The author argues that public and private pillars are essential for a well-functioning pension system. Public pillars, funded or unfounded, offer basic benefits that are independent of the performance of financial markets. Since financial markets suffer from prolonged, persistent, and large...

This paper presents a basic assessment of the financial performance of infrastructure service operators in developing countries. It relies on a new database of 120 companies put together to track the evolution of the cost of capital, the cost of equity and the return to equity for electricity,...

This paper examines whether the degree of spillovers from foreign direct investment is affected by the foreign ownership share in investment projects. The analysis, based on an unbalanced panel of Romanian firms from 1998-2000, provides evidence consistent with positive intra-sectoral spillovers...

In discussing the causes and consequences of large capital inflows to developing countries, the author emphasizes two things. First, although there are legitimate grounds for an optimistic long-term outlook on private capital flows to developing countries, there is little to suggest that the...

How can one account for the puzzling behavior of insider-managers who, in stripping assets from the veryfirms they own, appear to be stealing from one pocket to fill the other? The authors suggest that such asset-stripping and failure to restructure are the consequences of interactions between...

This paper argues that credit subsidies are ineffective in stimulating business investment in productive assets. Instead, they lead to an increase in corporate holdings of financial assets and real estate. For empirical verification, the investment patterns in a sample of 241 Korean corporations...

Bolivia's bold program of pension reform involved the immediate closing down of the old pay-as-you-go system and its replacement by a defined-contribution system based on individual capitalization accounts and managed by the private sector. The pensions of the old system will be covered by the...

The authors analyze the impact of three classes of external shocks in open economies, using a rational expectations framework that nests three prototype economies: a neoclassical full-employment benchmark, with intertemporally optimizing consumers and firms an instant clearing of asset, goods,...

In reviewing contracts, establishing price limits, or arbitrating conflicts, regulatory agencies and policy advisors face significant information asymmetry in determining the appropriate allowed rate of return, or discount rate. The information gap is especially important in determining the...

The authors develop a numerical endogenous growth model approximating an infinite horizon, which allows them to investigate the relationship between trade liberalization and economic growth. Economic theory generally implies that trade liberalization will improve economic growth, and the two...