rafmacalaba/datause-encoder-data huggingface dataset:
difficult. Second, measuring benefits in the security sector involves low-risk (yet high-cost, even catastrophic) events and numerous prevention activities, also difficult to quantify. It is therefore very important to place security sector institutions in an adequate accountability framework and to follow clear and transparent processes, as discussed in the next two sections.

# **4. Security as a Public Service**

As noted earlier, security is an essential service that needs to be delivered. Thus taking a service delivery approach makes good sense, and provides some guidance for improving public finance management in the security sector, particularly with respect to institutions, incentives, and accountability. The distinctive features of security as a public service need to be taken into account, however.

## **4.1. Conceptual Framework**

A simple model illustrates the institutions, accountability relationships, and financial flows associated with service delivery and their implications (World Bank, 2003b).<sup>11</sup> There are three main actors: the people (as citizens and consumers/clients of services), the state (as political body and policymaker), and the service providers (which could be public or private). The interactions by which these three actors influence and are accountable to each other form an “accountability triangle” (see Figure 3a), and there are correspondingly financial flows among them (Figure 3b). The people can affect service delivery by influencing policy makers (e.g. by voting or through the advocacy role of civil society), who in turn exert influence on the service providers (this is the so-called “long route” of accountability). Citizens can also directly influence service providers (the “short route” of accountability) by selecting the provider (when there is competition), using their voice (e.g. complaints), or making financial contributions (when there is cost recovery). Another important set of actors in developing countries is the donor community, which exerts influence through its dialogue with policymakers, its financing, and its direct contracts with service providers.

**Figure 3: Service Delivery Framework**

<!-- Start of picture text --> a. Accountability b. Financing<br>Dialogue Budget Support<br>State State<br>Donors Donors<br>Elect, General<br>Advocate Manage, Taxation Earmarked<br>Contract Support<br>Afghan People Providers Afghan People Providers<br>Choose, Pay for<br>Assess Service<br>Source: Adapted from World Bank (2003b).<br><!-- End of picture text --> One of the main messages emerging from this conceptual framework is that it is often possible to improve service delivery by strengthening the short route of accountability, i.e.

> 11 In this discussion, “accountability” basically means “answerability”—the obligations to answer questions on what has been and will be done and why.  Sanctions can be legal, financial, political, or just reputational.

16
<!-- Start of picture text --> ao- Job separation so- Job finding so- Change in employment<br>50 + 50 + 50+<br>. .<br>40 40+ 4o-<br>5 5 AS<br>pm a eoa207 6a404<br>a a<br>204 20-4 Nd 20-4<br>. iTM «<br>105 10 i; .<br>.<br>ry<br>a ee 032 —<br>PrCn a half-yearar a oFa a FSShalf-year oFCn a SFhalf-yeareeSS<br>——@®—- Jordanian = —#®—\ Syrian<br><!-- End of picture text -->
Table 3

# CENTRAL AMERICAs EXPORT PROMOTION SCHEMES

||costs1km|El Sabsads|Guatemla|Hduas<br>1aa|N1|
|---|---|---|---|---|---|
|**FBtKI**TRADE ZONES||||||
|Tsx exenstioas||||||
|Machiy<br>and intr<br>edat imports|100% '|100%|10D%|100%||
|<br>Plofits|100% 8 years<br>50% 4 years|100% 10 years<br>exteadible|100% 12 years|100%||
|LIinaid<br>asd|Up to 40%<br>sulijec**t**o|Nolimit<br>subject to|Up to 20%<br>subjectto|No limit *wha<br>there is no iomi||
||appoval|apoval|apro|productionof the<br>same', subect to||
|DRAWBACK INDUSTRIS||||||
|Tax Exmodons||||||
|Machinery ad nemediae impots|100%|10D%|100%|100%||
|<br>Profits|100%b|100% 10 years|100% 10 years|100% 10 yeas||
|Lcl<br>market sles|no|No limit<br>subject to|No limit<br>wihpayment of|no||
|||approval|c<br>_oodng_Maes|||
|_Elxuort_leni;ves|no|Boeus of8%<br>of value-|no|no||
|||added||||
|NON-TADIIONAL<br>EXPORT INCENTIVES||||||
|Tax exemilions||||||
|Macineryandintmedie<br>imports|100%|-|100%|100%|100%|
|Profits|100%'|-|100% 10years|100% 10yeus|80%|
|Exporttaxes||-|2%|1%||
|Tax Rebates|Up to 12%<br>of the FOB value|-|--|-|15%of the<br>FOBsalne'|
|CabBonus|-|K% of the<br>FOB value||||
|Re<br>uiremens|35% minimum|-|-|G<br>ae|Expt|
||national value-|||t least|atleast|
||added|||25 direct|25% of|
|||||jobs|prouto|

Sore: Polhitas lodusuia de oamenca j hasma'. ECLAC LCMEXI310, August 5, 1991.

