rafmacalaba/datause-encoder-data huggingface dataset:
African small and medium
            enterprises, networks, and manufacturing performance
This paper examines the role of private
            support institutions in determining small and medium
            enterprise (SME) growth and performance in Sub-Saharan
            Africa (SSA). It finds that SMEs in SSA get around market
            failures and lack of formal institutions by creating private
            governance systems in the form of long-term business
            relationships and tight, ethnically-based, business
            networks. There are important links between these informal
            governance institutions and SME performance. Networks raise
            the performance of "insiders" and, in the sparse
            business environments of the SSA region, have attendant
            negative consequences for market participation of
            "outsiders," such as indigenous African SMEs. This
            is indicated through the determinants of access to supplier
            credit. Policy interventions will be needed to improve the
            platform for relation-based governance mechanisms and to
            address the exclusionary effects of tight networks.
Creating an efficient financial
            system : challenges in a global economy
Financial sector development fosters
            economic growth and reduces poverty by widening and
            broadening access to finance and allocating society's
            savings more efficiently.  The author first discusses three
            pillars on which sound and efficient financial systems are
            built: macroeconomic stability and effective and reliable
            contractual and informational frameworks. He then describes
            three different approaches to government involvement in the
            financial sector: the laissez-faire view, the market-failure
            view and the market-enabling view. Finally, the author
            analyzes the sequencing of financial sector reforms and
            discusses the benefits and challenges that emerging markets
            face when opening their financial systems to international
            capital markets.
Trade liberalization, factor market
            flexibility, and growth : the case of Morocco and Tunisia
In recent years there has been an
            increasing recognition of the importance of complementary
            policies in enhancing the benefits of a more open trade
            regime. This study focuses on the importance of factor
            market flexibility to trade reforms. Using the Global Trade
            Analysis Project (GTAP) model and database, the results show
            that the welfare impact of trade reform is contingent on the
            flexibility of factor markets, with higher welfare gains
            occurring where factor markets are more flexible, and
            vice-versa. Defining two extreme factor market scenarios
            over Morocco and Tunisia, the author finds that the welfare
            gains of trade reforms under conditions of flexible factor
            markets can be as much as six times the gains compared with
            a rigid factor market scenario. This is so because whereas
            trade reforms may improve the incentive structure for
            resource reallocation, the extent to which resources move
            from less efficient to more efficient sectors of an economy
            is dependent on the degree of flexibility of factor markets.
Incentives for public investment
            under fiscal rules
The authors explore the relationship
            between fiscal rules and capital budgeting. The current
            budgetary approach to limit deficits to a fixed portion of
            GDP or to balance budgets could undermine incentives to
            invest in public capital with long-run returns since
            politicians concerned about electoral prospects would favor
            expenditures providing immediate benefits to their voters.
            An alternative budgetary approach is to separate capital
            from current revenues and expenditures and relax fiscal
            constraints by allowing governments to finance capital
            expenditures with debt, as suggested by the golden rule
            approach to capital funding. But the effect of capital
            budgeting would be to provide opportunities to politicians
            to escape the fiscal rule constraints by shifting current
            expenditures into capital accounts that are difficult to
            measure properly, thereby leading to increased borrowing. As
            an alternative, the authors propose a modified golden rule
            limiting debt finance to a proportion of the
            government's investment in self-liquidating assets.
Entering the Union : European
            accession and capacity-building priorities
The authors examine the impact of trade
            facilitation on bilateral trade flows. They examine trade
            facilitation and capacity-building priorities in 12
            countries in the Europe and Central Asia region-eight of the
            current members of the European Union: Czech Republic,
            Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia, and
            Slovenia, and three candidate members: Bulgaria, Romania,
            and Turkey. The results suggest that behind-the-border
            factors play an important role in determining bilateral
            trade flows (controlling for the effects of tariffs,
            development levels, distance, and regional characteristics
            of exporters and importers, among other factors). The
            development of new data sets to expand work related to trade
            facilitation, including strengthening the empirical work
            explored here, is a key priority without which intelligent
            policy and priorities cannot be made. The authors'
            analysis is based on data from the World Economic Forum,
            Global Competitiveness Report 2001-2002, World
            Competitiveness Yearbook 2000, and Kaufmann, Kraay, and
            Zoido-Lobaton (2002). The results indicate that more gains
            in exports than in imports are expected should the values of
            three out of the four indicators (port efficiency,
            regulatory regimes, and information technology
            infrastructure) of the new and candidate member countries
            improve halfway to the EU15 average. These countries would
            expect large trade gains as well as improvements in trade
            balances as their integration into the EU continues. For
            example, the greatest absolute trade gains-$49 billion and
            $62 billion respectively-could be expected if their port
            efficiency and information technology infrastructure reach
            half the average level of the EU, and 70 percent of trade
            gains are associated with export expansion.
Integrated urban uprading for the
            poor : the experience of Ribeira Azul, Brazil
This study looks at the experience of
            integrated urban upgrading in a low-income neighborhood of
            Salvador, Bahia, Brazil. Infrastructure and social
            investments have been made in the community through a
            government program, with community participation playing a
            major role in the design and implementation. This approach
            is now perceived to be highly successful in terms of its
            implementation and positive impact on living conditions, and
            will provide the basis for a major state-wide program. This
            paper analyzes the lessons learned from the experience, with
            implications for scaling up as well as applications for
            other urban upgrading programs. Among the key issues looked
            at are: (1) what has worked well with the integrated urban
            upgrading approach and what has not; (2) how cost-effective
            the interventions were; (3) institutional arrangements given
            the multi-sectoral approach; and (4) sustainability issues
            of financing, tenure security, the prevention of further
            slum expansion, operations and maintenance, environmental
            sustainability, and job creation, and how they will impact
            on the poor over time. Key findings point to the importance
            of community participation, clear roles and responsibilities
            in institutional arrangements, the need for strong local
            government participation, and the high costs and challenges
            of providing housing for the poor.
Bank ownership type and banking relationships
The authors formulate and test
            hypotheses about the role of bank ownership types-foreign,
            state-owned, and private domestic banks-in banking
