rafmacalaba/datause-encoder-data huggingface dataset:
Moving forward faster : trade
            facilitation reform and Mexican competitiveness
Improved competitiveness is at the top
            of the agenda for Mexico as it moves to leverage economic
            progress made over the past decade. The authors evaluate the
            impact of changes in trade facilitation measures on trade
            for main industrial sectors in Mexico. They use four
            indicators of trade facilitation: port efficiency, customs
            environment, regulatory environment, and e-commerce use by
            business (as a proxy for service sector infrastructure). The
            authors use gravity model results to consider how much trade
            among countries might be increased under various scenarios
            of improved trade facilitation. They follow a simulation
            strategy that uses a formula to design a unique program of
            reform for each country in the sample, and apply it to the
            case of Mexico. The formula brings the below-average
            countries in the group half-way to the average for the
            entire set of countries. After simulating these improvements
            in trade facilitation in all four areas, the authors find
            that the total increase in trade flow in manufacturing goods
            is estimated to be $348.2 billion (about 7.4 percent of
            total world trade). The analysis indicates that Mexico has a
            large scope for trade promotion from trade facilitation
            reform: overall increments from domestic reforms are
            expected to be on the order of $31.8 billion, equivalent to
            22.4 percent of total Mexican manufacturing exports for
            2000-03. On the imports side, these figures are $17.1
            billion and 11.2 percent, respectively. In total exports as
            well as in textiles, increases in exports result from
            improvements in port efficiency and the regulatory
            environment (that is, the perception of corruption). In
            turn, exports of transport equipment are expected to get a
            greater increment from improvements in port efficiency,
            whereas exports of food and machinery seem to be more
            related to improvements in the regulatory environment. On
            the imports side, Mexican improvements in port efficiency
            appear to be the most important factor, although for imports
            of transport equipment improvements in service sector
            infrastructure are also of relative importance.
Banking on the principles :
            compliance with Basel Core Principles and bank soundness
This paper studies whether compliance
            with the Basel Core Principles for Effective Banking
            Supervision (BCP) improves bank soundness. BCP compliance
            assessments provide a unique source of information about the
            quality of bank supervision and regulation around the world.
            The authors find a significant and positive relationship
            between bank soundness (measured with Moody's financial
            strength ratings) and compliance with principles related to
            information provision. Specifically, countries that require
            banks to report regularly and accurately their financial
            data to regulators and market participants have sounder
            banks. This relationship is robust to controlling for broad
            indexes of institutional quality, macroeconomic variables,
            sovereign ratings, as well as reverse causality. Measuring
            soundness through z-scores yields similar results. The
            findings emphasize the importance of transparency in making
            supervisory processes effective and strengthening market
            discipline. Countries aiming to upgrade banking regulation
            and supervision should consider giving priority to
            information provision over other elements of the Core Principles.
Finance and economic development :
            policy choices for developing countries
The empirical literature on finance and
            development suggests that countries with better developed
            financial systems experience faster economic growth.
            Financial development-as captured by size, depth,
            efficiency, and reach of financial systems-varies sharply
            around the world, with large differences among countries at
            similar levels of income. This paper argues that governments
            play an important role in building effective financial
            systems and discusses different policy options to make
            finance work for development.
Discordant couples : HIV infection
            among couples in Burkina Faso, Cameroon, Ghana, Kenya, and Tanzania
Most analyses of the determinants of HIV
            infection are performed at the individual level. The recent
            Demographic and Health Surveys which include results from
            HIV tests allow studying HIV infection at the level of the
            cohabiting couple. The paper exploits this feature of the
            data for Burkina Faso, Cameroon, Ghana, Kenya, and Tanzania.
            The analysis yields two surprising findings about the
            dynamics of the HIV/AIDS epidemic which have important
            implications for policy. First, at least two-thirds of the
            infected couples are discordant couples, that is, couples
            where only one of the two partners is infected. This implies
            that there is scope for prevention efforts among couples.
            Second, between 30 and 40 percent of the infected couples
            are couples where the female partner only is infected. This
            is at odds with levels of self-reported marital infidelity
            by females and with the common perception that unfaithful
            males are the main link between high risk groups and the
            general population. This study investigates and confirms the
            robustness of these findings. For example, even among
            couples where the woman has been in only one union for 10
            years or more, the fraction of couples where only the female
            partner is infected remains high. These results suggest that
            extramarital sexual activity among cohabiting women,
            whatever its causes, is a substantial source of
            vulnerability to HIV that should be, as much as male
            infidelity, targeted by prevention efforts. Moreover, this
            paper uncovers several inconsistencies between the sexual
            behaviors reported by male and female partners, suggesting
            that as much as possible, prevention policies should rely on
            evidence including objectively measured HIV status.
