rafmacalaba/datause-encoder-data huggingface dataset:
- 26 -

# E. Aduxtaent for Fiscal Objectives

100. OMS 2.25 gave at least as much attention to fiscal objectives as to distributional ones. It recognized that fiscal resources are scarce in many countries, and the mechanisms for increasing tax revenues are often underdeveloped. Pricing public sector goods higher than their efficiency prices will often be warranted, as will be discriminatory taxes on project beneficiaries. The job of the pricing analyst is to minimize the efficiency losses from such taxes.

101. Our review of SARs indicates that fiscal objectives are rarely given explicit attention. The exceptions are telecommunications and a minority of irrigation projects, and indirect mention in most education and health projects. Fiscal objectives are implicitly apparent where projects incorporate covenants that require the government to make annual contributions to the operating budget of the public enterprise or department. However, such covenants were rarely accompanied by an evaluation of the general fiscal position of the country or of the relative importance of alternative sectoral claims on government resources. It could be argued that such covenants are the antithesis of the approach recomended in OMS 2.25: instead of adjusting public sector prices to accommodate fiscal resources, the latter are arbitrarily earmarked for sectoral priorities. (Earmarking is discussed more generally later in this Section).

102. Because there is so little discussion in the SARs of the net fiscal contribution of the sector, the following analysis is based on the fiscal impact of the Bank projects. Comparative figures should therefore be used with caution.

# Taxes o.i Public Enterorises

103. Taxes on the income or output of public enterprises were mentioned in eight sectors: coal, fertilizers, oil/gas, ports, power, railways, telecomunications and water/sewerage. In addition, in the roads sector indirect user charges such as fuel taxes often contribute to general government revenues. Except in oil/gas and sometimes roads, it was unusual for the Bank to make any recommendations or negotiate covenants about these taxes, despite considerable intrasectoral variation in size and incidence.

104. In the Igj1 sector, two of the four sample countries levy a tax on output. In India a tax of about 14% of minehead prices is paid by consumers, of which about one-sixth is returned to the producers to pay for workers' housing and medical facilities. **The** resainder is presumably retained by government. In Colombia, where most mines are small and privately owned, a 5% tax is levied on the minehead price. The National Coal Fund **receives** 60% of the tax revenues for financing coal exploration and assisting small and medium scale mining operations; the remainder apparently rest3 with central government. Neither SAR gav, an analysis of the amount of **revenue** generated or whether the **taxes were set** at an appropriate level.

105. In the f rtilizer sector, two of the five cases reviewed were subject to corporate income tax on their earnings of 55-58%. The incidence
With the funds provided by the central authorities, regional governments<sup>select the</sup> rural electrification projects to be subsidized and transfer<sup>the necessary funds to the</sup> municipalities. These usually award execution of the<sup>civil works to the distribution</sup> concession-holder in the area, but where there is more<sup>than one distributor capable of</sup> providing the service, execution of the civil works is put<sup>out to tender. The new equipment</sup> and networks are transferred to the distribution firms, which<sup>are then committed to operate,</sup> maintain and manage them for at least 30 years. In recent<sup>years, the REP has transferred</sup> about US$ 129 million in assets to distribution companies in this<sup>way.</sup>

**Table** 4: **Rural electrification program** (Ch$ million December1998 prices)

|Year<br> <br>|Homes<br>electrified|Total<br>Subsidy|Average<br>subsidy<br>per<br>household|Subsidy<br>of<br>investme|as %<br>total<br>nt|Rural<br>electricity<br>coverage %|
|---|---|---|---|---|---|---|
|1992|8,442|4,402.6|521.5|70.0||_55_|
|1993|9,123|4,982.3|546.1|70.0||57|
|1994|8,370|3,525.9|421.3|64.0||58|
|1995|17,933|9,508.0|530.2|63.0||62|
|1996|19,053|11,123.6|583.8|64.0||66|
|1997|19,107|11,626.9|608.5|62.0||70|
|1998|20,427|13,446.5|658.3|61.0||74|
|September 99|10,639|7,344.0|690.3|61.0||75|
|Total|113,094|65,959.8|4,560.0||||
|Source:|National Ene|rgy Commission|||||

The incentive mechanism provided by the REP has had a considerable<sup>impact on</sup> rural electrification, although it actually only provides about<sup>a third of all rural</sup> electrification subsidies. Total subsidies provided by the REP and<sup>the GRDF together</sup> averaged approximately US$ 24 million per year between 1995 and<sup>1997, and about US$</sup> 22
Capacity: Evidence from Biometric Smartcards in India." American Economic Review, 106 (10): 2895-2929.

