bluuebunny/crossref_metadata_2025 huggingface dataset:
Why Do Countries Float the Way They Float?
Authors: Hausmann Ricardo , Panizza Ugo , Stein Ernesto H.
Published: March 2024

Countries that are classified as having floating exchange rate systems (or very wide bands) show strikingly different patterns of behavior. They hold very different levels of international reserves and allow very different volatilities in the movements of the exchange rate relative to the volatility that they tolerate either on the level of reserves or in interest rates. We document these differences and present a model that explains them as the optimal response of a Central Bank that attempts to minimize a standard loss function, in an environment in which firms are credit-constrained and incomplete markets limit their ability to avoid currency mismatches. This model suggests that the difference in the way countries float could be related to their differing levels of exchange rate pass-through and differences in their ability to avoid currency mismatches. We test these implications and find a very strong and robust relationship between the pattern of floating and the ability of a country to borrow internationally in its own currency. We find weaker and less robust evidence on the importance of pass-through to account for differences across countries with respect to their exchange rate/monetary management.
Labor Markets and Income Support: What Did We Learn from the Crises?
Authors: Márquez Gustavo
Published: March 2024

The adoption of emergency employment and short-term training programs to provide income support to the population affected by the episodes of economic volatility since 1995 reveals the failure of the traditional, labor law-based income support mechanisms in the region. These emergency programs are not additional and transitory, but rather have become a permanent component of social policies. As such, they present policymakers with the opportunity to build a more encompassing and better designed mechanism to protect workers against the effects of macroeconomic volatility. The paper argues for an income support system centered on unemployment insurance, complemented with additional mechanisms to provide effective income support to workers during normal times; the paper also discusses what changes are necessary in emergency programs to make them work as part of that system.
Do We Know How Much Poverty There Is?
Authors: Lustig Nora , Mejía-Guerra José Antonio , Cumpa Martin , Székely Miguel
Published: March 2024

This paper tests the sensitivity of poverty indexes to the choice of adult equivalence scales, assumptions about the existence of economies of scale in consumption, methods for treating missing and zero incomes, and different adjustments to handle income misreporting. We also perform sensitivity analysis to the use of different poverty lines and poverty indexes, which are issues that have been much more explored in the literature. The sensitivity analysis is applied to household survey data from 17 Latin American countries, which include 92% of the population in the region. By varying these parameters within reasonable boundaries, we find that the proportion of poor could be said to be either 12.7 percent or 65.8 percent of the total population. Additionally, the ranking of countries with respect to poverty is also highly sensitive. This points to the need of justifying and being explicit about the underlying choices and definitions behind poverty statistics, and to the need of performing sensitivity analysis illustrating the menu of options that can answer the question of how much poverty there is.
Are Crises Good for Long-Term Growth?: The Role of Political Institutions
Authors: Cavallo Eduardo A. , Cavallo Alberto F.
Published: March 2024

This paper provides empirical evidence for the importance of institutions in determining the outcome of crises on long-term growth. Once unobserved country-specific effects and other sources of endogeneity are accounted for, political institutions affect growth through their interaction with crises. The results suggest that only countries with strong democracies, high levels of political competition and external constraints on government can potentially benefit from crises and use them as opportunities to enhance long-term output per capita and productivity growth.
Corporate Governance and Firm Value in Mexico
Authors: Chong Alberto E. , López-de-Silanes Florencio
Published: March 2024

The objective of this paper is twofold. On one hand, we undertake an analysis of the recent evolution of capital markets and their effect on the availability of external financing in Mexico in the last two decades. On the other hand, based on a newly assembled firm-level data set on corporate governance and firm performance, we show that better firm-level corporate governance practices are linked to higher valuations, better performance and more dividends disbursed to investors. These results hold after controlling for endogeneity. Overall, the evidence shows that the Mexican legal environment poses serious problems for access to capital.
Minority Enrollments at Public Universities of Diverse Selectivity Levels under Different Admission Regimes: The Case of Texas
Authors: Calcagno Juan Carlos , Alfonso Mariana
Published: March 2024

This study describes how minority enrollment probabilities respond to changes in admission policies from affirmative-action to merit-only programs and then to percentage plans when the demographic composition of the potential pool of applicants is also shifting. It takes advantage of admission policy changes that occurred in the state of Texas with the Hopwood and HB588 decisions and of a unique administrative dataset that includes applications, admissions, and enrollments for three public universities of different selectivity levels. The findings suggest that the elimination of affirmative action and the introduction of the Top 10% plan had differential effects on minority enrollment probabilities as well as on application behavior depending on the selectivity level of the postsecondary institution. In particular, Hopwood is related to shifts in minority enrollments from selective institutions to less selective ones as the cascading hypothesis predicts. And although the Top 10% plan seems to have helped increased minority enrollment probabilities at the selective college as the upgrading hypothesis predicts, once the increases in minority shares among high-school graduates are taken into account, we find that the Top 10% plan can no longer be related to improvements in minority representation at selective universities.
Girls Just Want to Have Fun?: Sexuality, Pregnancy, and Motherhood among Bolivian Teenagers
Authors: Alfonso Mariana
Published: March 2024