Do workers' remittances promote
            financial development
Workers' remittances to developing
            countries have become the second largest type of flows after
            foreign direct investment. The authors use data on
            workers' remittance flows to 99 developing countries
            from 1975-2003 to study the impact of remittances on
            financial sector development. In particular, they examine
            whether remittances contribute to increasing the aggregate
            level of deposits and credit intermediated by the local
            banking sector. This is an important question considering
            the extensive literature that has documented the
            growth-enhancing and poverty-reducing effects of financial
            development. The findings provide strong support for the
            notion that remittances promote financial development in
            developing countries.
Linking public investment programs
            and SPAHD macro models : methodology and application to aid requirements
The authors propose a "bottom
            up" approach to link public investment programs with a
            class of macro models recently developed to quantify
            Strategy Papers for Human Development (SPAHD) in low-income
            countries. The methodology involves establishing
            constant-price projections of investment outlays
            (disaggregated into infrastructure, education, and health),
            spending on maintenance and other goods and services,
            salaries, and user charges. These estimates are incorporated
            in a SPAHD macro framework to calculate, under alternative
            scenarios, domestic financing, foreign borrowing, and aid
            requirements. The authors also evaluate the impact on growth
            and indicators associated with the Millennium Development
            Goals. They use illustrative applications, based on a SPAHD
            model for Niger, to highlight the link between tax reform
            and aid requirements.
Global redistribution of income
The actual distribution of world income
            across countries is extremely unequal, much higher than the
            within country inequality faced by most countries. The
            question studied in this paper is: How do international
            policies on aid, trade, and factor movements affect the
            international distribution of income? To begin to answer
            this question, the authors calculate the impact by decile of
            the actual level of aid flows and the effect on potential
            income of merchandise trade restrictions by high-income
            countries. They find that aid's distributional impact
            is equality enhancing. While it is extremely small in terms
            of changes in standard inequality measures, it is of some
            importance for the lowest decile of the world's income
            distribution. The authors also find that some of this impact
            is counteracted by lost potential income in the lower
            deciles from merchandise trade barriers imposed by
            high-income countries. In brief, there is a contradiction in
            international policies where aid's equality-enhancing
            effect is somewhat offset by protectionism. They also
            discuss some of the analytical difficulties with extending
            this analysis of redistribution to other forms of
            international factor flows-more specifically, migrant worker
            and profit remittances. The analysis presented is partial
            and static and ignores within country distribution. As such,
            the authors suggest that future research should explore the
            distributional consequences of the broader general
            equilibrium effects, dynamic effects, and externalities
            associated with aid, trade, and factor flows. Future
            research should also analyze the within country
            distributional impacts of international policies.
Untangling the maze of European
            Union funds to Bulgaria
The paper presents a fiscal estimate of
            Bulgaria's perspective European Union (EU) membership.
            The projected EU funds have two distinct effects: first,
            there is the overall effect on the balance of payments of
            the country; and second, there is the pure effect on the
            national budget. The paper concludes that Bulgaria is likely
            to benefit from large net inflows of resources of an average
            of 3.7 percent of gross domestic product (GDP) in 2007-09.
            In contrast, its fiscal position is expected to deteriorate
            by 1.6 percent of GDP on average in 2007-09 if no
            expenditure restructuring of the fiscal framework is carried
            out. The expected deterioration of the public finances
            related to EU accession would be due to co-financing
            requirements, national contributions to the EU budget, and
            possible full pre-financing of the EU direct payments to
            Bulgarian farmers in the first year of accession. However,
            the above expenditures will be partly offset by the
            budgetary compensation allocated out of the EU budget,
            savings from agricultural subsidies, and shifting of certain
            public expenditures to Cohesion Fund-supported projects.
Household financial assets in the
            process of development
Systematic information on household
            financial asset holdings in developing countries is very
            sparse. The author reviews some available data and current
            policy debates. Although financial asset holdings by
            households are highly concentrated, deeper financial systems
            are correlated with improved income distribution. For
            low-income countries, the relevant question for poor
            households is not how much financial assets they have, but
            whether they have any access to financial products at all.
            Building on and synthesizing disparate data collection
            efforts by others, the author produces new estimates of
            access percentages for over 150 countries. Across countries
            access is negatively correlated with poverty rates, but the
            correlation is not a robust one: thus the supposed
            anti-poverty potential of financial access remains
            econometrically elusive. Despite policy focus on the value
            of credit instruments, it is deposit products that tend to
            be the first to be used as prosperity increases, before more
            sophisticated savings products and borrowing.
Household financial assets in the
            process of development
WPS3965

