Stanford University

World Bank

China's Rural Public Finance: The Village Perspective - Annex 8

Paragraphs

In this paper we set out to accomplish three objectives. First, we wanted to track and describe the way the fiscal reforms have been implemented in China's townships. Second, we have tried to identify the effect that the fiscal reforms have had on the fiscal health of the township. This objective was pursued in three contexts: the effect on the average township; the effect on townships in different provinces; and the effect on townships in poor and rich townships. Finally, we sought to assess the impact that the fiscal reforms had on village fiscal health and farmer satisfaction.

Although farmers certainly have expressed their support for tax and fee reduction through a variety of media, our results show that the fiscal reforms are far more complicated and complex than tax reduction policies. They include a large set of policies that have sought to reassign expenditures, realign responsibilities (for control over resources that flow from county to town and town to county), reduce the importance of extrabudgetary and self raised funds, and increase investment into the public goods infrastructure in rural areas. When assessing the broad impact of these policies on township fiscal health, we find the average township has not fared well. Although county to town transfers have risen, the targeted transfers to offset the decline due to the tax and fee reduction policies do not nearly cover the losses of fiscal resources in the system as a whole. In addition, many policies are putting increasing control in the hands of the county financial office. through changes such as increasing requirement to hand up town to county transfers and expenditure reassignments (even though the fiscal resources come out of the township's budget). Hence, overall the fiscal condition of township's operating budget has clearly deteriorated between 2000 and 2004.

The bright side of the fiscal reforms has come in the area of capital budget management and flows of fiscal resources into new infrastructure investment. Between 2000 and 2004 there has been a veritable explosion of investment into the rural economy, mostly in roads, but also into irrigation, drinking water and to a lesser degree into clinics. The investments have risen largely due to the rising allocation by upper level governments. While we show that the rising investment from any source increases farmer satisfaction, there are some concerns with the new effort to improve rural infrastructure. First, in many places (and especially in Jiangsu and other richer townships) as investments from above have risen requirements for matching funds apparently have led to an increase in township debt. Second, the increasing reliance investment from above also has a drawback. While any investment from any source is shown to increase the satisfaction of farmers, ceteris paribus, when the investments come from above, they appear to reduce farmer satisfaction. Apparently, when villages are less involved with the project selection, design and implementation, the projects leave farmers less satisfied.

All Publications button
1
Publication Type
Working Papers
Publication Date
Journal Publisher
Report to the World Bank, Fiscal Reform and the Role of the Township
Authors
Scott Rozelle

The World Is Not Flat: Globalization is Disequalizing

-

Nancy Birdsall is the founding president of the Center for Global Development. Prior to launching the center, Birdsall served for three years as Senior Associate and Director of the Economic Reform Project at the Carnegie Endowment for International Peace. Her work at Carnegie focused on issues of globalization and inequality, as well as on the reform of the international financial institutions. From 1993 to 1998, Birdsall was Executive Vice-President of the Inter-American Development Bank, the largest of the regional development banks, where she oversaw a $30 billion public and private loan portfolio. Before joining the Inter-American Development Bank, Birdsall spent 14 years in research, policy, and management positions at the World Bank, most recently as Director of the Policy Research Department.

Ms. Birdsall is the author, co-author, or editor of more than a dozen books and monographs. She has also written more than 75 articles for books and scholarly journals published in English and Spanish. Shorter pieces of her writing have appeared in dozens of U.S. and Latin American newspapers and periodicals.

Philippines Conference Room

Nancy Birdsall Speaker President, Center for Global Development
Seminars

A Dynamic Model of the Demand for the Rule of Law in Post-Communist Economies

-

We investigate the demand for the rule of law in post-Communist economies after privatization under the assumption that theft is possible, that those who have "stolen" assets cannot be fully protected under a change in the legal regime towards "rule of law," and that the number of agents with control rights over assets is large. A demand for broadly beneficial legal reform may not emerge because the expectation of a legal vacuum increases the expected relative return to asset-stripping, and strippers may gain from a weak, corrupt state. The outcome can be inefficient even from the narrow perspective of the asset-strippers.

Download pdf

Encina Basement Conference Room

Karla Hoff Speaker The World Bank
Seminars

China's Rural Public Finance: The Village Perspective - Annex 7

Paragraphs

This report provides a preliminary examination of changes in village fiscal affairs between 2000 and 2004. The basis for this assessment is a survey of 101 villages in 50 townships in 25 counties in 5 provinces in China that was carried out between March and April of 2005. The provinces include Jilin, Hebei, Shanxi, Sichuan and Jiangsu. In each province, the counties, townships and villages were selected to provide a representative cross-section. Our village survey was complemented by an investigation into fiscal changes in each of the 50 townships. In this report, we focus on the revenue and expenditure implications of these changes at the village level. We provide an overall assessment for all 100 villages, but also examine village-level differences across provinces, as well as differences between villages in the richest and poorest quintiles of our sample.

