rafmacalaba/datause-encoder-data huggingface dataset:
framnework for tax and customs administration and their reform process. The nature of Bank involvement should also be clarified. For exarnple, one promising line of action, that has been suggested is for the Bank to support and strengthen regional associations of tax administrations which can act as catalysts of change. A second, may be to partner and support private sector consultancy organizations to enable them to manage major components of administrative reform. A third area of action is to formally institutionalize the knowledge accumulation process, an area which is particularly important in fields like tax administration. This will also have implications for the skill mix of staff and, therefore, staff recruitment and training plans. Regarding specific areas, a number of recommnendations are suggested by the analysis in this review.

# _Diagnosis_

1. Pre-project diagnostic work should be based on a comprehensive framework, which pays sufficient attention to institutions in addition to traditional concerns of tax administrators. Ideally, a single but flexible framework should be adopted throughout the Bank.

2. Diagnostic performance measurement should be done, where possible, quantitatively according to standard indicators and against preferably cross-country benchmarks.

3. Pre-project work should also include a review of (or a citation of) the key determinants of good administration and project implementation.

# _Design_

4. Project design should be based on a strategic vision of the administration, pay adequate attention to good governance but should, nevertheless be limited in scope given a country's implementation capacity. Alternative designs and sequencing should be analyzed and their rationale provided.

_5._ To generate long-term lessons, projects should specify hypotheses being tested.

# _Performance indicators_

6. A standard set of outcome performance (effectiveness, efficiency, accountability) indicators for tax and customs administrators should be specified, to be drawn on for all projects.<sup>16</sup> 7. Diagnostic work should give rise to pre-project base values of performance indicators for outcome assessment.

8. Outcome performance indicators for projects should not only permit project performance to be tracked, but should be chosen to permit hypotheses to be evaluated.

9. The use of taxpayer surveys should be an integral part of both diagnostic work and performance appraisal if not precluded by cost considerations.

10. Standard guidelines for quantitative input, process and output indicators should be laid down and mandated.

> 1<sup>6</sup> A set of performance indicators is being developed by the Tax Policy and Administration Thematic Group. A preliminary version has already been field tested. Similar work is also being done at the Inter-American Development Bank, the IMF and the OECD.

29
some differences across regions, this was mostly driven by a very low nonresponse rate of 3.8% in one of the smaller administrative regions (Barisal).

One strong relationship we find in the data is how the types of firms that failed to answer direction questions on corruption, and firm answers on the RRT questions on paying bribes. We find that a large number of firms that failed to answer the direct corruption question, when answering the RRT, indicated no incidence of bribery. Our data shows that firms that indicated bribes were used to obtain permits in the randomized response question had a 6% lower nonresponse rate (13%) than firms that indicated bribery wasn’t used to obtain permits (19%) in the direct corruption questions.<sup>8</sup> Or, put another way, the mangers that answered the direct question on corruption had a much higher rate of answer “yes” on the using bribes to obtain permits (61.7%) relative to firms that firms that failed to responded to the corruption question (50.1%).

This result could fly in the face of the idea that the firms failing to respond to corruption questions are more likely to engage in corruption. This descriptive data suggests that firms that fail to answer direct questions on corruption are _less_ likely to have engaged in bribes. What explains this pattern? One possibility is that the firms that fail to answer direct questions on corruption are also likely to underreport corruption in the RRT. In short, firms providing nonresponses to some sets of politically sensitive questions could be the same firms providing false responses to other questions.

How do we evaluate potential false responses? One strategy commonly employed in surveys is to instruct enumerators to evaluate the perceived truthfulness of the respondent. In our survey of firms, enumerators were instructed to classify respondents as “very truthful”, “somewhat truthful” or “somewhat untruthful” or “very untruthful” at

> 8 The exact differences is .0588 with a standard deviation of .0196 .

15
<!-- Start of picture text --> Back-office Other<br>Accounting 1.0 Broadcasting 0.3<br>Legal 0.5<br>Sound recording 0.1<br>Telecom 0.2<br>Motion pictures 0.1<br>Computer 0.2<br>0 .2 .4 .6 .8 1 0 .2 .4 .6 .8 1<br><!-- End of picture text --> Source: OECD; authors’ calculations; The scale of the regulatory restriction index is 0‐1.

