rafmacalaba/datause-encoder-data huggingface dataset:
On the dangers of decentralization
The author highlights some of the
            dangers of decentralizations.  The benefits of
            decentralization in allocative efficiency are not as obvious
            as suggested by the standard theory of fiscal federalism.
            The assumptions of this theory are fragile.  These doubtful
            benefits might carry a cost in production efficiency, but
            more empirical research is needed on this point. What is not
            doubtful is that decentralization runs counter to
            redistribution and stabilization.  Decentralization makes
            redistributive policies, whether interpersonal or
            interjurisdictional, more difficult, if not impossible.
            Decentralization also makes macroeconomic stabilization
            programs more difficult to implement because subnational
            government fiscal policies can run counter to national
            policies.  Serious drawbacks or potential drawbacks should
            be considered in designing any decentralization program.
            The arguments that the author develops make it easier to
            understand some of the real choices.  These choices are not
            so much whether to decentralize in general but rather what
            functions to decentralize - in which sectors, and in which
            regions. Guidelines can be provided on this. Often, the
            problem is not so much whether a certain service should be
            provided by a central, regional, or local government, since
            the service often has to be provided with the intervention
            of all three levels of government. The real challenge is how
            to organize the joint production of the service.
            Decentralization refers simultaneously to a state and to a
            process.  The virtues and dangers of decentralization are
            often discussed simultaneously for both concepts.  This is a
            dangerous confusion because decentralization is
            path-dependent.  What is desirable in a given country at a
            certain point in time depends on the present state of
            decentralization and the speed at which it has been reached.
            Much more work, particularly empirical work, is needed -- in
            review of decentralization (or centralization) experiences
            in general, as well as those encouraged or supported by the
            World Bank.
Privatization and foreign investment
            in the developing world, 1988-92
Foreign direct investment in the
            developing world has grown rapidly in recent years, making
            it one of the most important sources of financing to
            developing countries.  The author presents a database on
            about 1,100 global privatization transactions from 1988
            through 1992.  Between 1988 and 1992, developing country
            governments earned almost US$62 billion in revenues from the
            sale of state-owned assets.  About a third of those revenues
            came from foreign sources.  Privatization in Latin America
            represents about 66 percent of privatization in the
            developing world.  Privatization in Europe, including
            Eastern Europe, accounts for 17 percent, and privatization
            in East Asia, 13 percent.  The heaviest foreign
            participation is in Eastern Europe, primarily for lack of
            domestic financing.  Foreign investors' general
            participation in privatization programs was strong,
            providing developing countries with substantial amounts of
            foreign exchange.  The relative size of the privatization
            program and the degree of openness to foreigners are
            important determinants of foreign direct investment.  Each
            dollar in privatization revenue generates an additional 35
            cents in new foreign direct investment inflows, and a 1
            percent increase in foreign participation adds another 50
            cents. In addition to the direct inflow of funds through the
            sale of assets, many developing countries also increasingly
            attracted foreign investment outside of their privatization
            programs.  Privatization of infrastructure and the financial
            sector especially seem to have sent important signals to
            foreign investors, indicating an improved economic
            environment and possibly the eventual elimination of
            bottlenecks. Improved expectations about the profitability
            of investment projects render these countries more
            attractive to foreign investors.
Empirical perspectives on national
            index funds
Closed-end national index funds (NIFs of
            country funds) invest primarily in the stocks of the
            originating countries, such as Brazil, India, and the
            Republic of Korea.  They are typically traded in the
            organized exchanges of industrial countries, such as the
            United States and the United Kingdom. Although NIFs have not
            raised large amounts of external funds, recently they have
            expanded rapidly.  In a companion paper ("The Pricing
            of Country Funds and Their Role in Capital Mobilization for
            Emerging Economies," WPS 1058), the authors develop a
            theoretical model to compare the pricing of country funds in
            the reference markets (say the United States) with the
            pricing of the underlying component assets (or net asset
            valuation) in the originating securities market under
            various assumptions about market structure.  In this paper,
            they empirically investigate the hypotheses that emerge from
            the model. They first analyze country fund pricing and
            associated premia, or discounts, and then explore the issue
            of diversification services provided by NIFs from emerging
            markets.  The emphasis on emerging markets is important as
            many markets are otherwise closed to foreign investors.
            They compare results across emerging and industrial markets
            and, where appropriate, over different subperiods. Their
            evidence suggests that U.S. investors could benefit
            significantly in diversification that involves NIFs,
            particularly funds originating from countries to whose local
            markets they have limited access.  The authors investigate
            the pricing of NIFs, testing their principal theoretical
            predictions about the relative significance of the home
            market, host market, and global closed-end fund factors.
            They analyze initial (public-offering literature) and
            after-market returns, and explain the behavior of fund
            premia/discounts.  The evidence shows that variables that
            proxy the degree of access and substitution effects show up
            as significant determinants of country fund
            premia/discounts.  The empirical study supports their theory
            about the welfare implication for emerging economies that
            originate country funds.  The model suggests that country
            funds can improve pricing efficiency in local capital
            markets and promote local capital mobilization by firms at
            more favorable terms (lower costs of capital).
