rafmacalaba/datause-encoder-data huggingface dataset:
employment growth (Park, Giles, and Du, 2012). The study also finds that employment in exporting firms exposed to adverse export demand shocks caused by the global financial crisis was less sensitive to enforcement of labor regulations. These results confirm that strict enforcement of the new Labor Law led to lower employment in the manufacturing sector, a finding consistent with many studies of the employment impact of labor regulations in other developing countries cited earlier.

It is less clear, however, that the Labor Contract Law reduced aggregate employment or increase overall unemployment in the country as a whole? Even if cities with stricter enforcement of the Labor Law saw lower rates of manufacturing employment growth, this does not mean that aggregate employment was strongly affected. Workers may have moved from cities with greater strictness to cities with less strictness, or from the manufacturing sector to self-employment or jobs in the service sector where enforcement of the Law may have been more lax, as evident in the lower prevalence of labor contracts among migrants. One complication in examining how the new Labor Contract Law affected aggregate employment is that the global economic crisis also hit China in 2008, the same year the new Law was in force. Thus, looking at aggregate employment statistics, it may be hard to separately identify the potential negative impact of the Labor Law on employment in China from the negative impact of the global economic crisis.

However, this turns out not to be a major issue, because all of the available data suggests that Chinese employment growth has been remarkably robust to both of these major events. Evidence from various micro-data sources confirms that although the global economic crisis, which hit China in force in October 2008, led to over 20 million migrant workers losing their jobs, most migrant workers had found new jobs by the summer of 2009 (Giles et al, 2012). Rural household surveys by China’s National Bureau of Statistics found that the total employment of rural migrant workers in China was 2.4% greater in 2009 than in 23
loss has occurred, reinsurers will have paid 91 percent of their total ultimate loss, whereas primary carriers will have paid 99.7 percent of theirs. The reinsurer is therefore again subject to more claims inflation and uncertainties from changing economic and social/legal conditions than is the primary carrier.

<!-- Start of picture text --> Primary vs. Reinsurer Historical Loss Development:<br>Automobile Liability<br>100<br>90<br>*A 80<br>70<br>70~~~~~~~~~~~~~~~~~~<br>~60<br>q~50<br>0<br>&40 niay.Cr,os DeeometYa<br>U<br>*30<br>IL 20<br>1 0<br>1 2 3 4 5 6 7 8 9 10<br>Loss Development Year<br><!-- End of picture text --> _Sources: A.M. Best Company for primary carriers; Reinsurance Institute of America for reinsurers_

# REINSURANCE MARKET

In its broadest sense, the reinsurance market would include the following:

- 1) Reinsurance treaties: transfer of risks to another insurer

- 2) Internal pools: sharing of risks among affiliated insurers

- 3) Industry pools: sharing of difficult risks (e.g., nuclear) among a large number of participants

- 4) Non-voluntary pools: required sharing of high risk business among all licensed insurers based on market share

- 5) Lloyds system: insurance with syndicates of independent individuals

- 6) Reciprocal insurance exchanges: mutual sharing of risks by participating entities

Much of the reinsurance coverage is available through German and Swiss reinsurers. Also, there are some large reinsurers located in America, France, Sweden, and Japan, while a few other key players in the reinsurance market are scattered about. Reinsurance can be obtained from professional domestic insurers, located in the countries of their respective clients, from reinsurance departments of primary carriers, and from foreign-based reinsurers located outside of the client's country. Reinsurance may be purchased directly from the reinsurer, or through a broker or other insurance intermediary, or through an insurance exchange, such as the ones at Rotterdam and Chicago. The advantage of going through a broker is that some of the large brokerage firms will provide advisory services about the nature of contract, the quality of the reinsurer, and will help negotiate the most favorable price for the contract desired. However, they do charge for their services, and some brokers do not offer and are not capable of offering these services. Rather, they act merely as an intermediary for a handful of companies with which they conduct virtually all of their business. Also, certain reinsurers, such as Swiss Re, routinely provide training services for their clients on

- Page 14 -
**Table 5: Variance Decomposition of Agri and Non-Agri GDP Volatility**

