rafmacalaba/datause-encoder-data huggingface dataset:
in the MENA region. For example, the latest Gini coefficient for Morocco estimated in 2007 was above 40%; that for the Arab Republic of Egypt, where inequality is believed to be very low, was around 32% in 2011.

**Table 14: Poverty Impact of Subsidy Reforms**

||Intern|ational Povert<br>Si 1|y Line<br>Si 2|Nat|ional Poverty<br>Si 1|Line<br>Si 2|
|---|---|---|---|---|---|---|
||Poverty<br>level|cenaro<br>Poverty<br>change|cenaro<br>Poverty<br>change|Poverty<br>level|cenaro<br>Poverty<br>change|cenaro<br>Poverty<br>change|
|Pre reform|8.48|.|.|14.44|.|.|
|Flour|8.62|0.15|0.46|14.66|0.22|0.69|
|Flour-bread|8.91|0.43|1.63|15.06|0.61|2.38|
|Semolina|8.50|0.03|0.07|14.48|0.04|0.12|
|Rice|8.73|0.26|0.75|14.77|0.33|0.98|
|Sugar|8.59|0.11|0.45|14.72|0.28|0.75|
|Tea|8.53|0.05|0.14|14.50|0.06|0.17|
|Macaroni|8.64|0.16|0.56|14.72|0.28|0.85|
|Vegetable Oil|8.77|0.29|1.36|14.88|0.44|1.81|
|Paste tomatoes|8.61|0.14|0.40|14.66|0.22|0.63|
|Milk for children|8.48|0.00|0.03|14.45|0.01|0.08|
|Milk (concentrated)|8.57|0.09|0.28|14.59|0.15|0.45|
|Post reform||2.02|8.11|17.26|2.82|9.58|

Source: Libyan Household Consumption Survey 2007/8; Libyan authorities; and Bank staff calculations.

A cash transfer of LYD 175 per capita per year targeted to the first quintile would be enough to keep poverty unchanged under the scenario of full subsidy elimination (Figure 4). An increase in poverty from 8.5% to 16.5 % implies that poverty remains concentrated in the bottom quintile following the price reform. Therefore, targeting that share of the population would be sufficient to maintain poverty unchanged at the pre-reform level. This targeted transfer system would cost the government LYD 340 million per year. Given that savings from the price increases would amount to LYD 1.3 billion as calculated above, the net gains to the budget from full subsidy elimination _and_ cash compensation to the population in the first quintile of LYD 175 per capita would be LYD 943 million. In case targeting the first quintile was not possible, extending that level of transfer to the entire population would raise the budgetary cost to LYD 1.1 billion per year. In this case, total net gains to the budget from subsidy reform _and_ cash transfers would be much lower, at LYD 165 million per year.

18
performance bonuses. For this sub‐sample of larger establishments, however, the relationship between total factor productivity and knowledge of targets, while remaining positive, is no longer statistically significant.

Table 8: The relationship between management practices and productivity in large establishments (50+ employees)

|**Panel A: Y = Labo**|**r productivity**<br>||||||
|---|---|---|---|---|---|---|
||(1)<br>Average<br>score|(2)<br>Response to<br>problems|(3)<br>No. of metrics<br>monitored|(4)<br>Difficulty of<br>targets|(5)<br>Knowledge of<br>targets|(6)<br>Basis of<br>bonuses|
|**Management**<br>**variable**|0.735**|0.0373|‐0.0384|‐0.160|0.378|0.270|
||(0.287)|(0.323)|(0.249)|(0.258)|(0.240)|(0.167)|
|**Fixed effects:**<br>|Two‐digit ind<br>|ustrydummies,and c<br>|ountryand region<br>|(within country)f<br>|ixed effects<br>||
|**Observations**|1,402|1,402|1,402|1,402|1,402|1,402|
|**R‐squared**|0.307|0.300|0.300|0.301|0.312|0.306|
|**Panel B: Y = Total**|**factorproductiv**<br>|**ity**<br>|||||
||(1)<br>Average<br>score|(2)<br>Response to<br>problems|(3)<br>No. of metrics<br>monitored|(4)<br>Difficulty of<br>targets|(5)<br>Knowledge of<br>targets|(6)<br>Basis of<br>bonuses|
|**Management**<br>**variable**|0.872**|0.603**|‐0.0484|‐0.146|0.228|0.476***|
||(0.357)|(0.242)|(0.173)|(0.186)|(0.164)|(0.144)|
|**Fixed effects:**<br>|Two‐digit ind<br>|ustrydummies,and c<br>|ountryand region<br>|(within country)f<br>|ixed effects<br>||
|**Observations**|459|459|459|459|459|459|
|**R‐squared**|0.800|0.799|0.794|0.794|0.796|0.803|

Notes: Standard errors in parentheses; *** p<0.01, ** p<0.05, * p<0.1. Survey weights are used in all regressions. All regressions control for establishment characteristics.

