rafmacalaba/datause-encoder-data huggingface dataset:
- 72 -

2005). In Africa as a whole, one-fourth of GDP may be lost to corruption every year (Thachuk, 2005).

As a result, public roads are often underinvested and poorly maintained in developing countries. Road maintenance is particularly to be neglected. In Africa, about 30 percent of the infrastructure assets are estimated to need rehabilitation. In the road sector, only 37 percent of the road network in African low-income countries is in good condition. For feeder or rural roads, the share is even lower. 17 percent of the tertiary roads are in good condition (Foster and Briceno-Garmendia, 2010). Therefore, there remain the significant needs for road investment and maintenance that have not been met.

Important, road assets deteriorate exponentially without proper maintenance. According to a case study based on highway development software, HDM4, road roughness would increase over time and exceed a usual maintenance standard of IRI 4.5 in 5 to 6 years.<sup>29</sup> Generally, maintaining roads assets is more cost-effective than letting them deteriorated and reconstructing them. In Africa it is estimated that about $40 to $45 billion of road assets were lost because of inadequate maintenance, which would have cost only $12 billion, during the 1970s and 1980s (Harral and Faiz, 1988). Moreover, climate change may increase the importance of road maintenance, because poorly maintained roads are even more vulnerable to severe weather conditions. Potholes, clacks and wide joints are the places where water infiltrates in the road, accelerating deterioration. In developing countries, many roads remain to be paved (Figure 44). This could add to the risk of road deterioration and thus the cost of rehabilitating damaged road surfaces.

Therefore, the challenges for sustainable public road financing are complex and interrelated. Governance will affect not only the bidding behavior at competitive bidding but also post-

> 29 In this particular case, a 10-km primary bituminous road with 2 lanes in a tropical area is examined using the software HDM4. The project life is assumed 35 years. The discount rate is set at 12 percent. Two maintenance options are compared: (i) do minimum (reconstruction when IRI reaches 10, with routine pothole patching and edge treatment), and (ii) GASO4.5 (structural overlay at IRI 4.5, with routine pothole patching and edge treatment).
and 11 month higher maturity. Finally, there is a 6 percentage point within firm increase in the use of banks to finance fixed assets.

Our assumption in the paper so far has been to treat CB reforms as exogenous. An issue with identifying the effect of CB reform on firm financing is the potential that reform is endogenous. In other words, existence of unobserved determinants (or observed variables that are not appropriately controlled) of access to finance that also drive CB reform will bias our estimates of the impact of reform. Our estimation strategy uses fixed effects to control for unobservables that are time invariant. In addition, since our analysis is at the firm level, we are able to appropriately control for a wide range of time varying firm and country level variables. Nevertheless, as robustness check we allow for reverse causality and we explicitly address the concern of endogeneity by estimating the impact of CB reform using Two-Stage Least Squares (2SLS) regressions.

The body of empirical research on the determinants of financial reform largely finds that there appear to be no consistent macro or institutional predictors of financial reform.<sup>11</sup> At the same time, Abiad and Mody (2005), Lora and Olivera (2004), and Heckelman and Mazumder (2013) find strong evidence for regional convergence in financial reform: reform appears to be driven by the gap to regional leaders. Guided by findings from this literature, we propose using the fraction of countries in the region<sup>12</sup> with existing CBs and fraction of countries in the region that have introduced CBs in the last 5 years as instruments for the potentially endogenous CB reform variable.<sup>13</sup>

> 11 We look at the literature on determinant of financial reform in general as those pertaining to credit information schemes in particular do not exist.

> 12 We use the World Bank’s region classification which includes East Asia and Pacific, Europe and Central Asia, Latin America and the Caribbean, Middle East and North Africa, South Asia and Sub-Saharan Africa.

> 13 Our intention with the two instruments is to capture both the overall existence of CB’s in the region as well as the intensity of recent reform. A restriction to reform in the last 5 years is an arbitrary benchmark, but changing it to 3 years or 7 years does not alter the IV estimates.

