rafmacalaba/datause-encoder-data huggingface dataset:
Revenue uncertainty and the choice
            of tax instrument during the transition in Eastern Europe
The author examines the eroding tax base
            facing transitional economies by employing a framework that
            allows risk factors in assessing tax instruments.  In an
            uncertain world, the author asks, which tax instruments
            should be used?  The author examines Eastern Europe's
            revenue problem, including the implications for public
            revenue of different causes of uncertainty - and
            investigates which taxes are "better" at
            generating revenue.  The author defines a "better"
            tax as one that has greater stability in a risky environment
            (that is, less variation in generating a target revenue) and
            has the least adverse impact on the economy (for example, on
            consumption).  The author employs the framework to explain
            much of the output and revenue fall in transitional
            economies.  The term-or-trade shocks from the collapse of
            the CMEA trade as well as the rigid but uncertain economic
            responses in transitional economies are all important
            factors. The results of the authors model indicate that
            import tariffs are more effective than other traditional tax
            instruments in raising revenue, especially if real revenue
            is defined in dollar terms (the price anchor).  The
            contraction in domestic output and prices and the
            devaluation of the real exchange rate needed in the
            transition are significant reasons that favor imports as a
            tax base over other revenue sources. To emphasize the
            transitory nature and reversibility of the policy
            recommendation, import tariffs should be implemented in the
            form of a temporary uniform import surcharge.  This
            conclusion seems to hold whether the government formulates
            tax policy with correct or incorrect expectations.  But the
            choice of revenue target matters.  All tax instruments will
            do almost equally well if the commonly used tax-to-Gross
            Domestic Product ratio is the target.  But it is a
            misleading measure since the ratio does not reflect the
            immense erosion of domestic tax bases in the economy and how
            real revenue in absolute level may actually be decreasing
            rapidly as a result.  The revenue decline and uncertainty
            can also be viewed as a necessity toward downsizing the
            large state sector and in redirecting trade away from former
            nonmarket partners.  The results emphasize that restoring
            revenue should never lead to maintaining subsidies toward
            nonprofitable state enterprises or other public spending no
            longer relevant in market system.  Doing so will only lead
            to unreasonably high taxation.  No less important is moving
            assets out of collapsing sectors, privatizing them, and
            making them productive again.
The regulation and supervision of
            domestic financial conglomerates
Financial conglomerates are groups of
            financial institutions related by ownership or control.
            Specific regulatory and supervisory issues arise when
            financial services -- such as commercial and retail banking,
            securities underwriting and trading, investment management,
            and insurance underwriting -- are provided by a  financial
            conglomerate structure.  The author provides a handbook for
            authorities responsible for financial conglomerate
            regulation and supervision, identifying key issues, spelling
            out regulatory and supervisory alternatives, and describing
            both preferred solutions and alternatives.  He makes
            reference to the regulatory framework adopted in the
            European Economic Community.  Among the main tools available
            to the authorities are prudential regulations, accounting
            consolidation, and consolidated supervision.  Prudential
            regulation for financial conglomerates preferably would be
            applied on a uniform and fully consolidated basis.
            Alternatively, existing regulations applicable to different
            financial sectors can be modified, in particular to mitigate
            the potential that intragroup transactions overstate capital
            or earnings.  Accounting consolidation of the financial
            entities in a group is a prerequisite for consolidated
            prudential regulation and improves the transparency of the
            group's financial position.  The authorities should use
            consolidated supervision to ensure that the risks from all
            group entities are identified and assessed.
