bluuebunny/crossref_metadata_2025 huggingface dataset:
Inflation and Labor Market Flexibility: The Squeaky Wheel Gets the Grease
Authors: Panizza Ugo , Loboguerrero Ana María
Published: March 2024

Inflation can grease the wheels of the labor market by relaxing downward wage rigidity but it can also increase uncertainty and have a negative sand effect. This paper studies the grease effect of inflation by looking at whether the interaction between inflation and labor market regulations affects how employment responds to changes in output. The results show that in industrial countries with highly regulated labor markets, the grease effect of inflation dominates the sand effect. In the case of developing countries, we rarely find a significant effect of inflation on labor market regulations and provide evidence indicating that this could be due to the presence of a large informal sector and limited enforcement of de jure labor market regulations.
Concentration and Foreign Penetration in Latin American Banking Sectors: Impact on Competition and Risk
Authors: Micco Alejandro , Levy Yeyati Eduardo
Published: March 2024

In recent years, Latin American banking sectors have experienced an accelerated process of concentration and foreign penetration that has prompted diverse views regarding its implications for the competitive behavior of banks and for the financial stability of the system as a whole. Exploiting a rich bank-level balance sheet database for eight Latin American countries, we examine the evolution of concentration and foreign penetration indicators and their impact on competition and risk. We find that, while concentration did not reduce competition in the industry, foreign penetration appears to have led to less competitive banking sectors. Moreover, we find banking sector fragility to be positively related to competition and, through this channel, negatively related to foreign participation, despite the fact that foreign banks in the region are associated with higher insolvency risk due to higher leverage ratios and more volatile returns.
On the Empirics of Sudden Stops: The Relevance of Balance-Sheet Effects
Authors: Mejía Luis Fernando , Izquierdo Alejandro , Calvo Guillermo A.
Published: March 2024

Using a sample of 32 developed and developing countries we analyze the empirical characteristics of Sudden Stops in capital flows and the relevance of balance-sheet effects in the likelihood of their occurrence. We find that large real exchange rate (RER) fluctuations accompanied by Sudden Stops are basically an emerging market (EM) phenomenon. Sudden Stops seem to come in bunches, grouping together countries that are different in many respects. However, countries are similar in that they remain vulnerable to large RER fluctuations. This may be the case because countries are forced to make large adjustments in the absorption of tradable goods, and/or because the size of dollar liabilities in the banking system (i.e., domestic liability dollarization, or DLD) is large. Openness, understood as a large supply of tradable goods that reduces leverage over the current account deficit, in combination with DLD, is a key determinant of the probability of Sudden Stops. The relationship between Openness and DLD in the determination of the probability of Sudden Stops is highly non-linear, implying that the interaction of high current account leverage and high dollarization may be a dangerous cocktail.
Privatization in Mexico
Authors: Chong Alberto E. , López-de-Silanes Florencio
Published: March 2024

Over the last 20 years, Mexico redefined the role of the state in its economy through an ambitious program to liberalize trade, promote efficiency and reduce the size and scope of the state-owned sector. In Mexico, privatization led to a significant improvement in firm performance, as profitability increased 24 percentage points and converged to levels similar to those of private firms. From this increase, at most 5 percent can be attributed to higher prices and 31 percent to transfers from workers, with the remaining 64 percent representing productivity gains. There is evidence that privatization provides other social benefits, as greater access to services, which usually follows privatization, leads to welfare gains for the poorest consumers that outweigh any increase in prices. Moreover, an often-overlooked aspect of privatization is its fiscal impact, whereby the proceeds from the sale are augmented by reduced subsidies and increased taxes and can help pay off debt or finance social spending. The Mexican privatization program can provide a valuable guide to privatization dos and donts: First, the privatization process must be carefully designed and run in a transparent way. Special requirements such as bans on foreign direct investment or cash-only payments lead to substantial price discounts for firms sold, while simplicity breeds competition and leads to higher prices. A transparent program can also help quell the tendency of politicians to favor their friends by tweaking the rules of the game. Second, restructuring firms prior to privatization is counterproductive in raising net sale prices and should be avoided. Governments spend substantial resources on politically motivated investment or efficiency programs that are not valued by bidders and which can rarely be justified on the social ground on which they are sold. Additionally, restructuring programs lengthen the privatization process considerably and lower prices for firms sold in the case of Mexico, each month of delay reduced the sale price by 2.2 percent. Finally, this paper argues that it is essential to carefully deregulate and re-regulate privatized firms to ensure that they behave appropriately as well as to provide a corporate governance framework to ensure firms are able to finance their operations without relying on the Government for help.
The Housing Market in Colombia: Socioeconomic and Financial Determinants
Authors: Muñoz Santiago , Janna Michel , Clavijo Sergio
Published: March 2024

