rafmacalaba/datause-encoder-data huggingface dataset:
to be much more efficient than a petroleum tax. CAFE, according to Crandall, would cost the economy at least 8.5 times as much as a carbon tax with equivalent effects on carbon emissions. The inefficiency of the CAFE is mainly because of its failure to equate the marginal costs of reducing fuel consumption across all uses, including usage of older vehicles and non-vehicular consumption. Using an empirically rich simulation model and cost estimates for anticipated fuel economy technologies, Austin and Dinan (2005), compared the cost of the higher CAFE standards against the cost of a gasoline tax that would save the same amount of gasoline. Their findings suggested that a gasoline tax would produce greater immediate savings by encouraging people to drive less and, eventually, to choose more-fuel-efficient vehicles. Fischer (2008) and West and Williams (2005) concurred with Austin and Dinan’s assertion that gasoline taxes are a more efficient means to reduce fuel consumption than mandating fuel economy increases.

Increased vehicle miles traveled due to enhanced fuel economy is another aspect that some studies, such as Dowlatabadi et al. (1996), Bamberger (2002) and Portney et al. (2003), found to be problematic. An increase in VMT also means an increase in congestion and crash costs (CBO, 2003), and an increase in the overall cost of driving (Bamberger, 2002). Nivola and Crandall (1995) argued against the effectiveness of CAFE in reducing vehicle miles traveled and labeled CAFE as a problematic experiment. They argued that the United States would have saved at least as much oil, by reducing miles driven in all types and vintages of vehicles, at about a third the economic cost, if a fee of just 25 cents a gallon had been added to the cost of gasoline nine years ago. Wang (1994) proposed a marketable permit scheme for light duty vehicle manufacturers as a more efficient alternative to the existing CAFE standards. For CAFE to be more effective, Portney et al. (2003) suggested the adoption of tradable fuel economy (FE) permits among manufacturers, revision of the criterion for distinction between cars and light trucks, and removal of distinctions between domestic and imported vehicle fleets.

Several studies (Greene, 1991; NRC 2002; Greene and Hopson, 2003) have measured the welfare effects of fuel economy regulations by estimating lifetime fuel saving benefits and subtracting the added vehicle costs from it. Welfare studies widely differ not only in 12
_We decide not on the basis of what we know but on the basis of what we do not know._ Bayless Manning to Albert Hirschman, August 29, 1967<sup>1</sup>

# **1. Introduction**

For an organization like the World Bank, with its commitment to development finance, project evaluation is an essential activity. Yet this function was not conceptualized by the Bank until the 1960s, and it was put into practice only in the early 1970s, more than twentyfive years after the Bank was created. In 1964, after twenty years of operations, the Bank carried out the first in-depth evaluation of its own projects; by that point it had already made 480 loans to 85 countries, totaling almost $10 billion, in a broad spectrum of sectors including industry, agriculture and fishing, electric power, and education.<sup>2</sup> How this fundamental development occurred, and why it happened so late, is the subject of this paper.

This subject may at first seem narrow, but in reality, it opens a particularly interesting perspective on the evolution of development theories after the foundational phase of development economics in the aftermath of World War II, shedding light on the ways in which global development institutions reacted to those theoretical changes in order to foster effective development policies in less developed countries. Far from being a matter internal to the World Bank, the discussion on project evaluation that took place in the 1960s is important for the broader history of development theory and institutions: it marked a shift both in the theoretical landscape of development economics, and in the policy strategies of the World Bank, the most important multilateral player in the development field.

Up until the 1960s, the theoretical landscape had been characterized by debates about macroapproaches to development strategies, such as “balanced growth” vs. “unbalanced growth,” and project appraisal and evaluation had remained a somewhat marginal topic in the larger

> 1 Albert O. Hirschman Papers, Box 56, Folder 15. 2 Data from the World Bank’s website, Projects & Operations, www.worldbank.org/projects.

2
# _6.1 Growth regressions with poverty as an initial condition_

Table 2 gives estimates of the following regression: (The regressors are assumed to be exogenous, though this will be relaxed later.) The result using the full sample is given in column (1) of Table 2.<sup>28</sup> This suggests that differences in the initial poverty rate have sizeable negative impacts on the growth rate at any given initial mean. A one standard deviation increase in ln _Hit_  comes with a decline of 0.025 (2.5% points) in the growth rate for the survey mean.

