rafmacalaba/datause-encoder-data huggingface dataset:
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**Ta1bie 3: Correlation of Share in World Trade ot EnvironmentaBy Sensitive Goods with the Share of Environmental Expenditures in GDP for Selected Industrial Countries**

|Correlation<br>Coefricient<br>**(total env.exp.)**|Confidence<br>**teit (2.5%)|**)**<br>|Correlation<br>coefricient<br>**(private env.exp.)**|Confidence<br>**test**(2.5%)|
|---|---|---|---|
|**Austria**<br>**n.a**|**n.a**|**0.7**|**10.56**|
|**Germany**<br>**0.12**|**1.63**|**0.14**|**2.24**|
|**Japan**<br>**-0.33***|**3.91**|**n.a.**|**n.a.**|
|**United States -0.05**|**0.90**|**-0.07(0.05)****|**1.33(0.89)**|

***) For Japan the dta refers to public expeaditurci only. **) For the Unit&! States nuribers in parenthesis refar to** data **on** private expunditure **reported by the US** national **sourcos and the other number is b&ed on OECD defonition.** *4*) **If the number below** is **larger than S.02 the coefficient** is **significant at the 3 % level.**

The increase in the share of developing countries in world exports of the sensitive goods reflects their increased overall participation in world trade. Their exports of environmentally sensitive goods increased much less than those of manufactures. Export growth from developing countries in the sensitive goods may have been influenced by trade barriers. As many of the prouLcts of industries included in the sample of sensitive goods are experiencing structural difficulties in the industrial countries (iron and steel, some chemicals) from over-capacity or from lower labor-costs in developing countries, protection from imports in some sectors may have influenced import growth. Although tariff barriers in the sensitive goods are low, a large share of imports of environmentally sensitive goods is subject to non-tariff barriers (Table 4). Developing countries face lower duties than industrial countries, but more of their imports are subject to non-tariff measu, es especially in the United States and Japan. However, the measure gives l.ttle indication on the protective impact of the non-tariff barriers. Estimates of their tariff eq&,valents are not available. A more likely explanation for the slower export growth of developing countries in the sensitive goods is the low income elasticity of many of these goods cempared to other manufactures and the declining material intensity of production. This is particularly true of the metals, steel, nickel, manganese etc. Also energy intensity of production has declined substantially since the oil price hikes of the 1970's.
and an effective tool to reduce poverty in transforming countries.<sup>3</sup> Balancing agriculture and industry is an important—though difficult—dimension of development policy. Recently ―agropessimist‖ views—based on the observation that agriculture in developing countries is often the least productive sector—have been voiced in the literature.<sup>4</sup> In the second section, we look back on the determinants of the Green Revolution and discuss the foundations of agricultural growth. In developing countries that have experienced sustained increases in yields, the mode of agriculture has been intensive and has involved adoption of new varieties by farmers, irrigation and massive use of fertilizer—with predictable environmental consequences—which presupposes good institutions. In the coming decades, massive productivity increases in Sub-Saharan Africa will be necessary if the subcontinent is to catch up with the rest of the world. The challenge is thus of a different nature than before. Further cropland expansion (which was the basis for the slow yield increases that took place in the past), with a few exceptions, is really not possible. New seeds that are resistant to climate risks and adapted to local conditions will need to be developed and sustainable irrigation systems expanded. The most difficult challenges are institutional and economic. Often smallholders cannot internalize the benefit of their efficiency (compared with large farms) because of missing markets for insurance and credit, low education levels, limited market access and market information, and insecure property and usage rights. Hence, although new advances in R&D— such as genetically modified organisms and extension services—are important for future growth and poverty reduction, getting fundamental institutions right is a prerequisite for growth and a priority on the agricultural development agenda.

> 3 The 2008 World Development Report establishes a typology of countries (World Bank 2007). In agriculture-based economies, agriculture contributes on average 32 percent to overall economic growth and the majority of the poor live in rural areas, In transforming countries, agriculture contributes on average 7 percent to overall growth but poverty is still mostly rural. In urbanized countries, agriculture accounts for only 5 percent of economic growth and urban poverty is higher than poverty in rural areas.

> 4  Of course, at the early stages of development, agricultural growth is an important source of overall economic growth and a major driver behind structural transformation of the economy. But authors like S. Dercon or D. Gollin, while accepting this fact, observe that linkages between agriculture and industry are less important for overall growth in open economies (in which goods from productive sectors including agriculture are traded) than in more closed economies. Their main argument is that, in an open economy, importing food and focusing efforts on other sectors might be more beneficial to a country‘s development if it is difficult to increase the productivity of agriculture.

