rafmacalaba/datause-encoder-data huggingface dataset:
**Table 3. Tax Expenditures Integrated into Budget Process**

**_<u>(Selected countries, preliminary data)</u>_**

|Australia|A separategovernment document.|
|---|---|
|Austria|As an annex, part of "Subsidy Report" to budget documents|
|Belgium|An annex to budget|
|Canada|Not linked to budget process, but for pre-budget consultation.|
|France|Appended to budget bill.|
|Germany|As apart of budget,called "SubsidyReport"|
|Italy|Not linked to budget process, nor as annex to budget document.<br>but an independent document.|
|Netherlands|As an annex to the budget memorandum, not directly linked to the<br>budget but severs as an additional background information for the<br>Parliament|
|United<br>Kingdom|Not linked to budget process, nor as annex to budget document,<br>but as part of statistical supplement to Autumn Statement (revenue)|
|United States|As part of annual budget documents, but is not integrated into the<br>budgetprocess|
|_Source: H.P. B_<br>_Spending Thro_|_rixi et al,. "Tax Expenditures-Shedding Light On Government_<br>_ugh The Tax System," the World Bank, 2003._|

# **_B. Fiscal transparency_**

Transparency in government operations has several dimensions. First, at the aggregate level, transparency requires the provision of reliable information on the government’s fiscal policy intentions and forecast. Second, detailed data and information are required on government operations, including the publication of comprehensive budget documents that contain properly classified accounts for the general government and estimates of quasi-fiscal activities conducted outside the government. Third, behavioral aspects must be present, including clearly established conflict-of-interest rules for elected and appointed officials, freedom-of-information requirements, a transparent regulatory framework, open public procurement and employment practices, a code of conduct for tax officials and published performance audits (Shende and Bennet, 2004). These aspects and dimensions of transparency are consistent with the IMF’s principles of fiscal transparency.

- The IMF has set out four principles that define transparency that should be

- expected of a government: • Clarity on the structure and functions of government, responsibilities within government and relations between government and the rest of the economy;

- Public availability of comprehensive information on public sector financial stocks and flows, published at specified times;

17
We define then we can re-arrange (13) and write it as _Alternative specifications:_ We focus on models that can be estimated using repeated cross-section data with retrospective questions, such as household labor force surveys which are available for many countries. An example from the US is the March supplement of Current Population Survey<sup>9</sup> . However if longitudinal data are available, it is possible to consider unobserved heterogeneity in the model. Arcidiacono and Miller (2011) show how an EM loop can be incorporated in CCP to estimate unobserved heterogeneity. Their intuition can also be applied to PPML regression. Appendix D illustrates how it is possible to use an EM loop within PPML regression when panel data are available.

Another alternative modeling approach is to use wage shocks rather than moving cost shocks in agents’ utility function. In Appendix A, we provide an equation that can be used instead of (10) in case of such wage shocks.

In the next section we present an example to illustrate a practical application of the method.

> 9Other countries with such data, that we are aware of so far, are Indonesia, Mexico and Turkey.

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16

**IX,** HEDGING THROUMG **NEW** YORK COTTON **FUTURES**

Prices received for FPA cotton have fluctuated significantly, especially in the latter half of the 1980's. Figure 1 depicts the volatility of FPA cotton export prices (c.i.f. North Europe) over the period May '85-Jan '93. The average monthly export price over this period was US¢66.64/lb with a standard deviation of ¢12.78. In the sub-period Jan. '86 and Dec. '90, price volatility was scmewhat higher, with a standard deviation of ¢13.16 around a mean price of ¢68.87/lb. Thus the coefficient of variaLion for the period Jan. '86-Dec. '90 is 19.1W which is higher than the volatility of world prices over the same period. This volatility is estimated to be around 17%.