This study attempts to quantify female teenage sexual activity, pregnancy, and motherhood in Bolivia using the most recent Demographic and Health Survey. Descriptive results suggest that teenage sexual activity, pregnancy, and childbearing are more prevalent among those adolescents who are more likely to be socially vulnerable and excluded. In addition, the high incidence of undesired pregnancies among Bolivian teen girls suggests that government action to prevent teenage pregnancy is needed. Lastly, the estimation results indicate that not only socioeconomic and demographic factors, but also some of the expected outcomes of teenage motherhood, regional fertility factors, and knowledge about and use of family planning methods, are significantly related to the probability of teenage pregnancy/childbearing.
Social Mobility in Latin America: A Review of Existing Evidence
Authors: Bouillon César P. , Azevedo Viviane
Published: March 2024

This paper reviews evidence on social mobility in Latin America. Several studies have used data sets that collect intergenerational socio economic information. The data, though limited, suggest that social mobility is low in the region, even when compared with low social mobility developed countries like the United States and United Kingdom, with high levels of immobility at the lower and upper tails of the income distribution. While Latin America has improved education mobility in recent decades, which may have translated into higher mobility for younger cohorts, the region still presents, except for Chile, lower education mobility than in developed countries. The paper also reviews studies on the main determinants of the regions low levels of social mobility, including social exclusion, low access to higher education, and labor market discrimination.
On the Role of Productivity and Factor Accumulation in Economic Development in Latin America and the Caribbean
Authors: Daude Christian , Fernández-Arias Eduardo
Published: March 2024

This paper combines development and growth accounting exercises with economic theory to estimate the relative importance of total factor productivity and the accumulation of factors of production in the economic development performance of Latin America. The regions development performance is assessed by contrast with various alternative benchmarks, both advanced countries and peer countries in other regions. The paper finds that total factor productivity is the predominant factor: low productivity and slow productivity growth, as opposed to impediments to factor accumulation, are the key to understanding Latin Americas low income relative to developed economies and its stagnation relative to other developing countries. While policies easing factor accumulation would help somewhat in improving productivity, for the most part, closing the productivity gap requires productivity-specific policies.
Productive Development Policies in Costa Rica: Market Failures, Government Failures, and Policy Outcomes
Authors: Rivera Luis , Monge-González Ricardo , Rosales-Tijerino Julio
Published: March 2024

This paper analyzes five Productive Development Policies (PDPs) implemented in Costa Rica, finding that they are not optimally addressing market failures. Moreover, government failures rather than market failures represent the main justification for PDPs. Even in the presence of market failures, the policy instruments applied are not necessarily the most economically efficient but rather the most politically feasible options. In addition, the lack of policy evaluation and monitoring prevents adjustments and corrections of such policies. Addressing the arguments for policy intervention and incorporating the results of evaluation into policy design and reform are necessary conditions for success. In spite of positive policy outcomes, limitations to enhance competitiveness and create the conditions for productivity growth are still present. An umbrella approach in the case of those PDPs that reinforce each other is necessary for productivity growth.
Agricultural Productivity Growth, Efficiency Change and Technical Progress in Latin America and the Caribbean
Authors: Ludeña Carlos E.
Published: March 2024

This paper analyzes total factor productivity growth in agriculture in Latin America and the Caribbean between 1961 and 2007 employing the Malmquist Index, a non-parametric methodology that uses data envelopment analysis (DEA) methods. The results show that among developing regions, Latin America and the Caribbean shows the highest agricultural productivity growth. The highest growth within the region has occurred in the last two decades, especially due to improvements in efficiency and the introduction of new technologies. Within the region, land-abundant countries consistently outperform land-constrained countries. Within agriculture, crops and non-ruminant sectors have displayed the strongest growth between 1961 and 2001, and ruminant production performed the worst. Additional analysis of the cases of Brazil and Cuba illustrates potential effects of policies and external shocks on agricultural productivity; policies that do not discriminate against agricultural sectors and that remove price and production distortions may help improve productivity growth.
There's More Than One Way to Get a House: Housing Strategies in Panama
Authors: Jacobs Michael , Savedoff William D.
Published: March 2024

This paper uses household data from two cities in Panama to evaluate the determinants of the tenure decision in the context of two models. The key factors explaining the decision to rent or own are those associated with the family's lifecycle, while the choice between buying a complete house and progressive building is affected primarily by income and assets.
Infrastructure, Competition Regimes and Air Transport Costs: Cross Country Evidence
Authors: Micco Alejandro , Serebrisky Tomás
Published: March 2024