21
to be affected by trauma and distress, since they tend to have recently fled from wars (Moya et al., 2012). These characteristics may complicate the efficient integration of displaced individuals into formal reception markets.

We focus on the case of Colombia because its unique characteristics make it an ideal case with which to pursue this study. The escalation of the Colombian armed conflict in the late 1990s and the 2000s induced large sudden flows of displaced individuals. According to data from the Human Rights Observatory, internal conflict in Colombia between 1995 and 2010 displaced approximately 5.8 million people. Colombia also collects among the most complete and rich firm-level panel data available for the study of firm behavior in developing countries. The Annual Manufacturing Survey, a census of all manufacturing firms of more than 10 employees, includes plant-year level information on sales, wages, employment, and capital as well as product-plant-year information on output and input prices.

To identify causal effects, we use a panel-instrumental variable methodology. We construct the instrumental variable for inflows of IDP following the standard approach in the literature, which combines early settlements of migrants with time trends on migration outflows.<sup>2</sup> Our geographic variation comes from the fact that IDP move disproportionately to municipalities where there are early settlements of populations from their municipalities of origin. Our time variation comes from observed outflows of displaced populations by municipality and year due to conflict shocks. We construct the predicted inflow of immigrants by combining municipal cross-sectional information from the Colombian population census of 1993 (the last population census before the intensification of the conflict) with time-varying data on the total number of individuals expelled from each municipality. Our instrument is a strong predictor of the observed inflows of IDP between 1995 and 2010.<sup>3</sup> We find that large inflows of IDP induce sizable negative effects on formal firms’ intensive

> 2See Card, 2001 and Altonji and Card, 1991 for the pioneer approaches and Lewis and Peri, 2015 for a review of the literature on applications.

> 3A new criticism of the validity of this type of shift-share instrument was recently proposed by Jaeger et al. (2018). The authors suggest that using pre-settlements of migrants in countries where migration flows are stable in time confounds short- and long-term causal effects. Our identification strategy is not sensitive to their critique because the inflows of forced migrants were sudden and large in scale as a consequence of the intensification of armed conflict.

3
# **Social Networks among Indigenous Peoples in Mexico**

Emmanuel Skoufias Trine Lunde Harry Anthony Patrinos The World Bank

## _JEL classification_ : J15; J71; O12

_Keywords_ : Economic Opportunities, Indigenous Peoples, Mexico, Social Networks.

