rafmacalaba/datause-encoder-data huggingface dataset:
# **_A.2.2._** _Empirical Evidence_

This section attempts to draw some inferences from the theoretical framework developed in the preceding section and to test them empirically.<sup>3</sup> A first inference from the theoretical framework is that consumption volatility can be expected to be larger in countries with high income volatility. This phenomenon is illustrated in Graph 1.1 which plots the volatility of per capita consumption against the volatility of per capita income. However, what is surprising is that countries typically lie above the 45-degree line where the volatility of consumption is higher than that of income (this is the case in 67 of the 102 countries and in only 1 of the 12 Caribbean countries considered).<sup>4</sup> This seems to indicate that the riskmanagement mechanisms seem to amplify shocks rather than help absorb them. Production volatility by itself accounts for about 40 percent of the observed variation in consumption volatility across countries, which implies that it is indeed a main factor which helps to explain the volatility of consumption (Table 1.2).

<!-- Start of picture text --> Graph 1.1: Consumption Volatility and Income Volatility<br>20<br>0 Conbbcan<br>+ + Others<br>0<br>Rep- I<br>+ 41 dg- t-~<br>U" ~~ ~~~~+ , + 0+<br>It ~+ +_ +<br>0<br>o 5 It S1 20<br>Volatility of Per Capita GDP<br>StSwfdod d.&H..o itt)<br>Sources SIMA database (102 countries included).<br><!-- End of picture text -->

**3De** Ferranti, 2000 and World Bank 2000 (a) present a series of stylized facts that help understand consumption and production volatulities.

" i autarky, consumption volatility and production volatility should be equal while consumption volatility should be less than production volatility under intemnational nosk-shanng.

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Trade-related Intellectual Property Rights (TRIPs)--increases the challenge facing governments. The implementation of the Uruguay Round agreements will confront the MENA countries with greater competition on third markets. At the same time, the WTO offers an opportunity to adopt better trade policies and improve trade institutions. Many countries in the region were not GATT contracting parties, and are therefore not Members of the WTO (which entered into force in January 1995). They include Algeria, Iraq, Jordan, Lebanon, Libya, Saudi Arabia, Syria, and Yemen. Nonmembership of the WTO is likely to make it more difficult to attract the foreign direct investment (FDI) and technological know-how needed to diversify production and compete on world markets. Algeria, Jordan and Saudi Arabia were at the time of writing involved in accession talks. Bahrain, Egypt, Israel, Kuwait, Morocco, Qatar, Tunisia, and the UAE were GATT members by the end of the Uruguay Round. Whether or not a GATT contracting party, all countries in the region will be affected by the liberalization of trade agreed to in the Uruguay round. Existing GATT members will also be confronted with a substantial number of policy and institutional changes that are required under the WTO (e.g., on customs valuation, product standards, services and intellectual property protection).

This paper discusses the trade policy status quo in the region, the need for change, and the possible role of external institutions in facilitating reform. Section 2 starts with a brief discussion of current trade policy in MENA countries. Section 3 goes on to use trade data to illustrate how the policy stances have inhibited private investment in export-oriented production by comparing MENA's recent export performance with that of the Central and Eastern European countries (CEECs). Section 4 discusses the economic impact of the Uruguay round, the policy and institutional implications of the WTO, and what Membership can do to move trade regimes closer towards 'good practices'. An important element supporting the export growth of the CEECs has been the Association Agreements negotiated with the European Union (EU) in 1992. Similar agreements are being negotiated by Egypt, Jordan, Morocco, Tunisia and Israel. The Commission of the European Communities has proposed that these become part of a wider Europe-Mediterranean Economic Area. This offers a window of opportunity to pursue further reforms in a setting that could help governments to overcome 2
We also assume that public investment is only partially efficient, in the sense that capital outlays in education, infrastructure, and health do not serve to increase one to one the public capital stock. Specifically, we assume that only half of investment flows turn into increases in public capital and impose αh = 0.5 for all h in equation (10). This is consistent with Pritchett’s (1996) estimate that half of all capital outlays are wasted in developing countries. It also corresponds to the mid-point of the range of values estimated by Arestoff and Hurlin (2005). Although this choice has no effect on the calculations of aid requirements (which are based on the _flow_ data provided by the PIP), they do affect macroeconomic outcomes, namely, the economy’s growth rate and the MDGs.<sup>7</sup> Table 2 shows the aid requirements calculated by the model and the associated medium-term budget framework for the period 2006-15. The results show that with (domestic and foreign) borrowing constant as a share of GDP, and a more or less constant tax effort (of about 10 percent of GDP), expenditure of about 25 percent of GDP, aid requirements drop slightly over time from 12.5 percent in 2006 to 11.4 in 2015. In proportion of tax revenues, aid falls from 125 percent in 2006 to 109 in 2015, but in proportion of total public investment, aid rises from about 241 to 250 percent during the same period.

