rafmacalaba/datause-encoder-data huggingface dataset:
# **Table 6 Historical, Projected, and Actual Macroeconomic Variables in High-Income OECD Countries**

<u>(annual percentage change)</u>

|_Variable_|_Trend_<br>_1965–89_|**_History_**<br>_Then re_<br>_experie_<br>_1980–89_|_cent_<br>_nce_<br>_1990_|_IMF_<br>_Base-_<br>_line_<br>_1991–_<br>_96_|_Project_<br>_Link_<br>_1990–95_|**_Projections_**<br>_Wharton_<br>_Econometric_<br>_Forecasting_<br>_Associates_<br>_(WEFA)_<br>_1990–95_|_Data_<br>_Resources, _<br>_Inc. (DRI)_<br>_1990–95_|_World_<br>_1990_<br>_Baseline_|_Bank_<br>_–2000_<br>_Low case_|**_Ac_**<br>_1990–95_|**_tual_**<br>_1990–2000_|_2000–10_|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|Real GDP|3.1|3.1|2.6|3.1|2.8|3.2|3.1|2.9|2.2|1.9|2.5(2.9)<sup>a</sup>|1.4|
|Inflation|6.6|3.8|3.7|3.4|3.4|4.4|3.3|3.6|4.3|2.1|1.5|1.4|
|Real rate of interest|3.1|5.8|4.3|3.9|4.0|4.3|4.9|3.4|5.1|2.3|3.2|0.4|
|Nominal rate of interest|8.6|10.2|8.4|--|7.7|8.6|7.9|7.4|9.6|4.9|5.4|2.7|
|World trade (export<br>volume)|4.1|4.1|5.0|--|5.6|4.3|--|5.8|4.5|6.2|7.0|3.8<sup>b</sup>|
|Real price of oil<br>|1.8|-4.2|20.0|--|0.9|0.8|–2.0|3.5|3.0|–4.6|2.4|8.4|

_Source_ : Projections are from World Bank 1991; actual figures are from World Development Indicators.

_Note_ : Values for 2010 for the period 2000–10 are estimates from World Bank 2012b.

a. Figure in parentheses is the real average annual GDP growth of high-income OECD countries excluding Japan.

b. Data are for 2000–09.

51
between manufacturing and services performance around specialization dynamics. This added perspective will provide a richer foundation for understanding growth in Indian cities.

# **References**

- Black, Duncan, and J. Vernon Henderson, “Urban Evolution in the USA,” _Journal of Economic Geography_ 3:4 (2003), 343–372.

- Ciccone, Antonio, and Robert Hall, “Productivity and the Density of Economic Activity,” _American Economic Review_ 86:1 (1996), 54–70.

- Deichmann, Uwe, Somik Lall, Stephen Redding, and Anthony Venables, “Industrial Location in Developing Countries,” _World Bank Research Observer_ 23:2 (2008), 219–246.

- Desmet, Klaus, Ejaz Ghani, Stephen O’Connell, and Esteban Rossi-Hansberg, “The Spatial Development of India,” World Bank Policy Research Working Paper No. 6060 (2012).

- Duranton, Gilles, “Growth through Cities in Developing Countries”, Working Paper (2013a).

- Duranton, Gilles, “Specialisation, Diversity, and Sectoral Growth in Colombian Cities”, Working Paper (2013b).

- Duranton, Gilles, and Diego Puga, “Diversity and Specialization in Cities: Why, Where and When Does It Matter?” _Urban Studies_ 37:3 (2000), 533–555.

- Duranton, Gilles, and Diego Puga, “Nursery Cities: Urban Diversity, Process Innovation, and the Life Cycle of Products,” _American Economic Review_ 91:5 (2001), 1454–1477.

- Duranton, Gilles, and Diego Puga, “Micro-Foundations of Urban Agglomeration Economies,” in _Handbook of Regional and Urban Economics,_ Volume 4, eds. J. Vernon Henderson and Jacques François Thisse (Amsterdam: North-Holland, 2004), 2063–2117.

- Ellison, Glenn, and Edward Glaeser, “Geographic Concentration in U.S. Manufacturing Industries: A Dartboard Approach,” _Journal of Political Economy_ 105 (1997), 889–927.

- Ellison, Glenn, Edward Glaeser, and William Kerr, “What Causes Industry Agglomeration? Evidence from Coagglomeration Patterns,” _American Economic Review_ 100:3 (2010), 1195–1213.