**The most restrictive components of trade barriers in air transport and cargo‐handling services are related to foreign entry and competition.** In air transport, there are still equity restrictions (which are also reflected in the OECD’s FDI restrictions shown in Figure 4.3). Turkey also has some restrictions on mergers and acquisitions by foreign firms and nationality restrictions on boards of directors. Regarding competition policies, Turkey has regulations related to slots (i.e. no auction takes place to give away slots, all carriers are allowed to retain slots from one season to another, and no administrative slot system is in place) and minimum capital requirements, all of which affect foreign service suppliers. In logistics cargo handling services, there are barriers to competition, such as price and fee regulations, contracts awarded without competitive bidding processes, and minimal capital requirements.

**Services trade barriers tend to affect firm operations more than entry, with a mix of discriminatory and non‐discriminatory elements.** The top panel of Figure 4.6 shows the percentage division of services trade restrictions in Turkey that are classified as entry barriers versus barriers on the operations (i.e. conduct) of firms; the bottom panel shows the percentage of restrictions that are assessed as discriminatory versus non‐discriminatory. Although entry barriers are still present in services markets, more restrictions affect firm operations. On the other hand, no clear pattern arises when looking at the differences between discriminatory and non‐discriminatory barriers. In most services sectors (apart from air transport and insurance or logistics freight and maritime services), restrictions affect both foreign and domestic firms.

28
Figure 3: Effects of average plot size in adjacency <!-- Start of picture text --> 0 1 2<br>log average plot size in adjacency<br>Borewell density<br>Groundwater transaction intensity<br>1<br>.8<br>.6<br>.4<br>.2<br><!-- End of picture text --> _Notes:_ Nonparametric regressions of borewell density and groundwater transactions per plot, respectively, on log average plot size for all 2306 reference borewell plot adjacencies.

were acquired through inheritance.

Land fragmentation would be irrelevant, of course, were groundwater markets frictionless. In this case, Coasian reasoning suggests that allocations should be independent of asset ownership. Thus, borewells would be just as likely on small plots as on large plots; the owner of a small plot could simply sell any excess groundwater to a neighbor. Obversely, small plots would be just as likely cultivated in the dry season as large plots; any plot owner without a borewell of his own could purchase groundwater from that of a neighbor. In Appendix B, however, we use plot-level data from our sample to strongly reject both implications of frictionless groundwater markets. Thus, in practice, land fragmentation does predict the distribution of borewells and fallowed area.

When we aggregate these data from around 9600 plots to the adjacency level in Figure 3, two key facts emerge: First, borewell density–measured as the ratio of borewell irrigated area to total area in the adjacency–is increasing in average adjacency plot area. Put another way, in more fragmented adjacencies, borewell density is lower; this simply reflects the finding in Appendix B that borewells are much less likely to be installed on small plots. Second, the proportion of plots in the adjacency receiving any groundwater transfer from the reference well (aside from transfers between its co-owners) is decreasing in average adjacency plot area. So, borewell density and groundwater market activity are _substitutes_ , both driven by the degree of land fragmentation. We return to this feature in the econometric model.

18
- 18 -

has argued that precisely the same sorts of externalities may be involved with human capital investment as others such as Romer have analyzed for physical i,nvestment.

# _S. Incomplete or Imperfect Capital Markets_

Capital markets may not be perfectly functioning or complete for institutional reasons. A number of examples of these may be as follows.

# _a. Liquidity Constraints._

Households or firms may be liquidity-constrained. If households are prevented from borrowing early in life against their future labor income, they will be forced to consume less than the desired amount and aggregate saving will be higher.<sup>7</sup> Again, policies operating on the saving side of the market would be appropriate here rather than investment incentives.

Firms may be liquidity-constrained as well, especially, as noted above, young growing firms. Corporate tax policies can be of some help here to the extent that *hey make cash available to firms who are strapped for funds. Since many such firms are in a negative tax liability position, full refundability of tax losses would be helpful. Refundable investment incentives would also offset the effects of liquidity constaits.

