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What can we learn about country performance from conditional comparisons across countries?

  • Ravallion, Martin

There have been many attempts to infer latent performance attributes of governments (or other institutions) from conditional comparisons that control for observed variables. Success in doing do could greatly improve government performance. The author critically reviews the econometric foundations of the methods used. He argues that latent heterogeneity remains a fundamental, but unresolved problem. Locating a benchmark for measuring performance, adds a further problem. Current methods do not yield a consistent estimate of even the mean latent performance attribute. An assessment of country performance by these methods could well be wildly wrong.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2342.

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Date of creation: 31 May 2000
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Handle: RePEc:wbk:wbrwps:2342
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  1. Sudhir Anand & Martin Ravallion, 1993. "Human Development in Poor Countries: On the Role of Private Incomes and Public Services," Journal of Economic Perspectives, American Economic Association, vol. 7(1), pages 133-150, Winter.
  2. Sen, Amartya, 1981. "Public Action and the Quality of Life in Developing Countries," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 43(4), pages 287-319, November.
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  5. Bidani, Benu & Ravallion, Martin, 1997. "Decomposing social indicators using distributional data," Journal of Econometrics, Elsevier, vol. 77(1), pages 125-139, March.
  6. Ravallion, Martin, 1997. "Good and bad growth: The human development reports," World Development, Elsevier, vol. 25(5), pages 631-638, May.
  7. Patrick Vanhoudt, 1997. "Do Labor Market Policies and Growth Fundamentals Matter for Income Inequality in OECD Countries?: Some Empirical Evidence," IMF Staff Papers, Palgrave Macmillan, vol. 44(3), pages 356-373, September.
  8. Aigner, Dennis & Lovell, C. A. Knox & Schmidt, Peter, 1977. "Formulation and estimation of stochastic frontier production function models," Journal of Econometrics, Elsevier, vol. 6(1), pages 21-37, July.
  9. Joseph Tracy & Joel Waldfogel, 1994. "The Best Business Schools: A Market Based Approach," NBER Working Papers 4609, National Bureau of Economic Research, Inc.
  10. Ranis, G. & Ramirez, A. & Stewart, F., 1997. "Economic Growth and Human Development," Papers 787, Yale - Economic Growth Center.
  11. James Heckman & Hidehiko Ichimura & Jeffrey Smith & Petra Todd, 1998. "Characterizing Selection Bias Using Experimental Data," NBER Working Papers 6699, National Bureau of Economic Research, Inc.
  12. Kakwani, N., 1993. "Performance in living standards : An international comparison," Journal of Development Economics, Elsevier, vol. 41(2), pages 307-336, August.
  13. GOUYETTE, Claudine & PESTIEAU, Pierre, . "Efficiency of the welfare state," CORE Discussion Papers RP -1427, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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