rafmacalaba/datause-encoder-data huggingface dataset:
Corporate governance and bank
            performance : a joint analysis of the static, selection, and
            dynamic effects of domestic, foreign, and state ownership
The authors jointly analyze the static,
            selection, and dynamic effects of domestic, foreign, and
            state ownership on bank performance. They argue that it is
            important to include indicators of all the relevant
            governance effects in the same model.
            "Nonrobustness" checks (which purposely exclude
            some indicators) support this argument. Using data from
            Argentina in the 1990s, their strongest and most robust
            results concern state ownership. State-owned banks have poor
            long-term performance (static effect), those undergoing
            privatization had particularly poor performance beforehand
            (selection effect), and these banks dramatically improved
            following privatization (dynamic effect. However, much of
            the measured improvement is likely due to placing
            nonperforming loans into residual entities, leaving
            "good" privatized banks.
Corporate governance and bank
            performance : a joint analysis of the static, selection, and
            dynamic effects of domestic, foreign, and state ownership
WPS3632

# **Corporate Governance and Bank Performance: A Joint Analysis of the Static, Selection, and Dynamic Effects of Domestic, Foreign, and State Ownership**

Allen N. Berger Board of Governors of the Federal Reserve System Wharton Financial Institutions Center George R.G. Clarke World Bank DECRG Robert Cull World Bank DECRG Leora Klapper World Bank DECRG Gregory F. Udell Indiana University

## **Abstract**

We jointly analyze the static, selection, and dynamic effects of domestic, foreign, and state ownership on bank performance. We argue that it is important to include indicators of all the relevant governance effects in the same model. “Nonrobustness” checks (which purposely exclude some indicators) support this argument. Using data from Argentina in the 1990s, our strongest and most robust results concern state ownership. State-owned banks have poor long-term performance (static effect), those undergoing privatization had particularly poor performance beforehand (selection effect), and these banks dramatically improved following privatization (dynamic effect). However, much of the measured improvement is likely due to placing nonperforming loans into residual entities, leaving “good” privatized banks.

JEL Classification Numbers: G21, G28, G34, F36 Keywords: Bank, Governance, M&A, Foreign Acquisition, Privatization World Bank Policy Research Working Paper 3632, June 2005 _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._ The authors thank the journal referee; the conference discussants, Andrew Powell and Phil Strahan; and other participants at the World Bank Conference on Bank Privatization for helpful suggestions; Jalal Akhavein and Christa Bouwman for special help; and Juan Miguel Crivelli and Maria del Pilar Casal for outstanding research assistance.

