bluuebunny/crossref_metadata_2025 huggingface dataset:
A Moving Target: Universal Access to Healthcare Services in Latin America and the Caribbean
Authors: Savedoff William D.
Published: March 2024

Healthcare services are more widespread in Latin America and the Caribbean today than 50 years ago, yet this availability is not necessarily reflected in popular perceptions. This study documents the expansion of healthcare services in the region in terms of medically-trained professionals, service utilization, and insurance eligibility. It finds that people in countries with more doctors have a more positive view of access to healthcare and greater confidence in the healthcare system. However, other factors intervene in this relationship between perceptions and objective indicators, such as the strength of local social networks and wealth. As a consequence of rising expectations, differential access and continuing discontent, public policy can be driven by factors that are least likely to improve the population's health.
Teacher Unionization and the Quality of Education in Peru: An Empirical Evaluation Using Survey Data
Authors: Zegarra Eduardo , Ravina Renato
Published: March 2024

This paper analyzes the evolution and current profile of teacher unionization and estimate the impact of unionization on the quality of public education in Peru. The research uses data from a 1999 household survey (ENAHO) and from a recent evaluation of a public program oriented to improve the quality of Peruvian public education. Regarding the evolution of unionization, there is evidence compatible with the hypothesis that the rate of teacher unionization has dropped during the last three decades, but especially during the 1990s, due basically to the hiring of temporary teachers. For the impact of unionization on quality, the data indicate that unionization does not currently seem to be a major factor affecting the quality of educational services in the Peruvian public education system.
Titling and Chronic Diseases: Evidence from A Natural Experiment in Uruguay
Authors: Gandelman Néstor
Published: March 2024

In this paper the author exploits a natural experiment to study the effects of granting formal property rights on health for households in Uruguay. Titling could improve health outcomes through various channels: housing investment, income or family cohesion. The author found that titling diminishes the probability of suffering several chronic diseases (hypertension, diabetes, sinusitis and rheumatism) but could not find supporting evidence for the housing channel.
Structural Reforms in Latin America: What Has Been Reformed and How to Measure It
Authors: Lora Eduardo
Published: March 2024

This document is an update of an earlier study (Lora, 1997), which argued that the lack of direct measurements of structural policies had stood in the way of adequately evaluating the effects of the reforms on economic growth and other variables. The aim is to describe and measure the advance of the structural reforms, using for that purpose a structural policies index that summarizes the status of progress in policies in the trade, financial, tax, privatization, and labor areas. The first part of this document is devoted to describing the most important advances in the various areas of structural policy since the 1980s. The second part of the study presents the methodology for constructing the index and shows its overall evolution in each of the areas over time and by country.
Veto Players, Fickle Institutions and Low-Quality Policies: The Policymaking Process in Ecuador
Authors: Araujo María Caridad , Saiegh Sebastián , Pérez-Liñán Aníbal , Mejía Acosta Andrés
Published: March 2024

This paper seeks to understand why political actors, institutions and legal reforms have systematically failed to produce cooperation in the Ecuadorian policymaking process. From a comparative and historical standpoint, Ecuador has been trapped in a cycle of low-quality public policies that fail to adjust to environmental conditions, that fluctuate according to political whims and that tend to favor well-organized lobbies rather than pursuing optimal social outcomes. The paper identifies two alternative policymaking paths leading to poor policy outcomes. In the first one, the executive agenda is eclipsed by the short-term clientelistic demands of multiple veto players in the legislature, thus contributing to policy deadlock or rigidity. In the second, executive power is delegated to a decisive, often technical bureaucracy isolated from political pressures, but the lack of institutional stability of such bodies leads to a pattern of policy volatility. Lastly, the paper discusses the formal and informal roles of "last-ditch" veto players to stall or revert unwanted policies.
Veto Players, Intertemporal Interactions and Policy Adaptability: How Do Political Institutions Work?
Authors: Stein Ernesto H. , Tommasi Mariano , Scartascini Carlos
Published: March 2024

Veto player theory argues that a higher number of veto players lowers the likelihood of change; in turn, policies that do not change help to sustain commitments but may prevent adaptation to changing circumstances. This paper challenges that claim of veto player theory by arguing that policy stability does not necessarily mean lower policy adaptability. If policymaking takes place over time with actors interacting repeatedly, more cooperative polities might be able to achieve both objectives at once, and a higher number of veto players might even favor intertemporal cooperation. The paper presents a simple formalization of the argument and some supportive cross-national empirical evidence.
Growth Diagnostic: Peru
Authors: Hausmann Ricardo , Klinger Bailey
Published: March 2024

