rafmacalaba/datause-encoder-data huggingface dataset:
example given in the previous section and one more appropriate for an index-based risk transfer product.

In addition to secure limited drought financing in a timely and objective manner, the objective of the pilot was to allow the government to establish a market price for its drought risk and to determine the best use for this type of instrument in their food security strategy in conjunction with other available risk management and mitigation tools. In addition, the piloting of this approach also helped define the operational and legal implications for entering into this type of transaction and securing contingency funding not only for Malawi but also for other African governments.

The actual transaction flow is shown in Figure 6. The World Bank acted as intermediary in a national weather derivative transaction to the international market on behalf an International Development Agency (IDA) member country, which in this instance was the Government of Malawi.<sup>14</sup> That is, IDA entered into a derivative transaction with Malawi while simultaneously entering into a mirroring, back-to-back transaction with a market counterpart. The World Bank also facilitated a competitive market process for Malawi’s drought risk and provided legal, administrative and technical support to the government for an actual transaction. An independent third-party data verifier, with experience the weather derivative market, was contracted to quality control and clean the data in real-time as it was reported by the Malawi Meteorological Services.

# **Figure 6:  Pilot Transaction Structure**

<!-- Start of picture text --> Market Premium World Bank Premium Government of<br>Counterparty (Treasury) Malawi<br>Payout Payout (MoF)<br>Data Data Data<br>Verification Verification<br>Provider<br><!-- End of picture text --> The rationale for World Bank intermediation for this landmark transaction is two-fold. Firstly there is strong market preference for dealing with an experienced and familiar counterparty; this in turn would attract significantly more market players to participate in the tender, leading to more competitive pricing for the government. By being the market face of the transaction increased confidence in the transaction and reduced start-up costs on both sides. Secondly this introductory, market building function for the World Bank was viewed as a necessary investment to overcome market entry barriers for the government. In addition, the government also received World Bank Treasury technical assistance so that it can take full control of the risk transfer

> 14 In June 2008, the World Bank’s Board of Executive Directors approved the decision to allow IDA to carry out this type of transactions.  The Malawi transaction was carried out in summer 2008, and represents the first time that IDA backed its first-ever weather derivative contract on behalf of a member country.

15
Matsumoto, T., and T. Yamano (2009). Soil Fertility, Fertilizer, and the Maize Green Revolution in East Africa. World Bank Policy Research Paper. Washington, World Bank.

Mazgebo, T. (2005) “Structure, conduct and performance of fertilizer marketing industry of Ethiopia”, draft.

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Statistical Table 4 Indicator of overall institutional environment and components (East Caribbean)

||Rule<br>Credibility<br>from Statistica<br>Table I|Policy<br>Credibility<br>l from Statistica<br>Table 2|Resource<br>predictability<br>l from Statistica<br>Table 3|Overall<br>Institutional<br>l Environment|
|---|---|---|---|---|
|Antigua and Barbuda|5.0|4.5|5.8|5.1|
|Grenada|6.9|4.3|6.4|5.9|
|St. Kitts and Nevis|6.1|5.8|6.2|6.0|
|St. Lucia|6.6|5.3|6.0|5.9|
|St. Vincent And Grenadimes|6.3|4.4|5.9|_5.5_|
|East Caribbean|6.3|4.8|6.0|5.7|

