Analysis of the Integration of Financial Regulation and Supervision to the Central Bank

Se realiza un estudio analítico sobre las consecuencias esperadas de integrar la regulación y supervisión financiera al banco central. El regulador unificado de servicios financieros, que se extendió en los últimos quince años como alternativa a la regulación institucional especializada, puede o no estar en el banco central. Su presencia allí tiene como principal ventaja la posibilidad de aprovechar economías de escala y alcance, mejorar la fluidez de los flujos informativos y darle un sesgo prudencial a la regulación, dado que el banco central es quien deberá resolver una eventual crisis bancaria. En la reciente crisis financiera internacional además, quedó de manifiesto que un enfoque regulatorio centrado en lo micro-prudencial, resultó insuficiente ante la aparición de problemas macro-prudenciales, por no contemplar los efectos externos sistémicos que pueden causar instituciones en problemas. Un enfoque más equilibrado entre lo macro y lo micro- prudencial puede ayudar a evitar o mitigar las externalidades que una caída de una institución puede generar al sistema en su conjunto. Se analizan aquí aspectos relacionados con instituciones e instrumentos de la regulación macro-prudencial.We analyze the expected consequences of integrating financial regulation and supervision to the central bank. The unified financial services regulator, which spread in the last fifteen years as an alternative to specialized institutional regulation, may or may not be at the central bank. His presence there has as main advantages the ability to achieve economies of scale and scope, the improvement of the flows of information and the provision of a prudential bias to regulation, as the central bank is the institution that must solve a potential banking crisis. During the recent international financial crisis, also became clear that the micro-prudential regulatory approach proved inadequate in the context of macro-prudential problems, because it does not take into account the external effects that systemic institutions in trouble can cause. A more balanced approach between the macro and micro-prudential regulation can help to prevent or mitigate the externalities that an institution can generate to the system as a whole. Thus we also analyze aspects related to institutions and instruments of macro-prudential regulation.Fil: Demaestri, Edgardo. Banco Interamericano de Desarrollo; ArgentinaFil: Ferro, Gustavo Adolfo. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad Argentina de la Empresa; Argentin

Higher education efficiency frontier analysis: A review of variables to consider

The measurement of efficiency in higher education has gained a growing interest in recent years, especially due to the expansion of the university system. This paper provides a review of the literature on efficiency in higher education institutions by covering empirical articles which applied frontier efficiency measurement techniques from 1997 to 2019. We review the methodological approaches used, both parametric and non-parametric techniques, such as Data Envelopment Analysis, Malmquist index and Stochastic Frontier Analysis. Secondly, we list the applied inputs, input prices, outputs, quality, and environment variables and based on the overview, we discuss the advantages and drawbacks of the different empirical proxy variables used. We address the importance of characterizing students and research funding as raw materials of both the teaching and research services, respectively, and we provide suggestions on how to deal with them empirically. We also discuss the difference between quality and environmental variables, and we give some practical indications to distinguish them in doubtful cases.Fil: Ferro, Gustavo Adolfo. Universidad del Cema. Departamento de Economía; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; ArgentinaFil: D'Elia, Vanesa. Universidad del Cema; Argentin

On the closure of the Argentine Fully-Funded System

Argentine demography more closely resembles southern European countries than most other Latin American nations. Its pay-as-you-go welfare system, implemented in the first half of the twentieth century, was reformed in the 1990s. The new fully funded scheme intended to solve its stressed pay-as-you-go system, as well as to yield positive externalities in the financial system, the savings rate and economic growth. After 15 years in place, the system was closed in 2008; its affiliates were sent back to the pay-as-you-go plan and the accumulated savings were transferred to the public social security administration, which must pay all future benefits. The official explanation for such a measure was twofold: the international financial crisis imperiled the value of the savings of future pensioners, and the (private) pension funds administrators were not managing the funds properly. In Congress, the political support for this reform was remarkably strong in both chambers. In a country with a tradition of mass demonstrations, the owners of the savings accounts protested little. How and why did this happen? Did pension funds administrators, given the regulatory constraints, act in the best interests of their affiliates? Can we learn some lessons that would be relevant to other countries with similar characteristics (that is, in Latin America, Eastern Europe or Central Asia), despite the uniqueness of the local circumstances? We think we can, and have developed some lessons based on this experience. We discuss the process and ask whether it could occur elsewhere. We think it could occur if a weak political consensus on the reform were built and/or if the objectives and instruments were not properly differentiated. Does the reform intend to fix the social security system or to promote national savings? In addition, the marketing and counter-marketing of the reform could polarize the debate and hamper the per se complex achievement of the extended consensus. Finally, the counter-reform has had unexpected pay-offs by hiding the public debt of the social security system, which the previous reform had made explicit. In addition, the available resources from contributions to finance the State budget in the short run increases the appeal of eliminating the fully funded scheme, where that contribution went to personal savings. The long-run responses to the aging process and the short-run political horizon have given rise to the counter-reform coalition.Fil: Ferro, Gustavo Adolfo. Universidad Argentina de la Empresa; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; ArgentinaFil: Castagnolo, Fernando. No especifíca

