1 Research Highlights, with a Focus on Poverty Presentation on Knowledge for Change Program, Copenhagen, November, 2012 Martin Ravallion Development Research.

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Research Highlights, with a Focus on Poverty

Presentation on Knowledge for Change Program, Copenhagen, November, 2012

Martin RavallionDevelopment Research Group

World Bank

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What does DEC research aim to do?

• Original research on important development issues; both issues faced now and those likely to emerge in the future

• Inform and influence policy debates, both globally and within specific countries

• Connect key stakeholders:– data producers connected with data users; data geared to addressing

the most important development issues– development practitioners connected with latest development

thinking

• Develop robust operational tools to facilitate analysis by practitioners including in developing countries; data and software.

Research products and disseminationResearch papers (with open access for many years)Books, including Policy Research ReportsData and software: DEC has been a pioneer on open data!

Research newsletters/briefing notes/OPEDS/blogs/conferences• Researchers gave 600+ seminars/conference-presentations drawing on

KCP-supported research in last one year • ABCDE

– 2010, Stockholm, “Post-Crisis World”– 2011, Paris, “Opportunities”– 2012, Washington DC, “Accountability and Transparency”– 2013, Washington DC, “Risk”

• Feeding into: World Development Reports, Regional Studies, AAA,…..

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DEC is a leader in research on development

Research department alone:• 10-20 books and edited

volumes per year• 100-150 journal articles per

year• 150-200 working papers per

year, free on the web• Top ranking in development

economics, ahead of all universities except Chicago

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REPEC/IDEAS: Top 10 institutions in the field of development economics

Rank Institution 1 World Bank Group

2 Department of Economics, University of Chicago

3 Economics Research, World Bank Group

4 Economics Department, MIT 5 Department of Economics, Harvard University

6 Economics Department, Brown University

7 Economics Department, Yale University

8 Kennedy School of Government, Harvard University

9 London School of Economics (LSE)

10 Department of Economics, Oxford University

However, DEC is not an academic research group. It responds to emerging new policy challenges and knowledge gaps (whether or not they are academically fashionable).

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This talk:

How we do researchWhat we research,

with a focus on poverty

How we do research

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• Balancing “retail” and “wholesale” models• Strong partnerships to assure connectivity

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Two complementary models for research

The retailing model1. Identify a research question2. Do the research (data, analysis)3. Produce a research product4. Disseminate findings

The wholesaling modelProduce the things that others need to do research• Data (household surveys, facility surveys, sub-national

geographic data, country data). • Methodologies and “cookbooks” on “how to do x.”• Software products to reliably reduce the costs incurred in

using the best available analytic methods and data.

Why wholesaling?1. The changing global research community

• Expanding community of development researchers outside WB– While the Bank remains a leading institution in development research,

it is only one institution in the global context.

• Research technology advances rapidly, but still high entry costs for users– Long lags between the introduction of new theories/methods and

their application to real-world problems.

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2. More demanding clients and public

• More demanding of openness and transparency from institutions such as the World Bank – Dramatic changes in our information technology have made that

openness more feasible than ever before. – Civil society groups have often been suspicious that advocacy was

being dressed up as analytics, given high entry costs.

• More demanding of analysis and knowledge tailored to specific country needs and cross-cutting (versus “silos”)– Expansion in countries’ own analytical capabilities means more

questions are asked about the content of our work.– More demand from clients for active participation in shaping and

carrying out an analytical agenda.

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We are responding by strengthening our “wholesaling model”

• DEC has long emphasized open data– LSMS pioneered open access to household level data in 1980s.– Open Data initiative by DEC is a huge step forward.

• But Open Data is not sufficient . Also need analytic tools for using data in policy analysis, with open access to those tools

• Useful tools can best be developed by researchers in the practice of solving real-world problems

• Three objectives:– Empowerment of researchers, esp., in developing countries– Expand and deepen our research collaborations– Openness, so stakeholders participate in the process and

can question findings (replicate; test robustness)10

Examples of open knowledge tools: PovcalNet

• Until a few years ago, users of our “$1 a day” poverty counts could not replicate the calculations, or try different assumptions, such as about purchasing power parity rates or poverty lines

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PovcalNet was devised to address this problem with KCP support: • An interactive on-line

analytical tool for poverty and inequality analysis.

