rafmacalaba/datause-encoder-data huggingface dataset:
private sector remains in the informal sector, where there appears to be no growth. Second, even within the formal sector there could be a glaring productivity gap between small and large firms, as illustrated by the “two Mexico” phenomenon of a recent McKinsey Global Institute (MGI) study (Remes and Rubio, 2014). From 1999 to 2009, labor productivity had risen by a respectable 5.8 percent per year in large firms with 500 or more employees. In small firms, with 10 or fewer employees, labor productivity growth had declined at an annual rate of 6.5 percent, while the share of employment, already at a high level, had increased from 39 percent to 42 percent over this period. As Rodrik (2014) argues, this phenomenon is not unique to Mexico but is an increasingly common occurrence around the developing world: the developing economies’ low productivity segments, rather than shrinking, in many cases are expanding.

So what do all these phenomena— **a high incidence of informality, SME’s potential contribution to employment share and job creation, relatively low productivity of the small firms, and a stunted growth profile of the firm in developing countries** —imply for the potential role of investment climate reforms in job creation? Conceptually, IC reforms can affect job creation through at least three channels.

**First,** reforming barriers to entry can spur the creation of new formal firms and enable existing informal firms to join the formal sector and grow. This, in turn, can lead to more jobs if firms in the formal sector tend to grow, while those in the informal sector tend to remain stagnant throughout their life-cycle. The scope of entry barrier reforms could range from reforming the entry process (such as the process of business registration, tax registration, obtaining necessary entry, and operating permits) to encourage entry through more proactive engagement on behalf of the government in promoting competition and a level playing field, providing incentives, designing prudent investment policy, and engaging in effective investment promotion activities.

**Second,** reforms relating to the business operating environment which promote an accountable, transparent, efficient, and predictable regulatory regime (implemented by different licensing and inspection authorities and tax and custom administration) can potentially foster firm productivity and profitability by reducing the transaction costs of doing business. This also can lead to more jobs. An improved investment climate that promotes firm expansion could lead

8
after the current conflict breakout in 2015, that is the period 2015-2021.<sup>5</sup> To construct the conflict indicator, we focus on 3 types of events, namely battles, explosions and violence against civilians, summing up the number of occurrences at the district level. The reason for choosing these events lies in the fact that throughout our period of analysis, these events have scored the highest number of occurrences compared to protests, riots, and developments (see Figure IV.4 and Figure IV.5). Even though the latter type of event has witnessed a remarkable increase in 2019 and 2020, we exclude it because they often refer to brokered deals or advances that are likely to affect households differently to conflict events. We also choose to focus on the number of events rather than the number of fatalities, since the latter is deemed to suffer from underreporting.<sup>6</sup> ACLED data is collected from reported conflict events in news outlets, and it is more likely that the number of events are better documented compared to the number of causalities which tends to be less accurate.

After constructing the conflict intensity at the district level, the sample is split into three equal groups of increasing conflict intensity: low, medium, or strong conflict intensity.

_Figure IV.4: Total number of conflict events by year. Source: ACLED_ <!-- Start of picture text --> 1400<br>1200<br>1000<br>800<br>600<br>400<br>200<br>0<br>2015 2016 2017 2018 2019 2020 2021<br>Battle Explosion Protest Riot Developments Violence civilians<br><!-- End of picture text --> 5 ACLED data is not available prior to 2015 to be able to detect trends in the period before the study.

6 As a robustness check we control for the number of fatalities and find no difference in the main results reported in the paper.

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# Are Ghana's Roads Paying Their Way? Assessing Road Use Cost and User Charges in Ghana*

# by Re.iben Gronau The Hebrew University of Jerusalem

# Table of Contents

|I.|Introduction|1|
|---|---|---|
|II.|Background|8|
|III.|Road User Costs|17|
||A. Road Damage Externality<br>B. Marginal Congestion Costs<br>C. Road-User Costs|17<br>21<br>26|
|IV.|The Adequacy of Transport Taxes|31|
|V.|Concluding Comments|36|
|Appe|ndix|40|
|Refer|ences|43|

* This research was funded by the World Bank's Research Support Budget, RPO 674-37, "Transport Taxation and Road User Charges in SubSaharan Africa."
Policy Research Working Paper 6899

