rafmacalaba/datause-encoder-data huggingface dataset:
The Republic of Korea's small
            and medium size enterprises and their support systems
The authors evaluate the effectiveness
            of private and collective technical, marketing, and
            financial support systems for the Republic of Korea's
            small and medium-size enterprises (SMEs) and entrepreneurs.
            Their report draws on a survey of 122 SMEs that make woven
            textiles (42 firms), auto parts (20 firms), electronic parts
            (20 firms), and factory-automation products (40 firms).
            Although Korea has a dense network of public
            technology-support institutions, Korean SMEs tend to turn to
            private sources of technical support (especially from
            buyers, suppliers, and moonlighting engineers) more often
            than in public institutions. Even so, some collective
            support was used often and valued highly, especially in
            technologically dynamic sectors. For technical assistance to
            be timely and relevant, its delivery must increasingly be
            decentralized - to industry-specific institutes and to
            geographic clusters of SMEs in the same industry. Among
            various collective providers of technical support for Korean
            SMEs, at least one was used by more than half of the SMEs
            surveyed. Collective marketing support was used much less
            than private sources and was not considered very useful -
            except by firms in the initial stages of exporting or in the
            pioneer stage of a new export industry. Generally, networks
            of local agents and foreign traders developed as firms
            gained in export experience. Financial assistance is the
            most critical form of support for SMEs. The Korean
            government has made extensive use of parastatal finance
            institutions, target credit, and credit guarantee schemes.
            Government intervention in finance was so pervasive that the
            line between private and collective support blurred. Most
            SMEs sampled used at least one collective institution of
            financial support, and rated them very positively.
Economic policy reform, government
            debt guarantees, and financial bailouts
Economic policy reform that creates
            opportunities for new productive activities often shifts
            wealth from one set of agents toward another, creating
            reason for political pressure against the reform. The author
            explores how government financial guarantees secure the
            political support of the reform's "losers."
            Governnment guarantees have two effects: 1) they will
            probably lead to a bailout of some firms' obligations
            to debtholders. This bailout must be financed by taxes on
            the cash flows from old and new projects, and tax collection
            involves a resource cost; 2) the existence of the guarantees
            distorts entrepreneurs' investment incentives by
            creating an incentive to invest in overly risky projects and
            not to invest in safe new projects. The author demonstrates
            that government guarantees on existing debt, combined with
            the use of junior secured debt to finance new projects,
            would mitigate the problem of underinvestment in safe
            projects and overinvestment in risky projects. The
            potentially positive role of government financial guarantees
            after economic reform does not imply that prudential banking
            standards fail to apply during a period of economic reform.
            If anything, prudential standards are more important during
            such a period. But it does imply that a financial bailout
            may be a lagging indicator of a successful policy to offer
            financial guarantees to potential losers, so they will
            support reform.
Sustained inflation in response to
            price liberalization
The author demonstrates that sustained
            inflation is a predictable response to price liberalization
            in the countries of the former Soviet Union. The author
            models the phenomenon in a dynamic macroeconomic framework,
            and demonstrates the immediate price jump followed by
            sustained inflation that has characterized the transitional
            economies of the former Soviet Union. The author supports
            the theoretical derivation with a simulation exercise that
            demonstrates the scope of sustained inflation for specific parameters.
Patterns of behavior in biodiversity preservation
Conservation budgets are limited, so it
            is right to ask of biodiversity programs, What  should be
            preserved? How much should be preserved? Where?  Recent
            papers on optimal preservation policy have tried to
            integrate three considerations: the relative uniqueness of
            different species or habitats, the degree of risk to their
            continued survival, and the opportunity cost of the
            resources needed to enhance their prospects for survival.
            It is natural to ask, How are we doing? Have biodiversity
            conservation resources been optimally allocated? What
            determines government decisions about the preservation of
            endangered species?  The authors submit the first report
            card, an empirical analysis of U.S. species preservation
            policy, the best-documented country experience currently
            available.  The authors discuss the most common normative
            justifications for biodiversity preservation and identify
            measurable proxies for a subset of those justifications.