• Now a major source for secondary tabulations of poverty and inequality data, including the World Development Indicators.

PovcalNet; who are our users?

• Huge impact! 5.4 million analytic uses in the last 9 months alone.

• 85% of users are non-World Bank. • Top 25 non-WB users =>

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NETHERLANDS, UTRECHT, AMERSFOORTBROOKINGS INSTITUTION WASHINGTON DCASIAN DEVELOPMENT BANK, MANILAMALAYSIA, KAULA LUMPURGERMANY, NIEDERSACHSEN, FASSBERGSYRIAN ARAB REPUBLIC, DIMASHQ,DAMASCUSCENTER FOR GLOBAL DEVELOPMENT, WASH. DCGERMANY, NIEDERSACHSEN, FASSBERGGERMANY, NIEDERSACHSEN, FASSBERGILO, SWITZERLAND, GENEVE, GENEVEMALAYSIA, KAULA LUMPURASIAN DEVELOPMENT BANK, MANILADARTMOUTH COLLEGEEGYPT, AL QAHIRAH, CAIROTHE BOSTON CONSULTING GROUPUSAIDUNIVERSITY OF CTUNITED KINGDOM, ENGLAND, LONDONOECD, PARISINTERNATIONAL MONETARY FUND AUSAIDETHIOPIA, ADIS ABEBA, ADDIS ABABA BANK INDONESIADENMARK, HOVEDSTADEN, GLOSTRUPUNITED STATES, MARYLAND, OLNEY

• ADePT extracts indicators from micro-level surveys and presents them in a print-ready form

• The analytical reports that used to take months to produce can now be automatically generated within minutes

• ADePT is a free, stand-alone program, available for download to anyone in the world

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ADePT is an innovative software program to simplify and speed-up production of standardized tables and graphs in many areas of economic analysis, focusing on the Bank’s analytic work at country and regional levels.

Making analytics easier

• 12 modules, mostly from demand, in various fields: Poverty, Inequality, Labor, Health, Education, Social Protection.

• Huge usage within and outside World Bank, incl. other international development agencies. – Very successful Food Security module just released jointly with FAO– ADePT Labor with ILO. Currently in talks with WFP and WHO on

developing modules for them.

• More than 15,000 users around the World. Three books published and two more books are close to be published.

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Impact of ADePT

Other new tools, all with KCP support

• PovMap2: software poverty mapping and other survey-to-survey applications using latest methods.

• ODAT: new software tool to allow access to confidential data without violating confidentiality. China test!

• CAPI: Computer Assisted Personal Interviews. Reduce processing time; enhance accuracy; help in survey design.

• MAMS: CGE models for country strategy analysis linking fiscal policy, trade, aid, private sector production, and MDGs.

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Strong partnerships are crucial to how we do research and its impact

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Partnerships with:• WB Operations and networks• Outside research networks

• Public at large

Our internal partnerships

• Direct support to operations: All DEC’s researchers are obliged to sell one third of their time to operations; 20+ person years per year!– This is a market test of our usefulness to Bank Operations– It can also be a great source of ideas for research down the road.

• Network Board representations (16 Boards)• Contributions to sector strategies (agriculture, education,

social protection, HNP, finance, trade, environment)

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Our external partnerships

• Our researchers work with consultants from some 90 different countries

• Also supporting role in key networks: Global Development Network (GDN); African Economic Research Consortium (AERC), New Economic School (NES) in Moscow, Economic Research Forum (ERF) in Cairo, and others

• Bank research is supported in turn by development partners. Knowledge for Change Program financed by 14 Part I countries

• Wholesaling research allows us to builds stronger working links with users + feedback loop– Opens new channels for partners to influence and participate in priority

areas for research, and shape their own research programs. – And facilitates cross-country learning.

Broader dissemination and interactions• Dissemination: Revamped retail products to better target our

findings to policymakers and the development community– Non-technical abstracts of all research papers.– Monthly report on research findings to senior management.– Monthly public newsletter on research findings to 37,000 subscribers

(94% from outside WB) and 30,000 monthly views of web version.