As can be seen in column (2) of Table 2, this poverty effect on growth is even stronger if one confines attention to consumption surveys (dropping the 21 surveys for which only income was available). The result is also robust to using consumption from the national accounts (column 3), although the headcount index based on the $1.25 line is a slightly stronger predictor of the national accounts consumption growth rate,<sup>29</sup> and the coefficient on the poverty rate is lower, as is the convergence parameter. (I will return to discuss the estimates in columns (4)-(6).) It might be conjectured that the poverty measure (at given initial mean) is picking up some other aspect of the initial distribution, such as inequality (the variable identified in much of the empirical literature referred to in section 2). Indeed, if we imagine ln _H it_  to be a linear function of ln  _it_  and ln _Git_  (which fits the data quite well as noted in section 3) then one can re-write (9) in a reduced form similar to the past papers in the literature which found that inequality impedes growth at a given mean (section 2). However, an encompassing test—adding the log of the initial Gini index to equation (9)—does not change the result; then the coefficient on the Gini index is not significantly different from zero for growth rates in either the survey means or national accounts consumption and the coefficient on ln _H it_  remains (highly) significant in the augmented version of (9). It is poverty not inequality that is doing the work.

To investigate this further, I added inequality ( ln _Git_  ), the income share of the middle three quintiles ( ln _MQit_  ), the share of the Western middle class and rich (1  _Fit_  (13) ), the

> 28 The regressions are consistent with a derivative of ln  _it_ with respect to ln  _it_  that is less than unity, but fades toward zero at sufficiently long gaps between survey rounds; for example, column (1) in Table 2 implies a

> derivative that is positive but less than unity for   26 years; the largest value of  in the data is 27 years.

> 29 Using the $2 line, the coefficient on the poverty measure in column (3) becomes -0.012 (t=-2.245).

15
24 private farmer finances capital Inputs. The law envisages that the ejidatarlo shall recelve a share of the profits generated from the association. In practice, who Is to say If he receives an equal share of the profits or Is merely paid the equivalent of a rent for the land? The now legislatlon may be Interpreted as an kupilcit legalzation of the renting out of ejido parcels.

41. On the other hand, the 1981 legislation Increases the powers of the Mkttry of Agriture to seize underutilized and and farm them out to andlee peasants (Bailey,1981:360). The 1981 Census distngulshes, for the first time, between holdings that are being farmed and those that are Idle (Table 5). Thus, ejidatarlos who rent to private farmers and perform no work on the land themselves (preferring to pursue off-farm empioyment) may still run the rlsk of having their land taken away from them. Since there Is no clear-cut distinction between renting out and sharlng in the profits of a Joint venture (both Involve some payment to the ejidatarlo), the new law lends Itself to arbitrary appilcation: ajidatarios have every reason to think twice about collaborating with private farmers, for fear they may have their parcels confiscated. This Is another respect In which the law may adversely affect the average productivity of the ejido sector, by reducing the transfer of land from less efficient to more efficient producers.

# V. ACCESS TO LAND AND LAND USE PATTERNS.

42. The quality of land distributed under the land reform has deciined since 1940. Before that year, cropland accounted for about 20 percent of all the land handed out; 4 percent of the total land distributed was Irrigated. However, In 1965-76, only 8 percent of the newly incorporated land was suitable for crops,
<!-- Start of picture text --> 60<br>°° —— eee ae<br>40<br>30<br>0 - ——————————<br>10 == Avg. speed (km/h)<br>——Cargo volume (tons)<br>0<br>2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020<br><!-- End of picture text -->
Bihar’s institutions can also be understood within a broader macroeconomic story of what explains why some countries are rich and others persistently poor. One body of work has argued that European colonization established "extractive" institutions in the history of currently poor countries, and those historical institutions have persistent effects till today, explaining why some places are not able to sufficiently grow out of poverty or develop "inclusive" political institutions that assure health and education for all (Acemoglu, Johnson and Robinson, 2001 and 2002; ). These ideas are tested by Banerjee and Iyer (2005) and Iyer (2010) by examining variation in institutions within India. They find that colonial institutions have persistent effects on agricultural productivity and the delivery of public services. Bihar happens to be the state where the historical institutions used by Banerjee and Iyer (2005) and Iyer (2010) show no within-state variation. All of Bihar was governed directly by the British and through feudal land institutions during the colonial era, which are the institutions these authors find correlated with low agricultural productivity and fewer public good provision in current times (respectively), long after independence and land reforms.

