| Title | Authors | Date |
| Output-Based Aid in Infrastructure: A Tool for Reducing the Impact of Corruption | Yogita Mumssen and Charles Kenny | 8/1/2007 |
| Global Partnership on Output-Based Aid Publication |
| Corruption in infrastructure leads to big losses. Estimates of the share of construction spending lost to bribe payments around the world range from 5 percent to more than 20 percent. It is important to reduce the financial cost of corruption by limiting bribe payments. But even more important is to ensure that corruption does not reduce the quantity and quality of infrastructure provision. Output-based aid (OBA) is a tool that can help achieve these goals. (Size 0.26MB) |
| Analyzing the Transmission System in the Electricity Industry: A Contract Design Approach | Daniel Benitez | 7/10/2007 |
| World Bank Publication |
| The paper analyzes the decentralization of the transmission system in different organizational structures: a single firm, or Transco solution versus and a two-firm organization formed by a transmission operator and a system operator. The model considered is based on two sequential activities that imply different informational problems: adverse selection and moral hazard. The paper shows that the decentralizing of the transmission and system operation in a Transco creates economies of scope on informational rents when inducing efficiency. On the contrary, the allocation of these activities in different firms yields to a lower result, as firms do not internalize the mentioned effect. The paper also shows that introducing supervision could do be better when the expected rents reduction overcome the internalization effect. This result, however, is affected by the technology of supervision and the possibility of collusion. (Size 0.38MB) |
| Mobilizing Private Finance with IBRD/IDA Guarantees to Bridge the Infrastructure Funding Gap | Jeff Delmon | 6/26/2007 |
| World Bank Publication |
| Where markets and institutions are not sufficiently developed to attract private participation, innovative risk mitigation instruments and applications can help to bridge the infrastructure funding gap. This paper describes the guarantees that the World Bank uses to catalyze private finance for infrastructure. It seeks to demystify these products: partial risk guarantees (PRGs) and partial credit guarantees (PCGs), and help the reader to make a better assessment of when a guarantee would be a useful addition to a project and which product would be the most appropriate. (Size 0.45MB) |
| An Empirical Assessment of Private Sector Participation in Electricity and Water Distribution in Developing and Transition Countries | Katharina Gassner, Alexander Popov and Nataliya Pushak | 6/07/2007 |
| World Bank Publication |
| The paper analyzes panel data from 302 utilities with private sector participation (PSP) and 928 state owned enterprises (SOEs) in 71 developing and transition countries in order to evaluate the impact of PSP on firm performance in the electricity distribution sector and the sector for water and sanitation services.The paper finds robust evidence in the global sample for a strong performance impact of private participation.The research also finds a link between the form of PSP and the estimated performance impact, with the strongest effects in the electricity sector realized by utilities whose assets were divested to the private investor, and by utilities managed under concession contracts in the water sector. |
| Big Challenges, Small States | David Ehrhardt and Chloe Oliver | 5/1/2007 |
| PPIAF (Public-Private Infrastructure Advisory Facility) Gridlines Note No. 24 |
| Small island economies face special challenges in providing affordable infrastructure services. Effective regulation can help, by encouraging providers to seek innovative solutions better suited for small and remote islands. But conventional regulation may be out of reach for small islands, requiring more money, competence, and independence than they have. Low-discretion rules and 'light' or regional regulatory bodies may be good alternatives. (Size 1.09MB) |
| Matching Regulatory Design to Country Circumstances | Anton Eberhard | 5/1/2007 |
| PPIAF (Public-Private Infrastructure Advisory Facility) Gridlines Note No. 23 |
| Developing countries attempting to implement the standard model of independent regulation have encountered many problems and challenges. These may arise when a regulatory system is incompatible with the country's regulatory commitment and institutional and human resource endowment. Selecting from a menu of regulatory options to create a hybrid model-one that best fits a country's own circumstances and challenges-can improve regulatory performance. (Size 1.1MB) |
