rafmacalaba/datause-encoder-data huggingface dataset:
the behavior by the treated households. For example, treated households might spend their earnings by increasing consumption immediately after payment, which would not be captured by a the seven-day recall period of the survey which takes place a few weeks after the payment. Untreated households respond by similarly increasing very short run consumption – to “keep up” up with their neighbors, or because their reference point was affected – but then have to reduce consumption in subsequent periods because their short-term splurge was not financed by PWP earnings. This explanation requires peculiar behavior by the untreated households, however – either their marginal utility of “keeping up” with their neighbors is high enough to offset reduced consumption later on, or their preferences are time-inconsistent, or they have erroneous expectations about future income.

An alternative explanation requiring less complicated behavior by the untreated households is that immediately after they are paid, treated households purchase food in bulk quantities for storage and later consumption. These purchases are not captured in the survey recall period and therefore do not translated into increased food security from the program, but they do reduce the availability of commodities at local markets for untreated households. The equilibrium effect is on the quantity of goods, not prices, perhaps because of frictions in the wholesale market. Food security for untreated households falls because of supply-side factors.

We see some evidence of this behavior in the fertilizer purchases of untreated households in the North. Treated and untreated households increase their expenditure on and use of fertilizer by about the same amount – nearly double – relative to controls. For treated households, the MK 6,000 increase in spending across the basal and top dressing fertilizer applications could have come entirely from PWP earnings. Untreated households, though, did not have extra income to use for the fertilizer. They did not have the opportunity to earn wages from public works activities and did not work more in the casual wage labor market. If the increase in use of fertilizer had not been accompanied by a reduction in food security, we would suspect that treated households had shared the spoils of the program with their untreated neighbors. We see no evidence of this in our direct measures of cash and in-kind transfers. The pattern of food security and fertilizer use results makes it more likely that instead, untreated households in the North modeled their behavior on that of their treated neighbors. We cannot distinguish between an adjustment of the reference point about appropriate fertilizer use or incorrect expectations that PWP or other opportunities would soon be available to untreated households.

Relatedly, Bazzi, Sumatro & Suryahadi (2015) find that a large-scale CCT in Indonesia does not affect consumption growth for households that receive transfers on schedule, but reduces consumption growth for households whose second transfer is delayed. In our context, untreated households in PWP villages may behave like Indonesian households whose transfers 28
Our high-frequency surveys did not ask the amount spent on transportation and exit fees per visit to Corabastos, but we did ask these in the six-month and 12-month follow-ups. The mean control group user averages 29,659 COP per visit, and the ITT pooled treatment effect over these two rounds is 3,556 COP per visit (s.e. 1297, p=0.008), reflecting fewer heavy goods to transport. Combining this reduction in the cost per visit with the reduction in the number of days per week going to Corabastos of 0.17 in the short-run gives an estimated short-run cost savings of 20,556 COP per week (US$6.66), which is equivalent to approximately 0.5% of baseline weekly sales, or 4.9% of baseline weekly profits. Using our statistically insignificant pooled effect over the year of a 0.09 reduction in travel days would reduce this to 18,054 COP (US$5.85) per week.

Finally, panel D of Table 3 examines whether this reduction in travel time and travel costs is accompanied by a change in work-life stress. We asked a set of eight questions about general life and work satisfaction, whether they find work stressful, as well as about whether the owner feels tired, lacks time, and frequently has no time for family. These variables are coded as binary variables in the same direction so that one indicates more stress, and zero less. At baseline, 90 percent of owners say they are satisfied with their life and their work, but one-quarter report feeling tired most days per week, and 40 percent say they frequently feel work forces them to spend less time with their family. We see that the offer (and use) of Agruppa results in lower work-life stress, which is significant at the six-month horizon but not at the 12-month. Table A5 shows the impacts on each contributing item to this index, with the largest changes seen in questions about whether they lack time to do all the things they have planned, or frequently do not have enough time for family, where there is an 18 to 20 percentage point reduction coming from using Agruppa.

