rafmacalaba/datause-encoder-data huggingface dataset:
requires improved accuracy, timeliness, and distribution of financial information to relevant stakeholders (e.g. policymakers, local officials, and citizens depending on the sensitivity of the information), which typically requires the creation of effective information management systems, training of staff in their application and use, and, crucially, the design and introduction of incentives for regular data collection, maintenance, and use without which providers are unlikely to collect and use performance information.

# _Improving internal control: oversight, audits, and simplification_

Management control and oversight are necessary to implement financial and budget rules, establish civil servant accountability, and improve performance. Audits can detect a range of financial irregularities and provide information on means to rectify problems when incentives to follow up and respond to audit findings are in place. To help minimize the time and cost of audits, health and finance ministries can undertake record simplification and procedural streamlining. Improved oversight, follow through on recommendations, and institutionalization of audit procedures can promote progress in these areas.

# _Payroll cleanup and management_

Regular updating of employee lists and payroll commitments is a basic management tool and is a high priority for health systems, which have large numbers of employees. While politically difficult and not inexpensive, accurate, up-to-date employee records are a critical starting point for improving human resource management and reducing payroll irregularities. Physical verification where teams visit points of pay and verify that physicians and nurses on payroll exist and are being paid the correct salary can be carried out. A less costly method is to have auditors carry out spot checks at health facilities to verify that workers on payroll actually exist.

# _Tracking the flow of funds and supplies_

PERs and PETs in the health sector provide information on where budget leakages take place during the flow of funds. Quantitative Service Delivery Surveys (QSDS) examine the efficiency of public spending and incentives, and various dimensions of services delivery, especially at the level of the service facility, and can be useful complements to PERs and PETS, providing further information on areas that are prone to leakage, and why.<sup>13</sup> Once the main governance weaknesses contributing to leakages have been identified priority actions can be outlined. For instance, health PETS for Chad and Ghana determined that leakages were most likely to occur between the central and regional/district levels (Savedoff 2008).

# _Outsourcing disbursement of funds to independent third-party_

Contracting out disbursements to an independent third-party can complement government efforts, and are particularly useful in fragile states with little existing capacity to ensure that public funds reach their destination. In general, contracting out

> 13 For a brief, useful overview of QSDS see http://poverty2.forumone.com/files/14546_30_QSDS.pdf

