rafmacalaba/datause-encoder-data huggingface dataset:
Financial Regulation and Development Figure 7: Policy Change and Trends: Branch Installation <!-- Start of picture text --> 2000 2005 2010 2015<br>year<br>Branches − Small Banks Branches − Big Banks<br>2000 2005 2010 2015<br>year<br>Num First Branches − Small Num First Branches − Big<br>150<br>100<br>50<br>0<br>15<br>10<br>5<br>0<br><!-- End of picture text --> _Note:_ This figure plots the coefficients of the overall trend exhibited by small and larger banks in overall branches and rural branches for big banks (blue) and small banks (red). The policy is implemented in April 2011 (shown by the red vertical line). As is evident, while branch accumulation does not differ before the policy change, afterwards big banks start to install more branches overall (upper panel) and more rural branches (lower panel). Appendix F reports the same picture, showing the difference with 95% confidence intervals.

26
# **Table of Contents**

|**_Ap_**|**_pendices ............................................................................................................. 2_**|
|---|---|
|**1.1**|**Materials ................................................................................................................... 2**|
|**1.2**|**Text/WhatsApp Messages .......................................................................................... 6**|
|**1.3**|**Description of Sample and comparison with other localities in States .......................... 8**|
|**1.4**|**Omnibus balance tests of localities’ sample .............................................................. 10**|
|**1.5**|**Main regression tables without covariates................................................................ 11**|
|**1.6**|**Main regression tables without clustering ................................................................ 12**|
|**1.7**|**Balance of survey sample ......................................................................................... 13**|

1
price of the good they produce falls below a certain price) the government will set a tariff to compensate producers for the welfare loss generated by the fall in their income.

The existing literature, however, has not addressed the systemic effects of such unilateral policies. Unilateral pro-poor trade policies (when applied by a "large" country or simultaneously applied by a sufficiently large number of "small" countries) create a coordination problem. The game theory portrait below exemplifies the problem. When acting unilaterally each country will find it optimal to protect its own poor. But, in so doing, they end up in an inferior equilibrium.

|Strategies<br>CountryA/CountryB|Protect|Don’t protect|
|---|---|---|
|Protect|1,1|3,0|
|Don’t protect|0,3|2,2|

Unilateral "pro-poor" trade policies have created a world where the poor end up facing higher tariffs, thus depressing global demand for the goods the poor produce. If all countries protect their low-wage sector, even small countries will behave like a large country, thus depressing demand for the goods that the poor produce.

Note that the existence of such coordination problem does not require that the poor are employed in the same sector in each country. It is sufficient that sectors' wages show a high ranking correlation across countries- a hypothesis that data support (section 5.5 provides evidence for the existence of this correlation).

# **4. Data and Methodology**

The Government of India’s National Sample Survey Office (NSSO) regularly conducts national household surveys on employment and consumption. For the present exercise, the data are taken from the 68<sup>th</sup> round conducted during the period from July 2011 to June 2012, specifically survey data collected from the questionnaire referred to as "Schedule 10: Employment and Unemployment". The number of households surveyed was 101,724 (59,700 in rural areas and 42,024 in urban areas). These sample households correspond to 456,999 individuals (280,763 in rural areas and 176,236 in urban areas).

# **4.1 Matching household survey data with tariffs and NTMs**

The paper uses a novel approach to assess barriers that individual producers across the income distribution face in international markets. In doing so, it combines household survey data on income and consumption from India with information on lowest applied tariffs in the top 15 destination markets (EU counted as one) for Indian products in 2012.<sup>6</sup> These importers account for more than 75% of world imports from India. This is done by matching India’s National Industrial Classification (NIC) – which is based on the International Standard of Industry

> 6 These importers account for more than 75% of world imports from India.

7
# **References**

- Abadie, A., Athey, S., Imbens, G., and Wooldridge, J. (2017). When Should You Adjust Standard Errors for Clustering? _NBER Working Paper No. 24003_ .

- Abadie, A., Drukker, D., Herr, J. L., and Imbens, G. W. (2004). Implementing Matching Estimators for Average Treatment Effects in Stata. _The Stata Journal_ , 4(3):290–311.

