rafmacalaba/data-use-mentions-extended huggingface dataset:
- 16 -

We can use the postal index score (letters per capita performance allowing for income) for 2000 to see what correlates with “better than expected” postal performance. Looking across the first row of the correlation matrix, it is possible to see how closely our index of postal performance is related to the other indicators in our database. In short, the postal index appears to be strongly and positively correlated with our measure of trust in the postal system and the number of letters per employee, and strongly negatively correlated with total postal expenditure divided by the number of letters delivered.<sup>21</sup> Both postal expenses per letter and letters delivered per postal staff member are strongly correlated with postal performance—lower costs and fewer staff per letter are correlated with more letters sent at a given income (see Figure 3).

# **Figure 3.**

<!-- Start of picture text --> 4<br>3<br>2<br>y = -1.2492x + 0.8064<br>1<br>R 2 = 0.4544<br>0<br>-1<br>-2<br>-3<br>-4<br>0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50<br>Expenses/Letter<br>(tw o outliers removed)<br>Postal Performance<br><!-- End of picture text --> Causation runs in both directions. High fixed-costs mean that factors that increase volumes will improve efficiency, while improved efficiency and quality will also increase the demand for mail services. Trust in the postal network is also a significant correlate with postal performance— countries with low trust in the postal system (a score of below 4 out of 7) average postal performance of -0.59, compared to countries with high trust (above 4)
); IMF Annual Macroprudential Policy Survey; World Bank. Note: EMDEs = Emerging market and developing economies, EAP = East Asia and Pacific, ECA = Europe and Central Asia, LAC = Latin America and the Caribbean, MNA = Middle East and North Africa, SAR = South Asia, and SSA = Sub-Saharan Africa.

A. Sample includes 123 EMDEs. Unweighted average of the Macroprudential Policy Index of Cerutti, Claessens, and Laeven (2017). The Macroprudential Index measures the tools used by authorities and is based on a simple sum of 12 tools, including the countercyclical capital buffer and loan-to-value ratios.

B. Macroprudential instruments include counter-cyclical capital buffer, limits on leverage ratios and credit growth, capital conservation buffer, etc.

C. Based on data for 2017 in 98 EMDEs. Broad-based tools include the counter-cyclical capital buffer, limits on leverage ratios and credit growth, capital conservation buffer, etc.

D. Number of EMDEs that have an established macroprudential authority, that is housed in the central bank and has legislative powers to implement macroprudential policy.
measure of welfare, as used by Serbia’s official poverty and inequality indicators. Appendix 1 explores an alternative question about the incidence of indirect taxes over the life cycle with respect to household consumption as a proxy for permanent income, using adjustments by the income-consumption ratio. The estimated value of indirect taxes that can be included in the analysis reflects the extent of information available in the HBS. In most countries, total consumption of households in the household surveys (HBS) represents a fraction of household consumption reported in the National Accounts. In this application of the methodology to Serbia, the fraction of indirect taxes that can be captured in the analysis (Table 1) closely reflects the fraction of consumption that is captured in the HBS (close to 60 percent, see also Appendix 4). Due to the lack of an available input-output table in Serbia, this analysis has not been able to estimate indirect effects of indirect taxes.

On the spending side, the SILC includes detailed information on who received payments from contributory and non-contributory social protection programs. Among contributory benefits, the data includes all types of pensions (old-age, disability, survivor’s, agricultural, pension from abroad, pensions from private schemes), unemployment benefit, and sickness benefit. The non-contributory benefits included in the survey are financial social assistance, child allowance, parental allowance, foster care benefits, war veteran benefits, severance payments, one-off assistance paid by local governments, heating and utility bills allowance. Wage compensation during maternity leave is not defined as such in the data, but we use the question “Did you receive any pregnancy-puerperal benefits” for this purpose. Caregiver allowance is placed in one variable, so it is not possible to distinguish what is contributory and received through the Pension Fund and what is noncontributory and received from the Ministry of Labour, Employment, Veteran and Social Affairs. We used the reported values from the SILC database for all the benefits.<sup>9</sup> Assigning the value of public spending on education follows
estimates of food access using the FIES to monetary poverty. Although monetary poverty and food access are distinct concepts, we illustrate there exist empirically supported assumptions under which models of consumer theory predict that many key manifestations of poor food access —undernourishment and undernutrition — are more prevalent in poorer households (e.g., Jensen and Miller 2010).<sup>4</sup> Importantly, given this predicted relationship, and given that both undernourishment and

> 3For a comprehensive list of research articles performing this type of analysis, see ”https://www.fao.org/in-action/voices-of-the-hungry/resources/research/en/”.

