rafmacalaba/datause-encoder-data huggingface dataset:
for a 10% increase. Earlier research has indicated that economic impacts of air pollution stem mainly from health effects that decrease length and quality of life, increase health expenditures, and reduce labor supply and productivity. In 2013, one-tenth of deaths worldwide were attributable to air pollution, resulting in about $225 billion annually in lost labor income (World Bank and Institute for Health Metrics and Evaluation, 2016). For those facing negative health impacts, personal wealth can suffer immensely, between $240 billion and $630 billion are spent each year on health care costs related to pollution (Preker et al., 2016). Quality of life is affected too, Levinson (2012) found individual average willingness to pay up to $42 per day for a one-standard-deviation improvement in air quality in the United States. Reduced air pollution has also been shown to increase short-run labor supply due to a healthier population, in one case by 3.5 percent, translating to increased income for individual workers (Hanna and Oliva, 2015). Worker productivity in certain sectors also relies on health from clean air, with a 10 ppb change in average ozone exposure, for instance, resulting in a 5.5 percent change in a study of agricultural worker productivity (Zivin and Neidell, 2012). In that case, reducing ozone pollution could result in annual cost savings in labor expenditure—totaling approximately $700 million in the United States if a 10 ppb reduction was implemented.

While many of the results point toward an economic failure, we also see potentials for enhanced growth. Policy targeted at exogenous pollution can have positive growth effects by reducing the harmful effects of pollution. Positive economic effects, specifically on the poor, in turn help combat air pollution. Bottom-up growth spills over positively to average growth while reducing pollution, and can therefore be seen both as an effective component in pollution reduction strategies as well as in general economic growth programs. Health policies for the poor that reduce the economic impact on these households, may similarly have economic benefits for the broader economy by leveraging growth spillovers and pollution reduction effects. Optimal pollution policies have both a positive effect on expenditures, specifically for the poor, while reducing exogenous pollution. Simple examples may include distributing cleaner gas stoves such as under the Clean Stove Initiative of the World Bank. This type of initiative reduces particulate matter emissions by reducing the amount of wood, agricultural residues, dung, and coal burned, while having a positive effect directly on bottom household wealth. Wealth increase in the bottom, then has the potential to spill over through the entire economy. In a different fashion, a pollution tax such as under Chile’s Green Tax Strategy, may in fact 31
WPS4053

# **_Corporate Governance and Stakeholders’ Financial Interests in_**

# **_Institutions Offering Islamic Financial Services_**

**Wafik Grais and Matteo Pellegrini**

## **Abstract**

This paper focuses on the corporate governance (CG) arrangements of Institutions offering Islamic financial services (IIFS) aimed at protecting stakeholders’ financial interests. Many IIFS CG issues are common with those of their conventional counterparts. Others are distinctive. In particular they offer unrestricted investment accounts that share risks with shareholders but without a voting right. This paper first reviews internal and external arrangements put in place by IIFS to protect stakeholders’ financial interests. It discusses shortcomings notably in terms of potential conflict of interest between shareholders and holders of unrestricted investment accounts. It then suggests a CG framework that combines internal and external arrangements to provide safeguards to unrestricted investment account holders without overburdening IIFS’ financial performance. The paper uses a review of 13 IIFS and regulatory information from countries where IIFS have developed the most.

World Bank Policy Research Working Paper 4053, November 2006 _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._
# **Microfinance and Economic Development**