This paper presents a growth diagnostic exercise for Peru. It notes that although Peru has recently enjoyed high rates of economic growth, this growth is actually a recovery from a significant and sustained growth collapse that began in the 1970s, caused by a decline in export earnings due to the fall in international prices and an inadequate investment regime in export activities. However, the transformation of the export sector has been surprisingly small: the same activities that declined- mining and energy- are the ones that are leading the current recovery in exports. The authors argue that the lack of structural transformation is associated with Peru's position in a poorly connected part of the product space. The key policy message is that the public sector must act to encourage the development of new export activities that better utilize the human resources of the country.
Development under Conditions of Inequality and Distrust: An Exploration of the Role of Social Capital and Social Cohesion in Latin America
Authors: Mateo-Berganza Díaz María Mercedes , Ferroni Marco , Payne J. Mark
Published: March 2024

Intended as a contribution to the discussion of the relevance of social capital and social cohesion to Latin American development, this paper treats the two as assets for development and the creation of welfare. The paper defines the concepts, including their uses and limitations, and analyzes some of the key relationships involved. It also introduces an index of social cohesion and presents evidence of positive linkages between levels of social cohesion and development-related outcomes such as growth, investment and innovation capacity, governmental effectiveness, the quality of public policies, and the predictability of the policy environment. The paper concludes with a discussion of the implications for the choice of policies and public action.
Housing Tenure and Housing Demand in Colombia
Authors: Arbeláez María Angélica , Steiner Roberto , Wills Daniel , Becerra Alejandro
Published: March 2024

Using the 2003 and 2008 Quality of Life Surveys (QLS) conducted by the National Department of Statistics (DANE), this paper identifies the factors that affect housing tenure decisions in Colombia. Households with higher incomes are more likely to purchase than to rent, and the choice of formal housing is positively associated with wealth. Households eligible for social housing subsidies are more likely to purchase than to rent, and those working in the informal sector are more likely to purchase informal dwellings. Subsidies and access to mortgage credit have a large positive impact on demand. Finally, savings have a positive effect on demand in 2008, but not in 2003. The positive effect on demand of both subsidies and credit is explained by demand for low-income housing.
Protecting Workers against Unemployment in Uruguay
Authors: Amarante Verónica , Arim Rodrigo , Dean Andrés
Published: March 2024

This paper considers the main institutional features of the Uruguayan labor market and its recent evolution, with a focus on unemployment. The main policies aimed at protecting workers against unemployment are analyzed. Using administrative data from social security records, the paper studies the dynamics of the labor market. Particularly examined are inflows and outflows from the formal labor market, as well as the effect, in terms of earnings loss, of episodes out of the formal labor market. Finally, an impact evaluation of recent changes in the unemployment insurance program is presented.
The Impact of Public Credit Programs on Brazilian Firms
Authors: De Negri João Alberto , Maffioli Alessandro , Rodríguez César , Vázquez Gonzalo
Published: March 2024

This paper analyzes the effectiveness of public credit lines in promoting the performances of Brazilian firms. We focus on the impact of the credit lines managed by BNDES and FINEP in fostering growth measured in terms of employment, labor productivity and export. For this purpose, we use a unique panel data set developed by the Instituto de Pesquisa Econômica Aplicada (IPEA), which includes information on both firm-level performances and access to public credit lines.
Second-tier Government Banks and Access to Credit: Micro-Evidence from Colombia
Authors: Eslava Marcela , Maffioli Alessandro , Meléndez Arjona Marcela
Published: March 2024

Government-owned development banks have often been justified by the need to respond to financial market imperfections that hinder the establishment and growth of promising businesses, and as a result, stifle economic development more generally. However, evidence on the effectiveness of these banks in mitigating financial constraints is still lacking. To fill this gap, this paper analyzes the impact of Bancoldex, Colombia's publicly owned development bank, on access to credit. It uses a unique dataset that contains key characteristics of all loans issued to businesses in Colombia, including the financial intermediary through which the loan was granted and whether the loan was funded with Bancoldex resources. The paper assesses effects on access to credit by comparing Bancoldex loans to loans from other sources and study the impact of receiving credit from Bancoldex on a firm's subsequent credit history. To address concerns about selection bias, it uses a combination of models that control for fixed effects and matching techniques. The findings herein show that credit relationships involving Bancoldex funding are characterized by lower interest rates, larger loans, and loans with longer terms. These characteristics translated into lower average interest rates and larger average loans for firms that used Bancoldex credit. Average loans of Bancoldex' beneficiaries also exhibit longer terms, although this effect can take two years to materialize. Finally, the findings show evidence of a demonstration effect of Bancoldex: beneficiary firms that have access Bancoldex credit are able to significantly expand the number of intermediaries with whom they have credit relationships.
Getting it Right: What to Reform in International Financial Markets
Authors: Hausmann Ricardo , Fernández-Arias Eduardo
Published: March 2024

