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The ambitious goals of environmental sustainability stated in international agreements and national programs require developing strategies to achieve them. At the same time, there is a lack of empirical evidence on the environmental performance factors, which can be purposefully changed to achieve an effective result in the short and medium-term. The paper aims to find the institutional factors of national environmental performance, including financial ones, which might be effectively used as environmental sustainability management tools. For this, the relationships between the Environmental Performance Index (EPI), as the dependent variable, and the indicators of control of corruption, the effectiveness of an anti-monopoly policy, financial opportunities, undue influence, corporate culture, innovation output, GDP, and income growth among the poorest population, using a sample of 81 countries, and the technique for constructing nonlinear regression models based on the normalizing transformations for non-Gaussian data were studied.The study findings show that environmental performance can be predicted with sufficient accuracy by a linear model of its dependence on corruption control, minority shareholders protection, judicial independence, favoritism in decisions of government officials, tax incentives, ease of access to loans, and innovation output. Adding GDP per capita to the explanatory variables of the EPI model does not significantly affect the result accuracy but changes the model shape from linear to nonlinear. The paper substantiates ways to apply results for institutional reforms and sustainability management, such as inflation targeting, public credit guarantee schemes, performance-based loans, etc.

Growth in the six South East European countries (SEE6) rebounded to 2.1 percent in 2015, as investment revived. The SEE6 region is not only growing but also rebalancing to more durable sources of growth. While higher growth in 2015 brought new jobs in the private sector, and helped poverty reduction to resume, unemployment is still entrenched. In 2015, fiscal deficits continued to narrow in all SEE6 countries except Montenegro. With inflation at historic lows, accommodative monetary policy supported growth, and credit to the economy slowly began to grow. The near-term baseline outlook for the region is positive. Fiscal and current account deficits must decline further to support growth. Sustaining the nascent rebalancing requires unlocking the growth potential of the SEE6 economics by reversing productivity dynamics that have been deteriorating since 2008. The agenda for reducing the structural rigidities that impede growth is broad based and centered on five pillars: eliminate disincentives and barriers to formal; employment; improve the business climate and governance; reduce the size of government while improving quality of service delivery; deepen trade and financial integration; and ensure that natural resource use is sustainable.

El objetivo de este trabajo consiste en investigar los efectos de las restricciones de liquidez sobre la inversión en capital humano en un país en desarrollo. La metodología y los datos empleados permiten identificar a los individuos y hogares restringidos de una manera directa, mediante definiciones alternativas de restricción financiera. Los datos provienen de la Encuesta Nacional de Hogares y Medición de Nivel de Vida (ENMV) de Nicaragua para los años 1998 y 2005. Las estimaciones respaldan la hipótesis de que las restricciones de acceso al préstamo reducen la asistencia escolar en todos los niveles educativos., The aim of this paper is to evaluate the effects of liquidity constraints on investment in human capital in a developing country. The methodology and the data used allow the identification of individuals and households restricted directly using alternative definitions of financial constraints. The data come from the Encuesta Nacional de Hogares y Medición de Nivel de Vida (ENMV) of Nicaragua for the years 1998 and 2005. The estimates support the hypothesis that restrictions on the access to loans reduce attendance at all educational levels., Instituto de Investigaciones Económicas

Using a new and representative data set of Chinese household finance, this paper documents household access to and costs of finance, along with their correlates. As in most developing countries, informal finance is a crucial element of household finance, and wealth tends to be associated with better access to formal and informal finance. Better financial knowledge shifts loan portfolios toward formal sources relative to informal ones. Connections to the Communist Party are associated with significantly better access to finance in rural areas but not in urban areas. A larger social network is positively associated with access to informal finance. Controlling for household characteristics, rural residents pay interest rates on loans similar to urban residents. Younger residents pay higher rates, while households on firmer economic footing face lower rates. Taking financial classes and college education is associated with higher interest rates for urban residents, suggesting perhaps that financial knowledge coincides with greater demand for credit in areas with more economic opportunity. Overall, the findings suggest that Chinese residents face dual credit markets, with the poor, young, those with poor financial knowledge, and those with larger family sizes relying much more on informal finance, while others are better able to access formal finance.

Growing research and policy interest focuses on the misallocation of output and factors of production in developing economies. This paper considers the possible misallocation of financial loans. Using plant-level data on the organized and unorganized sectors, the paper describes the temporal, geographic, and industry distributions of financial loans. The focus of the analysis is the hypothesis that land misallocation might be an important determinant of financial misallocation (for example, because of the role of land as collateral against loans). Using district-industry variations, the analysis finds evidence to support this hypothesis, although it does not find a total reduction in the intensity of financial loans or those being given to new entrants. The analysis also considers differences by gender of business owners and workers in firms. Although potential early gaps for businesses with substantial female employment have disappeared in the organized sector, a sizeable and persistent gap remains in the unorganized sector.