_Corresponding author_ : Emmanuel Skoufias, The World Bank, 1818 H Street NW, Washington DC 20433-USA. tel: (202)458-7539. fax: (202) 522-3134. e-mail: <u>eskoufias@worldbank.org.</u> _Acknowledgements:_ This paper is extracted from a World Bank Regional Study financed by the Regional Studies Program of the Office of the Chief Economist of the Latin America and Caribbean Region. The team is grateful to Christian Borja-Vega for data support and analysis. The findings, interpretations and conclusions expressed in this paper are entirely those of the authors, and do not necessarily represent the opinions of the World Bank, its Board of Directors or the countries it represents.
|e|e<br>Lesotho|e<br>LowLacome|S54|World|performancevs.<br>Benchmark|
|---|---|---|---|---|---|
|Deviaton of -10%o or more from Benchmark||||||
|Energy: 4uccess to Electricity<br>NMetvrork(> ofPopulation)|6|iF|13|60|Underperform|
|ElectricityAverage End-User Prices (U5 cents/k¥h) - (Residential’Mon-Energy: Residential|a3|676|avs|a6|Underperform|
|ICT: WMlainlines Teledensity (mainlines subscribers/1000 people)|16|ao|31|213|Underperform|
|ICT: Cost of LocalPhone Call(U5 cente/S minutes)|22|z|10|a|Underperform|
|ICT: Phone Faults (reported faults/100 mainlines)|FS|ot|37|37|Underperforin|
|Transport: Paved Roads (% of totalroads)|12|ig|23|30|Underperform|
|Water: Access to Improved Sanitation (% ofpopulation)|37|ar|37|64|Underperform|
|Deviaton ofbetween -10%o and +10%o from Benchmark||||||
|Deviation of +10%o or more from Benchmark||||||
|ICT: Celhilar Teledensity (cellular subscribers/1000 people|Ay|a7|ac|296|Cutperform|
|ICT: Cost ofPhone Callto the US (CUS cents/3 minutes)|231|Fhe|4o7|333|Outperform|
|ICT: Cost ofCellularLocal CallCUS cente/S off peakminutes)|26|ad|4a|4a|Outperform|
|Water: Access to ImprovedVaterSources (*6 ofpopulation)|ea|oF|64|#0|Outperform|
|Transport: Road Density inTerms ofPopulation(road-low1000 people)|3.4|i.e|3.3|6.7|Outperform|
|Transport: RoadDensity inTerms ofLandfroad-hm1000 sqkt|196|rar|153.7|240.6|Outperform|
|Transport:TravelTimetoVorkinMainCitiesGminutes/one-wayworktrip)|13|IF|34|31|Outperform|
possible omitted factors is underscored by the non-positive rate of return to extension implied by an alternative set of regional productivity indicators, even without regional fixed effects. An important caveat is necessary with these results. Although a number of tests are undertaken to test the robustness of the results in the presence of regional (district) fixed effects, it is not possible to definitively establish the factors underlying the strong regional effects. This is largely because of the limitations imposed by the cross-sectional framework. A more appropriate analysis would be to use panel data methods, which would allow a better control for the fixed regional effects and provide better insight into the impact of extension.

The main conclusion from this analysis is that the anticipated impact of T&V extension on agricultural productivity in Kenya is not discernible from the available data. Preliminary results also suggest a differential impact across districts. A value-weighted sum of districtspecific impacts is used to determine the aggregate impact and to test if it is significantly different from zero (although it is counter-intuitive that extension could reduce the productivity of farmers as implied by the negative coefficients for some districts, it may be possible at the whole-farm level, say, by advising inappropriate crop-mixes). The test shows that the hypothesis that T&V had no impact in Kenya between 1982 and 1990 cannot be rejected, implying that the sample data fail to support a positive rate of return on the investment in T&V.

The findings highlight issues pertinent to empirical analyses intended to inform Bank policy. First is the sensitivity of empirical results to potential data errors and model misspecification, errors that can yield misleading policy implications and investment signals. This is particularly important when dealing with cross-sectional and imperfect data, often all that are available in many countries. The B&E study provides a pertinent example where seemingly innocuous data errors and alternative specifications lead to strikingly different results. An important lesson emerging for the Bank and other concerned agencies from this analysis is the need for great vigilance in empirical analyses, especially with regard to the quality of data, used to support Bank policy, including the need to validate potentially influential empirical findings.

As is the case in such empirical studies, it must be reiterated that the results reported here are situation-specific and are subject to the limitations imposed by the available data. To firmly establish the achievement of concrete results and to draw broad policy implications, the need to rigorously establish impact and to validate the empirical findings in other settings, with the use of appropriate data, cannot be overstated. Household panel data would have been particularly helpful in overcoming some of the problems that appear to have a significant bearing on B&E's results on the returns to extension in Kenya. The earlier-mentioned OED impact evaluation work is using such data and the results are expected to be available in early 1999.

12
demand helps fuel growth), to employment losses of five to 10 percent in a small number of metro areas (with Flint, Michigan, in the Rust Belt, losing an estimated 28 percent of its jobs).

