bluuebunny/crossref_metadata_2025 huggingface dataset:
Intergenerational Mobility, Middle Sectors and Entrepreneurship in Uruguay
Authors: Robano Virginia , Gandelman Néstor
Published: March 2024

This paper estimates the relationship between parents educational attainment and income and children's schooling in Uruguay between 1982 and 2010. This relationship is interpreted as a measure of intergenerational social mobility, and the paper reports evidence that it has decreased over time. The paper finds that the probability that the children of the more educated remain among the more educated has grown, with analogous results for the less educated. As a result, the improvements in education of the 1980s and 1990s were unevenly distributed, with a bias against the disadvantaged. The paper also finds that while entrepreneurship status and belonging to the middle class matter in terms of social mobility as measured by compulsory education, i.e., primary school and the first three years of secondary school, they do not have a notable effect on noncompulsory education, i.e., the last three years of secondary school and higher.
The Effects of Oil and Mineral Taxation on Non-commodity Fiscal Revenues
Authors: Perry Guillermo , Bustos Sebastián
Published: March 2024

This paper shows, first, that non-commodity revenues are more volatile in oil- and mineral-rich countries and that quality of institutions is associated with lower volatility. We investigate the channels through which oil and mineral revenue volatility lead to non-commodity revenues volatility, and find that when oil and fiscal revenues increase (decrease), non-commodity revenues are reduced (increased) discretionally, and that this substitution effect is larger and faster than an indirect positive income effect through increased public expenditures and GDP. Latin American oil- and mineral-rich countries appear, though, to behave differently. In particular, most of them show increased non-commodity revenues pari passu with increased oil and mineral revenues during the last decade. These findings have consequences for the overall volatility of public expenditures and the effectiveness of automatic tax stabilizers in oil- and mineral-rich countries.
Incentive Schemes in Export and Investment Promotions
Authors: Weinschelbaum Federico , Arozamena Leandro
Published: March 2024

This study examines the use of incentive mechanisms for employees in export and investment promotion agencies intended to improve their performance. It briefly describes these organizations and presents the contributions from economic theory that are useful to understand the agency problems that arise. It proposes a framework to study the issues that need to be considered to design a sound incentive mechanism. The study concludes that such a design should be carried out carefully, analyzing all of the possible drawbacks of rewarding each measure of employee performance, and identifies the main issues that need to be resolved.
Automatic Stabilization and Fiscal Policy: Some Quantitative Implications for Latin America and the Caribbean
Authors: Espino Emilio , González Rozada Martín
Published: March 2024

This paper provides an estimation of the size of income and demand automatic stabilizers in a representative sample of Latin American and Caribbean (LAC) countries. The authors find that when a negative unemployment shock hits the economy, the size of income and demand automatic stabilizers coefficients is much smaller than the size of these coefficients in Europe and the United States. This evidence suggests that there is room for policies that can enlarge the absorption by these coefficients as a way to contribute to macroeconomic stability in LAC countries. The paper analyzes four policies affecting the income stabilization coefficient and two others affecting directly the demand stabilization coefficient. The main results suggest that changing the minimum tax exemption and its progressiveness using the tax structure of middle-income countries outside the LAC region is the best option to enlarge the size of the income and demand stabilization coefficients, and in this way to reduce the need of discretionary fiscal policies in theregion.
Basic Issues Emerging from Recent Research on Technological Behaviour of Selected Latin American Metalworking Plants
Authors: Turkieh Mauricio , Sandoval Peralta Diego , Cruz Hélio Nogueira da , Berlinski Julio
Published: March 2024

This document explains the technological behavior of the engineering industries in Argentina, Brazil, Colombia, Mexico, Peru and Venezuela. The authors focus on the individual history of each firm, variations determined by the market, macroeconomic forces such as prices, protection level, and rate change. It also contains a discussion of the competitive behavior of these firms internationally.
International Product Fragmentation and the Insertion of Latin America and the Caribbean in Global Production Networks: Colombian Case Studies
Authors: Uribe Maria José , Meléndez Arjona Marcela
Published: March 2024

Understanding the drivers of international production fragmentation is an important issue for Latin American and Caribbean countries because participation in global production networks can help mitigate instability due to dependence on natural resources and can provide opportunities for further exports diversification and increased growth. This paper contributes to the literature on global value chains by analyzing two case studies that examine the experience of Colombian firms that have successfully penetrated international markets through participation in global production networks. The stories of these firms are contrasted within the framework of the global value chain literature. A series of policy implications are drafted as a result of this exercise
Short Form for the Institutional Assessment of Civil Service Systems: Case of Barbados
Authors: Isaacs Hedy
Published: March 2024

