time horizon of an individual is decreasing in poverty, result- ing in a behavioral poverty trap. The prediction is tested using data from a randomized experiment in Mozambique, which confirms that the beneficiaries of an agro-input subsidy and a matched savings intervention increased their planning horizon as a result of their improved economic prospects

Measuring Skills in Developing Countries

International audienceMeasures of cognitive, noncognitive, and technical skills are increasingly used in development economics to analyze the determinants of skill formation, the role of skills in economic decisions, or simply because they are potential confounders. Yet in most cases, these measures have only been validated in high-income countries. This paper tests the reliability and validity of some of the most commonly used skills measures in a rural developing context. A survey with a series of skills measurements was administered to more than 900 farmers in western Kenya, and the same questions were asked again after three weeks to test the reliability of the measures. To test predictive power, the study also collected information on agricultural practices and production during the four following seasons. The results show the cognitive skills measures are reliable and internally consistent, while technical skills are difficult to capture and very noisy. The evidence further suggests that measurement error in noncognitive skills is non-classical, as correlations between questions are driven in part by the answering patterns of the respondents and the phrasing of the questions. Addressing both random and systematic measurement error using common psychometric practices and repeated measures leads to improvements and clearer predictions, but does not address all concerns. The paper provides a cautionary tale for naïve interpretations of skill measures. It also points to the importance of addressing measurement challenges to establish the relationship of different skills with economic outcomes. Based on these findings, the paper derives guidelines for skill measurement and interpretation in similar contexts

Measuring Skills in Developing Countries

International audienceMeasures of cognitive, noncognitive, and technical skills are increasingly used in development economics to analyze the determinants of skill formation, the role of skills in economic decisions, or simply because they are potential confounders. Yet in most cases, these measures have only been validated in high-income countries. This paper tests the reliability and validity of some of the most commonly used skills measures in a rural developing context. A survey with a series of skills measurements was administered to more than 900 farmers in western Kenya, and the same questions were asked again after three weeks to test the reliability of the measures. To test predictive power, the study also collected information on agricultural practices and production during the four following seasons. The results show the cognitive skills measures are reliable and internally consistent, while technical skills are difficult to capture and very noisy. The evidence further suggests that measurement error in noncognitive skills is non-classical, as correlations between questions are driven in part by the answering patterns of the respondents and the phrasing of the questions. Addressing both random and systematic measurement error using common psychometric practices and repeated measures leads to improvements and clearer predictions, but does not address all concerns. The paper provides a cautionary tale for naïve interpretations of skill measures. It also points to the importance of addressing measurement challenges to establish the relationship of different skills with economic outcomes. Based on these findings, the paper derives guidelines for skill measurement and interpretation in similar contexts

Measuring Skills in Developing Countries

International audienceMeasures of cognitive, noncognitive, and technical skills are increasingly used in development economics to analyze the determinants of skill formation, the role of skills in economic decisions, or simply because they are potential confounders. Yet in most cases, these measures have only been validated in high-income countries. This paper tests the reliability and validity of some of the most commonly used skills measures in a rural developing context. A survey with a series of skills measurements was administered to more than 900 farmers in western Kenya, and the same questions were asked again after three weeks to test the reliability of the measures. To test predictive power, the study also collected information on agricultural practices and production during the four following seasons. The results show the cognitive skills measures are reliable and internally consistent, while technical skills are difficult to capture and very noisy. The evidence further suggests that measurement error in noncognitive skills is non-classical, as correlations between questions are driven in part by the answering patterns of the respondents and the phrasing of the questions. Addressing both random and systematic measurement error using common psychometric practices and repeated measures leads to improvements and clearer predictions, but does not address all concerns. The paper provides a cautionary tale for naïve interpretations of skill measures. It also points to the importance of addressing measurement challenges to establish the relationship of different skills with economic outcomes. Based on these findings, the paper derives guidelines for skill measurement and interpretation in similar contexts