bluuebunny/crossref_metadata_2025 huggingface dataset:
Becoming an Entrepreneur
Authors: Valenzuela Patricio , Ñopo Hugo R.
Published: March 2024

Using the 1996-2001 Chilean CASEN Panel Survey, this paper analyzes the impact on income of the switch from salaried employment to entrepreneurship (self-employment and leadership of micro-enterprises). By means of a difference-in-differences non-parametric matching estimator the paper alleviates problems of selection bias (on observable and unobservable traits) and creates the appropriate counterfactuals of interest. The results indicate that the income gains associated with the switch from salaried employment to entrepreneurship are positive, statistically significant and financially substantial. Even more, the results are qualitatively the same using mean and medians, suggesting that the impacts are not influenced by the presence of few superstar winners. Additionally, the income changes associated with the reverse switches (from self-employment to salaried jobs) are negative. The results also suggest interesting gender differences, as females show higher gains than males on the switch from salaried jobs to entrepreneurship and lower losses on the reverse switch.
On the Determinants of International Currency Choice: Will the Euro Dominate the World?
Authors: Powell Andrew , Bobba Matteo , Della Corte Giuseppe
Published: March 2024

Money is used as a store of value, a medium of exchange and a unit of account. Most recent analyses of currency choice in an international setting have focused on the denomination of reservesthe store of value role. However, public data are only aggregate and exclude several countries. This paper focuses on currency choice for the unit of account role, employing a detailed database on security issuance across countries, time and currencies. The paper finds a stable relation between currency choice and specific real and financial variables with different specifications for developed and developing countries, as well as evidence for persistence and network externalities. Exploiting the creation of the Euro, the paper finds a large and significant Euro liquidity effect at the cost of the dollar, especially in the early years of the life of the new currency. The estimates suggest that the Euro is making significant progress toward threatening the role of the dollar as the dominant international currency.
Social Exclusion and Violence in Latin America and the Caribbean
Authors: Berkman Heather
Published: March 2024

This paper examines how social exclusion contributes to violence in communities throughout Latin America and the Caribbean. Residents in socially excluded communities cannot depend on those institutions designed to protect them, and violence becomes an instrument to achieve certain outcomes, such as justice, security, and economic gain. When conventional methods of obtaining and working for increased social status, higher income, and wider influence are limited, as they often are in marginalized areas, some feel compelled to resort to violent acts. This paper discusses how social exclusion and violence interact in a vicious circle that leaves the socially excluded in a very hostile social environment where the borders between legal and illegal, legitimate and illegitimate are often fuzzy and uncertain. In this environment violence is used by a minority to acquire justice, security, authority and economic gain. The use of violence by this minority, however, affect the lives of the majority of excluded people that do not resort to violence. As youths are particularly vulnerable to this issue, this paper also examines the relationship between violence and the plight of Latin American youth gangs and street children.
Innovation and Productivity: Evidence from Six Latin American Countries
Authors: Zuñiga Pluvia , Crespi Gustavo
Published: March 2024

This study examines the determinants of technological innovation and its impact on firm labor productivity across six Latin American countries (Argentina, Chile, Colombia, Costa Rica, Panama, and Uruguay) using micro data from innovation surveys. In line with the literature, in all countries firms that invest in knowledge are more able to introduce new technological advances, and those that innovate have greater labor productivity than those that do not. Yet firm-level determinants of innovation investment are much more heterogeneous than in OECD countries. Cooperation, foreign ownership, and exporting increase the propensity to invest in innovation activities and encourage innovation investment in only half of the countries studied. Scientific and market sources of information have little or no impact on firm innovation efforts, which illustrates the weak linkages that characterize national innovation systems in those countries. The results in terms of productivity, however, highlight the importance of innovation in enabling firms to improve economic performance and catch up.
Innovation Shortfalls
Authors: Rodríguez-Clare Andrés , Maloney William
Published: March 2024

There is a common perception that low productivity or low growth is due to what can be called an innovation shortfall, usually identified as a low rate of investment in research and development (R&D) compared with some high-innovation countries. The usual reaction to this perceived problem is to call for increases in R&D investment rates, usually specifying a target that can be as high as 3 percent of GDP. The problem with this analysis is that it fails to see that a low R&D investment rate may be appropriate given the economy's pattern of specialization, or may be just one manifestation of more general problems that impede accumulation of all kinds of capital. When does a country suffer from an innovation shortfall above and beyond the ones that should be expected given its specialization and accumulation patterns? This is the question tackled in this paper. First, it shows a simple way to estimate the R&D gap that can be explained by a country's specialization pattern, and illustrates this with the case of Chile. The analysis finds that although Chile's specialization in natural-resource-intensive sectors explains part of its R&D gap, a significant shortfall remains. Second, it shows how a calibrated model can be used to determine the R&D gap that should be expected given a country's investment in physical and human capital. If the actual R&D gap is above this expected gap, the country suffers from a true innovation shortfall.
Global Value Chains Meet Innovation Systems : Are There Learning Opportunities for Developing Countries?
Authors: Rabellotti Roberta , Pietrobelli Carlo
Published: March 2024