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7 length and weight of one of those children (randomly selected). Salter scale (Model 235 6S) and wall-mounted measuring rods (portable baby/child length/height measuring system) were used.

The WASH governance index combined questions about the presence of a water committee, frequency of committee meetings, WASH expenses (excluding maintenance), presence of a maintenance plan, whether the committee tracks health conditions in the community, and whether it tracks hygiene and sanitation.

Secondary outcomes were access to improved water and sanitation facilities, water quality at water points and in homes, hygiene knowledge and behaviors, observed handwashing, perceptions of WASH governance, children’s school absenteeism, child weight-for-age Z score, and child weight-for-height Z score.

Structured observation of handwashing was done in four households per village. We first attempted to observe the four households that were interviewed at the five-month follow-up; if any were unavailable or unwilling, we randomly selected from the six new households to replace them. A research assistant spent two hours in each of these households, recording if handwashing occurred at critical junctures such as before preparing food (see S8 Table for full list of junctures). This took place before the interview, to minimize Hawthorne effects.

Access to improved water and sanitation was self-reported, i.e. respondents reported whether their main water source is improved or not according to the Joint Monitoring Program standard definitions (e.g. boreholes are considered improved, while unprotected springs or surface water sources are not). Cost paid by households for water and time spent collecting water were also self-reported.

To measure water quality, we tested samples collected (i) at each of the water points used by members of each village, and (ii) at household water storage containers in six randomly selected households per village, on average. Testing was done concurrently with the household interviews. We used the Aquagenx Compartment Bag Test E. Coli +Total Coliform Most Probable Number (MPN) Kit. This measured the MPN of fecal indicator bacteria [28].

To measure subjective performance of local WASH institutions, we used survey questions about: fairness of selection of water governance entity, perception of fair treatment, confidence in the entity’s management of money, confidence in the entity’s response to infrastructure breakdowns, confidence in management, and overall satisfaction. The data collection team also directly observed water point functionality. Length of breakdowns was reported via a water committee and village leader survey.

# Statistical analyses

The number of village clusters in the study was determined by the program budget and proximity of villages to one another (details above). Sample size calculations were used to determine how many households in each village should be interviewed. Based on the primary outcome of diarrhea prevalence, with a minimum detectable effect of 8 percentage points (pp), 32%
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anticipated the scope and fra..kness of Gorbachev's recognition of the limits to Soviet influence in the Third World. Nor was it anticipated that he would make Soviet restraint and peace initiatives in the Third World a key element in a global political strategy to persuade the West to permit the Soviet Union greater access to international capital, technology and other essential ingredients for economic restructuring and development at home.<sup>8</sup>

# Soviet 'New **Thinking' About** Regional Security

21. The statements and evident policy shifts toward the Third World emanating from the Soviet Union have already significantly altered the nature of the U.S.-Soviet r' y and the opportunities for expanding the role of multilateral institutions. The most dra.r.dtic step in this direction occurred on the afternoon of February 8, 1988 when Radio Moscow broadcast a declaration by Gorbachev of his intention to withdraw all Soviet troops from Afghanistan.<sup>9</sup> Gorbachev we on. in the sarmie statement to pledge his government's determination to "spare no effort" to resolve peacefally other regional conflicts--in the Middle East, Cambodia, Central America and southern Africa.

22. Since then, Soviet troop withdrawal from Afghanistan and various indications of political and diplomatic support for the nascent peace processes in Southeast Asia, Angola and Central America, suggest that the commitment to curtail foreign entanglements in regional conflicts is real.10 From Gorbachev's other writings, notably a lengthy article entitled "The Reality and Guarantees of a Secure Worlc;," and his widely quoted December 7, 1988 address to

## Continued from previous page

- debate see: Philip D. Stewart and Margaret G. Herman, "The Soviet Debate over 'New Thinking' and 'Restructuring' of IJ.S.-Soviet Relations," forthcoming in the The Third Revolution in Soviet National Security Policy, George Hudson, ed.

- _/_ Sir Michael Howard, "Meeting New Challenges, The Gorbachev Challenge and the Defense of the West" in Survival, Novembe-'w)ecember 1988.

- 2/ Transcript of Radio Moscow brnadcast of Gorbachev Statement on Afghanistan, FBIS-Sov88025, 8 February 1988.

- _jQ/_ Interviews by the author with Soviet foreign ministry and Party officials in Moscow during Dezember 1988 and May 1989 visits strongly reinforce this impression, as have separate incerviews with officials from several Asian, African and Latin American countries involved in regional conflicts.
clear that one religion is more supportive than another of economic productivity” (McCleary, 2007). We report formal tests of relevance and validity below.

