rafmacalaba/data-use-mentions-extended huggingface dataset:
|**-7.8**<br>se,WDI,Coad|**0.61**<br>yet. al.(201|**21**<br>0) (ix)|**57%**|**14%**|**5%**|

_Source:_ Wealth of Nations (2011:195), PRMPS MTEF Database, WDI, Coady et. al. (2010) <u>(ix)</u> _Notes:_ Oil dependent refers to more than 25 % income, export, or fiscal revenue dependence (source Barma et. al. 2011) 66. Prevailing political pressures for greater inclusiveness have seen a number of MENA governments emphasize boosting wages and benefits, and increasing transfers and subsidies – especially towards aggrieved groups and politically-influential constituencies. Most of these measures seem to be short term, ad hoc and ultimately unsustainable. This implies westward movement in Table 1 (and Figure 4), as intertemporal commitments come under strain and short-term considerations overwhelm long-term planning. A central question therefore will pertain to the institutional capability of MENA‘s governments to both maintain aggregate fiscal discipline, even in the absence of significant changes in resource prices, while enhancing the selectivity and sustainability of distribution programs.

67. Various forms of Medium Term Expenditure Frameworks (MTEFs) can serve as instruments to support both aggregate fiscal discipline, expenditure prioritization, and performance based orientation. A recent cross-country dataset aims to capture the prevalence of degrees of MTEFs globally, focusing on three indicators to denote institutionalization of macro-fiscal management, expenditure prioritization, and performance orientation (see Table 7, Colum vi-ix, Table 8).<sup>26</sup> On adoption of expenditure prioritization mechanisms (MTBFs), MENA ranks lowest globally, followed by LAC. This raises significant questions as to the medium term mechanisms MENAs governments can adopt to sustainably reprioritize distribution programs in the context of political transitions, especially as
, we distinguish between incumbents and new businesses using available identification information (tax ID). “Repeated” (column 2) is the number of filing records in a given year that also appeared in the previous year, and “New” (column 3) is the number of filing records that appeared in the dataset for the first time in the current year. The data suggest entry and exit rates of household businesses of about 5-6 percent a year during 2018-2019.<sup>14</sup> The category of “irregular filing”, housed in separate databases from the regular annual filing database, is of particular interest. “Closure filings” defines the number of firms that filed to (permanently) close their business. “Suspension filings” defines the number of firms that filed to (temporarily) suspend the business in at least one month of a given year.<sup>15</sup> While the former provides a measure of exit in line with earlier studies, we believe the latter is a new indicator that captures how household businesses cope with idiosyncratic or economy-wide shocks

> 10The data on operating industry is only available for 2018 and 2019.

> 11The VEC is collected by the General Statistical Office of Vietnam (GSO) once every five years, the last round in 2017. The survey includes data on both formal enterprises and household businesses operating in the country (Le et al., 2020).

> 12This number also aligns with data from the 2017 VEC, which shows that there are over 850,000 HBs reported in the census that possess a tax ID, approximately 135,000 of which located in Ho Chi Minh city and 71,000 in Ha Noi.

> 13See Le et al. (2020) for a discussion of pull and push factors related to HB registration incentives.

> 14Certain HBs might have closed the business without officially filing for business closure. The repeated and new filings are subject to errors due to provincial tax offices’ tax-ID reporting timeline and accuracy.
br>-OECD Main Science and Technology<br>indicators<br>-RICYT<br>-Taiwan(China)Statistical Data book|
|Rdperfhe|R&D<br>expenditure<br>performed by<br>higher<br>education|Percentage of total R&D<br>expenditure|-UNESCO Statistical Yearbooks<br>-OECD Main Science and Technology<br>indicators<br>-RICYT<br>-Taiwan (China) Statistical Data book<br>- Database developed byFurman et al.|
|Rdperfpub|R&D<br>performed by<br>the public<br>sector|Percentage of total<br>R&D performed by the<br>public sector|-UNESCO Statistical Yearbooks<br>-OECD Main Science and Technology<br>indicators<br>-RICYT|
|stockpat, stockpatEPO|Stock of patents<br>granted by the<br>USPTO and<br>EPO|Sum of patents from the first<br>year that the patenting office<br>granted a patent to time “t”|Author’s calculations|

