rafmacalaba/datause-encoder-data huggingface dataset:
Trinidad and Tobago, Barbados and Guyana concentrate about 60 percent of the total Caribbean intraregional traffic, and in general there is a clear concentration of the traffic around the hub countries (Table 9). However, what is striking from recent traffic statistics is the clear downward trend of the intra-regional market particularly in countries like The Bahamas, St. Vincent, Jamaica, and Barbados with a negative annual growth rate of over 10 percent between 2008 and 2013 (Table 9). The trend has been downward since 2005, along with a sharp decline in the number of country pairs being served (Figure 14).

The clear shrinking trend hints at a troubled intra-Caribbean network: Caribbean countries are less likely to connect among themselves than with the rest of the world, even when the use of Caribbean hubs is considered. This tendency also underscores the difficulties of achieving regional integration in practice.

**Figure 14: Intra-Regional travel within the Caribbean**

<!-- Start of picture text --> a. Estimated seat capacity b. Estimated airport pairs<br> 5,000 80<br> 4,000<br>60<br> 3,000<br>40<br> 2,000<br> 1,000 20<br> - 0<br>2001 2003 2005 2007 2009 2011 2013<br>Year<br>Year<br>International airport pairs within Caribbean<br>International seats within Caribbean<br>Airport Pairs<br>Estimated Seats, thousands<br>2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013<br><!-- End of picture text --> _Source: Authors’ calculation based on data provided by Diio (2014)._

# <u>Small Island States</u>

The inter-island network of the smaller island states is relatively difficult to serve, since some distances are very short, and load factors can be low. In addition, there are two systems of hubs, one inside and another outside the small islands, consisting of Barbados and Trinidad externally, and Antigua internally. The outside hubs add operational difficulties while in transit, especially by re-screening passengers and luggage in Barbados.

Leeward Island Air Transport, or LIAT is the dominant method of passenger transport between the islands. The company has a _de facto_ monopoly over the small islands’ internal market. LIAT states that it is “owned by the Governments of Antigua and Barbuda, Barbados and St. Vincent and the Grenadines with a combined shareholding of 90 percent between them. The remaining 10 percent is owned by other Regional Governments and minority shareholders” (LIAT, 2012). Dominica became a shareholder in 2013, with an US$ 3 million equity investment. The airline dates back to 1956.

The inter-island market is mostly served by LIAT (Table 10). British Airways also connects islands but by hopping between islands to drop off and pick up passengers coming from or destined to the UK, rather 39
# Trade Policy Reform, **Efficiency, and Growth**

## Ejaz Ghani and Carl Jayarajah

## The World Bank

" The authors are grateful to several people for their comments including late Bela Belassa, William Branson, Kazi Matin, John Nash, late Alexander Nowicki, Lawrence Summers, and Sulaiman Wasty. The authors are responsible for any remaining errors. Sanliang Yue provided research support.
more cost-disadvantaged. All else equal, this reduces the optimal tari¤ and, naturally, the e¤ect is stronger the larger weight the policy maker places on domestic pro...ts.

(iii) The e¤ect of using import tari¤s to increase domestic consumers’surplus is given by An increase in domestic production costs reduces total supply of food in the domestic market. If consumers’surplus is convex in output, which is true for linear demand functions, this means that the reduction in consumers’surplus due to a marginal tari¤ increase is lower. All else equal, this increases the optimal tari¤ and, naturally, the e¤ect is stronger the larger weight the policy maker places on consumers’surplus.

Thus, we can conclude that the policy maker will optimally respond to a domestic rainfall shortage by lowering import tari¤s if the second of the three above described e¤ects –the reduced e¤ectiveness of import tari¤s as a rent-shifting instrument –is su¢ ciently strong to outweigh the other two e¤ects. Otherwise, the import tari¤ will increase.