47
3

# The **Welfare** Formulation

The welfare measures proposed in this paper are based on a modification of the _distorted trade expenditure fiuition or balance of trade fiuction_ widely utilized in the trade literature (e.g., Vousden, 1990; Lloyd and Schweinberger, 1988; Anderson and Neary, 1992) to evaluate the effects of trade and exogenous shocks. The basic form of the modified trade expenditure function used in this paper is defined for a single-household economy as:' (1) _H' = e(p, w, d) - g(p, w. v,_ .0 _- (p - PP'm(p,_ W _vJ -f_ and the money-metric measure of total welfare in the economy _(Hr)_ is based on four components: (a) the minimum expenditure necessary to obtain a given level of utility from consumption; (b) benefits in the form of income to owners of factors of production; (c) benefits in the form of governmen **t** axation revenues from trade taxes; and (d) net transfers from abroad. These four components are obtained as follows. The fimction _e_ is the net expenditure function of a representative household for a given vector of domestic prices, p, and a level of utility which is exogenously specified at level i/ since this measure is based upon the Hicksian money-metric measures of welfare change. The function g defines the (maximized) net revenue generated from production in the economy for given domestic prices of outputs, prices of endogenously supplied tAlthough the dcussion in this papor is pedominantly couched in trm of dual functions, thme is no need for the functional specification used in any paticular ampirical analysis to be specified dirty in terms of these functions. The technology may, instead, be specified using pdmal production or transfonraion function **s** uch u the Cobb-Dougls or CMS. When the necessay and sufficient conditions for optimizalicn are satisfied, tho resuting supply and demand functions are consisten with an appropriate revenue function safying al of the theoretical requirements. Similarly, the consumption strhcture may be specified using a primal specification such as the laoinRubin utility fimction which widelios the popular linear Expenditure System
that covers the period 1960 to 2010. Our analysis is conducted at the level of states; we use the individual level data to compute state level measures of inequality of opportunity, overall income inequality, average income, and income growth (at selected percentiles). The same data are used to derive a set of controls including variables on demographics, education and employment. Additional controls are obtained from Marrero and Rodríguez (2013). Different methods are considered for the estimation of the dynamic panel data model (at the state level), specifically pooled OLS and different System-GMM regressions. As part of the robustness analysis we also consider different measures of IO (by varying both the choice of circumstances and the choice of outcomes along which inequality is being evaluated) and vary the choice of control variables.

Total income inequality is found to be negatively correlated with posterior growth of average income per capita when IO is not controlled for. Adding IO to the regression reveals that the correlation with future income growth is largely channeled through IO, leaving the effect of total inequality mostly insignificant.

When we re-examine the relationship between total inequality and income growth for low-, middle- and high income households, not controlling for IO, we find that the relationship is negative for the poor but positive for the rich. However, also here, the significance of total inequality is dramatically reduced when IO is added to the regression. This suggests that it is IO that is limiting the growth prospects of the poor rather than total inequality.

The exact channels via which IO might be impacting on future income growth remain to be identified. However, concentrating on IO while tracking growth separately for the poor, the middle class and the rich, denotes a necessary step forward in the dissection of the inequality-growth relationship.

The paper is organized as follows. Building on the literature of opportunity Section 2 develops the necessary distinction between overall inequality and inequality of opportunity. In Section 3 we introduce the database, including descriptives of the key variables used in the analysis. Section 4 presents the empirical model and the main results. Finally, Section 5 discusses the main results.

3
# **Does sharecropping affect long-term investment? Evidence from West Bengal’s tenancy reforms**

# **1. Introduction**

The economic rationale for redistributive land reform is that providing cultivators with secure ownership rather than insecure use rights and making them residual claimants to their output increases incentives to exert non-contractible effort and make long-term investments. While impacts of sharecropping on productive efficiency have been studied in a large literature, results diverge widely, largely due to the difficulty of accounting for endogenous contract choice and the challenges involved in identifying longerterm effects on investment. The present study considers a setting that differs from those explored elsewhere, in that the decision to enter into a share contract can plausibly be argued to be exogenous. This allows us to derive reliable estimates of the productivity effects of sharecropping, both in the short and the longer term.

Land reform has long been high on West Bengal’s political agenda and measures to provide land rights to some 4 million households in 1978-82 are widely seen as having yielded significant benefits. However, the most significant intervention in this context, tenancy reform, fails to give beneficiaries full ownership rights. It thus combines two elements with potentially countervailing effects: on the one hand, antieviction clauses protect sitting tenants and make tenancy heritable, thus increasing tenants’ investment incentives and net wealth. On the other hand, regulations outlawing cash rental, together with restrictions on subleasing, are likely to reduce efficiency and investment incentives, reducing the productivity benefits of land reform. As a result, benefits from land reform could be below their potential and the net impact of this policy may be ambivalent.

A reliable and precise estimate of land reform regulations’ productivity effects could inform policies to increase the benefits from this measure in ways that can be directly linked to policy recommendations for West Bengal. In light of the widespread incidence of share cropping globally, it will also be of interest beyond the case at hand. We discuss implications, noting that some features of our setting, especially the long-term nature of the relationship, would imply that what we obtain are conservative estimates.