The results discussed thus far suggest that improved management practices are associated with higher productivity, and that their impact is concentrated among larger establishments. These are based on combining the data for all countries, which may mask some important differences in how effective these practices can be in different contexts. The seven countries analyzed differ in terms of their level of development (Bolivia, for example, is, according to World Bank classifications, a lower‐middle income economy, while Argentina is classified as high income), their industry composition (in Argentina, 46 percent of establishments are engaged in manufacturing; compared to 18 percent in Ecuador where the service industry dominates) and their institutional environments (Peru ranked number 68 out of 190 countries in the 2019 Doing Business report, while Bolivia was much farther down the rankings at 156). All these aspects, as well as many others, could impact the effectiveness of management practices.

Table 9 below considers the relationship between improved management practices and labor productivity in each of the seven countries separately. It shows that a significant relationship exists between the average management score and sales per worker in Bolivia, Colombia, Ecuador and Uruguay. However, in 20
Policy Research Working Paper 8073

# **Abstract**

Poverty lines are typically higher in richer countries, and lower in poorer ones, reflecting the relative nature of national assessments of who is considered poor. In many high-income countries, poverty lines are explicitly relative, set as a share of mean or median income. Despite systematic variation in how countries define poverty, global poverty counts are based on fixed-value lines. To reflect national assessments of poverty in a global headcount of poverty, this paper proposes a societal poverty line. The proposed societal poverty line is derived from 699 harmonized national poverty lines, and has an intercept of $1 per day and a relative gradient of 50 percent of median national income or consumption. The societal poverty line is more closely aligned with national definitions of poverty than other proposed relative lines. By this relative measure, societal poverty has fallen steadily since 1990, but at a much slower pace than absolute extreme poverty.

This paper is a joint product of the Development Data Group and the Poverty and Inequality Team, Development Research 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 djolliffe@worldbank.org or eprydz@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
# **_iii. Heterogeneous effects across different robot applications_**

The final contribution of the paper is to examine whether certain robots matter more for quality than others. Our robot data contains information on specific robot types, that vary widely in their sophistication within a given application. For example, within handling applications, there are robots that are equipped with sensory devices that allow for product defect detection and others that lift and stack pallets. Similarly, within processing applications, some robots have precision laser cutting, while others are mechanical. Within this section we focus on these examples within cutting and handling applications, contrasting the quality effects across advanced and more rudimentary robots.<sup>26</sup> Unfortunately, the robot application data is not available directly at the country-industry level. We approximate robot applications at the country-industry-level by interacting the (country-level) share of a given robot application with the (country-industry-level) of robot stock. We do so, to avoid country-level regressions and enable a consistent estimation specification across regressions. We construct our instrumental variables in the same way. This results in less variation than our baseline robot stock measure and thus our instruments are somewhat weaker. We present the OLS results below and report the IV results in Table A8 and A9 in the Appendix which find similar results but with weaker instruments.

For cutting robots we find gains overall from both mechanical and laser guided cutting machines (see Table 6). Interestingly, for developing countries we find that quality gains are obtained from the more rudimentary robots, with mechanical cutting tools. In contrast, developed countries experience quality gains only from sophisticated laser guided cutters. Even adopting relatively basic robots may increase production quality in developing countries, if for instance, they reduce production errors compared to the pre-existing production technology of labor and machines. For handling robots (see Table 7) we find that quality gains from that robot class are mainly driven by less sophisticated applications, pallet handling, as opposed to more sophisticated handling and

> 26 Handling, processing and welding robots represent nearly 85% of the total robots in our data.

32
the application and interpretation of the model, they are the best in terms of representing, first, the entry and exit margins, and, second, the policy and developmental barriers to firm dynamics.

**Table 2. Selected Statistics,** **_Doing Business_**

||**Entry**||**Exit**|
|---|---|---|---|
||Fees|Time|Recovery rate|
||(% of GDP<br>pc)|(days)|(cents per 1$)|
|**Average**|106.3|46.2|30.8|
|**Median**|24.3|34.0|27.3|
|**Minimum**|0.0|2.0|0.0|
|**Maximum**|6,375.5|694.0|92.7|
|**St. deviation**|491.3|59.6|24.9|
|**P90**|203.9|87.5|75.3|
|**P10**|3.21|11.7|0.0|
|**U.S.A.**|0.8|6|77*|
|**Median LDC (Egypt)**|68.8|19|16.6*|
|**Median LAC (Brazil)**|9.9|152|12.1*|

Source: World Bank, _Doing Business_ , 2007

*In the simulations, the recovery rates of the U.S., Egypt, and Brazil are rounded to the nearest number used in the simulation grid. As shown in Table <u>3, they are, respectively, 77.5, 17.5, and 12.5.</u>

