rafmacalaba/datause-encoder-data huggingface dataset:
5 We will illustrate the use of the frontier concepts with several examples. First, we will discuss a benchmarking exercise that relates aggregate indicators of financial sector development to country characteristics to predict a structural depth line, i.e. the level of financial depth predicted by socio-economic characteristics of the economy. While such a structural depth line is not identical to the frontier concept, as it does not take into account long-term policy variables, it is an important first approximation and can serve as basis for cross-country and over-time comparisons of financial system development. We will also use this benchmarking exercise to compare the development of different segments of the financial system with country characteristics. Second, we will use the benchmarking exercise and the example of the former transition economies to illustrate the relative development of both structural depth line and actual levels of financial sector development over the past twenty years. We will document the rapid deepening process across the transition economies as well as the overheating after the mid-2000s. Third, we will illustrate the application of the frontier concept to the SME market, using firm-level data from the World Bank’s Enterprise Survey data. Such micro-data allow closer insights into specific demand and supply-side constraints. Finally, we will use the example of a specific country – Egypt – to illustrate how the combination of aggregate and micro-data allows an assessment of underlying constraints to financial sector development. The conclusion from these three specific examples is that a combination of macro and micro data is necessary to determine not only the situation of a financial system or a specific segment of the financial system relative to its frontier, but also to identify the specific constraints.
collapses of their banking systems have surprised many analysts, particularly given the ex-ante relatively good health of their bank indicators.<sup>6</sup> This suggests that the deteriorating general economic conditions suddenly contaminated the banking sector, making the bank runs difficult to predict far in advance. Third, in both cases, we are able to track a sequence of macroeconomic events and to investigate how they affected bank deposits and interest rates. We start with a description of the Argentine crisis, by summarizing the more detailed analysis provided in De la Torre, Levy-Yeyati, and Schmukler (2003). In the case of Uruguay, our account of the crisis is focused on the description and diagnosis provided in Porto (2002), Fernández, Garda, and Perelmuter (2003), and Vallcorba (2003).

# **2.1. The Crisis in Argentina**

In 1998, right before the beginning of the protracted recession that led to the crisis, Argentina was ranked among the most solid banking sectors within emerging countries. The regulatory reform initiated after the 1995 crisis led to well-capitalized, highly liquid, strongly provisioned banks that prompted the World Bank to place Argentina second among 12 emerging economies based on CAMELOT scores (the World Bank’s version of the CAMEL rating).<sup>7</sup> By December 1999, however, the Argentine economy was caught in a currency-growthdebt (CGD) trap. The currency was overvalued, growth was faltering, and the debt was hard to service.<sup>8</sup> This trap was in no small part due to major external shocks (the devaluation of the Brazilian real, the strong dollar, and high international interest rates, to name a few). Still, even

> 6 For example, in both countries bank capital exceeded that observed in other countries in the region. The average capital to asset ratio was approximately 20 percent for banks in Argentina and 14 percent for banks in Uruguay, while it hovered around 13 percent in Chile, Peru, and Mexico, and 11 percent in Colombia. 7 See World Bank (1998), Argentina Financial Sector Review.

> 8 According to computations by Perry and Servén (2003), by mid-1999, the peso was overvalued by about 30 percent, in line with the view of most observers at the time. On the other hand, GDP growth was –3.4 percent in 1999 and –0.8 percent in 2000, which coupled with a high average rate on their public debt led the debt-to-GDP to increase from 39 percent in 1998, to 43.8 percent in 1999 and 46.4 percent in 2000.

7
# **1. Introduction**

While the substantial declines in tariffs over recent decades under World Trade Organization (WTO) negotiations and in the context of preferential trade agreements have fostered growth in world trade, countries have been tempted to resort to alternative ways to protect their domestic markets. The growing use of non-tariff measures (NTMs), generally in the form of import regulations, by both developed and developing countries has resulted in a trade policy environment that is less transparent and less well understood.<sup>1</sup> Anecdotal evidence suggests that NTMs restrict market access, particularly for smaller exporters in developing countries. But the effects of NTMs on trade are difficult to assess due to the breadth of regulations covered as well as their non-measurability.