Our empirical analysis relies on a 2008/9 survey of some 9,000 parcels, owned by about 2,000 ownercum tenants who had benefited from tenancy reforms in 1978-82, in 200 villages from 10 West Bengal districts. Household-level listing data on production and investment for all 40,000 producers in the survey villages suggest that owner-cum tenants’ levels of productivity and investment are below those of pure tenants as predicted by theory, increasing confidence in the external validity of the results. Plot-wise data 1
61. As a testament to Romania’s success in this respect, in conjunction with the advancements in structural reforms, net foreign direct investment inflows increased from 2.9% of GDP in 2001 to over 9% in 2006 ( **Figure 14** ). FDI went to a variety of sectors, notably manufacturing, financial sector, real estate, trade, and transport. Equally important, in recent years, FDI has covered a large part of the expanding external current account deficit. In 2006, for example, FDI covered around 90% of the 10.3% of GDP current account deficit. This is expected to decline in 2007, owing to a slowdown in privatization. Looking forward, strong FDI inflows, and especially greenfield investment, as privatization comes to an end, will be instrumental in ensuring continued macroeconomic stability and productivity growth. Therefore, policies aimed at improving the business environment would need to be implemented with priority.

**Figure 14. FDI inflows, average 2001-03**

<!-- Start of picture text --> 12.0<br>10.0<br>8.0<br>6.0<br>4.0<br>2.0<br>0.0<br>Hungary Poland Czech Rep Romania Slovakia Bulgaria<br><!-- End of picture text --> <!-- Start of picture text --> Source: WIIW, Eurostat, NBR.<br><!-- End of picture text -->

- *Data for Romania refer to 2003-06.

- *Data for Bulgaria refer to 2003-05

62. Outward oriented policies include explicit barriers to trade and investment (such as foreign ownership barriers, discriminatory procedures against foreign firms, and tariffs) and regulatory barriers (such as a failure to engage in international harmonization treaties etc.) These are reviewed in turn below, but can be summarized as follows: Romania has achieved substantial progress on all count except tariffs, which as of the spring of 2006 remained substantially above the EU. The policy implication of this is nil however, since Romania’s tariff policies are now governed by the EU’s foreign trade regime as of January 2007.

# **_Explicit Barriers to Trade and Investment_**

63. The first generation of reforms, anchored in the 1993 European Association Agreement, rapidly succeeded in eliminating all quantitative restrictions and the state monopoly over foreign trade (World Bank 2004). The EU Eastern enlargement project rapidly led to Romania’s participation in the European free trade area. The association with the EU also encouraged bilateral trade liberalization with other countries enjoying 23
37I Appendlz Table **A2-4:** bPartial Correlaton of Labor Force Growth with Growth Rate of Output per Worker for Various **Samples** of Countries, 160-1990

|Control varables:|None|YO|Yo. BMP, LLY, XS|_N_|
|---|---|---|---|---|
|All<br>-.|23<br>(.04)|-.23<br>(.04)|-.27<br>(.02)|79|
|OECD<br>.________<br>__|-.43<br>_____<br> <br>(.05)|-.46<br>(.04)|_-.59_<br>(.01)|22|
|Developing|-..I<br>(.40)|-.10<br>(.48)|-.18<br>(.19)|_56_|
|Africa|0.05<br>(.85)|0.08<br>(.74)|0.11<br>(.69)|19|
|Laun America|-.18<br>(.48)|_-.19_<br>(.47)|-.26<br>(.37)|18|
|Asia/Pacific|-.33<br>(.30)|-.33<br>(.32)|-.23<br>(3S7)|12|
|Low Income|-.04<br>(.85)|0.01<br>(.98)|0.12<br>(.61)|24|
|Middle lxcome|-.15<br>(.42)|-.15<br>.43)|-.33<br>(.08)|32|
|Land Poor<br>_wIo_SGP|_-.15_<br>(.38)|-21<br>(.20)..|-.17<br>(.33)|39|
|Land Rich|-.42<br>(.01)|-.25<br>(.14)|-.36<br>(.04)|39|

Notes: 1) Number in parenthesis is the p-level of the te dhe correlation is zero.