| Government Expenditures on Education, Health, and Infrastructure : A Naive Look at Levels, Outcomes, and Efficiency | Lourdes Trujillo, Marianela Gonzalez, and Antonio Estache | 5/1/2007 |
| World Bank Policy Research Working Paper 4219 |
| All interested parties seem to agree that it is important to be able to monitor public sector performance at the sectoral level, but most current work based on multi-country databases does not lend itself to country-specific conclusions. This is due to a large extent to major data limitations both on sectoral expenditures and on sectoral outcomes. This paper discusses the related issues and shows what we can do with the current data in spite of the drastic limitations. The main conclusions of the paper are that any efforts to assess country-specific performances in relative terms are likely to be difficult in view of the data problems. A rough sense of performance across sectors can be estimated for groups of countries, allowing some modest benchmarking exercises. |
| Government Guarantees: Allocating and Valuing Risk in Privately Financed Infrastructure Projects | Timothy C. Irwin | 4/15/2007 |
| World Bank Publication |
| This book aims to help governments respond to such requests. As well as seeking to make precise the oft-invoked principle that risks should be allocated to those best placed to manage them, it explains how governments can value the guarantees they are thinking of granting and how they can modify aspects of public-sector management to improve the likely quality of their decisions about guarantees. |
| Measuring Welfare Gains from Better Quality Infrastructure | Michael Lokshin and Irina Klytchnikova | 4/1/2007 |
| World Bank Policy Research Working Paper 4217 |
| This paper reviews methods of evaluating the welfare implications of changes in the quality of infrastructure services within the broader theoretical perspective of welfare measurement. The study outlines the theoretical assumptions and data requirements involved, illustrating each method with examples that highlight common methodological features and differences. The paper also presents the theoretical underpinnings and potential applications of a new approach to analyzing the effects of interruptions in the supply of infrastructure services on household welfare. |
| The Pricing Dynamics of Utilities with Underdeveloped Networks | Ioannis N. Kessides and Omar O. Chisari | 4/1/2007 |
| World Bank Policy Research Working Paper 4198 |
| This paper uses an analytically tractable intertemporal framework for analyzing the dynamic pricing of a utility with an underdeveloped network (a typical case in most developing countries) facing a competitive fringe, short-run network adjustment costs, theft of service, and the threat of a retaliatory regulatory review that is increasing with the price it charges. Under a variety of plausible assumptions (in the context of developing countries) the utility will find its long-run profits enhanced if it exercises restraint in the early stages of network development by holding price below the limit defined by the unit costs of the fringe. The utility's optimal price gradually converges toward the limit price as its network expands. Moreover, when the utility is threatened with retaliatory regulatory intervention, it will generally have incentives to restrain its pricing behavior. |
| How "Natural" are Natural Monopolies in the Water Supply and Sewerage Sector ? Case Studies from Developing and Transition Economies. | Caroline Van den Berg and Celine Nauges | 2 /9/2007 |
| World Bank Policy Research Working Paper 4137 |
| Using data from the International Benchmarking NETwork database, the authors estimate measures of density and scale economies in the water industry in four countries (Brazil, Colombia, Moldova, and Vietnam) that differ substantially in economic development, piped water and sewerage coverage, and characteristics of the utilities operating in the different countries. They find evidence of economies of scale in Colombia, Moldova, and Vietnam, implying the existence of a natural monopoly. The results of this study show that the cost structure of the water and wastewater sector varies significantly between countries and within countries, and over time, which has implications for how to regulate the sector. |
| Will Markets Direct Investments Under the Kyoto Protocol ? | Gunnar Breustedt and Donald F. Larson | 2 /1/2007 |
| World Bank Policy Research Working Paper 4131 |