The relevance of transport costs has increased as liberalization continues to reduce artificial barriers to trade. Countries need to adopt policies to 'get closer' to global markets. Can improvements in infrastructure and regulation reduce transport costs? Is it worthwhile to implement policies designed to increase competition in transport markets? Focusing on air transport, which has increased its share in US imports from 24 percent in 1990 to 35 percent in 2000, this paper quantifies the effects of infrastructure, regulatory quality and liberalization of air cargo markets on transport costs. During the 1990s, the US implemented a series of Open Skies agreements, which have provided a unique opportunity to assess the effect on prices of a change in the competition regime. We find that infrastructure, quality of regulation and competition matter. In our sample, an improvement in airport infrastructure from the 25th to 75th percentiles reduces air transport costs 15 percent. A similar improvement in the quality of regulation reduces air transport costs 14 percent. In addition, Open Skies agreements reduce air transport costs by 8 percent.
Macroeconomic Effects of China's Fiscal Stimulus
Authors: Rebucci Alessandro , Cova Pietro , Pisani Massimiliano
Published: March 2024

This paper analyzes the macroeconomic impact of Chinas 2009-2010 fiscal stimulus package by simulating a dynamic general equilibrium multi-country model of the world economy, showing that the effects on Chinas economic activity are sizeable: absent fiscal stimulus Chinas GDP would be 2.6 and 0.6 percentage points lower in 2009 and 2010, respectively. The effects are stronger under a US dollar peg because of the imported loose monetary policy stance from the United States. Higher Chinese aggregate demand stimulates higher (gross and net) imports from other regions, in particular from Japan and the rest of the world, and, only to a lesser extent, from the United States and the euro area. However, the overall GDP impact of the Chinese stimulus on the rest of the world is limited. These results warn that a fiscal policydriven increase in Chinas domestic aggregate demand associated with a more flexible exchange rate regime have only a limited potential to contribute to an orderly resolution of global trade and financial imbalances.
Income Inequality and Economic Growth: Evidence from the American Data
Authors: Panizza Ugo
Published: March 2024

Cross-country studies have found a negative relationship between income inequality and economic growth. The main problem with the cross-country analyses is the poor quality of the data on income distribution. This paper tests the robustness of the cross-country results to the use of a more accurate cross- state data-set.
School Principals in Latin America and the Caribbean: Leaders for Change or Subjects of Change?
Authors: Borden Allison M.
Published: March 2024

The purpose of this paper is to analyze three broad themes related to school principals: (1) the role of the school principal, (2) the preparation of principals to assume new roles, and (3) directions for future research on principals and their work.
Trade Costs and the Economic Fundamentals of the Initiative for Integration of Regional Infrastructure in South America (IIRSA)
Authors: Mesquita Moreira Mauricio
Published: March 2024

In October 2000, the twelve countries of South America launched, a multinational, multisectoral and multidisciplinary initiative, whose main objective is to develop the region's infrastructure within a context of environmental sustainability. Supported by the Inter-American Development Bank (IDB), the Andean Development Corporation, and the Financial Fund for the Development of the River Plate Basin, the Initiative is based on a hub strategy and its action plan calls for (1) strengthening national investment planning and coordination among countries, (2) standardizing and harmonizing regulatory and institutional aspects and (3) developing a portfolio of projects that encourage private sector participation and innovative financing schemes. This paper revisits IIRSA's economic fundamentals, looking at: the motivation behind regional integration; the importance of transport versus policy related trade costs; and the likely impact of the initiative on regional disparities and growth.
Trade Liberalization and the Political Economy of Protection in Brazil since 1987
Authors: De Paiva Abreu Marcelo
Published: March 2024

The paper analyses aspects of trade liberalization and the political economy of protection in Brazil since 1987. Section I considers the internal and external constraints to the continued adoption of a strategy based on import substitution industrialization. In section II trade liberalization up to 1994 is described including its adjustments related to the creation of Mercosur. It also places trade liberalization in the context of the wider reforms implemented in Brazil in the 1990s. The impacts of trade liberalization on import penetration, productivity and the cost of investment as well as its distributive effects are examined in section III. The relative importance of trade liberalization and inflation acceleration on the cost of investment is also discussed. Section IV deals with the political economy of trade liberalization and the protectionist backlash in the mid-1990s. An analysis is made of long-term factor mobility and the Brazilian case is compared with findings on other economies about the transition from a political economy of protection centered on the clash of "class interests" to one concerned with "special interests".
The Civil Service in Latin-America and the Caribbean: Situation and Future Challenges: The Caribbean Perspective
Authors: Draper Gordon
Published: March 2024

