bluuebunny/crossref_metadata_2025 huggingface dataset:
Evaluation of Transnational Programs at the IDB
Authors: Atuesta Laura , Corrales Maria Elena , Puerta Juan Manuel , Sekkel Julia , Costas-Perez Elena
Published: March 2024

This evaluation assesses IDB's role in contributing to the coordinated solution of transnational challenges during the period 2000-2011. The evaluation found that the relevance and effectiveness of IDB's Technical Cooperation program has been limited - in particular the Regional Public Good (RPG) program. The efficiency of the transnational Technical Cooperation program has been reduced by specific characteristics of the RPG program, though the RPG team has been successful in mitigating some of these challenges through strong execution. Even in technical cooperation that financed pilots, asymmetric ownership among countries has been a serious constraint to sustainability. Transnational operations face a pervasive misalignment of incentives. Without concessional funds, countries have limited incentives to undertake these costly operations. The IDB should carefully consider the pros and cons of deepening its engagement in transnational projects and related technical cooperation. In the event it chooses to do so, it should take steps to identify ways to enhance concessionality, and adapt IDB processes, structures, incentives, and budget to facilitate the implementation of transnational projects. It should also enhance the effectiveness of the transnational technical cooperation program, which should continue at some level of funding.
Identification and Exchange of Information on Politically Exposed Persons in Central American Countries
Authors: Jorge Guillermo
Published: March 2024

In the fight against money laundering, information on politically exposed persons (PEPs) is highly relevant for financial institutions as it is about customers deemed to be high-risk due to their public functions and the degree of influence they can exert. This document reviews the regulatory and operational frameworks to access and exchange of information on PEPs in Central American countries, as well as the enhanced due diligence measures under implementation in these countries. The main findings indicate that there are legal constraints in relation to the definition of PEPs and the obligation to declare beneficial owners. There are also operational constraints in terms of the measures implemented to identify PEPs and to ensure the integrity of information systems. Likewise, this document presents recommendations to address the barriers identified and analyzes best practices to help strengthen the detection and prevention mechanisms used by Central American governments and financial institutions for cases in which PEPs use the financial system to launder money obtained through corruption and related crimes.
Employment Protection and Gross Job Flows: A Differences-in-Differences Approach
Authors: Micco Alejandro , Pagés Carmen
Published: March 2024

This paper examines the effect of employment protection regulation on gross job flows in a sample of developed and developing countries. By implementing a differences-in-differences test we lessen the potentially severe endogeneity and omitted variable problems associated with cross-country regressions. This test is based on the hypothesis that job security regulations are more binding in some sectors of economic activity than in others, depending on sector-specific characteristics such as the variance of demand or technological shocks. Unlike most of the existing literature, our analysis indicates that more stringent job security regulations slow down gross job flows, and this tendency is more pronounced in sectors that require higher labor flexibility. These effects occur within the sample of developed and developing countries and are very large in magnitude. Moreover, these effects are robust to changes in regulatory measures, measurement of sector flexibility requirements, control variables and samples.
The Employment Problem in Latin America: Perceptions and Stylized Facts
Authors: Lora Eduardo , Márquez Gustavo
Published: March 2024

This article, which serves as an introduction to a group of studies prepared by the IDB Office of the Chief Economist, presents the perceptions of Latin American citizens and employers concerning the employment problem. It compares them to the conditions in the labor markets of the region.
The 1990s in Latin America: Another Decade of Persistent Inequality
Authors: Hilgert Marianne , Székely Miguel
Published: March 2024

This paper argues that there is no country in Latin America where we can confidently say that income inequality improved during the 1990s. We document this fact for the 15 countries where comparable household surveys, covering most of the population, are available. What we observe are genuine distributive changes, which are being driven neither by differences in the characteristics of the data nor by the way in which the data is treated. In 10 of the countries, the lack of progress is driven by increases in inequality among the first nine deciles. In the remaining 5, the reason is a greater concentration among the richest 10% of the population. We also observe that in 7 countries, the dynamics among individuals with 14 years or more of schooling are the main reason why income distribution has not improved in the 1990s. However, the lack of progress in income distribution is not exclusive to this region. We compare Latin America internationally and find that, with few exceptions, inequality has increased less in this region than in developed countries and in Eastern Europe.
Is FDI a Safer Form of Financing?
Authors: Hausmann Ricardo , Fernández-Arias Eduardo
Published: March 2024

It has been common to attribute financial crises to short-term capital inflows, while foreign direct investment (FDI) is seen as a safer form of finance. The relationship between crises and the composition of capital flows is particularly relevant at present because the flow of capital to Latin America is becoming increasingly dominated by FDI. This paper asks whether the composition of capital inflows and of the stock of foreign liabilities is relevant for financial crises, be it their frequency, depth, or length. It explores the possible role of FDI as a benign form of external liability relative to other classes of liabilities, reviewing both analytical and empirical arguments.
Structural Volatility in Argentina: A Policy Report
Authors: Caballero Ricardo J.
Published: March 2024