This paper provides an overview and assessment of reform initiatives, both those currently on the table and those that are not but should be. The intent is to clarify the logic behind these proposals and assess them from a Latin American perspective. For each core initiative examined in this paper, whether currently on the table or proposed for consideration, the authors first identify which of the main distortions, identified in the companion paper, it addresses. The overall conclusion is that the current approach to reforming the international financial architecture is not appropriate for the task and a paradigm shift is required. This paper was presented at the Tenth International Forum on Latin American Perspectives in Paris, November 25-26, 1999.
Productive Development Policies in Latin America and the Caribbean: The Case of Mexico
Authors: Baz Verónica , Capelo Maria Cristina , Centeno Rodrigo , Estrada Ricardo
Published: March 2024

While Mexico has potential to grow rapidly, its economic growth has remained low for the past three decades. There is no consensus on the country's development path or on how to achieve specific goals. Since the policy debate remains ideological and lacks pragmatism, productive development policies (PDPs) are often uncoordinated, redundant or even incongruent with each other. It is therefore important to understand the process whereby PDPs are designed and the institutional setting in which they are implemented. This paper consequently examines whether PDPs respond to market failures and/or government failures. When PDPs are not designed to address specific market failures they can produce unwanted results or prove completely ineffective. When PDPs do address government failures, it is important to determine the reasons why the failure cannot be corrected in the first place and whether PDPs will be effective at addressing the problem in a second-best manner.
Credit, Labor Informality and Firm Performance in Colombia
Authors: Caro Lorena , Galindo Arturo , Meléndez Arjona Marcela
Published: March 2024

This paper explores the links between labor formality, access to credit and firm performance in Colombia using Annual Manufacturing Survey data for the period 2000-2009. A significant though small relationship is found between access to credit and informality. The results suggest that a 10 percent increase in the ratio of credit to sectoral output increases labor formality between 0. 76 and 1. 14 percentage points. This effect vanishes as a firm's financial constraint increases. The paper also reports a strong correlation between labor formality and firm performance measured as output and employment growth. A one percentage point increase in labor formality is associated with an 8. 5 percent increase in output and an 11 percent increase in employment growth.
Middle-Class Entrepreneurship and the Effect of Social Capital
Authors: Ordeñana Xavier , Arteaga Elizabeth
Published: March 2024

This paper surveys Ecuadorian entrepreneurs to ascertain the differences between middle-class and upper-class entrepreneurs and identify the variables associated with the "success" of a business. The paper also explores the variables that can determine the probability of upward intergenerational mobility. The paper finds that, although the level of social capital among Ecuadorian entrepreneurs is weak, it positively affects the chances of being a dynamic entrepreneur.
Effectiveness of Weather Derivatives as a Cross-Hedging Instrument against Climate Change: The Cases of Reservoir Water Allocation Management in Guanajuato, Mexico and Lambayeque, Peru
Authors: Sanchez-Aragon Leonardo , Juarez-Torres Miriam
Published: March 2024

Ongoing climate change will increase competition for water. Diversified demand for water-in contrast with the rigid design of water systems, institutions and infrastructure-could hinder the implementation of adaptation policies in water management for Latin American countries. In this context, weather derivatives are proposed as a complementary mechanism for the successful adoption of more efficient water allocations in irrigation districts. Weather derivatives spread risks and incorporate a better understanding of climate system behavior, strengthening irrigation districts¿ ability to deal with water availability and demand. The model uses a dynamic water resource allocation model, historical precipitation and Intergovernmental Panel on Climate Change (IPCC) scenarios to find optimal water allocation strategies for the baseline scenario and in the presence of climate change. This analysis is applied to two irrigation districts in Latin America: one in Mexico and the other in Peru, with their corresponding particularities and results.
The Impact of the Business Cycle on Elasticities of Tax Revenue in Latin America
Authors: Zuloeta José , Machado Roberto
Published: March 2024

This paper estimates short-run and long-run elasticities of tax revenue with respect to GDP in eight Latin American countries using quarterly data. Taxes considered are corporate income tax (CIT), personal income tax (PIT), value-added tax (VAT), and overall taxes. Results indicate that long-run elasticities are statistically and economically larger than 1, whereas short-run elasticities appear not to be statistically different from zero in the majority of cases. Tax systems seem very elastic in Argentina, Colombia, Ecuador, Peru, and Venezuela. The CIT exhibits the largest estimated long-run elasticity in most countries. Focusing on short-run elasticities that show statistical significance, only the CIT in Colombia and the PIT in Brazil and Colombia show larger fluctuations over the business cycle than growth potential in the long run. Overall, our results indicate that tax systems in Latin America are significantly more elastic than previous estimations.
Sub-national Revenue Mobilization in Mexico
Authors: Castañeda Luis Cesar , Pardinas Juan E.
Published: March 2024