This paper presents the preliminary results of the study of Civil Service systems and reforms in Barbados, the Bahamas, Guyana, Suriname, and Trinidad and Tobago. The study is based in part on responses to questionnaires that have been completed by the countries. The aim of the paper is: to explore conceptual issues relating to the Civil Service; to examine existing Civil Service systems with a focus on elements of human resource management and structure; to review contemporary civil service reform initiatives; and to explore the emerging issues and future challenges for civil service systems in the region. This paper was presented at the Regional Policy Dialogue Meeting on Public Policy Management and Transparency: Civil Service held in October of 2001.
Tax Harmonization and Economic Integration: MERCOSUR
Authors: Rezende Fernando
Published: March 2024

The issue of tax harmonization may come to the fore as part of newer proposals to deepen the economic integration. Under this more favorable assumption, this paper aims at appraising alternative scenarios for tax harmonization in the MERCOSUR and proposing a specific route to be followed. With this goal in mind, the author begins by pointing out the most important differences in the tax systems of the member countries and examining the main challenges they face to harmonize taxation in the region. Also discussed is the experience of the European Union with respect to tax harmonization, and also an appraisal of the implications of tax asymmetries. Lastly, the paper concludes with recommendations for achieving tax harmonization in the region.
The Opportunities for Sustainable Urban Transportation in Medium-Sized Cities in Latin American and the Caribbean
Authors: Bleviss Deborah ,   BBG Group
Published: March 2024

The purpose of this report is to carry out for the Inter-American Development Bank (IDB) a strategic analysis of specific medium-sized cities in the Latin America and Caribbean (LAC) region that could present opportunities for linking greenhouse gas mitigation and sustainable urban transportation improvement. Cities included in this study range in size from populations of approximately 100,000 to those with populations of about 2 million. The information provided by this report is expected to help identify cities for project development in sustainable transportation. Among the types of projects that could be developed are those for the Global Environmental Facility (GEF) and possibly the Clean Development Mechanism (CDM). This report includes a proposed criteria for evaluating cities and a proposed set of recommendations for the Inter-American Development Bank to advance sustainable transportation in these medium-sized cities in Latin America and the Caribbean.
Agricultural Insurance in Mesoamerica: An Opportunity to Deepen Rural Financial Markets
Authors: Covarrubias Katia , Arias Diego
Published: March 2024

This study analyses the opportunities and challenges presented by agricultural insurance instruments in the deepening of financial services in rural areas in Mesoamerica. It outlines a public policy framework to guide the decision-making process. It concludes that, in order to support the competitiveness of the agricultural sector in the light of increasing trade liberalization and natural hazard risks, agricultural insurance should be at the forefront of the set of financial instruments to be developed.
Dynamic Consistency of Multidimensional and Income Targeting: An Application for Mexico Using Panel Data Information
Authors: Bouillon César P. , Yáñez-Pagans Patricia
Published: March 2024

This paper compares the dynamic consistency of targeting methodologies that use multidimensional welfare indicators with those based on means and proxy means tests using panel data from Mexico. To make these comparisons, an extension of the Alkire and Foster (2008) dual cutoff multidimensional poverty methodology is proposed. This extension provides a relative approach to multidimensional deprivation that ranks individuals according to an aggregate of their relative position in the distribution of a set of welfare attributes or outcomes. The extension gives particular importance to deprivations that affect smaller portions of the population, as these deprivations are especially critical in defining relative multidimensional welfare. The findings, disaggregated by geographical area (urban and rural), suggest that taking into account deprivation in multiple dimensions may lead to more dynamically consistent measures of well-being and thus more dynamically consistent targeting algorithms.
The Impact of ICT on Health Promotion: A Randomized Experiment with Diabetic Patients
Authors: Gandelman Néstor , Balsa Ana
Published: March 2024

This paper summarizes a randomized experiment to study the effects of an Internet-based intervention on type 2 diabetes patients in Montevideo, Uruguay. A specially designed website and electronic social network allowed participants to navigate freely, download materials, and interact with other diabetics and specialists. No significant impact was found on participants' knowledge, behavior, or health outcomes. Only a minority of patients logged on to the website, and most were only reached by email and mobile text (SMS). Patients' gender, marital status, and education influenced their participation on the website.
The Inter-Generational Transmission of Cognitive Abilities in Guatemala
Authors: Calderón María Cecilia , Hoddinott John
Published: March 2024

This paper examines early childhood development (ECD) outcomes and their association with family characteristics, investments, and environmental factors, with particular emphasis on the inter- generational transmission of cognitive abilities. The paper examines the causal relationship between parental cognitive abilities and ECD outcomes of their offspring using a rich data set from rural Guatemala that can account for such unobservable factors. A 10 percent increase in maternal Raven's scores increase children's Raven's scores by 7.8 percent. A 10 percent increase in maternal reading and vocabulary skills increases children's score on a standard vocabulary test by 5 percent. Effects are larger for older children, and the impact of maternal cognitive skills is larger than for paternal skills.
IDB Investments in Brazilian Protected Areas during the 1990s
Authors: Dourojeanni Marc J.
Published: March 2024

