rafmacalaba/datause-encoder-data huggingface dataset:
Well-being during a time of change :
            Timor-Leste on the path to independence
Countries undergoing fundamental
            economic and political transformations might experience
            differential adjustments in material well-being and
            empowerment. The author evaluates self-rated welfare and
            power changes in Timor-Leste covering the period prior to
            the 1999 referendum on independence from Indonesia to the
            eve of independence in end 2001. Drawing on the first
            nationally representative household survey and village
            census, he shows how subjective, objective, and recall
            information can be combined to provide a rich profile of
            trends in well-being from the pre- to post-conflict stage.
            The authors analysis shows that changes in self-rated
            welfare and power broadly corresponded to changes recorded
            by objective indicators. While economic well-being improved
            little, empowerment increased dramatically. The changes were
            not uniform across the population but some groups benefited
            more than others. The evidence for Timor-Leste is consistent
            with these hypotheses: a) Economic resources increase
            welfare, and more than power; b) Social resources increase
            power, and more than welfare; c) Welfare winners have low
            initial economic resources; d) Power winners have high
            social resources; and e) Economic shocks reduce welfare and
            power, but welfare more than power.
Roads out of poverty assessing the
            links between aid, public investment, growth, and poverty reduction
The authors develop a macroeconomic
            framework that captures links between aid, public
            investment, growth, and poverty. Public investment is
            disaggregated into education, infrastructure, and health,
            and affects both aggregate supply and demand. Dutch disease
            effects are captured by accounting for changes in the
            relative price of domestic goods. The authors assess the
            impact of policy shocks on poverty by linking the model to a
            household survey. They calibrate the model for Ethiopia and
            simulate the changes in the allocation of aid and public
            investment. The authors also calculate the amount by which
            foreign aid should increase to reach the poverty targets of
            the Millennium Development Goals.
Duty drawbacks, competitiveness, and
            growth - are duty drawbacks worth the hassle
Many countries use duty drawbacks on
            exports, yet they have been given little attention in the
            literature and there is no consensus whether countries
            should embrace or abandon them. The author asserts that the
            answer depends on a countrys development priorities and
            economic conditions. An increase in the drawback has a
            positive impact on export competitiveness and employment,
            but could lead to exports with low domestic value added. The
            welfare effects of duty drawback reform are ambiguous. An
            increase in the drawback is more likely to be welfare
            improving if the economy is small with high input tariffs,
            low initial drawback, low administrative costs, and leakages
            in the tariff collection system. In China duty drawback
            removal after meeting WTO commitments will deepen domestic
            supply chains and improve welfare, but will hurt Chinas
            economic efficiency, export competitiveness, and real factor
            incomes. Further liberalization could mitigate these
            negative effects.
Access to capital in rural Thailand
            : an estimated model of formal versus informal credit
The aim of this paper is to understand
            the mechanism underlying access to credit. The author
            focuses on two important aspects of rural credit markets in
            Thailand. First, moneylenders and other informal lenders
            coexist with formal lending institutions such as government
            or commercial banks, and more recently, micro-lending
            institutions. Second, potential borrowers presumably face
            sizable transaction costs obtaining external credit. The
            author develops and estimates a model based on limited
            enforcement and transaction costs that provides a unified
            view of those facts. The results show that the limited
            ability of banks to enforce contracts, more than transaction
            costs, is crucial in understanding the observed diversity of lenders.
Child labor, school attendance, and
            indigenous households : evidence from Mexico
The authors use panel data for Mexico
            for 1997 to 1999 to test several assumptions regarding the
            impact of a conditional cash transfer program on child
            labor, emphasizing the differential impact on indigenous
            households. Using data from the conditional cash transfer
            program in Mexico PROGRESA (OPORTUNIDADES) they investigate
            the interaction between child labor and indigenous
            households. While indigenous children had a greater
            probability of working in 1997, this probability is reversed
            after treatment in the program. Indigenous children also had
            lower school attainment compared with Spanish-speaking or
            bilingual children. After the program, school attainment
            among indigenous children increased, reducing the gap.
The clash of liberalizations :
            preferential versus multilateral trade liberalization in the
            European Union
There has been an explosion in the
            number of preferential trade agreements in the past decade.
            Preferential trade agreements are characterized by
            liberalization with respect to only a few partners and thus
            they can potentially clash with and retard multilateral
            trade liberalization. Despite this important concern with
            preferential trade agreements, there is almost no systematic
            evidence on whether they actually affect multilateral trade
            liberalization. The authors model the effect of preferential
            trade agreements on multilateral trade liberalization and
            show that preferential trade agreements slow down
            multilateral trade liberalization unless they have a common
            external tariff and allow for internal transfers. Next, they
            use detailed data on product-level tariffs negotiated by the
            European Union in the past two multilateral trade rounds to
            structurally estimate their model. The authors confirm the
            main prediction-the European Union's preferential trade
            agreements have clashed with its multilateral trade
            liberalization--and find that the effect is quantitatively
            significant. Moreover, they also confirm several auxiliary
            predictions of the model and provide new evidence on the
            political economy determinants of multilateral
            liberalization in the European Union.
The clash of liberalizations :
            preferential versus multilateral trade liberalization in the
            European Union
# WPS3493