|**Agri**||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
|**quarters**|**tot**|**r_us**|**Log(yf)**|**Log(gc)**|**Log(inv)**|**tby**|**r**|**Log(yA)**|**Log(yNA)**|**External **|**Domestic**|
|1|0.047|0.010|0.031|0.053|0.031|0.000|0.009|0.819|0.000|0.088|0.912|
|4|0.038|0.023|0.208|0.149|0.042|0.015|0.010|0.513|0.001|0.270|0.730|
|8|0.038|0.026|0.228|0.162|0.040|0.015|0.010|0.479|0.002|0.292|0.708|
|12|0.038|0.026|0.229|0.162|0.040|0.015|0.011|0.477|0.002|0.293|0.707|
|16|0.038|0.027|0.229|0.162|0.040|0.015|0.011|0.477|0.002|0.293|0.707|
|20|0.038|0.027|0.228|0.162|0.040|0.015|0.011|0.477|0.002|0.293|0.707|
|**Non-**<br>**Agri**||||||||||||
|**quarters**|**tot**|**r_us**|**Log(yf)**|**Log(gc)**|**Log(inv)**|**tby**|**r**|**Log(yA)**|**Log(yNA)**|**External **|**Domestic**|
|1|0.185|0.037|0.036|0.014|0.191|0.059|0.061|0.006|0.412|0.258|0.742|
|4|0.134|0.151|0.170|0.028|0.136|0.070|0.033|0.008|0.270|0.454|0.546|
|8|0.120|0.221|0.159|0.027|0.124|0.068|0.030|0.010|0.243|0.500|0.500|
|12|0.120|0.227|0.157|0.027|0.122|0.067|0.030|0.010|0.241|0.504|0.496|
|16|0.120|0.228|0.157|0.027|0.122|0.067|0.030|0.010|0.240|0.505|0.495|
|20|0.120|0.228|0.157|0.027|0.122|0.067|0.030|0.010|0.240|0.505|0.495|

_Source_ : authors.

**Figure 1.7: Impulse Responses of Non-Agricultural Output to Various Shocks**

<!-- Start of picture text --> tot shock r_us shock Log(yf) shock<br>.002 .004<br>0<br>0<br>.002<br>-.002<br>-.002<br>0<br>-.004 -.004<br>Log(gc) shock Log(inv) shock tby shock<br>.003 .004 .004<br>.002<br>.002 .002<br>.001<br>0 0<br>0<br>-.001 -.002 -.002<br>r shock Log(yA) shock Log(yNA) shock<br>.001 .001 .006<br>0 0 .004<br>-.001<br>-.002 -.001 .002<br>-.003 -.002 0<br>0 5 10 15 20 0 5 10 15 20 0 5 10 15 20<br>quarters quarters quarters<br>95% CI IRF<br><!-- End of picture text --> _Source_ : authors.
at the 10 percent level and actually has the opposite sign from what we would expect if there was sorting – a higher, not lower, number of firms registered just above the cutoff in 2012 than in 2008.

The interaction terms with tax year 2011, which is the year for which we find a positive effect of the micro tax reform on formal firm creation, have the sign and size we might expect if there was sorting. That is, the coefficients indicate a lower number of new firms registering just above the cutoff in 2011 than in 2008 and they indicate that the number of new firms became an upward sloping or flat function of declared revenue in 2011 as opposed to 2008 when the function was downward sloping. However, since the interaction terms with year 2011 are not statistically significant, we do not interpret these findings as evidence for sorting around the cutoff.

**Table 10: Did fewer new firms register above the GEL 30,000 cutoff after the reform?**

||Dependent variable:<br>|Number of new firms<br>||
|---|---|---|---|
||(1)|(2)|(3)|
|Constant|14.503|12.886***|14.662***|
||(8.720)|(3.289)|(1.269)|
|Tax year 2009 dummy|-4.906|0.777|-2.143|
||(12.476)|(4.225)|(1.669)|
|Tax year 2010 dummy|0.015|0.428|-1.567|
||(13.580)|(4.695)|(1.804)|
|Tax year 2011 dummy|-10.894|-4.762|-2.337|
||(12.343)|(4.478)|(1.920)|
|Taxyear 2012 dummy|1.187|3.785|-2.154|
||(9.610)|(4.627)|(1.565)|
|Revenue|-2.161|-1.642*|-2.154***|
||(2.675)|(0.942)|(0.310)|
|Revenue*Taxyear 2009 dummy|1.018|-0.773|0.079|
||(3.854)|(1.193)|(0.403)|
|Revenue*Taxyear 2010 dummy|-0.115|-0.285|0.258|
||(4.156)|(1.324)|(0.436)|
|Revenue*Taxyear 2011 dummy|3.526|1.543|0.848*|
||(3.798)|(1.252)|(0.469)|
|Revenue*Tax year 2012 dummy|-0.451|-1.273|0.455|
||(2.936)|(1.271)|(0.376)|
|R-squared|0.079|0.135|0.253|
|Observations (intervals, years)|250|500|1,000|
|Sample with revenue between|30,000 and 35,000|30,000 and 40,000|30,000 and 50,000|

Note: Revenue is in intervals of 10,000s of GEL. Robust standard errors in parentheses, clustered at the revenue interval level. Statistical significance levels: *10 percent, **5 percent, *** 1 percent.