The Inter-American Development Bank (IDB) through its Regional Policy Dialogue, Public Policy and Management Network commissioned this study [update] of the Institutional Assessment of Civil Service systems (CSS) in Barbados. While reforms address key elements of the HRM system, the frameworks, or foundation required to support these reform efforts, namely, a coherent and clearly articulated HR strategy and an integrated HRM system have yet to be addressed. Two recommendations are made with these limitations in mind. Articulate a coherent HR strategy that specifies goals and objectives, to which all stakeholders commit: Recommendation 1. Develop an integrated HRM system that will facilitate interconnections between the subsystems and ultimately contribute to greater efficiency of the CSS in Barbados: Recommendation 2.
The Consultative Process with Civil Society in the Formulation of Sweden's Positions on Trade Policy within the EU
Authors: Ahnlid Anders
Published: March 2024

The conditions for trade policy formulation have changed significantly in many, if not all, countries over the past decade. The scope of trade policy has increased. Trade policy interrelates more directly with other policies that were previously perceived to belong to the sphere of exclusive national sovereignty. This working paper was prepared for the Inter-American Development Bank Regional Policy Dialogue Trade and Integration Network and it is the latest version available.
Goverment Modernization and Civil Service Reform: Democratic Strengthening, Consolidation of the Rule of Law, and Public Policy Effectiveness
Authors: Echebarría Koldo
Published: March 2024

This document is part of a series of studies commissioned by the Inter-American Development Bank for the first meeting of the Regional Policy Dialogue in Transparency and Public Policy, to be held in the Bank's Headquarters in Washington, D.C., the 26 and 27 of April, 2001. It discusses challenges for development in Latin America and the Caribbean in terms of government modernization, as well as the importance of civil service.
The Civil Service in Latin America and the Caribbean: Situation and Future Challenges
Authors: Oszlak Oscar
Published: March 2024

This document is part of a series of studies commissioned by the Inter-American Development Bank for the first meeting of the Regional Policy Dialogue in Transparency and Public Policy, to be held in the Bank's Headquarters in Washington, D.C., the 26 and 27 of April, 2001. The paper has two purposes: to review the progress achieved so far in the comparative study of the Civil Service in Latin America and the Caribbean, and to present preliminary conclusions and options that result from the analysis.
Small Is Not Beautiful: Firm-Level Evidence of the Link between Credit, Firm Size and Competitiveness in Colombia
Authors: Galindo Arturo , Meléndez Arjona Marcela
Published: March 2024

Credit has been found to be a catalyst for economic growth, as it spurs investment, enhances productivity, allows costs to be spread out over time, improves resource allocation, and enables investors to cope better with macroeconomic volatility. Most studies focus on the relationship between financial development and growth at the country level, while few analyze the relationship at the firm level. Using a panel-shaped firm-level dataset of Colombian firms and employing the methodology developed by Love and Zicchino (2006), this paper examines whether the response of firms to financial and real shocks varies according to firm size and across different levels of firm productivity. The study finds that financial shocks have a significant positive impact on firm growth, which is larger for larger firms and more productive firms that export. The results indicate that something is preventing smaller firms from taking full advantage of access to external financing.
Firm Size and Credit in Argentina
Authors: Sánchez Gabriel , Bebczuk Ricardo N. , Auguste Sebastián
Published: March 2024

The goal of this paper is to study the link between bank credit (and internal funding) and average firm size in Argentina. Besides the fact that economic growth tends to go hand in hand with larger firm size, the topic is of particular interest because of the severe credit crunch in Argentina in the aftermath of the 2001-2002 financial crisis. To this end, a novel three-digit industry-level dataset spanning the 2000-2010 period was constructed. The results confirm the expected positive impact of credit supply on average firm size. Furthermore, the study expands on common knowledge by testing the sensitivity of firm size to internal funding and the differential financing behavior of the primary and the manufacturing sector. The results do not seem to be driven by endogeneity bias.
The Cyclical Characteristics of Universal Social Insurance
Authors: Hemming Richard
Published: March 2024

This paper examines how a universal social insurance program proposed for Mexico can respond to cyclical variations in revenue while remaining selffinancing. More specifically, it discusses the issues involved in setting up a stabilization fund that can accumulate surpluses when revenue is cyclically high, which can be drawn down when revenue is cyclically low. Attention is also paid to the options available to create a fund with sufficient resources to respond to revenue shocks early it its life, before a significant revenue cushion can be built up. In this connection, it is argued that letting the fund borrow to do this would not compromise the financial independence of the program.
Access to Credit and the Size of the Formal Sector in Brazil
Authors: D'Erasmo Pablo N.
Published: March 2024