The impact of the PIP-cum-aid package on the MDGs is shown in Table 3. The headcount index decreases in the “best” case (a consumption growth elasticity of -1.5) from about 63 percent in 2006 to 38.5 percent in 2015. However, with a consumption growth elasticity of -0.5, the poverty rate drops by less than 10 percentage points over the same period. The literacy rate (defined as the ratio of educated labor to total population) increases from 20.3 percent in 2006 to 27 in 2015, as a result of an increase in public investment in education and infrastructure combined with an increasing number of teachers. Whereas infant mortality drops from 150 in 2006 to 118 in 2015, malnutrition prevalence

> 7Of course, experiments involving a higher efficiency assumption parameter (perhaps as a result of reforms aimed at improving governance) could also be performed.

15
The municipality levies a local tax known as TSG ( _Tasa por Servicios Generales_ ), which is linked to the provision of lighting and cleaning services. This type of tax is present in every municipality of the Buenos Aires Province and is the main source of locally collected resources (Porto, Fernández Felices, and Puig, 2019). Tres de Febrero is no exception, as the TSG accounts for 20% of its total resources and 45% of its own revenue in 2021.

The monthly TSG tax comprises both variable and fixed components. In our period of analysis 2018–2020, the tax liability for residential taxpayer _i_ was calculated as follows: The variable component is calculated by applying a tax rate to the property’s assessed value. These tax rates vary across eight property-use categories defined by the municipality: residential, industrial, commercial, wholesale establishments, mixed-use residential with commerce or factory, empty lots, civil entities, and religious entities. As of 2021, the statutory tax rates ranged from 0.32% to 2.48% (see Table 1). Property assessments are based on the cadastre maintained by the Revenue Agency of the Province of Buenos Aires (ARBA), though the municipality reserves the right to update these values based on its own criteria.

The fixed charge corresponds to a flat fee for specific municipal services, including security, health, fire departments, and maintenance of public spaces. Notably, fixed charges constitute a larger share of the total tax burden for lower-value properties. This share varies significantly across the property value distribution, comprising 65% of the total tax burden for properties in the first decile but only 14% for those in the tenth decile (Figure C.4). As a result, the overall tax schedule has historically exhibited a mildly regressive structure, as illustrated in Figure 6.<sup>5</sup> TSG bills are issued monthly and are due in the first weeks of each month, with twelve equal installments per year. Alternatively, residents can opt for an advance annual payment at the beginning of the year instead of monthly installments. While cadastral values are seldom updated, both the tax rates and fixed charges are adjusted annually to keep up with inflation.

**Property Tax Enforcement.** Enforcing local property taxes in developing countries has historically been a tall order. Anecdotal evidence from conversations with public servants at Tres de Febrero’s tax agency reveals several factors limiting their ability to enforce the TSG property tax:

> 5. While this approach simplifies revenue collection and ensures a baseline contribution toward municipal services (e.g., see Bergeron, Tourek, and Weigel, 2024), it reflects archaic tax regimes that may have been suitable in earlier periods but conflict with modern views of tax fairness, which often advocate for progressive tax systems that impose a larger relative burden on wealthier households (Chancel, Piketty, Saez, and Zucman, 2022). The municipality is currently reforming this structure by recalibrating the balance between fixed and variable components to enhance equity.

