rafmacalaba/datause-encoder-data huggingface dataset:
Correlated incidence heterogeneity can invalidate the IVs. If the BWR varies systematically, then the IVs based on Component 1 are likely to be correlated with the error term through their non-zero covariance with the<sup>ε</sup> _i_<sup>’s. To help address this concern, we exploit our</sup> panel data by using the lagged values of Component 1 income sources as the IVs.

However, while this will go some way toward reducing the bias, we acknowledge that (as in other applications using lagged values as IVs) positive serial correlation in incomes can jeopardize this identification strategy. However, under the assumption above of latent pro-poor incidence, the unobserved differences in transfer receipts will tend to favor poor people. Then we can expect that our IVs are negatively correlated with the error term. Having removed the bias due to incentive effects and measurement errors (under our assumptions), the true value of the − mean BWR ( β ) will then be lower than our IV estimate.<sup>23</sup> By bounding the bias in the IV estimator under our assumption of latent pro-poor incidence we will still be able to draw a robust policy implication in our application to follow.

# **3. Background and data on China’s** **_Dibao_ program**

Economic transformation has come with a dramatic change in the nature of social protection in China, which has switched from employer-based security arrangements (the socalled “iron rice bowl”) to an increasing role of government at all levels. This has been a policy response to fundamental changes in the urban labor markets, themselves stemming from policy changes (World Bank, 2007, 2010; Ravallion, 2013b). A new form of open unemployment— found in many other economies but new to China—emerged in urban China in the late 20<sup>th</sup> Century, in the wake of retrenchments of workers in un-profitable state-owned enterprises since the mid-1990s. Not surprisingly, those least able to work, including the disabled or unhealthy, tended to be the first to go. Having previously been protected by their work units, they were now exposed to market forces. Using a 2000 survey, Appleton et al. (2002) found persistently high unemployment amongst retrenched workers, who tended to have fewer skills, less education, poorer health, and to be women and middle-aged. Less secure, less regular forms of part-time work have also become more common in urban China (Solinger, 2002; Park and Cai, 2011).

> 23 Note that (as usual) Plim β ˆ _IV_ = β + _Cov_ ( _Z i_ , μ _i_ /) _Cov_ ( _Z i_ , _Yi_ − _Ti_ ) where _Z_ is the IV.

11
backed by some type of government guarantees.<sup>12</sup> In that way, constraints to public investment spill over to private investment in infrastructure.

In summary, considering average levels of PPP investments of between 0.5 and 1 percent of GDP, and public infrastructure investments of 1 to 1.5 percent, Latin American average investment in infrastructure is unlikely to exceed 1.5-2.5 percent of GDP in the near future, very much in line with current levels.<sup>13</sup> This leaves investment efficiency improvements, including refocusing spending “needs”, reducing costs, improving cost recovery, and managing demand as the only realistic avenues to speed up infrastructure delivery in the short and medium run.

In terms of setting adequate targets or goals, consider the cases of water and electricity, highlighted in World Bank (2017). By one estimate (Hutton and Varughese 2016) achieving universal access to basic water, sanitation, and hygiene by 2030, in line with the early Millennium Development Goal (MDG), would require an investment of only 0.05 percent of GDP a year through 2030. On the other hand, achieving the much more ambitious Sustainable Development Goal (SDG) of universal access to _safely managed_ water and sanitation services by 2030 would cost five times more, at 0.25 percent of GDP, an amount equivalent to current Latin American spending on water and sanitation.

The potential for demand management, through better pricing schemes, incentives and behavioral nudges, is probably large. The experience of Brazil in 2001, when the droughtinduced energy crisis led to the implementation of a large scale electricity saving program, is a case in point (Costa and Gerard 2015). Faced with strong incentives, including quotas and penalties for exceeding them, households responded sharply, reducing electricity consumption. More interestingly, the policy led to a permanent and stable reduction in average electricity use of 11% four years later, arguably through a change in consumption habits. The possibility of hysteresis, whereby temporary policies may have permanent effects by shifting agents to a different equilibrium, has clearly been underestimated when defining policy goals in the context of infrastructure investments, which lock in behaviors over a long period of time.

