nep-lam New Economics Papers
on Central and South America
Issue of 2015‒08‒13
fifteen papers chosen by

  1. Financial Inclusion in Latin America and the Caribbean: Access, Usage and Quality By María José Roa García
  2. Inequality and Fiscal Redistribution in Middle Income Countries: Brazil, Chile, Colombia, Indonesia, Mexico, Peru and South Africa By Nora Lustig
  3. Prudential Regulation, Currency Mismatches and Exchange Rate Regimes in Latin America and the Caribbean By Martín Tobal
  4. Violence and Birth Outcomes: Evidence from Homicides in Brazil By Foureaux Koppensteiner, Martin; Manacorda, Marco
  5. Should Latin America save more to grow faster ? By De La Torre,Augusto; Ize,Alain
  6. Latin American Regionalism in a Multipolar World By Jorge F. Garzón
  7. Challenges to promoting social inclusion of the extreme poor: evidence from a large scale experiment in Colombia By Laura Abramovsky; Orazio Attanasio; Kai Barron; Pedro Carneiro; George Stoye
  8. Soft Budgets and Renegotiations in Public-Private Partnerships: Theory and Evidence By Eduardo Engel; Ronald Fischer; Alexander Galetovic
  9. A Microestructure Approach to Gross Portfolio Inflows. The Case of Chile By Bárbara Ulloa; Carlos Saavedra; Carola Moreno
  10. Income Inequality in Bolivia, Colombia, and Ecuador: Different Reasons By Aristizábal-Ramírez, María; Canavire Bacarreza, Gustavo J; Jetter, Michael
  11. Impacto de la regulación en la eficiencia asignativa del mercado spot eléctrico colombiano By John J. García; Santiago Arango Tamayo; Andrés F. Ortiz Rico
  12. Gender differences on sexual behavior and school inputs: evidence from Bogota By Andrea Atencio; Juan Gallego
  13. Estimating the production function for human capital: results from a randomized controlled trial in Colombia By Orazio Attanasio; Sarah Cattan; Emla Fitzsimons; Costas Meghir; Marta Rubio Codina
  14. Looking Behind the Scenes: An Assessment of the Interdependence of Brazilian Cultural Industries By Amir B. Ferreira Neto; Fernando S. Perobelli; Alexandre Rabelo
  15. Validación de un instrumento de medición de ambiente escolar para docentes Colombianos By Juan Pablo Román Calderón; Mónica Patricia Ospina Londoño; José David Garcés Ceballos

  1. By: María José Roa García (Centro de Estudios Monetarios Latinoamericanos)
    Abstract: This study presents a general overview of financial inclusion in Latin America and the Caribbean. I employ data for the three dimensions: access, use and quality, which outline a complete picture of the nature and characteristics of financial inclusion in the region. This information is essential for identifying weaknesses in financial market development and serves as a basis for elaborating effective inclusión strategies. As will be seen, despite the steps taken in the region to achieve greater participation of the population in the formal financial sector, levels
    Keywords: financial inclusion, access, use, Latin America, Caribbean
    JEL: D14 G23 G28 I22 O16
    Date: 2015–04
  2. By: Nora Lustig (Department of Economics, Tulane University)
    Abstract: This paper examines the redistributive impact of fiscal policy for Brazil, Chile, Colombia, Indonesia, Mexico, Peru and South Africa using comparable fiscal incidence analysis with data from around 2010. The largest redistributive effect is in South Africa and the smallest in Indonesia. Success in fiscal redistribution is driven primarily by redistributive effort (share of social spending to GDP in each country) and the extent to which transfers/subsidies are targeted to the poor and direct taxes targeted to the rich. While fiscal policy always reduces inequality, this is not the case with poverty. Fiscal policy increases poverty in Brazil and Colombia (over and above market income poverty) due to high consumption taxes on basic goods. The marginal contribution of direct taxes, direct transfers and in-kind transfers is always equalizing. The marginal effect of net indirect taxes is unequalizing in Brazil, Colombia, Indonesia and South Africa. Total spending on education is pro-poor except for Indonesia, where it is neutral in absolute terms. Health spending is pro-poor in Brazil, Chile, Colombia and South Africa, roughly neutral in absolute terms in Mexico, and not pro-poor in Indonesia and Peru.
