bluuebunny/crossref_metadata_2025 huggingface dataset:
Wage Shocks and Consumption Variability in Mexico during the 1990s
Authors: Attanasio Orazio P. , Székely Miguel
Published: March 2024

This paper presents evidence on the relationship between economic shocks to relative male wages and changes in household consumption in Mexico during the 1990s, which is a period characterized by high volatility. In addition to performing this type of analysis for Mexico for the first time, the paper makes two main contributions. The first is the use of alternative data sources to construct instrumental variables for wages. The second is to examine differences across four consumption categories: non-durable goods, durable goods, education and health. Our results for non-durable goods consumption reject the hypothesis that Mexican households are able to insure idiosyncratic risk. For the comparisons across consumption categories, the conclusion is that households in Mexico tend to react to temporary shocks by contracting the consumption of goods that represent longer-run investment in human capital, which makes them more vulnerable in the future.
Quality of Life in Urban Neighborhoods in Metropolitan Lima, Peru
Authors: Andrade Raúl , Alcázar Lorena
Published: March 2024

This paper presents the results of the estimations of a quality of life (QoL) index focusing on three dimensions: individual factors, urban factors, and civil society. The study was mainly based on information collected through a survey applied in three districts of Lima: La Victoria, Los Olivos and Villa El Salvador. These districts are relatively similar in terms of income, although Villa El Salvador has a larger percentage of poor households. The results show that various indicators have different impacts on QoL. Two findings stand out. First, variables related to participation in civil society are statistically significant in all specifications used. Second, in La Victoria and Los Olivos, QoL is determined largely by indicators in the individual sphere, while the civil society sphere is more important in Villa El Salvador.
Political Institutions, Policymaking Processes, and Policy Outcomes in Mexico
Authors: Nacif Benito , Negretto Gabriel , Lehoucq Fabrice , Benton Allyson Lucinda , Aparicio Francisco Javier
Published: March 2024

This paper uses a transaction-costs framework to link the policymaking process (PMP) and the outer features of public policies in Mexico. It shows how a highly secretive PMP, centralized around the presidency, fashioned nationalist policies that were stable, adaptable, coordinated and private-regarding for the urban-based corporatist pillars of the regime. When growth faltered in the late 1970s, however, this PMP was unable to adapt to economic volatility, although it remained dominant in an increasingly turbulent polity. The paper explains how unified government and corporatist control of the economy made a constitutionally weak president the envy of executives around the world, even at the cost of being unable to enact reforms with short-term costs for the corporatist pillars of the regime. The article also explains why democratization in the 1990s is giving rise to a less centralized and more open PMP that benefits larger shares of the population.
Political Institutions, Policymaking Processes, and Policy Outcomes in Venezuela
Authors: Penfold Michael , Monaldi Francisco , Obuchi Richard , González de Pacheco Rosa Amelia
Published: March 2024

This case study of Venezuela's democratic institution and policymaking processes is part of the broader regional project based on the theoretical framework developed by Spiller, Stein and Tommasi (2003). The framework focuses on the conditions that foster political cooperation among political actors to sustain inter-temporal policy commitments. The study shows that the political institutions that established Venezuela's democracy in the 1960s were deliberately set up to generate a cooperative equilibrium with low stakes of power, resulting in a relatively effective policymaking process and good policy outcomes. However, an oil boom unraveled the cooperative framework and induced rapid economic decay. The political reforms implemented in the late 1980s to improve the democratic process further weakened the party system and induced a highly uncooperative and volatile policymaking process. The recent political reforms, increasing the stakes of power, have stimulated a complete breakdown in cooperation and a highly polarized political system.
Political Institutions, Policymaking Processes, and Policy Outcomes: The Case of Uruguay
Authors: Moraes Juan Andrés , Buquet Daniel , Chasquetti Daniel , Garcé Adolfo , Pereyra Andrés , Tansini Ruben
Published: March 2024

This paper analyses the dynamics of policymaking among the various political institutions in Uruguay. The authors find that first, there are relatively stable policies, such as those allowing for the commercial and financial openness of the country. Then there are inflexible and low-quality policies, such as those related to social policies, some areas of state reform (civil servants' wages and hiring mechanisms), the bankruptcy regime, etc. Finally, there are volatile outcomes resulting from economic shocks, such as those related to discretionary public spending. In certain cases, the main outer feature of Uruguayan policies is rigidity. The source of rigidity appears to be a mixture of institutional factors and political conflict, in which it is very costly to move from the status quo due to the credible threat of policy reversal. Political institutions in Uruguay are conducive to achieving political compromise in the short run, but cannot effectively cooperate in establishing stable and flexible policies in the long run.
Empirical Estimated of Trade Costs for Asia
Authors: De Prabir
Published: March 2024

