Waly Wane

The Quality of Foreign Aid: Country Selectivity or Donors Incentives?

The author investigates the determinants of foreign aid quality. He shows that design effects are a crucial component of quality. He thus establishes that donors have an impact on the quality of the foreign assistance they provide. The author also shows both theoretically and empirically that the quality of aid is endogenous to the relationship between the donor agency and the recipient government. Highly capable and accountable governments accept only well-designed projects, whereas governments with low accountability may accept poor quality projects either because they are unable to assess the worth of the projects or they will benefit personally.

The optimal income tax when poverty is a public 'bad'

The author considers poverty as an aggregate negative externality that affects people in different ways, depending on their aversion to poverty. If society is on average averse to poverty, then the optimal income tax schedule displays negative marginal tax rates, at least for less skilled individuals. Negative marginal tax rates play the role of a Pigouvian earnings subsidy, fostering the supply of poor individuals to provide labor. The result of no distortion at the endpoints, which is therefore violated, can be restored once the focus is shifted from individual to social distortions.

Social Transfers, Labor Supply and Poverty Reduction: The Case of Albania

In 1993, in response to persistent unemployment, and rising poverty and social unrest, the government of Albania introduced an anti-poverty program, namely Ndihma Ekonomike; in 1995 it was extended to all poor households. This paper estimates the separate effects of participation in this income support program and the old-age pension program on objective and subjective measures of household poverty. The analysis uses the nationally representative Albanian Living Standards Measurement Surveys carried out in 2002 and 2005. Using propensity score matching methods, the paper finds that Ndihma Ekonomike households, particularly urban residents, have lower per capita consumption and are more likely to be discontented with their lives, financial situation, and consumption levels than their matched comparators. In contrast, households receiving pensions are not significantly different from their matched comparators in reference to the same set of outcomes. The paper finds that the negative impact of Ndihma Ekonomike participation on welfare is driven by a negative labor supply response among work-eligible individuals. This negative labor response is larger among women and urban residents. In contrast to Ndihma Ekonomike, the receipt of old-age pension income transfers does not significantly impact the labor supply of prime-age individuals living in pension households

Populist Fiscal Policy

Political economy explanations for fiscal profligacy are dominated by models of bargaining among organized interest groups over group-specific targeted benefits financed by generalized taxation. These models predict that governments consisting of a coalition of political parties spend more than single-party regimes. This paper presents an alternative model-that of populist pressure on political parties to spend more on the general public good, financed by costly income taxation-and obtains the opposite prediction. According to this model, public spending and taxes are lower under coalition governments that can win elections more cheaply. Indeed, in order to win elections, coalition partners need to satisfy a smaller share of swing voters than does a single-party government that enjoys narrower support from its core constituency. A coalition government therefore spends less on the public good to capture the share of the swing vote necessary for re-election. Using data from more than 70 countries during the period 1970-2006, the paper provides robust supporting evidence for this alternative model.

Informal Payments and Moonlighting in Tajikistan's Health Sector

This paper studies the relationship between gender and corruption in the health sector. It uses data collected directly from health workers, during a recent public expenditure tracking survey in Tajikistans health sector. Using informal payments as an indicator of corruption, women seem at first significantly less corrupt than men as consistently suggested by the literature. However, once power conferred by position is controlled for, women appear in fact equally likely to take advantage of corruption opportunities as men. Female-headed facilities also are not less likely to experience informal charging than facilities managed by men. However, women are significantly less aggressive in the amount they extract from patients. The paper provides evidence that workers are more likely to engage in informal charging the farther they fall short of their perceived fair-wage, adding weight to the fair wage-corruption hypothesis. Finally, there is some evidence that health workers who feel that health care should be provided for a fee are more likely to informally charge patients. Contrary to informal charging, moonlighting behavior displays strong gender differences. Women are significantly less likely to work outside the facility on average and across types of health workers.

Is Poverty in Africa Overestimated Because of Poor Data

Africa’s GDP growth rates in the last decade have been averaging about 5 per cent per year, making it second only to East Asia as the fastest growing region. Seven of the 10 fastest growing economies in the last decade are in Africa. Trade with the rest of the world has increased by 200 per cent since 2000, although from a low base. In addition, Africa appears to have recovered from the recent global economic slowdown better than anyone predicted and the region is expected to resume its recent growth trajectory much earlier than envisaged. Further, projections by the World Bank and IMF indicate that on average Africa will have the world’s fastest growing economy over the next five years. All of these have led to an upbeat buzz about the future of Africa (see The Economist, 2011, 2013; Sachs, 2012; African Development Bank, 2011). Non-income indicators of the Millennium Development Goals (MDGs) such as primary school enrollment, child mortality, gender parity in schooling, and access to water and sanitation services are also improving (Demombynes and Trommlerova, 2012).

Delivering Service Indicators in Education and Health in Africa: A Proposal

The Delivering Service Indicators seek to provide a set of indices for benchmarking service delivery performance in education and health in Africa in order to track progress in and across countries over time. It seeks to enhance effective and active monitoring of service delivery systems and to become an instrument of public accountability and good governance in Africa. The main perspective adopted by the Delivering Service Indicators index is one of citizens accessing services and facing potential shortcomings in those services available to them. The index is thus presented as a Service Delivery Report Card on education and health. However, unlike traditional citizen report cards, it assembles objective information from micro level surveys of service delivery units.