rafmacalaba/datause-encoder-data huggingface dataset:
progress, less likely to drop out of high school, and have significantly higher test scores. Longerterm studies also find higher rates of college attendance (for whites) and lower rates of delinquency and crime (for blacks) among program participants (Garces et al. 2002).

A number of studies have analyzed the effect of Head Start on child socio-emotional development. This is important because child attributes as basic as being able to sit still and pay attention are necessary for any reasonable amount of learning to take place in school. Children who are appropriately socialized tend to turn into better-adjusted adults, and the labor market returns to various non-cognitive skills, including motivation, enthusiasm, cooperation, and teamwork may be as large as or larger than those to “IQ” and other dimensions of cognitive development (Carneiro and Heckman 2003; Heckman and Rubinstein 2001). Behavioral problems in early childhood have also been shown to be strong predictors of high school dropout and delinquency.

There is some controversy about the effects of center-based programs like Head Start on child socio-emotional development. At what age, and under what circumstances, is it beneficial for young children to spend large amounts of time away from their mothers? The analysis of the Perry Preschool Project and the Carolina Abecederian Project suggest that, whatever the negative effects of the intervention may be on mother-child attachment and (possibly) child socioemotional development, these are offset by the positive effects on academic achievement, wages and criminality—at least for the high-risk populations that participated in these model programs. That being said, it is not clear how easy it is to extrapolate from such model programs to large, publicly-funded or implemented programs like Head Start. Two recent papers are here informative. A randomized evaluation of the Early Head Start program, which combines centerbased preschool with parent-child group socialization activities and parent education, either center-based or during home visits, suggests that children participating in Early Head Start exhibit less aggressive behavior, less negative behavior towards parents, and are better able to pay sustained attention during play (Blau and Currie 2004). This is consistent with earlier evidence that Head Start had positive effects on measures of social adjustment of children, including impulse control (Lee et al. 1990, cited in Currie 2001). On the other hand, research by Magnuson et al. (2004) suggests that children in pre-kindergarten programs, as well as children participating in Head Start, were _more_ likely to exhibit aggressive behavior and were less able to exercise selfcontrol. It is not clear what explains these differing findings. Part of the explanation may be that there are very large differences in quality across different child care options and Head Start sites: By some estimates, as many as 40 percent of children in the United States are attending child care 7
incumbents are able to charge due to restricted entry; and attenuate what they term the “cost inefficiency effect”—the fact that in an environment with limited competition marginal costs of incumbents are likely to be higher than if entry were allowed. The latter is most important as inefficiency imposes a cost on all sectors and households that consume the services involved. They conclude that removing policies that increase costs can have much greater positive effects on national welfare than the removal of merchandise trade barriers – by up to a factor of seven or eight. Instead of the “standard” 0.5 to 1 percent increase in real income from goods liberalization, introducing greater competition on services markets that removes cost inefficiencies raises the gains to 6-8 percent. These large potential effects of services liberalization reflect both the importance of services in the economy and the extent to which they tend to be protected.

Rutherford, Tarr and Shepotylo (2006, 2008) use a static CGE model to assess the impact on Russia of accession to the WTO. Their analysis is innovative in that all 55,000 households distinguished in the Russian Household Budget Survey are incorporated into their model, allowing assessments of the impacts on income distribution and the poor. Their analysis also includes FDI (mode 3) and incorporates Dixit-Stiglitz endogenous productivity effects in both the trade and poverty analysis. They conclude that in the medium term virtually all households would gain from liberalization, with increases in real incomes in the range of 2 to 25 percent of base year household income. These estimates are decisively affected by liberalization of FDI in business services sectors and endogenous productivity effects in business services and goods. The gains from FDI liberalization in services alone are 5.3 percent of the value of Russian consumption, and represent more than 70 percent of the total value of the potential gains from WTO accession-related reforms. The welfare gains from Russia’s tariff reductions and better access to markets abroad would be equivalent to only 2 percent of consumption. Thus, similar to what emerges from Konan and Maskus (2006) for Tunisia, the most important component of potential welfare gains from liberalization are removal of barriers against FDI in services sectors.