# **Abstract**

Private (non-state) sector engagement in the provision of educational services at the primary and secondary levels in South Asia has recently undergone remarkable growth. This type of education comes in various forms, such as schools financed and managed by the private sector, schools financed by the government and managed by the private sector, private school vouchers, and tutoring outside the classroom. According to recent household survey data, almost one-third of school-goers aged 6 to 18 years in South Asia go to private schools, with a high concentration in Bangladesh, India, Nepal, and Pakistan. Data for India, Nepal, and Pakistan show that on average, private schools perform at least as well as government schools on student test scores, after controlling for socioeconomic factors, and they do so at significantly lower costs to society. However, student achievement varies greatly across schools of each type, with many weak private schools as well as strong government schools. Substantial, albeit indirect, evidence points to teacher behavior and accountability as an important driver of the effectiveness of private schools. In the long run, however, many factors may play important roles in sustaining the private sector’s advantage. Another risk is that overall poor quality in a large government sector may set a low benchmark for the private sector. The findings cast doubt on the effectiveness of government regulations for private schools, given weak institutional capacity. Public-private partnerships with effective accountability mechanisms could leverage both equity and efficiency. Finally, it appears important to understand and customize teaching to the child’s individual level.

This paper is a product of the Education Unit, South Asia Region. 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 qnguyen4@ 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
capital stock reduces the coefficient on the training / grant treatment from 1758 to 971, suggesting that as much as half of the initial effect is due to the grant. As a final check, given the grant was 15,000 Rs, the TOT of 1786 Rs in the pooled sample would represent a monthly return on the grant of 11.9 percent if the effect was due to the grant alone. This is similar to the return on capital found for the average male microenterprise owner in Sri Lanka, but considerably higher than average returns for female business owners found in de Mel et al. (2008, 2009a). It therefore appears plausible that some of the short-term effect may be due to the combination of training and the cash grant, rather than just the cash grant alone. However, the fact that this effect appears to only be temporary suggests that the combination is speeding up convergence to a steady state, but not dramatically changing the trajectory of the enterprise.

# **5.3 Impact on starting a business among potential business owners**

We now turn to the potential business owner group. Table 5 examines whether the treatments affect the likelihood that an individual enters self-employment or engages in wage work during our various survey rounds. We present ITT estimates from a regression of equation (1) with self-employment as the dependent variable (and no lagged dependent variable since none of this group operated a business at baseline), and TOT estimates instrumenting receipt of the treatment with random assignment.

We see that 38 percent of the control group operates a business at the time of the round 2 survey, increasing to 56 percent by the round 4 survey and 57 percent by the round 5 survey. This high rate of start-ups may reflect both the screening of our sample, and the rapid growth of the economy during this period, improving the environment for starting a new business.

The combination of cash and training results in a 29 percentage point increase in the likelihood of running a business in round 2 for those treated, and a 20 percentage point increase in the likelihood in round 3. But the gap closes completely in rounds 4 and 5. This suggests that the treatment sped up entry markedly, but had no longer term effect. Those receiving the cash and training treatment are 10 percentage points more likely to have opened a business at any point since baseline, and 9 percentage points more likely to have opened a business and then closed it – with these two effects netting out to give the near zero and insignificant effect on round 5 business ownership.

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The deficit variable chosen consists of the deficit of the Consolidated Public Sector before any interest service (primary deficit), this being normalized by GDP. The Terms of Trade series are from ECLA. There is no series available on the stock of foreign assets held by argentines. As proxies we have tried two variables: (i) the balance on the service account of the Balance of payments and (ii) a measure of foreign assets held build by the accumulated sum of Current Account surpluses.

None of the variables trying to capture the effects of the level of foreign indebtedness turned out to be significant in the explanation of the Trade Balance. One would expect a positive sign from the level of foreign debt (or its service) on the trade balance surplus, indicating that the economy does some adjustment in order to service its debt.

In Regression Al, the debt service variable has the correct sign but is not significantly different from zero as the T-value of only 0.83 shows. In Regression A2 we try the series generated for the stock of foreign debt by accumulating the past current account deficits from 1960 onwards (and assuming the initial level of debt was arbitrarily equal to zero). This variable (lagged one period in order to represent the initial level of debt during the current period) also has the correct sign but again the coefficient is not statistically significant. This results simply verify the obvious observation that the Argentine economy has not paid up its external debt and therefore has not faced up the need to adjust the level of the external trade surplus.