A strong theoretical argument for focusing on access to finance is that financial market imperfections can result in large inefficiencies, as firms with productive investment opportunities underinvest. Lack of access to finance is a frequent complaint of microenterprises, which account for a large share of employment in developing countries. However, assessing the extent to which a lack of capital affects their business profits is complicated by the fact that business investment is likely to be correlated with a host of unmeasured characteristics of the owner and firm, such as entrepreneurial ability and demand shocks. In a randomized experiment that gave cash and in-kind grants to small retail firms, providing an exogenous shock to capital, the shock generated large increases in profits, with the effects concentrated among firms that were more financially constrained. The estimated return to capital was at least 20--33 percent a month--three to five times higher than market interest rates. Copyright The Author 2008. Published by Oxford University Press on behalf of the International Bank for Reconstruction and Development / the world bank . All rights reserved. For permissions, please e-mail: journals.permissions@oxfordjournals.org, Oxford University Press.

This seventh economic update goes to the heart of one of the main challenges faced by Tanzania: how can the country finance its development? This is a fundamental question when aid is coming down as a proportion of a growing GDP, and as access to financial markets remains limited. Oneoption would be to rely more on the private sector to deliver education, health, roads, ports and electricity. This is possible as demonstrated by many such experiences around the world, and therefore this approach needs to be one important part of the solution to finance development. The argument presented in this economic update is that higher tax revenues will come only if a comprehensive approach is adopted. The tax system has to be affordable, fair, simple, and transparent. The government also has to be accountable for the money it is receiving. It is onlywhen these basic conditions are met that tax compliance will increase. Because a strong social contract between the State and its citizens is not yet sufficiently in place in Tanzania, a number of suggestions are proposed in the update, with the objective of stimulating debate on possibleapproaches to increase tax revenue.

This report synthesizes the technical assistance (TA) “Cambodia Sanitation Marketing” carried out by the World Bank’s Water and Sanitation Program (WSP) from July 2011 to February 2015 in support of developing the rural sanitation market in Cambodia. It documents the results and lessons learned and makes recommendations to government on how - with support of development partners – the effectiveness and scale of the sanitation market can be increased to achieve sustainable sanitation outcomes for rural Cambodians. This TA is part of a larger support program to assist the Government of Cambodia, notably the Ministry of Rural Development, to increase access and use of improved sanitation in rural areas of Cambodia. Technical Assistance P132212 is a complementary effort that focusses on strengthening the policy and enabling environment for rural sanitation service delivery at national and sub-national level. The following lessons were learned from the TA: (1) the local private sector has catered more than 50,000 latrines to rural households, (2) the provinces where the TA was taking place experienced an average 10 percentage point increase in overall sanitation access, more than three times the national average increase within the same time period, (3) the increase in sanitation access among the poor was eight percentage point indicating the challenges that the private sector has in reaching the poorer segment of the population, (4) the private sector’s revenue was estimated to amount to nearly USD 2.6 million from the sales of the underground latrine core, and (5) more than USD 600,000 was disbursed by two microfinance institutions (MFIs) to nearly 10,000 cash constrained households, enabling them to gain access to improved sanitation.

This paper studies the use of psychometric tests, which were designed by the Entrepreneurial Finance Lab as a tool to screen out high credit risk and potentially increase access to credit for small business owners in Peru. The analysis uses administrative data covering the period from June 2011 to April 2014 to compare debt accrual and repayment behavior patterns across entrepreneurs who were offered a loan based on the traditional credit-scoring method versus the Entrepreneurial Finance Lab tool. The paper finds that the psychometric test can lower the risk of the loan portfolio when used as a secondary screening mechanism for already banked entrepreneurs—that is, those with a credit history. For unbanked entrepreneurs—those without a credit history—using the Entrepreneurial Finance Lab tool can increase access to credit without increasing portfolio risk.

Demand is also fueled by other factors: in many emerging economies a ‘demographic dividend’ of young people, the product of significant reductions in child and infant mortality rates—is poised to enter education and work. And, according to the 2014 Millennium Development Goals report, nearly 90 percent of children in developing regions are on track to complete primary education. The shift from agricultural to knowledge-based economies also plays a significant role in creating demand for higher learning. The purpose of the study was to identify key success factors in private sector student lending in order to support IFC in understanding, and potentially making investments, in student lending across a range of emerging markets. The study examined 70 student lending models globally as well as a range of innovative financial models. Detailed case studies were developed for eight compelling and diverse private sector student lending models. The study also highlighted a range of innovative financial models including crowd funding, big box banking, social impact bonds, and other mechanisms. The purpose of this investigation of innovative financial models was to see what leading-edge methods might be at work in other sectors and to see if they might offer inspiration to student lending.