25
||(-2.27)|(-0.53)|(0.56)|(-0.90)|(-0.91)|(0.08)|(0.16)|(-1.24)|(0.86)|(1.71)|(1.44)|(-1.01)|
|---|---|---|---|---|---|---|---|---|---|---|---|---|
|Gender(male=1)||-0.449*|-0.555**|-0.465**|-0.448*|-0.447*|-0.454*|-0.498**|-0.430*|-0.397*|-0.515**|-0.522**|
|||(-1.89)|(-2.38)|(-1.98)|(-1.90)|(-1.87)|(-1.91)|(-2.11)|(-1.79)|(-1.68)|(-2.15)|(-2.17)|
|Age||0.170***|0.190***|0.168***|0.174***|0.170***|0.174***|0.173***|0.169***|0.174***|0.177***|0.182***|
|||(3.18)|(3.47)|(3.09)|(3.21)|(3.19)|(3.23)|(3.18)|(3.17)|(3.25)|(3.27)|(3.43)|
|Agesq||-0.002***|-0.002***|-0.002***|-0.002***|-0.002***|-0.002***|-0.002***|-0.002***|-0.002***|-0.002***|-0.002***|
|_||(-3.31)|(-3.53)|(-3.24)|(-3.31)|(-3.31)|(-3.36)|(-3.29)|(-3.29)|(-3.34)|(-3.37)|(-3.53)|
|Married||0.373|0.333|0.359|0.349|0.366|0.370|0.331|0.357|0.351|0.382|0.369|
|||(1.16)|(1.01)|(1.11)|(1.08)|(1.13)|(1.15)|(1.02)|(1.10)|(1.10)|(1.19)|(1.12)|
|At least secondaryschool||0.661**|0.698**|0.666**|0.664**|0.664**|0.657**|0.638**|0.667**|0.664**|0.714**|0.630**|
|||(2.25)|(2.35)|(2.23)|(2.27)|(2.26)|(2.23)|(2.18)|(2.23)|(2.23)|(2.43)|(2.12)|
|Gender of head(male=1)||0.381|0.456|0.389|0.412|0.373|0.376|0.361|0.372|0.354|0.444|0.404|
|||(1.03)|(1.20)|(1.06)|(1.12)|(1.01)|(1.02)|(0.98)|(1.02)|(0.96)|(1.21)|(1.06)|
|Muslim(Christian is base)||0.321|0.385|0.333|0.293|0.329|0.322|0.305|0.332|0.369|0.366|0.355|
|||(0.95)|(1.20)|(0.98)|(0.89)|(0.97)|(0.95)|(0.92)|(0.98)|(1.10)|(1.12)|(1.05)|
|Spousepresent||-0.745**|-0.755*|-0.744**|-0.770**|-0.734**|-0.749**|-0.654*|-0.717*|-0.675*|-0.744**|-0.748**|
|||(-2.00)|(-1.94)|(-1.97)|(-2.09)|(-1.98)|(-2.00)|(-1.73)|(-1.91)|(-1.82)|(-1.99)|(-2.00)|
|Household size||-0.027|-0.037|-0.027|-0.027|-0.027|-0.026|-0.036|-0.026|-0.033|-0.032|-0.037|
|||(-0.51)|(-0.68)|(-0.49)|(-0.51)|(-0.50)|(-0.49)|(-0.67)|(-0.50)|(-0.63)|(-0.62)|(-0.68)|
|Poor||0.138|0.098|0.148|0.125|0.144|0.142|0.134|0.149|0.171|0.203|0.053|
|||(0.44)|(0.30)|(0.47)|(0.40)|(0.46)|(0.45)|(0.42)|(0.47)|(0.55)|(0.64)|(0.17)|
|Urban||1.268***|1.349***|1.275***|1.265***|1.270***|1.280***|1.282***|1.272***|1.299***|1.285***|1.326***|
|||(3.02)|(3.24)|(3.04)|(3.01)|(3.03)|(3.03)|(3.06)|(3.03)|(3.11)|(3.07)|(3.21)|
|Ashanti(Northern is base)||0.751*|0.716*|0.754*|0.674|0.759*|0.729*|0.736*|0.775*|0.722*|0.787*|0.831*|
|||(1.75)|(1.68)|(1.74)|(1.57)|(1.73)|(1.71)|(1.72)|(1.73)|(1.66)|(1.84)|(1.94)|
|Impulsive|||-0.076|-0.507|||||||||
||||(-0.40)|(-0.87)|||||||||
|Work centrality|||-0.012||-0.700||||||||
||||(-0.07)||(-1.05)||||||||
|Tenacity|||0.039|||0.075|||||||
||||(0.25)|||(0.14)|||||||
|Polychronicity|||-0.259||||-0.007||||||
||||(-1.53)||||(-0.01)||||||
|High internal locus of control|||-0.003|||||-0.676|||||
||||(-0.02)|||||(-0.88)|||||
|Achievement|||0.094||||||0.495||||

