New Economics Papers
on Central and South America
Issue of 2011‒02‒26
six papers chosen by

  1. Macroeconomic Analysis of Corruption in Developing Economies By James P. Gander
  2. Microeconomics of Corruption Among Developing Economies By James P. Gander
  3. L'éducation au service de la mobilité sociale ascendante en Amérique latine By Christian Daude
  4. Inclusión social: un propósito nacional para Colombia By Santiago Araoz-Fraser
  5. The War on Illegal Drugs in Producer and Consumer Countries: A simple analytical framework By Daniel Mejia; Pascual Restrepo
  6. Fragile States and Development Policy By Timothy Besley; Torsten Persson

  1. By: James P. Gander
    Abstract: Based on empirical data, a two-equation game-type corruption reaction function model was developed. A “data to model” approach was used rather than the usual a priori approach. The general hypothesis tested was the “monkey see, monkey do” principle. The latest data on corruption among developing countries was obtained from the Enterprise Surveys done by the World Bank Group in 2010. The key variables were the percent of domestic firms expecting to make informal payment to public officials to “get things done,” and the percent of foreign firms doing like wise. The time span is from 2002-2010. A variety of econometric methods were used. In general, the statistical results were quite good and supported the hypothesis. Both reaction equations were positively sloped. Time had a reducing effect on the frequency of domestic corruption, yet it had an increasing effect on foreign corruption. Variations in the frequency of corruption across regions of countries were generally not significant.
    Keywords: Firm, Corruption, Game Model, Developing Countries JEL Classification: C51; D81; E60; K49; M29
    Date: 2011
  2. By: James P. Gander
    Abstract: A simple micro model of a firm’s investment decision made under the uncertainty of the success of a bribe of a government official is developed. The probability of success of the bribe is a function of the amount paid to the official to “get things done.” The operational model runs the amount of the bribe on such determinants as firm size, country size, shareholder ownership, political instability, and court system. The data covers the periods 2002-2005 and 2006-2010, includes 150 developing countries and has data on some 72,000 firms. Several econometric estimation methods were used. The findings support earlier studies, to wit, firm size and country size are inversely related to the index of corruption. Political instability and the court system were positively related to corruption. Policy implications of the findings are discussed.
    Keywords: Firm, Corruption, Uncertainty, Developing Countries. JEL Classification:
    Date: 2011
  3. By: Christian Daude
    Abstract: o Les revenus sont très inégalement répartis en Amérique latine, de même que les possibilités de mobilité sociale ascendante. o Le développement de la petite enfance est un puissant mécanisme égalisateur du champs social. o Une éducation secondaire plus généralisée et de meilleure qualité est un élément clé. Les réformes devront s'appuyer sur une meilleure administration des écoles qui associe flexibilité et transparence à un système moderne d'évaluation et d'incitations pour les gestionnaires d'établissements scolaires et les enseignants.
    Date: 2010–11
  4. By: Santiago Araoz-Fraser
    Abstract: La estructura social colombiana es altamente concentrada y debe corregirse acelerando y profundizando el proceso de inclusión social. Esta concepción se apoya en la “ética del desarrollo”, de Amartya Sen, y en la importancia del capital social y humano en el crecimiento. El proceso consiste en incluir a los excluidos, para que participen pasiva y activamente mediante una ampliación indefinida de la ciudadanía hacia una sociedad en la cual los derechos sociales, económicos y culturales sean aceptados y de uso cotidiano. Lo anterior solamente es posible si Colombia asume la inclusión social como un propósito nacional con políticas de largo plazo e instrumentos que mejoren las competencias laborales, la productividad y la demanda interna.
    Date: 2010–12–14
  5. By: Daniel Mejia; Pascual Restrepo
    Abstract: This paper develops a simple model of the war against illegal drugs in producer and consumer countries. Our analysis shows how the equilibrium quantity of illegal drugs, as well as their price, depends on key parameters of the model, among them the price elasticity of demand, and the effectiveness of the resources allocated to enforcement and prevention and treatment policies. Importantly, this paper studies the trade-off faced by drug consumer country`s government between prevention policies (aimed at reducing the demand for illegal drugs) and enforcement policies (aimed at reducing the production and trafficking of illegal drugs in producer countries). We use available data for the war against cocaine production and trafficking in Colombia, and that against consumption in the U.S. in order to calibrate the unobservable parameters of the model. Among these are the effectiveness of prevention and treatment policies in reducing the demand for cocaine; the relative effectiveness of interdiction efforts at reducing the amount of cocaine reaching consumer countries; and the cost of illegal drug production and trafficking activities in producer countries.
    Date: 2011–02–01
  6. By: Timothy Besley; Torsten Persson
    Abstract: It is widely recognized that fragile states are key symptoms of under-development inmany parts of the world. Such states are incapable of delivering basic services totheir citizens and political violence is commonplace. As of yet, mainstreamdevelopment economics has not dealt in any systematic way with such concerns andthe implications for development assistance. This paper puts forward a frame-workfor analyzing fragile states and applies it to a variety of development policies indifferent types of states.9076:
    Keywords: state fragility, development
    JEL: P45
    Date: 2011–01

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