This paper addresses two research questions: How do learning mechanisms operate in different types of global value chains? What is the supporting role of the innovation system in GVC-driven learning and innovation processes? Empirical evidence is used from the authors' research as well as secondary sources. Given the highly differentiated reality behind the sketchy and simplistic term "developing countries," the paper focuses on a particular group of middle-income developing countries: Brazil, Taiwan and Mexico.
Economic and Social Effects of El Niño in Ecuador, 1997-1998
Authors: Velasco Margarita , Vos Rob , De Labastida Edgar
Published: March 2024

This study proposes methodologies to identify different types of risks associated with natural disasters and to establish degrees of vulnerability to such risks by geographical areas and population groups. It finds that most economic costs in Ecuador relate to losses of agricultural production and damages to infrastructure. Increased health risks are also critical.
Government Strategic Planning Systems and Determination of Budget Priorities
Authors: Berretta Nora
Published: March 2024

The purpose of this paper is to discuss the possibilities of making progress in coordinating government strategic programming through the allocation and implementation of public budgetary resources, particularly with regard to Latin American countries.
A New Compensation Mechanism for Preference Erosion in the Doha Round
Authors: Rosito Tatiana , Lawrence Robert Z.
Published: March 2024

In this paper we explore a proposal to backload the phase-in of MFN tariff reductions in sensitive sectors and use the revenues generated to provide compensation for preference erosion. We argue that the approach would be both equitable and effective.
The Transportation Costs of Fresh Flowers: A Comparison between Ecuador and Major Exporting Countries
Authors: Vega Henry
Published: March 2024

Using a case study approach of Ecuador's supply chain, complemented by an empirical analysis of microdata on exports from major fresh flower exporting countries to the United States, this study confirms producers' claims that time and transportation costs vary widely across countries. The findings of this study indicate that in the Ecuadorian case, time reliability of the supply chain is not the norm.
Multilateralising Preferential Rules of Origin around the World
Authors: Harris Jeremy , Suominen Kati , Estevadeordal Antoni
Published: March 2024

This paper maps out Rules of Origin (RoO) in regional trade agreements (RTAs) around the world, and observes that the restrictiveness and complexity of RoO are driven by factors specific to each RTA, including economy size and level of development.
Multilateralising RTAs in the Americas: State of Play and Ways Forward
Authors: Suominen Kati , Shearer Matthew , Estevadeordal Antoni
Published: March 2024

The purpose of this paper is to examine the extent of liberalisation in RTAs in the Americas in comparison to agreements in other world regions, and to put forth policy recommendations for multilateralising the regional RTAs. While primarily focusing on market access in goods-and tariff liberalisation schedules, in particular-we also explore the regional RTAs' employment of rules of origin, investment, and services provisions. While the analysis centres on the depth of liberalisation accomplished by the region's RTAs, we preliminarily investigate the extent to which the regional RTAs feature "open regionalism"-liberalisation vis-à-vis third parties.
The Impact of South-South Preferential Trade Agreements on Industrial Development: An Empirical Test
Authors: Siedschlag Iulia , Volpe Martincus Christian , Sanguinetti Pablo
Published: March 2024

This paper present information about the effects of the establishment of MERCOSUR on manufacturing production patterns in Argentina, Brazil, and Uruguay over the period 1985-1998.
Improving the Education Component of Conditional Cash Transfers in Urban Settings
Authors: Meghir Costas , Santiago Ana , Attanasio Orazio P. , Shephard Andrew
Published: March 2024

Presents information about opportunity cost of attendance to school, touching on issues of the proper dimensioning of cash subsidies, the adequacy of the conditionality and operational issues associated with conditional cash transfer (CCT) programs. It then analyzes the challenge of increasing school enrollment in urban areas using a dynamic model that accounts for labor opportunities of young people in these areas.
Complements or Substitutes?: Preferential and Multilateral Trade Liberalization at the Sectoral Level
Authors: Volpe Martincus Christian , Ando Mitsuyo , Estevadeordal Antoni
Published: March 2024

This paper explores the relationship between preferential and multilateral trade liberalization at the sectoral level using a unique dataset that includes data on most favored nation (MFN) and bilateral preferential tariffs at the 4-digit ISIC level for 11 Latin American countries over the period 1985¿2005. We find evidence of heterogeneity across sectors. While in some industries, complementary effects between both kinds of trade liberalization are observed, in others no significant links are detected and¿in a few cases¿even substitutability seems to prevail. Variation across sectors appears to be systematically related to both import demand elasticities and countries¿ sectoral comparative advantages.
Free Trade Area of the Americas: The Scope of the Negotiations
Authors: Zabludovsky Jaime , Blanco M. Herminio
Published: March 2024