It turns out that only two of the variables, inflation and the Fiscal Deficit are significant in the explanation of the Trade Surplus. In both cases the coefficients of the variables have the theoretically expected signs and are significantly different from zero at the 2% or less confidence level. Higher current inflation improves the trade balance surplus (it is not possible to illustrate the opposite long run effect because of the insignificance of the coefficient of the foreign assets held) in accordance to what is theoretically expected from the portfolio model discussed before. The primary deficit of the CPS is shown to deteriorate the trade balance surplus, as expected in an economy where the Ricardian equivalence propositicn is not fully valid. The coefficient value of 0.32 indic.ates that one third of the value of a primary fiscal deficit results in a trade deficit. The trade deficit in turn requires a lower real exchange rate (a real appreciation) for the home goods market to clear. We therefore find a negative relationship between the real exchange rate and the primary deficit of the CPS.

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Proponents of new structuralism might view the financial histories of developed economies as promising for their approach – since the evolution of financial intermediaries was endogenous to demand for financial services from the real sector, an optimal financial structure might be a by-product of an optimal industrial structure. And yet, the industrial structures that emerged in many countries were far from optimal, and thus the financial structures that evolved did not function as well as they might have. As described in Calomiris and Haber (2011), in less developed economies financial intermediaries are often created by coalitions that include the government and business interests. Those business interests must be assured that the government will not expropriate the intermediaries that they create, nor will it promote the entry of competing intermediaries, because those intermediaries could finance firms that would compete with those of the members of the coalition. The result is a financial system comprised of a small number of relatively large banks and other intermediaries that service affiliated firms, but that do not promote widespread access to financial services, especially credit. This is at odds with the optimal financial structure during early stages of development from the new structural perspective, where a large number of relatively small banks would service small-scale entrepreneurs.

The foregoing discussion leads to (at least) two questions. First, can it be shown that the countries that come closer to achieving the optimal financial structure for their stage of development also achieve higher rates of growth? More specifically, do countries in early stages of development fare better under a bank-based system that harnesses local information rather than a market-based system that does not? Second, if there is evidence supportive of the notion that optimal financial structure varies with the stage of development, why is it that some countries come closer to achieving those structures than others? This paper provides empirical evidence from firm surveys to address the first question. Addressing the second question is beyond the scope of the paper, though we note that if countries were equally successful in achieving an optimal financial structure, we would see little variation in financial structure indicators for a given level of development and find no significant relationships between those indicators and firm growth. A quick glance at Table 2 reveals relatively wide variation in indicators of financial development within countries at similar stages of economic development as reflected in per capita income, and we do find significant relationships between financial 4
# **From Policy to Practice: The Significance of Discretion and Social Context for Organizational Success**

The macro-scale themes described in the previous section surrounding power, hierarchy, and the coherence of bureaucracies, come alive in a specific, micro-scale theme that has been a staple of bureaucracy studies and which is covered in this section: discretion. Understandably, much social science of institutions has been concerned with the question of whether the practices of bureaucrats follow the stated policies of the bureaucracy and, if not, why that is so. This is what Hoag (2011, 2014) has called “the policy-practice problematic.” It has been particularly salient in service delivery contexts, where scholars have sought to understand how bureaucrats’ emotions or biases impact the application of policy (Graham 2002; Fulgerud 2004).<sup>6</sup> On the one hand, Marxist approaches have found that class interests manifest themselves in the dissemination and understanding of official policy through the cultivation of bureaucratic worldviews that serve superordinate powers (Heyman 1995), while authors drawing on culturalist and cognitivist frameworks find that bureaucratic logics of classification and insider-outside taxonomies facilitate indifference or power-laden discretion on the part of bureaucrats (Handelman 1981; Herzfeld 1992), if sometimes haphazardly (Gilboy 1991).

As Hull (2012a, 2012b) has pointed out, anthropology historically made its way into organizational studies through scholars who believed it could help to explain “informal” processes that might dictate the operation of organizations somewhat outside the purview of formal rules (Baba 2009; Warner and Low 1976; see also Garsten and Nyqvist 2013). This notion was further developed by sociologists such as Peter Blau, who stated that “informal organizations” (i.e., bureaucratic practices and cultures that fall outside of the “formal” organizational structure) are

> 6 This, of course, assumes that bureaucrats know the laws they are supposed to carry out (Hunter et al. 2016).

11
mortality<sup>9</sup> , we partially address this, exploiting the baseline characteristics as well as the time dimension which largely precludes anticipation of deaths based on morbidities. Also, other dimensions may be important, including power and bargaining dynamics within the household and the mental health of the elderly. While we do not study these changes in this paper (partly due to data limitations), they are important topics for future research.

