The politics of intergovernmental deficits: Theory and evidence

The purpose of this paper is twofold. First, we present a model of decentralized fiscal policy-making where a "coordination failure" problem arises. Second, we make an effort in order to empirically test this approach by developing an empirical investigation based on the recent experience of two countries: Argentina and Great Britain.

Worker Flows in the European Union During the Great Recession

We measure the contribution of worker flows across employment, unemployment, and non-participation to the change in unemployment in eleven EU countries during the period 2006-2012, paying special attention to which socio-demographic groups in each of the countries were mostly affected by job creation and job destruction during the crisis. We find that age, to a larger extent than educational attainments, is the main determinant of flows from employment into unemployment, particularly in those countries where unemployment increased by most. Secondly, we highlight some institutional features of the labour market (employment protection legislation, unemployment insurance, and the incidence of active labor market policies) that help to explain the cross-country differences in flows between employment and unemployment and in their socio-demographic composition. Finally, we examine if the crisis has led to some employment reallocation across sectors, finding that, so far, there is no clear evidence in favor of cleansing effects

Euro-Latin Study Network on Integration and Trade (ELSNIT): 1st Annual Conference

Latin American and Caribbean countries are today at an important juncture in their international economic relations. Since the end of the 1980s the countries of the region have been pursuing a process of economic reform and opening that has brought about a radical change in their domestic economies and in their integration into the world economy. Besides having undertaken a unilateral liberalization of their trade and investment inflows, Latin American countries are in the process of deepening economic integration at the subregional level and negotiating trade liberalization agreements at the regional and hemispheric level. Furthermore, they are also negotiating cooperation and trade agreements with other countries and regions of the world ¿ both developing and industrial ones ¿ and are also engaged in the process of multilateral trade negotiations. These parallel processes on the integration and trade fronts represent enormous challenges for Latin America. And in facing them, the countries of the region are open to ideas, experiences and good practices that may contribute to their successfully meeting these challenges, and for capturing the opportunities that integration into an increasingly open and competitive international economy offers. In this regard, the rich European experience in the process of regional integration over the last decades that has brought about not only mutual trade liberalization, but also the establishment of joint institutions, a common currency as well as political cooperation and a strong component of solidarity among member countries could be of benefit for the region. Moreover, Latin America is an important market for the EU as it positions itself in global competition and seeks partners for global cooperation. With this in mind, the Inter-American Development Bank, through the Special Office in Europe and the Integration and Regional Programs Department, through the Institute for the Integration of Latin America and the Caribbean (INTAL), has launched the Euro-Latin Study Network on Integration and Trade (ELSNIT). Established jointly with our partners, leading European research centers in the area of integration and trade, the Network represents a platform for an exchange of ideas between European and Latin American experts, and ultimately a source of support for policy makers on both sides of the Atlantic. This publication represents a synthesis of the findings of the first cycle of activities of the Network during 2003/2004

The Quality of Life in Latin American Cities: Markets and Perception

A growing number of cities around the world have established systems for monitoring the quality of urban life. Many of those systems combine objective information with subjective opinions and cover a wide variety of topics. This book assesses a method that takes advantage of both types of information and offers criteria to identify and rank the issues of potential importance for urban dwellers. This method--which combines the so-called 'hedonic price' and 'life satisfaction' approaches to value public goods--was tested in pilot studies in six Latin American cities: Bogotá, Buenos Aires, Lima, Medellín, Montevideo, and San José of Costa Rica. This publication belongs to the Latin American Development Forum Series (LADF), sponsored by the Inter-American Development Bank, the United Nations Economic Commission for Latin America and the Caribbean, and the World Bank.