| Under the Kyoto Protocol, countries can meet treaty obligations by investing in projects that reduce or sequester greenhouse gases elsewhere. Prior to ratification, treaty participants agreed to launch country-based pilot projects, referred to collectively as Activities Implemented Jointly (AIJ), to test novel aspects of the project-related provisions. Relying on a 10-year history of projects, the authors investigate the determinants of AIJ investment. Their findings suggest that national political objectives and possibly deeper cultural ties influenced project selection. This characterization differs from the market-based assumptions that underlie well-known estimates of cost-savings related to the Protocol's flexibility mechanisms. |
| Measuring and reducing the impact of corruption in infrastructure | Charles Kenny | 12/1/2006 |
| World Bank Policy Research Working Paper 4099 |
This paper examines what we can say about the extent and impact of corruption in infrastructure in developing countries using existing evidence. It suggests that there is considerable evidence that most existing perceptions measures appear to be very weak proxies for the actual extent of corruption in the infrastructure sector, largely (but inaccurately) measuring petty rather than grand corruption. The paper discusses evidence for the relative costs of corruption impacts and suggests that a focus on bribe payments as the indicator of the costs of corruption in infrastructure may be misplaced. It draws some conclusions regarding priorities for infrastructure anti-corruption research and activities in projects, in particular regarding disaggregated and actionable indicators of weak governance and corruption. (Size: 0.38 MB) |
| Utilities reforms and corruption in developing countries | Antonio Estache, Ana Goicoechea | 12/1/2006 |
| World Bank Policy Research Working Paper 4081 |
This paper shows empirically that "privatization" in the energy, telecommunications, and water sectors, and the introduction of independent regulators in those sectors, have not always had the expected effects on access, affordability, or quality of services. It also shows that corruption leads to adjustments in the quantity, quality, and price of services consistent with the profit-maximizing behavior that one would expect from monopolies in the sector. The results suggest that privatization and the introduction of independent regulators have, at best, only partial effects on the consequences of corruption for access, affordability, and quality of utility services. (Size: 0.35 MB) |
| Facing the Challenges of African Growth: Opportunities, Constraints, and Strategic Directions | Benno Ndulu, Lopamudra Chakraborti, Lebohang Lijane, Vijaya Ramachandran, and Jerome Wolgin | 11/9/2006 |
| World Bank publication |
A new study shows that boosting economic growth in Sub-Saharan Africa depends on more infrastructure investments, a better investment climate, increased innovation, and greater institutional capacity. This study reviews the forty-five years of economic growth in Africa and elsewhere in the world and distills that experience into a set or policy recommendations for economic practitioners in Africa. (Size: 2.2 MB) |
| Public infrastructure and growth : new channels and policy implications | Pierre-Richard Agénor and Blanca Moreno-Dodson | 11/1/2006 |
| World Bank Policy Research Working Paper 4604 |
This paper provides an overview of the various channels through which public infrastructure may affect growth. In addition to the conventional productivity, complementarity, and crowding-out effects typically emphasized in the literature, the impact of infrastructure on investment adjustment costs, the durability of private capital, and the production of health and education services are also highlighted. Effects on health and education are well documented in a number of microeconomic studies, but macroeconomists have only recently begun to study their implications for growth. Links between health, infrastructure, and growth are illustrated in an endogenous growth model with transitional dynamics, and the optimal allocation of public expenditure is discussed. The concluding section draws implications of the analysis for the design of strategies aimed at promoting growth and reducing poverty. (Size: 0.42 MB) |
| Strengthening Bank Group Engagement on Governance and Anticorruption | World Bank Development Committee | 9/8/2006 |
| World Bank Development Committee paper DC2006-0017 |
This paper responds to the Development Committee’s request for a document articulating the World Bank Group’s strategy for heightening its focus on governance and anticorruption as an integral part of its work to reduce poverty and promote growth. It also responds to the increasing demand for governance and anticorruption engagement from stakeholders worldwide. (Size: 0.5 MB) |
| Financing infrastructure in Africa | Robert Sheppard, Stephan von Klaudy, and Geeta Kumar | 9/1/2006 |
| PPIAF (Public-Private Infrastructure Advisory Facility) Gridlines Note No.13 |