This document provides an overview of the housing system in Colombia, exploring its socioeconomic and financial determinants and offering recommendations to improve the collection of basic data on the construction sector, household socioeconomic conditions, and mortgage markets. The paper also estimates a simultaneous econometric model for the country's housing market using quarterly data over the period 1991-2004. On the demand side, we find that the area of approved licenses is highly elastic to households' disposable income, new housing prices and real interest rates on mortgage credit. On the supply side, we find high input-cost elasticity and a moderate response to wealth effects. These results prove to be robust to different proxies and diverse estimation procedures.
Weak instruments and weak identification in estimating the effects of education on democracy
Authors: Bobba Matteo , Coviello Decio
Published: March 2024

Is there any relation between education and democracy? Once we correct for weak instruments and identify education as "weakly exogenous" we find new evidence that education systematically predicts democracy. Our results are robust across model specification, instrumentation strategies, and samples.
Political Environment and Privatization Prices
Authors: Chong Alberto E. , Riaño Alejandro
Published: March 2024

This paper studies the link between the political and institutional context and privatization sales prices. The latter serves as a measure for assessing the relative performance of the privatization goals. Whereas this link has been studied theoretically, there are very few, if any, empirical papers on this relationship. Using data from 308 privatizations around the world and applying a cross-country approach (including instrumental variables), we find that, while the overall political regime does not matter much for prices, the political processes beyond the basic regime do matter. Institutional context also produces a significant impact on prices. Both results are robust to changes in specification.
Barriers to Exit
Authors: León Gianmarco , Chong Alberto E.
Published: March 2024

Unlike previous empirical studies that focus on barriers to entry in international trade, we focus on barriers to exit as measured by passport costs for a cross-section of countries. We test four common theories on the determinants of such exit barriers and find that macroeconomic and brain-drain explanations do explain high barriers to exit. However, institutional and cultural hypotheses do not appear to be empirically robust explanations of such high barriers. Our findings hold when applying instrumental variables, changes in specification, and changes in cross-country periods.
Policy Volatility and Growth
Authors: Chong Alberto E. , Gradstein Mark
Published: March 2024

A growing body of recent macroeconomic evidence suggests that volatility is detrimental to economic growth. The channels through which volatility affects growth, however, are less clear; substantive evidence based on disaggregate data is almost non-existent. This paper offers a framework in which policy volatility has an adverse effect on firms' entry into productive industries, thereby affecting economic growth. Empirical support for this relationship is based on a detailed dataset of thousands of firms from some 80 countries. Additional evidence is provided on the channels through which volatility affects firm growth, showing that institutional obstacles magnify the effect.
Returns to Private Education in Peru
Authors: Calónico Sebastián , Ñopo Hugo R.
Published: March 2024

The private provision of educational services has been representing an increasing fraction of the Peruvian schooling system, especially in recent decades. While there have been many claims about the differences in quality between private and public schools, there is no complete assessment of the different impacts of these two type of providers on the labor markets. This paper attempts to provide such a comprehensive overview by exploring private-public differences in the individual returns to education in Urban Peru. Exploiting a rich pair of data sets (ENNIV 1997 and 2000) that include questions on type of education (public vs. private) for each educational level (primary, secondary, technical tertiary and university tertiary) to a representative sample of adults, this paper measures the differences in labor earnings for all possible educational trajectories. The results indicate higher returns to education for those who attended private schools than those who attended the public system. Nonetheless, these higher returns also show higher dispersion, reflecting wider quality heterogeneity within the private system. The private-public differences in returns are more pronounced at the secondary than at any other educational level. On the other hand, the private-public differences in returns from technical education are almost nonexistent. A cohort approach paired with a rolling-windows technique allows us to capture generational evolutions of the private-public differences. The results indicate that these differences have been increasing during the last two decades.
Booms and Busts in Latin America: The Role of External Factors
Authors: Talvi Ernesto , Romero Randall , Izquierdo Alejandro
Published: March 2024

This paper analyzes the relevance of external factors in average quarterly GDP growth for 1990-2006 in the seven largest Latin American countries (LAC7). Modeling the relationship between LAC7 GDP and several external factors, it is found that those factors account for a significant share of variance in LAC7 GDP growth, and that external shocks produce significant responses. Likewise, a significant share of recent LAC7 growth performance can be explained by an external factor tailwind. Also evaluated is the impact of deterioration in external financial conditions. Finally, the relevance of these findings for policy evaluation is emphasized. Growth performance, the strength or weakness of macroeconomic fundamentals and the impact of domestic macro and micro policies on growth can only be properly appraised by first filtering out the effects of external factors.
Stated Social Behavior and Revealed Actions: Evidence from 6 Latin American Countries Using Representative Samples
Authors: Chong Alberto E. , Ñopo Hugo R. , Cárdenas Juan Camilo
Published: March 2024

