rafmacalaba/datause-encoder-data huggingface dataset:
In order to assess the stationarity of the variables, unit root tests were performed using the Augmented Dicky-Fuller (ADF). The tests, summarized in Annex 2, show that all the variables are stationary (i.e. I(0)).

# 5. Results

In this section, the empirical results are presented and discussed. The long-term pass-through coefficients are estimated from the 2-step regression model, and the short-run dynamics are obtained from the VAR models. In general, the results show that pass-through is incomplete both in the long and short runs, which is in line with theory. However, the results on the size of the pass-through diverge between the long and short-term. In fact, the short-term impact of external food shocks is higher than in the long-run, suggesting that the effect of the shock tend to dissipate over time.

## 5.1 Long-term pass-through coefficients

The 2-step regression model shows that pass-through to domestic food inflation is low and lies between 13% and 16% (depending on the international price measure used) and the spill-over from domestic food inflation to core inflation is moderate, estimated at around 0.6%.

The first-step equation was estimated following the methodology shown in the previous section. Three measures of international food prices were used (IMF food index, FAO food index and FAO cereals subindex). Only statistically significant coefficients of the different lags, regardless of their signs, were used to compute the full long-term pass-through from international price inflation to domestic food inflation<sup>5</sup> . The results using the IMF food price index are not reported because it yielded negative pass through estimates. In general, the results from this step, reported in table 2, show that the pass through to domestic food inflation is low. A 1% increase in the international price inflation leads to a 0.16% increase in the domestic food price inflation when the FAO food index is used as a measure of international food prices, and to a 0.13% when the FAO cereals sub-index is instead used. Also, the first-step equation shows that international food price inflation explains around one quarter of the changes in domestic food price inflation, meaning that changes of domestic food prices are attributed to factors other than the international food price inflation.

> 5 All selected coefficients are significant at least at 95% confidence level.

13
|Country Group<br>Estimations<br>**Variables**<br>This table presents estimations of annual ec<br>commodity index. G7 growth is a weighted a<br>four rows of the table present a joint test of i_<br>have country fixed effects. P-values from rob<br>WEO, Bloomberg.|AM<br>Panel<br>**Real GDP Growth**<br>**Still coupling with**<br>onomic growth (q/q data) <br>verage of each individual c<br>growth+i_growth*late=0<br>ust standard errors are pres|AM<br>Panel<br>**Real GDP**<br>**Growth**<br>**G7 and not a re**<br> of non-G7 AM a<br>ountry belonging<br>where i represents<br>ented in italics. *,|AM<br>Panel<br>**Real GDP**<br>**Growth**<br>**Table 3**<br>**lationship with C**<br>gainst G7 and Chin<br>to that group. Grow<br>G7 or China. Both p<br>** and *** denotes|AM<br>Country by Country<br>(median values)<br>**Real GDP Growth**<br>**hina in advanced econo**<br>a growth. CRB Commodity<br>th is weighted by PPP-meas<br>anel and country by country<br>significance at the 10, 5 and|AM<br>Country by Country<br>(median values)<br>**Real GDP Growth**<br>**mies**<br> Index Growth is the log <br>ured GDP in current prices<br>(taken median values) are<br>1% level respectively. Sou|AM<br>Country by Country<br>(median values)<br>**Real GDP Growth**<br> change in the CRB general<br>from a year before. The last<br>presented. Panel estimations<br>rce: IMF IFS Statistics, IMF|
|---|---|---|---|---|---|---|
|G7 Growth|1.206***|1.110***|1.284***|1.190***|1.284***|1.479***|
||_0.000_|_0.000_|_0.000_|_0.000_|_0.000_|_0.000_|
|G7 Growth*Late|-0.176***|-0.0348|-0.0340|-0.122*|-0.060|-0.062|
||_0.000_|_0.355_|_0.827_||_0.242_|_0.136_|
|China Growth||-0.145***|-0.0231||-0.069|0.023|
|||_0.001_|_0.639_||_0.139_|_0.292_|
|China Growth*Late||-0.04|0.0351||-0.011|0.035|
|||_0.355_|_0.453_||_0.242_|_0.178_|
|CRB Commodity Index Growth|||-0.0429***|||-0.028|
||||_0.000_|||_0.179_|
|Constant|0.003**|0.020***|0.00247|0.001*|0.014|0.007*|
||_0.012_|_0.000_|_0.701_|_0.093_|_0.249_|_0.092_|
|Observations|942|942|942|71|70|70|
|R-squared|0.440|0.446|0.457|0.518|0.603|0.620|
|**G7 Growth+G7 Growth*Late**|1.030***|1.075***|1.250***|1.068***|1.225***|1.417***|
||_0.000_|_0.000_|_0.000_|_0.000_|_0.000_|_0.000_|
|**China Growth+China Growth*Late**||-0.185***|0.012||-0.083|0.058|
|||_0.004_|_0.872_||_0.234_|_0.161_|
Turning to _actual_<sup>_9_</sup> procurement laws and their implementation, a small literature has emerged on public procurement practices in developing countries. Table 3 provides a listing of recent studies.