            relationships, using data from India. The empirical results
            are consistent with all of their hypotheses with regard to
            foreign banks. These banks tend to serve as the main bank
            for transparent firms, and firms with foreign main banks are
            most likely to have multiple banking relationships, have the
            most relationships, and diversify relationships across bank
            ownership types. The data are also consistent with the
            hypothesis that firms with state-owned main banks are
            relatively unlikely to diversify across bank ownership
            types. However, state-owned banks often do not provide the
            main relationship for firms they are mandated to serve (for
            example, small, opaque firms), and the predictions of
            negative effects on multiple banking and number of
            relationships hold for only one type of state-owned bank.
On defining and measuring the
            informal sector
A range of alternative empirical
            definitions of informal activity have been employed in the
            literature. Choice of definition is often dictated by data
            availability. Different definitions may imply very different
            conceptual understandings of informality. In this paper the
            authors investigate the degree of congruence between three
            definitions of informality based on employment contract
            registration, social security protection, and the
            characteristics of the employer and employment using
            Brazilian household survey data for the period 1992 to 2001.
            The authors present evidence showing that 64 percent of the
            economically active population are informal according to at
            least one definition, but only 40 percent are informal
            according to all three. Steady compositional changes have
            been taking place among informal workers, conditional on
            definition. The econometric analysis reveals that the
            conditional impact of particular factors (demographic,
            educational attainment, and family circumstances) on the
            likelihood of informality varies considerably from one
            definition to another. The results suggest growing
            heterogeneity within the informal sector. Therefore, the
            authors argue that informal activity may be as much
            associated with entrepreneurial dynamism as with any desire
            to avoid costly contract registration and social protection.
            However, the authors confirm there is no a priori reason for
            entrepreneurial activity to be unprotected. Consequently
            definitions of informality based on occupation and employer
            size seem the most arbitrary in practice even if
            conceptually well-founded.
How well do institutional theories
            explain firms' perceptions of property rights
The authors examine how well several
            institutional and firm-level factors and their interactions
            explain firms' perceptions of property rights
            protection. Their sample includes private and public firms
            that vary in size from very small to large in 62 countries.
            Together, the institutional theories they investigate
            account for approximately 70 percent of the country-level
            variation, indicating that the literature is addressing
            first-order factors. Firm-level characteristics such as
            legal organization and ownership structure are comparable to
            institutional factors in explaining variation in property
            rights protection. A country's legal origin and
            formalism index predict property rights variation better
            than its openness to international trade, its religion, its
            ethnic diversity, natural endowments or its political
            system. However, these results are driven by the inclusion
            of former socialist economies in the sample. When the
            authors exclude the former socialist economies, legal origin
            explains considerably less than openness to trade and
            endowments. Examining a broader set of variables for
            robustness, they again find that when they exclude former
            socialist countries, legal origin explains comparatively
            little of the variation in perceptions of judicial
            efficiency, corruption, taxes and regulation, street crime,
            and financing.
Legal knowledge and economic
            development : the case of land rights in Uganda
Mixed evidence on the impact of formal
            title in much of Africa is often used to question the
            relevance of dealing with land policy issues in this
            continent. The authors use data from Uganda to assess the
            impact of a disaggregated set of rights on investment,
            productivity, and land values, and to test the hypothesis
            that individuals' lack of knowledge of the new law
            reduces their tenure security. Results point toward strong
            and positive effects of greater tenure security and
            transferability. Use of exogenous knowledge of its
            provisions as a proxy for the value of the land law suggests
            that this piece of legislation had major economic benefits
            that remain to be fully realized.
Diversification, innovation, and
            imitation inside the Global Technological Frontier
Recent research highlights the
            relationship between economic development and productive
            diversification, which may be hindered by market failures.
            After identifying stages of diversification in disaggregated
            export data, the authors develop a metric for the flows of
            export "discoveries," or inside-the-frontier
            innovations in developing countries. They then explore the
            empirical relationship between economic development and (1)
            inside-the-frontier-innovation as reflected by the
            introduction of new export products, (2) export
            diversification measured by an index of export-revenue
            concentration, and (3) on-the-frontier innovation as
            reflected in patents. The data suggest, unsurprisingly, that
            inside-the-frontier innovation is more common among poor
            countries than among industrial economies. Overall export
            diversification increases at low levels of development but
            declines with development after a high-income point, whereas
            patenting activity rises exponentially with development. The
            data also suggest that the relationship between the
            frequency of export discoveries and economic development is
            not due to changes in the industrial composition of exports.
            The authors use a simple model of innovation and imitation
            to test the hypothesis that the threat of imitation inhibits
            the discovery of new exports. Econometric evidence suggests
            that the frequency of export discoveries across countries
            rises with the returns of export activities (proxied by
            exogenous export growth during the sample period), but the
            magnitude of this effect increases with barriers to entry.
            The count-data estimations deal with unobserved
            international heterogeneity, and the results are robust to
            various changes in the specification of the empirical model.
            This finding supports the hypothesis that market failures
            inhibit inside-the-frontier innovation.
The poverty impact of rural roads :
            evidence from Bangladesh
The rationale for public investment in
            rural roads is that households can better exploit
            agricultural and nonagricultural opportunities to use labor
            and capital more efficiently. But significant knowledge gaps
            remain as to how opportunities provided by roads actually
            filter back into household outcomes and their distributional
            consequences. This paper examines the impacts of rural road
            projects using household-level panel data from Bangladesh.
            Rural road investments are found to reduce poverty
            significantly through higher agricultural production, higher
            wages, lower input and transportation costs, and higher
            output prices. Rural roads also lead to higher girls'
            and boys' schooling. Road investments are pro-poor,
            meaning the gains are proportionately higher for the poor
            than for the non-poor.
The poverty impact of rural roads :
            evidence from Bangladesh
WPS 3875

