In this paper we study incentivized voluntary contributions to a public good. We focus on the case of blood donations. Motivated by the market for blood in Germany, where donors can choose whether or not to be remunerated for their donations, we propose a market design that lets prospective donors sort into an incentive scheme. We show theoretically that this enables second-degree price discrimination for the blood collector. This increases the efficiency of collection by lowering the cost. This prediction comes from a model that interacts image concerns of donors with intrinsic and extrinsic incentives for donation. We develop an experimental design to test our theoretical predictions under controlled conditions. We implement the experiment in an online labor market. Preliminary results suggest that our proposed market design can improve efficiency of collection. Letting prospective donors choose increases total contributions and lowers average cost.
We study social interactions between worker peers in an environment that allows for reciprocity between employers and workers. Employers may pay workers more than the competitive wage with the expectation that workers reciprocate better pay with higher efforts. The effectiveness of this approach is well-established in the lab, though evidence from the field is more mixed. We argue that an important dimension often not considered in the lab is the effect of social interactions between worker peers. Peer effects are pervasive in many jobs and have been shown in the lab and in the field to increase worker effort. We develop an experiment to study the interaction of both effects under controlled conditions.
| World Bank Group (2015)
In 2013, the World Bank Group adopted two new goals to guide its work: ending extreme poverty and boosting shared prosperity. More specifically, the goals are to reduce extreme poverty in the world to less than 3 percent by 2030, and to foster income growth of the bottom 40 percent of the population in each country. While poverty reduction has been a mainstay of the World Bank’s mission for decades, the Bank has now set a specific goal and timetable, and for the first time, the Bank has explicitly included a goal linked to ensuring that growth is shared by all. The discussion until now has centered primarily on articulating the new goals. This report, the latest in World Bank’s Policy Research Report series, goes beyond that and lays out their conceptual underpinnings, discusses their relative strengths and weaknesses by contrasting them with alternative indicators, and proposes empirical approaches and requirements to track progress towards the goals. The report makes clear that the challenges posed by the World Bank Group’s new stance extend not just to the pursuit of these goals but, indeed, to their very definition and empirical content. The report also argues that an improved data infrastructure, consisting of many elements including the collection of more and better survey data, is critical to ensure that progress towards these goals can be measured, and policies to help achieve them can be identified and prioritized.
| 2015 Global Policy 6(4): 343–357.
We argue that survey-based median household consumption expenditure (or income) per capita be incorporated into standard development indicators, as a simple, robust and durable indicator of typical individual material wellbeing in a country. Using household survey data available for low and middle-income countries from the World Bank's PovcalNet tool, we show that as a measure of income-related wellbeing, it is far superior to the commonly used GDP per capita as well as survey-based measures at the mean. We also argue that survey-based median measures are ‘distribution-aware’, i.e. when used as the denominator of various widely available indicators such as mean consumption expenditure per capita they provide a ‘good enough’ indicator of consumption (or income) inequality. Finally, as a post-2015 indicator of progress at the country-level in promoting shared development and reducing inequality, we propose that the rate of increase in median consumption per capita after taxes and transfers exceeds the rate of increase in average consumption in the same period.
| 2015 The Oxford Handbook of Africa and Economics: Volume 1: Context and Concepts.
This chapter considers economic development of sub-Saharan Africa from the perspective of slow convergence of productivity, both across sectors and across firms within sectors. Why have “productivity enclaves,” islands of high productivity in a sea of smaller low-productivity firms, not diffused more rapidly? Three sets of factors are summarized and analyzed: first, the poor business climate, which constraints the allocation of production factors between sectors and firms. Second, the complex political economy of business–government relations in Africa’s small economies. Third, the distribution of firm capabilities. The roots for these factors lie in Africa’s geography and its distinctive history, including the legacy of its colonial period on state formation and market structure.
| 2014 World Development 60: 132–146.
We identify a group of people in Latin America that are not poor but not middle class either—namely “strugglers” in households with daily income per capita between USD 4 and USD 10 (at constant 2005 PPP). This group will account for about a third of the region’s population over the next decades; as the size and income of the middle class rises, they could become increasingly marginalized. The cash transfers they receive are largely offset by indirect taxes; the benefit of schooling and other in-kind transfers they receive is questionable after adjusting for quality. We discuss implications for the social contract.