Futures markets provide a convenient mechanism for hedging this type of risk.<sup>10</sup> However, the only market that trades in cotton futures is the New York Cotton Exchange (NYCE). The New York No. 2 cotton contract is based on grade 41, staple 34 (strict low middling 1-1/16 inch) cotton. The quality cf FPA cotton is similar (middling 1-3/32 inch) but not identical. Provided that the characteristics of t'.e cash commodity is identical to the quality specified in the futures contract, the traditional recommendation is to hedge all of the cas', commodity in the futures market. (This 'OSince options are options on futures contracts, the analysis presented here can be easily extended to include options strategies. In addition, the analysis to determine the basis risk is applicable to the use of options on these futures contracts.
United States, the United Kingdom, Switzerland, and the European Union countries. These initiatives emphasized the need for banks and other financial intermediaries to collect better information on their clients and promote tax sharing across different jurisdictions (Sharman 2017). The intergovernmental efforts were supported by the work of transnational NGOs such as the aforementioned Tax Justice Network, the Washington DC-based thinktank Global Financial Integrity founded in 2006 to measure and study illegal financial flows, and other organizations such as the OCCRP and Global Witness committed to global corruption investigation and exposure. After a concerted effort by the OECD and the G20, most states today have agreed to cooperate with foreign information requests on tax-related matters.

The public debate about financial secrecy has been significantly catalyzed by data leaks from such offshore financial zones as Panama, The Bahamas, and other secrecy jurisdictions. The infamous Panama papers involving millions of documents exposed in 2016 (with an additional leak in 2018) implicated political and economic elites, including heads of states around the world. Other leaks, such as the Paradise papers, also involved millions of documents connecting specific names to offshore companies. These data leaks enabled a scholarly exploration of the effects of such public exposure on firm value quantifying (if indirectly) the economic value of secrecy. Donovan et al. (2019) identified 338 publicly listed firms with links to corporate vehicles in secrecy jurisdictions. Their findings suggest that such connections to secrecy jurisdictions are used both to create firm value and to expropriate corporate funds. When firms rely on secret corporate vehicles to avoid taxes, and as a means to bribe state officials to win business, they add value. This conclusion is also supported by an earlier study of companies involved in Luxembourg Leaks (Huesecken et al., 2016). However, this study suggested that secret corporate vehicles aid insiders to divert corporate funds (Ibid., 4142-4143). The public exposure of secret accounts and entities in offshore zones has affected the shareholder value of these firms. Following the data leaks, firms connected to the leak have experienced about a 1% drop in firm value relative to other firms (Ibid., 4120).<sup>16</sup> The inter-governmental regulatory activities aimed at improving the integrity of the global financial system have been developing for a few decades now. But what about their effectiveness? Some recent

> 16 Note that a different study arrives at a bit different conclusions with regard to the effect of the exposure on capital structure and taxation level. See Li and Ma 2019.

18
using cross-country and within-country data, although we cannot rule out non-causal explanations for this.

This analysis contributes to three literatures. The first examines the role of earnings in attracting quality candidates to the public sector. Ferraz and Finan (2009) document that higher wages for politicians improve political performance in Brazil. In addition, Dal Bó, Finan, and Rossi (2013) find that when salaries increased, more able applicants applied for public-sector jobs. With respect to teachers, combining cross-country data on teacher salary and student performance on international assessments in OECD countries, Dolton et al. (2011) suggest that “the relative wage of teachers is a very good proxy for their average quality.” Recently, Hanushek et al. (2019) show that in OECD countries, teacher salary premiums are associated with teacher cognitive skills and student performance. Our results are consistent with these studies and contribute to the literature by adding evidence from African countries.

The second examines the role of teacher pay changes on student learning. When Indonesia substantially increased teacher pay, teachers’ job satisfaction rose but student academic achievement did not (de Ree et al., 2018).<sup>5</sup> Several studies examine the effect of providing hardship allowance to teachers working in remote areas in developing countries on student performance, and most of them find little to no effect (Cabrera and Webbink, 2020; Bau and Das, 2020; Pugatch and Schroeder, 2018; da Silva Filho and de Xavier Pinto, 2014); recent work from Peru is an exception (Bobba et al. 2021). By contrast, we find a positive association between teacher earnings premia across countries and student performance. These findings might not be contradictory to each other if we consider the potential mechanisms for how student learning might be affected. Most of the literature on changes in teacher pay measures the short-term effects of such policies, where the primary mechanism to improve student learning in the time frame studied is through the effort of teachers in the current system. However, over time, the mechanism associated with wage differentials and student learning is more likely to be through the selection of higher quality candidates into the profession.<sup>6</sup> Bau and Das (2020), which unlike the other studies follows teacher recruitment for a reasonably long period of time—four years—in Pakistan, nevertheless find no adverse selection effects in teacher quality from a reduction in salaries. Even

> 5 Other studies, such as Iwu et al. (2017) in Nigeria, also show positive associations between teacher pay and job satisfaction.