            Proxies include "scientific" species
            characteristics, such as "degree of endangerment"
            and "taxonomic uniqueness," as well as
            "visceral" characteristics, such as physical size
            and to what extent a species is considered a "higher
            form of life."   They find that both kinds of
            characteristics, but especially "visceral"
            characteristics, influence government decisions on whether
            to protect a species under the Endangered Species Act.  The
            authors find that "visceral" characteristics-
            especially physical size and taxonomic class - are also
            important in explaining how much is spent on endangered
            species.  Perhaps more surprising is their finding that more
            is spent on animals with lower risk of extinction than on
            animals with a higher risk of extinction.  The author's
            results are sobering.  Many millions have been spent on
            species preservation, but neither uniqueness nor risk has
            weighed heavily in resource allocation.  Instead there has
            been a heavy bias toward "charismatic megafauna" -
            large, well-known birds and mammals ("higher forms of
            life," in the human value system).  Other classes of
            fauna - including, say, eels or wild toads - and all flora,
            have gotten extremely short shrift.  Prominent examples of
            species with high charisma, high attention, and relatively
            low endangerment are the bald eagle, the Florida scrub jay,
            and the grizzly bear.  Other species may have less charisma
            but could have more scientific value or species risk.
The effects of fiscal consolidation
            in the OECD
Despite the current recession in many
            parts of the OECD, fiscal consolidation is likely in many
            OECD economies in the 1990s. The author asks: is fiscal
            consolidation in the OECD in a period of low growth a recipe
            for global stagnation? In particular, what effects are
            likely in developing countries? The author starts with an
            overview of cuts in the U.S. fiscal deficit proposed by the
            Clinton administration and the extent to which European
            governments must cut fiscal deficits between now and 1997 to
            satisfy deficit targets in the Maastricht Treaty. How
            changes in fiscal policy are transmitted within an economy
            and between that economy and the rest of the world depends
            on whether those changes lead to permanent or temporary
            changes in government saving; whether they are implemented
            through government spending or taxes; and whether the taxes
            fall on households or firms. The main channels of
            transmission are through changes in: agents'
            expectations about future taxes, interest rates, exchange
            rates, and economic activity. The author uses the MSG2
            multicountry models to quantify the ramifications of those
            changes. He concludes, among other things, that fiscal
            contraction in the OECD will probably lead to slower growth
            over the next several years. But the current and likely
            paths of fiscal policy are such that deficit reduction
            programs may have stimulating effect in the short run, as
            long as future fiscal contraction is credible. And fiscal
            deficit reduction will probably increase long-run output in
            the OECD through its effects on savings and investment.
            Finally, growth in the developing countries (at least total
            growth) may not be impaired at all by fiscal consolidation
            in the OECD. The negative effects of fiscal contraction will
            occur through lower net exports of non-OECD economies. For
            developing countries with open capital markets, the initial
            reduction in demand through lower exports can be offset by
            the reduction in interest rates following an inflow of
            capital from the countries with contracting fiscal policy. A
            significant decline in real global interest rates is likely
            to increase growth in developing countries that are
            debt-constrained, either directly (through private capital
            inflows) or indirectly (by relaxing the balance of payments
            constraint, allowing more resources to be channeled to
            domestic investment needs).
Labor regulations and the informal economy
The informal economy, which evades labor
            regulations, provides employment for much of the labor force
            in developing countries.  The author explores how labor
            regulations and imperfections in informal capital markets
            affect income inequality and the speed of industrialization.
            Empirical evidence shows that labor costs are higher in the
            formal sector, and that the cost of capital is higher in the
            informal sector (in part because many informal activities
            are illegal, so contracts are unenforceable).  The author
            develops a theoretical model based on such factor-cost
            asymmetry.  He applies it to an urban economy with and
            without ample supplies of labor from the rural sector.  The
            dynamic analysis considers rural-urban migration and optimal
            capital accumulation.  He finds the following.  First, labor
            regulations that mandate workers' compensation above
            its market-dictated level induce the formation of an
            informal sector and thus the dispersion of wages across
            homogeneous workers.  And labor regulations slow capital
            accumulation and retard the process of rural-urban
            migration.  Second, when capital allocation to informal
            producers becomes more efficient, the informal sector
            expands relative to the formal sector, the gap between
            formal and informal wages narrows, and rural-urban migration
            speeds up.  Finally, policies with an urban bias hasten
            rural-urban migration, inducing an expansion of the informal
            labor force relative to the total labor force.   Post-World
            War II experience in informal economies in Latin America
            motivates and in some respects supports the theoretical
            findings, says the author.