We supplement religious composition with one additional exogenous instrument, from the “State Antiquity Index” project of Bockstette, Chanda and Putterman (2002). Specifically, we use their estimate of (the log of) number of years of statehood from 1 AD to 1950 AD.<sup>20</sup> These authors suggest that a more extensive history of statehood “may support the development of attitudes consistent with bureaucratic discipline and hierarchical control,” but also fosters a common language and sense of identity, facilitating trust and harmonious social interaction.

When instrumenting for multiple endogenous variables, it is important that the excluded instruments not be related in too similar a way to both the morality proxy and the morality-ability correlation. A weak instruments problem can be present even if they have strong explanatory power in both first-stage regressions, if the fitted values from those regressions are highly correlated with each other. In other words, the excluded instruments must discriminate reasonably well between the two endogenous variables. We report formal tests for this weak instruments problem below. With few exceptions, theory does not provide much guidance as to which instruments might predict the morality-ability correlation but not the morality proxy. According to McCleary (2007), upper-caste Hindu men have a duty to “earn a living responsibly,” suggesting percent Hindu may be positively correlated with the morality-ability correlation. In general however our strategy is simply to let the data determine whether the instruments can discriminate sufficiently between the two endogenous variables.

> 20 Coding is based on three key questions for territory corresponding to the boundaries of modern nations: (1) was there a government above the tribal level? (2) Was the government locally based or foreign (e.g. a colony)? (3) How much of the modern territory was ruled by this government? We follow Bockstette, Chanda and Putterman (2002) in using their version of this variable that discounts by 5% to reduce the weight of periods in the more remote past.

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# **_III.   The Pitfalls of Sustained Extensive Growth_**

One of the central sources for industrial development and innovative capability is the embeddedness of firms in the local production system (Parthasarathy 2004, Hsu 2004). According to UNCTAD (2004: 151), “high-skill services,” among other things, “require advanced skills at high levels of specialization, often with strong educational institutions. They involve agglomeration economies, with different skills, enterprises and institutions interacting with each other to share <u>work, stimulate knowledge flows, and allow specialized skills to be fully utilized” (author’s</u> emphasis). Bangalore appears to enjoy many of these characteristics. However, as it will be shown below, the particular business model adopted by the IT industry sustains extensive growth and thus discourages the kind of interactions necessary to be at the technological frontier. Related to this model is the significant influence of export markets. When foreign economies and firms are the principal clients and innovators, they influence what gets produced, how, and for which markets. This is not intrinsically an unfavorable situation since diversified external market growth could translate into local technological learning opportunities. This is certainly evident in India. But institutionally, the tension between exogenous drivers such as export demand and technical talent and the endogenous “local production system” could undermine an “interlocking ... collective order” (Scott 1998 in Lombardi 2003: 1444). As a result, under an export-driven system favoring extensive growth, forming thick local institutional linkages such as UILs for innovation are either unnecessary or structurally difficult (see D’Costa 2004b).

Extensive growth presumes continued demand for customized software services and an elastic supply of Indian IT professionals. Such growth results from maximizing revenue strategies by adding more employees. The consequences of this are a fragmented industry, institutional disconnectedness, and high labor mobility. Except for institutional incoherence, neither of the other two outcomes by definition are detrimental to intensive growth. If fragmentation means lots of small firms one could assume competition is rife and thus a basis for innovation. Furthermore, such an industrial structure is consistent with global patterns of export domination by large IT firms. Similarly, labor mobility suggests competition among firms, skill upgrading, knowledge transfer, rising wages and thus innovation-led intensive growth. However, as it will be shown below 10
_Decentralization: The Way Forward for Rural Development?_

# Notes:

I An IFAD study (Jazairy et al 1992) reported that more than one-third of the developing world's rural population lived below the poverty line in 1988.

2 This review paper does not go into detail concerning the need to implement good macroeconomic policies. Binswanger (forthcoming) highlights the negative impact of poor macroeconomic policies on the design of agricultural and RD policies and programs.

3 Cross-country evidence on the correlation between various measures of government intervention in agriculture and agricultural as well as overall economic growth suggests that agricultural as well as economic growth were slowed down by government intervention in agriculture. There is substantial evidence for the large impact over time of depressing agricultural incentives on reducing agricultural investment and growth and increasing ruralurban migration; for a review, see Binswanger (1993).

4 Transfers out of agriculture averaged 46 percent of agricultural gross domestic product a year.

5 Some studies have provided positive evidence of the importance of spatial and product-wise concentration as a mechanism to obtain trade benefits (e.g., Amelung 1989).

6 This integrated approach to RD has a long history that predates the Bank's endorsement of it. In addition, during the 1970s it was widely adopted by other aid agencies as the primary RD strategy.

