rafmacalaba/datause-encoder-data huggingface dataset:
33 illustrative because it was not a full numerical model of an actual economy, was that of Harris and MacKinnon (1979). Based on the CRTS version of the model of this paper, de Nelo, Stanton and Tarr (1989) calculated optimal tariffs and taxes in the US oil and petroleum products sectors.

22. Dixit (1988) and Krishna et al. investigated optimal policies in their models. They did not have a wage subsidy instrument available, but they found a simllar pattern of results to table S when production subsidies or tariffs are used alone in their scenarios with labor rent present. Dixit finds little use for a tariff when both a tariff and a production subsidy are available; but his model considers only distortion costs in autos. Krishna et al. find that the optimal policy is a subsidy to imports not a tariff when there is no labor rent, a result that led them to also call for caution in recommending optimal industrial policy.

23. See Fernandez (1989) for additional strategic considerations which are likely to make the achievement of optimal industrial policies problematical.

24. In de Melo and Tarr (1990b) we present data, baied on Jacobson (1978), that indicate that the present value of the lifetime earnings losses of a displaced auto worker is about $57 thousand. Using this as a proxy for worker adjustment costs, 35 thousand displaced auto workers yield about $2 billion of adjustment costs. The benefits of quota removal (the avoidance of the quota costs) discounted conservatively over 6 years (at 7 percent), are between $29 billion (row 8) and $53 billion (row 4). See de Melo and Tarr (1990b) for details on the methodology.
The studies shed light on the various components of the costs of compliance. Management services, personnel, and technologies continued to receive the greatest amount of funding, experiencing little to no changes in allocation since 2018.<sup>80</sup>

|**Distribution of Privac**|**y Budget, 2018-2019**|||
|---|---|---|---|
|**Study**|**Area of Budget**|**2019**|**2018**|
||Managed services|28%|28%|
|**MW&E, 2019**|Personnel|17%|18%|
|**(McDermott Will**|Technologies|17%|17%|
|**& Emery)**|Consultants|11%|10%|
||Business<br>process<br>engineering|11%|10%|
||Outside lawyers|9%|9%|
||Training|7%|7%|
||Salary& travel|50%|47%|
|**IAPP-EY, 2019**<br>**(International**|Technology<br>&<br>tools|12%|12%|
|**Association**<br>**of**|Outside counsel|10%|15%|
|**Privacy**<br>|Internal training|9%|N/A|
|**Professionals)**|Consultingservices|8%|8%|
||Professional<br>development|7%|9%|
||Gov. affairs|4%|3%|
||Other|2%|4%|

Statista attributes the large expenditure in banking to the high risk posed by their data processing activities as a bank data breach runs the risk of handing over the financial information and resources of data subjects, therefore requiring heavier investments in cybersecurity.<sup>81</sup>

**Total Compliance Cost for FTSE 100 in Millions of U.S. Dollars**

|**Research Entity**|**Industry**|**Cost**<br>**of**<br>**Compliance**|**GDPR**|
|---|---|---|---|
||Banks|$93.8M||
|**Statista, 2018**|Technology & Telecoms|$28.5M||
||Energy & Utilities|$27.3M||
||Retail|$21.4M||
||Health care|$15.4M||
||Travel & Leisure|$14.2M||
||Financial Services|$11.3M||

> 81 Johnson, _supra_ note 61.