> 4This is distinct from the more dynamic relationship with how households become food insecure and poor, where poor human development outcomes can lead to and are also potentially a result of poor earnings (e.g., Kremer and Miguel 2004; Vermeersch and Kremer 2004; Glewwe and Miguel 2008; etc.)

3
**

This paper studies empirically the relationship between trade policy and _individual_ income risk. The analysis proceeds in three steps. First, longitudinal data on Mexican workers are used to estimate individual income risk in various manufacturing sectors. Second, the variation in income risk and trade barriers _−_ both over time and across sectors _−_ is used to arrive at estimates of the relationship between trade policy and individual income risk. Finally, using the estimates of this relationship between trade policy and income risk, a simple dynamic general equilibrium model with incomplete markets is used to obtain estimates of the corresponding welfare effects.

33
a large drag in the capacity of rural areas to produce income, is at historically low levels, see Figure 7 panel a.

**Figure 7, Panel a: Conflict: Battle related deaths**

<!-- Start of picture text --> 50,000<br> 40,000<br> 30,000<br> 20,000<br> 10,000<br> -<br>2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023<br>Battle-related deaths<br><!-- End of picture text --> Panel b. Trends in nominal and real wages, unskilled and skilled labor <!-- Start of picture text --> Unskilled labor Skilled labor<br>130 130<br>ITA R1 R2 R3 ITA R1 R2 R3<br>120 120<br>110 110<br>100 100<br>90 90<br>80 80<br>70 70<br>Nominal Wage Real wage Nominal Wage Real wage<br>Wage index Wage index<br><!-- End of picture text --> _Source: World Bank based on ACLED_ and WFP food monitoring data _Note: conflict 2023 data reported as in March._

# Conclusion

Afghanistan has experienced significant economic and social changes since the regime change in late 2021. However, how these multiple shocks have affected monetary poverty has yet to be assessed since up-to-date household and budget survey data has not been available, a situation unlikely to change in the short term. Under these circumstances, round 3 of the AWMS phone survey was expanded to include questions to predict monetary poverty through survey-to-survey imputation techniques. The resulting 19
returns of self-employment for salaried work poccurs in the contp,xti of economic downturns where the informal return must fall to absorb displaced workers. Similarly, to the degree that increased interest rates are associated with recession and the loss of salaried jobs, again, we may expect more movement of the displaced into the informal sector: movement into self-employment would be counter-cyclical. In both cases, the predicted signs would be the opposite of those postulated by the model above.<sup>3</sup> The next section offers a method for using logit methods in a rotating panel context to estimate the determinants of the worker's decision to move, and hence to test between these two views.

# **HII. Logit Analysis in a Rotating Panel Context**

# Selection of Individuals

In the relatively common case that we address, individuals are selected according to a "rotating" scheme in the following manner. In period 1 of a total of T periods, the first sample is selected of N individuals who will remain in the sample for z periods: yll, Y21 _YNI._ In the second period, the first m = _NIz_ individuals are retired and the first place until the Nth place are occupied by the individuals who follow individual m: Y12 , Y2 2 . -,YN2. The process of retiring and replacing continues for each period **.** t with a new sample: **Y,t** Y2t _,--YNt._ The combination of data obtained by this process is called a Rotating Panel and we can considered it ordered as:

> 3 See Maloney (1997) for a discussion of the relative merits of formal vs informal work and the procyclicality of the latter in Mexico.

5
<br>value|0.15|82||0.9462|||0.9994|||

_Note: *** significant at 1% level, ** significant at 5% level, * significant at 10% level. RE - random effects generalized least squares estimation method, POOLED IV 2SLS - pooled two stage least squares procedure with instrumental variables on panel data; robust standard errors utilized. The detailed description of all the models applied in our analyses is given in Annex 4._ _Source: OECD, Eurostat, World Bank, Heritage Foundation, IZA, own calculations._

# **6.** **<u>Conclusions</u>**

Several estimation approaches for different data samples and explanatory variables were used in this paper to analyze the impact of labor market institutions on the development of shadow production and employment in European countries. The presented results for different model specifications show that the most robust estimation outcomes come from specifications that use as dependent variables the shadow economy as percentage share on overall official GDP, the share of labor force not contributing to the pension system and the share of labor force employed without a legal written contract. Models explaining the share of labor force employed in small firms with fewer than ten employees or being self-employers do not offer robust results, as the two indicators proxy shadow employment only weakly and are influenced by other factors and patterns of development. Our findings also confirm that availability of relevant data related to the shadow economy and employment for European 26
*Fuel**

**As for electricity, the Palestinian population relies on fuel imports.** Under the Paris Economic Protocol (PEP), the West Bank and Gaza is allowed to import petroleum from sources other than the Israeli supplier provided that the final consumer price in the Palestinian Territories is less than 15 percent lower than in Israel. The clause further prescribes that Israel shall collect taxes and customs at crossing points.