# _h. Incomplete Markets for Risk._

Complete markets for the trading of risk require that the number of assets be as least as great as the number of possible states of nature. Given that the latter can be large, it is quite likely that such markets are incomplete. Furthermore, since government policy itself contributes to the risky environment in ways that cannot be foreseen, it would be very difficult to insure against future government policies. By offering less than full loss offsetting, tax policy itself may contribute to the inefficiency in trading in risk. There is no particular reason why the government should be any better informed than the private sector so it is not clear that the government can improve the efficiency of allocating risk except by making sure that tax policies do not distort it further.

One particular form of risk trading that the government may have a role in influencing is the sharing of risks across generations. Strictly speaking this is not an efficiency argument but an equity argument. However, it may be analyzed precisely as an insurance problem when cohorts are put behind 7 **The consequences** of **ftis** have **becn** analyzed by Hubbard and Judd (1987).
27 4% higher health spending per capita. With regard to employment levels overall, the IV results are consistent with SHI reducing total employment as a share of the working-age population by 5-6%, though the differences-in-differences estimates which are also valid point to a smaller (and insignificant) impact.

The results are similar (though somewhat smaller in magnitude) to those of Wagstaff and Moreno-Serra (WMS) (2008a; 2008b) who employ similar methods to look at the impacts of SHI transitions among a group of 28 (mostly different) countries in central and eastern Europe and central Asia over the period 1990-2003. They too found that SHI raised health spending per capita (by 11% in their comparable model), increased self-employment (by 17%), and reduced total employment as a share of the working-age population (by 10%). WMS, however, found no significant impacts in either direction on health status indicators; it is worth noting, though, that many of their cause-specific mortality indicators are not ones that are considered amenable to medical care, and their indicators reflected deaths among all age groups not just those among age groups where mortality is considered amenable to medical care.

The findings in this paper (and in WMS) with regard to SHI increasing health spending are not new, but rather provide reassurance that the often-noted higher spending levels in SHI countries in a typical cross-section reflects causality and is not a spurious association. The finding in this paper and in WMS with regard to the size (in employment terms) of the formal sector is novel, but is consistent with speculation by previous authors. The results in the two papers suggest that policymakers should take seriously the suggestion (cf. e.g. Baeza and Packard 2006) that SHI may encourage informality in labor markets.
# <u>Table 1 Description of analyzed datasets</u>

|||||Teachers<br>|Percent of total|
|---|---|---|---|---|---|
|Country|Source|Year<br>|Number<br>surveyed<br>|Percent of total<br>surveyed wage workers<br>|surveyed work force<br>(ages 15-64)<br>|
|||(1)|(2)|(3)|(4)|
|Burkina Faso|Continuous Multisectoral Survey|2014|343|13%|1.3%|
|Côte d'Ivoire|National Employment Survey|2013|201|6%|1.1%|
|Democratic Republic of<br>Congo|National Household Survey|2012|1,104|18%|3.1%|
|The Gambia|Integrated Household Survey|2010|243|10%|1.9%|
|Ghana|Ghana Living Standards Survey 6|2012-2013|772|16%|2.4%|
|Liberia|Household Income and Expenditure<br>Survey|2014-2015|171|14%|2.2%|
|Malawi|Integrated Household Panel Survey|2010|393|12%|1.9%|
|Namibia|Labor Force Survey|2013|359|8%|3.7%|
|Niger|National Survey on Household<br>Living Conditions and Agriculture|2014|119|12%|1.6%|
|Nigeria|General Household Survey|2015|240|20%|2.8%|
|Senegal|Poverty Monitoring Survey|2010|331|7%|0.8%|
|Sierra Leone|Labor Force Survey|2014|220|27%|3.1%|
|Tanzania|Labor Force Survey|2014|396|12%|1.4%|
|Uganda|Living Standards Measurement<br>Survey|2013|170|15%|2.6%|
|Zambia|Labor Force Survey|2014|486|10%|2.4%|

Source: The surveys were downloaded from the World Bank Microdata Library.

33
to conclude that at least part of the current production decline in mature markets is likely to be permanent, and that China will soon occupy the top spot and keep it for the foreseeable future.