Nontariff measures and developing
            countries : has the Uruguay Round leveled the playing field
In the policy environment prevailing
            before implementation of the Uruguay Round results, exports
            from developing countries face significant nontariff
            measures in industrial countries. Based on 1992 trade flows,
            the import coverage ratio of nontariff measures on this
            trade was more than 18 percent, compared with less than 11
            percent for trade among industrial countries. Trade
            liberalization measures agreed to in the Uruguay Round will
            dramatically reduce the incidence of nontariff measures on
            developing country exports: the coverage ratio will drop to
            less than 4 percent on nonoil exports. This change has the
            dual effect of increasing export market opportunities for
            developing countries and of substantially reducing - if not
            eradicating - the relatively negative bias against
            developing country exports. These impressive results from
            the Uruguay Round are attributed to
            "tariffication" in agriculture, the abolition of
            the Multi-Fibre Arrangement (MFA), and the elimination of
            voluntary export restraints (VERs) under the safeguards
            agreement. But all these aspects of liberalization will not
            happen instantaneously when the Uruguay Round results come
            into force. Agricultural tariffication will occur
            immediately, but the MFA will be phased out over ten years
            and VERs will be eliminated over four years. Considering the
            extent of the liberalization presaged by these policy
            changes, the authors speculate about likely sources of
            pressure for measures to mitigate the effects of removing
            nontariff measures. They conclude that the greatest risks
            will probably come from safeguards and antidumping. The new
            safeguards agreement permits the use of quantitative
            restrictions to stem the flow of injurious imports, and
            although the agreement tightens existing GATT rules in some
            respects, it loosens them in others. The antidumping
            instrument has been used with increasing frequency by an
            increasing number of countries in the past two decades or
            more. The efforts of several governments in the Uruguay
            Round to impose additional controls on antidumping met with
            little success, and antidumping continues to offer
            considerable scope for imposing protectionist trade measures.
NAFTA's Implications for East
            Asian exports
Several studies have quantified the
            influence of the North American Free Trade Agreement (NAFTA)
            and the earlier Canada - United States Free Trade Agreement
            on member countries. Less attention has been paid to their
            effects on nonmembers. The authors try to quantify
            NAFTA's third-party effects on East Asia using a
            partial equilibrium trade model and a gravity flow model.
            They identify and focus on East Asian export sectors that
            are especially at risk of trade diversion. Their results
            suggest that the NAFTA-induced trade diversion losses could
            range from $380 million to $700 million. The larger figure
            represents less than 1 percent of East Asia's nonoil
            exports to the United States. Their analysis also indicates
            that losses would be concentrated in a few sectors - such as
            textiles, clothing, and ferrous metals - where high U.S.
            trade barriers exist. A larger share of Hong Kong and Macau
            trade would be diverted than trade in other East Asian
            economies because textiles and clothing represent a larger
            share of their exports. Economies specializing in such
            products as machinery and equipment (Singapore) would have
            relatively little trade diverted. East Asia's trade
            losses might be reduced by roughly half once the results of
            the Uruguay Round are implemented because that will lower
            the preference margins NAFTA members can extend to each
            other. To put things in perspective: the trade losses East
            Asian economies might incur because of NAFTA are roughly 1
            percent of the gains they will receive from successful
            implementation of the Uruguay Round results.
Which foreign investors worry about
            foreign exchange risk in South Asia and why
The authors show that the potential
            benefit to a host country of forward markets or of foreign
            exchange guarantees depend on the investor's country of
            origin and on specific characteristics of investment.  They
            show this in terms of the effects on foreign-exchange risks
            and on the amount of foreign direct investment taking place.
            Their main lessons for foreign investors: (a) the benefits
            of hedging exchange risks through forward markets vary
            substantially, depending on the investor, the type of
            investment, and, for foreign direct investment (FDI), the
            direction of the market supplied; (b) for short lived
            investment or FDI targeted to the host country market, the
            potential for gain from forward contracts is substantial
            because in the short run, nominal exchange rate fluctuations
            tend to be larger than real exchange rate fluctuations; (c)
            for long-lived investments or export oriented FDI, the gains
            from forward contracts will be much smaller.  Firms
            investing in long lived assets or in activities targeted to
            exports net natural insurance from the correlation between
            the nominal exchange rate and the firm's earnings in
            host-country currency; and (d) the evidence on exchange rate
            and price fluctuations between 1975 and 1991 suggests that
            the demand for coverage is likely to be stronger in South
            Asia than in Latin America.  In East Asia, the evidence is
            mixed. Their main lessons for host country governments: (a)
            in the short run, if there are no private forward markets,
            the optimal policy for a risk-neutral host country is to
            provide the firm with forward contracts at the expected spot
            exchange rate.  This government insurance has the same
            effects as allowing trading in forward markets.  But these
            contracts can have fiscal consequences, as they did in Latin
            America; (b) forward markets do not discriminate against
            host country firms.  Those engaged in international trade
            can also benefit from the presence of  forward markets; and
            (c) in the medium run, as exchange controls are being
            liberalized, forward markets may be slow to develop because
            of participants' uncertainty about their ability to get
            foreign currency to cover forward commitments.  In this
            transitional period, contracts offered by the government are
            likely to be the most efficient means of reassuring foreign
            investors.  These contracts should also be make available to
            host-country firms during the transitional period, in order
            not to discriminate against domestic investors.