This paper explores the link between what people say they prefer to do and what they actually do. Using data from an experimental project exploring trust and pro-sociality for representative samples of individuals in six Latin American capital cities, the paper links the results of these experiments with the responses obtained from representative surveys to the same participating individuals. Individuals with higher agreement with a set of pro-social statements are those more willing to contribute and collaborate to the social welfare in the community, and what people say is linked to what people do. This supports the idea that the inclusion of subjective controls in the lefthand- side in an empirical specification does carry useful information.
Breaking Credibility in Monetary Policy: The Role of Politics in the Stability of the Central Banker
Authors: Rueda R. Miguel Ricardo
Published: March 2024

This paper studies the relationship between the hazard rate of the exit of a president of a central bank and a measure of credibility in monetary policy. The expected hazard rate of exit is estimated as a function of legal and political variables. The measure of credibility is the expected probability of a disinflation beginning when inflation is rising. For a sample of 22 Latin American and G7 countries, I find a negative relationship between the hazard rate of exit and the measure of credibility. This provides evidence of the expected relationship between independence and credibility not found in previous cross country studies. Using the executives party ideology as a measure of aversion to inflation, there was no evidence that this relationship is different for countries where the government is identified as more conservative. However, when a president of the central bank appointed by a conservative government is in office, a rise in the probability of a disinflation beginning when inflation was rising was found. The results show that legal independence after controlling for the hazard rate of the presidents exit is not associated with credibility gains.
On the Micro-Foundations of Contract versus Conflict with Implications for International Peace-Making
Authors: Mansoob Murshed Syed , Cuesta José A.
Published: March 2024

This paper expands the micro-foundations of the traditional greed and grievance non-cooperative model of civil conflict between a government and a rebel group.First, the papers model allows for greed and grievance to be orthogonal, so that they may affect each other. Second, the model allows for the reaction curves of both parties in non-cooperative games to be substitutes and not inevitably complementary. Third, the paper allows for Diaspora transfers to rebel groups.Fourth, the paper expands external aid in the form of fungible financing of government transfers buying peace. These extensions provide a better understanding of conflict persistence, the consequences of competing international aid and why sub-optimal sanctions provision (cheap talk) by the international community are frequent.
Do Credit Rating Agencies Add Value?: Evidence from the Sovereign Rating Business Institutions
Authors: Cavallo Eduardo A. , Powell Andrew , Rigobón Roberto
Published: March 2024

If rating agencies add no new information to markets, their actions are not a public policy concern. But as rating changes may be anticipated, testing whether ratings add value is not straightforward. This paper argues that ratings and spreads are both noisy signals of fundamentals and suggest ratings add value if, controlling for spreads, they help explain other variables. The paper additionally analyzes the different actions (ratings and outlooks) of the three leading agencies for sovereign debt, considering the differing effects of more or less anticipated events. The results are consistent across a wide range of tests. Ratings do matter and hence how the market for ratings functions may be a public policy concern.
Output Collapses and Productivity Destruction
Authors: Blyde Juan S. , Fernández-Arias Eduardo , Daude Christian
Published: March 2024

This paper analyzes the long-run relationship between output collapsesdefined defined as GDP falling substantially below trendand total factor productivity (TFP), using a panel of 71 developed and developing countries during the period 1960-2003 to identify episodes of output collapse and estimate counterfactual post-collapse TFP trends. Collapses are concentrated in developing countries, especially African and Latin American, and were particularly widespread in the 1980s in Latin America. Overall, output collapses are systematically associated with long-lasting declines in TFP. The paper explores the conditions under which collapses are least or most damaging, as well as the type of shocks that make collapses more likely or severe, and additionally quantifies the welfare cost associated with output collapses.
Ethnic and Gender Wage Gaps in Ecuador
Authors: Gallardo Lourdes , Ñopo Hugo R.
Published: March 2024

Returns to labor for workers with similar endowments of productive characteristics in Ecuador are influenced by two characteristics that, arguably, should play no role on the determination of wages: gender and ethnicity. This paper analyzes wage gaps due to both characteristics in Ecuador for the period 2003-2007, applying a matching comparisons technique developed in Ñopo (2008). The results indicate ethnic wage gaps that are notably higher than gender wage gaps. Furthermore, ethnic wage gaps are higher among males than among females. Differences in human capital characteristics, however, explain almost one-half of the ethnic wage gaps but only a small fraction of the gender wage gaps. Both gender and ethnic wage gaps are more pronounced at the lower extremes of the earnings distribution.
Monetary and Exchange Rate Policies for the Perfect Storm: The Case of the Bahamas, Barbados, Guyana, Haiti, Jamaica, Suriname, and Trinidad & Tobago
Authors: Souza-Sobrinho Nelson F. , Rebucci Alessandro , Powell Andrew , Minella André
Published: March 2024