'Nony tie re no reictons for impots to itb zone, but rw maters io iaeediawe _impoms_ may be sictd if the Ministy of Idstry requited by the impont firms.

dearminsa t local products an me tne price, quality and delivery condtions ' In tbe cse of regited foreip invstments, a lx of 15% is cbarged wheai ing the profits. _e_ In the case of regis forega investmeats, a tax of 15% is charged wben repuritn the profits. 'Decins each year and disears in 1997.

* Declines to 10% in 1993, 5% in 1995 and dispears in 1997.

Note: _The figpr_ for _Nia a are_ from the proposd 'Ley de Promocion de Exportecion' whicb has not yet been approved.
**Inflation:** Inflation emerged as a major concern in 2021. No one claims that the recent increases in prices are due to trade restrictions. The U.S.- China trade war may have increased the prices of targeted products<sup>27</sup> , but it had small effects on US CPI. However, one of the main presumed benefits of open trade is its effects on lowering consumer prices.  The low inflation the US and many other advanced economies enjoyed in the past two decades, despite aggressive monetary policies, is in part due to globalization.  International sourcing allowed firms to reduce their costs, and even though these cost reductions were not always passed through to consumers in the form of lower prices, so that many firms increased their profit margins<sup>28</sup> ,  international competition kept price increases in check. On the labor side, unions and workers in general had little bargaining power when their jobs could be outsourced to low-wage destinations (or to machines and robots). One may lament the effects that globalization and technology may have had on the American worker, but the flipside of these forces is that they kept prices low for consumers.  If in the new era product and labor markets are shielded from foreign competition in the form of trade or immigration, the price of work and goods will rise.  This is especially relevant in a period characterized by labor and other supply chain shortages.

**Within-country Inequality:** On the other hand, the empowering of the American worker has been one of the stated objectives of the new stance towards globalization in the US. The question is then, will deglobalization halt and possibly reverse the rising inequality that emerged during the era of hyper-globalization?  As the Deaton Review argues, “inequality” is a complex phenomenon with many dimensions, social, political, and economic, so that there is no simple answer to this question. However, the experience of the past two years should give one pause. In the US, nominal median weekly earnings went up by 10% from January 2021 to December 2022. But due to a 14% inflation, real wages actually declined, by 4%.<sup>29</sup> Though other factors than deglobalization could be responsible for this trend, one thing that is certain is that the American worker was not better off in 2022 compared to past years.

**Global Inequality:** The effects of potential deglobalization on global inequality might be easier to sign.  The past three decades saw a sharp reduction of global poverty, driven

> 27 Studies of the price effects of the trade war find complete pass-through of the tariff increases on import prices, though consumer prices were less affected. See Fagjelbaum et al (2019) and Cavallo et al (2021). 28 See De Loecker et al (2016) for a discussion of pass-through of cost reductions on prices.

> 29 Weekly earnings are median usual weekly real earnings for wage and salary workers employed full time, 16 years and over, and inflation is the consumer price index for all urban consumers, both reported by the Federal Reserve Bank of St. Louis.

40
# **Labor Policy and Digital Technology Use: Indicative Evidence from Cross-Country Correlations**<sup>1</sup>

By

**Truman G. Packard** World Bank, Social Protection & Jobs Global Practice

and

**Claudio E. Montenegro** Department of Economics, University of Chile; The World Bank, and the German Development Institute (DIE)

JEL classification: J08, J31, J32, J65, O33, O57 Keywords: Labor regulation, digital technology, jobs A Technical Background Paper for the Regional Study

## **“Technology Adoption and Inclusive Growth: Impacts of Digital Technologies on Productivity, Jobs and Skills in Latin America”**

Office of the Chief Economist, Latin America and Caribbean Region, World Bank Group

> 1 This draft reflects the helpful comments of participants at the workshop _“Digital Technology Adoption, Skills, Productivity and Jobs in Latin America and the Caribbean”_ held at the World Bank’s headquarters, October 31- November 1, 2016. Indhira Santos, Mark Dutz and Rita Almeida provided guidance in forming our research questions and our analytical approach.  We are particularly grateful to Rita Ramalho, Arvo Kuddo, Klaus Adolfo Koch-Saldarriaga and Daniel Lederman for their careful reviews of our work and extensive, constructive comments on earlier drafts, and to Anna Reva for her expert advice on the use of the Doing Business data.  We’d also like to acknowledge the helpful research assistance of Jonathan Mallek.  We remain solely responsible for the views expressed, interpretations, conclusions and any errors.
Two positions can be distinguished as shown in table 1. Position 1 broadly suggests the post-disaster trajectory will fall short of the planned trajectory, while position 2 contends that there is no negative effect beyond the first year and the planned GPD path can be achieved or even surpassed.

