rafmacalaba/datause-encoder-data huggingface dataset:
New tools and new tests in
            comparative political economy - the database of political institutions
This paper introduces a large new
            cross-country database on political institutions: the
            Database on Political Institutions (DPI). The authors
            summarize key variables (many of them new), compare this
            data set with others, and explore the range of issues for
            which the data should prove invaluable. Among the novel
            variables they introduce: 1) Several measures of tenure,
            stability, and checks and balances. 2) Identification of
            parties with the government coalition or the opposition. 3)
            Fragmentation of opposition and government parties in
            legislatures. The authors illustrate the application of DPI
            variables to several problems in political economy. Stepan
            and Skach, for example, find that democracy is more likely
            to survive under parliamentary governments than presidential
            systems. But this result is not robust to the use of
            different variables from the DPI, which raises puzzles for
            future research. Similarly, Roubini and Sachs, find that
            divided governments in the OECD run higher budget deficits
            after fiscal shocks. Replication of their work using DPI
            indicators of divided government indicates otherwise, again
            suggesting issues for future research. Among questions in
            political science and economics, that this database may
            illuminate: the determinants of democratic consolidation,
            the political conditions for economic reform, the political
            and institutional roots of corruption, and the elements of
            appropriate and institutionally sensitive design of economic policy.
The vicious circles of control -
            regional governments and insiders in privatized Russian enterprises
How can one account for the puzzling
            behavior of insider-managers who, in stripping assets from
            the very firms they own, appear to be stealing from one
            pocket to fill the other? The authors suggest that such
            asset-stripping and failure to restructure are the
            consequences of interactions between insiders
            (manager-owners) and regional governments in a particular
            property rights regime. In this regime, the ability to
            realize value is limited by uncertainty and illiquidity, so
            managers have little incentive to increase value. As the
            central institutions that rule Russia have ceded their
            powers to the regions, regional governments have imposed
            various distortions on enterprises to protect local
            employment. Prospective outsider-investors doubt they can
            acquire the control rights they need for restructuring firms
            and doubt they can avoid the distortions regional
            governments impose on the firms in which they might invest.
            The result: little restructuring and little new investment.
            And regional governments, knowing the firms' taxable
            cash flows will have been reduced through cash flow
            diversion, have responded by collecting revenues in kind. To
            disentangle these vicious circles of control, the authors
            propose a pilot for transforming ownership in
            insider-dominated firms through a system of simultaneous
            tax-debt-for-equity conversion and resale through
            competitive auctions. The objective: to show regional
            governments, for example, that a more sustainable way to
            protect employment is to give managers incentives to
            increase enterprises' value by transferring effective
            control to investors. The proposed mechanism would provide
            cash benefits to insiders who agree to sell control to
            outside investors. The increased cash revenue (rather than
            in-kind or money surrogates) would enable regional
            governments to finance safety nets for the unemployed and to
            promote other regional initiatives.
Analyzing the sustainability of
            fiscal deficits in developing countries
The author surveys the recent literature
            on the sustainability of fiscal deficits, most of which
            focuses on the United States and other industrial countries,
            to see how useful it might be in developing countries. The
            accounting approach to analysis focuses on steady states and
            assumes that a fiscal deficit (or surplus) that leads to
            unchanging debt/GDP ratios over time is sustainable. The
            data required to apply this approach are relatively modest.
            The present-value constraint (PVC) approach assumes that the
            sustainability of fiscal policy depends ultimately on what
            level of fiscal deficit is financeable, which depends in
            turn on the behavior of lenders. Recent empirical
            implementations of this approach concentrate on methods for
            testing whether maintaining current fiscal policy (as
            captured by historical time series on government spending,
            revenue, and debt) violates the present-value-constraint or,
            equivalently, the no-Ponzi-game (NPG) condition. The
            econometric methods used in this literature (such as tests
            for the prsence of unit roots and cointegration) require
            long-time series over a constant fiscal regime, requirements
            that may be unrealistic in many countries. Typically,
            analyzing the sustainability of deficits in developing
            countries involves issues that are not particularly
            important in industrialized countries. Developing countries
            rely far more on seignorage to finance deficits, although
            the degree of that reliance varies greatly among countries;
            the simultaneous presence of both domestic and
            foreign-currency borrowing is central in a growing number of
            developing countries; and concessional lending and grants
            may also be an important part of fiscal finance. The author
            generalizes the PVC approach to economies that use
            money-financing of deficits, economies for which
            concessional financing is available, and economies that
            incur both domestic and foreign debt. He proposes a possible
            compromise in approaches: rather than use time series
            techniques to describe constant fiscal regimes, one can
            specify fiscal rules into the foreseeable future based on
            country-specific information about fiscal targets (perhaps
            as stated in IMF stabilization programs). Then one can
            calculate the implied time path for domestic and foreign
            debt, given current debt levels as initial conditions. Using
            this hypothesized time path for debt, one can ask whether it
            satisfies the no-Ponzi-game condition. If it does, fiscal
            policy is -by this definition- sustainable. If the NPG
            condition is violated, fiscal policy is unsustainable.
