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Decent Work and Economic Growth
Poverty and employment in Latin America: 1990-2005
What factors led to the reduction of poverty in Latin America from 1990 onwards? This article looks into the key factors that have played a part in reducing poverty in the region including in particular employment and remuneration for work. With data from household surveys the authors discuss the ways in which changes in the working age population in its participation in economic activity in employment rates and in income from work and other sources affect the per capita incomes of families in the lowest deciles of income distribution and hence in poverty indicators.
Rural non-farm employment and rural diversity in Latin America
In the 1990s rural development specialists became increasingly interested in rural non-farm employment (RNFE) and the factors determining it. Ideas about the subject gradually made their way into the political debate and some development programmes. Location is one of the aspects mentioned in many studies as a factor influencing the characteristics of RNFE. Some others include scale type generated income and participating household members. This article looks at what has been written on the subject and suggests that location and the various “distances” that go with it are a vital determinant of RNFE.
The settlement of disputes under the WTO. The experience of Latin America and the Caribbean
This article analyses the implications for the Latin America region of the dispute settlement procedure approved in 1994 by the Marrakesh Agreement Establishing the World Trade Organization (WTO). These implications are important because the region has become involved in a growing number of commercial disputes as its international trade has increased. The procedure applies to disputes between any of the 148 member countries over matters covered by the Agreement and the 29 multilateral agreements annexed to and forming an integral part of this. The present article highlights the ways in which the procedure differs from the old GATT rules and other international dispute settlement procedures. It describes the agreements that have generated the most disputes (anti-dumping subsidies and countervailing measures and safeguards) discusses United States policy in this area and details the disputes in which the Latin American countries have participated with particular reference to Brazil.
Towards an efficient innovation policy in Latin America
Innovation has emerged as a central theme on the growth agenda of Latin America. This paper examines four issues. First how can we know if Latin America really has an “innovation problem” that is behind its weak total factor productivity performance? Second what do we mean by innovation and what are dimensions of it in which the region exhibits weaknesses? Third what does recent experience and literature suggest for principles and broad policy measures to foment innovation? Fourth are there any linkages between these weaknesses and equity? Since even in the Organisation for Economic Cooperation and Development (OECD) there is little consensus on the specific policies that governments should implement and even less on their suitability to developing countries this paper attempts to organize thinking around some basic principles and offer suggestive experience rather than specific policy advice.
Consensus and dissension among Mexican economists
This article identifies areas of agreement and disagreement among Mexican economists in relation to key issues of economics on the basis of a survey of 360 members of the profession. The propositions eliciting the greatest consensus included: equity in income distribution vigorous use of antitrust and consumer protection laws and the use of countercyclical fiscal policies. The most contentious issues were: private investment in the energy sector the determinants of inflation the minimum wage as a cause of unemployment and the objectives to be pursued by an independent central bank.
Can the Latin American and Caribbean countries emulate the Irish model of FDI attraction?
In the era of globalization foreign direct investment (FDI) is an essential factor in the development of the economy. In recent years creating a better investment climate has therefore been a policy priority for many governments including the Latin American ones. Only a very small group of Latin American countries have attained relative success in attracting quality FDI however. Conversely Ireland has achieved impressive results by creating an attractive environment for FDI. The Latin American countries would do well to emulate the Irish experience especially as regards the approach to establishing competitive advantages and efficiently promoting the country as a market site for FDI.
Mirrors of change: Industrialists in Chile and Uruguay
This study examines institutional changes in Chile and Uruguay between the mid-1960s and late 1990s. It seeks to tie together the macro and micro levels in order to observe how institutions working with local and global issues interact or conflict from the perspective of two industrialists’ associations the Manufacturers Association (SFF) in Chile and the Chamber of Industry of Uruguay (CIU). From this vantage point the study analyses how the organizations’ ‘logic of appropriateness’ has altered since the 1960s with the expectation of identifying changes in the way sources of legitimacy interact at the global regional and national levels. To make the process of change more visible the study concentrates on two years 1966 and 1998. It also tries to identify new dimensions of comparison between the development processes of Chile and Uruguay.