Table 1: Synopsis of macroeconomic perspectives on natural disasters

|**Position 1**<br>**“Natural disasters are setbacks for**<br>**economic growth”**|**Position 2**<br>**“Disasters have no effects on economic**<br>**growth”**|
|---|---|
|Methodologies involving|Methodologies involving|
|• Supply side focus|• Supply side and demand side|
|• Model projections<br>• Neoclassical intuition<br>• Empirical evidence|• Empirical evidence|
|Studies<br>by<br>Benson<br>(various);<br>ECLAC|Studies by Albala-Bertrand, 1993, 2006;|
|(various); Otero and Marti, 1995; Crowards,|Skidmore and Toya, 2002; Caselli and|
|2000; Charveriat, 2000; Murlidharan and<br>Shah, 2001; Freeman et al., 2002; Mechler,<br>2004; Cuaresma, Hlouskova, and Obersteiner,|Malhotra, 2004.|
|2004;<br>Hochrainer,<br>2006;<br>Noy,<br>2009;||
|Okuyama, 2009||

Source: Adapted from Zenklusen, 2007 The body of research subscribing to position 1 generally finds significant short-tomedium-term macroeconomic effects (Otero and Marti, 1995; Benson, 1997a,b,c; Benson, 1998; Benson and Clay, 1998, 2000, 2001; ECLAC 1982, 1985, 1988, 1999, 2002; Murlidharan and Shah, 2001; Crowards, 2000; Charveriat, 2000; Mechler, 2004; Hochrainer, 2006; Noy, 2009) and considers natural disasters _a barrier for development_ in disaster-vulnerable developing countries.

ECLAC (various studies) has been conducting numerous case studies on disaster impacts in Latin American countries since 1972. Otero and Marti (1995) summarized the 4
targeted interest rate subsidies. Of course, the results for pro poor income programs are qualified by possible offsets by distortionary taxes to fund the increase in such programs. We sidestep this issue by explicitly considering private subsidies as the funding source for social and pubic goods.

# **3. Data and methods**

In this section we provide the details of the data used in this study and the empirical methods employed. We start off with the government spending variables and other macro-level controls. We then describe the individual level data set, and finish the section off with a description of our empirical approach.

# **3.1 Government spending and macroeconomic controls**

We use the International Monetary Fund’s Government Finance Statistics (GFS) database that contains government spending data comparable across countries. The GFS database has the largest degree of coverage in comparison to similar data sets such as EUROSTAT or the Asian Development Bank that tend to be region specific. Our key variable of interest is the share of social and public goods – the sum of total social and public good spending over total government spending. There are two advantages of this measure. By using the share of social and public goods and controlling for total government spending, we explicitly identify the financing source of spending as other spending categories which mainly include government private subsidies and defense spending. The second advantage is that we obtain a unit free measure of spending that is unaffected by currency and inflation fluctuations. This approach alleviates measurement error. We split our measure of total government spending into consumption spending and investment spending obtained from the Penn World Tables (PWT). The latter category is combined with private investment, providing a measure of total investment in the economy.

We follow the literature in controlling for macroeconomic measures of development and institutions. Following Williamson (2000), protection of private property rates is considered a key institutional 8
and the cost-eectiveness of simple interventions to reduce these compliance gaps. In this sense, our study is a complement to Brockmeyer and Hernandez (2016) who conduct a systematic anatomy of compliance in Costa Rica, uncovering substantial compliance gaps on the extensive margin. The role of third-party information in enhancing tax compliance has featured prominently in the literature (Kleven et al. 2011; Kleven, Kreiner, and Saez 2015). Third-party reporting has been shown to enhance tax compliance at the intensive margin for the value-added tax (Pomeranz 2015; Naritomi 2015), but was also found to generate evasion shifting to the cost margin, when applied to income taxation (Carrillo, Pomeranz, and Singhal 2016, Slemrod et al. 2015). Our study focuses on the role of third-party reporting in enhancing compliance on the extensive margin, showing that information is both a tool for strengthening deterrence interventions and a by-product of better ling compliance.