    Keywords: fiscal incidence, social spending, inequality, developing countries
    JEL: H22 D31 I3
    Date: 2015–07
  3. By: Martín Tobal (Banco de México)
    Abstract: In this paper, the author reports some of the results from a survey on limits and reserve requirements involving FX positions and the flexibility of their exchange rate regimes. The survey reveals new facts. Countries that have more intensively implemented these measures have taken the bulk of their policies in the transition towards exchange rate flexibility. The author shows that, in flexible regimes, policymakers have higher motivations for implementing FX regulation to achieve exchange rate stability. Yet, policy makers’ concerns differ substantially across countries and implementation characteristics are heterogeneous across policies constraining the same relationship in the balance sheet.
    Keywords: Prudential regulation, currency mis-matches, exchange rate regimes, Latin America,Caribbean.
    JEL: E58 F31
    Date: 2014–11
  4. By: Foureaux Koppensteiner, Martin (University of Leicester); Manacorda, Marco (Queen Mary, University of London)
    Abstract: This paper uses microdata from Brazilian natality and mortality vital statistics between 2000 and 2010 to estimate the impact of in-utero exposure to local violence – measured by homicide rates - on birth outcomes. The estimates show that exposure to violence during the first trimester of pregnancy leads to a small but precisely estimated increase in the risk of low birthweight and prematurity. Effects are found in both rural areas, where homicides are rare, and in urban areas, where violence is endemic and are particularly pronounced among children of poorly educated mothers, implying that violence compounds the disadvantage that these children already suffer as a result of their households' lower socioeconomic status.
    Keywords: birth outcomes, birthweight, homicides, stress, Brazil
    JEL: I12 I15 I39 J13 K42
    Date: 2015–07
  5. By: De La Torre,Augusto; Ize,Alain
    Abstract: Latin America?s historically low saving rates and sub-par growth performance raise the question of whether the region should save more to grow faster. Economists generally resist acknowledging a policy-exploitable causal connection going from saving to growth because domestic saving is perceived to be fully endogenous, optimally determined, or fully substitutable by foreign saving. However, to the extent that these three assumptions do not hold, three channels can be established through which higher domestic saving?by curbing persistent current account deficits?can promote medium-term growth. The channels are first, a real interest rate channel, whereby higher saving reduces the cost of capital and enhances macro sustainability; second, a real exchange rate channel, through which higher saving leads to a more competitive real exchange rate; and third, an endogenous saving channel, whereby saving follows growth and, hence, subsequently compounds the effect of the first two channels. Econometric evidence supports all three channels and suggests that the lower-saving countries in Latin America and the Caribbean, especially those with recurrently weak balance of payments and persistent domestic demand pressures on the non-tradable sector, would benefit the most from boosting their saving rates.
    Keywords: Access to Finance,Economic Theory&Research,Debt Markets,Emerging Markets,Currencies and Exchange Rates
    Date: 2015–08–06
  6. By: Jorge F. Garzón
    Abstract: The landscape of Latin American regionalism has experienced profound transformations in a relatively short period of time. Regional organizations have proliferated; the open regionalism of the 1990s has gone into decay; new organizations, often referred to as belonging to a new wave of a more political “posthegemonic regionalism,” took center stage; only to be displaced in the attention of observers by newer trade-oriented organizations such as the Pacific Alliance. These developments have been puzzling scholars and policy makers, who for their most part have tended to converge on the view that a fragmented regional configuration with diverging or even incompatible models of regional integration is on the rise. This article challenges this interpretation by arguing that many of the trends we observe are rather the result of Latin American states’ practical adaptation of their foreign policy strategies to the emergence of a multipolar political economy in the international system. One important consequence of this process of adaptation, I argue, is a “decoupling” of the economic function of regionalism from its other dimensions – a process that I show is facilitating the emergence of a regional architecture characterized by a finer division of labor among organizations.