Banks, capital markets, and
            corporate governance : lessons from Russia for Eastern Europe
The financial sector should be active in
            enterprise restructuring in the transitional economies, and
            should help channel resources to the private sector.  What
            will best help the sector achieve these tasks: gradual
            reform or radical reform?  Liberalization and privatization
            are the most urgent tasks transitional economies face.  But
            for market reform to succeed, reforms of banking and capital
            markets must keep pace with enterprise reform and
            privatization.  Central and Eastern Europe have pursued a
            gradual approach to financial reform, splitting the former
            state bank (or monobank) into a central bank and several
            large state-owned commercial banks, eventually to be
            privatized.  Russia has taken a more radical approach,
            creating many new private commercial banks that have already
            taken over most of the business from state banks.  The
            reform of banks and capital markets in transitional
            economies should not be modeled too closely on patterns in
            western economies, with their large institutions, complex
            financial instruments, and extensive regulation.  A simpler
            process in required, compressing in a short period the
            historical development of financial systems - starting with
            small banks and accepting imperfect regulation and
            supervision as a fact of life.  Systemic risks remain
            manageable if financial institutions are small and numerous
            enough.   A system with many private banks is more likely to
            produce a financial sector that plays an active role in
            enterprise restructuring, channels resources to the private
            sector, and thus accelerates restructuring and economic
            growth.  Historical comparisons confirm the benefits of such
            a liberal, weakly regulated banking system.
China's economic reforms :
            pointers for other economies in transition
China's two main economic problems
            before reform were low incentives to workers and the
            misallocation of resources among sectors. These problems
            were the result of a development strategy oriented toward
            heavy industry. By improving material incentives,
            China's reforms created a flow of new resources and
            allowed them to be allocated to sectors suppressed under
            pre-reform strategies. The onset of reform in China was not
            allowed to disrupt production from existing resources.
            Instead, the newly created resources were permitted to
            accrue and to flow into the more productive, often light
            industrial sectors, thus stimulating continuous growth of
            the national economy during reform. Low incentives and the
            suppression of nonpriority sectors are common features of
            the legacy of economies in transition from central planning
            that based their development on the rapid growth of heavy
            industry. China's approach may be of interest to them.
            Among lessons China learned are that: (a) Autonomy must be
            granted to micromanagement units and preserved to improve
            the incentive structure and create a new flow of resources.
            (b) While maintaining essential minimum levels of production
            in the pre-reform priority sectors, autonomous enterprises
            must be permitted and encouraged to allocate new incremental
            resource flows to the previously suppressed sectors. (c) In
            parallel, the distorted policy environment and
            planned-allocation system must be progressively reformed to
            bring them into line with the new system of incentives and
            modus operandi of autonomous enterprises.
Ownership and corporate control in
            Poland : why state firms defied the odds
Survey results in Poland indicate that
            hard budgets and import comeption can spur state firms to
            adjust even when privatization lags behind. As they examine
            the underpinning of Polish reform, the authors address the
            key question of why managers instigated such adjustment.
            They examine how corporate ownership and control influence
            the behavior of state firms, as illuminated by the following
            survey findings and conclusions: (a) Contrary to
            expectations, state firms took painful adjustment measures.
