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Decent Work and Economic Growth
External sector liberalization, financial development and income in South Asia
The paper provides an analysis on the impact of external sector openness and financial sector development on per capita income in the South Asian economies of Bangladesh Bhutan India Nepal Pakistan and Sri Lanka. For the annual series from 1980 to 2015 the instrumental variable model using a generalized method of moments (GMM) approach is estimated. The results show that liberalizing the external sector raises per capita income conditional on the level of financial sector development. The large-economy influence analysis shows that India will benefit the most from external sector liberalization and other economies involved in this study still need to focus on financial sector development as opposed to on liberalizing capital flows. It further indicates that premature external liberalization in small and poor economies tends to be beneficial to the large neighbouring economy which in this case is India leading to resource exploitation. Accordingly unless financial markets and institutions are strong enough to effectively deal with domestic resource mobilization opening up the external sector alone may impede the economic development process.
The major unresolved issues in the negotiations on the UNCTAD Code of Conduct for the transfer of technology
Ten years after the appearance on the international agenda of the issue of technology transfer a consensus seems to be emerging among the parties concerned —both technology suppliers and technology importers— that:
The impact of foreign direct investment on income inequality: a panel Autogressive Distributed Lag approach for the Asia-Pacific Economic Cooperation developing economies
In the present paper the effect of foreign direct investment (FDI) inflows on income inequality in Asia-Pacific Economic Cooperation (APEC) economies is investigated by using annual data for the period 1990–2015. The variables used are the Gini coefficient FDI inflows gross domestic product (GDP) per capita trade openness and human capital. Also panel Autoregressive Distributed Lag (ARDL) and panel heterogeneous non-causality tests are used in this study. The panel ARDL results suggest that in the long run FDI inflows decrease income inequality. This supports the argument that encouraging FDI inflows does not harm the distribution of income in APEC economies. The results also confirm that GDP per capita and trade openness help reduce income inequality while human capital widens income inequality. The results from this study suggest that APEC authorities could implement sound policies to attract more FDI as evidence indicates that those inflows would narrow income inequality in APEC economies.
The export of manufactures
The development of the manufacturing sector has an important role to play in Latin America in relation to a long list of economic variables all of which aim at changing the economic characteristics of the region in aspects such as the diversification of production Structure of employment and production growth of income and the average wage and attenuation of the fluctuations in prices and export earnings as will be seen in the following pages. Hence all measures tending to develop and consolidate this sector whether through import substitution or exports of manufactures merit special attention in the economic policy of the Latin American countries and the developing countries in general.
International economic reform and income distribution
Latin America on the threshold of the 1980s
With the end of the 1970s at hand by way of drawing up a general balance the author sketches the main features of Latin American development in the recent past and notes the main challenges which the region will have to face in the years to come. He begins by recognizing that since the war and especially during the 1960s and the beginning of the present decade Latin America achieved vigorous economic growth but he stresses that this did not succeed in solving some of the most serious social problems while it also brought with it a growing internationalization of the economies of the region with a consequent increase in their external vulnerability. Furthermore towards the middle of the 1970s there was a reversal of the expansive cycle as a result of the flagging performance of the central economies the changes in the international prices of some goods especially oil and the internal difficulties faced by the national development patterns themselves.
Mortgage loans and access to housing for low-income households in Latin America
On the basis of a study on mortgage loan options available in eight Latin American countries this article identifies two pending tasks for most of the countries: the need to make long-term funds available to mitigate the risk of a mismatch of maturities and rates and the need to harmonize profitability criteria for lenders with the criterion of access to credit for the low-income population. The paper recommends the creation of linkages between the housing finance market and the capital market through secondary mortgage markets for which the housing finance market must use instruments other than subsidies. In addition the paper proposes a number of options to ensure that the State helps to create mortgage markets that will provide the low-income population with better access to housing.
The relations between different levels of government in Argentina
This article deals with the fiscal and financial relations between the national government and the provincial governments in Argentina during the last 15 years identifying the factors which help to explain the high degree of conflictivity of those relations. In view of the institutional roots of the conflict a historical review is made in order to place the recent problems and future discussion in a long-term context. First of all the development of federalism in Argentina and the evolution of the various forms of autonomy of the provinces is examined followed in the central section of the document by a review of the options that have dominated the changes in the functions and incomes of the different levels of government in recent decades. Those options have to do not only with the distribution of taxes but also with the process of decentralization and the changes in functions among levels of government.