The above analysis is based on the simplifying assumption of linear demand. Although the main mechanisms of the model, as given by the three di¤erent e¤ects described above, generalize well beyond the assumption of linear demand, it is worth considering the extent to which our results are robust to alternative demand assumptions. In particular, the result that a tari¤ increase has a larger negative impact on consumers at higher consumption levels relies on the assumption that consumers’surplus is convex in output. For a general inverse demand function p (Q), this requires that In other words, consumers’surplus is convex in output for concave, linear and ‘not-tooconvex’ demand functions. However, since demand for food is likely to become quite inelastic for low consumption levels, consumers’surplus might be concave in output for the range of output levels that are relevant for rainfall shortages that cause a serious cut-back in domestic production.<sup>8</sup> If this is the case, a rainfall shortage will increase the negative e¤ect of import tari¤s on consumers’surplus, thereby increasing the scope for tari¤ reductions as an optimal response to a negative rainfall shock.

> 8 In empirical studies, demand for food is generally found to be inelastic (Andreyeva et. al. 2010). O’Hare and Kammen (2008) argue that it seems reasonable to assume that demand for food becomes less and less elastic as agricultural output declines. As food consumption falls, consequences like malnutrition and starvation begin to appear, impacts much more compelling than the hedonic costs of consuming a less-preferred diet or wasting less food. Consistent with this hypothesis, Andreyeva et. al. (2010) survey a large body of evidence on the price elasticity of demand for food and conclude that demand is relatively more elastic for categories like "food away from home", "soft drinks" and "juice".

9
* ,i,qK,rr---, oef w,, r!' i, . k _I_ fl a i lt io n Pr ocj t.,I ,ince 19F,?.

|Area|Country<br>and Ioan/Credrt1<br>N<br>inrbe r|Appr'rvcJ|Re',earchCorfonent||Current<br>Status<br>of Stkxdie,%<br>includirig<br>Comrpeted Docurnents/Data|
|---|---|---|---|---|
|AFRICA<br>AFRICA<br>AFRICA|Cswtroon Lm 2683-cM<br>Cape Verde CR<sup>1853-CV</sup><br>Chad CR1950-CD|1986<br>|<br>1988<br>1989|Educationalancd<br>Vocational<br>Training.<br>Conduct<br>studJy to prepare proposals<sup>to inprove the</sup><br>efficiency<br>of primary education.<br>Strengthen<br>institutional<br>capacity<br>.<br>(para.3.3p.9)<br>Manpower surveys for voc.<sup>ed. (para.</sup><br>3.11p. 13).<br>Included in component<sup>to establish</sup><br>data systems<br>andprovide consulting<br>services<br>(approx- S8m).<br>Primary Education Upgrading.<sup>Studies on cost of</sup><br>finar-ing<br>educationandlow-cost<sup>methods of</sup><br>schco construction<br>(para. 3.25 p.16).<br>(ii)<br>study of socio-economic<sup>and educational</sup><br>parameters of Municipality<br>of Santa<br>Cruz (1988).<br>Evaluation<br>of test project<br>in 1989<br>(para.<br>3.5p. <sup>10 </sup>Annex 13).<br>Education Rehabilitation.<br>Provision<br>for (i)<br>the monitoring<br>of book distribution<br>(para. 3.5<br>p.11);<br>(ii)<br>the monitoring<br>and evaluation<br>of<br>teacher training<br>(para.<br>3.7p.12);<br>(iii)<br>study community innitiatives<br>in primary<br>education<br>(Annex 3-11);<br>(iv)<br>study payment procedures<sup>for teachers;</sup>|Project<br>suspended shortty<br>after<br>effectiveness<br>in 1987. Currently<br>being substantiatly<br>redesigned<br>However following<br>studies<br>availabte:<br>(i)<br>"Etude detamise en place<sup>d'une systeme</sup><br>de formation<br>par l'apprentissage<br>auCameroun"<br>(doc.9128.286)<br>(ii)<br>"Etude des couts et des<sup>finarcements de</sup><br>leducation"<br>(doc. # 013828; ISl 35660)<br>(iii)<br>Etudes sur lenseignement<br>et ta formation<br>(doc. # D11168-74;ISM31955)<br>Studies not yetavailable<br>Studies not yet started.|