# **4.3.Did offering Agruppa change product availability, prices and mark-ups?**

Table 4 examines impacts of offering Agruppa on the extensive margin of whether a store was open, and whether it was selling specific vegetables and fruits. To allow for seasonal and time effects, our regressions include daily fixed effects. Column 1 shows that overall, and in the short and medium-term, there was a small and statistically insignificant impact on whether our enumerators found the store to be open on the day of the interview. The next five columns show that there was no significant change in whether or not firms were selling the core five Agruppa products. We see that onions and spring onions are sold by 95-97 percent of stores, plantains by 17
using an index that assigned higher priority to individuals between the ages of 16 and 24, and women heads of household. The prioritization index also had a component that included variables relating to household income, to give higher priority to the poorest applicants.

Finally, the local committees of each municipality verified and confirmed the prioritized list of participants.

The program reached its peak in 2012, covering 27,992 beneficiaries, representing an allocation of 0.08 percent of GDP (Figure 3). Around 40 percent of the beneficiaries were youngsters in the 16–24-year-old range, and more than 70 percent were females. The most active years were 2011 and 2013, and in 2015 the program was discontinued.

An impact evaluation of the program showed that it was effective in attracting individuals who were most in need, as well as in increasing labor force participation (in particular among the youth, women, and those relatively well educated), and readiness to start a new job (Beneke de Sanfeliu and Acosta 2014) in the short run. The evaluation also highlighted that program participants seem to be more satisfied in their communities with the public areas, many of which were improved by the assets built through the program, especially among the persons who will probably make most use of them, the youth and adults. Finally, the participants demonstrated increased civic participation in their community, whether in community organizations or in positions of responsibility. However, the evaluation did not find any improving effects on social interactions in the neighborhood.

**Figure 3: PATI: Number of beneficiaries and spending as a share of GDP 2010–2014**

<!-- Start of picture text --> 30,000 0.078 0.090<br>0.080<br>25,000<br>0.070<br>0.055 0.055<br>20,000 0.060<br>0.050<br>15,000 0.034<br>0.040<br>10,000 0.030<br>0.020<br>5,000 0.002 0.010<br>3,633 14,525 27,992 23,456 5,500<br>0 0.000<br>2010 2011 2012 2013 2014<br>Beneficiaries Spending %GDP<br>spending % GDP<br>number of beneficiaries<br><!-- End of picture text --> _Source:_ World Bank, ASPIRE database.

7
2

# I. **INTRODUCTION**

Developing countries—understandably—often show more interest in learning from the health systems of industrialized economies, rather than from one another’s. For the developing countries of East Asia, one especially relevant group of industrialized economies are Japan and the Asian Tigers (Hong Kong (China), the Republic of Korea, Singapore and Taiwan (China)). It is true that even countries such as China, Malaysia and Thailand (the richer developing countries in East Asia) lag far behind Japan and the Tigers in terms of per capita income, and that on present trends they may well never catch up ( **_Figure 1_** ).<sup>*</sup> But in terms of health system challenges and solutions, the gaps are smaller than per capita income gaps suggest—both within the Japan-Tiger grouping, and between the Japan-Tiger grouping and the developing countries of East Asia.

_Figure 1: Per capita incomes in selected East Asian economies, 1960-2003_<sup>_†_</sup> <!-- Start of picture text --> 40,000<br>China<br>Hong Kong, China<br>35,000 Japan<br>Korea<br>Malaysia<br>30,000<br>Singapore<br>Taiwan, China<br>25,000 Thailand<br>20,000<br>15,000<br>10,000<br>5,000<br>0<br>1960 1965 1970 1975 1980 1985 1990 1995 2000 2005<br>GDP per capita $US 2000 prices<br><!-- End of picture text --> All health systems face the problem of how to pay providers. Japan, richer than the Tigers, has been most successful in devising a non-inflationary and non-distortionary fee schedule, but it is Korea and Taiwan (China) that are ahead in introducing prospective payment methods. Policymakers in many systems are conscious of the pitfalls of the shared approach (a legacy of Chinese medicine) of having the same person both prescribe and dispense medicines.

> *  In terms of GDP per capita, China today is roughly where Korea and Taiwan (China) were in 1960. Malaysia today is roughly where Taiwan (China) was in 1997, and Korea was in 1984. And Thailand today is roughly where Korea and Taiwan (China) were in the early 1970s.