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Osborne, M., and Slivinski, A. (1996). A Model of Political Competition with CitizenPerry, James L. (1996). Measuring Public Sector Motivation: An Assessment of Construct Reliability and Validity. Journal of Public Administration Research and Theory: J- PART, Vol.6, No 1.

Pierre , Gaëlle, Maria Laura Sanchez Puerta, Alexandria Valerio, Tania Rajadel (2014). STEP Skills Measurement Surveys: Innovative Tools for Assessing Skills. World Bank.

Raffler, P., 2017. Does political oversight of the bureaucracy increase accountability? Field experimental evidence from an electoral autocracy. Working paper, Harvard University.

Rasul, I, D Rogger and M Williams (2017), “Management and bureaucratic effectiveness: A scientific replication”, mimeo, UCL.

Reinikka, Ritva; and Svensson, Jakob. 2004. Loca Capture: Evidence From a Central Government Transfer Program in Uganda. The Quarterly Journal of Economics, vol. 119 (2).

Rogger, Daniel (2017). Who Serves the Poor? Surveying Civil Servants in the Developing World. World Bank Policy Research Paper 8051.

Tirole, Jean, (1994), The Internal Organization of Government, Oxford Economic Papers, 46, issue 1, p. 1-29, https://EconPapers.repec.org/RePEc:oup:oxecpp:v:46:y:1994:i:1:p:129.

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World Bank. (2016a) Making Politics Work for Development: Harnessing Transparency and Citizen Engagement. Policy Research Report. Washington, DC. © World Bank. https: //openknowledge.worldbank.org/handle/10986/24461 License: CC BY 3.0 IGO.” 40
-5-

Three characteristics of the economic environment in the 1990's are important in thinkir- about poverty. One, servicing the foreign debt will continue to be an important constraint on policy, despite the renegotiation of the private component of the debt. This, together with the overriding need to keep the fiscal deficit under control, implies that stringent resource constraints will continue (barring a large and sustained positive terms of trade shock). And while the government's role as producer and investor is reduced, there are large gaps in infrastructure that need attention, particularly so given the cutbacks imposed during the 1980's. An attack on poverty requires resources. Yet, given this environment, poverty programs must only reach the target population, and do so in a cost effective way.

Two, structural reforms have enhanced the role of market forces in resource allocation. In this context distortions in relative prices prove counterproductive as the economy produces the wrong bundle of goods, or does so with the wrong techniques: it is essential that prices, including the product wage, reflect opportunity costs. Poverty programs must recognize this. To the extent possible, these programs must avoid, or minimize, subsidies and price controls.

Three, the structural reforms implemented so far are lopsided. The environment for industry has been substantially more liberalized than tha f agriculture, both with regards to external and internal regulations. Trade reform has concentrated mainly in manufactures; this sector now operates under a mostly tariff trade regime2 with relatively few restrictions on entry and exit. Its legal and institutional environment is well defined; property rights are identified. The same is not true of agriculture. The external trade regime is more controlled; there are significant restrictions on entry and exit; property rights are at times uncertain. The reform gap is, at present, one of Mexico's key problems. If not attended soon it can deepen disparities in income levels. Reform of agriculture is now essential to redress the balance. Poverty programs must not only aim at providing minimum welfare levels for the poor. They must also be part of a larger strategy that incorporates lagging regions into the rest of the economy.

