rafmacalaba/datause-encoder-data huggingface dataset:
shocks and thereby dampen the effect on prices. However, as shown in the competitive storage model of Deaton and Laroque (1992), if stocks are very low, shocks in the market will be fully reflected in price behavior. Increased prices will then look like spikes although they reflect the normal price behavior that would exist in the absence of any storage. Since the middle of the 1990s, global food reserves have declined as countries such as China have deliberately reduced their stockholdings and, as a result, shocks to food markets could not be attenuated by releasing accumulated quantities.

Although the food price increase of 2006-2008 seems drastic compared with previous years, the peak was not higher than others during the past century (Baffes and Haniotis 2010). Sharp price hikes have been rather infrequent over the past 50 years—but recent forecasts suggest that prices could stay above their 2004 level for some time (Zaman et al. 2008), although wheat and rice prices are expected to decline in 2010 (FAO 2010b). Volatility is expected to be higher than at the beginning of the century (Headey and Fan 2008), although implied volatility from the derivate market seems to have stabilized and started to decline again, implying a possible decline in actual price volatility. Nevertheless, the recent crisis makes it clear that stable agricultural production is not only important for food availability, but also to allow poor households in developing countries to access food supplies at an affordable price.

# _Price Transmission and Stabilization Policies_

International food prices are an important indicator of the global food situation, but what ultimately matters for the poor and their food security in developing countries are the domestic prices they pay for their food. To measure the effect of international food price volatility on the poor, one needs to know how much of this volatility is transmitted to domestic markets and passed to consumers. If a country is well integrated into world trade and there are no policy interventions, international prices are fully transmitted to domestic markets. Evidence on price transmission is mixed. For example, Mundlak and Larson (1992), using a data set for 58 countries over 1968 – 1978, estimate that international agricultural prices are almost completely transmitted to domestic markets. A disaggregation of prices into single commodities shows that the transmission of wheat prices, for example, is lower than the average for agricultural commodities. Moreover, the authors find that the main part of domestic price instability is caused by volatile international prices. However, Baffes and Gardner (2003), investigating eight 41
# **Table 4. Willingness to Pay by Package of Benefits** _(in COP $)_

||**Health care:**<br>**Subsidized regime**|<br>**Health care:**<br>**Contributive regime**|**Full package: Contributive**<br>**healthcare and pension**<br>**regimes, severance pay,**<br>**holidays, premium services**<br>**and family compensation fund**|
|---|---|---|---|
|All Occupied Workers|26,561|49,944|78,953|
|Formal Salaried|29,453|54,353|88,552|
|Salaried Self-employed|38,812|78,888|129,870|
|Informal poor|19,770|32,821|51,572|
|Informal Nonpoor|27,364|52,066|81,501|
|Beneficiaries Subsidized<br>health care regime|20,316|33,964|54,007|
|Beneficiaries Contributive<br>health care regime|29,601|56,580|90,372|
|“Obliged” Salaried|23,178|44,084|68,504|
|“Obliged” Self-employed|25,253|44,592|74,189|
|Earns < 1 Minimum Wage|21,611|39,990|62,022|
|Earns between 1 and 4 MW|29,543|54,053|88,354|
|Earns more than 4 MW|54,130|103,044|150,995|

Source: EFL 2008 Notes: all workers are asked to respond valuation questions, regardless of being benefiting or not from such schemes. Informal poor refer to informal workers belonging to Sisben 1 and 2 categories. Informal nonpoor refer to informal workers with other Sisben categories.

Figure 4 corroborates the relationship between willingness and ability to pay. The figure explores the distribution of willingness to pay for the complete benefits package across deciles of labor earnings (although the question put to formal workers concerns their gross income, whereas informal workers are asked about their net income). Results show that the willingness to pay for the complete, legally established social security package increases along with the worker’s income level, but that this increase is not necessarily lineal, sustained, or even similar for each category of worker. This reflects, in part, the fact that labor income distributions (meaning the range of incomes that determine each decile) vary for each occupational category. Therefore, the basic minimum monthly salary of COP$ 461,500 in 2008 is situated in decile 4 of the aggregate distribution of all employed, in decile 2 of the distribution of formal salaried workers, in decile 3 of the formal selfemployed workers, and in decile 6 of informal poor workers and decile also 6 for informal nonpoor workers.

14
**Figure 14  Asset composition in Danish Pension companies**

<!-- Start of picture text --> 80<br>70<br>Bonds<br>60<br>Shares<br>50<br>Real<br>40 Estate<br>Other<br>30<br>20<br>10<br>0<br>1999 2000 2001 2002 2003 2004<br>percent<br><!-- End of picture text --> Source: Danish FSA, Market Development for Life-assurance Companies and Nation-wide Pension Funds The growing use of derivatives and the changes in asset allocation strategies improved the interest sensitivity of the total portfolio. While in 2001 and 2002, an interest rate fall of one percentage point produced a net loss of more than DKK 15 billion, this was transformed into a net gain of DKK 15 billion in 2003 and DKK 8 billion in 2004.