In this paper, the authors determine how policy and environmental barriers affect international trade, using data at 4-digit HS. The authors estimate a modified gravity equation, controlling for remoteness, for eight sectors in 10 Asian countries. Looking at the impact of the 'non-price' and 'price' factors on international trade, this paper finds that country's tariff, infrastructure quality and transport costs are the main three determinants for cross-country variations of trade flows. The major findings of the paper can be summarised as follows: (i) bilateral infrastructure quality is a principal determinant of trade performance, (ii) bilateral tariffs, which are largely ignored in the empirical gravity literature in context of Asia, has an impact on trade, (iii) the bilateral transport costs strongly influence the trade flows, and (iv) except transport equipment, trade in all other manufacturing sectors, considered in this study, are influenced by tariffs, transport costs and infrastructure quality.
Supply Chain Dynamics in Asia
Authors: Banomyong Ruth
Published: March 2024

Supply chain management in Asia is a relatively novel topic but a key challenge for all Asian based manufacturers and traders when trying to integrate into the "global market". The purpose of the paper is to describe key supply chain issues faced in Asia. These issues are related to supply chain security that forces Asian firms to comply with numerous requirements as well as the importance of a properly managed supply chain in enhancing firms' competitiveness. The critical role played by Asian based logistics providers in facilitating supply chain integration is explored. Logistics providers must be able to design effective and efficient supply chains for the clients. A case study is presented to illustrate how supply chain dynamics affects supplier selection. This paper was presented at The Fifth LAEBA Annual Meeting, Singapore, July 15th, 2009.
Rural Development from a Territorial Perspective: Case Studies in Asia and Latin America
Authors: Damiani Octavio
Published: March 2024

This paper reviews the contribution of agriculture and rural development to poverty reduction by examining the transformation of five territories in four countries of Asia (Malaysia and People's Republic of China) and Latin America (Brazil and Peru) that have experienced substantial reductions in poverty. While the four countries fall into three distinct groupings based on national statistics on the importance of agriculture and the growth of Gross Domestic Product, the five territories included in the study were among the poorest in their respective countries. At the same time, all five have experienced great reductions in poverty during the last two decades - a transformation that they achieved by taking substantially different paths that implied different roles of agriculture.
Labor Informality and the Incentive Effects of Social Security: Evidence from a Health Reform in Uruguay
Authors: Bérgolo Marcelo , Cruces Guillermo
Published: March 2024

This paper studies the incentive effects of social security benefits on labor market informality following a policy reform in Uruguay. The reform extended health benefits to dependent children of private sector salaried workers, and thus altered the incentive structure of holding formal jobs within the household. The identification strategy of the reform¿s effects relies on a comparison between workers with children (affected by the reform) and those without children (unaffected by the reform). Difference in differences estimates indicate a substantial effect of this expansion of coverage on informality rates, which fell significantly by about 1.3 percentage points (a 5 percent change) among workers in the treatment group with respect to those in the control group. The evidence also indicates that individuals within households jointly optimized their allocation of labor to the formal and informal sector. Workers responded to the increased incentives for only one member of the household to work in the formal sector. These findings provide evidence of the relevant and substantial incentive effects of social security benefits on the allocation of employment.
Housing Finance in Chile: Instruments, Actors, and Policies
Authors: Micco Alejandro , Piedrabuena Bernardita , Parrado Eric , Rebucci Alessandro
Published: March 2024

The Chilean system of housing finance is a mixture of public and private elements that has arguably been very successful. This paper provides an up-to-date review of the main instruments, actors, and government policies of the Chilean system of housing finance. It concludes that, while the system is indeed functioning well, the increasingly important role of BancoEstado warrants further analysis of the role of public banks in a modern, fully developed housing finance system.
A Dynamic Analysis of Household Decision-Making in Urban Colombia, 1976-1998: Changes in Household Structure, Human Capital and its Returns, and Female Labor Force Participation
Authors: Sánchez Torres Fabio , Núñez Jairo
Published: March 2024

The objective of this paper is to examine the changes and dynamics of household structure, human capital and the returns to education, labor earnings, women's labor force participation and investment in human capital. The approach used in the analysis is the so-called "cohort technique," which consists of following across time men and women born in the same year or year spell. The main sources of information for this work are the quarterly Household Surveys beginning in 1976. With such information a database of more than 6 million observations (workers, parents, children, etc.) was constructed. The research results show that the number of children of the younger parents has drastically decreased.
Intra-generational Social Mobility and Entrepreneurship in Uruguay
Authors: Bukstein Daniel , Gandelman Néstor
Published: March 2024