This paper studies the link between credit conditions and formalization in Brazil, as both credit and the rate of formalization have notably increased in the last decade. A firm dynamics model with endogenous formal and informal sectors is developed to quanti- tatively evaluate how much of the change in corporate credit and the size of the formal sector can be attributed to a reduction in the cost of financial intermediation. The model predicts that the observed reduction in intermediation costs generates an increase in the credit-to-output ratio and in the share of formal workers, in line with the data. It is found that-by affecting the corporate interest rate, the allocation of capital and the entry and exit rates-the change in credit conditions has important effects on firm size distribution and aggregate productivity.
Rule-of-Thumb Consumers, Nominal Rigidities and the Design of Interest Rate Rules
Authors: Ocampo Díaz Sergio
Published: March 2024

This paper argues that, in the presence of nominal wage rigidities, the existence of Rule-of-Thumb agents and price rigidities does not cause a change in the Taylor Principle as suggested by Galí et al. (2004), and that the only rigidity relevant for this result is that faced by Rule-of-Thumb consumers. For doing so, a New-Keynesian model with Rule-of-Thumb agents is proposed. The model discriminates between both type of agents when defining wage rigidities, thus al- lowing to identify and measure the factors that affect the Taylor Principle, this also allows to drop complete markets for Rule-of-Thumb agents, and the simple use of non-separable utility functions in order to determine the incidence of the wealth effect when facing staggered wages.
Information and Communication Technology, Agricultural Profitability, and Child Labor in Rural Peru
Authors: Beuermann Diether
Published: March 2024

We estimate the impact of access to information and communication technology on agricultural profitability and child labor among isolated villages in rural Peru. We exploit the timing of an intervention that provided at least one public (satellite) payphone to 6,296 villages that did not previously have communication services. Using a village level panel, we show that profitability increased by 19.7 percent. Moreover, this income shock translated into a reduction in the likelihood of child market and agricultural work of 14 and nine percentage points respectively. Overall, the evidence suggests a dominant income effect in the utilization of child labor.
Benchmarking Container Port Technical Efficiency in Latin America and the Caribbean
Authors: Morales Sarriera Javier , Serebrisky Tomás , Araya Gonzalo , Briceño-Garmendia Cecilia , Schwartz Jordan
Published: March 2024

We developed a technical efficiency analysis of container ports in Latin America and the Caribbean using an input-oriented stochastic frontier model. We employed a 10-year panel with data on container throughput, port terminal area, berth length, and number of available cranes in 63 ports. The model has three innovations with respect to the available literature: (i) we treated ship-to-shore gantry cranes and mobile cranes separately, in order to account for the higher productivity of the former; (ii) we introduced a binary variable for ports using ships¿ cranes, treated as an additional source of port productivity; and (iii) we introduced a binary variable for ports operating as transshipment hubs. Their associated parameters are highly significant in the production function. The results show an improvement in the average technical efficiency of ports in the Latin American and Caribbean region from 36% to 50% between 1999 and 2009; the best performing port in 2009 achieved a technical efficiency of 94%with respect to the frontier. The paper also studies possible determinants of port technical efficiency, such as ownership, corruption, transshipment, income per capita, and location. The results revealed positive and significant associations between technical efficiency and both transshipment activities and lower corruption levels.
Industrial Clusters and Economic Performance in Brazil
Authors: Piza Caio , Cravo Tulio , Lodato Simon , Pires Jose Claudio Linhares
Published: March 2024

Industrial clusters, which are commonly targeted to receive financial support allocated to locally based development projects, are seen as an effective industrial policy tool for improving productivity and generating employment. Nevertheless, identifying clusters and assessing their economic performance is a challenge for policymakers. This paper aims to address this challenge by identifying the location of clusters based on neighbor relationships and specialization in Brazil and providing some insights on their effects on employment generation. The paper uses both Location Quotient and Local Indicator of Spatial Association to identify potential clusters in 27 industrial sectors in 5564 Brazilian municipalities. In addition, it uses annual municipal panel data for 2006-2009 to assess whether the presence of potential clusters is correlated with employment generation. The results show that clusters located in municipalities whose neighbors have similar industrial structures perform better than those that present industry specialization only.
Long-Term Effect of Climate Change on Health: Evidence from Heat Waves in Mexico
Authors: Agüero Jorge M.
Published: March 2024

This paper uses year-to-year variation in temperature to estimate the long-term effects of climate change on health outcomes in Mexico. Combining temperature data at the district level and three rounds of nationally representative household surveys, an individual's health as an adult is matched with the history of heat waves from birth to adulthood. A flexible econometric model is used to identify critical health periods with respect to temperature. It is shown that exposure to higher temperatures early in life has negative consequences on adult height. Most importantly, the effects are concentrated at the times where children experience growth spurts: infancy and adolescence. The robustness of these findings is confirmed when using health outcomes derived from accidents, which are uncorrelated with early exposure to high temperatures.
The Roots of Banking Crises: The Macroeconomic Context
Authors: Hausmann Ricardo , Gavin Michael
Published: March 2024

