nep-lam New Economics Papers
on Central and South America
Issue of 2017‒08‒27
eight papers chosen by

  1. Public Private Partnership (PPP) in Latin America's Infrastructure Market and Policy Suggestions for Korea By Kwon, Ki-Su; Kim, Jin-O; Park, Misook; Yi, Siun
  2. The Political Economy of Program Enforcement: Evidence from Brazil By Brollo, Fernanda; Kaufmann, Katja Maria; Ferrara, Eliana La
  3. Attitudes towards intimate partner violence against women in Latin America By Bucheli, Marisa; Rossi, Máximo
  4. Medical Brain Drain and Life Expectancy: A Comparative Analysis between Arab, American and Asian Countries By Kouni, Mohamed
  5. Estimation of price and income elasticities for the Brazilian household electricity demand By Daniel de Abreu Pereira Uhr; Júlia Gallego Ziero Uhr, André Luis Squarize Chagas
  6. A study on environmental infractions for Brazilian municipalities: a spatial dynamic panel approach By Júlia Gallego Ziero Uhr; André Luis Squarize Chagas, Daniel de Abreu Pereira Uhr, Renan Porn Peres
  7. Political approval ratings and economic performance: evidence from Latin America By Rodrigo Cerda; Natalia Gallardo; Rodrigo Vergara
  8. Especializaciones productivas y desarrollo económico regional en Uruguay By Adrian Rodríguez; Pablo Galaso; Sebastián Goinheix; Camilo Martínez

  1. By: Kwon, Ki-Su (Korea Institute for International Economic Policy); Kim, Jin-O (Korea Institute for International Economic Policy); Park, Misook (Korea Institute for International Economic Policy); Yi, Siun (Korea Institute for International Economic Policy)
    Abstract: In Latin America, the investment in infrastructure has been led by governments. However, the importance of PPP is growing, as fiscal revenues are decreasing in many countries due to the fall of commodity prices. Private investment in infrastructure in Latin America is outpacing other emerging economies. Latin America accounts for about 43% of the total private investment in infrastructure among developing economies. PPP is especially active in Brazil, Colombia, Chile and Peru. Among foreign firms, Spanish companies have the strongest presence in the PPP market of Latin America. Yet the competitive landscape is changing; while Spanish and European firms are losing their market share, Chinese and American enterprises are broadening their presence. Traditionally, investment in infrastructure has been concentrated in the ICT and electricity sectors but investment is being diversified into other sectors such as airports, railway, road, water and sanitation. Latin America has a less favorable PPP environment compared to other regions such as Asia. However, Chile, Brazil, Peru, Mexico and Colombia show promising conditions for PPP and hold a high rank among all developing countries. This is because these five countries have clear laws and institutions regarding PPP, and abundant experience with PPP projects. This study focuses on Chile, Peru, Mexico and Colombia and finds some similarities among these nations: 1) they have exclusive organizations for PPP, 2) projects with private initiatives are encouraged, 3) risks are transferred more to private sectors and subsidies from government are decreasing, 4) and there are growing projects in social infrastructure. We select some subsectors of infrastructure which have high demand for PPP projects. We also study several cases of foreign investment in each subsector: electricity in Mexico, transportation in Peru, health and medical treatment in Chile, and water and sanitation in Colombia. Latin America has several regional MDBs, such as the InterAmerican Development Bank (IDB) and Development Bank of Latin America (CAF). These banks play a crucial role for PPP projects. We offer four suggestions for firms: 1) firms need to understand the change in the infrastructure market toward more projects being planned in a PPP scheme rather than solely financed by the government, 2) the development level of the PPP environment differs by country, and thus firms need to prepare a customized strategy by country, 3) strategic alliance with local or foreign companies is crucial since they understand the local market well, 4) collaboration with regional MDBs, such as the IDB, CAF and CABEI, is recommended. This study also suggests the following policy recommendations for the Korean government: 1) The government can establish a government-business council and support Korean firms to win PPP contracts; 2) Incentives need to be provided to promote joint overseas business between conglomerate and small and medium-sized firms (SMEs); 3) ODA projects can be planned to identify infrastructure development demand in Latin America, and then the projects can be developed into PPP projects later, or feasibility studies for privately initiated PPP projects can be financed by ODA funds; 4) A formal cooperation system can be built between the Korean government and MDBs to facilitate Korean firms' access to MDBs; 5) Exchange of personnel from PPP-related institutions from Korea and Latin America can support Korean firms to acquire information and win projects.
