rafmacalaba/datause-encoder-data huggingface dataset:
# **A Context Appendix**

Table A.1: Policies Incentivizing the Use of Electronic Payment Technologies

||A. VAT Rebates|
|---|---|
|Argentina|5 percent VAT refund on debit card purchases _<_ARS 1000 (USD 51) [2001-2017]<br>3 percent VAT refund for credit cards [2003-2009]|
|Colombia|2 percentage points VAT rebate for card purchases [2004-2014]|
|Japan|2 or 5 percentage points rebates for consumers making cashless purchases at registered<br>business [2019-]|
|Korea, Rep.|VAT tax credit for merchants. 0.5% of credit card sales [1994], 1% [1996-2000] and 2%<br>[2000-], with 5 million won ceiling|
|Uruguay|2-4 percentage point VAT rebates for card payments [2014-]|
||B. Income Tax Rebates|
|Colombia|Cash payments deductible only below certain thresholds|
|Greece|Income tax discount of up to 22% of electronic purchases, up a threshold proportional to<br>income [2017-]|
|Mexico|Allowable deductions of a company’s expenditure must be backed by a digital tax receipt<br>or electronic transaction if _>_2000 pesos (107$)|
|Korea, Rep.|Share of electronic payments deductible from taxable labor income: 10% of transaction<br>amount [1999-2002] up to a ceiling of 3 million won or 10% of total labor income; rate was<br>revised over the years, reaching 30% for some years|
||C. POS Subsidies|
|Argentina|Up 50% of monthly POS rental fee can be claimed as fscal credit by merchant; no trans-<br>action fee and rental fee waver for small merchants in frst two years [2016-]|
|Japan|Subsidies to installing cashless payment systems to 2 million eligible small and medium<br>sized businesses [2019-]|
|Malaysia|Subsidized POS terminals|
|Mexico|Free POS installation and fxed monthly merchant fee up to certain transaction volume<br>[2004-]; Ministry of Finance subsidized tablet equipped with MPOS|
|Uruguay|Eligible merchants can claim an income tax exemption of up to 100% of the value of the<br>POS investment (subsidy rate revised over time) [2012-]|
||D. Lotteries|
|Greece|Lotteries for consumers [October 2017-]; automatic participation when paying by electronic<br>means; tickets awarded correspond to aggregate monthly amount spent by electronic means|
|India|Lotteries for merchants and consumers [2016-]|
|Mexico|Lotteries (cars) for consumers [2004-]|
|Netherlands|Lotteries for merchants and consumers [2002-]|
|Korea, Rep.|Lotteries for merchants and consumers, one credit card invoice stub per month randomly<br>chosen as winner|

Notes: This table compiles a non-exhaustive list of countries employing incentive schemes similar to those we study in this paper. Our compilation focuses on financial and fiscal policies to incentivize the use of electronic payment technology. It is based on World Bank Group (2014) and Nicolaides (2021). This table is discussed in the introduction, Section 1.

32
of the elasticity of output with respect to capital, using: Alternatively we have obtained s<sup>Q</sup> K;i<sup>from:</sup> where<sup>b</sup> �j = b"jK<sup>+b"j</sup> L<sup>+b"j</sup> M<sup>isthedegreeofreturnstoscaleinsectorj.Theresultarerobusttothis</sup> choice.

# 8 Results

We will discuss now the empirical results obtained when the production function is estimated on the ...rm level data contained in Amadeus for Belgium, France, Great Britain, Italy, Spain over the period 1998-2005. To avoid overburdening the reader, we report results for selected estimators (OLS, System GMM, and Olley and Pakes) for only one of our countries, Belgium.

The estimation results for the elasticity of output with respect to each factor, for constant returns to scale and for average markups are reported in the tables 6, 7, and 9: Estimates are pretty standard and vary somewhat across estimators. Recall that materials include services together with materials and intermediates. The degree of returns to scale is very close to one in most sectors using OLS and System GMM, while it is slightly smaller, but still close to one, with the Olley and Pakes estimator. The estimate of "<sup>j</sup> K<sup>is greater for the OLS estimator and the smallest for the Olley</sup> and Pakes estimator. For ...ve sectors it is negative using the GMM System estimator with serially uncorrelated errors, although not signi...cantly so. The test of overidentifying restrictions and the test of second order serial correlation for the GMM System do not suggest major misspeci...cation issues for most sectors, which leads us to focus on this version of the GMM estimator, instead of the one allowing for an AR(1) error component in the level equation. The average estimated markup, obtained using (36), exceeds one in all sectors, whatever the estimator used. Moreover it is strictly greater than one for 64% of ...rms, using OLS, 70% using System GMM, and 63% using Olley and Pakes.

We ...nd markup estimates that are quite reasonable compared to existing estimates in the microeconometric literature<sup>12</sup> , albeit somewhat high relative to the macro literature. The numerical estimates in Tables 6 through 9, usually in the range of 1.10 to 1.25, seem quite small, but one needs to remember that these are markups on gross output. Converting to markups on value added using a representative materials share of 0.7, the markups are in the range of 1.43 to 3. Similarly, the implied pro...t rates are a bit on the high side. Using equation 38, the pro...t rate can

> 12 For example, Dobbelaure and Mairesse (2008) ...nd very similar markups using panel data for French ...rms.