- Ahrens, A., Hansen, C. B., and Schaffer, M. E. (2018). pdslasso: Stata module for post-selection and post-regularization OLS or IV estimation and inference. _Statistical Software Components S458459, Department of Economics, Boston College. https://ideas.repec.org/c/boc/bocode/s458459.html_ .

- Almås, I., Armand, A., Attanasio, O., and Carneiro, P. (2018). Measuring and Changing Control: Women’s Empowerment and Targeted Transfers. _The Economic Journal_ , 128(612):F609– F639.

- Anderson, M. L. (2008). Multiple Inference and Gender Differences in the Effects of Early Intervention: A Reevaluation of the Abecedarian, Perry Preschool, and Early Training Projects. _Journal of the American Statistical Association_ , 103(484):1481–1495.

- Anderson, S. and Eswaran, M. (2009). What Determines Female Autonomy? Evidence from Bangladesh. _Journal of Development Economics_ , 90(2):179–191.

- Antecol, H., Eren, O., and Ozbeklik, S. (2014). The Effect of Teacher Gender on Student Achievement in Primary School. _Journal of Labor Economics_ , 33(1):63–89.

- Asadullah, M. N. and Wahhaj, Z. (2016). Missing from the Market: Purdah Norm and Women’s Paid Work Participation in Bangladesh. _IZA Discussion Paper No. 10463_ .

- Asgari, S. and Dasgupta, N. (2010). When Does Contact with Successful Ingroup Members Change Self-Stereotypes? A Longitudinal Study Comparing the Effect of Quantity vs. Quality of Contact with Successful Individuals. _Social Psychology_ , 41(3):203–211.

- Asian Center for Development (2015). Garment Workers in Bangladesh. Social Impact of the Garment Industry. _Technical Report_ .

- Atkin, D. (2009). Working for the Future: Female Factory Work and Child Health in Mexico. _Working Paper_ .

- Avolio, B. J. and Bass, B. M. (2014). Multifactor Leadership Questionnaire (MLQ). _Statistic Solutions_ .

32
20 close as we can get to infinity in this 50 period model-- will cut the effective tax rate, at that level of uncertainty, from the current 50.1% to 44.21%. The cost in terms of revenue is however large as revenue fal.s to about 88.2% of its current level.

Table 3: Incentive and Revenue Effects of Carry Forward Provisions (for a standard deviation of 1)

|years|BASE|Revenue|2%|Revenue|5%|Revenue|
|---|---|---|---|---|---|---|
|of|MERT|as %|MAT|as % of|MAT|as %|
|Carry<br>Forwa|<br>rd|current|MERT|current|MERT|current|
|4|50.1%|100%|52.5%|104.7%|56.1%|111.9%|
|10|44.7%|89.2%|47.2%|94.2%|51.0%|101.7%|
|50|44.2%|88.2%|46.7%|93.2%|50.5%|100.7%|

The introduction of a 2% minimum asset tax would reduce the loss by maintaining revenue at 93.2% of its current level. This suggest that the efficiency costs of a minimum tax can be offset by a extension of the carry forward provision length. However, to ensure that the revenue objectives of the tax are met, the MAT rate needs to be adjusted as well. For a 50 years carry forward period, a 5% MAT would do the job in terms of revenue but it would do so by offsetting the effect on the MERT of the increase in the carryforward provision. On the other hand, for a 4 year carry forward period of 4 years, by adopting a 5% minimum tax on assets, the government could increase its revenue by almost 11%. This would be achieved at the cost of an increase in MERT to 56.1%. A major difference between the two tax designs however, is that the high-MAT/long-carry-forward-period design reduces the distortions against risk takers implied by the limit on the carry forward provision in the other tax set up.