**Table 6  Simulation Results of Change in Interest Rates**

|Year|Change|Liabilities<br>DKK bn|Assets<br>DKK bn|AL Gains<br>DKK bn|Derivatives<br>DKK bn|Net Gains<br>DKK bn|
|---|---|---|---|---|---|---|
|2001|-1%|-65.0|49.4|-15.6||-15.6|
|2002|-1%|-66.6|26.7|-39.9|25.1|-14.8|
|2003|-1%|-52.0|40.2|-11.8|26.9|15.1|
|2004|-1%|-76.1|40.7|-35.4|43.8|8.4|

Source: Ladekarl et al, 2006 Other important changes cover developments in product pricing and product innovation. In a market environment that is dominated by with-profits policies, changes in product pricing involve changes in the distribution of profits. Until recently, most institutions set the rate of profit distribution to clients one year ahead. This rate was an important competitive parameter among pension institutions. However, after the financial turmoil, many institutions introduced a variable rate of profit distribution that depended on investment performance during the year. This more flexible approach made it easier for 33
regressions, this interaction term is dropped in order to increase e¢ ciency in the parameter. Our estimates therefore suggest that on average, a decrease of 1% of the fertility at destination leads to a decrease of about 0.30% in the home country fertility.

The estimation results also point to a (weakly) signi...cant incentive impact, as re‡ected by the negative and signi...cant parameter a3; as re‡ected by the results of the parsimonious regressions (columns 2 and 4). The results support the idea that higher migration prospects tend to slightly reduce fertility at home, possibly through a higher investment in education. The coe¢ cient associated to the selection ratio (a4) is however non signi...cant and is also dropped in the subsequent parsimonious regressions. The negative estimate of the adults’education level (a6) is in line with the incentive impact of migration through investment in education. The weakly signi...cant coe¢ cient might be explained by the high collinearity with the level of GDP per head, especially given the cross sectional dimension data.<sup>8</sup> It is therefore dropped in parsimonious speci...cations. As for the impact of remittances (a5), we ...nd moderate support for a positive impact on fertility at home in the parsimonious speci...cation. This could suggest that the income e¤ect slightly dominates the negative impact associated to the old-age security. Nevertheless, one might expect that old-age security e¤ect of the migrant’s transfers play a higher role in developing countries than in developed countries. We check this point below when restricting the sample to developing countries only.

As for the control variables included in regression (19), our results are mostly in line with the expected impact. Fertility rates are found to decrease with income per capita. They are found to be higher in Islamic countries and increase with the proportion of Catholics in the country. Compared to the ECA-SA region, fertility rates are higher Sub Saharan Africa, Latin America and East Asia and Paci...c.

8The correlation between the adults’human capital and incoime per head amounts to 0.67 (resp. 0.57) for the full sample (resp. sample of developing countries).

20
<!-- Start of picture text --> IDN 46.9 54.4<br>PHL 50.751.9<br>THA 46.848.4<br>LAO 45.7<br>MYS 42.7 46.2<br>VNM 37.5 40.7<br>MMR 27.9<br>KHM 12.1 21.6<br>SGP 9.0<br>0 20 40 60<br>Restrictiveness of services trade policy<br> STRI 2008 STRI 2012<br>Note: LAO, SGP, MMR not covered in 2008<br><!-- End of picture text --> Countries differ significantly in terms of the level and depth of liberalization in policies. In Philippines, automobile and life insurance via mode 1 were not allowed in 2008, but these services were allowed in 2012. In Thailand, cross-border bank loans, deposits, and automobile insurance were not allowed in 2008 but were allowed without restrictions in 2012. In Malaysia, demonstration of domestic availability was required for cross-border life insurance in 2008, but was not required in 2012. In Cambodia, cross-border accounting and auditing services had been opened up since 2008. In Indonesia, FDI in road freight services was closed in 2008 but was allowed in 2012 subject to limitations; in contrast, FDI in retailing was open in 2008 but was not allowed in 2012. In Vietnam, there was no restriction in cross-border maritime international shopping in 2008 but there wasa quota on bulk and liner cargo in 2012.

