Industry, Innovation and Infrastructure

It was in the 1980s that proposals for the targeting or focusing of social expenditure on the poor gained ground. These proposals contrast universality and selectivity in terms of a dilemma in a disjunctive relationship; targeting or universal policies, or targeting versus universal policies.

Sociology’s contribution to our understanding of the Latin American development process has been closely linked to studies on the social structure and stratification of the region and to analyses and interpretations of the various social groups’ characters and behaviour.

In the past, international cooperation in the area of commodities has been concentrated on measures to stabilize world prices through agreements between producers and consumers. At present, the questions of the level and stability of world prices continue to be just as important as ever, but there are few possibilities of resuming international cooperation of this type. Furthermore, the level of final prices is only one of the problems related with production costs (which in turn depend on the technologies applied) and other aspects regarding the added value retained in the producer countries.

The constitution of a new international industrial order dominated by a core of large transnational corporations generally makes life more difficult for the great majority of developing countries because, since most are not in a position to compete effectively, they face still greater marginalization.

This article analyses the costs in terms of income distribution of the crisis and adjustments of the 1980s, as well as the effects of the subsequent recovery and resumption of sustained growth patterns. This analysis is based on comparable pairs of estimates of income distribution and poverty prepared by ECLAC for the ten largest and predominantly urban countries of the region.

Consideration of the roles to be played by the public and private sectors in a country’s developm ent strategy naturally leads to an analysis of the public sector’s main orientations regarding both its own actions and the establishm ent of a regulatory framework for the performance of certain types of activities. These orientations are expressed through public policies, i.e., the courses of action followed by the public sector in pursuance of a more or less well-defined objective.

The extension of technological progress to sm all-scale agricultural producers is an unavoidable issue in any strategy aimed at changing production patterns with equity in the rural environment. With a few exceptions, analysis of the achievements of public policies in this area reveals that they have fallen far short of their goals even in periods when the restrictions on public spending were nothing like as severe as those faced by the economies of the region today.

The region’s changeover from a shortage of external funds to a relatively plentiful supply of such resources at a time when an effort is being made to liberalize its trade and financial sectors raises a number of questions regarding the effect of this phenomenon on the growth of Latin American exports. In an effort to answer these questions, the author examines a number of different attempts to arrive at a quantitative evaluation of the relationship between exchange and trade policies and the region’s export performance in the 1980s.

This paper discusses the interplay between domestic policies and foreign interests under the institutional framework to be administered by’ the World Trade Organization (WTO). It presents a theoretical model that treats the WTO as the forum for an overlapping game which provides the rules for the maintenance of an open trading system among economies that are periodically submitted to protectionist pressures. Overlapping games occur when a particular player is engaged at the same time in games against distinct opponents, and when the strategy pursued in one game limits strategies available in the other.

Latin America’s economics are prone to continual shocks, of both external and internal origin, giving rise to a marked variability in their growth rates. In order to reduce this volatility, it is necessary therefore to establish stabilization mechanisms, including in particular the instruments of fiscal policy. The economies’ increasing variability is prompting the development of fiscal norms that in-corporate anti-cyclical features. Such rules arc based on the setting of medium-term public spending goals that are consistent with the economy’s growth trend and level of public debt but are independent of the cyclical component of the level of activity. In such a system, tax revenues would perform the traditional function of stabilizers of economic fluctuations.

The objective of this article is to describe how the transformation of the trade and industrialization regime is taking place in Ecuador and what are the systemic factors which condition the realization of this transformation. A long-run perspective of economic policy and growth in Ecuador (considering the whole of the twentieth century) reveals that growth has been relatively fast compared to other countries in the region, with exports as the driving force of that growth. The disturbing fact is that these exports have been dominated by a few booming export products at different points in time, and that growth has therefore shown a distinct stop-go nature. Corporate behaviour would seem to be characterized by rent-seeking, as natural economic rents have been present at several moments in history.