This paper estimates potential Mexican sub-national tax revenues using a stochastic frontier model. The results suggest that states are exploiting their current tax bases, particularly the payroll tax, appropriately. Mexican municipalities, however, have a low rate of tax collection compared to their potential, especially in relation to the property tax, which is their most important source of revenue and relatively simple to collect. Empirical evidence further suggests that tax collection efforts are strongly related to GDP per capita, and that some political economy factors can influence them. Political affiliation, for example, influences municipalities' tax collection effort more than that of states. The analysis of a scenario in which some VAT and PIT taxation powers are returned to the states suggests that a state surcharge on the VAT and PIT could increase states' own revenues. Without broadening the tax base and redefining the revenue-sharing allocation criteria, however, doing so would have a strong and adverse impact on the revenue distribution of sub-national governments.
The Use and Production of Numerically Controlled Machine Tools in Argentina
Authors: Jacobsson Staffan
Published: March 2024

With the development of the microprocessor, the electronics sector has become regarded as a key technological sector in the OECD countries. Massive government intervention programs have been designed, not only for the production of these integrated circuits, but also for their incorporation into products e.g. robots and for the diffusion of microelectronic controlled processes. It is the all-pervasive character of the chip that has justified these programs. In particular, it is the microprocessor's low cost, high reliability, speed and flexibility in information processing; these attributes have been perceived to have broken down some technical and economic barriers to automation in many industries and services.
Access to Preprimary Education and Progression in Primary School: Evidence from Rural Guatemala
Authors: Cristia Julian P. , Bottan Nicolas L. , Bastos Paulo
Published: March 2024

Evidence on the impacts of a large-scale expansion in public preprimary education is limited and mostly circumscribed to high and middle-income countries. This paper estimates the effects of such an expansion on progression in primary school in rural communities of Guatemala. Combining administrative and population census data in a difference-in-difference framework, the paper examines a large-scale construction program that increased the number of preprimaries from around 5,300 to 11,500 between 1998 and 2005. The results indicate that the program increased by 2. 1 percentage points the fraction of students that progress adequately and attend sixth grade by age 12. These positive effects are heavily concentrated among girls.
Determinant Factors in the Perception of Crime-Related Insecurity in Mexico
Authors: Vilalta Perdomo Carlos J.
Published: March 2024

What determines the feeling of insecurity with respect to crime and what can be done about it? This study proposes and tests a correlational model that combines different theoretical determinants of insecurity and the fear of crime. The test was carried out both in the country as a whole and in the Mexico City Metropolitan Area. The sources of information are the National Victimization Survey and Perception on Public Security (ENVIPE) of 2011 and the Victimization Survey and Institutional Effectiveness (ENVEI) of August 2010 and January 2011. The findings suggest that actions to promote civility in neighborhoods and towns and efforts to develop a relationship of trust with the local police should be implemented in order to significantly reduce the feeling of insecurity.
Does Expanding Health Insurance Beyond Formal-Sector Workers Encourage Informality?: Measuring the Impact of Mexico's Seguro Popular
Authors: Hallward-Driemeier Mary , Pagés Carmen , Aterido Reyes
Published: March 2024

Seguro Popular (SP) was introduced in 2002 to provide health insurance to the 50 million Mexicans without Social Security. This paper tests whether the program has had unintended consequences, distorting workers' incentives to operate in the informal sector. The analysis examines the impact of SP on disaggregated labor market decisions, taking into account that program coverage depends not only on the individual's employment status, but also on that of other household members. The identification strategy relies on the variation in SP's rollout across municipalities and time, with the difference-in-difference estimation controlling for household fixed effects. The paper finds that SP lowers formality by 0.4-0.7 percentage points, with adjustments largely occurring within a few years of the program's introduction. Rather than encouraging exit from the formal sector, SP is associated with a 3.1 percentage point reduction (a 20 percent decline) in the inflow of workers into formality. Income effects are also apparent, with significantly decreased flows out of unemployment and lower labor force participation. The impact is larger for those with less education, in larger households, and with somebody else in the household guaranteeing Social Security coverage. However, workers pay for part of these benefits with lower wages in the informal sector.
Crime, Punishment, and Schooling Decisions: Evidence from Colombian Adolescents
Authors: Ibáñez Ana María , Zarruk David , Rodríguez Catherine
Published: March 2024

