Showing papers in "Cepal Review in 2008"
TL;DR: The authors analyzes the problem of slow economic growth in Mexico and reveals the critical rote played by the sluggish performance of investment, arguing that this sluggishness can be explained in part by the peso's appreciation during disinflation and its adverse impact on investment profitability.
Abstract: This paper analyzes the problem of slow economic growth In Mexico. It decomposes the growth of output from the demand side and reveals the critical rote played by the sluggish performance of investment. Using econometric tools, it argues that this sluggishness can be explained in part by the peso’s appreciation during disinflation and its adverse impact on investment profitability. Finally, it shows that the problem has been complicated by a long-run decline in the GDP/capital ratio.
34 citations
TL;DR: In this article, the authors argue that in a stable and competitive real exchangerate (SCRER), macroeconomic regime, the exchange-rate component candrive up inflation through the very mechanisms that stimulate high rates of gross domestic product and employment growth; to offset this pressure,fiscal and monetary policies will have to be used to control aggregated demand.
Abstract: This article argues that in a stable and competitive real exchangerate(SCRER); macroeconomic regime, the exchange-rate component candrive up inflation through the very mechanisms that stimulate high rates ofgross domestic product and employment growth; to offset this pressure,fiscal and monetary policies will have to be used to control aggregatedemand. It finds that in an exchange-rate regime of this type, monetarypolicy has a degree of autonomy that can be exploited to apply activemonetary policies. It analyses the degree to which monetary policy canbe used to control aggregate demand and concludes that it cannot bearthe main responsibility for this, which means that fiscal policy ought to bethe main instrument for controlling aggregate demand.
30 citations
TL;DR: In this article, the authors explored the role of the declining cost of capital in the emergence of world-class Latin multinationals from Mexico and Brazil, in particular, following the path taken by their Spanish counterparts in the 1990s.
Abstract: The corporate world has changed remarkably in the past 10 years.
New multinationals are appearing in countries with emerging markets
such as Brazil, India, China, South Africa and Mexico, which are not only
top recipients of foreign capital, but have fast become major investors
themselves. An important part of the remarkable story of emerging
multinationals has been the eruption of world-class Latin multinationals
(or multilatinas) from Mexico and Brazil, in particular, following the path
taken by their Spanish counterparts in the 1990s. In all these cases,
classical push and pull factors have been driving their emergence. But
a decisive helping hand for these multilatinas over the past decade has
been the declining cost of capital. This financial dimension is driving the
leap from overseas sales to overseas acquisitions, a phenomenon that will
be explored in this article.
30 citations
TL;DR: The role of the CEPAL Review in disseminating the thinking of ECLAC and other currents of analysis concerned with theproblems of development was examined in this article, where some of the largecollection of articles published in the Review between 1976 and 2008, focusing on those that most clearly address the permanent concernsof ECLACA (growth and technical progress, poverty and social inequity, sustainable development, and democracy and citizenship); and grouping them by the editorial team in charge when they were published.
Abstract: This article examines the role of the CEPAL Review in disseminatingthe thinking of ECLAC and other currents of analysis concerned with theproblems of development. To this end, it examines some of the largecollection of articles published in the Review between 1976 and 2008,concentrating on those that most clearly address the permanent concernsof ECLAC (growth and technical progress, poverty and social inequity,sustainable development, and democracy and citizenship); and groupingthem by the editorial team in charge when they were published: Prebisch-Gurrieri, Pinto-Lahera and Altimir-Bajraj. It concludes by presenting andbriefly analysing essays published at various times in the CEPAL Reviewby Prebisch (1980);, Pinto (1976); and Altimir (1994);.
18 citations
TL;DR: An examination of the links between migration and development using census micro data for 15 Latin American countries reveals that internal migration is diminishing, which was not foreseen in the specialist literature, and internal migration, while apparently helpful for individuals and beneficial for successful regions, erodes the human resources of poorer regions as discussed by the authors.
Abstract: An examination of the links between migration and development using census micro data for 15 Latin American countries reveals that: (i) internal migration is diminishing, which was not foreseen in the specialist literature, (ii) internal migration, while apparently helpful for individuals and beneficial for successful regions, erodes the human resources of poorer regions, and (iii) as a result of increasing urbanization, urban-urban migration is replacing rural to urban migration as the predominant flow and other types of migration are on the increase, an example being intrametropolitan migration which, unlike the traditional kind, is driven by residential and not occupational factors. Where policy is concerned, the governing principle is freedom of movement within a country’s borders, without restrictions or resettlements. Governments have to resort to incentives and indirect measures if they wish to influence migration decisions; however, local measures and regulations do influence intrametropolitan migration choices.