33
# **Table 7: Capturing Seasonality and Salience**

|Dependent var. (Self-report):|||One if h|ave outage 1|dayago|||
|---|---|---|---|---|---|---|---|
||All|Oct toJan|(dummy)|= 1|Oct toJan|(dummy|)= 0|
||season|Total|Urban|Rural|Total|Urban|Rural|
||(a)|(b)|(c)|(d)|(e)|(f)|(g)|
|Panel (A)||||||||
|<br>SSB||||||||
|One if have 1 day ago|0.169***|0.259***|0.069**|0.324***|0.059***|0.021|0.074***|
||(0.010)|(0.017)|(0.027)|(0.020)|(0.010)|(0.013)|(0.012)|
|R-squared|<br>0.084|<br>0.135|<br>0.116|<br>0.128|<br>0.086|<br>0.031|<br>0.091|
|<br>No. of obs.|12928|5322|1388|3934|7606|2001|5605|
||(h)|(i)|(j)|(k)|(l)|(m)|(n)|
|Panel (B)||||||||
|SSB||||||||
|One if have 1 day ago|0.105***|0.138***|0.047|0.170***|0.052***|0.013|0.067***|
|<br>but not b/w 6pm and 10pm|(0.011)|(0.020)|(0.035)|(0.023)|(0.012)|(0.017)|(0.015)|
|<br>One if have 1 day ago|<br>0.246***|<br>0.390***|<br>0.094***|<br>0.486***|<br>0.069***|<br>0.031|<br>0.085***|
|including b/w 6pm and<br>10pm|(0.013)|(0.021)|(0.036)|(0.024)|(0.013)|(0.020)|(0.017)|
|<br>R-squared|0.093|0.158|0.117|0.161|0.086|0.031|0.091|
|No. of obs.|12928|5322|1388|3934|7606|2001|5605|
|**Interview date/week FE**|NO|NO|NO|NO<br>|NO|NO|NO|
|PSU FE|YES|YES|YES|YES<br>|YES|YES|YES|
|Dependent var. (Self-report):|||Per-dayho|urs of outage|1 dayago|||
||All|Oct toJa|n(dummy)|= 1|Oct toJ|an(dumm|y)= 0|
||season|Total|Urban|Rural|Total|Urban|Rural|
||(a)|(b)|(c)|(d)|(e)|(f)|(g)|
|Panel (A)||||||||
|<br>SSB||||||||
|per-day hours 1 day ago|0.253***|<br>0.391***|<br>0.119***|<br>0.468***|0.013**|0.002|0.016**|
||(0.013)|(0.017)|(0.026)|(0.018)|(0.006)|(0.005)|(0.008)|
|R-squared|<br>0.133|<br>0.238|<br>0.194|<br>0.239|<br>0.110|<br>0.032|<br>0.109|
|<br>No. of obs.|12928|5322|1388|3934|7606|2001|5605|
|**Interview date/week FE**|NO|NO|NO|NO|NO|NO|NO|
|PSU FE|YES|YES|YES|YES|YES|YES|YES|

15
# WPS3609

**Why Governments Should Stop Non-Social Subsidies: Measuring Their Consequences for Rural Latin America**

**By**

## **Ramón López**

## **University of Maryland at College Park**

**(Tel. 301-405-1281; Fax: 301-314-9091; email: rlopez@arec.umd.edu)**

**Abstract.** The provision of public goods and the amelioration of market failure are the classical justifications for government intervention in the economy. In reality, (1) governments intervene in markets that are not affected by failure, and (2) a large share of the government resources is spent in private goods, not in public goods. In contrast to issue (1), issue (2) has received little attention in the literature, in spite of the potentially large efficiency and equity losses arising from misguided allocations of public expenditures. This paper empirically documents the size of (2) in the rural sector and investigates its consequences for rural development for ten Latin American countries over the 1985–2000 period. The econometric evidence suggests that the structure of public expenditures is an important factor of economic development in the rural sector, much greater than that of the _level_ of public expenditures and of other factors on which the development literature has traditionally focused.  Expanding total public expenditure in rural areas while maintaining the existing public expenditure composition prevailing in certain countries does little to promote agricultural income and reduce rural poverty. Spending a significant share of government resources in (non-social) subsidies causes less agriculture income, induces an excessive reliance of agriculture on land expansion and reduces the income of the rural poor.

## World Bank Policy Research Working Paper 3609, May 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._ Excellent research assistance was provided by Denise Falck, Gregmar I. Galinato, and Carolina Handall. I would like to thank Daniel Lederman, Mark Wenner, and Bruce Gardner for comments and discussions on the issues of this paper.
documents the rise of borrowing/lending for houses. Both the IMF and BIS papers focus on risks – for example debt-financed household borrowing leading to larger current account deficits on the one hand, and excessive borrowing in situations where there is little regulation to protect households or banks from taking on risks that they are unable to manage.

The link between financial development and trade and/or exports has been studied in previous papers. For example, Beck (2002, 2003) investigates whether financial development translates into comparative advantage for industries that use external finance. Using industry- level data, he finds that countries with better developed financial systems have higher export shares and trade balances. His paper follows the notions developed in Kletzer and Bardhan (1987) and Baldwin (1989) in which financial markets are a source of comparative advantage, particularly in industries with higher external financing needs. Some papers examine the role of financial constraints in explaining trade patterns in the wake of the recent financial crisis and come to varying results. Amiti and Weinstein (2011), Ahn et al (2011), and Chor and Manova (2012) conclude that credit frictions contributed substantially to the collapse in trade. Levchenko et al (2010) and Eaton et al (2011) do not find significant impacts of the credit channel. Coban (2015) finds finance to be important in supporting exports in Turkey. Contessi and Nicola (2013) review the literature on the role of finance in international trade and, after accounting for the heterogeneity in methodologies, measures of access to and dependence on finance, and find an important impact of finance on trade, particularly at the extensive margin.