- Feldman, Maryann and David Audretsch, “Innovation in Cities: Science-Based Diversity, Specialization and Localized Competition,” _European Economic Review_ 43:2 (1999), 409–429.

- Fernandes, Ana and Gunjam Sharma, "Together We Stand? Agglomeration in Indian Manufacturing,” World Bank Policy Research Working Paper No. 6062 (2012).

- Ghani, Ejaz, William Kerr and Stephen O'Connell, “Spatial Determinants of Entrepreneurship in India,” National Bureau of Economic Research Working Paper No. 17514 (2011).

- Ghani, Ejaz, William Kerr, and Stephen O'Connell, “The Exceptional Persistence of India’s Unorganized Sector,” World Bank Policy Research Working Paper No. 6454 (2013a).

24
34 Declared/stated preferences are provided by responses given by a sample of potential or actual users provided when they are placed in hypothetical situations. The potential users are asked to rank, rate or pick among several options. This is generally organized through field surveys conducted around the area in which the benefits of a project are supposed to be observable. Asking users to pick or rate is faster and generally more reliable than asking for a ranking and is hence more common. T he interview can be conducted in 10- _1_ 5 minutes-it takes at least twice as much to ask for a ranking of options. The specific design has of course to be tailored to the type of mode in use. You have more time to interview a passenger on an intercity train than to ask the driver of a car waiting for the light to turn green. In some instances, the survey requires the users to be paid to come to a specific location to do the questionnaire.

Overall, the declared preferences approach is to some extent less demanding initially. It is however very sensitive to the quality of the questionnaire design and to the quality of the team conducting this field survey. It needs to be tested carefully as errors are easy-and common. For urban projects, it is recommended to have sample sizes of the population of about 10% when passenger flows are larger than 900 pax/hour-and assuming a response rate of 20-30%. It generally ends up being more expensive than a revealed preference study. The list should make it clear that this is quite time consuming and requires a strong commitment to success.

While the economists have all the required tools to derive individual demand forecast from these models, they are not cheap to implement. They are indeed quite time consuming and demand strong technical skills. These models require detailed surveys through questionnaires and econometric analysis-which quickly drive costs up. Their main attraction is that they can be quite effective at allowing an estimate of the probabilities that an individual with specific characteristics will prefer one mode over another. To get the demand for each mode, this individual information are aggregated. This also can be done in various ways. each introducing its own biases which must be understood if the results are to be used in any regulatory decision (Ben Akiva and Lerman 1985).

The quality of the policy advise generated from these models have made become a standard in the industry. They are being used in assessing projects in various Latin American countries at reasonable costs and some of these examples will be discussed below. One of their
In the European Union, expenditures in multitiered fiscal systems are often procyclical. Although national automatic stabilizers may help smooth taxes, consumption, and output over the business cycle, the Stability and Growth Pact, which limits independent borrowing by subnational government, pulls subnational fiscal policy in the opposite direction. Comparative empirical research emphasizes the role of national tax transfer systems in cushioning asymmetric regional shocks, but little is known about the cyclicality of subnational fiscal policy.

In China, the tax reforms of 1994, which strengthened the central government’s fiscal capacity, played a key role in laying the ground for a stimulus package during a crisis. The reforms gradually increased the share of total government revenue to GDP and the share of central government revenue to total government revenue (box 3).

# **Box 3 Tax reforms in China**

From 1980 to 1993, China adopted the fiscal contracting system, which decentralized tax administration. Subnational governments had strong incentives to retain fiscal revenues and develop their localities by imposing the lowest taxes possible on enterprises. As a result, the ratio of total government revenue to GDP declined, as did central government revenues relative to total government revenues. The 1994 tax reform replaced the discretion-based revenue-sharing system with a more rule-based fiscal assignment system, allowing the central authorities to reassert themselves more actively and to use fiscal policy for redistribution (Dollar and Hofman 2008). Before the reforms, the share of central government expenditures was roughly in line with its share of revenues; after the reforms, central government revenues to total government revenues rose sharply, more than doubling, from about 22 percent in 1993 to 56 percent in 1994 and hovering around 50 percent in recent years. The share of central government expenditures to total government expenditures declined from about 30 percent to 20 percent.

_Source_ : Huang and Luo 2008.