First of all, I should like to say how grateful I am for the kindness with which I have been received everywhere I have been in Chile. Nevertheless, ECLAC has a very special meaning for me. I am perhaps a little conservative in my habits, although not so much in my way of thinking, as Enzo Faletto seems to think …

Critical deficiency maps, conceived as objective, uniformly applicable technical tools that could be employed to make social expenditure more efficient and effective, constitute the most ambitious and successful method devised to date for using census data for social planning in Latin America and the Caribbean. Nevertheless, while their importance and potential as a policy tool have gained increasing recognition, questions have arisen concerning their virtues and limitations and on how they could be made to serve the need for more complex social information or to reveal the changing forms that poverty assumes.

This study examines “South-South” economic relations in the context of regionalism. It covers three Latin American countries and eight high-performing Asian developing economics. Although the level of trade and investment between these two groups is currently very low, trade is growing fast and there are indications that the potential for continued growth exists. Although regionalism is advancing in both these parts of the world, it has so far not affected the ties between the two groups of countries, and in fact inter-regional trade growth has recently been exceeding intra-regional growth in the case of most of the countries covered by this study. In the short term, it would appear that economic relations between these Latin American and Asian countries will depend largely on whether a “second generation” of reforms in Latin America will sustain the gains from prior reforms.

What has happened in rural development in recent years means that one must be very chary of the traditional view that agriculture lacks dynamism and is incapable of responding effectively to economic stimuli. On the contrary, output has grown steadily, export agriculture has expanded, the level of technology used has risen and the organization of production has been changing, and all this is closely linked to substantial changes in the make-up and outlook of the agents of production, and notably to the presence of a new rural entrepreneurial class.

Water is a scarce resource which has an economic value and fulfills important ecological and social functions. For this reason, it is normally considered a public good of the State, which grants user rights to private individuals. These rights arc usually protected by constitutional provisions regarding private property, since it is assumed that the private sector will not make investments unless it has guaranteed ownership rights. On the other hand, the water in respect of which user rights arc granted must indeed be used for socially beneficial purposes: otherwise the rights arc revoked. There are some systems where the user rights are unconditional, but this is not usual. The legal elements affecting the stability of water rights are of a structural nature: they include rules ensuring stability, those concerning the transfer of such rights, and rules on the recognition of prior uses and rights.

The author describes the neoclassical restoration, which, from the 1970s onwards, took a radical approach to the search for a theory of development by attempting to fuse the particular characteristics of developing economies with the central ideas of economic theory. Intervention with the aim of furthering development was perceived not as a solution but as part of the problem, and adjustment programmes were oriented not so much towards correcting imbalances as towards establishing an economic structure close to neo-classical precepts. Several East Asian economies were chosen as examples of the application of correct policy, since they were seen as being market-driven, but closer analysis revealed that behind their export success lay the firm guiding hand of the State.

The government of Cuba established a tax regime for micro-enterprises as soon as it legalized the sector in 1993. It was designed to function in a difficult context in which a tax-paying culture did not exist, in which widespread noncompliance was feared, and in which some micro-entrepreneurs’ incomes were high. The tax regime included advance monthly lump-sum payments, a 10% maximum amount of total revenues which could be deducted as costs in calculating taxable income, and an escalating tax schedule. This tax regime has a number of weaknesses which make it inequitable, inefficient and ineffective in revenue generation. The analysis of this essay indicates that the actual incidence of the tax is higher than the official tax scale when actual production costs exceed the maximum allowable 10%, even exceeding 100% in some circumstances. The up-front lumpsum tax payments result in marginal tax rates of 100% for initial levels of revenue, followed by a rate of 0% until a level of taxable income is reached where taxes payable according to the tax scale are equal to the initial lump-sum payment. The tax regime discriminates against micro-enterprises which have costs of purchased inputs in excess of 10% of gross revenues. It is regressive in that the tax rates are higher for lower-income micro-enterprises up to a fairly significant level of true net income. The micro-enterprise sector also faces a more onerous tax regime than the foreign and joint venture sector of the economy. From the standpoint of its impact on the efficiency of resource use, the tax regime restricts the entry of new firms into the sector and forces some out of business or underground, thereby reducing production, raising prices, reducing employment and reducing the generation of income. Finally, to the extent that firms “go underground,” refrain from starting up, go out of business, or evade taxes, the government loses revenue. A number of modifications in the tax regime are suggested in order to overcome its weaknesses. These changes could help the sector to make a more valuable contribution to Cuba in terms of employment and income generation, increased production at lower real costs and prices, and increased tax collection.