This paper discusses the ways in which macroeconomic developments can put stress on banks, and in extreme cases lead to banking crises. These macroeconomic causes of bank vulnerability and crisis have important implications for regulatory regimes, and for macroeconomic policy itself. Much of the discussion emphasizes the need for monetary policy to be set with an eye on the state of the domestic banking system as an occasionally important consideration. One purpose of this paper is to promote a discussion of how to do a better job of incorporating weak banking systems into macroeconomic policy management.
Labour Market Reforms and Unemployment: Lessons from the Experience of the OECD Countries
Authors: Scarpetta Stefano
Published: March 2024

The OECD labor market has undergone major changes over the past two decades. The most evident of these changes is the rise in the number of job-seekers. In 1997, there were more than 35 million people unemployed in the OECD area as a whole, some 6 million more than in the mid-1980s and almost 25 million more than in the early 1970s. These figures hide profound differences across countries. In the major European countries, unemployment has increased dramatically over the past two decades and in some of them, including Italy, Spain, and France, increases that were initially cyclical have tended to become structural over time.
Volume and Quality of Infrastructure and the Distribution of Income: An Empirical Investigation
Authors: Chong Alberto E. , Calderón César
Published: March 2024

We provide evidence on the link between infrastructure development and the distribution of income for the period 1960-1995. To do this, we use several proxies such as roads, railways, telecommunications and energy measures. The approach is comprehensive as cross-country and panel methods are applied. In the latter case, we apply GMM dynamic panel methods in order to minimize for endogeneity problems. Both quantity of infrastructure and quality of infrastructure are negatively linked with income inequality. The quantitative link tends to be stronger in developing countries than the qualitative link. These findings hold when using different econometric methods and most infrastructure measures.
Volatility, External Debt, and Fiscal Risk: Simulations of the Impact of Shocks on Fiscal Adjustment for Thirteen Latin American Countries
Authors: Kletzer Kenneth
Published: March 2024

This paper examines how the combination of indebtedness and exogenous shocks induce volatility for the countries of Latin America. A techique for simulating the impact of shocks on the costs of external indebtedness and the response of fiscal policies in adjustment to such shocks is presented and applied to thirteen indebted Latin American countries.
Transition to a Functional Financial Safety Net in Latin America
Authors: Garber Peter M.
Published: March 2024

The basic worldwide financial safety net architecture provides for a system of similar institutions: a lender of last resort, deposit insurance, and prudential regulation. In countries whose banking systems suffer seriously from negative capital positions and overbanking, such as in some Latin American markets, the safety nets and the detailed mechanisms of their operation may not be functional in reducing excessive risk taking. They offer banks strong incentives to double their bets for survival. Thus, banks' negative capital positions have been eliminated with capital injection, liquidation, and mergers.
Business Development Services: A Framework for Analysis
Authors: Goldmark Lara
Published: March 2024

The purpose of this study is to provide an overview of current practices in the provision of business development services (BDS) to small and microentrepreneurs in developing countries. The document is meant to serve as a resource for Bank staff and other development practitioners who play a role in evaluating proposals and designing, implementing, and evaluating projects which target the microenterprise sector. By business development services, the authors refer to services such as training, technology transfer, marketing assistance, business advice, mentoring, and information, which are aimed at helping small and microentrepreneurs improve the performance of their businesses.
Testing the Hypothesis of Collusive Behavior Among Organization of the Petroleum Exporting Countries (OPEC) Members
Authors: Spilimbergo Antonio
Published: March 2024

This paper presents a test to discriminate among behaviors of producers of exhaustible resources. The behavior of a competitive producer of an exhaustible resource should follow an Euler equation. The existence of futures markets allows us to sidestep the difficult issues related to estimating future prices and demand. This theoretical framework is used to test the hypothesis of collusive Organization of the Petroleum Exporting Countries (OPEC) behavior between 1983 and 1991.
Political Stabilization Cycles in High Inflation Economies
Authors: Stein Ernesto H. , Streb Jorge M.
Published: March 2024

High inflation economies often do not exhibit smooth inflationary processes, but rather stop-go cycles. This paper relates these stop-go episodes of inflation to a political cycle. The government can try to repress inflation until after the elections in order to increase the chances of being reelected. It is modeled as a two-period game of incomplete information where voters try to pick the most competent government, and inflation can be lowered by the government in the short run through foreign debt accumulation. Several stabilization episodes in Latin America, such as the Primavera Plan in Argentina and the Cruzado and Real Plans in Brazil, are used to illustrate the model.
Public-Private Collaboration on Productive Development Policies in Costa Rica
Authors: Román Marcela , Jimenez Jorge , Cornick Jorge
Published: March 2024

