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Decent Work and Economic Growth
Non-sectoral agents and recent changes in Argentina’s agricultural sector
This article explores some of the changes that Argentina’s agricultural sector has undergone in the past decade before going on to analyse the structure of the production sector for a non-traditional crop the blueberry in the province of Entre Ríos. This crop is unusual in that it has been adopted chiefly by entrepreneurs from outside the local area and shows alternatives in terms of diversification of production and vertical integration. Capital investment is more important in blueberry production than investments of land and information and management technologies play an important role. These are also features of the recent development of traditional crops in non-Pampas areas. The role of capital from outside the sector is worthy of consideration given the flexibility and versatility made possible by some of today’s production methods.
Distributive effects during the expansionary phase in Argentina (2002-2007)
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.
Export diversification and growth in emerging economies
This paper develops and tests a model of growth that emphasizes the introduction of new exports as the main source of growth in countries that are well within the global technology frontier and depend for growth on adapting existing products to their economic environment. It seeks to capture the stylized facts behind growth in countries as different as the Republic of Korea Taiwan Province of China Mauritius Finland China and Chile all of which have relied on export diversification. The widening of comparative advantage is thus seen as the main driver of economic growth. The export diversification hypothesis is tested using an empirical growth model. Controlling for other variables that affect growth export diversification —both alone and in interaction with growth in per capita export volumes— is found to be highly significant in explaining per capita gdp growth over the 1980-2003 period.
Developing competitive advantages: Successful export SMEs in Argentina, Chile and Colombia
Female-headed single-parent households and poverty in Costa Rica
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.
The macroeconomics of the Latin American economic boom
This paper argues that the recent boom in the Latin American economies can be explained by the conjunction of two external factors not found together since the 1970s: strong commodity prices (more so for hydrocarbons and mining products than for agricultural commodities) and exceptional external financing conditions. Concerning the latter the key development was the massive influx of capital during two periods of “exuberance” in international financial markets (between mid-2004 and April 2006 and between mid-2006 and mid-2007) particularly the second. It also argues for the importance of spreading and consolidating Latin America’s two great (and complementary) macroeconomic policy innovations of recent years: countercyclical fiscal management (still confined to just a few countries) and active intervention in currency markets. Such intervention needs to be based on a growing recognition that the real exchange rate ought to be an explicit goal of macroeconomic policy.
Trade policy reform and poverty: Successes and failures in Central America
During the past two decades trade regimes in Latin America have been reformed to facilitate export-led growth in the expectation that the benefits of this growth would eventually trickle down and thereby help the poor. These goals have been achieved to differing degrees. Their accomplishment has depended not only upon the effectiveness of the trade policy reforms but also upon exchange-rate policy external shocks and remittance inflows. Technological change has also been crucial when it comes to capitalizing on the benefits of the reforms. These assertions are substantiated using simulation results from a computable general equilibrium model solved with data for Costa Rica El Salvador and Honduras. The model is combined with a microsimulation methodology to capture the full distributive implications of simulated policy and external shocks.
The financial protection impact of the public health system and private insurance in Brazil
This research assesses the effectiveness of the Brazilian public health system and of private insurance in Brazil in providing financial protection in health care. The determinants of catastrophic health expenditures are estimated by probit regressions with Heckman selection adjustment controlling for health-care need. Findings show that the public system provides a significant reduction (47%) in the probability of a household having catastrophic health expenditures and that private insurance makes such expenditures more likely by 36%. 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.
Inequality, institutions and progress: A debate between history and the present
This article analyses current attempts to interpret the factors underlying long-term economic growth paying special attention to the Latin American case. It discusses both the interpretations whose advocates claim that geographic conditions have a decisive role in shaping the development process and those according to which colonization is seen as giving rise to an institutional framework ill-suited for development. The author -based on his own estimates- emphasizes the importance of market access and the effect of social fragmentation on the establishment of an efficient and credible institutional framework. The article concludes with a discussion of the impact of inequality on both the quality of institutions and the dynamics of growth.
ECLAC in its historical setting
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 Raúl 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.
Trade and investment rules: Latin American perspectives
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.
The global crisis, speculative capital and innovative financing for development
One of the characteristics of globalization has been the marked volatility of financial flows. The realization that this was affecting growth and equity induced the International Conference on Financing for Development held in Monterrey in 2002 to adopt a global commitment to deal with the issue of development financing. Since then there has been a mixture of progress backsliding and inaction. This article conducts a brief review of financial globalization and the current global crisis. It then examines the Monterrey Consensus the evaluations by the United Nations Secretariat of compliance with the commitments accepted and the financial system reforms needed to make globalization more equitable. It then proceeds to a stocktaking of the progress made under a North-South collaboration initiative Action against Hunger and Poverty in applying “innovative financing mechanisms” that can contribute to attainment of the Millennium Development Goals and help developing countries cope with critical situations like the current global recession. It concludes with proposals for dealing with the challenges that remain.
