Development Research Group

AI and Digital Development

Overview

The AI and Digital Development (AI/DD) Research Initiative asks, What is the impact of AI and the digital transformation on development, growth, and inclusion in Low- and Middle-Income Country (LMIC) economies?

AI/DD is particularly focused on creating and disseminating high-quality, independent evidence on AI’s effects both on the global economy and on individual outcomes. AI could vastly expand access to knowledge—for students and teachers, health providers and patients, entrepreneurs and farmers—but implications for equity of access, market concentration, and labor demand need to be understood to ensure that AI offers a path to prosperity for all.  

Key questions include whether AI solutions can improve health and education for the poor; how AI will change the markets for skills; and what the impacts of AI are on firm composition, competitiveness, and growth in LMICs. Governments working with the World Bank are particularly interested in learning how to use AI to achieve more efficient and equitable outcomes in domains such as taxation, regulation, and public service provision – without compromising privacy, transparency, or accountability – and how AI solutions can be adapted to contexts with limited data.

Another focus of our work is how mobile money and other fintech innovations affect financial behavior. This includes their impact on resilience, food security, educational attainment, and women’s economic empowerment. This workstream leverages the Global Findex data on the growing use of digital financial services worldwide. Questions include  how increasing women’s use of a digital financial service can enhance their financial control and agency; how digital payments can improve business accounting, cash management, and access to credit; and what the roles of appropriate regulations and consumer protection measures are in mitigating fraud and financial abuse.

News and Events

Global Findex Database (DECRG/World Bank and Gallup) receives the “Best Financial Services Research" award

December 2, 2024 -- The Market Research Society (MRS) announced the MRS Awards 2023, where the Global Findex Database (Development Research Group/World Bank and Gallup) received the “Best Financial Services Research” award and was also “Highly Commended” for the Liz Nelson Award for Social Impact, the event’s flagship honor.

Joint initiative between LAC Education and DECRG to support the Regional Directorate of Education in Lima, Peru

November 2024 -- Meeting with government officials from the Dirección Regional de Educación Lima Metropolitana (DRELM) to discuss the implementation and evaluation of an AI training program for teachers. This is a joint initiative between Ezequiel Molina (LAC Education) and Carolina Lopez (Development Research Group).

Resources on Financial Inclusion in Sub-Saharan Africa

For over a decade, the Global Findex Database, led by Leora Klapper, has been the definitive source for data on global digital financial services usage. A series of “Findex Notes” highlights trends in Sub-Saharan Africa, including the growth of mobile money products, the adoption of digital identification, and the digitization of payments for agricultural sellers. Explore and download the full series on the Global Findex Africa page.

Generative AI: A Technical Tutorial for Economists 

November 26, 2024 -- Robert Pless (George Washington University Computer Science) gave a brown bag talk for AI/DD with an introduction to the technical underpinnings of modern (generative) AI models.

New Forthcoming Research: Evaluating the Impacts of Access to a Digital Jobs Platform and Skills Training on Female Domestic Workers

January 6, 2024 -- S Anukriti's impact evaluation on a digital employment matching app à la Uber for domestic workers in Bangladesh was accepted by the Journal of Development Economics in the pre-results review track.

Business Dynamism in Middle-Income Countries

Overview

Middle-income countries (MICs) are home to three-fourths of the global population, account for over two-thirds of the global GDP, and cover more than 60% of the population living in extreme poverty. Given their global significance and development challenges, sustaining high economic growth rates is of critical importance. However, history shows that MICs get trapped in mediocre economic growth rates.

The Business Dynamics in MICs program aims to develop and implement diagnostic tools to identify the policies and distortions undermining creative destruction and the business dynamism underlying any fast-growing economy. The program follows a micro-to-micro approach, acknowledging that macroeconomic outcomes reflect firm-level and individual-level distortions that can only be identified at the micro level. Grounded in the latest economics research, it leverages increasingly available firm- and household-level databases to characterize business dynamism in middle-income countries and deliver policy implications.

Key questions:

Concretely, this program seeks to address the following questions:

1. What is the strength of business dynamism in middle-income countries? How do firm-size distributions, entry and exit rates, and job reallocation rates differ relative to advanced economies?
2. What barriers and distortions hinder technology infusion, innovation, and allocative efficiency?
3. What policy principles are most important for fostering creative destruction at the middle-income stage?

News and Events

World Bank and University of Chicago Growth Academy

July 22 - August 1, 2024 -- The program is divided between the University of Chicago and World Bank Headquarters in Washington, D.C. This unique setup allows participants to spend one week at each venue, providing the opportunity to directly engage with distinguished academics, including Nobel laureates and prominent World Bank researchers. Participants attended from over twenty middle-income countries, most of them policymakers and researchers at central banks, ministries of finance, and think tanks. Agenda:

Week 1: Chicago, July 22nd to 26th
Week 2: World Bank headquarters, Washington DC, July 29th-August 1st

A list of speakers with video and slides can be found here: https://bfi.uchicago.edu/growth-academy/

Events with a similar structure are expected to be held on the premises of middle-income countries. Events in Egypt and Romania are scheduled for April and May 2025 and others in South America are also being organized.

