rafmacalaba/datause-encoder-data huggingface dataset:
certainly does matter, the wage adjustment process in this context is dependent on multiple factors not captured in household surveys.

Secondly, our interpretation of trends over time assumes that the composition of consumption baskets, and hence the COICOP category weights, remained constant over time and across changes in income levels (zero elasticity).

Thirdly, the calculation does not differentiate between purchased and home-produced consumption items, as well as price differentiation stemming from spatial differences, such as urban and crop-producing regions, or income-dependent behavioral differences, for example, price hunting. This is a limitation, but future iterations and work on disaggregating inflation impacts will seek to model this nuance explicitly in the estimation strategy.

# **3. RESULTS: THE DISTRIBUTIONAL IMPACT OF INFLATION**

Descriptive statistics show significant heterogeneity in consumption baskets of Pakistani households across income groups. Data compiled from the HIES (2018-19) for the 12 COICOP categories reveals that households from the bottom of the income distribution spend more than two-thirds of their budget on food, housing, and utilities (Table 1). More specifically, households in the first decile allocate around half of their budget for food and non-alcoholic beverages. The top decile, in contrast, spends around 28.4 percent on food and non-alcoholic beverages. Similarly, poor families allocate less than 1 percent for education compared to 7.26 percent by families in the richest decile. Similarly, the budget shares increase across deciles for COICOP categories for housing, utilities, and transport. For instance, the top decile spends more than double (9 percent) on transport compared to spending by the lowest decile (4.2 percent). Overall, the poorest families (decile 1) spend 72 percent of their budget on basic necessities such as food, housing, health, and education.

The fact that the consumption structure varies across the welfare distribution implies that high inflation rates for some categories affect some households more than others, depending on their consumption patterns. This inflation heterogeneity depends on the sources of inflation. For instance, keeping in view Table 1, poor households face higher inflation than the rich when it is caused by food inflation. On the other hand, inflation, driven by energy prices and especially fuel prices, affects richer households relatively more.

**Table 1: Decile-Wise Budget Shares of COICOP Categories**

|**COICOP Categories**|**D1**|**D2**|**D3**|**D4**|**D5**|**D6**|**D7**|**D8**|**D9**|**D10**|
|---|---|---|---|---|---|---|---|---|---|---|
|Food and Non-Alcoholic Beverages|49.2|46.9|46.0|44.6|43.5|42.3|40.6|38.4|35.3|28.4|
|Alcoholic Beverages and Tobacco|1.6|1.5|1.4|1.3|1.2|1.2|1.1|0.9|0.8|0.6|
|Clothing and Footwear|9.4|9.1|9.0|8.8|8.6|8.3|8.1|7.8|7.5|6.6|
|Housing, water, electricity, Gas, etc.|18.4|19.0|19.4|20.4|20.7|21.1|22.0|23.5|24.6|27.4|
|Furnishing, household equipment, etc.|3.2|3.4|3.4|3.3|3.4|3.4|3.3|3.3|3.5|3.9|
|Health|3.6|3.7|3.5|3.5|3.4|3.5|3.5|3.3|3.4|3.1|
|Transport|4.2|4.7|5.5|5.8|6.2|6.6|7.0|7.3|8.0|9.0|

7
More than 80 percent of the revenue earned from privatization in 1995-96 were in cash (or cash-like) transactions. A portion of the money went to pay the expenses of privatization, but most was used to repay foreign debt. Around HUF 100 bn of it has been used to supplement the budget each years (see Table 3.4).