This study provides a set of tools to analyze the monetary and exchange rate policy issues in the seven countries of the Inter-American Development Banks Caribbean region (The Bahamas, Barbados, Jamaica, Haiti, Guyana, Suriname, and Trinidad and Tobago). It then applies some of them to the analysis of the impact of the global turmoil on these economies in the last quarter of 2008. The paper also discusses, in light of both recent theoretical developments and key aspects of these economies, the monetary and exchange policy responses to the initial phase of the global turmoil.
Financial Integration and Foreign Banks in Latin America: How Do They Impact the Transmission of External Financial Shocks?
Authors: Rojas-Suárez Liliana , Galindo Arturo , Izquierdo Alejandro
Published: March 2024

This paper explores the impact of international financial integration on credit markets in Latin America, using a cross-country dataset covering 17 countries between 1996 and 2008. It is found that financial integration amplifies the impact of international financial shocks on aggregate credit and interest rate fluctuations. Nonetheless, the net impact of integration on deepening credit markets dominates for the large majority of states of nature. The paper also uses a detailed bank-level dataset that covers more than 500 banks for a similar time period to explore the role of financial integrationcaptured through the participation of foreign banksin propagating external shocks. It is found that interest rates charged and loans supplied by foreign-owned banks respond more to external financial shocks than those supplied by domestically owned banks. This does not hold for all foreign banks. Spanish banks in the sample behave more like domestic banks and do not amplify the impact of foreign shocks on credit and interest rates.
Natural Disasters in Latin America and the Caribbean: An Overview of Risk
Authors: Charvériat Céline
Published: March 2024

This paper integrates information from both economics and the physical sciences to survey the effects of natural disasters in the region. A first section surveys the human and economic impact of natural disasters in the region at both the household and aggregate levels, noting both the geographical distribution of disaster risk and its long-term implications for development. A second section reviews types of disasters prevalent in the region, and future disaster risks, as well as the socio-economic sources of vulnerability to disasters resulting from development and migration patterns. A third section discusses risk management strategies at the household and community level, with public policy options and proposals for emergency response and finding an appropriate mix of local, national and market-based solutions.
Maturity Mismatch and Financial Crises: Evidence from Emerging Market Corporations
Authors: Bleakley Hoyt , Cowan Kevin
Published: March 2024

Substantial attention has been paid in recent years to the risk of maturity mismatch in emerging markets. Although this risk is microeconomic in nature, the evidence advanced thus far has taken the form of macro correlations. This paper empirically evaluates this mechanism at the micro level by using a database of over 3,000 publicly traded firms from fifteen emerging markets. The paper measures the risk of short-term exposure by estimating, at the firm level, the effect on investment of the interaction of short-term exposure and aggregate capital flows. This effect is (statistically) zero, contrary to the prediction of the maturity-mismatch hypothesis. This conclusion is robust to using a variety of different estimators, alternative measures of capital flows, and controls for devaluation effects and access to international capital. The paper finds evidence that short-term-exposed firms pay higher financing costs and liquidate assets at fire sale prices, but the paper does not find that this reduction in net worth translates into a drop in investment.
The Determinants of Corporate Risk in Emerging Markets: An Option-Adjusted Spread Analysis
Authors: Valenzuela Patricio , Cavallo Eduardo A.
Published: March 2024

This study explores the determinants of corporate bond spreads in emerging market economies. Using a largely unexploited dataset, the paper finds that corporate bond spreads are determined by firm-specific variables, bond characteristics, macroeconomic conditions, sovereign risk, and global factors. A variance decomposition analysis shows that firm-level characteristics account for the larger share of the variance. In addition, the paper finds two asymmetries. The first is in line the sovereign ceiling lite hypothesis which states that the transfer of risk from the sovereign to the private sector is less than 1 to 1. The second is consistent with the popular notion that panics are common in emerging markets where investors are less informed and more prone to herding.
An Extension of the Blinder-Oaxaca Decomposition to a Continuum of Comparison Groups
Authors: Ñopo Hugo R.
Published: March 2024

This paper proposes an extension of the Blinder-Oaxaca decomposition from two to a continuum of comparison groups. The proposed decomposition is then estimated for the case of racial wage differences in urban Peru, exploiting a novel data set that allows the capturing of mestizaje (racial mixtures).
Aid, Exports, and Growth: A Time-Series Perspective on the Dutch Disease Hypothesis
Authors: Rebucci Alessandro , Kang Joong Shik , Prati Alessandro
Published: March 2024