All Publications button
1
Publication Type
Working Papers
Publication Date
Journal Publisher
Report to the World Bank, Village Finance: Tax-for-Fee-Reform, Village Operating Budgets and Public Goods Investment
Authors
Scott Rozelle

Afghanistan at Halftime

Authors
News Type
Commentary
Date
Paragraphs
In a recent op ed, CDDRL's J. Alexander Thier discusses Afghanistan's landmark September 2005 elections. He notes, however, that while this is an encouraging sign, Afghanistan is far from out of the woods in terms of establishing itself as a stable state.

Afghanistan held its landmark legislative elections this Sunday. Almost exactly four years after 9/11, and the invasion that followed, Afghanistan will have, for the first time in its history, a democratically elected constitutional government. That is something remarkable, and cause to celebrate - but only in the way that one cheers hopefully during a tough game at halftime.

Everything we know about democracy promotion and post-conflict reconstruction tells us that Afghanistan is far from out of the woods. Even after significant international intervention, many failed states remain unstable, or relapse into conflict and chaos. Remember Haiti? The United States invaded in 1994 and oversaw reconstruction and elections in 1995 and 2000, as international forces slowly withdrew. By 2004, U.S. and United Nations Forces were dispatched to the troubled island again. Haiti is not an outlier. World Bank studies show that countries coming out of civil war are forty percent likely to return to war within five years. It took one horrific hurricane to turn New Orleans to chaos. Imagine the effects of 25 years of war.

One of the main reasons failing countries continue to fail is economic. Economic recovery after war provides one of the best measures of the likelihood of long-term stability. International assistance can play a key role in jump-starting the economy and paying for basic government services, but it can take a generation to return to pre-war standards of living. The problem is that donor countries tend to be most generous in the first few years of the crisis - when local capacity to do something with those funds is limited. And just when the government starts to get on its feet - usually around the four-year mark - the assistance dries up.

The Afghan economy has seen remarkable growth rates over the last four years, but that is only half good. There is a truly free market now in Afghanistan - free from the rule of law. Much of the growth has come from the booming opium trade and other smuggling operations. While a strong economy is necessary to rebuild state and society, a criminal economy will necessarily destroy them both.

Politically, Afghanistan is getting its first taste of real elections - but it is far from being a stable democracy. There were more than 5,000 candidates in the legislative elections this Sunday, violence was relatively low, and turnout decent - all signs that political participation is blossoming. But nobody knows who will run the new parliament, or how it will function. It has no building and no staff. The only other parliament in Afghanistan's history, from 1965 to 1973, is widely blamed for increasing the polarization that led to civil war there. Since armed warlords still dominate many parts of the country, they will undoubtedly be strongly represented in the new legislature. As we have seen in places like Liberia and Serbia, post-conflict elections can produce quite undemocratic leaders.

What does this mean for Afghanistan? First, it means that the next four years will be as important there as the last four. Afghanistan's leaders, elected and otherwise, must put the cause of their nation before their factional, ethnic and venal interests. For our part, the United States and its allies must continue to support Afghanistan, financially and militarily, until it gets out of the danger zone. That means the same level of support for at least another four years.

Second, it means we have to shift our mentality there from short term to long term. If the United States has one overarching goal, it must be to build a legitimate Afghan state that is strong enough to survive and competent enough to deliver results. The Afghan police and legal system remain in shambles. Afghanistan's school system was rated the worst in the world last year by the United Nations Development Program. More international support needs to go to education, training a capable Afghan government, and supporting the rule of law.

Finally, it means something a little more intangible: continued political attention. If Afghanistan falls off the policy agenda in Washington, London and Berlin, the dangers that lurk there will prosper. Lagging reconstruction is already creating support for the ongoing Taliban insurgency. An unchecked opium trade keeps warlord armies well fed.

On this anniversary, we must remember the true cause of those grim attacks four years ago: Bin Laden and Al Qaeda had free reign of a failed state in chaos. We may not be able to find bin Laden, but we know where Afghanistan is located.

All News button
1

The Effect of European Union Integration on Democracy Promotion

-

Alina Mungiu Pippidi holds a PhD in Social Psychology from the University of Iasi, Romania. She is a Professor of Political Communication at the Romanian National School of Government and Administration, a consultant for the World Bank and UNDP in Romania, and the Director of Romanian Academic Society. She is a former Shorenstein Fellow of Harvard University and Fellow of the World Academy of Art and Science. She has authored many books and articles on the Romanian transition, post-Communist political culture and nationalism.