Building on this theoretical and empirical research, this paper researches the relationship between borrower composition, external balances and GDP composition. It expands earlier research on the topic.

# **Data and Methodology**

The data for household and firm credit are taken from the Bank for International Settlements (BIS). Most regressions cover the period 1964-2013, for 42 countries. All other data sources and time periods are described in the annex, Table A1. The relationships are estimated using OLS and 2SLS, though only the 2SLS versions are shown.

Table 1A below shows indicators of financial sector development from 1994-2013, using credit ratios to GDP as the measure of financial sector development. The period before the most 5
our sample. In nearly all other countries, there is negligible tax rates applied to this category of taxes.

12. **Cost to start a business** – The total cost to start up an industrial or commercial business. These include obtaining all necessary licenses and permits and completing any required notifications, verifications or inscriptions for the company and employees with relevant authorities. The largest cost in the region to open a business is found in Bolivia where on average new incomers in the market pays 141 percent of per capita GNI, while the cheapest in Chile (9.8 percent of per capita income).

13. **Minimum capital requirement to start a business** – This _Doing Business_ indicator records the paid-in minimum capital requirement that the entrepreneur needs to deposit in a bank before registration starts. The amount is typically specified in the commercial code or the company law. In order to make that data comparable across countries, the minimum capital requirement is computed as percent of per capita income, for example in Ecuador and Mexico the paid-in minimum capital recorded is 7.7 percent and 7 respectively 12.5 percent of per capita income.

14. **Government effectiveness** – According to World Bank Institute’s _Worldwide Governance Indicators_ (Kauffman et al, 2007), this variable measures the quality of public and civil services and the degree of its independence from political pressures, the quality of policy formulation and implementation and the credibility of the government’s commitment to such policies. For each indicator on government effectiveness, higher scores correspond to better outcomes. In this group of 14 countries, Chile and Uruguay perform best in the region for the two governance indicators while Ecuador and Paraguay are the worst performers.

In the Appendix to this paper, Table 1 lists the data source for each explanatory variable we use in our regressions and describe how the explanatory variables are constructed. Table 2 shows the main descriptive statistics for all variables of interest (number of observation, mean and standard deviation, maximum and minimum).

# **1.3 Who fears informal competition?**

We test our hypothesis that formal firms most resembling informal firms are more likely to be affected by informal competition with the following probit regression:

> 7 The methodology was developed in Djankov and others (2002) and was then slightly modified. To get additional information on the methodology and to download the data, the reader should go to <u>www.doingbusiness.org</u>
The choice of approach links in part back to the motivations. While Chapter 9 in the United States and Hungary’s legal insolvency mechanism deal with insolvency through the courts, South Africa’s legal framework is a hybrid, blending administrative intervention followed by judicial intervention if the financial distress deteriorates into insolvency. South Africa’s procedure in the event of municipal financial distress has three steps: an early warning system consisting of various indicators, intervention by provincial governments and then by the central government, and intervention by the judicial system in debt restructuring. Brazil has chosen an administrative approach to deal with subnational insolvency. In Hungary, for example, a desire to neutralize political pressure during the restructuring favored the judicial approach.

The earliest documented attempt of introducing a municipal insolvency procedure occurred in Switzerland. In 1883, four municipalities were on the brink of insolvency after a guarantee for the benefit of the Swiss National Railway Corporation was triggered. Insolvency was only averted by a sizeable federal bailout. This crisis prompted a search for a legal framework for municipal insolvency.

_Friedrich Meili_ (1885), a renowned Swiss law professor, undertook a comprehensive survey on municipal insolvency for the Swiss federal government, and put forward a detailed proposal for a law.<sup>65</sup> _Meili_ regarded the crisis of the four municipalities as a welcome opportunity to introduce clarity into the relationship between municipalities and their creditors. In his view, like to so many who followed, the main benefit is legal certainty.<sup>66</sup> The inherent political character of subnational entities is a key consideration in design. Subnational governments in many countries are elected. Their removal by administrative fiat or by a judge might directly conflict with the democratic governance at the subnational level. There is a need to safeguard internal decision making, which is peculiar to public bodies with elected officials, is referred to as “sovereignty concerns”.