The purpose of this work is to analyze the negotiation agenda of the Free Trade Area of the Americas (FTAA), its participants¿ main interests and the main conflicts that might arise in the process. Hence, a revision of the core interests pursued by countries in each of the nine FTAA negotiating groups is made. Interests are classified into "defensive" and "offensive". The first, are those pursued by the status quo, generally associated with the protection of the domestic market, and the latter, respond to the objective of achieving free access to the markets of participating countries. Then, diverse factors characterizing the FTAA negotiation as a unique initiative, are examined, namely: (1) the ambitious negotiation agenda and the relatively short time for its accomplishment; (2) the high number of participating countries; (3) diversity in size and productive structure of participating countries; (4) the coincidence of FTAA negotiations, the Doha Round and trade agreements signed by a significant number of countries in the region; (5) the coexistence of the future hemispheric agreement with current trade and other agreements in the region; and (6) the USA political environment.
How do Rules of Origin Affect Investment Flows?: Some Hypotheses and the Case of Mexico
Authors: Suominen Kati , Estevadeordal Antoni , López Córdova José Ernesto
Published: March 2024

The proliferation of free trade agreements around the world has accentuated the role of preferential rules of origin (RoO) in global companies¿ sourcing and investment decisions. However, there are few theoretical and practically no empirical analyses on the effects of RoO on foreign direct investment (FDI). This paper strives to shed light on the relationship between RoO and FDI. We put forth a set of hypotheses on the impact of RoO on FDI, and perform an empirical exercise on the effects of RoO of the North American Free Trade Agreement (NAFTA) on FDI in 122 Mexican manufacturing industries 1994-2000. The findings indicate that NAFTA RoO have played a central role in foreign investors' cost assessments of locating production to Mexico, and that FDI in post-NAFTA Mexico has flowed in sectors with flexible RoO. This suggests that NAFTA-era investment in Mexican final and intermediate goods industries has been made by efficient, globally competitive firms that thrive on flexible RoO.
The Political Economy of High Protection in Brazil before 1987
Authors: De Paiva Abreu Marcelo
Published: March 2024

The paper is concerned with the high protection cum high growth experience in Brazil until the second half of the 1980s and its crisis. The paper is structured in four sections. The first section is a summary of the arguments presented in the following three sections of the paper. Section II considers the level of protection in Brazil compared with those of other Latin American economies and examines the reasons why it was so high while its economic growth performance was outstanding. The following section analyses the golden age of autarky until the early 1960s, including the role of foreign direct investment (FDI). The last section centers on the combination of export incentives with closed domestic markets that extended the life of import substitution industrialization (ISI) as a decreasingly effective economic strategy.
Improving the Access of Mercosur's Agriculture Exports to United States: Lessons from NAFTA
Authors: Bianchi Eduardo , Sanguinetti Pablo
Published: March 2024

In the last 15 years or so Mercosur countries have implemented trade liberalization reforms both unilaterally and at regional level. These reforms have been successful in promoting overall trade flows, but not so much with respect to exports to developed countries. This is particularly the case with the United States (US) and the European Union (EU) markets. For example, in the case of Argentina, exports to the EU have increased only 20% between 1990-2000. Exports to US have grown at higher rates but still below those observed for the rest of the world. Why is it that Mercosur products have been unable to increase their access to these markets? One reason that clearly outstands is that these countries have developed a comparative advantage in agricultural (both primary and manufactured) products and these items have been the ones that faced the strongest protection in the central economies.
MERCOSUR: Instituciones de gobierno regional, asimetrías e integración profunda
Authors: Bouzas Roberto
Published: March 2024

Según se desprende de los objetivos establecidos en el Tratado de Asunción (1991) el Mercado Común del Sur (MERCOSUR) fue concebido como un proceso de integración profunda. Después de una etapa inicial de liberalización del comercio intra-regional de bienes, los Estados Parte adoptarían una política comercial común y establecerían un territorio aduanero unificado. Este artículo analiza los mecanismos de gobierno regional del MERCOSUR desde el punto de vista de su capacidad para promover un proceso de integración profunda. En la segunda sección se examinan los principales elementos que componen la estructura legal e institucional del MERCOSUR, tomando a dichas instituciones como "variables independientes". En la tercera sección se presenta una visión ecléctica sobre algunos factores que ayudan a explicar la adopción de las estructuras de gobierno regional del MERCOSUR, concibiéndolas en este caso como "variables dependientes". Las secciones cuarta y quinta, por su parte, analizan de qué manera las instituciones del MERCOSUR han lidiado con los temas relativos al tratamiento de las asimetrías estructurales y de política, respectivamente. Finalmente, cierra el artículo una última sección de conclusiones en la que se formulan algunas recomendaciones en materia de gobierno regional, partiendo del supuesto de que los Estados Partes del MERCOSUR continúan compartiendo el objetivo de que éste adopte la forma de un proceso de integración profunda.
Does ICT Increase Years of Education?: Evidence from Peru
Authors: Czerwonko Alejo , Cristia Julian P. , Garofalo Pablo
Published: March 2024

