rafmacalaba/datause-encoder-data huggingface dataset:
surpluses; but it will tend to raise private investment and hence growth especially in conjunction with a fall in political risk (increasing the capital stock to K3 in Figure 1). The combination of rising growth and lower interest rates will in turn exert an upward effect on net worth which could in principle offset the effect of a fall in revenues. Besides, the fall in revenue could be curtailed by improving tax administration which increases the tax base and thus partially or completely offsets the impact of lower marginal tax rates.<sup>15</sup> Now consider government capital expenditure. If it is cut, the immediate effect will be to raise primary surpluses and improve debt dynamics; but net worth could decrease as a result of a fall in long-run growth (via complementary reductions in private investment). This in turn could trigger a rise in interest rates if initial indebtedness is high and tax revenues fall with growth. Of course, if capital expenditure is of low quality, a cut would be unambiguously beneficial. In Kenya’s case as we shall see, the reduction in interest rates and cut in marginal tax rates have contributed to an accelerated decline in indebtedness (government debt-to-GDP ratio) after 2003; but growth diagnostics indicate that more public spending is needed to alleviate the infrastructure constraint on private investment. The challenge therefore is to choose infrastructure projects with high rates of return which will ensure that the government’s net worth is protected.<sup>16</sup> However, in line with the main point of this paper, this is secondary to managing political risk.

# **_3. Kenya’s Economic Liberalization: A Snapshot_**<sup>17</sup>

The economic liberalization started with Sessional Paper Number 1 of January 1986, when the government decided to shift from dirigisme to freeing up the economy. By the late 1980s, Kenya had adopted a managed float. Then a series of incidents intervened after the Berlin Wall collapsed in November 1989 and Kenya began to lose its geopolitical bargaining power (as

> 15 Many developing countries offer the prospect of raising average effective tax rates (and hence total revenues) _even_ when marginal tax rates are cut by enlarging the tax base through better administration. 16 A detailed analytical discussion is contained in Serven (2007).

> 17 _Sources:_ Meetings with academicians, private sector firms, IMF files.

9
# **Figure 11. Actual and predicted size of the industrial formal sector**

<!-- Start of picture text --> 90<br>85<br>80<br>75<br>70<br>65<br>Actual Shimer<br>Shimer no trade Shimer no Constitution<br>1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002<br><!-- End of picture text --> Note: the actual size of the formal sector is constructed using monthly data from the Monthly Labor Survey (PME) from Jan 1983 to Dec 2002. This series has been aggregated per year and corresponds to the Industry sector average (compounded by sub-sectoral inputs weighted by the participation of each Industry Sub sector). The predicted sizes are obtained applying equation in footnote 24 on the fitted values coming from regressions of Table 7 under the neutral and “no trade” and “no Constitution” scenarios.

<!-- Start of picture text --> 90<br>85<br>80<br>75<br>70<br>65<br>Actual Shimer fix Destruction Shimer fix Creation<br>1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002<br><!-- End of picture text --> Note: the actual size of the formal sector is constructed using monthly data from the Monthly Labor Survey (PME) from Jan 1983 to Dec 2002. This series has been aggregated per year and corresponds to the Industry sector average (compounded by sub-sectoral inputs weighted by the participation of each Industry Sub sector). The predicted sizes are obtained applying equation in footnote 24 and correspond to the steady state size of F applying the 1983-2002 average transition rate of F to ALL and ALL to F respectively. F = formal, ALL = not formal.

55
# **1 Introduction**

The spread and proliferation of antidumping statutes around the world and the imposition of importrestricting antidumping (AD) measures imposed under the auspices of these laws has been well documented (Miranda, Ruiz and Torres, 1998; Prusa, 2001; Zanardi, 2004). Not surprisingly, researchers seeking to understand this phenomenon would like to test empirically between evolving theories relating to the spread of AD, as well as industry linkages to the use of AD across countries. Furthermore, policymakers, trade negotiators and even legal practitioners involved in the AD process in national localities are also interested in cross-country comparisons of political and/or legal elements of the process, as AD reform is a potential topic on the agenda of WTO negotiations, during the Doha Round if not a future round of negotiations.<sup>1</sup> An improved understanding of antidumping requires access to data on its use, of course, so that this data can be effectively scrutinized.

