rafmacalaba/data-use-mentions-extended huggingface dataset:
Policy Research Working Paper 10993

# **Abstract**

This paper examines the medium-term effects of policydriven income shocks on human capital accumulation in low-income environments. Using administrative data on test scores of the universe of primary school students in Rwanda and the staggered rollout of coffee mills in the country, it shows a positive spillover effect of the coffee mills on students’ performance. Early life exposure to coffee mills is associated with a 0.09 standard deviation (4 percent) increase in student test scores. Improvements in household welfare, child health, and school attendance are likely operative channels of impact.

This paper is a product of the Office of the Chief Economist, Africa Region. 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 jmensah2@worldbank.org; adabalen@worldbank.org; and aimable.nsabimana@wider.unu.edu.

_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 Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent._ Produced by the Research Support Team
emphasizing moral hazard effects of UB in developing economies (e.g., Van Doornik et al. 2018), these studies underscore the scarcity of formal jobs in developing countries as a key factor reducing the likelihood of reemployment in the formal sector.

Another argument concerning the efficiency of UB in developing countries is the weaker institutional capacity of these countries in administrating and monitoring UB system. In the majority of developing countries, UB covers a small percentage of population and social security database is not well developed. Therefore, in these countries, protecting jobs – through stricter labor market regulations, such as higher severance pay or restrictions in hiring and firing policies – is more common than protecting workers – through social protection or unemployment benefits (Vodopivec 2013; Holzmann et al. 2012; Asenjo and Pignatti 2019; and Ozkan 2020). High economic cost of strict labor regulations has been well established in the literature, leading to the adoption of “flex-security” policies by many countries that combines relaxing labor regulations and increasing social security and unemployment benefits.

For example, in Brazil, Britto (2022) found that severance pay, which is a one-time lump sum payment to unemployed individuals has more detrimental effect on formal employment and reemployment earnings than extension in UB period, as the latter provides more bargaining power to the job seeker and involves in training and job matching support. Gerard and Naritomi (2021) also showed that upon receiving lump sum severance payment at layoff, workers increased their consumption by 35 percent despite experiencing a 14 percent long-term loss, indicating bias for present time and the importance of the disbursement timing of unemployment and social protection.

In an effort to increase the efficiency of UB system in an environment with limited administrative capacity, Chile introduced a two-tiered UB program in 2002, which provided benefits through a combination of mandatory individual insurance accounts fully funded by individual contributions and solidarity funding. The first tier would minimize disincentive and moral hazard and the second tier, funded by general tax, would protect vulnerable population without impeding formal jobs (
(2005) show that African firms have high indirect costs - costs for transport, logistics, telecom, water, electricity, land and buildings, marketing, accounting, security, bribes, etc. – compared to firms in Asia, and that African firms suffer significant losses due to power outages, crime, shipment losses etc. Further, the economic risk in Africa is typically high, credit is either expensive or not available, skilled labor is relatively expensive and domestic markets are typically very small. It seems reasonable to suppose that these factors pose significant problems for manufacturers in Africa. In this section we review what has been learned from the firm data about these key characteristics of the business environment in Africa.

# _i) Risk_

Entrepreneurs in Africa face significant uncertainty with regard to prices (including foreign exchange rates), demand, customer payment, reliability of infrastructure, corruption and so on. To investigate empirically the effects of risk is difficult, however, since risk is not easily measured. A common way of proceeding, especially in macroeconomic analysis, is to use some measure of volatility, e.g. in demand or the exchange rate. Gunning and Mengistae (2001) argue that this may be misleading, since the standard deviation of the exchange rate may not capture the credibility of the government’s exchange rate policy. The African firm surveys, however, have included questions about expectations for macroeconomic variables (inflation, interest rates, exchange rate) and firm variables (employment, output). Firms were asked for example about their expectations about the extent of depreciation during the next 12 months. This kind of data has enabled researchers to get a much better handle on the effects of risk on investment. Using data on Ghanaian manufacturing firms, Pattillo and Söderbom (2001) find that firms that face a lot of uncertainty regarding future demand tend to have lower profit rates than firms facing less uncertainty. The authors argue that this is because high risk makes firms choose a conservative product mix which has a relatively
Police System indicator from the Global Competitiveness project. This is not surprising: Foreign-owned firms have fewer connections with local residents, yet they have greater assets/streams of wealth. They are thus more likely to be targets and victims of crime.