In this paper, we provide rigorous econometric evidence on the effect of product standards—a type of NTM—on trade using firm-level data. We estimate the effect of standards on pesticide residue limits for agricultural and food products imposed by importing countries on firms’ decisions to export, enter or exit a product-destination market, as well as their export values and quantities. To do so we combine two novel datasets, one covering all exporting firms in 42 developing countries and one covering pesticide standards for 243 agricultural products in 63 importing countries over the 2006-2012 period. Agro-food products are an important component of the export portfolio of the developing countries in our sample, accounting on average for 20 percent of their total exports, and play a critical role for the development of poor rural areas in most developing countries.<sup>2</sup> Our main findings are as follows. First, product standards affect foreign market access in that more restrictive product standards in the importing country relative to the exporting country reduce significantly firms’ probability of exporting as well as their export values and quantities. Second, our evidence shows that the relative restrictiveness of importing countries’ standards deters exporting firms from entering new product-destination markets and leads to higher exit rates from product-destination markets (once firm size is controlled for). Third, firm characteristics mediate the effect of product standards on firms’ export decisions. Smaller

> 1 NTMs are a key topic of negotiation under new trade agreements such as the ongoing Transatlantic Trade and Investment Partnership (TTIP) negotiations between the United States (US) and European Union (EU). Since tariffs in the EU and US are low, any substantial impact of such an agreement on trade flows for signatories and third markets will be driven by changes in NTMs.

> 2 The average masks heterogeneity across countries in the share that agro-food products represent in total exports, ranging from 50-60 percent for Kenya, Nicaragua, and Uganda to 5 percent or less for Bangladesh, Botswana, Cambodia, and Mexico.

2
**<u>│</u> 21**

Looking specifically at China, the developing country example of using FDI for export upgrading _par excellence_ , evidence has shown that a one standard deviation increase in foreign MNE presence is associated with a 6.3 percent increase in transaction unit values and a 1.3 percent increase in exports (Chen and Swenson, 2014). For high-income economies there is often a smaller technology gap to close, and so the presence of foreign MNEs has a smaller effect on the sophistication of domestic production (Harding and Javorcik, 2012).

# Innovation input

The strong association of foreign investment with productivity improvements suggests a direct link with innovation – both by the foreign multinational firm and its domestic competitors and suppliers. Channels of such effects could take place through adaptation of foreign multinational firm practice to local context and exposure of domestic firms to foreign production processes and practices.

Yet, empirical work on the relationship between FDI and host economy innovation, whether measured by input or output (R&D intensity or patents), is scarce. Most of the existing literature on China’s experience has found a positive relationship between FDI and domestic firm innovation. Looking at Chinese provincial-level data from 1995 to 2000, evidence shows positive effects of FDI on the number of domestic patents across three different kinds of patents (Cheung and Lin, 2004; Xian and Yan, 2005), though these effects are strongest for minor rather than major innovations. Separate evidence, from Mexico, finds that the entry of a foreign multinational retailer caused market share reallocations, exit patterns, and adjustments in innovative effort that increased both productivity and the rate of innovation (Iacovone et al., 2009).

The Enterprise Surveys confirm that the innovation input intensity of foreign multinationals is higher than that of domestic firms in most countries, and even more often in countries highly integrated in global value chains with significant upgrading taking place over the last years (see Fig. 6). Innovation intensity is also associated with the size of foreign multinationals, and by extension the size of the markets they operate in across a wide range of sectors. For example, foreign multinationals operating in Latin America also report high rates of innovation input despite the lower focus on high technology manufacturing.

The fact that the propensity of firms to invest in innovation appears to be also correlated with capital accumulation confirms the association with scale as part of the strategy for firms’ expansion (see Fig. 7 and Annex Table 1). Countries where foreign multinationals acquire fixed assets intensively are generally large emerging markets, such as China and India where investment takes place in large ventures across a number of sectors.
statutes. There may well be a gap between what is on the books and what happens in practice, but this database focuses on the former as the measures are objective and provide an easy way to benchmark countries across issues, countries and time. The indicators are generally 0-1 measures of whether women and men have the same right. They do not attempt the measure the degree of the inequality, nor are the indicators weighted or aggregated into an index.