Public-private collaboration in productive development policy in Costa Rica frequently takes the form of policy co-governance: an autonomous institution in charge of policy for a particular economic sector is created, with a board of directors comprising representatives from both the public and the private sectors, often with the public sector in a minority position. This paper analyzes five cases of co-governance: tourism, fisheries, rice, coffee, and the attraction of foreign direct investment (FDI). When co-governance has been used in conjunction with market discipline and as a means to discover and remove obstacles to higher productivity, as in tourism and FDI attraction, PDPs have been quite successful. When, on the contrary, it has been used to shield producers from market discipline or to allow unsustainable use of natural resources, as in rice and fisheries, they have turned into failures. Coffee stands in between, with considerable social achievements but only modest competitiveness achievements.
Productivity, Exporting and Financial Constraints of Chinese SMEs
Authors: Van Biesebroeck Johannes
Published: March 2024

While many studies explain the correlation between firm-level productivity and export status entirely by better firms self-selecting into exporting, a few studies find evidence of reverse causation. Especially in developing or ransition economies, exporters seem to improve performance after they start selling internationally. We provide evidence that the realization of scale conomies is one possible explanation for such a learning-by-exporting effect. Exporting enables small firms to expand output and exploit all scale economies that the production technology allows. With access to finance problems and weak contract enforcement at home, domestic expansion of SMEs is constrained by the necessity of awarding trade credit to new clients. We show that small firms with a lot of outstanding trade credit expand sales the most following export market entry. This is especially true if they operate in industries with higher scale economies or if they are located in provinces with weaker institutions. The same type of firms also enjoy the largest productivity gains immediately following export market entry.
Impacts of Climate Change on Dengue Risk in Brazil
Authors: Alves Denisard , Pereda Paula C. , Menezes Tatiane A. de
Published: March 2024

Climate-sensitive health problems kill millions every year and undermine the physical and psychological well-being of millions more. To identify the climate impacts on dengue risk in Brazil, a comparative case study is used based on the synthetic controls approach. The South and Northeast regions of Brazil are compared to the rest of the country in order to identify those impacts. The results suggest that dengue is more prevalent in warmer regions, but the humidity conditions and amount of rainfall seem fundamental for increase of the diseases prevalence in temperate climate regions or drier tropical regions of the country. On the other hand, the increase in rainfall in the rainiest tropical areas could diminish the diseases prevalence, as standing water accumulations might be washed away. Therefore, due to expected climate changes in the future, the dengue fever distribution in the country might change, with the disease migrating from the north to the south. Public policy's role in minimizing these effects in the country should be focused on anticipating the proper climate conditions for dengue incidence by using integrated actions among local authorities.
Assessing the Effects of Climate and Socioeconomic Factors on Vulnerability to Vector-Borne Diseases in Latin America
Authors: Estrugo Andrés , García Ayala Rodrigo
Published: March 2024

Climate change is imposing a large burden on the most vulnerable populations, particularly in the developing world. Establishing consistent causal relationships, however, is difficult because a multiplicity of climatic, economic and sociodemographic elements are combined to create the conditions for an outbreak of vector-borne disease. Based on a two-step procedure, this paper presents and tests an approach to estimating the effects of epidemic outbreaks on health vulnerability. The model proposed is empirically tested for five countries in Latin America where dengue is a national health priority. Using data from national censuses, satellite climate information and data from a newly developed disease outbreak surveillance online platform, the paper finds that climate has nonnegligible effects on health vulnerability. The evidence found and the vulnerability index constructed can be used to analyze the main determinants of vulnerability in order to address policy concerns.
State Capacity and the Quality of Policies: Revisiting the Relationship between Openness and the Size of Government
Authors: Franco Maria , Scartascini Carlos , Tommasi Mariano
Published: March 2024

The literature has identified that countries with higher levels of openness tend to present a larger government sector as a way to reduce the risks to the economy that openness entails. This paper argues that there are a number of policies that can mitigate trade-induced risks, many of which do not have the necessary implication of increasing public spending. Yet, many such policies require governmental capabilities not available to any country. For that reason, the relationship between openness and the size of government might be mediated by the quality of its public sector. While countries with weak government capabilities will tend to rely on spending expansions to deal with trade-induced volatility, countries with stronger governmental capabilities might address such challenges by more efficient and less costly means. The empirical analysis in this paper shows that the effect of openness on government consumption is mediated by the quality of government institutions.
Can Bottom-Up Institutional Reform Improve Service Delivery?
Authors: Molina Ezequiel
Published: March 2024