## The Clash of Liberalizations:

## Preferential versus Multilateral Trade Liberalization in the European Union<sup>∗</sup>

Baybars Karacaoval ı<sup>†</sup> Nuno Limão<sup>‡</sup> University of Maryland

### Abstract

There has been an explosion in the number of preferential trade agreements (PTAs) in the last decade. PTAs are characterized by liberalization with respect to only a few partners and thus they can potentially clash with and retard multilateral trade liberalization (MTL). Despite this important concern with PTAs, there is almost no systematic evidence on whether they actually affect MTL. We model the effect of PTAs on MTL and show that PTAs slow down MTL unless they have a common external tariff and allow for internal transfers. Next, we use detailed data on product-level tariffs negotiated by the European Union in the last two multilateral trade rounds to structurally estimate our model. We con fi rm the main prediction—the European Union’s PTAs have clashed with its MTL–and fi nd that the effect is quantitatively signi fi cant. Moreover, we also con fi rm several auxiliary predictions of the model and provide new evidence on the political economy determinants of multilateral liberalization in the European Union.

JEL Classi fi cation: D78; F13; F14; F15.

Keywords: Preferential trade agreements; customs unions; multilateral trade negotiations; MFN tariff concessions; reciprocity.

> ∗We thank, without implying, Stephanie Aaronson, Kishore Gawande, Bernard Hoekman, Patricia Tovar-Rodriguez and Alan Winters for helpful discussions and comments and Marcelo Olarreaga and John Romalis for generously sharing some data. The views expressed here are those of the authors.

> †University of Maryland, Department of Economics, MD 20742. E-mail: karacaov@econ.umd.edu.

