Aart Kraay
Biographic Data
| ID | 1089588 |
|---|---|
| NAME | Aart Kraay |
| GIVEN NAMES | Aart |
| FAMILY NAME | Kraay |
| SIGNATURE | KRAAY A |
| AFFILIATIONS | World Bank |
| ORCID | 0000-0001-6521-3734 |
| VERIFIED | Yes |
| TOTAL WORKS | 43 |
| TOTAL CITATIONS | 567 |
| AUTHOR COUNT | 43 |
| EDITOR COUNT | 0 |
| FIRST PUBLICATION YEAR | 1998 |
| LATEST PUBLICATION YEAR | 2023 |
| H-INDEX | 11 |
A New Distribution Sensitive Index for Measuring Welfare, Poverty, and Inequality
Simple welfare indices such as mean income are ubiquitous but not distribution sensitive. In contrast, existing distribution sensitive welfare indices are rarely used, often because they are difficult to explain and/or lack intuitive units. This paper proposes a simple new distribution sensitive welfare index with intuitive units: the average factor by which individual incomes must be multiplied to attain a given reference level of income. This n…
A Socioeconomic Disaggregation of the World Bank Human Capital Index
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 …
Predicting Conflict
This paper studies the performance of alternative prediction models for conflict. The analysis contrasts the performance of conventional approaches based on predicted probabilities generated by binary response regressions and random forests with two unconventional classification algorithms. The unconventional algorithms are calibrated specifically to minimize a prediction loss function penalizing Type 1 and Type 2 errors: (1) an algorithm that se…
Misunderestimating Corruption
Estimates of the extent of corruption rely largely on self-reports of individuals, business managers, and government officials. Yet it is well known that survey respondents are reticent to tell the truth about activities to which social and legal stigma are attached, implying a downward bias in survey-based estimates of corruption. This paper develops a method to estimate the prevalence of reticent behavior, in order to isolate rates of corruptio…
Growth still is good for the poor
Misunderestimating Corruption
Corruption estimates rely largely on self-reports of affected individuals and officials. Yet survey respondents are often reticent to tell the truth about sensitive subjects, leading to downward biases in surveybased corruption estimates. This paper develops a method to estimate the prevalence of reticent behavior and reticence-adjusted rates of corruption using survey responses to sensitive questions. A statistical model captures how respondents…
Growth Still Is Good for the Poor
Weak Instruments in Growth Regressions: Implications for Recent Cross-Country Evidence on Inequality and Growth
This paper revisits four recent cross-country empirical studies on the effects of inequality on growth. All four studies report strongly significant negative effects, using the popular system generalized method of moments estimator that is frequently used in cross-country growth empirics. This paper shows that the internal instruments relied on by this estimator in these inequality-and-growth regressions are weak, and that weak instrument-consist…
Growth, Inequality, and Social Welfare: Cross-Country Evidence
Social welfare functions that assign weights to individuals based on their income levels can be used to document the relative importance of growth and inequality changes for changes in social welfare. In a large panel of industrial and developing countries over the past 40 years, most of the cross-country and over-time variation in changes in social welfare is due to changes in average incomes. In contrast, the changes in inequality observed duri…
Do Poverty Traps Exist
This paper reviews the empirical evidence on the existence of poverty traps, understood as self-reinforcing mechanisms through which poor individuals or countries remain poor. Poverty traps have captured the interest of many development policy makers, because poverty traps provide a theoretically coherent explanation for persistent poverty. They also suggest that temporary policy interventions may have long-term effects on poverty. However, a rev…
Do Poverty Traps Exist? Assessing the Evidence
A "poverty trap" can be understood as a set of self-reinforcing mechanisms whereby countries start poor and remain poor: poverty begets poverty, so that current poverty is itself a direct cause of poverty in the future. The idea of a poverty trap has this striking implication for policy: much poverty is needless, in the sense that a different equilibrium is possible and one-time policy efforts to break the poverty trap may have lasting effects. B…
Growth Still is Good for the Poor
Average incomes in the poorest two quintiles on average increase at the same rate as overall average incomes. This is because, in a global data set spanning 121 countries over the past four decades, changes in the share of income of the poorest quintiles are uncorrelated with changes in average income. The variation in changes in quintile shares is also small relative to the variation in growth in average incomes, implying that the latter account…
Misunderestimating Corruption
Estimates of the extent of corruption rely largely on self-reports of individuals, business managers, and government officials. Yet it is well known that survey respondents are reticent to tell the truth about activities to which social and legal stigma are attached, implying a downward bias in survey-based estimates of corruption. This paper develops a method to estimate the prevalence of reticent behavior, in order to isolate rates of corruptio…
Good countries or good projects? Macro and micro correlates of World Bank project performance
Corruption and Confidence in Public Institutions: Evidence from a Global Survey
Well-functioning institutions matter for economic development. In order to operate effectively, public institutions must also inspire confidence in those they serve. We use data from the Gallup World Poll, a unique and very large global household survey, to document a quantitatively large and statistically significant negative correlation between corruption and confidence in public institutions. This suggests an important indirect channel through…
Does respondent reticence affect the results of corruption surveys ? evidence from the world bank enterprise survey for Nigeria
A companion volume to the International Handbook on the Economics of Corruption published in 2006, the specially commissioned papers in Volume Two present some of the best policy-oriented research in the field. They stress the institutional roots of corruption and include new research on topics ranging from corruption in regulation and procurement to vote buying and private firm payoffs.