14 citations
TL;DR: In this article, time-varying coefficients are used to estimate the balance of payments constrained growth (BPCG) model for Cuba, and the conclusion is that given the rapid rise in the export of services, there are now better growth prospects for the Cuban economy.
Abstract: In this article, time-varying coefficients are used to estimate the balance of payments constrained growth (BPCG) model for Cuba. Exports are considered to have been a decisive factor in Cuba’s recovery following the crisis. Also, there was an estimated increase in income elasticity of demand for imports in the early 1990s and between 2003 and 2005, indicating a decrease in import substitution. The conclusion is that, given the rapid rise in the export of services, there are now better growth prospects for the Cuban economy. However, prospects could be better and would benefit a larger share of the economy if import substitution were also made more efficient and other export sectors with a greater multiplier effect were expanded. K E Y W O R D S
13 citations
TL;DR: In this article, the authors depict the changing international landscape of investment rule-making from a Latin American perspective, pointing out differences and synergies between these closely intertwined processes and the role that Latin American countries have had in shaping them.
Abstract: This paper depicts the changing international landscape of investment rule-making from a Latin American perspective. It does so by looking first at the recent evolution of investment rules, pointing out differences and synergies between these closely intertwined processes and the role that Latin American countries have had in shaping them. Against the backdrop of repeated failures to develop a comprehensive set of investment disciplines at the multilateral level, the paper reviews the main arguments that have been recently advanced in favour of and against global rules for investment. The paper dissects the main reasons why investment fell off the negotiating agenda of the Doha Development Agenda of the World Trade Organization (WTO). It concludes with a number of policy lessons regarding the most optimal institutional settings in which to pursue various elements of investment rule-making and sketches a few forward-looking scenarios on investment rule-making at the multilateral level.
12 citations
TL;DR: In this article, the authors analyzed public-debt management in Brazil, and considered the main recent theoretical models and the possible effect that the strategy adopted by the Treasury from 1999 onwards could have on the base interest rate.
Abstract: This paper analyses public-debt management in Brazil, and considers the main recent theoretical models and the possible effect that the strategy adopted by the Treasury from 1999 onwards could have on the base interest rate. The findings show that the public-debt-management strategy adopted by Brazil was based on the recommendations of Calvo and Guidotti (1990). The average maturity of public debt, the proportion of shares linked to the Special System of Clearance and Custody (SELIC) and the public-debt-to-GDP ratio all play a significant role in determining the base interest rate. Government efforts to restructure public-debt maturities and reduce the negative effect on the interest rate are key in this regard.
11 citations
TL;DR: In this paper, the determinants of innovation in Argentina and Brazil, countries that have based their industrializationstrategies on import substitution, were analyzed and compared, showing that knowledge external to firms helps to promote innovation, that internal research and development capacity is relativelyweak and that external trade integration has a positive effect on firms' propensity to innovate.
Abstract: This article analyses and compares the determinants of innovationin Argentina and Brazil, countries that have based their industrializationstrategies on import substitution. Probit regressions in which instrumentalvariables are used to check for problems of endogeneity of exports revealthat, in both countries, knowledge external to firms helps to promoteinnovation, that internal research and development capacity is relativelyweak and that external trade integration has a positive effect on firms'propensity to innovate (more so in Brazil than in Argentina);. The results ofthis study suggest in general that there has been modest progress in thepattern of innovation among Argentine and Brazilian firms in recent yearscompared with the import substitution period.
10 citations
10 citations
TL;DR: In this article, the authors analyze the function that international finance might perform and that it actually has performed, focusing specifically on the analysis of private capital flows, official development assistance and external borrowing.
Abstract: T he volume of assets traded on international financial markets has reached gigantic proportions. The question must arise, then, as to whether international finance might play a decisive role in the provision of stable resources in the quantities needed to fund development. This article analyses the function that international finance might perform and that it actually has performed, focusing specifically on the analysis of private capital flows, official development assistance and external borrowing. It concludes that there need to be far-reaching structural reforms in the workings of the international financial system and in development financing instruments and mechanisms if these are to be placed at the service of long-term development goals. K E Y W O R D S
TL;DR: Recommendations include improvements in the quantity, accessibility, quality and reliability of public providers, more appropriate provision of drugs by the public system and tighter regulation of private insurance.
