rafmacalaba/datause-encoder-data huggingface dataset:
Trends in tariff reforms and trends
            in wage inequality
The authors provide new evidence on the
            impacts of trade reforms on wages and wage inequality in
            developing countries. While most of the current literature
            on the topic achieves identification by comparing outcomes
            before and after one episode of trade liberalization across
            industries, they propose a stronger identifying strategy.
            The authors explore the recent historical record of policy
            changes adopted by Argentina: from significant protection in
            the early 1970s, to the first episode of liberalization
            during the late 1970s, back to a slowdown of reforms during
            the 1980s, to the second episode of liberalization in the
            1990s. These swings in trade policy comprise broken trends
            in trade reforms that they can compare with observed trends
            in wages and wage inequality. After setting up unusual
            historical data sets of trends in tariffs, trends in wages,
            and trends in wage inequality, the evidence supports two
            well-known hypotheses: trade liberalization, other things
            being equal, (1) has reduced wages, and (2) has increased
            wage inequality.
How important is selection
            Experimental versus non-experimental measures of the income
            gains from migration
Measuring the gain in income from
            migration is complicated by non-random selection of migrants
            from the general population, making it difficult to obtain
            an appropriate comparison group of non-migrants. This paper
            uses a migrant lottery to overcome this problem, providing
            an experimental measure of the income gains from migration.
            New Zealand allows a quota of Tongans to immigrate each year
            with a lottery to choose among the excess number of
            applicants. A unique survey conducted by the authors in
            these two countries allows experimental estimates of the
            income gains from migration by comparing the incomes of
            migrants to those who applied to migrate, but whose names
            were not drawn in the lottery, after allowing for the effect
            of non-compliance among some of those whose names were
            drawn. The authors also conducted a survey of individuals
            who did not apply for the lottery. Comparing this
            non-applicant group with the migrants enables assessment of
            the degree to which non-experimental methods can provide an
            unbiased estimate of the income gains from migration. They
            find evidence of migrants being positively selected in terms
            of both observed and unobserved skills. As a result,
            non-experimental methods are found to overstate the gains
            from migration, by 9 to 82 percent. A good instrumental
            variable works best, while difference-in-differences and
            bias-adjusted propensity-score matching also perform
            comparatively well.
Trade and harmonization : if your
            institutions are good, does it matter if they are different
Good institutional quality (function)
            and similar institutional design (form) can promote
            international trade by reducing transactions costs. The
            authors evaluate the relative importance of function versus
            form in a gravity model, using an indicator of different
            legal systems as a proxy for differences in form, together
            with indicators of overall institutional quality. They find
            that good institutions promote trade much more than similar
            legal systems and have much more explanatory power. This
            effect is economically large-up to 10 times the effect of
            different legal systems. Moreover, better infrastructure
            matters as much as good institutions.
Trade and harmonization : if your
            institutions are good, does it matter if they are different
WPS3907

# **Trade and Harmonization: If your institutions are good, does it matter if they are different?**<sup>**1**</sup>

# **Roumeen Islam World Bank**

# **Ariell Reshef New York University**

# Abstract

Good institutional quality (function) and similar institutional design (form) can promote international trade by reducing transactions costs. We evaluate the relative importance of function versus form in a gravity model, using an indicator of different legal systems as a proxy for differences in form together with indicators of overall institutional quality. We find that good institutions promote trade much more than similar legal systems and have much more explanatory power. This effect is economically large –up to 10 times the effect of different legal systems. Moreover, better infrastructure matters as much as good institutions.

# World Bank Policy Research Working Paper 3907, May 2006

_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 view of the World Bank, its Executive Directors, or the countries they represent. Policy Research Working Papers are available online at http://econ.worldbank.org._

