This paper discusses the theoretical arguments in favor of and against economic globalization and, with a view to ascertaining whether Latin America may be able to capture the globalization upside, examines the trends and salient features of Latin America's globalization as compared with that of Southeast Asia.
... See More + The paper focuses on trade and financial integration as well as the aggregate demand structures (domestic demand-driven versus external demand-driven) that underpin the globalization process. It finds that Latin America is mitigating some bad side effects of financial globalization by moving toward a safer form of international financial integration and improving its macro-financial policy frameworks. Nonetheless, Latin America's progress in raising the quality of its international trade integration has been scant. The region's commodity-heavy trade structures and relatively poor quality of trade connectivity can hinder growth potential to the extent that they are less conducive to technology and learning spillovers. Moreover, Latin America's domestic demand-driven growth pattern (a reflection of relatively low domestic savings) may become an additional drag to growth by accentuating the risk of a low savings-low external competitiveness trap.
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Policy Research Working Paper WPS6837 APR 01, 2014
de la Torre, Augusto; Didier, Tatiana; Pinat, Magali
Using newly collected national and sub-national data, and historical case studies, this paper argues that differences in innovative capacity, captured by the density of engineers at the dawn of the Second Industrial Revolution, are important to explaining present income differences, and, in particular, the poor performance of Latin America relative to North America.
... See More + This remains the case after controlling for literacy, other higher order human capital, such as lawyers, as well as demand side elements that might be confounded with engineering. The analysis then finds that agglomeration, certain geographical fundamentals, and extractive institutions such as slavery affect innovative capacity. However, a large effect associated with being a Spanish colony remains suggesting important inherited factors.
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Policy Research Working Paper WPS6814 MAR 01, 2014
This issue focuses on ways to minimize impact on vulnerable populations living in the Rio de Janeiro's mountainous region, particularly in regards to extreme flooding and devastating landslides.
... See More + With the spotlight on Rio de Janeiro as a host city of the World Cup and Summer Olympics, government authorities need to protect residents and tourists from disasters and are striving to build resilience by improving land-use planning and implementing best practices in disaster risk management (DRM) to better prepare for climatological hazards. In the wake of the Rio flooding and landslide disaster in 2011, government authorities sought to understand the economic impacts and human losses triggered by extreme hazard events and the underlying causes of disaster risk. A number of DRM interventions, analytical studies, technical assistance, and capacity building activities include four main areas: risk identification; disaster preparedness and response; policymaking; and economic analysis. A culture of disaster risk awareness is growing in Brazil as urban planners are developing integrated and proactive approaches to development by institutionalizing DRM policies and building technical capacities to mitigate disasters. However, even with recent progress, much remains to be done to improve the performance and technical capacity of the institutions to integrate DRM principles into decision-making processes. The frequent and intense natural disasters in Brazil call for substantial investments including: studies to identify the best technologies; strategies for collecting and using data; development of land-use planning and urban policies that incorporate mitigation measures for existing hazards; and avoidance of settlements in high-risk areas.
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Research from the United States shows that gaps in early cognitive and noncognitive abilities appear early in the life cycle. Little is known about this important question for developing countries.
... See More + This paper provides new evidence of sharp differences in cognitive development by socioeconomic status in early childhood for five Latin American countries. To help with comparability, the paper uses the same measure of receptive language ability for all five countries. It finds important differences in development in early childhood across countries, and steep socioeconomic gradients within every country. For the three countries where panel data to follow children over time exists, there are few substantive changes in scores once children enter school. These results are robust to different ways of defining socioeconomic status, to different ways of standardizing outcomes, and to selective non-response on the measure of cognitive development.
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Policy Research Working Paper WPS6779 FEB 01, 2014
In 2012, the Latin America and the Caribbean (LAC) region continued its successful drive to reduce poverty and build the middle class. The proportion of the region's 600 million people living in extreme poverty, defined in the region as life on less than $2.50 a day, was cut in half between 2003 and 2012 to 12.3 percent.
... See More + Reflecting the upward mobility out of poverty, households vulnerable to falling back into poverty became the largest group in LAC in 2005, and represent almost 38 percent of the population. However, in the last two years, the share of vulnerable households has started to decline. The middle class, currently 34.3 percent of the population, is growing rapidly and is projected to replace the vulnerable as the largest economic group in LAC by 2016. The Southern Cone region (including Brazil) continued to be the most dynamic region and the main driver of poverty reduction in LAC, while poverty in Central America and Mexico proved more stubborn. About 68 percent of poverty reduction between 2003 and 2012 was driven by economic growth, with the remaining 32 percent arising from decline in inequality. Overall, equality of access to basic childhood goods and services has improved in recent years. Yet access can be further improved, and serious issues remain concerning the quality of those goods and services, particularly in education and housing infrastructure. Moreover, access increases with parental education and income or assets, reflecting low intergenerational mobility in many countries in the region. As with poverty reduction, most of the progress in equality of access since 2000 has come in the Southern Cone and the Andean regions, while many of Central America's countries managed only small improvements. There are also severe differences at the subnational level and between urban and rural areas, highlighting the need to strengthen the capacity of local governments to deliver high quality basic services to all their citizens.