A number of empirical studies have measured the effect of Information and Communication Technology (ICT) on test scores, yet there is a lack of empirical evidence on the effects of this type of intervention on drop-out and repetition rates, variables that have a direct impact on years of education. This working paper analyzes rich longitudinal censal data from Peru as well as information regarding a specific program that deployed computers in 350 schools in the year 2004. Results indicate null impacts of increasing computer access on repetition, drop-out rates and initial enrollment. The large sample sizes allow the authors to detect even very modest effects. These results, together with previous evidence on the lack of effects on tests scores, point to a limited potential of computers in improving education outcomes.
Entry and Quality Choices in Child Care Markets
Authors: Cristia Julian P. , Bastos Paulo
Published: March 2024

Many developing countries have adopted the market approach for expanding the supply of child care, but little is known about the economic behavior of independent providers. This paper draws on uniquely rich administrative data on child care centers and their inputs from São Paulo to examine the role of local household income in shaping the entry and quality choices of private suppliers. It documents three main facts: (1) entry rates are considerably higher in high-income districts; (2) the quality of provision as measured by teachers¿ schooling, group size and equipment is highly heterogeneous across space and increases systematically with local household income; and (3) a considerable share of centers operates below recommended (but not regulated) quality standards, especially in low-income districts. These findings accord with a model in which heterogeneous providers optimally adjust the quality of care to the willingness to pay for quality of local consumers. Market-driven heterogeneity in the quality of provision across space is a key consideration for understanding the effect of regulations on the supply of child care.
The Effect of Temporary Contracts on Human Capital Accumulation in Chile
Authors: Stucchi Rodolfo , Giuliodori David , Carpio Susana , Rucci Graciana
Published: March 2024

This paper studies the probability of receiving employer-paid training and other training independent of who finances it for permanent and temporary workers in Chile. The authors use data from the Social Protection Survey, EPS, allowing them to construct a panel of workers with information from 2002, 2004, 2006, and 2009. The results suggest that having a temporary contract in Chile reduces the probability of receiving employer-paid training. The survey also finds that this deficit is not compensated by other types of training. This finding is important for two reasons. First, the proportion of temporary workers that obtain an open-ended contract is low. Second, the productivity growth in Chile after 1997 is practically zero and human capital accumulation is one of the factors that might help to recover the path of productivity growth.
The Impact of Out-of-Home Childcare Centers on Early Childhood Development
Authors: Veramendi Gregory , Urzúa Sergio
Published: March 2024

This paper presents a comprehensive empirical analysis of the impact of attending a child day care center on early childhood development (ECD) in Chile, examining child development from a multi-dimensional perspective. The potential endogeneity associated with the parental decision of sending children to day care centers (or preschools) is addressed. Additionally, unobserved heterogeneity is interpreted as (latent) abilities. This approach provides a unifying framework combining parental decisions, children¿s endowments, and child care characteristics. The results of the study suggest that: (i) cognitive and socioemotional test scores from children younger than two are too noisy to be analyzed; (ii) analysis of enrollment in child care centers for children older than two reveals significant effects of family background, unobserved abilities, the local availability of centers, and local capacity; and (iii) enrollment in child care centers seems to boost cognitive development among children older than two.
Economic Crisis and Fiscal Reforms in Latin America
Authors: Hallerberg Mark , Scartascini Carlos
Published: March 2024

The recent financial crisis has initiated pressures for not only policy reform but also fundamental institutional fiscal reforms. This paper explores the connection between economic crises and fiscal institutional reforms in a region that has experienced plenty of both in recent years, namely Latin America. For that purpose it reviews the literature and provides five hypotheses about why, and under what circumstances, crises would promote reforms. The empirical evidence shows that debt crises make reforms more likely but banking crises on their own, if anything, reduce the pressure for fiscal institutional reforms. Political institutions are also important. If the electoral system encourages the personal vote, the country is more likely to reform. This evidence may become useful for predicting the likelihood of reforms in the developed world.
Why Do Populist-Outsiders Get Elected?: A Model of Strategic Populists
Authors: Miller Sebastián J.
Published: March 2024

