rafmacalaba/datause-encoder-data huggingface dataset:
Policy Research Working Paper 6916

# **Abstract**

Although water variability has already been observed across river basins, climate change is predicted to increase variability. Such environmental changes may aggravate political tensions, especially in regions that are not equipped with an appropriate institutional apparatus. Increased variability is also likely to challenge regions with existing institutional capacity. This paper argues that the best attempts to assess the ability of states to deal with variability in the future rest with considering how agreements have fared in the past. The paper investigates to what extent particular mechanisms and institutional designs help mitigate inter-country tensions over shared water. The analysis specifically focuses on identifying which water allocation mechanisms and institutional features provide better opportunities for mitigating conflict given that water allocation issues tend to be most salient among riparians. Water-related events from the Basins at Risk events database are used as the dependent variable to test hypotheses regarding the viability, or resilience, of treaties over time. Climatic, geographic, political, and economic variables are used as controls. The analysis is conducted for the years 1948–2001 with the country dyad as the level of observation. Findings pertaining to the primary explanatory variables suggest that country dyads governed by treaties with water allocation mechanisms exhibiting both flexibility and specificity evince more cooperative behavior. Country dyads governed by treaties with a larger sum of institutional mechanisms likewise evince a higher level of cooperation, although certain institutional mechanisms are more important than others.

This paper is a product of the Computational Tools Team, Development Research Group. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The authors may be contacted at bblankespoor@worldbank.org.

_The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent._ Produced by the Research Support Team
individual gains from migrating—but also consider the household functions the member performs, and the likelihood of the member remitting money. In many societies parents exhibit greater control over daughters than sons, so young women may be especially likely to be sent for family reasons. Several researchers argued that this is so in the Philippines, where the majority of migrants are women.<sup>3</sup> _Community factors._ Once some young people have migrated, community factors make it more likely that other youth will migrate too. One reason for this is the migrant social network, which lowers the costs and increases the benefits of migrating. Since youth are more likely to migrate due to the reasons just discussed, a young potential migrant is more likely to have a recent migrant in his or her peer network than an older individual, and so may be more likely to benefit from the migrant network. Over time a culture of migration can then develop in a community, with migration becoming a rite of passage for youth, and with those not migrating considered lazy and unenterprising (Massey et al, 1998).

# **3. Data**

The main source of data for this paper is public use microdata from national censuses and large scale household surveys. Census data from 2000 or 2001 is used for five major migrant receiving countries (Canada, South Africa, Spain, the United Kingdom, and the United States). This is coupled with household survey data for two regional migrant destinations, Argentina and Côte d’Ivoire. Altogether this yields a rich dataset of individual-level observations on almost 300,000 migrants aged 12 to 24. I supplement

> 3 See Massey et al.  (1998). Lauby and Stark (1988) argue this is also the case for rural-to-urban migration in the Philippines.

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|Line of business|A.<br>Gross Premium|<br>2011|B.<br> <br>[96] Ultimate<br>Loss Ratio 2011|C=A*B<br>Ultimate gross<br>Loss 2011|
|---|---|---|---|
|Motorvehicle liability insurance|20,000|70%|14,000|
|Other motor insurance|5,000|60%|3,000|
|Marine, aviation and transport insurance|5,000|80%|4,000|
|Fire and otherdamage to property insurance|15,000|70%|10,500|
|Generalliabilityinsurance|5,000|60%|3,000|
Exports<sup>4</sup> fell to a record low of 5,200 tons in 1980. When the government started seizing harvests without payment, cash crops were almost completely abandoned and barter trade became the dominant form of exchange.

Declines in the other agricultural sectors were equally striking; timber production declined from 360,000 cubic meters in 1968 to an annual average of 6,000 cubic meters in the late 1970s, and coffee and palm-oil production virtually disappeared. Basic services in health, education, water and electrical supplies could not be maintained; foreign investment literally stopped, and the trading system, operated by state enterprises, broke down.

<!-- Start of picture text --> Equatorial Guinea: Composition of Exports in<br>percentage 1970 - 1982<br>120<br>100<br>80<br>Cocoa<br>60 Timber<br>Coffee<br>40<br>20<br>0<br>1970 1976 1977 1978 1979 1980 1981 1982<br>Years<br>Percentage of total exports<br><!-- End of picture text --> Source: Equatoguinean authorities and World Bank.

The devastation of Equatorial Guinea’s economy in the 1970s was accompanied by the complete disarray of its public finances. Public financial transactions were recorded only sporadically, and the accounts of the Treasury, the Bank of Equatorial Guinea - the former Central Bank – and public enterprises were not kept separately<sup>5</sup> . In August 1979, a military junta overthrew the dictatorship regime, led by Macias Nguema and established a new government, Presided by Lt. Col. Obiang Nguema Mbasoro and which then began to rebuild the economy and social institutions.