Fifteen years after the reform, China has become much more decentralized. The central government raises more than 50 percent of revenue but accounts for only 20 percent of expenditure (figure 3). Subnational governments receive less than 50 percent of tax revenues in 20
- Munich, D., K. Terrell and J. Svejnar. 1999. "Returns to Human Capital From the Commnunist Wage Grid to Transition: Retrospective Evidence from Czech Micro Data." (mimeo)

- Murphy, K. and F. Welch. 1992. "The Structure of Wages." _Quarterly Journal of Economics_ 107: 285-326.

- Nelson, R.R. and E.S. Phelps. 1966. "Investment in Humans, Technological Diffusion, and Economic Growth." _American Economic Review_ 65(2): 69-75.

- Nesterova, V.D. and K.Z. Sabirianova. 1998. "Investing in Human Capital Under Economic Transformation in Russia." Economic Education and Research Consortium, Russia Economic Research Program, Working Paper Series No. 99/04.

- Noorkoiv, R., P.F. Orazem, A. Puur and M. Vodopivec. 1998. "Employment and Wage Dynamics in Estonia, 1989-95." _Economics of Transition_ 6 (2) 481-503.

- OECD. 2001 a. _Education at a Glance: OECD Indicators 2001._ Paris: OECD.

- OECD. 2001b. _Education Policy Analysis 2001._ Paris: OECD.

- OECD. 1997. _HumanCapitalInvestment:AnInternationalComparison._ Paris:OECD.

- Parajuli, D. 1999. "External Efficiency and Equity in Nepalese Education." World Bank (mimeo).

- Patrinos, H.A. 2001. "Technology and Labor Market Outcomes: Implications for Education." World Bank (mimeo).

- Patrinos, H.A. 1995. "Education and Earnings Differentials." World Bank (mimeo).

- Patrinos, H.A., E. Velez, and G. Psacharopoulos. 1994. "Language, Education and Earnings in Asuncion, Paraguay." _Journal of Developing Areas_ 29: 57-68.

- Pissarides, C.A. 2000. "Human Capital and Growth: A Synthesis Report." OECD Development Centre, Technical Papers No. 168.

- Pritchett, L. 2001. "Where Has All the Education Gone?" _World Bank Economic Review_ 15(3): 367-393.

- Psacharopoulos, G., E. Velez, A. Panagides and H. Yang. 1996. "The Returns to Education during Boom and Recession: Mexico 1984, 1989 and 1992." _Education Economics_ 4(3): 219-230.

10
# **Introduction**

One of the main preoccupations of governments around the world is how to improve labor market outcomes, both generating sufficient jobs for all members of the labor force and increasing the productivity, and therefore the earnings, associated with these jobs. The problem is that there are multiple policies operating at various levels of the economy that affect labor market outcomes. These include macroeconomic and institutional policies that influence investments decisions, economic growth, and labor demand; education and training policies that affect the distribution of skills in the labor force; and, social protection policies that affect the bargaining power of workers, their mobility, as well as labor costs and the tax-wedge.<sup>1</sup> Policymakers face several challenges when it comes to designing and implementing policies at these various levels because they need to accurately predict the _joint_ effects that alternative policies have on labor market outcomes. It would also be interesting to transform/aggregate the changes in labor market outcomes into a measure of social well being.

In terms of the link between policies and outcomes, two general approaches can be considered here. One is to conduct ex-post evaluations of a given policy intervention. These are powerful tools for guiding policymaking and are becoming more and more popular. They usually refer, however, to specific, narrow, and well targeted interventions. Their use is more limited when a comprehensive strategy – such as one to promote employment creation – is going to be conducted. In the latter case, general equilibrium and macroeconomic effects are important and there is less room for “piloting” before implementation. Ex-ante evaluations in this case remain important. These involve the existence of an economic model linking policy levers to outcomes of interest. Unfortunately, the economics profession is still lacking an integrated framework that can be used to analyze labor market policies (see Fields, 2007). There are still several questions to address in terms of what type of models should be used to link policies to outcomes; to complicate matters these tend to depend on the country context.

> 1 See for instance World Bank (2007) for a discussion on framework that integrates these policies.

2
**26** **<u>│</u>**

Lastly, on the question of how these wage differences spill over to domestic firms, the evidence is mixed. Foreign investment may induce wage increases in domestic firms by shifting up the labor demand curve, thereby increasing equilibrium wages (a so-called ‘reference wage effect’) or ‘wage spillovers’, which can operate through labor mobility and bargaining (Tomohara and Takii, 2011). As an example, studies have found that a 10% increase in the share of former foreign MNE workers in domestic firms increases an incumbent worker’s wage in domestic firms by approximately 0.6% (Poole, 2013). Negative effects have also been identified in the literature; for example, to wages paid by domestically owned enterprises. The possible reason for negative wage spillovers is that foreign firms ‘steal’ the best workers, i.e., high wage workers from the local firms (so-called “labor-market crowding out”); moreover, the competition between local and foreign firms in the product market decreases the profitability of local firms which, in turn, may lead to wage reductions in these firms (so-called “productmarket crowding out”) (Pittiglio et al., 2014).

