CEPAL Review - Volume 2004, Issue 83, 2004

Theories about a necessary link between authoritarianism and progress have been discredited by history. Now democracy and development are prominent (though not inseparable) values on nations’ agendas. The link between the two is not a given; it is established by recognizing that democracy is justified in itself as a universal value that can be accepted by all. Democracy legitimizes public policies because it is based on deliberation and a negotiated trade-off of interests, under transparent rules. Democratic procedures can be used to cope with unexpected difficulties and strengthen the confidence of outsiders. The way to deal with the asymmetrical effects of globalization is to participate in the international economy on more advantageous terms, affirming the ability of democracy to shape a form of development that is nonexclusive. unlike that which we experienced in the past. This is no easy task, and if people are not rewarded by a higher quality of life, then not only will democracy be in jeopardy, but the economy will not prosper.

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.

This article explores some of the changes currently occurring in enclaves of structural poverty in Argentina. While many studies have dealt with middle-class impoverishment, this study addresses the growing geographical concentration and accumulation of social disadvantages, something that has triggered a process of urban segregation and threatens these enclaves with exclusion. Control of the public space in such areas of structural poverty proves to be a determining factor in many of the disadvantages suffered by these communities: social isolation, internal fragmentation and depletion of household asset portfolios. Setting out from an ethnographic analysis of the way young people appropriate the public space and impose a “street culture’ with its own norms and practices, this paper explores the dynamic complex of disadvantages that operates as an engine of exclusion for these enclaves and their inhabitants.

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.

This paper stems from the debate on food security that has been under way since the World Food Summit of 1996. It discusses the viability of a type of programmatic proposal deriving from the Rome Declaration and Plan of Action signed by the Governments of 148 countries, and it suggests that the implementation of the Plan of Action requires the establishment of a structural link between the population affected by food insecurity -usually unable to make its views known or exert pressure- and the various authorities responsible for initiating public action. The central hypothesis of this paper is that this structural link can be centred upon family farmers. It argues that food security, underpinned by the right to food, is a territorial expression of civic rights.

The growth of high-quality employment needed to reduce the share of informal occupation and open unemployment in Peru will require an acceleration and diversification of private investment in the tradable sector. One of the main constraints faced is the uncompetitiveness of the non-extractive tradable sector. In 1990-2003. competitiveness improved in this sector essentially as a result of lower labour costs, a socially unjust and economically ineffective route to follow. To raise competitiveness, it is essential for the macroeconomic regime to include a competitive real exchange rate (to which there are obstacles) and higher productivity at the microeconomic level. This latter goal needs to be pursued through microeconomic and mesoeconomic policies, the main obstacle being the narrow outlook prevailing from the mid 1990s onward, which emphasized the reduction of average labour costs as the main way to raise competitiveness.

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.

Although Chilean exports have performed well in recent decades, they are still largely confined to a few products, a few markets and a small number of firms. The present paper explores this last point, discussing the export behaviour of companies. The main stylized facts are as follows: only a small group of firms are capable of exporting on a permanent basis, and these companies are much larger and have much higher levels of productivity and human capital than the rest.

This paper is a methodological and analytical contribution to a line of research whose objective is to construct representative indices of the technological capabilities of Mexican manufacturing establishments. It also examines the distribution of these capabilities in such establishments and their association with performance variables in a sample of 1.818 firms. Factor analysis was used to identify four factors expressing the main sources of learning in manufacturing industry: i) training policy, ii) continuous improvement innovation, iii) information and documentation systems, and iv) investment in new technologies. Grouping analysis was used to identify four groups of establishments on the basis of points scored per factor and to examine their performance indicators. There was found to be a positive association between technological capabilities and performance in three of the five indices: profit margins, labour productivity and technical change.

The proposed new Basel Capital Accord aims to better align regulatory capital with the risk that banks actually take on. This paper argues that current proposals will inappropriately and significantly increase the cost or reduce the quantity of bank lending to developing countries, as they will make the requirements for lending to them far more stringent. The failure of the Basel proposals to take account of the benefits of international diversification implies that risk is overestimated at the portfolio level. We show that, for a number of variables (such as bank profitability) and for a number of periods, the degree of correlation between developed economies is greater than that between developed and developing countries. We also show via simulations that a portfolio diversified across developed and developing economies has a lower level of risk than one focused only on developed ones. We therefore urge the Basel committee to explicitly incorporate the clear benefits of international diversification.

international financial institutions are showing a renewed interest in measures to enhance national budget management and strengthen the integrity of public finance in emerging economies. The role of national parliaments and supreme audit institutions in the governance of the budget and the accountability of public finances is being rediscovered. To strengthen the contribution these institutions make to the budget process, the Inter-American Development Bank (idb) is providing them with multilateral loans whose potential remains unexplored and whose effectiveness could be improved. Besides increasing technical capacity and enhancing operational efficiency, second-stage reforms should enhance the governance of public finance and fiscal control by ensuring greater financial autonomy and political independence for supreme audit institutions and promoting more efficacious links between supreme audit institutions and parliamentary public accounts committees.