Trade and growth in Ecuador : a
            partial equilibrium view
When the outbreak of the debt crisis in
            1982 halted private international capital flows to most
            developing countries, it was not easy for Ecuador to cope
            with the changed international circumstances. Investments
            were largely in imported machinery as domestic capital goods
            production was in its infancy. Exports were concentrated in
            petroleum and several agricultural products and could not be
            counted on to increase foreign exchange in the short run.
            The trade balance was improved in the first half of the
            1980s by reducing imports. The author examines the behavior
            of the Ecuadoran economy in a period of scarce foreign
            exchange. He uses a small, econometrically specified
            "trade and growth" model of the Ecuadoran economy
            to illustrate the importance of trade elasticities. He
            estimates trade elasticities for Ecuador and integrates them
            into a small simulation model of Ecuador's supply side.
            He uses a nested constant-elasticity-of-substitution
            production function to derive factor input demands for two
            types of imported goods important in Ecuador: imported
            intermediate goods and imported machinery. Elasticity
            estimates of imported factor of production are very low.
            They characterize both types of imports as complements to
            domestic factors. The author uses the econometrically
            specified model to examine the connection between imported
            factors of production and output capacity. He analyzed trade
            balance responses to a terms-of-trade shock, a devaluation,
            and an increase in world demand. Low trade elasticities on
            the import side make the economy vulnerable to external
            shocks. The low elasticities necessitate large relative
            price shifts (through devaluation) to improve the trade
            balance if growth-reducing policies are to be avoided in
            times of scarce foreign exchange. A deterioration in terms
            of trade has a pronounced negative impact on the trade
            balance. To the extent that trade elasticities remain low in
            the 1990s, events such as a commodity price decline, a
            renewed credit squeeze, or increased protectionism against
            Ecuadoran exports - like the recent European Union quotas on
            banana imports - can translate into renewed domestic supply
            disturbances. Policies that lead to diversification of
            exports and higher price responsiveness for both imports and
            exports would reduce the vulnerability of Ecuador's
            economy to external shocks.
The use of New York cotton futures
            contracts to hedge cotton price risk in developing countries
Cotton exports account for a significant
            share of commodity exports for some developing countries,
            especially in West Africa and Central Asia.  In these
            countries, dependency on cotton for export revenues has
            increased in the past 20 years.  These countries therefore
            have a high exposure to cotton price volatility.
            Cotton-producing developing countries and economies in
            transition make little use of hedging mechanisms to reduce
            risk from the volatility of cotton export revenues.
            Countries in Francophone West Africa use forward sales to
            hedge but only for a small share of the crop.  These
            countries could use cotton futures and options contracts to
            hedge against short- to medium-term price volatility, making
            cotton export revenues more predictable.  Cotton futures and
            options contracts could also make cotton-related commercial
            transactions more flexible.  (Futures could be sold when
            there are no buyers in the physical market, for example.)
            In West Africa, futures and options could complement the
            existing system of forward sales.   The authors examine the
            feasibility of using New York cotton futures and options
            contracts as hedging instruments.  They base their analysis
            on a portfolio selection problem in which the hedger selects
            the optimal proportions of unhedged and hedged output to
            minimize risk.     The results suggest that despite the
            existence of relatively high basis risk (that is, a
            relatively low correlation between spot and future prices),
            hedging reduces cotton price volatility by 30 to 70 percent.
            Moreover, for all varieties of cotton examined, the hedge
            ratio (the percentage of exports hedged) was below one.
            Using a hedge ratio of one (naive hedge), at times,
            increases rather than decreases risk.  The results also show
            that hedging, while reducing risk, also reduces expected
            returns.  Attitudes toward risk that is, the degree of risk
            aversion - determine how much of this risk-return tradeoff
            is acceptable.  For a risk-averse agent, the main benefit of
            hedging lies in risk reduction rather than in the potential
            for increased returns.