Has investor protection been rendered obsolete by the Argentine crisis?
Unlike the train of events in previous crises when the negotiations between the parties–creditors and debtors investors and host countries– were played out within some kind of institutional framework the crisis of 2001 portrayed Argentina as a country abandoned to its fate not just once but twice. But although investors had initially been able to alter the rules in their favour to secure better protection and enhanced legal certainty ultimately they came out of the situation worse off. The Argentine experience suggests that as the influence of the international financial institutions declines asymmetric solutions cannot last and at the end of the day democratic governments will put their electorate before their investors. But is the Argentine case an exception to the rule or does it reflect a more general weakening of foreign investment protection?
Social benefits in Uruguay: Why do some potential beneficiaries not apply?
Cash transfer programmes have become very important in Latin America. Concerns about proper targeting have centred on excluding people who do not meet eligibility requirements. Less attention has been paid to the failure of programmes to reach the whole of their target population partly because there are people who do not even apply. The present article analyses the determinants of non-take-up of social benefits. The case studied is the National Social Emergency Plan an income transfer programme implemented in Uruguay between 2005 and 2007. It is calculated that over a fifth of eligible households have never enrolled in the programme. A probit model is used to estimate the determinants of the decision to apply. The evidence obtained is highly consistent with theoretical and empirical research into the subject.
The economic returns to education in Mexico: A comparison between urban and rural areas
This study uses the Mincer equation to calculate the private economic returns to education in urban and rural areas of Mexico in the 1994-2005 period. The findings indicate that investing in education is profitable in both types of area. Returns to education were found to be greater in the countryside than in cities in most of the years analysed and at every level of education. Education in rural areas tends to be more profitable for women at the basic education levels and for men at the higher levels. In urban areas education proved to be more profitable for men at the primary and higher levels and in some years for women at the lower and upper secondary levels.
Employment Challenges and Policy Responses in Argentina, Brazil and Mexico
In this paper we argue that Argentina Brazil and Mexico must focus economic and social policies on creating employment if they want to provide decent work (i.e. formal jobs with social security coverage). During the 1990s financial and trade liberalization and the associated laissez-faire policies did not deliver in terms of growth or employment in the countries under consideration. We assess the macroeconomic trade investment and labour-market policies of the countries during 1990-2004 and then propose a series of recommendations that give employment growth the priority it deserves.
Determinants of technological innovation in Argentina and Brazil
This article analyses and compares the determinants of innovation in Argentina and Brazil countries that have based their industrialization strategies on import substitution. Probit regressions in which instrumental variables are used to check for problems of endogeneity of exports reveal that in both countries knowledge external to firms helps to promote innovation that internal research and development capacity is relatively weak and that external trade integration has a positive effect on firms’ propensity to innovate (more so in Brazil than in Argentina). The results of this study suggest in general that there has been modest progress in the pattern of innovation among Argentine and Brazilian firms in recent years compared with the import substitution period.
Local economic development and territorial competitiveness in Latin America
This article argues that the local and regional governments of Latin America in an increasingly globalized world must face new challenges that include establishing or improving their competitive strengths and transforming their local production systems. These two aspects must be linked to territorial policies and more specifically to the development of a territorial culture that embraces both. While it is true that enterprises are the ones that actually compete their competitiveness may be enhanced if the territorial environment encourages this dynamic and if they themselves realize the importance of being enterprises “of the territory” rather than “in the territory”. This objective may be thwarted however by the existence of territories that are unequally prepared to meet these challenges. Different types of intervention need to be used therefore in terms of local and regional policies to enhance the competitive strengths of such territories.