**The General Directorate of Petroleum (GDoP) is charged with the responsibility of regulating imports of oil and petrochemicals.** The GDoP purchases an average of 80 million liters of fuel a month, including 25 million liters of gasoline, 55 million liters of diesel, and 14,000 tons of cooking gas and other byproducts like kerosene and gas. It is also the monitoring and licensing agency that sets petroleum and petrochemical prices.

**Fuel prices in Israel depend on the world oil price index.** Average prices are calculated monthly based on the last five workdays of the previous month. The GDoP is provided with the Israeli refineries’ costs, profit margin, and the logistic expenses. A deduction is applied for the global gasoline evaporation rate (0.005), and addition of the Blu Tax and VAT taxes.

**Fuel prices in the Palestinian Territories do not fully reflect fluctuations in global oil prices due to the addition of taxes and subsidies, and exchange rate fluctuations with the dollar.** In general, taxes represent an average of 68 percent of total purchase price. Government fuel subsidies on the consumption of petrol, gas, and other fuel products help alleviate price increases for Palestinian consumers. The GDoP calculates fuel prices at the beginning of every month after consultation with the Minister of Finance to determine the size of financial subsidies, which depends on the financial position of the government, liquidity available in the Treasury, and fluctuations in global oil prices.  Retail prices in the West Bank and Gaza are lower than the global price due to the subsidies, on
Policy Research Working Paper 9286

# **Abstract**

Payments of bribes and the expenses incurred on rent-seeking activities impose a significant financial burden on private firms, which is compounded when they do not have enough funds of their own or find it costly to borrow externally. This paper hypothesizes that financial constraints magnify the harmful effects of corruption. It applies this idea to the impact of corruption on employment growth among private firms. Using firm-level survey data for 109 countries, the analysis finds that corruption has a much larger negative impact on employment growth for firms that are financially constrained compared with firms that are not financially constrained. For the baseline specification, a one standard deviation increase in the bribery rate brings about a decline in the annual growth rate of employment of financially constrained firms that is 2.3 percent greater than that for firms that are not financially constrained. This is a large difference given that the mean employment growth is about 5.1 percent. The results show that corruption “sands the wheels” at high levels of financial constraint and “greases the wheels” of an otherwise slow bureaucracy at low levels of financial constraint.

This paper is a product of the Global Indicators Group, Development Economics. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://www.worldbank.org/prwp. The authors may be contacted at mamin@worldbank.org.

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for
# **6 Conclusion**

How do regional trade agreements affect non-members’ exports? The conventional view is that RTAs, by lowering tariffs between members, increase trade policy discrimination faced by firms in third countries, leading to trade diversion. However, modern RTAs often go beyond traditional trade policy and can increase the similarity of export markets, possibly reducing entry costs and leading to higher exports. This paper builds on the recent literature on extended gravity and uses detailed firm-level data on exports from Costa Rica and information on the content of RTAs to shed new light on this question.

We find that RTAs increase the probability of export and entry of non-member firms that previously exported to one of the member countries. The positive spillover effects are larger for deeper trade agreements and especially those that include nondiscriminatory (MFN) provisions and provisions on regulatory issues (i.e. SPS/TBT measures). Moreover, the positive effects of deep RTAs are largely driven by products that are sensitive to regulations, suggesting that firms that already export to one of the members benefit from prior adaptation to the regulatory regime and face reduced entry costs to new destinations.

These findings have important policy implications. While multilateral trade negotiations have been stalled in recent years, RTAs made much progress. This paper has an upbeat message, as its results indicate that the trade benefits of deep trade agreements could be substantially larger than what previous research indicates. Besides the direct effects through trade creation between members, this paper identifies a new source of positive externality for deep RTAs that facilitates exports and entry for firms in nonmember countries. It also points to the importance of properly designing the content of new trade agreements. The identified spillover effect is driven by provisions in deep trade agreements, such as SPS and TBT measures, that promote regulatory convergence. An important question left for future research is how to carefully craft these rules in RTAs to maximize the positive spillover effects on non-members.

