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Latin America faces old and new development challenges. While, over the last two decades, some countries have implemented solid macroeconomic policies and many have improved their financial regulatory and supervisory frameworks, large segments of the population have not reaped the benefits from economic growth. The COVID-19 crisis has only made things worse—poverty reduction is expected to suffer a setback of more than 10 years and inequality continues to rise.
Structural problems, including very low productivity, the substantial size of the informal economy and the lowest savings rate in the emerging world, remain unsolved. Novel issues, like the migration from Venezuela, or the health and economic challenges that COVID-19 brings about add further pressure to weak social and political consensus—and the looming risk of a financial crisis persists.
CGD’s Latin America Initiative provides sound analysis on these issues and advances recommendations to policymakers and multilateral organizations to support the effort of overcoming these challenges to climb the development ladder and reach shared prosperity.
América Latina afronta, al mismo tiempo, nuevos y viejos desafíos en materia de desarrollo. Aunque, en las últimas dos décadas, algunos países han implementado políticas macroeconómicas sólidas y han mejorado sus marcos regulatorios y de supervisión, amplios segmentos de la población no se han beneficiado del crecimiento económico. La crisis de la COVID-19 solo ha empeorado las cosas: se espera un retroceso de más de 10 años en materia de reducción de la pobreza y la desigualdad continúa aumentando.
Problemas estructurales, como la muy baja productividad, el gran tamaño de la economía informal y los niveles de ahorro más bajos en el mundo emergente, continúan sin resolverse. Nuevos temas, como la migración venezolana o los desafíos sanitarios y económicos generados por la COVID-19, ejercen aun mayor presión sobre un débil consenso social y político. Además, continúa existiendo la amenaza de una crisis financiera.
La Iniciativa Latinoamericana de CGD busca analizar estos temas y proponer recomendaciones que apoyen los esfuerzos de los formuladores de políticas y los organismos multilaterales para avanzar en el proceso de desarrollo de la región y lograr una prosperidad compartida.
Here at CGD, we’re always working on new ideas to stay on top of the rapidly changing global development landscape. Whether it’s examining new technologies with the potential to alleviate poverty, presenting innovative ways to finance global health, assessing changing leadership at international institutions, or working to maximize results in resource-constrained environments, CGD’s experts are at the forefront of practical policy solutions to reduce global poverty and inequality. Get an in-depth look below at their thoughts on the 2018 global development landscape.
We estimate the economic effects of short-term work by a small sample of farmers from Haiti in the United States, where no US workers are available. We then compare these to the effects of more traditional assistance. We find that these work opportunities benefit Haitian families much more directly, and to a dramatically greater extent, than more traditional forms of assistance—raising workers’ current earnings on average by multiple of 15.
Since mid-2016, a new wave of political developments in advanced countries has been shaking Latin America. This latest assessment of the Latin American Committee on Financial Issues (CLAAF) examines how the anti-globalist movement sweeping the West will affect macroeconomic trends in Latin America.
Public policy on financial crises in emerging markets has implicitly been grounded in economic theory calling for lender-of-last-resort intervention when the country is solvent, and on theory recognizing that reputational damage is the quasi-collateral enabling lending to sovereigns with no physical collateral. The call for Private Sector Involvement — PSI — in the financing of crisis resolution has appropriately arisen from the desire for fairness as well as for successful outcomes. This paper identifies an array of PSI modalities and argues that in each crisis case the most voluntary type consistent with the circumstances should be chosen, to speed return to market access.
While most technical assessments classify privatization as a success, it remains widely and increasingly unpopular, largely because of the perception that it is fundamentally unfair, both in conception and execution. We review the increasing (but still uneven) literature and conclude that most privatization programs appear to have worsened the distribution of assets and income, at least in the short run. This is more evident in transition economies than in Latin America, and less clear for utilities such as electricity and telecommunications, where the poor have tended to benefit from much greater access, than for banks, oil companies, and other natural resource producers.