This essay attempts to document the funds invested by the IDB and its counterparts and how the resources were used in the restricted field of protected areas in Brazil, during the period 1990-1999. For this purpose, all relevant documents regarding loans, technical cooperation and small projects approved or executed since 1990 were reviewed. The goal of the exercise was to fine-tune a search on the subject of protected areas, as defined by the World Commission on Protected Areas (WCPA) of the World Conservation Union (IUCN) and by the Brazilian legislation on the matter. On the basis of the results, the author discusses the viability of this kind of exercise, the perception of other institutions regarding IDB investments on biodiversity in Brazil and, briefly, the role of the IDB in assisting Brazil in the field of protected areas.
Women in Poverty: A New Global Underclass
Authors: Buvinic Mayra
Published: March 2024

This article discusses the plight of poor women around the world and the feminization of poverty. The evidence is imperfect, but current trends suggest that women account for a growing proportion of those people who are considered poor on the basis of income, not only in industrial countries, but also in the developing world.
Labor Market Reforms and Their Impact on Formal Labor Demand and Job Market Turnover: The Case of Peru
Authors: Torero Máximo , Saavedra-Chanduví Jaime
Published: March 2024

This paper analyzes the effects of several aspects of labor legislation that were modified through successive waves of reform since 1991. Firing costs diminished sharply through the progressive elimination of job security regulations, the introduction of temporary contracts and changes in the severance payment structure. Simultaneously, non-wage labor costs increased. This paper assesses the effect of these changes on the level of formal employment, the effect of regulations changes on turnover, and compares employment duration data for the formal and informal sectors using empirical hazards and parametric estimations of hazard functions.
Labor Market Policies and Employment Duration: The Effects of Labor Market Reform in Argentina
Authors: Hopenhayn Hugo A.
Published: March 2024

Over the last few years, the debate on labor market reform has been at the center of economic policy debate in Argentina. One of the major targets of the attack on labor market regulation has been high dismissal costs. Attempts to reduce dismissal costs for all existing jobs have faced strong opposition. As a compromise, and to stimulate job creation, employment promotion contracts for new jobs were introduced in 1995. These contracts are limited to a fixed term ranging from three months to two years. There is a growing concern about the volatility of these temporary jobs, referred to as junk contracts, and a predominant view that they tend to generate excessive turnover. This paper studies the effect of this reform on job duration. The main findings are that the reform generated an overall increase in the hazard rate, and particularly so for the first three months of employment.
Poverty, Health Infrastructure and the Nutrition of Peruvian Children
Authors: Valdivia Martín
Published: March 2024

This paper discusses the effect of a significant pro-poor expansion of the country's health infrastructure on child nutrition in Peru, as measured by the height-for-age z-score. Using a pooled sample from the 1992, 1996 and 2000 rounds of the Peruvian DHS, this analysis controls for biases in the allocation of public investments by using a district fixed effects model. Desegregating by type of location, the econometric analysis finds that the effect was found to be significant only in urban areas. Furthermore, the effect is highly nonlinear and has a pro-poor bias. In this sense, this policy seems to have had a pro-poor bias within urban areas, while at the same time excluding the rural population, a traditionally marginalized population group in Peru. These findings support the idea that reducing distance and waiting time barriers may be necessary, but that more explicitly inclusive policies are required to improve the health of the rural poor, especially indigenous groups, so that they can escape this kind of poverty trap.
Political Institutions and Policy Outcomes in Colombia: The Effects of the 1991 Constitution
Authors: Pachón Mónica , Junguito Roberto , Cárdenas Mauricio
Published: March 2024

The 1991 Colombian Constitution strengthened the checks and balances of the political system by enhancing the role of Congress and the Constitutional Court, while somewhat limiting the powers of the President (who nonetheless remains extremely powerful even by Latin American standards). As a consequence of the larger number of relevant players, and the removal of barriers that restricted political participation, the political system has gained in terms of representation. However, political transaction costs have increased, making cooperation harder to achieve. The authors show that this has been typically the case in fiscal policy, where the use of rigid rules, the constitutionalization of some policies, and a reduction in legislative success rates-due to the presence of a more divided and fragmented Congress-have limited the adaptability and flexibility of policies. In contrast, in other areas of policy that were formally delegated to the technocracy, policies have been more adaptable to economic shocks, delivering better outcomes.
Productive Development Policies and Supporting Institutions in Latin America and The Caribbean
Authors: Rodríguez-Clare Andrés , Melo Alberto
Published: March 2024

