Do Structural Reforms always Succeed? Lessons from Brazil

structural reforms, policy coordination, fiscal policy, stabilization, trade liberalization, political economy, Brazil

Patterns of long term growth in Sub-Saharan Africa

Using the most recent purchasing power parity data for 44 sub-Saharan African countries, this paper examines the characteristics of long run growth in Africa between 1975 and 2005. The authors investigate the following issues: cross-country income structure, income convergence, the country level distribution of income, growth and income persistence, and formation of convergence clubs.Economic Conditions and Volatility,Economic Theory&Research,Achieving Shared Growth,Economic Growth,Inequality

Does trade liberalization always decrease union bargaining power?

The theoretical and empirical literature shows that union wages are more responsive to international import competition than nonunion wages, thus reducing unions bargaining power. In this paper we track the influence of unions on wages in Brazil before and after the trade liberalization in the beginning of the 1990s. We find that union bargaining power increased rather that decreased after economic openness. Our results seem to be related to the bargaining framework prevailing in the Brazilian labor market.Union, trade liberalization, wage structure, wage dispersion, Brazil

Hunting for Leopards : long run country income dynamics in Africa

This paper examines the country-level dynamics of long-run growth in Africa between 1975 and 2005. The authors examine how growth has affected mobility and the distribution of income among countries. They analyze changes in cross-country income structure and convergence, and look for evidence of the formation of country groups or"clubs."Using a novel method of breaking up the growth histories of African economies into medium-term spells of growth accelerations and declines, the authors investigate whether a group of African"leopards"- the regional equivalent of Asia's"tigers"- is beginning to emerge.Economic Conditions and Volatility,Achieving Shared Growth,Economic Theory&Research,Economic Growth,Inequality

More growth or fewer collapses ? a new look at long run growth in Sub-Saharan Africa

Low and highly volatile growth define Africa's growth experience. But there is no evidence that growth volatility is associated to long term economic performance. This result may be misleading if it suggests that volatility is not important for economic and social progress. In this paper we use a variant of the method developed by Hausmann, Pritchett, and Rodrik (2005) to identify both growth acceleration and deceleration episodes in Africa between 1975 and 2005. The authors find that Africa has had numerous growth acceleration episodes in the last 30 years, but also nearly a comparable number of growth collapses, offsetting most of the benefits of growth. Had Africa avoided its growth collapses, it would have grown 1.7 percent a year instead of 0.7 percent, and its GDP per capita would have been more than 30 percent higher in 2005. The authors also find that growth accelerations and decelerations have an asymmetric impact on human development outcomes. Finally, our results suggest that it is easier to identify the likely institutional and policy origins of growth decelerations than of growth accelerations.Governance Indicators,Achieving Shared Growth,Economic Conditions and Volatility,Economic Growth,Nutrition

Trade liberalization and labor market in developing countries: Theory and evidence

This paper presents a review of the theoretical and empirical literature on the effects of trade liberalization on the labor markets of developing countries. We discuss models which seek to explain the empirical finding that openness has increased wage inequality in several developing countries

How do Economic Reforms affect the Structure of Wages? The Case of Brazilian Manufacturing, 1984-1996

One of the established findings in the literature on inter-industry wage differentials is the long-term stability of the wage structure. In this paper, we examine how market-oriented and other economic reforms undertaken by an industrialising country affect the dispersion and structure of wages. Using a large, individual-level dataset, we find that the labour market is highly responsive to the economic reforms undertaken in Brazil in the early 1990s. Wage dispersion falls dramatically just after the implementation of economic reforms and we find evidence that the wage structure is under transition after the changes. Human capital variables gain importance in the explanation of wage differentials, while industry affiliation and institutional characteristics become less important. This finding is consistent with the labour market being flexible enough to adapt to the new economic conditions, and becoming more competitive as a result of the economic reforms

Is Africa's economy at a turning point?

In this paper, Arbache, Go, and Page examine the recent acceleration of growth in Africa. Unlike the past, the performance is now registered broadly across several types of countries-particularly the oil-exporting and resource-intensive countries and, in more recent years, the large- and middle-income economies, as well as coastal and low-income countries. The analysis confirms a trend break in the mid-1990s, identifying a growth acceleration that is due not only to favorable terms of trade and greater aid, but also to better policy. Indeed, the growth diagnostics show that more and more African countries have been able to avoid mistakes with better macropolicy, better governance, and fewer conflicts; as a result, the likelihood of growth decelerations has declined significantly. Nonetheless, the sustainability of that growth is fragile, because economic fundamentals, such as savings, investment, productivity, and export diversification, remain stagnant. The good news in the story is that African economies appear to have learned how to avoid the mistakes that led to the frequent growth collapses between 1975 and 1995. The bad news is that much less is known about the recipes for long-term success in development, such as developing the right institutions and the policies to raise savings and diversify exports, than about how to avoid economic bad times.Economic Conditions and Volatility,Governance Indicators,Achieving Shared Growth,Economic Theory&Research,Emerging Markets

Hunting for leopards: Long-run country income dynamics in Africa

This paper examines the country-level dynamics of long-run growth in Africa between 1975 and 2005. We are primarily interested in examining how growth has affected mobility and the distribution of income among countries. We analyse changes in the cross-country income structure and convergence. We also look for evidence of the formation of country groups or clubs. Finally, we use a novel method of breaking up the growth histories of African economies into medium term spells of growth accelerations and declines to see if a group of African leopards- the regional equivalent of Asia's tigers - is beginning to emerge

Tourism and poverty relief

This paper examines the issue of how tourism affects poverty in the context of the effects oftourism on an economy as a whole and on particular sectors within it. A framework foranalysing the channels through which tourism affects different households is developed, and acomputable general equilibrium model of the Brazilian economy is used to examine theeconomic impact and distributional effects of tourism in Brazil. It is shown that the effects onall income groups are positive. The lowest income households benefit from tourism but byless than some higher income groups. Policies that could redistribute greater shares of therevenue to the poor are considered.