rafmacalaba/datause-encoder-data huggingface dataset:
8 a level playing field for foreign and domestic firms); and complementing markets (via the reorientation of public expenditures to primary education, health and infrastructure, both for growth and to improve the distribution of income).

**Table 1.  The Decalogue of Washington Consensus Policies (1989)**

|1.|Fiscal Discipline|Budget deficits—properly measured to include local governments, state<br>enterprises, and the central bank—should be small enough to be financed<br>without recourse to the inflation tax.|
|---|---|---|
|2.|Public Expenditure<br>Re-Prioritization|Public spending should move away from politically popular but economically<br>unwarranted projects (bloated bureaucracies, indiscriminate subsidies, white<br>elephants) and towards neglected fields with high economic returns and the<br>potential to improve income distribution (primary health and education,<br>infrastructure).|
|3.|Tax Reform|To improve incentives and horizontal equity, the tax base should be broad and<br>marginal tax rates moderate. Taxing interest on assets held abroad (“flight<br>capital”) should become a priority in the medium term.|
|4.|Positive Real Interest<br>Rates|Ultimately, interest rates should be market determined. As this could be<br>destabilizing in an environment of weak confidence, policy should have more<br>modest objectives for the transition, mainly to abolish preferential interest rates<br>for privileged borrowers and achieve a moderately positive real interest rate.|
|5.|Competitive Exchange<br>Rates|Countries need a unified (at least for trade transactions) exchange rate set at a<br>level sufficiently competitive to induce a rapid growth in non-traditional<br>exports, and managed so as to assure exporters that this competitiveness will be<br>maintained in the future.|
|6.|Trade Liberalization|Quantitative trade restrictions should be replaced by tariffs, and these should be<br>progressively reduced until a uniform low tariff in the range of 10 percent is<br>achieved.|
|7.|Foreign Direct<br>Investment|Barriers impeding foreign direct investment and the entry of foreign firms<br>should be abolished; foreign and domestic firms should be allowed to compete<br>on equal terms.|
|8.|Privatization|State enterprises should be privatized.|
|9.|Deregulation|Governments should abolish regulations that impede the entry of new firms or<br>restrict competition, and ensure that all regulations are justified by such criteria<br>as safety, environmental protection, or prudential supervision of financial<br>institutions.|
|10.|Property Rights|The legal system should provide secure property rights without excessive costs,<br>and make these available to the informal sector.|

_Sources: Williamson (1990) and Williamson (1993)._ In contrast to the popular perception, Williamson’s Decalogue is a far cry from market fundamentalism. He does not even mention the liberalization of the (non-FDI) capital account— which became increasingly controversial in the policy debate as the 1990s unfolded. On the liberalization of domestic financial markets, Williamson is restrained calling only for gradually
I POLICY RESEARCH WORKING PAPER 2566

# Summary findings

Much attention has been paid to the issue of possible nonlinearities in the relationship between log wages and schooling in the literature on both the United States and developing countries. Schady uses data from a recent household survey for the Philippines, the 1998 Annual Poverty Indicator Survey, to test the fit of the log-linear specification for Filipino men. He presents results based on various estimation strategies, including spline regressions and semi-parametric regressions with a large number of dummy variables for years of schooling and experience. He concludes that:

* There appear to be large differences between rates of return to education across different levels in the Philippines. The wage premia for both primary and secondary education are significantly smaller than those for tertiary education.

* Within each level--primary, secondary, and university-the last year of schooling is disproportionately rewarded in higher wages. That is, there appear to be clear sheepskin effects associated with graduation.

