rafmacalaba/datause-encoder-data huggingface dataset:
scheme. It could be that there were synergies between the incentives to the facilities and the users. It is noteworthy though that we find a difference in outcomes between the treatment and control groups although some health centers could independently endow women with gifts in order to increase their performance with respect to incentivized indicators. As the number of countries in Sub-Saharan Africa that are introducing or scaling up pay-for-performance schemes to incentivize health providers is rapidly increasing (World Bank 2015), this study shows that incentivizing users can enhance the impact of these schemes on service utilization.

Although the results are consistent with previous studies of schemes that incentivize health service utilization with conditional transfers, they are remarkable considering that most eligible women reported not receiving the transfers.<sup>12</sup> It is possible that women went to the health centers with the expectation to receive the gifts and only learned about the lack of gifts while already receiving the services. Although funding provided to health centers to procure the gifts stopped, the program itself was not announced to be terminated, so both health providers and users could have been under the impression that the program was ongoing. Our analysis of the RDHS 2014-15 data suggests that the estimated impact might have been larger if the health centers were not experiencing stock outs.

> 12 This is partially due to the timing of the follow-up survey months after the last funding was transferred to the health centers.

11
- 100-

Therefore in comparing the cost of credit taking into consideration the actuarial estimates of catastrophe occurrence, we would express the present value of the annual cost of the credit as: In other words, in each year, the expected cost of the credit discounted from perpetuity equals: the non-probability (1 -p) of the event multiplied by the product of the commitment fee and the estimated maximum loss (which in this case is used as the estimate of the required credit amount); plus the probability (p) of the event occurring, multiplied by the present value of the cost of the credit both in terms of interest and principal repayment. Again, the term EPL is used as the equivalent of the credit amount, and i/m(EPL) is the amount subtracted from principal outstanding each year for the purposes of calculating the interest amount due. Similarly, the term EPL/m reflects the principal installments payable assuming level payment of principal each year with no grace period. Prior to discounting the entire expression by 'r' given the annual uniform expected 'annuity value', the expression is discounted by each period's risk free rate since each repayment of interest and principal carries with it a different relative present value.

The above principle of measurement is therefore used in this report to determine the cost effectiveness of utilizing alternative risk transfer and risk financing instruments (LpV versus Rpv) to complement traditional reinsurance, and in the process obtain a more secure and stable price for coverage which is possible with long term credit facilities. Using simulations over a 200-400 year period, and assuming a LIBOR cost of financing for credits with a ten year principal repayment period, risk financing becomes more optimal than reinsurance at specified event probability points. These are further elaborated below, however, for the purposes of testing feasibility, the 200 and 400 year elapsed periods are used instead of the 'perpetuity' since the former is more realistic in terms of "viable period sustainability". The reinsurance rates used reflect the current low rates for catastrophe risk - this becomes a very conservative assumption as rates appear to be at a cyclical low, and any increase in rates would result in more favorable outcomes for risk financing instruments.

# **_Applying ESC Market Data to the Insurance Model_**

Property rates across the OECS, Barbados and Trinidad & Tobago vary considerably. This part of the region has three risk sub-zones, with the northern zone (Antigua & Barbuda, St. Kitts & Nevis) considered the higher risk area, the middle zone (Dominica, St. Lucia, Barbados) being medium risk, and the southern zone (St. Vincent & the Grenadines, Grenada, Trinidad & Tobago) being the lowest risk zone, particularly in terms of hurricane activity.
**The external tariff liberalization agenda has yet to be completed.** Notwithstanding the progress made in the last decade, the level of tariff protection in the MENA region vis-à-vis the rest of the world remains relatively high by international standards. According to the Tariff-only Trade Restrictiveness Index (TTRI),<sup>14</sup> only the South Asia region had a level of tariff

restrictiveness higher than the MENA region in 2008 (Figure 4). The MENA region compares unfavorably with its main competitors in Eastern Europe and Central Asia, Latin America and the Caribbean, and East Asia and the Pacific—the new dynamic poles of the world economy. In particular, agriculture in the Arab world is still relatively heavily protected by high tariffs. Further external liberalization is all the more important as some countries may be adversely affected by trade diversion and the economic size of the Arab world is limited. Arab countries that are members of the PAFTA represents a little less than Spain’s GDP. With relatively small domestic markets, trade and investment liberalization become key to integrate the region into production sharing or processing-type of trade, where each country specializes in its areas of comparative advantage and factor endowment to serve bigger markets. As discussed below, a pre-condition for this to materialize, however, is a substantial increase in the efficiency of logistics and other trade services.

