rafmacalaba/datause-encoder-data huggingface dataset:
[2004]; Euwals and Hogerbrugge [2006]). Our methodology allows us to control for these alternative drivers of part‐time employment. First, by controlling for country‐level trends and comparing sectors with different degrees of ICT‐dependence, we are able to control for any country‐wide changes that affect all sectors equally such as labor market regulations. Second, we show that our main results hold for both men and women separately, addressing concerns of our findings deriving from an increase in female labor force participation. Finally, we address the potential confounding effect of an increase in the size of the services sector by including sector‐year pairs fixed effects, and by showing that our results are robust to excluding agricultural and manufacturing sectors.

This paper also contributes to the literature on the impacts of the Internet on telecommuting, which has reached mixed conclusions thus far. On the one hand, Dettling (2016) finds evidence suggesting that Internet use increases married women’s labor force participation in the United States. Telework and time saved in home production are the mechanisms that explain this outcome. On the other hand, Kolko (2012) uses slope of terrain as an instrument for broadband expansion in the United States and finds no effects of the latter on telecommuting or other home‐based work. In addition, this paper contributes to the literature on the general impacts of ICT on labor markets. Our findings are consistent with empirical evidence showing that that the Internet is associated with higher employment growth (Kolko [2012]; Forman et al. [2012]). There is also a large body of literature focusing on the effects of ICT on labor market polarization, a topic that is beyond the scope of this paper.<sup>1</sup> Finally, we also contribute to the literature studying the rise in other forms of alternative work arrangements such as temporary work, self‐employment and second job holding. The incidence of temporary work has increased across Europe since the early 2000s (World Bank [2006]). There is

> 1 Labor market polarization is characterized by an increasing share of both low and high‐skilled jobs, and a decline of middle‐skilled or routine jobs. See, for example, Acemoglu and Autor (2011) for the United States; Goos et al. (2009) for Western Europe; and Lewandowski et al. (2016) for Central Europe.

5
of the estimations in this paper only use whether inventors are of Anglo-Saxon origin, as a means for reducing the potential of reverse causality as discussed above. The AngloSaxon share of US domestic patenting declines from 73% in 1980–1984 to 66% in 1995– 1999 (table S2). This group accounts for a majority of patents in each of the six major technology categories developed by Hall et al. (2001).

As with the productivity and trade data, the patenting series are aggregated into fiveyear blocks by city and industry. These intervals start in 1975–1979 and extend through 1995–1999, and the series are normalized by the patenting level of each city-industry in 1980–1984. These series are then united with the spatial distribution of each country’s ancestry group using model (5) to form an aggregate for each country-industry, and the log growth rate is then calculated across these five-year intervals. The lag of this growth rate is used as the instrument for the productivity growth rate in an exporter-industry. That is, the estimated growth in technology flows from Brazil’s chemical industry during 1975–1979 →1980–1984 is used as the instrument for the growth in Brazil’s labor productivity in chemicals for the 1980–1984 →1985–1989 period. This lag structure follows the emphasis in Kerr (2008) on the strength of ethnic networks for technology diffusion during the first 3–6 years after a US invention is developed, and the comparison to contemporaneous flows is shown in robustness checks. The supplement provides additional notes on the instrument design and its connection to patent data.

# III.  EMPIRICAL RESULTS

This combined dataset is a unique laboratory for evaluating Ricardian technology differences in international trade. This section commences with ordinary least squares (OLS) estimations using the UNIDO and WTF data. The instrumental variable (IV) results are then presented.

