Policy Research

España, L.P., Morales, J.R. & Barrios, D., 2016. Poverty, coverage of the Missions and social protection needs for the economic reform of Venezuela.Abstract

Even before the oil price crisis began in 2014, progress in reducing poverty in Venezuela had ceased and official figures showed that. According to the INE, between 2008 and 2013, the percentage of the population living in poverty remained almost the same, going from 33.1% to 34.2%.

Estas son las últimas cifras oficiales de pobreza de ingreso que disponemos ya que la última contabilización oficial de porcentaje de población en situación de pobreza es la del segundo semestre de 2013[1]. A partir de ese momento la descripción social de la pobreza en Venezuela ha dependido de estudios independientes realizados entre otros, por un consorcio de varias universidades del país[2] que dan cuenta de la evolución de la pobreza entre 2014 y 2015 (ENCOVI, 2014 y 2015), años donde se precipitaron los precios del petróleo hasta un tercio de lo que llegaron a ser durante 2008 acelerando un proceso de deterioro en los indicadores de desempeño económico y bienestar del hogar.

Según estas fuentes independientes de información la pobreza de ingresos en Venezuela habría llegado hasta un 55% en 2014 y 76% en 2015. Cifras que por sí solas hablan de la necesidad diseñar un plan de reformas económicas y sociales para hacerle frente al impacto social de la caída de los precios del petróleo, así como al conjunto de factores, más allá de los precios del crudo, que han llevado al país a tres años continuos de recesión y aumento de la pobreza.

En atención a lo anterior, el presente trabajo se enmarca dentro del conjunto de ejercicios de investigación que son necesarios para poder diseñar un programa de estabilización económica y su correspondiente plan de protección social. En ese sentido, en lo que sigue trataremos de dimensionar el número de familias que necesitarían formar parte de este potencial plan de protección social.

Para ello nos valdremos como fuente de información de la ENCOVI 2014 y 2015, encuestas desde las cuales no sólo tenemos información para contabilizar los hogares e individuos en estado de necesidad, sino además las coberturas probables de los programas sociales (Misiones) que actualmente implementa el gobierno de Venezuela, para de esta forma estimar; en primer lugar, las familias en situación de pobreza que reciben beneficios sociales; en segundo lugar las que estando en esa condición de pobreza no los reciben y; por último, y con miras a la reforma de los programas y la introducción de elementos de progresividad distributiva, los beneficiarios que aún sin ser población objetivo, por no estar en situación de pobreza, son receptores de transferencias, pensiones o becas por parte del Estado.

Adicionalmente a lo anterior, las políticas de control de cambio y la regulación de los precios, aunado a los problemas de abastecimiento, han hecho que los precios de los bienes a los que tienen acceso los distintos grupos sociales varían según si se adquieren en los mercados controlados o en los informales. Estos diferenciales de precios son muy importantes y están generando impactos distributivos difíciles de estimar, pero fundamentales para entender las necesidades de protección social que requieren los hogares para cubrir la canasta de productos básicos.

Es por ello que este trabajo también se propone describir a muy alto nivel los problemas distributivos generados por los diferenciales de precios. Si bien probablemente no sea posible llegar a conclusiones definitivas, al menos plantearemos lo relevante del tema para entender como la escasez de productos y las regulaciones de precios han introducido un conjunto de distorsiones en los precios y en el acceso a los bienes esenciales y presentaremos algunos de los dilemas y preguntas que estas distorsiones generan al momento de analizar la capacidad de satisfacer necesidades básicas en Venezuela.

[1] En Agosto de 2016, el Instituto Nacional de Estadística (INE) publicó estadísticas sobre el porcentaje de hogares en situación de pobreza por primera vez desde el año 2013. La serie fue actualizada para incluir los datos de 2014 y el primer semestre de 2015. Para el primer semestre de 2014 la cifra de hogares en situación de pobreza por ingreso alcanzó 29,5%, para el segundo semestre de ese año llegó a 32,6% y finalmente para el primer semestre de 2015 33,1% de los hogares se encontraban en situación de pobreza por ingresos. Sin embargo, el INE no ha hecho públicas ni el valor de Canasta Alimentaria Normativa para 2015, ni las Encuestas de Hogares que sustentan este cálculo ni las cifras de pobreza por ingreso como porcentaje de la población.