**Table 3.4 The use of privatization revenues 1990-98** (HUF bn at current prices)

||**1990**|**1991**|**1992**|**1993**|**1994**|**1995**|**1996**|**1997**|**1998**|
|---|---|---|---|---|---|---|---|---|---|
|Budget<br>support<br>and<br>debt|0.5|22.4|51.5|57.5|151.7|368.4|122.9|254.8|39.0|
|repayment||||||||||
|Transfers to Municipalities|0.0|2.3|4.8|3.4|6.0|6.1|21.6|26.4|0.0|
|Direct privatization costs|0.0|1.1|6.2|7.6|25.3|33.6|33.0|36.1|46.3|
|Reorganization expenditures|0.0|0.0|8.7|49.5|8.0|9.8|16.8|12.1|13.5|
|Guarantees|0.0|0.0|5.8|7.8|7.0|3.7|33.2|16.0|51.6|
|The use total|0.5|25.8|77.0|125.8|198.0|421.6|227.5|345,4|150.4|
|**The use total,**<br>**% ofGDP**|**0.02**<br>_<br>_<br>_|**1.12**<br> <br>_<br>_|**2.62**<br>_<br>_|**3.55**<br>_<br>_|**4.54**<br>_<br>_<br>_|**7.51**<br>_<br>_|**3.32**<br>_<br>_|**4.1**<br>_<br>_|**_1.5_**|

## Source: The APV Rt. and MOF.

Note: Out of the amounts on budget support and debt repayment, HUF 150 bn and HUF 100 bn in 1995 and 1996, respectively, were used to support the budget.

# **Continuing obligations and contingencies**

Current government policy is that to the extent feasible, divestiture should be a clean transaction, with no remaining state obligations. Thus, the state property agency does not warrant the future performance or financial condition of privatized entities, nor does it indemnify the new owners for the cost of meeting rising environmental standards. Nevertheless, the state property agency does have a number of ongoing commitments and risks either predating privatization or arising out of the sale of assets. The agency maintains reserve funds to cover various contingencies and is confident that these will suffice to protect the government against any call on the budget.

In describing the ongoing risk held by the privatization property agency, it is useful to distinguish between those which are independent of the privatization process and those which are directly linked to the divestiture of assets. The former includes assets still owned by the state, asset management guarantees and bank and enterprise equity.

**_State Owned Assets._** By early 1999, the state property agency has held approximately 250 companies with estimated total equity value of HUF560 billion. It expects to divest approximately HUF200 billion through future privatizations, but anticipates that the remaining assets will remain under state control. The state will continue to be at risk for the performance of these companies, and with all of them managed by a single agency, the risk of cross subsidization is substantial.

22
_-4_ project benefits in terms of productivity-wage enhancement due to human capital investment is not captured by anv of these measures.

A series of papers were published recently on the implementations of educational policies in Africa.<sup>4</sup> These papers generally focus only on sectoral policies. Only a few touched upon the relationship between macro- policies and the implementation of educational policies. For example, Achola (1990) found that in Zambia the problems with implementation of educational policies were associated with a declining economy since the mid-1970s, resulting from falling copper prices, high oil bill and a drain on foreign exchange, poor pricing policy in agriculture, and poor harvests. A rapidly growing population (3.7 percent annually in 1980-89) resulted in greater demand for more new primary schools and/or school places, difficulties in educational financing and low quality of education. Economic decline caused unemployment among school-leavers and high dropout rates at the end of primary education. The estimates ranged from 1 to 1.5 million unemployed youth, most of them young school leavers. Kelly (1991) also examined the impact of Zambia's declining economy on the provision of formal education from 1975 to 1985. The paper showed that the consequences included a substantial reduction in expenditure **pai** student, a depreciation of the real income of teachers to about 40 percent of their 1975 value, and a greater reliance on the community, the private sector, and foreign aid for support to the education sector.

Bank policy studies have examined the relationship of education and the overall economic environment. The adverse effects on education of a rapidly growing population, a stagnant economy, I These studies evaluate the comprehensive experience of eight Anglophone Eastern and **Southem** African countries, each of which had developed and issued major education policy reforms or pronouncements. After reviewing 153 cases of educational policies, Craig found that only a handful (12 cases, 8 percent of total) were mostly or fully implemented". Why educational policies can fail? Psacharopoulos concludes that it is mainly because of insufficient, or the absence of implementation, which can be attributed to vaguely stated policies, unspecified financing scheme, and unclear theoretical relationship between instruments and outcomes. The results indicate an urgent need for the formulation of more concrete, feasible and implementable policies based on documented cause-effect relationships. See Psacharopoulos (1990), Craig (1990), Kiros (1990), Eshiwani (1990), Galabawa (1990), Thelejani (1990), Magalula (1990), Odaet (1990), Achola (1990) and Maravanyika (1990).
**Table 11**