Perhaps surprisingly, foreign firms have relatively higher productivity in more corrupt countries (as captured by the GC Corporate Ethics). This could reflect that foreign firms are less vulnerable than domestic firms from government expropriation, and are thus able to attain a higher level of productivity.

_Human capital._ Relative to domestic firms, foreign firms are more hampered in firm growth by higher _Enterprise Survey_ Skill Obstacles.

_Infrastructure and Access to Finance_ . Foreign-owned firms gain competitive advantages when domestic infrastructure or access to finance is worse. The coefficient of the interaction term between the foreign dummy and the Power Outage indicator from the Enterprise Survey for log labor productivity is positive and significant, which suggests that foreign firms have higher productivity advantages over domestic firms where local power outages are more frequent. The negative coefficient of the interaction term between the foreign dummy and the Getting Credit indicator from _Doing Business_ suggests that foreign firms have relatively higher productivity than domestic firms when the host country has worse access to finance. These findings are intuitive: Foreign-owned firms have more capital and can afford equipment to generate their own power. They are thus less vulnerable to problems with the local power supply or lack of finance, and their better access to critical inputs would naturally lead to competitive advantage over local firms in such poor business environments.

_Barriers to Entry_ . Foreign-owned firms are less burdened by difficulty in gaining access to land. The interaction between the foreign dummy and the Enterprise Survey’s Land Access Obstacle measure is positive and significant for firm employment growth. This likely reflects the fact that perhaps partly due to foreign firms’ stronger bargaining power, host countries often offer good deals on land when luring foreign direct investment (FDI) (Bai, Hsieh, and Song 2019), and land allocation policies thus bias the playing field in
of 155,450 and an HIV prevalence of 26% for FSW.<sup>21</sup> The primary aim of the study was to investigate the effect of a lottery intervention on combined HIV/STI incidence among FSW. In May 2018, 2,206 participants were enrolled using respondent driven sampling to identify FSW from various locations (bars, brothels, street). Individuals meeting the following eligibility criteria were eligible to participate: 1) female; 2) exchanged sexual intercourse for money in the past 6 months; 3) HIV-negative at enrollment; 4) aged 18 years or older; 5) not currently pregnant; 6) lived in Dar es Salaam for past three months and plan to remain living in Dar es Salaam for at least next 2 years; 7) have a cell phone able to receive text messages; 8) able to adequately grant informed consent; 9) in possession of a valid coupon (obtained through Respondent Driven Sampling).

Participants were randomized in a 1:1 ratio to receive standard HIV prevention services (testing, counseling, and weekly text messages on safe sex practices), or standard HIV prevention services plus entry in a random lottery rewarding safe sex as proxied by negative test for curable STIs.

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>3</sup> Our evaluation was designed prospectively, alongside the launch of the program. Thanks to the World Bank’s strong support for this policy and close collaboration with the governments of New Zealand, Tonga, and Vanuatu, we were able to conduct baseline surveys of households and communities in Tonga and Vanuatu before workers left to work in New Zealand, and then reinterview these same households 6, 12 and 24 months later. Using this rich baseline data and institutional knowledge of how recruitment for the program occurred, we use propensity-score matching to identify an appropriate set of households to act as a comparison group for the households participating in the RSE, and then use panel difference-in-differences and fixed effects estimation to assess the impacts of the RSE on household incomes, consumption, durable assets and subjective well-being, and additionally measure broader community-level impacts.

The results show that the RSE has had large positive effects on sending households in Tonga and Vanuatu. We find per capita incomes of households participating in the RSE to have increased

> 3 <u>http://www.ilo.org/dyn/migpractice/migmain.showPractice?p_lang=en&p_practice_id=48</u> [accessed August 11, 2010]

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selected poor households that did not receive a cash transfer in the 15 control villages where no households received cash transfers.