[2] We refer to the National Survey of Living Conditions (ENCOVI) conducted in 2014 and 2015 by the Andrés Bello Catholic University, the Simón Bolívar University and the Central de Venezuela. The results and report of the 2014 survey can be seen in: Zuñiga, Genny and González, Marino. A look at the social situation of the Venezuelan population. National Survey of Living Conditions. 2014 . IIES-UCAB. Caracas. 2015, The report of the 2015 survey is being prepared but the database is available at the Institute of Economic and Social Research of the UCAB.

Andrews, M., Russell, S. & Barrios, D., 2016. Governance and the Challenge of Development Through Sports: A Framework for Action.Abstract

Previous papers such as Russell, Barrios & Andrews (2016), Guerra (2016), and Russell, Tokman, Barrios & Andrews (2016) have aimed to provide an empirical view into the sports economy. This proves to be a difficult task, given the many definitions of ‘sports’ and data deficiencies and differences in the sports domain (between contexts and over time). The emerging view in these previous papers provides interesting information about the sports sector, however: it shows, for instance, that different contexts have differently intensive sports sectors, and that sports activities overlap with other parts of the economy. This kind of information is useful for policymakers in governments trying to promote sports activities and use sports to advance the cause of broad-based social and economic development.

This paper is written with these policymakers in mind. It intends to offer a guide such agents can use in constructing sports policies focused on achieving development goals (what we call development through sports[1]), and discusses ways in which these policymakers can employ empirical evidence to inform such policies.  

The paper draws on the concept of ‘governance’ to structure its discussion. Taking a principal-agent approach to the topic, governance is used here to refer to the exercise of authority, by one set of agents, on behalf of another set of agents, to achieve specific objectives. Building on such a definition, the paper looks at the way governmental bodies engage in sports when acting to further the interests of citizens, most notably using political and executive authority to promote social and economic development. This focus on governance for development through sports (asking why and how governments use authority to promote sports for broader social and economic development objectives[2]) is different from governance of sports (which focuses on how governments and other bodies exercise authority to control and manage sports activities themselves), which others explore in detail but we will not discuss.[3]

The paper has five main sections. A first section defines what we mean by ‘governance’ in the context of this study. It describes an ends-means approach to the topic—where we emphasize understanding the goals of governance policy (or governance ends) and then thinking about the ways governments try to achieve such goals (the governance means). The discussion concludes by asking what the governance ends and means are in a development through sports agenda. The question is expanded to ask whether one can use empirical evidence to reflect on such ends and means.  One sees this, for instance, in the use of ‘governance indicators’ and ‘governance dashboards’ in the international development domain. A second section details the research method we used to address these questions. This mixed method approach started by building case studies of sports policy interventions in various national and sub-national governments to obtain a perspective on what these policies tend to involve (across space and time). It then expanded into an analysis of sports policies in a broad set of national and sub-national governments to identify common development through sport ends and means.  Finally, it involved experimentation with selected data sources to show how the ends and means might be presented in indicators and dashboards—to offer evidence-based windows into development through sports policy regimes.

Based on this research, sections three and four discuss the governance ends and means commonly pursued and employed by governments in this kind of policy process. The sections identify three common ends (or goals)—inclusion, economic growth, and health—and a host of common means—like the provision of sports facilities, organized activities, training support, financial incentives, and more—used in fostering a development through sports agenda. Data are used from local authorities in England to show the difficulties of building indicators reflecting such policy agendas, but also to illustrate the potential value of evidence-based dashboards of these policy regimes. It needs to be stated that this work is more descriptive than analytical, showing how data can be used to provide an evidence-based perspective on this domain rather than formally testing hypotheses about the relationship between specific policy means and ends. In this regard, the work is more indicative of potential applications rather than prescriptive. A conclusion summarizes the discussion and presents a model for a potential dashboard of governance in a development through sports policy agenda.

 

[1] This terminology comes from Houlihan and White, who identify the “tension between development through sport (with the emphasis on social objectives and sport as a tool for human development) and development of sport (where sport was valued for its own sake)” (Houlihan & White 2002, 4).

