rafmacalaba/datause-encoder-data huggingface dataset:
PoFcy RESEARCH WORKINC PAPER 1 733

# Summary findings

Using a specially designed survey of Japanese firms planning investmenrs in Asia, Kinoshira and Mody emphasize the importance of privately held information in making for¢ign investment decisions.

> Information on operating conditions hased oTn direct experience in a country is likely to be rlte mnost credible Information, but for investors new to a c ountry, information inferred from observing others investing in that country may he more influential. Initially, in fact,

> observing the actions of comppetitors seenms to lead to cascading investments in that -ountry, apparenitly through herd behavior (as in China anid Vietnam). Countries whiich do not draw a critical mass of investors are in danger of being bypassed for significint perto ls. Publicly available information is iniip(Jrtatlit in helping

> shape "average" perceptions about a couLntry, leading

potential investors to view particular locations favorably. Privatclv held information complements that public inforination, and ac-oulits for iniportant variations in rive.tinier plans.

Sulj¢jective perceptions about policy on foreign direct investinenit are also important.

- Pol cv designed co attract invcstors for exaimiple, .speci. _, zones_ for foreign investors -have been *.icce tful in nmanv instances, cspecially **in** East Asia, but have ilso beell a waste of scarce investmuent resources when not appropriately planned. And such policy is of lirtle alne in artracting those already investing in a country, or those who alruady perceive rivals to be active rhere

This paper - a product of the East Asia and Pacific Regional Of tice -- is part of a larger effort in the department to study trends in foreign investment in the region. Copies of the paper are av **1ilable** free ftrm the World Bank, 181 8 H Street NW, Washington, DC 20433. Please contact Rafaela Reff, room Q5- I3 9, n.luphonc 202 473-48 15, fax 202-477-0218, Internct address rreff(&worldbank.org. February 1997. (32 pages) _The Policy Researcbh WZorking Paper Series disseminates the findings ot w irk_ **_in_** _progress to_ **_encourage_** _the exchange of ideas ahout development issues._ **_An_** _objectiue ot the series is to get the findings out quickl,, eiven if the presentations are iess than fully polished._ **_The_** _papers carr,- the narnes of the authors and should be cited accordingly. The findings interpretations, and conclusions expressed in this paper are entirelv those o/ tie authors. Ther do not necessarily reprecotnt t?ie vitc of the World iznk, its Exetutti'e Directors. or the countries the- represent._ prrodluced by the l'olicy Research I **_i_** ¢se mi nation Center
|(4)<br>Contribution (%)|13|21<br>18|4|43|100<br>mn (2) of Table 4, by<br>olumn (3) measures the change<br>tari¤s and FDI equal to 0.056.<br> sum of all marginal R-squared.|
|---|---|---|---|---|---|
||||||u<br><br> <br>e|
|Contributions<br>ared<br>Share of|||||¢ cients of Col<br> R-squared in C<br> including only<br> variables in th|
|ginal <br>)<br>R-Squ|56|89<br>76|17|82|42<br>he coe<br>ginal <br>red of<br>tional|
|ar<br>(3<br>l|0.0|0.0<br>0.0|0.0|0.1|0.<br> t<br>ar<br>ua<br>di|
|M<br>na|||||on<br> m<br>sq<br>ad|
|Table 5: <br>(2)<br>s<br>R-squared<br>Margi|0.056|to Hubs<br>0.145<br> Stability<br>0.132|d. Cap.<br>0.073|ents<br>0.238|umn (2) is constructed based <br>les listed in Column (1). The<br> (2) when compared to the R-<br>e shareof contribution of the|
|ariable||istance <br>olitical|om. In|ndowm|in Col<br> variab<br>olumn <br>ates th|
|(1)<br> V||D<br> P|D|E|d <br>he<br> C<br>ul|
|ded|I|I + <br>I +|I +|I +|uare<br>ly t<br> in <br>calc|
|Inclu|+ FD|+ FD<br>+ FD|+ FD|+ FD|: R-sq<br>ing on<br>quared<br>mn (4)|
||Tari¤|Tari¤<br>Tari¤|Tari¤|Tari¤|Sum<br>Notes<br>includ<br>in R-s<br>Colu|