Robert Cull, World Bank Jonathan Morduch, New York University

**JEL codes:** G21, G23, H25, O16

**Keywords:** microfinance, financial inclusion, poverty, implicit subsidy, economic development

A slightly modified version of this paper was prepared for the _Handbook of Finance and Development_ (Thorsten Beck and Ross Levine, eds.) We are grateful for permission to incorporate parts of “The way statistics shaped microfinance,” presented by Jonathan Morduch at the 4<sup>th</sup> IMF Statistical Forum, November 17, 2016. Morduch thanks the Institute for Advanced Study in Princeton, where he spent 2016-17 <mark>as the</mark> Roger W. Ferguson. Jr. and Annette L. Nazareth member. The views are those of the authors only. They are not necessarily those of the World Bank, International Monetary Fund, or their affiliate institutions.
<!-- Start of picture text --> Figure 3.4 - Global Liquid Supply Cost Curve<br>420 4 (U_S. dollar per barrel) Cost curve :<br>100 @ Average break-even Fy<br>,r | _&@<br>80 NAM,-” a 8<br>Offshore Deepwater Onshore Row Shale 3%<br>=<br>60 Se<br>Onshore ie) 57 62 Faeeel<br>40 Middle East 49 ~ » 5 g 8<br>43 wet os<br>Ge-""" Onshore Ultra 5| 28<br>29 = Russia <——————— Deepwater 2<br>20 & Total production in 2020 &<br>wemmnenet =" is fromof the categorytotalcumulative as share<br>0 fi production<br>0 20 40 60 80 100<br>Total 2020 liquid production (million boe/d)<br><!-- End of picture text -->

Source: Rystad Energy research and analysis.
# Table 2

# Lines of Moderate and<sup>Extreme-Poverty</sup>

||Moneta<br>|ry Cost<br><sup>Et-Pt</sup>|
|---|---|---|
|List of Necessities|Moderate Poverty|<sup>xremeovery</sup>|
|1. Food<br>||41863|
|1.1 nutritional basket<br>(Canasta Normativa Alimentaria)<br>|41,863<br>|,|
|1.2 other food consumed<sup>at home</sup><br>|14,073<br>||
|1.3 food consumed<sup>outside home</sup><br>|6,680<br>||
|1.4 eating & preparation<sup>utensils</sup>|6,398||
|2. Housing<br>|12237||
|2.1 maintenance &<sup>depreciation</sup><br>|,<br>||
|2.2 financial amortization<br>|28,342<br>||
|2.3 water&electricity|4,498<br>||
|2.4 real estate taxes<br>|1,800<br>||
|2.5 furniture, blankets<sup>and similar</sup>|4,576||
|3. Health|||
|3.1 Medicines<br>|527<br>||
|3.2 House and personal<sup>cleaning</sup>|9,108||
|4. Education|||
|4.1 tuition<br>|791<br>||
|4.2 school materials|1,287||
|5. Culture and Entertainment|||
|5.1 books<br>|6,403<br>||
|5.2 movies, vacation<sup>and similar</sup><br>|24,516<br>||
|5.3 radio, T.V.,<sup>and similar</sup>|3,679||
|6. Transport and<sup>Communication</sup><br>|10107||
|6.1 transport|,<br>||
|6.2 mail and phone|224||

(continued)
− industries performs better than an enclave a small pocket of firms. We measure the density of economic activities by (1) ln(no. firms relative to workers) = ln(no. formal firms / no. workers in formal firms), and (2) ln(population density).

The basic estimation results from decomposing the residuals of Table 5-2 (1) are reported in Table 7. The basic structure is that city growth residuals between _t_ and _(t-1)_ years are affected by city characteristics in year _(t-1)_ . However, when data in year _(t-1)_ are not available, we use the city characteristics in year _t_ assuming long-lasting persistence of city characteristics across years. In any case, the estimation result should be interpreted as associations of contemporary variables rather than a causal relationship. We find that population growth is higher in cities with better enforcement of land use and zoning laws – the estimates suggest that city growth is associated with increases in the percentage of city population under land zone laws.<sup>15</sup> However, we do not find any statistically significant association between city growth and existence of laws to collect IPTU (property tax). This is most likely because there is almost no variation in the IPTU collection data – most cities have laws to collect the property tax. A richer set of inter industry linkages is also associated with growth – the OLS coefficient for the number of (formal) firms relative to (formal) workers is statistically significant and has the expected sign. A higher number of firms relative to workers stimulate competition and collaboration among firms and workers in a city, and is associated with higher city growth.