However, the mechanisms of persistent impact remain shrouded in mystery. Research is also lacking on why current formal institutions, such as competitive electoral institutions, courts, police, which most states, including Bihar, possess, are not sufficient to overcome the burden of history. Further, these explanations may be unsatisfying because they are so abstract, and provide such little guidance of ways out of the problem. What precisely are "extractive" institutions, and why is to so hard to reverse them after the colonial powers are removed? It is difficult to argue that Bihar’s political institutions are not "inclusive", after decades of competitive elections, turnover of political parties in office, and rise of lower-caste political leaders, on platforms of empowering the lower castes. Indeed, our survey data are consistent with inclusive politics, uncovering quite astonishing rates of political aspiration, and sophisticated political thinking among citizens in rural Bihar, across caste groups (discussed in the section below).

Taking stock of the literature on institutions, two World Bank reports have argued that the reason historical institutions have persistent effects is because they work through norms– 23
first time, the contemporary theory and practice of project appraisal in infra-structure will be subjected to a systematic _ex-post_ methodological scrutiny on a wide basis.”<sup>21</sup> Because of these high expectations, the Bank became remarkably involved in the research, especially considering the fact that it was conducted by an external researcher. Robert Asher, a major officer at the Brookings Institution who worked with the Bank on the Hirschman study, noted that “it is an extraordinary thing for the Bank to open its project files to an outside researcher, to provide an assistant for the outside researcher, to request the collaboration of its member governments, and to do the other things the Bank has agreed in this case to do.”<sup>22</sup> Beyond the good reception of Hirschman’s proposal, however, one might particularly note those comments that, while acknowledging the proposal's usefulness, attempted to expand the borders of inquiry. Some Bank officers argued that undertakings more complex than specific projects should be taken into consideration. The case was made for including the activities of local development banks and regional development agencies amongst the projects under investigation. These institutions were new in most developing countries, and their impact on the development of a country was not easy to weigh; still, according to many at the Bank, they should not be disregarded. As Einar Sekse put it, “the economic, financial and social effects of the activity of the development banks concerned are, mainly, a composite of the effects of the projects these banks have financed. This may make a study as proposed of a development bank much more complex than that of some other projects. [...] However, [...] such a study [...] will be most interesting and valuable.”<sup>23</sup> Eventually, the Industrial Credit & Investment Corporation of India (ICICI), the Damodar Valley Corporation, and the Cassa per il Mezzogiorno for the development of Southern Italy were included in Hirschman’s travel schedule.

Other voices in the Bank questioned the representativeness of the small and heterogeneous sample that Hirschman intended to examine: “one wonders,” wrote an officer, “whether in relation to the wide variety of projects and the widely differing economic and political backgrounds of the Bank’s and IFC’s member countries, such a small sample as a dozen

> 1964, Albert O. Hirschman Papers, Box 56, Folder 13; Albert O. Hirschman to Mr. J. Burke Knapp, “Study of selected World Bank investments,” July 1, 1964, Albert O. Hirschman Papers, Box 56, Folder 13. 21 Dragoslav Avramovic to Department Heads, IBRD and IFC, “Investment in Developing Countries – Effects, Expectations and Reality,” February 18, 1964, World Bank Hirschman Folders Vol. 1, italics in the original. 22 Robert E. Asher to Mr. Robert D. Calkins, “Hirschman Project,” April 8, 1964, Albert O. Hirschman papers, Box 57, Folder 5.

> 23 Einar Sekse to Mr. William Diamond, “Investment in Developing Countries – Effects, Expectations and Reality,” February 24, 1964, World Bank Hirschman Folders Vol. 1.

12
Perceptions Index for 2002<sup>13</sup> . After eliminating observations with missing key data<sup>14</sup> , our sample includes 7760 firms in 80 developed and developing countries.

We measure property rights protection by survey responses to the question _“I am confident that the judicial system will enforce my contractual and property rights in business disputes”._ Firms are asked to respond on a six point scale, with one denoting the **highest** level of confidence. This property rights question is not meant to capture disputes between the state and the individual.