The author identifies sources of volatility in Argentina that include weak international financial links, a recurrent credit crunch and financial underdevelopment problem, a fragile fiscal situation, and a pervasive profit and collateral squeeze mechanism brought about by a rigid labor market and exchange rate system. The paper's policy recommendations include improving external financial links, continuing and accelerating the path of domestic financial deepening, giving very high priority to the reduction of the public debt burden problem, and addressing the fundamental incompatibility between labor market rigidities and a highly inflexible exchange rate system.
Trade Intensity and Business Cycle Synchronization: Are Developing Countries any Different?
Authors: Calderón César , Chong Alberto E. , Stein Ernesto H.
Published: March 2024

Some key criteria in the optimal currency area literature are that countries should join a currency union if they have closer international trade links and more symmetric business cycles. However, both criteria are endogenous. Frankel and Rose (1998) find that trade intensity increases cycle correlation among industrial countries. We study whether the same result holds true for the case of developing countries, as their different patterns of international trade and specialization may lead to cyclical asymmetries among them and between industrial and developing countries. We gather annual information for 147 countries for 1960-99 (33,676 country pairs) and find: (i) countries with higher bilateral trade exhibit higher business cycle synchronization, with an increase of one standard deviation in bilateral trade intensity raising the output correlation from 0.05 to 0.09 for all country pairs; (ii) countries with more asymmetric structures of production exhibit a smaller business cycle correlation; (iii) the impact of trade integration on business cycles is higher for industrial countries than both developing and industrial-developing country pairs; (iv) a one standard deviation increase in bilateral trade intensity leads to surges in output correlation from 0.25 to 0.39 among industrial countries, from 0.08 to 0.10 for our sample of industrial-developing country pairs, and from 0.03 to 0.06 among developing countries; (v) the impact of trade intensity on cycle correlation is smaller the greater the production structure asymmetries between the countries.
Privatization and Labor Force Restructuring around the World
Authors: Chong Alberto E. , López-de-Silanes Florencio
Published: March 2024

Critics of privatization argue that poor labor force restructuring is a key concern and that governments should establish better retrenchment programs. Using new data from a random sample of 400 companies in the world, we test competing theories about the wisdom of retrenchment programs and their effect on prices paid by buyers and re-hiring policies by private owners after privatization. Our results show that adverse selection plagues retrenchment programs carried out by governments before privatization. Controlling for endogeneity, several labor retrenchment policies yield a negative impact on net privatization prices. In confirmation of the adverse selection argument, various types of voluntary downsizing lead to a higher frequency of re-hiring of the same workers by the new private owners. Compulsory skill-based programs are the only type of program that is marginally associated with higher prices and lower re-hiring rates after privatization, but the political and economic costs of this policy may make it somewhat impractical. A qualified do not intervene appears to be the safest bet with respect to labor retrenchment before privatization.
Productive Development Policies in Trinidad and Tobago: A Critical Review
Authors: Mohammed Anne-Marie , Moya Ramiro , Sookram Sandra
Published: March 2024

Even as Trinidad and Tobago seeks productive diversification away from the energy sector, the process underlying the countrys productive development policies (PDP) is in a state of transition from state-directed industrial policy to a newer approach with extensive private-public participation. This study explores the main characteristics of four PDPs in Trinidad and Tobago and reviews them following the related literature (e.g., Rodríguez-Clare, 2005a and 2005b, and Melo and Rodríguez-Clare, 2006). The four PDPs are: a) The process towards the Promotion of Clusters; b) the PDPs for the Tourism industry; c) the classical PDPs for Micro, Small and Medium Enterprises and; d) the Free Trade Zone as a policy designed to compensate for the failure of the State.
Productive Development Policies in Latin American Countries: The Case of Peru, 1990-2007
Authors: Tello Mario D. , Távara José
Published: March 2024

This paper assesses the institutional setting and productive impact of selected productive development policies (PDPs), institutions, and programs implemented in Peru during the period 1990-2007. The assessment is based on a simple, basic framework of a series of economic or market failures that may have constrained the transformation of the productive structure, the process of innovation, and the growth of total factor productivity. Evidence indicates that the PDPs and structural reforms implemented in Peru did not significantly alter the productive structure of the Peruvian economy. If the objectives of the PDPs are to transform the productive structure, increase total factor productivity, and enhance innovation, government interventions need to focus directly on the source of market failures and create quality productive changes within the private sector.
Microeconomic Interventions after the Washington Consensus
Authors: Rodríguez-Clare Andrés
Published: March 2024