    Keywords: Latin America; PPP
    Date: 2017–07–19
  2. By: Brollo, Fernanda (University of Warwick); Kaufmann, Katja Maria (Mannheim University); Ferrara, Eliana La (Bocconi University)
    Abstract: Do politicians manipulate the enforcement of conditional welfare programs to in- fluence electoral outcomes? We study the Bolsa Familia Program (BFP) in Brazil, which provides a monthly stipend to poor families conditional on school attendance. Repeated failure to comply with this requirement results in increasing penalties. First, we exploit random variation in the timing when beneficiaries learn about penalties for noncompliance around the 2008 municipal elections. We find that the vote share of candidates aligned with the President is lower in zip codes where more beneficiaries received penalties shortly before (as opposed to shortly after) the elections. Second, we show that politicians strategically manipulate enforcement. Using a regression discontinuity design, we find weaker enforcement before elections in municipalities where mayors from the presidential coalition can run for reelection. Finally, we provide evidence that manipulation occurs through misreporting school attendance, particularly in municipalities with a higher fraction of students in schools with politically connected principals.
    Keywords: JEL Classification:
    Date: 2017
  3. By: Bucheli, Marisa; Rossi, Máximo
    Abstract: In this paper we analyze the factors that explain attitudes towards intimate partner violence against women (IPVAW) in 23 countries in Latin America and the Caribbean (LAC). Analyses of IPVAW in LAC are relatively scarce although there is growing concern about this problem in the region. We aim to assess the effect of individual and country characteristics using data from common sources for all countries. This work contributes to the sparse literature dealing with methods that attempt to assess the effect of macro variables. We perform a two-step procedure. We first estimate a logit model at the individual level, we calculate a measure of relative approval of IPVAW at country level and we use this measure as a dependent variable to estimate the effect of macro variables. Our study finds that most LAC patterns at individual level are similar to the international ones: approval of IPVAW is higher among women, people in rural areas, people in a disadvantaged socio-economic situation and individuals with some particular cultural characteristics. Unlikely international evidence, attitudes do not differ between ages. Our findings at country level show that approval of IPVAW increases with poverty, fertility rate and equal gender outcomes. It decreases with internet access and, with a lesser degree of robustness, with the time elapsed since the enactment of women’s suffrage. The most novel contribution of our work is the study of the variables at country level.
    Keywords: intimate partner violence,attitudes,Latin America,gender roles,violence
    JEL: J12 J19 D03 D19
    Date: 2017
  4. By: Kouni, Mohamed
    Abstract: Purpose: In this paper we use the most recent database on medical brain drain (estimated by Bhargava, Docquier and Moullon in 2010) in order to analyze the consequences ofincreasing medical migration flowson human development, in particular on life expectancy in three developing country groups. Methodology: Our aim is to study the quantitative and qualitative effect of medical brain drain (MBD) on life expectancy in the Arab, Asian and American countries. Findings: The results showed that the MBD has an important and significant quantitative effect on life expectancy in Arab and Asian countries. Indeed, the elasticity of life expectancy with respect (1+MBD) is positive and significant at 1% level in all regressions for the two groups. Nevertheless, this relationship is not clear for central and Latin American countries where elasticity is not significant in two among three regressions. Moreover, the qualitative MBD effect is negative for all countries in the three groups. Recommendations: Therefore, there is a need for the majority of these countries to change both their labor and emigration policies. This can be achieved by a veritable incentive policy and by reinforcing networks between emigrant physicians and their origin society.