This paper uses a natural policy experiment to estimate how changes in the costs of engaging in criminal activity may influence adolescents¿ decisions in crime participation and school attendance. The study finds that, after an exogenous decrease in the severity of judicial punishment imposed on Colombian adolescents, crime rates in Colombian municipalities increased. This effect appears to be larger in municipalities with a higher proportion of adolescents between 14 and 15 years of age. The study provides suggestive evidence that one possible transmission channel for this effect is a decrease in the effort of the police force to capture teenage suspects. The study also finds that the probability that boys of this same age group attend school decreased following the change in the juvenile justice system. This effect is stronger for boys from homes where the heads of household are less educated.
Calling Their Bluff: Expressed and Revealed Preferences of Top College Graduates Entering Teaching in Argentina
Authors: Santiago Ana , Ganimian Alejandro , Alfonso Mariana
Published: March 2024

Many school systems today are trying to attract top college graduates into teaching, but little is known about what dissuades this target group from entering the profession. This study randomly assigned applicants for a highly-selective alternative pathway into teaching in Argentina either to a survey about their motivations for applying to the program or to surveys that revealed information about their future pay or working conditions. The study finds that applicants who received information about pay or working conditions were much more likely to report that they intended to drop out of the selection process, but were no more likely to actually drop out. This can be explained by the temporary salience effects of the informational prompts. Applicants with higher undergraduate grade point averages and/or scores in the selection process, however, were both more likely to report that they will drop out and to actually do so.
A Cycle-Adjusted Fiscal Rule for Sustainable and More Equitable Growth in Argentina
Authors: Zúñiga Jimena , Capello Marcelo , Butler Inés , Grión Nester
Published: March 2024

This paper seeks to identify the most promising fiscal strategy to boost long-term economic growth in Argentina and quantify its effects. To this end, the authors updated a growth-diagnostics study for Argentina and corroborated that low appropriability of social returns and insufficient public infrastructure are key constraints to private investment. Further, low appropriability stands out among the key constraints to productivity-enhancing activities. Because low appropriability is largely rooted in macroeconomic volatility, the authors argue that a cycle-adjusted fiscal rule is one of the most promising fiscal reforms the country could implement to tackle this problem, and discuss the specific design features that such a rule could include. Then, the authors construct a model reflecting the stylized facts of the Argentine Republic's fiscal federalism structure to assess the effect that a cycle-adjusted fiscal rule, in different variants, would have on the volatility of key macro variables. The authors find that the rule would meaningfully reduce macroeconomic volatility, thereby contributing to improved appropriability and long-term growth.
Is the Glass Half Empty or Half Full?: School Enrollment, Graduation, and Dropout Rates in Latin America
Authors: Bassi Marina , Busso Matías , Muñoz Juan Sebastián
Published: March 2024

This paper uses 113 household surveys from 18 Latin American countries to document patterns in secondary school graduation rates over the period 1990-2010. It is found that enrollment and graduation rates increased dramatically during that period, while dropout rates decreased. Two explanations for these patterns are provided. First, countries implemented changes on the supply side to increase access, by increasing the resources allocated to education and designing policies to help students staying in school. At the same time, economic incentives to stay in school changed, since returns to secondary education increased over the 1990s. Despite this progress, graduation rates are low, and there persist remarkable gaps in educational outcomes in terms of gender, income quintiles, and regions within countries. In addition, wage returns have recently stagnated, and the quality of education in the region is low, casting doubts on whether the positive trend is sustainable in the medium term.
Preschool Education in Brazil: Does Public Supply Crowd Out Private Enrollment?
Authors: Straume Odd Rune , Bastos Paulo
Published: March 2024

This paper examines whether an expansion in the supply of public preschool crowds out private enrollment, using rich data for municipalities in Brazil from 2000-2006, where federal transfers to local governments change discontinuously with given population thresholds. Results from a regression-discontinuity design reveal that larger federal transfers lead to a significant expansion of local public preschool services, but show no effects on the quantity or quality of private provision. These findings are consistent with a theory in which households differ in willingness to pay for preschool services, and private suppliers optimally adjust prices in response to an expansion of lower-quality, free-of-charge public supply.
The Effects of Shared School Technology Access on Students' Digital Skills in Peru
Authors: Bet Germán , Cristia Julian P. , Ibarrarán Pablo
Published: March 2024

This paper analyzes the effects of increased shared computer access in secondary schools in Peru. Administrative data are used to identify, through propensity-score matching, two groups of schools with similar observable educational inputs but different intensity in computer access. Extensive primary data collected from the 202 matched schools are used to determine whether increased shared computer access at schools affects digital skills and academic achievement. Results suggest that small increases in shared computer access, one more computer per 40 students, can produce large increases in digital skills (0. 3 standard deviations). No effects are found on test scores in Math and Language.
Decentralization and Recentralization: Lessons from the Social Sectors in Mexico and Nicaragua
Authors: Jacobs Michael , Gershberg Alec Ian
Published: March 2024