This paper examines the microeconomic interventions used to complement Washington Consensus reforms in Latin America. It maintains that the kind of interventions currently in vogue in most countries lack a sound theoretical and empirical foundation or are applied in a manner likely to prove ineffective. Arguing that the countries of the region should engage in selective interventions aimed at discovering new profitable activities (horizontal policies) and at creating innovation clusters (vertical policies), the paper discusses how such a strategy could be implemented. Both horizontal and vertical policies are important, although the appropriate mix depends on a countrys stage of development. Pessimism about Latin American economies ability to undertake this more sophisticated set of microeconomic interventions is an exaggerated reaction to the problems of corruption and capture encountered by import-substitution policies. At least in some countries, there is scope for a carefully executed strategy of the type discussed here.
Corporate Dollar Debt and Depreciations: Much Ado about Nothing?
Authors: Bleakley Hoyt , Cowan Kevin
Published: March 2024

Much has been written recently about the problems for emerging markets that might result from a mismatch between foreign-currency denominated liabilities and assets (or income flows) denominated in local currency. In particular, several models, developed in the aftermath of financial crises of the late 1990s, suggest that the expansion in the "peso" value of "dollar" liabilities resulting from a devaluation could, via a net worth effect, offset the expansionary competitiveness effect. Assessing which effect dominates is ultimately an empirical matter. In this vein, this paper constructs a new database with accounting information (including the currency composition of liabilities) for over 450 non-financial firms in five Latin American countries. The authors estimate, at the firm level, the reduced-form effect on investment of holding foreign-currency-denominated debt during an exchange-rate realignment. It is consistently found that, contrary to the predicted sign of the net-worth effect, firms holding more dollar debt do not invest less than their counterparts in the aftermath of a depreciation. The paper shows that this result is due to firms matching the currency denomination of their liabilities with the exchange-rate sensitivity of their profits. Because of this matching, the negative balance-sheet effects of a depreciation on firms holding dollar debt are offset by the larger competitiveness gains of these firms.
On Compulsory Voting and Income Inequality in a Cross-Section of Countries
Authors: Chong Alberto E. , Olivera Mauricio
Published: March 2024

This paper explores the link between compulsory voting and income distribution using a cross-section of countries around the world. Our empirical cross-country analysis for 91 countries during the period 1960-2000 shows that compulsory voting, when enforced strictly, improves income distribution, as measured by the Gini coefficient and the bottom income quintiles of the population. Our findings are robust to changes and additions to our benchmark specification. Since poorer countries suffer from relatively greater income inequality, it might make sense to promote such voting schemes in developing regions such as Latin America. This proposal assumes that bureaucratic costs related with design and implementation are not excessive.
Do Sovereign Defaults Hurt Exporters?
Authors: Panizza Ugo , Borensztein Eduardo
Published: March 2024

This paper uses a difference-in-difference methodology similar to the one originally proposed by Rajan and Zingales (1998) to test whether defaulting hurts the more export-oriented industries. Strong support for this hypothesis was found, but contrary to the findings of previous studies, our estimations suggest that the effect of defaults is short-lived.
The Unexplained Part of Public Debt
Authors: Campos Camil F.S. , Panizza Ugo , Jaimovich Dany
Published: March 2024

This paper shows that budget deficits account for a relatively small fraction of debt growth and that stock-flow reconciliation, which is often considered a residual entity, is one of the key determinants of debt dynamics. After having explained the importance of the stock-flow reconciliation, the paper shows that this residual entity can be partly explained by contingent liabilities and balancesheet effects.
Quid pro Quo: National Institutions and Sudden Stops in International Capital Movements
Authors: Velasco Andrés , Cavallo Eduardo A.
Published: March 2024

The paper explores the incidence of sudden stops in capital flows on the incentives for building national institutions that secure property rights in a world where sovereign defaults are possible equilibrium outcomes. Also the paper builds upon the benchmark model of sovereign default and direct creditor sanctions by Obstfeld and Rogoff (1996). In their model it is in the debtor countrys interest to tie its hands and secure the property rights of lenders as much as possible because this enhances the credibility of the countrys romise to repay and prevents default altogether. It incorporate two key features of todays international financial markets that are absent from the benchmark model: the possibility that lenders can trigger sudden stops in capital movements, and debt contracts in which lenders transfer resources to the country at the start of the period, which have to be repaid later. The paper shows that under these conditions the advice build institutions to secure repayment at all costs may be very bad advice indeed.
Public Investment in Infrastructure in Latin America: Is Debt the Culprit?
Authors: Lora Eduardo
Published: March 2024