This paper examines the evolution of productive development policies in Latin America in the last half century, with an emphasis on the post-reform period. The paper begins with a review of the import-substitution era and goes on to describe and make a preliminary assessment of the meaning and implications of productive development policies in the liberalization period.
The Pitfalls of Policymaking in Peru: Actors, Institutions and Rules of the Game
Authors: Morón Eduardo , Sanborn Cynthia
Published: March 2024

Policymaking in Peru over the last 25 years has been largely dominated by the Executive, and has been influenced by a variety of structural and political factors as well as by the personal ambitions of presidents and the public perception of crisis. With few exceptions, neither the Congress nor the other branches and levels of government have played effective roles in defining the national policy agenda, promoting inter-temporal cooperation and providing checks and balances on executive power. Although this situation has been partially modified since 2001, it is not clear that the general pattern has changed. While certain arenas of decision-making have been reformed in recent years, in many spheres policymaking remains an arbitrary and unpredictable process, resulting in policies that are of low quality, poorly enforced and easily reversed. Although reforming aspects of the political and electoral systems could contribute to improving this outcome, the instability of the political regime per se has been a deterrent to longer-term institutional development.
People's Republic of China's Technological Capability
Authors: Sigurdson Jon
Published: March 2024

This paper discusses the importance of the People's Republic of China in the global economy by exemplifying industrial sectors where it has established a strong competitive advantage. The author accounts for China's growth by looking at factors such as direct foreign investment and investment in research and development. This paper discusses several economic sectors including the textile, electronics, semiconductor, and aircraft industries as cases where China has upgraded its technological profile. The role of the university system is also discussed as a resource for China's future as a knowledge-based economy. This paper was presented at the Latin America/Caribbean and Asia/Pacific Economics and Business Association (LAEBA)'s 4th Annual Conference held in Beijing, China on December 3rd-4th, 2004.
Technology and Indonesia's Industrial Competitiveness
Authors: Thee Kian Wie
Published: March 2024

This presentation gives an overview of industrial policy in Indonesia during the past few decades. It also discusses industrial policy, reliance on FDI, and improvement in the ITC sector. This presentation was presented at the Latin America/Caribbean and Asia/Pacific Economics and Business Association (LAEBA)'s 2nd Annual Meeting held in Buenos Aires, Argentina on November 28th-29th, 2005.
Regional Integration and Trade Cost in South Asia
Authors: Gilbert John , Banik Nilankan
Published: March 2024

Until now, amount of inter-country trade within South Asian nations have been low. While similarities in exports profile can be seen as a reason for this low value of trade it might not be a valid one, especially in presence of growing South Asian income. Intra-industry trade theory suggests that complementarity might actually increase trade in presence of a rising income. There can be other important factors, such as, trade costs. Using an augmented gravity model in a panel framework the authors try to identify the components of trade costs that might have resulted in lower inter-country South Asian trade. This paper was prepared for the Latin America/Caribbean and Asia/Pacific Economics and Business Association (LAEBA)'s 4th Annual Meeting held in Lima, Peru, on June 17, 2008.
Returns to Education, Sector Premiums, and Male Wage Inequality in Mexico
Authors: Bouillon César P.
Published: March 2024

This paper examines Mexico's increase in wage inequality using data from household surveys (Encuesta Nacional de Ingreso Gasto de los Hogares de México) produced by the Mexican Institute for Statistics, Geography and Informatics (Instituto Nacional de Estadística, Geografía e Informática). An econometric simulation technique based on Juhn, Murphy, and Pierce (1993) and developed for the household level by Bourguignon, Fournier, and Gurgand (1998) is used to measure the contribution of changes in skill premiums and sector returns to the increase in inequality in Mexican males' wages during the period of analysis. The household surveys used in this paper make it possible to decompose some of the changes in inequality in Mexico after trade reform in the mid-1980s. The regressions and simulation technique confirm that male Mexican wage earners experienced an important increase in skill premiums and a decrease in sector wage premiums after the trade reform. The increase in skill premiums was unequalizing, while the decrease in sector premiums was equalizing.
Does Contracting-Out Primary Care Services Work?: The Case of Rural Guatemala
Authors: Evans William N. , Beomsoo Kim , Cristia Julian P.
Published: March 2024

This paper estimates the impact of a large-scale contracting-out program in Guatemala, using two waves of living standard measurement surveys which collected data before and after the expansion of the program and exploiting variation in the timing of the program to estimate treatment effects. Results indicate large program impacts on immunization rates for children and prenatal care provider choices. The program increases substantially the role of physician and nurses as prenatal care providers at the expense of traditional midwives. There is no evidence of effects in family planning outcomes. Taken together these results suggest a potential effective role of contracting-out in the provision of health care.
Housing Markets in Uruguay: Determinants of Housing Demand and Its Interaction with Public Policies
Authors: Garabato Natalia , Ramada Magdalena
Published: March 2024