Access to and control of assets is examined between unmarried men and women and between married men and women. In addition, indicators include whether sons and daughters are treated equally in inheritance, and another whether wives and husbands are treated the same in determining their inheritance shares when the other spouse dies.<sup>2</sup> A second set of indicators concerns legal capacity. These largely stem around ‘head of household’ statutes, both in terms of recognizing a head and who the head can be, and the rights the head can exercise. Gender gaps include the inability of women to be recognized as the head of household. And statutes can give the husband, as head of household, the right to deny permission to his wife to work or pursue a trade or profession. His signature may be required for her to open a bank account, to sign a contract or to initiate legal proceedings.

A third set looks at the approach to equality before the law. By 2010 all the countries with a constitution have this principle enshrined in it. Many further have a non-discrimination clause that explicitly enumerates discrimination based on gender or sex as something that is protected against.<sup>3</sup> However, the principle is not universally applied across all areas of the law in some countries. The two most common exceptions come from the formal recognition of

> 2 Additional measures of the default marital property regime and whether joint titling is allowed are included in the database.  As these indicators remain almost unchanged for countries, they are not included in the time series analysis.

> 3 It should be noted that it is not necessary to enumerate gender or sex if the constitution already has an equality provision.  In fact, its presence can sometimes be an indicator of perceived weakness of women’s rights that such a clause was deemed necessary.

8
16 and household per capita expenditures. The rich seem to use hospitals less in rural and more in urban areas than in 1978, while the other groups have mostly increased their rate of use.

v) Private clinics: In this case, the categories listed in the two surveys do not correspond exactly. The 1978 SUSENAS asked about maternity hospitals and clinics, while the 1987 survey lists polyclinics. Both tend to predominantly be private facilities, often offering better quality than the available public facilities and charging more for it. Therefore, they have been lumped together for the sake of comparison. Proportions of individuals using these facilities in 1987 tend to be highest for the middle 40O expenditure quantile. The rural Outer Islands provides the exception. Here both the lower and upper quantiles exhibit higher usage, with the latter outdoing the former. By contrast, in 1978, there was very uneven usage of polyclinics and a pattern is difficult to discern. Since then, use has generally gone down in the Outer Islands and up in Java.

vi) Traditional healerst The importance of traditional healers has declined almost consistently over the decade, though this form of treatment retains many followers in the rural areas of the Outer Islands. But, there is on the whole much less differentiation along expenditure classes in the use of traditional healers than was evidenced in 1978. It seems that where health centers exist, the local poor use them in preference to traditional medical practitioners. It should be noted that traditional healers encompasses various types of practit'oners of "traditional" medicine as opposed to "modern" medicine. The SUSENAS include bone setters, but probably exclude traditional midwives. There appears to be declining demand for some among them. For example, from casual observation, "dukuns" (a broad category of traditional healer) who are trained by the government, seem to be in steady decline, whereas bone setters maintain high popularity in many areas of Indonesia. There is at least anecdotal evidence that some doctors refer
# **1. Introduction**

Bangladesh’s economy underwent major structural transformation over the last two decades. While the garment sector has emerged as an important source of income, employment and export earnings and, in the rural areas, rural-non farm activities have grown in importance, both as a source of livelihood and income (World Bank 2004). Yet the agricultural sector has also changed dramatically, and has now become more productive than ever in Bangladesh’s history. These structural transformations reflect the government’s efforts to open the economy and liberalize domestic markets of the 1980s and 1990s (Mujeri 2002, Dorosh 2001). They have enabled Bangladesh to obtain a robust economic growth in the 1990s. Between 1991 and 2000, real GDP increased by 60 percent. In spite of this impressive growth performance however, the decline in the national incidence of poverty stood at a mere 9 percent, leaving poverty levels stubbornly high. In 2000, about half of the Bangladeshi population, or about 63 million people, lived below the official poverty line.