Panel data for seven Latin American countries are used to assess the influence of public indebtedness on public investment in infrastructure in the period 1987-2001. Debt increases are associated with higher public infrastructure investment, an effect that is robust to the inclusion of many other fiscal and macroeconomic variables. This paper also finds some evidence of complementarity between public and private investment and of the negative effect of IMF adjustment loans on infrastructure expenditures. No evidence is found that debt defaults affect public investment in infrastructure
Gender and Ethnic Wage Gaps in Guatemala from a Matching Comparisons Perspective
Authors: Ñopo Hugo R. , Gonzales Alberto
Published: March 2024

This paper analyzes gender and ethnic wage gaps in Guatemala for the period 2000-2006, applying a matching comparisons technique, finding pronounced wage gaps along both gender and ethnic dimensions, the latter being greater. Wage gaps in Guatemala are partially explained by differences in human capital characteristics, especially education, between indigenous and non-indigenous and males and females, which calls for equalization of educational opportunities for the population. However, wage gaps are greater than differences in education would predict, which suggests the need for interventions: information campaigns to generate consciousness regarding the need to provide more equal opportunities in labor markets according to each individuals productivity.
Political Institutions, Intertemporal Cooperation, and the Quality of Policies
Authors: Scartascini Carlos , Stein Ernesto H. , Tommasi Mariano
Published: March 2024

While economists have tended to focus on specific public policies when developing recommendations, the achievement of welfare objectives might depend more on the quality of policies than their content. This paper develops several measures of the qualities of policies across countries, arguing that the quality of public policies depends on each politys ability to strike intertemporal transactions necessary to develop and sustain effective policies. The analytical framework developed here indicates that this ability depends on several characteristics of political institutions, such as congressional capabilities, judicial independence, and bureaucratic independence and professionalism. The empirical evidence presented supports this idea. The measures of policy quality developed here could be utilized for other purposes, including the determination of conditions under which more public spending in a given area is likely to generate the desired outcomes.
Estimating the Direct Economic Damage of the Earthquake in Haiti
Authors: Becerra Oscar , Cavallo Eduardo A. , Powell Andrew
Published: March 2024

This paper uses simple regression techniques to make an initial assessment of the monetary damages caused by the January 12, 2010 earthquake that struck Haiti. Damages are estimated for a disaster with both 200,000 and 250,000 total dead and missing (i.e., the range of mortality that the earthquake is estimated to have caused) using Haitis economic and demographic data. The base estimate is US$8.1bn for a death toll of 250,000, but for several reasons this may be a lower- bound estimate. An estimate of US$13.9bn for the same death toll is within statistical error. While the results are subject to many caveats, the implications of such an estimate are significant. Raising such a figure will require many donorsbilateral, multilateral and private. Hence excellent coordination of funding and execution will be the key to ensuring the efficient use of funds.
The Political Economy of Fiscal Reform in Brazil: The Rationale for the Suboptimal Equilibrum
Authors: Souza Saulo , Pereira Carlos , Melo Marcus André
Published: March 2024

This project examines fiscal reforms in Brazil since the 1990s, particularly in taxation, budgeting, and fiscal federalism. While recentralizing fiscal authority and massively expanding the extractive capacity of the state, policymakers chose not to revamp an inefficient tax system that has nonetheless proven capable of generating high levels of revenue. In budgeting, the economic crises of the mid-1990s prompted the government to rein in subnational fiscal imbalances but discouraged policymakers from introducing major changes in the tax system. As the executive derives utility from fiscal stability and inflation control because of electoral incentives and credibility gains in international markets, reform initiatives can generate political benefits for incumbent politicians. The paper finally argues that the Achilles heel of the sustainability of the Fiscal Responsibility Law is its enforcement technology: the -Tribunais de Contas-.
Corporate Tax Stimulus and Investment in Colombia
Authors: Galindo Arturo , Meléndez Arjona Marcela
Published: March 2024

This paper uses a yearly dataset of plant-level investment in Colombian firms during the period 1997 to 2007 to assess the impact of a tax incentive for firms that invest in fixed assets implemented in 2004. A positive and statistically significant correlation is found between the boom observed in investment and the adoption of the tax policy. However, the correlation vanishes when year-specific effects are controlled for. This result is robust to changes in the empirical specification, changes in estimation techniques, the inclusion of additional controls, and changes in the data set, among other tests. Overall, it is concluded that the tax stimulus analyzed was ineffective in promoting investment in Colombia.
The Political Economy of Fiscal Reform: The Case of Colombia, 1986-2006
Authors: Pachón Mónica , Perry Guillermo , Olivera Mauricio
Published: March 2024