Another interesting conclusion emerging from the CGE literature is not only that gains from services liberalization may be greater than from goods liberalization, but the adjustment costs associated with service-sector reforms may be lower because of the 21
8 Table 1. Aniysis of Alterative Definitions of Manufactured<sup>ProdlcUa Usea by National andlnternationalO</sup> nization

|Ddrintion|Originatig Institution|SITC G3roups Included|Notable Omission and/or Inclusions'|
|---|---|---|---|
|I|United Nations (UNCTAD),<br>CleneralAgreement on Tariffs<br>and Trade GATT(I) and World<br>Bank.|S through 8 les 68|Includes all goods classified as chemicals (5),<br>manufactured goods classified by materal (6)<br>excluding nonferrous metals (68), machnery<br>and ttansport equipment (7), and<br>miosellaneous manufactured articles (8).<br>Exclusion of SfTC 68 means that owe hklWly<br>fabricated nonferrous meinis products (i.e,<br>copper, aluminum, nickel, tin plates, shape,<br>bars and tubes, etc.)**are**not included as<br>rianufactursc. Also oxcluded are highly<br>processed food products in S1TC 0), dilled<br>and fermented alcoholic beverages and<br>tobacco manufactures in SITC 1', sawn<br>lumber and wood pulp in SITC (2), and<br>refined vegetable oils in SITC 4.|
|2|UNCTAD (2)|5 through 8 less 67 and<br>68|Similar to the UNCrAD4OATT definition<br>excep**t**hat both iron and steel (67) and<br>nonferrous metals (68) arn excluded.|
|3|World Bank in WoQrd<br>lkvdoeDLt RV.QM 1987|S through 8 less 68, 651,<br>652, 654, 655 and 667|Similar to the usual World Bank defmition<br>oxcpt five threo4igit SfTC products ae also<br>excluded from manufactures: textile yarn and<br>thread (651), cotton fabri¢c<br>3 (652), tulle, lace,<br>embroidery and ribbons (654), special textile<br>fabrics (655) and pears and precious stones<br>(667)|
|4|UNIDO<sup>4</sup>|5 through 8 less 68 and<br>several minor products.<br>Major items from SITC<br>0, 1, 2, 3 and4are<br>included.|Pearls and pe¢ious stones (667), developed<br>cinmatographic films (893) and works of art<br>and antiques (896) are excluded. Included are<br>major prepared food products, beverages,<br>tobacco manufactures, petroleum products and<br>animal and vegetable fats and oils. For<br>specific**s**ee Appendix Table 1.|
|S|GArr(2)'|S through 8 less 68 plus<br>major groups of<br>processed goods in SlTC<br>0, 1, 2, 3, 4 and 68.|Used for compilation of stistics on<br>manufactured production. As a result,<br>pro4uction and trade data are not comparable<br>since they are on a diTernnt base.|
|6|Test Proposal|S through 8 less<br>iunwrouIhA<br>nonferrous<br>metals in 68|Similar to the UNCrAD.GATT definition<br>but includes refined copper,nickel,aluminum,<br>lead, zinc, and tin bars plates, tubes and foil<br>(682.2), (683.2), (684.2), (686.2) and (687.2).|

1 Standard International Trade Classification (SITC) numbers are<sup>shown in pareathesis.</sup> 2 While consumable slcoholic beverages (SITC 112) are excluded,<sup>non-consumable</sup> alcohols (SlTC S12.2) are included in the definition of manufactures.

3 While cotton fabrics (SITC 652) are excluded silk, wool, linen,<sup>jute and hemp fabrics (SrTC 653) are included in the definition of</sup> manufactures.

4 As elaborated in UNIDO (1982) among others.

_5_ As elaborated in GAIT (1987, p. 139).
unlikely to spend the resource costs of pursuing WTO litigation if the expected market access gains from winning the case against a developing country respondent are small.

Finally, data in Table 4 suggest that some of the major targets of poor country use of antidumping are exporters in other developing countries. The table presents detailed information from five of the largest developing country antidumping _users_ regarding the foreign exporters that they most frequently target with imposition of new trade restrictions. Not surprisingly, China is each antidumping user’s first or second most-frequent target, despite being no higher than the fourth biggest source of imports for any one of these developing countries. Furthermore, each of these countries substantially targets other developing country exporters with their use of antidumping, frequently out of proportion to the country’s overall share of the user’s import market, as is the case with China.<sup>18</sup>

# **2.2.2  Evidence from the GATS**

Other suggestive evidence comes from transition economies that acceded to the WTO after 1995. Eschenbach and Hoekman (2006) compare GATS commitments with the evolution of actual policy stances over time in 16 transition countries, using an index of service sector policy compiled by the European Bank for Reconstruction and Development (EBRD). Over half of the 16 transition countries are economies that had the prospect of accession to the EU. No such country made very deep commitments in the GATS, and in practice all are much more open than their GATS commitments suggest. This indicates that these countries did not see a need to use the GATS as a means to commit to liberalization. Instead, they appear to have relied on other mechanisms, in particular the EU _acquis communautaire_ , as a focal point and lock-in device.

