Venezuela’s Growth Experience

The standard of living, measured as gross domestic product (GDP) per capita, increased dramatically in Venezuela relative to that of the United States from 20 percent in 1920 to 90 percent in 1958, but since then has collapsed to around 30 percent nowadays. What explains these remarkable growth and collapse episodes? Using a standard development accounting framework, we show that the growth episode is mainly accounted for by an increase in capital accumulation and knowledge transfer associated with the foreign direct investment in the booming oil industry. The collapse episode is accounted for equally by a fall in total factor productivity and in capital accumulation. We analyze Venezuela during the collapse episode in the context of a model of heterogeneous production units were policies and institutions favour unproductive in detriment of more productive activities. These policies generate misallocation, lower TFP, and a decline in capital accumulation. We show in the context of an heterogeneous-establishment growth model that distortionary policies can explain a large portion of the current differences in TFP, capital accumulation, and income per capita between Venezuela and the United States.Productivity, physical capital, misallocation, policies

Venezuela's Growth Experience

The standard of living, measured as gross domestic product (GDP) per capita, increased dramatically in Venezuela relative to that of the United States from 20 percent in 1920 to 90 percent in 1958, but since then has collapsed to around 30 percent nowadays. What explains these remarkable growth and collapse episodes? Using a standard development accounting framework, we show that the growth episode is mainly accounted for by an increase in capital accumulation and knowledge transfer associated with the foreign direct investment in the booming oil industry. The collapse episode is accounted for equally by a fall in total factor productivity and in capital accumulation. We analyze Venezuela during the collapse episode in the context of a model of heterogeneous production units were policies and institutions favour unproductive in detriment of more productive activities. These policies generate misallocation, lower TFP, and a decline in capital accumulation. We show in the context of an heterogeneous-establishment growth model that distortionary policies can explain between 80 to 95 percent of the current differences in TFP, capital accumulation, and income per capita between Venezuela and the United States.Productivity, physical capital, misallocation, policies

Interregionalism's impact on regional integration in developing countries: the case of Mercosur

This article examines the impact of interregionalism on deepening regional integration processes in non-European Union (EU) regions, specifically the Southern Common Market (Mercosur). It considers whether ‘capacity-building’ functions of interregionalism are present in EU–Mercosur relations. It argues that although negotiations for an association agreement might have helped Mercosur survive periods of severe crisis in the past, the terms of the agreement under negotiation were not sufficiently attractive to encourage deeper integration in Mercosur. Moreover, interregionalism cannot be expected to compensate for low institutionalization, nor substitute for weak political willingness to deepen integration. Ultimately, Mercosur alone can decide how far it wants to take its regional integration

Mañana today: a long view of economic value creation in Latin America

This commentary concerns the significant opportunities which the global economy’s current nearshoring trend offers the Latin American and Caribbean (LAC) region owing to a US–China decoupling. Yet the region, generally, is woefully unprepared. The state of the LAC will make or break the peoples’ attempts to exploit the new potential to better themselves. Yet the short-termist myopia and public policy neglect of politicians is the greatest obstacle to the kind of development the region needs the most: high-quality FDI enabling educated innovators to push LAC up the rank of global value chains; or else it will be trapped in middle income, at best

Birth of Koalas Phascolarctos cinereus at Lone Pine Koala Sanctuary following artificial insemination

This paper documents the successful development of an artificial insemination (AI) programme for the Koala Phascolurctos cinereus. The protocols for trials involving two methods to induce ovulation and two insemination techniques are described. In Trial 1, interrupted coitus using a 'teaser'♂ successfully induced ovulation in nine Koalas. Five ♀♀ were inseminated while conscious using a modified 'foley catheter' (Cook insemination catheter) resulting in the births of two offspring. The other four ♀♀ were anaesthetized and inseminated using a technique which allowed visualization of the most cranial portion of the urogenital sinus, where semen was deposited using a 3.5 Fr. 'Tom-cat catheter' (urogen-itoscopic insemination). Three of the four ♀♀ inseminated by this technique produced pouch young. Microsatellite analysis of DNA from the pouch young excluded the teaser ♀♀ as possible sires, confirming that all offspring were sired by donor sperm. In Trial 2, eight ♀♀ were induced to ovulate by injecting them with 250 International Units of human chorionic gonadotrophin (hCG). A luteal phase was confirmed in all eight ♀♀ but only one gave birth following urogenitoscopic insemination. The Koala pouch young in this study are the first of any marsupial to be conceived and born following A1 procedures. Details of the A1 procedures used are presented and the significance of A1 to the conservation biology of P. cinereus discussed