This article makes three contributions to the literature. First, it provides newevidence of the impact of community monitoring interventions using a unique dataset from the Citizen Visible Audit (CVA) program in Colombia. In particular, this article studies the effect of social audits on citizens' assessment of service delivery performance. The second contribution is the introduction a theoretical framework to understand the pathway of change, the necessary building blocks that are needed for social audits to be effective. Using this framework, the third contribution of this article is answering the following questions: i) under what conditions do citizens decide to monitor government activity and ii) under what conditions do governments facilitate citizen engagement and become more accountable.
U.S. Free Trade Agreements and Enforcement of Labor Law in Latin America
Authors: Dewan Sabina , Ronconi Lucas
Published: March 2024

This paper analyzes whether Free Trade Agreements (FTAs) signed between the United States and Latin American countries during the last decade produced higher enforcement of labor regulations. The paper computes before-after estimates of the effect of FTAs on labor inspections and exploits variation across countries using non-signers as a comparison group. The empirical strategy benefits from the fact that about half of Latin American countries have signed a trade agreement with the United States. Difference-in-differences estimates suggest that signing an FTA produced a 20 percent increase in the number of labor inspectors and a 60 percent increase in the number of inspections. The North American Free Trade Agreement (NAFTA), however, does not appear to have the same positive impacts on Mexico. The paper concludes with a discussion of these results.
Soap Operas for Female Micro Entrepreneur Training
Authors: Nakasone Eduardo
Published: March 2024

This paper analyzes the impact of the Strengthening Women Entrepreneurship in Peru (SWEP) program. SWEP trained female micro entrepreneurs in business management practices (such as accounting and marketing). The training, which was provided in 4- to 5-hour sessions, used soap operas and practical exercises specifically designed for the program. A field experiment was conducted among a group of micro entrepreneurs based in two Peruvian cities (Lima and Piura) to investigate whether SWEP had a positive impact on its beneficiaries. The results show that the program positively affected the adoption of business practices taught by the program. In particular, those who received the training were 4 to 6 percentage points more likely to assign themselves a fixed salary (rather than taking cash from their businesses based on personal needs) and 6 to 11 percentage points more likely to keep better records of potential business contacts. Some positive impacts were found on the adoption of bookkeeping practices (4 to 6 percentage points), although this result is not significant across all of the specifications. Although these changes in adoption rates were large compared with their baseline levels, they were rather small in absolute terms. Therefore, the study did not find any impact on average business performance, household expenditures, or women's empowerment in the household. Qualitative information suggests that micro entrepreneurs were satisfied with the training, but considered that many of the practices taught by the program were difficult to follow because of time constraints.
Challenges in Educational Reform: An Experiment on Active Learning in Mathematics
Authors: Busso Matías , Berlinski Samuel
Published: March 2024

This paper reports the results of an experiment with secondary school students designed to improve their ability to reason, argument, and communicate using mathematics. These goals are at the core of many educational reforms. A structured pedagogical intervention was created that fostered a more active role of students in the classroom. The intervention was implemented with high fidelity and was internally valid. Students in the control group learned significantly more than those who received treatment. A framework to interpret this result is provided in which learning is the result of student-teacher interaction. The quality of such interaction deteriorated during the intervention.
Shared Mandates, Moral Hazard, and Political (Mis)alignment in a Decentralized Economy
Authors: Estache Antonio , Seroa da Motta Ronaldo , Garsous Grégoire
Published: March 2024

This paper investigates the effects of political (mis)alignment on public service delivery when mandates are shared between state and local governments. We analyze sewage treatment policies in the state of São Paulo, Brazil. Relying on difference-in-differences estimations, we establish a causal relationship between political alignment and higher sewage treatment provision. Conceptually, we find that, with uncertain local commitment and weakly enforceable local obligations, shared mandates lead to a moral hazard issue implying service under-provision. Our results show that political alignment attenuates such moral hazard effects.
Did You Get Your Shots? Experimental Evidence on the Role of Reminders
Authors: Busso Matías , Cristia Julian P. , Humpage Sarah D.
Published: March 2024

Many families fail to vaccinate their children despite the supply of these services at no cost. This study tests whether personal reminders can increase demand for vaccination. A field experiment was conducted in rural Guatemala in which timely reminders were provided to families whose children were due for a vaccine. The six-month intervention increased the probability of vaccination completion by 2.2 percentage points among all children in treatment communities. Moreover, for children in treatment communities who were due to receive a vaccine, and whose parents were expected to be reminded about that due date, the probability of vaccination completion increased by 4.9 percentage points. The cost of an additional child with complete vaccination due to the intervention is estimated at about $7.50.
Dealing with the Dutch Disease: Fiscal Rules and Macro-Prudential Policies
Authors: García-Cicco Javier , Kawamura Enrique
Published: March 2024