In contrast, many of the transition countries that were not EU accession candidates score high in terms of GATS commitments. This group includes Armenia, Georgia, the Kyrgyz Republic, Moldova, and the Former Yugoslav Republic of Macedonia. All these countries have little or no chance of joining the EU in the near future, which presumably helps to explain why the depth and coverage of their GATS commitments is much greater than that of other transition economies as well as most WTO members. With the exception of Macedonia, they are geographically or culturally distant from the EU, have small markets, and were not GATT

> 18 For the reasons posited in Bown and Hoekman (2005), the fact that the exporters are also in developing countries may contribute to the explanation of why developing country WTO violations are going unchallenged, as was reported in table 2.

12
and a large proportion of beneficiaries are from the richest quintile. But when including private contributions, secondary education is progressive.

The state of public healthcare is quite different. Access to public facilities follows a bell curve, with the middle quintiles more likely to receive benefits than either the richest or the poorest. This result is not explained by differences in health status, as the reported incidence of illness (within the 15 days prior to the survey) is essentially uniform across socioeconomic groups. In the upper quintiles this result is to be expected, since the rich contribute more to finance their demand of public healthcare and are also more likely to seek care from private providers. Nevertheless, out-of-pocket contributions could be better targeted, as the analysis shows that more than 40 percent of beneficiaries from the top quintile do not pay anything whatsoever for care received in public facilities.

A great scope for distributional improvement is also observed in access to care for members of the lowerincome quintiles, and in particular access across multiple tiers of the healthcare system. Whereas large numbers of members of the top quintile are to access free public health services from all levels of the healthcare system, the analysis suggests that the poor is less likely to seek care at any level. It is not clear whether the poor also fail to move on to provincial or national facilities, as the information available only in the LCMS VI reports only the first provider consulted and not all visits. To the extent that the driving force behind the regressive nature of healthcare benefits among the lower income quintiles be that the poor typically access only first-tier facilities, which offer more basic, lower -cost treatments—while wealthier patients receive more expensive and sophisticated care at provincial and nation hospitals— healthcare expenditures on the poor will remain disproportionately low.

The benefits of agricultural-input subsidy programs follow a somewhat progressive pattern but clearly suffer from targeting problems. For each beneficiary in the top quintile there are almost two beneficiaries in the poorest quintile, but the distribution is far from progressive across all income groups. On an aggregate basis, the results show that despite their intended targeting of very poor and economically vulnerable farmers, the largest benefit shares accrue to farmers in the middle-income quintiles. Moreover, in unitary terms the distribution is regressive, with farmers in the second-richest quintile benefitting slightly more than those in the richest and significantly more than farmers in all other income groups.

Taken together, these public spending patterns lend themselves to three overall conclusions. First, due to unequal access to public services the gross benefits of public spending _increase_ with consumption level, 36
# **1. Introduction**

Access to windfall revenues from foreign aid and natural resource rents can reduce the dependence of governments in less-developed countries on their own taxpayers. Such governments have weakened incentives to broaden the tax base, improve collection rates, and eliminate inefficient exemptions and corruption. Cross-country data for developing countries provide evidence in this paper that rents from aid and (to a lesser extent) natural resource exports reduce the quality of tax systems. Aid’s negative effects are robust to correcting for potential reverse causality, to changes in the sample, and to alternative estimation methods. Fuel exports are also associated with lower-quality tax policy and administration, but this finding is somewhat sensitive to outliers. Non-fuel resource exports, in contrast, show no relationship to efficiency of revenue mobilization.

The next section summarizes previous literature related to the arguments and findings of this paper. The data used in the analysis are described in section 3. Results are presented in section 4. A concluding section discusses implications for development and aid policy.

# **2. Taxation, Governance and Sovereign Rents**

How governments mobilize public revenues has important implications for other aspects of the quality of governance. Taxation is a key shaper of accountability relationships between citizens and government (OECD, 2008).

