An econometric analysis of IBRD creditworthiness

The author econometrically ascertains the determinants of default to the International Bank for Reconstruction and Development (IBRD) through panel logit analysis. Creditworthiness with a lag of one period is determined by the extent of arrears to private creditors, the proportion of total debt service that is being paid, the government budget deficit, the extent of military involvement in the government of a country, and by the G7's current account balance. Default to the IBRD falls into a graduated hierarchy, whereby default occurs first to Paris Club and commercial bank creditors, with subsequent default triggered by portfolios with high proportions of IBRD and short-term debt, as well as the factors mentioned above. Default to these other creditor groups can be explained by more traditional country risk variables, although Mckenzie's analysis highlights the importance of political and external factors in explaining default to all creditors studied. He finds sovereign default to be a state-dependent process, whereby the repayment behavior of a country changes once it enters into default. Operationally, the author arrives at a model that can be used to assess short-term creditworthiness, although data imperfections and availability still limit the usefulness of the model for some countries. Longer-term risk assessment proves more difficult, which raises operational questions for the IBRD.Environmental Economics&Policies,Payment Systems&Infrastructure,Banks&Banking Reform,Economic Theory&Research,Strategic Debt Management,Strategic Debt Management,Economic Theory&Research,Environmental Economics&Policies,Financial Intermediation,Banks&Banking Reform

Beyond baseline and follow-up : the case for more t in experiments

The vast majority of randomized experiments in economics rely on a single baseline and single follow-up survey. If multiple follow-ups are conducted, the reason is typically to examine the trajectory of impact effects, so that in effect only one follow-up round is being used to estimate each treatment effect of interest. While such a design is suitable for study of highly autocorrelated and relatively precisely measured outcomes in the health and education domains, this paper makes the case that it is unlikely to be optimal for measuring noisy and relatively less autocorrelated outcomes such as business profits, household incomes and expenditures, and episodic health outcomes. Taking multiple measurements of such outcomes at relatively short intervals allows the researcher to average out noise, increasing power. When the outcomes have low autocorrelation, it can make sense to do no baseline at all. Moreover, the author shows how for such outcomes, more power can be achieved with multiple follow-ups than allocating the same total sample size over a single follow-up and baseline. The analysis highlights the large gains in power from ANCOVA rather than difference-in-differences when autocorrelations are low and a baseline is taken. The paper discusses the issues involved in multiple measurements, and makes recommendations for the design of experiments and related non-experimental impact evaluations.Scientific Research&Science Parks,Science Education,Statistical&Mathematical Sciences,Disease Control&Prevention,Economic Theory&Research

Bending creep of corrugated fibreboard in cycling relative humidity : a thesis presented in partial fulfilment of the requirements for the degree of Master of Applied Science in Agricultural Engineering at Massey University

Packaging of fresh fruit for export is a major use for corrugated fibreboard manufactured in New Zealand. However the cold and humid conditions used to preserve fruit quality are particularly detrimental to the strength of corrugated packaging. The main objective of this study was to develop a method to measure the performance of corrugated fibreboard in high and cycling relative humidity environments. This method was then used to compare the performance of three corrugated fibre-boards 1 For commercial reasons these will be referred to as 'CB1', 'CB2'and 'CB3' The creep performance of corrugated fibreboard was measured by subjecting samples to four point bending stress under controlled cyclic relative humidity conditions using a computer controlled testing apparatus. A mathematical model by Urbanik (1995) and an empirical exponential model were reviewed before selecting a three term model developed by Pecht (1985) to describe the deflection of the corrugated board. Cyclic relative humidity accelerated the rate of creep compared to a static high humidity environment. The rate of creep in the machine direction was found to be considerably lower than that in the cross machine direction. It was also found that increasing the peak relative humidity from 80% to 90% RH dramatically changed the deflection response. This provides a solution to conflicting data in the literature on relative humidity cycling effects. Isochronous deflection curves were used to compare the creep performance of the corrugated fibreboard samples in an environment cycling between 50% and 90% RH. Corrugated fibreboard sample CB1 had a slightly lower creep stiffness than corrugated boards CB2 (p=0.0580, n=8) and CB3 (p=0.0398, n=8). However a greater number of tests would be required on a wider range of samples to conclusively determine if there were differences in board performance

How can we learn whether firm policies are working in africa ? challenges (and solutions?) for experiments and structural models

Firm productivity is low in African countries, prompting governments to try a number of active policies to improve it. Yet despite the millions of dollars spent on these policies, we are far from a situation where we know whether many of them are yielding the desired payoffs. This paper establishes some basic facts about the number and heterogeneity of firms in different sub-Saharan African countries and discusses their implications for experimental and structural approaches towards trying to estimate firm policy impacts. It shows that the typical firm program such as a matching grant scheme or business training program involves only 100 to 300 firms, which are often very heterogeneous in terms of employment and sales levels. As a result, standard experimental designs will lack any power to detect reasonable sized treatment impacts, while structural models which assume common production technologies and few missing markets will be ill-suited to capture the key constraints firms face. Nevertheless, the author suggests a way forward which involves focusing on a more homogeneous sub-sample of firms and collecting a lot more data on them than is typically collected.Microfinance,Small Scale Enterprise,E-Business,ICT Policy and Strategies,Banks&Banking Reform

Are tortillas a Giffen Good in Mexico?