**Table 3: List of recent literature on specific instances of public procurement reform** **<u>in 25 developing economies or assessments of existing procurement policies.</u>**

|_Num_<br>_-ber_|_Economy or_<br>_region_<br>|_Literature (for full citations see the references at_<br>_the end of this paper)_<br>|_Least developed_<br>_economy or_<br>_region?_|
|---|---|---|---|
|1.|Bangladesh|LoveiandMcKechnie (2000)|Yes|
|2.|Botswana|Lionjanga (2003)||
|3.|Bhutan|Trepte (1998)|Yes|
|4.|Brazil|Levy (2001), OECD (2003) (citing_Business News_<br>_America_2002), and Ozorio deAlmeida (2004)||
|5.|Chile|Orrego-Urzua, Osorio, andMardones (2001)||
|6.|China|Cao (2003), Tian (2001, 2003), Liu (2004),<br>Rothery (2003)||
|7.|Columbia|USAID(1999)||
|8.|Czech Republic|Mardas and Varsakelis (2000)||
|9.|Estonia|Annikve (1998),Lamvol(2002)||
|10.|Ecuador|Moncayo (2004)||
|11.|Guatemala|USAID(1999)||
|12.|Ghana|Verhage et. al. (2002)||
|13.|Hungary|Mardas (2001)||
|14.|India|Srivastava (1999), Khorana (2002), and Das<br>(2004)||
|15.|Kenya|Obiri(2003)||
|16.|Korea|Choi(1999), Seong andLee (2004)||
|17.|Kosovo|Piselli(2003)||
|18.|Laos|Trepte (1998)|Yes|
|19.|Nicaragua|Cohen(n.d.)||
|20.|Nigeria|Ekpenkhio (2003), Onyekpere (2005).||
|21.|Pakistan|TransparencyInternational(2002)||
|22.|Poland|Glebocki(2000),Piasta (2000), andLemke (2003)||
|23.|South Africa|Wittig (1999), Caron(2002), Watermeyer(2004)||
|24.|Tanzania|Nkingu (2003)|Yes|
|25.|Uganda|Wittig (1999),Agaba (2003)||

_Notes_ : This list is based on a search of (i) the websites of the World Bank, OECD, the International Trade Centre, the United Nations Commission on International Trade Law, and the WTO; (ii) the Social Science Research Network database, and (iii) the tables of contents of the leading public procurement journals, including the _Public Procurement Law Review_ and the _Journal of Public Procurement_ , and (iv) recent conferences on public procurement reform in developing countries. This list focuses on the writings of individuals and excludes documents produced by official bodies or reports of international organizations.<sup>10</sup> 9 We are well aware that there is a growing literature of theoretical analyses of public procurement matters and indeed have surveyed such literature in other papers. Here our focus is on studies of actual procurement regimes and procurement reforms in developing countries.