**Cross-tabulation of decile rankings of pension capital accumulation according to different assumptions about real rate of return and rate of earnings growth**

|||||i=2%|, dY=2|%||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
|||1st|2nd|3rd|4th|5th|6th|7th|Rth|9th|Tcp|
||1st|82.1|16.6|1.3|0.0|0.0|0.0|0.0|0.0|0 0|0.0|
||2nd|17.2|61.9|19.4|1.6|0.0|0.0|0.0|0.0|0.0|0.0|
||3rd|0.6|19.7|53.6|24.4|1.6|0.0|0.0|0.0|0.0|0.0|
||4th|0.0|1.8|21.0|47.5|25.1|4.4|0.3|0.0|0.0|0.0|
|i=4%|5th|0.0|0.0|4.4|20.6|46.4|24.4|4.1|0.0|0.0|0.0|
|dY=0%|6th|0.0|0.0|0.3|5.6|22.3|49.4|21.3|1.3|0.0|0.0|
||7th|0.0|0.0|0.0|0.3|4.1|19.1|56.9|18.9|0.9|0.0|
||8th|0.0|0.0|0.0|0.0|0.6|2.8|16.3|62.1|17.8|0.3|
||9th|0.0|0.0|0.0|3.0|0.0|0.0|1.3|17.9|70.9|10.0|
||Top|0.0|0.0|0.0|0.0|0.0|0.0|0.0|0.0|10.3|89.7|

Clearly these earnings growth rate and interest rate assumptions lead to non-trivial differences in relative pension outcomes, thou_gh the majority of the relative movement is across only one decile. We can further examine the data to establish the characteristics of those who move between deciles. In Figures 5 and 6 above we suggested that the key factor is the period in the life-course during which the bulk of income is received. In Table 12 we examine two cases - where 30% or more of lifetime income is received between the ages of 20 and 29 ('young earners'), and where 30% or more of lifetime income is received between the ages of 50 and 59 ('old earners'). For the LIFEMOD population of 3195 individuals who live to at least age 65, 23.3% of lifetime income is received between ages 20 and 29, and 20.4% is received between ages 50 and 59.

49
pattern (Acemoglu and Autor, 2011; Autor, 2014; Autor, Levy, and Murnane, 2003; MacCrory et al., 2014). These findings have generated further interest in examining the role of technology (or computer use) at an individual level to explain changes in hourly earnings.

Most of the evidence on this matter has been documented for high-income countries. Krueger (1993) was among the first to attempt to establish a link between computer use at work and a wage premium. He used the supplemental questions containing information about computer use from the Current Population Survey (CPS) in 1984 and 1989. His findings indicated that the computer use payoff over the same time period ranged from 10 to 15 percent. He also found that about 40 percent of the increase in earnings during the second half of the 1980s was attributable to computer use. DiNardo and Pischke’s (1997) study and, later, Handel’s (2007) study noted that the premium on computer use might not be reflective of changes in the wage structure but instead reflect unobserved heterogeneity within a job or occupation.

Sakellariou and Patrinos (2003) put forth another interpretation for the wage premium on computer use. They suggested that the observed premium is a reflection of the ease in recovering the costs that high-wage workers incur when they gain these skills. Their correlational research with higher education graduates in Vietnam showed wage premiums close to 26 percentage points. In addition, Borghans and ter Weel (2003) aimed to disentangle computer _use_ from computer _skills_ . Their study used the Skills Survey of the Employed British Workforce from 1997 to estimate the returns to computer, writing, and math skills. The study, which sampled workers ages 18 to 60, found positive and significant returns for writing (25 percentage points), math (17 percentage points) and computers (33 percentage points), but found no significant relationship between wages and computer _skills_ at work. They inferred that higher wage premiums are associated with computers _if_ computers are used in an advanced manner.

More recently, Falck et al. (2016) used PIAAC data from 19 countries to estimate labor market returns of information and communication technology (ICT) skills. Starting with the premise that developing such skills is facilitated by internet access, the authors employed an instrumental-variable strategy based on variation in broadband internet access—and found that a one stand deviation increase in ICT skills increased earnings by 24 percent.