# **6 WAS ASEAN INTEGRATING FASTER INTERNALLY?**

One of the goals of the survey, as described in Section 2, was to identify instances where ASEAN countries treated services and/or services providers from their regional partners differently from those whose provenance was outside the region. In fact, neither the law firms that collected the policy data nor the governments that verified the data could identify any meaningful instances of differential treatment. For the seven broad sectors (and relevant modes) covered by the questionnaire, the supposedly preferential policies vis-à-vis other ASEAN 16
The sensitivity analysis for 2002 confirms the conclusion that in 2002, there is little or no persistence in occupation choices across generations in rural China, once the effects of location is taken into account.<sup>39</sup>

# **5. Divergence between Educational and Occupational**

# **Mobility**

Probably the most striking finding from our empirical analysis is that intergenerational occupational persistence in rural China has effectively vanished in a span of 14 years. Another interesting aspect of the dramatic improvements in occupational mobility is that its benefits are distributed equally across gender. Such a dramatic improvement in occupational mobility for both sons and daughters in a span of a decade and a half is no less than magical. But the not so magical part of the transition to a more market oriented economy in rural China is that the educational mobility has not witnessed any noticeable improvement over the same period of time. Daughters fared better in terms of educational mobility; but even they did not experience any significant improvement from 1988 to 2002. For sons, the evidence in fact suggests that, if anything, the intergenerational persistence in educational attainment has become much stronger, implying significantly lower mobility in 2002. While a complete treatment of possible reasons behind this divergence between occupational and educational mobility is beyond the scope of the present paper, we put forth a number of possible explanations behind the observed pattern in intergenerational persistence which can be explored in depth in future research.

One might expect that occupational mobility and educational mobility should go hand in hand in rural areas, especially given the evidence from recent research that probability of rural

> 39 The high occupational mobility in rural China in 2002 is similar to the evidence found in Emran and Shilpi (2011) for rural Vietnam using LSMS 1992/93 data.

36
use of country systems by donors is sensitive to their quality, not only for all donors collectively, but also for the vast majority of individual donors. This conclusion does not apply to a few large donors, however, namely the USA, France and the UN system.

# **3. Data and Empirical Strategy**

_Measuring use of country PFM and procurement systems_ We measure use of country PFM systems with data from the OECD DAC’s Paris Declaration Monitoring Survey (PDMS). The PDMS was designed to assist in measuring progress toward the Paris Declaration’s objectives between 2005 and 2010. We measure use of country PFM systems with PD Indicator 5a. This indicator is constructed as a simple average of three sub-indicators from the survey: use of national (i) budget execution procedures, (ii) financial reporting procedures, and (iii) auditing procedures, each as a percentage of aid for the government sector.<sup>2</sup> Detailed criteria for these three dimensions of use-of-PFM-systems are provided in Appendix 1. Correlations among them average .73 (ranging from .54 to .77). Findings presented below change very little if any one of its three components is analyzed instead of Indicator 5a. Mean use of PFM systems among the 2,089 observations appearing in our baseline multivariate regression is 33.5%.<sup>3</sup> Use of country procurement systems is measured using PD Indicator 5b, defined as the share of aid to the government sector that is not subject to additional or special requirements by

> 2 Aid for the government sector accounts for about 83% of total aid disbursements reported in the PDMS.  It excludes aid disbursed to NGOs, parastatals or private companies unless it is provided “in the context of an agreement with officials authorized to act on behalf of central government” (OECD, 2008).  Empirical results reported below are unaffected if government sector aid is replaced with total aid in the denominator of the use-ofPFM-systems indicator.

> 3 Appendix Table A1 provides summary statistics for all variables in the analysis.

7
16

# Table 7: Ukraine

Unofficial Economy Share: three scenarios.

||1989|Uno<br>1299|fficial Ec<br>1991|onomy S<br>1992|har<br>1993|1994|
|---|---|---|---|---|---|---|
|Unitary Elasticity Scenario|12.0|16.2|25.8|34.7|39.7|48.5|
|Conservative Elasticity Scenario|12.0|16.3|25.6|33.8|38.0|45.7|
|Overall Conservative Scenario|12.0|14.9|23.5|31.6|35.9|44.3|

All three scenarios point to similar trends, orders of magnitude, and observations on the evolution of the unofficial economy in Ukraine. In particular:

1. The unofficial economy in Ukraine has virtually tripled in size, while the official economy is less than one-half the size it was in 1989.

2. The decline in the overall economy since 1989 has been by almost 30 percent. While significant, this is still less than the decline derived from official statistics. Clearly, the decline in the official economy in Ukraine has been mitigated by the rapid growth in the unofficial economy during the period.

3. By 1994 the estimated unofficial share in the overall Ukraine economy exceeded 40 percent of the overall economy. These figures are roughly consistent with the microsurvey estimates reported in the previous section.

4. Varying the initial 1989 baseline estimate for the unofficial economy by using lower (say, 8 percent of overall activity) or higher (for instance, 16 percent) figures would only change the estimated share of the unofficial economy by 1994 minimally--since the lion's share of unofficial economy growth took place after 1990.