2) Control variables: YO is inital income, UMP is the black market premium, LLY is the ratio of liquid liabiliies to GDP, XS is the export to GDP raio.
than to adult human capital, such as through education, which may shape political behavior such as deciding whether to vote for corrupt or clean candidates. We use data on districts’ average students’ score at the UCE, a nationally administered exam students take at the end of lower secondary school, as the best available proxy for education in the population. There is indeed a positive correlation between better education outcomes and better health service delivery. However, including or excluding the education variable does not change the coefficient on political integrity.

Another way to think about reverse causality is consistent with our preferred interpretation of mechanisms (that politicians of higher quality take better actions to improve service delivery): if experience with better health services gives citizens greater trust or confidence in local institutions, and thus makes them more likely to select clean candidates, part of the reasons why they would do so is because of the expectation (that should be fulfilled if this were the equilibrium) that clean candidates will be able to do a better job of ensuring service delivery. There is a specific role district councilors are supposed to play to monitor health facilities. If active citizens choose better quality politicians, by that very logic, we may reasonably expect them to choose politicians who can do a better job monitoring the health facilities. Hence, the proximate reason behind the correlation of political integrity and service delivery would, logically, be more active politicians.

In ongoing work in a seperate research project in the district of Hoima, we discover qualitative evidence of the role of local politicians (Ferraz, Habyarimana, and Khemani, ongoing). We held meetings with district bureaucrats and politicians and asked them to deliberate upon the most important problems of their district and what they could do to improve the situation. Health services were identified by the local politicians in Hoima as the most important problem, and the role of local politicians was highlighted to empower technical officials to deliver it. Interestingly, our data shows that Hoima’s district councilors have significantly higher integrity than councilors in other districts, although they are undistinguished on other selection traits.

In the course of the deliberations in Hoima, the District Health Officer is recorded as saying: " _We as technical people, we need support from different leaders_ ", to which the directly 32
96

## **X.** IMPLEMENTATION ISSUES

There are several issues that require careful attention while considering implementation of a motor vehicle pollution control program in a developing country. They include the availability and more importantly the reliability of data on vehicle emissions and ambient air quality, the costs and effectiveness of adopting a set of air pollution abatement strategies, and the legal requirements and institutional responsibilities for implementing an air pollution control program.

# Information Requirements

The evaluation of appropriate strategies to deal with transport-induced air pollution problems requires a well-maintained database on emission sources, the types and amounts of pollutants emitted and their spatial and temporal distribution. In most developing countries, a major implementation issue is the availability of reliable data. The database needed to develop a cost-effective program to control air pollution from land transport sources should include the following elements: _* Air quality data_ - including ambient concentration and spatial distribution of various pollutants at different time periods; wind speed and wind rose data for wind direction; stability of atmosphere including ambient temperature, precipitation, cloud cover and amount of sunlight; ceiling height for pollutant dispersion, and frequency and duration of temperature inversions; and other relevant meteorological information.

> _* Transportation system characteristics -_ including peak hour traffic, traffic mix, hourly traffic volumes (for 8-hour CO on major arterials), intersections and interchanges in the area, number of lanes for each direction of movement, lane capacities, traffic lights and stop sign locations, signal phasing, and traffic speeds; rail and bus corridors, type of rail facility, and location and type of power generating source for rail operations; and modal share of trips.

_Vehicle data_ - including types of vehicles and their age, condition and emission characteristics; the type of motive power and amount of fuel used by different modes; and information on vehicle and railcar occupancy rates.

_* Sensitive receptors -_ including information on distribution of sensitive population groups (children, people with heart and lung diseases), sensitive aquatic and terrestrial (forest) ecologies, and historical and culturally significant monuments and buildings.
# **Figure 5.  Saving and Country Rating Gaps 1990-2012**

<!-- Start of picture text --> 1<br>EAP<br>MNA<br>0 ECA<br>SSA<br>HI<br>LAC<br>-1<br>-2<br>-1 -0.5 0 0.5<br>Country Rating<br>National Saving<br><!-- End of picture text --> ♦LAC 1990-2012 Average ●Other countries per Period ♦ Other groups of countries 1990-2012 Average Sources: Authors' calculations based on UN, WDI and Institutional Investor data. Notes: This figure shows the national saving and country rating gaps for the whole sample. Each period is a three-year average. See Section 3 for the details of how the benchmarks are calculated.

33