Has agricultural trade
            liberalization improved welfare in the least-developed
            countries Yes
The author evaluates the progress in
            agricultural liberalization -and the welfare effects for
            least-developed and net food-importing countries- as a
            result of agricultural price shocks resulting from the
            Uruguay Round. She finds that: (1) The changes in welfare
            are significantly affected by the structure of trade and
            distortions in the domestic economy. (2) Although many
            economies are hurt by increases in world prices, losses in
            terms of trade are small relative to total GDP. Only in a
            few countries does the estimated welfare change constitute
            more than 1 percent of GDP. (3) In several countries, the
            distortion effects are significantly larger than the
            terms-of-trade effects. In some cases, the distortion
            effects work in opposition to the terms-of-trade effects and
            are large enough to reverse the sign of the net welfare
            change. In short, removing policy distortions could convert
            the small loss in terms of trade to potential gains. But
            many least-developed, net food-importing countries did not
            use the Round to support domestic efforts at trade reform.
            As most studies show, most gains from multilateral
            liberalization come from the countries' own
            liberalization efforts, so countries that failed to
            liberalize their trade policy lost the opportunity for gains.
Logit analysis in a rotating panel
            context and an application to self-employment decisions
The authors derive a methodology for
            analyzing logit models in a rotating panel context. They
            then apply the technique to test two theories of why and
            when salaried workers enter the informal self-employed
            sector. In the traditional view, workers fired from formal
            jobs queue in the informal sector to reenter the formal
            sector. The authors argue that for many, self-employment is
            a desirable goal, but that credit constraints often dictate
            that they work in the formal sector until enough start-up
            capital is accumulated. They model the decision to move as a
            stopped Markov process in which, in each period, the worker
            compare accumulated savings with the target level for
            switching sector dictated by the forecasted stream of
            discounted utility arising from employment labor and capital
            in each sector. They test and find support for the model
            using the new logit methodology and rotating panel data from Mexico.
Quitting and labor turnover :
            microeconomic evidence and macroeconomic consequences
Combining microeconomic evidence with
            macroeconomic theory, the authors present an integrated
            approach to wage and employment determination in an economy
            where firms pay above market "efficiency wages" to
            prevent trained workers from quitting. The model offers
            predictions about the behavior of formal employment, labor
            turnover, and segmentation in response to formal sector
            productivity shocks (including economic growth and tax
            reductions), changes in the desirability of self-employment
            (formal sector tax rates), and the cost of training a new
            worker. They use panel data from Mexican labor surveys to
            estimate the quit function derived from the model and the
            results support their view that transitions from formal
            salaried work to informal self-employment are quits rather
            than fires. (Quitting is positively related to the mean
            self-employment income and the probability of being rehired
            and negatively related to the mean formal salaried wage.)
            They then use the parameters estimated from the quit
            function to calibrate the model economy and simulate the
            impacts of economic shocks and policy innovations and find
            the impact on employment, turnover, and segmentation to be substantial.
Does financial reform increase or
            reduce savings : Does financial reform increase or reduce savings
Using Principal Components, the authors
            construct a 25-year time series index of financial
            liberalization for each of eight developing countries:
            Chile, Ghana, Indonesia, the Republic of Korea, Malaysia,
            Mexico, Turkey, and Zimbabwe. They use it in an econometric
            analysis of private saving in those countries. They find
            that the pattern of effects differs across countries. In
            sum, liberalization seems to have had a significant positive
            direct effect on saving in Ghana and Turkey and a negative
            effect in Korea and Mexico. No clear effect is discernible
            in the other countries. There is no evidence of significant,
            positive, and sizable interest-rate effects. Their results
            must be taken as an indication that there is no firm
            evidence that financial liberalization will increase saving.
            Indeed, under some circumstances, liberalization will be
            associated with a drop in saving. All in all, it would be
            unwise to rely on increased private saving as a channel
            through which financial liberalization can be expected to
            increase growth. Instead, improved resource allocation must
            be the primary channel.
Finance and the sources of growth
The authors evaluate whether the level
            of development in the banking sector exerts a causal impact
            on economic growth and its sources-total factor productivity
            growth, physical capital accumulation, and private saving.
            They use (1) a pure cross-country instrumental variable
            estimator to extract the exogenous component of banking
            development and (2) a new panel technique that controls for
            country-specific effects and endogeneity. They find that:
            Banks do exert a large, causal impact on total factor
            productivity growth, which feeds through to overall GDP
            (Gross Domestic Product) growth. The long-run links between
            banking development and both capital growth and private
            savings are more tenuous.
Who controls East Asian corporations
            : Who controls East Asian corporations
The authors identify the ultimate
            ownership structure for 2,980 corporations in nine East
            Asian countries. They find that: A) More than half of those
            firms are controlled be a single shareholder. B) Smaller
            firms and older firms are more likely to be
            family-controlled. C) Patterns of controlling ownership
            stakes differ across countries. The concentration of control
            generally diminishes with higher economic and institutional
            development. D) In many countries control is enhanced though
            pyramid structures and deviations from one-share-one-vote
            rules. As a result, voting rights exceed cash-flow rights.