Despite such interest in the international aspects of antidumping, empirical economic and political-economic research on antidumping has thus far focused primarily on its use by the United States first, and European Union a distant second.<sup>2, 3</sup> Empirical research on other countries’ use of antidumping has been extremely spartan in comparison, and even empirical research on the international (externality) implications of one country’s use is only beginning to evolve.<sup>4</sup> 1 See, for example, the symposium on the “Ten Major Problems” of ten countries’ use of antidumping, ten years after establishment of the WTO, organized by Horlick and Vermulst (2005).

2 Throughout this paper we may refer to the EU or EEC as a “country,” for ease of exposition since the antidumping trade policy instrument is administered by the EU/EEC jointly and not by each individual member country.

3 For recent surveys on various aspects of the economics research literature on antidumping, see Blonigen and Prusa (2004) and Nelson (forthcoming). See also the collection of published articles reprinted in Nelson and Vandenbussche (forthcoming).

4 Exceptions include a handful of empirical studies which have used a cross-country data set collected by researchers at the World Trade Organization (WTO), which is a data set limited to antidumping case initiations and with information on products that is typically categorized only at the industry (2-digit) level, e.g., reported in Miranda, Ruiz and Torres (1998) with updates. Examples of papers that have used this data include Prusa and Skeath (2002, 2005) and Feinberg and Reynolds (forthcoming) which focus on retaliation threats. Related papers that motivate some of this emphasis on cross-country linkages also include Blonigen and Bown (2003) and Bown (2005). There is also some emerging research from other user countries which exploits more detailed data that has been collected on an individual basis - an example is the Mexican use of antidumping examined by Niels and Francois (forthcoming).
informal firms, which is due to their ambiguous legal status, lack of proper accounts, and the lack of credit-rating procedures relevant to informal firms. Because of the small absolute size of the loans required by informal firms, it should be feasible to support alternative procedures for the provision of credit.

Third, putting the emphasis on exports requires significant improvements in the investment climate. With poor infrastructure and a weak regulatory system, Africa is at a disadvantage in this context, and reforms are urgently needed. Not all reforms may be required at once, however, and focusing growth efforts on a specific sector or location can save money. There is clear-cut evidence that sound economic policies make a difference. In Madagascar, for instance, the creation of an efficient export processing zone led to a very rapid expansion in the textiles and garment sector, and in Mauritius the investment climate played a major part in transforming the economy in less than 20 years. In some cases, access to firm-level panel data has made it possible to measure the effects of macro policies on different types of firms with greater precision than what has been possible with aggregate data. Gauthier, Soloaga and Tybout (2002) provide a case study of the Cameroonian experience, see Box 2.

The basic point is that Africa must try to take advantage of the existing opportunities, and take action where the problems are most acute. We know that African manufacturing firms have the potential to perform well. We mentioned in the introduction that one of the most striking results that have come out of the work on the firm data is that there is large variation in performance within sectors and countries. In recent years, while most firms may have experienced limited success, some have performed very well. These tend to be exporters. To enable more firms to achieve similar levels of performance, the adoption of new technology and orientation towards new markets must feature as key components of African industrial policy. Policies that provide incentives and means to firms to adopt a scientific strategy are likely to result in better performance, provided policies also facilitate exports. Countries that cannot break out of the current situation, where most manufacturing firms focus on supplying the domestic market with basic and cheap products, are unlikely to see a significant expansion of jobs in the sector. In such countries, manufacturing will not play a major role in reducing poverty.