> 10 Additional _official_ sources of information on procurement practices include WTO _Trade Policy Reviews_ , especially for members of the GPA at http://www.wto.org/english/tratop_e/tpr_e/tpr_e.htm; submissions to

9
## **Samara Oblast**

3.13 The region of Samara has decided to fill the legal and fiscal vacuum left by Article 41 of the 1992 Russian "Law on Use of the Subsoil," which provides that "regular payments for the right the extract minerals are determined taking into account the type of mineral, the quantity and quality of their reserves, the natural, geographic, technical and economic conditions of their reclamation and exploitation of their deposit." Samara Oblast has thus started differentiating mineral resource user fees to reflect rent-generating factors and capture part of the rent. It has implemented the 6-16% range set for oil and gas in the legislation so that now, for deposits with relatively advantageous conditions, fees range from 12.29% to 13.14%, while users of relatively disadvantaged deposits pay only 8-10.43% (Evteeva 2000).

## A **Practical Experiment: Novgorod Oblast**

3.14 The forest sector used to figure prominently among the sources of revenues of this northwestern region of Russia. In 1904, for example, they represented 26% of total regional budget revenues (Novgorod Oblast 1965-1976-1986). This role was dramatically reduced with the new rules for stumpage fee calculation established in 1949 as well as the massive industrialization campaign undertaken by Stalin. By the 1960s, the share of forestry in regional budget revenues had been reduced to less than 5%. Nowadays, forest revenues play an even smaller role. The share of natural resource user fees in Novgorod's consolidated regional budget revenues represented 2.7% in 1999, with stumpage fees accounting for half of that. The share of the whole forest sector in the region's consolidated tax revenues is estimated at around 5%, or US$ 3.4 million (GNIVTs 2000).

3.15 Eismont _et al._ have tried to overcome the problems of using the net-back method to estimate the timber rent in Novgorod (2001). As highlighted above, depending on the origin of the data, the net-back method can lead to serious uncertainties in the estimation process. The innovation of Eismout _et al._ (2001) consists of using timber auction data to estimate the timber rent econometrically.

3.16 The model assumes perfect competition among loggers and sets the rent equal to the auction price (stumpage fee). The auction price is a function of several explanatory variables: (1) timber type (coniferous vs. deciduous, with coniferous fetching higher prices than deciduous); (2) volume per tree (the higher the volume the higher the price); and (3) hauling distance (the smaller the distance the higher the price).

- 3.17 As a first step, a linear specification is used to estimate the rent:

# **_C_** _= + C2 TYPE +C3 -QUALITY C DISTANCE_ (4)

where _PA_ is the auction price (stumpage fee), and _TYPE_ is a dummy variable, representing timber type (one if coniferous, zero otherwise). The estimation results are as follows. Except for the constant, all of the estimated coefficients are of the correct sign and statistically significant at the 1% level: 37
-22-

following recent rulings of the Hungarian Constitutional Court stressing privacy rights of taxpayers (World Bank, 1995).

Before closing this section, reference should be made to the issue of taxation of the self-employed and small enterprises. As already discussed in section I in the context of the withholding tax, owners of unincorporated businesses are, to a certain extent, legally able to minimize their tax bill. This avoidance is due to the fact that labor is heavily taxed as a factor of production in Hungary. In 1994, the total tax wedge on the average worker was 117% of the net wage, 81% of the gross wage, and 54% of employer costs.<sup>29</sup> Individuals with earnings above the average wage even faced higher tax wedges. The tax system offered a way to circumvent high tax burdens legally by choosing a special legal status. Owners of unincorporated partnerships (law firms, medical offices, etc.) receive labor as well as profit distributions from their business. The favorable treatment of dividends has opened a loophole allowing to minimize the tax bill by declaring (low-tax-rated) dividends rather than (high-tax-rated) labor remumerations. Recall that dividends are taxed at 40%, whereas tax rates of up to 48% are levied on labor income. In addition, social security contributions must be paid.

Facing a high tax burden, economic agents spend a lot of time and effort in tax planning and other activities that are unproductive for the economy as a whole. This applies to taxpayers seeking selfemployed status as well as to corporations adjusting their distribution policy to a distorting tax system. Since self-employed income is harder to monitor than wages and salaries, the switch from the status of employed to self-employed often implies a reduction in compliance as well as increased auditing costs for APEH. The introduction of a limit for profit distribution in unincorporated businesses does not represent an efficient remedy nor a systemic reform of the tax code. It is an _ad hoc_ measure which closes a loophole but does not address an underlying problem in the incentive structure.