This paper analyzes the determinants of housing demand for Uruguay and the extent to which housing policies have an impact on their target population. The paper first analyzes the determinants of housing demand, following an approach based on Rosen's (1974) two-step procedure consisting of fitting a hedonic price regression in 34 different geographical units (or markets) to estimate a housing demand function. The determinants of formality and ownership choices were examined using a multinomial logit framework. Determinants of these choices include both household demographic attributes and access to and use of public housing programs and other social programs. Policy recommendations are offered on the basis of the finding that a price and income-inelastic formal housing market greatly contrasts with a rather price and income-elastic informal housing market.
The Impact of the Seed Capital Program of SERCOTEC in Chile
Authors: Bonilla Claudio A. , Cancino Christian A.
Published: March 2024

This paper seeks to measure the impact on small businesses in Chile of the Seed Capital Program implemented by Chile's Technical Cooperation Services (Servicio de Cooperación Técnica SERCOTEC). The results are mixed. On the one hand, the impact of sales is positive but its statistical significance depends on the model used. With regard to the number of employees, however, the results are positive and statistically significant regardless of the model used. The results also show that participating in the program has no incidence on the probability of later obtaining financing. This study highlights the importance of differentiating between productive development programs and social programs. It also suggests improvements in public policy to develop entrepreneurship in small businesses in Chile. These suggestions may also be interesting for other countries in the region facing similar challenges in terms of developing private entrepreneurship as a vehicle to generate economic development.
Second-tier Government Banks and Firm Performance: Micro-Evidence from Colombia
Authors: Maffioli Alessandro , Eslava Marcela , Meléndez Arjona Marcela
Published: March 2024

Despite the large potential gains from credit by second-tier development banks, little is known about the actual impact of these banks' lending activity. This study partially fills that gap by analyzing the impact of the lending activity of Bancoldex, the Colombian second-tier development bank, on firm performance. The evaluation uses data over a several-year period on loans granted to firms by Bancoldex and on performance for all manufacturing establishments with 10 or more employees.
Productivity and Resource Misallocation in Latin America
Authors: Madrigal Lucía , Pagés Carmen , Busso Matías
Published: March 2024

Total factor productivity (TFP) in Latin America has not increased since the mid- 1970s, and in many countries it has declined. Moreover, resource misallocation can lower aggregate TFP. This paper presents evidence based on firm-level data from 10 Latin American countries to quantify the heterogeneity of firm productivity and the degree of resource misallocation within countries. Productivity heterogeneity and resource misallocation are found to be much larger than in the United States. Achieving an efficient allocation of resources could boost manufacturing TFP between 45 percent and 127 percent depending on the countries and years considered.
Unemployment Insurance and Search Effort in Chile
Authors: Huneeus Cristóbal , Leiva Silvia , Micco Alejandro
Published: March 2024

Unemployment is a pressing problem in many countries in Latin America. Financial crises and increased globalization increase job turnover and therefore the risk of unemployment. To protect workers, Chile implemented an innovative unemployment insurance (UI) system. UI protects workers but creates moral hazard and self-selection issues. Using administrative data for the period 2007 to 2010, the effect of the 2009 reform of UI on job search behavior was studied. The results revealed different job search behavior between workers who use unemployment benefits and those who do not. Search efforts were found to fall as long as unemployment benefits are in place. There is strong evidence that workers who decide not to take UI despite having the right to do so have a higher probability of finding a new job.
Banking Crises and Financial Integration
Authors: Caballero Julián
Published: March 2024

This paper explores whether the level of financial integration of banks in a country increases the incidence of systemic banking crises. The paper uses a de facto proxy for financial integration based on network statistics of banks participating in the global market of interbank syndicated loans. Specifically, the network statistics degree and betweenness are used to proxy for the de facto integration of the average bank in a country. The paper fits a count data model in the cross-section for the period 1980- 2007 and finds that the level of integration of the average bank is a robust determinant of the incidence of banking crises. An increased level of de facto integration as mea- sured by borrowing by banks is positively associated with the incidence of crises. A higher level of de jure integration (capital account openness) is also associated with a higher incidence of crises. However, the results also indicate that prudential banking regulation (supervision) plays a crucial and much larger role in reducing the incidence of crises. Interestingly, the results also show that the level of integration as measured by betweenness of the average bank has a negative effect on the incidence of crises. That is, the more important the average bank of a country is to the global bank network, the fewer the number of crises the country endures.
The Reform of the Civil Service in Advanced Democracies: Merit with Flexibility
Authors: Longo Francisco
Published: March 2024