28
WPS 3388

# **Tools for Legislative Oversight: An Empirical Investigation**

## **By**

## **Riccardo Pelizzo**<sup>**1**</sup>

## **and Rick Stapenhurst**<sup>**2**</sup>

## Abstract

Parliaments are the institutions through which governments are held accountable to the electorate. They have a wide range of tools with which to carry out this oversight function, but until recently little analysis had been undertaken on the characteristics or use of such tools. This paper uses data for 83 countries that was collected in 2001 to investigate whether the oversight potential relates to three variables, namely the form of government (presidential, semi-presidential, or parliamentary), per capita income levels, and the level of democracy.

The paper finds that oversight potential is greatly affected by the form of government, per capita income levels, and levels of democracy. Countries with parliamentary forms of government, higher income levels, and which are more democratic have a greater number of oversight tools and greater oversight potential. While the oversight potential follows this general trend, the use of committees of enquiry, interpellations and ombudsman offices follows a different pattern. The use of interpellations as an oversight tool is most common in high income countries, less common in low income countries and least common in middle income countries while the presence of committees of enquiry and of the ombudsman offices is most common in middle income countries, less common in high income countries and least common in low income countries.

World Bank Policy Research Working Paper 3388, September 2004 _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 Assistant Professor, Singapore Management University 2 Senior Public Sector Management Specialist, World Bank Institute An earlier abridged version of this paper was presented at the Southern Political Science Association conference in New Orleans, January 2004. A modified version of that earlier draft can be found in _Quaderni di Scienza Politica_ , vol. 11, n. 1, (gennaio) 2004, pp. 175-188.
for high-income OECD countries, overall in developing countries, and for the ECA region (Figure 6, Panel D).

Expansions in deposit insurance coverage and scope may have helped in restoring confidence in banking sectors across the globe, but these developments have likely come at a cost in terms of market discipline. Admittedly, with only a few exceptions, there have not been contagious runs by retail depositors in recent years (Hasan et al., 2017). However, overreaction to fix public confidence in the banking system in the short-term can ultimately be destabilizing over longer time horizons.<sup>9</sup> Limited (but credible) ex-ante funding commitments are therefore crucial in three respects. First, they limit risk-taking incentives by banks. Second, they limit the amount of tax-payer funds that are potentially at risk. Finally, they help to harmonize insurance schemes in common banking areas, therefore limiting regulatory arbitrage (Anginer and Can Bertay, 2019).

9 In the post-GFC period, policy makers acknowledged that market discipline could be undermined by government intervention in the banking sector. An effort to design clear rules to wind down distressed institutions was therefore undertaken. Furthermore, there was explicit recognition that larger/more interconnected banks presented a critical challenge because of the economic and political ramifications connected to their failure. This effort led to the shoring up of resolution frameworks by, for instance, creating separate procedures for bank and non-financial firms. Insolvency resolution schemes were introduced or re-designed to incentivize banks’ shareholders and managers to encourage the prudent management of banks. An important distinction was also made in terms of size of individual institutions and the potential domestic and international impact of distressed institutions. The Financial Stability Board has been publishing the list of Globally Systemically Important Banks (G-SIBs) since 2014. Since 2012 there has also been discussion of adapting the policy framework for G-SIBs to domestic systemically important banks (D-SIBs). In this regard, there is a risk that incentives by market participants to monitor large banks could be reduced as investors might not monitor large or interconnected entities assuming that this task would be performed by the banking supervisory agencies. See _The Global Financial Development Report 2019/2020: Bank Regulation and Supervision_ for further discussion.

13
averaging the data before and after treatment; and 4) using an empirical variance-covariance matrix. Bertrand, Duflo and Mullainthan (2004) find that the empirical variance-covariance matrix outperforms the others, but it does not work properly with small samples. Cameron, Gelbach, and Miller (2008) state that the block bootstrap works properly with small numbers of groups.<sup>12</sup> In our case, bootstrapped, clustered standard errors are similar to clustered standard errors. In most cases, the latter method reports greater standard errors, and in some cases, conventional standard errors are larger than the latter method. As a conservative criterion, we decided to report the method with the largest standard errors in each case. Depending on the nature of the outcome variable, continuous, count, or fractional, we use different estimators that will be discussed in the results section.

# **<<A>>** _III. DATA SOURCES AND VARIABLE CONSTRUCTION_

We begin by describing the data sources and variable construction for the analysis of the impact of nationalization on access to water sanitation networks. We then turn to the data sources and variable construction for the analysis of the impact of nationalization on water quality.

## **<<B>>** _Access to sanitation networks_

The data regarding the percentage of households with water-sealed toilets connected to sewer lines are obtained from the annual Uruguayan national household survey, Encuesta Continua de Hogares (ECH), conducted by the National Statistical Office of Uruguay, Instituto Nacional de Estadística. The ECH is the main source of socioeconomic information on Uruguayan households and their members at the national level. The surveys were conducted throughout the year with the objective of generating a description of the socioeconomic situation of the entire population.