**_Figure 4.  Tariff-only Trade Restrictiveness Index (TTRI) by region, 2008_**

<!-- Start of picture text --> TTRI<br>Percent<br>25<br>20<br>15<br>10<br>5<br>0<br>East Asia & Europe & Central Latin America & Middle East & South Asia Sub-Saharan<br>Pacific Asia Caribbean North Africa Africa<br>Total trade Agrigulture Manufacturing<br><!-- End of picture text --> Source: World Bank and UNCTAD staff estimates.

**Non-tariff measures (NTMs) have become the most important barriers to trade in the Arab world.** While there has been tariff liberalization under the PAFTA, NTMs—including straightforward border closures—continue to impede regional integration. These include

> 14 The TTRI is calculated as a weighted sum of ad valorem tariffs and ad valorem equivalent of specific duties, where the weights are import volumes and import demand elasticities.

13
community infrastructure variables are better proxies of the living standards of reference groups. °° will now turn to a more detailed discussion of the estimation of Model 2. Following Ravallion and Lokshin (2002), the Aldrich-Nelson Pseudo R?, corrected according to Veall and Zimmermann (1996), is used to measure overall fit. While the overall fit of the welfare regressions is higher than the one of the power regressions, the top panel of Table 6 shows that the model does well in predicting the overall shares of the step categories for both welfare and power (rows 1 to 4). Table 6 also displays the predicted probabilities for two key binary economic and social variables: wage earner (versus being unemployed) and mother tongue Tetun (versus having none of the four most common local languages as mother tongue). Being wage earner is associated with high welfare rungs (Row 7), confirming Hypothesis 1, and mother tongue Tetun is associated with high power rungs (Row 16), consistent with Hypothesis 2. By contrast, wage earners are on lower power rungs than the unemployed (Row 13, and native Tetun speakers are on lower welfare rungs than those with other mother tongues (Row 10). As a result, relative to the power distribution, being wage earners decreases the probability mass on the low rungs (Row 17), and mother tongue Tetun increases the probability mass on the low rungs (Row 18), in line with Hypothesis 2. °" Table 7 shows the marginal effects for the bottom four steps of all independent variables. The estimated threshold values of Model 2 in Table 6 are consistent with a linear specification. Table 7 displays the OLS estimation of Model 2 (columns 6 to 7 and 12 to 13) and the p-values of F-tests for equality of parameters between the welfare and power models (Column 14).

4.4. Welfare This section will dicuss the estimation results for welfare and power in 2001 of Model 2. It discusses first the basic characteristics, and then moves on to economic and social features.

30 Defining the reference group at the hamlet rather than village level leads to smaller (closer to zero) and less significant coefficients. In contrast to ?, there is no evidence that inequality matters for self-assessed well-being. Quintile indicators, which account for the households position within the consumption distribution either for the population as a whole or specific to the individual’s language group, are insignificant. 3! The 6th to 9th rungs of the power distribution are merged into one single rung for the comparison with the welfare distribution in rows 17 and 18.
and real GDP (Table 2). The tool uses Cagan money demand function to estimate base money as a function of expected inflation.<sup>13</sup> This tool also assumes a default value for the semi-elasticity of money demand with respect to inflation, 0.3, consistent with previous findings of seigniorage maximizing rate of inflation of around 300 percent for Turkey.<sup>14</sup> Based on these assumptions, seigniorage revenue is projected at about 0.6 percent of GDP on average during the projection period.

_Table 2 Benchmarking Revenue from Seigniorage_

||_Base_<br>_year_<br>|||_Projection_<br>|_Period_<br>|||
|---|---|---|---|---|---|---|---|
||2005|2006|2007|2008|2009|2010|2011|
|Real GDP growth,||||||||
|percent|4.8|5.0|5.0|5.0|5.0|5.0|5.0|
|Inflation rate, percent|6.8|6.0|4.5|3.5|3.5|3.5|3.5|
|Base money, percent|6.11|6.05|6.01|6.01|6.01|6.01|6.01|
|of GDP||||||||
|Seignorage revenue,<br>percent of GDP||0.71|0.63|0.61|0.61|0.61|0.61|

The base case scenario for public debt dynamics assumes continued commitment to maintain high primary fiscal surpluses (6.5 percent of GDP) over the projection period. The CPI inflation is expected to decline further, consistent with the inflation target of 3.5 percent per year. The real interest rates on domestic and external public debt are projected to stabilize at about 10 and 8 percent per year, respectively. The real exchange rate is also assumed to remain broadly stable, appreciating by less than one percent per year. Following the strong growth performance in 2002-2004, growth rates are expected to stabilize at 5 percent, considered the potential growth rate. As a result, in this baseline scenario, the net public debt-to-GDP ratio will continue to decline, falling below 60 percent in 2006, further below 50 percent in 2008 and reaching 29 percent in 2011 (Figure 2a and b).