The four firm-level variables we study, **Size** , **Ownership, Legal Organization,** and **Sector** are also obtained from the survey. The sample includes firms of all sizes: small firms (between 5-50 employees) represent 39% of the sample, medium firms (51 to 500 employees) are 40% of the sample and the remaining 20% are large firms (more than 500 employees)<sup>15</sup> . The firms’ ownership structures are classified into 9 different categories - individual, family, conglomerate group, bank, board of directors, managers, employees, government and others. We also have information on the legal organization of the company, whether it was organized as a single proprietorship, partnership, cooperative, privately-held corporation, corporation listed on a stock exchange and a other category. The firms surveyed belong to five different sectors, agriculture, manufacturing, services, construction and other.

# **Insert Figure 1**

Figure 1 shows that there are differences in perceptions of property rights across firms with different characteristics. Overall, small-sized firms perceive their property rights as being less secure when compared to large and medium firms as shown in Figure 1a. On probing deeper, we find that there is significant variation across sizes even within the same country, i.e., holding all legal and political institutions constant. For instance,

> 13 According to TI, “International surveys on perceptions serve as the most credible means of compiling a ranking of nations”. See Batra, Kaufmann and Stone (2003) for a detailed analysis of the sampling methodology and findings of the survey

> 14 The original database consists of 10032 observations in 81 countries. We lose 2243 observations because of missing data on the dependent variable and the four firm level variables, size, ownership structure, organizational form and industry sector. On removing variables with missing institutional variables, we lose 1country (West Bank and Gaza) which has 29 firms. This leaves us with 7760 observations in 80 countries.

> 15 Employment is typically the most reliable figure in developing countries. Hence number of full time workers is used as a measure of firm size by the World Bank Group and other international survey teams including RPED and the Oxford Centre for the Study of African Economies

13
<!-- Start of picture text --> Figure 6: End of Year Stock of Rice<br>30<br>25<br>20<br>15<br>10<br>5<br>0<br>Period<br>South Asia India<br>2000/01 2001/02 2002/03 2003/04 2004/05 2005/06 2006/07 2007/08 2008/09<br>Million MT<br><!-- End of picture text --> _Source: USDA Database_ to the demand pressure for both wheat and rice. Thus, India imported 6.7 million MT of wheat in 2006/07 and 2 million MT in 2007/08 as compared with almost zero imports in the past 6 years. Regarding rice, exports declined from a peak of 5.5 million MT in 2006/07 to only 2.0 million MT in 2008/09. These developments in domestic supplydemand balances suggest that similar to global experience, domestic food shortages are an important factor underlying food price pressures in South Asian countries.

At the country level, foodgrain prices moved differently from the global prices and within the region. In terms of staple food wheat consumption is concentrated in Afghanistan, India and Pakistan who account for about 90 percent of total wheat consumed in South Asia. Rice, on the other hand, is more widely consumed in all countries. So, in looking at price trends and impact, we will take these considerations into account.

The trend in wheat prices in South Asia’s major wheat consuming countries is shown in Figure 7. Unfortunately, comparable data for Afghanistan is not available. So we will rely on fragmented data. Figure 7 shows that wheat prices in both India and Pakistan increased in response to the global pressure, but the increases were much less intense, 10
<!-- Start of picture text --> Chart 11. Changing Age Composition of Adult Population in Industrial Countries,<br>1970-2020<br>(In percent)<br>50<br>40 ME<br>30<br>20<br>10<br>0<br>1970 1980 1990 2000 2010 2020<br>* E 20-39 N 40-64 L 65+<br>SouRa U.N. population data and prpectlons<br><!-- End of picture text --> <!-- Start of picture text --> Chart 12. Net Household Financial Savings in Industrial Countries<br>over the Next Ten Years<br>(1992 U. S. $Trillions)<br>11.6<br>Extraordinary<br>2.5 } 1 1 _ growth<br>$5 trillion<br>6.0W<br>Base line<br>growth<br>$7 trillion<br>U.S. Japan Germany, All Total<br>Italy and others industrialized<br>Canada world<br>Sourcw McKinsey (1994)<br><!-- End of picture text --> 19
enrollments are lowest in the regions with the lowest net enrollments - Sub-Saharan Africa and South Asia. An average six-year-old girl in South Asia can expect to spend six years in school - three years less than a boy of the same age - and girls based in rural areas are far more likely to drop out of school. (See Miller 2000) Nevertheless, there has been remarkable progress over the past decade in many countries where girls' enrollments have risen faster than boys. Gender differences at the primary level have been eliminated or greatly reduced in many countries such as Algeria, Angola, China, Bangladesh, Egypt, India, and The Gambia. In some countries girls' secondary school enrollments exceed those of boys.

