Merit goods and redistribution in Guatemala

Read the extracts and answer the questions that follow.

Text A — Health and education

1. Guatemala has expanded rural vaccination and secondary-school programmes. Education and healthcare are merit goods because their social benefits exceed the benefits considered by individual consumers.

2. Clinics have reduced illness-related absence, while scholarships have increased school attendance among children from low-income households. Staff shortages and long travel distances continue to limit service quality.

Text B — Income policy

1. The government finances a conditional transfer payment for low-income households whose children attend school and health checks. It has also increased the minimum wage in formal agriculture.

2. Supporters expect lower poverty and stronger human capital. Employers claim that a wage substantially above worker productivity could reduce formal employment. The programme also places pressure on a limited government budget.

Table 1 — School and health outcomes

Rural school and health outcomes before and after the programme.

Table 2 — Formal agricultural labour market

Formal agricultural labour market at the previous equilibrium and new minimum wage.

Inward investment and regional integration in Morocco

Read the extracts and answer the questions that follow.

Text A — Electric-vehicle production

1. A foreign multinational enterprise will establish an electric-vehicle battery factory in Morocco. This inward foreign direct investment will involve foreign ownership and continuing control of productive assets.

2. The factory is expected to train Moroccan workers, purchase some local inputs and export batteries. However, it receives a ten-year tax concession, may import skilled managers and plans to repatriate part of its profit.

Text B — Access to regional markets

1. Morocco has joined a regional agreement involving economic integration and lower trade barriers. The larger market may attract investment and permit economies of scale.

2. Domestic component producers face stronger competition. Environmental groups are also concerned that battery production will use scarce water and generate chemical waste.

Table 1 — Battery-factory projections

Annual projections for the battery factory in Morocco.

Table 2 — Regional battery trade

Morocco's battery trade with regional partners before and after tariff reductions.

Mobile banking and land rights in Tanzania

Read the extracts and answer the questions that follow.

Text A — Financial inclusion

1. Many small farmers in Tanzania live far from bank branches. A programme has expanded mobile banking, allowing deposits, payments and account access through mobile phones.

2. Farmers can receive crop payments securely and build transaction records. A partner institution provides small loans, but consumer groups report high charges and borrowing for consumption rather than investment.

Text B — Secure land tenure

1. The government is registering customary plots to strengthen land rights. Secure claims may encourage irrigation and soil-conservation investment and may allow land to be used as collateral.

2. Some communities fear that registration fees and failure to recognize communal use could transfer land to wealthier borrowers. Courts in rural regions are also slow.

Table 1 — Mobile-banking participation

Mobile-banking participation and transaction costs in rural Tanzania.

Table 2 — Farm investment and output

Average annual farm investment and crop output before and after land registration.

Privatization and deregulation in Georgia

Read the extracts and answer the questions that follow.

Text A — Railway freight services

1. Georgia’s state freight operator requires an annual subsidy and has experienced delays. The government proposes privatization, subject to price and reliability regulation.

2. Supporters expect stronger incentives to control costs and invest. Trade unions fear job losses, while exporters fear that a private monopoly could raise freight charges.

Text B — Business entry

1. Georgia has also pursued deregulation by reducing the permits and time required to establish logistics firms. Environmental and worker-safety rules will remain.

2. New entry may increase competition and formal employment. However, regulators have limited resources to monitor dominant firms and enforce standards.

Table 1 — Freight operator outcomes

Freight operator outcomes before and after privatization.

Table 2 — Business-entry indicators

Business-entry indicators for logistics firms before and after deregulation.

Anti-corruption reform and property rights in Indonesia

Read the extracts and answer the questions that follow.

Text A — Public procurement

1. Indonesia has introduced electronic procurement, independent audits and protection for officials reporting corruption. The reforms seek to reduce unofficial payments and improve the value obtained from infrastructure spending.

2. Businesses report that unpredictable payments discourage investment. Reform is resisted by groups benefiting from existing arrangements, and courts remain slow in some provinces.

Text B — Small-business assets

1. A land and business-registration programme aims to strengthen property rights. Registered assets can be transferred legally and may be accepted as collateral by banks.

2. Registration could encourage investment and formalization. However, fees, limited legal knowledge and failure to recognize customary ownership may exclude vulnerable households.