This paper evaluates from a welfare perspective three policy alternatives for dealing with Dutch disease problems originating from cyclical movements in commodity prices: fiscal rules for government expenditures, capital controls, and taxes on domestic lending. A DSGE model of a small open economy is developed, with a sectoral decomposition that features three distinctive characteristics: financial frictions, a learning-by-doing externality in the industrial sector, and a fraction of households being non-Ricardian (credit constrained). The model is calibrated using Chilean data. For each policy tool, optimal simple rules are analyzed from a welfare (Ramsey) perspective, describing how different households rank the several policy alternatives, and studying how each of the models features shapes the optimal policy design. A general conclusion of the analysis is that the included Dutch disease inefficiencies are of quantitatively limited relevance in analyzing the desirability of these policies from a welfare perspective.
The Mystery of Saving in Latin America
Authors: Noy Ilan , Becerra Oscar , Cavallo Eduardo A.
Published: March 2024

Using reduced-form regression models, this paper shows that average predicted private saving rates in Latin America and the Caribbean (LAC) are significantly lower than in other regions, particularly Emerging Asia (about 4 percentage points of GDP on average). Predicted public saving rates in LAC are also lower than in Emerging Asia, but by a smaller margin (1 percentage point of GDP on average). It is further shown that LAC private saving rates are below the region-specific prediction by approximately 1. 5 percentage points of GDP on average. Finally, it is found that a greater reliance on external savings does not fully close the negative estimated private saving gap, reducing it by less than 1 percentage point. No gap is found in the case of public saving rates, suggesting that the lower predicted public saving rate in LAC is accounted for by the known determinants of fiscal policy.
Does Access to Better Water and Sanitation Infrastructure Improve Child Outcomes? Evidence from Latin America and the Caribbean
Authors: Schady Norbert
Published: March 2024

I review the evidence on access to water and sanitation infrastructure and child outcomes In Latin America. I show that there are large differences in access across countries and, within countries, between households living in urban and rural areas. Many papers in the public health literature show associationsbetween access to clean water sources or improved sanitation, on the one hand, and child outcomes like the incidence of diarrhea or child development, on the other. These papers provide only weak evidence of causality. Stronger evidence comes from a handful of papers that exploit historical accidents in the extension of coverage of water and sanitation infrastructure, although the evidence is limited to child mortality, rather than morbidity, nutritional status, and development. Also, it has generally not been possible to separately estimate the effects of changes in quantity and quality of water because piped water frequently improves both. Given the paucity of the evidence to date, there would be large returns to evaluations that had credibly exogenous sources of variation in access to piped water or sanitation, and traced out the benefits to children, including surviving children, over time.
In Search of Larger Per Capita Incomes: How To Prioritize across Productivity Determinants?
Authors: Llopis Jimena , Ruiz José Juan , Muratori Umberto , Izquierdo Alejandro
Published: March 2024

This study is a first contribution to prioritization across productivity determinant capabilities that attempts to obtain the equivalent of a "shadow price" for each of these capabilities by estimating their impact on the success a country may have in reaching higher income per capita groups. The prioritization of these determinants-spanning different sectors-seems to be specific to the income per capita group to which a country belongs. Moreover, empirical estimates reveal that interactions among sectors matter for increasing the probability of climbing up the income-per-capita ladder, reflecting the existence of complementarities across sectors, thus indicating that the joint improvement of some of them may be necessary before effects are noticeable. Results also indicate that the identification of priorities by looking at the impact that sectors have on increasing the likelihood of advancing to a better income per capita group may or may not coincide with the size of sector gaps typically used for the determination of priorities, as larger gaps do not necessarily capture the relevance of sectoral restrictions and their interactions.
When the Victor Cannot Claim the Spoils: Institutional Incentives for Professionalizing Patronage States
Authors: Schuster Christian
Published: March 2024

Merit-based selection of bureaucrats is central to state capacity building, yet rare in developing countries. Most executives instead favor patronage -political discretion- in public employment. This paper proposes and tests an original theory to explain when executives forsake patronage for merit. The theory exploits exogenous variation in the institutional design of patronage states. In some, constitutions and budget laws monopolize patronage powers in the executive; in others, patronage benefits accrue to the legislature and public employees. When institutions fragment patronage powers and challengers control other government branches, merit becomes more incentive-compatible: it enables executives to deprive challengers of patronage while enhancing public goods provision to court electoral support. Drawing on 130 face-to-face elite interviews, a comparison of reforms in Paraguay, the Dominican Republic and the United States validates the theory. How patronage states are institutionally designed thus shapes their reform prospects: fragmented control over bad government can incentivize good government reforms.
Crime Concentration and Hot Spot Dynamics in Latin America
Authors: Ajzenman Nicolás , Jaitman Laura
Published: March 2024