Many studies have attempted to shed light on the somewhat timid response of poverty to growth performance over the 1990s. Mujeri (2002) noted that globalization is a major feature of Bangladesh’s economy since the 1980s and analyzed the impact of trade liberalization efforts on growth and poverty. Using a computable general equilibrium (CGE) model, he found that while Bangladesh’s greater integration into the world economy has been generally “pro-poor”, the gains are relatively small due to the presence of structural bottlenecks and other constraints. The World Bank (2002) study stressed the importance of disaggregating growth and poverty by region and showed that the benefits of economic growth during the 1990s had not been distributed evenly across regions. In the same vein, another study (World Bank 2004) shows that the aggregate numbers hide important distributional effects across income levels and employment type. Indeed, the 1990s have seen an increased mobility of labor from farm to non-farm jobs and an improvement in rural agricultural wages (Hossein 2003). This rise in agricultural wages has tremendous impact on the poorest households who are disproportionately concentrated in this segment of the labor market.

This paper contributes to this literature by drilling further down in explaining poverty dynamics in the 1990s. We use a combination of ex-post and ex-ante approaches 2
19 <!-- Start of picture text --> Figure 6: The case where health spending is not financed out of current income<br>Non-medical<br>expenditures<br>( NM )<br>x<br>x'<br>NM 0<br>Poverty line<br>( PL )<br>F 0<br>45 0<br>M 0 x' x Medical expenditures ( M )<br><!-- End of picture text --> Source: Author.

Empirical evidence suggests that people are indeed able to prevent drops in nonmedical consumption by selling assets or borrowing. The _World Health Survey_ (WHR) asks people how they financed their health expenditures. Respondents were able to choose any or all of the following sources: “savings”; “selling items”; “borrowing from relatives”; “borrowing from others”; “health insurance”; “current income”; and “other”. Figure 7 shows the cumulative percentages for a selection of countries. If people used all seven sources, the y-axis would be 700%. In a country with a pre-payment scheme financed out of general revenues and where nobody pays anything out-of-pocket, it seems likely that people would answer No to all seven questions, since people may well not see the pre-payment scheme as insurance. This explains why S Africa and Sri Lanka average less than 100%. The clear message from Figure 7 and from other surveys is that people do indeed borrow, sell assets and dissave to protect their living standards in the face of
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- Bandiera, O., N. Buehren, M. P. Goldstein, I. Rasul, and A. Smurra (2019): “The Economic Lives of Young Women in the Time of Ebola : Lessons from an Empowerment Program,” Policy Research Working Paper Series 8760, The World Bank.

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30
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Policy Research Working Paper 9818

# **Abstract**

Little is known about how gender inequality influences poverty rates of forcibly displaced people. This paper uses a nationally representative survey to analyze poverty among internally displaced people and non-displaced people in Somalia. More than half of internally displaced people’s households and 47 percent of non-displaced people’s households are female headed. Although poverty rates are higher among internally displaced people than non-displaced people (77 versus 66 percent), male-headed households are poorer than female-headed ones among both groups. Extending the analysis beyond headship to demographic characteristics and by the gender and number of earners provides a more nuanced picture. Demographic characteristics are strongly associated with poverty rates for internally displaced people but not for non-displaced people. Having more income earners reduces poverty risk for all households. For internally displaced people’s households, the largest decrease in poverty risk is associated with having more female earners, while having more male earners is associated with the lowest poverty for nondisplaced people’s households. The analysis highlights that poverty reduction policies and programs must cover all households and lift barriers to women’s economic opportunities. Programs that respond to women’s care responsibilities and address barriers to women’s economic opportunities are especially important for internally displaced people.

This paper is a product of the Gender Global Theme. 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://www.worldbank.org/prwp. The authors may be contacted at lhanmer@worldbank.org (corresponding author), erubiano@worldbank.org, and juliethsa@iadb.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