Can Disaggregated Indicators Identify Governance Reform Priorities ?
Many highly-disaggregated cross-country indicators of institutional quality and the business environment have been developed in recent years. The promise of these indicators is that they can be used to identify specific reform priorities that policymakers and aid donors can target in their efforts to improve institutional and regulatory quality outcomes. Doing so however requires evidence on the partial effects of these many very detailed variabl…
The Worldwide Governance Indicators: Methodology and Analytical Issues
Response to ‘What do the Worldwide Governance Indicators Measure?’
The worldwide governance indicators: Methodology and Analytical Issues
The uprisings, which began in Tunisia, have spread at a rapid pace and with an unprecedented intensity.These uprisings have influenced all Arab countries in a variety of ways, followed particular pathways and ended differently.However, the reactions of armies to the orders of their respective governments have varied from loyalty to defection.This paper aims to examine the reciprocal and combined effect of government and military institutions on t…
Governance Matters VIII: Aggregate And Individual Governance Indicators 1996-2008
This paper reports on the 2009 update of \n the Worldwide Governance Indicators (WGI) research project, \n covering 212 countries and territories and measuring six \n dimensions of governance between 1996 and 2008: Voice and \n Accountability, Political Stability and Absence of \n Violence/Terrorism, Government Effectiveness, Regulatory \n Quality, Rule of Law, and Control of Corruption. These \n aggregate indicators are based on hundreds of spec…
Corruption And Confidence In Public Institutions: Evidence From A Global Survey
Well-functioning institutions matter for \n economic development. In order to operate effectively, \n public institutions must also inspire confidence in those \n they serve. The authors use data from the Gallup World Poll, \n a unique and very large global household survey, to document \n a quantitatively large and statistically significant \n negative correlation between corruption and confidence in \n public institutions. This suggests an impo…
The Worldwide Governance Indicators Project: Answering The Critics
The Worldwide Governance Indicators, reporting estimates of six dimensions of governance for over 200 countries between 1996 and 2005, have become widely used among policymakers and academics. They have also attracted some explicit written criticisms. In this short paper the authors synthesize 11 critiques offered by four recent papers. They then refute them as either conceptually incorrect or empirically unsubstantiated
Governance Indicators: Where Are We, Where Should We Be Going?
Progress in measuring governance is assessed using a simple framework that distinguishes between indicators that measure formal rules and indicators that measure the practical application or outcomes of these rules. The analysis calls attention to the strengths and weaknesses of both types of indicators as well as the complementarities between them. It distinguishes between the views of experts and the results of surveys and assesses the merits o…
Measuring Corruption: Myths and Realities
The report points out that over the past decade measuring corruption has become an ever-growing empirical field. This empirical analysis questions the traditional notion of viewing the firm as an 'investment climate taker' and thus ignoring the view that powerful conglomerates can also shape the business climate and thus become 'investment climate makers'. The study implies that it is warranted to move away from simply blaming government official…
The worldwide governance indicators: Methodology and Analytical Issues
The uprisings, which began in Tunisia, have spread at a rapid pace and with an unprecedented intensity.These uprisings have influenced all Arab countries in a variety of ways, followed particular pathways and ended differently.However, the reactions of armies to the orders of their respective governments have varied from loyalty to defection.This paper aims to examine the reciprocal and combined effect of government and military institutions on t…
When is growth pro-poor? Evidence from a panel of countries
Growth and Governance: A Reply
Small States, Small Problems? Income, Growth, and Volatility in Small States
Good countries or good projects? Macro and micro correlates of World Bank project performance
Trade, Growth, and Poverty
The evidence from individual cases and \n from cross-country analysis supports the view that \n globalization leads to faster growth and poverty reduction \n in poor countries. To determine the effect of globalization \n on growth, poverty, and inequality, the authors first \n identify a group of developing countries that are \n participating more in globalization. China, India, and \n several other large countries are part of this group, so \n w…
Response to ‘What do the Worldwide Governance Indicators Measure?’