    Keywords: regionalism, regional organizations, Latin America, multipolarity, foreign economic policy, open regionalism, posthegemonic regionalism, cross regionalism
    Date: 2015–04
  7. By: Laura Abramovsky (Institute for Fiscal Studies); Orazio Attanasio (Institute for Fiscal Studies and University College London); Kai Barron (Institute for Fiscal Studies and University College London); Pedro Carneiro (Institute for Fiscal Studies and cemmap and UCL); George Stoye (Institute for Fiscal Studies)
    Abstract: We evaluate the large scale pilot of an innovative and major welfare intervention in Colombia, which combines homes visits by trained social workers to households in extreme poverty with preferential access to social programs. We use a randomized control trial and a very rich dataset collected as part of the evaluation to identify program impacts on the knowledge and take-up of social programs and the labor supply of targeted households. We find no consistent impact of the program on these outcomes, possibly because the way the pilot was implemented resulted in very light treatment in terms of home visits. Importantly, administrative data indicates that the program has been rolled out nationally in a very similar fashion, suggesting that this major national program is likely to fail in making a significant contribution to reducing extreme poverty. We suggest that the program should undergo substantial reforms, which in turn should be evaluated.
    Date: 2014–11
  8. By: Eduardo Engel; Ronald Fischer; Alexander Galetovic
    Abstract: Public-private partnerships (PPPs) are an increasingly popular organizational form of providing public infrastructure. They can increase efficiency and improve resource allocation, yet pervasive contract renegotiations cast doubts on whether they should be preferred over public provision.Renegotiating a PPP contract allows the present government to extract resources from future governments in exchange for current infrastructure spending by the PPP. This option is not available under public provision. We develop a model that formalizes this idea and predicts that government will use renegotiations to anticipate spending and shift payments to future administrations. Regulating renegotiation procedures so as to avoid opportunistic behavior does not avoid the use of renegotiations to anticipate government spending, changing fiscal accounting rules does.We analyze data from Chile, Colombia and Peru, comprising 59 highway PPPs and 535 renegotiation processes, to conclude that the evidence is broadly consistent with the predictions of our model. We find that the magnitude of renegotiations is substantial: renegotiations per concession-year average 9.5% of the initial investment in Colombia, 3.6% in Peru and 1.3% in Chile. With concessions that last many decades, this suggests that the magnitude of renegotiations will end up being larger than the initial investment for many concessions, as is already the case for 11 out of the 25 concessions in Colombia. Most of the cost of renegotiations falls on future administrations and in the three countries more than 45% of renegotiations, as measured by volume, occur during the construction phase, which can be interpreted as evidence against incomplete contract models of renegotiations and in favor of our model.JEL classification: H21, L51, L91.
    Keywords: Build-operate-and-transfer, concessions, lowballing.
    Date: 2015
  9. By: Bárbara Ulloa; Carlos Saavedra; Carola Moreno
    Abstract: In this paper we explore the determinants of portfolio equity gross inflows (foreign liabilities) to the Chilean economy in dimensions that are novel to the literature. Using a unique dataset proprietary to the Central Bank of Chile that records each transactio n of foreign investors on domestic portfolio equity instruments, we analyze aggregated and disaggregated flows, the latter identifying the type of foreign investor behind the flow. Our findings indicate that inward, and not outward, flows are those that r espond to the traditional push/pull factors. Moreover, some pull factors that appear to be statistically non - significant for aggregate flows, become important to flows from specific investor types, and the economic relevance of these factors also varies am ong investors.
    Date: 2015–07
  10. By: Aristizábal-Ramírez, María (Universidad EAFIT); Canavire Bacarreza, Gustavo J (Universidad EAFIT); Jetter, Michael (University of Western Australia)
    Abstract: This paper analyzes the individual-level determinants of wage inequality for Bolivia, Colombia, and Ecuador from 2001 to 2010. Using a rich annual data set from surveys in all three countries, we analyze wages both using conventional wage regressions and decompositions of standard Gini indices. Although popular opinion and standard Gini indices suggest Colombia to exhibit the most unequal distribution of income among these countries, our results suggest otherwise. If one assumes educational attainment to form part of one's own responsibility the Colombian income distribution appears more equal than Bolivia's or Ecuador's. In 2010, educational achievement explains over 10.9 percent of the Gini score in Colombia, 6.3 percent in Ecuador, and a mere 2.4 percent in Bolivia. Our findings show that the sources of income inequality can differ substantially across countries. Respective policy prescriptions should differ accordingly.