This paper explores the characteristics of the political economy process that conditioned the scope and success of the combination of fiscal reforms before and after Colombias 1991 constitutional reforms. Using formal analysis of reforms and interviews with actors, reforms in taxation, decentralization, the budgetary process and pensions are examined in times of political crisis, economic crisis, and economic boom. The results generally confirm the hypothesis that increased political fragmentation and limited unilateral executive power after the 1991 reforms restricted the extent of reforms, particularly in tax law. Nonetheless, the enactment of piecemeal reforms was encouraged by crisis conditions.
Industrial Policies in Colombia
Authors: Perry Guillermo , Meléndez Arjona Marcela
Published: March 2024

This paper surveys and analyzes industrial policies in Colombia, finding extensive use of productive development policies (PDPs) and despite claims of only moderate government intervention. Rarely explicitly associated with the need to address market failures, PDPs are instead associated with economic reactivation and vaguely defined competitiveness. There are also PDPs that address government failures considered unlikely to be corrected by first-best interventions. Colombia has made progress, however, in structuring an institutional setting for PDP design that is sufficiently linked with private sector groups to elicit information on constraints and opportunities that require government intervention. Nonetheless, the overall set of PDPs in place still lacks coherence and is not always guided by the policy requests of the private sector more widely defined.
Collective Bargaining Systems in Six Latin American Countries: Degrees of Autonomy and Decentralization: Argentina, Brazil, Chile, Mexico, Peru, and Uruguay
Authors: O'Connell Lesley D.
Published: March 2024

The transition to a market driven development strategy in Latin America for more than a decade has redefined business strategies and reshaped the state's traditional role as guarantor of employment, stability, and protection. These changes, plus the move to create more flexible labor markets in some countries, have lead to the elimination or reduction of legislated employment protections and benefits, creating space for unions to enlarge their role in collective bargaining.
Catastrophic Natural Disasters and Economic Growth
Authors: Galiani Sebastián , Noy Ilan , Cavallo Eduardo A. , Pantano Juan
Published: March 2024

This paper examines the short and long-run average causal impact of catastrophic natural disasters on economic growth by combining information from comparative case studies. The counterfactual of the cases studied is assessed by constructing synthetic control groups, taking advantage of the fact that the timing of large sudden natural disasters is an exogenous event. It is found that only extremely large disasters have a negative effect on output, both in the short and long run. However, this result appears in two events where radical political revolutions followed the natural disasters. Once these political changes are controlled for, even extremely large disasters do not display any significant effect on economic growth. It is also found that smaller, but still very large natural disasters, have no discernible effect on output.
Trade, Gravity and Sudden Stops: On How Commercial Trade Can Increase the Stability of Capital Flows
Authors: Cavallo Eduardo A.
Published: March 2024

Financial stability is an important policy objective, since crises are associated with large economic, social and political costs. This paper contributes to the discussion by providing new theoretical and empirical evidence on the causal connection between lack of exposure to commercial trade and proclivity to sudden stops. On the theoretical front, the paper shows how exposure to trade raises the creditworthiness of countries and reduces the probability of sudden stops.
Regional Review of Water Charge Instruments for Water Management in Latin America and the Caribbean: Case Studies of Brazil, México and France
Authors: Seroa da Motta Ronaldo
Published: March 2024

The economic literature commonly identifies economic instruments (EIs) as a "better" way to achieve environmental goals than specified quantity and technological standards commonly known as command-and-control mechanisms (CAC).
Investing in Teacher Learning: Staff Development and Instructional Improvement in Community School District #2, New York City
Authors: Elmore Richard F. , Burney Deanna
Published: March 2024

The context for this paper is a general concern among educational reformers and students of educational reform about the role of local school districts in the improvement of teaching and learning in schools.
Why We Should End Reforms in Education
Authors: McGinn Noel
Published: March 2024

Education reforms are a constant social and political activity. Teachers have received more training, classes are smaller, more students have textbooks and they are of better quality. Curricula have been revised in accord with developments in cognitive psychology and advances in science. Literacy rates have risen notably and the average level of education in the population has grown steadily. Despite the many reforms carried out, and despite objective evidence of improved access and inputs, criticisms of public education have grown more intense and extensive. Why have reforms become more common even as they are unsatisfying?
Social Protecion in a Globalizing World
Authors: Tanzi Vito
Published: March 2024

This paper will discuss the use of instruments that promote social protection. It then will assess the impact that globalization, in all its manifestations, might have on these instruments.
Changes in the Labor Market in LAC: What Do They Mean for Education?
Authors: Cox Edwards Alejandra
Published: March 2024

There are four generalized trends observed in Latin American labor markets in the 1990s: (1) slow growth in GDP per capita; (2) high rates of unemployment; (3) rising wage differentials associated to tertiary education; and (4) declining wage differentials associated to gender and increased female labor force participation.
Rules of Origin for Development: From GSP to Global Free Trade
Authors: Harris Jeremy
Published: March 2024