This study is designed to help practitioners prepare and evaluate institutional reforms for education and health programs. It provides an analytic framework for use by public officials and researchers, with case studies that illustrate a wide range of actual practice, and a set of lessons learned. The framework uses the concept of "accountability" to link the broad goals of reform to the key dimensions of organizational arrangements. The case studies, based on fieldwork in Mexico and Nicaragua, demonstrate a wide variety of available policy instruments.
Intergenerational Schooling Mobility and Macro Conditions and Schooling Policies in Latin America
Authors: Behrman Jere R. , Birdsall Nancy , Székely Miguel
Published: March 2024

The effects of market and policy reforms on poverty and inequality in Latin America have been of considerable concern. The region continues to have relatively great income inequalities. Two different societies with the same income distribution may have different levels of social welfare because they have different degrees of social mobility. To date little attention has been paid to measuring social mobility in the region. Schooling is thought to be a major mechanism through which intergenerational social mobility is affected. This paper explores the strength of the association of family background with child schooling and whether the strength of this association is related to some major macro and aggregate school policy variables.
Private External Overborrowing in Undistorted Economies: Market Failure and Optimal Policy
Authors: Lombardo Davide , Fernández-Arias Eduardo
Published: March 2024

An undistorted free market economy endowed with perfectly rational and informed agents overborrows, i.e., borrows beyond the efficient level, because of the agents' failure to internalize credit rationing resulting from sovereign risk. It follows that the elimination of the market overborrowing will not cure private overborrowing. This paper explores the possibilities of economic policy as a remedy to the problem.
Policy Instruments and Financing Mechanisms for the Sustainable Use of Forests in Latin America
Authors: López Ramón
Published: March 2024

The objectives of this paper are two-fold: to analyze the role of international and domestic policies on the sustainable use of forests in Latin America; and to examine potential financing mechanisms to promote sustainable forest development and a more efficient wood processing industry. The paper examines the role of a more intensive exploitation of natural forests as a mechanism to promote the national interest as opposed to the global interest in Latin America. It also also analyzes the potential for cooperation to allocate land in a globally optimal way, and mechanisms to finance such cooperation.
Choosing Environmental Policy Tools: Theoretical Cautions and Practical Considerations
Authors: Russell Clifford S. , Powell Philip T.
Published: March 2024

This working paper contains a review and analysis of environmental policy tools in Latin America. It contains a review of the instruments themselves and their properties are discussed in both static and dynamic contexts. The report brings together the institutional and more narrowly economic material and attempts to offer general guidance on types of instruments that seem most promising in various combinations of circumstances. These recommendations are also contrasted with those from some other authors, to the extent that is possible. The penultimate section of the report contains summary material on efforts at environmental management in a few Latin American countries, especially on efforts to institute economic incentive systems. The concluding section contains both a summary of the major arguments and conclusions from earlier sections and some speculation about the possibilities for using environmental policy design as a way of influencing institutional evolution within developing countries.
Public-Private Collaboration on Productive Development Policies in Argentina
Authors: González Andrea , Ramos Daniela , Hallak Juan Carlos , Bisang Roberto , López Andrés , Rozemberg Ricardo
Published: March 2024

This study discusses four cases of public-private collaboration (PPC) in the design and implementation of productive development policies (PDP) in Argentina. We find that PPCs have contributed to the success of most of the studied PDPs by facilitating information sharing and creating coordination devices that have improved the diffusion, transparency, and resilience of the policies and a more effective use of public funds. We also identify conditions that seem to be critical for a successful PPC. These conditions include the previous acquaintance and existence of trust relationships among the agents involved in the PPC, the alignment of their objectives and interests, and the emergence of clear leaderships in the private and/or in the public sectors. The stability of the PPCs, in turn, depends on the availability of public funding and the creation of formal governance mechanisms, while it is threatened by large disparities in the size, interests, and capabilities among the different private-sector agents involved in the collaboration.
The Effect of Credit on the Export Performance of Colombian Exporters
Authors: Molina Danielken , Roa Mónica
Published: March 2024

In this paper we use Colombian manufacturing data on exports and external financing for the period 1998 - 2006 to estimate the credit elasticity of exports. We use bank-firm linked data to construct a supply side instrument for a manufacturer's demand of credit, which we use to address the reverse causality between a manufacturer's export revenue and its demand for credit. We find that access to credit produces a significant increase on a manufacturer's export revenue explained by the positive effect of credit on an exporter's market reach - number of destinations -. Across manufacturers the effect of credit on a manufacturer's export revenue varies by size. While medium sized manufacturers use credit to increase their market reach, market penetration and product mix, large manufacturers only use credit to increase their market reach. Small manufacturers do not seem to benefit from bank credit.
Uncertainty and Economic Activity: A Global Perspective
Authors: Cesa-Bianchi Ambrogio , Pesaran M. Hashem , Rebucci Alessandro
Published: March 2024