Very small enterprises (VSEs) in Latin America and the Caribbean (LAC) represent a broad and heterogeneous segment, often underserved by formal financial institutions. They are generally informal and often family businesses. The financial needs of these enterprises are typically overlooked by “downscaling” banks, which find larger and often more formal small and medium enterprises (SMEs) to be a more natural market for their products and services. Microfinance Institutions (MFIs) are starting to move upmarket to serve SMEs, and in particular, VSEs within this segment. However, they use varying definitions, methodologies and products to do so and to date there has been little research or documentation of their experiences. This report highlights the results of a recent study of the existing practices in Latin America of MFIs serving VSEs, where VSEs are considered to be those businesses with financing needs of between US$7,000 and US$30,000. It is a starting point for an institution considering entering the segment, or for one that finds itself having grown into the segment “organically” but with a view to strengthen its position. It includes several checklists for MFIs interested in expanding upmarket into the VSE space, as well as more detailed discussions and examples of the most relevant points.

PhD (Economics), North-West University, Vaal Triangle Campus, 2014 The study investigated on the channels of poverty reduction in Malawi, using household data aggregated at district level. Malawi is divided into 31 districts with different demographics and opportunities. Macro level data which was calculated in terms of district percentages were used in the study. The study emanated from the premise of the link between economic growth and poverty reduction. With the trend of growth that was seen in Malawi from 2004 to 2012; there was an interest to further investigate if there had been any significant change in the poverty levels as measured in the country by the National Statistical office. The objectives of the study were two pronged; the theoretical and the imperial. The theoretical objectives were; to provide a background of Malawi, to review the literature on poverty theories, to review the literature on the link between poverty reduction and the channels of potential impact, namely: economic growth, education attainment, access to loans and enterprises, agricultural production, population growth and employment or unemployment. The empirical objectives on the other hand were; to investigate if there has been any poverty reduction in the years 1998 to 2012 in Malawi, to assess how economic growth at a district level proxied by agriculture production and land holding affect poverty at district level in Malawi, to assess how education attainment affect poverty reduction at a district level in Malawi, conduct an analysis on how employment or unemployment affect poverty reduction at a district level. Also investigate the relationship between access to loan and poverty reduction in Malawi and to determine if different poverty measures exhibit statistically significant different responses to channels under investigation namely economic growth, education levels, population growth and access to loans at district level. The study employed descriptive and regression analysis to arrive at the results for the set empirical objectives. Due to the fact that panel data was used for districts, a random effects regression model was used for the estimations. A Breusch-Pagan test was used to decide on random effects as opposed to fixed effects model. The results from the regressions showed that all the channels that were hypothesised to be of importance, came out significant from objective based regressions. These regressions were run separately for each channel, with the district poverty rate as a dependent variable. The study found the considered channels of poverty reduction to be significant at different levels. First, it was established that there has been significant growth in Malawi. This growth however was seen to be erratic where in other years it was higher and in other years lower. A more important conclusion from the first objective was that there had been poverty reduction in the country between 1998 and 2012. A t test was also used for mean difference in the years where Integrated Household surveys were conducted namely, 1998, 2004 and 2012. The t-test showed a statistically significant reduction in poverty between 1998 and 2012 of up to 15.07. The study also found that the relationship between agricultural production and poverty was significant especially looking at local maize production which had a negative significant coefficient. Implying that, an increase in agricultural production has an associated reduction in the district poverty rate. It was also established from the results that input subsidy had a significant impact on poverty at district level. This input programme which helps poor households to access fertilizer at a highly subsidised price had a negative relationship with poverty that was significant. This shows that government’s effort in funding the national wide fertilizer subsidy has some bearing on the poverty level of the country. On the relationship between education and poverty reduction, the study also found a significant relationship. This was clear on the impact of literacy rate on poverty reduction. The regression results showed a significant negative relationship between literacy rate and poverty reduction. The channels of employment in poverty reduction was found to be significant but in a direction unexpected. Labour force participation had a positive influence on poverty rate at district level. A number of things were discovered; first the employment rate as reported in the statistical year book is misleading. What is considered employment in these statistics is basically subsistence farmers who take up more than 80% of the employment rate. Second, most of what is recorded as employment is non-skill labour with people without education recoding a 99% employment rate. This is a misleading record in as far as what employment for poverty reduction is concerned. It is therefore not a surprise that, most of the people reported as employed are also found below the poverty line some even below the ultra-poverty line. A special contribution resulting from the study is the framework on the interconnection between the channels. The study points out the fact that for agricultural production to thrive there is need for education. Also for agricultural production to succeed there is need for the farmers to have access to loans. the study discovered that more than 45 percept of the loans people obtained were for agricultural inputs. There is also a link between education and employment, education and access to loans and access to loans and employment through business start-ups that create employment. The conclusion of the study is that policies that are intended to reduce poverty should be aimed at promoting education participation. There is also need to create an environment that enables the poor to access loans and credits at a reasonable interest rate. The government should continue with the input subsidy programme for the poor household. There is need for the national statistical office to reconsider the definition of employment so that the government works with practical figures, other than the inflated employment rates that are reported in the statistical year book. Doctoral