Setting performance standards for regulation of water services: Benchmarking Latin American utilities

The aim of this study is to estimate both stochastic and mathematical programming efficiency cost frontiers for the Latin American water sector, by means of econometric and Data Envelopment Analysis techniques, using the ADERASA database. ADERASA is the Latin American association for water regulators, which has made a systematic job of data collection, among other initiatives. This study fills a gap in the understanding of relative efficiency in the Latin American water sector, using a consistent database. First, we present a survey of the empirical literature related to cost and production frontiers in the water and sanitation sector. Second, once alternative specifications were chosen, models have been estimated and environmental variables included in an exploratory way. The coefficients have the expected signs and plausible values. Some consistency between methodologies is found. This paper yields two results. The better knowledge of the underlying cost (or production) model is a first step to using benchmarking as a regulatory tool. The policy implications are relatively straightforward. With benchmarking technology it is possible to coordinate the action of different regulators, each with their own asymmetry of information. The key is setting indicative standards which constitute the basis of further discussion.Fil: Ferro, Gustavo Adolfo. Universidad Argentina de la Empresa; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; ArgentinaFil: Romero, Carlos A.. Universidad Argentina de la Empresa; Argentin

An update of the worlds of wine: The emerging countries' influence

The article re-categorises two concepts widely used in the literature of wine, old world and new world. It generates a new classification of the world of wine in terms of the up-to-date paths of production, consumption, and global trade expansion in the last decades: emerging countries competing with developed countries. While determining the temporal and geographical location of the major transformations that happened in the wine industry in the last six decades, the article opens the discussion for a better and updated characterisation of the worlds of wine. It is imperative to compare and examine wine countries within their structural local and global economic and competitive context; it is then relevant to use a 21st-century classification like the one this article proposes (developed versus emerging countries) rather than a 20th-century characterisation (old world versus new world) when describing, analysing, and defining the worlds of wine.Fil: Villanueva, Emiliano C.. Eastern Connecticut State University; Estados UnidosFil: Ferro, Gustavo Adolfo. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad del Cema; Argentin

Benchmarking labor courts: An efficiency frontier analysis

We aim to determine the average efficiency levels of the Argentine Labor Courts and their individual behavior with respect to the average. We also seek to establish the determinants of the relative efficiency levels of those courts. In so doing, we estimate a Data Envelopment Analysis efficiency frontier, and then analyze the efficiency score drivers and the Judiciary career incentives. Our sample comprises 80 courts during the period 2006-2012. Our findings show high levels of efficiency on average. Nonetheless, there is 9-12 percent room for improvement in the output with the same inputs on average, whether considering variable or constant returns, respectively. The efficiency results take caseloads and backlog into account. Given that no measure of capital input is used, this is a short-run analysis. The analysis of the efficiency scores with respect to its determinants shows that more variables, outside our sample, can help explain the variance in the scores.Fil: Ferro, Gustavo Adolfo. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad del Cema; ArgentinaFil: Oubiña, Victoria. Universidad de Buenos Aires. Facultad de Ciencias Económicas; ArgentinaFil: Romero, Carlos Adrián. Consejo Nacional de Investigaciones Científicas y Técnicas. Oficina de Coordinación Administrativa Saavedra 15. Instituto Interdisciplinario de Economía Política de Buenos Aires. Universidad de Buenos Aires. Facultad de Ciencias Económicas. Instituto Interdisciplinario de Economía Política de Buenos Aires; Argentin

Getting Smart (Grids): An Efficiency Frontier Assessment

Information and communication technology are reshaping the electricity industry, with economic, environmental, and regulatory consequences. Smart grids allow the growing integration of renewable energy sources, a horizontalization of the roles of producers and consumers, a flatter demand profile which save investments intended to supply peaks of consumption, idle at great extent off-peaks. On the other hand, smart grids require important investments for modernizing technology. Concerning our objectives, firstly, we seek to understand the conceptual consequences of the irruption of smart grids on the electricity sector, and its importance for renewables adoption. Secondly, we discuss policies and regulations needed to accelerate the transformation of the electricity network in a smart grid, and to increase the renewables? share on total energy. Thirdly, our empirical approach runs a Data Envelopment Analysis (DEA) model to estimate the efficiency gains in the transition between traditional and smart grids. Our results show the efficiency levels of those countries whose objective is to deliver electricity with high levels of quality of services, and at the same time, using more renewables (with fewer carbon emissions), and low cost of supply. We conclude discussing the implications of our empirical model, the limitations, and next stages in polishing the results.Fil: Ferro, Gustavo Adolfo. Universidad del Cema; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; ArgentinaFil: Romero, Carlos Adrián. Consejo Nacional de Investigaciones Científicas y Técnicas. Oficina de Coordinación Administrativa Saavedra 15. Instituto Interdisciplinario de Economía Política de Buenos Aires. Universidad de Buenos Aires. Facultad de Ciencias Económicas. Instituto Interdisciplinario de Economía Política de Buenos Aires; ArgentinaFil: Ramos, Maria Priscila. Consejo Nacional de Investigaciones Científicas y Técnicas. Oficina de Coordinación Administrativa Saavedra 15. Instituto Interdisciplinario de Economía Política de Buenos Aires. Universidad de Buenos Aires. Facultad de Ciencias Económicas. Instituto Interdisciplinario de Economía Política de Buenos Aires; ArgentinaLV Reunión Anual Asociación Argentina de Economía PolíticaCiudad Autónoma de Buenos AiresArgentinaAsociación Argentina de Economía Polític