# **HOUSEHOLD FINANCIAL ASSETS IN THE PROCESS OF DEVELOPMENT**

by

# **Patrick Honohan***

The World Bank and CEPR

# _Abstract_

Systematic information on household financial asset holdings in developing countries is very sparse; we review some available data and current policy debates. Although financial asset holdings by households are highly concentrated, deeper financial systems are correlated with improved income distribution. For low-income countries, the relevant question for poor households is not how much financial assets they have, but whether they have any access to financial products at all. Building on and synthesizing disparate data collection efforts by others, we produce new estimates of access percentages for over 150 countries. Across countries, access is negatively correlated with poverty rates, but the correlation is not a robust one: thus the supposed anti-poverty potential of financial access remains econometrically elusive. Despite policy focus on the value of credit instruments, it is deposit products that tend to be the first to be used as prosperity increases, before more sophisticated savings products and borrowing.

# World Bank Policy Research Working Paper 3965, July 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._ ___________________________________

* <u>phonohan@worldbank.org.  This paper was prepared for the UNU-WIDER Project</u> “Personal Assets from a Global Perspective.” I am grateful to the project organizer Jim Davies and to participants at the project meeting in Helsinki, 4-6 May 2006, as well as to Priya Basu, Francesco Gaetano, Tae Soo Kang, Jaechil Kim, Li Shi, Steve Peachey, Ding Sai, Daniel Waldenström and Jae Hoon Yoo for suggestions and advice on data sources and to Ying Lin for excellent research assistance.
On the financial sustainability of
            earnings-related pension schemes with
            "pay-as-you-go" financing and the role of
            government indexed bonds
In this paper the authors reconsider the
            idea of an earnings-related pension system with reserves
            invested in indexed government bonds as a mechanism to both
            ensure financial sustainability and improve security. They
            start by reviewing the characterization of the sustainable
            rate of return of an earnings-related pension system with
            pay-as-you-go financing. The authors show that current
            proxies for the sustainable rate, including the Swedish
            "gyroscope," are not stable and propose an
            alternative measure that depends on the growth of the
            buffer-stock and the pay-as-you-go asset. Using a simple
            one-sector macroeconomic model that embeds a notional
            account pension system they then show how GDP indexed
            government bonds, if combined with the right measure for the
            sustainable rate of return on contributions, could be used
            to generate a sustainable and secure earnings-related
            pension system, without becoming a fiscal burden. The
            proposal is particularly attractive for countries
            considering reforms to earnings-related systems that have
            accumulated a large implicit pension debt. In this case, the
            government bonds allow the financing of this debt in a
            transparent way. The proposed mechanism can also facilitate
            the transition to a fully-funded pension system when the
            government bonds are allowed to be traded.
Deposit insurance design and
            implementation : policy lessons from research and practice
This paper illustrates the trends in
            deposit insurance adoption. It discusses the cross-country
            differences in design, and synthesizes the policy messages
            from cross-country empirical work as well as individual
            country experiences. The paper develops practical lessons
            from this work and distills the evidence into a set of
            principles of good design. Cross-country empirical research
            and individual-country experience confirm that, for at least
            the time being, officials in many countries would do well to
            delay the installation of a deposit insurance system.
Do reorganization costs matter for
            efficiency Evidence from a bankruptcy reform in Colombia
The authors study the effect of
            reorganization costs on the efficiency of bankruptcy laws.
            They develop a simple model that predicts that in a regime
            with high costs, the law fails to achieve the efficient
            outcome of liquidating unviable businesses and reorganizing
            viable ones. The authors test the model using the Colombian
            bankruptcy reform of 1999. Using data from 1,924 firms
            filing for bankruptcy between 1996 and 2003, they find that
            the pre-reform reorganization proceeding was so inefficient
            that it failed to separate economically viable firms from
            inefficient ones. In contrast, by substantially lowering
            reorganization costs, the reform improved the selection of
            viable firms into reorganization. In this sense, the new law
            increased the efficiency of the bankruptcy system in Colombia.
Implementing a WTO agreement on
            trade facilitation : what makes sense
Contrary to the prevailing view that the
            Doha negotiations have achieved little, the authors find
            that on trade facilitation much progress has been made. This
            is particularly true in regard to action by development
            banks and bilateral development agencies to meet client
            demand for assistance in reform. Active private sector
            participation has been an important factor driving change.
            Many agencies have been involved in this work. The authors
            find that their roles have been consistent with their
            comparative advantages. As to how the international
            community can best support continued progress, the authors
            conclude in favor of a cautious approach to the imposition
            of new WTO obligations in the area of trade facilitation. On
            the whole, this is the approach the WTO has taken, for
            example, by limiting its negotiations on trade facilitation
            to several specific provisions of the GATT. The WTO can
            continue to function as a catalyst for reform. It is perhaps
            uniquely placed to relate the trade facilitation agenda to
            the overall trade agenda. On design and construction of the
            relevant infrastructures and capacities to spur development,
            the development institutions, including bilateral agencies,
            should continue to lead. The authors find little evidence to
            support the need for a comprehensive new
            "platform" or mechanism to channel trade-related
            aid as part of implementation of any new agreement at the
            WTO on trade facilitation. They recommend, however, that an
            innovative approach to using the well established, but under
            utilized Trade Policy Review Mechanism be considered to
            increase transparency on where new aid is going over time
            and to expand understanding of where and how country-based
            progress has been achieved.