Second, this experiment adds to other communication experiments to increase tax compliance, as reviewed in Dwenger et al. (2016) and Hallsworth (2014). Our study uses a cost eective delivery method - emails - and maximizes message impact by combining dierent message elements that have proven successful in other contexts. As expected, the observed treatment eect of our emails is substantially larger than treatment eects in most other studies. Besides, our study is one of few in this literature to focus on rms, including corporations, as opposed to individual taxpayers, and the rst with Kettle et al. (2016) to focus on tax ling.<sup>11</sup> Indeed, most studies in this literature have focused on correct reporting of liabilities or on the payment of already assessed liabilities, such as property tax liabilities. Furthermore, we extend the literature by using rich administrative data to measure a variety of outcomes. Contrary to compliance crowd-out, we nd positive impacts on compliance in prior tax periods, ling of informative declarations, and a persistence of the main treatment eects in the medium term.

Finally, this paper contributes to the literature on rm formalization, as reviewed in Bruhn and McKenzie (2014) and De Andrade, Bruhn, and McKenzie (2014). This literature found that providing information, reducing registration costs or simplifying regulation is relatively ineective in encouraging rms to formalize. Only enforcement, e.g. in the form of inspection visits, or payment of about one month of prots were found to signicantly increase registration rates. We suggest that encouraging regular tax ling among rms that are tax-registered but do not le (regularly) is a more cost-eective way of casting the tax net wider. As non-lers are rms that have chosen to

> 11Hallsworth (2014) refers to three other papers considering ling behavior, but all are focused on individual taxpayers.

6
||**_Table_**_9:_|_Access_**_toimproved wa_**|**_tersource_**||
|---|---|---|---|---|
||**_(1) _**<br>**Withoutaccessto**<br>**improved watersource**<br>**1990**|**(2)**<br>**Withoutaccess to**<br>**improvedwatersource**<br>**2000**|**(3)**<br>**Averageannualrateof**<br>**change1990-2000**(%)|**(4)**<br>**Averageannualrateof**<br>**changenecessaryto**<br>**achievegoal(%/6)**<br>**(2000-2015)**|
|Alldeveloping countries|27|21|-2.5|-2.9|
|EastAsiaandPacific|30|25|-1.8|-3.4|
|EuropeandCentralAsia|..|10|||
|LatinAmericanand<br>Caribbean|19|15|-2.4|-3.0|
|MiddleEastandNorth<br>Africa|16|11|-3.7|-2.1|
|SouthAsia|20|13|-4.3|-1.7|
|Sub-SaharanAfnca|51|45|-1.3|-3.8|
|Source:WHO|||||

As can be seen in Table 9, several regions have made good progress on improving access to an improved water source, including South Asia and the Middle East and North Africa, which are on track to meet the Millennium Development Goal in advance of 2015. Unfortunately, progress in East Asia and the Pacific and in Sub-Saharan Africa is not on a path to meet the MDG, and will have to be doubled and tripled, respectively, to meet this target.

# _Access to sanitation_

In the proposed Millennium Development Goals access to an improved sanitation system has been coupled with the slum dwellers target. Sanitation remains vitally important for rural residents as well. In fact, sanitation plays a fundamental role in improving health outcomes. Lack of clean water and basic sanitation are critical causes of the prevalence of disease transmission by feces in developing countries. An improved sanitation system implies disposal facilities that can effectively prevent human, animal, and insect contact with excreta. The use of sanitation systems does not, however, assure that effluents are treated to remove harmful substances before they are released into the environment.

In 2000, 70 percent of the people who do not have access to sanitation live in East Asia and the Pacific and South Asia. These regions made great progress in serving more people with sanitation over 10 years, but could not catch up with population growth. Data in Table 10 indicate that the rate of progress would have to more than double in East Asia and quintuple in South Asia to meet this goal. It is also worth noting that there are enormous variations in the definition of improved sanitation among countries. For example, in many African countries the population "without access' to improved sanitation means people with no access to any sanitary facility. In Latin America and the Caribbean, however, it is more likely that those "without access" have a sanitary facility, but the facility is considered unsatisfactory. As Table 10 shows, Latin America and the Middle East are the regions which made the most progress on this indicator in the 1990s. All regions except Sub-Saharan Africa have a lower rate of access to sanitation compared to access to an improved water source.

