International benchmarking of Lesotho's infrastructure performance

The author provides a preliminary benchmarking of infrastructure performance in Lesotho in four major sectors--electricity, water and sanitation, information and communication technology, and road transportation--against the relevant group of comparator countries using a new World Bank international data base with objective and perception-based indicators of infrastructure performance from over 200 countries. The results of the benchmarking are revealing of several major, comparative deficiencies in infrastructure performance in Lesotho: (1) extremely low access to electricity and its affordability; (2) poor coverage, quality, and the cost of local (non-cellular) telephony; and (3) poor quality of roads. Infrastructure service delivery in electricity, telephony, and roads is well below what would be expected, on average, for a country in Lesotho's income group. In these sectors, Lesotho also compares unfavorably with many other geographical country groups. Unless addressed, such infrastructure shortfalls are likely to adversely affect the welfare of Lesotho's poor, and the cost competitiveness and growth prospects of a range of economic sectors (such as tourism and trade) that depend critically on a stable and competitive supply of basic infrastructure service. They could also affect the speed and quality of Lesotho's regional economic integration within the South Africa Customs Union (SACU) sub-region with attendant consequences for the long-term growth of regional trade and real output. By contrast, Lesotho's performance is solid in the access to improved water and sanitation, in the aggregate and in both rural and urban areas. Finally, this benchmarking, combined with more in-depth, sector analyses, could provide policymakers in Lesotho a useful guide to the areas of infrastructure performance requiring attention.Infrastructure Regulation,Urban Services to the Poor,Urban Slums Upgrading,Banks&Banking Reform,Roads&Highways

Seignirage Sharing and Dollarization, Central Banking (U.K.), Vol. X, No.4, 77-88.

Dollarization is becoming a viable option for a number of countries, but the loss of seigniorage is a major obstacle. The paper looks at the major seigniorage sharing arrangements available and issues that arise in the design of the new arrangements.dollarization, dollarisation, seigniorage, monetary unions

Official Dollarization: Current Experiences and Issues, Cato Journal, Vol. 20, No. 2 (Fall 2000), 179-213.

The paper reviews the salient features of officially dollarized economies (with particular reference to Panama) and discusses costs and benefits of official dollarization. Also, the paper reviews existing and some potential seigniorage sharing arrangements and discusses conditions that are conducive to official dollarization, especially in Latin America.dollarization monetary unions seigniorage Panama Latin America

Collateral, Access to Credit, and Investment in Bulgaria, chap. 8 in D. Jones and J. Miller (eds) THE BULGARIAN ECONOMY: LESSONS FROM REFORM DURING EARLY TRANSITION, Ashgate 97.

The paper measures economic loss from the problem of inadequate collateral in Bulgaria and proposes solutions consisting of creation of security interests, perfection, and enforcement.collateral, finance, access to credit, investment, Bulgaria

The tax base in transition : the case of Bulgaria

The transition from socialism characteristically reduces existing tax revenues at the same time that it increases the need for government spending. An increasing need for revenue combined with an eroding tax base creates a transition-related fiscal gap and a challenge for tax policy. The solution, say the authors, is not to lay a heavier tax burden on new private firms. The issue is how to meet revenue needs without inhibiting private sector development. Large-scale tax evasion in the private sector - the de facto outcome in Bulgaria and in many other transitional economies - may be a good incentive for development of private enterprise, but it is illegal and inequitable to wage-earners and salaried workers. The chief means of increasing tax revenue are to: (1) reduce tax rates to decrease the benefit of evasion; (2) improve tax administration (to increase tax coverage and better dectect evasion); and (3) increase penalties for evasion. These three measures effectively decrease the benefits and increase the cost of tax evasion to economic agents. It takes time to improve tax administration, however. Given administrative limitations, what should the tax structure be? The authors contend that an administratively feasible system designed to encourage development of the private sector during the transition should: (i) be simple, not complex or oversophisticated; (ii) be administratively implementable with current resources; (iii) impose a low tax burden on all economic agents; (iv) rely on broad tax bases with minimum exemptions; (v) begin the long-term improvement of tax administration; and (vi) limit the severity of tax penalties in the transition from an authoritarian to a democratic regime. In theory, reducing the cost of compliance and increasing the expected cost of noncompliance should reduce tax evasion and increase tax revenue. In practice, small businesses and self-employed citizens tend to evade taxes, providing an effective zero tax base. The government has little to lose from reducing taxes on the self-employed but, to be equitable, it should reduce taxes for everyone. As a general rule, say the authors, economies in transition should impose lower tax burdens than are imposed in mature western market economies. It may also reduce the perception of"exploitation"by giving the impression of a more modest government consistent with the dynamic private sector led economy.Public Sector Economics&Finance,Environmental Economics&Policies,Banks&Banking Reform,National Governance,Municipal Financial Management