• Let’s Talk Development blog – forum for dissemination and exchange of views, aiming for open debate (http://blogs.worldbank.org/developmenttalk/blog )

• Development Impact blog; new forum for open interaction on evaluation issues (http://blogs.worldbank.org/impactevaluations/)

• Revamped Department and Team web pages – better access to more material

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What we researchTransformations Opportunities RisksResults

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Transformations

• The links between structural change and broader development goals (poverty reduction; job creation)

• Roles of states, markets and private sector in transformation• Industrial policies and comparative advantage• Governance issues for industrial upgrading• Role of agriculture versus other sectors; sectoral priorities;

trade-offs. Green revolution in Africa?• “Clean energy” technologies: costs, effects on the economy

and on access to energy, environmental implications• “Green Growth:” is there a tradeoff, and how much?

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Opportunities• Why do some countries and places attain faster poverty

reduction and more inclusive development than others?– Does poverty self-perpetuate without intervention?

• Governance challenges in assuring better education, health and social protection. Local governance– Information to strengthen provider incentives.

• Policies to enhance access to finance• More inclusive global integration/regional integration; global

markets; role of labor markets• Rural development and sound natural resource management

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Risks• Understanding the Global Financial Crisis• Addressing financial-sector vulnerabilities• Post-crisis perspectives on macroeconomic management• Recovering from crises• Food and energy price volatility: causes and impacts• More effective and cost-efficient social protection• Fragile and conflict-ridden states• Managing new and existing environmental risks• Dynamics of poverty; everyday “micro risks”• Mapping hazards

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Results

• Monitoring impacts of crises, including on poverty and human development

• Measures of longer-term country performance, including benchmarking and identifying comparators– Poverty and HD monitoring– Better data on poor people– More comprehensive wealth accounting

• Broader approach to impact evaluation– Emphasizing external validity, drawing on richer economic modeling,

more diverse types of data, multiple disciplines, and tailored to strategic knowledge gaps in the above areas.

– Pragmatic on methods; the question drives the method, not the other way around.

How do these research priorities relate to the KCP’s windows?

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TORR: Research priorities from Research Directions and the Georgetown Speech

Transformations Opportunities Risks Results

KCP

II W

indo

w 1. Poverty dynamics

and basic service delivery

x xx xx x

2. Investment climate x x x x 3. Global public goods x xx 4. Structural transformation

xx x x x

xx: Primaryx: Secondary

Results is a cross-cutting theme of KCP

Some examples from recent work on poverty

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Results Window 1

Data on Poor People Livings Standards…. Poverty mapping… Data quality

KCP WindowTORR

Plus KCP annual Report

Better data on poor people• Global poverty monitoring: 22 surveys in 1990; 900 today!• Living Standard Measurement Study (LSMS)

– 97 integrated household surveys from 35 countries collected so far– 60+ of the surveys can be downloaded; 4,000 in past year

• LSMS-ISA: Panel Data collection in Africa (seven countries)– Integrated surveys with strong emphasis on agriculture

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Results Window 1

• Poverty mapping – combining survey with census data– 60 + countries, incl. China, India– Mapping other variables, e.g.,

public spending

• Improving data quality– Computer Assisted Personal Interviews– Experiments to refine survey collection and data quality

High impact research on broader debates: Setting the Bank’s proposed new poverty goals

• When do we say our performance is “good” or “bad”?

• Targets can motivate extra effort, but can’t be too easy or too hard.

• New President, Jim Kim, turned to WB researchers to set new goals for poverty reduction.

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Results Window 1

0

10

20

30

40

50

60

1980 1985 1990 1995 2000 2005 2010 2015 2020 2025

Optimistic

Pessimistic

Ambitious

Headcount index (% below $1.25 a day)

PovcalNet has been virtually the only data toll used in the analytics underpinning the Bank’s internal debate on poverty targets. (Monthly usage rose by 32% during the poverty targets debate.)

Growth and poverty revisited: does poverty self-perpetuate without intervention?

• Without successful interventions to reduce poverty now, poverty can readily self-perpetuate.– High current poverty impedes

future growth (as a distributional effect, side-by-side with neoclassical convergence in mean incomes)

– and it makes the growth that does happen less poverty reducing.