| Sub-Saharan Africa receives only a small share of private investment in infrastructure. One reason for this is its difficulties in getting project finance difficulties that stem from the low creditworthiness of most African countries, the limits of local financial markets, and the risk profiles typical of infrastructure projects. Whether the region can attract more private foreign currency funding for infrastructure will depend in part on the ability to reduce foreign exchange risks. But in some countries local currency sources, especially local capital markets, also offer good potential. (Size: 1.1MB) |
| Infrastructure at the Crossroads: Lessons from 20 Years of World Bank Experience | World Bank | 9 /1/2006 |
| World Bank publication |
| This publication brings together lessons from the last two decades of World Bank engagement in infrastructure. It analyzes trends in the Bank's infrastructure lending, describes the evolution of the external environment and the Bank's own strategic priorities, and presents lessons about project design and appraisal, poverty focus, private sector participation, environmental and social sustainability, the issue of corruption, and stakeholder communications. (Size: 0.62 MB) |
| Dimensions of urban poverty in the Europe and Central Asia region | Infrastructure Department, Europe and Central Asia Region | 8/1/2006 |
| World Bank Policy Research Working Paper 3998 |
| The objective of this study is to contribute to a better understanding of the extent and nature of poverty in urban areas in transition countries in Eastern Europe and the former Soviet Union, providing particular attention to the disparities within urban areas between capital cities and secondary cities, and focusing on dimensions of poverty related to provision of network infrastructure and energy services in cities. Household surveys carried out in 1998-2003 in 20 countries provided the data. The study found substantial differences in urban areas between the capital and secondary cities, which often had poverty indicators equivalent to, or worse than, those of rural areas. The study confirmed that many households, especially in secondary cities, are "infrastructure-poor" because of unreliable and deteriorated services and that these households are hidden in studies that do not examine actual quality. Finally, the study found that income and infrastructure inequality are generally higher in urban areas, although inequality in secondary cities often was greater than that in the capitals. (Size: 1.13 MB) |
| Measuring financial performance in infrastructure: an application to Europe and Central Asia | Jane O. Ebinger | 8/1/2006 |
| World BankPolicy Research Working Paper3992 |
| Unintentional implicit subsidies (hidden costs) to public utilities can be considered an illegitimate claim on public resources. This paper examines the role and sources of hidden costs in the energy and water sectors in the Europe and Central Asia (ECA) region. It reviews available data and introduces a model-the Hidden Costs Calculator-that can be used to quantify the burden on governments of infrastructure policy and implementation decisions. This simple-to-apply model provides insight into three key components of hidden costs that affect infrastructure-poor bill collection rates, excessive losses due to inefficient operations or theft from the networks, and tariffs set below cost-recovery rates. This model can provide a single measure for hidden costs that can be easily calculated, tracked, and reported. The underlying premise is that quantifying the order of magnitude of each component of hidden costs has potential for strengthening infrastructure policy dialogue and influencing decision makers who allocate scarce budgetary resources. (Size: 0.28 MB) |
| Infrastructure and growth in South Africa: direct and indirect productivity impacts of 19 infrastructure measures | Zeljko Bogetic and Johannes W. Fedderke | 8/1/2006 |
| World BankPolicy Research Working Paper39 89 |
| Empirical explorations of the growth and productivity impacts of infrastructure have been characterized by ambiguous (countervailing signs) results with little robustness. A number of explanations of the contradictory findings have been proposed. These range from the crowd-out of private by public sector investment, non-linearities generating the possibility of infrastructure overprovision, simultaneity between infrastructure provision and growth, and the possibility of multiple (hence indirect) channels of influence between infrastructure and productivity improvements. The authors explore these possibilities using panel data for South Africa over the 1970-2000 period, and a range of 19 infrastructure measures. Using a number of alternative measures of productivity, the prevalence of ambiguous (countervailing signs) results, with little systematic pattern is also shown to hold for their data set in estimations that include the infrastructure measures in simple growth frameworks. (Size: 0.72 MB) |
