Latin American Development Forum

'Investor Protection and Corporate Governance' analyzes the impact of corporate governance on firm performance and valuation. Using unique datasets gathered at the firm-level-the first such data in the region-and results from a homogeneous corporate governance questionnaire, the book examines corporate governance characteristics, ownership structures, dividend policies, and performance measures. The book's analysis reveals the very high levels of ownership and voting rights concentrations and monolithic governance structures in the largest samples of Latin American companies up to now, and new data emphasize the importance of specific characteristics of the investor protection regimes in several Latin American countries. By and large, those firms with better governance measures across several dimensions are granted higher valuations and thus lower cost of capital. This title will be useful to researchers, policy makers, government officials, and other professionals involved in corporate governance, economic policy, and business finance, law, and management.

This report highlights structural differences in public spending policies between emerging markets and industrialized nations. Emerging markets commit to long-term (rigid) spending based on short-term (cyclical) economic conditions, causing challenges in addressing fiscal imbalances and prompting changes in public spending composition.

Investments in education across countries in Latin America and the Caribbean have transformed the lives of millions of girls and the prospects of their families and societies. Unleashing the full economic potential of women is nevertheless still a curtailed issue in the region: just about half of women are unable to participate in paid work. The majority of the population out of the labor market is women between the ages of 24 and 45. This is the largest share of the available pool of unused human capital countries have, and where mothers of young children are concentrated. This book argues that more and better childcare constitutes a fundamental policy option to improve female outcomes in the labor market, but countries need to pay particular attention to the design and features of such services. First-rate educational programs will be useless if children are not enrolled or do not attend formal education centers. Through an integrated framework applied to each country and an overview of the existing evidence, this book addresses the why and what questions about policy relevant instruments to achieve female labor participation. Moreover, this book tackles the how question contributing to the incipient evidence about factors affecting the take-up of programs and demand for childcare services and other informal care arrangements.

Following the collapse of commodity prices in Latin America and the Caribbean (LAC) in 2014-15, many countries in the region were unable to cushion the impact of the shock in order to experience a more gradual adjustment, to a large extent because they had not built adequate fiscal buffers during the commodities' windfall from 2010-14. Many LAC countries entered 2020 and the COVID-19 crisis in an even more difficult position, with rising debt and limited fiscal space to smooth the negative impacts of the pandemic and adequately support their economies. Fiscal policy in most LAC countries has been procyclical. Public expenditure and debt levels have expanded in good times and contracted in severe downswings due to insufficient fiscal buffers, making crises deeper. Fiscal rules represent a promising policy option for these and other economies. If well-designed and implemented, they can help build buffers during periods of strong economic performance that will be available during rainy days to smooth economic shocks. This book-which was prepared before the COVID-19 crisis-reviews the performance and implementation of different fiscal rules in the region and world. It provides analytical and practical criteria for policy makers for the design, establishment, and feasible implementation of fiscal rules based on each country's business cycle features, external characteristics, type of shocks faced, initial fiscal conditions, technical and institutional capacities, and political context. While establishing new fiscal rules would not help to attenuate the immediate effects of this pandemic crisis, higher debt levels in the aftermath of COVID-19 will demand rebuilding better and stronger institutional frameworks of fiscal policy in LAC and emerging economies globally. Having stronger fiscal mechanisms that include fiscal rules can help countries prepare for the next crisis and should be on the front burner for policy makers in coming years. The findings and lessons discussed apply to economies of different sizes, with some differences under certain scenarios in terms of the technical design and criteria needed for implementation. In this book, policy makers will find that fiscal rules, if tailored to country characteristics, can work and be an essential fiscal tool for larger and particularly smaller economies.

Countries in Latin America and the Caribbean have made remarkable progress in improving the living conditions of their people since the 1990s. Poverty has declined by almost 50 percent, and average life expectancy has increased substantially, especially for children under the age of five. Most children now attend primary school, and three out of four start secondary education. These advances can be largely accounted for by two factors: the fast-paced economic growth of the early 2000s and the substantial expenditures for social programs in the region. However, the region's economic slowdown has halted the pace of improvement, and social policies have not been implemented consistently or effectively because of flaws in design and execution. These failings raise important questions. Who formulates social policy? What resources do actors bring to decision-making processes, and how do those resources position them within decision-making networks? These are not academic questions. The budget and economic constraints imposed by the COVID-19 pandemic mean that public policies will have to be more efficient and effective while dealing with limited resources. Few analyses to date have focused on the process of formulating social policy, the social networks involved, the details of coordination among actors and organizations, and the institutional, normative, and operational factors that make policies likely to succeed-or fail. There has not been a comprehensive, systematic study of how social policy-making processes and coordination mechanisms-formal or informal- can make a difference in the operational effectiveness and impact of social policies. Who Decides Social Policy? Social Networks and the Political Economy of Social Policy in Latin America and the Caribbean attempts to fill this void. This book combines an institutional political economy approach to policy making with social network analysis of social policy formulation processes. Based on extensive interviews with governmental and nongovernmental actors, the case studies of social policy formulation in Argentina, The Bahamas, Bolivia, and Trinidad and Tobago show that while societal actors are central in the networks in South American countries, government officials are the main participants in the Caribbean countries. The comparative analysis of the networks of ideas, information, economic resources, and political power across these cases indicates that differences in the types of bureaucratic systems and governance structures may explain the diversity of actors with decision power and the resources used to influence social policy formulation across the region. These analytical and methodological contributions-combined with specific examples of policies and programs-will help to enhance the efficiency, efficacy, and sustainability of public policies in the social arena.