Economic geographers and the limelight: The reaction to the 2009 World Development Report

The reaction of economic geographers to the World Bank's World Development Report 2009 – Reshaping Economic Geography – has so far been a corporatist turf-protecting exercise. The report has been dismissed as the work of economists who completely ignore a rich tradition of work by "proper" economic geographers. However, this negative response has prevented geographers from engaging constructively with the World Bank's analysis and proposals. In this note I argue that, while the report presents an accurate diagnosis of recent development trends and should be praised for its flexibility in providing numerous policy alternatives, geographers can significantly contribute to promote a discussion around two key issues in the report: its treatment of institutions and its recommendation of spatially-blind policies.

Fallas de coordinación, conglomerados e intervenciones microeconómicas

(Disponible en idioma inglés únicamente) En este trabajo se tratan las fallas de coordinación, su pertinencia para los países en desarrollo y las circunstancias en las que se producen; se propone que los conglomerados se pueden considerar como aglomeraciones de empresas y organizaciones en actividades económicas afines, entre las cuales es probable que se produzcan fallas de coordinación. En otras palabras, los conglomerados ofrecen oportunidades para intervenciones microeconómicas que promueven la coordinación y la acción colectiva para mejorar la productividad. En ese contexto, se presenta un modelo de una economía pequeña plagada de fallas de coordinación propias de actividades o conglomerados específicos, lo que demuestra que la política debería fomentar la cooperación en actividades en las cuales la economía ya muestre ventajas comparativas. En cuanto a la innovación, es probable que las políticas destinadas a aumentar la innovación en general sean inferiores a las políticas que asumen un enfoque más selectivo al tratar de inducir el desarrollo de conglomerados de innovación en áreas de ventaja comparativa. Este trabajo concluye con sugerencias sobre la manera en que las fallas de comprensión y de coordinación pueden formar la base de un conjunto de intervenciones microeconómicas eficaces en países de ingresos medios.

Costa Rica’s Development Strategy based on Human Capital and Technology: how it got there, the impact of Intel, and lessons for other countries

human development, technology

Do institutions matter for regional development?

This paper discusses whether institutions matter for regional development and how to integrate them in regional development strategies. It finds that while institutions are crucial for economic development, generating an institution-based regional development strategy is likely to be undermined by the lack of definition of what are adequate, solid, and efficient institutions. Problems related to the measurement of institutions, to their space and time variability, to the difficulties in establishing the right mix of formal and informal institutions, and to the endogeneity between institutions and economic development make one-size-fits-all approaches to operationalizing institutions difficult. Development strategies specifically tailored to the conditions of different regional institutional environments across regions may yield greater returns.

Intervenciones microeconómicas después del Consenso de Washington

(Disponible en idioma inglés únicamente) En este trabajo se analizan las intervenciones microeconómicas usadas para complementar las reformas del Consenso de Washington en América Latina. Se sostiene que la clase de intervenciones que se estilan actualmente en la mayoría de los países carecen de una base teórica y empírica sólida, o se están aplicando de una manera que probablemente resulte ineficaz. Se sostiene que los países de la región deberían realizar intervenciones selectivas destinadas a descubrir nuevas actividades rentables (políticas horizontales) y a crear conglomerados de innovación (políticas verticales), y se trata cómo se puede poner en práctica dicha estrategia. Tanto las políticas horizontales como las verticales son importantes, pero la combinación adecuada de ambas depende del grado de desarrollo del país. El pesimismo acerca de la capacidad de las economías latinoamericanas de emprender este conjunto de intervenciones microeconómicas más sofisticadas es una reacción exagerada a los problemas de corrupción y captura con los que se topan las políticas de sustitución de importaciones. Al menos en algunos países se sigue una estrategia cuidadosamente aplicada del tipo que se trata en este trabajo.

Offshoring in a Ricardian World

Falling costs of coordination and communication have allowed firms in rich countries to fragment their production process and offshore an increasing share of the value chain to low-wage countries. Popular discussions about the aggregate impact of this phenomenon on rich countries have stressed either a (positive) productivity effect associated with increased gains from trade, or a (negative) terms of trade effect linked with the vanishing effect of distance on wages. This paper proposes a Ricardian model where both of these effects are present and analyzes the effects of increased fragmentation and offshoring in the short run and in the long run (when technology levels are endogenous). The short-run analysis shows that when fragmentation is sufficiently high, further increases in fragmentation lead to a deterioration (improvement) in the real wage in the rich (poor) country. But the long-run analysis reveals that these effects may be reversed as countries adjust their research efforts in response to increased offshoring. In particular, the rich country always gains from increased fragmentation in the long run, whereas poor countries see their static gains partially eroded by a decline in their research efforts.

Infrastructure endowment and investment as determinants of regional growth in the European Union

This paper analyses the role of infrastructure endowment and investment in the genesis of regional growth in the European Union. It assesses the economic effects of the existence and improvement of transport networks in light of their interactions with innovation and local socio-economic conditions. The analysis accounts for spatial interactions between different regions in the form of spillovers and network externalities. The regression results highlight the impact of infrastructural endowment on regional economic performance, but also the weak contribution of additional investment. Regions having good transport infrastructure endowment and being well connected to regions with similar good endowments tend to grow faster. However, investment in infrastructure within a region or in neighbouring regions seems to leave especially peripheral regions more vulnerable to competition. Furthermore, the positive impact of infrastructure endowment on growth tends to wane quickly and is weaker than that of, for example, the level of human capital

Individual earnings and educational externalities in the European Union

This paper examines whether differences in educational externalities affect individual earnings across regions in the EU. Using microeconomic data from the European Community Household Panel, the analysis relies on spatial economic analysis in order to determine to what extent differences in individual earnings are the result of (a) the educational attainment of the individual, (b) the educational attainment of the other members of the household he/she lives in, (c) the educational endowment of the region where the individual lives, or (d) the educational endowment of the neighbouring regions. The results highlight that, in addition to the expected positive returns of personal educational attainment, place-based regional and supra-regional educational externalities generate significant pecuniary benefits for workers. These findings are robust to the inclusion of different individual, household, and regional control variables.individual earnings; educational attainment; externalities; households; regions; Europe