Historically, democracy and the rule of law in Western societies evolved from bargaining between monarchs and economic elites over tax revenues and political and economic rights (e.g. Tilly, 1990). In European warfare, rulers relying only on coercive 2
Having the managers of firms rate constraints on the firms’ operation and growth is a useful start for identifying important obstacles in the business environment. We analyze these obstacles not only by using econometric tools but also by examining the importance of these obstacles across regions and sectors.

# **4.1 Understanding Obstacles to Firms’ Operation**

In the World Bank Enterprise Survey, as noted, firms rate 15 obstacles in their business environment. These are access to finance, practices of competitors in the informal sector, electricity, corruption, crime, inadequately educated workforce, labor regulations, business licensing and permits, political instability, tax administration, tax rates, transport, customs and trade regulations, courts, and access to land.

A review of firm responses shows that the biggest reported obstacles differ across regions and countries (see appendix). Using model 2 (as explained in greater detail in the next section), we find that different sectors also confront different obstacles. For example, in the manufacturing sector access to finance, informal sector competition, tax rates, and labor regulations matter the most, while in the sales and services sectors only access to finance and informal sector competition are negatively and significantly correlated with firm growth (see table 6). Estimation results for the same model show that each country faces its own set of significant obstacles.<sup>8</sup> So does each region (see table 5).

Many of these obstacles are linked directly or indirectly to poor firm performance. In an ideal world a country would address all these problems in order to improve firm performance. But governments in developing countries have limited financial and human resources and, as argued by the growth diagnostics approach, should therefore prioritize reform efforts to remove the most important constraints.

The top three obstacles to firms’ operation emerging from the survey data for our sample are electricity, access to finance, and tax rates (figure 1). But we do not know whether these are the top obstacles to employment growth. We therefore need to analyze which obstacles have a significant effect on employment growth.

> 8 The estimation results are available upon request.

9
India has had a long history of direct interventions, often aimed at fighting poverty, notably through food subsidies, farm-input subsidies, subsidized credit schemes and workfare schemes. The subsidies on food and fertilizers, in particular, have been costly in budgetary terms and economically inefficient; some of the poor have clearly benefited, but many have not, while many of the non-poor have. Survey data for 2004/05 indicate that India’s the poorest wealth quintile are the least likely to have some form of ration card, to allow access to subsidized goods, and that the richest quintile are the most likely (Ajwad, 2006).

There are a number of reasons for caution in making an assessment of the poverty impacts of such programs, including political economy considerations.<sup>42</sup> But few careful observers would contend that India’s record in using this class of policies to fight poverty is anything but mixed. By conventional assessments of who is “poor,” these interventions have probably reduced poverty somewhat, but they have not been well-targeted and there have been persistent problems of corruption.<sup>43</sup> There is much hope for the new _National Rural Employment Guarantee Scheme_ (NREGS). This promises to provide up to 100 days of unskilled manual labor per family per year, at the statutory minimum wage rate for agricultural labor, to anyone who wants it in rural India. The scheme was rolled out in phases and now has national coverage. India has had much experience with such programs, going back to the Famine Codes of the late nineteenth century.<sup>44</sup> NREGS was heavily influenced by the famous _Employment Guarantee Scheme_ (EGS) in Maharashtra, which started in the early 1970s. This aims to assure income support in rural areas by providing unskilled manual labor at low wages to anyone who wants it. The scheme was financed domestically, largely from taxes on the relatively well-off segments of Maharashtra’s urban populations. The employment guarantee is a novel feature of the EGS idea, which helps support the insurance function, and also helps empower poor people. Those seeking relief must work to obtain support, and the work done can help develop badly needed public works, particularly in poor areas. The work requirement helps assure a degree of “self-targeting,” in that non-poor people would not often be attracted to such work. The ability to provide self-targeted insurance against down-side risks has been a marked advantage of these schemes over other

> 42 See Ravallion (2009) (in the context of an anti-poverty program in China, though the points made are reasonably generic). On the political economy of targeting see Gelbach and Pritchett (2000).

> 43 For further discussion, including an analysis of the average and marginal incidence of these programs, see Lanjouw and Ravallion (1999).

> 44 On India’s Famine Codes see Drèze (1990).

21
# THE EVOLUTION OF POVERTY AND WELFARE IN NIGERIA (1985-92)

**Sudharshan Canagarajah John Ngwafon Saji Thomas**

This document was prepared in close collaboration with the staff of the Federal Office of Statistics, Nigeria. We acknowledge valuable comments and technical advice from Martin Ravallion, Hazel Denton, Lionel Demery and David Bigman, and greatly appreciate the financial support provided by UNICEF.
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