[2] The paper relates to a vibrant literature on this topic, which investigates the reasons and ways governments support the sports sector (classic and recent studies in this literature include Adams and Harris (2014), Gerretsenand Rosentraub (2015), Grix and Carmichael (2012), Grix (2015), Hallman and Petry (2013), Houlihan (2002, 2005, 2016), Houlihan and White (2002), Hylton (2013), Koski and Lämsä (2015), Schulenkorf and Adair (2013), and Vuori et al. (1995).

[3] Work on the governance of sports assesses the way international entities like FIFA and the IOC work with national and local governmental bodies to oversee, regulate, and otherwise manage sports like football and the Olympic movement, using authority to create and implement rules on behalf of those involved in the sport itself. See, for instance Forster (2006), Geeraert (2013), and Misener (2014).

Guerra, A., 2016. More Goals, More Growth? A Take on the Mexican Sports Economy through the Economic Complexity Framework.Abstract

In order to appropriately understand the sports sector, its magnitude, embeddedness in the economy, and strategic value, it is necessary to develop a framework through which to study it. Having a standardized and comprehensive methodology to analyze the sports sector will allow policymakers, academics, and other stakeholders to look at the sports sector at a new level of detail and rigor.

Previous work has outlined the numerous data quality and aggregation challenges currently present in the sports economy literature (Russell, Barrios & Andrews 2016). In light of these challenges, this paper attempts to build on the suggested categorization of the sports industry and develop a sound strategy to analyze the sector through an empirical exercise in a specific context: the Mexican Economy.

To this end, we first attempt to understand how connected the sports sector is to other activities in the economy and identify which sectors share similar know-how with m1. Additionally, we attempt to determine the relative magnitude of the sports sector through variables such as value added and employment.

Similarly, we consider study the spatial considerations around sports related economic activities at a subnational level. The advancement of spatial economics has allowed us to understand a new dimension of how an economic sector can develop and how characteristics inherent to a given geography can play a role in determining why some activities end up appearing and developing in the places they do.

Lastly, some descriptive and regression analysis efforts in this paper enabled us to better understand and characterize the sports sector. Such exercises allow us to learn what type of workers typically comprises the sports sector, and whether such profile is different across the different categories of sports activities. Among the variables analyzed I the descriptive exercise, we can look at education level and wages–among others–of those who work on this sector, and compare them to the overall employed population.

This paper is structured as follows: Section 1 will make the case for how publicly available data in Mexico meets the level of detail required for this type of study. Section 2 will look at the way in which the sports sector is nested in the overall economy. Section 3 studies the magnitude of the sports sector through different metrics. Section 4 looks at the type of jobs that comprise the sports sector. Section 5 looks at the differences in intensity of sports activities and early work on its potential causal roots. Section 6 provides some conclusions.
 

Russell, S., et al., 2016. Keeping One's Eye on the Ball: Exploring the Intensity of Sports Activities across Europe.Abstract

As described in Russell, Barrios & Andrews (2016), past attempts to understand the sports economy have been constrained by a number of data limitations. For instance, many of these accounts use revenues when value added measures would be more appropriate. Similarly, many accounts use top-down definitions that result in double counting and an inflated estimate of the size of the sports economy. More importantly, past accounts have focused most of their efforts estimating the overarching size of the sports economy. Constrained by aggregated data that groups a wide range of sports-related economic activities together, they primarily discuss the size of the sports-related economic activity. Their focus on answering the question of "How big?" conceals substantial differences between activities. Core sports activities, such as professional sports teams, behave very differently than activities, like sporting goods manufacturing that are closer to the periphery of the sports economy. Likewise, there are even important differences amongst core sports activities. Professional sports teams are very different than fitness facilities, and they might differ in different respects.

Guerra (2016) demonstrates that, when detailed, disaggregated data are available, the possibilities to analyze and understand the sports are greatly increased. For instance, Guerra (2016)  were able to conduct skills-based analyses, magnitude analyses, employment characterizations, geographic distribution analyses, and calculations of the intensity of sports activities. The sector disaggregation, spatial disaggregation, and database complementarity present in the Mexico data used in that paper therefore enables a more detailed and nuanced understanding of sports and sports-related economic activity.