37
**Table 5: Salaries and Promotions by Mean Performance Ratings Aggregated over 10 Years (staff hired at GF in 2000-2005)**

||**Bottom**<br>**decile**|**2**<sup>**nd**</sup>|**3**<sup>**rd**</sup>|**4**<sup>**th**</sup>|**Middle**<br>**decile**|**6**<sup>**th**</sup>|**7**<sup>**th**</sup>|**8**<sup>**th**</sup>|**9**<sup>**th**</sup>|**Top**<br>**decile**|
|---|---|---|---|---|---|---|---|---|---|---|
|**Start**<br>**Salary**|100|98|99|99|98|99|98|98|101|99|
|**10 year**<br>**salary**<br>**growth**|26%|38%|45%|49%|55%|58%|65%|68%|69%|83%|
|**%GG**<br>**after 10**<br>**yrs**|60|74|79|71|59|63|61|58|63|45|
|**%GH**<br>**after 10**<br>**yrs**|1|4|12|16|26|29|33|38|37|53|
|**%GI**<br>**after 10**<br>**yrs**|0|0|0|0|0|0|1|0|0|3|

# V. Conclusion

We have analyzed salary differences at the WBG between 1987 and 2015 in terms of differences by sex and by nationality. Our analysis begins with the idea that aggregate and career gaps can be examined as an interplay between composition and compensation effects and our decomposition results suggest that composition effects play the major role in explaining the aggregate gap in 2015. The career gap in general—and especially among GE+ staff where sample sizes are sufficient for meaningful comparisons— tends to be small at the WBG with entry salaries, salary growth and exits contributing in different proportions depending on the grade at which the employee was originally hired.

As a research paper, the objective is to establish basic facts that can inform discussion and debate at the WBG. One general theme that emerges from this line of work is that pay distributions today are linked in complex ways to historical hiring and compensation patterns. Conversely, policies today will have longrun effects that need to be carefully considered. For instance, attempts to increase the number of women at the GH level through greater hiring at the GF level and promotions would have to account for the fact that men tend to leave the institution at a faster rate than women and that overall exits are highly cyclical. Consequently, boosting hiring at the bottom of an exit-cycle can have very different long-term effects relative to additional hiring at the peak of the cycle. Similarly, one-time salary raises to staff who are below a benchmark would have to be evaluated both in terms of their effects on the balance between pay and performance as well as the design of the compensation system.

38
# **1. Introduction**

Along with climate change has come an increase in the frequency of natural disasters across the world (Figure 1). This poses an important policy challenge. Natural disasters cause tremendous human suffering. Locally, they often also yield substantial physical and economic damages, which may temporarily, or even permanently, jeopardize a country’s overall economic development. To help policymakers gauge the benefits from disaster risk mitigation and adaptation, it is important to better understand the economic costs associated with natural disasters.

**Figure 1:  Trends in Natural Disasters, 1975-2005**

<!-- Start of picture text --> 500<br>450<br>400<br>350<br>300<br>250<br>200<br>150<br>100<br>50<br>0<br>1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005<br>Number of Disasters Reported<br><!-- End of picture text --> Source: author’s own calculations using data on natural disasters from CRED- EMDAT.

This has instigated an incipient literature on the empirical relationship between natural disasters and economic growth. As expected, several papers report a (substantive) negative effect of disasters on growth. For instance, using a cross-country sample for the period 1970-2002, Rasmussen (2004) finds that natural disasters lead to a median reduction of 2.2 percent in the same-year real GDP growth, and that they increase the current account deficit and public debt.<sup>1</sup> Surprisingly however, many others find no

> 1 Other studies that report a negative effect include Raddatz (2007), Heger, Julca, and Paddison (2008), and most recently, Noy (2009). Based on reviews of events (as opposed to cross-country studies), Charveriat (2000), Crowards (2000), and Auffret (2003) also find that major events are associated with drops in aggregate output.