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assumes that it is possible to find a type and form of targeting that is perfect (i.e., no errors of inclusion or exclusion).<sup>10</sup> We look at each of these policies separately and jointly because there are strong advocates for one or the other approach. In this case, we find that uptake rates among the poor are all significantly higher. Compared to the results in Table 5 (with positive monthly charges and connection charges), the uptake rates increase by 19‐20 percentage points for poor connected households and by 39‐40 percentage points for poor unconnected households. Hence, large scale subsidization of the piped water service may have a positive impact on the poor gaining access to the service. Yet, despite the massive subsidization a still significant part of the poor population will still not be interested in making the switch from their current source to piped water, suggesting that subsidization can make a difference, but may not be sufficient to achieve universal coverage of piped water service.

# **5. Discussion and Conclusions**

In this paper, we present a case‐study from Sri Lanka, where we surveyed approximately 1,800 households in 2003, to clarify concepts and offer an operational interpretation of how WTP surveys can be used to estimate coverage of piped water connections. WTP surveys can be used to gauge household demand for improved network water and sanitation services by presenting consumers with a contingent scenario in which they can obtain the described service. These surveys are particularly useful as policy analysis tools because behavioral data are typically not available to estimate parameters of demand for service such as improved supply of safe, reliable and sufficient water. In addition to solving the problem of missing ‘behavioral data’, WTP surveys can contribute a valuable participatory element to the development planning process, and they provide an important type of ‘field experiment’ in which the analyst can mix control and realism in a practical way.

> 10 We investigate the options for targeting through geography and proxy means in a companion paper (Pattanayak et al., 2005). We conclude that while still imperfect, a mix of geographic and proxy means would be the most effective _form_ of targeting for poverty reduction. These could be combined with several _types_ of targeting, including placement of new pipelines (fundamentally geographic) and subsidized water connections and consumption (potentially based on proxy means).

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latent export lines from 1972 to 2012. In contrast, the number of products exported per year by the average country increased by 150 goods from 1972 to 2012.

# **4.1.1. Broad versus Narrow Sectoral Categories**

The results presented thus far rely on export data from COMTRADE using the SITC Rev.1 classification at the 5 digit level. The level of aggregation might affect the difference between standard measures of diversification and our proposed measure of latent diversification. In the extreme, at the highest possible level of aggregation, all countries’ export count would be one and thus the variance of both indicators across countries would be wiped out. The question then is, which of the two measures is more sensitive to the level of aggregation in the data?

One can perform two exercises to assess the extent to which this variance-attenuation bias is a function of the level of aggregation of the trade data. First, Figure 3 can be replicated with data at the 1, 2, 3, 4, and 5 digit level of disaggregation to construct a difference between the curve linking latent diversification and cross-sectional diversification and the 45 degree line. This exercise assesses the effect of aggregation on the difference between the two measures of diversification. To make the exercises comparable across aggregation levels, one needs to rescale the two measures of diversification by the maximum number of export goods at each level of disaggregation.

The exercise requires an empirical approximation of the curve linking the two measures of diversification. We obtain this approximation by estimating the polynomial of order 5 that best fits the relationship between the average number of products exported per year and the number of latent export lines in 2012. We then use the predicted polynomial to calculate (twice) the area between the curve and the 45 degree line (the distance of the polynomial with respect to the 45 degree line). Mathematically, the exercise can be represented as:

## where pk(x) is the predicted polynomial for each level of aggregation k.

The results of the exercise, presented in Panel A of Figure 5, show that the difference in the area below the five polynomials predicted for each level of aggregation is larger when we move from the 1-digit to the 2-digit level of aggregation, and from the 4-digit to the 5-digit level of aggregation. The difference, however, does not vary much for intermediate levels of aggregation. This shows that disaggregation does 15
or Rs 14,529 (246.25 USD) using again the same (conservative) duration spell of individuals as clients and interest rate to compute the present value.<sup>46</sup> The provision of training involves two main costs. First, the one-time costs of developing the materials for trainers and trainees as well as the transport, lodging and salaries for the training of trainers (NRSP staff). Second, the recurring costs of training clients including the actual training sessions as well as the travel allowances and salaries of the staff involved. The cost per trainee if the one-time costs were included is USD 126.32 and USD 20.44 if they are not. Since the one-time fixed cost can be amortized over many trainees (not just the ones trained in the study), we only include the recurring costs in the benefit-cost calculation. The net benefit per individual offered training to the lender is therefore -8 USD and around 225.80 USD to the client. In other words, the lender loses money by offering training, while the client would benefit even if he paid for it.