The economies of Latin America have undergone important transformations during the past years. Yet, while there have been many studies on the macroeconomic changes that have taken place in Latin America, studies on the microeconomic changes are relatively scarce. The purpose of this paper is to provide evidence that leads to a better understanding of how firms respond to new circumstances. The research on Latin American manufacturing firms presented here shows that the new state of the economic environment has led to a substantial change in firms’ behaviour. Innovative firms have adopted flexible forms of behaviour and are upgrading their production and marketing capabilities, and they have introduced significant changes in terms of vertical integration, input procurement, technological innovation, incentive pay systems and management techniques, training, subcontracting, distribution and retailing. At least for the most innovative consumer goods manufacturing firms, their core activities have shifted from being mainly concerned with production to combining the manufacture of goods with their distribution, and often also the distribution of other domestic and imported goods as well. This provides them with a better chance of simultaneously increasing their profits and defending their market share. Finally, the investigation also showed that uncertainty surrounding economic policy leads to a substantial decrease in investment by firms. Such uncertainty explains why more firms do not change, or why they do not change faster. It has a twofold negative effect on entrepreneurs’ decisions to modernize their firms: they are uncertain about what they should do, as well as about the sustainability of the economic policy. There is therefore an important role for policies that redound in programmes that seek to encourage firms to upgrade. At the same time, it must be stressed that the most important role for policy is that of creating a stable economic environment in which firms can plan long-term investment.

This article analyses the impact of MERCOSUR on the pharmaceutical sector. It concludes, among other things, that the sector suffered strong impacts, both static and dynamic, as a result of the integration process. From the static point of view, it may be observed that integration has given rise to a marked increase in intrazonal trade, which reflects the existence of a substantial trade creation process in MERCOSUR. From the dynamic point of view, the outstanding aspect is the increasing interest in regaining a place in the markets of Argentina and Brazil shown by transnational corporations since the integration process. This process, together with the changes in the regulations on medical patents, has given rise to big changes in the strategies and positions of laboratories of domestic origin.

There is a marked contrast between the growing sense of insecurity among the population and the absence of consolidated statistics that would allow the phenomenon to be measured more objectively. This article seeks to make a contribution to the knowledge of the situation of citizen insecurity affecting the region, taking a comparative view based on the limited and not always reliable information available and looking at the problem from various standpoints, both social and economic. The authors begin by examining some manifestations of criminal violence in the 1990s, especially in urban areas, after which they review the most important theories on the study of violence, the profiles of victims and attackers, traditional and emerging forms of delinquency, the frequent relation between violence and unemployment, the economic cost of violence and delinquency, and the main policies adopted to deal with them. They then go on to examine the measures taken in the region with regard to citizen security, which have shown the need to use more integral forms of prevention (primary and secondary) and control for dealing with criminal violence and to consolidate the systems of crime statistics of the region in order to be able to identify the factors with the greatest incidence on criminal violence and the less visible forms taken by the latter.