Consolidating democracy and development in Chile
The transition to democracy in Chile has been achieved in an unusually rapid and successful manner. Its consolidation is only just beginning however and is faced with serious challenges which will call for extensive and complex efforts in the years to come.
Selectivity as the crux of social policies
The social cost of the crisis of the 1980s and the consequent application of adjustments to the economy has been giving rise to a number of problems in the region which together with the marked regression in the main vital indexes are causing fresh social tensions in the systems of institutions as weli as taking other forms of expression too despite the substantial advances made in the exercise of representative democracy in recent years.
Self-financing water supply and sanitation services
Financing investments in urban water supply and sanitation has been a perennial problem in all countries of Latin America and the Caribbean. The issue has increased in significance with the need to provide sewage treatment to reduce the gross pollution of many water bodies and to lessen the threat from waterborne diseases. In this paper the authors explore through a statistical analysis the practicability of financing water supply and sanitation services from income generated by the tariffs. Particular emphasis is placed on the possibility of the whole population paying for sanitation services: an issue of some importance given the unequal distribution of income in most cites of the region.
Productivity: Agriculture compared with the economy at large
This paper posits the need for a study in greater depth to identify the special features of the structurai heteroge* neity of the Latin American economies. Such a study is needed regardless of whether this phenomena is defined ultimately as the presence of marked inequalities in the productivity of labour between different sectors of the economy or whether the heterogeneity of the economies of Latin America is understood fundamentaliy as a significant relative lag of agriculture compared with other sectors of the economy.
Integration today: Bases and options
The idea of regional integration is deeply rooted in Latin America. It has been part of the proposals for the region’s development for decades past and now through a combination of domestic and external circumstances it occupies a leading place in the regional economic debate. It was a novel idea which through being applied only partially in so many cases gradually became an issue of the past: an empty prospect and a contradiction in its own terms.
Why are men so irresponsible?
This article seeks to answer the question posed in the title which refers in particular to men in the lower-class urban sectors. The statistics reflect a type of behavior marked by an avoidance of the obligations connected with the formation and maintenance of a family leading to an increase in rates of illegitimacy in the proportion of adolescent pregnancies and in the rates of abandonment of families with children.
The economic and social significance of narcotics
The production trafficking and abuse of drugs has attained enormous magnitude all over the world. In Latin America the problem has taken on very special implications because that is the region where the countries which are the biggest producers of coca leaves basic paste and cocaine are located.
Shaping competitiveness in the Chilean wood-processing industry
The neoliberal view is that outward orientation and general liberalization should result in efficient factor allocation and thus in the formation of competitive economic structures. Its policy recommendations are therefore generally in the “get prices right” mould.
The empty box syndrome
This article examines the thesis -posited in the book entitled “Changing Production Patterns with Social Equity” published by ECLAC- that no country in Latin America was successful in achieving high overall economic growth with a reduction of income inequalities in the 1980s. As compared to the experience of many countries in South East Asia this was a lost decade for the region. This situation in Latin America has been referred to by Fernando Fajnzylber as the “casillero vacío” or “empty box” syndrome. The examination presented here is based on a comprehensive set of 33 variables related to economic stabilization structural change overall economic growth and the standard of living. It is shown that many Latin American countries did indeed score relatively poorly as compared to Asian countries.
Growth and income distribution in countries at intermediate stages of development
This article analyses the relationship between growth and income distribution. The existence of a conflict between these two variables depends on a country’s level of development. Such conflicts arise during intermediate stages of development when growth is led by savings and tend to disappear when growth becomes a knowledge-led phenomenon. Part of the reason for this is that saving is much more concentrated than education and technology are. The author contends that the conflict is not insuperable however; in practical terms it can be corrected by means of fiscal and educational policy measures.
Integration and trade diversion
Regional integration has once again become an important issue for Latin America and the Caribbean. Compared with previous experiences however recent integration commitments have a number of new aspects in such areas as negotiating procedures the issues involved in the various agreements -some of which are as unprecedented as the adoption of common currencies the creation of binational companies common labour laws etc.- and the actual timing of these steps.
Industrial policy in Central America
The Central American countries have a 40-year tradition of cooperation based on bilateral and multilateral treaties the most important of which is the General Treaty on Central American Economic Integration under whose terms the Central American Common Market (CACM) was established in 196b. Nevertheless the industrial policies pursued by these countries since that time are notable for their lack of uniformity.