2At the time of writing most sectors of manufacturing had no prior permits, licenses or QR's. Significant sectors where restrictions remain are automobiles, pharmaceuticals and computers. Production weighted tariff rates average 12.6%, with a standard deviation of 4.3X (World Bank, 1989c, Vol. II, p. 79).
# **1. Introduction**

For poorer countries, however, there are many examples of sudden, large changes in growth rates, both up and down. ... I do not see how one can look at figures like these without seeing them as representing possibilities. – Robert E. Lucas (1988) The premise of the aggregative approach to growth was that markets function well enough within countries that we can largely ignore the fact that there is inefficiency and unequal access to resources within an economy when we are interested in dynamics at the country level. The evidence suggests that this is not true ... – Abhijit Banerjee and Esther Duflo (2005) This paper documents changes in the nature of growth within and across business cycles. Our focus is on understanding how changes in sub-national economic activity interact with remoteness across different periods, and influence regional convergence processes.<sup>2</sup> Specifically, we employ a spatial lens to examine the relationship between changes in provincial economic activity across sectors and the corresponding changes in aggregate output in Türkiye during the first two decades of the twenty-first century, a period marked by many booms and busts.

While most developing economies experience aggregate economic fluctuations that overshadow their average annual growth rates (Lucas (1988), Pritchett (2000)), the relationship between the nature of these aggregate fluctuations and the corresponding changes in sub-national activity is largely understudied in developing country contexts.<sup>3</sup> At the same time, there is a growing policy emphasis on the spatial dimensions of poverty and vulnerability to shocks (World Bank (2020)) and the attendant changes in spatial inequality (World Bank (2018)).

Dollar and Kraay (2002) and Dollar, Kleineberg, and Kraay (2016) have shown that, on average, growth is good for the poor.<sup>4</sup> They also conclude that the mechanisms driving this robust relationship are unclear. Lopez (2004) provides evidence pointing to the important roles played 1 This paper reflects the views of the authors and does not reflect the official views of the World Bank, its Executive Directors, or the countries they represent. The corresponding author is Javier E. Baez (Email: jbaez@worldbank.org). We thank David Newhouse for useful comments.

2 In their recent survey of the very large growth and convergence literature, Johnson and Papageorgiou (2020) conclude that: " _A more definitive conclusion from this survey is that the process of growth and so, potentially, of convergence, is not smooth but rather start and stop, and is characterized by significant country heterogeneity_ ".

3 A substantial literature has examined the relationship between volatility and long run growth. Hnatkovska and Loayza (2005), for example, find an inverse causal relationship. This paper examines one country and abstracts from issues related to long run growth.

4 Cerra, Lama, and Loayza (2021) survey the large literature that has examined these issues.

2
and look at the impact on an average individual; distributional effects are considered in appendix C.2. Specifically, we consider the impact on an individual receiving the average per-capita income of $1219. Tax revenue was estimated to be 10.39% of GDP in 2011, according to the World Bank, so we use a net-of-tax rate of 0.8961, and we continue to use 3.81% as the annual discount rate, although now this should be understood as either a personal or social rate of time preference.

# **4.2.1 Welfare Gains from 1% Point Reduction in IMR**

Given the assumptions above, each 1% point reduction in IMR raises wages by $21 per male worker per year. As a result, using the estimated male population of main workers from the 2011 Census, totalling about 273 million, the present-value increase in welfare amounts to $37.27 billion, or over three times the fiscal gains. Panel (A) of Figure 5 displays the robustness of this result to varying estimates and discount rates; they confirm a significant welfare gain that ranges from about $20 billion to over $120 billion. In appendix C.2, we estimate the welfare gain using the estimates from the regression of consumption on IMR in Table 6, as well as the estimates from quantile regressions of wages and consumption on IMR, and in each case we find even larger values than the baseline.