> 1 We wish to thank Decio Coviello, William Easterly and William Martin for helpful suggestions. Authors’ contact details: rislam@worldbank.org, ariellr@nyu.edu
Turkey's evolving trade
            integration into Pan-European markets
This is an empirical paper seeking to
            identify the mode of Turkey's integration into global
            markets in general, and pan-European markets in particular,
            as revealed in its trade performance. The analysis provides
            empirical support to the following observations. First,
            thanks to steady expansion of trade in goods and services
            since the mid-1980s, Turkey has become highly integrated
            into the world economy. Second, Turkey's export
            performance in 1996-2004 in EU markets bears strong
            similarities to the aggregate performance of new EU members
            from Central Europe (EU-8). Similarities include dynamics,
            similar factors responsible for the increased presence in EU
            markets, factor content, and the role of
            "producer-driven" network trade. Turkey, together
            with Hungary, the Czech Republic, the Slovak Republic,
            Slovenia, Estonia, and Poland, stands as one of the top
            performers in "producer-driven" network trade
            indicating participation in a new global division of labor
            based on production fragmentation. The available evidence
            suggests an economic success story in the making. Export
            expansion owes a lot to improved policy environment and
            domestic liberalization. It is rather telling that the
            recent expansion has coincided with the implementation of
            most of the provisions of the EU-Turkey Customs Union
            Agreement, the completion of the removal of tariffs on trade
            in industrial products among pan-European parties to the Pan
            European Cumulation of Origin Agreement, and improved
            macroeconomic stability after the 2001 crisis.
Trading on time
The authors determine how time delays
            affect international trade using newly collected World Bank
            data on the days it takes to move standard cargo from the
            factory gate to the ship in 126 countries. They estimate a
            modified gravity equation, controlling for endogeneity and
            remoteness. On average, each additional day that a product
            is delayed prior to being shipped reduces trade by at least
            1 percent. Put differently, each day is equivalent to a
            country distancing itself from its trade partners by 70
            kilometers on average. Delays have an even greater impact on
            developing country exports and exports of time-sensitive
            goods, such as perishable agricultural products. In
            particular, a day's delay reduces a country's
            relative exports of time-sensitive to time-insensitive
            agricultural goods by 6 percent.
Evaluating fiscal equalization in Indonesia
This paper presents a methodology to
            evaluate fiscal decentralization focusing on the potential
            mis-targeting of intergovernmental fiscal equalization
            transfers. The approach builds on an explicit comparison and
            the summary measurement of different (horizontal) allocation
            distributions across states or localities. Whereas
            formula-based fiscal transfers have the merit of being
            transparent and promoting revenue predictability in fiscal
            decentralization, in practice, two challenges emerge: (1)
            What are the appropriate formula designs given the
            sub-national data constraints evident in most decentralizing
            developing countries? and (2) How costly in terms of
            mis-targeting to the presumed expenditure needs and fiscal
            capacity are deviations from these types of benchmark
            formulas (for example, due to historical factors or the need
            to meet establishment costs such as civil service wages)?
            The authors illustrate this approach by assessing
            Indonesia's evolving intergovernmental fiscal system
            instituted in the 2001 Big Bang decentralization. The
            discussion comes against Indonesia's recent policy
            decision to fully fund sub-national civil servant wages as
            part of the base general allocation grant (DAU) transfers,
            raising questions about both incentive effects for local
            governments and potential mis-targeting. The authors
            identify potential efficiency losses from the DAU's
            horizontal misallocation from half a dozen alternative
            scenarios found in the policy dialogue, ranging from 9 to 30
            percent-on the order of US$ 3.9 billion-of the overall
            annual size of this large intergovernmental transfer. The
            scale of these tradeoffs highlights the importance of
            intergovernmental transfers in more general debates in
            public finance for decentralized countries.
Thailand's growth path : from
            recovery to prosperity
Thailand is one of the most successful
            developing countries. After decades of rapid growth, the
            economy rebounded quickly from the 1997-98 Asian crisis and
            is set to continue its expansion into the future.
            Nevertheless, there are doubts about the resilience of the
            Thai economy. The country appears to be on a lower growth
            projectory now than before the crisis. What growth can
            Thailand realistically expect? And what can the government
            do to sustain such growth into the future? Using a new
            methodology for identifying binding constraints to growth
            (Rodrik 2004 and Hausmann and others 2005), the author
            argues that Thailand's challenge is to maintain growth
            levels of 4 to 5 percent over the medium term. To achieve
            this goal, Thailand needs to continue its efforts of
            improving business infrastructure, trade integration, and
            skills, as well as intensifying its governance reforms.
Thailand's growth path : from
            recovery to prosperity
WPS3912

# **Thailand’s Growth Path: From Recovery to Prosperity**

## **Abstract**

Thailand is one of the most successful developing countries. After decades of rapid growth, the economy rebounded quickly from the 1997–98 Asian crisis and is set to continue its expansion into the future. Nevertheless, there are doubts about the resilience of the Thai economy. The country appears to be on a lower growth projectory now than before the crisis. What growth can Thailand realistically expect? And what can the government do to sustain such growth into the future? Using a new methodology for identifying binding constraints to growth (Rodrik 2004 and Hausmann et al 2005), this paper argues that Thailand’s challenge is to maintain growth levels of 4 to 5 percent over the medium term. To achieve this goal, Thailand needs to continue its efforts of improving business infrastructure, trade integration, and skills, as well as intensifying its governance reforms.