**Table 1. Passenger vehicle production levels and growth in countries producing one million or more units in 2008 (in thousands)***

||**2002**|**2007**<br>**Annual growth**<br>**2002-07**|**2008**|**Annual growth**<br>**2007-08**|
|---|---|---|---|---|
|Spain|2,855|2,891<br>0.25%|1,940|-32.90%|
|Canada|2,629|2,602<br>-0.21%|2,068|-20.52%|
|United Kingdom|1,821|1,770<br>-0.57%|1,450|-18.08%|
|United States|12,280|10,611<br>-2.88%|8,746|-17.58%|
|Italy|1,427|1,284<br>-2.09%|1,085|-15.47%|
|Germany|5,145|6,200<br>3.80%|5,500|-11.29%|
|South Korea|3,148|4,085<br>5.35%|3,830|-6.24%|
|Mexico|1,805|2,254<br>4.54%|2,154|-4.44%|
|India|892|2,046<br>18.06%|2,022|-1.20%|
|Japan|10,258|11,596<br>2.48%|11,564|-0.28%|
|Turkey|340|1,097<br>26.40%|1,147|4.57%|
|China|3,251|8,890<br>22.29%|9,340|5.06%|
|Russia|1,220|1,654<br>6.28%|1,776|7.40%|
|Brazil|1,793|2,960<br>10.55%|3,210|8.45%|
|Thailand|540|1,178<br>16.88%|1,400|18.85%|

Sources: Data for 2002 and 2007 and for North American countries and Japan are taken from Automotive News. Other information comes from various internet sources, mostly from newspaper reports and national industry associations.

* Two countries are missing, France (3.01 million vehicles in 2007) and Iran (1.18 million in 2007); 2008 production volumes were not available for these countries.

# **6. Policy Discussion**

What have can be learned from the recent crisis in the automotive sector and the government responses? Although the process of restructuring is still underway, we can make several observations.

- Economic nationalism cannot be ignored in this industry. To a remarkable extent, countries are willing to put money on the line to support national champions, even if this angers their trading partners or political allies. These political motivations strengthen the regional pattern

20
**Table I6: Relationship between food security measures and height-for-age z-scores (Uganda): Expanded Controls Version**

||(1)|(2)|(3)|(4)|(5)|
|---|---|---|---|---|---|
|VARIABLES||Heig|ht-for-age z-s|cores||
|1-SSEXR|0.036|||||
||(0.045)|||||
|FCS||0.150***<br>(0.042)||||
|DDS|||0.021|||
||||(0.049)|||
|PC expenditure||||0.121**<br>(0.050)||
|Food Share|||||0.005|
||||||(0.041)|
|Child is female|0.124|0.113|0.124*|0.126*|0.123|
||(0.075)|(0.075)|(0.075)|(0.075)|(0.075)|
|Age of Child (in months)|-0.065***|-0.065***|-0.065***|-0.065***|-0.065***|
||(0.012)|(0.012)|(0.012)|(0.012)|(0.012)|
|Age Squared|0.001***|0.001***|0.001***|0.001***|0.001***|
||(0.000)|(0.000)|(0.000)|(0.000)|(0.000)|
|Household size|0.014|0.009|0.012|0.022|0.011|
||(0.014)|(0.013)|(0.013)|(0.014)|(0.014)|
|Share if kids under 5|-1.202***|-1.296***|-1.221***|-1.233***|-1.207***|
||(0.367)|(0.367)|(0.367)|(0.365)|(0.366)|
|Female-headed HH|-0.082|-0.064|-0.084|-0.064|-0.082|
||(0.101)|(0.101)|(0.102)|(0.102)|(0.101)|
|_HH Head Education: Reference_|_category - No fo_|_rmal educatio_|_n_|||
|Less than primary|0.214|0.202|0.220*|0.239*|0.228*|
||(0.130)|(0.128)|(0.130)|(0.128)|(0.128)|
|Completed primary|0.181|0.156|0.184|0.204|0.193|
||(0.144)|(0.143)|(0.146)|(0.142)|(0.143)|
|Completed O-levels|0.173|0.131|0.180|0.196|0.191|
||(0.173)|(0.172)|(0.175)|(0.170)|(0.172)|
|Completed A-levels|-0.138|-0.159|-0.130|-0.075|-0.130|
||(0.313)|(0.310)|(0.314)|(0.318)|(0.314)|
|Technical college/University|0.434**|0.378*|0.440**|0.431**|0.455**|
||(0.209)|(0.209)|(0.212)|(0.208)|(0.208)|
|_Mother's Education_||||||
|Less than primary|-0.177*|-0.198*|-0.181*|-0.189*|-0.178*|
||(0.104)|(0.103)|(0.104)|(0.104)|(0.105)|
|Completed primary|0.024|-0.011|0.023|0.003|0.029|