27
ity: 9% of households have zero forgone consumption, while nearly a quarter could reduce expenditure by 10% or more without reducing quantity purchased. If we take the alternative approach of holding expenditure constant and calculating the counterfactual quantities that could be purchased by buying in bulk, we find even larger average values. Households could purchase 33% more kerosene, 50% more cooking bananas, 24% more cooking oil, 46% more onions, 18% more dried sardines – surprisingly large amounts for goods that are part of daily life in Tanzanian villages.

It appears that there could be substantial welfare gains from rearranging purchases to avoid buying small quantities at high mark-ups. Whether that is actually true depends on the reasons that shoppers arrange purchases this way. The second half of the paper is dedicated to understanding why households forego bulk discounts. We consider a range of hypotheses that come from the literature, from discussions with Tanzanians, or from discussions with other researchers. These include: binding liquidity constraints prevent households from buying in bulk; people enjoy going to the market and shopping; it is too costly to transport bulk quantities; it is too costly to store bulk quantities; consumers are not aware of bulk discounts; coordination failures among household members lead to financially inefficient purchasing; frequent purchases are a way to avoid over-consuming stocks; frequent purchases are a way to avoid stocks that attract friends and neighbors requesting hand-outs.

The paper presents evidence against all of these hypotheses except the last two, for which there is support. The finding that households make frequent purchases as a way to ration consumption, perhaps due to worries that they will consume large stocks more quickly than they would like, is based on the analysis of shopping patterns for “temptation goods,” which we identified through a separate survey effort in Tanzania. The suggestive evidence that households purchase in small quantities in order to avoid social taxation—non-household members consuming a portion of their purchases—aligns with recent work on redistributive pressures in similar settings (Anderson and Baland, 2002; Platteau, 2006; Goldberg, 2016; Baland, Guirkinger and Mali, 2011; Alby, Auriol and Nguimkeu, 2013; Jakiela and Ozier, 2016; Squires, 2016).

> which we hold constant in calculating the value of foregone consumption. Hence, the expected financial savings over the course of an entire year is still in the neighborhood of 9%. Of course, the household might have other ways to reinvest that 9% savings and further improve its financial position.

3
_Table 1: Participation in employment by gender and refugee hosting regions_

||Ga|mbella|So|mali|Tigra|y-Afar|Benishan|gul-Gumuz|
|---|---|---|---|---|---|---|---|---|
||Men|Women|Men|Women|Men|Women|Men|Women|
|Refugees|||||||||
|Labor participation (all)|0.19|0.22|0.40|0.20<sup>***</sup>|0.20|0.16<sup>*</sup>|0.16|0.09<sup>***</sup>|
|Wage employment|0.06|0.06|0.27|0.09<sup>***</sup>|0.12|0.07<sup>***</sup>|0.13|0.06<sup>***</sup>|
|Self-employment|0.08|0.09|0.12|0.10|0.06|0.06|0.04|0.02<sup>**</sup>|
|Unpaid employment|0.13|0.16|0.03|0.03|0.03|0.04|0.02|0.02|
|Agriculture|0.02|0.02|0.05|0.03<sup>*</sup>|0.02|0.02|0.01|0.02|
|No. of observation|361|610|920|1053|1496|1022|1420|1519|
|Hosts|||||||||
|Labor participation (all)|||0.66|0.29<sup>***</sup>|0.72|0.50<sup>***</sup>|0.80|0.65<sup>***</sup>|
|Wage employment|||0.33|0.07<sup>***</sup>|0.36|0.14<sup>***</sup>|0.19|0.07<sup>***</sup>|
|Self-employment|||0.16|0.12|0.16|0.20|0.17|0.08<sup>***</sup>|
|Unpaid employment|||0.06|0.05|0.03|0.04|0.07|0.07|
|Agriculture|||0.23|0.09<sup>***</sup>|0.25|0.13<sup>***</sup>|0.54|0.51|
|No. of observation|||329|341|381|487|993|1109|

Notes: Mean comparison across refugees by gender. Asterisks indicate statistical significance at 1% ***, 5% **, and 10% * levels.

