rafmacalaba/datause-encoder-data huggingface dataset:
than the more holistic approach looking at the financial services industry as a whole, and the distribution of the characteristics of its small-scale and low-income users.

Of course, similar questions arise in regard to borrowing customers and insurance, and to various forms of small value payments services.

Even if we had a credible measure of the penetration of financial services as a proportion of the population, it would not satisfy our curiosity for long. We also want to know how many _poor_ people have access, we would want to explore different _types_ of each service (residential mortgages _vs._ six-month crop loans) and ask about the _price_ at which they are available to different classes of people.

There is some potential for extracting more and better data from financial service providers and their regulators (and this is reviewed in Section 4 below), but the difficulties already mentioned underline the need for seeking other sources of information such as household and enterprise surveys (Sections 2 & 3). It is also clearly essential to ensure that any such efforts start out with questions that are both answerable in a way that is comparable across countries, and contribute to building a systematic picture of access to financial services allowing private and public sector interests to be served. In short, there must be a coherent conceptual framework.

# **_1.2 The conceptual framework for data collection_**

_Framework underlying other international databases_ The most successful international data collection exercises on national economic conditions have been driven by the attempt to quantify powerful underpinning economic models.

Most prominent among the international economic databases is the System of National Accounts (http://unstats.un.org/unsd/sna1993/introduction.asp), originally built on the Keynesian IS-LM model and requiring the classification of aggregate national economic transactions into income and expenditure, consumption and savings, investment and the balance of payments. Monetarist developments of the same Keynesian system underlie the depository corporations survey (formerly known as the monetary survey - cf. the IMF’s Monetary and Financial Statistics Manual <u>http://www.imf.org/external/pubs/ft/mfs/manual/) which is the bedrock of central</u> banking data, and which classifies the assets and liabilities of banking and monetary institutions into monetary and credit aggregates. Collection of national data consistent with these two systems have allowed the evolving understanding of macroeconomic and monetary processes, as learnt from the experience of certain well-studied countries, to be verified and applied on a global basis thereby in particular offering an important technology transfer to developing countries.

International comparisons of living standards have also relied on unifying theoretical constructs. For example, the theory of price indexes based on utility theory underlying the purchasing power-parity calculations of the Penn World Tables and similar exercises taking into account international differences in the price of consumer goods thereby 4
As long as the poverty measure is weakly relative (  _j_  1 ), distribution-neutral growth in the mean will reduce that measure.

On the other hand, the partial effect of an increase in the Gini index is theoretically ambiguous. This will depend in part on precisely how the Lorenz curve shifts and there are infinitely many possibilities. However, it is of interest to consider situations in which (13) can be re-written as:<sup>42</sup> Then we find that (holding _m j_ and<sup>_~~u~~_</sup> _jz_<sup>constant):43</sup> The sign of this expression cannot be determined from the assumptions so far. If   5.0 or relative comparisons are upward-looking (   5.0 ) then poverty will increase with a higher Gini index (holding the mean constant). With downward revisions, however, the effect could go either way. We will examine this issue empirically in Section 6.

# **5. Identification using national poverty lines**

In using data on national poverty lines to calibrate welfare-consistent international lines one requires a strong identifying assumption, namely that the national lines represent the local _z z_ costs of a common global level of welfare needed to not be considered poor, i.e., that _~~u~~ j_  _~~u~~_ for all _j_ in equation (11). While it is plausible that national poverty lines reflect relative comparisons, it is hardly evident that the implicit reference level of welfare can be treated as globally constant. Of course, one can allow for idiosyncratic factors, including measurement errors, which can be swept into a regression error term. But it is a strong assumption that these omitted countryspecific factors are orthogonal to the variables of interest, notably the mean. More plausibly, the latent national welfare norm is higher in richer countries. (One would then see a pattern such as in Figure 2 even if there is no welfare effect of relative comparisons.) If the gradient in national poverty lines in Figure 2 is entirely due to the effects of differences in the mean on the reference

> 42 Kakwani (1993) characterizes a class of proportional shifts in Lorenz curves that satisfy this property, although this is only one possibility consistent with our assumption.