Fiscal adjustment and strong growth will gain additional importance in debt reduction. Based on the projected debt-to-GDP ratios and macroeconomic scenario, the composition of the change in these ratios for 2006-11 indicates the contribution of fiscal adjustment (primary surplus) amounts to about 2/3 of all debt reducing items, while continuing healthy growth also plays a

> 13 See the accompanying technical instruction manual, section IV, World Bank WP No.4170.

> 14 Note that this is consistent with previous findings of seigniorage maximizing rate of inflation, 1/η, of around 300 percent for Turkey. For more detailed financial sector model, please see Anand and van Wijnbergen(1989).

19
**Table 5: Impact of Internet on Homogeneous and Differentiated Goods (SUR results)**

||(1)|(2)|
|---|---|---|
|VARIABLES|Homogeneous|Differentiated|
|Internet adoption exporter (log)|-0.028***|0.317***|
||(0.005)|(0.005)|
|Internet adoption importer (log)|0.129***|0.119***|
||(0.006)|(0.006)|
|Distance (log)|-1.181***|-1.388***|
||(0.007)|(0.006)|
|GDP exporter (log)|0.888***|1.118***|
||(0.003)|(0.003)|
|GDP importer (log)|0.735***|0.639***|
||(0.004)|(0.004)|
|Contiguity|1.311***|1.031***|
||(0.029)|(0.027)|
|Common language|0.439***|0.563***|
||(0.016)|(0.014)|
|Colony|0.976***|1.049***|
||(0.041)|(0.038)|
|Common legal origin|0.475***|0.264***|
||(0.011)|(0.003)|
|Observations|160,592|160,592|
|R-squared|0.60|0.69|
|Year FE|Yes|Yes|
|Importer|Yes|Yes|
|Exporter|Yes|Yes|
|Standard errors in parentheses|||
|*** p<0.01, ** p<0.05, * p<0.1|||

# **4. Robustness Checks**

## (a) Instrumental Variables

There may be a concern that the results are subject to an endogeneity bias. The extent of Internet adoption in a country can be influenced by international trade, given that a country with higher trade and higher income can afford more telecommunications infrastructure and promote more Internet adoption. A suggested method to circumvent this issue is to lag the Internet adoption variable, as is commonly done 11
WPS3687

# Re-Interpreting Sub-Group Inequality Decompositions

Chris Elbers, Peter Lanjouw, Johan A. Mistiaen, and Berk Özler<sup>1</sup>

## **Abstract**

We propose a modification to the conventional approach of decomposing income inequality by population sub-groups. Specifically, we propose a measure that evaluates observed between-group inequality against a benchmark of maximum between-group inequality that can be attained when the number and relative sizes of groups under examination are fixed. We argue that such a modification can provide a complementary perspective on the question of whether a particular population breakdown is salient to an assessment of inequality in a country. As our measure normalizes between-group inequality by the number and relative sizes of groups, it is also less subject to problems of comparability across different settings. We show that for a large set of countries our assessment of the importance of group differences typically increases substantially on the basis of this approach. The ranking of countries (or different population groups) can also differ from that obtained using traditional decomposition methods. Finally, we observe an interesting pattern of higher levels of overall inequality in countries where our measure finds higher between-group contributions.

## World Bank Policy Research Working Paper 3687, August 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._

> 1 Elbers is at Vrije (Free) University of Amsterdam.  Lanjouw, Mistiaen and Özler are at the World Bank.  We are grateful to Tony Atkinson, Francois Bourguignon, Sam Bowles, Valentino Dardanoni, Jean-Yves Duclos, Francisco Ferreira, Gary Fields, Ravi Kanbur, Jenny Lanjouw, Branko Milanovic, Adam Przeworski, Martin Ravallion, Tony Shorrocks, and Jacques Silber for comments and/or helpful discussions.  We are particularly indebted to Marta Menéndez for numerous contributions to this project. Correspondence: <u>planjouw@worldbank.org, jmistiaen@worldbank.org, or bozler@worldbank.org.</u>
**EVALUATION QUESTIONS AND STRATEGY**

produce.” The SIEF list itself is a self-selected group of individuals involved in the policymaking process that have self-identified as having an interest in impact evaluations.