This paper follows an income-based, time-dependence approach to measure social mobility in Uruguay between 1982 and 2010. The paper finds that social mobility in Uruguay is considerable and reports evidence suggesting that this mobility is greater within cohorts of groups, such as those defined by gender or region, than between groups. Entrepreneurship and self-employment are associated with greater social mobility.
Entrepreneurship, Economic Mobility, and Entrepreneurial Propensity: A Regional View Based on the Analysis of Selected Latin American Countries
Authors: Kantis Hugo , Federico Juan , Trajtenberg Luis A.
Published: March 2024

Using household surveys from Argentina, Brazil, Peru, Ecuador, and El Salvador, this paper assesses the contribution of entrepreneurship to socioeconomic mobility and to understand the main variables associated with entrepreneurial propensity in selected Latin American countries. It is found that, at the aggregate regional level, income mobility is rather modest and that entrepreneurs do not outperform the rest of the population. However, entrepreneurs tend to perform as well as or better than non-entrepreneurs in countries where relative income mobility is moderate. In countries where relative income mobility is rather low, entrepreneurs tend to show less income mobility. Entrepreneurial propensity is rather modest, at 10 percent of the population. University graduates show the highest propensity in most of the countries studied, while women and young people were found to have the lowest entrepreneurial propensity.
Sub-national Revenue Mobilization in Latin America and Caribbean Countries: The Case of Venezuela
Authors: Ríos Germán , Ortega Federico , Scrofina J. Sebastián
Published: March 2024

This paper analyzes the high fiscal dependence of Venezuelan states and municipalities on the central government and the political economy process embedded in the interaction between the central government and sub-national entities. Also explored is whether there is scope to increase sub-national governments' revenues, improve the current intergovernmental transfer system, and reduce horizontal imbalances; of particular importance is analyzing the impact of current transfer mechanisms on sub-national governments' revenues volatility. Following a presentation of Venezuela's economic background, public sector and fiscal variables, the paper describes the process of decentralization, inter-governmental transfer mechanisms and revenue volatility, and local governments' own revenues. Subsequently presented are sub-national governments' fiscal dependence and its determinants, followed by options for revenue mobilization and improving the transfer mechanism. The paper concludes with a summary and policy recommendations.
Entrepreneurship, Entrepreneurial Values, and Public Policy in Argentina
Authors: Anchorena José , Ronconi Lucas
Published: March 2024

This paper uses datasets from six surveys to describe entrepreneurship in Argentina. While the quantity of entrepreneurship in Argentina is high, its quality is low, given the high proportion of informal and necessity entrepreneurs. Income is found to play a greater role in determining probability of becoming an entrepreneur than parental wealth; entrepreneurship is, however, transmitted inter- generationally. Although it is found that Argentina promotes entrepreneurial values more than most Latin American countries, entrepreneurs face several obstacles. Finally, using panel data based on household surveys, the paper estimates the short and long-run effects of an increase in public employment on entrepreneurship, finding the effects to be negative and strong. Overall, the evidence suggests that changes in public policies and other areas are needed for Argentina to become an entrepreneurial economy.
Crime and Erosion of Trust: Evidence for Latin America
Authors: Ruiz-Vega Mauricio , Corbacho Ana , Philipp Julia
Published: March 2024

Crime has tangible economic costs. It also has less understood and likely sizable intangible costs. In particular, widespread crime has the potential to weaken trust between citizens and institutions, undermine government reform efforts, and become an obstacle to development. Yet, the impact of crime on trust remains relatively unexplored in the literature. This paper analyzes the potential interrelationship between individual victimization and several measures of trust, including trust in formal public institutions and trust in informal private networks. It is based on a representative sample of individuals in 19 countries in Latin America. The empirical strategy is intended to mitigate overt biases and assess sensitivity to hidden biases. The results show that victimization has a substantial negative effect on trust in the local police but no robust effect on informal institutions. Governments may henceforth need to redouble efforts to reduce victimization and the resulting erosion of trust in public institutions.
Macroprudential Regulations in Central America
Authors: Loo-Kung Rudy , Rojas-Suárez Liliana , Izquierdo Alejandro
Published: March 2024

In recent years, and especially in the aftermath of the global financial crisis, a number of emerging market economies have been reforming their regulatory frameworks to adopt recommendations of the macroprudential approach. This paper discusses the potential usefulness of implementing this approach in Central America. Two major results support serious consideration of this type of policy in the region. First, credit booms in Central America are not only as pronounced as in other emerging economies, they are also associated with significantly lower economic growth during downturns. Regulations that minimize the eruption of credit booms and busts are therefore warranted. Second, simulation exercises involving two of the most popular instruments under the macroprudential approach - reserve requirements and dynamic provisioning -suggest significant potential benefits for the stability of financial systems in the region.
Accessing the Global Value Chain in a Changing Institutional Environment: Comparing Aeronautics and Coffee
Authors: Macedo Junior Ronaldo Porto , Gross Clarissa Piterman , Cafaggi Fabrizio , Silva Tiago Andreotti e , Joppert Swensson Luana F. , Ribeiro Thiago Alves , Almeida Lucila Gabriel de
Published: March 2024