Jensen and Miller (2001) have recently demonstrated rice and noodles to be Giffen Goods among the poor in South and North China respectively. We examine whether tortillas, the main staple in Mexico, are also a Giffen Good. The large income change due to the 1995 Peso Crisis and the large tortilla price increase arising from the removal of government subsidies provide an ideal environment for this test. We find tortillas to be an inferior good, but not a Giffen Good.

Impact assessments in finance and private sector development : what have we learned and what should we learn ?

Until recently rigorous impact evaluations have been rare in the area of finance and private sector development. One reason for this is the perception that many policies and projects in this area lend themselves less to formal evaluations. However, a vanguard of new impact evaluations on areas as diverse as fostering microenterprise growth, microfinance, rainfall insurance, and regulatory reform demonstrates that in many circumstances serious evaluation is possible. The purpose of this paper is to synthesize and distil the policy and implementation lessons emerging from these studies, use them to demonstrate the feasibility of impact evaluations in a broader array of topics, and thereby help prompt new impact evaluations for projects going forward.Access to Finance,,Debt Markets,Banks&Banking Reform,Microfinance

Scientific mobility and knowledge networks in high emigration countries: evidence from the Pacific

This paper uses a unique survey to examine the nature and extent of knowledge flows that result from the international mobility of researchers whose initial education was in small island countries. Current migrants produce substantially more research than similar-skilled return migrants and non-migrants. Return migrants have no greater research impact than individuals who never migrate but are the main source of research knowledge transfer between international and local researchers. Our results contrast with previous claims in the literature that too few migrant researchers ever return home to have much impact, and that there is no productivity gain to researchers from migration

Australia's Pacific Seasonal Worker Pilot Scheme (PSWPS): Development impacts in the first two years

Australia launched the Pacific Seasonal Worker Pilot Scheme in August 2008. This program was designed to alleviate labor shortages for the Australian horticultural industry by providing opportunities for workers from Kiribati, Papua New Guinea, Tonga, and Vanuatu to undertake seasonal work. This paper presents an analysis of the development impacts of this program in the first two years, and compares them to those from New Zealand’s seasonal worker program in the same countries. The overall development impact of the scheme to date is small, since only 215 individuals participated in the program in the first two years. We examine the selection of these workers, finding they tend to come from poorer areas of Tonga, but within these locations, appear to be of average income levels, and indeed are similar in many respects to the workers going to New Zealand. We estimate the gain per participating household to be approximately A$2,600, which is a 39 percent increase in per-capita annual income in participating Tongan households. The aggregate impact to date is small, but the experience of New Zealand’s program shows that seasonal worker programs can potentially have large aggregate effects. Finally, we provide some evidence on worker’s opinions about the program

The development impact of a best practice seasonal worker policy: New Zealand’s Recognised Seasonal Employer (RSE) Scheme

Seasonal migration programs are widely used around the world, and are increasingly seen as offering a potential “triple-win”- benefiting the migrant, sending country, and receiving country. Yet there is a dearth of rigorous evidence as to their development impact, and concerns about whether the time periods involved are too short to realize much in the way of benefits, and whether poorer, less skilled households actually get to participate in such programs. We study the development impacts of a recently introduced seasonal worker program which has been deemed to be “best practice”. New Zealand’s Recognised Seasonal Employer (RSE) program was launched in 2007 with an explicit focus on development in the Pacific alongside the aim of benefiting employers at home. A multi-year prospective evaluation allows us to measure the impact of participation in this program on households and communities in Tonga and Vanuatu. Using a matched difference-in-differences analysis based on detailed surveys fielded before, during, and after participation, we find that the RSE has indeed had largely positive development impacts. It has increased income and consumption of households, allowed households to purchase more durable goods, increased subjective standard of living, and had additional benefits at the community level. It also increased child schooling in Tonga. This should rank it among the most effective development policies evaluated to date. The policy was designed as a best practice example based on lessons elsewhere, and now should serve as a model for other countries to follow

The economic consequences of ‘brain drain’ of the best and brightest: Microeconomic evidence from five countries

Brain drain has long been a common concern for migrant-sending countries, particularly for small countries where high-skilled emigration rates are highest. However, while economic theory suggests a number of possible benefits, in addition to costs, from skilled emigration, the evidence base on many of these is very limited. Moreover, the lessons from case studies of benefits to China and India from skilled emigration may not be relevant to much smaller countries. This paper presents the results of innovative surveys which tracked academic high achievers from five countries to wherever they moved in the world in order to directly measure at the micro level the channels through which high-skilled emigration affects the sending country. The results show that there are very high levels of emigration and of return migration among the very highly skilled; the income gains to the best and brightest from migrating are very large, and an order of magnitude or more greater than any other effect; there are large benefits from migration in terms of postgraduate education; most high-skilled migrants from poorer countries send remittances; but that involvement in trade and foreign direct investment is a rare occurrence. There is considerable knowledge flow from both current and return migrants about job and study opportunities abroad, but little net knowledge sharing from current migrants to home country governments or businesses. Finally, the fiscal costs vary considerably across countries, and depend on the extent to which governments rely on progressive income taxation