# **4.2.2 Welfare Gains from Eliminating Open Defecation**

Our estimates above indicate that each 10% point reduction in open defecation raises wages by $36. This implies that the elimination of open defecation would generate total discounted gains of $1852 for an individual born today;<sup>17</sup> this is equivalent to about one and a half times the current GDP per capita, or about 12.4 years of maximal annual earnings from NREGA, a large government workfare program. Over the entire workforce, the total after-tax income gains are $192.7 billion; that is, the total increase in utility over the next 100 years or so from the income consequences of eliminating open defecation today is equivalent in present value terms to a helicopter-drop of $192.7 billion on the Indian population today. Figure 5 displays the robustness of these results; the gains are large at all combinations of parameters, and reach as high as about $476 billion in total, or $3649 per individual born today. Appendix

> 17If discounting starts only at the time of the individual’s entry into the labor market 18 years from now, the gain is a far larger $14239.

21
and allocative efficiency and examines how exporter behavior changes with export growth over time for robustness. Finally, Section 6 concludes.

# **2. The Exporter Dynamics Database**

The Exporter Dynamics Database contains aggregated measures on export-sector characteristics and dynamics presented at the following levels: a) country-year, b) country-product (HS 2-digit, HS 4-digit, or HS 6-digit)-year and c) country-destination-year, and d) country-HS 2-digit productdestination-year (for a restricted sample of countries). The data are primarily for the period between 2003 and 2010. The measures are constructed using exporter-level customs data as input, covering the universe of annual exporter transactions for 38 developing countries and 7 developed countries.<sup>4</sup> The measures at the country-sector-destination-year level are available for 34 developing countries for which we have access to the raw exporter-level data and for 3 developed countries.<sup>5</sup> The Database includes measures on the basic characteristics of the export sector in each country (e.g., number of exporters, average exporter size and exporter growth rates); concentration/diversification (e.g., Herfindahl index, share of top exporters, number of products and destinations per exporter); firm, product and market dynamics (e.g., entry, exit, first-year and

> 4 The stylized facts presented in this paper use only the aggregated measures contained in the Database. The exporter-level customs datasets used as inputs to construct the Database are described to explain how the measures in the Database were built, but are not utilized in this paper for any other purpose. These exporter-level datasets are available upon request for a selected group of countries, determined by the willingness to share data by the data providers.  Given the confidential nature of the exporter-level (firm-level) data used as input, we structured the Database to provide as much detail as possible on the underlying exporter structure behind an export flow, without revealing any information that could be traceable to an individual firm, as per what we agreed with all of our data providers. While the data underrepresent industrial countries and Asia, the patterns we find are robust and available statistics from other studies, such as for the US and the EU, are consistent with the patterns observed here.  We aim over time to expand coverage of the Database.

> 5 Table 1 marks with an asterisk the developing countries for which we have access to the raw exporter-level data. The measures at the country-year-HS2-digit product-destination level are currently only available upon request to the authors. They will be made publicly available with the second release of the expanded Database. Measures at the country-year-HS2-digit product-destination level for Norway, Portugal, and Spain were made available to the authors by Andreas Moxnes, Joana Silva, Asier Minondo and Francisco Requena, the researchers working with data for those countries.

6
First, we explore the relationship between the level of development and export concentration within countries. In turn, we examine the relationship between export discoveries and development by contrasting it with the relationship between patent counts and development. In addition, we test whether structural change in factor endowments associated with development might be responsible for the estimated relationship between the number of export discoveries and the level of development.

As the evidence implies that structural change cannot explain the distribution of export discoveries across and within countries, the second set of results tests the validity of the market-failure hypothesis. The intuition behind our empirical strategy is straightforward: if the threat of imitation reduces private investments in export discoveries, then we should observe that barriers to entry magnify the positive effect of the profitability of exports on export discoveries.

Section 4 concludes by summarizing the main findings and discussing the benefits of imitation and low barriers to entry, as well as other policy implications.