> based industrial system. The Route 128 region, in contrast, is dominated by autarkic (self-sufficient) corporations that internalize a wide range of productive activities. She concluded that this difference in regional socio-economic structure accounts for the divergent prosperity of two regional economies, in spite of their common origins in postwar military spending and university-based research, and even though they enjoyed roughly the same employment levels in 1975.

> 15 We can get a similar result when we use a dummy variable indicating more than 50% of population is under land zone laws.

22
<!-- Start of picture text --> 30%<br>25%<br>20%<br>15%<br>10%<br>5%<br>0%<br>BESCOS EFTASES ZFSVSL SAPSRLS SEESSTIISSMOURESTFS SS RSSSERSSTIISSMOUEEESEERSSTFSSSRPSZIIAZFZSMELBSS<br>2018 2019 2020 2021<br>-®=C1=Pre shipment Inspection<br><!-- End of picture text --> <!-- Start of picture text --> 7%<br>6%<br>5%<br>4%<br>3%<br>2%<br>1%<br>0% S USSESTSSISSTRSSSSTSTFB Z OSES OS TESASPSLBSS SASISSSR STERTSSIVSSTLERERTSSVSSSESIA ZHKSSESLSZIZAZGSZSB<br>2018 2019 2020 2021<br>-©=87- SNI (National Standards)<br><!-- End of picture text --> <!-- Start of picture text --> 25%<br>20%<br>15%<br>10%<br>5%<br>0%<br>BESTESTSSESTSSPSUSLSESESTSSPSLSLSSESTSSPSLSLSESESTSSAHOZASE TASS A HOZASE TASS AHOZAS ETE SL AHOZSPSUS<br>2018 2019 2020 2021<br>——C3-Port of entry restrictions<br><!-- End of picture text --> <!-- Start of picture text --> 45%<br>40%<br>35%<br>30%<br>25%<br>20%<br>15%<br>10%<br>5%<br>0% SUSSSESTSSISTFB Z OSES OS TESASPSLBSS SSSASI S R ERTSSIVSSTLERERTSSVSSSESTTRSSSSTSSIA ZHKSSESLSZIZAZGSZSB<br>2018 2019 2020 2021<br>-©814- Import Approval<br><!-- End of picture text -->
Realizing the Gains from Trade: Export Crops, Marketing Costs, and Poverty<sup>_∗_</sup> Jorge Balat<sup>_†_</sup> Irene Brambilla<sup>_‡_</sup> Guido Porto<sup>_§_</sup> Yale University Yale University Dev. Research Group and NBER The World Bank January 2008

> _∗_ We thank J. Muwonge at the Uganda Bureau Of Statistics (UBOS) for assistance with the data and D. Merotto and H. Tang at the World Bank for encouragement and support. We thank H. Ennis, P. Goldberg, A. Harrison and M. McMillan for detailed comments, and seminar participants at Duke, NBER, Penn State, and University of Connecticut. This paper was supported by a DECRG Research Support Budget grant and two Dfid projects on trade and services and on trade facilitation. All errors are our responsibility.

> _†_ Yale University, New Haven, CT. email: jorge.balat@yale.edu

> _‡_ 37 Hillhouse, New Haven, Connecticut, 06511. email: irene.brambilla@yale.edu

> _§_ The World Bank, MailStop MC3-303, 1818 H St., Washington DC 20433. email: gporto@worldbank.org
# **Generating Ownership and Enhancing Capacity**

In order to ensure ownership of the policy agenda, any external inputs must closely support the government’s own efforts. This will increase the likelihood of commitment to and continuation of reforms. An investment climate reform framework that is simply parachuted in from above risks rejection by the country authorities. It also risks bypassing and hence undermining nascent governmental capacity.