Characteristics and performance of
            settlement programs : a review
The studies and cases reviewed by the
            authors suggest that settlement programs are too often
            designed on the assumption that all settlers will or can
            succeed. This had led to too much centralized administration
            and rigid designs, rather than reliance on decentralized
            approaches, flexibility in implementation, support for
            spontaneous settlement, and reliance on the settler's
            own investment capacity.  Collective forms of crop
            production have not worked.  Cropland is best allocated to
            individual families whose land rights must be clearly
            defined as ownership or long-term leases.  Farm sizes must
            be flexibly adjusted to skills, the availability of family
            labor, and the families' capital ownership.  Settlers
            should therefore be allowed to sell or rent the land to
            other beneficiaries.  If poor settlers are to benefit or
            succeed, settlement cannot be based on credit finance but
            must include grants. Paternalistic constraints on the choice
            of crops or technologies, marketing, or participation in the
            labor force have usually not been enforceable or have had
            negative effects.
Effects of tax reform on
            Argentina's revenues
Too often, a good tax policy proposal is
            considered sufficient to improve the tax system - too little
            consideration is given to weaknesses in tax administration,
            perhaps because of measurement problems. Analyzing legal and
            administrative measures and quantitatively evaluating their
            impact on tax revenues is generally arduous. The authors
            develop a simple approach to assessing how tax effort
            affects tax revenues (performance). By "tax
            effort" they mean changes in tax legislation (except
            changes in nominal taxes), tax administration, and
            individual taxpayers attitudes toward tax evasion. Changes
            in tax administration include increasing tax penalties, new
            technologies, and administrative reform. They measure tax
            effort as a residual: the variations in tax revenues that
            cannot be explained by changes in economic variables and tax
            structures. Using this approach, one can easily identify
            factors that influence tax revenues over time, and
            understand the behavior of tax revenues in developing
            countries,  particularly where macroeconomic conditions are
            volatile. The authors apply this approach to Argentina; it
            can easily be applied to other countries. Their main
            conclusions in this application follow. The administrative
            dimension of tax reform is at the heart of Argentina's
            recent fiscal adjustment. Since 1991, tax effort is an
            average 80 percent higher than during the preceding
            (temporary) successful adjustment period (under the Austral
            Plan). An efficient tax administration and an improvement in
            taxpayer compliance levels appear to precede rather than
            follow increases in tax revenues. Tax effort is influenced
            significantly by such macrovariables as GDP growth and
            inflation, as well as by political (in)stability. It is
            influenced less by such fiscal variables as alternative
            sources of financing. In Argentina, the sequence of the tax
            effort was, first, to broaden the potential value added tax
            base, and then to reduce tax evasion through higher tax
            penalties and improvements in the basic functions of tax
            administration (inspection, audits, tax management, and
            personnel policy).
The enterprise sector and emergence
            of the Polish fiscal crisis, 1990-91
The author analyzes the causes of the
            collapse of profitability in 1991 of the Polish enterprise
            sector. He explores how it affected the government budget
            and assesses the forecasts of enterprise sector performance
            used to prepare the government's 1990 and 1991 budgets.
            About half of the drop in profitability he attributes to the
            decrease in the inflation rate and the consequent decrease
            in the inflation bias in profits that results from
            historical cost accounting. He attributes most of the rest
            of the collapse in profitability to higher labor costs and
            higher amortization allowances. When wages are endogenized
            in a simple model, nearly the entire collapse of
            profitability is explained by the changes in inflation bias
            and amortization allowances. The decrease in the inflation
            bias and the increase in amortization allowances caused
            profits, and thus profit taxes, to fall, freeing up cash
            that could be spent on wages, causing profits and profit
            taxes to fall even further. This loss in government revenues
            was offset by increased revenues from wage taxes, which were
            in turn offset by an increase in wage indexed government
            spending, notably on pensions. As a result of all these
            changes, the government deficit increased about 4 to 5
            percent of GDP - about half of the fiscal swing between 1990
            and 1991. Policy options recommended for increasing tax
            revenues include: increasing the turnover tax rate and
            introducing the value added tax that will replace it at
            rates that maintain the increased level of revenue;
            increasing the social security tax rate; and maintaining,
            but not raising, the historical cost based profit tax, an
            automatic stabilizer. An obvious alternative to the profit
            tax based on historical cost accounting is to redress 1991
            mistake, the indexing of amortization deductions. The author
            recommends drastically reducing or even abolishing
            amortization deductions for state owned enterprises for
            fixed capital acquired before 1990 (before the start of the
            transition from socialism). It is odd that these firms are
            given a tax break on top of the free use of state owned
            capital. If anything, they should be paying for the use of
            the capital.