A narrow scope of intervention is one way of safeguarding subnational autonomy. Under § 904 of the United States Bankruptcy Code, the federal court’s jurisdiction cannot exceed the debtor’s volition. Financial management remains the responsibility of the municipality. The court may not interfere with the municipality’s choice on services to citizens. It is the municipality’s prerogative to prioritize spending, within the envelope established through the adjustment plan. Hence, the insolvency mechanism is separate from internal decision-making. Court-ordered replacements of politicians are ruled out.

The United States displays an interesting variant of such “sovereignty concerns”. Chapter 9 vests jurisdiction in federal courts; this raises “sovereignty concerns”, since municipalities are creatures of the states. The solution adopted is the specific

> 65 Entwurf zu einem Bundesgesetz betreffend die Schulbetreibung und den Konkurs gegen Gemeinden (Meili, 1885, at 249-258).

> 66 Meili (1885).

22

-  -
confidence intervals (shaded bands) and the estimated percentage using simulated data (dashed line) against the whole spectrum of poverty rates in the first period.

Figure 1 shows that estimated poverty rates using simulated data closely track the true rates and fall within their 95 percent confidence intervals, but the more time-invariant variables that are available, the better prediction we have. In particular, the dashed lines are almost indistinguishable from the solid line for the graphs where  = 0.15 or even where  = 0.58. When there is very limited information on these time-invariant variables ( _ρ_ = 0.88) and the sample sizes for the actual panel data are mid-sized or unusually large (N= 4000 or 10000), estimates (partially) fall outside the 95 percent confidence interval for the middle part of the distribution. But note that even in this case, if the sample size is not large enough (N= 1000), the synthetic panel estimates still compares favorably well to true poverty rates (which are less accurately estimated given the small sample size). Varying the model parameters or the poverty lines gives us similar results (not shown).

Overall, these simulation results are very encouraging and indicate that our method performs rather well under the theoretical setting where our assumption about the bivariate normality distribution of the error terms holds. We will examine in the next sections how our method performs in the real-life settings where this assumption may be violated.

# **V. Data**

To validate our method with real survey data, we analyze household panel survey data from Bosnia-Herzegovina (Bosnia-Herzegovina Living Standards Measurement Survey, BLSMS), Lao PDR (Expenditure and Consumption Survey, LECS), the United States (Panel Study of Income Dynamics, PSID), Peru (Peruvian National Household Survey, ENAHO), and Vietnam (Vietnam Household Living Standards Survey, VHLSS). We use two rounds 27
# **Annex 3: Federation of Canadian Municipalities’ Quality of Life Reporting System**

By John Burrett, Senior Manager, Social Policy, Federation of Canadian Municipalities The Federation of Canadian Municipalities’ (FCM) Quality of Life Reporting System (QOLRS) has been in operation since 1996.<sup>20</sup> Conceived by a group of large municipal governments, the system was to track changes, primarily in social conditions, following changes in the system of federal/provincial/territorial social support funding in the middle of that decade. The system’s scope has now grown to cover the local economy and environmental conditions.

Currently 20 Canadian cities and regional municipal governments participate:

- City of Vancouver

- City of Calgary

- City of Edmonton

- City of Regina

- City of Saskatoon

- City of Winnipeg

- City of Greater Sudbury

- City of London

- City of Toronto

- City of Hamilton

- City of Ottawa

- Halifax Regional Municipality

- Regional Municipality of Waterloo

- Regional Municipality of Niagara

- Regional Municipality of Halton

- Regional Municipality of Peel

- Regional Municipality of York

- Regional Municipality of Durham

- Communauté métropolitaine de Québec

- Ville de Laval

Other major cities and regional municipalities in Canada are currently considering membership, and work is underway to develop the capability of serving smaller centers.

Three rounds of reports have now been released, in 1991, 1996 and 2004-2005. The reports have relied on Census of Canada data for approximately half of the indicators, along with data from other government departments and various non-profit and commercial sources. A significant portion of the data used came from surveys of the participating municipalities. The system produced 72 indicators of local conditions and municipal activities for the latest round of reports.<sup>21</sup> <u>43</u>

> 20 FCM has been the national voice of municipal governments since 1901.  The organization is dedicated to improving the quality of life in all communities by promoting strong, effective and accountable municipal government.  FCM membership includes Canada’s largest cities, small towns, rural municipalities, and the 19 major provincial and territorial municipal associations.

> 21 All reports of the QOLRS, as well as all current indicators and the underlying data are available on the FCM website: www.fcm.ca.

43