**3. Summary Statistics of Variables Used in Econometric Analyses Presented in Table 6.**

30
maximum population densities and different drone technologies_

|**Max density served**<br>**(Population/km2)**|**Share of isolated rural**<br>**population served (percent)**|**Total annual cost in milli**<br>**3 000$ Drones**|**on $ (average over 5 years)**<br>**50 000$ Drones**|
|---|---|---|---|
|150|69|5|9|
|100|51|4|7|
|75|37|3|5|

Based on the most conservative assumptions in this analysis for Sierra Leone, bringing weekly supplies to remote areas by drone costs 3 times less every year than increasing rural accessibility from 30 to 31 percent; and 22 times less than increasing accessibility from 69 to 70 percent. Moreover, these costs are likely to go down quickly, as drone markets mature, and the number of service providers increases. Thus, at least in the short term, drone delivery could help increase social integration in remote rural areas.

# **4. Conclusion**

This study presented first estimates of global road access in rural areas, combined with road upgrade cost and strategies to explore how rural access can be increased. To do so, we used the latest state-of-the-art publicly available data sets: road network data from OpenStreetMap and global population estimates from WorldPop.

The results showed that for some countries, universal access to paved roads is not a realistic goal in the short to medium term. We thus reversed the question and asked how much incremental access can be achieved if countries spend 1% of their GDP annually on the upgrade of rural roads, beginning with those that have the highest impact. We found that, under optimistic assumptions on GDP growth, rural accessibility would only increase from 39 to 52 percent by 2030 across
sup>7</sup> Revenues from offshore represented around 4.4% of total CIT revenues, a share which eventually increased to 9.4% by 2018.

Importantly for our analysis, the aggregate data also suggest that the reform was not accompanied by other tax relief measures that limited the increased tax burden for offshores in the face of the rate increase. In fact the effective tax rate imposed on offshores (calculated as paid tax/taxable profit) hovered even slightly above the actual 10% rate in the period 2014-18 (11.8%-13.8%).<sup>8</sup> That is due to the fact that offshores can sell up

> 7This dominance of the onshore sector is due to two main reasons. First, during the period of analysis they are responsible for around three-quarters of total revenues. Second, as noted below, in 2014 only 20% of offshores were actually liable to pay taxes because of their age.

> 8This rate is computed by dividing the tax paid by offshore firms by their overall profits, both data

8
of gold would lead to an eventual parity adjustment or outright abandonment of the gold standard. In more recent years, with the advent of much higher international capital flows, international reserves can be a self-insurance against the “sudden stops” alluded to above. In a survey of central bankers, the IMF found that about 80 percent cited “buffer for liquidity needs” as a motivation for increasing reserves, and about 60 percent cited “smoothing of exchange rate volatility” as another reason for building reserves (IMF, 2011c).

Following the crises of the 1980s and 1990s, the fear of “sudden stops” led to policy guidance in the form of reserve adequacy. For example, the Guidotti-Greenspan rule suggests that countries should

> 103 See IMF (2011b).  In particular, Annex 2 provides details on the calculation.

43
...nancially constrained and at the same time help the economy to recover faster. In this sense, social transfers seem to provide an inclusive manner to deal with temporary and deep recessions, like during the COVID-19 pandemic. Second, because most of the e¤ect of a social transfer shock impacts the economy especially in the short- and medium-run (as opposed to having truly long-lasting e¤ects) and through private consumption (as opposed to via increasing the economy’s productive capacity and investment), this type of ...scal policy tool is far from ideal to increase long-term growth and productivity.

# References

Aguiar, M. A., Bils, M., Boar, C., 2020. Who are the hand-to-mouth? NBER Working Paper No. w26643.