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Successful entrepreneurs are individuals who transform ideas into profitable commercial enterprises. This process often requires special talents, including a capacity to innovate, to introduce new products, and to explore new markets.
... See More + It also requires an ability to manage others, to assign priorities to tasks to increase the efficiency of production, and to make the best use of available resources. But these talents are not enough. Successful entrepreneurs thrive in favorable economic and institutional environments that enhance the expected returns of innovation. When an enabling environment exists, entrepreneurs take risks and invest in innovation, spurring productivity gains through the dynamics of firm entry and exit and innovation by incumbent firms, thus fostering economic development. Entrepreneurs are key actors in the transformation of low-income societies characterized by low productivity and often subsistence self-employment into dynamic economies characterized by innovation and a rising number of well-remunerated workers. To the extent that causal links from entrepreneurship to productivity growth are at work, there is room for using policy levers to quicken the development process by improving the incentives and supportive institutions that facilitate innovation by entrepreneurs. These analytical and policy issues motivate this report, which explores the challenges faced by potential high-growth, transformational entrepreneurs in Latin America and the Caribbean (LAC).
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This issue focuses on a regional study and technical assistance initiative to strengthen climate adaptation planning for small and medium-sized cities in Latin America and the Caribbean (LAC).
... See More + City planners and mayors in LAC are witnessing higher population growth in small and medium-sized cities (SMSC) than in large cities and capitals where numbers have stabilized or decreased in the past years. Rapid urbanization is often accompanied by spatial expansion and urban sprawl into hazard-prone areas such as floodplains and landslide-prone hillsides and mountain slopes. This development trend in SMSC increases the vulnerability of new settlements to climate-related impacts such as heavy rain and storm surge. To better understand the SMSC's climate risks, strengthen their adaptive capacities, increase knowledge exchange, and develop decision-making resources, the World Bank LAC disaster risk management and urban development team implemented a multi-faceted five-city pilot program to deliver technical assistance to conduct urban risk assessments and to develop city adaptation plans. This brief provides an overview of the program, outcome, and practical tools to perform risk assessments and prioritize adaptation investments.
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This issue focuses on a regional study and technical assistance initiative to strengthen climate adaptation planning for small and medium-sized cities in Latin America and the Caribbean (LAC).
... See More + City planners and mayors in LAC are witnessing higher population growth in small and medium-sized cities (SMSC) than in large cities and capitals where numbers have stabilized or decreased in the past years. Rapid urbanization is often accompanied by spatial expansion and urban sprawl into hazard-prone areas such as floodplains and landslide-prone hillsides and mountain slopes. This development trend in SMSC increases the vulnerability of new settlements to climate-related impacts such as heavy rain and storm surge. To better understand the SMSC's climate risks, strengthen their adaptive capacities, increase knowledge exchange, and develop decision-making resources, the World Bank LAC disaster risk management and urban development team implemented a multi-faceted five-city pilot program to deliver technical assistance to conduct urban risk assessments and to develop city adaptation plans. This brief provides an overview of the program, outcome, and practical tools to perform risk assessments and prioritize adaptation investments.
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Cartagena, the historic city where the '1983 Cartagena convention for the Protection of the Caribbean' was signed, is meeting its responsibilities to protect the public health of its citizens as well as the costal marine environment through improved wastewater management.
... See More + Cartagena's experience can serve as an inspiration to the wider Caribbean region and provide a model for other developing coastal cities. Water pollution control is a key issue for the world's coastal cities. Pollution emanating from domestic and industrial wastewater can not only contaminate the ocean environment but also damage highly productive estuaries and bays that provide a critical ecological connection to the marine environment. Inadequate wastewater management can also pollute urban beaches, potentially threatening public health and undermining tourism. This technical note summarizes Cartagena's experience in wastewater management for international dissemination and was jointly prepared by the World Bank, the Colombian Ministry of Environment and Sustainable Development, the Cartagena water utility (ACUACAR), and the Global Partnership for the Oceans (GPO).
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Cartagena, the historic city where the '1983 Cartagena convention for the Protection of the Caribbean' was signed, is meeting its responsibilities to protect the public health of its citizens as well as the costal marine environment through improved wastewater management.
... See More + Cartagena's experience can serve as an inspiration to the wider Caribbean region and provide a model for other developing coastal cities. Water pollution control is a key issue for the world's coastal cities. Pollution emanating from domestic and industrial wastewater can not only contaminate the ocean environment but also damage highly productive estuaries and bays that provide a critical ecological connection to the marine environment. Inadequate wastewater management can also pollute urban beaches, potentially threatening public health and undermining tourism. This technical note summarizes Cartagena's experience in wastewater management for international dissemination and was jointly prepared by the World Bank, the Colombian Ministry of Environment and Sustainable Development, the Cartagena water utility (ACUACAR), and the Global Partnership for the Oceans (GPO).
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Ratings for the Regional Sustainable Transport and Air Quality Project for Latin America were as follows: outcomes were moderately satisfactory; risk to global environment outcome was low or negligible; Bank performance was moderately satisfactory and borrower performance was also moderately satisfactory.