The 2007-2008 global financial crisis and the subsequent anemic recovery have rekindled academic interest in quantifying the impact of uncertainty on macroeconomic dynamics. This paper studies the interrelation between financial markets volatility and economic activity assuming that both variables are driven by the same set of unobserved common factors and that these factors affect volatility and economic activity with a time lag of at least a quarter. Under these assumptions, the paper analytically shows that volatility is forward looking and that the output equation of a typical VAR estimated in the literature is mis-specified. The paper empirically documents a statistically significant and economically sizable impact of future output growth on current volatility, and no effect of volatility shocks on business cycles, over and above those driven by the common factors. The evidence is interpreted as suggesting that volatility is a symptom rather than a cause of economic instability.
Does Participatory Budgeting Improve Decentralized Public Service Delivery?
Authors: Amelina Maria , Beuermann Diether
Published: March 2024

This paper provides the first experimental evaluation of the participatory budgeting model showing that it increased public participation in the process of public decision making, increased local tax revenues collection, channeled larger fractions of public budgets to services stated as top priorities by citizens, and increased satisfaction levels with public services. These effects, however, were found only when the model was implemented in already-mature administratively and politically decentralized local governments. The findings highlight the importance of initial conditions with respect to the decentralization context for the success of participatory governance.
The Effect of Mandated Child Care on Female Wages in Chile
Authors: Prada María Fernanda , Urzúa Sergio , Rucci Graciana
Published: March 2024

This paper studies the effect of mandated employer-provided child care on the wages of women hired in large firms in Chile. We use a unique employer-employee database from the country's unemployment insurance (UI) system containing monthly information for all individuals that started a new contract between January 2005 and March 2013. We estimate the impact of the program using regression discontinuity design (RDD) exploiting the fact that child care provision is mandatory for all firms with 20 or more female workers. The results indicate that the monthly starting wages of the infra-marginal woman hired in a firm with 20 or more female workers is between 9 percent and 20 percent less than those of female workers hired by the same firm when no requirement of providing childcare was imposed.
Global Demographic Trends, Capital Mobility, Saving and Consumption in Latin America and the Caribbean (LAC)
Authors: Bonfatti Andrea , Kitao Sagiri , Attanasio Orazio P. , Weber Guglielmo
Published: March 2024

This paper studies the effect of demographic transitions on the economy of Latin America and the Caribbean (LAC). The paper builds a model of multi-regions of the world and derives the path of macroeconomic variables including aggregate output, capital, labor and the saving rate as economies face a rapid shift in demographics. The timing and the extent of the demographic transition differ across regions. The model is simulated under both closed economy and open economy assumptions to quantify the roles played by factor mobility across regions in shaping capital accumulation and equilibrium factor prices.
Growing Resources for Growing Cities: Density and the Cost of Municipal Public Services in Brazil, Chile, Ecuador, and Mexico
Authors: Libertun de Duren Nora Ruth , Guerrero Compeán Roberto
Published: March 2024

This paper finds that per capita municipal spending on public services is strongly and non-linearly correlated to urban population density. Optimal expenditure levels for municipal services are achieved when densities are close to 9,000 residents per square kilometer. In this study of approximately 8,600 municipalities in Brazil, Chile, Ecuador, and Mexico, 85 percent are below this ideal density level. This analysis provides strong policy support for densification, particularly for medium-sized cities in developing countries, which are currently absorbing most of the world's urban population growth.
Labor Earnings, Misallocation, and the Returns to Education in Mexico
Authors: López-Calva Luis Felipe , Levy Algazi Santiago
Published: March 2024

Over the last two decades Mexico has had an open trade regime, experienced macroeconomic stability, and made substantial progress in education. However, average workers¿ earnings have stagnated and earnings for workers with more schooling have declined, compressing the earnings distribution and lowering the returns to education. This paper hypothesizes that these developments are explained by large and persistent of distortions that misallocate resources towards less productive firms, since these firms are substantially less intensive in educated workers than more productive ones. It is shown that at the same time that the relative supply of workers with more years of schooling has increased, misallocation of resources toward less productive firms has persisted. These two trends have generated a widening mismatch between the supply and demand for educated workers. The paper decomposes worker earnings into observable and unobservable firm and individual worker characteristics and simulates a counterfactual earnings distribution in the absence of misallocation. Under the counterfactual, earnings differentials across schooling levels would increase, as would the returns to education. In parallel, earnings differentials, rather than narrowing over time, would widen. The paper concludes by arguing that the persistence of distortions that misallocate resources toward lower-productivity firms impedes Mexico from taking full advantage of its investments in the human capital of its workers.
The Productivity Gap in Latin America: Lessons from 50 Years of Development
Authors: Rodríguez-Apolinar Sergio , Fernández-Arias Eduardo
Published: March 2024