This document is part of a series of papers commissioned by the IDB for the first meeting of the Regional Policy Dialogue of Public Management and Transparency that will take place at the IDB headquarters in Washington on April 26 and 27, 2001. The purpose of this paper is the analysis of the changes produced in the Civil Service systems of a group of countries within the OECD. Its objective is to fulfill the request made to the author by the Inter-American Development Bank (IDB), within the framework of its "Regional Policy Dialogue".
The Pharmacological Channel Revisited: Alcohol Sales Restrictions and Crime in Bogota
Authors: De Mello Joao , Mejía Daniel , Suárez Lucía
Published: March 2024

This paper attempts to evaluate the impact on crime of the restriction of late-night alcohol sales in Bogota and quantify the causal effect of problematic alcohol consumption on different crime categories. It is found that the restriction reduced deaths and injuries in car accidents and batteries. The results are stronger in areas where the restriction was actually binding and are highly heterogeneous depending on the number of liquor stores restricted at the block level. Finally, the paper measures the impact of the restriction on alcohol consumption (the first stage, or mechanism), and quantifies the causal pharmacological impact of alcohol consumption on crime using the restriction as an instrument for problematic alcohol consumption (the second stage). The results indicate that a one standard deviation (s. d. ) increase in problematic alcohol consumption increases deaths and injuries in car accidents by 0. 51 s. d and 0. 82 s. d. respectively, and batteries by 1. 27 s. d.
Taxation and Economic Growth in Latin America
Authors: Canavire-Bacarreza Gustavo , Martínez-Vázquez Jorge , Vulovic Violeta
Published: March 2024

Tax policy is among the most common and relevant instruments in the toolkit of policy-makers when thinking about promoting growth, yet there is not compelling evidence regarding its effect in Latin American countries. Using a variety of approaches, we estimate the effects on growth of the most important taxes for the region, namely personal income tax, corporate income tax, general taxes on goods and services, including value added and other sales taxes, and revenues from natural resource. We evaluate the effect of these tax instruments on growth for Argentina, Brazil, Mexico, and Chile using vector autoregressive techniques, and for close to the entire region and a worldwide sample of developing and developed countries using panel data estimation. We find that, for the most part, personal income tax does not have the expected negative effect on economic growth in Latin America, which is largely explained by the small collections in the region. For corporate income tax, our results suggest reducing tax evasion and greater reliance on collection may boost economic growth in the region as a whole and especially for natural resource exporting countries. But, we also find small negative effects of corporate income tax on growth for individual countries, specifically Argentina, Mexico, and Chile. Finally, our results suggest that greater reliance on consumption taxes has significant positive effects on growth in Latin American in general, although we again find slight negative effects in some of the selected countries. On the other hand, natural resource revenues do not seem to contribute to growth.
More Schooling and More Learning?: Effects of a Three-Year Conditional Cash Transfer Program in Nicaragua after 10 Years
Authors: Barham Tania , Macours Karen , Maluccio John A.
Published: March 2024

Conditional Cash Transfer (CCT) programs have become the anti-poverty program of choice in many developing countries. Numerous evaluations, often based on rigorous experimental designs, leave little doubt that such programs can increase enrollment and grades attained--in the short term. But evidence is notably lacking on whether these short-term gains translate into longer-term educational benefits needed to fully justify these programs. This paper uses the randomized phase-in of the RPS CCT program in Nicaragua to estimate the long-term effects on educational attainment and learning for boys, measured 10 years after the start of the program. We focus on a cohort of boys aged 9¿12 years at the start of the program in 2000 who, due to the program¿s eligibility criteria and prior school dropout patterns, were likely to have benefitted more in the group of localities that were randomly selected to receive the program first. We find that the short-term program effect of a half grade increase in schooling for boys was sustained after the end of the program and into early adulthood. In addition, results indicate significant and substantial gains in both math and language achievement scores, an approximately one-quarter standard deviation increase in learning outcomes for the now young men. Hence in Nicaragua, schooling and achievement gains coincided, implying important long term returns to CCT programs.
The Impact of Public Expenditures in Education, Health, and Infrastructure on Economic Growth and Income Distribution in Peru
Authors: Mesones Jorge A. , Peschiera Cassinelli Jorge R. , Baca Campodónico Jorge F.
Published: March 2024

The Peruvian economy has exhibited remarkable growth in the past 20 years. Good tax and monetary policies, along with comprehensive structural adjustment, which has attracted substantial foreign investment, are regarded as the pillars of this success. Notwithstanding the advances experienced on reducing poverty, lowering inequality and unemployment continue to be elusive targets for the Peruvian government and constitute main causes of social unrest. This paper assesses the impact of Peruvian public expenditures in education, health, and infrastructure on economic growth, poverty, and income distribution in the past 20 years using a Dynamic Computable General Equilibrium Model (DCGEM), which is an economy-wide model that describes the behavior of producers and consumers and the linkages among them.