            Enterprise managers firmly believed that privatization was
            coming. This belief led them to manage better, not worse; a
            private sector based economy means a market for managers and
            a premium on skilled management. (b) The excess wage tax
            (the much criticized "Popiwek" scheme) did
            restrain wage-setting behavior, judging from the
            wage-setting equations presented by the authors. (c)
            Essential to the good performance of state industries is an
            end to open-ended subsidies. Subsidies, rather than helping
            firms adjust, give them incentives to continue their past
            behavior and destroy any mechanism of control other
            claim-holders might have. (d) Commercial banks, the Polish
            experience shows, can be made to exercise governance over
            state firms. Without effective takeover mechanisms,
            withholding funds is their most powerful instrument. That
            instrument is made powerless if firms, pressured to adjust
            by banks, can turn to the government themselves. Banks
            themselves started to respond appropriately- and to play a
            powerful role in discipline enterprises - only after their
            own governance and control/incentive mechanisms had been
            reformed as part of the banking reforms of the fourth
            quarter of 1991.
Information and price determination
            under mass privatization
The valuation of enterprises has been a
            major stumbling block to privatization in transitional
            economies. Data on the performance of state-owned
            enterprises under central planning is plentiful, but that
            information is not worth much in a market economy,
            especially one in which much progress has been made in price
            and trade liberalization. One of the author's
            privatization schemes have emerged as a politically
            attractive alternative; the valuation problem is overcome
            through a decentralized system of bidding, while shares are
            efficiently allocated through an auction. But nobody has
            analyzed how these information markets function or how
            prices emerge from bidding rounds. One of the authors
            presents econometric evidence on the functioning of
            information markets and on the process by which prices
            emerged for enterprise shares under the Czech and Slovak
            mass privatization scheme. The results indicate that public
            information about enterprises' past performance clearly
            mattered, especially in the early rounds when private
            information had not been revealed. But such historical
            information alone never explained more than 29 percent of
            the variation in the ultimate equilibrium price. Instead,
            information about enterprises' prospects revealed
            through the bidding process explained about 85 percent of
            the variation in prices by the final rounds. Private or
            "insider" information about enterprises'
            prospects played a gradually diminishing role as
            participants learned quickly from each other's bidding
            behavior. Other mass privatization schemes rely more heavily
            on the secondary market to generate an appropriate valuation
            of shares, rather than on the initial valuations emerging
            from the primary market. But if improved information is the
            first step toward efficient asset markets and corporate
            governance, participation in the Czech and Slovak mass
            privatization scheme have a head start on other transitional economies.
Informal gold mining and mercury
            pollution in Brazil
The Amazon region has been responsible
            for a major share of Brazilian gold production in recent
            years.  The region has witnessed a sizable gold rush
            comparable only to the California gold rush last century.
            The gold rush has spawned a powerful informal mining sector
            and has attracted many people - some who have come to the
            region in search of wealth and some who were already there
            but were displaced from other, unsuccessful economic
            activities.  What these people encounter at the mining sites
            are dreadful living and working conditions.  Gold mining
            also causes substantial environmental problems, which may
            persist whether gold deposits do or not.  The author
            discusses the environmental effects of gold mining in the
            region, focusing on mercury pollution.  Mercury, an
            important input in gold extraction, is being discharged into
            the atmosphere and the rivers at alarming rates.  The
            environmental costs of the present extraction, is being
            discharged into the atmosphere and the rivers at alarming
            rates.  The environmental costs of the present extraction
            technology will be faced primarily by future generations,
            because of natural chemical processes. Although removing the
            mercury already discharged from the Amazonian environment
            may be an enormous task, at least future discharges should
            be curtailed through the use of appropriate technology,
            environmental education, and a combination of command and
            control measures and market-based incentives.  The author
            describes the gold extraction process and the extent of
            mercury use and contamination.  He analyzes key elements of
            the environmental problem, especially the informal miner and
            the fish economy.  Finally, he suggests a combination of
            command and control regulations and market-based incentives
            adapted to the informal gold mining economic environment.
            He emphasizes the need for an education campaign about the
            perils of using mercury and the availability of more
            appropriate, and inexpensive, alternative extraction technologies.