The existence of populist regimes led by outsiders is not new in history. In this paper a simple framework is presented that shows how and why a populist outsider can be elected to office, and under what conditions he is more likely to be elected. The results show that countries with a higher income and wealth concentration are more likely to elect populist outsiders than countries where income and wealth are more equally distributed. It is also shown that elections with a runoff are less likely to bring these populist outsiders into office.
The Impact of Export Promotion Institutions on Trade: Is It the Intensive or the Extensive Margin?
Authors: Volpe Martincus Christian , Carballo Jerónimo , Gallo Andrés
Published: March 2024

This paper provides evidence on the channels through which export promotion institutions affect bilateral trade using a sample of Latin American and Caribbean countries over the period 1995-2004. We find that these institutions have a larger impact on the extensive margin of exports, especially in the case of trade promotion organizations.
Indigenous Peoples and Health: Issues for Discussion and Debate
Authors: Perafán Carlos César , Savedoff William D.
Published: March 2024

The discussion paper presents a summary of health specialist concerns, followed by a summary of concerns for those working on indigenous peoples' issues. The final section attempts to highlight areas of agreement and define questions for debate. In each section, the reader is encouraged to consider at least three levels of analysis: the conceptual framework, the implicit priority setting mechanisms, and technical proposals. Furthermore, it is important to keep in mind at least three different kinds of "health programs": those that aim to make "Western Medicine" available for indigenous peoples; those that aim to support and promote "Indigenous Medicine" (including medications and medical practices); and those that seek to integrate the two.
The Public Sector Premium and the Gender Gap in Latin America: Evidence from the 1980s and 1990s
Authors: Panizza Ugo
Published: March 2024

This paper exploits a rich collection of household surveys to investigate the wage differential between the public and private sectors in 17 Latin American countries during the 1980s and 1990s. The paper also studies how the sector of employment affects the gender wage gap. The paper finds very small premia for male workers and significant premia for female workers. The paper also finds that, on average, Latin American women earn 30 percent less than men with similar skills and that approximately one third of this gender gap results from lack of access to formal sector employment.
The Impact of Regulations on Brazilian Labor Market Performance
Authors: Corseuil Carlos Henrique , De Barros Ricardo Paes
Published: March 2024

The objective of this paper is to identify whether the prevailing Brazilian labor market regulations, largely the result of the 1988 constitutional change, have any impact on labor market performance. To reach this objective the authors explore alternative methodologies, sources of information and measures of labor market performance. The paper briefly describes the 1988 constitutional change, with special emphasis on topics related to labor costs; two alternative measures of labor market performance, the first of which is based on parameters estimated from a labor demand model, and the second based on turnover rates. Later, the authors describe the implementation of the regression analysis through which they estimate the parameters of labor demand. Finally, it discusses the results achieved when we use turnover rates to measure labor market performance.
An Experimental Study of Labor Market Discrimination: Gender, Social Class and Neighborhood in Chile
Authors: Bravo David , Urzúa Sergio , Sanhueza Claudia
Published: March 2024

The objective of this paper is to study the Chilean labor market and determine the presence or absence of gender discrimination. In order to transcend the limitations of earlier works, an experimental design is used, the first of its kind in Chile. This study also allows socioeconomic discrimination associated with names and places of residence to be addressed. The study consists of sending fictitious Curriculum Vitae for real job vacancies published weekly in the Santiago newspaper El Mercurio. A range of strictly equivalent CVs in terms of qualifications and employment experience of applicants are sent out, varying only in gender, name and surname, and place of residence. The results show no significant differences in callback rates across groups, in contrast with what is found in other international studies.
Does Society Win or Lose as a Result of Privatization?: Provision of Public Services and Welfare of the Poor: The Case of Water Sector Privatization in Colombia
Authors: Barrera-Osorio Felipe , Olivera Mauricio
Published: March 2024

This paper studies the effects of water sector privatization on consumers' welfare in 46 municipalities in Colombia. The paper evaluates the impact of privatization on access, price, and quality of water as well as health outcomes using differences-in-differences methodology with variation across time (before and after privatization) and between treatment and control groups (privatized and non-privatized municipalities) and controlling for household and municipality characteristics. The results show positive effects of privatization, in particular in urban areas. There are four main results: (i) Privatization in urban areas increases access, has positive effects on the quality, and improves health outcomes. (ii) Privatization increases the price of water in the lower quintiles, although these effects may be the result of the joint implementation of privatization and the elimination of cross subsidies. (iii) In privatized municipalities with better governmental technical capacities there are positive effects on access, prices and quality. (iv) The positive effects of privatization in rural areas on the frequency of the service and on health outcomes are outweighed by negative impacts on access and prices.
Political Environments, Sector-Specific Configurations, and Strategic Devices: Understanding Institutional Reform in Uruguay
Authors: Moraes Juan Andrés , Fernández Carlos , Moreira Constanza , Filgueira Fernando , Filgueira Carlos
Published: March 2024