# **<u>7.Conclusions</u>**

In this paper we take borrowing and managerial capital constraints as the two main barriers to firm growth in developing countries. The experimental design alleviates each potential barrier in turn by offering a subset of the borrower groups an 8 day long business training course and the opportunity to participate in a lottery for a loan up to 7 times the average loan size. We find that offering business training leads to improved business and household outcomes, but only among men.

The gender differences we find are not unique to the context we study. De Mel et al. (2009) study a comparable sample of female entrepreneurs in Sri Lanka and find that they tend to overinvest in fixed assets relative to male entrepreneurs, consistent with the idea that investment in fixed assets is a (costly) strategy to protect resources that might otherwise be expropriated by men in the household. Using a similar experimental design with a larger sample that includes businesses with five or more employees, Fafchamps et al. (2014) find that small female businesses in Ghana are very similar to those in Sri

> 46 While the average spell of individuals as clients is the correct duration to compute the benefit to the lender, one may argue for a longer duration when computing the private benefits to the client from increased expenditure.

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<!-- Start of picture text --> 10 No change Increase in VAT of 1.5 percentage points<br>in VAT (1)<br>8 No output Linear output Non-linear output effect (4)<br>effect (2) effect (3)<br>—1__ ee<br>Initial VAT Initial VAT<br>6 rate of 12% rate of 24%<br>©,< 5.0 —— ee<br>o<br>s<br>ze #4 3.4<br>2<br>90o 2.0 24 2.0<br>=o<br>Co2o<br>pi 0| L —<br>-0.9<br>-2<br>-2.8<br>-4<br>m@ Change in debt to GDP ratio lm Endogenous change in output<br><!-- End of picture text -->
|P086877|2006|2011|5/15/2011|12 Closed|Morocco|
|---|---|---|---|---|---|
|P086877|2006|2012|1/4/2012|13 Closed|Morocco|
|P086877|2006|2013|8/22/2012|14 Closed|Morocco|
|P086877|2006|2013|6/20/2013|15 Closed|Morocco|
|P086877|2006|2014|1/3/2014|16 Closed|Morocco|
|P086877|2006|2014|6/22/2014|17 Closed|Morocco|
|P086877|2006|2015|11/29/2014|18 Closed|Morocco|
|P086886|2006|2006|12/29/2005|1 Closed|Yemen,Republic of|
|P086886|2006|2006|6/28/2006|2 Closed|Yemen,Republic of|
|P086886|2006|2007|8/23/2006|3 Closed|Yemen,Republic of|
|P086886|2006|2007|3/19/2007|4 Closed|Yemen,Republic of|
|P086886|2006|2008|9/18/2007|5 Closed|Yemen,Republic of|
|P086886|2006|2008|3/10/2008|6 Closed|Yemen,Republic of|
|P086886|2006|2009|9/10/2008|7 Closed|Yemen,Republic of|
|P086886|2006|2009|3/31/2009|8 Closed|Yemen,Republic of|
|P086886|2006|2010|12/16/2009|9 Closed|Yemen,Republic of|
|P086886|2006|2010|5/12/2010|10 Closed|Yemen,Republic of|
|P086886|2006|2011|11/22/2010|11 Closed|Yemen,Republic of|
|P086886|2006|2011|6/5/2011|12 Closed|Yemen,Republic of|
|P086886|2006|2012|10/2/2011|13 Closed|Yemen,Republic of|
|P086886|2006|2012|6/25/2012|14 Closed|Yemen,Republic of|
|P086886|2006|2013|12/26/2012|15 Closed|Yemen,Republic of|
|P086886|2006|2013|6/25/2013|16 Closed|Yemen,Republic of|
|P086886|2006|2014|10/21/2013|17 Closed|Yemen,Republic of|
|P086886|2006|2014|12/28/2013|18 Closed|Yemen,Republic of|
|P086903|2005|2008|6/20/2008|1 Closed|Sierra Leone|
|P086943|2003|2008|10/18/2007|1 Closed|Tanzania|
|P086949|2005|2005|5/31/2005|2 Closed|Romania|
|P086949|2005|2006|10/24/2005|3 Closed|Romania|
|P086949|2005|2007|9/9/2006|4 Closed|Romania|
|P086949|2005|2007|3/7/2007|5 Closed|Romania|
|P086949|2005|2008|12/4/2007|6 Closed|Romania|
|P086949|2005|2008|6/30/2008|7 Closed|Romania|
|P086949|2005|2009|2/11/2009|8 Closed|Romania|
|P086949|2005|2010|12/9/2009|9 Closed|Romania|
|P086949|2005|2010|5/11/2010|10 Closed|Romania|
|P086949|2005|2011|10/17/2010|11 Closed|Romania|
|P086949|2005|2011|6/27/2011|12 Closed|Romania|
|P086949|2005|2012|11/13/2011|13 Closed|Romania|
|P086949|2005|2012|2/8/2012|14 Closed|Romania|
|P086949|2005|2013|9/24/2012|15 Closed|Romania|
|P086949|2005|2013|12/7/2012|16 Closed|Romania|
|P086949|2005|2013|3/25/2013|17 Closed|Romania|
|P086953|2005|2005|4/30/2005|1 Closed|El Salvador|
|P086953|2005|2006|12/27/2005|2 Closed|El Salvador|
|P086953|2005|2006|6/7/2006|3 Closed|El Salvador|
|P086953|2005|2007|3/30/2007|4 Closed|El Salvador|
<mark>Gehrke, E. and R. Hartwig (2018). “Productive effects of public works programs: What do we know? What should we know?”</mark> _<mark>World Development</mark>_ <mark>(107): 111-124.</mark> <mark>Goldberg, J. (2016). “Kwacha Gonna Do? Experimental Evidence about Labor Supply in Rural Malawi.”</mark> _<mark>American Economic Journal: Applied Economics</mark>_ <mark>8(1): 129–149.</mark> Goldin, C. (1995). The U-shaped female labor force function in economic development and economic history. In T.P. Shultz (Ed.), Women’s Human Capital and Economic Development. University of Chicago Press.