12
**Box Article 2. Rebalancing Components while keeping** ⁄ **unchanged - A Comparison of the effects of and on GDP Growth** IIYY We consider two scenarios, in which total ⁄ remains unchanged from the baseline at 24 percent. In the II<sup>GG</sup> /YY II<sup>PP</sup> /YY first scenario, we increase by 1ppt to 7 percent and reduce to 17 percent from 2020. There is an IIYY initial decline in GDP growth vis-à-vis the baseline (line with marker in graph A of Box Figure 3) given the loss of private investment impact at a high II<sup>GG</sup> /YY M but the differential turns positive by 2029 and remains so II<sup>PP</sup> /YY thereafter because rises more slowly compared to the baseline and M is therefore higher (line with KK<sup>PP</sup> marker in graph B of Box Figure 3). KK<sup>PP</sup> /YY KK<sup>PP</sup> In the second scenario, we reduce by 1ppt to 5 percent and increase to 19 percent from 2020. In contrast to the first scenario, there is an initial increase in GDP growth vis-à-vis the baseline, but the II<sup>GG</sup> /YY II<sup>PP</sup> /YY differential turns negative by 2027 (dotted lie in graph A of Box Figure 3), as rises more quickly compared to the baseline and M declines faster (dotted line in graph B of Box Figure 3). KK<sup>PP</sup> /YY **Box Figure 3. Rebalancing Investment Components – Impact on GDP Growth** KK<sup>PP</sup>

<!-- Start of picture text --> Percentage A. Real GDP growth % B. Marginal Product of Private Capital (MPK P )<br>points (difference versus baseline)<br>30<br>0.15<br>0.10<br>25<br>0.05<br>0.00<br>20<br>-0.05<br>-0.10<br>15<br>-0.15<br>+ 1pp Ig/Y, -1p1pp I G /Y, -1 p Ip/Yp I P /Y -1pp Ig/Y, +1pp Ip/Y-1pp I G /Y, +1pp I P /Y Baseline + 1pp Ig/Y, -1p1pp I G /Y, -1 p Ip/Yp I P /Y -1pp I-1pp Ig/Y, +1pp Ip/Y G /Y, +1pp I P /Y<br>2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 2045 2047 2049<br>2020 2022 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050<br><!-- End of picture text -->

# **4.2 Total Factor Productivity Growth**

We model three TFP scenarios with different levels of reform by benchmarking Malaysia against highincome countries. The simulations include a weak reform scenario which targets a low value over a long period, a strong reform scenario which targets a high value over a short period, and a moderate reform scenario in the middle. We assume each subcomponent index for innovation, education, market efficiency, infrastructure, and institutions, which are identified as main determinants of TFP based on a literature review (Kim and Loayza 2019), increase linearly to the 25<sup>th</sup> , 50<sup>th</sup> , and 75<sup>th</sup> percentiles among high-income countries for the scenarios of weak, moderate, and strong reforms, respectively. The number of years to reach the target is 75th (long), 50th, and 25th (short) percentile, respectively, in the distribution of years that the high-income countries took from the Malaysia’s current level (in 2018) to the target. For example, for the strong reform scenario for education, there are 5 high-income countries which achieved the target 20
**<mark>Table A7.2: Baseline Association of Business Outcomes with  Management Measures</mark>**

|||LogEmp|loyment|||Labor Pro|ductivity||
|---|---|---|---|---|---|---|---|---|
|Anexo K Score|0.035***|||0.017***|0.672***|||0.877***|
||(0.006)|||(0.006)|(0.140)|||(0.186)|
|WMS Management Score||0.250*||0.086||4.914||‐0.652|
|||(0.134)||(0.153)||(4.070)||(5.310)|
|MOPS Management Score|||0.869*|‐0.554|||8.994|‐2.894|
||||(0.465)|(0.459)|||(8.650)|(12.164)|
|Sample Size|156|77|95|46|156|77|95|46|
|R‐squared|0.19|0.05|0.03|0.14|0.14|0.01|0.01|0.25|
|Notes:|||||||||
|Anexo K management pract|ices are 141|managem|ent pract|ices divided in|to five sub‐ar|eas.|||
|WMS is World Managemen|t Survey, tak|en for sub|sample of|firms in 2013|. MOPS is Ma|nagement|and Org|anizational|
|Practices Survey, and was c<br>Robust standard errors in p|onducted in<br>arentheses,|2017, wit<br>*, **, ***|h recall of<br>denote si|practices 5 ye<br>gnificance at t|ars earlier use<br>he 10, 5, and|d to obta<br>1 percent|in baselin<br>levels res|e measure.<br>pectively.|

66