Energy poverty is a global problem: access to energy services is crucial to meet basic household needs, deliver and access public services, and generate income. Less than 10 percent of Sub-Saharan (SSA) rural households have access to electricity, with an overall access rate below 25 percent. One of the main obstacles for SSA electrification practitioners is the difficulty in obtaining practical and timely knowledge on how to overcome economic, technical, institutional, and political barriers to electrification in their day-to-day work. Launched in 2008, the Africa Electrification Initiative (AEI) seeks to create and sustain a living body of practical knowledge and a network of SSA practitioners for the design, development, and implementation of rural, peri-urban, and urban on-grid and off-grid electrification programs. AEI supports the network by organizing workshops and promoting online discussions and knowledge exchanges on topics important for its members. The workshop set out to address a number of relevant electrification topics previously identified through in-depth discussions and ongoing knowledge exchanges among a growing network of SSA practitioners. The workshop's main focus was on ground-level implementation of different institutional approaches to electrification, with particular focus on the experiences of rural energy agencies/rural energy funds (REAs/REFs) across SSA. The workshop lasted two and a half days, comprising 21 sessions, including regular session panels and discussion clinics with a longer duration. It also featured exhibition space for posters submitted by participating institutions, an expo of approved lighting products from the lighting Africa program, and an awards ceremony to recognize the best papers submitted by SSA electrification practitioners in response to the AEI call for papers.

Inclusive growth (IG) analysis involves analyzing the available data in a country to determine the best course of action for accelerating growth and or improving the distribution of the opportunities and benefits from the growth process. In economies in which international migration is a significant trend, that determination may be especially challenging. The international migration phenomenon can contribute to (or detract from) growth and its distribution through myriad number of complex and sometimes divergent channels, and these effects can change substantially over time. The ability to analyze these impacts, however, is often significantly handicapped by a lack of appropriate data. Moreover, because the migration decision is inherently a private decision made by households in the best interest of their welfare, determining the policy conclusions based on the results of inclusive growth analysis is often unclear. Governments are rightfully wary of interfering with the migration process. This paper examines the issue of international migration in inclusive growth. The aim is to provide the practitioners of inclusive growth diagnostics a useful framework for assessing the nature of the international migration phenomenon, and to highlight the key tools utilized in evaluating its current and potential impact on shared growth.

Over the past five years, the microcredit sector has experienced unprecedented growth. The number of borrowers served by microfinance institutions (MFIs) has increased threefold to reach 120 million clients, according to MIX estimates as of December 2009 and by other estimates the number may be as high 190 million (Microcredit Summit Campaign 2011). In large markets, such as Mexico and South Africa, commercial banks and consumer lending companies have expanded their activities to include microfinance for low-income households. Unfortunately, the growth of microcredit is not always sustainable. Some iconic markets, such as India and Bosnia Herzegovina, are experiencing large-scale credit crises, and they are not alone. The deterioration in the quality of MFI loan portfolios can be attributed to several factors. Some fast growing MFIs have outgrown their risk management systems and controls. These weaknesses have often been exacerbated by high staff turnover, leading to a further erosion of credit discipline. Rapid growth has also been focused in narrow geographies, which in turn affected borrower repayment incentives and behaviors. This report takes a fresh look at the state of credit reporting at the base of the pyramid. The data and analysis for this paper are drawn from International Finance Corporation (IFC) and Consultative Group to Assist the Poorest (CGAP) market intelligence on credit reporting systems. the lessons learned for effective credit reporting at the base of the pyramid and identifies key success factors as well as common challenges.