... See More + Some lessons learned includes: the experience gained under this operation raises a series of questions regarding the most appropriate way of structuring regional or umbrella type projects. The implementing agency needs to be capable of exercising its implementation capacity since the grant/loan effectiveness. Trying to strengthen and build the implementation agency while in parallel trying to advance execution is not recommendable and inevitably leads to delays in project implementation. Additionally, ensuring cross-fertilization and effective coordination between projects can be extremely challenging, particularly when resources, both human and financial, are restricted. Functions endowed on the 'coordinating body', including information sharing, dissemination, institutional strengthening, monitoring and evaluation are often too broad when compared to budget availability, making operating costs often higher than expected.
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Implementation Completion and Results Report ICR2719 DEC 20, 2013
Since the 1990s, financial systems around the world, and especially those in developing countries, have gained in soundness, depth, and diversity, prompted in part by a series of financial sector and macroeconomic reforms aimed at fostering a market-driven economy in which finance plays a central role.
... See More + Latin America and the Caribbean (LAC) has been one of the regions at the forefront of these changes, and it serves as a good laboratory for seeing where the challenges in financial development lie. The progress in financial development in LAC no doubt reflects governments' substantial efforts to provide an enabling environment. This includes lower macroeconomic volatility, more independent and better anchored currencies, increased financial liberalization, lower currency mismatches and foreign debt exposures, enhanced effectiveness of regulation and supervision, and notable improvements in the underlying market infrastructure. This book studies the recent history of financial sector development and reforms in the LAC region and compares it to other developing and developed countries to shed light on the key obstacles to financial development, both past and future. This study is particularly timely in the wake of the global financial crisis that began in 2008, as assumptions about the underpinnings of efficient and well-functioning markets undergo close scrutiny. This book builds on and complements several overview studies on financial development both in LAC and in the developing world more broadly that have been published in the past decade, including those by the World Bank. It covers additional aspects of the financial development process and focuses on the broader set of LAC countries. The chapters in this book cover different issues related to financial development in LAC. Chapters one through five attempt to ascertain where the region's financial development lies, analyzing in detail some of the reasons and policy implications underlying its gaps in banking depth and equity liquidity, as well as the links between financial development and financial globalization. Chapters six and seven consider two themes that are central to the region's financial development: long-term finance and the role of the state in risk bearing. Chapters eight through eleven deal with regulation and supervision, first taking stock of the progress in the region and then analyzing the challenges LAC faces on three main facets of systemic oversight: macro prudential policy, micro systemic regulation, and systemic supervision.
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Publication 83498 DEC 17, 2013
Didier, Tatiana; Schmukler, Sergio L.; Anginer, Deniz; Auqui, Martin; Calderon, Cesar; Ceballos, Francisco; Cortes, Mariano; De la Torre, Augusto; D'Hulster, Katia; Dijkman, Miquel; Feyen, Erik; Gutierrez, Eva; Heysen, Socorro; Ize, Alain; Levy-Yeyati, Eduardo; Peria, Maria Soledad Martinez; Raddatz, Claudio; Seelig, Steven A.; Serven, Luis; Williams, Thomas
This report contributes to the design and implementation of policies that promote healthy living in Latin America and the Caribbean (LAC), thus effectively preventing premature mortality from non-communicable diseases (NCDs) in the region.
... See More + It examines the health and economic impact of NCDs in the region and the governance challenges in the design and implementation of multisectoral policies to prevent these conditions, including polices to improve diet, increase physical activity, and reduce tobacco use and alcohol abuse. The study focuses on how policy decisions involving multisectoral interventions to prevent health risk factors are taken, which stakeholders directly or indirectly participate in those decisions, which incentives they experience, and what strategies they use in these processes. This document is divided into six chapters: 1) non-communicable diseases in Latin America and the Caribbean, 2) risk factors for NCDs in Latin America and the Caribbean, 3) economic impact of NCDs in Latin America and the Caribbean, 4) governance of multisectoral interventions to promote healthy living: international examples, 5) multisectoral interventions to promote healthy living in Latin America and the Caribbean, and 6) lessons learned and agenda for the future. See Less -
This paper studies the impact of gender and ethnicity on educational outcomes using cross-country evidence from Bolivia, Mexico, Peru, Senegal, and Sierra Leone.
... See More + It uses the Minnesota Population Center's Integrated Public Use Microdata Series-International database, which includes individual-level data from large, harmonized, and representative samples of country censuses. Using an estimation method analogous to difference-in-differences, the paper finds that gender-based differences in literacy, primary school completion, and secondary school completion are larger for minority ethnic groups compared with others or, alternatively, ethnicity-based differences are larger for women compared with men. The findings suggest that the intersection of gender and ethnicity confers cumulative disadvantage for minority groups, especially in Latin America. The paper discusses the implications of these findings on the design of, targeting in, and resource allocation for development programs.
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Policy Research Working Paper WPS6734 DEC 01, 2013
Tas, Emcet O.; Reimao, Maira Emy; Orlando, Maria Beatriz