This article analyses the process whereby domestic violence in Chile became a subject of open discussion and a public issue included in the institutional agenda of the Executive and the Legislature, giving rise to preventive programmes against such violence and public services for aiding its victims, together with the adoption of a law against intra-family violence in 1994. The analysis highlights the dynamic and complex nature of the process, whose course and results were not and could not be determined a priori. Public issues do not exist in their own right, as purely objective phenomena, but are constructed by actors who operate in different settings, exchanging and confronting discourses based on various frames of interpretation. Several different phases may be distinguished in the process, depending on the features and opportunities offered by the political and institutional system, the different types of actors involved, their organizational resources, the structure of the links they establish with each other, and the frame of interpretation that guides what the actors do. Seen from this standpoint, the emergence of cases of violence as a public issue is at the same time the story of the establishment of women as valid social subjects, their organizations, their strategies for mobilizing the issue in different public contexts, and the spread of new types of discourse and proposals on gender-related matters.

Nowadays, regional planning at the national level is present in most attempts at social change both in developed and developing countries. The author criticizes the lack of a suitable methodology for conducting the planning process at the level of any given region, emphasizes the limitations, deriving from the degree of openness and relative smallness of the regions, as regards their impact on decision-making, and proposes a process of regional planning which gives prominence to the political aspects associated with the strengthening of regional bargaining power both with the central government and with other institutions outside the region. In proposing a process of “negotiated” planning, the author puts the case for utilizing this process as an instrument for strengthening the democratic structure of society.

Confronted with recurrent macroeconomic shocks, governments in Latin America and the Caribbean have increasingly been concerned about establishing or strengthening systems of social protection and safety net programmes. The goal of these programmes is to help mitigate the impact of shocks on the poor before they occur, and to help the poor cope with the shocks once they have occurred. In this paper, we focus on publicly funded or mandated safety nets functioning as risk-coping mechanisms. The paper reviews the characteristics of a good safety net, in comparison with the main types of safety nets currently in place, and finds in general that no single programme meets all of the criteria in terms of efficiency and effectiveness, although some are better than others. Finally, what has been the actual record in terms of protecting the poor through targeted public spending during crises? The paper finds that because of fiscal constraints during a crisis, social spending is often pro-cyclical when ideally it should be counter-cyclical. Ironically enough, social protection spending itself does not appear to be protected.

The poverty and weakness of Central America, combined with its potential strategic importance in world politics, have made this region extremely vulnerable to external intellectual and political influences. The result of these influences has been national political processes guided by European notions of Conservatism, Liberalism and Socialism, and a social sciences tradition that is trapped in the intellectual ethos of its mid-nineteenth century European precursors. This article argues that the Eurocentric theoretical orientation dominating Central American social sciences ignores the fact that the relation between time and space that conditioned the evolution of Europe is qualitatively different from that which has influenced the political evolution of Central America since 1492.

This article seeks to make an orderly summary of the information on urban female labour in Latin America in the 1990s and thus make a contribution to an updated diagnosis of the female labour market to help serve in the formulation of policies for women. It looks at the past evolution of fem ale labour, analyses the effects of the crisis of the early 1980s on this sector of labour, and reviews the changes that have taken place in it, which have undermined the validity of some myths on this subject. It also looks at some critical aspects of female labour, such as income, occupational segm entation, the segregated incorporation of women into jobs involving new technology, and the reduction of the stability of female employment, as reflected in the increase in homeworkers and own-account workers.

This article analyses the main manifestations of the globalization process and its implications in terms of the restructuring of energy markets. The reforms now being undertaken by the countries of the region are being pursued within the context of an economic paradigm with ramifications at the international level which assigns high priority to the liberalization and/or privatization of public utilities, and this, in turn, can be expected to engender new savings/investment strategies based on the relatively more stable nature of income flows from energy activities.

Against a background of increased expenditure and improved equity, this reform of public health management in Chile, set in the context of a dual health system, aims to consolidate a cost advantage over the private sector. Emphasis has been placed on the distinction between the regulatory, financial and supply functions in the public sector, and a relative opposition of interests between them has been encouraged, with a view to generating quasi-markets. The “management commitments” entered into between the Ministry of Health and the Health Services mark a departure from the strategy of resource allocation guided by historical budgets and make results the decisive factor of funding.