Among households randomly assigned to a CCT scheme, for their children under age six, the conditions imposed were quarterly visits to the local health clinic for child growth monitoring, while for children age seven to fifteen, the conditions were school enrollment with an attendance rate above 90 percent each quarter. In the villages randomly assigned to conditional cash transfers, satisfaction of the conditions was assessed using a family booklet in which the school teachers and the health workers signed and stamped the booklet for a given child to confirm school attendance and health visits, respectively. Further, in the CCT villages, local village committees, which had received specific training, randomly selected 20 percent of the booklets and verified the information reported in those with data from the school attendance registers and the health center visits register.

For families randomly assigned to a UCT program, the mother or father received a quarterly stipend for each child without conditions. For each child under age six, in the CCT and UCT programs, the mother or father would receive 1000 FCFA per quarter, for a total of 4000 FCFA per year. Using the exchange rate during the 2008 baseline of 415 FCFA = $1 USD, the annual transfer was worth approximately $9.64, which is 9 percent of household per capita expenditures. For each child age 7 to 10 (or in grades 1 to 4), the mother or father would receive 2000 FCFA per quarter (8000 FCFA per year), while for each child age 11 to 15 (or in grades 5 or higher), the mother or father would receive 4000 FCFA per quarter (16,000 FCFA per year).<sup>4</sup> There was no household transfer cap amount, so that each age eligible child could participate irrespective of the composition of the family. The transfers were made in cash during a quarterly

> 4 To minimize child fostering in response to the
GVCs, introducing the concept of “value chain modularity.” The next section identifies three key firm-level actors: lead firms, contract manufacturers, and platform leaders, and discuss their development, or “co-evolution.” A series of company, cluster, and country case studies are then presented to illustrate how supplier capabilities in various places have developed in the context of electronics GVCs. The sixth section identifies some of the persistent limits to upgrading experienced by even the most successful firms in the developing world. Four models used by developing country firms to overcome these limitations are then presented: (1) global expansion though acquisition of declining brands (Emerging Multinationals), (2) separation of branded product divisions from contract manufacturing (ODM Spinoffs), (3) successful mixing of contract manufacturing and branded products (platform brands) for contractors with customers not in the electronic hardware business, and (4) the founding of factory-less product firms that rely on GVCs for a range of inputs, including production.

Some of the cases presented here suggest that the 2008–09 economic crisis presented a window of opportunity, in particular, for firms based in Taiwan (China), which represent a key point of transformation in the industry and appear to be gaining more leverage in the industry in

> 1 U.S. Bureau of Labor Statistics Current Employment Statistics program, <u>http://www.bls.gov/data/#employment,</u> accessed Janurary 15, 2010.

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century B.C., when Chinese emperors began investing in meritocratic recruitment of professional bureaucrats to administer state agencies. Dell, Lane, and Querubin (2018) provide evidence, drawing upon data from Vietnam, that a history of strong states in East Asia has persistent effects to present time, long after the disappearance of those historical institutions, through norms that support local cooperation in the provision of public goods. This literature on state capacity in East Asia thus highlights _norms_ within state agencies as the key. But it raises the question: if strong bureaucracies in East Asia, whose effectiveness goes all the way down to village-levels, is due to inheritance of institutions and norms developed over centuries, how can countries in other regions replicate the success now, and urgently?

- Politics and bureaucracy in the United States in the 19th century looked very similar to conditions in many developing countries today. Bensel (2004) writes that for many men (women did not have the right to vote) at that time in the United States, “the act of voting was a social transaction in which they handed in a party ticket in return for a shot of whiskey, a pair of boots, or a small amount of money” (Bensel 2004, ix). Politics was dominated by clientelism and vote-buying; corruption was rife; state bureaucracies and city halls were captured by political leaders and their party machines (Fukuyama, 2018). Things began to change towards the turn into the 20th century, with a large literature examining the so-called Progressive Era in the United States during which bureaucracies were de-politicized. Rauch (1994) describes the reforms in this era that resulted in the professionalization of the bureaucracy in American cities, and the ensuing reduction in the political power to intervene in city management. Glaeser and Goldin (2006), Fukuyama (2018) and World Bank (2016) argue that the confluence of several conditions facilitated this era of bureaucratic reforms: rise in demand among elites for urban public goods, greater political engagement by non-elite
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, there were 294 settlements in Badghis for which IOM has collected data on inflows and outflows of persons (Figure 2).<sup>2</sup> Key indicators refer to IDP arrivals (Afghans who fled other settlements and presently reside in the assessed location), returning IDPs (previous IDPs who returned to their location of origin), returnees from abroad (Afghans who returned to Afghanistan after having spent at least six months

> 1 UNOCHA data only focuses on conflict-induced IDPs, while UNHCR data reports numbers for documented returns.

