rafmacalaba/datause-encoder-data huggingface dataset:
The financing and taxation of U.S.
            direct investment abroad
The author examines the financing of
            U.S. direct investment abroad. Using a theoretical model, he
            first examines how home country investors can use debt
            finance to reduce their host country tax liability and to
            reduce the capital investment distortion attributable to
            foreign taxes. Empirically, U.S. affiliates are shown to use
            leverage in high tax environments and in situations  where
            the affiliates face high foreign wage bills relative to
            assets. This confirms the notion that leverage can be used
            to ward off host country tax and wage pressures on the firm.
            The author examines what characteristics of foreign direct
            investment determine the average host country tax rate paid.
            Generally, the taxation of foreign direct investment is
            positively related to the size of the wage bill. Host
            countries appear to charge lower taxes in cases where U.S.
            direct investor abroad pay high wage bills to labor within
            the host country. Certain trends emerge from the data: there
            is a relative shift of U.S. direct investment abroad toward
            the industrial countries; debt finance of direct investment
            is becoming more important in industrial countries and less
            important in developing countries; and the tax benefits that
            industrial and developing countries get from U.S.
            affiliates, as measured by average income and payroll taxes,
            are waning. The downward trend in tax rates suggests an
            increased international competition to attract foreign
            direct investment. The reduction in average tax rates on
            U.S. investment abroad and the relative shift toward
            investment in industrial countries suggests a tougher
            climate ahead for developing countries that wish to attract
            foreign direct investment. One strategy for attracting
            foreign investment would be to deepen the domestic financial
            market so a multinational can attract additional lending
            capital in the host country itself. Another approach is
            local equity participation in foreign direct investment to
            lessen the incentives for host countries to tax foreign
            investments highly.
Reforming health care : a case for
            stay well health insurance
All countries - whether industrial,
            developing, or in transition to a market economy - are
            interested in health care reform. A central focus of reform
            everywhere is to make patients more responsive to health
            care costs without diluting the protection offered by public
            or private insurance. Conventional insurance offers
            customers little incentive to monitor their own use of
            health care services or to adopt and maintain better health
            habits. The authors describe an alternative health insurance
            structure first adopted in Mendocino County, California, in
            1979, and compare it with conventional forms of insurance.
            The Mendocino or "stay well" plan offers consumers
            direct incentives to control their use of health care
            services and to adopt healthier lifestyles. How well this
            insurance can contain health care costs depends on the size
            of the incentives and consumer responsiveness to them.
            Conditions in some developing countries and in many
            countries moving to market based economies - overuse of
            services, poor health habits, and declining real incomes -
            improves the likelihood of a favorable response to such
            incentives. How to structure the stay well system depends on
            the country, but the stay well plan is a general flexible
            form of insurance that subsumes most conventional plans as
            special cases. The rewards for low use might take many
            forms. As in the Mendocino plan, the rewards might be a
            credit to a retirement account, but they could just as
            easily be annual cash rebates or credits against out of
            pocket expenses that exceed an individual's or
            family's spending goal in a future period.
            Administration of the stay well plan appears not to be
            unduly complex. If anything, incorporating stay well
            incentives in a single-payer or national health care system
            would be simpler than incorporating them in a self insured
            fund. The success of the plan hinges on whether incentives
            shift the frequency distribution of health care spending by
            reducing unnecessary utilization in the short run and
            through better health care habits, reducing long run costs.
            Despite additional payments to low users, the stay well plan
            could be less expensive than conventional plans with similar
            coverage. As in any insurance plan, solvency is enhanced by
            larger groups, better risk pooling, economies of scale in
            administration and claims processing, and greater bargaining
            power with health care providers.
How macroeconomic projections in
            policy framework papers for the African region compare with outcomes
Policy framework papers (PFPs) have
            become important documents because they provide a framework
            for the economic policies that a country will pursue and for
            donor assistance. The projections included in these
            documents reflect the policy targets and the expected
            outcomes of policy reforms. The author focuses on the
            quality and relevance of these projections, comparing actual
            outcomes with the projected or targeted outcomes for
            selected variables. The idea is that a retrospective survey
            such as this will eventually improve projections. The author
            recommends further country-by-country analysis and actual
            outcomes to identify how much of the divergence between the
            two is due to external factors (such as weather and terms of
            trade) and how much to lack of progress in policy reform.
            Delayed progress could be due to unforseen circumstances
            (such as political changes or internal strife) or to
            unrealistic targets. The quality and realism of PFP
            projections are likely to improve, says the author if
            certain steps are taken in making projections: all PFPs
            after the first one should contain a review of outcomes in
            relation to projections in previous PFPs; whenever the
            chances of falling short of projected or targeted outcomes
            are high, the PFP should say so; using references such as
            this review, the projections could consider benchmark
            figures based on experience with successful cases of
            adjustment; from time to time each country department could
            carry out a review to assess the realism of departmental PFP
            projections, and the Chief Economist's Office could
            review projections to assess their quality.