24
## **4.5.3 Adding maintenance costs**

While investing in new roads is necessary, poor maintenance leaves part of the existing infrastructure in disrepair. In Africa around 2010, half of the African countries surveyed were found not to devote adequate resources to maintenance of the main road network, and about half of these are not even spending enough to meet routine maintenance requirements (Gwilliam, 2011). There is great variation in spending for maintenance across countries, but under spending is conspicuous in low-income countries (Gwilliam, 2011). We therefore include maintenance costs to the analysis. Maintenance of the road network includes both routine maintenance to preserve the condition of the road and periodic maintenance to resurface paved roads to account for that lost due to vehicle usage. For the projects of interest, we assume an average annual maintenance cost (recurrent/routine maintenance as well as periodic maintenance) over the life of the assets of 3 percentage of capital cost range.<sup>8</sup> Table A16 reports the results of the net gains when including the maintenance costs. Adding maintenance costs reduce the net gains but the reduction is small for all corridors. The results remain similar to the previous estimation.

# **4.6 Spatial impacts**

Figures 9, 10, 11 and 12 show the gains for all 662 locations for each corridor. The corridor Conakry-Abidjan on Figure 11 brings the largest benefits. The gains are the largest for the locations directly along the corridors that benefit from a significant drop in transport costs. The size of the gains decrease with the distance from the corridors, but the indirect benefits go well beyond the neighboring locations. Therefore reducing transit and border costs should be done not only along the corridor but also in the whole region to maximize the gains.

> 8This estimation is commonly used to quantify maintenance costs in cost-benefit analysis. It is higher than an estimation of the average combined cost of routine and periodic maintenance for a typical Sub-Saharan African country. The median value from “Study of Road Infrastructure Costs: Analysis of Unit Costs and Cost Overruns of Road Infrastructure Projects in Africa” published by the African Development Bank in May 2014 is given by 7,500 USD/km for routine maintenance, 160,644 USD/km for periodic maintenance, and 23564 for the combined annual cost. The values are adjusted at 2% annual inflation from 2006 to 2017 since data in US$ are from 2006.

26
infrastucu investment, and choosing financial instuments so as to minimize the risks of dependence on foreign funds-these ideas were at the heart of th debate over fnancing infastructur investments, most notably the railways, in the 19th centuy. Thus, the historal record is replete with information on both the ircumstances under which such innovations are workable and their limitatons.

In middle-income developig countries, these methods have much to recommend them. Formal financial markets and prudential regulation are relatively well advanced. The i on requirent for efficient use of private and commercial finance are approximated if not fully met. Private iniiative, commercial bond and equity finance by public agencies, and limihts on government guarante could deliver at least some of fte beefit tumpeted by their advocates.

In less deveoped and less-liberli economies, in contrast, not all the informational and contrtua pecodions for efficient private or commercial finance of in projects prvail. As in regions of recent Euopean settlement and elsewhere in atin America, Afiica and Asia a century and more ago, it will be difficult to mobilize resources by tappi investors at home and abroad. Private insitutions (universal banks, for exmple) and public ones (such as regulatoxy agencies) are needed to ure an adequate flow of infomation to investors, to falitate montring, and to discipline management; these are not yet in phlac in many developing countres. With time, financial libetion and policies to encourage the gwwth of the formal financial sector can help to overcome these problems. But in the meantime, the hope that all problems of inftructure fimance can be dispatched through the adoption of policies friendly to prvate and commercidal inifiatives must be 42
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37
ZIMBABWE‘S INFRASTRUCTURE: A CONTINENTAL PERSPECTIVE This report presents the key AICD findings for Zimbabwe, allowing the country‘s infrastructure situation to be benchmarked against that of its African peers. Given that Zimbabwe is at present a distressed low-income country, but has approached middle-income status in the past, two sets of African benchmarks will be used to evaluate Zimbabwe‘s situation: that of low-income countries and that of middle-income countries. Detailed comparisons will also be made with Zimbabwe‘s immediate regional neighbors in the Southern African Development Community (SADC).

Several methodological issues should be borne in mind. First, because of the cross-country nature of data collection, a time lag is inevitable. In the particular case of Zimbabwe, it is hardly possible to make sense of the financial data for the period 2005–08 due to the spiraling currency crisis: hyperinflation soared to an official figure of over 230 million percentlow-income countrieby February 2008. Therefore the report will focus on the Zimbabwe‘s 2004 pre-currency-crisis and 2009 post-currency-crisis data points. Most technical data presented are for 2006 (or the most recent year available), while financial data for comparator countries are typically averaged over 2001–06 to smooth out the effect of short-term fluctuations.

Second, to make comparisons across countries, indicators are standardized to allow for a consistent cross-country analysis. This means that some of the indicators presented here may be slightly different from those that are routinely reported and discussed at the country level.