| International benchmarking of infrastructure performance in the Southern African Customs Union Countries | Zeljko Bogetic and Johannes W. Fedderke | 8/1/2006 |
| World BankPolicy Research Working Paper39 87 |
| The paper provides a first, systematic benchmarking of infrastructure performance in the Southern African Customs Union (SACU) countries (South Africa, Botswana, Lesotho, Namibia, and Swaziland) in four major sectors-electricity, water and sanitation, information and communication technology, and 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 analysis suggests important comparative gaps in all major infrastructure sectors, although performance varies widely across the SACU region. Performance shortfalls are particularly acute in rural areas where most of the poor live. The benchmarking is envisaged as a comparative input into deeper analyses of infrastructure performance, especially in the context of the ongoing scaling-up efforts (for example, South Africa, Lesotho, and Botswana). (Size: 0.87 MB) |
| The impact of energy price changes in Moldova | Iaroslav Baclajanschi, Lawrence Bouton, Hideki Mori, Dejan Ostojic, Taras Pushak and Erwin R. Tiongson1 | 7 /1/2006 |
| World BankPolicy Research Working Paper3960 |
| In January 2006 the price of natural gas supplied to Moldova increased from $80 to $110 per thousand cubic meters (mcm). Prices may increase further in the near future, putting additional pressure on the economy and leading to adverse effects on the poorest households. This study examines the potential impact of higher energy prices on the economy of Moldova by simulating the likely macroeconomic consequences of recent and future price increases. It also estimates the direct impact on individual households using data drawn from the 2004 Household Budget Survey and assesses the distributional implications of the price shock. The results suggest that energy price changes could dampen economic growth while putting additional strains on the current account deficit. The impact on the poorest households could be significant. This study identifies possible policy responses to dampen the shock of the energy price increase and to promote the longer-term objective of reducing energy vulnerability. (Size: 0.27 MB) |
| Infrastructure in Europe and Central Asia Region: Approaches to sustainable services | Infrastructure Department, Europe and Central Asia Region | 6/1/2006 |
| World Bank publication |
| This study reviews the status and performance of the physical infrastructure in the transition economies of the Europe and Central Asia (ECA) region during the last 12 to 15 years and attempts to identify the challenges to be overcome to ensure sustainable provision of reliable infrastructural services at acceptable levels of quality. It basically deals with the transition economies consisting of 15 countries which were part of the former Soviet Union and 12 Eastern European states which were formerly part of the CEMA arrangements with the Soviet Union and refers to the data and experience of Turkey to provide a comparative perspective. (Size: 1.05 MB) |
| Is cost recovery a feasible objective for water and electricity? The Latin American experience | Vivien Foster and Tito Yepes | 6/1/2006 |
| World BankPolicy Research Working Paper3943 |
| Given the relatively small segment of the population that faces genuine affordability problems in Latin America, there appears to be a promising case for using targeted subsidies to reconcile the cost recovery objective with social protection concerns. Social tariff schemes of various kinds are already widespread in Latin America, but they suffer from a number of design flaws. Increasing block tariff (IBT) structures are the most prevalent form of social tariffs in the region. These are likely to be more successful in the electricity sector than in the water sector because the correlation between consumption and income is much stronger in the case of electricity than water. Moreover, IBT structures in electricity tend to be much better designed than in the case of water, with lower fixed charges, lower subsistence blocks, and steeper gradients. A number of more sophisticated social tariff schemes are also being applied that combine consumption criteria with some form of socioeconomic screening. These are generally found to perform better than IBTs, although they also present significant room for improvement.(Size: 0.43 MB) |
| Reform, private capital needed to develop infrastructure in Africa | James Leigland and William Butterfield | 5/1/2006 |
| PPIAF (Public-Private Infrastructure Advisory Facility) Gridlines Note No.8 |