21
This version: 15 Feb 2024 27 Respondents drew vivid contrasts to highlight the improvements in housing quality.

_Big families lived in very small plank houses. Roofs leaked on rainy days. Now we live in_ _the new 21st century._ [Multiple respondents, Chinese, Selangor]

# **3c.  The Downside of Progress**

The narrative data also reveal the disenchantments among Malaysians that are not completely captured in quantitative data (see section 2 and Appendix Note B). **Table 4** reports two themes. Ninety percent of the FGDs in Peninsular Malaysia and 87 percent in Sabah reported an “imbalance” between income and expenses, and 73 percent of FGDs in Peninsular Malaysia and 47 percent in Sabah had statements that families now needed dual-earners and multiple jobs to meet basic needs.

# **Imbalance between income and expenses**

Participants narrated _why_ they did not feel that their lives were better-off compared to the previous generation despite visible signs of progress. Incomes have climbed but so has the cost of living without concomitant wage increments, making respondents feel poorer than the income class ascribed to them by official statistics.

Table 4: Focus Grou Level Res onses on Decline in Livin Standards <u>p p g</u>

|**Theme from qualitative coding**|**% of FGDs that mentioned**<br>**declines**|
|---|---|
||Peninsular Malaysia<br>Sabah|
|Imbalance between income and expenses|95.1<br>86.6|
|Need multiple jobs/ households need dual<br>earners/insufficient jobs|73.1<br>46.6|
|Source: MLSQS 2019 data.||

27
borrowers to be less willing to enter such relationships, thereby lowering the effective demand for external financing. Furthermore, less-competitive banking systems can be more costly and exhibit a lower quality of services, thereby lowering the effective demand for external financing and thus encouraging less growth. These effects may further vary by the degree of competition in the country’s overall financial sector; for example, the degree of hold-up problems in the system may vary with the availability of financing options outside of the banking system (e.g., from capital markets).

Although some of the relationships between competition and banking system performance have been analyzed in the theoretical literature and even empirically in some country studies, cross-country empirical research has so far mainly investigated the effects of regulations and specific structural or other factors on banking performance. For example, in a broad survey of rules governing banking systems, Barth et al. (2001) document for 107 countries various regulatory restrictions that were in place in 1999 on commercial banks, including various entry and exit restrictions and practices. Using this data, Barth et al. (2003) document (among other things) that tighter entry requirements are negatively linked with bank efficiency, leading to higher interest-rate margins and overhead expenditures, and that restricting foreign bank participation tends to increase bank fragility. There have also been a number of recent crosscountry studies on the effects of the structure of banking systems on financial sector stability, access to financing, and growth (see Berger et al. (2004) for a review). For example, DemirgüçKunt et al. (2004) investigate the effects of regulations, market structure, and institutions on the cost of financial intermediation.

3
1

# **1.   Introduction**

The financing of small and medium sized enterprises (SMEs) has attracted great interest from academics and policy-makers around the world. SMEs play an essential role in building a competitive private sector and contributing significantly to employment and economic activity.<sup>1</sup> Despite their importance, SMEs seem significantly more financially constrained than large firms, especially in developing countries. Indeed, enterprise-level surveys conducted by the World Bank show that a much smaller share of SMEs has a loan or a line of credit by comparison with large firms, and also that access to finance is relatively more constrained in lower and middle income countries (Figure 1a). Other studies using enterprise-level data show that the lack of access to external finance constitutes a major constraint to SME growth.<sup>2</sup> Despite the importance of the topic of SME finance, there has been relatively little research on the supply side of bank finance to SMEs. Notable exceptions are Beck, Demirguc-Kunt, and Peria (2008 and 2009), and De la Torre, Peria, and Schmukler (2010), which provided the first measures of the extent of bank lending to SMEs, as well as the drivers and obstacles to further SME lending. These studies were based on two surveys, the first covering 45 developing and developed countries and the second 3 Latin American countries and one Central European country. The results show that most banks increasingly see SMEs as an attractive business, in contrast with the traditional view that SME lending is dominated by small banks and based on relationship lending. However, the studies also show that institutional obstacles to SME lending remain and that the SME market is still far from saturated.

The ongoing efforts to investigate further the status of bank lending to SMEs are particularly relevant for the Middle East and North Africa (MENA) region. As shown in Figures 1b and 1c, enterprise-level surveys conducted by the World Bank suggest that SMEs are particularly financially constrained in MENA countries – only 20