# _Base OLS Specifications_

Table 1 provides the basic OLS estimations. Column 1 presents the “between” estimates from specification (2) before first differencing the data; the dependent variable is the log
We also consider a widely used measure of political institutions. Since 1972, Freedom House has published an annual assessment of the state of freedom in all countries (and select territories), now known as “Freedom in the World.” Individual countries are evaluated based on a checklist of questions on political rights and civil liberties that are derived in large measure from the Universal Declaration of Human Rights. Each country is assigned a rating for political rights and a rating for civil liberties based on a scale of 1 to 7, with 1 representing the highest degree of freedom and 7, the lowest level of freedom. The combined average of each country’s political rights and civil liberties ratings determines an overall political freedom measure on a scale of 1-3, with 1 designating “free,” 2 “partly free,” and 3 “not free.” While it is useful to try to distinguish the influence of different types of institutions, there is also a tradeoff in that country coverage for each measure is not complete. Therefore, as a robustness check, we also use a single overall index of institutional quality from Kaufman, Kraay, and Zoido-Lobaton (1999). This measure averages different institutional quality indexes and has very wide country coverage.

Aside from institutional quality, we also include on the right-hand side the log of per capita GDP in 1990 (from Heston et al. 2002) because very poor countries may have limited supporting resources to make development projects succeed. Third, we consider the effect of the overall level of aid relative to GDP on project success rate (aid flows taken from OECD DAC 2003). The influence of total aid could go either way: there could be “increasing returns” in the sense that a lot of aid may create a better environment of supporting services and resources (e.g., an education project may be more likely to meet its objectives if there are also projects in transport, rural development, etc.). On the other hand, one could as easily imagine diminishing returns or absorptive capacity constraints, so that it is hard to have a successful project if the government’s limited 6
# PREFACE

This paper reflects an early application of a methodology for private sector assessment [PSA] developed by CECPS' to identify constraints to and priorities for the development of a country's private sector. PSAs provide information and analysis essential to formulating strategies to alleviate constraints to private sector development (PSD). They are intended to contribute both to the policy dialogue with borrowing governments and to the formulation of country assistance strategies. They are not strategies themselves, but rather Generally, PSAs include: (i) an analytic description of the private sector and its role in the economy; (ii) a discussion of policy, institutional and other factors that limit efficient private sector economic activity; and (iii) identification of priority areas for government actions and World Bank Group assistance.

Specifically, two steps are recommended at the outset of a PSA to determine its focus:

- First, collect and review existing knowledge about the private sector by reviewing documents and talking with operational staff. In the process, learn what experts currently understand to be the priorities for promoting PSD.

- Second, identify gaps in knowledge on key issues and on the role and structure of the private sector.

In this case, consultation with Bank staff in Washington and in Abidjan revealed a particular concern with the stagnation of urban enterprise, and a desire for more information about labor market issues, the informal sector, tax and other regulatory constraints, and the interaction of public investment and expenditure policy with private sector development [PSD]. Thus, we focused our investigation on these four issues - _stead_ of conducting a more sweeping analysis that might have scratched the surface of a broader range of issues. While in C8te dlIvoire, we consulted informed officials and other experts, but most of our time and resources were devoted to speaking with entrepreneurs themselves: individuals whose day to day confrontation of their country's economic, physical and institutional constraints makes them an invaluable source of information on priorities for policy reform. The study made use of both in-depth interviews with businesses and a firm-level survey that elicited information from 37 firms of all types in Abidjan and Bouake on problems confronted, emphasizing constraints to future growth and operation.

Initial analysis of the data revealed that legal status provides the best clue to the dominant problems of an Ivoirian enterprise. Grouping firms by legal status (rather than age, size, or activity) elicits most clearly the key characteristics of enterprises and the problems they face. Thus, a good many of the results reported here are organized by the legal status of the firms studied.