> 6 Teacher pay could also affect teacher turnover, as suggested by a survey of teachers in Nigeria (Okafor et al. 2016).

4
WPS4153

# **The impact of trade with China and India on Argentina’s manufacturing employment**<sup>�</sup>

Lucio Castro<sup>♣</sup> Marcelo Olarreaga<sup>♦</sup> Daniel Saslavsky<sup>♠</sup>

## **Abstract**

For many in Latin America, the increasing participation of China and India in international markets is seen as a looming shadow of two ‘mighty giants’ on the region’s manufacturing sector. Are they really mighty giants when it comes to their impact on manufacturing employment? This paper attempts to answer this question by estimating the effects of trade with China and India on Argentina’s industrial employment. We use a dynamic econometric model and industry level data to estimate the effects of trade with China and India on the level of employment in Argentina’s manufacturing sector. Results suggest that trade with China and India only had a small negative effect on industrial employment, even during the swift trade liberalization of the 1990s.

**_Key words_** : China, Latin America, Trade, Import Competition, Trade and Labor Market Interactions, Employment

**_JEL Classification_** : F14, F15, F16, F17, L60.

World Bank Policy Research Working Paper 4153, March 2007 _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 opinions presented here are of the authors and thus do not necessarily represent the official position of the institutions they belong to. We are grateful to Maria Cecilia Gáname, Daniel Lederman, James Parks, Alejandro Guerson, and participants at the XLI Annual Meetings of the Argentinean Political Economy Association in Salta. A version of this paper is part of Lucio Castro’s Dphil in Economics’ dissertation at the University of Sussex.

> ♣ Lucio Castro is Senior Economist at Maxwell Stamp PLC; Abbot's Court, Farringdon Lane, London, EC1R 3AX; <u>lcastro@maxwellstamp.com</u>

> ♦ Marcelo Olarreaga is Senior Economist at the World Bank’s Office of the Chief Economist for Latin America and the Caribbean, and Research Fellow at the Center for Economic Policy Research in London, <u>molarreaga@worldbank.org</u>

> ♠ Daniel Saslavsky is Research Economist at the Center for Production Studies, <u>dsaslavsky@utdt.edu</u>
**Figure 2 Magnitude of WSS Subsidies by Region (% GDP)**

<!-- Start of picture text --> 2.50%<br>2.00%<br>1.50%<br>1.00%<br>0.50%<br>0.00%<br>% GDP<br><!-- End of picture text --> _Source:_ Authors’ compilation.

_Note:_ GDP = gross domestic product. Bars indicate the midpoint of the estimation range, while the black brackets represent the full estimation range. World Bank regional estimates exclude countries classified as advanced economies by the IMF. Advanced and nonadvanced countries refer to these IMF classifications. Estimates for East Asia and Pacific and nonadvanced economies exclude China, while estimates for South Asia exclude India. Estimates for nonadvanced economies exclude both China and India.

Annual subsidies relative to GDP within regions range from 0.05 percent up to 2.40 percent. The lowest rates are clustered in advanced economies (as classified by the International Monetary Fund) and the highest in Latin America. In figure 2, advanced economies were removed from their respective regions. If this had not been done, values for these regions would have been lower.

These results are in line with previous estimates: most high-income countries tend to charge water tariffs close to the level required to cover operating expenditures and asset depreciation, as well as maintain infrastructure. On the other hand, water tariffs far from cost recovery are most often found in low- and middle-income countries. Utilities in Sub-Saharan Africa, for example, usually operate at a loss and end up lowering their capital expenditures to continue operating, which ultimately leads to a decline in service quality.