# **The Poverty Impact of Rural Roads: Evidence from Bangladesh**<sup>**1**</sup>

## **Shahidur R. Khandker World Bank**

## **Zaid Bakht Bangladesh Institute of Development Studies**

## **Gayatri B. Koolwal National Economic Research Associates**

### **Abstract**

The rationale for public investment in rural roads is that households can better exploit agricultural and non-agricultural opportunities to employ labor and capital more efficiently. But significant knowledge gaps remain as to how opportunities provided by roads actually filter back into household outcomes and their distributional consequences. This paper examines the impacts of rural road projects using household-level panel data from Bangladesh. Rural road investments are found to reduce poverty significantly through higher agricultural production, higher wages, lower input and transportation costs, and higher output prices. Rural roads also lead to higher girls’ and boys’ schooling. Road investments are pro-poor, meaning the gains are proportionately higher for the poor than for the non-poor.

World Bank Policy Research Working Paper 3875, April 2006 _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 We would like to thank Gershon Feder and Robert Floyd for valuable comments and suggestions, as well as Hussain Samad for research assistance.

1
Competition and performance in the
            Hungarian second pillar
The performance of the Hungarian second
            pillar since inception has been mixed. This is partly due to
            a less than satisfactory support for the 1997 pension
            reform, conservative fund portfolio distributions, the
            hybrid nature of the mandatory pension fund system, the
            segmented nature of the market in terms of costs, and a less
            than aggressive commitment on the part of the Hungarian
            Financial Supervisory Authority to a low-cost, transparent,
            and competitive equilibrium. In the accumulation phase, the
            authorities would need to further promote transparency and
            comparability of information on costs and investment
            performance, facilitate migration to lower cost funds, and
            more generally promote competition. The regulatory framework
            of the payout phase needs to be overhauled before the first
            cohort of workers retires.
The distributional incidence of
            residential water and electricity subsidies
Subsidies to residential utility
            customers are popular among policymakers, utility managers,
            and utility customers alike, but they are nonetheless the
            subject of much controversy. Utility subsidies are seen as a
            way to help make utility service affordable for poor
            households and as an alternative mechanism for income
            redistribution. These arguments in favor of subsidies are
            countered by serious concerns about their adverse effects on
            consumer behavior, utility operations, and the financial
            health of utilities. Both the affordability and
            redistributive arguments for subsidies are based on the
            presumption that poor households benefit disproportionately
            from water and electricity subsidies, that they are
            well-targeted to the poor. The authors test this assumption
            by examining the extent to which the poor benefit from
            consumption and connection subsidies for water and
            electricity services. Their analysis of a wide range of
            subsidy models from around the developing world shows that
            the most common form of utility subsidy-quantity-based
            subsidies delivered through the tariff structure-are highly
            regressive. Geographically targeted or means-tested
            subsidies do better, and in many cases have a progressive
            incidence, but large numbers of poor households remain
            excluded. Low levels of coverage and metering severely limit
            the effectiveness of consumption subsidy schemes to reach
            the poor. Simulations suggest that connection subsidies are
            an attractive alternative for low coverage areas, but only
            if utilities have the means and motivation to extend network
            access to poor households and only if those households
            choose to connect.