Ensuring government ownership is easier said than done. Investment climate reform, like any reform process, is embedded in a political context. Development partners must be sensitive to post-conflict political realities, both in terms of possible vested interests of the principal stakeholders (not all of whom stand to gain from reforms that free up private sector activity) and to the risks of pushing reforms that have unintended consequences.

Sensitivity to post-conflict political realities—particularly when the political economy context is complex—can be fostered through dialogue and other consultative measures to ensure that PSD reforms have the intended effects. It is vital to identify all relevant stakeholders, including private sector representatives and civil society leaders, to ensure they are included in the reconciliation and reconstruction processes.<sup>43</sup> It is also necessary to have a frank view of ‘who is who’: to gauge ex-ante who stands to gain and who stands to lose from a particular PSD reform path. In some cases, this may mean actively seeking stakeholders as counterweights to vested interests who seek to block the emergence of a vibrant and competitive private sector.

Even the best policy framework will come to naught if the government’s capacity to implement is weak. Given that capacity is severely degraded in most post-conflict situations, implementation capacity must be developed side-by-side with policy reforms. Yet development partners have, to date, placed relatively little emphasis on enhancing implementation capacity for investment climate reforms. This is an area that needs greater commitment from development partners, at an earlier stage of the post-conflict phase.

# **Box 7. Unintended consequences in the Democratic Republic of Congo**

The extensive literature on ‘conflict economies’ has underlined the role that certain economic sectors— particularly extractive industries—can have in triggering conflict. Post-conflict reforms that attempt to restart activity in these same sectors can mean re-engaging the same actors and processes that stoked the conflict. In the Democratic Republic of Congo, for example, one view is that post-conflict legal reforms actually facilitated the diversion of timber revenues away from the authorities and that the privatization of state-owned companies was largely to the benefit of business interests closely linked to parties involved in the conflict. Thus, both reforms were politically destabilizing, further weakening the investment climate rather than strengthening it.

_Source_ : Taylor (2003).

> 43 DFID 2005.

26
Glass Barriers

# Appendix

- A. Random-Response procedure included in the IDI survey

- 5.8 In the last 12 months, have you ever omitted to declare goods or underreported their quantity or value on purpose in order to avoid taxes? 1 Yes <u>0 No 997 Doesn’t know 998 Refuses to answer</u>

## **_<u>Please read out the following script,</u>_**<sup>**_36_**</sup> **_<u>making sure the interviewee understands the procedure:</u>_**

## **_Enumerator: Please make sure the card deck is well shuffled (do it a minimum of 5 times before the interview)._**

I am going to read out a set of questions that describes acts or behaviors that people have expressed. Unlike other questions where you would just respond with a “yes” or “no,” this set has a slight variation to it. Before you answer each question, you will pick a card from this deck. There are 50% of black (spades/clubs) and 50% of red (hearts/diamonds) cards, randomly mixed. Based on which color you pick, I will give you an instruction to provide the appropriate response. Are you ready? I will now read the first question. Please pick a card from the deck, and if it’s a red card, just say YES regardless of whether you have done this or not. If it’s black, please just answer the question. Please do not let me see the card and do not put it back into the deck. This is very important.

|||1 Yes|0 No|
|---|---|---|---|
|5.9|Have you ever liedto protectyourself?|||
|5.10|Have you everdeliberately spoken illofamemberofyour family orafriend?|||
|5.11|Have you everdeliberatelytriedto cheatanotherperson?|||
|5.12|Have you everbrokena promise?|||
|5.13|Have you ever takensomethingthat isnotyours withoutpermissionandkept it?|||
|5.14|Have you ever bought, sold, bartered or been given something that you knew was<br>stolen?|||
|5.15|Have you ever mistreated someone because they did not share your opinions or<br>values?|||
|5.16|Have you ever been nice to a person only because you thought it would bring you<br>some benefit?<sup>37</sup>|||
|5.17|If you received some extra money that your family did not know about, would you<br>ever hideitfromthemand spendit onyourownenjoyment?|||
|5.18|Have you ever insulted yourparents,relatives orotherelders?|||
|5.19|Have you everbribed a policemanbecause you did something wrong ontheroad?|||
|5.20|Have you everdamaged somebody’s property tohurt them?|||
|5.21|Have you everstolen moneyfromamemberofyour household?|||