> 43 Note that ��� holds _m j_ / _z j_ constant while the following partial log derivative allows<sup>_z_</sup> _j_<sup>to vary.</sup>

22
IMF (2014). Fiscal policy and income inequality. IMF Policy Paper. Washington, DC, International Monetary Fund.

Inchauste, G. and N. Lustig, Eds. (2017). The distributional impact of taxes and transfers: Evidence from <u>eight developing countries. Directions in Development-Poverty. Washington, DC, World Bank.</u> Ismailakhunova, S., G. Shymanovich and K. Bornukova (2019). Fiscal Incidence in Kyrgyzstan: A Commitment to Equity Analysis. T. W. Bank.

Kakwani, N. C. (1977). "Measurement of tax progressivity: An international comparison." The Economic <u>Journal</u> **87** : 71-80.

Keen, M., Y. Kim and R. Varsano (2008). "The "flat tax(es)": Principles and experience." International <u>Tax and Public Finance</u> **15** : 712-751.

Lopez-Calva, L. F., N. Lustig, M. Matytsin and D. Popova (2017). Who benefits from fiscal redistribution in Russia? The distributional impact of fiscal policy: Evidence from developing countries. G. Inchauste and N. Lustig. Washington DC, World Bank.

Lustig, N. (2016). "Inequality and fiscal redistribution in middle income countries: Brazil, Chile, Colombia, Indonesia, Mexico, Peru and South Africa." Journal of Globalization and Development **7** (1): 17-60. Lustig, N., Ed. (2018). Commitment to equity handbook. Estimating the impact of fiscal policy on <u>inequality and poverty, Brookings Institution Press and CEQ Institute, Tulane University.</u> Manning, N. P. and N. E. Tikhonova, Eds. (2004). Poverty and social exclusion in the new Russia. Aldershot, Ashgate.

OECD (2015). In It Together: Why Less Inequality Benefits All.

Paulus, A. and I. V. Tasseva (2020). "Europe Through the Crisis: Discretionary Policy Changes and Automatic Stabilizers." Oxford Bulletin of Economics and Statistics **82** (4): 864-888. Popova, D., M. Matytsin and E. Sinnot (2018). "Distributional impact of taxes and social transfers in Russia over the downturn." Journal of European Social Policy **28** (5): 535-548. Reynolds, M. and E. Smolensky (1977). Public expenditures, taxes, and the distribution of Income: The <u>United States, 1950, 1961, 1970. New York, Academic Press.</u> Weigand, C. and M. Grosh (2008). Levels and patterns of safely net spending in developing and transition countries. Social Protection Discussion Paper No. 0817. Washington DC, The World Bank. World_Bank (2005). Growth, poverty, and inequality: Eastern Europe and the former Soviet Union. Washington DC, World Bank.

World_Bank (2016). Fiscal Incidence Analysis for Armenia: Status Quo and Effects of Proposed Changes under the Unified Tax Code. T. W. Bank. Washington, D.C.

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Policy Research Working Paper 7657

# **Abstract**

Using a cross-country data set on e-government systems, this paper analyzes whether e-filing of taxes and e-procurement adoption improves the capacity of governments to raise and spend resources through the lowering of tax compliance costs, improvement of public procurement competitiveness, and reduction of corruption. The paper finds that information and communications technology can help improve government capacity, but the impact of e-government varies by type of government activity and is stronger in more developed countries. Implementation of e-filing systems reduces tax compliance costs as measured by the number of tax payments, time required to prepare and pay taxes, likelihood and frequency of firms being visited by a tax official, perception of tax administration as an obstacle, and incidence of bribery. The effects of e-procurement are weaker, with the number of firms securing or attempting to secure a government contract increasing with e-procurement implementation only in countries with higher levels of development and better quality institutions. The paper finds no systematic relationship between e-procurement and bureaucratic corruption.

This paper—prepared as a background paper to the World Bank’s _World Development Report 2016: Digital Dividends_ —is a product of the 2016 World Development Report Team, Development Economics Vice Presidency. 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 zhasnain@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
Policy ReseaRch WoRking PaPeR 4657

# **Abstract**

Tobacco use, which is rising quickly in developing countries, kills 5.4 million people a year worldwide. This paper explores the impacts of mobile phone ownership on tobacco consumption. Indeed, mobile phone ownership could affect tobacco consumption because individuals might pay for their communication with money they would have spent on tobacco. Using panel data from 2,100 households in 135 communities of the Philippines collected in 2003 and 2006, the analysis finds that mobile phone ownership leads to a 20 percent decline in monthly tobacco consumption. Among households in which at least one member smoked in 2003, purchasing a mobile phone leads to a 32.6 percent decrease in tobacco consumption per adult over the age of 15. This is equivalent to one less pack of 20 cigarettes per month per adult. The results are robust to various estimation strategies. Further, they suggest that this impact materializes through a budget shift from tobacco to communication.