Public-debt management: The Brazilian experience
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.
Less advanced sectors in the Latin American fertility transition
Demographic change in Latin America has been driven by the behaviour of the middle and upper strata. Given that fertility and mortality in these groups are now relatively low. future changes will mainly come from the behaviour of less advanced sectors. This paper analyses the contribution of these less advanced groups to the decline in fertility distinguishing between the “distribution effect” and the “rates effect’. In less advanced sectors the desired number of children is lower than the actual number with early marriage and limited use of modern contraceptives continuing to be the rule. Even so these groups have entered the demographic transition. A number of countries have recently seen falls in their fertility rates due to the contribution of women with low levels of education: in the late transition countries behaviour is heterogeneous while in the advanced transition countries the greatest contribution is being made by women with primary education.
The human capital endowment of Latin America and the Caribbean
Although there are a great many theoretical and empirical studies which use the concept of human capital there is no generally accepted definition of this term and in many cases it is simply equated with formal education. This article will try to clarify the concept of human capital more precisely with special reference to the ways in which it can be acquired. It will also provide an international indicator that takes account of all the shades of meaning of the definition proposed here which are usually left out of the traditional indicators. Thus the proposed indicator will take into account health formal and informal education and experience. Analysis of the human capital endowments of the Latin American and Caribbean countries reveals a certain backwardness with respect to other regions. It should be noted however that there are big differences between countries although these have been reduced in the last few decades through a process of regional convergence.
The market and water management reform in Peru
This article examines the unsuccessful attempts made in the 1990s to introduce a market for water in Peru. This reform was thwarted because market operations were identified with water rights privatization even though a market can perfectly well operate on a basis other than that of private rights with the State retaining full ownership of the resource. The argument made here is that if these shortcomings were corrected the creation of a water market would be desirable to improve allocation and management of water and to deal with the increasingly serious difficulties associated with the administration of water access the lack of investment incentives and serious problems of efficiency and equity. The economic advantages and disadvantages of a water market are analysed as are the legal and regulatory prerequisites for promoting the kind of market that would really improve water allocation in the increasingly necessary institutional reform of this sector in Peru.
Spatial segregation, employment and poverty in Montevideo
This article looks at two processes that are affecting the characteristics of poverty in the city of Montevideo: the weakening of lower-skilled workers’ attachments to the labour market and the growing concentration of such workers in neighbourhoods with a high density of poverty. While far from conclusive the results suggest the advisability of further research into the relationship between changes in the social morphology of cities and the segmentation of their labour markets. If further research confirms both a tendency towards growing polarization in the spatial distribution of social classes in cities and the presence of feedback mechanisms reinforcing the social isolation of residents in the most disadvantaged neighbourhoods it will be safe to say that these processes if not effectively countered will irreversibly widen the already excessive inequalities that affect large Latin American cities.
The influence of capital origin on Brazilian foreign trade patterns
This article aims to determine whether the geographical pattern of the external trade of foreign-owned enterprises in Brazil differs from that of domestic enterprises and whether in the case of foreign enterprises the region of origin of their capital is an important factor in determining that pattern both in terms of the origin and destination of their imports and exports and with regard to the technological content of the pattern. The methodology employed was panel analysis applied to a representative set of enterprises using trade data broken down by region for 1989 1997 and 2000.
The globalization of the health-care industry: Opportunities for the Caribbean
The globalization of the health-care industry is proceeding. It is being driven by the high cost of health care in the developed countries compounded by the steep rise in demand for health care as a result of the ageing of populations in these countries and the increasing availability of health-care services in developing countries at less expensive rates than in developed countries. Increasingly patients are sourcing health care globally and opting for the most affordable treatment. In a growing number of fields of treatment the most cost-effective option is travelling to a developing country. The provision of health care has significant potential for those developing countries that can provide world-class services and facilities at internationally competitive prices. The proximity of the Caribbean to the United States gives it an additional advantage in meeting the rapidly growing demand for health care originating in that country.