**_Please mix in front of the respondent the cards s/he has picked with the rest of the deck. Do not look at the cards._**

- B. Adjusting Answers to Sensitive Questions

Answers to survey questions about sensitive topics, e.g., corruption or illegal activities, are notoriously unreliable because respondents put little faith in guarantees of survey data anonymity or want to avoid negative judgments from enumerators.

> 36 Adapted from Kraay and Murrell (2013).

> 37 This question was not exploited in the reticence adjustment procedure because of a very high proportion of “Yes,” suggesting a different rate of guilt.

Cambodia and Lao PDR 25
center in the 1930s and nurtured one of the most important industrial bases in China before the Sino-Japanese War broke in 1937. The wars lasting many years blocked the path of growth. After 1949, the Communist Chinese Government began to transform Shanghai into a solid industrial base for the national economy. Starting in the early 1980s, the open door policy allowed. Shanghai to start regaining its position as finance and commerce center with the return of foreign banks in the new Pudong Financial District and the establishment of a modern stock exchange market.

**Figure 2:** The GDP and GDP per Capita of Beijing and Shanghai, 1978-2001

<!-- Start of picture text --> RM RM<br>600 40<br>500<br>30<br>400<br>300 20<br>200<br>10<br>100<br>0 0<br>Shanghai (GDP) Bei j i ng Shanghai (GDP/capi t a) Bei j i ng<br>1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000<br><!-- End of picture text --> _Source_ : Shanghai Statistics Yearbook 2002; Beijing Statistics Yearbook 2002.

# **Urban centers of emerging metropolitan regions**

Since China’s reforms commenced in the late 1970s, three metropolitan regions have demonstrated the greatest dynamism and the highest growth rates<sup>3</sup> , two centered in Beijing and Shanghai respectively: Beijing is the economic heart of the Rim of North China Sea ( _Huan bohai_ ), while Shanghai lies at the center of the Yangtze River Delta. Regional development has buttressed urban growth and pushed economic restructuring in both these cities.

Table 2 shows the changing economic structure in Beijing and Shanghai from 1978 to 2001. Beijing and Shanghai are facing common challenges to sustain their growth in the

> 3  According to this report, the three metropolitan regions in coastal China are the Rim of North China Sea (Huan bohai) centered on Beijing, the Yangtze River Delta centered on Shanghai, and the Pearl River Delta axis on Guangzhou-shenzhen, (or, actually, centered on Hong Kong), together up to 0.3 million km2 (less than 3% of the national in total), producing 37% of the national GDP in 2002. And it is estimated that this number is to reach 65% in 2020.

9
29

# **Appendix 1- Panel Estimation Results**

A) External Factors and GDP Growth.- Panel Estimation Results.

**Table 1: Exogenous Factors and GDP Growth 1992-1997**

Panel Regression Sample: 1992:01 1997:4

|Variable|Coe|fficient|t-Statistic||
|---|---|---|---|---|
|A4Y1||0.632|14.041 (*)||
|_A4Y4_||-0.452|-9.703 (*)||
|_A4Y.5_||0.261|5.584_(*)_||
|_A4TOT_||0.040|8.323 (*)||
|_A4TOT4_||0.042|6.592_(*)_||
|_USI-2_||-0.006|-5.647_(*)_||
|_CAL2_||0.0003|1.963 (**)||
|_A4SPD-3_||-0.010|-3.477 (*)||
|_1S04_||0.001|3.848 (*)||
|**Fixed Effects**|||||
|_Argentina_||0.035|||
|_Brazil_||0.026|||
|_Chile_||0.055|||
|_Colombia_||0.027|||
|_Ecuador_||0.026|||
|_Mexico_||0.026|||
|_Peru_||0.052|||
|_Venezuela_||0.022|||
|R2|0.744|Mean de|pendent var|0.044|
|R adjusted|0.713|S.D. dep|endent var|0.042|
|S.E. of regression|0.023|Sum squ|ared resid|0.068|
|Durbin-Watson|1.69||||

(*) Significant at 1%. (**) Significant at 10%.

