nep-lam New Economics Papers
on Central and South America
Issue of 2021‒06‒28
six papers chosen by

  1. Political Power, Elite Control, and Long-Run Development: Evidence from Brazil By Ferraz, Claudio; Finan, Frederico; Martinez-Bravo, Monica
  2. Influencers on Economic Issues in Latin America, Spain and the United States – II By Newland, Carlos; Rosiello, Juan Carlos; Salinas, Roberto
  3. Baby Bust: Births fall in Brazilian major cities during the Covid-19 pandemic By Lima, Everton E. C. Dr.; Soares, Camila Ferreira; Monteiro da Silva, José H C
  4. Efectos de corto plazo en el mercado laboral urbano By García-Suaza, A; Jaramillo, I; Londoño, D; Ortiz, S; Rodríguez-Lesmes, P
  5. The Economics of the Public Option: Evidence from Local Pharmaceutical Markets By Juan Pablo Atala; José Ignacio Cuesta; Felipe González; Cristóbal Otero
  6. Fiscal Rule and Public Investment in Chile By J. Rodrigo Fuentes; Raimundo Soto; Klaus Schmidt-Hebbel

  1. By: Ferraz, Claudio; Finan, Frederico; Martinez-Bravo, Monica
    Abstract: This paper analyzes how changes in the concentration of political power affect long-run development. We study Brazil's military dictatorship whose rise to power dramatically altered the distribution of power of local political elites. We document that municipalities that were more politically concentrated prior to the dictatorship in the 1960s are relatively richer in 2000, despite being poorer initially. Our evidence suggests that this reversal of fortune was the result of the military's policies aimed at undermining the power of traditional elites. These policies increased political competition locally, which ultimately led to better governance, more public goods, and higher income levels.
    Date: 2020–06
  2. By: Newland, Carlos (The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise); Rosiello, Juan Carlos (The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise); Salinas, Roberto (The Johns Hopkins Institute for Applied Economics, Global Health, and the Study of Business Enterprise)
    Abstract: The technological progress in our modern societies has witnessed the emergence of persons who deploy different means of communication across social networks, seeking to generate an impact among their audiences. These efforts in social media communications attempt to alter consumption preferences and patterns, political choices, as well as reinforce or modify opinions of all sorts and stripes. Individuals who attain greater relevance due to effects they trigger on third parties are characterized as influencers, and one of their preferred means of communication are online platforms or social media. Among them, Twitter stands out as the most conducive space for debates on ideas, political parties, or public policies. This social media platform is a microblogging service that allows a person to send short messages (up to 280 characters) that are displayed on a user’s individual page, and that are replicated on their followers’ pages. In this paper, we aim to identify the most important influencers in Latin America, the United States and Spain, who use this social media network to debate issues primarily related to economics and economic policy. On this subject, there is a very strong discussion about the role that the government should play in economic life, the pros and cons of greater regulation, the problem of income distribution, the impact of inflation, and the nature of free markets and capitalism. We will first describe the methodology we employed, in order to then proceed to illustrate a ranking of the ten most relevant influencers, in terms of number of followers, from Argentina, Brazil, Colombia, Chile, Mexico, Spain, and the United States. We then explore their profiles and present an analysis of the economic issues debated on the relevant Twitter accounts on a per country basis. Based on this analysis, we present a hypothesis on the positioning of influencers in economic matters. Finally, the global reach of the universe of influencers that are considered in this essay is described and measured.
    Date: 2021–06–18
  3. By: Lima, Everton E. C. Dr. (Unicamp); Soares, Camila Ferreira; Monteiro da Silva, José H C