# **Section 3 - The Taxation of Capital Income in the European Union**

Can Hungary draw lessons from the recent European experience with capital tax reform? Since Hungary aims at accession to the European Union by the turn of the century, adapting its legislation to that of EU countries could be a worthwhile objective. This could be important, not so much because direct taxation --and capital income tax, in particular-- is an area where the _acquis communautaire_ is important (as discussed below, this is far from being the case) but, rather, because adapting tax laws to increasingly integrated capital markets in Europe is desirable. Neither 29 See World Bank, 1995, p. 17. The total tax wedge consists of the combined effect of personal income taxes and social security contributions.
deposits (which includes both mandatory and voluntary banks’ reserves). For Argentina, Brazil, and Uruguay, the correlation coefficients between exogenous changes in ECRR and changes in total banks’ reserves are 0.31, 0.68, and 0.99, respectively (statistically significant at the one percent level in all cases). This suggests that exogenous ECRR changes are important determinants of changes in total banks’ reserves.

# **3 Evidence from traditional identification strategy**

Before turning to the new identifying strategy, this section relies on the traditional time identifying strategy used in the monetary policy (Leeper _et al._ , 1996; Bernanke _et al._ , 1997, 2005; _Christiano et al._ , 1999) and the macroprudential policy (Lim _et al._ , 2011; Tovar _et al._ , 2012; Glocker and Towbin, 2012) literatures, which assume that innovations in central bank policies have no contemporaneous effects on macroeconomic outcomes.<sup>11</sup> We first estimate the effects of monetary and macroprudential policies on economic growth using quarterly data and the following panel SVAR:<sup>12</sup> where subscripts _i_ and _t_ denote country and time, respectively, _A_ are matrices of parameters, _αi_ is the country fixed effect, ∆ _Y_ is a vector composed by real GDP growth rate, inflation, ∆ _ECRR_<sup>_all_</sup> (the percentage point change in effective constant legal reserve requirement), and ∆ _IR_<sup>_all_</sup> (the percentage point change in the central bank interest rate), in that order, and _μ_ is the error term.<sup>13</sup><sup>_,_14</sup> It is important to note that for now (i.e., when evaluating the evidence

> 11See Coibion (2012) for an excellent review and a discussion of the limitations of this approach for the case of the monetary policy in the United States.

> 12While the empirical monetary literature in the United States and other industrial countries has mostly relied on the use of monthly data (typically using industrial production as a proxy for economic activity), this is not the dominant approach when focusing on developing countries (e.g., Disyatat and Vongsinsirikul, 2003; Le, 2009). First, for many developing countries monthly industrial production is unavailable or available only very recently. For example, while Argentine monthly industrial production is available at best since early 2000s, quarterly real GDP is available since 1990. Even when available, the quality and/or relevance of industrial production monthly data, in particular as a proxy for economic activity, is doubtful. For example, while both quarterly and annual data indicate that Argentina grew 4.1 percent in 2008, monthly data suggest a drastic fall of 12.7 percent.

> 13For the IR we use the monetary policy rate published by the central bank in the case of Argentina, the SELIC rate in the case of Brazil, and the money market rate in the case of Uruguay. See Appendix 8 for details.

> 14We use four lags. Our results for the case of eight lags remain almost the same as in the four-quarter

15
David Hess and Gregorio Impavido

> **Figure 2.** Investment mandates (% of funds surveyed)

<!-- Start of picture text --> Any Mandate<br>Economic<br>Social<br>Gov't Bonds _<br>(any)<br>0 20 40 60 80<br><!-- End of picture text -->

# _Il.D The Effects on Fund Performance_

> One result of policies that seek to fulfill social objectives beyond fund value maximization is poor asset allocation, which in turn may lead to low investment returns. Recent studies show that asset allocation can explain up to 90 percent of the variability in

> the return on assets over time (Brinson et al. 1986; Brinson et al. 1991). Where asset allocation decisions are based on politics rather than on sound portfolio theory, investment performance is sure to suffer-to the extent that in some countries public pension fund returns are consistently lower than the interest rate paid by banks to individual savings accounts in those same countries (Iglesias and Palacios 2000).