_Figure 2. Job growth is not limited to high‐skill metro areas (U.S. Metro areas, 2000‐2011)_ <!-- Start of picture text --> 60%<br>50%<br>40%<br>30%<br>20%<br>10%<br>0%<br>30 35 40 45 50 55 60 65<br>‐10%<br>‐20%<br>‐30%<br>‐40%<br>Average occupational college‐education level, 2000<br>Percent employment change, 2000‐2011<br><!-- End of picture text --> Source: Authors’ calculations based on U.S. Census, 2000 Census of Population and Housing long form and 2011 one‐year American Community Survey, extracted from IPUMS‐USA (Steven Ruggles, J. Trent Alexander, Katie Genadek, Ronald Goeken, Matthew B. Schroeder, and Matthew Sobek. Integrated Public Use Microdata Series: Version 5.0 [Machine‐readable database]. Minneapolis: University of Minnesota, 2010.).

Development strategies for inclusive growth in the Rio Grande Valley will necessarily need to differ from those in Flint and the rest of the Great Lakes. They share a need for skill development in the labor supply; many new jobs are low‐income jobs, meaning metros such as McAllen need to create more “good” jobs and upgrade many existing jobs. But Flint, once the home of many of General Motors’ largest assembly plants, may also need a combination of job development through the creation of new enterprises 15
# 1. Introduction

Wealth and gender inequity in a child’s ability to accumulate human capital impedes equality of opportunity. Wealth disparity in human capital’s accumulation perpetuates intergenerational transmission of poverty by denying children of low-income households the ability to attain the human capital necessary for upward mobility; gender disparity perpetuates gender inequality in future education, labour market outcomes and socioeconomic status.

Cognitive skills is a crucial component of human capital and determinant of wages (Murnane, R.J. et al. 1995; Juhn C. et al. 1993; Boissiere et al. 1985), but wealth and gender disparities in its accumulation still persist (Alderman et al. 1997, 1996a, b, c). World Bank (2005b) and Porta and Ramón (2007) found large disparities in school retention rates between high and low income households in Central America, and UNESCO (2002: 16) found lower school enrollment among females in low income households in Latin America. Often school attainment exhibits an opposite disparity with females attaining on average higher levels of schooling as documented among rural females in Mexico (Behrman et al. 2005), in other developing countries (Grant and Behrman 2008) as well as in Latin America in recent years (Behrman et al. 2004).

Researchers have begun examining the determinants of cognitive skills by using data on student achievement on standardized tests (see Todd and Wolpin 2003 for examples). The use of international student assessments such as the OECD’s Programme for 2
_Integration of Land and Building Data:_ For urban land, which accounts for a much greater share of wealth, mechanisms including digitally accessible address or building registries that allow unambiguous linking of objects such as apartments to associated land parcels are crucial. Ensuring the reporting of prices for such objects if transacted separately through automated data exchange, similar to what has been implemented for land, will provide the basis for applying an approach akin to the one used here. For public and other types of land that are not regularly traded, a cost approach could be adopted, or lease prices, together with an appropriate discount factor, could be used depending on the case at hand. Publication of such values at the parcel level will increase their credibility and enhance trust.

_Legal Provisions:_ Beyond addressing data issues, legislative measures are required. Legislation needs to establish a methodology for a market-based approach to mass valuation, mechanisms for gradually replacing normative valuation, and define implementation responsibilities, including the computation and management of necessary information systems and handling of appeals. To use such values routinely for administrative purposes, including as a basis for valuing real estate collateral or taxation, changes in the tax code and prudential banking regulations will be needed. Evidence from applying a mass valuation model to agricultural land suggests that, in addition to aligning with European valuation standards, such steps will facilitate easier access to credit for enterprises and promote horizontal equity and transparency.

Ukraine's shift toward a market-based land valuation system, supported by advanced digital infrastructure, represents a significant step toward economic modernization. Anchoring it in law will have implications for Ukraine's economic recovery, development, and investment climate and be of fundamental importance in a post-war context, where the ability to raise substantial domestic and foreign investment quickly and at low cost and allocate them to their best use will be critical to restore economic stability, recover from the war's devastating effects, and put in place a decentralized system of governance with the means and incentives to promote economic development.