The available evidence on the effects of aid on growth is notoriously mixed. We use a novel empirical methodology, a heterogeneous panel vector-autoregression model identified through factor analysis, to study the dynamic response of exports, imports, and per capita GDP growth to a "global" aid shock (the common component of individual country aid-to-GDP ratios). We find that the estimated cumulative resposive of exports and per capita GDP growth to a global aid shock are strongly positively correlated, and both responses are inversely related to exchange rate overvaluation measures. We interpret this evidence as consistent with the Dutch disease hypothesis. However, we also find that, in countries with less overvalued real exchange rates, exports and per capita GDP growth respond positively to a global aid shock. This evidence suggests that preventing exchange rate overvaluations may allow aid-receiving countries to avoid the Dutch disease.
Gender Earnings Gaps in the Caribbean: Evidence from Barbados and Jamaica
Authors: Bellony Annelle , Ñopo Hugo R. , Hoyos Alejandro
Published: March 2024

This paper analyzes gender earnings gaps in Barbados and Jamaica, using amatching comparisons approach. In both countries, as in most of the Caribbean region, females educational achievement is higher than that of males. Nonetheless, males earnings surpass those of their female peers. Depending on the set of control characteristics, males earnings surpass those of females by between 14 and 27 percent of average females wages in Barbados, and between 8 and 17 percent of average females wages in Jamaica. In the former, the highest earnings gaps are found among low-income workers. Results from both countries confirm a finding that has been recurrent with this matching approach: the complete elimination of gender occupational segregation in labor markets would increase rather than reduce gender earnings gaps. The evidence is mixed regarding segregation by economic sectors. Occupational experience, in the case of Barbados, and job tenure, in the case of Jamaica, help to explain existing gender earnings gaps.
High Inequality, Low Revenue: Redistributive Efficiency on Latin American Fiscal Policy in Comparative Perspective
Authors: Scott John
Published: March 2024

There are three principal redistributive fiscal instruments available to governments in modern mixed economies: a) progressive taxes on income or assets, b) monetary transfers (social security and social assistance), and c) non- monetary transfers, or the subsidized provision of goods and services.
Achievements and Challenges of Trade Capacity Building: A Practitioner's Analysis of the CAFTA Process and its Lessons for the Multilateral System
Authors: Miller Eric T.
Published: March 2024

In policy circles and intellectual centers throughout the world, there is considerable debate on how to make globalization "work" for smaller, poorer, and otherwise disadvantaged countries. The challenges and potential solutions have manifested themselves in a myriad of ways, from the declarations of the Monterrey Summit on Trade and Development to policy papers on reform of the "global financial architecture". On the trade front, the World Trade Organization (WTO) launched the Doha Development Agenda in Qatar in November 2001, which sought, among other things, to give the challenges of capacity and "systemic fairness" a central role in the policy discussion. Differing levels of trade capacity and the attendant consequences have also become issues in various regional trade initiatives, particularly in the Americas. Developing countries are quite correct in pointing out that the quantity of non-reimbursable resources relative the countries¿ needs is presently very small. The great challenge in the years ahead is to find efficient ways to close this gap. Undoubtedly, the institutional and governmental partners that have participated as donors in the IF and CAFTA processes will have an important role to play.
Institutional Analysis of the Mexican Civil Service System
Authors: Benton Allyson Lucinda
Published: March 2024

The Mexican public sector has undergone a dramatic reorganization and professionalization since the initiation of economic crisis and reform in 1982. Though such reforms appear to have improved efficiency in the provision of public services, administrative changes did not include the implementation of a national career civil service. (Note: The title in this original document is in Spanish, but the document itself is in English.)
Waste Collection from Large Generators in Rio de Janeiro
Authors: Costa Leite Luiz Edmundo , Penido Monteiro José Henrique
Published: March 2024

This work presents a case study of Rio de Janeiro's improvement of its urban trash and garbage services by bringing in private operators to collect the "extraordinary wastes" produced by the city¿s large generators, without relinquishing its authority to supervise and regulate critical aspects of that service.
Session I: ¿Disaster Risk Reduction Through Envirionmental Management¿
Authors:   Inter American Development Bank
Published: March 2024

This document was commissioned by the Natural Disaster Network of the Regional Policy Dialogue for the IV Hemispheric Meeting celebrated on February 26th and 27th, 2004.
Determinants of Environmental Performance in the Brazilian Industrial Sector
Authors: Seroa da Motta Ronaldo
Published: March 2024

This study will analyze the determinants of environmental performance in the Brazilian industrial sector. It uses a database conducted by the Brazilian National Confederation of Industries inquiring about questions on environmental management over 325 medium and large firms referred to the year 1997. We have been able to test three proxies of environmental performance, such as: a weighted average number of environmental control practices, environmental investments and operational cost ratios, controlling for actual data on market incentives and enforcement pressures as well as for declared motivations. Our results suggest that the Harrington paradox can be observed in Brazil when a compliance-dependent regime motivates firms to compliance with low sanction level. Consistent with results in the main literature, our study confirms that, apart from some expected characteristics of the firm, as size, sector and foreign ties, demands from communities and market incentives are also very influential determinants. Cost savings on inputs and subsidized credit are found equally important. Based on that, we recommend flexible instruments on pollution control that capture the firm¿s differentials in characteristics and compliance levels as well as dissemination of information on environmental control and related cost saving opportunities.
Environmental Management Insertion in Tourism: Sector Policies in the Caribbean
Authors:   University of the West Indies
Published: March 2024