Table 2 presents selective statistics on entry barriers and recovery rates for the 183 countries included in the _Doing Business_ database. It also presents the values corresponding to the U.S. (our benchmark efficient economy) and the median LDC (according to income per capita). Differences across countries are large. The most entry-regulated economies (90<sup>th</sup> percentile) have a direct cost to start a business of about 200% of GDP. That is around 60 times larger than the cost of the least entry-regulated ones (10<sup>th</sup> percentile). Recovery rates after exiting are 0% and 75% for the least advanced (10<sup>th</sup> percentile) and most advanced (90<sup>th</sup> percentile), respectively.

22
26

- OLR (2017): “Caracter ́ısticas de los migrantes de Venezuela a Colombia,” Tech. rep., Observatorio Laboral de la Universidad del Rosario.

- Radinger, T., A. Echazarra, G. Guerrero, and J. P. Valenzuela (2018): _OECD Reviews of School Resources: Colombia 2018_ , OECD Publishing.

- Revista Semana (2017): “El triste  ́exodo de los venezolanos a Colombia,” Accessed from: http://www.semana.com/nacion/articulo/venezolanos-en-colombia-y-colombianosrepatriados/519657.

- Rozo, S. V. and J. F. Vargas (2021): “Brothers or invaders? How crisis-driven migrants shape voting behavior,” _Journal of Development Economics_ , 150, 102636.

- van der Werf, C. (2019): “The Impact of Refugees on Native Students? Academic Achievement,”

- .
# 4. <u>FDI IN T&T</u>

The results obtained in the econometric section indicate that openness to FDI inflows is a fundamental driver of diversification. In order to apply the findings to the specific case of T&T, this section undertakes a detailed analysis of the links in the trends followed by FDI and diversification in T&T between 1980 and 2011. The section concludes by identifying the key policies the twin-island republic could implement to further leverage the benefits of FDI inflows.

# _<u>4.1 Stylized Facts</u>_

Between 1980 and 2000, FDI inflows in T&T have followed an increasing trend marked by significant volatility. Over the last ten years, inflows of direct investments have gradually declined with the exception of 2008 (see Figures 4.1 and 4.2). One of the possible explanations of why FDI inflows were severally impacted in T&T in 2009 and 2010 is probably the global financial crisis and the fact that the main source of FDI in T&T has traditionally been the US which was at the epicenter of the crisis. By 2011 direct investments started to recover. T&T is also characterized by relatively large and volatile capital inflows when compared to other countries in LAC (FDI inflows averaged 6.6% of GDP during the 1988-2011 period, above the LAC average of 2.4% of GDP over the same period). Further, FDI performance in T&T and the LAC region appears to be quite correlated.

<!-- Start of picture text --> Figure 4.1: Evolution of FDI (as a share of GDP) in T&T and other regions over the<br>1980-2011 period<br>20.0<br>18.0 Trinidad and Tobago<br>16.0 Fuel Exporters<br>14.0 Latin America & Caribbean<br>12.0 World<br>10.0<br>8.0<br>6.0<br>4.0<br>2.0<br>0.0<br>-2.0<br>Source: IMF-WEO<br>1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011<br><!-- End of picture text --> Most of the FDI in T&T is associated primarily with large energy projects; particularly natural gas projects following the deregulation of the sector (see Figure 4.3). Both petroleum production and gas production are clearly dominated by foreign participation. In 2010, about 60% of crude oil was produced by private companies, of which almost 80% was accounted for by three foreign companies. Natural gas production was also dominated by three foreign companies (BP Trinidad 15
_Table 1: Description of the sample_

||**Argentina**|**Bolivia**|**Colombia**|**Ecuador**|**Paraguay**|**Peru**|**Uruguay**|
|---|---|---|---|---|---|---|---|
|**Sample size**|991|364|992|361|364|1003|347|
|**Proportion**<br>**manufacturing (%)**|46.64|26.30|29.08|18.49|27.76|43.39|23.07|
|**Proportion retail (%)**|16.85|16.96|14.82|21.74|30.09|9.09|28.11|
|**Proportion other services**<br>**(%)**|36.51|56.74|56.10|59.77|42.15|47.51|48.83|
|**Average no. employees**|45.28|30.62|54.36|56.17|60.63|89.85|47.22|
|**Median no. employees**|14|9|15|15|18|20|14|
|**Proportion foreign**<br>**owned(%)**|2.80|10.23|10.12|11.98|7.65|8.95|9.52|
|**Proportion exporting (%)**|6.81|7.49|8.48|3.21|4.59|12.03|10.68|
|**Proportion multi‐**<br>**establishment(%)**|10.48|14.88|23.04|11.25|7.47|21.15|15.37|
|**Proportion female**<br>**managed(%)**|7.99|26.31|18.98|22.91|19.59|19.86|10.61|
|**Proportion sole**<br>**proprietorships (%)**|6.26|44.92|4.74|1.62|14.23|9.07|7.90|
|**Average top manager's**<br>**experience(years)**|26.55|20.10|23.95|19.67|22.62|24.19|25.81|

Note: Survey weights are applied in the computation of the averages presented above.