Table 2 illustrates the portfolio allocations of the funds surveyed for this paper. The average fund has 35 percent of its assets allocated to government bonds, 25 percent to bank deposits, and 15 percent to equities. More than 20 percent of the funds have at least 80 percent of their assets allocated to government bonds or bank deposit, with the average fund having 60 percent of its assets in either government bonds or bank deposits. Almost one-quarter of the sample have no investments in equities, and approximately two-thirds have less' than 10 percent of their assets in equities. By contrast, analysis of 111 U.S. state and local pension funds from 2000 revealed the average fund to have 59 percent of its assets allocated to equities.

The funds in our international sample used a wide range of asset allocations. Examination of the minimum and maximum portfolio allocations demonstrates this variety: while sonie funds face restrictions on investments in loans, one fund has invested 39 percent of its assets iti loans. Another fund has more than half of its assets in real estate.

> - 13 -
16 electricity is approximately the same as that of off-grid electricity (or the cost of producing a kWh using an alternate source of energy, such as kerosene or diesel and a generator). The WTP will be positive when off-grid (or diesel-generator) electricity is a poor substitute for grid electricity, and/or when off-grid electricity is expensive compared to grid electricity.

# _B. Computing the VOLL_

Our survey respondents announced their WTP to avoid the number of days with outages they had experienced in the MONTH 2016. To convert the WTP into a VOLL, we must divide it by an estimate of the kilowatt-hours lost to outages during that month. We proceed as follows. First, we compute an estimate of the number of hours without electricity in MONTH 2016. If, for example, the survey took place in July, and this respondent had listed July among the worst months in terms of electricity service, we take his or her estimate of the total duration of the unscheduled outages in the worst months. If the respondent did not flag July as one of the worst months, we take his or her estimate of the outage hours during a typical month. We then add the hours of scheduled load-shedding outages (in this example, those of July 2016), obtaining the total number of hours without electricity in MONTH 2016.

The kWhs lost are thus the total hours of service lost, times the household's average hourly consumption _now_ (which is equal to monthly consumption, divided by 30 days, and divided again by 24, the number of hours in a day).<sup>15</sup> Finally, we compute the VOLL as the WTP divided by the kWhs lost. This results in respondent-specific VOLLs. About a quarter of them will be equal to zero if we take the respondent's WTP responses at face value.

> 15 At the time of the survey the electricity supply situation in Nepal had much improved, and load-shedding outages had been discontinued, suggesting that electricity consumption was much closer to the desired level.
26 of a comprehensive haining program for judges and other judiciaiy personnel in management and selective substantive and procedura **l** egal subjects.

In the countries that lack legal information in geneml, an important component of tlaining activities is to make legal information and educational materials available and acsble to the legal profession and public at large. Many counties, especially in Easten Europe and Africa, lack sufficient intrnational and comparative legal expertse. This is an area where legal technical assistance can be particularly successful in desigmng processes for the dissemination of legal infion and in establishing legal information oenters, including law libnaries and legal databases. Such centers containing legal matials should be accessible to as many people in _eaw_ country as possible.

Leson learned: In order for legal technical assistance to have a lastig impat on a country, it is impeative to include trining activities wbih need to be adjusted to local conditions.

C. RECOMMENDATIONS AND IMPUCATIONS

1. Rec:ommendations for BaRk member countries implementing legal

**(1)** For lega technical assistance to bring abouthe desred results, govemments need to demonstrate a clear commitmen **t** o legal reform and take full ownership of the legal reform process.

(u) Countries should malke a choice about the direction of their legal refonns and shold piidoze their reform needs to reflect the particular circumstances of those countries.

(iii) In order to avoid duplicain of effrs and waste of resources, legal reform process need to be coordinated. Some counties, especialy those undergoing compse change in ecnmic or legal systems, may consider the estabismet of legal reform units that are in charge of aU legal reform activities in the economic area.