> † Data are from the World Bank’s World Development Indicators. GDP per capita is at constant 2000 prices, expressed in US dollars, not purchasing power parities (PPP) due to the shorter time-series for PPP GDP per capita data.
approximation. This is because the lognormal relies only on one parameter (the standard deviation) to capture the shape of the income distribution, while the other approximations rely on two or more, and are thus better able to capture the tails of the distributions. Whenever possible, we will therefore use the best fit of the General Quadratic and the Beta Lorenz curves (as reported by the _PovCal_ database, and, for LAC by the comparison with actual data), and leave the use of the lognormal approximation only for simulations that will not allow for this.

# **Simulations**

The heart of our analysis lies in simulating counterfactual poverty changes between 1995 and 2008, where we keep country-specific “performances,” but attribute equal “initial conditions” to countries. These two concepts remain specific to the way we structure the simulations, and deserve some attention.

Let us consider a space of income distributions _f(y,_ μ _,G)_ characterized by two parameters: _average income_ μ, and an _inequality index G_ . We then consider a _poverty index H(z,_ μ _,G)_ that can be mapped to each income distribution as follows: where _z_ can be thought of as an absolute reference threshold, which we shall denote as the _poverty line_ , and _h(y,z)_ a function that can be integrated. Observe that common indexes, such as the poverty headcount and the poverty gap, can all be expressed in a form compatible with (1).

Consider then, two income distributions, f(y, μ0, G0) , and f(y, μ1, G1) . Think of the first set of parameters as characterizing the distribution of income in a given country in period zero (i.e., 1995 for our main simulations), and of the second set as characterizing the distribution of income in period one (i.e., 2008). For a poverty line _z_ , changes in poverty between the two periods can then be expressed as: _H_ ( μ 1, _G_ 1) − _H_ ( μ 0, _G_ 0 ) .

Observe that, up to this point, we could run the comparison using actual poverty rates. The purpose of the parameterization, however, is to allow us to simulate counterfactual changes in poverty, so we proceed as follows. In the simulation, we aim to distinguish between _initial conditions_ (μ0, G0) and _policy performance_ (∆μμ⁄ 0 , ∆GG⁄ 0) . The underlying motivation supporting such a distinction is that, in 9
float-was stable by the begining of 1993 and inflation in 1993 of 31 % was a far cry from the 2379% level of the previous year. As of mid-1994, iere was evidence of an appreciation of the real exchange rate in the freely floating market, and inflation had falen further, to 18 percent, on an annualized basis.

14. Although admitedly it started frm a low economic base, Albaniaes GDP growth of 11% in 1993 was one of the greatest of all te former command economies, and the highest in Eumpe, east or west. In 1994, growth performance has been similarly robust. While the recovery primarily had its orgin in agriculture, constuction and other private services also expanded substtally. The adjustment process was, of course, not without costs, particlarly for those in the public sector. Unemployment rose to about 26% of the labor force as a result of layoffs in the state-owned industrial enterpises and real wages have fallen. Nonetheless, in ihe recent Eurostat survey , the _overwhelming_ majorty of Albanians agreed that they were "better off than before the reforms", a result which contrasted stingly with the generally pessimistic evaluation regee d in other Eastem European countries.

_15._ The susinabiity of the macroeCoDnomIc adcievements to date and their conversion into long term growth will depend on furter far-reaching strucural refonns. Thus far, Albania has privadzed viraly all agricultura **l** and, and the output response has been substantiaL. Privatization of trucking and the retail sector has been followed by privatizon of small and medium term enterprises. Remaining challenges include the buiding of iucture required by the private sector, privatization andior restructuring of the remaining state enterprises, and the creation of a banking system so that credk can start flowing to new acdvities.
corruption, and freedom of expression, job quality, migration, changes in consumption preferences and standards, or other sociological factors<sup>18</sup> . It should be noted that most of this popular tension started building after 2008 when the Kingdom saw a period of economic slowdown, especially between 2009 and 2012, which was further exacerbated by popular movements inspired by the Arab spring that swept the region starting in 2011. As we will see later in this paper, the poor economic performance during that period has reversed the welfare trends previously observed and threatens to undo all the gains made so far during the decade.