The new government reintroduced regular budgetary and banking procedures with technical assistance from IMF, and in April 1980, the first formal budget since 1974 was enacted followed by a stabilization program, agreed upon with the IMF, aimed at establishing financial discipline. During the first years of its rule, the government concentrated on returning the country to political stability, re-establishing the legal and administrative framework needed to support the economic reconstruction process, and attracting and coordinating the expected foreign aid. Rebuilding ministries and public agencies has been a difficult and a slow process though.

> 4 The World Bank - Technical Assistance Project – Republic of Equatorial Guinea - May 1984. 5 The World Bank – Report No P-4288 – EG, April 1986.

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shocks can change the range of acceptable behaviors. Fernandez et al. (2004) show that the exogenous surge in female labor force participation in the United States during World War II had persistent effects on the female labor force participation of future generations and on men’s acceptance of working wives.

# **Conclusions**

Although considerable progress has been made in recent decades toward closing the gender gap in education within most countries, gender gaps in economic and political participation have remained across the developed and developing world. The promised higher income and faster economic growth due to harnessing women’s talent has not ensued. Crosscountry evidence is helpful to identify aggregate patterns, but the use of this evidence is not well suited to inform or guide policy design, which requires precise information on mechanisms at work at the microlevel.

A new generation of microlevel studies based on randomized-controlled trials or clever uses of natural and field experiments is providing some of this much-needed evidence.<sup>7</sup> In contrast to the macrolevel evidence, most microlevel studies are designed to provide evidence on the mechanisms by which gender equality improves economic efficiency. Therefore, microlevel studies are more useful to provide precise policy guidance. Future research may shed light on additional mechanisms and on the applicability of the findings to different contexts, which is essential to develop credible estimates of the effect of gender equality on economic growth. We hope that this research will guide a new generation of policies that will truly eliminate gender disparities and will help to fulfill the potential for women’s talent to promote both development and economic growth.

# **References**

Albanesi, S., and C. Olivetti. 2009. “Gender Roles and Medical Progress.” NBER Working Papers 14873, National Bureau of Economic Research, Inc.

Alesina, A., P. Giuliano, and N. Nunn. 2010. “Fertility and the Plough.” NBER Working Papers 16718, National Bureau of Economic Research, Inc.

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Stoner, E. (2004); Bolivia: An early goodbye for President Mesa?, Center for International Policy, February 13<sup>th</sup> .

Available at: <u>http://www.ciponline.org/colombia/040213ston.htm</u> Thoumi, F. (2003); Illegal Drugs, Economy, and Society in the Andes, Woodrow Wilson Center Press, Washington, D.C., and The Johns Hopkins University Press, Baltimore and London.

---- (2005a); The Numbers Game: Let’s All Guess the Size of the Illegal Drug Industry!, _Journal of Drug Issues_ , Winter, pp. 185-200.

---- (2005b); Ventajas competitivas ilegales, el desarrollo de la industria de drogas ilegales y el fracaso de las políticas contra las drogas en Afganistán y Colombia, Borradores de Investigación No. 1, Facultad de Economía, Universidad del Rosario, Bogotá.

---- (2005c); Introduction, _Journal of Drug Issues_ , Winter, pp. 1-6.

Transnational Institute (TNI) (2004); Super Coca?, Drug Policy Briefing 8, Septemeber 8<sup>th</sup> .

Available at: http://www.mindfully.org/Reform/2004/Super-CocaTNI8sep04.htm United Nations Office on Drug and Crime (UNODC) (2004); World Drug Report, Volumes 1 (Analysis) and 2 (Statistics), United Nations Publication. Available at: <u>http://www.unodc.org/unodc/en/world_drug_report_2004.html</u> 49
higher real wages.” He then went on to analyze the dynamics of economic growth as profits earned in the high-income sector were reinvested, leading to capital formation, an increased demand for labor, and continued intersectoral shifts.

At the same time, Kuznets (1955) explored how various measures of income inequality would change as the high-income sector comes to employ an increasing share of the population, a process known as “intersectoral shifts.” All of the inequality measures used by Kuznets in his calculations exhibited an inverted-U in the context of intersectoral shifts, which pattern later came to be known as the “Kuznets Curve.” Research on labor market dualism has been developed considerably in the intervening years. Some of the subsequent writings on labor market dualism were grounded in the then-emergent theory of human capital, which also earned its developers the Nobel Prize (Schultz, 1961; Becker, 1964). Dual labor market theory received a boost through the work of Doeringer and Piore (1970). As summarized by Wachter (1974, p. 639), the dual labor market model advanced four hypotheses: First, it is useful to dichotomize the economy into a primary and a secondary sector. Second, the wage and employment mechanisms in the secondary sector are distinct from those in the primary sector. Third, economic mobility between these two sectors is sharply limited, and hence workers in the secondary sector are essentially trapped there. Finally, the secondary sector is marked by pervasive underemployment because workers who could be trained for skilled jobs at no more than the usual cost are confined to unskilled jobs.