This study is concerned with the insertion of environmental management in tourist sector policies to ensure that threats are recognized and addressed. Four main characteristics of Caribbean tourism provide the rationale for this study. First, tourism is the single most common industry in the region - particularly in the island economies. Second, tourism is the fastest growing industry in virtually every Caribbean country, including those in which the sector is not presently an important economic contributor. Third, tourism also is the most important and, sometimes, the only productive sector in some of these economies. Finally, the environment (ecological and socio-cultural) which is the economic `goose¿ that explains the initial three characteristics above - is under significant threat in several Caribbean tourist destinations. The study analyses the cases of Barbados, Bahamas, Saint Lucia and Tobago and presents a last chapter with summary and recommendations.
Availability of Information and the Implications for Educational Policy in Six Countries of the Caribbean
Authors: Fernández Jorge
Published: March 2024

This report is based on a limited study done with a questionnaire and interviews with important officers of the Ministries of Education in six Caribbean countries. The study was limited because of time constraints and the type of contacts that were possible with each of the respondents, in the six countries selected. As a consequence the study should be considered as exploratory, trying to identify new lines of thinking.
Successful Alternatives for Rural Education: Tutorial Learning System (TLS) and New School Methodology Rural Post-Primary
Authors: Arango Pablo R. , Leal Susana , Perfetti Mauricio
Published: March 2024

This paper will discuss the experience of two rural education models: Tutorial Learning System (TLS) and New School methodology for Post-Primary.
China and the Multilateral Trading System
Authors: Lawrence Robert Z.
Published: March 2024

Given its size, the pace of its expansion, and its outward orientation, China is likely to have a growing impact on the global trading system and its policies are likely to have an important influence on the system's evolution.
Convergence in the Rules of Origin Spaghetti Bowl: A Methodological Proposal
Authors: Harris Jeremy , Cornejo Rafael
Published: March 2024

Many countries are concerned by the dense body of regulations governing their preferential foreign trade and are seeking to simplify the current diversity of rules. To do this they are starting to look at alternatives that allow a degree of convergence between their agreements. This paper aims to develop a methodological proposal to facilitate negotiation and application of a convergent origin regime, thus enabling the simultaneous use of the tariff reductions agreed in various agreements and establishing a mechanism to cumulate imported inputs under different trade agreements.
Integration Options for MERCOSUR: A Quantitative Analysis by the AMIDA Model
Authors: Flôres Jr. Renato G. , Watanuki Masakazu
Published: March 2024

The recent developments at the multilateral and regional fronts call for a re-evaluation of trade and integration options for MERCOSUR. Applying a brand new CGE model, we evaluated six scenarios. The simulation results indicate that trade agreements will generate relatively small but positive gains. Integration with the Unites States and the European Union, two key partners, will have somewhat divergent and opposite outcomes. Agriculture will be a clear winner, while MERCOSUR has competitiveness issue in capital-intensive manufacturing sectors. It is revealed that the bloc's present trade policy is on a right track. Nevertheless it is undoubtedly important for the bloc to clinch regional initiatives with long-term perspective, and essential to streamline and modernize their productive sectors for sustained trade balance and growth.
Review of the Need for a General Capital Increase of the Ordinary Capital and Replenishment of the Fund for Special Operations: Progress and Next Steps
Authors:   Inter American Development Bank
Published: March 2024

Presented the first paper on review of the need for a general capital increase of the ordinary capital and replenishment of the fund for special operations.
Expedited Debt Restructuring in Latin America: A Regional Overview
Authors: Olivares-Caminal Rodrigo , Frigerio Gerónimo
Published: March 2024

The use of expedited debt-restructuring alternatives allows debtors and creditors to negotiate the terms of an agreement in a shorter period of time than traditional reorganization procedures, minimizing the problem of holdout creditors and avoiding long and costly procedures.
Integration, Resources Reallocation and Productivity: The cases of Brazil and Chile
Authors: Blyde Juan S. , Iberti Gonzalo , Mesquita Moreira Mauricio
Published: March 2024

Most microeconometric studies available for LAC have focused on measuring the direct impact of trade on plant productivity leaving aside other effects that arise through the market selection process. Additionally, most studies have focused on tariff barriers as the only obstacle to international trade and integration. In this paper we use data from Brazil and Chile to analyze how trade affects aggregate productivity through the process of resource reallocation and to explore not only the role of tariffs but also the role of transport costs. We find that trade costs affect the reallocative process by protecting inefficient producers, lowering their likelihood to exit, and also by limiting the expansion of efficient plants, lowering their likelihood to export. We also find that the reallocative impacts of trade come not only from tariff barriers but also from transport costs.
Building Regional Infrastructure in Latin America
Authors: Tanzi Vito
Published: March 2024

