Exploring the Relationship between Business Elite Networks and Redistributive Social Policies in Latin American Countries

Although the cohesion of business elites has been associated with income concentration and regressive policies, few studies have investigated in depth the role of business elite networks in macrosocial issues such as redistributive social policies. This research explores the relationship between business elite networks and redistributive social policies in several Latin American countries. To do so, this paper (1) examines business elite networks applying a network analysis of interlocking directorates, and (2) performs a cross-national comparative analysis of the cohesiveness of business elite networks, coverage and incidence of social protection and labor programs, and other variables. Results show that where business elites formed cohesive networks, social protection and labor programs were more inclusive. In conjunction with other factors, business cohesion plays a crucial role in business elites’ acceptance of redistributive social policies because it enables long-term cost-sharing agreements, reduces uncertainty and internal divergent interests, and facilitates inducement

Country Risk: An Empirical Approach to Estimate the Probability of Default in Emergent Markets

In this paper we have suggested a new methodology to estimate the probability of default of a country as a function of other macroeconomics variables. Such methodology is based in the valuation of the prices in the secondary market of bonds issued by debtor countries. We have chosen the Brady bonds because their institutional characteristics do not depend on the issuer country which allows us to build a homogeneous panel. The methodology proposed takes elements of traditional models such as the functional structure of the probability and elements of term structure models. The paper demonstrates a new way to extract sovereign risk, implicit in trade bond prices.

Reversal of Fortune

Colombia’s annual GDP growth fell to an average of 3% between 1980 and 2000 from 5% between 1950 and 1980. The sources-of-growth decomposition shows that this reversal can be accounted entirely by changes in productivity. Indeed, between 1960 and 1980 productivity gains increased output per capita by nearly 1% per year. Since 1980, productivity losses have reduced output per capita at about the same rate. The time series analysis suggests that the implosion of productivity is related to the increase in criminality which has diverted capital and labor to unproductive activities. In turn, the rise in crime has been the result of rapid expansion in drug-trafficking activities, which erupted around 1980. This explanation is supported by cross-country evidence that shows that Colombia is clear outlier in terms of conflict and fragmentation, and suggests that high crime is associated with low productivity.Economic growth,

Social Preferences Among the People of Sanquianga in Colombia

The afro-descendent people of the Sanquianga region in the Colombian Pacific Coast live under particularly extreme poverty conditions. Although highly integrated to markets through very frequent interactions, their access to basic social services and stable income generating activities are constrained, and their dependence on their local commons for food, fisheries, wood and firewood is high. Nevertheless, their pro-social preferences are rather high compared to other regions of Colombia and the world. High levels of altruism, sharing, reciprocity and hyper-fairness were observed in a series of Dictator, Ultimatum and Third-Party Punishment experiments conducted with a sample of 186 adults of two villages in the region. One of the more striking findings is that personal material wealth is associated with lower levels of generosity in the DG and UG games. Some explanations based on the historical roots of these small-scale societies may explain such pro-social behavior.poverty, generosity, pro-sociality, experimental economics, dictator,ultimatum, third-party punishment, Sanquianga, Pacific Coast, afro-descendants