# 3.3 Performance and management

The main metrics we use to measure the performance of the establishments are labor productivity and total factor productivity. Labor productivity represents the monetary value of sales per worker and can be calculated for establishments operating in all sectors. The figures for total factor productivity (TFP), on the other hand, are less intuitive. Our TFP estimates are based on observed monetary values (as opposed to physical units) and are estimated assuming a worldwide common production technology for each 2‐ digit industry.<sup>2</sup> The resulting TFP estimates represent the portion of output that is not explained by the amount of inputs utilized and, thus, unlike labor productivity results, TFP estimates are not expressed in monetary terms. TFP may be considered a better measure of efficiency than labor productivity, as it captures the level of efficiency at which all factors of production are utilized to produce output. However, due to the data requirements for the estimation of TFP, it can only be computed for establishments in the manufacturing sector (hence the lower “N” for TFP in Table 2).

Because average productivity figures can be strongly influenced by outliers in the sample, Table 2 below presents both the average and the median values for labor and total factor productivity. Of the seven countries covered, sales per worker are highest in Uruguay, as reflected in both the mean and median

> 2 For an explanation of the TFP estimation using the worldwide Enterprise Survey database see EBRD, EIB, World Bank (2016); page 16.

9
small fraction of freight forwarders report that delays are caused by poor performance of customs or other agencies operating at the border.

A key purpose of the survey is to understand the contractual arrangements that govern freight movements. One question of particular interest is the incidence of a delay on a given shipment. Respondents were asked to report the penalty they pay when goods are required to stay at the border post or terminal overnight unexpectedly. For those freight forwarders that manage the transportation service or directly subcontract it, the median response was 150 euros and the average was 210 euros. Given that the value of goods associated with a single import declaration is approximately 15,000 euros, this suggests that the typical direct costs to the freight forwarder from an overnight delay are roughly 1% of shipment value. While freight forwarders may have some options to make up time following a delay, in the majority of cases freight forwarders indicate that they absorb the logistics costs of delay.

Finally, Section V investigates the relative importance of time and monetary costs in operational decision-making by freight forwarders. Respondents were asked about operational decisions in particular situations that impose a direct trade-off between cost and time savings. Freight forwarders were given four choices that indicated a specific trade-off between monetary costs and potential delays. In three of the four cases, cost concerns dominated time savings, while in another case time savings appeared to be more important. Freight forwarders indicated that their clients typically claimed preferential trade agreement tariffs, even if doing so increased the risk of delay. They also risked delay by consolidating shipments, and by delaying shipments in order to get a full truck load. The only case in which time concerns dominated monetary costs was the freight forwarders’ choice of border posts as they indicated that they tend to choose faster border posts even when doing so means higher monetary costs. The reported preference for monetary over time savings is consistent with route choice decisions summarized in section III.

# **II. Data and Characterization of Freight Forwarders**

The analysis in this study is based on survey data for a representative sample of international freight forwarders in Serbia, collected by the market research company Ipsos’ Serbia branch between August 2014 and November 2014. The questionnaire included 54 questions focusing on 4
20 development, which (in its simplest form) is given by output per person. In fact, both the measures of equity that I have proposed in the ordered pair _d_ , and output per capita, are measures of equity according to different normative criteria, as discussed in section 2. Indeed, because utilitarianism was the reigning conception of distributive justice until at least the 1970s, it is unsurprising that GDP per capita was the corollary measure of development in economics.

There is an increasing number of economists who argue that ‘improving equity improves efficiency.’ (The World Development Report (2006) presses this point, but the argument goes back many years.) My objection is not to the substantive claim, that equalizing opportunities often increases productivity and national income, but only to the tradition of assigning utilitarianism _primus inter pares_ as the normative view which _defines_ efficiency.

If the view of economic development I here advocate is adopted, there may be a significant change in policy evaluation. One would not have to justify investment in very disadvantaged social groups by showing that such investment increased total output. In the long run, such a conflict might not exist: but often, policy makers must evaluate the consequences of their policy choices in the short run. If a country is evaluated on the basis of its ordered-pair statistic rather than on GDP per capita, policies could be quite different.

# 6.  A World-Bank proposal for measuring equal opportunity

The World Bank has been an important innovator in bringing considerations of equal opportunity into economic development. Its two important publications, to date,