Overall, the existing research on wage premiums related to cognitive and noncognitive skills, as measured by reading proficiency levels, frequency and complexity of computer use on the job, and personality traits and selected behaviors, shows some consensus on the role of these skills in predicting labor market success. The size and magnitude of these relationships vary and are in many ways a function of the range of metrics used to proxy for cognitive and noncognitive skills.

7
2 OECD trade barriers facing the NISs.<sup>2</sup> By way of introduction, both United Nations and FSU statistics are used to assess the current, and previous, importance of OECD markets for FSU exports. Statistics on OECD triff and nontariff barriers, combined with estimates of the NISs' pre-independence export patterns, are then employed to determine which products, and which NISs, are most seriously affected by these restrictions. The stricture of OECD tariffs is also analyzed, using the 'effective protection" concept, to assess their importance as constraints to mirther FSU processing of natural resources. The study concludes with an overall evaluation of the importance of OECD trade barriers facing exports from the FSU and tosiders ways in which these restrictions might be liberalized.

# **H.** The Growing Impcrtance of OECD Markets

Aside from recent political developments, the Importance of Western markets to Central Europe and the FSU has been growing for some time. For example, Table 1 indicates the values and shares of the FSU and other Eastern European countries' (the latter includes Bulgaria, Czechoslovakia, German Democratic Republic, Hungary, Poland, and Romania) exports to the OECD and other markets fr selected years over the 1970-90 period; while Chart 1 shows details on the annual changes in trade

**2** Thse include forner Baltic republics (Estonia, Latvia, and Lithuania), other Europeani republics (Belarus, Moldovs, Russia, and Ukraine), Transcaucasian republics (Armenia, Azerbaijan, and Georgia), and Central Asian republics (Kazkhstan, Kyrgyzstan, Tajikistan, Turkmenistan, and Uzbedstan). The Baltic republics becaine sovereign sates in September 1991. The rewaining became independent with the formal dissolution of the FSU, effective on January 1. 1992. The NISs are a very diversified group in terms of size and economic develo'ment. In term of 'economic size' the dissolution produced one very large economy, Russia; one medium-sized economy, Uramine; and thirteen small ones. In terms of territory, there has emerged one enormous country, Russia; one very large county, Kazkhstan, with X territory representing 30% of the land area of the United Stat; three large countries of approximately the size of France (Ukraine, Turkmenistan, and Uzbekistan); and nine mid-sized and small countries. The NISs are at very different stages of economic development.
members exert pressure on each other to behave in the desired way. For example, Scotland’s Violence Reduction Unit uses a US program called The Cincinnati Initiative to Reduce Violence (CIRV), which says that if a gang member commits a murder, the police will target the whole group for a whole set of offences, often unrelated to the murder, like drugs, parole probations, and weapon possession (Dolan et al 2010). Sometimes the ethical concerns associated with using peer pressure in this way can be quite weighty. One criticism of the otherwise widely acclaimed micro‐loan system in developing countries is that since loan‐takers often don’t have anything to put up as security for the loan, a group takes a joint loan, and if one member is tempted to renege on their commitment, the others will put pressure on him or her not to, since they would be responsible for the loan. As a result, people can be pressured into paying back a loan even in desperate circumstances when they really need the money for survival.

The sanctioning system can be strengthened in other, and perhaps more direct, ways as well. This can be done by making norm violations easier to detect, and/or by increasing the publicity of having been caught violating a norm, for example by making names of violators public. Of course our decisions must reflect whether we think increased publicity of social norms violations would be effective, and whether it is desirable, all things considered. Some forms of public shaming that were considered quite efficient are also nowadays considered cruel and inappropriate, and others questionable, such as the publicizing of names of convicted sex offenders on websites, either by the government or by private individuals. We should also bear in mind the possibility of crowding out effects (Frey and Jegen 2001) that actually decrease overall compliance when violations are sanctioned more heavily.