Throughout we have assumed that there was no carry forward provision under the MAT itself. But in some countries, payments under the MAT in excess of regular corporate tax liabilities can also be carried forward, to be applied against tax liabilities in excess of the MAT in years where that situation actually occurs. For example Mexico's MAT allows for three years of carry-over of excess MAT payments (and five years of carry over of regular losses under the straight corporate tax law).
# **_Post-Communist Transition Economies_**

After the fall of the Berlin Wall, the transition economies of Eastern Europe and the former Soviet Union provided a unique setting to study the influence of both relationships and market-supporting institutions on trade credit: “The governments in these countries have attempted to build market-oriented legal systems to replace the bureaucratic controls of the old planned economy. At the same time, firms have been entering and developing new relationships among themselves replacing the networks that broke down with the end of the planned economy.” (Johnson, McMillan, and Woodruff, 2002, p. 222).

In this context, trade credit helped jump start the private sector. For example, it has been argued that despite (or perhaps because of) a dysfunctional formal banking system, credit redistribution through private trade credit markets played a key role in Poland’s economic transition, relying upon “a minimum set of market institutions.” (Coricelli, 1996, p. 645).

Based on detailed surveys similar to the one used in Vietnam in McMillan and Woodruff (1999) of about 300 firms in five countries (Poland, Romania, the Russian Federation, the Slovak Republic, and Ukraine), Johnson, McMillan, Woodruff (2002) (Hereafter JMW) examined how trade credit worked and the role of courts in ensuring that customers paid their suppliers and that suppliers’ products were of acceptable quality. At the time of the surveys, these countries had “functioning but relatively weak court systems” with cross-country indicators ranking their courts well below most advanced countries but above those in very poor countries (JMW, 2002, p. 222).

Similar to the results for Vietnam, JMW (2002) found that suppliers were more likely to extend credit to customers in the five transition economies when they had personal knowledge of them or could obtain information about their past business dealings. For example, 15 percent more of a supplier’s goods were paid for after delivery if the customer was a family member or a friend; and 12 percent more was paid with delay if the trading relationship between supplier and customer was at least two months old. Suppliers received payment after delivery for 15 percent more of their goods when transacting with customers whom they had obtained information about from other manufacturers, and those that belonged to trade associations that provided 19
34 Table 4. Infant and Child Mortality Rates in Cote d' Ivoire, 1967;86 LMS 1985/86

||Neonatal|Postnatal|Infant|Child|
|---|---|---|---|---|
|Variables|mortality<br>rate per<br>1.000|mortality<br>rate per<br>1.000|mortality<br>rate per<br>1.000|mortality<br>rate per<br>1.000|
|Total|55|46|102|60|
|Demographic Variables|||||
|Sex|||||
|Male|58|45|103|62|
|Female|52|48|100|58|
|Mother's age at birth|||||
|<20|64|49|113|63|
|20-24|62|45|106|50|
|25-29|40|43|82|62|
|30-34|36|49|85|56|
|35-39|54|37|91|78|
|40+|84|63|146|54|
|Birth order|||||
|1st|60|47|107|49|
|2nd|43|39|82|47|
|3rd|45|36|82|48|
|4th|42|39|81|57|
|5th|42|41|83|69|
|6th|50|58|108|86|
|7+|89|65|154|80|
|Variables for Use of Ut|ilization of|Health Ser|vices||
|Place of delivery|||||
|(last birth)|||||
|Maternity|41|43|85|44|
|Other|75|51|126|82|
|Prenatal visits|||||
|(last birth)|||||
|<br>None|84|54|138|73|
|1-3|48|53|100|68|
|4-5|45|50|94|61|
|6|52|33|85|48|
|7+|50|41|91|45|
# **_1. Introduction_**

Understanding the determinants of firm turnover has become of increasing interest to policymakers as they have come to recognize both its important direct effects on the composition of surviving firms, as well as its indirect effects operating through the changes it brings about on the local economic environment in which firms operate. There is now considerable evidence as to the effect of various firm-level and some industrylevel variables on firm productivity, however, much less is known about the effect of the local economic environment on firm entry and exit. This paper attempts to address this gap in the received literature using sub-national data on Moroccan manufacturing firms from 1985-2001.<sup>1</sup> Explorations of regional variations in economic performance and wealth have placed considerable importance on the role of agglomeration externalities. Loosely defined as the effects of the local industrial structure on firms, agglomeration externalities are thought of as providing a possible explanation for the tendency of economic activity to concentrate in small pockets of the world. Given that businesses generally face high wage and rental costs in these highly congested regions, this suggests that firms derive substantial benefits from the local industrial structure that compensate for these additional costs. The empirical literature on the effects of agglomeration externalities on various measures of firm performance is well established,<sup>2</sup> however, there relatively little evidence on the effects of these externalities on firm entry and exit. Given that agglomeration externalities are generally assumed to operate through

> 1 Fraser Thompson thanks Marcel Fafchamps for making the data available for his dissertation and related work.