This paper combines development accounting exercises with economic theory to assess the importance of total factor productivity and the accumulation of factors of production as engines of growth in Latin America. Using the new, drastically revised Penn World Table (PWT) and Barro-Lee datasets, the paper shows that lower and non-convergent income relative to successful development benchmarks are explained by subpar productivity gains rather than slower factor accumulation. The empirical analysis of the interplay between productivity and accumulation in the process of development suggests that one explanation for this pattern is that investment in Latin America is not as productivity-enhancing as in less distorted economies.
Do Non-Monetary Prices Target the Poor?: Evidence from a Field Experiment in India
Authors: Hoffmann Bridget
Published: March 2024

This paper uses willingness to pay (WTP) data from a field experiment in Hyderabad, India in 2013 to determine whether non-monetary prices better target health products to the poor than monetary prices. Monetary WTP is increasing in income and non-monetary WTP is weakly decreasing in income. Household fixed effects in a pooled sample of monetary WTP and non-monetary WTP are used to compare the correlation of income and WTP across price types. It is found that non-monetary WTP falls relative to monetary WTP as income rises. Finally, a greater fraction of demand is comprised of the poor at non-monetary prices.
Capital Requirements, Risk-Taking and Welfare in a Growing Economy
Authors: Agénor Pierre-Richard , Pereira da Silva Luiz A.
Published: March 2024

The effects of capital requirements on risk-taking and welfare are studied in a stochastic overlapping generations model of endogenous growth with banking, limited liability, and government guarantees. Capital producers face a choice between a safe technology and a risky (but socially inefficient) technology, and bank risk-taking is endogenous. Setting the capital adequacy ratio above a structural threshold can eliminate the equilibrium with risky loans (and thus inefficient risk-taking), but numerical simulations show that this may entail a welfare loss. In addition, the optimal ratio may be too high in practice and may concomitantly require a broadening of the perimeter of regulation and a strengthening of financial supervision to prevent disintermediation and distortions in financial markets.
What are the Fiscal Limits for the Developing Economies of Central America and the Caribbean?
Authors: Wright Allan , Ramirez Francisco A.
Published: March 2024

This study uses simulations of state-dependent distributions of fiscal limits for 18 economies in Central America and the Caribbean to better understand governments¿ ability to service their debt, arising from endogenously determined dynamic Laffer curves. Using a small, open economy model to simulate macroeconomic fundamentals and fiscal policy interactions, the empirical findings produced results not previous available for these economies, showing varying and wider distributions of fiscal limits for the open economy model subject to terms-of-trade and flexible exchange rate shocks. This indicates that terms-of-trade and exchange rate volatility impacted the ability of national economies to service their debt. It is therefore prudent that policymakers and central bankers consider models that incorporate the use of trade and exchange rate volatility as a robust way of more accurately determining fiscal limits, which are a critical component in understanding governments' ability to service their debt.
Retaking in High Stakes Exams: Is Less More?
Authors: Krishna Kala , Frisancho Verónica , Lychagin Sergey
Published: March 2024

Placement, both in university and in the civil service, according to performance in competitive exams is the norm in much of the world. Repeat taking of such exams is common despite the private and social costs it imposes. We develop and estimate a structural model of exam retaking using data from Turkey`s university placement exam. Limiting retaking results in all agents gaining ex-ante, and most gaining expost. This result comes from a general equilibrium effect: retakers crowd the market and impose negative spillovers on others by raising acceptance cutoffs.
Saving Rates in Latin America: A Neoclassical Perspective
Authors: Imrohoroglu Ayse , Rud Juan Pablo , Fernandez Andres
Published: March 2024

Latin American countries have long exhibited low levels of saving rates when compared to other countries in relatively similar stages of economic development (e.g., Asian economies). Motivated by this fact, this paper examines the time path of the saving rates between 1970 and 2010 in three Latin American countries— Chile, Colombia, and Mexico—through the lens of the neoclassical growth model. The findings indicate that two factors, the TFP growth rate and fiscal policy (via tax rates and government expenditure), are capable of accounting for some of the major fluctuations in saving rates observed in these years. For instance, the impressive increase in Chile’s saving rate following the early 1980s debt crisis is likely to have resulted from a combination of high TFP growth and a tax reform that substantially reduced capital taxation. Counterfactual experiments also reveal that average saving rates in Latin America could have been some three percentage points higher, had the region experienced TFP growth similar to that of the Asian countries. This increase, however, is insufficient to bridge the observed gap between saving rates in the two regions.