Policy Research Talks: Distortions and Firm Dynamics in Developing Countries

November 2023 -- In this World Development Report 2024 Seminar Roberto N. Fattal Jaef (Senior Economist, Development Research Group, Macroeconomics and Growth, World Bank) discusses "Distortions and Firm Dynamics in Developing Countries."

Policy Research Talks: From micro to macro: entry barriers, misallocation, and aggregate productivity

February 2021 -- Differences in living standards around the world are substantial, with income per worker in the richest countries up to 60 times higher than in the poorest. Even as measures of the stock of physical and human capital have become more reliable over time, aggregate productivity still remains the biggest contributor to these striking income gaps. What, then, could explain these vast productivity differences across countries? In this Policy Research Talk on February 23, 2021, World Bank economist Roberto N. Fattal Jaef discussed the role of distortions in firms’ business environment that reduce competition, innovation, and allocative efficiency.

Key Partners

Coming soon!

Contact & Email Announcements

If you are interested in exploring opportunities to collaborate with us, please contact us at the following email address: rfattaljaef@worldbank.org.

Research and Development Center in Chile

Overview

The Research and Development Center in Chile conducts research on financial development relevant to Chile and other countries and generates knowledge to inform policymakers, practitioners, and the academic community on how the financial sector can foster growth across the economy for a more prosperous and equitable society.

Learn more ›

Emissions

Overview

Containing emissions, combatting climate change, and improving air quality are priority sustainable development goals for the World Bank. The Emissions Research Initiative is a multi-pronged research and engagement program to support knowledge generation, foster outreach, and promote actionable steps toward sustainable development.

The imperative to address climate change is obvious. Increasing heat waves, droughts, storms, and other extreme weather threaten development progress around the world. While short-term adaptation is critical, long-term solutions require reducing emissions of greenhouse gases and expanding activities to remove them from the atmosphere. This program will help drive progress on the creation and adoption of emissions trading markets to contain and reduce both greenhouse gas emissions and local air pollution. Carbon credits also serve as an important instrument to expand participation in emissions trading among and within developing countries and generate critical finance for the fight against greenhouse gas emissions. This program will help drive our understanding of carbon credits and help facilitate programs to realize their full potential.

Local air pollution and emissions of particulate pollution are closely related to climate change but are major determinants of health and productivity in their own right. Containing local air pollution will have substantial short-term welfare benefits in many low- and middle-income countries around the world. Yet many places lack information about air pollution levels or the tools to combat high levels of air pollution. This program will target both challenges. It will expand the scope of global air pollution monitoring networks and engage with policymakers to drive the adoption of tools that successfully reduce air pollution levels.

Key questions:

• Where is rigorous analysis and advice most needed for designing effective and appropriate emissions trading programs in developing countries?
• What are the co-benefits of reducing carbon emissions and local air pollution across countries?
• How can we improve measurement of air pollution to support sound investments and cost-effective policy making in developing countries?
• How does air pollution affect the formation and utilization of human capital and influence long-run economic growth?
• How can carbon credits be supplied in a credible way that creates value?
• How can carbon offsets and compliance markets be designed and implemented to reinforce each other?
  

News and Events

Harvard European Conference

January 31 - February 1, 2025 | Boston -- Carolyn Fischer participated in the panel "Pretense or Promise? Europe's Climate Ambition under Scrutiny" at the Harvard European Conference 2025. Under the theme "Leader or Dreamer? Europe’s Role in a Fragmented World Order," the conference brought together over 750 academics, students, and future leaders from around the world. Through 10 panels, 4 keynote speeches, and several working groups, participants examined key challenges shaping Europe's future, including defense, energy security, economic resilience, and transatlantic relations.

C3A Annual Symposium | Coalition for Capacity on Climate Action 1st Annual Symposium, Research and Leadership Segment

December 2-6, 2024 | Paris -- On December 2-6, 2024, C3A organizes its 1st Annual Symposium, taking place at the World Bank's Conference Center in Paris. A major event that aims to convene leading voices in global climate policy and research to jointly think through the most pressing issues facing Ministries of Finance and the whole-of-government in the face of a potentially unstable mid-transition period.

Energy in Africa

Overview

Governments and development partners are poised to invest billions of dollars in energy access in Africa in the coming decade. This mission will need a body of policy-responsive research on how to leverage policy instruments for markets and governments to achieve the outcomes of an energized, economically transformed Africa.