    Keywords: income inequality, Gini coefficient, unfair inequality
    JEL: D31 D63 J31
    Date: 2015–07
  11. By: John J. García; Santiago Arango Tamayo; Andrés F. Ortiz Rico
    Abstract: This paper uses an ARCH regression model to analyze the effect of several regulatory measures and fundamental factors (the relationship between commercial demand and real availability, El Niño, and water supplies) on the spot price in the Colombian wholesale power market. The results indicate that the regulations established by the Electricity and Gas Regulatory Commission have had a substantial and statistically-significant effect on spot prices. In addition, El Niño and hydro supplies have a positive and negative respectively effect on the spot price, due to the large share of hydropower in this market.
    Keywords: Regulación; Mercado de Energía Mayorista, precio spot; ARCH; Colombia.
    JEL: D43 L13 L51
    Date: 2015–07–15
  12. By: Andrea Atencio; Juan Gallego
    Abstract: Abstract: This paper explores the correlation between school factors and the differentiated results on sexual behavior between boys and girls in Bogota. A school stratified propensity score matching was performed to match each boy of the sample with the most similar girls in individual, household and school characteristics. A regression analysis was performed to estimate the correlation between school factors and the main outcomes, namely sexual status, condom use in last intercourse, teenage childbearing and age at first intercourse. Boys - in relation to girls - begin earlier their sexual life, report larger use of condom and lower incidence of teenage childbearing. These differences are correlated with sex education at school, and teachers characteristics { age, education level and pedagogy degree. The results suggest that the content of sex education that is delivered to girls at school is not complete or accurate and that teachers play a key role to reduce this gender bias.
    Keywords: Sexual Behavior, Schools, Gender Differences, Bogota
    JEL: H51 I28 J13 O15
    Date: 2015–01–22
  13. By: Orazio Attanasio (Institute for Fiscal Studies and University College London); Sarah Cattan (Institute for Fiscal Studies); Emla Fitzsimons (Institute for Fiscal Studies and Institute of Education, University of London); Costas Meghir (Institute for Fiscal Studies and Yale University); Marta Rubio Codina (Institute for Fiscal Studies)
    Abstract: We examine the channels through which a randomized early childhood intervention in Colombia led to significant gains in cognitive and socio-emotional skills among a sample of disadvantaged children. We estimate production functions for cognitive and socio-emotional skills as a function of maternal skills and child's past skills, as well as material and time investments that are treated as endogenous. The effects of the program can be fully explained by increases in parental investments, which have strong effects on outcomes and are complementary to both maternal skills and child's past skills.
    Keywords: Development, childhood, human capital, Colombia
    Date: 2015–02
  14. By: Amir B. Ferreira Neto (Regional Research Institute, West Virginia University); Fernando S. Perobelli (Federal University of Juiz de Fora); Alexandre Rabelo (Federal University of Juiz de Fora)
    Abstract: How important is Brazil’s cultural industries to its economy? We provide an answer to this question by evaluating the interdependence of the cultural activities in the Brazilian production structure and its evolution over the last few years (2005 – 2009). To accomplish this, we disaggregate 13 cultural economic industries in the Brazilian input-output table and calculate several indexes, such as, the production multiplier, linkage indexes, fields of influence and extraction analysis. Results show that the only cultural sector with high links to other sectors in the production structure is Telecommunication, edition and news agencies and that this sector provides the greatest loss in output when removed from the economy. Moreover, the sectors Jewelry, music, instruments and toys, and Manufacture of telecommunication equipment have output multipliers higher than the average of the economy.
    Keywords: cultural economics,cultural industries, input-output tables, interdependence analysis
    JEL: Z10 D57
    Date: 2015–07
  15. By: Juan Pablo Román Calderón; Mónica Patricia Ospina Londoño; José David Garcés Ceballos
    Abstract: This study explores the validity and reliability of a school environment instrument supplied to 3160 teachers from Medellin – Colombia public schools in 2011. The multilevel factorial analysis allowed establishing that through 20 reactives, the instrument evaluates four school environment dimensions at individual level: communication from the school to the teachers and communication from the teachers to the parents, participation level into the school decisions, respect-emotional security and academic expectations. At the group level, the same reactives allowed measuring a general school environment dimension. Therefore, results suggested the instrument permits to establish differences between schools in school environment terms.
    Keywords: Ambiente escolar; análisis factorial exploratorio multinivel; percepción de losdocentes; validación.
    JEL: C38 C83 I20
    Date: 2015–07–15

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