I CECPS is the Public Sector Management and Private Sector Development Division of the Country Economics Department of the World Bank 2
Figure 10: Deficit on trade in goods: annual change and drivers <!-- Start of picture text --> 90%<br>70%<br>50%<br>30%<br>10%<br>-10%<br>-30%<br>-50%<br>-70%<br>98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17<br>Capital goods Intermediate goods Consumer goods Trade in goods<br><!-- End of picture text --> Figure 11: Foreign content in exports on selected countries, 2014 (in percentage) <!-- Start of picture text --> 60<br>50<br>40<br>30<br>20<br>10<br>0<br>LUX IRL SVK HUN CZE TWN BGR SGP MYS KHM KOR THA VNM BEL FIN ISL TUN SVN MEX POL NLD PRT EST DNK SWE CHN AUT GRC ESP CRI FRA LTU ITA DEU ROU MAR PHL CAN ISR GBR TUR CHE IND ZAF HKG HRV CHL NOR JPN NZL USA AUS RUS PER ARG BRA IDN COL SAU<br><!-- End of picture text --> Source: OECD

**Although Turkey is one of the OECD countries with relatively low foreign content in its exports (** Figure 10 **), its foreign content has been increasing, which has contributed to the trade deficit, and thus the CAD.** Indeed, the foreign content of Turkish exports has almost doubled from 13 percent in 2001 to 22 percent in 2014, as Turkey’s integration into global value chains has increased considerably in the last two decades.

10
**Figure 5.1: Competition policy indicators and rule of law**

<!-- Start of picture text --> Competition policy indicators, 2013 Rule of law, 2015<br>1.1 1 1.1<br>1<br>0.9 0.8<br>.8 0.9 .5<br>0.4<br>.6<br>0 0.1 - 0 .1 - 0.1 -0.1<br>-0.2<br>.4 0.4 0.4 -0.4<br>.2 0.3 0.3 0.3 0.3 -.5 -0.7<br>0.2 0.1<br>-1<br>0<br>IDN ZAF IND OECD BRA HUN POL TUR BGR RUS CZE CZE POL HUN ZAF IND TUR BGR BRA IDN RUS<br>Indicator 0-6<br>Indicator -2.5 - +2.5<br><!-- End of picture text --> Source: OECD; author’s calculations. Note: higher values on the competition policy indicator denote less conducive to competition.

**More intense competition in service sectors could lead to 1 percentage point of additional growth in value added in all service‐intensive sectors** (World Bank, 2013). Increasing competition in services would have positive spillover effects downstream on nearly all sectors of the economy. Conservative estimates indicate that reducing regulatory and competition constraints on professional and transport services would result in benefits of over TL 1 billion in additional value added to the economy per year.<sup>16</sup>

**Professional services should be opened to competition** . Turkey’s regulatory framework governing the liberal professions (professions requiring special training in the liberal arts or sciences, such as notaries, lawyers, engineers, or accountants) does not comply with international best practices. Both the regulatory framework and the regulations imposed by professional associations lessen competition by either restricting entry (such as stipulating a fixed number of suppliers, exclusivity in the provision of services, and restrictions to practice) or aiding members in coordinating prices (such as establishing minimum prices). Minimum prices are in place for accounting, architecture, legal, and engineering services, while notaries regulate the exact level of pricing. Limitations on advertising apply to some professions and access to several professions is closed to foreign nationals. Fees for key professional services, such as legal and notaries, are among the highest in the OECD and the EU for comparable transactions (World Bank, 2013).

**Reforms would have three main objectives** : increasing productivity by allowing entry and competition across professional services; incentivizing competitive and efficient pricing; and lowering costs to users of professional services across the economy. These same principles should apply to restrictions on entry and price competition imposed by business associations and professions in other key sectors (such as road freight) (World Bank, 2013).

> 16 According to World Bank (2013), given that there are 19 Turkish sectors that use transport services intensively and 12 sectors that use business and professional services intensively, if all of these grow in value added by 0.75 percent, the additional value added generated from transport liberalization would be TL 1,002 million, and from professional service sector liberalization, it would be TL 877 million. The aggregate and cross‐sector impact of all service sectors would presumably be much larger.

31
estimates of β 1 demonstrate that political organization increases agricultural protection to import competing sectors and subsidies to exporting sectors according to their _z_ / _e_ ratio. For commodities whose producers are politically organized, the greater the stakes from protection (high output) and the lower the deadweight loss from protection (low imports, low _e_ ), the greater is the difference between domestic and world prices.

