rafmacalaba/datause-encoder-data huggingface dataset:
- Data Center—the subsidiary of the Development Bank that licenses Smetrix software and is responsible for overseeing the program.

- Participating dealers of government securities and development banks (such as Landbank)—the operators of checking accounts.

- Treasury—the program manager and operator of the Registry of Scripless Securities.

# **Systems involved**

The main systems involved in the Expanded Small Investors Program are:

- Document Hub—a database of digital signatures of customers with accounts at banks (dealers) authorized to sell government securities. This application, used to authorize the creation of investor accounts for the program, is run by the Data Center.

- Program application (GS Direct)—software responsible for opening accounts in the Registry of Scripless Securities (RoSS), taking orders for securities purchases, processing interest and principal payments upon maturity of securities, and confirming transactions by email. This application is run by the Data Center.

- Gatekeeper—a file transfer application located at participating banks (for use with checking account systems, with files received from Document Hub) and the Treasury (for use with the Registry of Scripless Securities, with files transferred from the program application). Gatekeeper is also responsible for issuing confirmations of purchases to investors’ mobile telephones.

- Checking accounts—required for investors; operated by participating dealers (banks).

- Registry of Scripless Securities—Treasury entity responsible for registering government securities and maintaining investor accounts.

The streamlined processes introduced by the Expanded Small Investors Program are reflected in figures 4 and 5, which compare old and new arrangements for retail purchases of government securities. The biggest change is that the program exposes retail investors directly to the primary market; previously they were relegated to the secondary market. In addition, the old setup relied on roundabout processes that involved a lot of duplication and data reentry, with no synchronization between the Registry of Scripless Securities and the holdings of securities dealers. The new system addresses these discrepancies.

32
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disordered, and whether these deals are open to all firms or deal-making opportunities are closed (i.e. only open to firms with certain characteristics).

The firm level evidence also shows why firms hate uncertainty. Variations in policy outcomes are correlated with lower firm employment growth. In fact, it is the variations themselves rather than the average level of policy outcome that is associated with firm performance. We then use a “differences in differences” approach to show policy implementation uncertainty has a greater relative effect on firms that are more susceptible to policy uncertainty.

Finally, we show that, in Africa, there is almost no connection between firm reported policy actions and _de jure_ policies (e.g. as measured by _Doing Business_ ) across countries. Knowing the _Doing Business_ measure, i.e. how long a procedure is formally supposed to take, provides no power in explaining how long it will actually take a firm to complete the procedure. _Doing Business_ is not aiming to measure what actually happens, but what is supposed to happen. That there is little relationship between the two is further evidence of the role of deals in shaping the conditions firms actually face. And, telling, the gap between the _de jure_ and _de facto_ measures grows with the burdens or delays implied in the formal rules. The space for deals thus grows with the burden of the regulatory requirements.

This finding, however, raises questions about whether reforming the formal rules will have much impact.<sup>3</sup> If a rule is not being applied, changing it may have little impact. But it could still reduce costs if the space for deals shrinks and firms need to incur lower

> 3 The _Doing Business_ project rightly points out that the regulatory requirements can be excessively burdensome in some countries.  Simplification of the regulations can remain a worthy goal – with added benefits of reducing the institutional capacity needed for implementation and likely helping close some of the opportunities for bribes.

5
disabilities.<sup>16</sup> Lastly, when poverty goes hand in hand with marginal literacy or illiteracy, the capacity to seek out appropriate healthcare (e.g. vaccination for children, Koenig, Bishai, and Khan 2001) and to derive the full benefit from the care provided by following an at times lengthy and complex therapeutic regimen (e.g. for TB or HIV), is often extremely limited. The fifth stylized fact is that, _Slums are largely a consequence of mismatches between migration to cities and the absorptive capacity of cities. Once formed, slums perpetuate and even worsen the health status of the inhabitants and widen urban income inequality often by trapping slum dwellers in low end casual jobs_ .

# **Raising Incomes Improves Health Status**

If poverty is at the root of ill-health, then raising incomes is the necessary first step. One of the most robust stylized facts is that, _Raising the growth of GDP is the surest way of reducing poverty._<sup>_17_</sup> _This is borne out by cross country analysis, and by longitudinal country studies in China and India for example. Moreover, growth generates the resources for additional expenditure on social services which can lead to further gains in health and health equity and reinforce the effects of higher household incomes_ .

Growth generally rides on the back of rising productivity and is directly correlated with the increase in employment. When growth is sustained, it results in many more jobs with higher added value which pay better wages.

One response to this stylized fact can be that growth is partly a function of human capital which is built up through investment in health and education. This can be buttressed by voluminous microeconomic evidence on the benefits to the individual of additional schooling and on healthcare. But such evidence is overshadowed by the findings which underscore the greater importance of capital investment and productivity.