Encina Ground Floor Conference Room

Alina Mungiu-Pippidi Professor of Political Communication
Seminars

Empowering the Poor: What Does Democracy Have to Do with It?

Paragraphs

Poverty reduction on a large scale depends on empowering those who are most motivated to move out of poverty - poor people themselves. But if empowerment cannot be measured, it will not be taken seriously in development policy making and programming.

Building on the award-winning Empowerment and Poverty Reduction sourcebook, this volume outlines a conceptual framework that can be used to monitor and evaluate programs centered on empowerment approaches. It presents the perspectives of 27 distinguished researchers and practitioners in economics, political science, sociology, psychology, anthropology, and demography, all of whom are grappling in different ways with the challenge of measuring empowerment. The authors draw from their research and experiences at different levels, from households to communities to nations, in various regions of the world.

Measuring Empowerment is an invaluable resource for planners, practitioners, evaluators, and students?indeed for all who are interested in approaches to poverty reduction that address issues of inequitable power relations.

All Publications button
1
Publication Type
Books
Publication Date
Journal Publisher
World Bank in "Measuring Empowerment: Cross Disciplinary Perspectives", Deepa Narayan, ed.
Authors
Larry Diamond

Mobilizing the State as Public Risk Mitigator

-

Dr. Hilton Root, an academic and policy specialist in international political economy and development joined the Faculty of Pitzer, a member of Claremont Colleges, as Freeman Fellow from June 2003 to June 2005. Before joining, he served the current administration as US Executive Director Designate of the Asian Development Bank, and as senior advisor on development finance to the Department of the Treasury. Dr. Root was Director and Senior Fellow of Global Studies at the Milken Institute and was a Senior Research Fellow and Director of the Initiative on Economic Growth and Democracy at the Hoover Institution. His areas of expertise are international economics, economic development and policy reform, and Asian affairs.

As a policy expert, Dr. Root advises the Asian Development Bank, the IMF, the World Bank, the UNDP, the OECD, the US State Department, the US Treasury Department and USAID. He has completed projects in 23 countries. The analytical framework he contributed to the World Bank's Asian Miracle study, 1993, was part of the effort to put institutions on the development agenda. While at the ADB as chief advisor on governance, he was the principal author of the ADB's Board-approved governance policy. He presided over a committee on governance indicators at the OECD and initiated the restructuring of the Sri Lanka civil service as an advisor to President Chandrika Bandaranaike Kumaratunga. He was one of the principal contributors to the design of the Millenium Challenge Account of the Bush administration.

As an academic, he has taught at the University of Michigan, California Institute of Technology, the University of Pennsylvania and Stanford University. Dr. Root has written and lectured extensively, publishing six books and more than 100 articles. He is a frequent contributor to the Wall Street Journal Asia, the International Herald Tribune, Los Angeles Times and the Washington Post. He has published and presented in both the English and the French languages and has been translated into many languages including Chinese, Korean and Japanese.

He has been awarded honors for The Key to the East Asian Miracle: Making Shared Growth Credible (with J. Edgardo Campos), which won the 1997 Charles H. Levine Award for best book of the year by the International Political Science Association. The Social Sciences History Association awarded him the 1995 best book prize of its Economic History Section for The Fountain of Privilege: Political Foundations of Markets in Old Regime France and England. From the American Historical Association he received the Chester Higby Prize, 1986, for the best article among those published during the previous two years. He is on the board of a number of organizations and journals including the Open Society Institute, Center for Public Integrity and Review of Pacific Basin Markets and Policies. Dr. Root received his doctorate from the University of Michigan in 1983.

Encina Basement Conference Room

Hilton Root Professor or Economics Claremont Colleges, Claremont, CA
Seminars

Baker Institute World Gas Trade Model, The

Paragraphs

This working paper describes a spatial and intertemporal equilibrium model of the world market for natural gas. Specifically, the model calculates a pattern of production, transportation routes and prices to equate demands and supplies while maximizing the present value of producer rents within a competitive framework. Data incorporated into the specifications of supplies and demands in each location are taken from a variety of sources including the United States Geological Survey, the Energy Information Administration, the International Energy Agency, the World Bank and various industry sources. A subsequent working paper uses the model to investigate the possible effects of a number of scenarios including possible political developments.

This paper is part of the joint PESD - James A. Baker III Institute for Public Policy study on the Geopolitics of Natural Gas.

All Publications button
1
Publication Type
Working Papers
Publication Date
Authors
Subscribe to World Bank