The paper presents some cautionary arguments with respect to the relationship between rules of origin and development, and proposes an alternative mechanism, extended cumulation, by which the problems generated by burdensome rules of origin might be alleviated without jeopardizing the development benefits for which the preferential programs were intended.
Brazil's Trade Policy: Old and New Issues
Authors: Mesquita Moreira Mauricio
Published: March 2024

This paper examines this agenda and argues that if Brazil really wants to fully enjoy the growth and welfare benefits of trade, it needs to further lower and rationalize its structure of protection; adopt a more aggressive, World Trade Organization-plus, policy to open markets abroad; design a regional integration strategy that makes sense to its smaller partners; and bring trade facilitation, particularly transport costs, to the core of its trade agenda
The Transport Costs of Brazil's Exports: A Case Study of Agricultural Machinery and Soybeans
Authors: Chami Batista Jorge
Published: March 2024

This report is a case study aimed at shedding some light on the magnitude and determinants of Brazil's exporting costs. Two exporting firms were selected to provide information on these costs: one exports primary goods (soybeans), while the other exports manufactured goods (agricultural equipment). It is shown that non-policy trade costs tend to be much higher than policy trade costs, especially in the case of Brazil's exports of soybeans. International freight costs are also significant in the case of agricultural equipment. Therefore, much larger cost reductions might be achieved through cuts in non-policy trade costs than in policy trade costs.
A Primer of International Migration: The Latin American Experience
Authors: Rodríguez-Montemayor Eduardo , García Pablo M.
Published: March 2024

Migration has recently taken an important place in the agenda of many governments around the world. But the phenomenon of international mobility of individuals is not new. Following Massey [2003], the modern history of international migration can be divided into four periods. During the mercantile period, from about 1500 to 1800, world immigration was dominated by flows out of Europe and stemmed from processes of colonization and economic growth under mercantile capitalism
What's New in the New Regionalism in the Americas?
Authors: Estevadeordal Antoni , Devlin Robert
Published: March 2024

The centrifugal forces of economic globalization in the 1990's ran parallel with centripetal forces of regionalization. While seemingly pulling in opposite directions, the two forces reflected complementary dimensions of dynamic capitalist market development. The completion of the Uruguay Round and growing membership in the World Trade Organization (WTO) was accompanied by a situation in which regional integration schemes became commonplace; indeed, practically all WTO members are now party to one or more regional accords. Latin America is a good example of these dual forces. Between the mid-1980s and 1990s the region unilaterally reduced its average external tariff from over 40% to 12 %. The region also actively participated in the Uruguay Round and by the end of the decade all Latin American countries were members of the WTO. Meanwhile, there was a parallel wave of new reciprocal free trade and integration agreements, around twenty in number. These trends were accompanied by a strong average growth of international trade in the 1990s and a marked increase in intraregional trade. This paper attempts to substantiate that Latin America¿s recent wave of regional integration is indeed a New Regionalism, quite different from the old, and hence merits a more comprehensive perspective than in the past.
The Impacts of U.S. Agricultural and Trade Policy on Trade Liberalization and Integation via a U.S.-Central American Free Trade Agreement
Authors: Hathaway Dale E.
Published: March 2024

This study looks at several major legislative actions in 2002 that will substantially affect trade negotiations with the United States, and examines the US import protection for agricultural products that will be critical in trade negotiations with Central American countries. The two important legislative actions were the passage of the 2002 Farm Bill and the passage of Trade Promotion Authority, which provides for "fast track" treatment of trade agreements. The 2002 farm bill was widely denounced as a major reversal of US farm policy, away from the earlier move toward reduced levels of support and toward decoupled supports for key commodities. In fact, however, the 2002 farm bill contained the same support mechanisms that were in the highly touted 1996 farm bill. The 2002 farm bill also reauthorizes the various export programs that the US government uses to support the increased exports of US farm products. The Trade Promotion Authority contains several new restrictions on US negotiators. It lays out a list of sensitive agricultural products and requires special procedures before any negotiations to liberalize access can occur. In addition to the list of sensitive products the US has some significant tariffs on a number of products that the Central American countries export to the US. Elimination of these tariffs can provide significant gains in market access for some products. In summary, the successful negotiation and approval of a US-CAFTA will require major political will on both sides to overcome the major hurdles that exist.
Early Childhood Stimulation Interventions in Developing Countries: A Comprehensive Literature Review
Authors: López Bóo Florencia , Baker-Henningham Helen
Published: March 2024

This report reviews the effectiveness of early childhood stimulation interventions in developing countries. The report aims to answer the questions: What works in terms of early stimulation for young children in developing countries? For whom and under what conditions do these programs work and why do they work.
Risk across Borders: A Study of the Potential of Microinsurance Products to Help Migrants Cope with Cross Border Risks
Authors: Lovoi Annette , Brown Julia , Magnoni Barbara , Thornton Rebecca
Published: March 2024