Towards an integrated vision for dealing with instability and risk
Evolution of the link between selective anti-poverty policies and social sectors policies
This conceptual and historical analysis of paradigmatic social policy experiences in the region reveals some fundamental landmarks in the evolution of the link between selective anti-poverty policies and social sector policies. These landmarks are associated with major changes in targeting policies and with a number of universal social policy reforms. Special attention is given to the redistribution-with-growth approach; subsequent reductionist targeting proposals which have undergone shifts in conceptual and effective terms over the last two decades; and the concern for interaction with social sectors displayed by some present-day conditional transfer programmes which stand out in the region because of their scale. Two related trends observed in fields that go beyond the effort to combat poverty are also analysed: the reductionist social risk management proposal and in the opposite direction the introduction of health guarantees.
The accumulation process and agrofood networks in Latin America
Within the context of the evolution of world markets and new models of trade openness several agrofood product lines in MERCOSUR countries have shown strong dynamism in recent decades becoming focal points (axes) of accumulation and economic growth. The expansion of production and the higher levels of competitiveness achieved have been based on the organization of these product lines in networks or complexes; on the adoption of technology packages from abroad with minimal local adaptation as part of the globalization of new paradigms; on the emergence or consolidation of groups of big firms in the main stages of these networks and on clearly defined forms of insertion in external markets. This article argues that the transnationalization of relevant segments and markets of these complexes affects the possibilities of local or regional development in particular the generation of locally dense and diversified production networks with equitable distribution of rents income and profits.
Adolescent reproduction: The case of Chile and its policy implications
Adolescent fertility and maternity are a source of concern in the Latin American and Caribbean region because they imply situations of adversity have not gone down as in other age groups and are more frequent among poor teenagers. Analysis of the micro-data from the last three censuses in Chile also shows: i) a generalized tendency for adolescent maternity to be out of wedlock; ii) the protective effect of staying in school which comes into play after passing an educational threshold which is rising with time; iii) the leading role played by the parents of the households where most adolescent mothers live and iv) the need for specific programmes and integral actions to reduce adolescent maternity since although access to information and sexual health and reproduction services avoids pregnancies it is not enough when there is a lack of alternatives to maternity or there are cultural and psychological obstacles to the proper use of contraceptive methods.
Central bank independence and its relationship to inflation
This paper builds on earlier studies of central bank independence (CBI) making a comparison of the rankings of central banks for 15 countries through three different indices. The analysis reveals that there is no shared concept of CBI and that the indices are a measure of the inflation bias. The Brazilian case is used as an example with the objective of examining the impact on inflation of an increase in independence over time as measured by Cukierman’s index. The findings indicate that CBI is a consequence of the conduct of monetary policy and that it is not an adequate framework for developing credibility.
The monetary pendulum in Mexico
First World priorities and the need for nations to coexist in harmony have given rise in each period to a set of rules constituting the international economic order. This is a shifting order in which national goals move alternatively towards and away from those of an international nature. The objective of the gold standard was to uphold monetary convertibility if necessary at the expense of national objectives. By contrast the Bretton Woods system inverted the terms of the equation by making governments responsible for employment and growth. The monetary pendulum is now swinging back again from nationalism to cosmopolitanism. In the case of Mexico owing to failures of adaptation this latest shift has translated into an all-out struggle against inflation that has brought the country to a state of chronic near-stagnation leaving it trailing in the rear of the world development process.
The technical skills of information technology workers in Argentina
This article makes an assessment of Argentina’s human resource skills in the field of information technology (IT). In various of the country’s government business and academic domains the quality and potential of domestic human resources in this area is taken for granted- a belief based on the country’s rich yet contradictory IT history but not founded on an analysis of the corresponding skills. This study aims to develop and apply a methodology to evaluate the skills of IT workers and highlight their problems and potentials using the results of an electronic survey. The current features and heterogeneity of those human resources are interpreted in the light of the progress and setbacks experienced by the activity during the course of its evolution.