7 Biggs (1984: 64) has observed that "feed-back systems between extension and research institutions are more evident as two-way arrows on an organizational chart in an office of the Ministry of Agriculture, rather than as senior scientists responding to reports coming from village level extension agents." 8 Of course, an effectively functioning democratic system requires the electoral process to be perceived as broadly free and fair, a major problem with local elections in Bangladesh in 1988, where widespread fraud led to the undermining of the Ershad regime (C&M). 9 The capacity to borrow funds through financial markets is likely **to** be restricted to larger urban areas, and will be of little relevance to poor rural areas. In any case, the power to borrow independently is a function rarely granted to rural local governments. We therefore do not discuss this issue here.

**10** Shah (1994) provides a detailed review of this literature, covering public choice theory and fiscal federalism.

I am grateful to Hans Binswanger for suggesting this apt analogy.

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of the firm across firms within the same 3-digit industry (columns 1 and 2) and within-firm over time (columns 3 and 4). Column (1) suggests that comparing firms producing in the same industry, firms that import intermediate goods are more likely to import capital equipment goods. Column (2) includes a control variable of firm size (wage-bill).<sup>5</sup> Looking at within-firm variation over time, columns (3) and (4) show that the decision to upgrade foreign technology embodied in imported capital goods is positively correlated with firms’ imported input intensity. This descriptive evidence suggests that there exists a certain complementarity between imported capital goods and intermediate inputs in India.

Table 2: Complementarity between imports of capital goods and intermediate inputs

||Dependent variable|: Importer of capital goods sta|tus||
|---|---|---|---|---|
||(1)|(2)|(3)|(4)|
|Imported input share|0.032***|0.058***|0.046***|0.047***|
||(0.004)|(0.004)|(0.005)|(0.005)|
|Firm size||Yes||Yes|
|Industry 3 digit fxed effects|Yes|Yes|||
|Firm fxed effects|||Yes|Yes|
|Year Fixed effects|Yes|Yes|Yes|Yes|
|Observations|14,680|14,680|14,680|14,680|
|R-squared|0.262|0.326|0.092|0.294|

_Notes_ : The dependent variable is a dummy for firm _i_ having positive imports of capital goods in year _t_ . The imported input share is the ratio of imported inputs over total inputs. Firm size is measured by the logarithm of wage-bill and it is included in columns (2) and (4). Heteroskedasticity-robust standards errors clustered at the firm level are reported in parentheses.<sup>_∗∗∗_</sup> ,<sup>_∗∗_</sup> , and<sup>_∗_</sup> indicate significance at the 1, 5 and 10 percent levels respectively.

_Empirical fact 3: The decision of sourcing capital goods from abroad is positively correlated with imports of intermediate goods._

# As a final step, we explore if this complementarity between foreign technology and imported interme-

diate goods translates into a higher global efficiency of the firm in the production process. We investigate 5We rely on wage-bill as a measure of firms’ size since total employment is not reported in the Prowess dataset.

9
new and old methods, and projections of possible future poverty trajectories under the assumption of distribution neutral growth are similarly little affected.

The fact that this update yields relatively limited changes to what we thought we knew about global poverty is a result of the fact that these methodological revisions were deliberately designed so as to preserve the real purchasing power of the $1.25 line in some of the world’s poorest countries – and of the additional fact that, between 2005 and 2011, price level changes in these countries were not atypical of the developing world as a whole. That the line is much higher in USD terms is simply a reflection of the fact that the 2011 ICP price surveys found lower price levels (and thus a higher purchasing power) in poor countries relative to the US, compared to the 2005 PPPs. The 2011 PPPs thus incorporate a lower relative purchasing power of the US dollar.

The exercise of updating the international poverty line when PPPs change - and the associated process of reviewing temporal and spatial price adjustments in over one hundred countries – are complex. Transparency and replicability are essential to ensure credibility, and we believe that this paper is a step in that direction. Even more importantly, the PovcalNet online tool will soon include the updated distributions, poverty line and PPP options to enable other researchers to replicate our results, as well as making different choices of their own.

Looking forward, we feel that one area where additional research is particularly needed, in order to enhance international comparability, is that of spatial cost-of-living adjustments. These are still made in a piecemeal and uncoordinated fashion across regions. While we feel that each of the adjustments we have made here is defensible in its own right, their consistency across space and time requires additional scrutiny. In that matter, and in many others, we look forward to advice from the Global Commission on Poverty, led by Professor Sir Anthony Atkinson, which was recently convened to advise the World Bank on how to take global poverty measurement forward, after this 2012 update.

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