## **Kaspar Richter**

## **_krichter@worldbank.org_**

## **East Asia Poverty Reduction and Economic Management World Bank**

## World Bank Policy Research Working Paper 3912, May 2006

_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 view of the World Bank, its Executive Directors, or the countries they represent. Policy Research Working Papers are available online at http://econ.worldbank.org._ 1
Sequencing fiscal decentralization
While there is extensive knowledge about
            how to design fiscal decentralization policies, considerably
            less is understood about how a decentralization program
            should be sequenced and implemented. Countries embarking on
            decentralization often struggle with decisions about the
            essential components of decentralization, including the
            order of an introduction of decentralization policies, the
            number of years necessary to bring a full program on line,
            and the components of the transition strategy. The authors
            argue that the sequencing of decentralization policies is an
            important determinant of its success. The consequences of a
            poorly sequenced decentralization program can range from
            minor delays and complications to ineffectiveness and
            subsequent failing support of decentralization efforts,
            macroeconomic instability, and fundamental failure in public
            sector delivery. At a minimum, the strategy of "making
            it up as we go" will not lead to the same structure of
            decentralization as will a planned strategy. The paper
            raises two questions: First, is there an optimal sequencing
            for decentralization policies and implementation? The answer
            is that there is, and that following these sequencing rules
            can reduce the costs and risks of implementing fiscal
            decentralization. Second, to what extent do countries follow
            these optimal sequencing rules? The answer is, in general,
            they do not. The gap between theory and practice is a result
            of the complexity of sequencing design, which discourages
            fiscal planners from implementing the full process. In
            addition, sequencing requires a sustained discipline and
            vision for its implementation, as well as overcoming
            pressures from political actors, especially in developing countries.
Rural-urban migration in developing
            countries : a survey of theoretical predictions and
            empirical findings
The migration of labor from rural to
            urban areas is an important part of the urbanization process
            in developing countries. Even though it has been the focus
            of abundant research over the past five decades, some key
            policy questions have not found clear answers yet. To what
            extent is internal migration a desirable phenomenon and
            under what circumstances? Should governments intervene and,
            if so, with what types of interventions? What should be
            their policy objectives? To shed light on these important
            issues, the authors survey the existing theoretical models
            and their conflicting policy implications and discuss the
            policies that may be justified based on recent relevant
            empirical studies. A key limitation is that much of the
            empirical literature does not provide structural tests of
            the theoretical models, but only provides partial findings
            that can support or invalidate intuitions and in that sense,
            support or invalidate the policy implications of the models.
            The authors' broad assessment of the literature is that
            migration can be beneficial or at least be turned into a
            beneficial phenomenon so that in general migration
            restrictions are not desirable. They also identify some data
            issues and research topics which merit further investigation.
The role of opinion leaders in the
            diffusion of new knowledge : the case of integrated pest management
The paper reviews the literature on the
            characteristics and impact of opinion leaders on the
            diffusion of new knowledge, concluding that there is no
            clear evidence on whether opinion leaders are more effective
            if they are similar in socioeconomic attributes to the other
            farmers rather than superior to would be followers. A
            multivariate analysis of the changes in integrated pest
            management knowledge in Indonesia among follower farmers
            over the period 1991-98 indicates that opinion leaders who
            are superior to followers, but not excessively so, are more
            effective in transmitting knowledge. Excessive socioeconomic
            distance is shown to reduce the effectiveness of diffusion.
            The paper then derives operational implications of the
            empirical results.
Recent and prospective adoption of
            genetically modified cotton : a global computable general
            equilibrium analysis of economic impacts
The authors provide estimates of the
            economic impact of initial adoption of genetically modified
            (GM) cotton and of its potential impacts beyond the few
            countries where it is currently common. They use the latest
            version of the Global Trade Analysis Project (GTAP) database
            and model. The results suggest that by following the lead of
            China and South Africa, adoption of GM cotton varieties by
            other developing countries-especially in Sub-Saharan
            Africa-could provide even larger proportionate gains to
            farmer and national welfare than in those first-adopting
            countries. Furthermore, the estimated gains are shown to
            exceed those from a successful campaign under the World
            Trade Organization's Doha Development Agenda to reduce
            and remove cotton subsidies and import tariffs globally.
Does access to credit improve
            productivity Evidence from Bulgarian firms
Although it is widely accepted that
            financial development is associated with higher growth, the
            evidence on the channels through which credit affects growth
            on the micro-level is scant. Using data from a cross section
            of Bulgarian firms, the authors estimate the impact of
            access to credit (as proxied by indicators of whether firms
            have access to a credit or overdraft facility) on
            productivity. To overcome potential omitted variable bias of
            OLS estimates, they use information on firms' past
            growth to instrument for access to credit. The authors find
            credit to be positively and strongly associated with total
            factor productivity. These results are robust to a wide
            range of robustness checks.
Early childhood development through
            an integrated program : evidence from the Philippines
More attention and resources have been
            devoted in recent years to early childhood development (ECD)
            in low- and middle-income countries. Rigorous studies on the
            effectiveness of ECD-related programs for improving
            children's development in various dimensions in the
            developing world are scant. The authors evaluate an
            important ECD initiative of the Philippine government using
            longitudinal data collected over three years on a cohort of
            6,693 children age 0-4 years at baseline in two
            "treatment" regions and a "control"
            region that did not receive the intervention. The initiative
            includes a wide range of health, nutrition, early education,
            and social services programs. The authors estimate its
            impact by using "intent-to-treat"
            difference-in-difference propensity score matching
            estimators to control for a variety of observed
            characteristics measured at the municipality, barangay,
            household, and child level and unobserved fixed
            characteristics, with differential impacts by age of
            children and duration of exposure to the program. There has
            been a significant improvement in the cognitive, social,
            motor, and language development, and in short-term
            nutritional status of children who reside in ECD program
            areas compared to those in non-program areas, particularly
            for those under age four at the end of the evaluation
            period. The proportions of children below age four with
            worms and diarrhea also have been lowered significantly in
            program compared to non-program areas, but there are effects
            in the opposite direction for older children so the overall
            impact on these two indicators is mixed.