Energy is instrumental and necessary for modern economic growth. Universal access to reliable, clean energy is also an intrinsically valuable goal of global development. However, past experience with energy infrastructure investments and expansion of access to low-income, rural households suggests three pitfalls. First, it has not been fiscally sustainable. Energy utilities are frequently at the heart of the region’s debt crises, with adverse consequences of macro-fiscal instability for economies. Second, expanding access as a social goal through subsidies to end-users and to energy firms to serve remote, low-income customers may not yield sufficient benefits to end-users to grow their incomes. Rural electrification programs may need to combine more strategically with other policies to support structural transformation of Africa’s local economies from subsistence agriculture to more productive employment. Third, domestic resources appear insufficient to achieve access goals and establish energy infrastructure. The region will need to attract long-term global capital, especially for investments in the continent’s vast renewable potential, and pay for it from growth in future incomes, savings, and revenues. Whether capital flows to Africa depends upon if the policy and regulatory environment is conducive to generating economic returns for investors.

Insufficient knowledge is available to guide policymakers on how to improve utility performance, design subsidies, and combine energy strategies with other policies for social and economic returns. The Energy in Africa Research Initiative aims to address these knowledge gaps in collaboration with African researchers and think-tanks, producing new research and building local capacity to use data and evidence to inform policy.

Key Questions:

• How should energy tariff and subsidy policies be designed to balance the goals of universal access with the need to finance it sustainably and attract global private capital?
• Given the recent protests against tariffs and taxes and experience of other regions with the political problem of reforming inefficient subsidies, how can African policymakers build legitimacy and trust with their citizens to implement tariff and tax policies?
• How can rural electrification programs strategically combine with other policies targeted at structural transformation of Africa’s local economies?
• What reforms are needed for utilities to perform better, both financially and technically (to prevent blackouts; to provide reliable services; to enable greater use of green energy sources, such as through Power Purchase Agreements with independent generators and cross-border energy trade)?

Global Findex Database

Overview

Financial inclusion is a cornerstone of development, and since 2011, the Global Findex Database has been the definitive source of data on global access to financial services from payments to savings and borrowing. The 2021 edition, based on nationally representative surveys of about 128,000 adults in 123 economies during the COVID-19 pandemic, contains updated indicators on access to and use of formal and informal financial services and digital payments, and offers insights into the behaviors that enable financial resilience. The data also identify gaps in access to and usage of financial services by women and poor adults.

Learn more >

News and Events

G20 Data Gaps Initiative

January 30, 2025 -- Leora Klapper presented a summary of the evidence of how digital financial services can be a catalyst to enable sustainable development at the G20 DGI-3 Recommendation 12 Workshop on Fintech-enabled Financial Inclusion.

Global Findex Database (DECRG/World Bank and Gallup) receives the “Best Financial Services Research" award

December 2, 2024 -- The Market Research Society (MRS) announced the MRS Awards 2023, where the Global Findex Database (Development Research Group/World Bank and Gallup) received the “Best Financial Services Research” award and was also “Highly Commended” for the Liz Nelson Award for Social Impact, the event’s flagship honor.

Trade Fragmentation

Overview

Trade fragmentation—characterized by the division of global trade into distinct regional blocs, disruption of integrated supply chains due to strategic considerations, and in some cases even the reversal of globalization—is a growing concern for developing countries. Historically, an integrated global trade system has contributed to global poverty reduction, development, and diffusion of new technologies. Growing trade fragmentation raises urgent questions about how low- and middle-income countries (LMICs) can succeed in the global economy of the next few decades. To address these questions, the Trade Fragmentation Research Initiative aims to (1) create public goods as new data sets, visualization tools, and policy modeling frameworks, (2) engage in capacity building, training programs, and collaboration with client governments, policy makers and academics in developing countries, and (3) establish new partnerships with leading policy and research institutions.

Key Questions:

1. What is happening to trade and trade policy? This pillar examines major global events like the US-China trade war, COVID-19, climate policies, and Ukraine crisis sanctions, showing that while global trade-to-GDP remains resilient, selective and geopolitical trade policies are making trade more discriminatory. This marks a significant shift from the non-discrimination principles of WTO/GATT, apart from Free Trade Agreements or customs unions.

2. What are the welfare and development consequences of these changes? This pillar assesses how trade changes affect countries—offenders, targets, and bystanders—with a focus on developing nations. It explores the effects on trade, employment, and welfare, especially in areas intersecting with economic growth, digitalization, industrialization, and economic transformation.

3. What should developing countries do in response? This pillar discusses strategies available to developing countries to navigate trade fragmentation, assessing the effectiveness of cross-border initiatives and domestic policies in mitigating risks or seizing new opportunities for development.

News and Events

Coming soon!