Wachter and also Cain (1976) stressed that for dualism to exist, different wages must be paid in different sectors to comparable workers. Empirical evidence has been compiled demonstrating that observationally equivalent workers earned different amounts in different parts of the economy, but skeptics remain unconvinced that dualism or segmentation in fact exists. Nonetheless, the good jobs/bad jobs dichotomy remains widespread in the current literature (e.g., Inter-American Development Bank, 2003; Bourguignon, 2005; Avirgan, Bivens, and Gammage, 2005; World Bank, 2006), as I think it should.

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Future expectations can also inform economic self-interest. Benabou and Ok (2001) show that expectations of socioeconomic mobility can affect preferences for redistribution. Individuals with below-average incomes who would benefit from redistributive policies financed by higher taxes may oppose such policies if they expect to be upwardly mobile. This prediction, known as the Prospects of Upward Mobility hypothesis, has been borne out by the data in experimental settings (Checchi and Filippin 2004; Agranov and Palfrey 2020) as well as in observational data (Alesina and La Ferrara 2005; Alesina and Fuchs-Schuendeln 2005; Cojocaru 2014; Rueda and Stegmueller 2019).

The literature on preferences for redistribution points to the importance of self-interest, cultural factors, and social mobility, both past and future (Corneo and Gruner 2002; Alesina and Giuliano 2009; Alesina, Stancheva, and Teso 2018; Cavaille 2023; see also Mengel and Weidenholzer 2022 for a detailed survey of this literature). Less is known about the role these factors play in shaping preferences for policy choices unrelated to redistribution. This paper aims to contribute to closing this knowledge gap. Several earlier studies consider the drivers of support for market reforms at the beginning of the post-Soviet transition (Duch 1993; Denisova et al. 2021; Rovelli and Zaiceva 2013) or in Latin America (Kaufman and Zuckermann 1998). Denisova et al. (2012) find that economic hardships during the post-Soviet transition—such as the experience of downward mobility, the lack of human capital suitable for a market economy, and the lack of private assets— significantly increased the desire for revising the results of earlier privatization.

Several earlier studies have examined the individual determinants of preferences for investments in education for a small subset of European countries (Busemeyer and Garritzmann 2017; Garritzmann, Busemeyer, and Neimanns 2018). Wiese and Eriksen (2024) investigate linkages between expectations of mobility and willingness to pay for improvements in public education and health care using data from the 2016 round of the LiTS, framing it as a test of the POUM hypothesis with respect to indirect rather than direct redistribution, which was the focus on the majority of earlier studies. However, willingness to pay additional taxes for investments in education or health care might not necessarily be driven by redistribution motives, as respondents can view such investments as benefiting themselves and their families; thus support 4
may again be due to the administrative costs of providing transparent information. Banks may be reluctant to incur these administrative costs in the absence of competitive pressures that would make having transparent information on potential clients more valuable.

The findings in table 6 and 7 are also consistent with stylized evidence on the tendency for “closed user groups” to emerge in a financial sector that is not competitive. This term refers to groups of lenders that formally or informally exchange credit information between each other, but restrict access to smaller competitors and new entrants by limiting either the quality or extent of information that is disclosed to the market as a whole.

Overall, the results in tables 2 though 4 provide empirical support for hypotheses 1 through 3. Lower bank competition is associated with a higher probability of a credit bureau emerging, and lower bank concentration is associated with a higher probability of a credit bureau emerging voluntarily. As expected, neither bank competition nor concentration is correlated with the existence of a credit registry where participation is mandatory. We do not find evidence in favor of hypothesis 4. On the contrary, the results how that, countries with higher entry barriers tend to have less comprehensive and transparent credit bureau information (possibly because administrative costs of providing extensive information weigh more heavily than gains to this information in the absence of competitive pressures). However, in line with hypothesis 5, some of the results weakly suggest that higher bank concentration is associated with lower coverage of the credit bureau.

# **6. Conclusion**

This paper explores the empirical relationship among banking sector competition, bank concentration, and the emergence of a credit bureau across countries. Based on the previous theoretical literature (Pagano and Jappelli, 1993), we argue that countries with higher entry barriers should be more likely to have a credit bureau since entry barriers lower the threat of competition and of losing monopoly rents by sharing proprietary credit information. The data confirm this hypothesis: going from the 25<sup>th</sup> percentile of entry barriers to the 75<sup>th</sup> percentile is associated with a 15 percentage point increase in the likelihood of having a credit bureau.