Population growth, externalities,
            and poverty
The authors review the implications for
            social policy in developing countries of two major
            justifications for fertility reduction: the externality
            argument and the income redistribution argument. First they
            set out the arguments. In terms of how policy affects the
            poor, they show that the implications of the two different
            arguments are virtually identical. Both imply that the only
            reasonable way to view policies to reduce fertility is as
            activities in which one segment of society (the rich) is
            offering another segment (the poor) compensation to elicit a
            change in behavior. Where there are true externalities, the
            rich may also end up as well or better off in terms of
            income than they were, because everyone can benefit from the
            overall efficiency gain. Where there are not true
            externalities, the poor are made better off in the sense of
            real income while the rich gain in terms of utility by
            financing the necessary social programs. The authors outline
            briefly the program implications of this welfare approach:
            more emphasis on a package of targeted social programs, and
            more emphasis in family planning services on client welfare
            and contraceptive choice.
The simple(r) algebra of pension plans
Chile's success with pension reform
            in the early 1980s and the continuing financial pressures
            facing the social security systems of many developing (and
            some industrial) countries have elicited considerable
            interest in the mechanics of pension systems that are based
            on fully funded individual capitalization accounts. The
            author sets out the simple(r) algebra of both defined
            contribution and defined benefit plans. The author notes the
            following results: (a) unless the real rate of interest
            exceeds the growth rate of real wages by a significant
            margin, payment of a reasonable pension rate requires a high
            contribution rate or a high active worklife ratio (the ratio
            of working life to retirement life); (b) it is more
            difficult for a high-growth economy to provide a high
            pension rate, although the absolute level of the pension
            could be higher than the pension level in a low-growth
            economy with a high pension rate; (c) when pensions are
            indexed to prices, the level of interest rates and growth
            rates affects positively the level of the pension rate. But
            when pensions are indexed to wages, only the difference
            between interest rates and growth rates has an effect on
            pension rates. In all cases, the active worklife ratio has a
            positive effect on the pension rate; (d) the timing of
            contributions, and therefore the pattern of earnings over a
            person's full career, has a significant but not major
            effect on pension rates; (e) employer-based, final-salary,
            defined-benefit plans penalize early leavers and favor late
            high-fliers; (f) full funding with universal coverage and
            full lifetime careers would lead to a massive accumulation
            of capital, especially if the demographic structure
            resembles a pillar rather than the more traditional pyramid.
            This would have major implications for the productivity of
            capital and the functioning of financial systems; (g) a
            mixed system -- combining a redistributive first pillar and
            a fully funded defined-contribution second pillar --
            represents a more prudent, perhaps more equitable, approach
            to reforming pension systems; (h) variable contribution and
            pension rates, within specified limits, might be preferable
            and more consistent with greater reliance on personal choice.
Swiss Chilanpore : the way forward
            for pension reform
Many countries are considering
            far-reaching pension reform.  This is happening in response
            to growing demographic pressures in some countries
            (especially in Western and Eastern Europe), to unsustainably
            generous benefits in others (especially in Latin America),
            or to failure to ensure the profitable investment of
            accumulated funds (as seems to be true with national
            provident funds in African countries).  Given the worldwide
            interest in reform, one could ask:  Is there a blueprint for
            pension reform?  Can lessons learned in different countries
            be combined in a best-practice structure usable in different
            countries' pension systems?  The author reviews the
            experience of Switzerland, Chile and Singapore, countries
            with relatively successful economies and pension systems.
            He suggests a multipillar pension system - which he dubs
            Swiss Chilanpore - that would blend the hard-headed softness
            of the Swiss, the expensive yields of the Chilean scheme,
            and the ruthless efficiency of Singapore.  He emphasizes
            that:  there is no perfect pension system - all systems
            suffer from the problems of moral hazard, adverse selection
            agency costs, and free riders; and all well-functioning
            pension systems require good government and good management.
            All pension systems have to cope with the  problems of
            long-term uncertainty.  For these reasons, the author favors
            a multipillar approach that diversifies across different
            providers. Swiss Chilanpore would have two compulsory and
            two voluntary pillars:  a first pillar (drawn from the Swiss
            model) consisting of two parts, a flat-rate pension
            proportional to the length of a person's career and an
            earnings-related pension based on annual actualized lifetime
            earnings; a second pillar consisting of a central agency,
            which could be public or private, for record-keeping and
            other centralized functions, and private fund management
            companies for investing funds, the point being to keep
            operating costs down and achieve high investment returns;
            and third and fourth pillars based on occupational pension
            schemes and personal savings.  The proposed structure would
            aim to combine the strengths and avoid the weaknesses of the
            three countries' systems, but the author cautions that
            no reform proposal would apply equally well in all
            countries, regardless of local circumstances and conditions.