> 2 See Rosenthal and Strange (2004) for a review of the recent empirical and theoretical literature.

2
# 1. Introduction

On a global scale, developing countries have become more decentralized since the 1970s. As reported in the _World Development Report 1997_ , in many countries the postcolonial period of nation-building during the 1950s and 1960s was followed by a shifting of public responsibilities toward lower levels of government. Decentralization can take many forms, ranging from administrative decentralization, in which specific state functions are transferred to lower levels of government while retaining budget authority at the central level, to the complete devolution of resources and political authority to local governments. One of the driving forces for such processes is the possibility of matching core public services with local preferences. Consequently, decentralization processes often start with passing the responsibility of planning and executing services in education, health, water, sanitation, garbage collection etc. to lower levels of government. Later in the process, local governments are also provided increased possibilities to influence and structure the local economy. With such processes, important instruments of social policy to reduce poverty become the responsibility of local governments.

With the need to design local anti-poverty strategies comes the need for local information. Such local information has at least two dimensions. One is to obtain quantitative data on poverty, its distribution and relationship to factors such as service access, the labor market, education or health. The second is to obtain feedback from the population, and especially the poor, on their satisfaction with current public (and private) programs as well as to assess priorities for future local policies, including for public spending.

This paper reports on the implementation and use of a rapid, integrative city survey in Cali, Colombia, to meet such local information needs. The rapid survey was an input into the design of a comprehensive development strategy for the city, which was undertaken by the Municipality of Cali with support from the World Bank. Requirements of the survey were that it had to be designed and implemented rather quickly to feed into the process of strategy formulation and that it had to be relatively moderate in cost so that the municipality would be able to field it as a monitoring survey out of its own budget in the future. Given these restrictions, it was to be as comprehensive as possible, catering to the need for quantitative information on poverty as well as for more qualitative information on perceptions and priorities.

Survey results proved insightful for local policy formulation in four areas. First, the survey collected information on a variety of poverty characteristics that produced, in part, 2
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Beine, Michel, Fréderic Docquier, and Hillel Rapoport, 2008. “Brain Drain and Human Capital Formation in Developing Countries: Winners and Losers,” _The Economic Journal 118_ (April) 631-652.

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22
Policy Research Working Paper 7910

# **Abstract**

In low-income, capital-scarce economies that face financial and fiscal constraints, managing revenues from newly found natural resources can be a daunting challenge. The policy debate is how to scale up public investment to meet huge needs in infrastructure without generating a higher public deficit, and avoid the Dutch disease. This paper uses an open economy dynamic stochastic general equilibrium model that is compatible with low-income economies and calibrated on Ugandan’s data to tackle this problem. The paper explores macroeconomic dynamics under three stylized fiscal policy approaches for managing resource windfalls: investing all in public capital, saving all in a sovereign wealth fund, and a sustainable-investing approach that proposes a constant share of resource revenues to finance public investment and the rest to be saved. The analysis finds that a gradual scaling-up of public investment yields the best outcome, as it minimizes macroeconomic volatility. The analysis then investigates the optimal oil share to use for public investment; the criterion minimizes a loss function that accounts for households’ welfare and macroeconomic stability in an environment featuring oil price volatility. The findings show that, depending on the policy maker’s preference for stability, 55 to 85 percent of oil windfalls should be invested.

This paper is a product of the the Office of the Chief Economist, Africa Region and the Macroeconomics and Fiscal Management 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 azeufack@worldbank.org, alexandre. kopoin@oecd.org, jnganou@worldbank.org, ftchanatchana@worldbank.org, and laurent.kemoe@umontreal.ca _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