Table 1 — Procurement outcomes

Procurement outcomes before and after reform.

Table 2 — Registration and credit

Registration and formal-bank credit for small enterprises in Indonesia.

Women’s empowerment and social enterprise in Jordan

Read the extracts and answer the questions that follow.

Text A — Employment and care responsibilities

1. Jordan has introduced subsidized childcare, transport grants and legal reforms intended to increase women’s empowerment. Female labour-force participation remains low, despite high levels of education.

2. Supporters expect higher household income, entrepreneurship and productive capacity. Some employers remain reluctant to hire women, and unpaid care responsibilities continue to restrict actual choice.

Text B — Home-based food producers

1. A social enterprise provides business training, digital marketing and shared kitchens to women producing packaged foods. Surplus is reinvested in childcare and quality certification.

2. The enterprise has obtained export orders, but faces limited finance and must balance affordable membership fees against financial viability.

Table 1 — Programme participation

Programme participation and childcare support in Jordan.

Table 2 — Enterprise outcomes

Enterprise outcomes for participating food producers before and after support.

Export diversification and inward FDI in Ghana

Ghana has traditionally depended on cocoa and gold for a large share of its export earnings. Volatile commodity prices have encouraged the government to promote tourism, processed agricultural products and electronics assembly. An export-processing zone offers improved infrastructure, duty-free imported inputs and an eight-year corporate income tax exemption.

Table 1 shows selected export data.

Ghanaian export earnings by sector in the initial year and year 4.

A foreign multinational enterprise has established an electronics assembly plant in the export-processing zone. Table 2 gives selected annual financial and employment data for the plant once it is fully operational. Assume that the imported intermediate inputs listed in Table 2 are the plant’s only intermediate inputs.

Selected financial, tax and employment information for the foreign-owned electronics plant once fully operational.

The government expects the investment to increase aggregate demand in the short run and productive capacity in the long run. However, critics are concerned about tax concessions, imported inputs and the repatriation of profits.

Debt relief and development finance in Zambia

Zambia's government has reached an agreement with external creditors to reduce and reschedule part of its public debt. The government intends to use part of the resulting annual debt-service saving to finance the increases in primary healthcare and water and sanitation spending shown in Table 1. A multilateral development institution has also offered a concessional loan for a water project.

Table 1 shows selected annual government budget data before and after the debt agreement.

Zambia's annual government budget before and after the debt agreement.

Table 2 gives projected information for the rural water project. Health researchers estimate that each household gaining safe water will avoid four working days lost to water-related illness per year.

Projected rural water-project data

Supporters argue that debt relief and development aid can interrupt the poverty cycle. Critics argue that weak procurement systems and renewed borrowing could prevent lasting development.

Mobile banking, microfinance and women's empowerment in Bangladesh

A Bangladeshi social enterprise provides mobile banking accounts and microfinance to women operating small rural businesses. Borrowers receive business training and make repayments through mobile devices, reducing travel time to bank branches. Some consumer groups are concerned about interest charges and over-indebtedness.

Table 1 compares selected outcomes for programme participants before joining and two years after joining.

Outcomes for 2000 female programme participants before joining and two years after joining.

Table 2 gives information about a representative one-year loan used to purchase equipment for a food-processing business. All interest is calculated using the simple-interest method on the original principal.

Representative one-year microfinance loan for equipment purchase.

The government is considering subsidizing business training and strengthening consumer-protection regulation while allowing private and social-enterprise providers to continue supplying credit.

Electricity privatization and development in South Africa

A state-owned electricity distributor serving a South African province has unreliable infrastructure and requires a large annual government subsidy. The provincial government is considering selling the distributor to a private firm. The buyer would be required to meet reliability targets, but it has requested permission to raise household electricity tariffs.

Table 1 shows current and projected outcomes under privatization.

Annual outcomes under state and projected private ownership. Tariff revenue is calculated from electricity sales and excludes the separate government subsidy.

Table 2 shows the expected effect of a proposed targeted electricity transfer for low-income households if privatization occurs.

Proposed targeted electricity transfer

Business groups argue that reliable electricity would increase investment and productive capacity. Civil-society organizations argue that higher tariffs could reduce access to a service essential for health, education and participation in economic activity.