Regional integration In the 1990s
The renewed interest sparked by the potential for intraregional cooperation in Latin America and the Caribbean today has been reflected in numerous agreements regarding trade preferences and in attempts to establish free trade areas customs unions or common markets. The possibility has even been discussed of setting up free trade arrangements on a hemispheric scale.
The political economy of the developmentalist State in Brazil
The study of the political economy of the crisis of the State and its role in the trajectory of Latin American development is an urgent political task which could also contribute to the historical and theoretical debate about industrial development in late evolving capitalist economies.
Participation and the environment
The petroleum-based production pattern has ultimately proved to be a dead end as the deteriorating quality of natural resources -owing to the way they have been used and appropriated- has begun to cast doubt upon the pattern’s viability. Repeated soundings of alarm on this score have increasingly sensitized the population thus creating a level of ecological awareness that has moved society to voice its ever more vehement rejection of a system which bases itself on the destruction or degradation of natural resources and in so doing jeopardizes the sustainability of the development process.
The social actors and structural adjustment
This paper presents several hypotheses on the social and political context of the application of the so-called structural adjustment policies and their effects on the social organization and patterns of conduct of the collective actors involved. The central idea put forward here is that quite apart from the crisis (economic social and sometimes political) which precedes and generally accompanies the application of these policies they ultimately bring about profound and lasting changes in the social structure of the countries implementing them.
State-owned enterprise reform in Latin America
The purpose of this study is to analyse the major characteristics and consequences of State-owned enterprise (SOE) reforms in Latin America so as to derive conclusions useful for guiding future reform programmes. Three countries at different stages of the reform process were identified for in-depth study; Chile Mexico and Argentina. The underlying rationale for SOE reforms in Latin America has been both economic and political. In most countries the need to reduce the public sector deficit was a primary motive for initiating reforms. In Chile Mexico and Argentina public sector deficits hit historic highs in the year prior to the initiation of reforms. Chile initiated the first major reform of sons in the region in 1974.
Latin America and the new finance and trade flows
This article explores Latin America’s prospects with regard to international finance and trade in the 1990s. It is concluded that the external environment will probably be unfavourable although there will be some opportunities for supporting the region’s structural adjustment processes.
Adjusting power between the State and the market
The models that dominated economic science and policy in the first three decades of the post-war period have broken down and there are no consummate replacements. The outlook seems to be conservative. The late 1970s turned back the clock which was moving for two centuries in the direction of morally justifying Stale intervention Intended to moderate or correct the social inequalities produced by market operations. Part I of this article explores these trends.
Monetary policy and an open capital account
In this paper the author analyses some of the difficulties encountered by monetary authorities when they are operating in a situation of international capital mobility; more specifically he focuses on how two of their monetary policy objectives -controlling inflation and maintaining a stable exchange rate- may conflict.
Growth, crises and strategic turnarounds
The import-substitution strategy was entirely justified in the 1930s and continued to make sense until the late 1950s so long as export opportunities were being dampened by the Great Depression the Second World War and the reconstruction of Europe. From the 1960s on however it afforded diminishing returns as international trade burgeoned. During the 1980s the macroeconomic instability caused by the debt crisis compounded the problems associated with this development strategy which had begun to become apparent in the 1970s.
In memory of Pedro Vuskovic: Jacobo Schatan
For those o f us who shared many years offriendship and professional collaboration with Pedro Vuskovic the news of his recent death in Mexico has been the cause of great sorrow not only because of the circumstances of his death following a cruel disease that gradually sapped his physical -but not intellectual- strength but also because it signifies the loss of a great Latin American of a teacher who helped shape so many generations of young people in our region and of a companion during so many days of intellectual strivings and political struggle.
Rationalizing social policy: Evaluation and viability
In this article it is argued that only a small fraction of social expenditures actually reaches the poor. Diverse social policy weaknesses which account for leaks and ineffective use of resources are reviewed and the authors maintain that it will only be possible to overcome those deficiencies if serious ex ante and cx post evaluations of social programmes and projects are made.
Strategic management, planning and budgets
After having reached a turning point some time ago the political economic and social processes of the countries of the region are currently in the midst of a transition. Now that the wave of change which elevated the market and private enterprise to a position of unrivalled supremacy has passed amore thoughtful evaluation needs to be made of the virtues and responsibilities shortcomings and excesses of these factors.