Oil price instability, hedging, and
            an oil stabilization fund : the case of Venezuela
The Venezuelan government and PDVSA
            (Venezuela's state oil companies) are both exposed to
            oil price instability.  Given the existing tax structure,
            PDVSA has a higher exposure than the government, especially
            when prices drop below $18-20 a barrel.  The authors show
            that the volatility of prices for crude oil is higher (but
            not significant) than the volatility of prices for refined
            oil products.  And both prices are highly correlated.  So,
            there is not much strength to the argument that Venezuela,
            being now mainly an exporter of refined products, faces less
            volatility than when it was exporting mainly crude oil.  The
            basis risk for hedging Venezuelan crude oil was founded to
            be higher than for other crudes of comparable quality in the
            region.  One explanation could be the pricing policies
            Venezuela follows, which leads Venezuelan crude oil prices
            to deviate for long periods from international prices. The
            basis risk in Venezuelan refined products is much lower and
            at acceptable levels for risk management.  The issue of
            liquidity is concentrated in contracts for periods of less
            than a year.  For products, the liquidity is concentrated in
            the nearest 4-5 months.  So, for short-term hedges (6-9
            months ahead), there is sufficient liquidity for Venezuela
            to hedge a substantial part of its exports. For longer-term
            hedges, the over-the-counter market is the more appropriate
            vehicle.  In either case, it will not usually be the case
            that all production or exports should be hedged.  The
            authors also examined the issue of an oil stabilization
            fund.  For an oil stabilization fund to be effective several
            preconditions must be met.  Most notably: oil prices should
            not follow a random walk; financial markets are incomplete;
            and there are large adjustment costs.  These conditions do
            likely apply in Venezuela.  Venezuela's best strategy
            would be to remove as much short-term oil price risk as
            possible by using short-dated hedging instruments (such as
            futures, options, or short-dated swaps) and to also do some
            longer term hedging (using mainly over-the-counter options
            and long-dated swaps).  They also find that an oil
            stabilization fund should be complemented by using
            market-based risk management tools.  The oil stabilization
            fund could then be used to manage any remaining interperiod
            oil price risk to the extent considered necessary.
Decentralizing infrastructure : for
            good or ill
The author examines the many faces of
            infrastructure decentralization: the costs and benefits, the
            government structure (constraint or variable?), the
            "polycentric" approach, and how to make
            decentralization work (for whom?). He proposes basic
            principles and guidelines for policy design, for both small
            projects and large. Broadly, these guidelines are summed up
            in a few propositions. In all countries, some critical
            infrastructure is provided through a decentralized political
            structure. Current trends make that likely to be more true
            in the future. Decentralization, however defined, in and of
            itself had no necessary implications for good or evil so far
            as infrastructure is concerned: its effects depend on the
            incentives various decisionmakers face. The key to ensuring
            that these incentives are conducive to "good"
            decisions (about design, siting, timing, finance, pricing,
            operation, maintenance, and use of infrastructure) is to
            ensure that those who made the decisions bear the financial
            (and political) consequences, as much as possible.
            Politically, this means that political leaders at all levels
            should be responsive and responsible to their constituents,
            and that those constituents are fully informed about the
            consequences of all decisions. Making politicians bear the
            consequences of their own mistakes is as close as one can
            get to a "hard" political budget constraint.
            Economically, it must be difficult for local residents to
            shift cost to nonresidents who do not receive benefits and
            to make local decisionmakers fully responsible to their
            citizens for the use they make of revenues collected from
            them (through local taxes), to users of infrastructure
            (local or otherwise) for the use made of the revenues they
            contribute (through user charges of various sorts), and to
            taxpayers in general for the use made of any transfers (or
            subsidized loans) they receive. Administratively, what such
            a system requires is a clear set of "framework"
            laws (on local budgeting, financial reporting, taxation,
            contracting, dispute settlement, rules to be followed in
            designing user charges and so on), as well as adequate
            institutional support for localities to operate in this
            environment. To the extent that these conditions are not
            met, the perverse incentives that too often exist because of
            the structure and finance of the public sector in many
            countries will probably be exacerbated by the current
            tendency to decentralize more and more decisions in the
            public sector.