The aim of the paper, based on empirical research in Brazil, is to investigate how supply chains have evolved over time, what factors have driven this evolution and also how a specific set of contractual practices along these chains is linked to access to international markets. The two selected case studies in the field of agriculture and aeronautics permit comparison between different modes of accessing international markets and GVCs; they illustrate the roles of transnational corporations and those of public institutions both at domestic and international levels in promoting access and determining its modes and potential spillover effects onto local production systems. More specifically, the research identifies the alternative channels of access to GVCs and international markets, and the institutional, legal and economic obstacles which prevent access or make it very costly. It looks at the role of intermediaries who control access to international markets, examining when they operate as gateways and when as bottlenecks. It examines both private and public actors, trying to disentangle when they facilitate and when they hinder access. It focuses on the most relevant factors that may attract foreign direct investments in human and physical capital to Brazil.
Insertion of Costa Rica in Global Value Chains: A Case Study
Authors: Zolezzi Sandro , Monge-González Ricardo
Published: March 2024

This study sheds light on how Costa Rica's insertion in global value chains occurs by examining governance patterns, the type of activities involved, and the level of underlying innovation in the selected value chain. The paper describes in detail two case studies of electronic-related companies in the aeronautic GVC that operate in Costa Rica as suppliers of global players in this industry. The final objective of the research is to contribute to the understanding of how public policies can be employed to improve Costa Rica's exporting and innovating performance.
Can Mexico Set Up in the Aerospace and the Software and IT Global Value Chains as a High-Value-Added Player?
Authors: Brown-Grossman Flor , Domínguez-Villalobos Lilia
Published: March 2024

This study is an effort to identify the process by which firms venture into GVCs and the obstacles faced by firms once they have been immersed in it. We have focused on two particular GVCs: the aerospace GVC and the software and IT services GVC. Through the case studies, we analyzed the nature of inter-firm linkages and how they affected the potential of scaling up by local suppliers in the value-added chain, the particular role of firms in the value chain in Mexico and the achievements and limitations of governmental policies as tools to facilitate the entrance of MNCs' subsidiaries and to create the conditions for the entrance and scaling up of local firms in the value chain. We found that geopolitical factors were important, in particular NAFTA, but these advantages are only part of explanation for the insertion of Mexican industry in both GVCs. In our opinion, this could not have happened without an effort of public policy at different levels to attain this goal on the part of the Mexican government. Nevertheless, there is a notorious unbalance between efforts to secure investment from foreign firms and certification and long-term financing initiatives. In our view, the latter has not been properly addressed and it is a major problem for the scaling up of local firms in the value chain.
The Effect of Firm-Size Dependent Policies on the Economy: The Case of the Repecos Law in Mexico
Authors: Valero-Gil Jorge N. , Sánchez-Vela Claudia
Published: March 2024

This paper analyzes the effects of a firm-size dependent law, on the Mexican economy which includes a small taxpayers' regime known in Mexico as the Repecos regime. It looks for effects on macroeconomic variables and on the industrial structure, on the proportion of small firms in the economy, which are originated in such regime. It uses a general equilibrium model calibrated on the U.S. economy and applies an environment of high taxes on labor and high tax evasion, characteristic of the Mexican economy, so that their effects can be distinguished from those of the Repecos regime.
Are Environmental Taxes Affected by Legislatures' Ideological Positions?
Authors: Vela Mauricio A. , Miller Sebastián J.
Published: March 2024

Environmental taxes have been discussed as one of the main mechanisms to deal with environmental problems. Nonetheless, instruments of this type have rarely been implemented, and the adoption of new or higher environmental taxes has faced resistance in some countries. The purpose of this work is to identify one possible political answer to why adoption of environmental taxes varies. One explanation is that legislatures' ideological position affects the degree of usage of taxes generally and environ- mental taxes in particular. For example, right-wing parties tend to be less associated with environmental concerns and more associated with lower government intervention. This paper presents evidence that reflects this relationship, showing the positive association of more left-wing legislatures with higher levels of environmental taxation. A panel of data for 37 developed and developing countries over 16 years is used considering the percentage of total revenue from environmentally related taxes, the ratio of this revenue to total energy use and tax levels in industry and household sectors. The results show that most of these impacts involve environmentally related taxes in the industry sector. Proportional representation electoral systems and high seat concentration by few parties appear to be necessary conditions for the negative relation of right-wing ideology with environmental taxes.
Shaky Roads and Trembling Exports: Assessing the Trade Effects of Domestic Infrastructure Using a Natural Experiment
Authors: Blyde Juan S. , Volpe Martincus Christian
Published: March 2024