This paper-a product of the Poverty Reduction and Economic Management Sector lUnit, East Asia and Pacific Regionis part of a larger effort in the region to understand the links between education, earnings, and welfare. Copies of the paper are available free from the World Bank, 1818 H Street NW, Washington, DC 20433. Please contact Tania Gomez, room 18-102, telephone 202-473-2127, fax 202-522-0054, email address tgomez@worldbank.org. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The author may be contacted at nschady@worldbank.org. March 2001. (38 pages) _The Policy Researcb Working Paper Sedes disseminates the findings of work in progress to encourage the exciange 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 polisbed. The papers carry the names of the autbors and sbould be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the autbors. They do not necessarily represen_ **_t_** _he view of the World 1Bank, its Executive Directors, or the countries they represent._

## Produced by the Policy Research Dissemination Center
first proposed by Aigner _et al._ (1977) and Meeusen and Van den Broeck (1977) to analyze the determinants of inefficiency within the sample. We use a slight variation on these procedures by Huang and Liu (1994) that applies maximum likelihood to estimate the stochastic production frontier and sources of inefficiency in one step. The inefficiency term is specified as ������ ��, where � is a normally distributed error term with mean ���� that is truncated from below at -���� (so that � is strictly positive), and �� is a vector of potential sources of inefficiency. This allows mean technical efficiency to be conditional on managerial characteristics. Assuming a flexible translog production function, the model takes the form: where _Y_ is yield per hectare; �� are physical inputs including the area of land planted, the amount of labor, nitrogen and phosphate applied per hectare, and the cost of crop protection chemicals (herbicide, insecticide and fungicide), mechanized ploughing and mechanized harvesting applied per hectare; �� are parcel characteristics including dummy variables for subjective soil quality, whether the parcel was fallow during the past 5 years, and whether use rights were obtained directly from the government or from another individual who was allocated these rights; and � is a normally distributed error term with mean 0. Technical inefficiency � is defined as above by ������ �� where �� denotes farmer attributes (age, education, gender, household size, personality traits) and technology including dummy variables for irrigation scheme, whether transplant or broadcast seeding is used, and seed type. � is normally distributed with mean zero, but truncated from below at �����.<sup>10</sup> In addition to the conventional factors included in regressions of this type (Liu and Myers 2009; Sherlund _et al._ 2002), previous research has linked motivational traits (Dunifon and Duncan 1998), locus of control (Groves 2005; Heckman _et al._ 2006), and organization with labor market outcomes, leading us to expect a positive association with technical efficiency. The time management skills measured by polychronicity may affect smallholders’ technical efficiency and ability to synchronize multiple income streams.<sup>11</sup> Higher discount rates in early life, due to impulsiveness, have been shown to negatively impact later life success (Castillo _et al._ 2011), and we expect this to negatively correlate with technical efficiency.

# **4. Estimation results**

Personality traits, especially polychronicity and optimism, are estimated to be more statistically significant and quantitatively important contributors to the adoption of transplanting—in turn a major predictor of

> 10 The maximum likelihood estimation is performed in STATA 13 using the sfcross command (Belotti _et al._ 2012). Likelihood ratio tests are used to test for significance of the _Z_ terms.

> 11 Psychology literature on farmers’ stress consistently shows time management to be a leading factor (McGregor _et al._ 1995; Walker and Walker 1987; Deary et al. 1997; Pollock et al. 2002; Alpass et al. 2004).

11
SENEGAL’S INFRASTRUCTURE: A CONTINENTAL PERSPECTIVE

# Power

## **Achievements**

In terms of access to electricity, Senegal is almost at the level of African middle-income countries and well above other low-income, nonfragile countries. About 47 percent of the population has access to electricity, and this figure reaches over 80 percent in urban areas (table 12). The relative success in expanding access is undoubtedly linked to well-planned reforms in the sector.