The central focus of this article is on the role played by transnational corporations in the industrial realignment of Argentina, Brazil, Chile and Mexico between the end of the import substitution stage and the early 1990s. Based on recently published studies dealing with the sweeping changes occurring in Latin America’s manufacturing sector following the region’s economic crisis and liberalization process, a computer programme developed by the ECLAC Division of Production, Productivity and Management has been used to examine the changes that have taken place in the sector’s production structure (sectoral composition and efficiency) and its linkages with the global economy.

This article looks at the benefits that Panama could derive from its possible integration with the countries of the Central American Common Market (CACM). First of all, Panama’s production structure is analysed in terms of the phenomenon known as the “Dutch disease”: this reveals the de-industrializing effect that the booms in the services sector have had on the economy. An examination is then made of the advantages that Panama could derive from gradual integration with the CACM countries in terms of intra-industry exports, promotion of investments, competition and modernization of production, and it is asserted that these benefits do not exist, on a reciprocal basis, in a scheme based on unilateral trade openness.

The present surge of interest in participative rural development projects based on peasant communities differs from similar past experiences in that it forms part of a broader tendency to decentralize social management, to enhance the role of the beneficiaries of social policies, and to give them a bigger say in their implementation. In order to avoid repeating the failures of past decades in programmes designed to reduce rural poverty, it is necessary to incorporate elements of modem applied anthropology in programmes for the training of extension workers and in the explanatory models of specialists formulating rural development projects.

The idea that globalization impairs the sovereignty of the modem nation-State is increasingly accepted in some academic, government and international circles. Currently, there is generalized concern over the progressive erosion of national authorities’ leeway for making decisions on matters of internal interest independently of outside influences. This perception has reached its extreme among those who feel that globalization has transformed the nation-State into a dysfunctional entity in a world without frontiers. It is understandable that a consensus should have grown up around this thesis, in view of its general nature and in particular because of the conceptual flexibility with which the notions of globalization and sovereignty are usually treated in some professional circles.

This paper attempts to provide a sounder link between institutions and economic growth. It does so by i) identifying those institutions which might matter the most with respect to economic performance, ii) providing a rationale as to why they might matter, and iii) confronting that rationale with some systematic empirical evidence. We postulate that the central and common characteristic of relevant institutions is that they give agents a voice, a stake in the system.

In recent years the question of the environment has been increasingly prominent in studies and proposals on the development of the Latin American and Caribbean countries. The serious processes of ecological imbalance in the world, together with numerous disasters and the ongoing loss of natural resources, have given rise to increasing concern over these matters. To a greater or lesser extent, all the governments of the region have tried to strengthen their environmental policies through various legal, technical, institutional and economic measures. Much still needs to be done, however, to correct the existing deficits and ensure that the new measures applied are really efficient and effective.

This article analyses the position taken by various international and regional organizations regarding pension system reforms in Latin America. Over the last ten years, these organizations have carried out studies on almost all the Latin American countries (although on only a few in the English-speaking Caribbean), identified and analysed key aspects, compared the reforms made, evaluated their advantages and disadvantages and developed global strategies or sets of desirable features for ideal types of reforms. The author identifies a number of the main alternatives or issues in the social security debate, makes a general classification of the pension system reforms carried out in the region, and after describing a hypothetically universal model he analyses its real viability.

Ever since the 1970s, the governm ents of the region have been transferring public com panies and other State institutions to the private sector in one m anner or another. Privatization has now spread to all sectors of the economy, including drinking water supply and sanitation services. Private sector involvement in the provision of these services offers potentially significant efficiency gains, but it will not, in itself, guarantee lasting welfare improvement unless these services are provided in a competitive market.

This article analyses the relations between economic integration processes, employment and equality of opportunities between men and women. To this end, the case of Chile is considered, where simultaneous processes of internationalization of the economy, the pursuit of economic integration agreements and the growing incorporation of women into the labour force are taking place. The relation between integration agreements and the labour situation of women derives from three factors. Firstly, the new trade flows affect employment and wages, and there may be a differential effect by sex if the female labour force is concentrated in particular, sectors of production.