Do Poverty Traps Exist? Assessing the Evidence
A "poverty trap" can be understood as a set of self-reinforcing mechanisms whereby countries start poor and remain poor: poverty begets poverty, so that current poverty is itself a direct cause of poverty in the future. The idea of a poverty trap has this striking implication for policy: much poverty is needless, in the sense that a different equilibrium is possible and one-time policy efforts to break the poverty trap may have lasting effects. B…
Growth and Governance: A Rejoinder
Poverty traps, aid, and growth
Spreading the Wealth
ONE OF THE MAIN CLAIMS of the antiglobalization movement is that is widening the gap between the haves and the have-nots. It benefits the rich and does little for the poor, perhaps even making their lot harder. As union leader Jay Mazur put it in these pages, globalization has dramatically increased inequality between and within nations (Labor's New Internationalism, January/February 2000). The problem with this new conventional wisdom is that th…
Dollar and Kraay Reply
Consistent Covariance Matrix Estimation with Spatially Dependent Panel Data
Many panel data sets encountered in macroeconomics, international economics, regional science, and finance are characterized by cross-sectional or “spatial” dependence. Standard techniques that fail to account for this dependence will result in inconsistently estimated standard errors. In this paper we present conditions under which a simple extension of common nonparametric covariance matrix estimation techniques yields standard error estimates …
Aggregating Governance Indicators
Governance Matters
Six new aggregate measures capturing various dimensions of governance provide new evidence of a strong causal relationship from better governance to better development outcomes
Small States, Small Problems? Income, Growth, and Volatility in Small States
Growth is Good for the Poor
The world economy grew well during the 1990s, despite the financial crisis in East Asia. However, there is intense debate over the extent to which the poor benefit from this growth. The two quotes above exemplify the extremes in this debate. At one end of the spectrum are those who argue that the potential benefits of economic growth for the poor are undermined or even offset entirely by sharp increases in inequality that accompany growth. At the…
Governance Matters II: Updated Indicators for 2000–01
The authors construct aggregate governance indicators for six dimensions of governance, covering 175 countries in 2000-01. They apply the methodology developed in Kaufmann, Kraay, and Zoido-Lobaton ("Aggregating Governance Indicators", Policy Research Working Paper 2195, and "Governance Matters", Policy Research Working Paper 2196, October 1999) to newly available data at governance indicators comparable with those constructed for 1997-98. The da…
Dollar and Kraay Reply
Spreading the Wealth
ONE OF THE MAIN CLAIMS of the antiglobalization movement is that is widening the gap between the haves and the have-nots. It benefits the rich and does little for the poor, perhaps even making their lot harder. As union leader Jay Mazur put it in these pages, globalization has dramatically increased inequality between and within nations (Labor's New Internationalism, January/February 2000). The problem with this new conventional wisdom is that th…
Institutions, trade, and growth
Governance Matters III: Governance Indicators for 1996–2002
Six dimensions of governance are estimated covering 199 countries and territories for four periods: 1996, 1998, 2000, and 2002. The indicators are based on several hundred individual variables measuring perceptions of governance drawn from 25 data sources constructed by 18 organizations. These individual measures are assigned to categories capturing key dimensions of governance. An unobserved-components model is used to construct six aggregate go…
When is Growth Pro-Poor? Cross-Country Evidence
Growth is pro-poor if the poverty measure of interest falls. According to this definition there are three potential sources of pro-poor growth: (1) a high rate of growth of average incomes; (2) a high sensitivity of poverty to growth in average incomes; and (3) a poverty-reducing pattern of growth in relative incomes. The author empirically decomposes changes in poverty in a large sample of developing countries during the 1980s and 1990s into the…
Trade, Growth, and Poverty
The evidence from individual cases and \n from cross-country analysis supports the view that \n globalization leads to faster growth and poverty reduction \n in poor countries. To determine the effect of globalization \n on growth, poverty, and inequality, the authors first \n identify a group of developing countries that are \n participating more in globalization. China, India, and \n several other large countries are part of this group, so \n w…
Governance Matters IV: Governance Indicators For 1996-2004