    Keywords: Brain Drain, Human Capital, Development
    JEL: F22 J24 O15
    Date: 2016
  5. By: Daniel de Abreu Pereira Uhr; Júlia Gallego Ziero Uhr, André Luis Squarize Chagas
    Abstract: This paper fills a gap in the literature on residential energy consumption in Brazil. We estimate price and income elasticities for residential electricity consumption using disaggregated data at household level for the São Paulo metropolitan area. Data were obtained from Fundação Instituto de Pesquisas Econômicas (Fipe), which has complete access to Pesquisa de Orçamento Familiar (POF). Information about residential electricity consumption and household characteristics was available at two different periods, 1998 and 2008, which enabled us to adopt panel data estimation procedures. This study is the first to use Brazilian household level data on electricity consumption and a panel approach to estimate price and income elasticities. The results show that the price elasticity ranges from -0.26 to -0.64 and the income elasticity between 0.11 and 0.32. Controlling for a variety of fixed effects, household and family characteristics, price and income elasticities for the short-run are, approximately, -0.50, and 0.21.
    Keywords: Electricity; Price elasticity; Income elasticity; Brazil; household data.
    JEL: C23 D12 Q41
    Date: 2017–08–11
  6. By: Júlia Gallego Ziero Uhr; André Luis Squarize Chagas, Daniel de Abreu Pereira Uhr, Renan Porn Peres
    Abstract: This paper presents novel evidence for environmental offenses in Brazil. IBAMA’s strategy to deter violations is based on large operations and on decapitalizing offenders to signal its will to monitor and enforce the law. We want to answer the following questions: Do the sanctions applied by IBAMA, especially sanction charges, deter actual and potential offenders? Are there any spatial or temporal patterns affecting violations? We use data on offenses against flora and applied fines for Brazilian municipalities between 1998-2015. We contribute to the existing research by providing evidence for Brazil and by incorporating spatial controls in a dynamic panel approach to explain infractions against the environment. We develop and apply a Spatial LIML estimator that accounts for the endogeneity of sanction charges to estimate our panel models. Results show that there is a pedagogic deterrent effect associated with applied fine values. Sanction charges are important to discourage new offenses.
    Keywords: Environment; Violations; Deterrence; Pedagogic effect; Brazil.
    JEL: K32 K42 C23
    Date: 2017–08–11
  7. By: Rodrigo Cerda (Centro Latinoamericano de Políticas Económicas y Sociales (CLAPES UC), Santiago); Natalia Gallardo (Banco Central de Chile, Santiago); Rodrigo Vergara (Centro de Estudios Públicos, Santiago)
    Abstract: Using a panel of 18 Latin American countries for the period 2002-2015, we study the impact of economic variables on government approval. Our empirical analysis shows that the composition of government spending, growth and inflation are related to government�s approval ratings in Latin America. More specifically, we show that for each point of additional growth the approval rating can increase as much as 4.2 percentage points; and that an increase in the share of social spending in total government spending is associated with 2.5 percentage points of increase in government approval. Inflation also affects negatively government�s approval. This tells us that a program focused on social spending, growth and macroeconomic stability have a positive influence in the popularity of the government.
    Keywords: Government approval, Government spending, GDP growth, Latin America
    JEL: O11 H53
    Date: 2017–08
  8. By: Adrian Rodríguez (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Pablo Galaso (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Sebastián Goinheix (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía); Camilo Martínez (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)
    Abstract: The main aim of this research is to characterize the provinces of Uruguay according to their economic activities, productive specializations and their levels of economic development. Based on the analysis of these economic-productive territorial dynamics, the document intends to study its implications in economic policy, in particular, from an approach that seeks to promote the local and regional development of the country. To achieve these goals, the paper analyzes in detail the productive capacity of the territory, the provincial sectorial specializations, the degree of enterprise development and the socioeconomic conditions of the environment. From these exercises, the results are synthesized in an indicator of departmental economic development and indicators on the degree of diversification and the productive specializations of each province. These provincial characterizations highlight the need to combine the local scale with an interpretation of productive dynamics and sectoral specializations on a larger regional or inter-provincial scale. In this way, interpretations are proposed that allow to overcome the legal-administrative limits of the provincial scale. As a main conclusion, it is derived that the consideration of the regional scale is the great challenge to be able to plan and implement policies of productive development that allow to successfully promote local productive development and contribute in an important way to national economic development.
    Keywords: Local development, regional development, productive specializations, provinces, Uruguay
    JEL: R11 R58 O18
    Date: 2017–07

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