This paper presents new evidence on migration and risk among Mexican migrants to the United States living in the New York City area. The paper examines the potential demand for formal risk mitigating mechanisms by studying some of the risks facing this community on both sides of the border, and provide greater understanding of their current informal risk management tools.
The Ministry of Education-Chilean Teachers Association Negotiation: Chile 2000: A Personal Perspective
Authors: Weinstein José
Published: March 2024

This paper narrates the Negotiation conducted in 2000 between the Chilean government, through the Ministry of Education (MINEDUC) and the teachers, led by the Colegio de Profesores (CP), the Chilean National Teachers Association. It describes the strategies employed by both sectors and the manner in which they finally concerted educational initiatives relevant to the successful development of the Educational Reform and the teaching profession. The Negotiation managed to impose cooperation over conflict, did not get stuck in wage demands, and identified fields of work that proved decisive in jointly improving the quality, equality and participation in the schooling system.
National Disparities and Regional Allocation of Resources: A Positive Framework
Authors: Ottaviano Gianmarco I.P.
Published: March 2024

Deeper integration of MERCOSUR aims at reducing the barriers to the international mobility of goods, factors and ideas as well as at promoting effective policy coordination among member countries. Lower barriers make the interactions among customers and suppliers in the integrated area increasingly tight, thus fostering the creation of a common market within the MERCOSUR economic space. The present paper proposes a theoretical framework to assess the economic impact and the welfare implications of the resulting reallocation of resources across firms and countries. Its final purpose is to answer the central questions whether and how the distribution of the associated costs and benefits might create resistance from national interests to move towards deeper integration. This paper was prepared within the framework of "Deeper Integration of MERCOSUR: Dealing with Disparities."
Asymmetries and Disparities in the Economic Integration of a South-South Customs Union
Authors: Vaillant Marcel
Published: March 2024

This article has two objectives. The first one is to analyze the possible changes that should be carried out in MERCOSUR in order to enhance its functionality. These changes should involve circulation of goods as well as customs revenues and the way they are allocated. The second objective is to evaluate the impact that changes in these the rules would have on disparities among the countries, considering the economic asymmetries now present.
Private Sector Performance Contracting in the Water Sector: The Case of SABESP: Case Study
Authors:   Inter American Development Bank
Published: March 2024

Water systems in Latin America are inefficient in part because of very low relative investment and in part because of the lack of availability of necessary management tools. One way to address both of these issues at the same time is the performance financing of micro-metering by private sector companies. This case study is written to highlight the counter-intuitive fact that the great inefficiencies in Latin American water systems offer strong opportunities for public/private risk sharing. Specifically addressed is the case of the water company Sabesp in São Paulo and their affect on the market.
An Evaluation of Training for the Unemployed in Mexico
Authors: Delajara Marcelo , Freije Samuel , Soloaga Isidro
Published: March 2024

This paper summarizes the findings of an impact evaluation of the Mexican training programs PROBECAT-SICAT for the period 1999-2004. It is a study commissioned by the Office of Evaluation and Oversight of the Inter-American Development Bank in accordance to the Bank's policy of ex-post evaluation of operations. The document provides an account of the Mexican public policy towards the unemployed and a description of the institutional and operative capacity of this policy for the last two decades, and reviews the previous impact evaluations of the training programs for the unemployed. It also includes a discussion of the methods we use for program evaluation and our main results, and presents a succinct cost-benefit analysis of the program, making use of the results of the impact evaluation.
An Assessment of Propensity Score Matching as a Non Experimental Impact Estimator: Evidence from Mexico's PROGRESA Program
Authors: Díaz Juan José , Handa Sudhanshu
Published: March 2024

In this working paper the authors present evidence on the reliability of propensity score matching to estimate the bias associated with the effect of treatment on the treated, exploiting the availability of experimental data from a Mexican antipoverty program (PROGRESA: Programa de Educación, Salud y Alimentación). The data comes from several outcomes such as food expenditure and child schooling and labor. The methodology compares the results of the experimental impact estimator with those using matched samples drawn from a (non-experimental) national survey carried out to measure household income and expenditures. The results show that simple-cross sectional matching produces significant bias for outcomes measured in different ways. Results are more positive for outcomes measured similarly across survey instruments, but even in this case there are indications of bias depending on sample and matching method.
Technology Adoption, Productivity and Specialization of Uruguayan Breeders: Evidence from an Impact Evaluation
Authors: Maffioli Alessandro , López Fernando
Published: March 2024

