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Subnational insolvency is a reoccurring event in development, as demonstrated by historical and modern episodes of subnational defaults in both developed and developing countries. Insolvency procedures become more important as countries decentralize expenditure, taxation, and borrowing, and broaden subnational credit markets. As the first cross-country survey of procedures to resolve subnational financial distress, this paper has particular relevance for decentralizing countries. The authors explain central features and variations of subnational insolvency mechanisms across countries. They identify judicial, administrative, and hybrid procedures, and show how entry point and political factors drive their design. Like private insolvency law, subnational insolvency procedures predictably allocate default risk, while providing breathing space for orderly debt restructuring and fiscal adjustment. Policymakers' desire to mitigate the tension between creditor rights and the need to maintain essential public services, to strengthen ex ante fiscal rules, and to harden subnational budget constraints are motivations specific to the public sector.

Access to Finance --- Bankruptcy and Resolution of Financial Distress --- Banks and Banking Reform --- Credit markets --- Debt --- Debt Markets --- Debt restructuring --- Defaults --- Finance and Financial Sector Development --- Financial distress --- Insolvency --- Insolvency law --- Insolvency mechanisms --- Insolvency procedures --- Public Disclosure --- Strategic Debt Management

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Global consumers, international brands, and governments in producing and outsourcing countries aim to improve working conditions in global value chains, but uncertainty exists about what is the best approach. This research uses firm-level data from the International Labour Organization-International Finance Corporation Better Work Vietnam program to assess the relationship between transparency on working conditions and firm compliance in the apparel sector in Vietnam between 2010 and 2018. It exploits a change in the policies of Better Work Vietnam when, in 2015, the program announced the launch of a new public disclosure program that would see factories' names made publicly available along with their compliance (or lack thereof) with certain "critical issues." The paper first examines which firm characteristics correlate with reductions in noncompliance rates over time, and then examines the impact of the public disclosure policy on compliance rates and firm dropout using different empirical techniques. It finds that while continued participation in the Better Work Vietnam program has the strongest effect on changes in firm compliance with labor standards over time, public disclosure is also associated with increased compliance, with stronger effects in some compliance points, including occupational health and safety, work time, and child labor. There is some evidence of increased dropout, but no evidence of firms only making progress on the critical issues is found. The research findings suggest that public disclosure within global value chains matters for firm behavior.

Child Labor --- Compliance --- Corporate Governance --- Global Value Chain --- Global Value Chains and Business Clustering --- Labor Policies --- Labor Policy --- Labor Standards --- Occupational Safety --- Private Sector Development --- Public Disclosure --- Social Protections and Labor --- Work Time

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Creditor-friendly laws are generally associated with more credit to the private sector and deeper financial markets. But laws mean little if they are not upheld in the courts. The authors hypothesize that the effectiveness of creditor rights is strongly linked to the efficiency of contract enforcement. This hypothesis is tested using firm level data on 27 European countries in 2002 and 2005. The analysis finds that firms have more access to bank credit in countries with better creditor rights, but the association between creditor rights and bank credit is much weaker in countries with inefficient courts. Exploiting the panel dimension of the data and the fact that creditor rights change over time, the authors show that the effect of a change in creditor rights on change in bank credit increases with court enforcement. In particular, a unit increase in the creditor rights index will increase the share of bank loans in firm investment by 27 percent in a country at the 10th percentile of the enforcement time distribution (Lithuania). However, the increase will be only 7 percent in a country at the 80th percentile of this distribution (Kyrgyzstan). Legal protections of creditors and efficient courts are strong complements.

Access to Finance --- Bank loans --- Bankruptcy and Resolution of Financial Distress --- Banks and Banking Reform --- Contract enforcement --- Creditor --- Creditor Rights --- Creditors --- Debt Markets --- Finance and Financial Sector Development --- Finance Corporation --- Financial markets --- Legal protections --- Legal systems --- Public Disclosure

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Asymmetric auctions are among the most rapidly growing areas in the auction literature. The potential benefits from improved auction efficiency are expected to be enormous in public procurement auctions related to official development projects. Entrant bidders are considered a key to enhance competition in an auction and break potential collusive arrangements among incumbent bidders. Asymmetric auction theory predicts that weak (fringe) bidders would bid more aggressively when they are faced with a strong (incumbent) opponent. Using official development assistance procurement data, this paper finds that in the major infrastructure sectors, entrants submitted systematically aggressive bids in the presence of an incumbent bidder. The findings also show that a high concentration of incumbents in an auction would harm auction efficiency, raising procurement costs. The results suggest that auctioneers should encourage fringe bidders to actively participate in the bidding process while maintaining the quality of the projects. This is conducive to enhancing competitive circumstances in public procurements and improving allocative efficiency.

Affiliated --- Affiliated organizations --- Auction --- Auctions --- Bid --- Bidders --- Bidding --- Competition --- Debt Markets --- E-Business --- Finance and Financial Sector Development --- Government Procurement --- Infrastructure Economics --- Infrastructure Economics and Finance --- International development --- Investment and Investment Climate --- Macroeconomics and Economic Growth --- Markets and Market Access --- Private Sector Development --- Public disclosure

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Tajikistan's economy has recovered strongly after the collapse of the 1990s, but sustaining rapid economic growth over the long term and reducing poverty present major challenges for policymakers. This paper contributes to the debate over the strategic role for fiscal policy to play in meeting these challenges, utilizing the "fiscal space" approach to assess the long-term potential for expanding public provision of growth-promoting goods and services and evaluating the priorities for public spending. It also analyzes the long-term risks to fiscal sustainability, from external public debt and the quasi fiscal deficit of the electricity sector. The paper contends that institutional reforms in key areas, notably public financial management, tax administration, and the energy sector, are crucial for generating fiscal space and for ensuring that higher levels of public spending are translated into stronger economic growth and poverty reduction. The priorities for government spending should be education, health, and the maintenance of the core networks of the existing infrastructure for energy and transport, rather than new public investment projects.

Access to Finance --- Banks and Banking Reform --- Debt Markets --- Economic growth --- Finance and Financial Sector Development --- Fiscal deficit --- Fiscal Policy --- Fiscal sustainability --- Poverty Reduction --- Public debt --- Public Disclosure --- Public financial management --- Public provision --- Public Sector Economics and Finance --- Public Sector Expenditure Analysis and Management --- Public spending