# **Capital (physical and human) and TFP Drive Growth in Industrializing Countries**

Whether we look at the cross country growth regressions or at estimates of the sources of growth in individual countries based on time-series, the stylized fact to note is

> 16 See Case and Deaton (2004). 17

> Dollar and Kraay (2002), Bourguignon (2002), and Moser and Ichida (2001).

8
where **_X_** _j_ is a matrix of observable characteristics in community _j_ and ξ is the vector of model parameters, including those that describe the distribution of the disturbances.

In constructing an estimator of μ _j_ we replace the unknown vector ξ with consistent estimators, ξ<sup>_ˆ_</sup> , from the survey-based consumption regression. This yields μ ˆ _j_ . This expectation is generally analytically intractable so we use simulation to obtain our estimator, μ<sup>~</sup> _j_ .

The first-stage estimation is carried out using the ECV 1994 household survey, which is stratified at the regional level, as well as for rural and urban areas. Within each region there are further levels of stratification, and also clustering. At the final level, a small number of households (a cluster) are randomly selected from a census enumeration area.

Our empirical model of household consumption allows for an intra-cluster correlation in the disturbances (see Elbers, Lanjouw and Lanjouw, 2002, 2003 for more details). Failing to take account of spatial correlation in the disturbances would result in underestimated standard errors. We estimate different models for each region and we include in our specification census mean variables and other aggregate level variables in order to capture latent cluster-level effects. All regressions are estimated with household weights. We also model heteroskedasticity in the household-specific part of the residual, limiting the number of explanatory variables to be cautious about overfitting. We approximate both the cluster and household-level disturbances as either a normal distribution or a _t-_ distribution with varying degrees of freedom.<sup>22</sup> Before proceeding to simulation, the estimated variance-covariance matrix is used to obtain GLS estimates of the first-stage parameters and their variance.

The estimates of poverty and inequality produced for Ecuador based on the above methodology have been described in greater detail in Demombynes et al (2004) and

> 22 Rather than drawing from parametric distributions in our simulations, we can also employ a semiparametric approach by drawing from observed residuals in the first stage model.  Our results have generally been found to be quite robust to the choice of parametric or semi-parametric draws.

19
# **4.3 Country-level analysis**

The next part of our analysis focuses on aggregate FDI flows and examines whether the existence of an investment promotion agency affects the amount of investment received by all sectors in a given country. There are several reasons for extending the analysis to the aggregate level. First, the information on sector targeting could be plagued by measurement errors. Employing an alternative measure of investment promotion activities reduces the possibility that the results are affected by measurement error, as obtaining information on the year of IPA establishment is more straightforward than cataloguing targeting information. The second reason for looking at aggregate data is that aggregate FDI figures are available for a longer time span (we go back to the year 1972 as opposed to 1990 in the case of sector-level information). Similarly, we can consider a larger number of countries than in the sector-level analysis where we are forced to discard countries with incomplete targeting information. Third, the detailed information on the status and reporting structure of the agencies obtained in the Census allows us to focus on more nuanced questions and thus can give us more confidence that we are picking up the IPA effect.

The aggregate analysis confirms the finding of the sector-level analysis. In Table 16, we start with a specification with host-country fixed effects, time fixed effects and control variables. The variable of interest is a dummy taking on the value of one if a host country has an IPA at time t and zero otherwise. As before, we find that developing countries engaged in investment promotion receive about two and a half times higher FDI inflows than developing countries not having an IPA. The estimated coefficients are statistically significant at the 1% level and are very much in line with the estimates based on the sector-level data. When developed countries are included in the sample, we find a positive effect when the IPA variable is lagged one and two periods but not in the other two specifications, which again mirrors our overall conclusions from the previous section. An alternative specification where investment promotion efforts are measured by the number of years an IPA has been in existence (and its square) leads to the same conclusions.

The estimated effects of the control variables broadly conform to our expectations. We find that countries experiencing faster GDP growth tend to attract more FDI. The expected sign on the per capita GDP is ambiguous, since this variable can be seen as a measure of the purchasing power of local consumers (thus implying a positive relationship for market seeking FDI) or a proxy for 23
- Doyle, Kate, R. Levtov, G. Bastian G. Barker, J. Bingenheimer, A. Nzabonimpa S. Kazimbaya, J. Pulerwitz, F. Sayinzoga, V. Sharma and D. Shattuck. 2018. “GenderTransformative Bandebereho Couples’ Intervention to Promote Male Engagement in Reproductive and Maternal Health and Violence Prevention in Rwanda.” _PLoS One_ 13(4).

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- Evans, David, Pamela Jakiela and Heather Knauer. 2021. “The impact of early childhood interventions on mothers.” _Science_ 372(6544):794–796.