Groh, M., N. Krishnan, D. McKenzie, and T. Vishwanath (2016). “Do Wage Subsidies Provide a Stepping-Stone to Employment for Recent College Graduates? Evidence from a Randomized Experiment in Jordan.” _The Review of Economics and Statistics_ 98(3): 488–502.

Haddock, S,. A. Raza, and G. Palmisano (2019). Addressing Childcare in the World Bank Portfolio: Approaches, Experiences, and Lessons Learned. World Bank, Washington DC.

Halim, D., E. Perova, and S. Reynolds (2022). "Childcare and Mothers’ Labor Market Outcomes in Lower- and Middle-Income Countries." _The World Bank Research Observer_ 38(1): 73-114.

Heath, R. and S. Jayachandran (2017). The Causes and Consequences of Increased Female Education and Labor Force Participation in Developing Countries." National Bureau of Economic Research Working Paper 22766.

Ho, L., S. Jalota, and A. Karandikar (2024). "Bringing Work Home: Flexible Arrangements as Gateway Jobs for Women in West Bengal." STEG Working paper 080.

Imbert, C. and J. Papp (2015). “Labor market effects of social programs: evidence from India’s Employment Guarantee.” _American Economic Journal: Applied Economics_ 7(2): 233-263.

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Jayachandran, S. (2015). "The Roots of Gender Inequality in Developing Countries." _Annual Review of Economics_ 7: 63-88.

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<mark>Klasen, S. (2019). "What Explains Uneven Female Labor Force Participation Levels and Trends in Developing Countries?"</mark> _<mark>World Bank Research Observer</mark>_ <mark>34(2): 161-197.</mark> Leight, J. and E. Mvukiyehe (2023). “Short-term and long-term effects of cash for work: Evidence from a randomized controlled trial in Tunisia.” IFPRI Discussion Paper 02184.

