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Growth is forecasted to slow down for the Middle East and North Africa region. The war in Ukraine in 2022 exacerbated inflationary pressures as the world recovered from the COVID 19 pandemic induced recession. The response by central banks to raise rates to curb inflation is slowing economic activity, while rising food prices are making it difficult for families to put meals on the table. Inflation, when it stems from food prices, hits the poor harder than the rich, thus compounding food insecurity in MENA that had been rising over decades. The immediate effects of food insecurity can be a devastating loss of life, but even temporary increases in food prices can cause long-term irreversible damages, especially to children. The rise in food prices due to the war in Ukraine may have altered the destinies of hundreds of thousands of children in the region, setting them on paths to limited prosperity. Food insecurity imposes challenges to a region where the state of child nutrition and health were inadequate before the shocks from the COVID-19 pandemic. The report discusses policy options and highlights the need for data to guide effective decision making.

Sub-Saharan Africa has fewer medical workers per capita than any region of the world, and that shortage has been highlighted consistently as a critical constraint to improving health outcomes in the region. This paper draws on newly available, systematic, comparable data from ten countries in the region to explore the dimensions of this shortage. We find wide variation in human resources performance metrics, both within and across countries. Many facilities are barely staffed, and effective staffing levels fall further when adjusted for absenteeism. However, caseloads—while also varying widely within and across countries—are also low in many settings, suggesting that even within countries, deployment rather than shortages, together with barriers to demand, may be the principal challenges. Beyond raw numbers, we observe significant proportions of health workers with very low levels of clinical knowledge on standard maternal and child health conditions. This work demonstrates that countries may need to invest broadly in health workforce deployment, improvements in capacity and performance of the health workforce, and on addressing demand constraints, rather than focusing narrowly on increases in staffing numbers.Key messagesThis study analyzed health worker surveys from ten countries in Sub-Saharan Africa for a deeper understanding of human resource challenges.Average staffing across facilities is far below the stated staffing norms for each country.Half of health centers and health posts have one or fewer clinical staff assigned to them.Staffing is even lower when adjusted for absence, which is highest in small facilities and public facilities.Massive within-country variation in caseload suggests that staffing problems may be solved in part by reallocation of clinical staff.Health workers lack basic clinical competencies, caseloads are imbalanced, and there is substantial absence of workers from health facilities.

The chapter discusses existing shortfalls and inequalities in the accumulation of human capital—knowledge, skills, and health. It analyzes their immediate and systemic causes and assess the scope for public intervention. The broad policy goals should be to improve: the quality, and not just the quantity, of education and health care; outcomes for disadvantaged groups; and lifelong outcomes. The means to achieve these goals, while maximizing value for money, include focusing on results rather than just inputs; moving from piecemeal interventions to systemic reform; and adopting a “whole-of-society” approach. Reforms must be underpinned by a robust evidence base.

Have teachers mastered the subject matter they are teaching? Can doctors accurately diagnose and treat critical health conditions? Are schools and health facilities sufficiently stocked with needed equipment and supplies? Are they sufficiently supported and staffed to optimize learning and health care outcomes? For the past decade, the World Bank’s Service Delivery Indicators (SDI) surveys have collected nationally representative data in countries across Africa to answer these questions. The surveys aim to measure the quality of services where they meet citizens: in schools and health facilities. The Quality of Health and Education Systems Across Africa: Evidence from a Decade of Service Delivery Indicators Surveys identifies areas of achievement and constraint in service delivery, shedding light on how service delivery may foster or stunt human capital accumulation. SDI surveys show that schools and health clinics across Africa are still falling short in some critical areas. The delivery of primary care services is very heterogenous between and within countries. Many health facilities lack the basic necessities to provide proper care, such as essential medicines, basic diagnostic equipment, and adequate water and sanitation. Moreover, health care providers’ ability to diagnose and treat common health conditions correctly is low and distributed unevenly. Health personnel’s absence from health facilities remains a concern across the surveyed countries. Learning is low, and, not unlike health care, levels of student learning vary significantly across countries: less than half of grade 4 students can recite a simple sentence or perform basic mathematical operations. This deficient learning is correlated with teachers’ low levels of content knowledge and sub-par pedagogy skills. Some schools are also missing crucial inputs, such as blackboards or private and gendered toilets, and struggle with high pupil-teacher ratios. Despite these challenges, success stories in both sectors illustrate the quality of service delivery that could be achieved and showcase the dedication of teachers and medical staff across Africa. By studying data from thousands of facilities, considering the local context, and drawing insights from the literature, this book offers important insights for how countries can strengthen health and education systems and build back better in the wake of the massive disruptions brought about by the COVID-19 pandemic.