Abstract: This research assesses the effectiveness of the Brazilian public healthsystem and of private insurance in Brazil in providing financial protectionin health care. The determinants of catastrophic health expendituresare estimated by probit regressions with Heckman selection adjustmentcontrolling for health-care need. Findings show that the public systemprovides a significant reduction (47%); in the probability of a householdhaving catastrophic health expenditures, and that private insurancemakes such expenditures more likely by 36%. Recommendations includeimprovements in the quantity, accessibility, quality and reliability of publicproviders, more appropriate provision of drugs by the public system andtighter regulation of private insurance.
TL;DR: The authors used the Mincer equation to calculate the private economic returns to education in urban and rural areas of Mexico in the 1994-2005 period, and found that investing in education is profitable in both types of area.
Abstract: This study uses the Mincer equation to calculate the private economic returns to education in urban and rural areas of Mexico in the 1994-2005 period. The findings indicate that investing in education is profitable in both types of area. Returns to education were found to be greater in the countryside than in cities in most of the years analysed and at every level of education. Education in rural areas tends to be more profitable for women at the basic education levels and for men at the higher levels. In urban areas, education proved to be more profitable for men at the primary and higher levels and, in some years, for women at the lower and upper secondary levels.
TL;DR: In this article, the effects of gender discrimination on poverty in Brazil between 1992 and 2001 were analyzed using data obtained from the National Household Survey (NHS) using data collected from the Amazonas province of Brazil.
Abstract: This paper analyses the effects of gender discrimination on povertyin Brazil between 1992 and 2001, using data obtained from the NationalHousehold Survey. A counterfactual distribution of per capita householdincome was estimated, based on a hypothetical scenario in which thelabour market pays equal wages to men and women in accordance withtheir qualifi cations. The results show that, when gender discrimination iseliminated, the percentage of poor persons tends to decline by an average of10%. Results were even more striking among the most vulnerable segmentsof the population, such as members of households headed by black womenwho lack a formal employment contract or union membership.
TL;DR: In this article, the authors analyzed the effect of bank concentration on lending in Brazil in the period 1995-2004, distinguishing two stages and estimating panel data for Brazil's 27 federative units.
Abstract: Since monetary stabilization in 1994, bank consolidation has been gathering pace in Brazil as part of a global concentration trend following bank deregulation processes. This article analyses the effect of bank concentration on lending in Brazil in the period 1995-2004, distinguishing two stages and estimating panel data for Brazil’s 27 federative units. The results support the hypothesis that the process of consolidation in the Brazilian banking sector has an adverse effect on lending, which mainly harms the less developed regions of the country.
TL;DR: In this paper, the authors examine an instrument that supports this process, venture capital, and highlight the need for a financing system covering each phase of innovation, and discuss issues connected with major problems of financial system development.
Abstract: One of the drivers of economic growth is innovation, which raises productivity by creating new production methods, technologies, products and firms. This article examines an instrument that supports this process, venture capital, and highlights the need for a financing system covering each phase of innovation. It starts by illustrating Latin America’s innovation deficit. It then proceeds to a general analysis of the difficulties affecting the financing of innovation and the provision of venture capital to overcome these. It goes on to examine the form taken by these obstacles in the region and, considering the experience of Brazil and Chile, the methods used to deal with them. In relation to a number of the subjects addressed, the article discusses issues connected with major problems of financial system development.
TL;DR: In this article, the authors analyse changes in the structure and competitiveness of the Brazilian capital goods industry since the early 1990s and propose a classification within that industry based on the different industrial segments from which the demand for machinery and equipment derives.
Abstract: This article analyses changes in the structure and competitiveness ofthe Brazilian capital goods industry since the early 1990s and proposes aclassification within that industry based on the different industrial segmentsfrom which the demand for machinery and equipment derives. Althoughthis industry still accounts for a large share of manufacturing sector valueadded, the production efficiency and international competitiveness of thesegments it comprises are quite heterogeneous. The article singles out thesegments with the greatest development potential and suggests measuresthat could be taken in each of them to complement the industrial andtechnology policy instruments contained in the Production DevelopmentPolicy officially established in May 2008.