This paper—a product of the Social Development Department, Sustainable Development Network—is part of a larger effort in the department to analyze how increased information flow affect household welfare. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The authors may be contacted at jlabonne@worldbank. org and rchase@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
# **Figure 5a: Services policy reforms in India, FDI and TFP**

<!-- Start of picture text --> Index of services reform Gro wth R ate<br>40 India : FDI in services sector is (C A GR )<br>4 35 growing faster than in non-services .......<br>3.5 36%<br>30<br>3<br>FDI in Services*<br>25<br>2.5<br>2 20<br>(1992/93 values<br>1.5 15 are indexed to 1;<br>1 10 Unit: US$)<br>0.5 20%<br>5<br>0 FDI in Non-services<br>199119921993199419951996199719981999200020012002200320042005<br>0<br>Banking Insurance Telecom Transport<br><!-- End of picture text -->

**Figure 5b. Impacts of Banking and Telecom Reforms on User Industries**

<!-- Start of picture text --> India: Gains in annual TFP growth after services reform<br>4 %<br>3 %<br>2 %<br>1 %<br>0 %<br>Industries Industries Industries<br>Ind. with<br>with low with low with high<br>high<br> dependence telecom use use of<br>dependence<br>on banks telecoms<br>on banks<br><!-- End of picture text --> _Source_ : Arnold, Javorcik, Mattoo and Lipscomb (2007).

# **_Sectoral analyses_**

Due to data constraints, there is only limited empirical _ex post_ analysis of the impacts of liberalization of trade in services. Most of the literature has focused on financial services, distribution/transport services, and telecommunications.

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# **INTRODUCTION**

# **_Firm creation is crucial for employment growth and development_**

David Birch published in 1979 a ground-breaking study on the job creation potential of firms. He concluded that small and, above all, young firms in the US created 8 out of 10 new jobs. As a result of this revolutionary finding, policy-makers are increasingly aware of the importance of the creation of new firms for the aggregate employment. One example of this awareness is the commitment set by the European Union at its Lisbon European Council in March 2000 to boost entrepreneurship (or firm entry) as part of its strategy to transform its economy and build a future economic and competitive strength.

The importance of new firm creation as a source of new jobs is even larger in a situation of large reallocation of workers and jobs across sectors. New firms in the expanding sector need to absorb workers released from firms in the declining sectors. If new firm creation is not enough, unemployment will rise. It has been estimated for the case of Italy, a good example in the European context of a country that has undertaken large displacement of workers from the agriculture and industry sector to the service sector, that the contribution to unemployment of barriers to entrepreneurship doubled when the worker reallocation was taken into account.<sup>3</sup> During the last decade, European and Central Asian countries (ECA) have suffered as well large displacement of workers. Most of large enterprises have downsized during the transition: they have reduced labor hoarding and shed redundant labor so as to reach the economically efficient size. As a result, the average firm size has decreased, and become closer to that in market economies. But if the average firm size decreases, the only way to increase employment is through a faster pace of firm formation. There must be more firms – firm density needs to increase – in order to offset the smaller firm size.

# **_The importance of the business environment for firm entry_**

Firm entry and expansion depend on the **quality of business environment** . The business environment or investment climate comprises institutions and policies that affect **firm entry** on the one hand, and institutions and policies that affect the **survival and growth** of new firms on the other hand.

Institutions that affect firm entry, according to the empirical and theoretical evidence, are the **administrative burdens on firm creation** (start-up costs), **the costs of going bankrupt** (exit costs) and the **access to finance** (where both the availability and the cost of finance for new and small firms are included).

> 3 See Lopez-Garcia, Paloma (2002): Labour Market Performance and Start-up Costs: OECD Evidence”, Centre for Economic Performance (LSE) Discussion Paper 565

3
currency. Overall, this indicates that further limiting<sup>foreign exchangerelatedexposure is likely</sup> to come at a cost.