Our knowledge of the trade effects of domestic infrastructure is very limited. The reason is twofold. First, data needed to examine these effects are not readily available. Second, identifying such effects requires properly addressing potential endogeneity problems affecting the relationship between internal infrastructure and trade. In this paper, we overcome these limitations by combining firm-level data with detailed geo-referenced information on Chile and by exploiting the earthquake that took place in this country in 2010 as an exogenous source of variation in available infrastructure and thereby in transport costs. We find that diminished transportation infrastructure had a significant negative impact on firms' exports.
Does Birth Underregistration Reduce Childhood Immunization?: Evidence from the Dominican Republic
Authors: Corbacho Ana , Brito Steve , Osorio Rivas Rene
Published: March 2024

Birth registration is not only a fundamental human right, but also a requirement for obtaining additional documents, proving legal identity, and accessing a number of government benefits. Yet, little is known about the effects of birth under-registration on access to health care. Using data from the Dominican Republic, this paper is the first to shed light on the causal impact of the lack of birth registration on childhood immunization, one of the key components of public services in many developing countries. Controlling for potential endogeneity and standard socioeconomic determinants of immunization, this paper finds that children between 0 and 59 months of age that do not have birth certificates are behind by nearly one vaccine (out of a total of nine) compared to those that have birth certificates. The results are robust to several robustness tests and threats to the exclusion restriction of the instrumental variables. Birth under-registration specifically reduces the probability of vaccination against polio, diphtheria, pertussis, and tetanus--once leading causes of child morbidity and infant mortality. In addition, untimely vaccination costs governments billions per year in treatment and rehabilitation.
Tax Compliance and Enforcement in the Pampas: Evidence from a Field Experiment
Authors: Castro Lucio , Scartascini Carlos
Published: March 2024

Tax evasion is a pervasive problem in many countries. In particular, some developing countries do not collect even half of what they would if taxpayers complied with the written letter of the law. The academic literature has not been oblivious to the need to explain why people pay (or do not pay) taxes. However, the empirical literature has not yet reached consensus. This paper reports the results of a large field experiment that tried to affect compliance by influencing property tax taxpayers' beliefs regarding the levels of enforcement, equity, and fairness of the tax system in a municipality in Argentina. Results indicate that the most effective message was one that stated the actual fines and potential legal consequences taxpayers may face in the case of noncompliance (tax compliance increased by more than 4 percentage points). No average effects are found for the treatments designed to affect beliefs about the equity and fairness of the system. However, the evidence also points out that not every taxpayer updates his or her beliefs in the same direction, as relevant heterogeneous effects are found across the population. The evidence in this paper advances the state of knowledge and may help to reconcile some of the different results in the literature.
Impact Evaluation of Innovation and Linkage Development Programs in Costa Rica: The Cases of PROPYME and CR Provee
Authors: Rodríguez-Álvarez Juan Antonio , Monge-González Ricardo
Published: March 2024

This paper estimates the impact of two productive development programs (PDPs) in Costa Rica: PROPYME and CR Provee. The first seeks to increase the capacity of small and medium-sized firms (SMEs) to innovate, and the second aims to increase backward linkages between Costa Rican SMEs and multinational companies operating in the country. The impacts of each program were measured in terms of three result variables: real average wages, employment demand, and the probability of exporting. A combination of fixed effects and propensity score matching techniques was used in estimations to correct for any selection bias. The results show that both PROPYME and CR Provee have positive and significant impacts on SME performance. PROPYME¿s beneficiaries performed better than other firms in terms of labor demand and their probability of exporting, while firms treated by CR Provee showed higher average wages, labor demand, and chances of exporting than untreated firms. Firms treated simultaneously by both programs performed better in terms of average wages than those that were only treated by CR Provee. This result is of special interest to policymakers since it indicates the importance of bundling in the implementation of PDPs. The findings suggest that policies aimed at overcoming the weaknesses of these two programs are important for obtaining higher real wages, generating more employment, and increasing the probability of exporting by Costa Rican SMEs.
On the Distributive Costs of Drug-Related Homicides
Authors: Galiani Sebastián , Seira Enrique , Ajzenman Nicolás
Published: March 2024