    Abstract: Since the beginning of the pandemic of the new coronavirus, Brazil is a country that has been heavily affected by this new disease, and from March 2020 this country saw its death records increased as the number of Covid-19 infected got out of control. Consequently, many studies tried to explain the influence of this illness in the number of deaths and possible reductions in life expectancy. Until now, there were few empirical attempts to comprehend the effects of pandemic on birth reductions. In this work, we sought to analyze the influence of the pandemic Covid-19 on birth numbers of six major cities of Brazil. Using data from the Ministry of Health, we compared the number of monthly births from October-December 2020 and January-March 2021 with the amount of newborns in similar months and in years previous to the pandemic. Our results show a strong decline in the number of births in all cities analyzed, and most of the reductions occurred at mothers' age of 30 years old. Because of the uncertain scenario that the pandemic brought us, women are postponing their fertility intentions, causing a perhaps temporary baby bust in major cities of Brazil.
    Date: 2021–05–31
  4. By: García-Suaza, A; Jaramillo, I; Londoño, D; Ortiz, S; Rodríguez-Lesmes, P
    Abstract: La pandemia de COVID-19 ha registrado cambios en el mercado laboral sin precedentes en un lapso muy corto de tiempo. Durante 2020 se experimentó tanto el choque como una recuperación del empleo que puede terminar por generar una recomposición del mercado de laboral, y de nuevos patrones de desempleo que requieren políticas activas para reducir los impactos de la coyuntura. Considerando información de la encuesta de hogares, se realiza un estudio de los factores que marcaron una mayor vulnerabilidad del empleo, indagando en características como género, ocupación, condición de informalidad, entre otros. Los resultados obtenidos sugieren que las mujeres y el empleo no profesional han sufrido los mayores impactos. A esto se suma el hecho de que los empleos generados durante la recuperación presentan menores estándares de calidad. Por lo tanto, definen retos específicos a la agenda política pública del mercado de trabajo.
    Keywords: COVID-19; empleo; informalidad; empleo profesional
    JEL: E24 J24 J46
    Date: 2021–04–01
  5. By: Juan Pablo Atala; José Ignacio Cuesta; Felipe González; Cristóbal Otero
    Abstract: We study the economic and political effects of competition by state-owned firms, leveraging the decentralized entry of public pharmacies to local markets in Chile around local elections. Public pharmacies sell drugs at a third of private pharmacy prices, because of a stronger upstream bargaining position and downstream market power in the private sector, but are also of lower quality. Exploiting a field experiment and quasiexperimental variation, we show that public pharmacies affected consumer shopping behavior, inducing market segmentation and price increases in the private sector. This segmentation created winners and losers, as consumers who switched to public pharmacies benefited, whereas consumers who stayed with private pharmacies were harmed. The countrywide entry of public pharmacies would reduce yearly consumer drug expenditure by 1.6 percent, which outweighs the costs of the policy by 52 percent. Mayors that introduced public pharmacies received more votes in the subsequent election, particularly by the target population of the policy.
    Date: 2021
  6. By: J. Rodrigo Fuentes; Raimundo Soto; Klaus Schmidt-Hebbel
    Abstract: We use three different approaches --narrative approach, counterfactual synthetic control method, and DSGE model--to assess the design and operation of the Chilean fiscal rule and its impact on public investment. We acknowledge the substantial progress in building a modern institutional framework for fiscal policy made during the past 30 years. Nevertheless, we find that the rule is incomplete in at least two dimensions: it lacks an escape clause and it needs supplementing the budget balance rule with a debt rule. The former was made patent with the breaching of the rule in 2009 and the subsequent inability of the authorities to steer fiscal accounts back to its long-term sustainable path. The latter showed in the speedy built up of the public debt in the last decade as a result of the need to finance fiscal deficits. We propose a number of reforms to existing fiscal institutions, including improving on the transparency and accountability of the institutional framework, a reformulation of the rule to consider a multi-year horizon planning of public finance (including investment plans, balance sheet management), escape clauses, and a debt anchor among others. This will complement the actual fiscal framework, especially nowadays when the fiscal stance has deteriorated significantly and is expected to worsen as a result of the Coronavirus pandemics.
    Date: 2020

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