> 80 _Id._ at 28

14
# **2. Context and Turkey’s Vocational Training Courses**

Turkey is a middle income country with a population of almost 75 million, and per capita income of US$10,400 ($17,300 in PPP terms). Urbanization, income and unemployment vary significantly at the province level. Nationwide, the population is 70% urban. In 2010, the employment rate for 15-64 year olds in Turkey was 46.3 percent compared to an E.U. average of 64.1 percent and a rate of 66.7 percent in the U.S.<sup>4</sup> This low employment rate is driven partly by a female employment rate of only 23 percent, but also reflects relatively high unemployment. The unemployment rate was 12.5 percent in 2009, and as is common in much of the world, was much higher for youth than for older workers (16.8 percent for youth under 25 in 2011, versus 7.2 percent for 25-64 year olds).<sup>5</sup> The Turkish National Employment Agency (ISKUR) provides services for individuals who register as unemployed through 109 offices in 81 provinces. Training programs are the primary active labor market program provided by ISKUR.<sup>6</sup> The Turkish Government dramatically increased access to ISKUR-supported training programs from 32,000 individuals trained in 2008 to 214,000 in 2010 and 250,000 in 2011. This expansion began as a means to mitigate the impact of labor market reforms and continued as a response to a spike in unemployment that coincided with the 2009 global recession.<sup>7</sup> The majority of training courses offered are general vocational training courses covering a wide range of vocations.<sup>8</sup> These are contracted to a mix of public and licensed private providers. Courses are announced in ISKUR offices, on the ISKUR website, and by text messages. The courses are provided free to the trainees, and the trainees also receive a small stipend of 15 Turkish lira (US$10 in 2010) per day during the course period (which averages three months). Given excess demand for courses and a desire to get the unemployed into jobs, individuals are

> 4 Source: Eurostat <u>http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Employment_statistics</u> [accessed December 14, 2012].

> 5 Source: Eurostat <u>http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Unemployment_statistics</u> [accessed December 14, 2012].

> 6 ISKUR provides information about job openings to the unemployed, but does not have the intensive job search support and counseling that is often provided to the unemployed in rich countries.

> 7 Note that Turkey experienced a contraction in 2009, but the economy then recovered quickly, with 9 percent growth in 2010 and 8.5 percent in 2011, and the unemployment rate dropped back to the average pre-crisis level by February 2011.

> 8 ISKUR also offers training programs designed to provide convicts and ex-convicts with skills to enter the labor market after release; courses for starting a business; a small public works program; and on-the-job training programs. General vocational training accounted for 61 percent of the total number of participants in all of ISKUR’s active labor market programs in 2009.

5
simple average, the standard deviation, the median and the import-weighted average elasticity.

The estimate also show some variation across products. Goods with the more elastic import demands (on average across countries) at the six digit level of the HS include HS 520635 (Cotton yarn), 854290 (Electronic integrated circuits), and 100810 (Buckwheat), with average elasticities of -16.29, -12.89 and -11.72, respectively. Similarly, the least elastic import demands are found in HS 140291 (Vegetable residuals for stuffing), HS 420232 (Articles for pocket, plastic/textile materials) and HS 290521 (Allyl Alcohol), with average elasticities of -0.52, -0.65 and -0.66.

Given the lack of existing estimates at the tariff line level, we need some guidelines to judge our results. Below we enumerate some predictions we expect to fi nd in the estimated import demand elasticities:

1. The import demand for homogenous goods is more elastic than for heterogenous goods. Rauch (1999) classi fi es goods into these categories, which we can use to test the hypothesis.

2. Import demand is more elastic at the disaggregate level — the substitution effect between cotton shirts and wool shirts is larger than the substitution effect between shirts and pants, or garment and electronics. Thus, we expect the HS six digit estimates to be larger in magnitude (more negative) than estimates at a more aggregate level, i.e., three digit level ISIC classi fi cation, which is formed of 29 industries, respectively. Broda and Weinstein (2004) uses a similar guideline for their elasticities of substitution estimates.

3. Import demand is more elastic in large countries. The rationale is that in large countries there is a larger range of domestically produced goods and therefore the sensitivity of import demand to import prices is expected to be larger. In other words, it is easier to substitute away from imports into domestically produced goods in large economies.

4. Import demand is less elastic in more developed countries. The relative demand for heterogenous goods is probably higher in rich countries. Given that heterogenous goods are less elastic, we expect the import demand to be less elastic in rich countries.