This paper argues for a multi-level explanatory model for understanding institutional reform. Using the case of Uruguay, the authors seek to show how a changed political environment combined with sector- specific configurations and political strategies of reformist leaders allowed for successful institutional reform. More specifically, the authors present that the dynamics of electoral politics and political learning are the clues that explain how the dynamics of cooperation and conflict in the political system in Uruguay moved from free rider behavior, to opposition restraint and finally to cooperative reformism thus enabling institutional reform. Furthermore, for the three cases of reform, technical accumulation and precise diagnosis, the power of administrative and beneficiaries corporations, the perception of the population regarding the quality of services and benefits, and the effects of the institutional diseases on the country as a whole appear as critical factors accounting for the intensity of the reformist impulse. Finally, the authors show how changes in the broad political environment were capitalized in social security and education and not in health and why.
Political Institutions, Policymaking Processes and Policy Outcomes in Chile
Authors: Vial Joaquín , Navia Patricio , Londregan John , Aninat Cristóbal
Published: March 2024

This analysis characterizes the salient features of the policymaking process (PMP) in Chile. It emphasizes the influence of political institutions on the PMP and examines the linkage between policymaking and policy outcomes in Chile. The salient features of the Chilean PMP are the electoral system and the associated party system, characterized by two long-lived coalitions, a powerful Executive, with de facto control over the agenda, a relatively independent judiciary, a bureaucracy that is relatively free from corruption even by the standards of the OECD, and a series of veto points in the policymaking process that permit adversely affected actors to block policy change. Looking at policy areas in cross section, the authors find that policy areas in which policymakers' interests are more nearly aligned, and in which there is more rapid exogenous change, are associated with more successful efforts at reform, while in areas in which the interests of the Executive and the various veto players diverge, policy tends to stagnate.
ASEAN Open Skies and Its Implications on Airport Development Strategy in Malaysia
Authors: Tham Siew Yean
Published: March 2024

This paper seeks to examine the implication of open skies in ASEAN on the airport development strategy in Malaysia. "Open Skies," in general, refers to the liberalization of aviation markets that can be pursued on a bilateral, regional, or multilateral basis. The findings show that although Malaysia has invested substantially in overall infrastructure development, including airports, other member countries within ASEAN, notably Singapore and Thailand, have also followed a similar investment-intensive strategy to develop their international airports into airport hubs. The dream to turn Kuala Lumpur International Airport (KLIA) into a regional hub requires Malaysia to undertake several measures to overcome the competitive pressures from neighboring hubs. This includes joining a strategic global alliance group to improve the traffic feed of the national carrier. It will also require the government to accelerate the construction of the new Low Cost Carrier Terminal (LCCT) at KLIA. The strategy to build a cargo hub at Senai should be reviewed while the promotion of tourism, especially to non-ASEAN countries has to focus on a distinctive product appeal that will enable the country to differentiate its tourism products from those of regional competitors. This paper was prepared for the Latin America/Caribbean and Asia/Pacific Economics and Business Association (LAEBA)'s 4th Annual Meeting held in Lima, Peru, on June 17th. 2008.
Competition Regimes and Air Transport Costs: The Effects of Open Skies Agreement
Authors: Micco Alejandro , Serebrisky Tomás
Published: March 2024

The relevance of transport costs has increased as liberalization continues to reduce artificial barriers to trade. Is it worthwhile to implement policies designed to increase competition in transport markets? Focusing on air transport, this paper quantifies the effects of liberalization of air cargo markets on transport costs. Between 1990 and 2003, the United States implemented a series of Open Skies Agreements, providing a unique opportunity to assess the effect that a change in the competition regime has on prices. In our sample, Open Skies Agreements reduce air transport costs by 9% and increase by 7% the share of imports arriving by air. Those results hold for developed and upper-middle-income developing countries but for lower-middle-income and low-income developing countries Open Skies Agreements do not reduce. This paper was presented at the Fourth LAEBA Annual Meeting, held in Lima, Peru, on June 17, 2008.
Trade, Direct Investment and Production Policies
Authors: Machinea José Luis , Vera Cecilia
Published: March 2024

This paper discusses the series of far-reaching structural reforms that took place in the economies of Latin America and the Caribbean during the 1990's. This set of reforms generated increases in foreign trade (particularly exports) and higher foreign direct investment. However, the growth path of the region's countries is a far cry from one of intensive, steady expansion. This document analyses possible reasons for this and posits that there is no unequivocally positive link between trade openness and economic growth, given the importance of the context and how the process of liberalization is carried out.
People's Republic of China's Competitive Threat to Latin America: An Analysis for 1990-2002
Authors: Lall Sanjaya , Weiss John
Published: March 2024