The authors present the latest update of their aggregate governance indicators, together with new analysis of several issues related to the use of these measures. The governance indicators measure the following six dimensions of governance: (1) voice and accountability; (2) political instability and violence; (3) government effectiveness; (4) regulatory quality; (5) rule of law, and (6) control of corruption. They cover 209 countries and territor…
When is growth pro-poor? Evidence from a panel of countries
Governance Matters V: Aggregate And Individual Governance Indicators For 1996 - 2005
The authors report on the latest version of the worldwide governance indicators, covering 213 countries and territories and measuring six dimensions of governance from 1996 until end-2005: voice and accountability, political stability and absence of violence, government effectiveness, regulatory quality, rule of law, and control of corruption. The latest indicators are based on hundreds of variables and reflect the views of thousands of citizen a…
Poverty traps, aid, and growth
The Worldwide Governance Indicators Project: Answering The Critics
The Worldwide Governance Indicators, reporting estimates of six dimensions of governance for over 200 countries between 1996 and 2005, have become widely used among policymakers and academics. They have also attracted some explicit written criticisms. In this short paper the authors synthesize 11 critiques offered by four recent papers. They then refute them as either conceptually incorrect or empirically unsubstantiated
Governance Indicators: Where Are We, Where Should We Be Going?
Progress in measuring governance is assessed using a simple framework that distinguishes between indicators that measure formal rules and indicators that measure the practical application or outcomes of these rules. The analysis calls attention to the strengths and weaknesses of both types of indicators as well as the complementarities between them. It distinguishes between the views of experts and the results of surveys and assesses the merits o…
Measuring Corruption: Myths and Realities
The report points out that over the past decade measuring corruption has become an ever-growing empirical field. This empirical analysis questions the traditional notion of viewing the firm as an 'investment climate taker' and thus ignoring the view that powerful conglomerates can also shape the business climate and thus become 'investment climate makers'. The study implies that it is warranted to move away from simply blaming government official…
Growth and Governance: A Reply
Growth and Governance: A Rejoinder
Governance Matters VIII: Aggregate And Individual Governance Indicators 1996-2008
This paper reports on the 2009 update of \n the Worldwide Governance Indicators (WGI) research project, \n covering 212 countries and territories and measuring six \n dimensions of governance between 1996 and 2008: Voice and \n Accountability, Political Stability and Absence of \n Violence/Terrorism, Government Effectiveness, Regulatory \n Quality, Rule of Law, and Control of Corruption. These \n aggregate indicators are based on hundreds of spec…
Corruption And Confidence In Public Institutions: Evidence From A Global Survey
Well-functioning institutions matter for \n economic development. In order to operate effectively, \n public institutions must also inspire confidence in those \n they serve. The authors use data from the Gallup World Poll, \n a unique and very large global household survey, to document \n a quantitatively large and statistically significant \n negative correlation between corruption and confidence in \n public institutions. This suggests an impo…
Does respondent reticence affect the results of corruption surveys ? evidence from the world bank enterprise survey for Nigeria
A companion volume to the International Handbook on the Economics of Corruption published in 2006, the specially commissioned papers in Volume Two present some of the best policy-oriented research in the field. They stress the institutional roots of corruption and include new research on topics ranging from corruption in regulation and procurement to vote buying and private firm payoffs.
Can Disaggregated Indicators Identify Governance Reform Priorities ?
Many highly-disaggregated cross-country indicators of institutional quality and the business environment have been developed in recent years. The promise of these indicators is that they can be used to identify specific reform priorities that policymakers and aid donors can target in their efforts to improve institutional and regulatory quality outcomes. Doing so however requires evidence on the partial effects of these many very detailed variabl…
Political science (27 works) · Economics (26 works) · Corruption and Economic Development (18 works) · Business (16 works) · Corporate governance (14 works) · Fiscal Policy and Economic Growth (12 works) · Income, Poverty, and Inequality (12 works) · Development economics (11 works) · Finance (10 works) · Demographic economics (9 works)