# Geographical Diversification

Marked regional differences in the distribution of foreign investment are a fact in most developing countries and have motivated a substantial stream of literature on the choice of FDI location within countries. Access to customers as well as suppliers of intermediate inputs (Amiti and Javorcki, 2005); institutions and risk appetite due to cultural differences among investors (Du, Tao and Lu, 2012); agglomeration effects, follow-the-leader strategies (Deichmann, Karidis and Sayek, 2003; Hilber and Voicu, 2010) as well as the availability of qualified labor and good infrastructure have all been identified as strong determinants of MNE spatial concentration or diversification in various contexts.

The Enterprise Surveys confirm that foreign multinational activity tends to be less widespread than domestic activity, either concentrated in industrial or economic hubs within the tertiary sector of host countries (see Fig. 10 using the share of the top subnational region in MNE output and aggregate economy output as a proxy for concentration). The concentration can be in stark contrast with domestic activity such as in the cases of Angola, Russia, India, and China, or in line with domestic economic activity, such as is the case in smaller African countries, Mexico or the Arab Republic of Egypt.

The positive relationship between FDI agglomeration and local economic activity leads to a multiplier effect that can benefit countries in terms of competitiveness: the more the latter grows, the greater the likelihood of that region attracting further FDI inflows and vice-versa. This partly explains why large cities such as those in China are foreign investment hubs, continually attracting FDI (Huang and Wei, 2011). The effect of such agglomeration on inclusiveness can be ambiguous to the extent that supply linkages extend to more remote areas and activities, and redistribution policies are in place.
|RailwayProject|
|---|
|RailwayProject|
|Financial Sector Adjustment Credit(FSAC)Project<br>Irfan Aleem|
|Financial Sector Adjustment Credit(FSAC)Project<br>Irfan Aleem|
|Financial Sector Adjustment Credit(FSAC)Project<br>Irfan Aleem|
|Financial Sector Adjustment Credit(FSAC)Project<br>Irfan Aleem|
|Financial Sector Adjustment Credit(FSAC)Project<br>Irfan Aleem|
|SexuallyTransmitted Infections Project<br>Peter Okwero|
|SexuallyTransmitted Infections Project<br>Peter Okwero|
|SexuallyTransmitted Infections Project<br>Peter Okwero|
|SexuallyTransmitted Infections Project<br>Peter Okwero|
|SexuallyTransmitted Infections Project<br>Peter Okwero|
|SexuallyTransmitted Infections Project<br>Peter Okwero|
|SexuallyTransmitted Infections Project<br>Peter Okwero|
|SexuallyTransmitted Infections Project<br>Peter Okwero|
|SexuallyTransmitted Infections Project<br>Peter Okwero|
|SexuallyTransmitted Infections Project<br>Peter Okwero|
|SexuallyTransmitted Infections Project<br>Peter Okwero|
|Program for Alleviation of Povertyand the Social Costs of Adjustme Gita Gopal|
|Program for Alleviation of Povertyand the Social Costs of Adjustme Gita Gopal|
|Program for Alleviation of Povertyand the Social Costs of Adjustme Gita Gopal|
|Program for Alleviation of Povertyand the Social Costs of Adjustme Gita Gopal|
|Program for Alleviation of Povertyand the Social Costs of Adjustme Gita Gopal|
|Program for Alleviation of Povertyand the Social Costs of Adjustme Gita Gopal|
|Program for Alleviation of Povertyand the Social Costs of Adjustme Gita Gopal|
|Structural Adjustment Credit Project(02)<br>Ritva S. Reinikka|
|Structural Adjustment Credit Project(02)<br>Ritva S. Reinikka|
|Structural Adjustment Credit Project(02)<br>Ritva S. Reinikka|
|Enterprise Development Project<br>Claude P. Sorel|
|Enterprise Development Project<br>Claude P. Sorel|
|Enterprise Development Project<br>Claude P. Sorel|
|Enterprise Development Project<br>Claude P. Sorel|
|Enterprise Development Project<br>Claude P. Sorel|
|Enterprise Development Project<br>Claude P. Sorel|
|Enterprise Development Project<br>Claude P. Sorel|
|Enterprise Development Project<br>Claude P. Sorel|
|Enterprise Development Project<br>Claude P. Sorel|
|Water SupplyProject(02)<br>Alain R. Locussol|
|Water SupplyProject(02)<br>Alain R. Locussol|
|Water SupplyProject(02)<br>Alain R. Locussol|
|Water SupplyProject(02)<br>Alain R. Locussol|
|Water SupplyProject(02)<br>Alain R. Locussol|
|Water SupplyProject(02)<br>Alain R. Locussol|
|Water SupplyProject(02)<br>Alain R. Locussol|
|Water SupplyProject(02)<br>Alain R. Locussol|
|Water SupplyProject(02)<br>Alain R. Locussol|
|Road Development Project<br>Labite Victorio Ocaya|
# **1 Introduction**