TL;DR: In this paper, the authors examine and compare the dynamics of growth in these regions and explain their differing performance, showing that the faster growing regions have become integrated into the world economy thanks to their renewable and non-renewable natural resources, the development of agro-industrial exports and the presence of cities that have linkages with the global economy as providers of financial and commercial services.
Abstract: C loser integration of the Chilean economy into the world economy, based primarily on use of the country’s comparative advantages, has contributed significantly to the changes observed in the performance and the relative positioning of the regions of Chile. This article examines and compares the dynamics of growth in these regions and explains their differing performance. The faster-growing regions have become integrated into the world economy thanks to their renewable and non-renewable natural resources, the development of agro-industrial exports and the presence of cities that have linkages with the global economy as providers of financial and commercial services. Growth in some of the regions has not necessarily translated into social improvements, and this demonstrates the need for explicit social policies. K E Y W O R D S
TL;DR: In this article, the authors discuss the ways in which changes in the working age population, in its participation in economic activity, in employment rates and in income from work and other sources affect the per capita incomes of families in the lowest deciles of income distribution and hence in poverty indicators.
Abstract: What factors led to the reduction of poverty in Latin America from 1990 onwards? This article looks into the key factors that have played a part in reducing poverty in the region, including, in particular, employment and remuneration for work. With data from household surveys, the authors discuss the ways in which changes in the working age population, in its participation in economic activity, in employment rates and in income from work and other sources affect the per capita incomes of families in the lowest deciles of income distribution and hence in poverty indicators.
TL;DR: In this paper, the authors analyzed developments in the labour market and income distribution in Argentina between 2002 and 2007, using data from the Permanent Household Survey and econometric estimates, finding that members of resource-poor households had less chance of finding work and faced disadvantages in terms of pay and labour market participation.
Abstract: This article analyses developments in the labour market and income distribution in Argentina between 2002 and 2007, using data from the Permanent Household Survey and econometric estimates. Following the 2001 crisis the employment situation improved in the aggregate and there was initially a marked decline in income concentration. This reduction later tailed off, however, apparently because of differences in the opportunities for different types of households to reap the benefits of growth. Members of resource-poor households had less chance of finding work and faced disadvantages in terms of pay and labour market participation. The isolation and social homogeneity of the neighbourhoods in which these households were located appear to have influenced the distributive outcome.
TL;DR: In this paper, the authors show that, having undergone restructuring at a microeconomic and sectoral level, the agricultural machinery industry in Argentina depends for growth on higher exports and further progress towards internationalization, which are strategic goals for the largest firms.
Abstract: This paper sets out to show that, having undergone restructuring at a microeconomic and sectoral level, the agricultural machinery industry in Argentina depends for growth on higher exports and further progress towards internationalization, which are strategic goals for the largest firms. Given the dynamism of global demand for this type of machinery, the conclusion is that the sector can increase its sales in export markets, where some of its products are competing well. The behaviour of domestic demand will be critical, and this largely depends on the profitability of Argentine agriculture. To internationalize further, the sector will have to overcome certain limitations, largely technological in nature, while receiving support from government programmes and assistance from employers’ associations and science and technology institutions.
TL;DR: The authors synthesizes and reviews a number of socio-historical trends, formulates some observations aimed at illustrating and disaggregating its main findings, considers the medium-term outlook and suggests a road map for improving democratic governance in Latin America.
Abstract: Latin America is going through a time of political crisis, reconfiguration and change in which the relationship between institutions and equity will be crucial to future democratic governance. In particular, this crisis and this reconfiguration are first and foremost sociocultural in nature. Politics and political actors would be in no position to resolve politico-institutional problems if they were not capable of confronting society’s problems, particularly those of equity and poverty. This article synthesizes and reviews a number of socio-historical trends, formulates some observations aimed at illustrating and disaggregating its main findings, considers the medium-term outlook and suggests a road map for improving democratic governance in Latin America.
TL;DR: In this paper, the authors analyzed a dimension that is almost completely absent from studies on the socio-territorial mechanisms that reproduce inequalities in Brazil: differences in the risk of school backwardness among children and young people between 7 and 17 years of age based on residential segregation in Rio de Janeiro.
