rafmacalaba/datause-encoder-data huggingface dataset:
should _increase_ such aid. To the extent policies reflect public preferences, existing ODA levels should be positively associated with support for aid in the WVS analysis, with causation going mostly from preferences (i.e. support for aid) to policy (i.e. levels of ODA). In the GI analysis, in contrast, high levels of existing aid may reduce support for further increases in it, producing a negative coefficient on ODA.<sup>9</sup> Coefficients on ODA in Table 6 are consistent with these arguments. Although they are not significant at conventional levels, the ODA coefficient is positive in the WVS analysis and negative in the GI analysis. In the GI analyses it becomes highly significant if two outlying cases, the U.S. and Japan, are dropped (new coefficient = - 1.41). Interpreting this effect size suggests that if a country were to increase from an average level of foreign aid, about 0.5% of GNP, to 0.75% of GNP, the odds of a citizen’s support for foreign aid would decrease by 30%. So there is some evidence for the hypothesis that citizens in countries with high levels of existing aid express less support for _increasing_ aid than citizens from other countries.

Across both surveys, the GDP of a society has a significantly negative effect on support for foreign aid. A $1000 increase in income per capita is expected to decrease the odds of individuals in that country supporting foreign aid by 4%. A one standard deviation change in income per capita ($6,500 in GI) leads to a 23% decrease in the odds. Interestingly, therefore, in contrast to the generally positive effect of socio-economic status on support for foreign aid at the individual-level, in the aggregate, richer countries do not exhibit greater support for foreign aid.

The results for military spending differ across the WVS and GI analyses. Military Spending negatively effects support for foreign aid in the smaller WVS sample, but not in the larger GI sample. Even using the WVS, however, this finding is highly sensitive to inclusion of the United States. The coefficient on Military Spending is substantially reduced and becomes non-significant if the U.S. is removed from the analysis. Although U.S. citizens may view their country as fulfilling its global citizenship duties through its

> 9 If preferences over aid levels were a sufficiently important determinant of actual aid levels, variations in aid levels among donor countries could merely reflect variations in the preferences of their respective median voters.  Under this strong assumption, we should observe, in each donor country in the GI survey, a roughly equal number of respondents favoring increases and decreases in aid.  In most countries, however, far more respondents support increasing than decreasing aid.

16
# **1 Introduction**

Research on developing country engagement in the international trading system increasingly challenges its relevance for their economic interests and performance.<sup>1</sup> Within this area of research, there is a growing political-legal-economic literature analyzing the failure of poor member countries to engage actively in the World Trade Organization (WTO), especially through formal legal participation in WTO dispute settlement provisions. Most analysis of poor countries’ lack of engagement in WTO dispute settlement focuses on hurdles to participation as complainants or interested third parties in disputes related to their _export_ market access interests.<sup>2</sup> For example, only one least developed country (LDC) has ever initiated WTO dispute settlement proceedings: Bangladesh in a 2004 case against India involving Indian anti-dumping duties on lead acid batteries (WTO/DS/306).<sup>3</sup> The focus on defending export interests ignores a dimension of the dispute settlement process that may be more important for developing countries and the economic development relevance of the WTO: developing countries in the WTO system are rarely challenged as _respondents_ in WTO litigation. As table 1 indicates, through the end of 2006, only two lowincome WTO members (India and Pakistan) have been formally challenged by WTO litigation. Put more starkly, of the more than 350 formal WTO dispute settlement cases through 2006, _none_ of the 32 WTO members classified by the United Nations as LDCs have been challenged.

As it is unlikely that poor countries are in full compliance with their trade liberalization commitments, the failure of WTO members to enforce the provisions of trade agreements reduces the value of participation in such agreements for these countries. Lack of enforcement reduces economic gains from WTO membership for several reasons: welfare economic losses due to continued import protection _within_ developing economies; diminished incentives for the country to take on additional WTO commitments such as reducing tariff bindings to meaningful

> 1 The frustration of developing countries in the WTO more broadly is captured in Fatoumata and Kwa (2004). For an economic dissection of what developing countries might realistically expect to achieve out of the WTO, see Staiger (2006). For economic appraisals of the ineffectiveness and unintended consequences of the Generalized System of Preferences (GSP) and other forms of special and differential treatment (SDT), see Ismail (2006), Keck and Low (2006), Ozden and Reinhardt (2004, 2005) and Subramanian and Wei (2007).