Data with characteristics similar to those found in Mexico are few and far between. We have, unfortunately, been unable to completely escape such data limitations. However, we have compiled and analyzed a large array of employment data on sports-related economic activities in Europe. In the paper that follows, we describe our analyses of these data and the findings produced.

Section 1 begins with a discussion of employment in sports and an explanation of why we chose this variable for our analyses. Section 2 provides an overview of the data used in this paper particularly focusing on the differences between it and the Mexico data discussed in Guerra (2016). It also describes the methodology we use. We analyze these data using one of two related measures to understand the intensity of sports-related activities across different geographic areas in countries. We also construct measures at the level of a single country in order to compare across entire economies. At the international level, we adopt the revealed comparative advantage (RCA) measure that Balassa (1965) first developed to analyze international trade. Within specific countries, however, we use a population-adjusted version of the RCA measure known as RPOP. Section 3 presents the most relevant findings and Section 4 discusses their limitations. Section 5 concludes with the lessons learned and avenues for future research. While there are limitations on these analyses, they can give policymakers a better understanding of the distribution and concentration of sports across space. Such information can serve as an important input for sports-related investment decisions and other sports-related policies.

Russell, S., Barrios, D. & Andrews, M., 2016. Getting the Ball Rolling: Basis for Assessing the Sports Economy.Abstract

Data on the sports economy is often difficult to interpret, far from transparent, or simply unavailable. Data fraught with weaknesses causes observers of the sports economy to account for the sector differently, rendering their analyses difficult to compare or causing them to simply disagree. Such disagreement means that claims regarding the economic spillovers of the industry can be easily manipulated or exaggerated. Thoroughly accounting for the industry is therefore an important initial step in assessing the economic importance of sports-related activities. For instance, what do policymakers mean when they discuss sports-related economic activities? What activities are considered part of the "sports economy?" What are the difficulties associated with accounting for these activities? Answering these basic questions allows governments to improve their policies.

The paper below assesses existing attempts to understand the sports economy and proposes a more nuanced way to consider the industry. Section 1 provides a brief overview of existing accounts of the sports economy. We first differentiate between three types of assessments: market research accounts conducted by consulting groups, academic accounts written by scholars, and structural accounts initiated primarily by national statistical agencies. We then discuss the European Union’s (EU) recent work to better account for and understand the sports economy. Section 2 describes the challenges constraining existing accounts of the sports economy. We describe two major constraints - measurement challenges and definition challenges - and highlight how the EU's work has attempted to address them. We conclude that, although the Vilnius Definition improves upon previous accounts, it still features areas for improvement.

Section 3 therefore proposes a paradigm shift with respect to how we understand the sports economy. Instead of primarily inquiring about the size of the sports economy, the approach recognizes the diversity of sports-related economic activities and of relevant dimensions of analysis. It therefore warns against attempts at aggregation before there are better data and more widely agreed upon definitions of the sports economy. It asks the following questions: How different are sports-related sectors? Are fitness facilities, for instance, comparable to professional sports clubs in terms of their production scheme and type of employment? Should they be understood together or treated separately? We briefly explore difference in sports-related industry classifications using data from the Netherlands, Mexico, and the United States. Finally, in a short conclusion, we discuss how these differences could be more fully explored in the future, especially if improvements are made with respect to data disaggregation and standardization.

Barrios, D., Russell, S. & Andrews, M., 2016. Bringing Home the Gold? A Review of the Economic Impact of Hosting Mega-Events.Abstract

There is perhaps no larger sports policy decision than the decision to host or bid to host a mega-event like the FIFA World Cup or the Summer Olympics. Hosts and bidders usually justify their decisions by touting their potential impact. Many organizers and promoters either fund or widely disseminate ex-ante studies that tend to highlight the positive effects of the event. For instance, the consultancy firm Ernst & Young produced a 2010 report prior to the 2014 World Cup in Brazil that painted an optimistic picture of the event’s potential legacy. It estimated that an additional R$ 142.39 billion (4.91% of 2010 GDP) would flow through the Brazilian economy over the 2010-2014 period, generating 3.63 million jobs per year, R$ 63.48 billion (2.17% of 2010 GDP) of income for the population and additional tax collection of R$ 18.13 billion (0.62% of 2010 GDP) for the local, state and federal governments. Ernst & Young estimated that during the same period 2.98 million additional visitors would travel to Brazil, increasing the international tourist inflow up to 79%.

