Maloney develops a view of the informal sector in developing countries primarily as an unregulated micro-entrepreneurial sector and not as a disadvantaged residual of segmented labor markets. Drawing on recent work from Latin America, he offers alternative explanations for many of the characteristics of the informal sector customarily regarded as evidence of its inferiority.This paper - a product of the Office of the Regional Chief Economist, Latin America and the Caribbean Region - is part of a larger effort in the region to understand the impact of macroeconomic crises.

Analyzing the experience of Mexico under the North American Free Trade Agreement (NAFTA), 'Lessons from NAFTA' aims to provide guidance to Latin American and Caribbean countries considering free trade agreements with the United States. The authors conclude that the treaty raised external trade and foreign investment inflows and had a modest effect on Mexico's average income per person. It is likely that the treaty also helped achieve a modest reduction in poverty and an improvement in job quality. This book will be of interest to scholars and policymakers interested in international trade and development.

Simple numerical measures of the minimum wage may offer deceptive indicators of its impact. Alternative measures, such as kernel density or cumulative distribution plots, are more reliable, and highlight influences higher in the wage distribution or on the informal sector. Panel employment data from Colombia, where minimum wages seem high and binding, show that the minimum wage can have important impacts on wages and unemployment across the wage distribution.

Productivity has again moved to center stage in two critical academic and policy debates: the slowing of global growth amid spectacular technological advances, and developing countries’ frustratingly slow progress in catching up to the technological frontier. Productivity Revisitedbrings together the new conceptual advances of 'second-wave' productivity analysis that have revolutionized the study of productivity, calling much previous analysis into question while providing a new set of tools for approaching these debates. The book extends this analysis and, using unique data sets from multiple developing countries, grounds it in the developing-country context. It calls for rebalancing away from an exclusive focus on misallocation toward a greater focus on upgrading firms and facilitating the emergence of productive new establishments. Such an approach requires a supportive environment and various types of human capital--managerial, technical, and actuarial--necessary to cultivate new transformational firms.The book is the second volume of the World Bank Productivity Project, which seeks to bring frontier thinking on the measurement and determinants of productivity to global policy makers.

Back cover blurbRising agricultural productivity has driven improvements in living standards for millennia. Today, redoubling that effort in developing countries is critical to reducing extreme poverty, ensuring food security for an increasing global population, and adapting to changes in climate. This volume presents fresh analysis on global trends and sources of productivity growth in agriculture and offers new perspectives on the drivers of that growth. It argues that gains from the reallocation of land and labor are not as promising as believed, so policy needs to focus more on the generation and dissemination of new technologies, which requires stepping up national research efforts. Yet, in many of the poorest nations, a serious research spending gap has emerged precisely at the time when the challenges faced by agriculture are intensifying. The book focuses on how this problem can be redressed in the public sector, as well as on reforms aimed at mobilizing new private sector actors and value chains, particularly creating a better enabling environment, reforming trade regulations, introducing new products, and strengthening intellectual property rights. On the demand side, the book examines what recent research reveals about policies to reduce the barriers impeding smallholder farmers from adopting new technologies.Harvesting Prosperity is the fourth volume of the World Bank Productivity Project, which seeks to bring frontier thinking on the measurement and determinants of productivity to global policy makers.“As rightly argued by the authors, growth in agricultural productivity is the essential instrument to promote development in low-income agriculture-based countries. Achieving this requires research and development, upgrading of universities, reinforcement of farmer capacities, removal of constraints to adoption, and the development of inclusive value chains with interlinked contracts. As important, such efforts also need to be placed within a context of comprehensive agricultural, rural, and structural transformations. However, in many countries implementation of the requisite policies has been lagging. This book, with contributions from many top experts in the field, provides the most up-to-date presentation of this argument and explains in detail how to successfully put its ideas into practice. Governments, the private sector, and civil society organizations need to study it carefully to turn the promise of agriculture for development into a reality.“ Alain de Janvry and Elisabeth Sadoulet Professors of the Graduate School, University of California at Berkeley

Since Schumpeter, economists have argued that vast productivity gains can be achieved by investing in innovation and technological catch-up. Yet, as this volume documents, developing country firms and governments invest little to realize this potential, which dwarfs international aid flows.Using new data and original analytics, the authors uncover the key to this innovation paradox in the lack of complementary physical and human capital factors, particularly firm managerial capabilities, that are needed to reap the returns to innovation investments. Hence, countries need to rebalance policy away from R and D-centered initiatives – which are likely to fail in the absence of sophisticated private sector partners – toward building firm capabilities, and embrace an expanded concept of the National Innovation System that incorporates a broader range of market and systemic failures. The authors offer guidance on how to navigate the resulting innovation policy dilemma: as the need to redress these additional failures increases with distance from the frontier, government capabilities to formulate and implement the policy mix become weaker. This book is the first volume of the World Bank Productivity Project, which seeks to bring frontier thinking on the measurement and determinants of productivity to global policy makers.

The informal sector behav ...