# Why infrastructure matters

In common with the rest of the continent, southern Africa‘s<sup>2</sup> growth performance improved markedly in the 2000s vis-à-vis the 1990s. The overall improvement in per capita growth rates has been estimated at 2.1 percentage points, of which 1.1 points are attributable to better structural policies and 1.0 point to improved infrastructure. Zimbabwe stands out markedly as a sad exception. Zimbabwe‘s broad-based output declined dramatically during 2000–08. Its GDP contracted by roughly 50 percent —possibly the largest peacetime contraction ever recorded<sup>3</sup> —reaching a low point in 2008. The recent introduction of effective policy measures, including the dollarization of the economy, is likely to lead to a nascent economic rebound (figure 1).

> 2 Southern Africa (or those countries in the SADC) includes Angola, Botswana, Madagascar, Mauritius, Malawi, South Africa, Zambia, and Zimbabwe.

> 3 2010 Investment Climate Statement—Zimbabwe (www.state.gov/e/eeb/rls/othr/ics/2010/138171.htm).

3
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# **Table 10a: Predicted change in the probability of selecting each animal from AOGCM climate scenarios**

|||**Beef cattle**|**Dairy cattle**|**Goats**|**Sheep**|**Chickens**|
|---|---|---|---|---|---|---|
|Baselin|e probability|11.8%|23.1%|23.4%|19.4%|22.3%|
|2020|||||||
||CCC|-1.59%|1.31%|1.75%|1.90%|-3.37%|
||CCSR|-0.54%|-0.10%|1.59%|1.86%|-2.81%|
||PCM|-2.10%|-1.37%|5.51%|1.24%|-3.28%|
|2060|||||||
||CCC|-1.70%|-1.46%|4.69%|2.87%|-4.40%|
||CCSR|-1.24%|4.41%|-1.90%|2.10%|-3.38%|
||PCM|-2.09%|3.99%|-2.65%|8.62%|-7.87%|
|2100|||||||
||CCC|-3.93%|6.81%|-5.73%|16.69%|-13.84%|
||CCSR|-3.29%|-0.10%|4.60%|1.88%|-3.10%|
||PCM|-2.08%|-0.87%|4.34%|4.01%|-5.39%|

**Table 10b: Predicted change in net income per animal from AOGCM climate scenarios (US$/animal)**

|||**Beef cattle**|**Dairy cattle**|**Goats**|**Sheep**|**Chickens**|
|---|---|---|---|---|---|---|
|<br>Baseline|income|145.00|132.09|6.49|11.77|1.14|
|2020|||||||
||CCC|-12.45|0.48|-0.36|-1.49|-0.24|
||CCSR|-22.68|-2.59|-0.22|-0.92|-0.28|
||PCM|-14.07|12.49|0.01|-1.12|-0.11|
|2060|||||||
||CCC|-21.46|12.66|-0.21|-1.72|-0.22|
||CCSR|-58.13|-6.06|-0.33|-2.68|-0.39|
||PCM|-27.58|-4.62|0.24|-2.29|-0.43|
|2100|||||||
||CCC|-42.92|-22.32|1.90|-1.74|-0.67|
||CCSR|-9.32|53.50|2.13|4.29|-0.32|
||PCM|-27.61|17.21|0.25|-1.30|-0.31|

34
subsidizes 50 percent of the standard expenditures. The grant for livelihood protection subsidizes 75 percent of the standard expenditures. The subsidizing share is generally large for those programs that impose heavy fiscal burdens on local governments, or in which the central government has strong interests. Conversely, the subsidizing share is small for programs that are inherently the functions of local governments. The grant rates of some typical local activities are as follows:

# Local Activities

# Typical Grant Rates

|Capital Grants||
|---|---|
|Local road construction|1/2|
|Local road improvement|2/3|
|River riparian works and dams|2/3|
|Port construction and improvement|1/2|
|Local airport construction and improvement|3/4|
|Sewage pipes|2/3|
|Sewage treatment plants|1/3|
|Public housing|1/2|
|Public health office appliances|1/2|
|Primary and secondary school building|1/2|
|High school buildings|1/3|
|Recurrent Grants||
|National road maintenance|1/2|
|River maintenance|1/3|
|Primary and secondary school teachers' salary|1/2|

# Source: Fujiwara (1992).

Generally speaking, local governments with strong fiscal capacities spend more on subsidized programs than local governments with low fiscal capacities. Thus, if the actual amount of expenditure was used as a base to calculate the subsidies, wealthy local governments would be subsidized more generously than poor local governments. This is one reason why central government specific purpose disbursements are now determined on the basis of standard costs prescribed by the central government. Occasionally, the local governments are known to criticize these standard costs as being too low.

Most of the central government special purpose disbursements are allocated among local governments at the discretion of the central government; there are only a few formula disbursements. Therefore, every local governments seeks to obtain specific purpose disbursements to the maximum extent possible. To that end, local government **s** pend time and energy on rent-seeking.

The procedure of allocating a particular specific purpose program is as follows: a local government submits an application for a disbursemen **t** o the central government; the application describes te project and explains the reasons for its importance; and the central government assesses all of the applications submitted by local governments and selects projects that receive grants. During this selection process, the 28