Vos, Rob; Sánchez, Marco V. y Ganuza, Enrique

Overview

LEXTN-01-Vos.pdf (1.35 MB)

Poverty in Latin America and the Caribbean tends to be lower than in most other developing country regions. The region also scores better in terms of education and health achievements. Social indicators reveal substantial progress in terms of human development in recent decades. Nonetheless, on several counts progress has been slower than in other parts of the developing world. In terms of the Millennium Development Goals (MDGs), agreed upon by all countries in the world in the framework of the 2000 Millennium Declaration of the United Nations, increased efforts will be needed to meet the established targets by 2015.

Vos, Rob; Sáncez, Marco V. y Kaldewei, Cornelia

Latin America and the Caribbean: financing options and trade-offs

LEXTN-02-Vos.pdf (3.24 MB)

Leaders from all countries have agreed to pursue the Millennium Development Goals (MDGs) and to reach them by 2015 with a view to securing a world with less poverty, hunger and disease, with better-educated children, more gender equality, greater survival prospects for infants and mothers, and a healthier environment. With less than ten years to the time horizon, the challenges ahead are still staggering, though there are some signs of progress. In most developing countries, providing every child with primary school education appears to be within our grasp. In the developing world as a whole, income poverty has been on the decline and there have been important gains in assisted child delivery and coverage of vaccination programmes, which have contributed to declining child and maternal mortality.

Lofgren, Hans; Díaz Bonilla, Carolina

MAMS: an economy-wide model for analysis of MDG country strategiesan application to Latin America and the Caribbean

LEXTN-03-Lofgren.pdf (3.08 MB)

This chapter documents MAMS (Maquetefor MDG Simulation), the underlying methodological framework of this multi-country study for Latin America and the Caribbean (LAC), which is used to address the three development strategy questions posed in Chapter 1. MAMS is a dynamic Computable General Equilibrium (CGE) model designed to analyse strategies for achieving the Millennium Development Goals (MDGs) and, more broadly, policies for medium- and long-run growth and poverty reduction in developing countries. The model is sufficiently flexible to address the key processes for MDG achievement and other development strategies in a wide range of countries, linking to country databases that capture country characteristics and may vary widely in terms of disaggregation. This chapter emphasizes model features relevant to the LAC context.

Cicowiez, Martín; Di Gresia, Luciano y Gasparini, Leonardo

Argentina

LEXTN-04-Cicowiez.pdf (1.98 MB)

When the Millennium Development Goals (MDGs) were established in the early 1990s, achieving these in Argentina seemed a doable, though challenging enterprise. The fifteen years following 1990 (the reference year for the MDG targets) were characterized by great turbulence, with periods of growth, recession and profound social crisis. As a consequence, Argentina's progress towards the goals has been far from satisfactory. The stop-go growth process did not lead to setbacks in improvements in primary education, children's health and basic sanitation, but progress in these areas has been rather modest. Progress towards MDG 1 (the eradication of extreme poverty and hunger) has been more dismal and income poverty has increased substantially since 1990. The target of halving extreme poverty between 1990 and 2015 seemed reachable in the early 1990s, but now has a low probability of being achieved.

Jiménez, Wilson; Mariscal, Mirna y Canavire, Gustavo

Bolivia

LEXTN-05-Jimenez.pdf (1.53 MB)

The favourable international economic environment during 2002-07 generated an export boom in Bolivia, primarily in hydrocarbons, minerals and agricultural products. At the same time, however, the country went through a period of political instability that has weakened institutions, severely worsened the investment climate and reduced the room to manoeuvre for public policy making.

O`Ryan, Raul; Miguel, Carlos J. de y Lagos, Camilo

Chile

LEXTN-06-Ryan.pdf (1.68 MB)

Chile has committed to meeting its Millennium Development Goals (MDGs) by the year 2015. Over the last two decades, the country made great progress towards these goals, possibly more than any other country in Latin America. This chapter looks at whether it is likely that Chile will be able to achieve the MDGs within the specified time period and - to the extent the country appears to be off track towards some of the goals - recommend specific policies to make their achievement possible. The analysis has been carried out by simulating alternative scenarios of economic growth and public spending through the year 2015.

Sánchez, Marco V.