Such results, if true, would clearly attractive for governments considering a bid, but these expected impacts don’t always materialize. Moreover, hosting mega-events requires significant investments - and the cost of these investments is rising. Zimbalist notes emerging economies like China, Brazil, and South Africa have increasingly perceived "mega-events as a sort of coming-out party signaling that [they are] now a modernized economy, ready to make [their] presence felt in world trade and politics" (Zimbalist 2015). Their intentions may be noble, but the intention of using mega-events as a "coming-out party" means developing countries hoping to host them need to make massive investments. They are confronted by significant obstacles in that they lack sufficient stadiums, accommodations, transportation systems, and other sports-related infrastructure. As a result, each of the mega-events hosted by emerging economies has been exorbitantly expensive. The 2014 World Cup cost Brazil between USD 15 billion and USD 20 billion, while Beijing reportedly spent USD 40 billion prior to the 2008 Summer Olympic (Zimbalist 2015). Additionally, as the debt-ridden 1976 Summer Olympics in Montreal demonstrates, expensive mega-events are not limited to emerging economies alone. Flyvbjerg and Stewart have even shown that every Olympics since 1960 has gone over budget (Flyvbjerg and Stewart 2012).

Such incredible figures, in terms of both costs and benefits, beget the question: are mega-events worth it? Which type of reports should governments focus their attention on? What economic consequences should a government reasonably expect? With such high stakes, policymakers need to choose wisely. We attempt to answer these questions and aid the decisions of policymakers by providing a concise review of the rich academic literature on mega-events. For the purposes of this paper, we mainly focus on the Summer Olympic Games and the FIFA World Cup as mega-events. However, we also leverage information regarding events like the Winter Olympic Games, the UEFA football championships, and the Commonwealth Games. These events are organized on a smaller scale than the previous two, but they might provide some insights on how to best understand mega-events. We focus on claims surrounding the direct or indirect mechanisms that facilitate the impact that ex-ante studies predict. We provide a review of these claims and their validity according to the existing literature.

Section 1 focuses on the argument that mega-events lead to increased economic activity in the host economy. Specifically, we evaluate whether or not mega-events leads to access to previously inaccessible funds and increased investments. These investments could theoretically come from supranational organizations, private stakeholders, or public stakeholders. We also consider whether or not these new expenditures and investments have the multiplicative effect that many ex-ante studies assume they have. We finally investigate if the economic activity surrounding mega-events leads to increased revenues and tax collection for host governments. Overall, the existing academic literature suggests that any increased economic activity resulting from the event is routinely dwarfed by additional public budgetary commitments. Moreover, the arguments regarding multiplicative effects and increased revenues also tend to be exaggerated.

Section 2 shifts the focus to the potential impact of mega-events on a specific industry: tourism. We explore the effect of mega-events on the number of tourists visiting the host region and their spending habits. We explore this channel both for analyses specific to a single mega-event and for cross-country evaluations incorporating many events. Next, we consider the impact of a mega-event on a region’s brand and image in the international community with the idea of testing if hosting the competition will impact future tourism. Finally, we consider if mega-events lead to increases in the capacity of a city or country to welcome future tourists as a result of improved airport infrastructure, accommodations, and/or transportation systems. As was true in Section 1, the academic literature suggests that the claims of many ex-ante studies are misleading. Our review finds that there is some evidence for increases in tourist arrivals to certain events, but those increases are far smaller than what is generally predicted beforehand. These effects are also usually dependent on factors, such as the timing of the competition, that are specific to the host region and the event itself.

Section 3 briefly discusses other potential qualitative and social impacts of mega-events such as international business relations, crime reduction, and the "feel-good effect." In the penultimate section, Section 4, we discuss how these conclusions should impact the decision-making of policymakers. Finally, in a short conclusion, we summarize the findings of our review.