> 2 Examples from the economics literature include Bown and Hoekman (2005), Bown (2005a, b), Horn, Mavroidis and Nordström (2005), and Nordström (2005). Examples from politics and legal scholarship include Davis and Bermeo (2006), Busch and Reinhardt (2003) and Shaffer (2006).

> 3 This case was settled in the consultations stage (Taslim, 2006). See Horn and Mavroidis (2006) and their database on WTO disputes at <u>www.worldbank.org/trade/WTOdisputes.</u>
entrants brings about overall market growth (see Malchow-Møller, Schjerning and Sørensen, 2011)<sup>3</sup> .

Indeed, while endogenous growth theorists (see Lucas, 1988; Romer, 1986 and 1990; Grossman and Helpman, 1991; Aghion and Howitt, 1997) highlighted the importance of human capital and R&D as additional explanations for increasing returns in the aggregate production function, more recently several scholars have proposed entrepreneurship as a third driver of economic growth and employment generation. In particular, entrepreneurs, through their new companies, would be able to exploit the opportunities provided by new knowledge and ideas that are not fully understood and commercialized by the mature incumbent firms (see Acs _et al_ ., 2005; Carree and Thurik, 2006; Audretsch, Keilbach and Lehmann, 2006; Braunerhjelm _et al._ 2010; Acs _et al_ ., 2012). Thus, according to these authors, entrepreneurship represents the missing link between investment in new knowledge and economic development, serving as a conduit for both entirely new knowledge and knowledge spillovers (see Carlsson _et al_ ., 2009; Audretsch and Keilbach, 2011; for a very recent comprehensive survey based on this view, see Braunerhjelm, 2011). In particular, as well articulated by Baptista and Preto (2011, pp. 421-22; ), knowledge spillovers brought about by new entrepreneurial firms are generated - directly - through the introduction of new knowledge-based products and the improvement of the variety and quality of existing products, and – indirectly – through the stimulus towards the incumbents which have to cope with the tougher competition through innovation and increasing productivity (see also Baptista, Escária and Madruga, 2008; Baldwin and Gu, 2011 _;_ and, for a focus on services, Bosma, Stam and Schutjens, 2011).

However, before continuing, the question of what is intended by entrepreneurship and how it can be measured needs to be addressed. In the industrial organization literature the answer is unequivocal: entrepreneurship is the process by which new enterprises are founded and become viable. In this approach, the most common way of measuring entrepreneurship is to look at new firm formation, _i.e._ at entry rates (either gross or net, that is entry flows minus exit flows). Indeed, according to the OECD (2003), industrial dynamics (i.e. the entry and exit of firms) would account for between 20 and 40% of total

> 3 Instead, job destruction may arise when the crowding out of the incumbents is larger than the positive job creation effect brought about by the improvement of supply conditions and improved competitiveness (see Fritsch and Mueller, 2004; Acs and Mueller, 2008).

4
**Table 9. Regional heterogeneity: Main outcome variables**

||Fo<br>|od insecuri<br>|ty<br>|Cons<br>|umption<br>|(log)<br>|
|---|---|---|---|---|---|---|
|VARIABLES|North<br>Central|North<br>East|South<br>South|North<br>Central|North<br>East|South<br>South|
||(1)|(2)|(3)|(4)|(5)|(6)|
|Conflict events|0.0262**|0.0495**|0.0417|-0.025|-0.030*|-0.009|
||(0.0120)|(0.0189)|(0.0349)|(0.024)|(0.016)|(0.039)|
|Observations|1,343|834|1,280|808|500|767|
|R-squared|0.045|0.125|0.050|0.279|0.240|0.465|
|Number of households|276|175|266|276|175|266|
|Controls|YES|YES|YES|YES|YES|YES|
|Year FE|YES|YES|YES|YES|YES|YES|
|HH FE|YES|YES|YES|YES|YES|YES|

_Note_ : All regressions are conducted using weights. Controls include all household and geographical variables listed in appendix table C.1. Standard errors clustered at the local government area level. Significance: *** _p_ < 0.01; ** _p_ < 0.05; * _p_ < 0.1 41
# **_<u>________________________________________________________</u>_**