There are few reliable estimates of the effects of violence on economic outcomes. This study exploits the manifold increase in homicides in 2008-2011 in Mexico resulting from its war on organized drug traffickers to estimate the effect of drug-related homicides on housing prices. Using an unusually rich dataset that provides national coverage on housing prices and homicides and exploits within-municipality variation, the study finds that the burden of violence affects only the poor. An increase in homicides equivalent to one standard deviation leads to a 3 percent decrease in low-income housing prices. Moreover, the effect on housing prices of long-term increases in crime is 40 percent larger.
Entry and Exit of Banks in Latin America and the Caribbean: Public Policy Concerns and a Proposed Solution
Authors: Benston George J.
Published: March 2024

Banking authorities must resolve or otherwise deal with existing banks that are weak or insolvent without imposing costs on consumers or taxpayers. Two aspects of this concern should be delineated. First, how can banking regulations be structured so that the future exit of weak and insolvent banks would be relatively costless? Next, how can the authorities resolve existing weak and insolvent banks without imposing costs on depositors or taxpayers?
Institutional Arrangements and Fiscal Performance: The Latin American Experience
Authors: Talvi Ernesto , Grisanti Alejandro , Stein Ernesto H.
Published: March 2024

This paper considers whether institutional factors, in this instance electoral systems and procedures, affect Latin American countries' fiscal performance as measured by the size of the public sector, fiscal deficits, the size of the public debt, and the degree of procyclality of fiscal policy. The authors find that electoral systems characterized by large district magnitude and high political fragmentation have larger governments, larger deficits, and more procyclical fiscal policies. Transparent and hierarchical budget procedures, on the other hand, lead to lower deficits and levels of debt.
Macro Policy and Employment Problems in Latin America
Authors: Lora Eduardo , Olivera Mauricio
Published: March 2024

This paper was prepared for the 1998 IDB/IIC Annual Meeting entitled: "The Employment in Latin America: What is the Problem and Should it be Addressed?" held in Cartagena, Colombia in March 1998. Despite macroeconomic stabilization and structural reforms, employment problems have persisted in Latin America. The 1990s have seen a slowdown in the rate of job creation, and unemployment rates have stagnated at about 10 percent. Informal sector employment has expanded, and increases in real wages have been particularly favorable to skilled workers. Economic cycles explain fluctuations in the employment and unemployment rates, while price stabilization and structural reforms have affected the composition of labor demand and relative wages.
Empirical Determinants of Good Institutions: Do We Know Anything?
Authors: Straub Stéphane
Published: March 2024

Abundant empirical evidence links well-functioning institutions and good governance to better economic and social outcomes. It is thus an important challenge to determine which conjunction of factors produces better institutions. Along this line, the objective of this paper is twofold. First, it examines the existing results of the literature on this matter in a critical way, tries to assess their robustness, and explores alternative methodology. Second, it makes use of a more comprehensive database, including all the aspects previously analyzed in a separate manner, to derive systematic empirical results. After discussing the traditional robustness checks employed, for example, in the empirical growth literature, which appear to be of limited usefulness, we introduce factor analysis as a preliminary step toward model specification and subsequently perform multiple regression analysis. Of the four levels of explanation that we identify, namely control and historical variables, the nature of the political game, the size and nature of existing rents to be allocated, and the nature and quality of bureaucratic incentives, the later appears to be the more clearly linked to institutional quality. However, the results prove not robust when dealing with endogeneity problems. Various kinds of interactions and non-linear effects are also investigated, yielding no clear insights. We conclude regarding the fragility of existing data, in particular with respect to the incentive structure, and the need for a better theoretical understanding of the underlying mechanisms.
Income Distribution, Factor Endowments, and Trade Openness
Authors: Spilimbergo Antonio , Londoño Juan Luis , Székely Miguel
Published: March 2024

This paper studies the empirical links among factor endowments, trade, and personal income distribution. The motivation is that many developing countries have implemented radical trade reforms in recent years. These reforms have changed relative prices, induced a reallocation of resources, and may have led to the introduction of new production techniques. These changes are quite complex and their final effect on income distribution is theoretically unclear. The author's aim is to present the stylized empirical facts on the relations between income distribution, factor endowments, and trade.
Evolution and Rationality of Budget Institutions in Colombia
Authors: Hommes Rudolf
Published: March 2024

The independence of central banks has an effect on the macroeconomic results of economies and ultimately on inflation. A similar relationship may exist between budget institutions and the fiscal performance of governments. Budget institutions may have a bearing on fiscal results. There is evidence that indicates that budgetary procedures favoring a stronger position of the budget authority vis-a-vis other members of government, or giving more power to the executive lead to greater fiscal discipline. This paper next examines the historical development of the budgetary institutions, and attempts to explain why and how the particularly Colombian pattern of fiscal behavior managed to develop.
Educational Indicators: What's to Be Measured?
Authors: Vos Rob
Published: March 2024