While far from providing definitive validation to the macroelectric approach, both the sensitivity analysis and the empirical consistency between the macroelectrical and the microsurvey approaches suggest that--with the appropriate caveats--it is worth expanding this methodology to other countries in the region. We turn to such comparative assessment.

## **Expanding the Macroelectric Methodology: Application to** FSU **and** CEE **States**

The number of countries included in the FSU and CEE sample totals sixteen, comprising eleven from the FSU (Ukraine included) and five in CEE. Excluded are those countries for which data was partially unavailable, and/or regarded by the country desk as particularly unreliable (e.g.
Policy Research Working Paper 6339

# **Abstract**

This paper uses unique survey data to provide, for the first time in the literature, direct evidence that vote buying in poor economies is associated with lower provision of public services that disproportionately benefit the poor. Various features of the data and the institutional context allow the interpretation of this correlation as the equilibrium policy consequence of clientelist politics, ruling out alternate explanations (such as, for example, poverty driving both vote buying and health outcomes). The data come from the Philippines, a country context that allows for measuring vote buying during elections and services delivered by the administrative unit controlled by winners of those elections. The data reveal a significant, robust negative correlation between vote buying and the delivery of primary health services. In places where households report more vote buying, government records show that municipalities invest less in basic health services for mothers and children; and, quite strikingly, as a summary measure of weak service delivery performance, a higher percentage of children are severely under-weight.

This paper is a product of the Human Development and Public Services 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 author may be contacted at skhemani@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
# **Table 1. Bank Stock Returns Before and During the Crisis**

In this table we report descriptive statistics of stock returns for three sample periods: (1) the pre-crisis period Q1/2006 to Q2/2007; (2) the crisis period Q3/2007 to Q1/2009; (3) and the period following Lehman bankruptcy Q3/2008 to Q1/2009. In the first column we also report the minimum and maximum number of banks per year reporting relevant variables in our sample. Stock returns are obtained from Datastream. The summary statistics are reported for all banks in our sample and large banks. Large banks are defined as banks with total assets above $50 billion (the 20th percentile of assets). Banks in our sample operate in 12 different OECD countries (see Table A1 for the list of countries and distribution of banks across countries).

||No. of Observ.|Mean|Std. Dev.|25thpercentile|50thpercentile|75thpercentile|95thpercentile|
|---|---|---|---|---|---|---|---|
|**Full sample**||||||||
|Stock return pre-crisis Q1-2006 to Q2-2007|1875|0.4|3.6|-1.6|0.3|2.2|6.1|
|Stock return crisis Q3/2007-Q1/2009|2344|-3.5|7.8|-6.7|-2.6|0.8|6.8|
|Stock return post-Lehman Q3/2008-Q1/2009|1013|-5.3|9.8|-10.0|-4.8|0.4|8.9|
|**Large banks sample**||||||||
|Stock return pre-crisis Q1-2006 to Q2-2007|340|0.8|3.0|-1.2|0.8|2.4|6.0|
|Stock return crisis Q3/2007-Q1/2009|480|-4.7|8.0|-8.0|-3.5|0.0|6.7|
|Stock returnpost-LehmanQ3/2008-Q1/2009|211|-6.7|10.3|-11.6|-5.8|-1.0|8.7|

16
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Notes

1. Though little convincing evidence has been presented, concerns about adverse effects on the poor have often been expressed in casual discussions and in recent literature; see, for example. Jayasuriya and Manning (1988), Sundrum (1988), Booth and Sundrum (1988) and Papanek (1988). The latter paper gives evidence that real wage rates in rural Java declined during the 1980s (as discussed further below), while national income per capita was increasing. Papanek infers from this that the overall distribution of income worsened, though that inference is clearly rather hazardous, as it ignores the numerous other variables which influence income distribution. More direct evidence is called for.

2. There have been recent signs of a slight downward trend in inequality. CBS (1988, Table 10.2.7) reports Gini coefficients for per capita expenditures of .33 for 1984, .32 for 1981, .34 for 1980, .38 for 1978 and .34 for 1976. However, Lorenz dominance does not hold, so other inequality measures may give different results. (The conditions necessary for lower inequality to reduce poverty are discussed further later in this paper). Inequality seems to have been on a rising trend through most of the 1970s; see Fields (1989).

3. See Demery and Addison (1987), and Keuning and Thorbecke (1989).

4. Agriculture accounted for over half of the rise in non-oil exports between 1986 and 1987; see Baik Indonesia (1988).

5. Papanek (1988) presents evidence that real agricultural wage rates were declining at about 1.7 percent per year in Central and East Java between 1982 and 1987. The apparent inclusion of the last half of 1987 as the