Is two better than one? Effects on growth of Bank-Fund interaction

We estimate the impact on economic growth of the joint participation in both IMF and WB programs. More specifically, using panel data for 128 developing countries over the period 1982-2005, and employing 2SLS to control for the possible endogeneity of participation in an IMF/WB program, we find that even if the WB and the IMF do not boost growth when they operate by themselves, the interaction term between these two organization is positive and significant at conventional levels. However, when we restrict the sample to low and lower middle income countries only (for which Bank-Fund cooperation is more “formalized”) the coefficient of the interaction term is not significant. Thus, so far, a trade-off emerges between a greater precision in the definition of Bank-Fund cooperation and the reliability of the estimates due to an insufficient number of observations.

Cost-Benefit Analysis of the Large Hadron Collider to 2025 and beyond

Social cost-benefit analysis (CBA) of projects has been successfully applied in different fields such as transport, energy, health, education, and environment, including climate change. It is often argued that it is impossible to extend the CBA approach to the evaluation of the social impact of research infrastructures, because the final benefit to society of scientific discovery is generally unpredictable. Here, we propose a quantitative approach to this problem, we use it to design an empirically testable CBA model, and we apply it to the the Large Hadron Collider (LHC), the highest-energy accelerator in the world, currently operating at CERN. We show that the evaluation of benefits can be made quantitative by determining their value to users (scientists, early-stage researchers, firms, visitors) and non-users (the general public). Four classes of contributions to users are identified: knowledge output, human capital development, technological spillovers, and cultural effects. Benefits for non-users can be estimated, in analogy to public goods with no practical use (such as environment preservation), using willingness to pay. We determine the probability distribution of cost and benefits for the LHC since 1993 until planned decommissioning in 2025, and we find there is a 92% probability that benefits exceed its costs, with an expected net present value of about 3 billion euro, not including the unpredictable economic value of discovery of any new physics. We argue that the evaluation approach proposed here can be replicated for any large-scale research infrastructure, thus helping the decision-making on competing projects, with a socio-economic appraisal complementary to other evaluation criteria.Comment: 17 pages, 7 figure

Additionality and regional development: are EU Structural Funds complements or substitutes of national Public Finance?

This paper deals with the effects of the transfer of additional funds on the real economy of recipient countries, in particular the European Member States. The intended and unintended effects of additional funds on national public finances and, ultimately, economic performance are discussed. Understanding the real effects of additional public funds and the possible complementarity or substitutability with national public finance is important for shaping the policies for the allocation of Structural Funds. Verification of additionality plays a role in ensuring that additional funds are used to effectively complement national expenditure programmes. In the case of the European Union, it is widely recognised that the current verification mechanism is affected by weaknesses, that prevent it from providing reliable and useful data to effectively assess additionality. For this reason, the paper suggests the European Commission to move away from the current verification approach and to adopt a new one that could more effectively assess to what extent the Structural Funds complement national investments.Public investment, substitution, displacement

Is two better than one? The effects of IMF and World Bank interaction on growth

IMF and World Bank conditionality, Coordination, Economic growth, Panel data, C23, F33, N2,

ADDITIONALITY AND REGIONAL DEVELOPMENT: ARE EU STRUCTURAL FUNDS COMPLEMENTS OR SUBSTITUTES OF NATIONAL PUBLIC FINANCE?

Abstract 1 This paper deals with the effects of the transfer of additional funds on the real economy of recipient countries, in particular the European Member States. The intended and unintended effects of additional funds on national public finances and, ultimately, economic performance are discussed. Understanding the real effects of additional public funds and the possible complementarity or substitutability with national public finance is important for shaping the policies for the allocation of Structural Funds. Verification of additionality plays a role in ensuring that additional funds are used to effectively complement national expenditure programmes. In the case of the European Union, it is widely recognised that the current verification mechanism is affected by weaknesses, that prevent it from providing reliable and useful data to effectively assess additionality. For this reason, the paper suggests the European Commission to move away from the current verification approach and to adopt a new one that could more effectively assess to what extent the Structural Funds complement national investments