rafmacalaba/datause-encoder-data huggingface dataset:
# **Transition risks for CO2 intensive economies**

MENA is not only the region with the highest level of transition risks due to the dependence of many countries on fossil fuel exports, but this elevated transition risk coincides often with elevated levels of macro, banking sector, and debt risk (Figure 12, Table 5). EAP, ECA, and LAC are the other regions with relatively high transition risks. Among these three regions, EAP has the strongest macro‐financial resilience to transition risks, while in ECA and LAC several countries with high transition risks also have high macro, banking sector, and debt risks. Countries in the South Asia and Sub‐Saharan Africa regions (for which data are available) show relatively low exposure to transition risks.

**Table 5. Countries with higher transition (carbon intensity) risk and at least one elevated macro‐ financial risk**

|**EAP**|**ECA**|**LAC**|**ME**|**NA**|**SAR**|**SSA**|
|---|---|---|---|---|---|---|
|China|Azerbaijan<br>Bosnia and<br>Herzegovina<br>Greece<br>Kazakhstan<br>Russian<br>Federation<br>Serbia<br>Turkey|Bolivia<br>Cuba<br>Dominican<br>Republic<br>Ecuador<br>Jamaica|Algeria<br>Egypt, Arab<br>Rep.<br>Iran, Islamic<br>Rep.<br>Iraq<br>Jordan<br>Lebanon|Libya<br>Morocco<br>Oman<br>Qatar<br>Syrian Arab<br>Republic<br>Tunisia<br>United<br>Arab<br>Emirates||Angola<br>South<br>Africa|

Our regression analysis (Table A1.4) suggests that countries with higher CO2 intensity tend to have a higher share of non‐performing loans. However, it is quite likely that this higher risk in the banking sector also reflect other characteristics of carbon‐intensive economies and not primarily the transition risk.

# **Transition risks for fossil fuel exporters**

As to be expected, MENA countries are the most exposed to this source of transition risk (Figure 13, Table 6). A significant share of MENA countries also faces twin risks, as this risk often coincides with macro‐ financial vulnerabilities. Many of these economies also have developed down‐stream, carbon‐intensive industries. They will thus not only have to find alternative sources of foreign exchange and fiscal revenue, but their industries will also have to undergo significant transition if they want to pursue low‐carbon objectives.

Our data also show that that in most regions about 20 percent of countries also face twin risks from the combination of fossil fuel exports and macro‐financial risks.

Our regression analysis (Table A1.4.) suggests that higher fossil fuel exports are associated with lower sovereign ratings, and higher macro, banking, and debt risks. While this would be consistent with the expected impact of high exposure to transition risks, it is likely that this also captures other vulnerabilities that are signaled by a high share of fossil fuel exports, especially vulnerability to swings in commodity prices and Dutch disease effects.

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insignificant contributions to the total urban infrastructure financing needs. It is worth mentioning here that the data available in the PPI database overstates to some extent the net investment provided from private sources because the transactions often include government contributions to the investment, amounting to about 10-15 per cent of the total<sup>10</sup> .

# **4. Why Private Participation in Infrastructure Has Provided So Little Urban Infrastructure Finance**

This section explores experience in the last several years to understand the reasons why, while a number of transactions took place, and great efforts were made to promote PPI in urban infrastructure, so little finance was actually mobilized across a wide range of countries. A sector like water supply and sanitation (WSS) is largely excludable<sup>11</sup> , and user charges can, at least in theory, be used to recover costs. These conditions offer the possibility of attracting private finance, and a number of WSS PPI’s were concluded, even if WSS projects represent a small fraction of total PPI. These projects suffered from a number of difficulties, as evidence by the high incidence, 25 percent, of problem projects, indicating considerable risks to both sides that could not be managed within the original contract arrangements.

One reason for this is that, in practice, it has proven much harder to achieve full cost recovery, even in water supply, across a very wide range of countries, and in spite of a decade of serious reform efforts, and in many places, fiscal pressures. Komives et alia (2005) and Foster and Yepes (2005) document in detail the state of cost recovery in the water sector. What is particularly striking about their findings is, notwithstanding substantial reform efforts in many countries, how very widespread subsidies are for the water sector. As shown in Table 4 below, 42 percent of high-income countries are estimated to subsidize operations and maintenance costs of water provision for residential users. While many countries recover more from commercial users and hence improve overall cost recovery from these low levels, that bifurcation of the market introduces complexities and risks for any private sector investor, especially if they are being asked to expand coverage for residential users as part of the investment plan. Luque (2005) notes, for example, that the São Paulo State water utility (SABESP), while recovering costs through a cross-subsidy from commercial users has been losing its commercial customer base.