Finally, boosting the efficiency of investment spending should be high on the agenda. It has been known at least since Pritchett (2000) that (cumulated) investment flows may translate into

> 12 See https://ppi.worldbank.org/

> 13 See http://infralatam.info/

18
states and in years when the dominant parties are not aligned with the centre. In view of the traditional dominance of a single party at the center, and the fact that the Indian federation is very centralized, it is quite likely that state midterm elections are fuelled by pressures from the central government. In fact, under Article 356 of the Constitution of India, the central government has the authority to recommend that a state government be removed, irrespective of whether it controls majority seats in the assembly, and Presidential Rule be imposed on the state if "a situation has arisen in which the government of the state cannot be carried on in accordance with the constitution" [Hardgrave, 1980, p. 58]. Typically, Presidential Rule lasts for a few months and is followed by midterm elections. About 45 per cent of the midterm elections in the sample followed the imposition of Presidential Rule in the state. Many political studies document that the imposition of Presidential Rule is driven by strikingly partisan motives.<sup>8</sup> Political affiliation certainly qualifies as a "persistent shock", since the electoral cycle could be the result of comparing systematically different policies adopted by aligned and non-aligned states, and not the result of strategic manipulation by govermnents facing elections. It is highly likely, in the Indian context, that the effect of political affiliation is accounted for simply through the state fixed effects, since "pro-center" or "anti-center" attitudes are relatively constant across the years in individual states, irrespective of the party currently controlling the legislative assembly. However, to test for the effect of political affiliation in a more general manner, we estimate the following model: where AFFit is an indicator of political affiliation that equals 1 when the incumbent in state _i_ at time t is aligned with the party in power at the center at time t, and 0

> 8 See Hardgrave [1980], Dua[1979], and Maheshwari [1977].

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Policy Research Working Paper 7056

# **Abstract**

This paper provides evidence on the effects of agricultural productivity on wage rates, labor supply to market oriented activities, and labor allocation between own farming and wage labor in agriculture. To guide the empirical work, this paper develops a general equilibrium model that underscores the role of reallocation of family labor engaged in the production of non-marketed services at home (‘home production’). The model predicts positive effects of a favorable agricultural productivity shock on wages and income, but the effect on hired labor is ambiguous; it depends on the strength of reallocation of labor from home to market production by labor surplus and deficit households. Taking rainfall variations as a measure of shock to agricultural productivity, and using subdistrict level panel data from Bangladesh, this paper finds significant positive effects of a favorable rainfall shock on agricultural wages, labor supply to market work, and per capita household expenditure. The share of hired labor in contrast declines substantially in response to a favorable productivity shock, which is consistent with a case where labor-deficit households respond more than the laborsurplus ones in reallocating labor from home production.

This paper is a product of the Agriculture and Rural Development 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 fshilpi@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
of the country (columns 3-8). This interaction term is small and statsitically insignificant. Two implications follow. First, the larger positive impact of maternity leave in countries with a higher share of females in the 20-29 age group is not because these countries happen to have more females in total population. Second, the positive impact of maternity leave is magnified because of more women in the 20-29 years age group and not because of more women in other age groups. This is an unlikely result if our maternity leave variable were a proxy for other correlated drivers of female workers.

Split-sample results based on below median vs. above median values of the share of females in the 20-29 age group are provided in table A7 in the Appendix. The specifications used are the same as in the baseline model discussed above (table 1). The split-sample results are consistent with the ones in table 4. That is, the maternity leave and female workers relationship is positive, large, and significant for countries with above median share of females in the 20-29 age group. For countries with below median values of the share of females in the 20-29 age group, the relationship between maternity leave and female workers is also positive but much smaller and statistically insignificant. Note that unlike the interaction term results discussed in the previous paragrph, the split-sample reuslts do not require any conditioning on government funding of maternity leave.

# 5.3 _Falsification test_

Our next endogeneity check involves a falsification test. The dependent variable here is a dummy variable equal to 1 if the firm has at least one female owner and 0 otherwise. The prediction is that there is either no relationship or a negative relationship between maternity leave and the presence of a female owner. One issue here is that the ES does not provide information on the extent of 33
Macroeconomic Parameters <!-- Start of picture text --> IWsUT_-;AuTA%-xVt ParameteFs Ii<br>DlscU rate<br>4 Tax Rate<br>fW Asses Ufe fr DepwjaWn (yewrs)<br>Welfare-Loss Mease of t&K*Ion<br><!-- End of picture text --> In this dialog, the user can specify the main macroeconomic parameters that have direct influence on a project's cash flows, such as the applicable discount rate, the corporate income tax rate, allowable asset life for calculating depreciation for tax purposes, and a measure of welfare-loss due to distortionary taxation (used in the INFRISK social welfare function to calculate the government's willingness to participate in a project.)