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on, parallel or decentralization) used commonly in World Bank projects can provide the added emphasis needed vis-a-vis managerial and institutional factors. Some of the considerations in applying T&V to existing Bank approaches are discussed below.

57. The Add-on Approach. Grafting-on educational extension services to existing supervision/inspection systems has many potential pitfalls if certain basic management principles are not established as part of the process. Perhaps the most significant for the add-on approach is to define specific objectives for personnel working with the extension services limiting their activities primarily--or even better, exclusively--to extension-related activities, rather than performing multiple responsibilities as they do in most existing supervision/inspection systems. This could be achieved by specialization among existing supervisor/inspectors: a certain group of supervisors would become solely responsible for extension services. Inevitably, this will raise the issue of providing adequate personnel to do the job. Existing supervisor/inspectors are generally too few and too high level to be retrained as extension field workers although they can be used as fieldstaff supervisors. A new position under the inspector/supervisor post may need to be defined with the attributes of the rural education extension officer. This has actually occurred in several countries: Pakistan and Bangladesh both introduced extension field workers (referred to as learning coordinators and assistant education officers respectively). These new extension workers, along with their supervisors, would need pre-service as well as continuous in-service training.

58. Inevitably, introducing new personnel raises the question of how many field extension workers are needed. Add-on approaches are in danger of understaffing because they prefer to attach new functions to existing personnel. Experience suggests that the ratio of extension field workers to school and teachers should be a function of the g4ographic dispersion of schools, the difficulty of transport and the number zf teachers per school. A rule of thumb is to start with the time required fe, each school site contact. This should be a minimum of one hour per teicher for each teacher in a school. This type of one-to-one contact should sccur at least once each month. At the same time, teachers would meet once each month with the extension worker in groups drawn from adjacent schools for out-of-school workshops on weekends or in the evenings.

59. Supervisor/inspectors of the existing system will need intensive re-training to be able to supervise the work of extension field workers. Their job is to make visits with each of the field workers under their supervision (spending about 2/3 of their time doing field supervision, and dividing 1/3 of their time between conducting/participating in training workshops ana office work). Such a regime of activities will inevitably push supervisors towards more involvement with the immediate needs of rural teachers.
Section 3 for details.<sup>12</sup> The following data are observable from a conventional IO table at the broad sector level (42 groups of products) for 2007 and 2010:

- �: gross output of sector _i_ ;

- c

- ���: domestic goods _i_ used as intermediate inputs in sector _j_ ;

-

- ���: imported goods _i_ used as intermediate inputs in sector _j_ ;

- D�: value added in sector _j_ ;

- d�: total exports of sector _i_ goods;

- ��: total imports of sector _i_ goods;

- ��c: total domestic final demand for sector _i_ goods (excluding exports);

- ���: total final demand for imported goods _i_ .

Using these data from the IO table as controls (constants) in the quadratic programming model, we make sure that the balance conditions in an official IO table are always satisfied. In other words, we can always aggregate values from our extended IO table with separate sub-accounts for firm groups back to the values in the original IO table.

��,�� We need to estimate the values of ezg% h for each g1 and g2, where g1 and g2 belong to one of the six �,� firm types, namely, SL, SS, FL, FS, OL, and OS. Similarly, we estimate ezg% h for one of the six firm types, indexed by g at the sector-pair level, indexed by (i, j). We also need to estimate sector-level domestic final demand by firm group, ey%�h, which are not available from the official IO table but can be constructed using firm-level census data from the NBS and detailed trade statistics from China Custom Administration. We cast the estimation as a constrained optimization problem. Initial values are selected relying on proportionality assumptions (e.g., share of market demand in total output in each sector and firm group, which will be discussed next) and micro data from Chinese official sources. These initial values do not necessarily satisfy all economic and statistical restrictions on the split IO table.

Using the notations previously defined, the quadratic programming model is specified by the objective function in eq. (15) below, subject to the six constraints specified in eqs. (16) through (21) below. The initial values for the same variables in eq. (15) are denoted with an additional zero. Variables without a zero (the _z_ ’s, and _y_ ’s ) are unknowns that are to be solved by minimization. Symbols with a zero in eqs. (16) through (21) represent parameters in the model and are kept constant throughout the optimization

> 12 One may prefer to call our optimization exercise a “calibration”, especially since our exercise does not provide standard errors to gauge the precision of our estimates. We are open to this alternative interpretation, but would like to emphasize that in research in progress, we are extending our current optimization program with a Monte-Carlo-type first stage, which will provide standard errors for our estimates.

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<!-- Start of picture text --> Male Female<br>1% 4% 3% 5%<br>23%<br>33%<br>51% 41%<br>21%<br>18%<br>M8 Wage-employment<br>M8 General Entrepreneurship<br>© Vocational training: ICT<br>G8 Vocational training: Energy<br>M8! Vocational training: Retail<br><!-- End of picture text -->