<!-- Start of picture text --> Figure 1: Growth incidence Curve<br>Total (years 2002 and 2010) Total (years 2008 and 2010)<br>6 Growth-incidence 95% confidence bounds Growth-incidence 95% confidence bounds<br>Growth at median Growth in mean 16 Growth at median Growth in mean<br>Mean growth rate Mean growth rate<br>5<br>13<br>4<br>10<br>3<br>7<br>2 4<br>1 1<br>1 10 20 30 40 50 60 70 80 90 100 1 10 20 30 40 50 60 70 80 90 100<br>Expenditure percentiles Expenditure percentiles<br>Annual growth rate % Annual growth rate %<br><!-- End of picture text -->

# _III.2. Patterns of Poverty Changes_

As a result of the welfare pattern observed earlier and the consequent growth in per capita household consumption, poverty declined sharply for the period 2002-2010. The overall poverty rate in Jordan declined by around 17.1 percentage points and reached around 14.9 percent in 2010 (Table 2). This decrease in poverty was depicted across the Kingdom but was particularly accentuated in rural areas. Looking at the poverty headcount rates in Table 2, poverty declined by 23.2 percentage points in rural regions compared to 15.1 percentage points in urban ones. Part of the drop in poverty was due to population movements during this period, with the poor

> 18 The Jordan Development Policy Review (World Bank 2012) examines in depth some of the mentioned factors.

8
# **Table of Contents**

# **I. Peru’s Trade Policy**

- _(a) Evolution_

- _(b) Economic and Political Context of Liberalization_

- _(c) Immediate Background of the 1990 Reform_

- _(d) The New Economic Policy_

- _(e) The New Foreign Trade Policy_

# **II. Antidumping and Safeguards**

# **A.  Institutional Reform**

_1. INDECOPI_ _2. The Antidumping and Subsidies Commission_ (CDS) _3. Rules and Procedures_ _(a) Antidumping Rules and Procedures_

- _(b) Safeguard Rules and Procedures_

_4. Other Aspects of Peru’s Experience_

# **B. Peru’s Cases**

# **_1. Overall Results_**

- _(a)  Outcomes of Investigation Requests_

- _(b)  Incidence over Time_

- _(c)  Incidence by Sectors_

- _(d) Incidence by Country_

- _(e)  Average Length of Processes_

- _(f)  Andean Community Cases_

- _(g) Safeguard Cases_

- _(h)  Appeals_

# **_2. Special Cases_**

# _A._ _<u>Cast Steel Balls: Chile</u>_

_B. Cornstarch and Glucose Syrup: Mexico C. Textile Clothing Articles: China_ _Conclusions_ _Bibliography_ iii
WPS3767

# **CHINA’S PATTERN OF GROWTH: MOVING TO SUSTAINABILITY AND REDUCING INEQUALITY**

## Louis Kuijs<sup>1/*</sup> and Tao Wang<sup>2/*</sup>

## **Abstract**

This paper studies the sources and pattern of China’s impressive economic growth over the last 25 years, and shows that key issues currently of concern to policymakers—widening inequality, rural poverty, and resource intensity—are to a large extent rooted in China’s growth strategy, and resolving them requires a rebalancing of policies. Using both macro level and sector data and analyses, the paper extends the growth accounting framework to decompose the sources of labor productivity growth. We find that growth of industrial production, led by a massive investment effort that boosted the capital/labor ratio, has been the single most important factor driving GDP and overall labor productivity growth since the early 1990s. The shift of labor from lowproductivity agriculture has been limited, and, hence, contributed only marginally to overall labor productivity growth. The productivity gap between agriculture and the rest of the economy has continued to widen, leading to increased rural-urban income inequality. Looking ahead, we calibrate two alternative scenarios. We show that continuing with the current growth pattern would further increase already high investment and saving needs to unsustainable levels, lower urban employment growth, and widen the rural-urban income gap. Instead, reducing subsidies to industry and investment, encouraging the development of the services industry, and reducing barriers to labor mobility would result in a more balanced growth with an investment-to-GDP ratio that is consistent with medium-term saving trends, faster growth in urban employment, and a substantial reduction in the income gap between rural and urban residents.

Keywords: Sources of growth; pattern of growth; labor productivity; labor relocation; income inequality; sustainability of growth; China.

