This volume assembles methodologies and techniques to evaluate the poverty impact of macroeconomic policies. It deals with evaluating the impact of macro-economic policies or shocks on poverty and income distribution using cutting-edge approaches.
Policy-makers are increasingly becoming aware that, despite a positive effect on the average income of their citizens, many macro policies can sometimes produce deterioration in the welfare of specific groups. Similarly, poverty reduction policies designed to target specific individuals and/or households, may end-up producing macro (mostly fiscal) consequences.
Thus, the selection and implementation of economic policies requires a careful assessment of both their effect on aggregate economy and their effect on income distribution and poverty. Modern micro-simulation techniques that use micro data sets to 'simulate' the policy impact on all individuals in a sample that is statistically representative of an entire population are the most promising tool that can provide such careful assessment. This volume presents a comprehensive array of these techniques, from the simpler macro models that use representative household groups to link macro economic policies and microeconomic data, to more complex top-down modeling frameworks that combine (top) macro models and (down) micro-simulation models .The book also explores fully integrated models where the macro and micro parts feed back each other.
By providing a clear access to these techniques, documenting their analytical underpinnings, their data requirements, their range of applicability and even by highlighting some of their limitations, this book provides a unique compendium for practitioners, policy makers and anyone interested in economic development.
Introduction: Evaluating the Impact of Macroeconomic Policies on Poverty and Income Distribution; F.Bourguignon, M.Bussolo & L.A.P.da Silva
PART I: TOP-DOWN APPROACH AND MICRO ACCOUNTING
Winners and Losers from Trade Reform in Morocco; M.Ravalllion & M.Lokshin
Trade Options for Latin America: A Poverty Assessment Using a Top-Down Macro-Micro Modeling Framework; M.Bussolo, J.Lay, D.Medvedev & D.van der Mensbrugghe
PART II: TOP-DOWN APPROACH WITH BEHAVIOURAL MICRO SIMULATIONS
Examining the Social Impact of the Indonesian Financial Crisis Using a Macro-Micro Model; A.-S.Robilliard, F.Bourguignon & S.Robinson
Can the Distributional Impacts of Macroeconomic Shocks Be Predicted? A Comparison of Top-Down Macro-Micro Models with Historical Data for Brazil; F.H.G.Ferreira, P.G.Leite, L.A.P.da Silva & P.Picchetti
PART III: MACRO-MICRO INTEGRATED TECHNIQUES
Distributional Effects of Trade Reform: An Integrated Macro-Micro Model Applied to the Philippines; F.Bourguignon & L.Savard
Simulating Targeted Policies with Macro Impacts: Poverty Alleviation Policies in Madagascar; D.Cogneau & A.-S.Robilliard
Wealth-Constrained Occupation Choice and the Impact of Financial Reforms on the Distribution of Income and Macro Growth; X.Giné & R.M.Townsend
PART IV: NONINCOME POVERTY AND DISTRIBUTION OF OPPORTUNITIES: A MACRO-MDG APPROACH WITH DISAGGREGATED PUBLIC SPENDING
Aid, Service Delivery, and the Millennium Development Goals in an Economywide Framework; F.Bourguignon, C.Diaz-Bonilla & H.Lofgren
Conclusion: Remaining Important Issues in Macro-Micro Modeling; F.Bourguignon, M.Bussolo & L.A.P.da Silva
FRANCOIS BOURGUIGNON is Senior Vice-President and Chief Economist at the World Bank, USA. He is a specialist in the economics of development, public policy, economic growth, income distribution and inequality. As the World Bank's Senior Vice-President for Development Economics and Chief Economist since October 2003, he provides intellectual leadership and direction to the Bank's overall development strategy and economic research agenda, at global, regional and country levels. As a member of the Bank's senior management team he advises the President and Bank's management on economic issues.
LUIZ PEREIRA DA SILVA has been working for the government of Brazil since 2004, as Secretary of State for International Affairs in the Ministry of Finance, and as Chief Economist in the Ministry of Budget and Planning. Before that, he held a lead economist position in the Research Department of the World Bank, and his areas of work are macroeconomic modelling of financial crises and poverty. He holds a PhD in Economics from the University of Paris-I (Sorbonne). He has worked for the French central statistical office (INSEE) and the governments of South Africa, Brazil and Japan, and has been a Visiting Professor at the University of São Paulo, Brazil.
MAURIZIO BUSSOLO is a Senior Economist in the Global Trends team of the Development Prospects Group of the World Bank, USA.