The ECH also includes questions about household living conditions. In particular, the survey asks whether water-sealed toilets are connected to sewer lines. Therefore, we generate a dummy variable that takes the value one if the household is connected to sewer lines and zero otherwise. Then, 11
_20_ _Definftion of_ **_system shock..._** _On what_ **_Is_** _the system shock, I haven't defined_ **_It_** _myself. I am not quite sure there is a scale to elther of the two lnterpretatlons you have put forward, though I suppose a mixture of the two_ **_mlght_** _do. But speclflcally taking_ **_the_** _posltlve shock of the 1950s, the international monetary system and domestic_ **_policies,_** _why did they collapse? The slmpllstic explanation_ **_ls:_** _there were negative shocks, the two_ **_oil_** _shocks in quick successior, plus the shock of the mld-1980s, the_ **_big_** _external payment Imbalances developing. Surely that can counterbalance any posltive policies._ _But I thlnk there_ **_Is_** _more to it than that in the sense that the success of the 1950s and 1960s was carrying the seeds of its own destruction in two ways: a domestlc way, through acceleration of inflatlon and full employment together with conflicting claims, too ambitlous policies, too much fine-tuning, hence an acceleration of Inflation, which even if we hadn't had the_ **_oll_** _shock would almost certainly have led us into a much more restrlctive stance in late 1970s or early 1980s._ _The second set of problems which the system was creating were international and financial In nature and led to the breaking up of Bretton Woods. This idea of the dollar remaining a reserve currency forever, nobody worrying about_ **_it,_** _even though everybody was accumulating It was too good to last. Hence, both mainstays of the system were doomed from the start. Expansionary policies were going to have to give way to restrictive policles because of accelerating inflatlon. An international monetary system, which was thought to be_ **_very_** _stable, had a strong potential for falling apart. In fact, it fell apart even before the_ **_oil_** _shock because of the so-called Triffin Inconsistency wlthin_ **_It._** _To that were then added the effects_ **_of_** _the two_ **_oil_** _shocks and everything else._ _The figures that Mr. Rao was referring to (i.e., a sharp Increase In the share of developing countries in the world output by_ **_the_** _year 2000) are purely illustrative. In no way was that meant to be a projection of likely growth rates. All I was trying to do was to show that, even under extremely favorable assumptions for the LDCs, to my mind it was unlikely that the LDCs would take over the role of major locomotive in the world economy. I was trying to defend my emphasis, the focus of my paper, which is entirely on the OECD countries._ _I admit that actually_ **_If_** _the LDCs did grow as rapidly as that, that could create some adjustment problems, possibly some favorable side effects for the world economy at large. Now if I may, just on the Imbalances more generally, start off with one of the points Leslie Lipschitz made, which I don't treat in the paper, thac is the Idea of an Intertemporal balance._

**_WP/PDC/ISF7:Jsq_**
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45
Since we find neither an increase in default nor an increase in the workload of credit officers handling larger loans, we conclude that these larger loans were profitable for the lender. In addition, when we compare the benefits of offering business training to the estimated costs of implementation, we find that the business training program is not cost-effective from the perspective of microfinance institution despite being profitable for (male) clients. This may help explain why few lenders offer such business training programs voluntarily.

These results taken together contribute to the literature that highlights the importance of heterogeneity in the impacts of relaxing credit constraints and enhancing business skills (De Mel, McKenzie and Woodruff, 2009; Karlan and Valdivia, 2010; Drexler, Fischer and Schoar, 2014; Calderon, Cunha and de Giorgi, 2013; Berge, Bjorvatn and Tungodden, Forthcoming; De Mel, McKenzie and Woodruff, 2012 and McKenzie and Woodruff, 2014 for a review).

Our paper is perhaps closest to Berge, Bjorvatn and Tungodden (Forthcoming) and De Mel, McKenzie and Woodruff (2012) in that both combine business training with access to capital. However, our paper differs from theirs and the rest of the literature in several respects. First, while most papers study a sample of business owners in urban areas, we use a large sample of male and female microfinance clients from rural areas with diverse occupations ranging from non-farm enterprises, to farming to salaried work. Second, we offer large loans instead of grants, which allow us to measure the prevalence of borrowing constraints and the impact of business training on actual take-up of credit. Finally, we use rich administrative and survey data that allow us to focus on a wide range of business, household and individual outcomes.

The remainder of the paper is structured as follows. Section 2 describes the context in Pakistan and the experiment. Section 3 discusses the data and Section 4 presents the intuition behind a simple model of technology choice under credit constraints and unknown ability. Appendix C develops the model and its predictions. Section 5 describes the empirical strategy and the results of the experiment. Section 6 presents the benefit-cost analysis of offering business training and Section 7 concludes.

5