Economies of scale in the water sector: A survey of the empirical literature

The issue of the most favorable size and optimal industry structure in the water sector is a relevant topic in many countries, due to fragmentation of the water sector and the key role played by municipalities. Important debates are taking place worldwide about how to provide universal access to the water supply and offer an efficient service. Regarding efficiency, the possibility of exploiting economies of scale would imply better resource allocation, the potential for lower water charges, and greater geographical coverage. By surveying the empirical research from different parts of the world, we aim to shed some light on the topic of economies of scale, and to provide a synthesis of the literature. We also aim to determine whether there is a tradeoff between centralization and decentralization. Our survey shows that, for several countries, variations in efficiency of water provision due to economies of scale do exist. Increases in efficiency related to economies of scale are found for populations in the range of 100,000 to 1 million people served. For larger populations, volume-or density-constant returns to scale are observed, followed by decreasing returns to scale; the reverse occurs for smaller values, suggesting that cost savings are derived from consolidation of providers. Returns to scale refer to changes in output resulting where all inputs increase by a constant factor. If output increases by that same proportional change, then there are constant returns to scale. If output increases by less than that proportional change, there are decreasing returns to scale. If output increases by more than that proportional change, there are increasing returns to scale. Returns to scale is a technological phenomenon, due to the relationship between inputs and outputs in the production function. Economies of scale refer to reductions in unit cost as the scale of production increases. Diseconomies of scale are the opposite: increasing in unit costs as the scale of production increases. Scale changes mean a proportional increase in all factors of production. Economies of scale are a economical phenomenon, due to the relationship between unit costs and the level of production.Fil: Ferro, Gustavo Adolfo. Universidad Argentina de la Empresa; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; ArgentinaFil: Lentini, Emilio J.. Universidad de Buenos Aires; ArgentinaFil: Mercadier, Augusto C.. Universidad Nacional de La Plata; Argentin

Regulation and performance: A production frontier estimate for the Latin American water and sanitation sector

The objective of this paper is to analyze the efficiency of the water sector in Latin American countries. We try to find factors affecting efficiency rather than identifying which country or individual provider is more or less efficient. We also consider which model would be more fitting for the water sector production in this region. Our motivation is to develop instruments to make benchmarking operative for regulatory actions that can reduce information asymmetry and increase efficiency in Latin American countries. We estimate econometric efficiency frontiers using data from a regional survey conducted by the Latin American Association of Water Regulators. The paper develops a model based on the core variables that explain the phenomena and explores “environmental” (contextual or beyond management control) variables to achieve fair comparisons. The study does not “name and shame” services but provides elements to foster the development of indicative goals at the regional level.Fil: Ferro, Gustavo Adolfo. Universidad Argentina de la Empresa; Argentina. Consejo Nacional de Investigaciones Científicas y Técnicas; ArgentinaFil: Romero, Carlos A.. Universidad Argentina de la Empresa; ArgentinaFil: Covelli, Maria Paula. Universidad Argentina de la Empresa; Argentin

Tópicos de economía de la regulación de los servicios públicos

Competitive markets could yield socially optimum results, but although market fail in many cases. If the regulation is successful in generating competition or in replicating its incentives, the next problem to solve is to face the inherent tendency of the competition dynamic toward concentration, cartelization or monopolization of the markets. Mechanisms to ensure or to preserve competition gain importance. Regulation could be conceived as an evolutionary process starting in natural monopoly regulation and ending in competition policy. In many cases, competition is infeasible with the current state of the technology (such as in water and sanitation), whether in other infrastructure sectors it can be possible (such as in segments of telephony or power generation. Regulation is compatible with state provision, and there can be separated the provision, control and supervision of the providers, even when the former are in public hands. Normally tariffs are regulated in infrastructure sectors, also quality and safety standards. Regulation nevertheless is a second best device, since it is costly. We develop a list of topics on market failures, natural monopoly, information problems, different kind of regulatory mechanisms, access prices, the basic Ramsey model of prices, applied to regulation, universal service obligation, the quality of product and service regulation, cost of capital in regulated industries, efficiency and benchmarking, and we conclude discussing the link between infrastructure and growth.Fil: Chisari, Omar Osvaldo. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad Argentina de la Empresa. Facultad de Ciencias Económicas. Instituto de Economía; ArgentinaFil: Ferro, Gustavo Adolfo. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad Argentina de la Empresa. Facultad de Ciencias Económicas. Instituto de Economía; Argentin