Labor costs in Francophone Africa are considered high by the standards of low-income countries, at least in the formal sector. Workers appear to have some bargaining power and, in Côte d'Ivoire, can force renegotiation of labor contracts in response to new investments.

The unprecedented globalization of the production process, dividing up the value chain, has brought the integration of trade and the disintegration of production, with deep implications for the international division of labor. Have Central European economies been able to readjust their production structures to international markets? Three of them: Estonia, Hungary, and Slovakia have done especially well.

This publication is a compilation of reports on research projects initiated, under way, or completed in fiscal year 2001 (July 1, 2000 through June 30, 2001). The abstracts cover 150 research projects from the World Bank and grouped under 11 major headings including poverty and social development, health and population, education, labor and employment, environment, infrastructure and urban development, and agriculture and rural development. The abstracts detail the questions addressed, the analytical methods used, the findings to date and their policy implications. Each abstract identifies the expected completion date of each project, the research team, and reports or publications produced.

Development and the ending of mass poverty require a massive increase in productive capabilities and production in developing countries. Some countries, notably in Asia, are achieving this. Yet ‘pro-poor’ aid policies, especially for the least developed countries, operate largely without reference to policy thinking on the promotion of innovation for productivity growth. Conversely, policy-makers and researchers on innovation and industrial policies tend to know little about the potential for social protection to support innovation and productivity improvement. This book aims to focus attention on this gulf between research on innovation and on poverty reduction and to identify some of its policy consequences; to set out some ways in which this gulf can be bridged, analytically and empirically; and to contribute to the creation of an agenda for further research and an understanding of the urgency of the implied rethinking. The first two chapters provide sustained arguments for embedding social policy thinking in much more ‘productivist’ frameworks of thought that focus on raising productivity and employment; and for identifying growth theories that can incorporate satisfactory understandings of innovation and employment upgrading. A set of chapters then tackle these broad themes in the context of health, addressing the interlinked issues of innovation, health inequity and associated impoverishment. The final set of chapters examines the challenge of creating industrial policies that generate both innovation and employment, using and going beyond concepts of systems of innovation.

If infectious people can infect other people, who in turn can infect others, and so on--the pure infection externality--government subsidies to affect private behavior should equally favor preventive and curative activities, if people recover to become susceptible again. Otherwise, other subsidy and tax strategies may make more sense.

Average most-favored-nation tariffs in the "Quad" (Canada, the European Union, Japan, and the United States) have fallen to about 5 percent. But tariffs more than three times the average most-favored-nation duty are not uncommon in the Quad and have a disproportionate effect on exports of least developed countries. Giving the poorest countries duty-free access for peak-tariff products would increase their total annual exports by roughly $2.5 billion.

In the 1990s, foreign direct investment began to swamp all other cross-border capital flows into developing countries. Does foreign direct investment support sound development? In particular, does it contribute to poverty reduction?

In a large sample of East Asian nonfinancial corporations, firms using foreign currency derivatives had distinctive characteristics, such as larger size and foreign debt exposures. Unlike in studies of U.S. firms, there was only weak evidence that liquidity-constrained firms with greater growth opportunities hedged more. Firms appeared to use foreign earnings as a substitute for hedging with derivatives, and to engage in "selective" hedging. There was no evidence that East Asian firms eliminated their foreign exchange exposure by using derivatives. And firms using derivatives before the crisis performed just as poorly as nonhedgers during the crisis.

Currency and banking crises such as those originating in Mexico (1994), Thailand (1997), and the Russian Federation (1998) tend to be associated and often take place together across countries. The East Asian experience was a fruitful laboratory for examining key questions. For example: How did contagion occur so extensively, and why was it so devastating? Did policy responses to crises and contagion minimize their impact on the real economy? What type of international financial architecture is needed to prevent and manage crises and contagion?