Economic Growth with Equity: Challenges for Latin America

262 Pages·2007·1.57 MB·English

by  Ricardo Ffrench-Davis, José Luis Machinea (eds.)

Economic Growth with
Equity
Challenges for Latin America
Edited by
Ricardo Ffrench-Davis and
José Luis Machinea
Economic Growth with Equity
This page intentionally left blank
Economic Growth with
Equity:
Challenges for Latin America
Edited by Ricardo Ffrench-Davis and José Luis Machinea
© Economic Commission for Latin America and the Caribbean 2007
Softcover reprint of the hardcover 1st edition 2007 978-0-230-01893-8
All rights reserved. No reproduction, copy or transmission of this
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ISBN 978-1-349-28520-4 ISBN 978-0-230-80091-5 (eBook)
DOI 10.1057/9780230800915
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Contents
List of Tables vii
List of Figures ix
Preface xi
Notes on the Contributors xiv
1. Growth and Equity: In Search of the “Empty Box” 1
José Luis Machinea and Osvaldo L. Kacef
Part I Recent Successful Experiences on Economic
Development
2. What Produces Economic Success? 27
Dani Rodrik
3. Development Success: May History Breed Humility 44
William Easterly
4. The Dual Divergence: Growth Successes and Collapses in 61
the Developing World Since 1980
José Antonio Ocampo and María Angela Parra
Part II Interrelations Between Growth and Equity
5. Is Greater Equity Necessary for Higher Long-Term Growth 95
in Latin America?
François Bourguignon and Michael Walton
6. Pro-Growth Social Policies for Latin America 126
Miguel Székely
Part III Financial Market Development for Growth
and the Capital Account
7. Financial Development, Growth and Equity in Brazil 153
Armando Castelar Pinheiro and Regis Bonelli
8. Financial Globalization: From Crises-Prone to 175
Development-Friendly?
Ricardo Ffrench-Davis
v
vi Contents
Part IV Trade for Growth
9. Trade and Growth: Why Asia Grows Faster than 201
Latin America
Manuel R. Agosin
10. Trade and Growth: Past Experience and Perspectives for 220
` Latin America
Marcelo de Paiva Abreu
Index 242
List of Tables
2.1 Frequency of growth episodes (%) 33
2.2 Acceleration probabilities: income quartiles against 34
decade and region
2.3 Predictability of growth accelerations 34
3.1 Structural adjustment loans, growth, and inflation in 45
poor countries with most structural adjustment loans
received
3.2 Income increases and likelihood from 1950 to 2001 53
3.3 Ten best and worst per capita growth rates, 1980–2002 54
4.1 Developing countries successes and collapses 70
4.2 Share of exports by technological content and economic 83
growth in countries that specialized in primary
commodities and natural resource-based manufactures
4.3 Share of exports by technological content and economic 84
growth in countries diversifying exports to non-resource
based manufactures
5.1 Tax structure in the 1990s, Latin America and developed 118
countries
7.1 Brazil: GDP growth and the contributions of capital, labor 155
and TFP, 1931–2004
7.2 Brazil: Sources of finance, 1994–2003 158
7.3 Brazil: Interest rates and spreads on non-government- 161
directed bank loans, 2001–04 (% p.a.)
8.1 Latin America (19): Composition of capital flows, 177
1977–2004
8.2 Latin America (19): Growth of exports and non-exported 182
GDP, 1990–2005
9.1 GDP and export growth in Latin America and Asia, 207
1980–2003
9.2 Selected Latin American countries and Asian exporters 209
of manufactures: Hirschman–Herfindahl export
concentration index, 1980–2002
9.3 An empirical model of growth 213
9.4 Introducing crises 215
9.5 Contributions to growth of GDP per capita, 1980–2003 216
10.1 Latin American selected economies: GDP-PPP 222
1990–2003 per capita growth rate and unweighted
average tariff rates, 1985–2002, (%)
vii
viii List of Tables
10.2 Latin America: Shares of world exports, 1928–2003, (%) 224
10.3 Export structure by main categories and selected 226
commodity groups, 1970–2003 (percentage of total exports)
10.4 Export structure by main regions of destination, 1970–2003 228
(percentage of total exports)
List of Figures
1.1 GDP per capita and poverty in Latin America, 1980–2004 2
1.2 Growth and inequality 7
1.3 Terms of trade in Latin America 11
1.4 Structure of exports by degree of technological intensity 16
2.1 Growth diagnostics 39
3.1 Growth trajectory in 1990s of intensive-AL transition cases 48
3.2 Economic freedom index in Latin America 49
3.3 Per capita income index in Latin America (log base 2 scale, 50
1950 = 1): actual and trend, 1950–2003
3.4 Power law of per capita income in pooled sample for 52
137 countries, 1820, 1870, 1913, 1950, 2001
4.1 Per capita GDP growth and dispersion, OECD and 66
developing countries, 1870–2001
4.2 Percentage of developing countries with per capita GDP 67
growth (five-year moving average) by intervals
4.3 Frequency of sustained growth and contractions in the 69
developing world
4.4 The global development cycle, 1951–2004 71
4.5 External debt sustainability and interest rates, 1970–2004 72
4.6 Primary commodities and developing countries terms of 72
trade, 1900–2005
4.7 Trade specialization by region, 1980, 2002 76
4.8 Specialization vs. growth: simple correlation patterns, 82
1980–2002
4.9 Specialization vs. growth: 1980–2002 85
5.1 Divergence in human capital according to family 99
circumstances starts in early childhood
5.2 Returns to capital decline with firm size for small firms 102
in Mexico
5.3 Countries with better governance grow faster 103
5.4 The rise in income inequality in China, 1981–2002 109
5.5 The impact of early childhood interventions on child 113
development in an experiment in Jamaica
5.6 Credit to the private sector, various countries 115
5.7 Coverage of micro finance: various countries and regions 116
(micro-finance clients as proportion of the population)
6.1 Prototype of a Latin American TCCTP 132
8.1 Latin America: Net capital inflows and RER, 1987–2005 184
8.2 Chile and Korea: GDP and aggregate demand, 1987–2005 186
ix