Despite the recent slowdown, the underlying growth of the global economy remains solid. After a 4 percent growth in 2010, Russia's real output is expected to grow 4.4 percent in 2011, increasingly driven by domestic demand. Russia's households have absorbed the food price shock thanks to a combination of higher wages and pensions, and resort to private and public safety nets. The country emerged from the global recession with lower unemployment and poverty than feared. But global risks and uncertainties increased with the new oil shock. Although the short-term impact will be positive for Russia's export and fiscal revenues, there is no room for complacency. Macroeconomic policy should focus on the short-term objective of controlling inflation and medium-term fiscal adjustment towards long-term, sustainable level of non-oil fiscal deficit. Improving the efficiency of public expenditure to create fiscal space for productive infrastructure and strengthening the investment climate for the private sector remain among key long-term challenges. The ongoing rethinking of the government's long-term strategy and a period of high oil revenues provide an opportunity to focus on these long-term issues more forcefully than during the global crisis.

A major problem in the transition countries of Europe and Central Asia (ECA) during the transition was the breakdown of the relationships of farms with input suppliers and output markets. The simultaneous privatization and restructuring of the farms and of the up- and downstream companies in the agrifood chain has caused major disruptions. The result is that many farms and rural households face serious constraints in accessing essential inputs (feed, fertilizer, seeds, capital, etc.) and in selling their products. The problems are worsened by the lack of public institutions necessary to support market-based transactions, such as for enforcing property rights and contractual agreements. The objective of the study is to analyze Vertical Coordination (VC) in agrifood supply chains in ECA and to identify options for improved policies, institutions, and investments which Governments could make, and which the World Bank could support, in order to improve links in the agricultural marketing and processing chain and increase access of farmers to input and output markets. This is especially important in those countries where contractual arrangements are slow to develop. It is also important if farmers are to be lifted out of subsistence farming and into a modern agrifood economy.

This aim of this report is to assess the accounting and financial auditing standards and practices in Burkina Faso in the private and semipublic sectors, using as benchmarks International Financial Reporting Standards (IFRS) and International Standards on Auditing (ISA) and taking into account the good practices noted in the international sphere in these two areas. The main objective of this assessment is to make recommendations aimed at strengthening accounting, financial auditing, and financial transparency practices in the private sector and semipublic enterprises in Burkina Faso. The development objectives associated with these recommendations are as follows: (i) stimulating private investment and enhancing the competitiveness of enterprises; (ii) improving governance in the private market and semipublic sector; and (iii) achieving greater integration of the Burkinabe economy at the regional and international levels.

To analyze the prospects for expanding financial access to the poor, bank professionals assessed 1,438 households in six provinces in Indonesia to judge their creditworthiness. About 40 percent of poor households were judged creditworthy according to the criteria of Indonesia's largest microfinance bank, but fewer than 10 percent had recently borrowed from a microbank or formal lender. Possessing collateral appeared as a minor determinant of creditworthiness, in keeping with microfinance innovations. Although these households were judged able to service loans reliably, most desired small loans. Calculations show that the bank, given its current fee structure and banking practices, would lose money when lending at the scales desired. So, while innovations have helped to extend financial access, it remains difficult to lend in small amounts and cover costs.

This paper provides background for the Government of Indonesia as it considers if and how to introduce more robust local government performance incentives into the intergovernmental fiscal framework. The next section briefly examines the forces that have driven the recent national wave of interest in improving local government performance. This is followed by a review of the relatively limited set of local government performance incentives currently in force in Indonesia. The fourth section provides a conceptual overview of how to think about the possible expansion of local government incentive programs, outlining the potential role(s) of such programs in general and the key issues involved in designing and implementing them. The fifth section tentatively considers a number of options for additional local government incentives in Indonesia that the central government may wish to consider pursuing. The paper concludes with an outline of next steps for moving forward with the possible development of more purposeful and meaningful performance incentives in Indonesia's intergovernmental fiscal framework.

Real Gross Domestic product (GDP) in Thailand is projected to grow at 5.0 percent in 2008, driven by recovery in domestic demand. The key reason for the strengthened growth this year is the higher confidence of both consumers and investors with the return of democracy and the election of a new government late in 2007. Last year's better than-expected growth of 4.8 percent was due to buoyant export performance throughout the year even as domestic consumption and investment declined amidst the uncertain political environment and sudden shifts in policy. But this year, the opposite is likely. The external current account may weaken slightly in 2008, as the global downturn slows exports and robust domestic demand stimulates imports. Private investment should recover after its slump last year. Recovery in private consumption and investment could be fragile as there remain large down side risks to their growth, but could be mitigated by additional fiscal stimulus. In addition to the short-term measures have been introduced by the government to mitigate risks this year and next, longer term measures are needed to sustain Thailand's growth and poverty alleviation.