To aid national and international efforts to support countries in enhancing their pandemic preparedness in the face of COVID-19, this paper draws from the World Bank's Service Delivery Indicator surveys to highlight key aspects of health service preparedness in Kenya, Sierra Leone, and Tanzania. The results of this analysis paint a highly variable picture. At least 10 percent of lower-level facilities in all three countries have inpatient care capacity, suggesting that these lower-level facilities could help absorb surges in patient flow. Less than half of the facilities in the three countries have a fixed or mobile phone and less than a third have internet access, suggesting a likely challenge in communication and timely sharing of essential information. Concerningly, less than half of the facilities have appropriate handwashing facilities for patients, with even lower rates in rural areas. Between 80 and 95 percent of the facilities have a thermometer to diagnose fever, but availability of a thermometer, stethoscope, and blood pressure cuff together is variable (ranging from almost 90 percent of the facilities in Tanzania to less than 65 percent in Sierra Leone). The paper concludes by highlighting key innovations for future surveys to improve measurement of pandemic preparedness.

Faced with COVID-19 (Coronavirus), countries are taking drastic action based on little information. Two tests can help governments shorten and soften economically costly suppression measures while still containing the novel coronavirus (COVID-19) pandemic. The first—a PCR assay—identifies people currently infected by testing for the presence of live virus in the subject. The second—an antibody test—identifies those rendered immune after being infected by searching for COVID-19-specific antibodies. The first test can help contain the disease because it facilitates the identification of infected persons, the tracing of their contacts, and isolation in the very early stages of an epidemic—or after a period of suppression, in case of a resurgent epidemic. The second can help us assess the extent of immunity in the general population or subgroups, to finetune social isolation and to manage health care resources. Wide application of the two tests could transform the battle against COVID-19 (Coronavirus), but implementing either on a large scale in developing countries presents challenges. The first test is generally available, but needs to be processed in adequately equipped laboratories with trained staff. The second test is easy to perform and can be processed quickly on the spot, but at this stage it is produced and available only on a limited basis in a few countries. This policy brief reviews the use of both tests, suggests strategies to target their use, and discusses the benefits and costs of such strategies. If PCR assay testing, together with tracing and isolation, helps reduce the duration of suppression measures by two weeks, and antibody testing allows one-fifth of the immune return to work early, the gain could be about 2 percent of national income, or about $8 billion for a country like the Philippines. Because the estimated economic benefits of the tests are likely to far outweigh the cost, the international community must help countries develop the capacity to process the first test and procure the second.

Using a new data set comprised of publicly available information, this paper provides cross-country evidence on domestic government spending for human capital in recent years. Creating a measure of social spending that covers the three sectors of health, education, and social protection has proven to be a challenging task. Only for health spending is there high data coverage over time and across countries. Education and, especially, social protection display large gaps. Increases in social sector spending have generally been slow and unsteady. Although education spending in low-income countries has seen a stable and steady increase, spending on health has been remarkably flat. Human capital outcomes are only weakly correlated with spending in the three sectors. Finally, this paper discusses future research required to provide guidance on how much and what type of investment is needed to achieve high levels of human capital.

This paper documents inequality in health and education outcomes by constructing an index of human capital disaggregated by quintiles of socioeconomic status (SES) for a sample 51 mostly low- and middle-income countries. The index measures the expected future human capital of children born today, following the methodology of the World Bank Human Capital Index that was launched in October 2018. Within-country disparities in human capital outcomes across SES quintiles are large, accounting for roughly one-third of the total variation. On average, human capital outcomes increase with income at roughly the same rate across socio-economic groups within countries as they do across countries.