Overall, female-headed households are more likely to depend on aid and less likely to participate in the labor market than male-headed refugee households (Figure 4). The gender differences are striking, with only 13% of female-headed refugee households obtaining most of their income from sources other than aid compared to 26% of male-headed refugees.

There are large differences between female- and male-headed households in the sources of their income. Whereas 19% of male-headed households participate in agriculture and wage employment, only 5% of female-headed households participate in these activities. Femaleheaded are more engaged in services (6%) than male-headed households (4%).

Gender differences in labor force participation are significant - most women report being economically inactive and not enrolled in school or college. Summary statistics of variables by the gender of the household head is presented in Table A1 in the appendix.

12
Previously undocumented in the literature, we find that insurance transitions are also large and asymmetrical. Only one-third of workers who change jobs between 2008 and 2009 (nearly 54 percent of those employed in 2009) maintained full social security coverage in both periods, 27 percent maintained incomplete or no coverage, 13 percent gained insurance and the remaining 27 percent saw their situation worsen.

**Table 5: Occupational Transition Matrices**

||||||<br>**To 2009**||||
|---|---|---|---|---|---|---|---|---|
|||**Formal**<br>**Salaried**|**Formal Self-**<br>**Employed**|**Informal**<br>**Salaried**|**Informal Self-**<br>**Employed**|**Unemployed**|**Inactive**|**Ocupational**<br>**Distribution**|
||**Formal Salaried**|**65.1**|0.8|10.0|4.6|5.0|14.4|17.7|
|**8**|**Formal Self-Employed**|12.7|**19.0**|7.8|45.8|2.8|12.0|1.4|
|**200**|**Informal Salaried**|17.4|1.2|**34.4**|17.5|7.9|21.7|12.1|
|**m**|**Informal Self-Employed**|3.6|1.7|14.2|**54.8**|4.8|20.9|17.2|
|**Fro**|**Unemployed**|10.9|0.4|15.0|13.6|**23.6**|36.5|5.7|
||**Inactive**|2.0|0.3|4.2|6.0|4.5|**83.1**|45.9|
||**Ocupational Distribution**|15.9|1.0|11.2|16.5|6.1|49.2|100|

Source: Authors’ estimates from Fedesarrollo (2008, 2009) ELS An additional question is how socioeconomic status affects the magnitude and direction of occupational transitions and transitional asymmetries. Several dimensions can capture socioeconomic status, and this study uses a simple characterization based on whether the household per capita income of a given individual is below or above the sample median of household per capita incomes. Using this simple measure is advisable for a number of reasons. First, other obvious alternatives are troublesome. For example, the means-tested targeting mechanism, SISBEN, categorizes households by socioeconomic condition based on a set of personal and household features and assets, but it is not regularly updated— certainly not between 2008 and 2009. A second alternative, the official poverty line, may not inspire sufficient confidence as there were structural changes in its calculation in 2006 when a new household survey, _Gran Encuesta Integrada de Hogares_ , replaced the _Encuesta Permanente de Hogares_ without 14
Manufacturing wage rate, a proxy for labor costs, carries a negative but mostly insignificant sign. A strong negative coefficient on wage rates would imply a dominance of vertical FDI in host market. However, as suggested from previous analysis, FDI in CEECs are predominantly of horizontal type with a focus of market penetrating. As a result, labor costs are more likely to be downplayed by foreign investors who are mainly interested in accessing larger market and seeking efficiency. To them, labor quality in the host market, a critical factor of operational productivity and efficiency, is of much higher relevance. In line with the reasoning, our labor quality variable as proxied by illiteracy rate is found to be negative and significant. Thus, low level of skilled labor as indicated by a higher illiteracy rate tends to deter FDI inflows, reflecting the importance of labor quality in determining CEECs FDI inflows.