**_JEL Classification_** : E22, E23, E24, J21, O11, O14, O15, O40, O53.

## World Bank Policy Research Working Paper 3767, November 2005

_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 view of the World Bank, its Executive Directors, or the countries they represent. Policy Research Working Papers are available online at http://econ.worldbank.org._

### 1/ World Bank, Beijing Office (EASPR). Email: **akuijs@worldbank.org**

2/ International Monetary Fund. Email: **<u>taowanghome@yahoo.com</u>**

* We thank Bert Hofman for encouragement and comments. We also thank the participants of the Chongqing Conference of the China Economist Society in June 2005 for comments.

1
(MDRI).<sup>10</sup> However, this initiative is available only to LICs and eligibility criteria are restrictive. Given the eligibility requirements for HIPC and MDRI, none of the EMs has benefitted from multilateral debt restructurings.

# _Proposed Mechanisms_

Dissatisfaction with the process and outcome of debt restructurings for EMs has led to a few proposals being placed on the table in the past two decades. Sachs (1995) proposed an international bankruptcy mechanism to achieve ODRs which would entail a payment moratorium by the debtor country during debt renegotiations. The Sovereign Debt Restructuring Mechanism (SDRM) was proposed by the IMF in 2001 to reduce the creditor coordination problem in the event of debt restructurings for bond debt, the holdings of which are much more dispersed than the concentrated syndicated bank loans which featured in the debt crisis of the 1980s.<sup>11</sup> In addition, a voluntary code of conduct was proposed by Jean-Claude Trichet in 2001 which spelled out nine principles governing creditor-debtor relations during debt restructurings.<sup>12</sup> However, none of these proposals has gained traction so far.

The only mechanism which has been widely accepted by the market has been Collective Action Clauses (CACs).<sup>13</sup> They are a part of the terms and conditions governing a bond issue and can be invoked by the debtor government. The most frequently used CAC is one which entails a modification of payment terms requiring a favorable vote by a majority of the outstanding bond holders (75 percent typically; 85 percent used by some countries and could be lower). Empirical evidence on the impact of CACs on bond pricing has been inconclusive and their usefulness in achieving an ODR is questionable.<sup>14</sup>

> 10Details at:

> <u>http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTDEBTDEPT/0,,contentMDK:20260411~m enuPK:64166739~pagePK:64166689~piPK:64166646~theSitePK:469043,00.html</u> Also see World Bank 2011.

> 11 See Krueger (2002).

> 12 See Trichet (2001).

> 13 See Bradley and Gulati (2011), Eichengreen and Mody (2000), and Weinschelbaum and Wynne (2005). 14 For example, it was reported in the news on March 9 2012 that Greece was able to secure a 95.7 percent participation rate among private-sector creditors in its bond exchange by invoking CACs to make the deal

8
# **Figure C3 Skilled-unskilled wage skill premium and relative supply**

<!-- Start of picture text --> ARG BOL BRA CHL<br>-1 -.5 0 -.4 -.2 0 -.8 -.6 -.4 -.2 -.6 -.4 -.2<br>COL CRI ECU HND<br>-.6 -.4 -.2 0 -1 -.5 0 -.6 -.5 -.4 -2 -1.5 -1<br>MEX NIC PAN PER<br>-1 -.8 -.6 -.4 -1.5 -1 -.5 -.6 -.4 -.2 -.4 -.2 0<br>PRY SLV URY VEN<br>-1.5 -1 -.5 -1.4 -1.2 -1 -.8 -.3 -.2 -.1 -1.2 -1 -.8 -.6<br>Relative Supply, Skilled-Unskilled<br>1.1 1.3 1.6 1.2<br>1 1.2 1.15<br>.9 1.4 1.1<br>1.1<br>.8<br>1 1.05<br>.7 1.2 1<br>1.35 1 1 1.5<br>1.31.25 .95.9 .9.8 1.41.3<br>1.2<br>1.15 .85 .7 1.2<br>1.4 1.4 1.2 .9<br>1.3 1.3 1.1 .8<br>1.21.1 1.2 1 .7<br>1 1.1 .9 .6<br>Wage Premium, Skilled-Unskilled<br>1<br>1.3 1.1 .9<br>1.2 .9 .8<br>1.1 1 .8<br>1 .7 .7<br>.9 .9 .6 .6<br><!-- End of picture text --> Source: own computations based on SEDLAC (CEDLAS and World Bank).

48