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# **1.  Introduction**

Many developing countries with large endowments of natural resources face daunting challenge, including macroeconomic volatility and Dutch disease-related phenomena. Despite the economic prospects of discovering natural resources, managing those resources effectively poses a serious challenge. Developing countries have often fallen prey to the _natural resource curse_ , essentially in the form of weak institutions, low efficiency of public spending, poor governance, and heightened risks of civil conflicts (van der Ploeg, 2011). Moreover, commodity price volatility creates macroeconomic instability, especially in economies that heavily rely on extractive commodity exports. And sharp inflow of foreign currency associated with resource windfalls may lead to Dutch disease effects, in which nonresource traded goods will be less price competitive on the export market due to currency appreciation.

The natural resource management framework has been dominated by the permanent income hypothesis (PIH) approach. According to the PIH, resource windfalls should be saved in their entirety in the form of financial assets, and to ensure fiscal sustainability the nonresource primary deficit should be limited to the perpetuity value of resource wealth. In turn, given a projection for nonresource revenue, the nonresource primary balance benchmark translates an estimate of the sustainable level of expenditure (Baunsgaard et al., 2012 and Lundgren et al., 2013). However, recent studies questioned the relevance of the PIH for lowincome countries<sup>1</sup> as it ignores that these countries are both capital and credit constrained. This suggests to devise more flexible fiscal management frameworks that allow governments to scale up spending financed by resource revenue to meet the urgent infrastructure needs—

> 1See Collier et al. (2010), , van der Ploeg (2011),, International Monetary Fund (2012), Lundgren et al. (2013), and van den Bremer and van der Ploeg (2013).

2
<mark>The school your child attends obtained better results than the average school in your district and province, and much better results than the average multigrade, rural school in the region. However, students in this school have not reached the goals set for their grade.</mark> A similar graph could be used for teachers and principals, replacing “My class” instead of “Me,” to compare the performance of one class relative to the entire grade. An additional plot could be added to show teachers where each individual student falls, suggesting that they focus on the students in critical situation or at-risk. Figure 12 shows an example. The important thing is to report results with clear markers that help easily identify different performance groups and where each student falls. Students are assigned a number (S1 through S32 in this case) and a list matching names and numbers is given to the teacher as a legend, along with simple instructions on how to work with students at each level of performance. Again, all of this is possible to do using Rasch scores, as long as the test fits the model. Raw scores, on the other hand, would not provide adequate information to produce this type of report.

**Figure 12. Map of reading performance in one third grade class**

<!-- Start of picture text --> 70<br>4. Satisfactory: can read longer, descriptive texts and infer information from them<br>60 3. Basic: can read short texts and infer information from them<br>2. At-risk: only can read<br>50 short texts and<br>understand them literaly<br>40<br>1. Critical: only can<br>read words and<br>30 sentences<br>20<br>10<br>0<br>0 10 20 30<br>Number of students<br>S22 S23 S24 S25 S26<br>S17 S18 S19 S20 S21<br>S14 S15 S16<br>S11 S12 S13<br>S9 S10<br>S7 S8<br>S3 S4 S5 S6<br>S2<br>Scores in the test<br>S1<br><!-- End of picture text -->

**_Using reading tests to define standards._** Clearly, the reality of Junin lags far behind from the curricular standards for reading comprehension in second grade. Using reports of individual and school-level results in the census evaluations in a format like the one suggested in this discussion could help illustrate the distance between the current situation and curricular goals. However, it could also turn out to be discouraging. Thus, it is important to set short-term (one-year) goals that could be reachable with the resources schools currently have, and then offer additional pedagogical support to those schools in the bottom quintile of performance to help them reach the goals. For a goal to have a mobilizing power, it needs to be: (1) clear and easy to understand by everyone involved (parents, students, teachers, administrators, authorities); (2) shared by all schools (school-specific goals can be set in addition to a general, common goal); and (3) easy enough so that all schools can potentially reach it, but hard enough to ensure progress will be made to close the gap between current performance and curricular standards. For instance, one form of standard could be that “every student in second grade would be able to read short stories

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