In the literature, tariffs are often considered an integral part of trade costs which are found to have a significant impact on FDI flows. However, on an aggregate level, their sign becomes ambiguous due to the different effect a horizontal or vertical FDI would bring. Specifically, they tend to attract horizontal FDI for domestic market penetrating purpose, but repel vertical FDI due to cost concerns. Thus, the sign would depend on which kind of FDI is dominant in the particular host country. Our results show a consistently positive though insignificant estimate, thus once again suggesting a dominant horizontal FDI among transition economies. Tax burden which is proxied by our inclusion of corporate income tax rate, even though keeping the right sign, seems to have only a marginal effect on FDI. One possible explanation, according to OECD study (2003), is that tax incentives may in certain cases be inefficient in promoting FDI. As they found out in their report, large MNCs usually are becoming more adept at relieving 23
The paucity of actions notified under the infant industry provision should not be taken as an indication that developing country governments did not apply trade restrictions for this purpose. Anjaria (1987, p. 671) concludes that the explanation for the larger number of measured notified under this provision is its easier procedural requirements. Infant industry measures (Article XVIIIC) require prior notification to the GATT, and compensation for affected exporters. Article XVIIIC also provides that the GATT CONTRACTING PARTIES can disapprove such an action and can authorize retaliation if a not-approved action in taken. Balance of payments measures (Article XVIIIB) are not subject to these restraints, nor are there time limits on how long they may be in place. The facts of usage suggest that measures notified under Article XVIIIB were often intended to support particular industries rather than to restrict imports generally. Anjaria reports (1987, p. 680) that for each country the aggregate of measures notified under XVIIIB was made up of many different applications, and that for three-fourths of the developing countries that notified measures the aggregate covered less than half of the import categories.

# <u>Rationale</u>

When the GATT was adopted the widely believed Prebisch thesis cautioned that commodity earnings would inexorably decline and industrialization would require vast imports of capital goods. Thus developing countries would continuously suffer balance of payments problems.<sup>24</sup> Reflecting this thinking, GATT soon evolved a tolerance for developing country trade restrictions.<sup>25</sup>

# <u>Discipline</u>

Again we find reciprocity to be the effective discipline. By the 1970s a number of developing countries had become important in world trade, both as potential export markets and as suppliers of imports that increasingly prompted developed country industries to call for protection. The intensified commercial presence of developing countries provoked industrial countries to press for market-opening actions by developing countries. Pressure was applied both through the GATT Balance of Payments Committee and the Trade Committee of the OECD. One of the focal points of this pressure was reduced use by developing countries of Article XVIIIB restrictions.

The Uruguay Round agreements include an understanding on balance of payments provisions intended to reduce overall use as well as to shift usage to tariffs instead of quantitative restrictions. Under pressure of this agreement, developing countries have drastically reduced the number of measures justified under GATT’s balance of payments provision. As Table 3.2 documents,

> 24 Little (1982) is a good source on development thinking of that era. 25 Hudec (1987) documents and analyzes this evolution.

15
MALI’S INFRASTRUCTURE: A CONTINENTAL PERSPECTIVE

**Figure 2. Infrastructure deficits hold back firms’ productivity**

- a. Percentage of productivity handicap attributable to infrastructure

<!-- Start of picture text --> Benin<br>Senegal<br>Mali<br>Mauritania<br>Burkina Faso<br>Niger<br>0% 20% 40% 60% 80% 100%<br>infrastructure non-infrastructure<br><!-- End of picture text -->

- b. Percentage of productivity handicap attributable to infrastructure subsectors

<!-- Start of picture text --> Mali<br>Senegal<br>Mauritania<br>Niger<br>Burkina Faso<br>Benin<br>0% 20% 40% 60% 80% 100%<br>Electricity Customs clearance<br>Transportation ICT<br>Water<br><!-- End of picture text --> Source: Escribano, Guasch, and Pena 2009.