> 10 Ettinger et alia( 2005: 8)

> 11 Publicly provided services are said to be “excludable” if access to the service can be denied to those who do not pay for it. Piped water can, in principle, be cut off if users do not pay their bills. This contrasts, for example, with public services like national defense, or city streets, where it is impracticable to bill directly those who use the service or prevent those who do not pay from benefiting.

10
In choosing among the multiple solutions for lifting one billion people out of poverty, the sustainability of poverty-reduction efforts is clearly important. We do not want to reach the poverty-reduction target only to fall back in subsequent years. On an encouraging note, recent research has suggested that lower initial levels of absolute poverty at a given mean consumption foster higher subsequent rates of growth in average living standards in developing countries and help to ensure that economic growth itself is poverty reducing (Ravallion 2012). Thus, a “virtuous cycle” can be anticipated that would help to ensure the sustainability of the reduction in poverty.

Environmental sustainability is also important. An economic-growth path that consumes all of a country’s natural resources in 15 years may attain the proposed poverty-reduction target, but the poverty rate would likely bounce back. However, existing measures of poverty reduction do not tell us whether the changes observed are actually sustainable; they relate only to the current time period, which might be quite short. Thus, we would need a separate check on the sustainability of observed poverty reduction. The best data that we currently have for that check appear to be the “adjusted net savings” rate based on Hamilton and Clemens (1999).<sup>15</sup> The sustainability of a reduction in poverty that came with low (including negative) adjusted net savings could be questioned on the grounds that it implies too high a discount rate.

The best sustainable route will naturally vary from country to country. The economic growth projections underlying these benchmark trajectories are grounded in the economic realities of both the particular countries concerned and the global economy. However, the policy challenges of ensuring that poor households share sufficiently and sustainably in that economic growth at country level still need to be addressed.

The bulk of the work needed to reach this global poverty-reduction target will need to be done at the country level. A similar benchmarking exercise for individual countries would be desirable. Naturally, this work would need to reflect the specific conditions and resource base of each country. One should be cautious in attempting to use cross-country comparisons to infer what any one country can accomplish by a specific year, even when such comparisons control for observable differences; there are invariably idiosyncratic factors at country level that cannot be addressed by such cross-country comparisons. This work should ideally accompany a reasonably clear plan of how the lower poverty-reduction targets would be achieved. Various

> 15 At the time of this writing, the latest estimates by country are in World Bank (2012c), table 4.11.

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Inspired by the large literature on commodity currencies, next we relate the cyclicality of a country’s exchange rate to its exposure to shocks to commodity prices.<sup>11</sup> A priori, one would expect large commodity exporters to have procyclical currencies. The intuition is that they tend to grow faster when the demand for commodities and their prices are stronger, and the currency tends to appreciate because of the favorable movement in the terms of trade. To test whether this is indeed the case, we construct an index of the “intensity” of commodity exports following Lederman and Maloney (2008). The index, constructed as the net exports of commodities, as percent of GDP, averaged over the sample period, takes positive values if a country is a net commodity exporter and negative values if it is a net commodity importer. As expected we find a positive and significant correlation between the commodity export intensity index and the CCI (Figure 4). This positive correlation seems to transcend across the level of development of the countries in our sample. As noted above we find several advanced countries, which are commodity exporters, to have procyclical currencies.

**Figure 4: Currency Cyclicality Index and Commodity Exports Index**

<!-- Start of picture text --> CCI = 0.10 + 10.25*Commodity Export<br>(2.90) (2.29)<br>KOR IDN<br>URY<br>UKR TUR<br>PHL THA MEX ARGNZLMYSISL<br>ROM SWE<br>SVKCZE BRAFIN COL CHLIRN<br>PRTGRCINDESPHUNPOL PERAUS RUS<br>GBR<br>GEO ISRSVNHRV DNKZAF<br>MLT MARITACHN CAN NOR<br>MKDCYP LUX JPNDEUBELAUTFRAUSA CRIBLZ BOL<br>BGR<br>LVA<br>LTU NLD<br>CHE IRL<br>EST<br>-.02 -.01 0 .01 .02<br>Commodity Exports Index<br>1<br>.5<br>CCI<br>0<br>-.5<br><!-- End of picture text --> Note: CCI is the correlation between the HP filtered NEER and HP filtered real GDP. The commodity exports index is constructed as the net exports of commodities, as percent of GDP, averaged over the sample period. The t-statistics are reported in parentheses.

The fact that the countries with procyclical currencies experience procyclical capital flows, and have a large commodity base, suggests that currency procyclicality is more likely to be a characteristic of developing or emerging economies rather than of advanced countries. In the latter case, the production base is generally more diversified and, more importantly, because of fly to quality considerations, their capital flows tend to be less procyclical and may even be countercyclical. Figure 5 shows that currency procyclicality is indeed a feature of emerging economies. The figure

> 11 See, among others, Chen and Rogoff (2003) and Cashin et al. (2004).