18
productivity gains achieved via a combination of policies and technological improvements. In particular, policies to boost energy efficiency have played a key role. These policies include the introduction of equipment, vehicle, and appliance efficiency standards, utility management programs, and building codes. The steep decline in U.S. oil intensity during the 1980s is typically attributed to energy conservation policies introduced from the mid-1970s onwards, following the 1970s oil price shocks. Moreover, the development of more energy efficient products and services has also contributed to a decline in oil use. However, improvements in energy efficiency have slowed down in recent years. In particular, the International Energy Agency (IEA) reports a decline in energy efficiency gains since 2015 and attributes it to a stagnation in the passing of new energy efficiency policies (see International Energy Association, 2017, 2019).

# **IV. Empirical Analysis**

## **IV.1 Data**

I use quarterly data covering the period 1980:Q1 to 2019:Q4. The database consists of real GDP growth rates, the real price of oil, U.S. and non-U.S. crude oil production, and U.S. per capita oil consumption. The data on real GDP growth rates are from the Global VAR (GVAR) dataset, 2019 Vintage (Mohaddes & Raissi, 2018). The GVAR dataset is based on Haver Analytics, the International Monetary Fund’s International Financial Statistics (IFS) database, and Bloomberg. The dataset consists of 33 countries, which include oil-importing advanced economies, oil-importing emerging markets and developing countries, and oil exporters. The oil market data consist of monthly series on U.S. and non-U.S. crude oil production, the real price of oil based on the U.S. refiner acquisition cost of imported crude oil, and U.S. per capita oil consumption. The oil market data is obtained from the U.S. Energy Information Administration (EIA). The U.S. oil consumption data is based on EIA’s data on petroleum consumption measured in BTUs.<sup>9</sup> The oil production and consumption data is transformed by taking first differences of logs. The monthly data are converted to a quarterly frequency using simple averages.

## **IV.2 Methodology**

This section lays out the empirical framework. First, I present the dynamic factor model, which allows for the extraction of an underlying common factor (henceforth, global GDP factor) using GDP growth rates for 33 countries. Furthermore, I do a variance decomposition to compute the fraction of variation in country GDP growth rates accounted by the global GDP factor to evaluate its performance as a metric of fluctuations in global economic activity. Second, I specify and estimate a structural FAVAR model to assess the effects of U.S. energy market shocks on global economic activity. I discuss an identification strategy based on sign and elasticity restrictions to disentangle U.S. oil supply and energy efficiency shocks.

> 9A robustness check in Section IV.4 uses fossil fuel consumption data (aggregate of coal, natural gas, and petroleum consumption), which is also obtained from EIA.

10
Policy Research Working Paper 9798

# **Abstract**

This paper contributes to a long-standing debate in development practice: Under what conditions can externally established participatory groups engage in the collective management of services beyond the life of a project? Using 10 years of panel data on water point functionality from Indonesia’s rural water program, the Program for Community-Based Water Supply and Sanitation, the paper explores the determinants of subnational variation in infrastructure sustainability. It then investigates positive and negative deviance cases to answer why some communities have successfully engaged in system management despite being located in difficult conditions as per quantitative findings and vice versa. The findings show that differences in the implementation of community participation, driven by local social relations between frontline service providers, that is, village authorities and water user groups, explain sustainable management. This initial condition of state-society relations influences how the project is initiated, kicking off negative or positive reinforcing pathways, leading to community collective action or exit. The paper concludes that the relationships between frontline government representatives and community actors are an important and underexamined aspect of the ability of external projects to generate successful community-led management of public goods.

This paper is a product of the Water Global Practice. 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://www.worldbank.org/prwp. The authors may be contacted at dthapa1@worldbank.org; mnoorfarid@gmail.com; and cprevost@worldbank.org.

_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