| In Sub-Saharan Africa the story of private participation in infrastructure has been largely one of telecommunications. With other sectors taken into account, the levels of private activity have been low for the past 15 years. Still, the overwhelming need for infrastructure has motivated regional economic organizations to push for an ambitious agenda of private participation. But to begin solving Africa’s infrastructure investment problems will also require broad institutional reform along with greater financial commitments by governments and donors. The private sector appears capable of supplying only a fraction of the estimated US$5–12 billion a year in additional infrastructure finance that Africa needs to meet its Millennium Development Goals for infrastructure. (Size: 1.7 MB) |
| Lifting constraints to public-private partnerships | Bhavna Bhatia and Neeraj Gupta | 5/1/2006 |
| PPIAF (Public-Private Infrastructure Advisory Facility)Gridlines Note No.6 |
| For countries in South Asia, bridging gaps in infrastructure is key to achieving goals for growth and poverty reduction. Over the years governments have underinvested in infrastructure assets and especially in maintaining them. Private investment has also been limited. Today policymakers increasingly recognize that public-private partnerships in infrastructure offer the most promise for developing infrastructure and improving services. How to ensure that such partnerships can succeed? Act on critical policy, regulatory, and institutional reforms, pay close attention to the design of transactions, and tackle key constraints to private participation. (Size: 1.8 MB) |
| Will consolidation improve sub-national governments? | William F. Fox, Tami Gurley | 5/5/2006 |
| World BankPolicy Research Working Paper3913 |
| Local government size varies dramatically around the world. In Sudan, Cote d'Ivoire, and the United Kingdom, municipalities average more than 125,000 people. Those in many European countries have less than 10,000 people. Countries often consider consolidation of local governments as a means to lower service delivery costs, improve service quality, enhance accountability, improve equity, or expand participation in government. The authors review a number of theoretical arguments and empirical findings concerning the size of sub-national governments. (Size 0.33 MB) |
| Information and Communications for Development 2006: Global Trends and Policies | Aref Adamali, David A. Cieslikowski, George Clarke, John Coffey, Pierre Guislain, Naomi Halewood, Kaoru Kimura, Michael Minges,William Prince, Christine Zhen-Wei Qiang, Zaid Safdar, and Björn Wellenius | 4/20/2006 |
| World Bank publication |
| Contains lessons from both developed and developing countries. The report examines the roles of the public and private sectors, identifying the challenges and the benefits of adopting and expanding ICT use, and assesses topics essential to building an information society, including investment, access, diffusion, and country policies and strategies. (Available for purchase) |
| The distributional incidence of residential water and electricity subsidies | Kristin Komives, Jonathan Halpern, Vivien Foster, Quentin Wodon and Roohi Abdullah | 4/1/2006 |
| World BankPolicy Research Working Paper3878 |
| Subsidies to residential utility customers are popular among policymakers, utility managers, and utility customers alike, but they are nonetheless the subject of much controversy. Both the affordability and redistributive arguments for subsidies are based on the presumption that poor households benefit disproportionately from water and electricity subsidies, that they are well-targeted to the poor. The authors test this assumption by examining the extent to which the poor benefit from consumption and connection subsidies for water and electricity services.(Size 0.35 MB) |
| The poverty impact of rural roads : evidence from Bangladesh | Zaid Bakht, Shahidur R. Khandker and Gayatri B. Koolwal | 4/1/2006 |
| World BankPolicy Research Working Paper3875 |
| This paper examines the impacts of rural road projects using household-level panel data from Bangladesh. Rural road investments are found to reduce poverty significantly through higher agricultural production, higher wages, lower input and transportation costs, and higher output prices. Rural roads also lead to higher girls ' and boys ' schooling. Road investments are pro-poor, meaning the gains are proportionately higher for the poor than for the non-poor.(Size 0.45 MB) |
| Diversification, innovation, and imitation inside the Global Technological Frontier | Bailey Klinger and Daniel Lederman | 4/1/2006 |
| World BankPolicy Research Working Paper3872 |
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