Please address correspondence to Allen N. Berger, Mail Stop 153, Federal Reserve Board, 20th and C Streets. NW, Washington, DC 20551, call 202-452-2903, fax 202-452-5295, or email <u>aberger@frb.gov.</u>
Quantifying the rural-urban gradient
            in Latin America and the Caribbean
This paper addresses the deceptively
            simple question: What is the rural population of Latin
            America and the Caribbean (LAC)? It argues that rurality is
            a gradient, not a dichotomy, and nominates two dimensions to
            that gradient: population density and remoteness from large
            metropolitan areas. It uses geographically referenced
            population data (from the Gridded Population of the World,
            version 3) to tabulate the distribution of populations in
            Latin America and in individual countries by population
            density and by remoteness. It finds that the popular
            perception of Latin America as a 75 percent urban continent
            is misleading. Official census criteria, though inconsistent
            between countries, tend to classify as "urban"
            small settlements of less than 2,000 people. Many of these
            settlements are however embedded in an agriculturally based
            countryside. The paper finds that about 13 percent of Latin
            America populations live at ultra-low densities of less than
            20 per square kilometer. Essentially these people are more
            than an hour's distance from a large city, and more
            than half live more than four hours' distance. A
            quarter of the population of Latin America is estimated to
            live at densities below 50, again essentially all of them
            more than an hour's distance from a large city. Almost
            half (46 pecent) of Latin America live at population
            densities below 150 (a conventional threshold for urban
            areas), and more than 90 percent of this group is at least
            an hour's distance from a city; about one-third of them
            (18 percent of the total) are more than four hours distance
            from a large city.
Comparison of institutional
            arrangements for river basin management in eight basins
This study represents an effort toward
            understanding conditions that affect successful or
            unsuccessful efforts to devolve water resource management to
            the river basin level and secure active stakeholder
            involvement. A theoretical framework is used to identify
            potentially important variables related to the likelihood of
            success. Using a comparative case-study approach, the study
            examined river basins where organizations have been
            developed at the basin scale and where organizations perform
            management functions such as planning, allocation, and
            pricing of water supplies, flood prevention and response,
            and water quality monitoring and improvement. This paper
            compares the alternative approaches to basin governance and
            management adopted in the following river basins: the
            Alto-Tiete and Jaguaribe River Basins, Brazil; the Brantas
            River Basin, East Java, Indonesia; the Fraser River Basin,
            British Columbia, Canada; the Guadalquivir Basin, Spain; the
            Murray-Darling River Basin, Australia; the Tarcoles River
            Basin, Costa Rica; and the Warta River Basin, Poland. The
            analysis focuses on how management has been organized and
            pursued in each case in light of its specific geographical,
            historical, and organizational contexts and the evolution of
            institutional arrangements. The cases are also compared and
            assessed for their observed degrees of success in achieving
            improved stakeholder participation and integrated water
            resources management.
Decentralization of river basin
            management : a global analysis
Decentralization and increased
            stakeholder involvement have been major elements of water
            sector reform as ways to promote sustainable and integrated
            resource management particularly of river basins. Based on
            an analytical framework for relating decentralization and
            stakeholder involvement to improved river basin management,
            this paper infers several hypotheses about factors
            associated with greater or lesser likelihood of success of
            the decentralization process using data from 83 river basins
            worldwide. The results suggest that physical, political,
            economic, financial, and institutional characteristics of
            the basin do affect the process and the level of performance
            of the decentralization. In particular, the presence of
            water scarcity may be a stimulus to reform, uniting the
            stakeholders in the basin and leading to better performance;
            organized user groups push for the initiation of
            decentralization reforms but may be associated with costs to
            the process and difficulty of achieving decentralization;
            the existence of dispute resolution mechanisms supports
            stakeholder involvement and improves decentralization
            performance; where stakeholders accepted greater financial
            responsibility, complying with tariffs and contributing to
            the budget for basin management, the decentralization
            process and performance measures increased; basins with
            higher percentages of their budgets from external
            governmental sources benefited from better stability and
            support and it shows in the performance of the
            decentralization process.
Decentralization of river basin
            management : a global analysis
WPS3637

# **DECENTRALIZATION OF RIVER BASIN MANAGEMENT: A GLOBAL ANALYSIS**

**Ariel Dinar Karin Kemper William Blomquist Michele Diez Gisèle Sine William Fru**

World Bank Policy Research Working Paper 3637, June 2005 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.