5
coefficients using GMM in table 6. The coefficients of capital are positive and statistically significant when using OLS and FE, but become insignificant when using LP when the simultaneous effect of factor inputs and final output are removed, which is consistent with the above results using GMM. This might imply that capital investment in Tunisia is highly correlated with the output; therefore, there could be an upward bias in the capital coefficient in OLS and FE estimation. In contrast, the coefficients of intermediate inputs get larger when using LP, which is also consistent with GMM estimation, although the coefficients of intermediary inputs with GMM get even larger, which might result from different assumptions of endogenous variables and different estimation methods in LP and GMM. Overall, the factor inputs coefficients using OLS, FE, and LP confirm that estimation results using GMM are in the credible range. The control variables, export and FDI, have significant and positive effects on final output, except for the coefficient of FDI, which is insignificant when using FE; these results are also consistent with table 5.

The coefficients of the overall innovation investment (ln_n_innovationi) are statistically significant and are 0.015 using OLS, 0.005 using FE, and 0.014 using LP. These coefficients are smaller than 0.027, the result in column (1) in table 5, implying that the innovations’ effect on final output (via productivity) is actually larger when the simultaneous effect between innovation investment and final output (via productivity) is considered. As seen in columns (2), (5), and (8), both internal and external innovation have positive and significant effects on final output. The magnitude of the coefficient of external innovation is larger when using OLS and LP, but smaller when using FE. The results are different from the results in column (2) in table 5, where internal innovation does not significantly impact the final outcome, while external innovation does. However, when adding the interaction terms between the internal and external innovation investment amount, the coefficients of internal innovation become insignificant when using OLS, FE, and LP, as seen in columns (3), (6), and (9), which is consistent with the results of column (3) in table 5. Significantly, the coefficients of the interaction term are in columns (3) and (5), but the magnitude is very small (close to zero), and this coefficient becomes insignificant in column (9) when using LP, which is consistent with the results of table 5.

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# **4 Current cost of service, tariffs, and revenue**

This section presents analysis of costs and revenues on a subset of 39 countries in SSA for which critical data are available. For cross-country comparison, data presented in U.S. dollar are expressed in constant 2014 U.S. dollars, as explained in section 2.3.

## 4.1 Current cost of electricity service

Figure 4 shows the breakdown by country of costs of service calculated in accordance with the methodology described in section 2 and divided by kWh billed. Total unit costs range from as low as US$0.08 per kWh in Zambia to more than US$0.60 per kWh in Liberia and Comoros. The weighted average and median cost of electricity in SSA are US$0.14 and 0.21 per kWh billed, respectively.

**Figure 4: Cost of electricity service in 2014 U.S. dollars per kWh billed**

<!-- Start of picture text --> Liberia $0.66<br>Comoros $0.61<br>Sierra Leone $0.55<br>São Tomé and Príncipe $0.54<br>Cape Verde $0.51<br>Gambia, The $0.44<br>Rwanda $0.43<br>Guinea $0.35<br>Senegal $0.35<br>Mauritania $0.34<br>Burkina Faso $0.34<br>Togo $0.33<br>Mali $0.33<br>Madagascar $0.32<br>Seychelles $0.32<br>Benin $0.26<br>Gabon $0.25<br>Kenya $0.22<br>Botswana $0.22 Variable O&M (excluding power purchases)<br>Nigeria $0.21 Domestic power purchases classified as opex<br>Côte d'Ivoire $0.21 Fixed O&M<br>Mauritius $0.21<br>Taxes<br>Burundi $0.21<br>Central African Republic $0.20 Estimated additional fuel costs<br>Niger $0.19 Generation capex<br>Swaziland $0.17 T&D capex<br>Congo, Rep. $0.17<br>Ethiopia $0.17<br>Tanzania $0.17<br>Malawi $0.16<br>Cameroon $0.16<br>Uganda $0.16<br>Zimbabwe $0.16<br>Sudan $0.15<br>Ghana $0.14<br>Mozambique $0.12<br>South Africa $0.11<br>Lesotho $0.09<br>Zambia $0.08<br>$0.00 $0.10 $0.20 $0.30 $0.40 $0.50 $0.60 $0.70<br><!-- End of picture text --> _Sources_ : World Bank staff calculations based on utility financial statements. _Note:_ Power purchases classified as opex = purchases from private suppliers and state-owned utilities with no financial statements; taxes = corporate income tax and other taxes not rebated to the utility; estimated additional fuel cost = fuel costs not recorded in utility financial statements.