            E) Management is rarely separated from ownership control,
            and management in two thirds of the firms that are not
            widely held is related to management of the controlling
            shareholder. F) In some countries, wealth is very
            concentrated and links between government and business are
            extensive, so the legal system has probably been influenced
            by the prevailing ownership structure.
How stronger protection of
            intellectual property rights affects international trade flows
Intellectual property rights affect
            international trade flows when protected goods move across
            national boundaries. And intellectual property rights have
            grown in importance as the share of knowledge-intensive or
            high-technology products in international trade has doubled
            (from 12 percent in 1980 to 24 percent in 1994). The authors
            report new evidence about how protecting intellectual
            property rights affects international trade flows of nonfuel
            trade products. Employing a gravity model of bilateral
            trade, they estimate the effects of increased protection on
            a cross-section of 89 x 88 countries. To address estimation
            problems associated with zero trade flows between countries,
            they adopt a bivariate distributed probit regression mode.
            Their results confirm previous findings: stronger protection
            of intellectual property rights increase bilateral trade
            flows of manufactured nonfuel imports. But the results do
            not hold for trade flows in high technology, where the
            effect of protection intellectual property rights was found
            to be insignificant.
Vehicles, roads, and road use -
            alternative empirical specifications
The authors extend their earlier
            empirical work by exploring alternative specifications for
            the relationship between vehicle ownership, road length, and
            the ratio of vehicles to road length, on the one hand, and
            income, population, pollution density, and other variables
            on the other. For the constancy or variability of
            cross-section income elasticities for each of these
            variables, they find that: a) the income elasticity of
            vehicle ownership decreases slightly with income at the
            national level but is constant at the urban level; b) the
            income elasticity of road length is constant at the national
            level but increases with income at the urban level; and c)
            the income elasticity of the vehicle to road ration
            decreases with income at both the national and urban level
            and, at high income levels, becomes negative for urban roads
            and for national paved roads. Comparisons of income
            elasticities from cross-section and time series data
            indicated that they are generally similar for vehicles, road
            length, and the vehicle to road ration at the national
            level. But at the urban level the time series income
            elasticity of road length (0.1) is much smaller than the
            cross-section elasticity (0.7), and the time series income
            elasticity of the vehicle to road ration (0.9) is much
            larger than the cross-section elasticities (0.1 for low
            income cities and -0.5 or high income cities). This means
            that the vehicle to road ratio (a proxy for congestion) is
            increasing over time in cities, almost in step with per
            capita income - a trend with dire consequences for urban
            transport. Although the urban results are somewhat alarming,
            the national results indicate that the vehicle to road
            ration nationally (especially on paved roads) is relatively
            low and not rising rapidly. It also shows remarkable
            stability across country income levels. This contrast
            between the national and urban results reinforces the view
            that urban decentralization is likely to remain the major
            mode of adjustment to urban congestion.
The real impact of financial shocks
            : evidence from the Republic of Korea
The debates surrounding the recent East
            Asian crisis have focused not only on causes but also on
            policy actions in the wake of the initial shock. This has
            raised questions about the relationship between monetary
            policy and market confidence. Specifically, would rising
            interest rates bolster or depress market confidence? To
            answer this question requires assessing whether, and to what
            extent, monetary and financial shocks are magnified through
            the economy via the credit channel. The authors focus on the
            Republic of Korea - a particularly good case for testing
            credit channel effects - with two objectives: a) To
            ascertain whether and to what extent interest rate spreads
            could help predict subsequent fluctuations in real economic
            activity. b) To test whether small and medium-size
            enterprises suffer more than other business do from the
            adverse effects of the credit channel. The author's
            empirical findings support the hypothesis that spreads that
            capture credit channel effects do indeed influence economic
            activity. Specifically, spreads contain significant
            information for predicting the future course of industrial
            production. The effect is, as one might have assumed,
            disproportionately larger for small and medium-size
            enterprises. Thus policymakers, in Korea and elsewhere, who
            neglect credit channel effects might be "overkilling
            the economy" and altogether overlooking the
            disproportionate effects of monetary and financial shocks on
            various segments of the economy.
Field adjustments in transition
            economies : social transfers and the efficiency of public
            spending - a comparison with OECD countries
Despite a dramatic shift away from
            subsidies in the early years of transition, the countries of
            Central Europe still show signs of unsuccessful fiscal
            adjustment, insufficient deficit reduction, and loose
            spending policy. High social transfers and low efficiency of
            government spending remain two challenges of fiscal
            adjustment and long-term sustainability of budgetary policy
            choices. A cross-country regression analysis shows that the
            problems with high social-security outlays are largely the
            result of loose eligibility criteria (many pensions go to
            early retirees) under current state pay-as-you-go pension
            systems - and not so much to old populations or high
            replacement rates. The authors suggest that transition
            economies should strive for a real social consensus on the
            reform of future pension rights. The transition to a funded
            pension system could be financed by a combination of:
            government debt; proceeds from privatization; and efficiency
            gains from lowering and/or restructuring government spending
            in favor of infrastructure, retraining, and market-oriented
            tertiary education.