This paper is a product of the study, “Integrated River Basin Management and the Principle of Managing Water Resources at the Lowest Appropriate Level – When and Why Does It (Not) Work in Practice?” The Research Support Budget of the World Bank provided major funding. The project was carried out by the Agriculture and Rural Development Department at the World Bank. The Water Resources Management Group and the South Asia Social and Environment Unit at the World Bank have provided additional support. The study core team includes Karin Kemper and Ariel Dinar (Co-Task Team Leaders, World Bank), William Blomquist and Anjali Bhat (consultants, Indiana University), and Michele Diez (World Bank), William Fru (consultant), and Gisèle Sine (International Network of Basin Organizations). Basin case study consultants include Maureen Ballestero (Tárcoles - Costa Rica), Ken Calbick and David Marshall (Fraser - Canada), Rosa Formiga (Alto Tietê and Jaguaribe - Brazil), Consuelo Giansante (Guadalquivir - Spain), Brian Haisman (Murray Darling - Australia), Kikkeri Ramu and Trie Mulat Sunaryo (Brantas - Indonesia), and Andrzej Tonderski (Warta - Poland). Help in the statistical analysis was provided by Pradeep Kurukulasuriya. Useful comments on this paper by Philip Keefer are acknowledged.
Efficiency of public spending in
            developing countries : an efficiency frontier approach
Government spending in developing
            countries typically account for between 15 and 30 percent of
            GDP. Hence, small changes in the efficiency of public
            spending could have a major impact on GDP and on the
            attainment of the government's objectives. The first
            challenge that stakeholders face is measuring efficiency.
            This paper attempts such quantification and has two major
            parts. The first part estimates efficiency as the distance
            between observed input-output combinations and an efficiency
            frontier (defined as the maximum attainable output for a
            given level of inputs). This frontier is estimated for
            several health and education output indicators by means of
            the Free Disposable Hull (FDH) and Data Envelopment Analysis
            (DEA) techniques. Both input-inefficiency (excess input
            consumption to achieve a level of output) and
            output-inefficiency (output shortfall for a given level of
            inputs) are scored in a sample of 140 countries using data
            from 1996 to 2002. The second part of the paper seeks to
            verify empirical regularities of the cross-country variation
            in efficiency. Results show that countries with higher
            expenditure levels register lower efficiency scores, as well
            as countries where the wage bill is a larger share of the
            government's budget. Similarly, countries with higher
            ratios of  public to private financing of the service
            provision score lower efficiency, as do countries plagued by
            the HIV/AIDS epidemic and those with higher income
            inequality. Countries with higher aid-dependency ratios also
            tend to score lower in efficiency, probably due to the
            volatility of this type of funding that impedes medium term
            planning and budgeting. Though no causality may be inferred
            from this exercise, it points at different factors to
            understand why some countries might need more resources than
            others to achieve similar educational and health outcomes.
Poverty traps, aid, and growth
The authors examine the empirical
            evidence in support of the poverty trap view of
            underdevelopment. They calibrate simple aggregate growth
            models in which poverty traps can arise due to either low
            saving or low technology at low levels of development. They
            then use these models to assess the empirical relevance of
            poverty traps and their consequences for policy. The authors
            find little evidence of the existence of poverty traps based
            on these two broad mechanisms. When put to the task of
            explaining the persistence of low income in African
            countries, the models require either unreasonable values for
            key parameters, or else generate counterfactual predictions
            regarding the relations between key variables. These results
            call into question the view that a large scaling-up of aid
            to the poorest countries is a necessary condition for sharp
            and sustained increases in growth.
Institutional and policy analysis of
            river basin management : the Alto-Tiete river basin, Sao
            Paulo, Brazil
The authors describe and analyze river
            basin management in the most intensely urbanized and
            industrialized region of Brazil. The area covered by the
            Alto Tiete basin is almost coterminous with the Metropolitan
            Region of Sao Paulo. With a drainage area of 5,985 square
            kilometers (2.4 percent of the state's territory), the
            basin encompasses 35 of the 39 municipalities and 99.5
            percent of the population of Greater Sao Paulo. Population
            growth and urban sprawl in Greater Sao Paulo have been rapid
            and uncontrolled in recent decades. In 2000, 17.8 million
            people lived in the basin and by 2010 the population is
            estimated to reach 20 million. This massive human occupation
            was accompanied by the large-scale construction of water
            infrastructure, including dams, pumping stations, canals,
            tunnels, and inter-basin transfers to and from neighboring
            basins. Today, the Alto-Tiete basin is served by a complex
            hydraulic and hydrological system. Despite this extensive
            water infrastructure, the water availability of the region
            is still very low (201
Insurance and liquidity : panel evidence
The author presents evidence that
            balance sheet effects are critical determinants of both the
            likelihood of a crisis and of income losses following a
            crisis. She tests the validity of "insurance" and
            "liquidity" models of currency crisis. Both models
            predict that the occurrence of a balance of payments crisis
            is conditional on the health of the nation's accounts
            in relation to the rest of the world. Problems in the
            balance sheet either cause a financial crisis that develops
            into a run on the central bank, or generate a run on the
            central bank once contingent liabilities exceed reserves and
            the yield differential moves against domestic assets.
            Estimations of crisis likelihoods based on several
            specifications of single and simultaneous equation probit
            models confirm that output losses following the crisis are
            persistent and conditional on the balance sheet indicator,
            that is, the ratio of the stock of gross external
            liabilities to assets. Measures of contingent liabilities,
            capital flight, and financial depth perform well as crisis
            predictors, and the marginal effects on the probability of a
            crisis are of the expected sign. The panel data set covers
            the time period 1973 through 2003 for 90 countries.
The economic consequences of health shocks
WPS3644 The Economic Consequences of Health Shocks