> ‡Corresponding Author: limao@econ.umd.edu. University of Maryland, Department of Economics, MD 20742. I acknowledge the fi nancial support of the World Bank Research Group which hosted me during the completion of part of this research.
Unemployment and the earnings
            structure in Latvia
Latvia has recorded sustained GDP and
            productivity growth since 1997. Yet unemployment rates,
            despite gradual decrease, have remained high. The paper
            explores the mysteries of unemployment in Latvia. It
            analyzes labor flows between employment, unemployment, and
            nonparticipation and finds the following results: The type
            of education and the region of residence appear to be the
            most important determinants of success in finding jobs by
            the unemployed. The unemployed from ethnic minorities have
            lower chances to find a job within a year, other things
            equal, while the difference between genders is not
            significant. However, neither ethnicity nor gender seems to
            matter as far as the transition from employment to
            unemployment is concerned. Regional disparities in job
            destruction seem to be less sizable than disparities in job
            creation. The analysis of job search methods by the
            unemployed indicates that two target groups of state
            employment policy (young unemployed and long-term
            unemployed) appear to make relatively little use of the
            public employment service. The author also looks at the
            impact of education, age, gender, ethnicity, and regional
            factors on individual earnings. The relative position of
            youth and women in Latvian labor market, compared with prime
            age men, is less unfavorable than in many other countries.
            Yet the gender wage gap has increased recently, and the same
            is true for regional disparities. Beneficiaries of the
            so-called new education system have a relatively high market
            value, especially with graduates from universities and
            general secondary schools. Finally, returns to experience
            seem to be nonexistent for many adult workers without higher education.
Agriculture and national welfare
            around the world: causality and international heterogeneity
            since 1960
Calculations of marginal welfare effects
            suggest that agricultural development has had important
            positive effects on national welfare, especially in
            developing countries. Latin American and Caribbean countries
            have also benefited from agricultural growth, but
            non-agricultural production has had marginal welfare effects
            that are greater in magnitude than those provided by
            agricultural activities. In contrast, the industrialized,
            high-income countries experienced marginal welfare gains
            from non-agricultural activities that are much greater than
            those derived from agriculture, whose impact is actually
            negative. These calculations of marginal welfare effects
            across regions depend on econometric estimates of
            elasticities linking agricultural and nonagricultural
            economic activities to four elements in a national welfare
            function: national GDP per capita, average income of the
            poorest households within countries, environmental outcomes
            concerning air and water pollution and deforestation, and
            macroeconomic volatility. The econometric analyses are
            motivated by theoretical treatments of key issues. The
            empirical models are estimated with various econometric
            techniques that deal with issues of causality and
            international heterogeneity.
Agriculture and national welfare
            around the world: causality and international heterogeneity
            since 1960
AGRICULTURE AND NATIONAL WELFARE AROUND THE WORLD: CAUSALITY AND INTERNATIONAL HETEROGENEITY SINCE 1960<sup>∗</sup> Claudio Bravo-Ortega Daniel Lederman Office of the Chief Economist Office of the Chief Economist Latin America and the Caribbean Region Latin America and the Caribbean Region The World Bank The World Bank and Department of Economics University of Chile

# **<u>All Comments are Welcome</u>**

# **_Abstract_**

Calculations of marginal welfare effects suggest that agricultural development has had important positive effects on national welfare, especially in developing countries. Latin American and Caribbean countries have also benefited from agricultural growth, but non-agricultural production has had marginal welfare effects that are greater in magnitude than those provided by agricultural activities. In contrast, the industrialized, high-income countries experienced marginal welfare gains from non-agricultural activities that are much greater than those derived from agriculture, whose impact is actually negative. These calculations of marginal welfare effects across regions depend on econometric estimates of elasticities linking agricultural and nonagricultural economic activities to four elements in a national welfare function: national GDP per capita, average income of the poorest households within countries, environmental outcomes concerning air and water pollution and deforestation, and macroeconomic volatility. The econometric analyses are motivated by theoretical treatments of key issues. The empirical models are estimated with various econometric techniques that deal with issues of causality and international heterogeneity.