**Table 12. Benchmarking Senegal’s power indicators**

|||Low-income,<br>nonfragile||Seneg|al|Middle-income|
|---|---|---|---|---|---|---|
||Unit|<br>countries|Late 1990s|Early 20|00s<br>Mid-2000s|countries|
|National access to electricity|% population|32.8|36.2|—|47.1|49.5|
|Urban access to electricity|% population|72.8|72.8|—|80.4|74.4|
|Rural access to electricity|% population|12.7|7.8|—|15.8|26.3|
|Population gaining access annually|% population/year|4.4||—|2.7|12.1|
|||||Mid-20|00s<br>Late 2000s||
|Installed power generation capacity|MW/million people|20|||25|799|
|Power consumption (residential)|kWh/capita|107|||179|4,479|
|Power outages|Day/year|124.5||—|141|70.6|
|Firms’ reliance on own generator|% consumption|21||6.7|<br>24.7|11|
|Firms’ value lost due to power outages|% sales|6||4.3|<br>5.0|2|
|Delay in obtaining an electrical connection|Days|41||9.4|<br>—|12|
|Collection ratio|% billings|93|—|98.8|<br>100|100|
|System losses|% production|24|—|21.5|<br>22.5|20|
|Cost-recovery ratio|% total cost|89|—|58.3|<br>74|85|
|Total hidden costs as % of revenue|%|68|—|90|52|6|
|Effective power tariffs ()||**Senegal**|Predom<br>hydro ge|inantly<br>neration|Predominantly<br>thermal generation|<br>Other<br>developing<br>regions|
|Residential at 100 kWh/month|US cents/kWh|23.8|10|.7|15.7||
|Commercial at 900 kWh/month|US cents/kWh|22.8|12|.9|19.0||
|Industrial at 100 kVA|US cents/kWh|15.8|9.|3|13.0|5.0–10.0|
|Average tariff|US cents/kWh|22.7|—||17.0||

_Source:_ Eberhard and others 2008. Other sources include access data coming from the Demographic and Health Surveys 1996 and 2001; utility data from the AICD electricity database (www.infrastructureafrica.org/aicd/tools/data) _Note:_ kWh = kilowatt-hour; MW = megawatts; kVA = kilovolt ampere. — = Not available.

Senegal has been moving from a unique vertical integrated provider (SENELEC)—which generates, transmits, and distributes electricity—to a model where generation, transmission, and retail distribution is liberalized and there is room for promising alliances with the private sector.

Senegal has had already a long history of private sector participation in the sector, under various kinds of contracts and with differing results. The first concession for SENELEC was granted in 1999 but 26
12 the Ministry of Health. The overall estimated needs came to approximately US$4 milion equivalent-only half of what had actually been spent on drug. The high wastage of drugs was confirmed by a Bank-funded audit of drug stocks throughout the country-45% of the drup were either expired (33%) or due to expire within the next six months (12%). In part this may be due to the introduction of user charges in 1985, which has reduced utilization of health facilities signifcantly and shifted drug purchase to the private sector, ordering of pharmaceuticals for the pubic sector has not yet caught up with the trend.

Stockouts of high priority drugs, on the other hand, may result in costly local purchases from private suppliers. Local purchases are commonly twice or three times the cost of imported drugs, and price differentials of up to 10 times have been reported. (See below, 'Procurementg.) Once the drug needs have been quantified, it is a relatively easy step to cost them and then establish the overall cost of drugs This link, between estimating and costing drug needs, and using the results in dscuuss with the financial authorities. is a crucial step towards improving the financing of drug supplies. Financial authorities-those rspo8sib for budget allocations and for release of foreign exchange-have shown themselves responsive to such iron-clad proof and justification of needs In fact, Zimbabwe recently used its drug quantification to obtain an agreement from the financial authorities that the needed foreign exchange would be made milblb.