This paper explores the competitive threat posed by the People's Republic of China (PRC) to Latin America and Caribbean (LAC). It focuses on the impact of PRC's rise as a major exporter of manufactured goods and discusses bilateral trade between LAC and PRC. The authors explore these issues with trade data collected from 1990-2002, analyzing and comparing export performance and specialization patterns in the global market as well as in the U.S.A., which is the main market for both the PRC and LAC. This paper was presented at the 2004 LAEBA Annual Conference, held in Beijing, People's Republic of China, on December 3-4, 2004.
Housing Policy Matters for the Poor: Housing Conditions in Latin America and the Caribbean, 1995-2006
Authors: Medellín Nadin , Rojas Eduardo
Published: March 2024

This paper discusses the evolution of housing conditions in urban areas of Latin America and the Caribbean from 1995 to 2006 based on data from household surveys done in 18 countries that comprise 95 percent of the urban population of the region. The results indicate that, on average, the proportion of urban households facing housing shortages is declining. This decline holds for households of all income levels, particularly those in the lower quintiles of the income distribution structure. The estimates made in this study indicate that in 2006 lack of infrastructure affected almost 19 million households. Further, about seven million households needed a new shelter and nine million needed significant improvements to their houses due to poor construction materials or overcrowding. Cross-country analysis shows that each country was facing a different combination of problems and was improving its housing conditions at a different pace, which indicates that it is highly unlikely that a ¿one-size-fits-all¿ solution exists.
Health Perceptions in Latin America
Authors: Lora Eduardo
Published: March 2024

This is the first study that uniformly analyzes health perceptions in all of Latin America and tests in a systematic way their relation to economic conditions at the country, income group and individual levels. The study uses three types of health self-assessment questions: i) health satisfaction; ii) health status on a scale of 0- 10; and iii) the EuroQol 5D instrument (EQ-5D), which asks about mobility, self- care, usual activities, pain/discomfort, and anxiety/depression. The empirical analysis finds support for the hypothesis that cultural differences between countries prevent cross-national comparisons of health perceptions, but it does not find support for the widely held view that the same applies within countries, presumably because the poor are more tolerant of their health problems.
When Should Developing Countries Announce Their Climate Policy?
Authors: Fernández Jorge , Miller Sebastián J.
Published: March 2024

This paper provides a rationale for developing countries to announce future credible commitments to reduce GHG emissions even if these are not to materialize in the short run, and for domestic reasons only. A simple framework is presented in which it is shown that it may be costly for an economy to transition from high to low emissions; and that, if climate policy eventually will be enacted, then it may be better for countries to commit earlier and therefore eliminate the uncertainty for the private sector to invest appropriately in clean technologies. In particular, conditions are shown under which the private investor prefers a pre-announced climate policy, and how this policy affects investment decisions and the deployment of clean technologies.
Water Governance in Latin America and the Caribbean
Authors: Rogers Peter
Published: March 2024

To choose better water investments we need to have a better appreciation of what is possible with improved governance, of how to identify improved governance, how to design institutions for it, and how to incorporate it into planning and investments. This paper reviews the theoretical and empirical bases for water governance in general and then presents five specific cases from Latin America which highlight different aspects of governance. The studies range from nation-wide and sector-wide cases in Brazil and Chile, to irrigation sector reform in Mexico, the private concession of municipal water supply and sanitation in Buenos Aires, to a very localized experience in Honduras which attempts to integrate all sectors of the local economy to protect and develop a lake ecosystem.
Financial Regulation in the English-Speaking Caribbean: Is it Helping or Hindering Microfinance?
Authors: Vogel Robert C. , Schulz Gerald
Published: March 2024

This paper presents the results of an investigation requested by the Multilateral Investment Fund of the Inter-American Development Bank under its Caribbean Microfinance Capacity Building project (CARIB-CAP) to strengthen microfinance in the English-speaking Caribbean. With the financial support of the Compete Caribbean program, this report seeks specifically to analyze the extent to which the regulation of financial entities in the region is supporting or inhibiting the development of microfinance in the region. Among the issues considered are the case for regulation, the differences between prudential and non-prudential regulation, the differences in regulatory arrangements among countries in the region, and especially the impact of these regulations on the availability of microfinancial services and on the different types of financial institutions that provide these services.
The Politics of Federalism in Argentina: Implications for Governance and Accountability
Authors: Leiras Marcelo , Ardanaz Martín , Tommasi Mariano
Published: March 2024

This paper contributes to an agenda that views the effects of policies and institutional reforms as dependent on the structure of political incentives for national and subnational political actors. The paper studies political incentive structures at the subnational level and the mechanisms whereby they affect national-level politics and policymaking at the national level in Argentina, a highly decentralized middle-income democracy, Argentina. The Argentine political system makes subnational political power structures very influential in national politics. Moreover, most Argentine provinces are local bastions of power dominated by entrenched elites, characterized by scarce political competition, weak division of powers, and clientelistic political linkages. Political dominance in the provinces and political importance at the national level reinforce each other, dragging the Argentine political and policymaking system towards the practices and features of its most politically backward regions.
Intergenerational Mobility and Income Effects for Entrepreneurial Activity in Mexico
Authors: Vélez-Grajales Viviana , Vélez-Grajales Roberto
Published: March 2024