Economic growth is often a kind of miracle because like most miracles, it is not easy to explain. Countries that have not grown for a century, at times begin to grow at a fast pace, while countries that were growing fast stop growing. From time to time economists have advanced particular theories that argue that some factors, such as investment, human capital, technological development, intangible capital, rule of law, good institutions, good policies, and so on, play a fundamental role in the growth process. The problem is that the number of these factors keeps growing. Recently some economists as well as several political leaders have suggested that infrastructure would be one of these factors. Some estimates have even been presented about how much Latin America should spend per year on the creation of infrastructure. Without addressing, at this point, the validity of these claims, or the realism of the estimated "infrastructure gap" for Latin America, it may be useful to be reminded that the term infrastructure is relatively new in economics. The focus in this paper is on regional projects. That is, infrastructure that concerns or links at least two countries. Furthermore, much of the discussion is mostly relevant for transportation projects, which, in any case absorb often an overwhelming share of total infrastructure costs and are less likely to generate incomes that make them interesting for private sector¿s investments. The discussion is much less relevant for projects related to the exploitation of material resources, including energy or for projects related to communication.
Regional Banks and Regionalism: A New Frontier for Development Financing
Authors: Castro Lucio , Devlin Robert
Published: March 2024

The 1990s witnessed the parallel forces of globalization and regionalization strongly at work. While seemingly contradictory, they are in fact complementary aspects of market development. This paper will focus on the latter, and its special aspects of regionalism; i.e., policy driven regional cooperation. Particular attention will be given to the recent advances and challenges in two crucial aspects of regionalism: regional trade and financial cooperation. The other important area of concern of the paper is how regional development banks are supporting regional initiatives and identifying emerging issues which they should be preparing to deal with.
Which Industrial Policies are Meaningful for Latin America?
Authors: De Paiva Abreu Marcelo
Published: March 2024

This paper's main concern is to assess which "industrial policies" would be meaningful for Latin America nowadays. The first section introduces the theme while the second section considers definitions of "industrial policies" and their nature in the past. The third section centers on national growth experiences that may serve as paradigms. Section IV is on economies, which are growth paradigms, and on their policies. Section V is on present multilateral constraints on "industrial policies". Section VI explains the institution building, macroeconomics and industrial policies. Section VII analyses industrial policy alternatives. The paper concludes with section VIII that is on policy recommendations seeking to improve criteria to pick winners where market failures are especially costly.
Exchange Rate Instability in MERCOSUR: Causes, Problems and Possible Solutions
Authors: Machinea José Luis
Published: March 2024

This paper formed part of a Conference "Mercosur: In Search of a New Agenda" held in the Getulio Vargas Foundation in Rio de Janeiro in June 2003. The purpose of the Conference was to was to examine future directions for Mercosur in light of emerging political dynamics pointing to renewed interest in deepening the initiative after a turbulent 1999-2002. The papers and the conference were supported by the Integration and Regional Programs Department of the Inter-American Development Bank through its Special Initiative on Trade and Integration. The Department is grateful for the collaboration of the Foundation and in particular to Professor Renato Flores. Taking into account the relevancy of exchange variability for integration agreements, this paper evaluates the importance of exchange volatility among member countries of a free trade area and some possible solutions. Measures to prevent or reduce these fluctuations in terms of macroeconomic policy coordination are also examined. Additionally, the creation of a monetary union within MERCOSUR, macroeconomic policy coordination, and a compensation mechanism to tackle exchange variability are also analyzed. Most relevant elements to advance in macroeconomic cooperation in MERCOSUR are studied, and an assessment is made of how exchange variability could be reduced, should exchange regimes be excluded from this coordination.
Regional Integration and Productivity: The Experiences of Brazil and Mexico
Authors: Mesquita Moreira Mauricio , López Córdova José Ernesto
Published: March 2024

This paper discusses the impacts of integration on productivity, specifically within regional agreements. The paper focuses on the economies of Brazil and Mexico and on their performance in the manufacturing sector. The authors estimate firm-level productivity and test its casual links with trade and foreign direct investment (FDI) variables. The results suggest strong trade related gains, with import discipline emerging as the dominant effect. The results on learning-by-exporting were mixed, with gains restricted to Brazil's regional and worldwide exports. On FDI, foreign firms appear to have had a positive impact on their buyers and suppliers in Mexico, but in Brazil, the overall impact was statistically insignificant on productivity levels and negative on productivity growth.
Potential Disaster Risk Reduction Strategy Elements for Ecuador
Authors:   Sun Mountain International
Published: March 2024