# _To Make or Buy? Local Producion of Drugs_

In 1982, production of pharmaceuticals in Africa was estimated to be worth approximately USS750 million, accounting for less than 1% of the world total of USS 95 billion.(Scrip, May 6, 1985) As much of this was done by local affiliates of foreip companies, with production of active ingredients and research taking place elsewhere, this may overstate the extent of local production. African countries continue to import significant quantities of drugs from Europe, with 96% of imports coming from Europe and only 0.7% from elsewhere in Africa in 1984. Africa is an important market for Europe, with an estimated 12.7% of European exports going to Africa By comparison, Latin American regional trade is more important, with 32% of imports coming from within the region and only 49% from Europe, and 13% from North America.(WHO, 1988b) This low level of pharmaceutical production activity in Africa conceals an important fact: virtually all Afrcan countries already have some installed capacity for drug formulation, if not production. (Formulation is the final stage in drug production, such as the tabletting, packaging, etc of pharmaceutical intermediates produced elsewhere.) Yet most of these fatories are operating significantly below capacity, and some are closed for long parts of the year. The reasons for this situation are complex
# **_D. Informal Manufacturing Sector_**

In this section we study the size-age gap in the informal manufacturing sector in India. In a recent paper using World Bank Enterprise survey data for the informal sector, La Porta and Shleifer (2008) show that informal firms look very different from formal firms in terms of size, productivity, and education level of managers and find little evidence that growth occurs by informal firms eventually becoming large formal firms. They interpret their findings as being consistent with the _dual economy_ view (e.g. Harris and Todaro, 1970) which predicts that in developing countries, in addition to the formal sector, there is an informal sector that employs a large section of the labor force.

Figure 16 presents the sample statistics for firm size across different age bins, combining the data for both the rural and urban sectors. We see that older firms in the unorganized manufacturing sector employ fewer people than firms younger than 5 years old. Thus firms in the informal manufacturing sector in India have a very different lifecycle than the firms in the formal manufacturing sector. The downward sloping age size profile in the informal sector is consistent with the description of the informal sector in La Porta and Shleifer (2008).

In unreported statistics, we examine if financial development has an impact on lifecycles in the informal manufacturing sector. Again we find no evidence that informal manufacturing plants in financially developed states are growing at a faster rate than informal plants in financially under-developed states.

# **_E. Reconciling our results with the Finance and Growth Literature_**

The analysis above shows that firms in the formal manufacturing sector in India grow as they age and the quality of financial institutions at the state level does not seem have to an 29
on a daily basis (known as CDRs). These data were the basis for the estimation of the number of cell phone lines pertaining to Venezuelan nationals along with their geographic distribution (at the level of Census tracts). This procedure had three separate stages:

1. **Activated mobile phones.** Specifically, a mobile phone was considered activated if it was used at least 60 times in 30 different days over the last 90 days. The uses considered were: turned on/off, received/initiated a call, received/sent a text message, or transferred data over the internet.

2. **Activated mobile phones belonging to Venezuelan nationals.** Activated mobile phones were considered as likely belonging to Venezuelan users if they were registered to a Venezuelan citizen or if was used at least 30 times over the previous 30 days to initiate/receive a call to/from Venezuela; to send/receive a text message to/from Venezuela; web searches or visits to websites considered of interest to the Venezuelan population (e.g. visa for Venezuelans, job opportunity, etc.).

3. **Assignment to a Census tract.** Each Activated Venezuelan mobile phone was assigned to the Census tract with the highest probability of containing the user’s residence. This assignment was based on the events generated during the night time (8pm to 6am) since most users are likely to be in their homes during these hours.<sup>15</sup> This method determines the number of _Telefonica Ecuador_ users residing in each Census tract, together with how many of those are likely to be Venezuelan. These counts were later adjusted using canton-level weights on the basis of _Telefonica_ ’s market share in order to estimate the total counts of mobile phones pertaining to Venezuelans and to the overall population in the canton across all companies. We adjusted these figures further in order to account for the share of the population owning mobile phones on the basis of the overall number of households in the 2010 Population Census.<sup>16</sup>

> 15More specifically, each of the events listed earlier (phone calls, text messages, data transfer events) makes uses of one or several of the cell phone towers owned by _Telefonica Ecuador_ . The cluster of geographic locations of the cell phone towers used more frequently during night time by each mobile phone was used to define the likely residence of the owner of the mobile phone device. In particular, the location of the residence was estimated to be the average of the centroids of the cell phone towers of the cluster, using as weights the number of events channeled through each of the towers. The coordinates of the residence are then mapped into the corresponding Census tract.