9
is a ...rst attempt to analyze di¤erences in public debt management strategies across countries and contribute to better understanding of the development economics of public debt management.

The remainder of the paper is organized as follows. Section 2 describes the analyzed survey data and its collection. Section 3 contains graphical analysis of the survey data across income groups, regions and levels of indebtedness. Section 4 carries our regression analysis of the survey data using economic indicators as candidate explanatory variables. Section 5 provides a summary of ...ndings and conclusions.

# 2 The Survey Data

Progressing in the e¤orts to better understand the development economics of public debt management strategies across di¤erent country groups and individual countries, the Banking and Debt Management Department of the World Bank conducted a survey on public debt management strategies. The survey was carried out during the period from August 2006 to February 2007 and covers OECD, IBRD and Blend countries.<sup>7</sup> The questionnaire was sent out to and completed by national authorities responsible for public debt management, or if not feasible the questionnaire was completed by the relevant country economist based on a dialog with the national governments. The information from the questionnaire was supplemented by a search through websites of institutions responsible for central government’s debt management. The questionnaire asked the following questions<sup>8</sup>

- (i) Has the government established a debt management strategy for the total central government debt portfolio?

- (ii) Is the debt management strategy document published?

> 7The applied classi...cation into country groups is that of the World Bank and is available at http://web.worldbank.org/WBSITE/EXTERNAL/DATASTATISTICS/

0,,contentMDK:20421402~pagePK:64133150~piPK:64133175~theSitePK:239419,00.html 8The survey was made con...dential regarding the aswers of individual countries so that no country examples appear in the paper.

5
# **References:**

- Anderson, Ronald and Chantal Kegels (1997). ‘Finance and Investment in Transition: Czech Enterprises, 1993–1994’, IRES-Institut de Recherches, Department of Economics, Université Catholique de Louvain, Discussion Paper 9715, Louvain-la-Neuve.

- Ayyagari, Meghana, Thorsten Beck, and Aslı Demirgüç-Kunt (2007). “Small and Medium Enterprises Across the Globe,” _Small Business Economics_ 29: 415-434.

- Beck, Thorsten, and Aslı Demirgüç-Kunt (2006). “Small and Medium-Size Enterprises: Access to Finance as a Growth Constraint,” _Journal of Banking & Fina_ nce 30: 2931-2943

- Beck, Thorsten, Aslı Demirgüç-Kunt, and Ross Levine (2005a). “SMEs, Growth, and Poverty: Cross-Country Evidence,” _Journal of Economic Growth_ 10: 199-229.

- Beck, Thorsten, Aslı Demirgüç-Kunt, Luc Laeven, and Vojislav Maksimovic (2006). “The Determinants of Financing Obstacles,” _Journal of International Money and Finance_ 25(6): 932-952.

- Beck, Thorsten, Aslı Demirgüç-Kunt, and Vojislav Maksimovic (2005b). “Financial and Legal Constraints to Firm Growth: Does Firm Size Matter?” _Journal of Finance_ 60: 137–7.

- Beck, Thorsten, Aslı Demirgüç-Kunt, and Vojislav Maksimovic (2008a). “Financing Patterns Around the World: Are Small Firms Different?” _Journal of Financial Economics_ 89: 467-487.

- Beck, Thorsten, Aslı Demirgüç-Kunt, and Maria Soledad Martinez Peria (2008b). “Bank Financing for SMEs Around the World: Drivers, Obstacles, Business Models, and Lending Practices,” Policy Research Working Paper 4785. World Bank, Washington, DC.

- Berger, Allan. N., Richard J. Rosen and Gregory. F. Udell (2007). “Does Market Size Structure Affect Competition? The Case of Small Business Lending,” _Journal of Banking and Finance_ 31: 11-33.

- Berger, Allan, and Gregory F. Udell (1995). “Relationship Lending and Lines of Credit in Small Firm Finance,” _Journal of Business_ 68: 351-381.

- Berger, Allen, and Gregory Udell (2006). “A More Complete Conceptual Framework for SME Finance,” _Journal of Banking and Finance_ 30: 2945-2966.

- Binks, Martin, and Christine Ennew (1997). “The Relationship between UK Banks and their Small Business Customers,” _Small Business Economics_ 9: 167-178.

- Blackwell, David W. and Drew B. Winters (1997). “Banking relationships and the effect of monitoring on loan pricing,” _Journal of Financial Research_ 20: 275–289.