> 9 An alternative to measuring the consequences of death shocks would be to study the impact of an averted mortality. Drawing on a sample of HIV-infected households under ARV treatment, Goldstein et al. (2008) take this approach in work from Kenya to assess the impact of ARV treatment on improved health and changes in labor outcomes. However, these results speak to the economic impact of morbidity among household members, and not the impact of death which may be quite different.

25
conditioned on spatial mobility (e.g., housing vouchers in inner-city neighborhoods in the United States and rural-urban transportation subsidies for the poor in Bangladesh).

Emerging findings suggest that design choices affect the direction of results, with close alignment between those three broad categories and the intended mobility outcomes. There are also second-round effects at the household and community-level – i.e., assistance provided to some helps others to move. This has important implications for informing discussions around the effects of social assistance, the devise of benefit structures, and for program theories of change and results frameworks. The findings, we hope, could help galvanize a long-overdue research and operational agenda around making social assistance more mobility-sensitive.

The remainder of the paper is organized as follows. The next section outlines the paper’s methodology. Section 3 locates our work within the wider literature on migration and development. Section 4 drills into the reviewed impact evaluations and identifies programs’ effects on mobility. Section 5 discusses emerging findings and implications, while section 6 concludes.

# **2. Methodology**

The review was conducted in four stages. First, we explored the word string “social assistance and migration” in five academic databases, ten websites, and search engines.<sup>2</sup> These yielded 269 entries which were examined individually. Second, we considered previous systematic reviews on this topic, which seems limited to the paper by Hagen-Zanker and Himmelstine (2012). The HZ-H paper was one of the first attempts to systematize the body of knowledge on migration and social protection. Previous contributions were mostly conceptual, including an early framework devised by Sabates-Wheeler and Waite (2003) which also led the basis for a subsequent volume enriched by case studies (Sabates-Wheeler and Feldman 2011). The HZ-H review identified 22 studies examining the impact of social protection programs on migration. We complement and refine their study by focusing on social assistance and by expanding the geographical scope of evaluations.<sup>3</sup> Third, we received expert guidance and advice on relevant studies from six lead specialists in migration and social assistance. Finally, when studies evaluated the same social assistance program, we only considered the latest and most rigorous study (determined based on evaluation techniques) unless the studies found opposite impacts of the program. Mexico is a case in point where we considered two programs examining _PROGRESA_ because of their divergent results. In 3
program, we are able to experimentally test the importance of different constraints to participation in such programs, which existing literature has not done.

The remainder of this paper is structured as follows. Section 2 provides background information on financial literacy in Mexico and reviews the existing literature. Section 3 describes the financial literacy course. Section 4 lays out the experimental design and initial take-up. Section 5 then describes our experiments to overcome barriers to take-up. Section 6 presents estimates of the impact of the course on financial knowledge, behavior, and outcomes. Section 7 concludes with policy recommendations.

# **2. Background and Literature Review**

# **2.1 Financial Literacy in Mexico**

During the last two decades Mexicans have experienced significant changes in access to finance, banking products, and exposure to risk. In 1997, the Mexican Pension System switched from a pay-as-you-go system to one based on individual retirement accounts. Under the new system, all private sector workers have to choose a pension fund administrator to manage their account and invest in portfolios with different levels of risk. A similar pension system was launched for public sector workers in 2007. Banking services and financial product availability has also increased in recent years. While in 2004 around 25 percent of the population had a bank account (World Bank 2008), this number had more than doubled by 2009 (Saldivar, 2009), reaching 58 percent. The number of credit cards has increased from just below 15 million to almost 28 million during the past five years – so that there are now as many credit cards as households in Mexico.<sup>5</sup> As access to financial services expands and many consumers become users of formal financial products for the first time, there is a growing concern that many individuals may not have sufficient information and financial acumen to use these financial products responsibly. The National Commission for the Protection of Financial Services Users (CONDUSEF) found that 62 percent of Mexicans lack financial education and are not aware of their rights and responsibilities with respect to financial institutions.<sup>6</sup> In the 2012 Visa International Financial Literacy Barometer, Mexico ranks in the lowest third of a sample of 28 countries on questions

> 5 The INEGI Population Count ( _Conteo de Población y Vivienda_ ) reports that there were 28 million households in Mexico in 2010.

> 6 <u>http://www.cnnexpansion.com/mi-dinero/2010/10/05/condusef-tras-la-educacion-financiera</u>

5