Sixth, the coefficient on GDP per capita indicates<sup>that banks in higher per capita income</sup> countries are more efficient in terms of attracting<sup>more depositsand generatingstrongercash</sup> flows than banks in low income countries. This<sup>should not be surprisingas countries with higher</sup> per capita income (i.e., more developed countries) tend<sup>to generatemore savings,and hence</sup> more deposits.<sup>3</sup> Concerning other elements of the macro environment,<sup>our findingson the effect</sup> (or precisely lack thereof) of macro financial structure<sup>are consistentwith those of Demirguc-</sup> Kunt and Huizinga (2000) who report no effect of macro<sup>financial structure on commercial bank</sup> performance. An interesting point to note in this<sup>regard is that unlike theexperience of some</sup> countries (notably in Latin America), high inflation<sup>is not necessarilyassociated with large-scale</sup> inefficiencies, which could take the form of price- and non-price<sup>behavior,as hypothesized</sup> earlier.

Seventh, the insignificance of the coefficient on the quality<sup>of institutions is surprising,</sup> but by no means unexplainable. The effect of a developed<sup>legaland regulatory system is likely</sup> to be captured by other factors, such as foreign ownership<sup>or per capita GDP.It could be argued</sup> that a developed legal and regulatory regime is conducive<sup>to foreign entry, as it is likely to</sup> reduce the transaction costs (associated with entry)<sup>and the likelihoodof expropriation(of</sup> foreign assets by the state). In addition, it has been<sup>demonstratedthat a developedlegal</sup> framework and the rule of law are positively correlated<sup>with economicgrowth(see, for instance,</sup> Knack and Keefer, 1995). Should this be the case, of<sup>course,foreignownershipand per capita</sup> GDP indicators would be stealing some explanatory<sup>power away from the indicatorsof</sup> institutional quality, possibly making their effect<sup>on bankingefficiencyinsignificant.Finally,</sup> since countries grouped in the same sub-region are<sup>likely to be similar at leastin termsof the</sup> _enforcement_ of laws (i.e., a _defacto_ indicator of rule of<sup>law), if not in termsof the development</sup> of the legal system (i.e., a _dejure_ measure), the<sup>effect of institutional quality indicators on</sup> banking efficiency are likely to be captured also by sub-regional<sup>dummies.</sup> Eighth, as one should have expected, the EBRD indicators<sup>of enterprise restructuring</sup> have strong explanatory power in determining bank<sup>efficiency across countries. This carriesa</sup> 31 The link between the level of a country's development<sup>and revenue-basedefficiencyis less</sup> clear, as higher risks of investment projects may end<sup>up being outweighed by higher marginal</sup> returns on investments.

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the medium to long run though, domestic prices of wheat and fertilizers would fall as their domestic production would increase and progressively replace imports. Overall, the price of imports would increase by 12 percent in the medium term, against 9 percent for domestic products sold on the domestic market.<sup>18</sup> This result is consistent with what was observed so far in several countries, including Tanzania, where the transmission of high world prices to domestic markets was in most cases only partial. Effects depended on the depth of international markets for different commodities, countries’ exchange rates variations against the US dollar during the period, the degree of openness of the different economies, the share of non traded goods in absorption and domestic policies in response to the shock. Evidence is scant for many countries and commodities.<sup>19</sup> But incomplete pass-through combined with differentiated price inflation across commodities is consistent with the observation of relatively moderate food inflation in many developing countries relative to the overall consumer price index. In all observable cases, domestic food inflation is significantly lower than international levels. In ten developing countries, the relative price of food over non food items grew up by 15 percent on average between late 2005 and March 2008.The FAO obtains the same broad conclusion on a different sample of countries over the period 2007-8.<sup>20</sup> The three columns in the Table 1 reports simulated post-shock relative change in welfare (as a percentage of their pre-reform utility levels, or disposable income) for the various households regrouped into 4 categories, in the short, medium and long term. Overall, the shock entails welfare losses in the short and medium terms, equivalent to respectively 4.0 and 1.8 percent of pre-shock total disposable income.

In the long run, though, the shock turns positive for all households, 2.5 percent on average, as resources get reallocated in sectors with new comparative advantages, such as

> 18 These computations are made using Laspeyres indexes.

> 19 FAO research suggests that the pass-through of the world price of rice in US$ to domestic markets in six Asian countries currencies over the period Q4-2003 to Q4-2007 ranged between 6 and 64 percent, or onethird on average (FAO, 2008).

> 20 See Dessus et al. (2008), and FAO (2008).

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