Government procurement is a major market, accounting for about 12% of world GDP in 2018 (Bosio et al., 2020). Given this important size, public authorities often prefer local to foreign providers in procurement contracts in order to achieve socioeconomic objectives (e.g., promoting “sustainable” local purchases, and the development of small and medium local enterprises).<sup>1</sup> Buy-national provisions are prime examples of measures that explicitly exclude foreign firms from government contracts. The Global Trade Alert (GTA) initiative has collected data since 2009 on the adoption of protectionist measures in government procurement. The data show that 56 new discriminatory measures in government procurement were enacted on average each year between 2009 and 2018.<sup>2</sup> In parallel with this persistent protectionism, governments have committed to greater market access in government procurement through the WTO Government Procurement Agreement (GPA) as well as targeted provisions within other free trade agreements (TAs). Membership to the WTO GPA expanded from the initial 34 signatory countries (including EU member states) in 1996 to a group of 48 as of 2020. Meanwhile, the number of TAs including enforceable provisions aimed at liberalizing procurement markets has been increasing over time. Figure 1 shows that provisions on government procurement have become more common since 2000. In 2017, a quarter of TAs in force had enforceable provisions on government procurement.

> 1We use the terms “government”, “public sector” and “public authorities” interchangeably to indicate public institutions that are buyers in the public procurement market.

> 2We include only policies that the GTA database classifies as “red” (i.e., that almost certainly discriminate against foreign firms) in the following policy areas: “Government Procurement: Domestic Price Preference”, “Government Procurement: Local Content Requirement”, “Government Procurement: Market Access Restrictions” and “Government Procurement: Tendering Process”. These protectionist measures involve around 2500 country pairs (one country implementing the policy measure and the other being among the targets) per year.

2
- 99 -

in adjusting to new economic conditions. They help change the shape of the production possibility frontier facing individual farmers.

4.15 Research and Extension. The work on the international research centers, IRRI in the Philippines and CIMKYT in Mexico, spawned the Green Revolution in the 1960s. In the 1970s, these centers developed complementary links to national and local research centers in Asia, which facilitated the adaptation of high-yielding varieties to local environments. The second generation varieties adapted to local conditions allowed farmers greater flexibility in planting dates. Research centers, many of whom coordinated their activities through CGIAR, extended genetic research to cropa other than wheat and rice--corn, cassava, pulses, tubers, **and** legumes--and developed new varieties of coconut, tea, and rubber. Research efforts have also promoted adoption of new cash crops, such as palm oil, cocoa, and horticultural products, and research has expanded into such new areas as aquaculture, dairying, and fast-growing hardwood species for tree plantations.

4.16 Despite initiatives in these broader directions, international and national agricultural research has focused heavily on raising productivity in rice and wheat, which benefits areas that are relatively prosperous and favorably endowed with capita, infrastructure, land, and water resources. Investment by Asian countries in agricultural research has been concentrated on lowland, irrigated rice and on major export crops, such as sugar and rubber. But as Chapter 3 points out, much agricultural land is in rainfed and upland area where yields are low and poverty is widespread. Increasing population pressures in upland areas have led cultivators to encroach onto steeper terrain, a practice associated with deforestation and degradation of watershed areas and serious environmental, economic, and social consequences. Many governments have recognized the increasing importance of research that focuses on developing sustainable patterns of agro-forestry and intercropping in upland areas.

4.17 A combination of public and private research has contributed to greater flexibility at the farm level, but with differing approaches.