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Begin New Search Political Geography Latin America Content Type Working Paper Publishing Institution Center for Global Development

21. The High Return to Private Schooling in a Low-Income Country

Author:
Tessa Bold, Mwangi Kimenyi, Germano Mwabu, and Justin Sandefur
Publication Date:
12-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Existing studies from the United States, Latin America, and Asia provide scant evidence that private schools dramatically improve academic performance relative to public schools. Using data from Kenya—a poor country with weak public institutions—we find a large effect of private schooling on test scores, equivalent to one full standard deviation. This finding is robust to endogenous sorting of more able pupils into private schools. The magnitude of the effect dwarfs the impact of any rigorously tested intervention to raise performance within public schools. Furthermore, nearly two thirds of private schools operate at lower cost than the median government school.
Topic:
Development, Education, Government, and Poverty
Political Geography:
Kenya, United States, Asia, and Latin America

22. Declining Inequality in Latin America: Some Economics, Some Politics

Author:
Nancy Birdsall, Nora Lustig, and Darryl McLeod
Publication Date:
05-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Latin America is known to have income inequality among the highest in the world. That inequality has been invoked to explain low growth, poor education, macroeconomic volatility, and political instability. But new research shows that inequality in the region is falling. In this paper we summarize recent findings on inequality, present and discuss an assessment of how the type of political regime matters and why, and investigate the relationship between changes in inequality and changes in the size of the middle class in the region. We conclude with some questions about whether and how changes in income distribution and in middle-class economic power will affect the politics of distribution in the future.
Topic:
Economics, Poverty, and Social Stratification
Political Geography:
Latin America

23. Financial Integration and Foreign Banks in Latin America: Do They Amplify External Financial Shocks?

Author:
Liliana Rojas-Suarez, Arturo J. Galindo, and Alejandro Izquierdo
Publication Date:
02-2010
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
This paper explores the impact of international financial integration on credit markets in Latin America. Using a cross-country dataset covering 17 Latin American countries between 1996 and 2008, the authors find that financial integration amplifies the impact of international financial shocks on aggregate credit and interestrate fluctuations. Despite this pernicious effect, the net impact of integration on deepening credit markets is positive and dominates for the large majority of states of nature. The paper also uses a detailed bank-level dataset covering more than 500 banks in Latin America for a similar time period to explore the role of financial integration—captured through the participation of foreign banks—in propagating external shocks. The authors find that interest rates charged and loans supplied by foreign-owned banks respond more to external financial shocks than those supplied by domestically owned banks. However, this result does not hold for all foreign banks: Spanish banks in the sample behave more like domestic banks and do not amplify the impact of foreign shocks on credit and interest rates. Important policy recommendations to avoid foreign banks' amplification of external financial shocks include the establishment of ring-fencing mechanisms, the development of early-warning systems, and the incorporation for agreements between domestic and foreign supervisors.
Topic:
Economics and Markets
Political Geography:
Latin America and Spain

24. The International Financial Crisis: Eight Lessons for and from Latin America

Author:
Liliana Rojas-Suarez
Publication Date:
01-2010
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The international financial crisis of 2008–09 exposed the strengths and weaknesses of the current paradigm of development in Latin America, a paradigm based on liberalized capital accounts and significantly improved macroeconomic conditions. This paper presents lessons derived from the crisis, not only for the region itself, but also for other developing countries that might seek economic growth in the context of greater integration to the international capital markets. Some of the lessons are not new but have been reinforced by the crisis, such as Latin America's imperative need for export diversification (not only in products but in partners). Other lessons break with longstanding myths about the region, such as its inability to undertake counter-cyclical policies—at least on the monetary side. Yet other lessons reflect new developments in the current growth paradigm, such as a renewed assessment of (1) the relative roles of foreign and domestic banks in shielding the financial system against external shocks and (2) the potential costs of adopting blanket international financial regulations that do not account for a country's degree of development. Taken together, the lessons in this paper bring a new sense of optimism for growth in Latin America.
Topic:
Economics, International Trade and Finance, and Financial Crisis
Political Geography:
Latin America

25. The Washington Consensus: Assessing a Damaged Brand

Author:
Nancy Birdsall, Augusto de la Torre, and Felipe Valencia Caicedo
Publication Date:
05-2010
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
In this paper we analyze the Washington Consensus, which at its original formulation reflected views not only from Washington but also from Latin America. We trace the life of the Consensus from a Latin American perspective in terms of evolving economic development paradigms. We document the extensive implementation of Consensus-style reforms in the region as well as the mismatch between reformers' expectations and actual outcomes, in terms of growth, poverty reduction, and inequality. We then present an assessment of what went wrong with the Washington Consensus-style reform agenda, using a taxonomy of views that put the blame, alternatively, on (i) shortfalls in the implementation of reforms combined with impatience regarding their expected effects; (ii) fundamental flaws—in either the design, sequencing, or basic premises of the reform agenda; and (iii) incompleteness of the agenda that left out crucial reform needs, such as volatility, technological innovation, institutional change and inequality.
Topic:
Economics
Political Geography:
Washington and Latin America