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contribution to the predicted growth rates come from education and investment, both areas that can be tackled by economic policy.

4. An additional improvement of the institutional quality, measured by indices of the rule of law and corruption, leads to a further rise in growth prospects by up to 1%-point in **Scenario 3** . Addressing present shortcomings in the transparency and enforceability of law and the access of civilians to justice and secure property rights, as well as delimiting corruption on all levels, appear to be fruitful strategies for enhancing Nigeria’s growth prospects.

# **7 Conclusions**

In this empirical assessment, the determinants of GDP per capita growth are studied using data of approximately 150 developing and developed countries during 1970 and 2014, focusing in particular on the role of natural resources, their interactions with institutional quality, and specific impacts in the country of Nigeria. Blessed by an enormous wealth of natural resources but at the same time afflicted by stagnating GDP growth rates, Nigeria is a prominent example of an economy that lacks economic development in spite of its resource-abundance. Based on the econometric results, Nigeria’s growth prospects are assessed under the assumption of different scenarios.

Relying on the global sample, the empirical findings suggest that a sound institutional environment, measured by an index of the rule of law, is associated with higher GDP per capita growth rates. In addition, the impact of natural resources on GDP per capita growth turns positive, once natural resources are interacted with the rule of law. The effect of natural resources thus depends on the quality of institutions, and resources can be a blessing in countries with transparent and enforceable law, secure property rights, as well equality before the law of all citizens, and their freedom of movement and religion. The estimates further suggest that the growth impact of natural resources differs by the level of resource-dependence of the countries. Countries that are highly dependent on resources obtain lower growth-returns than countries that have comparably low shares of resource rents in GDP.

Shifting the focus to Nigeria reveals that improvements of institutional quality—measured by the rule of law as well as by a corruption index—have a particular beneficial effect on growth rates of the country. In particular a reduction of corruption not only has a direct influence on economic growth, but also an indirect one through the improvement of the growth-enhancing potential of natural resources. If the level of corruption is held constant, higher natural resource rents are estimated to increase Nigeria’s growth rates. When omitting the corruption variable, the impact of natural resources appears to be detrimental to the growth of the economy. This suggests a strong link between resource endowments and the quality of institutions in the country, and a stabilization of the institutional environment at an improved level should be of high priority.

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An Assessment Of Reform Options For The Public Service Pension Fund In Uganda

**Figure 7: Age and gender distribution of the stock of civil servant retirees (2003/04, thous.  persons)**

<!-- Start of picture text --> 4,000<br>3,500<br>3,000<br>2,500<br>2,000<br>1,500<br>1,000<br>500<br>-<br>Age<br>Male Female<br>45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90 93 96 99<br>Number of employees (000')<br><!-- End of picture text -->

**Source** : MPS.

**Figure 8: Age and gender distribution of the stock of teacher retirees** **<u>(2003/04, thous.  persons)</u>**

<!-- Start of picture text --> 4,000<br>3,500<br>3,000<br>2,500<br>2,000<br>1,500<br>1,000<br>500<br>-<br>Age<br>Male Female<br>45 48 51 54 57 60 63 66 69 72 75 78 81 84 87 90 93 96 99<br>number of employees (000')<br><!-- End of picture text -->

**Source** : MPS.

- 35 -
||**Table 11. IMF Programs and Structural Reform**<br>**Fullperiod, 1991-2014**<br> <br>||
|---|---|---|
|Structural reform|No<br>Yes|Total|
|IMFprogram|||
|No|13<br>8|21|
|Yes|1<br>20|21|
|Total|14<br>28|42|

|||**First Subperiod, 1991-2002**||
|---|---|---|---|
|Structural reform|No|Yes|Total|
|IMFprogram||||
|No|1|0|1|
|Yes|0|14|14|
|Total|1|14|15|

|||**Second Subperiod, 2003-2014**<br>||
|---|---|---|---|
|Structural reform|No|Yes|Total|
|IMFprogram||||
|No|12|8|20|
|Yes|1|6|7|
|Total|13|14|27|

Source: see text.