Costa Rica

LEXTN-07-Sanchez.pdf (1.83 MB)

The degree of progress made towards the Millennium Development Goals (MDGs) has been uneven in Latin America and the Caribbean (See Chapter 2 and ECLAC, 2005). Costa Rica has shown notable progress towards most of the goals, and this has been possible in large part because the country's social policies historically have gone hand in hand with economic policy making. This policy approach contributed to the country's good economic performance. Real GDP per capita grew by 1.8 per cent per year in the 1960s and by 3.4 per cent per year in the 1970s. Improvements in prosperity were temporarily interrupted by the foreign debt crisis in the period between 1980 and 1983, when real GDP per capita fell by 4.3 per cent per year. Stabilization policies were introduced in response to the crisis, followed by a series of structural adjustment reforms that allowed the country to resume growth of per capita output at a pace of 1.7 per cent per year between 1983 and 1989. During the 1990s, this pace was stepped up to slightly above 3 per cent per year, less than the growth achieved in the 1970s and below the outcome expected from the structural reforms. During 2000-05, growth of per capita output decelerated to 1.9 per cent per year, close to the rate of income improvement of the 1960s, but under circumstances of a more unequal income distribution.

León, Mauricio; Rosero, José y Vos, Rob

Ecuador

LEXTN-08-Leon.pdf (2.28 MB)

The social and economic development of Ecuador has been uneven in recent decades. Progress has been made on some dimensions of human development, but stagnation or deterioration has occurred in other areas. This chapter seeks to assess the feasibility of achieving the United Nations' Millennium Development Goals (MDGs) by 2015, using a dynamic general equilibrium framework. The general equilibrium focus is especially relevant considering that the achievement of these goals has dynamic effects on the economy as a whole. It creates changes in the skill composition of the labour force, for example, and produces endogenous growth effects, which may make it easier to achieve these goals. At the same time, however, the upfront public spending efforts needed to meet the goals could generate macroeconomic trade offs and hence obstacles to sustained growth and poverty reduction. The objective of the analysis is to generate results regarding the level of public spending that would be required to achieve the goals, to assess the viability of alternative forms of financing the required increase in public spending, and to identify possible tradeoffs.

Bussolo, Maurizio; Medvedev, Denis

Honduras

LEXTN-09-Bussolo.pdf (1.83 MB)

Over the past ten years. Honduras has achieved important progress in terms of education attainment and provision of basic social infrastructure. This augurs well for the possibility of accomplishing the Millennium Development Goals (MDGs). Yet, compared with other countries in the Latin America and Caribbean (LAC) region, Honduras lags behind in growth and remains off track in terms of achieving the goal of halving poverty by 2015 (MDG 1). Without a significant acceleration in per-capita growth rates over the next decade, attaining the MDGs is likely to be very difficult because growth and MDG achievements reinforce each other. Improved health and educational outcomes can increase productivity, with positive synergies when service access improves simultaneously in different areas (health, education, water and sanitation). At the same time, growth and higher incomes can generate increased funding for services and raise service demand, creating a virtuous circle of growth and MDG achievement.

Ortega, Araceli; Székely, Miguel

México

LEXTN-10-Ortega.pdf (1.79 MB)

This chapter seeks to contribute to the consolidation of the MDGs in Mexico as an instrument for planning and evaluating public policies, identifying some of the actions that can help ensure they are achieved by 2015. To that end, the quantitative impact of public policies aimed at achieving the MDGs is estimated using a computable general equilibrium model known as MAMS (see Chapter 3). To adequately estimate the impact on poverty, this model is supplemented with a microsimulation technique (see Chapter 2, Appendix A2.1). This methodological approach permits to evaluate the feasibility and effectiveness of alternative policy scenarios to achieve the MDGs, in order to derive recommendations for further public action.

Sánchez, Marco V.; Vos, Rob

Nicaragua

LEXTN-11-Sanchez.pdf (2.25 MB)

For several decades, Nicaragua lagged far behind most of the countries of Latin America and the Caribbean (LAC) in terms of economic and social development. It suffered significant setbacks in the 1980s as a consequence of the armed conflict and the suspension of commercial and financial relations with the United States and the main international financial institutions (IFIs). From 1985 to 1989, per capita income dropped 7.4 per cent annually in a context of hyperinflation. This situation turned around markedly in the early 1990s once the peacemaking process was underway and commercial and financial relations resumed.

Castro, Juan F.; Yamada, Gustavo

Perú

LEXTN-12-Castro.pdf (2.31 MB)

This chapter provides an assessment of the costs associated with the MDG targets for poverty reduction, primary education, health, and access to water and basic sanitation by the year 2015 in Peru. The study is based on a scenario analysis using the computable general equilibrium model called MAMS, as described in Chapter 3, and adapted to Peru's socio-economic structure and conditions. The policy simulation analysis with MAMS for Peru was combined with cost-effectiveness analyses of delivery of education, health, and water and sanitation services and with the application of a microsimulation methodology that enables assessment of outcomes for poverty reduction and income inequality (see Appendix A2.1 of Chapter 2).