Alesina, A., Barbiero, O., Favero, C., Giavazzi, F., Paradisi, M., 2017. The e¤ects of ...scal consolidations: Theory and evidence. NBER Working Paper No. w23385.

Altig, D., Christiano, L. J., Eichenbaum, M., & Linde, J., 2011. Firm-speci...c capital, nominal rigidities and the business cycle. Review of Economic dynamics, Vol. 14, No. 2, pp. 225-247.

Barattieri, A., Basu, S., & Gottschalk, P., 2014. Some evidence on the importance of sticky wages. American Economic Journal: Macroeconomics, Vol. 6, No. 1, pp. 70-101.

Barros, R., Bonomo, M., Carvalho, C., Matos, S., 2009. Price setting in a variable macroeconomic environment: Evidence from Brazilian CPI. Mimeo, Getulio Vargas Foundation and Federal Reserve Bank of New York.

Beck, T., Demirgüç-Kunt, A., Levine, R., 2007. Finance, inequality and the poor. Journal of Economic Growth, Vol. 12, No.
goods and services. If immigration reduces low‐skilled wages, this will tend to decrease the prices of unskilled‐intensive goods and services, thereby raising the welfare of consumers (Cortes, 2006).

Second, preferences on immigration may also be shaped by perceptions regarding the impact of immigrants on fiscal outcomes. Facchini and Mayda (2009) find evidence consistent with the _tax‐adjustment_ model, where following an inflow of unskilled workers that may demand social assistance, tax rates would be increased to balance the government’s budget. In this case, high income individuals are more negatively affected by unskilled immigration than low‐income individuals as they bear most of the additional cost to the welfare system. However, they are more positively affected than low income individuals by skilled immigration.

Finally, attitudes toward immigrants may also be affected by other factors such as opposition to different social norms and customs, as well as ethnic prejudice. Card et al (2012) use the ESS to measure the relative importance of economic and compositional concerns – which are crucial to understand discrimination toward immigrants – in driving opinions about immigration policy. While they find that concerns over the effect of immigration on wages and taxes are important, differences in compositional concerns explain most of the variation in attitudes toward immigration across different native demographic groups.

These three channels have implications regarding the relationship between the age of an individual and his or her position regarding immigration. Given that older individuals are more likely to be out of the labor force – and thereby less concerned about the impact of immigrants on the labor market – and to have more savings than their younger counterparts – and thereby 6
and larger categories by location only (Table 12 and Table 13). Lastly, we estimate the effects of bribery using a panel of firms surveyed in both 2006 and 2010.

# <u>A. Firm & Country Groupings</u>

First we analyze bribery distortions for only small and medium-size enterprises (SMEs). SMEs form the backbone of economic activity in most of the developing countries and they suffer more from unfavorable business environment. In order to understand how stringent bribery is for their evolution, we restrict the sample to firms with employment levels less than 100 workers. Since sales data varies substantially across countries, we use employment levels to define SME. Excluding firms with more than 100 workers drops the sample size to 4,826 firms.

19
# **Does Greater Regulatory Burden Lead to More Corruption? Evidence Using Firm-Level Survey Data for Developing Countries**

By: Mohammad Amin* and Yew Chong Soh** (World Bank)

## **JEL Codes:** D72, D73, H11, H77, L51

## **Keywords:** Corruption, Regulation, Firm level, Bribery

____________________ We would like to thank Jorge Luis rodriguez Meza for very helpful comments. All remaining errors are our own.

* Corresponding Author. Senior Economist, Enterprise Analysis Unit, DECEA, World Bank Country office in Kuala Lumpur, Malaysia, World Bank **.** Email: mamin@worldbank.org

****** Consultant **,** Enterprise Analysis Unit, DECEA, World Bank Country office in Kuala Lumpur, Malaysia, World Bank **.** Email: <u>ysoh@worldbank.org</u>

1
- information (OECD, Eurostat, and WHO 2011). In line with convention, the analysis discussed in this work only considers current spending estimates.

