This paper presents theory and evidence on the relationship between inequality and institutional quality. We propose a model in which the two dynamically reinforce each other and set out to test this relationship with a broad array of institutional measures. We establish double causality between...

Poorer countries have a much smaller public sector and correspondingly a smaller tax burden than richer countries, yet, their economic performance has not been necessarily better. Using a simple model, this paper suggests that the growth and welfare effects of taxation are mediated through...

This paper studies three horizontal policy instruments and two vertical ones in Chilean industrial policy, particularly regarding small and medium enterprises (SMEs). The horizontal instruments are (1) a guarantee program for borrowing by SMEs (FOGAPE), (2) a small subsidy to new exports that...

This paper studies the joint effect of economic and political inequalities on redistributive taxation and institutional quality. The theoretical model suggests that income inequality, coupled with political bias in favor of the rich, decreases redistribution and lowers institutional quality. The...

Export Pioneers in Latin America analyzes a series of case studies of successful new export activities throughout the region to learn how pioneers jump-start a virtuous process leading to economic transformation. The cases of blueberries in Argentina, avocados in Mexico, and aircraft in Brazil...

This paper deals with a topic that has been amply debated in the development literature: the relationship between trade and growth. The paper's hypothesis is that what matters for growth is not merely openness to trade, or, for that matter, export growth per se. The key feature of countries that...

This study covers the impact of the emergence of China on Central American economies, with special emphasis on Guatemala and Honduras. The issue of the China¿s impact is generally approached from the standpoint of threats hovering over the economies of Central America (and of others in Region...

Why are growth rates in Latin America so disappointing? This book reviews the results of an ambitious research project to determine the binding constraints to growth, that is, the barrier whose removal would yield the greatest benefit in terms of growth. Included are case studies from seven...

Competing in the world economy does not automatically boost a nation's productivity and restructure its economy. Such progress requires mobilizing capital, employment, technology and knowledge. Opportunities beyond the business realm must be fully exploited to the benfit of society as a whole....