As a preview of the fi rst prior that homogenous goods are more elastic, we compare the estimated import demand elasticities for Metal (HS 72-83) with those of Machinery (HS 84-89), where the former are expected to be more homogenous. The average import demand elasticity of Metal is 16
mental policies focuses on price-based instruments to regulate emissions as an application of the Pigouvian rule. However, the Pigouvian tax has been shown to yield inefficient outcomes if additional market failures like imperfect competition are taken into account (see Buchanan, 1969; Lee, 1975; Barnett, 1980; Katsoulacos and Xepapadeas, 1996a).<sup>2</sup> In the innovation literature, it is a well-known result that the public good nature of innovation generally leads to underinvestment while complete absence of knowledge spillovers tends to induce costly overinvestment (Poyago-Theotoky, 2007). Different policy instruments like intellectual property rights, licensing, R&D subsidies or cooperative R&D encouragement have been examined as potential remedies (see Lahiri and Ono, 1999; Toshimitsu, 2003; Kitahara and Matsumura, 2006). As technological progress is often seen as an important part of the solution to environmental problems, much research has been undertaken on the intersection of both environmental and innovation policies. Numerous papers investigate either R&D incentives under different typical environmental instruments like taxes, tradable permit markets or standards (see Downing and White, 1986; Milliman and Prince, 1989; Jung et al., 1996; Requate and Unold, 2003; Requate, 2005), or study optimal green R&D subsidy schemes in combination with those instruments (see Katsoulacos and Xepapadeas, 1996b; Stranlund, 1997; Poyago-Thotoky et al., 2003; Poyago-Theotoky, 2007). One central conclusion from this literature is that a single policy instrument is typically insufficient to obtain first-best outcomes (see Carraro and Soubeyran, 1996; Fischer and Newell, 2008; Acemoglu et al., 2012; Krass et al., 2013).

Among the papers referred to above, it is common to assume that firms are profit-maximizing. Another strand of literature diverges from this common framework and analyzes, similar to our work, welfare-maximizing public firms, so-called state-owned enterprises (SOE). This focus is mainly motivated by the question of whether to privatize SOEs (or not). The majority of the extant empirical literature on the performance of SOEs finds that they are less efficient than private firms, at least with respect to short-term performance indicators like net income or value added, return on equity, sales or assets, or cost savings.<sup>3</sup> Belloc (2014) summarizes typical rationales for SOE inefficiencies into four channels: (1) Poor monitoring of managers and excessive bureaucracy; (2)

> 2For a comprehensive discussion on optimal tax rules under imperfect competition, see Requate (2006).

> 3See Vining and Boardman (1992) for a survey of 90 comparative studies; see Megginson and Netter (2001) for a literature review on performance changes of privatized companies.

5
# **1. Introduction**

Investments in human capital in childhood are generally believed to be critical for adult wellbeing. Children who have higher educational attainment are more productive as adults and earn higher wages. In country after country, governments have sought to devise effective policies to increase school enrollment.

Cash transfer programs are one kind of program that has expanded dramatically in many developing countries, especially in Latin America. Frequently, these are “conditional cash transfer” (CCT) programs: Eligible households are given cash transfers, often as large as 20 percent of household income, conditional on certain behaviors. In most countries, households are required to send school-aged children to school and to take younger children for regular visits to health centers, where they receive nutritional supplements and growth monitoring. The best known of these programs is PROGRESA in Mexico (now re-named _Oportunidades_ ), although similar programs have also been implemented in a number of other Latin American countries, including Argentina, Brazil, Colombia, Honduras, and Nicaragua (see Rawlings and Rubio 2005, and Das, Do, and Ozler 2005 for reviews).

Conditional cash transfer programs have been shown to have significant effects on school enrollment. For example, focusing on PROGRESA, Schultz (2004) reports program effects on enrollment of about 3.5 percentage points, with larger effects for children making the transition from primary to lower secondary school. Similar results are reported in Behrman, Sengupta, and Todd (2005). Schultz also finds significant reductions in child work.

A common presumption is that conditional cash transfers are a more effective way of compelling households to invest in child schooling than unconditional cash transfers. In a recent article in The Economist magazine the authors write that “cash transfers, with strings attached, are a better way of helping the poor than many previous social programs” (The Economist 2005). Todd and Wolpin (2003) use data on PROGRESA, and Bourguignon, Ferreira, and Leite (2003) use data on the Brazilian _Bolsa Escola_ program (now renamed _Bolsa Familia_ ) to simulate the impact of conditional and unconditional cash transfers; both papers conclude that the bulk of the enrollment effects are a result of the price change implicit in the condition, rather than the income effect associated with the cash transfer.

