nep-lam New Economics Papers
on Central and South America
Issue of 2006‒09‒03
three papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Global Prospects for Dairy in Argentina and Chile: Evidence from Field Visits and Model Simulations By Fuller, Frank H.; Beghin, John C.; Boland, Michael; Babcock, Bruce A.; Foster, William
  2. Bootstraps not Band-Aids: Poverty, Equity and Social Policy in Latin America By Nancy Birdsall; Miguel Szekely
  3. Economic Policy and Wage Differentials in Latin America By Jere R. Behrman; Nancy Birdsall; Miguel Székely

  1. By: Fuller, Frank H.; Beghin, John C.; Boland, Michael; Babcock, Bruce A.; Foster, William
    Abstract: We assess the international competitiveness of the dairy industries in Argentina and Chile, combining recent market intelligence gathered from field visits with quantitative simulations of global policy reform scenarios. Both countries exhibit strong potential for export growth but face significant internal and external barriers to expanding their dairy industries. Global policy reforms would resolve some of the international obstacles to their expansion. Argentina has great potential, but it is handicapped by its current macroeconomic policies, trade policy distortions, and the uncertainty associated with policy implementation. Chile is more limited in terms of natural capacity for expansion, but it has a positive trade and investment environment.
    Keywords: Argentina, agricultural trade policy, Chile, comparative advantage, competitiveness, dairy processing, exports, milk production.
    Date: 2006–08–23
  2. By: Nancy Birdsall; Miguel Szekely
    Abstract: After a decade of economic reforms that dramatically altered the structure of economies in Latin America, making them more open and more competitive, and a decade of substantial increases in public spending on education, health and other social programs in virtually all countries, poverty and high inequality remain deeply entrenched. In this paper we ask the question whether some fundamentally different approach to what we call “social policy” in Latin America could make a difference – both in increasing growth and in directly reducing poverty. We define social policy broadly to include economy-wide (“macro” and employment and other structural) policies that affect poverty and social justice in foreseeable ways, as well as social investment programs such as health and education and social protection programs including cash and other transfers targeted to the poor and others vulnerable to economic and other shocks. Section 1 contains a brief review of what is known about the links among poverty, inequality and growth in the region and elsewhere. We emphasize the relevance of empirical work showing that income poverty combined with inequality in access to credit and to such assets as land and education contributes to low growth and directly to low income growth of the poor. In Section 2 we focus on the effects of the market reforms of the last 10-15 years on poverty and inequality in the region, based on empirical studies using household data. We emphasize the finding that the reforms have not contributed to reducing poverty and inequality. Though reforms have not particularly worsened the situation of the poor, they have not addressed the underlying structural causes of high poverty, i.e. the poor’s lack of access to credit and to productivity-enhancing assets. In Section 3 we describe briefly four stages of social policy in the region over the last four decades. In Section 4 we propose a more explicitly “bootstraps”-style social policy, focused on enhancing productivity via better distribution of assets. We set out how this broader social policy could address the underlying causes and not just the symptoms of the region’s unhappy combination of high poverty and inequality with low growth. Length: 32 pages
    Keywords: Latin America, poverty, equity, social policy
    JEL: D23 J31 O54 O40 O15 I31 I32
  3. By: Jere R. Behrman; Nancy Birdsall; Miguel Székely
    Abstract: This paper applies a new approach to the estimation of the impact of policy, both the levels and the changes, on wage differentials using a new high-quality data set on wage differentials by schooling level for 18 Latin American countries for the period 1977-1998. The results indicate that liberalizing policy changes overall have had a short-run disequalizing effect of expanding wage differentials, although this effect tends to fade away over time. This disequalizing effect is due to the strong impact of domestic financial market reform, capital account liberalization and tax reform. On the other hand, privatization contributed to narrowing wage differentials and trade openness had no significant effect on wage differentials. Technological progress, rather than trade flows, appears to be a channel through which policy changes are affecting inequality.
    Keywords: Latin America, wages, market reform, tax reform, technological change
    JEL: O33 J31 O57 H20 G10 L33

This nep-lam issue is ©2006 by Maximo Rossi. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.