Currently, numerous strategies and new initiatives for improving quality of schooling at the primary and secondary levels are being considered and implemented, with strong support from multilateral agencies, including the World Bank and the IDB. These initiatives include increasing availability and quality of teaching materials, in-service training of teachers, improvement of teaching methods, supply of subsidized breakfast and lunches at school, etc. There is little dispute these are important and necessary interventions. However, the design, monitoring and evaluation of the cost-effectiveness of these programs and of the educational sector in general is hampered by persistent deficiencies in the quality and timely availability of educational statistics. The objective of the present paper is to provide a framework for the identification of relevant educational indicators. Which are relevant types of information depends on what one wishes to analyze for which policy need. Accordingly, the paper conceptualizes two typologies. The first identifies different types of operational educational indicators, distinguishing between input, access, output and outcome indicators to show that an appropriate information system requires to cover the whole process from supplying educational services, demand factors and accessibility, to results in terms of educational performance and externalities derived from enhanced human capital formation. The second typology distinguishes various types of policy-relevant analysis, such as the assessment of educational performance and needs, cost-effectiveness analysis of educational programs, impact evaluation and assessment of externalities. The informational needs in terms of indicators are specified for each type of policy analysis. The paper concludes with a specification of priority needs in data improvement.
Banking Crises in Latin America: Experience and Issues
Authors: Rojas-Suárez Liliana , Weisbrod Steven R.
Published: March 2024

This paper argues that the experiences with banking crises in Latin America have been different from those in the industrial world because of the peculiarities of Latin American financial systems. Hence, applying the lessons derived from crisis resolution in the industrial world is not sufficient to deal with banking problems in the region. It must be augmented by the unique experiences of Latin American regulators if future crises in the region are to be managed or avoided. Paper prepared for the Inter-American Development Bank/Group of 30 conferences on Banking Crises in Latin America, October 6 and 7, 1995.
Electric Power Sector Reform in Latin America and the Caribbean
Authors: Dussan Manuel
Published: March 2024

This paper analyzes the technical and economic characteristics of the electricity sector, the special conditions prevailing in the region that determine its development, the main issues that were faced prior to the reform movement, and the status and prospects for sector reform in the region. Based on this diagnostic, the paper proposes a common denominator across countries on the general elements of regulatory policy that are essential to meet the basic objectives of public services.
The Integration Movement in the Caribbean at Crossroads: Towards a New Approach of Integration
Authors: Nogueira Uziel
Published: March 2024

The Institute for the Integration of Latin America and the Caribbean (INTAL) has inaugurated a Working Papers Series with the publication of a study by Uziel Nogueira, the Institute's Economist. Entitled "The Integration Movement in the Caribbean at the Crossroads: Towards a New Approach to Integration", the study opens with an overview of the movement towards integration among the English-speaking countries of the Caribbean. It continues with an analysis of the integration process during this decade, with particular reference to the Association of Caribbean States (ACS), the North American Free Trade Agreement (FTAA), the Caribbean Basin Initiative (CBI) and the Free Trade Area of the Americas (FTAA). The third section examines economic reforms and trade liberalization in the countries of the region, stressing the function of the common external tariff, the commercial reform program and the role of the exchange rate in the trade regime. The Working Paper concludes that the integration process overseen by CARICOM has reached its limits, notwithstanding the attempt to widen the process with the creation of the ACS.
Development Diagnostics for the Southern Cone
Authors: Sánchez Gabriel , Valenzuela Patricio , Borensztein Eduardo , Miller Sebastián J.
Published: March 2024

This is an update and revision of our 2009 study. Using a broad dataset and an original methodology, this paper reports composite development gaps across economic, social and institutional sectors. We define development gap as the distance between the observed and the expected development level of a country. The gaps are indicators of areas where development needs are bigger. Although we estimate the development gaps for all countries with available data, we focus the analysis of our results in five Southern Cone countries: Argentina, Brazil, Chile, Paraguay and Uruguay.
Do Export Promotion Agencies Promote New Exporters?
Authors: Cruz Marcio
Published: March 2024