**JOURNAL SUBMISSION REQUIREMENTS AND SURVEY OF JOURNAL EDITORS—** We collected the stated submission requirements from the websites of seven journals: The American Economic Journal: Applied Economics; Economic Development and Cultural Change; The Journal of Development Economics; The Journal of Development Effectiveness; World Development; The Quarterly Journal of Economics; and The World Bank Economic Review, and responses to an email survey of the journal’s editorial staff.

The stated submission requirements describe each journal’s expected standards of rigor, topics of interest to its readership, and whether the journal accepts empirical or theoretical subjects. None revealed any preference for a specific methodological approach, including approaches such as CBA, CEA, or other VFM methods. Given the absence of formal guidance on VFM methods, we developed a five-question survey to explore journal editor’s perspectives and opinions and the journals’ de facto policies and practices.

1. Do the journal’s stated editorial policies or submission requirements discuss costeffectiveness, cost-benefit, and Value for Money analysis?

2. What formal and informal editorial practices govern the inclusion of cost-effectiveness, cost-benefit, and Value for Money analysis in published impact evaluations? And, what are they?

3. Do submissions with cost-effectiveness, cost-benefit, and Value for Money analysis receive special consideration?

4. Why is VFM so infrequently incorporated into impact evaluations?

5. What opinions do journal editors have regarding whether published impact evaluations should or should not include VFM analyses?

The survey was sent to 44 editors by email in December 2015. Sixteen journal editors responded to the survey, a 36 percent response rate representing six of the seven journals contacted.

# **Methods**

The team employed a mix of qualitative and quantitative methods to answer the research questions. We applied:

- Qualitative methods to separately analyze responses from the 33 structured and semistructured interviews; the 16 responses to the journal editor survey; and the set of 30 World Bank impact evaluations that contained a value for money analysis.

- Statistical methods to separately analyze the sample of 236 impact evaluations drawn from 3ie’s repository; the 30 World Bank impact evaluations that contained a value for money analysis; and the 497 responses to the policymaker survey.

8
# WATER POLLUTION ABATEMENT BY CHINESE INDUSTRY: COST ESTIMATES AND POLICY IMPLICATIONS

by

**Susmita Dasgupta* Mainul Huq David Wheeler Chonghua Zhang**

PRDEI Dasgupta, Huq and Zhang are Consultants, and Wheeler is Principal Economist in the Environment, Infrastructure and Agriculture Division of the World Bank's Policy Research Department. Our thanks to China's National Environmental Protection Agency and the Tianjin Environmental Protection Bureau for providing us with the data analyzed in this paper. Thanks also to Shakeb Afsah, Ken Chomitz and Raymond Hartman for useful comments and suggestions.
# 11. **An Empirical Assessment of Patterns of Government Spending in RESEs**

The data discussed in the previous section provide a "snapshot" of a fast-changing public spending picture in the reforming ex-socialist economies. In this and the next section, we want to address more directly the question of the adequacy and sustainability of the spending patterns that have emerged so far. More specifically, adopting a concept of "carrying capacity" of a fiscal burden for a given economy, we would like to assess: (i) whether the public-spending/GDP ratios presently observed in RESEs are in line with "comparable" indicators predicted from structural characteristics of advanced and less-advanced comparators; and, (ii) perhaps more importantly, whether the fiscal burden implied by the spending ratios is indeed bearable for the RESEs in the long term.

To shed light on these issues, we develop an empirical model aimed at explaining cross-country differences in the ratios of general government expenditure and revenues to GDP. The model picks up from and extends the existing empirical literature on spending and taxing ratios (See Lotz and Morss, 1967, and Heller and Diamond, 1990). The analysis is carried out using data on 73 countries, including the 26 RESEs, the OECD and a group of middle-income developing countries. The estimates are performed for 1993 or 1994, depending on data availability.

The purpose of the regressions is as follows. We first assess government spending ratios prevailing in RESEs by running a regression on non-RESE country spending patterns and selected structural indicators. The choice of indicators is discussed below. We then use the estimated parameter values to obtain theoretical spending ratios for RESEs, and compare them against the actual values. We use the difference between the theoretical and actual values as an indication of over- or under-spending, and provide comparisons based on the country groupings defined in the previous section. Next, we repeat the same procedure for govemment revenues. Then, we put the two sets of results together, and draw observations on adequacy and sustainability of expenditures.

# **Determinants of Public Expenditures**

The determinants of the size of the state in modem market economies have been analyzed in the past and, not surprisingly, they appear complex and not easy to quantify. The literature suggests that demographic factors are important in explaining govermment expenditures. For example, the age structure and growth of the population, urbanization, and ethnic or religious homogeneity, affect demand for both current and 11