# The state of Mali’s infrastructure

Mali is an enormous semi-arid territory without direct access to a sea port. Mali’s land area is the largest of the ECOWAS countries and one of the largest in Africa. It has a very low population density (figure 3a), a clear concentration of natural resources in the south (figure 3d), and varying levels of poverty and wealth (figure 3b). Mali’s territory is dominated by the Senegal and Niger River deltas, both of which have potential that remains largely undeveloped (figure 2b).

4
- Geruso, Michael and Dean Spears. 2014. “Sanitation and Health Externalities: Resolving the Muslim Mortality Paradox.” Working paper, UT Austin.

- Glewwe, Paul, Hanan G. Jacoby, and Elizabeth M. King. 2001. “Early Childhood Nutrition and Academic Achievement: A Longitudinal Analysis.” _Journal of Public Economics_ 81 (3):345–368.

- Hathi, Payal, Sabrina Haque, Lovey Pant, Diane Coffey, and Dean Spears. 2014. “Do Toilets Spill Over?: Population Density and the Effect of Sanitation on Early-Life Mortality and Health.” Working paper, Princeton University and r.i.c.e.

- Hatton, Timothy J. 2014. “How Have Europeans Grown so Tall?” _Oxford Economic Papers_ 66 (2):349–372.

- Humphrey, Jean H. 2009. “Child Undernutrition, Tropical Enteropathy, Toilets, and Handwashing.” _The Lancet_ 374 (9694):1032 – 35.

- Kov, Phyrum, Susanna Smets, Dean Spears, and Sangita Vyas. 2013. “Growing Taller Among Toilets: Evidence from Changes in Sanitation and Child Height in Cambodia, 2005-2010.” Working paper, r.i.c.e.

- Lin, Audrie, Benjamin F. Arnold, Sadia Afreen, Rie Goto, Tarique Mohammad Nurul Huda, Rashidul Haque, Rubhana Raqib, Leanne Unicomb, Tahmeed Ahmed, John M. Colford Jr., and Stephen P Luby. 2013. “Household Environmental Conditions Are Associated with Enteropathy and Impaired Growth in Rural Bangladesh.” _American Journal of Tropical Medicine and Hygiene_ 89 (1):130–137.

- Rosenzweig, Mark R. and Oded Stark. 1989. “Consumption Smoothing, Migration, and Marriage: Evidence from Rural India.” _Journal of Political Economy_ 97 (4):905–926.

- Spears, Dean. 2012a. “Effects of Rural Sanitation on Infant Mortality and Human Capital: Evidence from a Local Governance Incentive in India.” Working paper, Princeton University.

- ———. 2012b. “Height and Cognitive Achievement Among Indian Children.” _Economics and Human Biology_ 10 (2):210–219.

———. 2012c. “Sanitation and Open Defecation Explain International Variation in Children’s Height: Evidence from 140 Nationally Representative Household Surveys.” Working paper, Princeton University.

- ———. 2013. “How Much International Variation in Child Height Can Sanitation Explain?” Policy Research Working Paper no. 6351, The World Bank.

- Spears, Dean and Sneha Lamba. 2012. “Effects of Early-Life Exposure to Rural Sanitation on Childhood Cognitive Skills: Evidence from India’s Total Sanitation Campaign.” Working paper, Princeton University.

- Thorat, Sukhadeo and Katherine S. Neuman. 2012. _Blocked by Caste: Economic Discrimination in Modern India_ . Oxford.

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