Efficiency in Bulgaria's schools : a nonparametric study

In Eastern European countries in large social sectors such as education, inefficiency and technical deficiencies are the legacy of the old command economy. The authors examine the technical efficiency of classroom use (defined as the number of classes per classroom in one transitional economy -- Bulgaria. They examine the concept of efficiency in 199 urban and rural municipalities, using data envelopment analysis to generate efficiency scores. Those scores -- discussed in terms of frequency and regional distribution -- are then regressed on several socioeconomic variables. The researchers find significant relationships between the efficiency scores, on the one hand, and, on the other, the proportion of students in the population under age 20 (demand indicator), the number of teachers (variable input), the percentage of the municipal budget spent on education, and the degree of urbanization. Efficiency in the use of classrooms (in terms of classes) varies considerably among municipalities, and the efficiency is highest in the capital city of Sofia. To the extent that some variation in efficiency reflects demand or demographic factos, there is little that policy can do to change the pattern. But some changes in municipal policy could increase the efficiency of classroom use without jeopardizing the fundamental learning objective. In some rural areas, for example, where there are few students and classroom utilization is low, it may be possible to consolidate several grades into multigrade classes and reduce the size of the teaching (and nonteaching) staff, while maintaining the quality of learning and maximizing the use of such fixed inputs as classrooms. To the extent that it is possible to use such classrooms more efficiently, savings could be generated in the municipalities that need them most: in demographically sparse, poor municipalities with a weak economic base. Those savings could then be reallocated to other educational essentials, such as equipment and materials.Teaching and Learning,Primary Education,Public Health Promotion,Health Monitoring&Evaluation,Environmental Economics&Policies,Environmental Economics&Policies,Teaching and Learning,Health Monitoring&Evaluation,Primary Education,Curriculum&Instruction

The Tax Base in Transition: The Case of Bulgaria, World Bank Policy Research Working Paper Series No. 1267 (March 1994), The World Bank.

Meeting government revenue needs without inhibiting private sector development is a key challenge of tax policy during the transition from the socialist system. The paper explores issues in the design of tax bases and tax structures in the transition and argues that transition economies would need to adopt a lower and simpler tax structure than the ones prevailing in developed Western market economies.tax reform, tax policy, tax bases, tax structure, transition, Bulgaria

Infrastructure and Growth in South Africa: Benchmarking, Productivity and Investment Needs, paper presented at Economic Society of South Africa (ESSA) Conference, Durban, 9/7-9/2005

The paper provides three principal results. First, we benchmark South African infrastructure performance in terms of access, pricing, and quality against key comparator groups of countries using the most recent World Bank benchmarking data base (2005). Second, we establish clear empirical links between infrastructure and productivity using South African time-series data. And third, we estimate long-run demand for electricity and telephony using a panel of 52 low-income and middle- income countries for the period 1980-2002 and then project investment needs in these sectors until 2010. Our projections indicate average annual electricity generating requirement of US$0.5 billion or about 0.2$1.98 billion or 0.75% of GDP for telephony.infrastructure, growth, productivity, investment, South Africa

Infrastructure, Productivity and Urban Dynamics in Cote d'Ivoire, Africa Region Working Paper Series No. 86 (July 2005), The World Bank, Washington D.C.

Recent contributions in economic geography reflect renewed interest in issues of location and spatial concentration of economic activities, yet there are still few empirical studies of developing countries, particularly in Africa. This paper aims to contribute to this body of knowledge by (i) documenting wide regional disparities in economic activity and infrastructure (especially between the north and the south), which were partly determined by regional development policy, and (ii) examining empirically to what extent spatial factors such as agglomeration economies contribute to labor productivity––and therefore to urban dynamics––using recent panel data from Côte d’Ivoire for the period from 1980 to 1996.infrastructure productivity urban Cote d'Ivoire Ivory Coast Africa

Reforming health care : a case for stay well health insurance

All countries - whether industrial, developing, or in transition to a market economy - are interested in health care reform. A central focus of reform everywhere is to make patients more responsive to health care costs without diluting the protection offered by public or private insurance. Conventional insurance offers customers little incentive to monitor their own use of health care services or to adopt and maintain better health habits. The authors describe an alternative health insurance structure first adopted in Mendocino County, California, in 1979, and compare it with conventional forms of insurance. The Mendocino or"stay well"plan offers consumers direct incentives to control their use of health care services and to adopt healthier lifestyles. How well this insurance can contain health care costs depends on the size of the incentives and consumer responsiveness to them. Conditions in some developing countries and in many countries moving to market based economies - overuse of services, poor health habits, and declining real incomes - improves the likelihood of a favorable response to such incentives. How to structure the stay well system depends on the country, but the stay well plan is a general flexible form of insurance that subsumes most conventional plans as special cases. The rewards for low use might take many forms. As in the Mendocino plan, the rewards might be a credit to a retirement account, but they could just as easily be annual cash rebates or credits against out of pocket expenses that exceed an individual's or family's spending goal in a future period. Administration of the stay well plan appears not to be unduly complex. If anything, incorporating stay well incentives in a single-payer or national health care system would be simpler than incorporating them in a self insured fund. The success of the plan hinges on whether incentives shift the frequency distribution of health care spending by reducing unnecessary utilization in the short run and through better health care habits, reducing long run costs. Despite additional payments to low users, the stay well plan could be less expensive than conventional plans with similar coverage. As in any insurance plan, solvency is enhanced by larger groups, better risk pooling, economies of scale in administration and claims processing, and greater bargaining power with health care providers.Insurance&Risk Mitigation,Health Economics&Finance,Insurance Law,Health Systems Development&Reform,Health Monitoring&Evaluation