Latin America and the Caribbean is the most violent region in the world, with an annual homicide rate of more than 20 per 100,000 population and with an increasing trend. Yet most evidence of crime concentration, geo-temporal patterns, and event dependence comes from cities in high-income countries. Understanding crime patterns in the region and how they compare to those in high-income countries is of first-order importance to formulate crime reduction policies. This paper is the first to analyze crime patterns of cities in five Latin American countries. Using micro-geographic units of analysis, the paper finds, first, that crime in Latin America is highly concentrated in a small proportion of blocks: 50 percent of crimes are concentrated in 3 to 7.5 percent of street segments, and 25 percent of crimes are concentrated in 0.5 to 2.9 percent of street segments. This validates Weisburd's "law of crime concentration at place" (Weisburd, 2105). These figures are fairly constant over time but sensitive to major police reforms. The second finding is that hot spots of crime are not always persistent. Crime is constantly prevalent in certain areas, but in other areas hot spots either appear or disappear, suggesting a possible rational adaptation from criminals to police actions that cause crime displacement in the medium run to other areas. Finally, the paper finds a significant pattern of repeated crime victimization in location and time for property crimes. There are striking similarities with the developed world in crime concentration, although crime levels are much higher and usually increasing. There are also some differences in terms of the persistence of hot spots that pose interesting policy implications and avenues for future research.
Pollution or Crime: The Effect of Driving Restrictions on Criminal Activity
Authors: Malik Arun , López Andrea , Carrillo Paul E.
Published: March 2024

Driving restriction programs have been implemented in many cities around the world to alleviate pollution and congestion problems. Enforcement of such programs is costly and can potentially displace policing resources used for crime prevention and crime detection. Hence, driving restrictions may increase crime. To test this hypothesis, this paper exploits both temporal and spatial variation in the implementation of Quito, Ecuador's Pico y Placa program and evaluates its effect on crime. Both difference-in-difference and spatial regression discontinuity estimates provide credible evidence that driving restrictions can increase crime rates.
Early Childhood Development: Wealth, the Nurturing Environment and Inequality First Results from the PRIDI Database
Authors: Verdisco Aimee , Thompson Jennelle , Cueto Santiago
Published: March 2024

This paper presents findings from the Regional Project on Child Development Indicators, PRIDI for its acronym in Spanish. PRIDI created a new tool, the Engle Scale, for evaluating development in children aged 24 to 59 months in four domains: cognition, language and communication, socio-emotional and motor skills. It also captures and identifies factors associated with child development. The Engle Scale was applied in nationally representative samples in four Latin American countries: Costa Rica, Nicaragua, Paraguay and Peru. The results presented here are descriptive, but they offer new insight regarding the complexity of child development in Latin America. The basic message emerging from this study is that child development in Latin America is unequal. Inequality in results appears as early as 24 months and increases with age. There is variation in inequality. For example, correlations with the socio-economic characteristics of the home and maternal education are stronger for cognition, and language and communication than for motor development. The environment within which children develop and the adult-child interactions predominant within this environment ¿ referred to in this study as the nurturing environment - is important for all domains of child development utilized in this study, although stronger associations appear for cognition, language and communication, and socio-emotional development. For all domains measured by the Engle Scale, the nurturing environment bears a statistically stronger correlation than the socio-economic endowment of the home or maternal education. Gaps between the development of children in the top and low extremes in these factors matter. By 59 months, the development of a poor and under-nurtured child will lag by as much as 18 months behind her richer and more nurtured peers. For this child it will be more difficult to recognize basic shapes like triangles or squares, count to 20, or understand temporal sequences. She will also have gaps in her basic executive functioning and socio-emotional skills, including empathy and autonomy. She will not likely be ready for school and may not have success once there. Notably, however, if this same child, in the same poor household, were to benefit from a nurturing environment, her level of development would rise and would start to approach levels found in children in richer but less nurtured households. The nurturing environment thus appears to mitigate the negative association lower levels of wealth have with the domains of development included in this study.
On Corporate Borrowing, Credit Spreads and Economic Activity in Emerging Economies: An Empirical Investigation
Authors: Fernandez Andres , Caballero Julián , Park Jongho
Published: March 2024

This paper studies the influence of external financial factors on economic activity in emerging economies (EMEs) motivated by a considerable increase in foreign financing by the corporate sector in EMEs since the early 2000s, mainly in the form of bond issuance. A quarterly external financial indicator for several EMEs is built using bond-level data on spreads of corporate bonds issued in foreign capital markets, and its relationship with economic activity is examined. Results show that the indicator has considerable predictive power on future economic activity. Furthermore, an identified adverse shock to the financial indicator generates a large and protracted fall in real output growth, and about a third of its forecast error variance is associated with this shock. These findings are robust to controlling for possible spillovers from sovereign to corporate risk, among other considerations.