2
In each of the three manufacturing industries reviewed here, SMEs play a major role in output, employment, and exports. In both garments and non-electrical machinery, there were significant exports as far back as the 1970s, while in leather goods the main export boom came in the later 1980s. The sampled firms typically started small, many of them quite a few years back, and grew more or less gradually over the years. Both at present and even more in its earlier years, the typical SME sold mainly in the domestic market, with exports coming along as a possibility after it reached a certain age, size, and business capacity.

It is clear that both macro and micro factors are important determinants of export capacity in the three industries reviewed. The real exchange rate is central, as demonsimted by the timing of export growth and decline in sectors like garments (growth in the 1970s, collapse in the early 1980s, and growth again since the mid-1980s).

Micro determinants of export capacity also matter. The surveys, together with other types of information, indicate that the small and medium finns in these industries have faced a number of difficult problems in the areas of marketing, technology, and finance. They also have experienced some degree of harassment and extortion by uncooperative or dishonest people in the public agencies with which they interface, the problem of unreliability of some of the firms with which they do business, and the absence of ajudicial system that can help limit such abuses.& Their knowledge and skills in the area of international marketing are limited, as is their access to information and assistance on the technology fronts.

Private agents have provided the support that is most valued by firms in establishing marketing contacts and providing technological information and assistance (see Table 16 for summary figures). The contribution of the public sector and industry associations has mainly taken the form of facilitating interactions among private agents. It has been more usefnl on the marketing side, moderately so on the technology/productivity side. Some firms, especially those that were smaller at start-up, indicate that support from public sector and other institutions has been important at various phases of their growth and development as exporters. At the same time, many firms have complained of the lack of better support services, and of counterproductive practices (such has harassment) by certain public institutions. They consider their own efforts to be the most important factor in any success they have had in the technological and international marketing areas. Against this overall background, it is not hard to imagine a more effective support system for providing useful and timely assistance to Colombia's SME exporters. The finn-level evidence, the views of outsiders, and comparisons with other countries where support systems are more developed, all suggest that the process of penetrating export markets could have been falster and more 35A longer background paper (available on request) examines fiancial, regulatory and other constraints.

28
Recently, as governments have become more concerned with debt reduction and fiscal sustainability in general, the cash balance has also become the metric by which sustainability is generally judged. The Excessive Deficits Procedure of the Maastricht Treaty is defined as a limit on the general government cash deficit as a percentage of GDP, and many countries define self-imposed fiscal rules with respect to the cash balance as well. (Section 4 surveys fiscal rules and accounting standards in a number of countries.) Multilateral lending organizations likewise tend to look at the cash balance to measure fiscal sustainability.

We may distinguish a number of perspectives on these issues, each with its own implications for the way fiscal balance should be calculated.

# _(a) Fiscal sustainability_ :

A primary role of any balance measure will be in judging the sustainability of the current fiscal stance and ultimately the solvency of the government sector as a whole. The preoccupation with sustainability leads some commentators to argue for the cash balance approach – only debt matters – and others for the operating balance approach – only net worth matters, and debt is unimportant per se if it is backed by assets. Both views are in their ways erroneous. The latter view in particular is based on a false analogy between private sector and government finance.<sup>4</sup> Unlike the private sector, government solvency depends less on the value of assets held than on the taxable capacity of the economy (Musgrave, 1963). The argument for incurring debt, therefore, is not that assets are to be held on the balance sheet, but that public investment will, directly or indirectly, lead to future increases in government revenues.

When the assets in question are associated with projects that are or may be commercialized, the analogy to business finance is more apt. Some types of public capital investments such as in the utility sector (power, transport and communications) could be sold to private investors, thereby providing funds to governments to pay back debt. Thus, debt is sustainable to the extent that asset disposals can assure lenders that their principal and interest will be covered.

# _(b) Tax Smoothing_ :

Because the static marginal cost of public finance is an increasing function of the government tax take, there is a prima facie case for borrowing to finance public investment, thereby smoothing the associated tax burden over future years and future generations. Optimally, tax burdens should be set to minimize dynamic efficiency costs.