Digital technologies affect employment through complex channels: automation, connectivity, and innovation. Labor-saving technologies coupled with reshoring may disrupt labor markets in developing countries and result in job losses. Yet, technological change drives productivity gains in both white-collar and blue-collar jobs either through ICT uptake or modern mechanical technologies. The ‘gig economy’ changes the traditional employer-employee relationship as it introduces new types of work. Digital platforms increase flexibility and labor market transparency, but delink workers from employers and from social benefits and protections making them more vulnerable. Policymakers in rich and poor countries alike should rethink social protection mechanisms. Technology diffusion has created divided worlds varying by region and income level. Job automation is likely to have a greater impact on less skilled workers than those with a university education (40 percent versus 5 percent in OECD countries). Moving towards a digital economy will reward those with access to broadband connectivity, strong institutions, and digital literacy. Future workers must acquire basic IT skills together with socio emotional skills that adapt to a lifelong learning environment in a changing jobs landscape. Technology can also increase labor market access for women and persons with disabilities, given the right ‘analog’ complements are in place. Technological change will affect the number, quality, and distribution of jobs across the world. In developing countries, the future workforce should be ready to embrace technology, digital literacy, and connectedness—bringing everyone closer to the technological frontier.

This note summarizes some of the key contributions in the macro- and micro- economic literature on the pathways linking human capital and income growth. Rather than completeness, the objective of this work is to distill some of the most relevant threads in the evolution of these literatures using a human capital lens, with a view to provide a useful yet parsimonious conceptual framework and an update on empirical results. The note first describes the human capital model (section 1). It then outlines the main theoretical elements of growth theory and presents empirical results from the cross-country regressions and development accounting literature to gauge to what extent human capital affects growth at the aggregate level (sections 2, 3 and 4). The note then reviews the micro empirical literature estimating labor income returns of human capital investments (sections 5 and 6). The conclusion draws comparisons between the two empirical approaches and provides a brief critical assessment on how to interpret the empirical results. Investing in human capital is a promising strategy to attain stable and positive growth. The magnitude of the effects is country-specific and varies depending on the population of interest, the policy under consideration, and the human capital component considered.

Although it is widely accepted that financial development is associated with higher growth, the evidence on the channels through which credit affects growth on the micro-level is scant. Using data from a cross section of Bulgarian firms, the authors estimate the impact of access to credit (as proxied by indicators of whether firms have access to a credit or overdraft facility) on productivity. To overcome potential omitted variable bias of OLS estimates, they use information on firms' past growth to instrument for access to credit. The authors find credit to be positively and strongly associated with total factor productivity. These results are robust to a wide range of robustness checks.

Many Roma are among the poorest and most vulnerable Europeans, facing poverty, exclusion, and discrimination. In European Union member countries in Central and Eastern Europe (CEE) with substantial Roma populations, inequalities between Roma and non-Roma start early and are striking. Some of these inequalities reflect hard-wired family circumstances. For example, a Roma child is much more likely to grow up in a household at the very bottom of the income distribution, or have parents with little or no education. Other inequalities reflect limited opportunities such as access to basic goods and services (e.g., quality education and adequate living conditions), which are necessary not only for realizing ones potential in life, but also for living with dignity. This book focuses on identifying pathways to promote fair chances for disadvantaged Roma in CEE countries. Investing early, by promoting good nutrition, cognitive child development, and access to quality education is a policy with recognized high returns, especially for disadvantaged children.

This paper examines the relationship between household income shocks and child labor. In particular, we investigate the extent to which transitory income shocks lead to increases in child labor and whether household asset holdings mitigate the effects of these shocks. Using data from a household panel survey in Tanzania, we find that both relationships are significant. We investigate mechanisms that could account for these results, including buffer stocks and borrowing.

Using a newly assembled dataset spanning from 1820 to 1998, we study the relationship between the occurrence and magnitude of episodes of mass killing and the levels of development and democracy across countries and over time. Mass killings appear to be more likely at intermediate levels of income and less likely at very high levels of democracy. However, the estimated relationship between democracy and probability of mass killings is not linear in the full sample. In the 20th century, discrete improvements in democracy are systematically associated with episodes involving fewer victims.