# Construction Cost

<!-- Start of picture text --> iw1tiflTirnio Into<br>Constmuctton Peawod<br>Total Cost (Lcu) 1438.73<br>Constuctkon Costs Aiocauton<br>1992 1993 1T 1996<br>1iO9,w8 1109.68a ji09, 11 F,<br><!-- End of picture text --> This dialog is for infornational purposes only and allows the user to view information on the construction period, total construction cost, and the allocation schedule of costs over the construction period. Changing this data can be done through the specified input sheet via the variable labeled as _CK._ 16
as a credible signal for employers and challenge some of their perceptions about women’s productivity. In the IT sector, programs that promote skills training for women seeking to enter IT-related fields could be linked to the educational/vocational programs currently in Tunisia. Programs such as public information campaigns and career guidance services may also be needed to correct misperceptions about gender discrimination among students and their families and to encourage them to enroll in studies that tend to be male-dominated, such as engineering.

Moreover, it is important to implement targeted strategies to change (male) behavior in the workplace. Studies from the Organisation for Economic Co-operation and Development (OECD) found that in private enterprises, targeted strategies that champion leadership on gender issues from the top help to create opportunities for women through sponsorship, robust talent management, and a targeted search for female candidates for senior executive positions, who will, in turn, serve as positive role models for future generations of girls (Elborgh-Woytek et al. 2013). For example, in Norway, Kunze and Miller (2017) find narrower gender gaps in promotions for workers with female bosses, suggesting that policies that increase female representation in corporate leadership can have spillover benefits to women in the lower ranks.

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Table 4: <u>Cost-Benefit Analysis of ECD Interventions in Comparison to Other Options</u>

|||Ec<br>_2nd_|onomic stat|us<br>_4th_||
|---|---|---|---|---|---|
|Rate of return to a year of schooling|_Poorest_<br>30|_level_<br>20|_Average_<br>15|_level_<br>10|_Richest_<br>5|
|Scenario I: Early childhood development<br>program(focus onpreschool)|B<br>3.50|enefit/Co<br>2.70|st ratio for in<br>2.30|terventio<br>2.10|n<br>1.80|
|Scenario II: Early childhood development<br>program (preschool plus nutrition and health<br>interventions)|4.10|3.35|2.93|2.45|1.92|
|Scenario III: As in scenario II but with<br>additional intervention in first two grades|4.50|4.03|3.20|2.70|2.30|
|_Other interventions_:<br>||||||
|Reduce class size (50%) (assume increased<br>performance, future attainment by 5%)|1.10|1.20|1.30|1.50|1.70|
|Reduce class size (50%) with building cost<br>(assume increased performance, future<br>attainment by 5%)|0.90|1.00|1.10|1.20|1.30|
|Raise teacher salary (50%) (assume<br>increased efficiency, student achievement,<br>college entry by 5%)|1.70|1.50|1.20|1.20|1.20|
|Incentives to students ($200/year/child),<br>assume increased enrollment in 1st grade by<br>5%|2.00|1.80|1.00|0.50|0.30|
|Computers (assume improved learning,<br>increased employability, productivity by<br>5%)|1.00|1.10|1.20|1.30|1.30|

# **Conclusion**

This paper summarized the socioeconomic conditions of children around the world. It used the framework of the Copenhagen Consensus, as part of a larger effort to take stock of the world’s biggest problems and the most promising solutions. It presented an in-depth assessment of the costs and benefits of solutions to some of the problems facing children today. We placed emphasis on results from rigorous studies, impact evaluations and randomized experiments. Although the cost-evidence literature is scarce, a good case for early interventions and key quality-enhancing education interventions exists.

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- 34 -

A further cause of concern should have been the increase in cheque clearing. From a monthly average of KD 1.2 billion in 1981, the total peaked in July 1982 at KD 3.9 billion. This was a clear indication that future cheques were being cashed and should have warned authorities of the need for restrictions. Moreover, the development of debt instruments outside the CBK control should have been stopped. First to impose credit controls, and also because the credit risk information that the CBK shared with the banks as a basis for bank lending was no longer adequate.

Apparently the CBK saw its role as essentially one of servicing the banks' needs for foreign exchange, swaps, clearing, and credit risk information. Thus officials did not use monetary policy to control liquidity, though they did have open-market instruments available, including treasury bills and the discount rate.

For example, the CBK cut its discount and rediscount facilities from KD 600 million to KD 320 million at the end of 1981 and 1982 42/ . While this was designed to reduce liquidity, the banks had increased their deposits with the CBK from KD 238 million in 1980 to KD 732 million in 1982. The CBK actions were not significant relative to the size of the banks' liquid assets when the banks were net depositors. While the CBK also moved to issuing shorter term treasury bills in early 1982, and in May prohibited the banks from giving credit against future cheques and Gulf company shares, it was too late to control domestic liquidity. The stock market had already peaked and was declining and, in fact, these actions may have accelerated the decline.