Capital market imperfections before
            and after financial liberalization : a Euler Equation
            approach to panel data for Ecuadorian firms
Using a large set of panel data for
            Ecuadorian firms, the authors analyze the role of capital
            market imperfections in investment decisions and investigate
            whether the financial reforms introduced in the 1980s in
            Ecuador succeeded in relaxing financial constraints.  To
            facilitate capital accumulation and growth, the Ecuadorian
            government removed administrative controls on the interest
            rate and eliminated or scaled down directed credit programs.
            The model used here allows both for an increasing cost of
            borrowing, as the degree of leverage increases, and for a
            ceiling on leverage. The econometric results suggest that
            both types of capital market imperfections are important for
            small and young firms, but not for large and old firms.
            Moreover, the estimated equations do not provide evidence
            that financial reform in Ecuador has helped to relax these
            financial constraints.
Public output and private decisions
            : conceptual issues in the evaluation of Government
            activities and their implications for fiscal policy
In this essay, the author explores
            theoretical concepts behind the current debate on government
            growth, public sector inefficiency, and the role of fiscal
            policy with a view to raising the most important issues
            relevant for fiscal policy. He examines theories of public
            sector growth, the evaluation of benefits from government
            spending, and the response of the private sector to
            government activities. Three principal reasons have been
            suggested to explain public sector growth: conscious
            government choices, political pressure from interest groups,
            and the self-interest of bureaucracies. One may ask: is the
            growth of the public sector a response to public demand or
            the result of government waste and inefficiency? In terms of
            the agent-principal theory, bureaucrats who are supposed to
            serve as agents for citizens may not necessarily do so -
            which is where waste comes in. If bureaucrats are interested
            in the nonpecuniary benefits of their bureaus, they will
            have an incentive to maximize their activities and budgetary
            allocation rather than their operating efficiency. In
            discussing the evaluation of public programs, the author
            focuses on the "true" benefits, as perceived by
            citizens. Would a well-to-do citizen, who could afford
            private security guards, make the same evaluation about
            public security that a poor citizen would make? In general,
            what considerations affect a person's desire for a
            given amount of public spending, and what are the important
            parameters that analysts should take into account in their
            investigation? The author also explores the issues behind
            the private sector's response to government activities
            and argues against a mechanistic approach to the interaction
            between the private and public sector. Unless decisionmakers
            are relatively certain about how citizens evaluate
            government actions, citizens may respond in a way that
            0ifies the government action. The author concludes that more
            empirical work is needed on measuring citizens's
            response to public sector activities. And fiscal policy,
            especially on expenditures, should be modeled on a
            disaggregated basis to isolate hypotheses about potential
            private sector responses to individual public programs.
More evidence on income distribution
            and growth
Inequality is often regarded as a
            necessary evil that has to be tolerated to allow growth,
            says the author. The view that inequality is necessary for
            the accumulation of wealth, and contains the seeds of
            eventual increases in everyone's income, is evident in
            trickle down economic theories, where societal acceptance of
            inequality allows the rich to earn a greater rate of return
            on their assets. Others argue that inequality slows growth -
            because increased inequality causes more conflict over
            distributional issues, thereby encouraging greater economic
            intervention and higher taxes. According to the author, the
            empirical evidence shows that: Inequality is negatively, and
            robustly, correlated with growth. This result is robust to
            many different assumptions about the exact form of the
            cross-country growth regression. Although statistically
            significant, the magnitude of the relationship between
            inequality and growth is relatively small. Decreasing
            inequality from one standard deviation above to one standard
            deviation below the mean increases the long-term growth rate
            by about 1.3 percentage points a year. Inequality has a
            similar effect in democracies and non-democracies. When an
            interaction term between the type of regime and inequality
            is included in the base regression, it is insignificant at
            conventional significance levels. The cross-country data on
            inequality follows Kuznets' inverted-U shape. Care
            should be taken in interpreting these results. Although
            inequality is negatively correlated with growth, this does
            not necessarily imply that soak-the-rich policies will
            improve long-term growth. First, theoretical work on
            inequality and growth stresses that this negative
            correlation is caused by high levels of inequality provoking
            high levels of government economic intervention.
            Soak-the-rich policies may be less necessary where there is
            less inequality. Second, although the partial correlation is
            robust, the direction of causality has not been determined
            and the effects of specific income distribution policies
            have not been tested. Finally, if policies designed to
            decrease inequality result in greater government consumption
            and the cost of increased government consumptions outweighs
            the benefits of greater equality, long-term growth may be
            harmed. But for certain: inequity is not a prerequisite for growth.