That tax smoothing may be consistent with an operating balance rule for financing public investment can be seen by examining again the associated path for taxes given by equation (4): for a government with initial public debt fully backed by initial capital, (4)

> 4 It is also, of course, a too-narrow view of corporate finance.

7
WPS3684

# **Antidumping and Safeguard Measures in the Political Economy of Liberalization: The Mexican Case**

**_Luz Elena Reyes de la Torre* and Jorge G. González**_**

## World Bank Policy Research Working Paper 3684, August 2005

_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 view of the World Bank, its Executive Directors, or the countries they represent. Policy Research Working Papers are available online at http://econ.worldbank.org._

- _ler@sai.com.mx_

- _** Jorge.Gonzalez@Trinity.edu_

This paper was written for the World Bank. The authors acknowledge herein the valuable support and assistance given to this research by Emiliano Zubieta Medina, Jorge Sentíes Guerrero and Daniel Reyes Torres.
investigated by checking whether the included projects are also implemented in locations with different precision categories (see appendix). Reassuringly, more than 60 percent of the projects retained in the sample are also assigned to at least one location at the ADM1 (precision 4) or ADM2 (precision 3) level. The projects in the sample are also compared to projects with at least one location at precision 3 or 4 but without any location at precision 1 or 2, in terms of observable characteristics (see appendix). The projects in the two groups are broadly similar, although there are some differences in terms of sectoral composition; the projects in the sample have, on average, smaller shares in agriculture, health, and education, but larger shares in energy, transport, and water sanitation. This suggests that the sample of precise locations has (unsurprisingly) a disproportionate share of projects dedicated to the building of facilities and infrastructure.

# **2.2 Location of Mission Stations**

The analysis relies on two different historical sources for information on the locations of Christian mission stations. The preferred source is _Geography and Atlas of Christian missions_ by Beach (1903), digitized by Cagé and Rueda (2016). It includes the locations of Protestant mission stations in Africa as of 1903, together with information on the investment of each mission (school, dispensary, hospital, etc.). An alternative source is _Ethnographic Survey of Africa: Showing the Tribes and Languages_ by Roome (1924), digitized by Nunn (2010). This source reports locations of both Protestant and Catholic foreign mission stations in Africa as of 1924.

As is apparent from fig. 1, the two sources do not overlap perfectly. The cell-level correlation between Protestant missions from Beach (1903) and Roome (1924) is 0.31. One reason for the low correlation could be that missionaries started penetrating the African inland only after first settling on the coast. The 1924 data indeed show a higher concentration of mission stations farther from the coast. Therefore, this study takes a conservative approach, and the analysis is conducted using the two sources separately. The results of virtually all the analyses, using either one of the two atlases to construct Mission _ik_ , are quantitatively similar and qualitatively identical. Results from the baseline regression, equation (1), are reported for both sources, but for ease of exposition only results obtained using data from 10
|Share of Mexican efforts in TF|on total impact|simulati|ons|||
|---|---|---|---|---|---|
|Trade facilitation measures||||||
|"Border Measures”||||||
|Port Efficiency|40%|0%|47%|66%|13%|
|Custom Environment|9%|0%|11%|AT%|0%|
|“Inside the Borders ideasures"||||||
|Corruption|37%|73%|38%|0%|65%|
|Service Sector Infrastructure<br>|8%<br>|0%<br>|0%<br>|-18%<br>|0%<br>|
|% ofthe total impact onexpol<br><br>|94%<br>|73%<br>|96%|96%|97H|
|"Border Measures”|a|ee||||
|Port Efficiency|78%|65%|37%|232%|55%|
|a||||||
|“Inside the Borders ideasures”||||||
|Corruption|0%|27%|0%|-264%|0%|
|Service Sector Infrastructure<br>|9%<br>|-%<br>|3%<br>|106%<br>|15%<br>|
|‘vofthetotalimpactonimpof|70%|76%|AG|75%|BY|
|<br>Source:Ownestimates||||||