The author builds on the altruistic model of the family, to explore the strategic interaction between altruistic parents, and selfish children, when children's efforts are endogenous. If there is uncertainty about the amount of income the children will realize, and if parents have imperfect information, the children have an incentive to exert little effort, and to rely on their parent's altruistically motivated transfers. Because of this, parents face a tradeoff between the insurance that bequests implicitly provide their children, and the disincentive to work prompted by their altruism. The author shows that if parents can credibly commit to a pattern of transfers, they will choose not to compensate children in bad outcomes, as much as predicted by the standard (no uncertainty, no asymmetric information) dynastic model of the family. Alternatively, parents may choose to forgo any insurance, and offer a fixed level of bequest, to elicit greater effort from their children. The optimal transfers structure that the author derives, reconciles the predictions of the altruistic family model, with much of the existing evidence on inter-generational transfers, which suggests that parents compensate only partially, or not at all, for earnings differentials among their children. Moreover, the author shows that Ricardian equivalence holds in this setup, except when non-negativity constraints are binding.

In this article, we examine the link between child labor and financial development using cross‐country data. We show that child labor and financial development display a significant negative relationship, which is particularly strong in the sample of low‐income countries and is robust for a wide range of specifications and estimators, including fixed‐effects and instrumental variables. We identify a plausible channel through which financial development affects child labor, as we find that income variability has a sizable, positive impact on child labor in countries where financial markets are underdeveloped, although this is not the case when financial markets are developed. Our results suggest that policies aimed at widening access to credit could be effective in reducing the extent of child labor.

This paper analyses whether the presence of barriers to international trade and capital flows is associated with higher corruption. The evidence suggests that the main impact of trade barriers on corruption comes through the incentive to collusive behaviors between individuals and customs officials, rather than from the decreased foreign competition pressure on the domestic sector induced by restrictive trade policy. Interestingly, no clear association emerges between corruption and variables proxying for presence and intensity of controls on capital flows. Copyright © 2004 John Wiley & Sons, Ltd.

This paper reviews the economic rationale for and against decentralization with particular attention to the organization and delivery of education. The paper frames the overview within the standard efficiency-equity trade off and highlights the increasingly important role of incentive mechanisms, accountability, and citizens' participation. The discussion then turns to the issues that are specific to decentralizing education, including the pros and cons of financing schools from local taxes, and a taxonomy and description of institutional arrangements around the world. A brief review of evaluation studies of decentralization reforms in education concludes the paper.

While some recent evidence suggests that more decentralization is associated with reduced corruption, no empirical work has examined whether different types of decentraliz- ation have differential effects on corruption. The theoretical literature has emphasized that expenditure decentralization will only be effective if accompanied by the devolution of rev- enue generation to local governments. In this paper we examine this hypothesis empirically, by studying the mismatch between revenue generation and expenditure in U.S. states. Larger federal transfers are associated with higher rates of conviction for abuse of public office, supporting the theory that soft-budget constraints created by federal transfers are potentially problematic.

Numerous behavioral studies have found women to be more trust-worthy and public-spirited than men. These results suggest that women should be particularly effective in promoting honest government. Consistent with this hypothesis, we find that the greater the representation of women in parliament, the lower the level of corruption. We find this association in a large cross-section of countries; the result is robust to a wide range of specifications.

Economic growth has been sustained for many years pre-crisis in the region, but this has not resulted in the creation of an adequate number of jobs and has succeeded, at best, in generating low-quality, informal jobs. The report addresses one margin of exclusion: informal employment and the vulnerabilities and lack of opportunities associated with it. The report analyzes the constraints that prevent informal workers from becoming formal and discusses policy options to effectively address these constraints. This report looks at informality through a human development angle and focuses particularly on informal employment. Informality is a complex phenomenon, comprising unpaid workers and workers without social security or health insurance coverage, small or micro-firms that operate outside the regulatory framework and large registered firms that may partially evade corporate taxes and social security contributions. The first section provides a detailed profile of informal workers in the region. The second section describes the characteristics of informality in micro-firms that operate outside the regulatory framework and in larger firms that do not fully comply with social security contribution requirements and tax obligations. The third section presents informality and the firm. The fourth section focuses on informality: choice or exclusion? The fifth section discusses policy options for effectively expanding coverage of health insurance and pension systems and promoting the creation of better quality jobs.