In this paper, the authors analyzed the effectiveness of the Component 1 of the Livestock Pilot Project (LPP-1) in fostering the efficiency of the Uruguayan livestock producers. The study used a unique panel dataset of 520 beneficiary and 470 non-beneficiary producers, dataset that we constructed by merging information from the Uruguayan livestock Survey of 2001 and 2003 with information collected by the LPP's Coordinating Unit. The authors found that the LPP-1 had an overall positive impact on the adoption of managerial practices, but it had not a significant impact on both productivity and specialization; also found were positive effects of LPP-1 on productivity when the analysis was restricted to the sub-sample of producers specialized in the breeding stage.
The Welfare Impacts of Local Investment Projects: Evidence from the Guatemala FIS
Authors: Soares Yuri , Ibarrarán Pablo , Sarzosa Miguel
Published: March 2024

This paper assesses the welfare impacts of local investments projects in rural areas of Guatemala. Using census track data from two rounds of the Guatemalan population census, as well as administrative data on investment projects, the authors estimate the impact of education, sanitation, productive, and total investment activities at the village level on measures of welfare. This is the first impact evaluation of social funds in Guatemala, and also the first paper that uses village level data, and both a multi-treatment effect approach and the generalized propensity score with continuous treatments to analyze this type of interventions. The outcome is such that local investment in schools significantly boosts enrollment and investments in water and sewerage significantly improved measures of access to water. The authors also examine the welfare impacts in regards to infant mortality and school progression.
Does Energy Consumption Respond to Price Shocks?: Evidence from a Regression-Discontinuity Design
Authors: Bastos Paulo , Castro Lucio , Cristia Julian P. , Scartascini Carlos
Published: March 2024

This paper exploits unique features of a recently introduced tariff schedule for natural gas in Buenos Aires to estimate the short-run impact of price shocks on residential energy utilization. The schedule induces a non-linear and non-monotonic relationship between households' accumulated consumption and unit prices, thus generating an exogenous source of variation in perceived prices, which is exploited in a regression-discontinuity design. The estimates reveal that a price increase in the utility bill received by consumers causes a substantial and prompt decline in gas consumption. Hence they suggest that policy interventions via the price mechanism, such as price caps and subsidies, are powerful instruments to influence residential energy utilization patterns, even within a short time span.
Productive Development Policies in Argentina
Authors: Sánchez Gabriel , Rozemberg Ricardo , Butler Inés
Published: March 2024

In contrast to the limited impact of aggregate-level productive development policies (PDPs) in Argentina, micro-level PDPs in several sectors have proven highly successful. This study seeks to understand how these PDPs succeeded in a challenging environment, what kinds of mechanisms were generated to ensure adaptation and learning, and how these PDPs evolved. Of importance is not only policy design and implementation, but also the policymaking. Following a historical overview of PDP in Argentina, the paper presents three case studies: i) the Argentine Technology Fund (FONTAR), a horizontal PDP; ii) the National Institute of Agricultural Technology (INTA), a vertical PDP; and iii) the application of both horizontal and vertical PDPs to the biotechnology sector. Lessons learned and conclusions are presented in a final section.
News Shocks and Asset Price Volatility in General Equilibrium
Authors: Matsumoto Akito , Rebucci Alessandro , Cova Pietro , Pisani Massimiliano
Published: March 2024

This paper studies equity price volatility in general equilibrium with news shocks about future productivity and monetary policy. As West (1998) shows, in a partial equilibrium present discounted value model, news about the future cash flow reduces asset price volatility. This paper shows that introducing news shocks in canonical dynamic stochastic general equilibrium model may not reduce asset price volatility under plausible parameter assumptions. This is because, in general equilibrium, the asset cash flow itself may be affected by the introduction of new shocks. In addition, it is shown that neglecting to account for policy news shocks (e. g. , policy announcements) can potentially bias empirical estimates of the impact of monetary policy shocks on asset prices.
Is Export Promotion Effective in Developing Countries? Firm-Level Evidence on the Intensive and Extensive Margins of Exports
Authors: Volpe Martincus Christian , Carballo Jerónimo
Published: March 2024

How effective are export promotion activities in developing countries? What are the channels through which export promotion affects firms' exports, the intensive margin or the extensive margin? Empirical evidence in this respect is scarce. We aim at filling this gap in the literature by providing evidence on the impact of export promotion on export performance using a unique firm-level dataset for Peru over the period 2001-2005. We find that export promotion actions are associated with increased exports, primarily along the extensive margin, both in terms of markets and products. This result is robust across alternative specifications and estimation methods.
The Incidence of Job Security Regulations on Labor Market Flexibility and Compliance in Colombia: Evidence from the 1990 Reform
Authors: Kugler Adriana
Published: March 2024

Utilizing differences-in-differences estimates, this paper reviews the impact of reduced firing costs on the dynamism of the Colombian labor market. The effects include raising exit rates into and out of unemployment, increasing compliance with labor legislation by lowering the costs of formal production, and reducing unemployment from the late 1980s to the early 1990s.