This paper evaluates the impact of a cash transfer program in Ecuador, the _Bono de Desarrollo Humano_ (BDH), on school enrollment and child work. This is a large program—in 2
# **8. References**

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- <u>Barrero, J., Bloom N. and S. Davis (2020). “COVID-19 Is Also a Reallocation Shock,” National</u> Bureau of Economic Research, Cambridge, MA, http://dx.doi.org/10.3386/w27137.

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22
Guatemala is very limited, so we also excluded this country. These restrictions leave us with a total of 98 developing countries. This sample includes both low and middleincome developing countries, providing a wide variety in income levels and, as such, institutional quality. Furthermore, it includes host countries from all regions, making it possible to control for regional differences.

Our sample includes all active commercial banks, saving banks, cooperative banks, bank holding companies and middle and long term credit banks that are reporting to Bankscope at end 2005. We assume a bank is foreign owned if 50 percent or more of the shares of a bank is owned by foreigners. The source country of the foreign owner is determined by looking at the direct shareholder structure. The percentages of shares are summed by country of residence of the shareholder. The country with the highest percentage of shares is appointed as the source country. When ownership information is not available in Bankscope, information is gathered from banks’ websites or other internet sources. Ownership data are based on information available as of end 2005. We have ownership information for 2,297 banks, of which 35 percent are foreign owned.

# _Preliminary evidence_

If our competitive advantage hypothesis is correct we should find that, taking the behavior of competitors into account, banks that work in countries with high levels of institutional quality tend to go to developing countries with relative high or average levels of institutional quality. On the other hand, banks headquartered in countries with weak institutions will tend to go to developing countries on the lower end of the institutional quality scale. So, when looking at the relationship between institutional quality in host and source country, a positive correlation should exist. The scatter plots presented in Figure 1 show that this is indeed the case.

Figure 1 displays six scatter plots. In each one, a measure of institutional quality in the host country is plot against the same indicator of the source country when at least one bank from the source country entered the host country. As measures of institutional quality we use the governance indicators constructed by Kaufmann, Kraay and Mastruzzi (2005). These indicators measure six dimensions of governance: (1) voice and accountability, (2) political instability and violence, (3) government effectiveness, (4) 5
19 Competition policy can also contribute to further SME lending. The survey results suggest that there are private banks that have more effective lending technologies and that are able to generate and manage a significant SME portfolio, even within weak enabling environments. The entry of these banks into other MENA countries could contribute to more SME lending, both directly and through spillover effects. In this case, the policy implication is to ensure that entry requirements are not overly restrictive and that banking markets remain contestable. Moreover, the impact of the entry of foreign banks on SME lending can be magnified if there are credit registries/bureaus with good coverage and depth providing these new foreign banks access to substantive credit information on prospective SME borrowers.<sup>14</sup> Governments play a critical role in promoting an enabling environment in which private banks can fulfill their SME finance targets prudently and responsibly. In the interim, state banks would be well advised to place a higher emphasis on risk management, so that the greater risks they are currently taking in extending SME finance arise from well informed decisions and are better monitored. Likewise, credit guarantee schemes can play an important role and can even be expanded in some countries, but most schemes can be improved in design and should start conducting comprehensive reviews that include evaluations of impact.

Lastly, it is important to recognize that the potential for SME finance is also a function of the structure of the economy and the size of the SME sector. In the case of non-GCC countries, there is huge potential for expanding SME finance, with large numbers of smaller enterprises underserved and low levels of bank competition to serve them. In the case of GCC countries, the size of the SME sector may remain more constrained by the nature of oil economies, but there is also scope for further SME finance, especially if access to finance is also expanded for resident non-nationals.

> 14 Maddedu provides a review of credit reporting systems in MENA (2010). Azoategui, Martinez Peria, and Rocha (2010) provide an analysis of bank competition in MENA, showing that the region is generally less competitive than other regions, and also showing that bank competition indices are determined inter alia by entry regulations, and the quality of credit information.