Inequality in Central America in the 1990s
This study seeks to answer two questions: how and why has the distribution of labour income changed in Central America? and why does Costa Rica display greater equity? In order to answer these questions a technique based on the estimation of earnings equations is used. The direction of the changes in inequality is not uniform and depends on the indicator used. Although only Costa Rica and Guatemala show an unambiguous deterioration in the 1990s there are some phenomena common to all the labour markets studied that have contributed to increasing inequality. The most important of these is the increased dispersion of the number of hours worked caused by increasing proportions of part-time and overtime workers in all countries. There are two main reasons for the lower relative inequality in Costa Rica: education is distributed more equally and wage differences between rural and urban areas are smaller. These results suggest that public policies that universalize primary education and provide economic and social infrastructure to rural communities contribute to reducing inequality.
Brazilian fiscal institutions: The Cardoso reforms, 1995-2002
This paper looks at Brazil’s fiscal policy during the two administrations of President Fernando Henrique Cardoso: 1995-1998 and 1998-2002. It stresses that the authorities’ austere attitude was as important as institutional and structural reform for the fiscal adjustment that followed the 1998-1999 crisis. The principal cause of the fiscal deterioration in 1995-1998 was the reduction in the primary balance rather than the increase in the interest burden while the fiscal adjustment in 1999-2002 was largely due to increased revenues as primary public expenditure by the federal government continued to grow in real terms. We consider the outlook for fiscal sustainability and conclude that to preserve the country’s hard-won fiscal discipline the austere fiscal attitude shown recently by the authorities should be permanently embedded into fiscal institutions.
Celso Furtado’s contributions to structuralism and their relevance today
This article examines Celso Furtado’s three main analytical contributions to structuralism: (i) the historical-structural method which incorporates the histories of Brazil and other Latin American countries in structuralist formulations; (ii) the belief that underdevelopment in the Latin American periphery has tended to persist over long periods owing to the difficulty of overcoming underemployment and to inadequate diversification of production; and (iii) the idea that the pattern of investments in the periphery is predetermined by the composition of demand which mirrors and tends to preserve income and wealth concentration. Events in Latin America in the past twenty-five years show that Furtado’s analysis has lost none of its relevance.
Systemic governance and development in Latin America
The capacity of political regimes to formulate and implement policies in the common interest appears to be a crucial factor of development. Public institutions in Latin America are often characterized by a lack of common interest orientation. As a result most countries of the region are ill-prepared to meet the challenges of global market integration and knowledge-based development. Two approaches have been particularly influential in linking institutions to economic development: the good governance approach originally put forward by the World Bank and the systemic competitiveness approach introduced by the German Development Institute. Drawing on insights from both concepts this paper presents a framework for the assessment of reform blockades and propensities in given political systems. This is the “systemic governance” approach and it focuses on the capacity to generate and implement decisions in the common interest at all levels of the political system. In order to promote second-generation adjustment reforms the systemic character of governance has to be grasped.
A low-growth model: Informality as a structural constraint
After years of reforms and unending debate the question remains unanswered: why is Latin America not growing more? The present article approaches the subject from an unconventional perspective presenting the persistence of informality as a structural barrier to growth. As an analytical frame of reference it introduces a 2 x 2 model of growth in which the economy comprises just two sectors the formal and the informal. The model presents the links between the growth pattern of the formal sector and the dynamics of the informal sector and between these and the pattern of growth in the overall economy. Adverse specialization patterns and an unfavourable international trade profile are perpetuating informality. Thus export-led growth most resembles an enclave model which does not even guarantee high growth since the dynamic of the informal sector which accounts for about half the urban workforce adversely affects the performance of the whole economy.
Less volatile growth? The role of regional financial institutions
The volatility of economic growth in the countries of Latin America and the Caribbean has been exacerbated by a lack of suitable instruments for smoothing external shocks. Difficulties with the provision of emergency financing and the development of financial markets capable of trading government securities that incorporate better contingency mechanisms have contributed to economic volatility. To identify routes towards progress with these two issues in the Latin American context the present article examines the role that could be played by regional and subregional financial institutions always bearing in mind that while these can supplement global institutions they cannot supplant them.