# Adam Wagstaff

Development Research Group and East Asia & Pacific Region The World Bank, Washington DC, USA

# World Bank Policy Research Working Paper 3644, June 2005

_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._

**Author’s contact details:** The World Bank, Mailstop MC3-306, 1818 H Street NW, Washington, D.C. 20433, USA. Tel. (202) 473-0566. Fax (202)-522 1153. Email: <u>awagstaff@worldbank.org.</u>
Applications of negotiation theory
            to water issues
The authors review the applications of
            noncooperative bargaining theory to water related
            issues-which fall in the category of formal models of
            negotiation. They aim to identify the conditions under which
            agreements are likely to emerge and their characteristics,
            to support policymakers in devising the "rules of the
            game" that could help obtain a desired result. Despite
            the fact that allocation of natural resources, especially
            trans-boundary allocation, has all the characteristics of a
            negotiation problem, there are not many applications of
            formal negotiation theory to the issue. Therefore, the
            authors first discuss the noncooperative bargaining models
            applied to water allocation problems found in the
            literature. Key findings include the important role
            noncooperative negotiations can play in cases where binding
            agreements cannot be signed; the value added of politically
            and socially acceptable compromises; and the need for a
            negotiated model that considers incomplete information over
            the negotiated resource.
Is a guaranteed living wage a good
            anti-poverty policy
Minimum wages are generally thought to
            be unenforceable in developing rural economies. But there is
            one solution - a workfare scheme in which the government
            acts as the employer of last resort. Is this a
            cost-effective policy against poverty? Using a
            microeconometric model of the casual labor market in rural
            India, the authors find that a guaranteed wage rate
            sufficient for a typical poor family to reach the poverty
            line would bring the annual poverty rate down from 34
            percent to 25 percent at a fiscal cost representing 3-4
            percent of GDP when run for the whole year. Confining the
            scheme to the lean season (three months) would bring the
            annual poverty rate down to 31 percent at a cost of 1.3
            percent of GDP. While the gains from a guaranteed wage rate
            would be better targeted than a uniform (untargeted) cash
            transfer, the extra costs of the wage policy imply that it
            would have less impact on poverty.
Regime-switching in exchange rate
            policy and balance sheet effects
The authors apply regime-switching
            methods to a monetarist model of exchange rates and identify
            well-defined intervention policy cycles. The policy response
            indices include a standard exchange market pressure-based
            index and a model-based volatility ratio that is endogenized
            relative to Japan, assumed to be a "benchmark"
            floater. The authors find strong evidence that balance sheet
            effects, proxied by the stock ratio of external liabilities
            to assets, and economic performance, as measured by GDP and
            stock market indices, determine the cost of the regime
            shift. They use a panel of quarterly data from 1985 to 2004
            for a sample of 15 countries, mostly in East Asia and Latin America.
Incentives to learn
The authors report results from a
            randomized evaluation of a merit scholarship program for
            adolescent girls in Kenya. Girls who scored well on academic
            exams received a cash grant and had school fees paid. Girls
            eligible for the scholarship showed significant gains in
            academic examination scores (average gain 0.15 standard
            deviations). There was considerable sample attrition and no
            significant program impact in the smaller of the two program
            districts, but in the other district girls showed large
            gains (average gain 0.22-0.27 standard deviations), and
            these gains persisted one full year following the
            competition. There is also evidence of positive program
            externalities on learning-boys (who were ineligible for the
            awards) also showed sizable average test gains. Both student
            and teacher school attendance increased in the program schools.