# B) Methodology

To quantify the effect of the external factors on the decline in output growth observed in 1998 and 1999, we followed a two step procedure: _First Step:_ Estimate (1) for the period 1992-1997. Results of the estimation are in Table 1.

_Second Step:_ With the resulting coefficients we forecast 1998 and 1999 growth rates under two scenarios: a) actual values for external conditions are used in the forecast; b) 'constant external environment'. That is, forecast 1998 and 1999 assuming that terms of trade, interest rates, non-Latin spreads, current account in industrial countries, and El Nifno factor take the average value observed in 1997. We use N-Step ahead forecasts.
Table F.1: Productivity and Technology Sophistication, GBF and SSBF MOST

|VARIABLES|(1)<br>ln(VAPW)|(2)<br>ln(VAPW)|
|---|---|---|
|GBF EXT|1.72***<br>(0.32)||
|GBF EXT<sup>2</sup>|-0.20***<br>(0.05)||
|GBF EXT*AGRI||1.96***<br>(0.45)|
|GBF EXT*MANF||-0.29***<br>(0.09)|
|GBF EXT*SVC||0.38***<br>(0.10)|
|SSBF MOST*Agriculture|0.40**<br>(0.20)|0.48**<br>(0.20)|
|SSBF MOST*Food Processing|0.36**<br>(0.19)|0.38**<br>(0.19)|
|SSBF MOST*Apparel|0.65***<br>(0.15)|0.60***<br>(0.15)|
|SSBF MOST*Retail and Wholesale|-0.05|-0.15|
||(0.15)|(0.16)|
|SSBF MOST*Other Manufacturing|0.15*|0.12|
||(0.09)|(0.08)|
|SSBF MOST*Other Services|0.49*<br>(0.29)|0.48<br>(0.30)|
|Var(ABF EXT)|0.30***<br>(0.10)|0.37***<br>(0.10)|
|Firm Characteristics|_~~√~~_|_~~√~~_|
|Observations|2,746|2,746|
|R-squared|0.50|0.50|

Note: *** p _<_ 0.01, ** p _<_ 0.05, * p _<_ 0.1. Robust standard errors in parentheses. The regressions controlled for observable firm characteristics including size (i.e., small, medium, and large), sector (i.e., agriculture crops, livestock, food processing, wearing apparel, pharmaceutical, moto-vehicle, wholesale and retail, finance, land transport, hospital, other manufacturing, and other services), age (i.e., 0-5, 6-10, 11-15, and 16 or more), export, and multinational status.

94
- U.S. House of Representatives Committee on International Relations. (1999). Relief efforts in Central America in the aftermath of Hurricane Mitch, _U.S. Government Printing Office_ , Washington, DC.

- Vickery, P.J., & Skerlj, P.F. (2005). Hurricane Gust Factors Revisited. _Journal of Structural Engineering_ , 131, 825‐832.

- Von Peter, G., Von Dahlen, S. & Saxena, S. (2012). Unmitigated Disasters? New Evidence on the Macroeconomic Cost of Natural Catastrophe. _BIS Working Papers_ , No 394.

- World Bank & United Nations. (2010). Natural Hazards, Un‐Natural Disasters: The Economics of Effective Prevention, _World Bank. https://openknowledge.worldbank.org/handle/10986/2512 License: CC BY 3.0 IGO_ .

- ‐

- World Bank (2015). LAC Equity Lab. In: <u>http://www.worldbank.org/en/topic/poverty/lac equity lab1/overview.</u>

23
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