Do export promotion agencies (EPAs) impact the probability of non-exporting firms to export? In the last decade many countries have introduced EPAs to support their firrms in order to deal with asymmetric information problems and make feasible additional gains from trade. Some recent studies have found that the support of EPAs has been effective with respect to the intensive and extensive margins of trade. Nevertheless, due to the lack of information on non-exporting firms, few of them analyze their impact on the probability of promoting new exporters. This paper evaluates the impact of the Brazilian Trade and Investment Promotion Agency (Apex-Brasil) on firms' export status using a unique firm-level dataset which covers the full manufacturing sector in Brazil. In order to identify the impact of Apex's assistance on firms' export propensity this paper relies on a procedure of matching difference-in-difference estimators. The empirical results show evidence of the program's positive impact on the probability of promoting new exporters. Also, the effect is heterogeneous according to firms' size categories and sectors. Although the evidence of positive effect is robust, the low propensity to export for both the treated and the control groups reinforces the importance of other firms' determinants (e.g. productivity) widely emphasized by trade literature.
Export Mix Changes and Firm Performance: Evidence from Chile
Authors: Alvarez Roberto , Zahler Andrés
Published: March 2024

In this paper we analyze changes in the export mix of Chilean firms, looking particularly at differences between large firms and SMEs. To do that, we use detailed information of exported products by firms during the period 1995-2005. Our econometric results, which look at the impact of export product churning on firm performance, are heterogeneous by type of change inexport mix and by firm size. In general, export mix changes are associated with improvements on productivity, although our results suggest that this positive effect is only for SMEs. In terms of employment and sales, we find that export product churning has positive effect on large firms and lower - and in some case negative - on SMEs. It seems that changes in export mix are more important for firm growth in large firms, but not in terms of productivity. In contrast, SMEs can have a higher potential for productivity improvement through export product churning but this does not translate necessarily in significant increase in sales and employment.
Foreign Bank Behavior during Financial Crises
Authors: Caballero Julián , Adams-Kane Jonathon , Lim Jamus
Published: March 2024

This paper studies whether lending by foreign banks is affected by financial crises. The paper pairs a bank-level dataset of foreign ownership with information on banking crises and examines whether the credit supply of majority foreignowned banks that underwent home-country crises differs systematically from that of other foreign banks. The baseline results show that banks exposed to homecountry crises in 2007 and 2008 exhibit changes in lending patterns that are lower by between 13 and 42 percent than their non-crisis counterparts. This finding is robust to potential alternative explanations and also holds, though less strongly, for the 1997-98 Asian crisis.
The Health Impacts of Severe Climate Shocks in Colombia
Authors: Valencia-Amaya Mauricio G. , Mata Dolores de la
Published: March 2024

This paper studies the link between severe weather shocks in Colombia and municipality-level incidence of dengue and malaria. The unexpectedly high variability of the 2010 rainfalls relative to previous periods and their regional heterogeneity are exploited as an identification strategy. A differences-indifferences DD) strategy is thereby implemented where the period 2007-2009 is defined as the pre-treatment period and 2010-2011 as the post-treatment period. The treatment group is all municipalities that experienced higher intra-year rain variability in 2010 than in 2007-2009. The results from the different specifications confirm that the relationship between climate events and vector-borne diseases is intricate. The 2010 weather shocks are associated with not only an increase in the number of dengue cases, in the case of high variability (but not extreme) yearly rain, but also a decrease in its incidence, in particular in the presence of extreme rain events. Floods seem to have decreased the number of dengue cases.
On the Credibility of Inflation Targeting Regimes in Latin America
Authors: Mariscal Rodrigo , Tavella Pilar , Powell Andrew
Published: March 2024

Inflation targeting has been adopted in a set of emerging economies, including eight countries in Latin America. The success of this regime may depend critically on the credibility of the target and the expectation that the authorities will take appropriate actions if the target is breached. This paper exploits a database of inflation expectations and attempts to measure whether, for a set of inflation targeters in Latin America, expectations are well anchored. A tighter anchoring of expectations is interpreted as a gain in credibility. Also considered are the effects on the credibility of the regime if the inflation target is breached. The results indicate that while inflation expectations have not been fully anchored over the whole sample period, credibility has risen, but at the same time the cost of breaching the target has grown.
Quake'n and Shake'n...Forever! Long-Run Effects of Natural Disasters: A Case Study on the 1970 Ancash Earthquake
Authors: Miller Sebastián J. , Caruso Germán
Published: March 2024

This study estimates the effects of the 1970 Ancash earthquake on human capital accumulation on the affected and subsequent generation, 37 years after the shock, using the Peruvian censuses of 1993 and 2007. The main finding is that males affected by the earthquake in utero completed on average 0. 5 years less schooling while females affected by the earthquake completed 0. 8 years less schooling. Surprisingly, those whose mothers were affected at birth by the earthquake have 0. 4 less years of education, while those whose fathers were affected by the earthquake at birth have no effects on their education. The evaluation of other outcomes also suggests that the level of welfare of the affected individuals has been negatively impacted in the long run. The present investigation supports previous literature on shocks in early childhood, providing evidence of the existence of intergenerational transmission of shocks.