Is the degree of competitiveness of countries independent of their degree of inequality? Is competitiveness only a question of microeconomic and sectoral efficiency, of the real exchange rate, or is it also a social question? So far, the specialized literature has ignored the problem of equity in the determination of countries’ competitiveness. It has then not been able to fully explain the observed competitiveness, however. In this article, equity is incorporated into the production function and also into investors’ decisions in a world of perfect mobility of capital.

Non-agricultural rural employment accounts for an increasing proportion of total rural employment in Latin America. Its potential for stimulating rural development has been noted, but it has also been analysed as a focal point of poverty. This article considers the magnitude and composition of this employment in some of the Central American countries and examines the conditions under which nonagricultural activities may help to improve rural employment and income.

In the economic history of Latin America, a growing population demanded jobs; creating more jobs required industrialization; and industrialization made it necessary to cover a productivity differential. There were two feasible options for this purpose: i) to preserve allocative efficiency and generate a major regressive income redistribution process; or ii) to lose allocative efficiency but leave the distribution of income largely unchanged. Governments chose the latter and built in lasting distortions in the foreign exchange market. Import substitution industrialization ended in stagnation. Increased pressure in the labour market could have driven wages sharply downward, but instead the informal market arose and, thanks to its monopolistically competitive structure, segmented the goods markets and ensured a minimally acceptable form of income distribution.

This article takes a long-term view of the evolution of development thinking and policies in Latin America and the Caribbean. It begins by looking at the changes in policy formulation trends, noting that the most abrupt changes of this type occurred, first during the period between the wars, and second, in the early 1980s, and although in both cases changes took place which may be considered as swings of the pendulum or phases in a larger picture, they were nevertheless significant. The author then reviews the economic reforms implemented from the 1980s onwards and highlights their common factors, although these cannot be said to belong to a set paradigm, because of the markedly different ways they were applied in the different countries.

This article analyses the financial rescue measures taken by the United States in the Mexican payments crises of August 1982 and January 1995. On both occasions, Mexico was on the brink of suspending payments on its external debt, and both times this was avoided thanks to rescue measures. The implications of the two financial rescue programmes were very different, however. The measures taken in August 1982 were followed by a period of many years in which Mexico was practically excluded from private loan markets. In contrast, the 1995 rescue programme was quickly followed by renewed access by Mexico to private capital markets.

This study looks at the main obligations arising from the World Trade Organization and their repercussions on the design of trade policy. First of all, the study analyses the content of the world trade system and the problems it raises, and highlights the fact that, as the number of questions considered expands and an ever-increasing number of policies are brought under international scrutiny, the delicate balance between trade policy and negotiations must be adjusted more and more exactly. It is pointed out that the commitments entered into within the context of the WTO indicate the direction but not the depth of trade reforms in Latin America. Closer analysis of the obligations arising from the WTO shows that they offer substantial leeway.

This article analyses the recent increase in the importance of indigenous peoples as political and social actors in the region, reviewing the changes that have taken place in the situation of the indigenous peoples, the relationship between the State and such peoples, the forging of new identities, and cultural changes: questions that are all being reappraised in the light of what has become known as “the ethnic question". The author highlights the existence of a number of leading threads which appear and reappear in the various types of indigenous movements.

Latín America is currently undergoing a strategic turnaround with far-reaching implications: from an inward-oriented form of development with heavy State intervention in production and the system of prices, to an outward-oriented development strategy in the context of a free market, with the private sector playing the leading role. This study analyses the seven main reforms associated with this neo-liberal strategy.

This article analyzes the economic effects which the Europe of 1992 could have on the countries of Latin America. It examines the main factors which led to the signing of the Single European Act in 1985, such as the loss of competitiveness of the European economies, the slow recovery of the European Economic Càimmunity (rrc) after the two oil crises, and the rigid politico-institutional system of the Community.