# _Changing the symbolic meaning_

The symbolic nature of social norm behavior provides another way of influencing such norms. Somehow change the symbolic meaning of a behavior, and you manage to change the social norm. When complying with a social norm is costly to those involved, it is sometimes enough to make the interpretation of the social meaning ambiguous. If people have the opportunity to invoke an alternative social meaning, according to which the behavior in question is not desirable, they may be able to violate the norm without incurring sanctions. When social norms conflict, people are much more hesitant to sanction violations of one of them, since what violates one of the norms can be a case of complying with the other. The social norm that men of the Irish nobility defend their honor after an insult by fighting a duel was obviously destructive, even after the Code Duello had managed to limit some of the worst aspects: after all, people still fired guns at each other. One thing that contributed to the end of duels in the American South, where a similar honor culture required that 27
# **6 Monitoring by Foreign Investors**

Based on results in Section 5, the entry of foreign investors into domestic stock market triggers an efficiency-enhancing structural change by re-balancing countries’ export portfolios towards their comparative advantage. A possible cause behind these findings might lie in the monitoring effects of foreign investors in domestic firms. An influential strand of literature argues that foreign investors are more effective as external monitors compared to domestic investors who often feel loyal to the local management (e.g., Gillan and Starks 2003; Ferreira and Matos 2008; Aggarwal et al. 2011; Bena et al. 2017; Luong et al. 2017). If that is true, then stricter monitoring by foreign investors should push the exporting managers to abandon products that are far away from the comparative advantage of the domestic economy. This section provides some preliminary evidence in accordance with this interpretation.<sup>27</sup> If our findings are indeed driven by the superior monitoring skills of foreign investors, then the results should become stronger in a legal environment providing sufficient protection to the rights of investors in general and of foreign investors in particular. Arguably, foreign investors can fully employ their monitoring abilities only if they can rely on a robust legal framework protecting their rights vis-vis corporate insiders and local government. Table 8 examines this hypothesis, based on a composite index Legal System and Property Rights from the Economic Freedom Database. The index captures various legal dimensions relevant for investor protection like integrity of legal system, legal enforcement of contracts, protection of property rights, impartiality of courts, judicial independence, etc., with higher values of the index corresponding to higher levels of investor protection. The index varies both across countries and over time. Due to possible endogeneity concerns, we use the values measured in 1980, which is the first year of our sample.

Column (1) of Table 8 runs our preferred specification for all countries from column (3) of Table 3 on the subsample of countries for which we have data on the Legal System and

> 27 Efficiency-maximizing managers would abandon of their own volition those exports that use the available resources suboptimally. However, exporting activities might generate substantial managerial perks that would induce self-interested managers to keep alive also those exports that they know to be inefficient. Jaud, Kukenova and Strieborny (2018) present a formal model alongside these lines.

27
Policy Research Working Paper 10153

# **Abstract**

Burning off the gas coming out of oil wells—gas flaring—is a common practice in oil-producing developing countries. This economically wasteful and environmentally damaging process occurs because infrastructure has been built with a focus on oil production rather than gas capture and because weak regulations and limited environmental monitoring make flaring an attractive choice for oil producers. Moreover, gas flaring is harmful to human health, especially because of pollutants. This research focuses on Nigeria, where over 10 percent of all gas produced is flared and about 2 million people in the Niger Delta live within four kilometres of a gas flare. While several studies from developed countries examine relationships between gas flaring and human (especially infant) health, a lack of data limits what research is possible in developing countries. This paper uses infant health data from Demographic Health Surveys, and satellite-detected data on gas flaring to examine the effects of flaring on disease incidence and infant mortality in oil-producing regions of Nigeria. The findings show a strong positive association between gas flaring and the incidence of respiratory diseases and fever among children younger than five years. The study contributes to the literature measuring the wider cost to society of oil and gas production and adds to a growing body of work using satellite data to understand well-being in places where conventional data sources are unavailable or unreliable.

This paper is a product of the Office of the Chief Economist, Africa Region. It is part of a larger effort by the World Bank to provide open access to its research and make a contribution to development policy discussions around the world. Policy Research Working Papers are also posted on the Web at http://www.worldbank.org/prwp. The authors may be contacted at oalimi@worldbank.org, omoniyi.alimi@waikato.ac.nz, and john.gibson@waikato.ac.nz.

_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 views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent._ Produced by the Research Support Team