109
unchanged: lower oil prices hurt stock and high-yield bond indices, and help investment-grade and long-term Treasury bonds. The details of the bootstrapped regressions are shown in Appendix B.

# **On volatility**

This section examines the impacts of oil price fluctuations on uncertainty, proxied by the log of the VIX index. VIX is a popular measure of the market’s expectation of stock volatility over the next 30-day period. Table 4.3 reveals that volatility hiked by 9.09% for every 10% decline in WTI oil price. This finding reinforces the argument that oil price declines, although driven by exogenous supply shocks, can create uncertainty, flight to safety, and a deterioration of the stock market.

Table 4.3: Oil price declines and the VIX index

|VARIABLES|∆log(VIX)|∆log(VIX)|
|---|---|---|
|∆_Log (Oil Price)_|-1.005***|-0.909***|
||(0.297)|(0.290)|
|Lags|No|Yes|
|Constant|-0.000804|-0.000757|
||(0.00297)|(0.00300)|
|Observations|699|696|
|R-squared|0.054|0.068|

Robust standard errors in parentheses *** p<0.01, ** p<0.05, * p<0.1

# **The US Market: Breakdown by sector and asset class**

Table 4.4 presents the impact of oil price fluctuations on different asset classes (stocks, high-yield bonds, and investment-grade bonds) of different sectors. In each asset class, the sectors are sorted by the magnitude of the impacts.

About half of the sectoral stock indices are negatively affected by oil price declines. As expected, the energy sector is hit the hardest as the WTI oil price decreases. Focusing on column 4 (regressions with lags), a 10% decline in the WTI oil price 19
Figure 5.3: Post-Communist Transition Dynamics: China 1998-2011 <!-- Start of picture text --> TFP Investment Rate<br>Model<br>Data<br>1998 2002 2006 2010 1998 2002 2006 2010<br>Year Year<br>Top 1% Earnings Share Av Size<br>1998 2002 2006 2010 1998 2002 2006 2010<br>Year Year<br>1.3 0.15<br>1.1 0.05<br>Relative to SS 1998 Diff from SS 1998<br>0.9 −0.05<br>25 1.1<br>20<br>15 0.9<br>%<br>10 0.7<br>5 Rel. to SS 1998<br>0 0.5<br><!-- End of picture text --> The data for _TFP_ corresponds Penn World Table's (Zeileis 2021) _rtfnpa_ measure of _TFP_ between 1998 and 2011, linearly detrended by an annual _TFP_ growth of 0.85% in the U.S. The investment rates is the raw data for the period from the same source. The average size data is the same as in section 3. The top income share is drawn from the World Inequality Database, Piketty et al. (2019)). _TFP_ and the average size are expressed as ratios with respect to 1998 values, where, in the case of the model, 1998 stands for the calibration of the economy to the distortions in that year. The investment rate and the ratio of innovation expenditure over _GDP_ are expressed as absolute dierences.

The aggregate behavior of the model is underlaid by dynamics of the average rm size and the earnings in inequality that resembles the data. While we calibrated the pace of reversal of the prot taxes to replicate the observed behavior of the average rm size, the dynamics of inequality were non-targeted. The growth in earnings inequality arises, on one hand, from the reduction of prot taxes, which increases the share of earnings that entrepreneurs can appropriate and, on the other hand, from the higher expenses on innovation, which widens the earnings gap between wage earners and business owners and concentrates income among the most talented entrepreneurs. These properties can be seen in gure 5.4, which depicts the dynamics of the wage rate, the average entrepreneurial prots, and the average earnings among the richest entrepreneurs.

We conclude the case study with an exploration of the relative contribution of each component of China's reforms, the alleviation of idiosyncratic distortions and adjustment cost to investment.

33