This paper uses the Mexican Social Mobility Survey 2006 to analyze intergenerational social mobility as it relates to entrepreneurial activity. First, the paper analyzes whether entrepreneurs experience greater upward social mobility than self-employed workers or employees. Second, probit models are estimated to identify whether predetermined characteristics are the main determinants of the decision to become an entrepreneur. Third, using the propensity score matching method (PSM), the paper estimates the effect of entrepreneurial activity on income. Results show that entrepreneurs have more options for upward social mobility. For entrepreneurs with low-income parents, it is more difficult to reach the top of the socioeconomic distribution compared to those with middle- or upper-class parents. Second, the probability of becoming an entrepreneur increases when the respondent's father was an entrepreneur. Finally, the mean effect of entrepreneurial activity on income is positive, and is greater for those whose parents belonged to the extreme ends of the socioeconomic distribution.
Manna from Heaven: The Impact of Nonrenewable Resource Revenues on Other Revenues of Resource Exporters in Latin America and the Caribbean
Authors: Gonzáles-Castillo Alberto , Ossowski Rolando
Published: March 2024

This paper examines the impact of the availability of fiscal revenues from nonrenewable resources on other revenues of Latin American and Caribbean resource-exporting countries. It compares the performance of nonresource revenues in these countries to that in other countries in the region. The effect of resource revenue on nonresource revenue is found to be negative and statistically significant, with structural breaks both over time and across countries. Nonresource revenues have risen considerably, but they are still lower on average than in comparator countries, and the wedge between both groups of countries has widened over time. They also tend to be more volatile. The paper also analyzes the composition of nonresource revenues. It finds that the performance of VAT and nonresource income taxes of resource exporters has been similar to that of other countries, but revenues from other taxes (including excises) have been lower. The paper's findings have important policy implications. Especially for resource exporters with fiscal vulnerabilities to shocks and sustainability issues, strengthening nonresource revenues would be important to create adequate fiscal space to meet expenditure needs. Oil exporters should also consider phasing out their costly, inefficient, and poorly targeted petroleum subsidies, with compensating measures to protect vulnerable groups.
Domestic Technology Generation in LDCs: A Review of Research Findings
Authors: Katz Jorge
Published: March 2024

The purpose of the present paper is to review some of the research findings obtained during the course of a four year long exploration into the economics of technology generation in LDCs. Individual firm and industry studies were undertaken by a team of economists and engineers in some of the major Latin American countries in order to shed some light upon: 1. The rate and nature of the domestic technology-generating efforts carried out by different companies and manufacturing sectors. 2. The macro and micro variables which affect such knowledge-generating efforts.
Technical Change and Technology Policy: The Case of Numerically Controlled Lathes in Argentina
Authors: Jacobsson Staffan
Published: March 2024

This paper addresses the question: Under what conditions will the recent rapid technical change in products in the machine tool sector increase the technological gap between the developed countries and the Newly Industrializing Countries (NICs)? The technical change referred to is the trend towards the substitution of standard machine tools by Numerically Controlled (NC) machine tools. The specific task will be to analyze the conditions under which the leading Argentinian lathe producer will be able to move from the design and production of standard lathes to numerically controlled lathes.
Optimal Policy for Macro-Financial Stability
Authors: Otrok Christopher , Chen Huigang , Rebucci Alessandro , Benigno Gianluca , Young Eric R.
Published: March 2024

This paper studies whether policymakers should wait to intervene until a financial crisis strikes or rather act in a preemptive manner. This question is examined in a relatively simple dynamic stochastic general equilibrium model in which crises are endogenous events induced by the presence of an occasionally binding borrowing constraint as in Mendoza (2010). First, the paper shows that the same set of taxes that replicates the constrained social planner allocation could be used optimally by a Ramsey planner to achieve the first best unconstrained equilibrium: in both cases without any precautionary intervention. Second, the paper shows that the extent to which policymakers should intervene in a preemptive manner depends critically on the set of policy tools available and what these instruments can achieve when a crisis strikes. For example, in the context of the model, it is found that, if the policy tools are constrained so that the first best cannot be achieved and the policymaker has access to only one tax instrument, it is always desirable to intervene before the crisis regardless of the instrument used. If, however, the policymaker has access to two instruments, it is optimal to act only during crisis times. Third and finally, the paper proposes a computational algorithm to solve Markov-perfect optimal policy for problems in which the policy function is not differentiable.