||total number of<br>trucks/locations surveyed||
|---|---|---|
|Reported occurrence<br>of corruption|Number of cases when a<br>driver makes or is asked to<br>make an unauthorized<br>payment compared to the<br>total number of survey<br>responses|Information to calculate this indicator is derived<br>from records of received reports of corruption<br>maintained by the Customs administrations.|
|Revenue collected/<br>Customs staff|Total revenues collected /<br>Total number of customs<br>employees|Information obtained from records maintained by<br>the Customs administrations.|
|Total Customs<br>administration cost/<br>revenue collected|Total budget of the<br>administration (including<br>salaries, overtime, bonuses<br>and benefits)/ Total<br>revenue collected<br>irrespective of its<br>destination|Information obtained from records maintained by<br>the Customs administrations.|
|Revenue collected/<br>Salaries|Total agency salaries,<br>overtime, bonuses and<br>benefits/ Total revenue<br>collected irrespective of its<br>destination|Information obtained from records maintained by<br>the Customs administrations.|
|Trade<br>volume/Customs<br>staff|Trade Volume / number of<br>customs employees|Information obtained from country statistical data.|
|Annual number of<br>declarations/Customs<br>staff|Total number of<br>declarations (import,<br>export, suspense regimes,<br>but excluding transit)<br>irrespective of the number<br>of items/Total staff<br>employed by Customs|Information obtained from records maintained by<br>the Customs administrations.|

_Source: TTFSE Manual_ 56 __________________________________________________________________________________________________________
For both poverty and inequality, we find evidence that points to larger climate change effects at the subnational level than those estimated using more aggregated, country-level data, particularly in regions where temperature change has the largest effects. Our heterogeneity analysis further shows that countries in South Asia and Sub-Saharan Africa are more vulnerable to warmer temperature, but the effects of colder weather are also observed among countries in Europe and Central Asia.

Our study makes several new contributions to the literature. First and most importantly, we offer the first global assessment of warmer temperature on _both_ poverty and inequality, exploiting a novel global subnational panel database that we constructed based on the Global Subnational Atlas of Poverty (GSAP) (World Bank, 2021). Several attempts were made to understand the direct effects of global warming on poverty and inequality, but none examines these outcomes together.<sup>2</sup> For example, analyzing cross-sectional household survey data from 24 Sub-Saharan African countries, Azzarri and Signorelli (2020) show that a one degree increase in long-term temperature is associated with a 2.8 percentage point increase in poverty. Paglialunga _et al._ (2022) use data from 150 countries and find that a one percent temperature increase is associated with a 0.5 percentage point increase in the Gini index.<sup>3</sup> This lack of evidence poses an important, and perhaps quite urgent, challenge given the recent public debate of whether richer countries should take more responsibilities for the costs of climate change that correspond to their shares of the pollutants (Birnbaum _et al._ , 2022; Popovich and Plumer, 2021). As an example, 80 percent of global greenhouse gas emissions are currently produced by G20 economies—the world’s largest economies—but these economies can only price 49 percent of CO2 emissions from energy use (OECD, 2021).

> 2 There are also a number of studies investigating the effects of natural disasters on temporary (transient) poverty (e.g., Sawada and Takasaki, 2017). Our study, in contrast, focuses on chronic poverty as a result of climate change.

> 3 Other studies mostly focus on a country-specific context. See also Karim and Noy (2016) and Hallegatte _et al._ (2020) for recent reviews of the literatures on climate change, natural disasters, and poverty. Furthermore, since we analyze poverty and inequality using the same source of official household survey data, our estimates are consistent (and more comparable) than estimates that are based on different data sources.