- 2) **Education** : The database of education expenditures used for this analysis was curated by members of the World Bank’s Education Global Practice (Al-Samarrai, Cerdan-Infantes, and Lehe 2018). The data set combines estimates from the Unesco Institute of Statistics (UIS) (Unesco 2019) and the International Monetary Fund (IMF), with the latter being used when UIS information was missing.<sup>3</sup> The data include total government spending on all aspects of education, not distinguishing by level of educational attainment or per-student costs. Unlike for health, information for education spending is not disaggregated into capital and current spending. Even when available, the disaggregation is considered not reliable. For this reason, in the rest of the paper we will consider the sum of capital and current spending estimates.

- 3) **Social protection** : Social protection spending includes conditional/unconditional cash transfers, fee waivers, in-kind, public works, school feeding, social pension (non-contributory), and other social assistance. Notably, it excludes pensions and other contributory programs.<sup>4</sup> This data source is the most limited; it only has 124 observations (1 observation for each of the 124 countries), making it impossible to examine changes over time. The information has been curated by the Social Protection Global Practice at the World Bank and made available through the Atlas of Social Protection – Indicators of Resilience and Equity (ASPIRE) data set (World Bank Group 2019). ASPIRE only provides data on spending as a percent of GDP, not as a percent of total government expenditure, so this is also what we present here. Both current and capital spending are included in these values. While ASPIRE data have limitations, they are the most comprehensive set of social protection spending data for low-income
Mauritania (-3%), Namibia (-22%), and Swaziland (-3%). In addition, the calibration process gives negative values for _informal labor_ used to produce _domestic_ and _exports_ in Cape Verde (-5%), South Africa (-13%) and Zimbabwe (-13%).

The first problem is a general question about the reliability of GDP data in small developing economies. In particular, statisticians dealing with developing economies make efforts to incorporate the informal economy, but to the extent that some informal activities escape the measure of GDP, our calibrated informal sectors are too small. Data reliability may affect results for all countries, but it 12
unconditional basis as they are somewhat protected. They may even tempt project sponsors to misbehave and pursue riskier projects.<sup>42</sup> Finally, while the fund was supposed to act as a catalyst for initiating private sector investment in infrastructure with a limited time horizon, it appeared that it created a situation where private sector investment may have become dependent on government backed finance as the existence of the fund may have taken the pressure off the government to improve the regulatory framework to such a degree that government backing was needed to a lesser degree to attract private financing.

> 38 It should also be noted here that the provision of long-term financing resources was hampered by an unstable macro-environment.

39 In this context, a demand survey may have helped the government to identify obstacles to private participation and may have given important input in the designing the financing facility.

40 This policy was meant to be transitional. The bulk tariff structure under the policy was intended to be transitional and GOP was to reform its policy creating a competitive bidding structure and adjusting tax exemptions and incentives provided. Nevertheless the Government did not undertake these sector reforms (which it had agreed to in a parallel project with the World Bank. The current problems are a result of a number of factors including the stalled reforms in the sector, a sharp economic downturn that substantially reduced the demand for power and the government had overestimated power needs which resulted in an oversupply.

41 Commercia **l** enders use loan convenants to exert control over management or require them to behave in a fashion that is in line with the borrowers interest of repayment of the loan. NDFC has tried to mitigate this risks by being presented on the boards of all projects it finances. 42 See for a detailed discussion: Klein (1997).
policy became increasingly flexible as reforms proceeded (Chan 2001). A “self-supplied food grain” _hukou_ , a new type of urban _hukou_ in rural market towns, was issued to farmers who ran business or undertook industrial or commercial activities in rural market towns. Later, a more formal urban _hukou_ was issued to those people who had stable non-agricultural jobs and accommodations in selected cities and designated towns. Thus, a more flexible migration policy could have facilitated migration into towns.

Data on national migration flows (Table 1) tend to speak for the possible impacts of migration policy and development of TVE. It shows that the migration into towns was at its highest during the period of 1982-87; of total migration population, about 40% of them went to the towns. This was probably due to booming of TVEs in the rural towns in the late 1970s and earlier 1980s. The in-migration into towns started to diminish since

> 2 In the time of completing this paper, author does not have access to the 1 per 1,000 micro-data set of long form questionnaire, and will do more empirical testing whenever data are available.