> 16Besides providing crucial information for our analysis here, these data were used to design a large survey known as EPEC. This has been designed to be representative of the Venezuelan migrant population in Ecuador as well as the Ecuadoran population residing in the host communities.

10
We call researchers’ attention to the fact that COVID-19 also did not result in any longlived crises in financial markets, although these markets are not the main focus of this article. U.S. stock markets fell sharply initially, and demonstrated a strong negative reaction in the skewness and total market price of risk, more negative even than the GFC (Delis, Savva, and Theodossiou, 2021). The contagion effects across stock markets in different nations was also quite pronounced during COVID-19 (e.g., Iwanicz-Drozdowska, Rogowicz, Kurowski, and Smaga, 2021). However, the market came back even stronger during the pandemic, likely due in part to the policy interventions that helped the real economy and Federal Reserve policies that boosted financial markets. The S&P 500 index achieved a record closing high of 3,386 on February 19, 2020. However, 16 sessions later, the market closed at 2,481 on March 12, 2020, a decline of about 26 percent, a bear market. Nonetheless, financial markets have now recovered, with the S&P 500 closing at 4,163 on May 17, 2021. However, Demirguc-Kunt, Pedraza, and Ruiz-Ortega (2021) analyze stock price data to show that banks around the world, particularly those that operate in countries with little fiscal space, were put under stress in 2020 despite many policies introduced to moderate this impact.<sup>20</sup> We recommend that future research extend this analysis to monitor these vulnerabilities and developments across the world.

# **5. Key Reason for the “Economic Surprise” – Government Stimulus Programs during COVID-19**

We argue in this section that a key reason why the COVID-19 economic outcomes in the U.S. became a favorable “surprise” may be the large government stimulus programs that were quickly put into place during the crisis. Both the COVID-19 and GFC crises featured many stimulus programs in the U.S. from government payments to households, to aggressive Federal

> 20 Ding, Levine, Lin, and Xie (2021) explore the determinants of stock price reactions to the pandemic for nonfinancial corporations around the world.

28
when a country signs a trade agreement, its exports increase by an estimated 30% to non-member countries.

||log(trade)|
|---|---|
|RTAm|0_._274<sup>_∗∗∗_</sup><br>(9.99)|
|RTAin|_−_0_._220<sup>_∗∗∗_</sup><br>(-7.44)|
|RTAout|0_._296<sup>_∗∗∗_</sup><br>(9.80)|
|Country pair FE|Yes|
|Country_×_time FE|Yes|
|Observations|796,107|
|R2|0.7945|

t statistics in parentheses * p<0.05, ** p<0.01, *** p<0.001 Table 1: OLS estimates of regression equation (1) As expected, two countries entering a trade agreement is associated with an increase in trade between them. This is evidence of trade creation, which corroborates what was found in previous studies. More interesting is the associated strong decrease in inflows to, and a strong increase in outflows from, the region. While this does not contradict previous findings of a small effect on total trade with the rest of the world, our findings uncover strong underlying effects on inflows and outflows.

The decrease in inflows to the region following the implementation of a trade agreement is evidence of trade diversion. The lower trade barriers within the region make imports from the region relatively more appealing. As a result, members source more from within the region and less from outside the region. While regional trade agreements lower trade barriers within the region, their effect on trade barriers with the rest of the world is ambiguous. On the on hand, trade agreements feature Rules of Origin clauses which regulate the origin of the goods benefiting from lower trade barriers. Rules of Origin are a form of trade barrier on inflow to the region which is an additional factor explaining the decrease in inflows to the region associated 11