4
**Table 5: Sector-base Impact on Domestic Real Production (%)**

|||_Cas_|<br>_e 1_|||<br>_Ca_|<br>_se 2_||
|---|---|---|---|---|---|---|---|---|
||_Raw_<br>_materials_|_Basic_<br>_Manufactur_|_Other_<br>_Manufacto_<br>_~~r~~_|_Services_|_Raw_<br>_materials_|_Basic_<br>_Manufactu_<br>_~~r~~_|_Other_<br>_Manufacto_<br>_~~r~~_|_Services_|
|_AUS_|0.6|1.1|-1.9|-0.1|0.2|2.5|-1.8|-0.2|
|_CAN_|0.8|0.5|-2.5|0.0|0.7|1.5|-2.8|-0.1|
|_CHL_|-0.3|-0.1|-5.5|0.2|-0.9|1.2|-6.1|0.0|
|_CHN_|-5.4|-1.1|0.8|2.6|-0.8|-4.7|0.3|2.1|
|_HKG_|-2.2|-4.3|-7.1|0.7|-0.1|1.7|-1.6|-0.1|
|_IDN_|-1.9|-2.2|6.7|1.3|-1.1|-4.0|3.3|1.8|
|_JPN_|0.2|1.3|0.6|-0.2|0.3|1.8|0.1|-0.3|
|_KOR_|-4.1|1.0|0.2|0.0|-1.0|-1.5|0.4|0.2|
|_MEX_|-1.1|-2.1|3.8|0.2|-0.7|-2.8|3.0|0.7|
|_MYS_|-4.3|-3.9|5.3|-0.2|-3.6|-4.6|4.2|0.7|
|_NZL_|0.0|0.6|-3.8|0.1|-0.2|1.9|-3.8|-0.1|
|_PER_|0.7|2.3|-11.9|1.6|2.0|0.8|-11.0|1.8|
|_PHL_|-16.6|-19.5|54.6|5.4|-10.7|-27.9|46.0|6.9|
|_RUS_|-0.7|-3.8|-23.5|2.4|-0.2|-14.1|-28.7|4.0|
|_SGP_|-0.9|0.1|2.2|-0.4|-1.5|3.6|2.5|-1.3|
|_THA_|-22.6|-21.9|14.7|26.2|-15.2|-26.9|17.0|28.4|
|_CTP_|-0.7|1.4|-1.6|0.1|-0.6|3.1|-2.3|0.0|
|_USA_|0.9|0.7|-0.7|-0.1|0.6|1.2|-0.6|-0.1|
|_VNM_|-15.6|-28.5|15.7|17.2|-17.4|-38.6|-2.6|22.3|
|_EU27_|0.1|0.0|-1.7|0.2|0.4|0.8|-1.3|0.0|
|_ROW_|0.3|-0.1|-2.5|0.1|0.2|1.0|-2.3|-0.1|

(Note) Authors’ calculation using the GTAP model and Gempack.

Case 1 assumes that improvement of transparency leads to the reduction of importing cost in all the industrial sectors, while Case 2 assumes that raw materials do not benefit. As expected, the economies with greater potential for improvement in transparency would face more serious industrial adjustment, if they implement the reform. In Case 1, where the adjustment need is more serious, Russia needs to shrink all the sectors but services (SRV). Improved terms of trade and increased imports would likely compensate for the shrinkage of trading sectors, but this may be a kind of “Dutch Disease” syndrome. The Philippines, Thailand and Vietnam face a reduction in raw materials and basic manufactures (MNB) and expansion in assembling manufacture (MNA) to a greater degree.

Comparing both cases here, case 2 does not involve the need to reduce raw material production, as the scenario precludes the reduction of importing costs in the raw material sector, equivalent to protecting the sector. This provides one reason why the 28
- 35 -

# Bibliogr,agbhy

Auerbach, Alan, Laurence Kotlikoff, and Jonathan Skinner, "The Efficiency Gains from Dynamic Tax Reform", International Economic Review, (February 1983).

- Bolnick, Bruce, "Demographic Effects on Tax Ratios in Developing Economies," Junal of Development Economics 5 (1978) pp. 283-306.

- Brent, Robert J., "Lagged Reactions in Short-Ru' Estimates of Tax Shifting of Company Income and Sales Taxes in Kenya," Journal of DeveloDment Economais 20 (1986): pp. 15-32.

- Chamley, Christophe, "Taxation in Dynamic Economies: Some Problems and Methods," mimeo, World Bank, CPDRM (October 1983).

- Clarete, Ramon, and John Whalley, "Comparing the Marginal Welfare CosLs of Commodity and Trade Taxes," Journal of Public Economics 33 (October 1987): pp. 357-62.

- David, Paul, "Invention and Accumulation in America's Economic Growth: A NineteenthCentury Parable," In Brunner and Meltzer (eds.) Industrial Organization. National Policies. and Economic Develonment (Amsterdam, 1977).

- deMelo, J., "Estimating the Costs of Protection: A General Equilibrium Approach", Ouarterly Journal of Economics (1978), pp. 209-226.

- Engen, Eric, and Jonathan Skinner, "Government Size, Economic Growth, and Taxation," mimeo (May 1988).

- Feder, Gershon, "On Exports and Economic Growth", Journal of Development conomics 12 (1982) pp. 59-73.

- Griffiths, Ieuan LL., An Atlas of African Affairs. New York: Methuen (1984).

- Harberger, Arnold C., "The Incidence of the Corporation Income Tax," Journal of Public Economics (June 1962): pp. 215-40.

- Henderson, J.M., "Optimal Factor Allocation for Thirteen Countries", in A.0. Krueger, ed. Trade and Employment in Developing Countries (2). Chicago: University of Chicago Press (1982).