Reassessing social policies in Latin America: Growth, middle classes and social rights
This paper examines the analytical bases of social policy in Latin America as illustrated by empirical data. It finds that the dominant approach is based on the following premises: (i) economic growth is the primary mechanism for poverty reduction; (ii) social expenditure should focus mainly on the ?really poor?; (iii) private-sector provision of education health and pension services should be encouraged; and (iv) emergency social protection programmes are needed to deal with macroeconomic crises and natural disasters. The article then identifies areas in which social policy can be renewed such as income distribution attention to the middle class as a target of social policies possibilities for the poor and middle classes to accumulate capital and the economic and social rights of the population.
The periphery and the internationalization of the world economy
It is an accepted fact that the process of internationalization of the world economy has expanded considerably in the last few decades. The author begins by examining the historical background of this process and after emphasizing that it is not limited to the economic sphere —since it is also seen in the international dissemination of ideas institutions and ways of life— he goes on to analyse in particular the economic internationalization recorded since the Second World War. After thus defining his subject he reviews various expressions of internationalization in trade capital movements investments the activities of transnational enterprises and so on with special attention to the way in which this process has influenced the periphery.
Commercial bank finance from the North and the economic development of the South: congruence and conflict
The executives of the big private banks feel very satisfied with their growing role in the financing of the less developed countries and furthermore consider that there is a general harmony of interests between borrowers and lenders: a sense of satisfaction which is shared by an appreciable number of economists and officials responsible for formulating policies both in the developed and the under-developed countries.
Youth employment: Characteristics, tensions and challenges
Youth employment problems affect not only the welfare of young people themselves but also some key elements of socio-economic development in general. This article examines the circumstances origins and consequences of these problems and reviews the statistical information available on recent trends in youth employment variables. The figures show that the occupational position of young people has deteriorated in absolute terms along with labour markets generally and that contrary to some expectations it has not improved in relative terms either. Working conditions are also found to vary greatly by education level gender and household characteristics among other factors. The article then identifies a number of tensions between the subjective perceptions of the young and the reality of the labour market and reviews options for improving the youth employment situation with regard to the issues of employability equal opportunities for young men and young women entrepreneurship and employment creation.
Latin America meets China and India: Prospects and challenges for trade and investment
The high growth levels projected for China and India will make these two countries the most important pole of the global economy for the next few years creating a market of great potential for Latin American and Caribbean exports. These markets had remained largely untapped until recently with the exception of certain South American primary products. Latin America should strengthen its ties with the two Asian countries in order to increase production synergies with them. Free trade agreements and trade and investment partnerships should also be established in order to increase access to both markets and facilitate insertion into Asian production and export chains.
Changes in Chile’s production structure, 1986-1996: Output and industrial interdependence
In earlier studies the author showed that the type of development adopted by Chile differed significantly from that of the successful East Asian countries. Up to 1986 the Chilean economy had a relatively weak and technologically unsophisticated manufacturing base and the penetration of imported inputs was mainly at the expense of the scanty domestic productive intermediation. Therefore neither manufacturing industrialization nor industrial interdependence appeared to facilitate the type of manufactured exports that might sustain dynamic industrial development based on external markets. The present paper analyses changes in Chile’s production structure from 1986 to 1996 generally extended to 2000 using methods similar to those of earlier studies. The conclusion is that despite the outstanding growth rates over the period the economy still appears relatively weak as a basis for a sustainable increase in economic and technological sophistication.
Effects of training on competitiveness in the manufacturing sector
This article examines the effect of training on competitiveness in the manufacturing sector drawing a distinction between industries with differing technological and productive characteristics. Using a systemic approach it studies activities within firms and the impact that training has on them as well as the organizational and institutional environment that supports training and the effect of the latter on the locality as a whole. An analysis is performed at two levels. At the firm level (micro analysis) econometric tools are used to study the manufacturing sector in Mexico. At the regional level (meso analysis) the electronics industry in one region of Mexico is studied. Empirical evidence shows that enterprise training has different effects on competitiveness in industries with different technological characteristics. It also has a positive impact on the region through knowledge diffusion.