A change in _z_ / _e_ in an organized industry changes the level of protection/subsidy by β 1>0. For example, the middle two rows of Table 2 indicate that an increase in the output-to-import or output-to-export ratio by 100 would increase the dependent variable in (4) by anywhere between 18% and 24%.<sup>44</sup> This translates into an increase in the price received by the domestic producer by approximately 19% to 26% at the sample mean (of 0.082).<sup>45</sup> Since it is highly likely that between 10% and 80% of the commodities (more precisely, observations in the sample) are actually organized those estimates capture reality.

Quantitatively, the results echo a puzzling finding from previous examinations of the GrossmanHelpman model that used manufacturing data. Inverting the coefficient estimate yields estimates of the government preference parameter _a_ . These implied estimates are skewed towards welfare. The last two columns of Table 2 indicate that, across the models, the implied estimates of _a_ lies between 47.6 and 62.5 when the dependent variable is the {Core NTM, Export subsidy/Total subsidy} combination, between 41.7 and 55.6 with the {Overall Protection, Export subsidy/Total subsidy} combination, and between 83.3 and 100 with the {Tariff, Export subsidy/Total subsidy} combination. They show that government places far greater weight on a dollar of welfare, at least 40 times as much, as on a dollar contributed politically.

The first robustness test we undertake is with respect to the validity of the five instruments used in the first stage. The set of instruments pass the Sargan test of overidentification, that is, the

> 44 In the cross section, due to wide disparities in the _z/e_ ratios, differences of that magnitude are not uncommon.

> 45 A one percent change in the dependent variable in (4), _g_ /(1+ _g_ ), translates into a (1+ _g_ ) percent raise in the ad valorem tariff or subsidy, _g_ .  At the sample mean of _g_ =0.082 (see Table 1) we obtain these estimates.

19
education and health). Ring comparisons (linking regional PPP estimates through global prices) were done for more countries (18 in all—a marked improvement over past ICP rounds). The 2005 data were also subject to more rigorous supervision and validation methods than the 1993 round, including stricter standards in defining internationally comparable quality standards for the goods identified in the ICP price surveys. Otherwise, the PPP’s calculated from the ICP data (and in World Bank, 2008a) follow standard methods; as in the past, the Bank uses a multilateral extension of the bilateral Fisher price index.<sup>16</sup> For each country, the national poverty line was converted to 2005 $’s using the individual consumption PPP from World Bank (2008a). The 2005 PPP was not available for 11 of the 88 countries (due mainly to the poor ICP coverage in Latin America) and was deemed unreliable for one country (Zimbabwe).<sup>17</sup> Allowing for missing PPPs and other data problems, we have 75 poverty lines.<sup>18</sup> (The Appendix gives details on the countries with missing data.) Figure 1 gives the density function of the poverty lines (using a normal kernel). The national poverty lines at 2005 PPP range from $19.05 to $275.71 per month, with a mean of $87.59 and median of $60.81. (The standard deviation is $66.22.) The mode is slightly under $50 per month.

While the ICP aimed to survey prices that were nationally representative, this was not always the case. The main source of sampling bias appears to be that the surveys were confined to urban areas in a number of countries. For example, in the case of China, the ICP survey was confined to 11 cities. Although the survey included some surrounding rural areas, it cannot be considered representative of rural China (Chen and Ravallion, 2008a). Based on ICP sampling information we treat the 2005 consumption PPP’s as an urban PPP’s for the following countries: Argentina, Brazil, Bolivia, Cambodia, Chile, China, Colombia, Ecuador, Pakistan, Peru, Thailand and Uruguay. For these countries, the poverty line is an urban poverty line.