# **2. Data and Methodology**

The first step is to develop a metric of export discoveries. A problem with using export data seems obvious: a product emerging as a new export may have been produced domestically for some time, and therefore would not represent a genuine discovery. However, exporting a particular good for the first time, even if it was already produced domestically, is itself an entrepreneurial act that requires discovery and can be imitated (Ibeh 2003). In other words, the act of exporting is itself a discovery worth investigating, 4
||(1)|(2)|
|---|---|---|
||Feelin hsicall or||
||g pyy<br>emotionallyunsafe=1|Feeling lonely =1|
|Lower middle|-0.113***|-0.025|
||(0.024)|(0.024)|
|Upper middle|-0.236***|-0.072***|
||(0.024)|(0.023)|
|Upper|-0.295***|-0.067**|
||(0.034)|(0.033)|
|_Ref: Rural or Farm or Isolated house_|||
|Small city or town or suburb|0.062**|0.016|
||(0.030)|(0.027)|
|Large or capital city|0.074***|0.013|
||(0.028)|(0.026)|
||0.029**|0.024**|
|Has citizenship or valid residence permit=1|(0.014)|(0.012)|
|Household live has outdoor spaces=1|-0.114***|-0.067***|
||(0.014)|(0.014)|
|Log of GDP per capita|-0.192***|-0.010|
||(0.017)|(0.016)|
|_Ref: South Asia, East Asia, and Pacific_|||
|Europe and Central Asia|0.339***|0.070***|
||(0.017)|(0.020)|
|Latin America and the Caribbean|0.237***|-0.011|
||(0.025)|(0.026)|
|Middle East and North Africa|0.426***|0.146***|
||(0.034)|(0.033)|
|North America|0.142***|0.140***|
||(0.044)|(0.040)|
|Sub Saharan Africa|0.040|0.070|
||(0.048)|(0.057)|
|Observations|7,427|7,427|
||0.1227|0.0368|

Note: *** 1%, ** 5%, and * 10% level of significance.

Lastly, the cutback in consumption and feelings of insecurity and loneliness are likely correlated with the heightened anxiety and depression experienced by individuals. The analysis of the full PHQ-4 scale shows that compared to cismen, the other groups experienced a higher rate of moderate to severe psychological distress during the pandemic. More than half of the transgender people reported feeling moderate to severe psychological distress over the last 2 weeks from their survey interviews (Figure 6). For non-binary people, an equally high percentage, 45 percent, experienced moderate to severe 22
_Table 3: Impact on Likelihood of Having Household Off-farm Income-generating Activity_

||Have business<br>(yes=1)|Wage-employed<br>(yes=1)|
|---|---|---|
|round 3|-0.076***|-0.076**|
||(0.024)|(0.031)|
|FIF*round 2|0.040|-0.011|
||(0.029)|(0.026)|
|FIF*round 3|-0.012|0.017|
||(0.025)|(0.025)|
|WIF*round2|0.012|0.067|
||(0.046)|(0.078)|
|WIF*round3|0.064*|-0.015|
||(0.038)|(0.050)|
|WIF*FIF*round2|0.058|-0.075|
||(0.069)|(0.088)|
|WIF*FIF*round3|-0.036|0.016|
||(0.056)|(0.066)|
|Observations|2,428|2,428|
|R-squared|0.098|0.143|
|Estimates: FIF2 + WIF2 + FIF_WIF2|0.110|-0.018|
|P-value: FIF2 + WIF2 + FIF_WIF2=0|0.064*|0.824|
|Estimates: FIF3 + WIF3 + FIF_WIF3|0.015|0.018|
|P-value: FIF3 + WIF3 + FIF_WIF3=0|0.736|0.782|
|Control Mean(BL)|0.306|0.715|

Note: Analysis of Covariance (ANCOVA) regression specification is estimated. Standard errors are clustered at the kebele level. The estimated equations include baseline values of outcome indicators as well as baseline sociodemographic characteristics such as sex of the household head, household size, age of the household head, number of students in the household and region. ***, **, and * indicate significance at the one, five and 10 percent critical level.

# **6.2 Productivity and Income Outcomes**

Having looked at the mechanisms through which the interventions could impact the male and female spouses’ activities, we now turn to the interventions’ impact on household level agricultural productivity, the stock value of livestock and poultry, and off-farm revenue.

# **_Agricultural Productivity_**

We first assess the impact of the interventions on agricultural productivity at household level by looking at the total area of cultivated land, the total value of production per hectare (productivity), 19