- Facebook Data For Good. 2020. “Small Business Surveys.” _Report accessed from website address: https://dataforgood.facebook.com/dfg/tools/future-of-business-survey_ .

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- Goldin, Claudia. 2014. “A Grand Gender Convergence: Its Last Chapter.” _American Economic Review_ 104(4):1091–1119.

- Goldin, Claudia. 2021. “Career and Family: Women’s Century-Long Journey toward Equity.” _Princeton University Press_ .

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Rosser, A. and I. Wilson (2012) ‘Democratic Decentralisation and Pro-poor Policy Reform in Indonesia: The Politics of Health Insurance for the Poor in Jembrana and Tabanan’, _Asian Journal of Social Science_ , 40 (5-6), pp. 608-634.

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_Suara Karya_ (2015) ‘Pemerintah Godok PP Pemerataan Guru’, available at: <u>http://www.suarakarya.id/2015/03/15/pemerintah-godok-pp-pemerataan-guru.html, accessed</u> 15 August 2015. Sugiharto, S. (2012) ‘Just Remove Competency Test, Trust Teachers’, _Jakarta Post_ , 4 August, <u>http://www.thejakartapost.com/news/2012/08/04/just-remove-competence-test-trustteachers.html, accessed 14 September 2015.</u> Suryahadi, A. and Sanbodho, P (2012) _Assessment of Public Policies to Improve Teacher Quality and Reduce Teacher Absenteeism_ , SMERU Working paper, November.

Tendler, J. (2002) _The Fear of Education,_ Background Paper for Conference on Inequality and the State in Latin America and the Caribbean, Washington, DC: The World Bank.

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56
customs efficiency and public electricity service quality variables used here are based on the actual experiences of individual firms and are thus endogenous to the dependent variable. The nature of the endogeneity of the customs efficiency variable is quite straightforward: the more firms export, the more likely they are to experience problems in their trade-related transactions such as customs clearance. The electricity infrastructure quality variable might also depend on the amount of exports. Firms exporting more must be producing more, and the problems with infrastructure service quality are more likely felt when firms produce more and thus need such services more, compared with firms that are not exporting.

> Other firm-specific characteristics in X ijk include size (number of workers and total sales volume) and age. In addition, capital-labor ratio (value of capital stock per worker), new vintage capital (percentage of machinery and equipment 10 years old or younger in total capital stock in terms of value), skilled labor ratio (ratio of skilled workers to unskilled worker), education level of managers (whether managers have university education), and Internet access are also included. All these variables are assumed to be capturing the level of production efficiency. Some of these variables may also reduce trade costs, including both sunk entry costs and variable trade costs. For example, Internet access reduces firms’ search cost in identifying potential overseas customers and collecting other types of information regarding their overseas market opportunities, hence reducing market entry costs. At the same time, it also improves efficiency of various transactions related to shipment, thus reducing variable trading costs.

The inclusion of sector and country dummies is important to capture sector and country variations in unobserved factors in the data such as geographical characteristics of the countries and sectoral comparative advantage based on the countries’ factor endowment differences relative to their trading partners.

> To account for the endogeneity nature of the variables in DC ijk , we use the Instrumental Variable (IV) Tobit model. Similar to Clarke (2005), we instrument the endogenous regressors by taking region or city × sector averages of those firm-level observations corresponding to the

> variables in DCijk .17 Thus, for the customs efficiency as well as the electricity service quality variables, we use averages in specific regions for specific sectors are used as the instruments of the two endogenous regressors.  We allow the model to determine these variables endogenously, using twostep IVTOBIT procedure of STATA.<sup>18</sup>

The coefficient estimates are presented in Table 6. Consistently among the three specifications tested, statistically significant positive coefficients are found for the size factor (either

> 17 Each country has about five regions and about ten manufacturing sectors in the dataset.

> 18 IVTOBIT procedure is available in STATA 9.

16
Policy Research Working Paper 8033

# **Abstract**

Absent actual panel household survey data, this paper constructs, for the first time, synthetic panel data for more than 20 countries accounting for two-thirds of the population in Sub-Saharan Africa. In this process, the analysis employs repeated cross sections that span, on average, a six-year period for each country. The analysis suggests that all these countries as a whole have had pro-poor growth. One-third of the poor population escaped poverty during the studied period, which is larger than the proportion of the population that fell into poverty in the same period.

The region also saw a 9 percent reduction in poverty and a 28 percent increase in the size of the middle class. However, chronic poverty remains high, and a considerable proportion of the population is vulnerable to falling into poverty. There is some limited evidence that most resource-rich and middle-income countries have more upward mobility than downward mobility. Post-secondary education is especially strongly associated with higher upward mobility and less downward mobility, which holds to some extent for female-headed and urban households.

This paper is a product of the Poverty and Equity Global Practice Group and the Development Data Group. 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 hdang@worldbank.org and adabalen@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