The study details social, environmental, and resilience vulnerabilities, as well as financial activities that could have a strong, macroeconomic impact on Ecuador. It also considers potential social and environmental losses at the local and national levels, including the institutional dynamic that characterizes risk management in the country. This study is divided into four stages: 1) Strategic actions to avoid potential losses; 2) Based on Stage 1, strategy proposals to reduce potential losses in the event of a natural disaster; 3) Proposal of financial strategies to cover the gap between potential losses and projected available financial resources; 4) Conclusions and recommendations to execute the proposals identifying the institutions that will be in charge of implementing strategies and economic resources for appropriate Risk Management.
Improving Technology Adoption in Agriculture through Extension Services: Evidence from Uruguay
Authors: Maffioli Alessandro , Ubfal Diego , Cerdan-Infantes Pedro
Published: March 2024

This paper analyzes the impact of the Farm Modernization and Development Program (PREDEG) on the technology uptake and productivity of Uruguayan farmers. Using a unique panel dataset, the authors combine propensity score matching techniques and fixed effects models to estimate the program's impact. Although the results vary according to the crops, the authors find consistent evidence that the program increased the rate of adoption of certified varieties and the density of plantation. However, there is only limited evidence of its effects on productivity, mostly derived from helping producers to cope with an illness of peach orchards. Conversely, the authors find some indications of negative lagged productivity effects for apples, which might be related to a short term cost of transitioning to new varieties or technologies. While the evidence of the effects on yields is not definitive due to the limited timeframe of the evaluation, the results indicate that PREDEG services were useful for incentivizing the adoption of specific technologies, as well as for crop-specific technical assistance like plant health.
Evaluating the Impact of Technology Development Funds in Emerging Economies: Evidence from Latin-America
Authors: Maffioli Alessandro , Hall Bronwyn H.
Published: March 2024

This working paper surveys impact evaluations of government Technology Development Funds (TDFs) in Argentina, Brazil, Chile and Panama. All the evaluations were done at the recipient (firm) level using data from innovation surveys, industrial surveys, and administrative records of the granting units, together with quasi-experimental econometric techniques to minimize the effects of any selection bias. The surveyed evaluations considered four levels of potential impact: R&D input additionality, behavioural additionality, increases in innovative output, and improvements in performance. The evidence suggests that TDFs do not crowd out private investment and that they positively affect R&D intensity. In addition, participation in TDFs induces a more proactive attitude of beneficiary firms towards innovation activities.
Competitiveness and Science and Math Education: Comparing Costa Rica, El Salvador and Brazil (Recife) to Sweden
Authors:   Hifab International AB
Published: March 2024

The purpose of this study is to document and give deeper substance to the link between math and science achievement and the economic performance of firms in the information and communications technology (ICT) cluster in four countries: Brazil (Recife), Costa Rica, El Salvador, and Sweden. Sweden was used as the comparison country since its achievement in math and science, as measured by international tests, ranks among the highest in the world. There are four premises that underpin this study: 1) There is a clear link between math and science achievement and the economic performance of firms in a country; 2) This link is forged in the process of technology transfer; 3) The process of technology transfer in developing countries often occurs in exchanges between a transnational corporation (TNC) and its local suppliers; 4) Good math and science skill levels are critical for the technology transfer process to create value, both for the TNC and its local suppliers/partners.
Opportunities for GHG Mitigation in Latin America: Carbon Finance and the Clean Development Mechanism
Authors: Pollan Michael
Published: March 2024

This report discusses the opportunities and challenges for Clean Development Mechanism (CDM) projects in Latin America. CDM is an important tool to improve the viability of many clean technology investments as it offers a number of important opportunities including increasing a project's internal rate of return (IRR) and its impact on project risk and overall credibility. The new and enlarged interest in GHG mitigation and carbon finance since the entry into force of the Kyoto Protocol and the full operation of the CDM provides the opportunity to revise programs and activities as needed to meet beneficiary country needs in this arena.
Urban Air Quality and Human Health in Latin America and the Caribbean
Authors: O'Ryan Raúl , Toman Michael , Krupnick Alan J. , Cifuentes Luis A.
Published: March 2024

Health problems due to poor air quality have been among the main environmental concerns in Mexico City, Santiago, Bogotá, Sao Paulo, Lima, Quito among other cities in the region. This study provides quantitative estimates of key air pollution concentrations, health impacts, and the monetary value of improving air quality in 41 major LAC urban areas containing 100 million people in all. While the estimates the authors derive are not finite, they allow comparisons across cities and show the significance of air quality improvements for the region as a whole. From a policy perspective, the estimates highlight the real economic value of improvements in urban air quality and give policy analysts a basis for analyzing policies and abatement measures for their net benefits to society.