_Table 5:_ **_Ratio_** _of girls to boys_ **_in primary and_** _secondary school_

||(1)<br>**Ratioof**<br>**girlstoboys**<br>**1990(%)**|**(2)**<br>**Ratioof**<br>**girlstoboys**<br>**1998(%)**|**(3)**<br>**Averageannualrateof**<br>**change 1990-98(%)**|**(4)**<br>**Averageannual rateof**<br>**changenecessaryto**<br>**achievegoal(%)**<br>**(1998-2015)**|
|---|---|---|---|---|
|Alldevelopingcountries|82|86|0.6|2.2|
|EastAsiaandPacific|84|89|0.8|1.6|
|EuropeandCentralAsia|90|88|-0.4|1.9|
|LatiniAmericanand<br>Caribbean|98|99|0.1|0.2|
|MiddleEast andNorth<br>Africa|79|84|0.8|2.5|
|SouthAsia|68|78|1.7|3.6|
||Sub-SaharanAfrica|79|8CI|0.2|3.2|

Source: World Bank Improving girls' enrollments involves overcoming the social and economic obstacles that stop parents from sending their daughters to school. For many poor families the economic value of girls' work at home exceeds the returns to schooling. Enrollment rates for girls from wealthy families tend to be higher, but there is little evidence of a correlation between girls' enrollment rates (relative to boys'), average income, and the distribution of income across countries. (Hanmer and Naschold 2000)

# _Goals 4_ **_and_** _5 -_ **_Infant,_** _Child_ **_and_** _Maternal_ **_Mortality_**

> The Millennium Development Goals call for reducing under-5 child mortality rates by two-thirds and maternal mortality ratios by three-quarters of their 1990 levels by 2015. These are widely perceived to be ambitious targets, but progress in reducing infant and child deaths in many countries demonstrates that they are feasible.

> extends the date for equality to 2015 and increases the challenge by including tertiary education as well. Thus, while the MDGs do not set aside the earlier date of 2005 - indicating that more immediate progress is preferable - they do recognize that additional time will be needed to meet this goal in many countries.

8
# **Table 5 Descriptive statistics by investor type**

This table reports mean and median values for the variables by each investor group. Assets are in billion pesos. Number of stocks denotes the different number of stocks held by each investor/fund by month. _Stocks traded_ are the different number of stocks traded by each investor/fund during a month. Daily net flows are normalized by the value of the investor’s portfolio at the beginning of the month.

|Investor Type|Active Share|Assets|Turnover<br>No. stocks|Stocks traded|Net fows|
|---|---|---|---|---|---|
|||Panel A.|Mean values|||
|Domestic Individuals|76.2|0.9|2.1<br>10.4|2.1|-0.09|
|Domestic Institutions|71.3|22.3|1.3<br>12.1|2.9|-0.06|
|Corporations|73.6|7.4|1.3<br>10.9|2.4|-0.06|
|Pension Funds|44.1|480.6|0.5<br>24.2|6.5|0.16|
|Mutual Funds|57.8|12.3|1.7<br>16.0|5.1|-0.04|
|Brokerage Firms|68.8|69.1|2.7<br>22.1|6.9|-0.08|
|Others|70.2|25.1|1.1<br>13.4|2.8|-0.06|
|Foreign|68.7|20.7|0.9<br>9.3|3.2|0.14|
|Total|75.2|4.9|1.9<br>10.6|2.2|-0.07|
|||Panel B.|Median values|||
|Domestic Individuals|77.8|0.1|0.6<br>10.0|2.0|-0.10|
|Domestic Institutions|72.5|0.9|0.3<br>11.0|2.0|-0.08|
|Corporations|74.7|0.7|0.3<br>10.0|2.0|-0.08|
|Pension Funds|41.0|81.5|0.3<br>25.0|5.0|0.02|
|Mutual Funds|54.9|2.1|0.6<br>17.0|3.0|-0.12|
|Brokerage Firms|70.5|5.3|0.8<br>23.8|4.0|-0.03|
|Others|71.4|2.9|0.2<br>14.0|2.0|-0.09|
|Foreign|72.9|2.6|0.2<br>9.0|2.0|-0.02|
|Total|77.0|0.2|0.5<br>10.0|2.0|-0.09|

30