26. Bases, Bullets, and Ballots: The Effect of U.S. Military Aid on Political Conflict in Colombia

Author:
Oeindrila Dube and Suresh Naidu
Publication Date:
01-2010
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Does foreign military assistance strengthen or further weaken fragile states facing internal conflict? We address this question by estimating how U.S. military aid affects violence and electoral participation in Colombia. We exploit the allocation of U.S. military aid to Colombian military bases, and compare how aid affects municipalities with and without bases. Using detailed political violence data, we find that U.S. military aid leads to differential increases in attacks by paramilitaries (who collude with the military), but has no effect on guerilla attacks. Aid increases also result in more paramilitary (but not guerrilla) homicides during election years. Moreover, when military aid rises, voter turnout falls more in base municipalities, especially those that are politically contested.
Topic:
Arms Control and Proliferation, Democratization, and Foreign Aid
Political Geography:
United States, Colombia, and Latin America

27. Will World Bank and IMF Lending Lead to HIPC IV? Debt Deja-Vu All Over Again

Author:
Benjamin Leo
Publication Date:
11-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Four years ago, the G-7 pushed through an unprecedented initiative forcing the international financial institutions to cancel 100 percent of their outstanding debt claims on the world's poorest countries. Through the Multilateral Debt Relief Initiative (MDRI), these heavily indebted poor countries (HIPCs) stand to receive up to $60 billion in debt relief over time. Moreover, the World Bank, African Development Bank, and IMF shareholders approved a new debt sustainability framework to govern future lending decisions and prevent the need for yet another round of systemic debt relief. All parties emerged from these landmark agreements confident that the dragon of unsustainable debt finally had been slain. However, several unsettling trends raise serious questions about the finality of these actions. First, World Bank and AfDB lending disbursement volumes to these very same HIPC countries remain very high, and nearly the same as compared to pre-MDRI. Emergency IMF lending in response to the global economic crisis has compounded the situation. Second, IMF and World Bank growth projections for HIPCs remain overly rosy compared to actual and historical performance. Our new dataset of IMF growth projections suggests a structural optimism of at least one percentage point per year. Third, HIPCs continue to experience significant volatility in country performance measures that has a direct impact on their ability to carry debt sustainably. Taken together, these findings suggest that donor countries should re-examine the issue of debt sustainability in low-income countries and the system for determining the appropriate grant/loan mix. The upcoming IDA and AfDF replenishment negotiations present a timely opportunity to do so. Absent assertive and corrective action, the international community may be faced with the prospect of a HIPC IV agreement in the not too distant future.
Topic:
Development, Economics, and Foreign Aid
Political Geography:
Latin America

28. Rice Crisis Forensics: How Asian Governments Carelessly Set the World Rice Market on Fire

Author:
Tom Slayton
Publication Date:
03-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
The world rice market was aflame last spring and for several months it looked as if the trading edifice that had exhibited such resilience over the last two decades was going to burn to the ground. World prices trebled within less than four months and reached a 30- year inflation-adjusted high. Many market observers thought the previous record set in 1974 would soon be toast. The fire was man-made, not the result of natural developments. While the governments in India, Vietnam, and the Philippines did not to set the world market on fire, that was the unintended result of their actions which threatened both innocent bystanders (low-income rice importers as far away as Africa and Latin America) and, ultimately, poor rice consumers at home. This paper describes what sparked the fire and the accelerants that made a bad situation nearly catastrophic. Fortuitously, when the flames were raging at peak intensity, rain clouds appeared, the winds [market psychology] shifted, and conditions on the ground improved, allowing the fire to die down. It remains to be seen, however, if the trading edifice has been seriously undermined by the actions of decision makers in several key Asian rice exporting and importing countries. In describing the cascading negative effects of these seemingly rational domestic policies, this paper aims to help policy makers in the rice exporting and importing nations to avoid a repeat of the disastrous price spike of 2008.
Topic:
Agriculture, Economics, Health, Humanitarian Aid, Markets, and Political Economy
Political Geography:
Africa, India, Asia, and Latin America

29. Schooling Inequality, Crises, and Financial Liberalization in Latin America

Author:
Nancy Birdsall, Gunilla Pettersson, and Jere R. Behrman
Publication Date:
03-2009
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Latin America is characterized by high and persistent schooling, land, and income inequalities and extreme income concentration. In a highly unequal setting, powerful interests are more likely to dominate politics, pushing for policies that protect privileges rather than foster competition and growth. As a result, changes in policies that political elites resist may be postponed in high-inequality countries to the detriment of overall economic performance.
Topic:
Economics, Education, Globalization, and Political Economy
Political Geography:
Latin America

30. Performance-Based Incentives for Health: Conditional Cash Transfer Programs in Latin America and the Caribbean - Working Paper 120

Author:
Amanda Glassman, Jessica Todd, and Marie Gaarder
Publication Date:
04-2007
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
In order to support poor families in the developing world to seek and use health care, a multi-pronged strategy is needed on both the supply and the demand side of health care. A demand-side program called Conditional Cash Transfer s (CCTs) strives to reduce poverty and also increase food consumption, school attendance, and use of preventive health care. Since 1997, seven countries in Latin America have implemented and evaluated CCT programs with health and nutrition components. The core of the program is based on encouraging poor mothers to seek preventive health services and attend health education talks by providing a cash in centive for their healthy behavior (with healthy behavior representing performance). Evaluations of these programs measured outputs in the utilization of services; health knowledge, attitudes, and practice; food consumption; the supply and quality of services; as well as outcomes in vaccination rates; nutritional status; morbidity; mortality; and fertility.
Topic:
Education, Health, and Poverty
Political Geography:
South America, Latin America, Central America, and Caribbean