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Opportunities Window 1

-.15

-.10

-.05

.00

.05

.10

.15

-1 0 1 2 3 4 5

Log initial poverty rate ($2/day)

Ann

ual

ized

gro

wth

rate

con

trol

ling for

initi

al m

ean

Urbanization and poverty

• Urbanization has generally been poverty reducing, despite rising share of poor in urban areas and sometimes rising urban poverty

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Transformations

• Spillovers from urban to rural. India example: Pre- vs post-1990: urban economic growth now matters far more to the rural poor =>

• Africa is a notable exception. Less pro-poor urbanization process

• Moving to density: An ongoing KCP research program (Window 4) on Urbanization in Developing Countries is expanding research on urbanization and internal migration.

0

20

40

60

80

100

0 20 40 60 80 100

Urban areasRural areas

Headcount index for $2 a day (%)

Urban share of the population (%)

Windows 1 and 4

Example for India: While agriculture has lagged, urban economic growth has become more pro-poor

Note: Estimated from regressions of national proportionate rate of poverty reduction on urban and rural economic growth, with controls for changes in survey design

-.1

-.05

0.0

5.1

Cha

nge

in lo

g h

eadc

oun

t in

dex

(with

con

tro

ls)

-.2 -.1 0 .1 .2Change in log urban mean

Pre-1991

-.15

-.1

-.05

0.0

5.1

Cha

nge

in lo

g h

eadc

oun

t in

dex

(with

con

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-.05 0 .05 .1Change in log urban mean

Post-1991

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Can Africa replicate Asia’s Green Revolution?

• In some places the revolution has begun– For example, high rice yields in parts of Africa– But growing conditions and market conditions vary greatly

• Asian diets were heavily focused on a handful of crops grown under similar conditions; a few innovations transformational– For Africa, a portfolio of innovations is needed to start the process– Even so, because farm gate incentives vary, the conditions for economic

viability vary as well

• So far, gains in Africa are local rather than national transformations– Scope for sharing ingredients of success across countries– Scope for developing crop varieties that address varying local constraints

• For example, drought, low soil fertility or labor shortages

Transformations Windows 1 and 4

Better protection of poor and vulnerable people

• Policy Research Report on Conditional Cash Transfers– Generally good score card from impact evaluations– Influenced the large expansion in CCTs as crisis response in 2009/10

• Condition or not? – Evidence from a Cash Transfer Experiment in Malawi (adolescent girls):

conditions promoted schooling but also benefits from switching to unconditional transfers for older teenagers.

• Supplementary feeding programs protect infants and young children from malnutrition– Indonesia programs improved the nutritional status of young children

and helped avoid problems of severe malnutrition

• Research on mental health: close connections between psychological health and social protection policy

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Opportunities Window 1

Delivering better schooling and health care to poor people

• Human underdevelopment is bad in itself, but also impedes prospects for future growth and poverty reduction. – The states of India with better basic health and education saw more

pro-poor economic growth, esp., from the non-farm sectors. – Contrast the initial conditions at reform between China and India.

• However, as KCP research has demonstrated, there are severe challenges in service delivery. Performance is often poor.– Teacher absence in public schools is a chronic problem in many

countries, including rural India. – Poor quality of health care; poor training; weak adherence to clinical

checklists; frequent mistake sin diagnosis.

• Impetus for new research on the “science of service delivery”

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Opportunities Window 1

Local governance for more effective programs

• PRR: Localizing Development: Does Participation Work? – Often argued that fostering citizen participation is central to resolving

problems of good governance and development at the local level. – New Policy Research Report (2012) examines the foundations of this

approach and evidence of its efficacy; broad inter-disciplinary approach. – Participation can help, but (i) local capture can be severe; (ii) no

panacea for government failure; (iii) Bank (and others) weak on M&E.

• Public awareness of rights and better government in Bihar– India’s largest anti-poverty program is working least well in India’s

poorest state, Bihar. Why?– Bihar experiment in awareness raising, using film medium to teach

people their legal rights under National Employment Guarantee Act.– Randomized trial revealed success at rising awareness. Scaled up to

whole state.

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Opportunities Window 1

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Conclusions• We face continuing challenges in maintaining analytic

excellence across the wide range of development issues faced by countries.

• The KCP is hugely important in allowing us to address pressing knowledge gaps, with the flexibility to adapt quickly to newly emerging gaps.

• Our traditional research products will remain important, but we are becoming more strategic about research questions.

• And our new emphasis on tool development will help leverage up our skills to provide a more open platform for democratizing development research and building stronger collaborations with our partners.

• The KCP will play an important role in all this.