3
suggestive of at least some reverse causation from income to morality. These tests each throw away some of the WVS data, however, and (as mentioned above) we agree with Bjornskov (forthcoming) and others that the within-country variation over time is a highly noisy measure of actual change. In Table 5 therefore we adopt an alternative (and more conventional) approach by instrumenting for the potentially endogenous morality variables.<sup>19</sup> Results for the moralityability correlation from these tests are strikingly similar to those presented in Table 4, while results for the morality proxy are more favorable (i.e. more positive and consistently significant).

For instruments we rely primarily on religious composition of the population, using data from McCleary and Barro (2006). There are several precedents in the literature. La Porta et al. (1997, 1999) find that interpersonal trust and tax compliance are lower, and corruption higher, in countries with more adherents of “hierarchical” religions (Catholic, Eastern Orthodox, or Muslim). Zak and Knack (2001) instrument for interpersonal trust with these religious composition variables in cross-country growth regressions. Knack (2002) uses a broader set of religious composition variables in instrumenting for several “social capital” indicators in analyzing determinants of government performance across the American states. Building on Weber (1905), McCleary (2007) and McCleary and Barro (2006) describe how some of the major religions foster traits such as honesty and charity, and attitudes toward work. Religious composition potentially provides a relevant and valid set of instruments for our morality variables. They are relevant instruments if “differences in motivational mechanisms” across the major religions explain much of the cross-country variation in the morality variables, and they may be valid as “it is not

> 19 Rule of law and trade openness have been treated as endogenous in some studies, including RST (2004). We treat them as exogenous for three reasons. First, with more endogenous regressors it is more difficult to
of annual estimates of subdistrict populations, the population used to normalize the supply of schooling at the subdistrict level is the 2004 population of the subdistrict. There are 86 subdistricts in Jordan. If subdistrict populations are growing at different rates, this could introduce some measurement error of the true supply of schooling available to different cohorts.

> 8. Secondary schools include both general and vocational secondary schools. Public schools include schools under the jurisdiction of: (i) Ministry of Education, (ii) Ministry of Higher Education, (iii) Ministry of Defense, (iv) Ministry of Social Development, (v) Ministry of Religious Endowments (Awqaf), and (vi) UNRWA.

> 9. The original sample size of all individuals who are aged 25 to 70 years in 2010 and are born in Jordan is 8,312 observations. The sample restrictions on the missing values result in the exclusion of 34 observations (missing age), 1 observation (missing father’s schooling), and 7 observations (missing mother’s schooling).

13
level when assessing protection of industrial groups in the 23-sector input-output table for Egypt (see also Lederman, 2005). Instead of averaging many tariff lines across the 2-digit level, however, in the case of the specific industries available, we have differentiated activities according to the level of processing and delved into tariffs at the 4 and 6-digit level.

This disaggregation is important because the degree of tariff escalation in Egypt emerges clearly on observing how the formal tariff levels increase with the level of processing. For example in cotton textiles (HS2 56s), the raw cotton enters at a zero tariff, but carded cotton and any processing to threads, enters at 5 percent. For woven cotton materials, the tariff jumps to 10 percent; and for articles of clothing (HS2 61s), that is, final products, the tariff jumps to 30 percent. The dispersion around the 2-digit level averages is much higher than those around the average for a particular 4-digit level grouping of products. In fact, Egyptian tariffs tend to be uniform at any particular 4- digit level group, and it is very difficult to encounter more than one-line tariffs at the 6- digit level.

After considerable examination, we conclude that the 4-digit (and sometimes 6-digit) levels are more appropriate to capture more homogeneous groups. The degree to which product processing is associated with higher tariffs is well observed at the 4-digit level.

> 8 There appear to be no statistically constructed IO tables since 1992, and all available tables are updates.

9