Foreign direct investment and development: The MERCOSUR experience
This article analyses the impact of foreign direct investment (FDI) on the MERCOSUR countries in the light of key variables such as productivity foreign trade innovation and growth. The macroeconomic impact is not found to have been significant whereas the microeconomic effects seem to have been more noticeable though varied. Generally speaking the subsidiaries of transnational corporations operate at higher levels of productivity engage in more international trade and are more innovative than local companies. The indirect effects of FDI on the other hand are less clear. The sign (positive or negative) and magnitude of productivity spillovers to domestic competitors vary apparently depending on the characteristics of the local businesses and on the markets in which they operate. Finally only in Brazil is there evidence of spillover effects —although those effects have been both positive and negative— on the export activities and innovation of local companies as well as productivity spillovers from foreign subsidiaries to their national suppliers.
The new urban poverty: Global, regional and Argentine dynamics during the last two decades
This article analyses the various dimensions of the “new poverty” which emerged during the 1980s and 1990s. It begins with a review of the definitions of the term in Europe the United States and several Latin American countries. The case of Argentina is then examined paying close attention to the pauperization of the middle class in that country at several points between the mid-1970s and the crisis of 2001. Structural poverty —an older phenomenon— is used as a point of reference to describe the characteristics of the new impoverishment the adaptation strategies evolved to address it using cultural and social capital the erosion of collective social identity and the urban dimension of pauperization. The article concludes with an analysis of the transformations experienced by the new poor since the issue was first examined as well as the specific challenges it poses for public policy.
Poverty and employment in Latin America: 1990-2005
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.
Rural non-farm employment and rural diversity in Latin America
In the 1990s rural development specialists became increasingly interested in rural non-farm employment (RNFE) and the factors determining it. Ideas about the subject gradually made their way into the political debate and some development programmes. Location is one of the aspects mentioned in many studies as a factor influencing the characteristics of RNFE. Some others include scale type generated income and participating household members. This article looks at what has been written on the subject and suggests that location and the various “distances” that go with it are a vital determinant of RNFE.
The settlement of disputes under the WTO. The experience of Latin America and the Caribbean
This article analyses the implications for the Latin America region of the dispute settlement procedure approved in 1994 by the Marrakesh Agreement Establishing the World Trade Organization (WTO). These implications are important because the region has become involved in a growing number of commercial disputes as its international trade has increased. The procedure applies to disputes between any of the 148 member countries over matters covered by the Agreement and the 29 multilateral agreements annexed to and forming an integral part of this. The present article highlights the ways in which the procedure differs from the old GATT rules and other international dispute settlement procedures. It describes the agreements that have generated the most disputes (anti-dumping subsidies and countervailing measures and safeguards) discusses United States policy in this area and details the disputes in which the Latin American countries have participated with particular reference to Brazil.
Towards an efficient innovation policy in Latin America
Innovation has emerged as a central theme on the growth agenda of Latin America. This paper examines four issues. First how can we know if Latin America really has an “innovation problem” that is behind its weak total factor productivity performance? Second what do we mean by innovation and what are dimensions of it in which the region exhibits weaknesses? Third what does recent experience and literature suggest for principles and broad policy measures to foment innovation? Fourth are there any linkages between these weaknesses and equity? Since even in the Organisation for Economic Cooperation and Development (OECD) there is little consensus on the specific policies that governments should implement and even less on their suitability to developing countries this paper attempts to organize thinking around some basic principles and offer suggestive experience rather than specific policy advice.
Consensus and dissension among Mexican economists
This article identifies areas of agreement and disagreement among Mexican economists in relation to key issues of economics on the basis of a survey of 360 members of the profession. The propositions eliciting the greatest consensus included: equity in income distribution vigorous use of antitrust and consumer protection laws and the use of countercyclical fiscal policies. The most contentious issues were: private investment in the energy sector the determinants of inflation the minimum wage as a cause of unemployment and the objectives to be pursued by an independent central bank.
Can the Latin American and Caribbean countries emulate the Irish model of FDI attraction?