> 2 Out of these 294 settlements, IOM collected the first flow data in 2018 for 248 settlements, while 7 settlements started being surveyed in 2019, and 19 were first surveyed before June 2020, and 20 surveyed in December 2020. This indicates that, prior to these dates, there were no significant inflows of displaced population.

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(xi) indicator monitored (PM 2.5, Sox etc.); (xii) data value; (xiii) standard; (xiv) minimum; (xv) maximum; (xvi) monitoring frequency; (xvii) compliance ratio; (xviii) compliance status; (xix) district; (xx) employment; (xxi) output capacity; (xxii) output capacity units; and (xxiii) ownership (public/private). The summary statistics are given below.

While the SPCB’s mostly rely on inspected data, increasingly, self-monitoring, recordkeeping and reporting are being recognized by the Central Pollution Control Board (CPCB) as providing essential data to supplement and support inspections. This approach is well established and accepted in addressing environmental compliance and enforcement problems in many countries, such as the United Kingdom, Germany, the United States, Japan, Thailand, and others. In the United States, data gathered through self-monitoring are relied upon extensively to determine compliance and take enforcement actions. To ensure the integrity of the data, EPA requires facilities to self-certify their compliance annually and makes all 8
Policy Research Working Paper 10783

# **Abstract**

What drives citizen’s trust in state institutions? There are longstanding debates on the pathways towards institutional trust: is trust driven by citizen’s perceptions of policy outcomes or by their perceptions of the integrity and credibility of policy processes? This paper investigates this question using data from a large-scale survey of 5,916 Moroccans and argues that process matters more than outcomes for trust-building. The paper first shows that Moroccans’ trust in institutions is strongly associated with positive evaluations of policy outcomes—including satisfaction with the delivery of public goods and services and with government’s economic performance. It then provides evidence that institutional trust is even more strongly and robustly associated with the quality of governance processes, and in particular with the perception that institutions function with integrity and make credible commitments. Going beyond policy variables, the paper also provides complementary evidence that institutional trust is contingent on individual-level social capital, including social trust, and socio-demographic factors. The conclusion briefly lays out the policy implications of this research and areas for future investigation.

This paper is a product of the Governance Global Practice. 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 diane.zovighian@sciencespo.fr, mcloutier1@worldbank.org, and above@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
%|
|Assisted birth delivery|83|93|1.2%|64%|36%|
|Post-natal care,0-5|23|33|1.2%|92%|8%|
|Prenatal care,0-4|76|87|1.3%|76%|24%|
|Immunization vaccines,0-4|84|85|0.1%|---|---|
|Non-wasting,0-4|88|74|-1.7%|85%|15%|
|Non-stunting,2-17|78|72|-0.8%|---|---|
|Non-underweight,0-17|86|88|0.3%|57%|43%|
|_Aggregate HOIs_||||||
|IOHa9-15-HousingServices|83|94|1.2%|60%|40%|
|IOHa0-4-HousingServices|77|92|1.7%|63%|37%|
|IOHa0-4-Nutrition & ECD|17|16|-0.1%|---|---|
|<br>_Source_: HIECS 2000 and 2009 surveys, EDH|S 2000 and 2|008, and|authors’ c|alculatio|ns.|

_Narrowing the Urban-Rural Opportunity Gap_ . Between 1999/2000 and 2008/09, the urban-rural opportunity gap contracted for basic housing services and education, but remained unchanged for nutrition opportunities. This was caused not only by much faster improvement in the average HOI in rural areas, but also by the fact that most rural HOIs improved at a faster pace while eleven urban HOIs had little progress or deteriorated.<sup>25</sup> Basically, the average rate of progress of rural HOIs more than doubled the urban annual rate (1.4 versus 0.5 points) and the aggregate rural HOIs for basic housing services for 9-15 and 0-4 year olds increased by 42 and 41 points, while