Description
This volume assembles methodologies and techniques to evaluate the poverty impact of macroeconomic policies. It deals with evaluating the impact of macro-economic policies or shocks on poverty and income distribution using cutting-edge approaches.
Policy-makers are increasingly becoming aware that, despite a positive effect on the average income of their citizens, many macro policies can sometimes produce deterioration in the welfare of specific groups. Similarly, poverty reduction policies designed to target specific individuals and/or households, may end-up producing macro (mostly fiscal) consequences.
Thus, the selection and implementation of economic policies requires a careful assessment of both their effect on aggregate economy and their effect on income distribution and poverty. Modern micro-simulation techniques that use micro data sets to 'simulate' the policy impact on all individuals in a sample that is statistically representative of an entire population are the most promising tool that can provide such careful assessment. This volume presents a comprehensive array of these techniques, from the simpler macro models that use representative household groups to link macro economic policies and microeconomic data, to more complex top-down modeling frameworks that combine (top) macro models and (down) micro-simulation models .The book also explores fully integrated models where the macro and micro parts feed back each other.
By providing a clear access to these techniques, documenting their analytical underpinnings, their data requirements, their range of applicability and even by highlighting some of their limitations, this book provides a unique compendium for practitioners, policy makers and anyone interested in economic development.
Contents
Introduction: Evaluating the Impact of Macroeconomic Policies on Poverty and Income Distribution; F.Bourguignon, M.Bussolo & L.A.P.da Silva
PART I: TOP-DOWN APPROACH AND MICRO ACCOUNTING
Winners and Losers from Trade Reform in Morocco; M.Ravalllion & M.Lokshin
Trade Options for Latin America: A Poverty Assessment Using a Top-Down Macro-Micro Modeling Framework; M.Bussolo, J.Lay, D.Medvedev & D.van der Mensbrugghe
PART II: TOP-DOWN APPROACH WITH BEHAVIOURAL MICRO SIMULATIONS
Examining the Social Impact of the Indonesian Financial Crisis Using a Macro-Micro Model; A.-S.Robilliard, F.Bourguignon & S.Robinson
Can the Distributional Impacts of Macroeconomic Shocks Be Predicted? A Comparison of Top-Down Macro-Micro Models with Historical Data for Brazil; F.H.G.Ferreira, P.G.Leite, L.A.P.da Silva & P.Picchetti
PART III: MACRO-MICRO INTEGRATED TECHNIQUES
Distributional Effects of Trade Reform: An Integrated Macro-Micro Model Applied to the Philippines; F.Bourguignon & L.Savard
Simulating Targeted Policies with Macro Impacts: Poverty Alleviation Policies in Madagascar; D.Cogneau & A.-S.Robilliard
Wealth-Constrained Occupation Choice and the Impact of Financial Reforms on the Distribution of Income and Macro Growth; X.Giné & R.M.Townsend
PART IV: NONINCOME POVERTY AND DISTRIBUTION OF OPPORTUNITIES: A MACRO-MDG APPROACH WITH DISAGGREGATED PUBLIC SPENDING
Aid, Service Delivery, and the Millennium Development Goals in an Economywide Framework; F.Bourguignon, C.Diaz-Bonilla & H.Lofgren
Conclusion: Remaining Important Issues in Macro-Micro Modeling; F.Bourguignon, M.Bussolo & L.A.P.da Silva
Authors
FRANCOIS BOURGUIGNON is Senior Vice-President and Chief Economist at the World Bank, USA. He is a specialist in the economics of development, public policy, economic growth, income distribution and inequality. As the World Bank's Senior Vice-President for Development Economics and Chief Economist since October 2003, he provides intellectual leadership and direction to the Bank's overall development strategy and economic research agenda, at global, regional and country levels. As a member of the Bank's senior management team he advises the President and Bank's management on economic issues.
LUIZ PEREIRA DA SILVA has been working for the government of Brazil since 2004, as Secretary of State for International Affairs in the Ministry of Finance, and as Chief Economist in the Ministry of Budget and Planning. Before that, he held a lead economist position in the Research Department of the World Bank, and his areas of work are macroeconomic modelling of financial crises and poverty. He holds a PhD in Economics from the University of Paris-I (Sorbonne). He has worked for the French central statistical office (INSEE) and the governments of South Africa, Brazil and Japan, and has been a Visiting Professor at the University of São Paulo, Brazil.
MAURIZIO BUSSOLO is a Senior Economist in the Global Trends team of the Development Prospects Group of the World Bank, USA.
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