- Koester, Reinhard B., and Roger C. Kormendi, "Taxation, Aggregate Activityand Economic Growth: Cross-Country Evidence on Some Supply-Side Hypotheses,' Economic Inguiry (forthcoming 1988).

- Kormendi, Roger C., and Philip G. Meguire, "Macroeconomic Determinants of Growth: Cross-Country Evidence," Journal of Monetary Economics 16 (1985): pp. 141-63.
# **4.4 Obstacles**

Important institutional and policy constraints remain, although they are not currently binding. As can be seen in Figure 4.3, interviewed banks cited SME-specific factors, regulations, the legal and contractual environment, and macroeconomic factors as the most pressing obstacles to further expanding credit to SMEs (see below for a description of each factor). The nature of lending technology to SMEs (e.g. cost of applying traditional credit assessment techniques) and bank-specific factors (e.g. limited geographic coverage, inflexibility in lending procedures) were mentioned in a few cases by banks as pressing obstacles in mobilizing SME finance, while the lack of adequate demand and excessive competition in the SME segment were not considered as important constraints.

Figure 4.3: Obstacles to Banks’ Involvement with SMEs <!-- Start of picture text --> SM E-specific factors 88%<br>Regulations 88%<br>Legal and Contractual Environment<br>75%<br>M acroeconomic factors 63%<br>Nature of Lending Technology to SM Es 38%<br>Bank-specific Factors 25%<br>Lack of Adequate Demand 0%<br>Competition in the SM E segment 0%<br><!-- End of picture text --> _Source: Authors’ analysis of bank questionnaires (simple averages across all banks)._ Inherent SME features represent some of the main obstacles to lending. As stated in the relevant literature<sup>29</sup> , some of the intrinsic characteristics of SMEs – heterogeneity in their activities, informality, unavailability and unreliability of financial statements<sup>30</sup> , low managerial capacity of owners, and their family-owned nature – complicate their assessment of creditworthiness and increase transaction costs<sup>31</sup> . In addition to the results of this questionnaire, this finding seems to be corroborated by a recent Asobancaria survey of 5 major banks that stresses the importance of SME-specific features (Table

> 29 For example, see the Latin-American Shadow Financial Regulatory Committee (September 2004), OECD (2006), and Beck and Demirguc-Kunt (2006).

> 30 The quality of financial reporting is not solely an SME issue; see World Bank (July 2003) for an assessment of the accounting and auditing standards for Colombia.

> 31 This is also stated in CONPES document 3280 (April 2004) on government programs to support business development: “ _las barreras de acceso al crédito de las MIPYMES, en la mayoría de los casos, no tienen relación directa con la oferta de la banca de desarrollo, sino con aspectos como la baja calidad de la información que reportan las MIPYMES para la evaluación de riesgo por parte de los intermediarios financieros, la insuficiencia de garantías y el deficiente cumplimiento de las obligaciones de crédito reflejado en la historia crediticia de algunas de estas empresas_ ”. See also Felaban, CII and FOMIN/BID (January 2007) for a recent survey of the main barriers for accessing SME credit according to banks in several Latin American and Caribbean countries.

21
Policy Research Working Paper 7930

# **Abstract**

Disasters in Bangladesh and protests elsewhere have created an intense debate about the value, particularly to women, of apparel employment in developing countries. This paper focuses on how the forces of globalization, specifically the Multi-Fibre Arrangement (MFA), have affected women’s wages in the apparel sector in developing countries. The paper uses household and labor force surveys from Cambodia and Sri Lanka to estimate both apparel wage premiums relative to other industries and the male-female wage gap before and after the end of the MFA. The approach builds on new models that apply traditional trade theory (e.g., the Heckscher-Ohlin and Stolper-Samuelson theorems) to analyze the effect of globalization on gender-based earnings. The authors find large positive wage premiums and a closing of the male-female wage gap during the MFA period, but smaller premiums and a widening wage gap after the end of the MFA. The results suggest that the benefits of apparel exports for women in developing countries remain significant post-MFA. They also model an approach for studying the effects of globalization that differentiates males and females as separate factors. This may be a fruitful alternative to discrimination models or those that analyze the effects of globalization on women in terms of skill. Further research is necessary to identify the potential development effects of post-MFA apparel employment and to thoroughly compare the benefits documented in this paper with the costs that may come with apparel jobs.

This paper is a product of the Office of the Chief Economist, South Asia 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://econ.worldbank.org. The authors may be contacted at gacevedo@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 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