Abstract: This article analyses a dimension that is almost completely absent from studies on the socio-territorial mechanisms that reproduce inequalities in Brazil: differences in the risk of school backwardness among children and young people between 7 and 17 years of age, based on residential segregation in Rio de Janeiro. Data from the 2000 Population Census were used to construct two sets of multilevel logistic regression models to quantify the risk of school backwardness among primary school students in fourth and eighth grade, according to individual characteristics, family socioeducational conditions and the social setting of their place of residence. Apart from showing that residence in a ghetto (favela) is associated with a higher risk of school backwardness, the results show that the risk of backwardness and school dropout is higher among inhabitants of favelas located in wealthy neighbourhoods. Possible explanatory mechanisms for these findings are reviewed.
TL;DR: The authors reviewed three types of models which analyse the different factors involved in recent foreign-exchange crises and showed that financial stability is by no means guaranteed, particularly in a globalized financial system.
Abstract: The banking system has played a key role in balance-of-payments crises in a number of emerging countries. This article reviews three types of models which analyse the different factors involved in recent foreign-exchange crises. These usually stem at least partly from balance-of-payments problems; financial vulnerability causes the currency to collapse and undermines the banking system, thus generating a vicious circle. This paper shows that financial stability is by no means guaranteed, particularly in a globalized financial system. Emerging countries have to strike a balance between economic and financial stabilization, while maintaining their share of new capital flows. Although a difficult task, this is essential for avoiding a repeat of past crisis episodes, the threat of which apparently cannot be ruled out.
TL;DR: The authors discusses the features of the colonial situation in Latin America that conditioned the region's economic and social performance in the nineteenth and early twentieth centuries and examines the ideas that ECLAC contributed to the debate on Latin American development and the evolution of the countries that applied those ideas.
Abstract: This lecture discusses the features of the colonial situation in Latin America that conditioned the region’s economic and social performance in the nineteenth and early twentieth centuries. It deals in particular with Argentina, looking at the events following the First World War through to the beginning of the Second World War. Those events were formative in the education and experience of Raul Prebisch, who 30 years later would give ECLAC its fundamental characteristics. The lecture examines the ideas that ECLAC contributed to the debate on Latin American development and the evolution of the countries that applied those ideas. It also looks at the external and internal circumstances that changed the context in which development policies were implemented from the middle of the 1970s onwards. Lastly, it identifies the most recent changes in the world economic situation, and the role of ECLAC in defending the ideas of freedom, well-being and tolerance, which are the essence of modern civilization.
TL;DR: In this article, the authors argue that economic growth in Costa Rica did not translate into reduced poverty during this period because of changes that took place in household structure and in the labour market, and that these changes had an important gender dimension.
Abstract: Average real family incomes rose in Costa Rica in the late 1990s and at the start of the new decade, but poverty rates did not fall. Here it is argued that economic growth in the country did not translate into reduced poverty during this period because of changes that took place in household structure and in the labour market, and that these changes had an important gender dimension Specifically, a rising proportion of female-headed single-parent households led to an increase in the number of women with children entering the labour force, many of them for the first time. Many of these mothers were unable to find or unwilling to accept full-time work in the higher-paying formal sector and ended up unemployed or working part-time as self-employed workers. These labour market phenomena contributed to low incomes for vulnerable households, especially single-parent households headed by women.
TL;DR: The main problem has been the addition of numerous supplementary agreements to the original contracts as mentioned in this paper, and renegotiations are not conducted according to criteria of economicefficiency, and they can therefore affect public finance and lead toopportunistic behavior, affecting the efficacy of the bidding process.
Abstract: Concessions for public works projects have enabled Chile tomodernize its infrastructure; however, these arrangements have alsoraised certain issues that make it necessary to change the rules governingthe system. The main problem has been the addition of numeroussupplementary agreements to the original contracts. Under the presentsystem, renegotiations are not conducted according to criteria of economicefficiency, and they can therefore affect public finance and lead toopportunistic behaviour, affecting the efficacy of the bidding process. Aregulatory system allowing for compensation of investors when it is notfeasible to put out a new tender is more consistent with economic theoryand provides a better way to assess the economic value of a project thathas been changed. Bidding does not replace regulation; rather, becausecontracts are bound to be incomplete, the two methods complement eachother as mechanisms for including private investment in public projects.