Subsidies of networked water far exceed those for sewered sanitation globally, accounting for 64 percent of the total subsidy amount. Overall, advanced economies allocate a higher percentage of subsidies toward sewered sanitation than do nonadvanced economies (44 percent). Sub-Saharan Africa and East Asia and Pacific allocate the lowest proportion (6 percent and 11 percent, respectively). These differences are largely due to the higher rates of access to networked water than to sewered sanitation globally, and the varied rates of access to sewered sanitation across regions.

15
Prices of the composite inputs J1 and J2 are derived in similar fashion, as a result of the linear homogeneity of the nested CES production functions imposed in the production of private formal urban goods: where PROFP , as defined earlier, denotes profits of private firms in the urban formal sector.

The price of capital is defined as a geometric weighted average of the sales prices of the goods for which there is investment demand, namely, the public good and the private formal urban good (see equation (51)): where PCi = PDi for i = G.

The price of government spending, PG, is defined in similar fashion (see equation (49)): Markets for informal goods and government services clear continuously; equilibrium conditions are thus given by These conditions are used to determine PDI and PDG.

As in Karadag and Westaway (1999), the value added tax is modeled as an ad valorem tax on purchases of final goods.<sup>35</sup> Specifically, the sales price for the rural and formal private sector goods, PCi, differs from the composite price as a result of a sales tax, levied at the rate 0 < saltaxi < 1: The consumption price index for the rural and urban sectors are given by

> 35Indeed, in Turkish fiscal accounts, what is referred to as the “value added tax” is actually an ad valorem sales tax. We therefore chose to model it as applying to composite good prices, instead of value added prices.

48
# Table 8 (Continued) Comparison of the Ratios of Predicted and Actual Caribbean Transport Costs for Major Commodity Exports to those of Selected Competitors

|||Caribbean-C|ompetitor Tra|nsport Cost Ratio|
|---|---|---|---|---|
|Commodity (TSUSA No.)|Caribbean Country-Competitor RegionI/|Predicted|Actual|Difference 2/|
|||(percent)|(percent)|(percent)|
|Crude Petroleum (4751010)|Bahamas - South America East Coast|68.0|62.5|5.5|
||Bahamas - South America West Coast|68.0|45.9|22.1|
||Bahamas - West Asia|71.6|33.3|38.3|
||Bahamas - South Africa|66.0|43.3|22.7|
||Bahamas - North West Africa|81.9|56.3|25.6|
||Bahamas<br>- South Asia|61.8|32.8|29.0|
||Bahamas - Middle East|73.1|23.2|49.9|
|Bauxite( 6010600)|Jamaica - South America East Coast|66.7|54.0|12.7|
||Jamaica - West Asia 4/|42.7|16.8|25.9|
||Jamaica - North West Africa|78.6|72.3|6.3|
|Bauxite (6010600)|Suriname - South America East Coast|72.7|99.2|-26.5|
||Suriname - West Asia 4/<br>|46.6|30.9|15.7|
||Suriname - North West Africa|85.7|132.8|-47.1|

- 1/ The comparisons involve the designated Caribbean country and a country which Is the major supplier in the indicated region. For the latter the distance factor is measured to the closest major U.S. port of entry.

- 2/ A positive value for this term indicates the Caribbean port is operating relatively more efficiently than would be predicted using equation (5).

- 3/ The actual freight rate ratio greater than unity is due to charges of S19.2 per ton for shipments from Trinidad and S17.05 per ton from South America West Coast (Peru).