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percent of the jobs, as compared to 13 percent and 74 percent, respectively, for the general labor market (Figure 4).

Figure 4: Share employed in green occupations by race <!-- Start of picture text --> Green strict Green broad All employed<br>100 100 100<br>9 13<br>2<br>24 3<br>11<br>80 80 80 10<br>5<br>11<br>60 60 60<br>40 40 78 40<br>74<br>60<br>20 20 20<br>0 0 0<br>African/Black Coloured Indian/Asian White<br>Percent<br><!-- End of picture text -->

# Source: authors’ calculations using PALMS

The distribution of green jobs by age reflects the overall labor market. Strictly green jobs are most prevalent within the 25-34 (35 percent) and 35-44 (30 percent) age groups (Figure 5), as compared to 62 percent of all jobs belonging to the prime working age group (25-44). When considering both the strict and broad definitions of green jobs, the 25-34 age group has a slightly higher propensity for green jobs than for all jobs, by a few percentage points (Figure 5). The older (55-65) and youngest (15-24) age groups hold 9 percent and 8 percent of all jobs, strictly green jobs, and broadly green jobs.

Figure 5: Share employed in green occupations by age <!-- Start of picture text --> Green strict Green broad All employed<br>100 100 100<br>9 9 9<br>18 19 20<br>80 80 80<br>30 29 29<br>60 60 60<br>40 35 40 35 40 33<br>20 20 20<br>8 8 8<br>0 0 0<br>15-24 25-34 35-44 45-54 55-65<br>Percent<br><!-- End of picture text --> Source: authors’ calculations using PALMS 17
average by some percentage every year, reflecting the underlying technological progress. In this respect, the regulator should avoid to "crunch" numbers from the engineering model too often, otherwise regulation would become extremely intrusive and the incumbent will never have an incentive to adopt cost-reducing technologies which, in the end, would bring prices down. Of course, there is also the risk that if the regulator does not scrutinize the incumbent's behavior, competition could be jeopardized. In this respect, while in principle it would be ideal that the regulator is also able to monitor anti-competitive behavior, in practice this should not be a priority to the extent to which the regulator learns to co-operate with the competition agency of the same country.

# 4.5 **The affordability problem**

The concern for affordability is quite strong among policymakers and is resulting in efforts to get tariffs in line with international trends. The first issue is that the main vehicle to the internet continues to be through phone lines and that flat rate access to local calls are not standard practice as in the U.S.. Countries are working on this. In Argentina, for instance, the creation of special internet price schemes, combined with the reduction in the cost of leased lines have significantly contributed to the diffusion of the internet. Similar initiatives can be found in the region but while they contribute to make the "haves" better, they do not necessarily do much for the "haves not". Indeed, again in Argentina, the special local connection number for internet users was initially not available throughout the country and imposed additional long distance charges to many provincial users. And, of course, this is assuming that telecom penetration is sufficient in the provinces but this is not the case. Ultimately, this is another indicator that in the rush to close the digital gap, the concern for basic failures in the implementation of the telecoms reform contributes to the digital divide. The policy implication is simple once more: come up with a policy instrument that get phone lines where there are none.

The main instrument that has been used by regulators to address the affordable access issue has been to impose universal service obligations (USOs) to operators. Table 10 summarizes Latin America's experience with USOs. According to the ITU regulatory data base, over 70% of the countries of the region include basic telephony in their definition of universal services and about a third have now added electronic mail as well. Even if the table suggests that general principles behind USOs are agreed, the differences in approaches and definitions across countries suggest implementation challenges. There are three aspects to this.

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Policy Research Working Paper 8154

# **Abstract**

There is little rigorous quantitative data about the lives of lesbian, gay, bisexual, transgender, and intersex (LGBTI) people in developing countries. This makes the development of policy to improve the welfare of lesbian, gay, bisexual, transgender, and intersex people difficult, and it also makes it difficult to know whether lesbian, gay, bisexual, transgender, and intersex–focused policies and programs are working. Filling this data gap is necessary to understand the development outcomes for lesbian, gay, bisexual, transgender, and intersex people. Quantitative data practices exist that can be drawn on to fill the gap, including household surveys, experiments, and big data analysis. Summarizing existing experience, this paper provides guidance on how to study development outcomes for lesbian, gay, bisexual, transgender, and intersex people, by: paying attention to the different ways to define sexual orientation, gender identity and expression, and sex characteristics; and collecting samples that allow conclusions to be drawn with the broader lesbian, gay, bisexual, transgender, and intersex community, as well as the general population.

This paper is a product of the Governance Global Practice Group. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://econ.worldbank.org. The authors may be contacted at dkohler@ worldbank.org.

_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 views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent._ Produced by the Research Support Team