Small nations and the ‘constrictive’ style of development
In 1975 CEPAL submitted a request to a distinguished Uruguayan intellectual Carlos Real de Azúa for a study on the special economic and political development problems that small nations have to face The author prepared a first draft in that same year but for various reasons never completed the final version. Now when all who knew him are lamenting his untimely death we wish to pay him the modest tribute of publishing part of his study in the form of an article.
Latin America’s prospects in the financial markets
Since the onset of the debt crisis officials in both creditor and debtor nations have declared that commercial banks would resume making new loans to developing country borrowers once the debtors completed their macroeconomic adjustments and restored their creditworthiness. However the commercial banks’ long-term business interests may no longer coincide with Latin America’s debt service and investment requirements.
Participation and concentration in social policies
The author of this article contends that as a consequence of the debt crisis macroeconomic goals and social goals have become relatively dissociated from one another and that the latter have tended to be reduced to the provision of special attention to the needs of the poorest groups in the population.
Rural social policy in a strategy of sustained development
This article discusses the changes observed during recent years in the social demographic and occupational fields in the rural world which when they are added to the centuries-old problems of the sector foreshadow severe imbalances in the context of the new modalities of functioning of Latin American economies that arise from the present crisis. It advances the thesis that in most of the countries of the region the solution of the problem of the peasantry and the achievement of a higher degree of equity in rural society as well as between the rural and urban societies constitute inescapable imperatives for any viable strategy of national development in the 1990s.
The heterogeneity of poverty. The case of Montevideo
The economic crisis suffered during the present decade by the Latin American countries reduced the wages and incomes of many families with a consequent deterioration in the living conditions of the affected population. Homes which had previously met the minimum conditions for ensuring the social integration of their members sank into poverty thus increasing the heterogeneity of this phenomenon.
Cuba’s convertible currency debt problem
In the decade of the 1980s Cuba has confronted a worsening debt problem in terms of convertible currency and in the context of its participation in the world economy. Before 1985 the debt problem appeared to be manageable indeed it did not seem to be seriously damaging to Cuba’s macroeconomic growth performance which was strong from 1981 to 1985 in contrast to most other developing country debtors which underwent profound economic contraction in this period.
The ecopolitics of development in Brazil
How a collectivity deals with nature discloses as much about its internal social relations as the other way around. The present inquiry is a prologue to more detailed study of ecopolitics to the study of the political philosophy of relations between human beings and nature exploring the feasibility of integrating the knowledge of the social and of the natural sciences on the interchange between human activities and the cycles of nature. It is also an introduction to the study of a specific type of public policies those that address issues of resource use and conservation and the quality of life especially in the so-called developing countries.
Neo-Keynesian macroeconomics as seen from the South
The central problem in macroeconomics is to determine to what extent variations in aggregate demand will fall exclusively on prices or whether they will also have an impact on output. The Phillips curve was one answer to this question but when this attempt at synthesis failed the issue was reopened.
Women in the region: Major changes
This article addresses concerns relating to the promotion of the advancement of women within the framework of ECLAC’S proposal for changing production patterns with social equity. Virtually all the countries of the region have ratified the mechanisms set up by the United Nations to help attain truly equal treatment for women.
Macroeconomic policies: In search of a synthesis
This article analyses the evolution of the macroeconomic concepts which have prevailed in Latin America from the 1950s until the present. Two main concepts —structuralism and monetarism— have kept up an ongoing counterpoint over this period. The author analyses the main arguments of both currents of opinion and appraises their impact on the design of macroeconomic policies in the various stages of the region s development.
Structural elements of spiralling inflation
This paper reviews some of Prebisch*$ ideas on Inflation and comments on the article by Felipe Pazos which appears in this number of the Review.
The polluter must pay
The principte stated in the title of this article was adopted for the first time at the latertiational level in 1972 by the Organization for Economic Cooperation and Development (OECD). Basically it postulates that those responsible for pollution must pay the cost of the measures needed to prevent or reduce such pollution in order to comply with regulations and measures on environmental quality.
Macroeconomic policy coordination and integration
Macroeconomic policy cooivlination is a new topic in the Latin American integration debate. In the light of pronounced macroeconomic instabilities in many Latin American economies the recent efforts to revitalize regional integration schemes have led to an awareness that differences in national macroeconomic performance as well as the instability per se could frustrate advances In regional integration.
Industrial restructuring, trade liberalization and the role of the State in Central America
Industrial restructuring is a response of the industrial sector to a dynamic world. In open market economies industries continuously adjust to technological change to changes in fashion and to changes in relative prices. It is a process that Schumpeter referred to as “creative destruction” i.e. the replacement of outmoded products and production techniques with new products and techniques.