# World Bank Policy Research Working Paper 3499, February 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._

> ∗ Ramon López, William Maloney, Michael Walton, Guillermo Perry, Alberto Valdés, Julian Alston and William Foster provided valuable comments on preliminary drafts of this paper. We thank also participants at the World Bank conference in San Jose, Costa Rica. David Roodman kindly provided guidance on econometric estimators.
Bank privatization and performance -
            emprical evidence from Nigeria
The authors assess the effect of
            privatization on performance in a panel of Nigerian banks
            for the period 1990-2001. They find evidence of performance
            improvement in nine banks that were privatized, which is
            remarkable given the inhospitable environment for true
            financial intermediation. Their results also suggest
            negative effects of the continuing minority government
            ownership on the performance of many Nigerian banks. The
            authors' results complement aggregate indications of
            decreasing financial intermediation over the 1990s. Banks
            that focused on investment in government bonds and
            non-lending activities enjoyed a relatively higher performance.
Policy mix, public debt management,
            and fiscal rules - lessons from the 2002 Brazilian crisis
Despite significant progress in economic
            reform throughout the 1990s, and an exemplary development of
            the policymaking framework in the second part of the decade,
            Brazil suffered a major public debt and currency crisis in
            2002. Though the political origin of the uncertainty cannot
            be ignored, the author identifies other sources of
            uncertainty emanating from the policymaking framework:
            fiscal policy was not responsive to the shocks, public debt
            instruments were used with several objectives (to stabilize
            the currency and to lengthen maturity) and there was
            inadequate supervision of agents holding public debt. Most
            of the flaws have been fixed following the crisis: a) The
            primary fiscal balance has been increased, sending the
            signal that it is a flexible instrument that will be used to
            ensure commitment of the sovereign to honor its obligations.
            b) The central bank formally transferred to the Treasury the
            remaining debt-issuance functions, facilitating a more
            adequate balancing of different risks involved in debt
            management. c) Mutual funds' public debt holdings are
            better regulated, ensuring that end-investors have the
            proper information to assess the risk of the institutions in
            which they invest.
Geopolitical interests and
            preferential access to U.S. markets
The United States imports around 25
            percent of its merchandise under some form of preferential
            trade regime. The authors examine both the origins and
            consequences of U.S. trade preferences in the context of the
            gravity model of international trade. First, they provide
            estimates of the impact of preferential trade regimes in
            terms of access to U.S. markets while controlling for
            geo-strategic interests that determine the countries that
            are offered commercial preferences. Second, the authors
            consider not only country eligibility but also the extent of
            utilization of these programs. Third, they provide new
            estimates of the impact of transport and transactions costs
            beyond distance. In the standard gravity estimation, the
            authors find that beneficiaries of these preferences, except
            GSP, export 2-3 times more than the excluded countries,
            after controlling for country and product characteristics.
            Nonetheless, the estimated effects of these programs are
            lower when controlling for utilization ratios and selection
            biases due to the correlation between geopolitical interests
            and the standard explanatory variables used in the gravity
            model of trade, such as countries' geographic distance
            from the United States.
Dynamic cities and creative clusters
The author focuses on how urban policies
            and the clustering of creative industries has influenced
            urban outcomes. The set of creative industries include those
            with output protectable under some form of intellectual
            property law. More specifically, this sub-sector encompasses
            software, multimedia, video games, industrial design,
            fashion, publishing, and research and development. The
            cities that form the basis for the empirical investigations
            are those where policy-induced transitions have been most
            evident, including Boston; San Francisco; San Diego;
            Seattle; Austin; Washington, D.C.; Dublin (Ireland); Hong
            Kong (China); and Bangalore (India). The key research
            questions are: 1) What types of cities are creative? 2) What
            locational factors are essential? 3) What are the common
            urban policy initiatives used by creative cities? The author
            explores the importance of the external environment for
            innovation and places it in the larger context of national
            innovation systems. Based on a study of development in
            Boston and San Diego, he isolates the factors and policies
            that have contributed to the local clustering of particular
            creative industries. In both cities, universities have
            played a major role in catalyzing the local economy by
            generating cutting-edge research findings, proactively
            collaborating with industries, and supplying the needed
            human capital. In addition, these two cities benefited from
            the existence of anchor firms and active industry
            associations that promoted fruitful university-industry
            links. Many cities in East Asia are aspiring to become the
            creative hubs of the region. But their investments tend to
            be heavily biased toward infrastructure provision. Although
            this is necessary, the heavy emphasis on hardware can lead
            to underinvestment in developing the talents and skills
            needed for the emergence of creative industries in these cities.
Remittances, household expenditure
            and investment in Guatemala
The author uses a large household data
            set from Guatemala to analyze how the receipt of internal
            remittances (from Guatemala) and international remittances
            (from the United States) affects the marginal spending
            behavior of households on various consumption and investment
            goods. Contrary to other studies, the author finds that
            households receiving remittances actually spend less at the
            margin on consumption-food and consumer goods and
            durables-than do households receiving no remittances.
            Instead of spending on consumption, households receiving
            remittances tend to spend more on investment goods, like
            education, health, and housing. The analysis shows that a
            large amount of remittance money goes into education. At the
            margin, households receiving internal and international
            remittances spend 45 and 58 percent more, respectively, on
            education, than do households with no remittances. These
            increased expenditures on education represent investment in
            human capital. Like other studies, the author finds that
            remittance-receiving households spend more at the margin on
            housing. These increased expenditures on housing represent a
            type of investment for the migrant, as well as a means for
            boosting local economic development by creating new income
            and employment opportunities for skilled and unskilled workers.