**Table 12. Macroeconomic Frameworks and Structural Factors in the Eight Quarters Before Sudden Stops**

|Dependent<br>Variable|(1)<br>Fiscal<br>Balance/<br>GDP|(2)<br>Public<br>Debt/<br>GDP|(3)<br>Inflation|(4)<br>Exchange<br>Rate regime|(5)<br> <br>Reserves/<br>GDP|(6)<br>Foreign<br>Currency<br>Position|(7)<br>Capital<br>Controls|(8)<br>Inflation<br>Targeting|(9)<br> <br>Domestic<br>Credit|
|---|---|---|---|---|---|---|---|---|---|
|Dummy for||||||||||
|2003-2014|1.4*|-11.03*|-3.27**|0.44**|11.39***|0.32***|-0.14*|0.46***|14.78**|
||[1.14]|[1.09]|[1.31]|[1.70]|[4.01]|[5.25]|[0.97]|[3.34]|[1.34]|
|Constant|-2.45**|51.20***|10.69***|<br>1.75***|8.95***|-0.31***|0.55***|0.06|43.33***|
||[2.31]|[6.33]|[5.19]|[8.61]|[3.98]|[6.52]|[4.55]|[0.58]|[4.95]|
|Observations|36|42|38|43|43|32|30|43|43|
|R-squared|0.037|0.029|0.046|0.066|0.282|0.479|0.033|0.214|0.042|

For inflation we dropped two episodes where inflation was more than 40 percent. Exchange rate regime is an index. A higher value implies more flexible exchange rate regime. Foreign currency position is an index, a higher value means less negative foreign currency position. For capital controls a higher value means more controls. Inflation targeting is a dummy for inflation targeting countries. Domestic credit is ratio of private sector bank credit to GDP. Results are for linear regressions of dependent variables in first row. Coefficients indicate averages for the sudden stops across two sub periods. *, **, *** indicate if the coefficients across subperiods are significant at 20, 10 or 1 percent level of significance in a one tailed test. Data are from the sources noted in appendix, and from the IMF reports.

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However, with the passage of time, conditions for growing irrigated rice have changed dramatically. The price of rice is expected to increase in the long run (USDA 2008). In addition, the reform process initiated in the past two decades by African countries has tremendously changed the institutional and policy environment for growing rice in large irrigation schemes. For example, the Office du Niger irrigation scheme in Mali is now touted as a “success story” (Aw and Diemer, 2005). In fact, a recent assessment of existing irrigation schemes by Inocencio et al. (2007) found that the costs of irrigation projects are not significantly higher in SSA than in other regions and that irrigation investments can provide good returns under the right conditions. Therefore, it is worth examining empirically whether large-scale irrigation schemes can be a cradle for a rice Green Revolution (GR) in SSA, as was the case in Asia. However, the number of micro-level studies in SSA is limited.<sup>1</sup> This study aims to investigate the potential of SSA‟s large-scale irrigation schemes for a rice GR in the region as well as the conditions for achieving the potential. We use household-level data collected in six SSA countries: Uganda, Mozambique, Burkina Faso, Mali, Niger, and Senegal. The study sites are large-scale irrigation schemes and are considered as areas with high potential for rice cultivation in terms of availability of water and agro-climatic conditions. However, we observe wide variations in the availability of irrigation water, cultivation practices, and rice productivity within a scheme or between schemes. This provides us with a good opportunity to examine under what conditions the potential of an irrigation scheme can be fully realized.

> 1 Sakurai (2006) examines the possible constraints to lowland rain-fed rice cultivation in Côte d‟Ivoire and Kijima et al. (2006, 2008, 2011) investigate the potential of upland NERICA cultivation in Uganda. However, none of them are about rice cultivation in large- or medium-scale irrigation.

3