- 4/ The very low actual transport cost ratios are due to the high freight rate on bauxite (533.09) from China. In contrast, the actual rate Is S5.56 Jamaica and 510.21 from Suriname.
Table 1: Baseline balance, Caregiver and Household Characteristics

|||(1)<br>Control||(2)<br>NEP-B||(3)<br>NEP-I|t-test<br>p-value|t-test<br>p-value|
|---|---|---|---|---|---|---|---|---|
|Variable|N|Mean|N|Mean|N|Mean|(1)-(2)|(1)-(3)|
|Who is the caregiver (%)|||||||||
|Mother|972|94.5%|972|95.2%|972|94.8%|0.538|0.840|
|Grandmother|972|4.0%|972|3.2%|972|3.5%|0.330|0.551|
|Other|972|0.5%|972|0.4%|972|0.4%|0.738|0.738|
|Father|972|0.9%|972|1.2%|972|1.3%|0.511|0.391|
|Caregiver’s education (%)|||||||||
|Primary|958|19.9%|958|22.5%|954|20.2%|0.163|0.873|
|Secondary incomplete|958|17.2%|958|17.1%|954|15.5%|0.952|0.313|
|Secondary complete|958|46.8%|958|44.3%|954|47.5%|0.271|0.753|
|Tertiary<br>|958|16.1%|958|16.1%|954|16.8%|1.000|0.681|
|Single Mother|972|40.6%|972|41.2%|972|42.0%|0.818|0.550|
|Caregiver’s age (%)|||||||||
|15-20 years old|969|12.9%|969|15.1%|965|13.8%|0.169|0.568|
|21-30 years old|969|48.5%|969|48.6%|965|48.8%|0.964|0.893|
|31-40 years old|969|30.0%|969|26.8%|965|27.9%|0.119|0.296|
|41-50 years old|969|6.8%|969|7.5%|965|7.9%|0.538|0.370|
|>51 years old|969|1.8%|969|2.0%|965|1.7%|0.737|0.870|
|Hh’ld p.c. income (<40%)|972|80.0%|972|80.9%|972|79.7%|0.647|0.865|
|Hh’ld p.c. income ($US)|972|209.7|972|209.7|972|209.7|0.354|0.997|
|F-test of joint significance (p|-value)||||||0.538|0.840|

Note: T-tests report comparisons between the control arm and NEP-B and NEP-I. Household per capita income reported in 2011 US dollars per month. Significance levels: *p<=10%, **p<=5%. F-test for the joint significance across all variables is reported at the bottom.

In Appendix 1 (tables A1 to A6), we show that the sample is also balanced across treatment arms in terms of child characteristics, child development, parental beliefs, and parenting behaviors. We also show that child cognitive outcomes, such as language and executive function, are strongly positively correlated with maternal education, while children of more educated caregivers are less likely to exhibit behavioral problems (figures A1 and A2) (Fernald et al. 2012; Schady et al. 2014). These trends are mirrored by measures of parental behaviors and beliefs (figures A3 and A4). Relative to less educated caregivers, those who are more educated provide more cognitive stimulation to their children, are more nurturing, use less harsh disciplinary practices, have a higher perception of self-efficacy and see child rearing in a more authoritative way.

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34

# **Figure 8 Capacity Resale**

<!-- Start of picture text --> 5. Financial settlement<br>r...-_<br>| Shipper 2 7I British Gas TransCo<br>1. Offer<br>Shipper 3<br>Free capacity NTS<br>Shipper 4 s - (any combination - entry point<br>2. Bids and rebids of points) capacity<br>3. Bid selection '<br>Winnirig bid NTS<br>(shipper 2) L exit point<br>capacity<br>4. Notification LDZ<br>-- exit point<br>capacity<br>- Physical connection Financial flow _ Information flow<br><!-- End of picture text -->

Source: Author's compilation The price of capacity in an efficient secondary market reflects the SRMC and the opportunity costs of capacity. It is high during peak periods when the pipeline system is congested and the opportunity costs of capacity are high. On the other hand, the price of capacity is low during off-peak periods when the system has plenty of unused capacity and the opportunity costs of capacity are equal or close to zero.

Under the existing institutional arrangements, the secondary capacity trading in the U.K. is being developed mainly along the natural gas trading in the "on-system" market. Increasing liquidity of the "on system" gas market and uniformity of electronic systems make gas and capacity transactions at the NBP a viable option for shippers to match their gas and capacity needs on daily, monthly or even longer-term bases. As a result shippers increasingly trade secondary pipeline capacity, particularly in the short-term, although it may often be "bundled" with natural gas traded at the NBP.