Progress toward selected Sustainable Development Goals in Nepal and Cambodia

Nepal and Cambodia have adopted programmes intended to advance Sustainable Development Goal 3, good health and well-being, and Sustainable Development Goal 7, affordable and clean energy. Both countries have received development assistance for vaccination, rural clinics and electricity infrastructure.

Table 1 shows selected health and electricity indicators.

Selected SDG 3 and SDG 7 indicators, 2005 and 2022.

Table 2 shows selected information for a proposed five-year rural electrification programme in Nepal. The programme would combine public investment, concessional World Bank finance and contracts with private solar providers.

Proposed five-year rural electrification programme in Nepal.

The Nepalese government has limited fiscal resources. It must decide whether to prioritize rural electrification, primary healthcare, or a complementary programme covering both sectors.

Debt relief and multilateral assistance in Mozambique

Read the extracts and answer the questions that follow.

Text A — External debt

1. Mozambique has negotiated debt relief with official creditors after cyclone reconstruction and lower export earnings made debt servicing difficult.

2. The agreement reduces annual debt-service payments. The government plans to redirect part of the saving to primary healthcare and road maintenance, but governance groups demand transparent budgeting.

Text B — Stabilization and development finance

1. The World Bank has offered long-term finance for rural roads. The International Monetary Fund has offered temporary balance-of-payments support conditional on fiscal and institutional reforms. Both are forms of multilateral development assistance.

2. Stability may protect imports and investment, while roads may lower costs. Critics argue that rapid fiscal consolidation could reduce employment and essential public services in the short run.

Table 1 — Debt service and public spending

Annual debt-service payments and selected public spending in Mozambique.

Table 2 — Rural-road project

Rural-road project data for Mozambique.

Progress toward selected Sustainable Development Goals in Rwanda and Uganda

Read the extracts and answer the questions that follow.

Text A — Health strategies

1. Rwanda and Uganda are pursuing Sustainable Development Goals related to health and clean energy. Both expanded vaccination, community health services and rural clinics, supported partly by foreign aid.

2. National averages have improved, but remote and low-income households still experience weaker access. Health outcomes may also reflect sanitation, female education and rising household income.

Text B — Electricity strategies

1. Rwanda has emphasized coordinated grid and off-grid investment. Uganda has relied more heavily on private providers and targeted public subsidies. Electricity access does not necessarily show whether power is reliable, affordable or generated sustainably.

2. Economists use several indicators rather than a single composite indicator when assessing development because rankings depend on the dimensions, weights and data selected.

Table 1 — Under-five mortality

Under-five mortality rates in Rwanda and Uganda

Table 2 — Electricity access

Electricity access in Rwanda and Uganda, 2010 and 2022.

A mixed development strategy in Mongolia

Read the extracts and answer the questions that follow.

Text A — Dependence on minerals

1. Mongolia receives a large share of export revenue from copper and coal. The government seeks diversification through renewable energy, meat processing and digital services.

2. It proposes public investment in transmission lines and technical education, while offering foreign investors access to industrial land. Diversification is costly and new sectors may initially lack international competitiveness.

Text B — State and market roles

1. The government is also considering trade liberalization and the partial sale of a state telecommunications company. These are elements of a market-oriented approach.

2. Supporters expect competition, investment and innovation. Critics argue that rural communications have public-service benefits, while unregulated mining and energy projects may create environmental damage. The government’s administrative capacity is limited.

Table 1 — Export composition

Mongolia’s export composition in 2021 and 2025.

Table 2 — Telecommunications proposal

Telecommunications proposal: projected changes after partial privatization.

Regional integration and the market for solar panels in Kenya

Kenya currently imports solar panels from the lowest-cost world suppliers and imposes a tariff to protect domestic panel assembly. Kenya is considering joining a regional free trade agreement under which panels produced by member countries would enter without a tariff. The regional price would remain above the unrestricted world price.

Table 1 shows the Kenyan market under the existing tariff and after entry into the regional agreement. Quantities are measured in thousands of panels per year and prices are in USD per panel.

Table 1: Kenyan solar-panel market under two policy situations.

Domestic solar-panel assemblers argue that protection supports an infant industry and employment. Electricity providers and rural households argue that cheaper panels would accelerate access to clean energy. The government is considering whether regional integration should be combined with temporary support for worker training and domestic producers.