We follow RDV in using private consumption expenditure (PCE) per capita from the National Accounts (NAS) as the measure of economic welfare. (More precisely we use what is termed “Household Final Consumption Expenditure.”) The sample mean PCE is $209.40 per

> 16 As was argued in Ravallion et al. (1991), the weights attached to different commodities in the conventional PPP rate may not be appropriate for the poor.  Results reported in Deaton and Dupriez (2008) do not suggest that the re-weighting needed to derive a “PPP for the poor” will have much impact on the aggregate consumption PPP.  Later we test sensitivity to using the Deaton-Dupriez PPP.

> 17 The 2005 consumption PPP implies a poverty line of $6 per month, which is very hard to believe.

> 18 One country, Madagascar, was dropped because of large inconsistencies in the data from various sources (national accounts aggregates reported by the Bank versus the International Monetary Fund). Using the Bank’s estimate of PCE, the poverty line was almost three times mean consumption.

9
||**Table 4:**<br>All<br>countries|**Summar**<br>_English_|**y statisti**<br>_French_|**cs by legal**<br>_Socialist_|**origin**<br>_German_|_Scandina_<br>_vian_|
|---|---|---|---|---|---|---|
|_Services_<br>_share_|3.97|4.01|3.94|3.82|4.22|4.17|
|_Law_|.103|.225|-.192|-.180|1.73|1.93|
|_ELF_|.319|.422|.331|.102|.099|.073|
|_Latitude_|.279|.224|.236|.427|.503|.683|
|_GDP_|8.54|8.52|8.33|8.28|10.22|10.25|
|_Power_|6.92|7.00|6.42|7.32|9.05|9.77|
|_Roads_|-5.46|-5.38|-5.72|-5.27|-4.82|-3.84|
|_Pop_|16.0|15.5|16.2|16.7|17.1|15.0|
|Sample|112|35|58|10|4|5|
|<br>size<br>All variables ot|her than_Law_,_E_|_LF_and_Latitu_|_de_are in log t|erms.|||

Compared to the rest of the world, _German_ and _Scandinavian_ system countries have very high levels of _Law_ , services share, _Power_ , _Roads_ , etc. _ELF_ is also low for these countries. In actual values, the size of the service sector in _Scandinavian_ system countries equals 65% of GDP as compared to 54% for the rest of the world and power generation per capita in these countries is almost 8 times that in the rest of the world. These features can lead to identification problems in that our instruments can easily pick up the effects of _Power_ , _Roads_ , etc. The identification problem is not solved by dropping _LO_ as an instrument because _ELF_ is also much lower in these countries relative to the rest of the world. The same holds for the _German_ system countries but to a lesser extent. In light of these concerns, we follow the broad literature by dropping the _German_ and _Scandinavian_ legal origin countries from our sample in the remainder of the paper. In regression results not reported here we did not drop these countries and found that our overidentification 16
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of developing countries, as well as the availability of technical assistance, can help a country make the transition from manual to computerized systems a successful one.

# 5. Presumptive Taxation 1/

Presumptive taxation refers to the use of simple methods of assessing complicated taxes, or in some cases the replacement of more sophisticated tax legislation vith simpler rules. Presumptive taxes my be used in the field of personal and corporate income taxes, as well as property and land taxes. In the case of income taxes, public finance xperts tend to think of individual and company income tax as being imposed on a well-defined and accurate measure of recorded income over a given period, normally a year. In fact, income tax assessment for large numbers of taxpayers in both industrial and developing countries is "presumptive'--that is, It is legally defined on the basis of appropriate indicators. In most cases presumptive methods are used as a simple administrative expedient, but they can also be used for efficiency and equity goals.

Presumptions are used to assess taxpayers In both developed and developing countries, but especially In the latter, where Ohard-to-taxs taxpayers comprise a large fraction of the taxpaying population and adminlstrative resources are generally scarce. One developed country that has a well-established system of income presumption is France, 1/ This section relies heavily on Casanegra de Jantscher, Nilka, and Tanzi, Vito, "The Use of Presumptive Income in Modern **Tax** Systems," publication forthcoming.