While the stock market authorities were excluded from any supervision of the parallel market, the market developed very rapidly without government interference for so long that traders assumed the market was legal. In fact, prices were continuously quoted for the KSCCs, even though share sales were illegal before the three-year period. The stock market committee could have intervened at that time to halt the formation of KSCCs.

Although the stock market committee had wide powers under the law, officials did not set up procedures or mechanisms for effective regulation. Moreover, authorities should have controlled trading in the Kuwaiti shareholding companies on the grounds that KSCs are restricted to investing in the specific area proscribed in the by-laws, and cannot invest at random in other sectors. The Ministry annually sends a representative to the company's shareholders meeting to ascertain that the company's by-laws have not been violated. At that time officials could have curtailed the wide-ranging investments in the stock market. In fact, many companies paid dividends in 1984 and 1985, even though they showed large losses and their investments were valued at above-market prices, artificially improving their overall financial position. Even more surprising the external auditors did not note on their statements that there were violations or that the assets of the company were overvalued.

A2/ Central Bank of Kuwait. The Kuwaiti Economy 1980-1984. P. 72.
WPS3185

# **DOES INFRASTRUCTURE REFORM WORK FOR THE POOR? A CASE STUDY FROM GUATEMALA**<sup>**1**</sup>

**VIVIEN FOSTER**<sup>**2**</sup> **AND MARIA CARIDAD ARAUJO**<sup>**3**</sup>

## World Bank Policy Research Working Paper 3185, January 2004

_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 This research was originally prepared as a Background Paper for the Guatemala Poverty Assessment 2002.

2 Vivien Foster is an Economist with the Finance, Private Sector, and Infrastructure Unit of the Latin America and Caribbean Region of the World Bank (vfoster@worldbank.org).

3 María Caridad Araujo was a Doctoral student in the Department of Agricultural and Resource Economics at the University of California at Berkeley at the time when the research was conducted (caraujo@are.berkeley.edu).

1
entire period of data available, i.e. from 1901 to 2018.

To measure impacts of unusually dry and wet periods, we identify grid cell-month-year observations where the SPEI is two standard deviations above and below its long term mean, respectively. The spatial distribution of the frequency of extreme wet and dry shocks is shown in figures 1 and 2. Figure 3 shows the share of grid cells that experienced dry and wet shocks over the entire region in a given year. Notice that the 2010 spike in dry shocks is linked to an unusually strong La Nina event which pulled moisture away from East Africa and led to large-scale drought in the Sahelian belt and Eastern Africa during that year.<sup>2</sup>

# **Additional Data Sources**

The geolocated dataset is matched into first subnational level administrative boundaries obtained for the Global Administrative Areas (GADM). This allows us to exploit a rich set of region fixed effects in our econometric specification to account for the location-specific characteristics that are shared by households surveyed in a particular administrative area. Data on the presence of irrigation are included to examine whether access to irrigation in a region affects responses of local labor markets to water shocks. To measure the share of each grid cell that is irrigated at the start of the analysis period, the paper uses gridded data on the average area equipped for irrigation between 1990 and 2005 from the UN Food and Agriculture Organization (FAO). The construction of this data set is described in Siebert et al. (2007). To conduct the analysis, these raw data are aggregated to 0.5x 0.5 degree by taking the average percentage of area irrigated in all smaller cells that fall within a larger grid cell. Figure 4 shows the distribution of areas equipped for irrigation in our sample.

Additional datasets are included to examine the role of adaptation in mediating the impacts of water shock. The paper uses data on the precolonial mode of subsistence by ethnic homeland to examine whether the impacts of water shocks vary conditional on a region’s historical activities. To do so, information on individual food production strategy by ethnicity from the Ethnographic Atlas, originally compiled by Murdock (1967) are collected. The analysis identifies if an ethnic groups subsistence was reliant on either: (i) agriculture; (ii) hunting, gathering and fishing; or (iii) herding and animal husbandry (or pastoralism). Figure 5 illustrates the spatial distribution of the reliance on the three modes of subsistence across different ethnic homelands in sub-Saharan Africa.<sup>3</sup>

> 2For discussion of the droughts and famine in 2010, see these articles from NASA and New York Times.

> 3The data are originally in the form of GPS points. The analysis generates Voronoi polygons around these points and assign gridcells to the ethnic homelands of the Voronoi polygon their centroid falls within.

8