In the era of globalization foreign direct investment (FDI) is an essential factor in the development of the economy. In recent years creating a better investment climate has therefore been a policy priority for many governments including the Latin American ones. Only a very small group of Latin American countries have attained relative success in attracting quality FDI however. Conversely Ireland has achieved impressive results by creating an attractive environment for FDI. The Latin American countries would do well to emulate the Irish experience especially as regards the approach to establishing competitive advantages and efficiently promoting the country as a market site for FDI.
Mirrors of change: Industrialists in Chile and Uruguay
This study examines institutional changes in Chile and Uruguay between the mid-1960s and late 1990s. It seeks to tie together the macro and micro levels in order to observe how institutions working with local and global issues interact or conflict from the perspective of two industrialists’ associations the Manufacturers Association (SFF) in Chile and the Chamber of Industry of Uruguay (CIU). From this vantage point the study analyses how the organizations’ ‘logic of appropriateness’ has altered since the 1960s with the expectation of identifying changes in the way sources of legitimacy interact at the global regional and national levels. To make the process of change more visible the study concentrates on two years 1966 and 1998. It also tries to identify new dimensions of comparison between the development processes of Chile and Uruguay.
Has investor protection been rendered obsolete by the Argentine crisis?
Unlike the train of events in previous crises when the negotiations between the parties–creditors and debtors investors and host countries– were played out within some kind of institutional framework the crisis of 2001 portrayed Argentina as a country abandoned to its fate not just once but twice. But although investors had initially been able to alter the rules in their favour to secure better protection and enhanced legal certainty ultimately they came out of the situation worse off. The Argentine experience suggests that as the influence of the international financial institutions declines asymmetric solutions cannot last and at the end of the day democratic governments will put their electorate before their investors. But is the Argentine case an exception to the rule or does it reflect a more general weakening of foreign investment protection?
Social benefits in Uruguay: Why do some potential beneficiaries not apply?
Cash transfer programmes have become very important in Latin America. Concerns about proper targeting have centred on excluding people who do not meet eligibility requirements. Less attention has been paid to the failure of programmes to reach the whole of their target population partly because there are people who do not even apply. The present article analyses the determinants of non-take-up of social benefits. The case studied is the National Social Emergency Plan an income transfer programme implemented in Uruguay between 2005 and 2007. It is calculated that over a fifth of eligible households have never enrolled in the programme. A probit model is used to estimate the determinants of the decision to apply. The evidence obtained is highly consistent with theoretical and empirical research into the subject.
The economic returns to education in Mexico: A comparison between urban and rural areas
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.
Employment Challenges and Policy Responses in Argentina, Brazil and Mexico
In this paper we argue that Argentina Brazil and Mexico must focus economic and social policies on creating employment if they want to provide decent work (i.e. formal jobs with social security coverage). During the 1990s financial and trade liberalization and the associated laissez-faire policies did not deliver in terms of growth or employment in the countries under consideration. We assess the macroeconomic trade investment and labour-market policies of the countries during 1990-2004 and then propose a series of recommendations that give employment growth the priority it deserves.
Determinants of technological innovation in Argentina and Brazil
This article analyses and compares the determinants of innovation in Argentina and Brazil countries that have based their industrialization strategies on import substitution. Probit regressions in which instrumental variables are used to check for problems of endogeneity of exports reveal that in both countries knowledge external to firms helps to promote innovation that internal research and development capacity is relatively weak and that external trade integration has a positive effect on firms’ propensity to innovate (more so in Brazil than in Argentina). The results of this study suggest in general that there has been modest progress in the pattern of innovation among Argentine and Brazilian firms in recent years compared with the import substitution period.
Local economic development and territorial competitiveness in Latin America
This article argues that the local and regional governments of Latin America in an increasingly globalized world must face new challenges that include establishing or improving their competitive strengths and transforming their local production systems. These two aspects must be linked to territorial policies and more specifically to the development of a territorial culture that embraces both. While it is true that enterprises are the ones that actually compete their competitiveness may be enhanced if the territorial environment encourages this dynamic and if they themselves realize the importance of being enterprises “of the territory” rather than “in the territory”. This objective may be thwarted however by the existence of territories that are unequally prepared to meet these challenges. Different types of intervention need to be used therefore in terms of local and regional policies to enhance the competitive strengths of such territories.