Industrial development and the
            environment in Mexico
Postwar industrialization has moved
            Mexico's manufacturing industry toward more polluting
            activities. Fairly independent of changes in foreign trade
            policy, this process was induced by expansive public
            investments in heavily polluting subsectors, especially
            petro - and agrochemicals. Below - market pricing policies
            (implicit subsidies) for petroleum fuels contributed to an
            increase in industrial energy intensity -- in sharp contrast
            with pervasive energy - saving transition in Organization
            for Economic Cooperation and Development (OECD) countries in
            the last two decades. Energy intensity in Mexican industry
            increased 5.7 percent between 1970 and 1990, compared with a
            decrease of 35.3 percent in OECD industry.
Stock market development and
            financial deepening in developing countries : some
            correlation patterns
Programs to develop securities markets
            are now a common feature of World Bank financial sector
            loans.  Stock market development in particular is receiving
            considerable attention, especially the legal and
            institutional underpinnings required for successful stock
            market development.  The financial underpinnings needed have
            received less study.  The authors contribute to such a study
            by exploring the relationship between the degrees of
            financial depth and stock market development in an economy.
            Using a simple indicator of stock market development and
            several indicators of financial depth, and using
            cross-sectional data from 32 developing countries for
            1984-90, they find a strong correlation between the two
            factors.  Time-series data from 19 of these countries (for
            1978-90) show similar correlations for most Asian countries,
            but not for other countries in the sample. Also, the
            correlations of the Asian data are strongest after the
            mid-1980s.  They test a "threshold hypothesis"
            that a certain level of financial depth may be necessary to
            allow stock market development to take off.  They find that
            available data do not support the hypothesis. The results
            suggest that financial depth is a significant factor in
            stock market development in most developing countries, but
            that country specific factors (such as industrial policy and
            structure, foreign investment controls, and stock market
            regulatory and operational infrastructure) have an equally
            strong influence on stock market growth. Case studies of
            economies in which stock market development has been
            successful would help elucidate the interplay between these factors.
Indigenous territories and tropical
            forest management in Latin America
Using data from Latin America, the
            authors argue that fundamental changes must take place in
            the legal recognition and demarcation of indigenous
            territories if indigenous peoples are to fulfill their
            potential as resource managers for threatened tropical
            forest ecosystems.  The authors compare different national
            land tenure models for forest-dwelling indigenous peoples
            (contained in national Indian, agrarian, and protected-area
            laws in Latin America) and a model proposed by indigenous
            organizations in Latin America. The conventional models
            emerged during an era when most governments were more
            concerned with the rapid occupation and exploitation of
            frontier zones and the assimilation of indigenous peoples.
            Recent attention to the environmental degradation of these
            areas and the need to create alternative models of land use
            and development have directed attention to the potential
            contribution of indigenous peoples to the conservation and
            management of the vast tropical forests of Latin America.
            The authors find that indigenous peoples must be given some
            degree of control over their territories and resources.
            They contend that for successful management of tropical
            forests there must be a new type of partnership between
            indigenous peoples, the scientific community, national
            governments, and international development agencies. This
            relationship should be a contractual one, in which
            indigenous peoples are provided with juridical recognition
            and control over large areas of forest in exchange for a
            commitment to conserve the ecosystem and preserve biodiversity.
Transforming state enterprises in
            Poland : macroeconomic evidence on adjustment
Basing their report on repeat visits in
            late 1992 to 75 large state-owned manufacturing enterprises
            (which had been earlier surveyed in mid-1991), the authors
            present optimistic new evidence about the transformation of
            state-owned enterprises in Poland.  This evidence shows
            state-owned enterprises in a much more favorable light than
            the stereotype of myopic, decapitalizing companies that
            dominates discussion of Poland's state manufacturing
            sector.  Success stories are emerging, and the state sector
            is far from a write-off.  Moreover, favorable evidence is
            drawn from all manufacturing sectors, attesting to the
            potential for a diversified manufacturing base.  The
            state-owned enterprises' operations are largely
            autonomous, so the positive adjustments indicate that
            decentralized approaches to transformation could work - if
            bolstered by appropriate managerial incentives.  But several
            problems remain, and many issues have yet to be addressed.
            The authors examine various adjustment indicators (labor
            shedding, material and energy costs, bank borrowings, and
            export performance) and correlate these with firms
            classified by 1992 financial performance.  (By 1992,
            presumably, the transitional measurement distortions of 1990
            and 1991 had disappeared.)  They show that significant
            differences exist between successful and unsuccessful firms.
            Managers in successful firms have tended to stress a change
            in product mix, have generally become more efficient in the
            use of materials and energy, have maintained labor
            productivity, and have shown restraint in setting wages and
            in borrowing from banks.  The authors discuss key
            transformation issues: the disappearance of such safety
            valves as easy bank loans and interfirm credit, hardening of
            the microeconomic budget constraint, excess-wage tax reform,
            and, most important, managerial attitudes and incentives.
            To complete the picture, they correlate the results of
            manager interviews with the quantitative performance of
            firms.  Essentially, firms have learned a good deal about
            operating in a market economy in the past three years, and
            managers have matured.  The industrial revival showing up in
            economywide statistics can be regarded as a sustainable
            trend borne of genuine microeconomic adjustment.