Reassessing social policies in Latin America: Growth, middle classes and social rights
This paper examines the analytical bases of social policy in Latin America as illustrated by empirical data. It finds that the dominant approach is based on the following premises: (i) economic growth is the primary mechanism for poverty reduction; (ii) social expenditure should focus mainly on the ?really poor?; (iii) private-sector provision of education health and pension services should be encouraged; and (iv) emergency social protection programmes are needed to deal with macroeconomic crises and natural disasters. The article then identifies areas in which social policy can be renewed such as income distribution attention to the middle class as a target of social policies possibilities for the poor and middle classes to accumulate capital and the economic and social rights of the population.
The periphery and the internationalization of the world economy
It is an accepted fact that the process of internationalization of the world economy has expanded considerably in the last few decades. The author begins by examining the historical background of this process and after emphasizing that it is not limited to the economic sphere —since it is also seen in the international dissemination of ideas institutions and ways of life— he goes on to analyse in particular the economic internationalization recorded since the Second World War. After thus defining his subject he reviews various expressions of internationalization in trade capital movements investments the activities of transnational enterprises and so on with special attention to the way in which this process has influenced the periphery.
Commercial bank finance from the North and the economic development of the South: congruence and conflict
The executives of the big private banks feel very satisfied with their growing role in the financing of the less developed countries and furthermore consider that there is a general harmony of interests between borrowers and lenders: a sense of satisfaction which is shared by an appreciable number of economists and officials responsible for formulating policies both in the developed and the under-developed countries.
Youth employment: Characteristics, tensions and challenges
Youth employment problems affect not only the welfare of young people themselves but also some key elements of socio-economic development in general. This article examines the circumstances origins and consequences of these problems and reviews the statistical information available on recent trends in youth employment variables. The figures show that the occupational position of young people has deteriorated in absolute terms along with labour markets generally and that contrary to some expectations it has not improved in relative terms either. Working conditions are also found to vary greatly by education level gender and household characteristics among other factors. The article then identifies a number of tensions between the subjective perceptions of the young and the reality of the labour market and reviews options for improving the youth employment situation with regard to the issues of employability equal opportunities for young men and young women entrepreneurship and employment creation.
Latin America meets China and India: Prospects and challenges for trade and investment
The high growth levels projected for China and India will make these two countries the most important pole of the global economy for the next few years creating a market of great potential for Latin American and Caribbean exports. These markets had remained largely untapped until recently with the exception of certain South American primary products. Latin America should strengthen its ties with the two Asian countries in order to increase production synergies with them. Free trade agreements and trade and investment partnerships should also be established in order to increase access to both markets and facilitate insertion into Asian production and export chains.
Changes in Chile’s production structure, 1986-1996: Output and industrial interdependence
In earlier studies the author showed that the type of development adopted by Chile differed significantly from that of the successful East Asian countries. Up to 1986 the Chilean economy had a relatively weak and technologically unsophisticated manufacturing base and the penetration of imported inputs was mainly at the expense of the scanty domestic productive intermediation. Therefore neither manufacturing industrialization nor industrial interdependence appeared to facilitate the type of manufactured exports that might sustain dynamic industrial development based on external markets. The present paper analyses changes in Chile’s production structure from 1986 to 1996 generally extended to 2000 using methods similar to those of earlier studies. The conclusion is that despite the outstanding growth rates over the period the economy still appears relatively weak as a basis for a sustainable increase in economic and technological sophistication.
Effects of training on competitiveness in the manufacturing sector
This article examines the effect of training on competitiveness in the manufacturing sector drawing a distinction between industries with differing technological and productive characteristics. Using a systemic approach it studies activities within firms and the impact that training has on them as well as the organizational and institutional environment that supports training and the effect of the latter on the locality as a whole. An analysis is performed at two levels. At the firm level (micro analysis) econometric tools are used to study the manufacturing sector in Mexico. At the regional level (meso analysis) the electronics industry in one region of Mexico is studied. Empirical evidence shows that enterprise training has different effects on competitiveness in industries with different technological characteristics. It also has a positive impact on the region through knowledge diffusion.