Jimenez, A., 2016. Increasing Exports of Albanian Cultivated Fish to the EU, Growth Lab at Harvard's Center for International Development.Abstract

This document explores Albanian aquaculture in the context of European aquaculture and compares it to neighboring countries, especially Greece. Using information from fieldwork, multiple reports by the United Nations’ Food and Agriculture Organization (FAO), and interviews with experts in government and non-government institutions, we analyze the production of European seabass and Gilthead seabream in Europe in general and in Albania in particular. Albanian cultivation of seabass and seabream has increased sevenfold since production started in the early 2000’s, but it represented only 0.38% of European aquaculture of these two species in 2013. Albania has significantly lower productivity than its neighbors, especially Greece, the dominant actor in the market. The analysis indicates that Albania’s lower productivity is caused by: (i) high costs of cages, fingerlings, and feed; which are all imported; (ii) lack of a formal fish market; and (iii) lack of clarity in the regulation. The document concludes by offering recommendations to get over these impediments for growth including reducing tariffs; encouraging national production of cages, fingerlings, and feed through investment in research; offering more and better financing options for cage acquisition; improving quality controls; establishing a national fish market; and passing the Aquaculture Law to bring clarity to the sector regulation.

Orozco, M., 2015. The Demand for and Supply of Nostalgic Products among the Albanian-Americans: A Survey, Growth Lab at Harvard's Center for International Development.Abstract

The U.S. is home to more than 200,000 ethnic Albanians, about half of whom are emigrants from the Republic of Albania. Despite the significant Albanian population in the U.S., official trade of Albanian goods in the U.S. almost does not exist.

We surveyed about 200 Albanian-Americans and several stores offering goods imported from the Balkan region of Europe in three U.S. metropolitan areas with large Albanian population in order to study their purchasing habits. We found that the willingness to purchase products from the region of origin is certainly not matched by an adequate supply. The stores which offer such products are few, often hard to reach and offer limited supplies of a small variety of commodities. In the study, we recommend steps to strengthen the market for nostalgic good through continued market research, trade-related technical assistance, diaspora-donor partnerships for nostalgic trade development and trade fairs.

Lawrence, R., Frasheri, E. & Qazi, M., 2014. Integration in the Balkans: Albania and Kosovo, Growth Lab at Harvard's Center for International Development.Abstract

Despite their historic and ethnic ties, trade and investment between Albania and Kosovo remains underdeveloped. To be sure, even if fully developed, Kosovo is unlikely to play a major role in Albanian external economic relations. Nonetheless, increased economic integration between the two countries can serve as the basis not only for enhancing the ties between the two countries, but also for spurring the measures that could act as a springboard for Albania’s integration with respect to other countries in the Balkans as well as with the EU.  

Ali, O., 2015. Revitalizing the Albanian Electricity Sector, Growth Lab at Harvard's Center for International Development.Abstract

In an attempt to recuperate its dysfunctional electricity distribution system, Albania privatized its sole electricity distribution company in 2009. Disappointed with the results of the privatization, just five years later, the State of Albania renationalized the company.

The case study “Revitalizing the Albanian Electricity Sector” analyzes the key sources of inefficiencies in the electricity distribution sector in Albania and the structural problems of the current state-owned company. It explains how the tariff setting and the failed infrastructural investments triggered a chain effect of financial instability which spilled beyond the limits of the electricity sector and discusses possible reforms to the sector.

Coscia, M., Neffke, F. & Lora, E., 2015. Report on the Poblacion Flotante of Bogota.Abstract

In this document we describe the size of the Poblacion Flotante of
Bogota (D.C.). The Poblacion Flotante is composed by people who live
outside Bogota (D.C.), but who rely on the city for performing their job.
We estimate the Poblacion Flotante impact relying on a new data source
provided by telecommunications operators in Colombia, which enables us
to estimate how many people commute daily from every municipality of
Colombia to a specic area of Bogota (D.C.). We estimate that the size of
the Poblacion Flotante could represent a 5.4% increase of Bogota (D.C.)'s
population. During weekdays, the commuters tend to visit the city center
more.

Gomez-Lievano, A., Tellez, J. & Lora, E., 2015. New Insights About Wage Inequality in Colombia.Abstract

This paper presents a descriptive analysis of wage inequality in Colombia by cities and industries and attempts to evaluate the impact of the inequality of industries on inequality of cities. Using the 2010-2014 Colombian Social Security data, we calculate the gini coefficient for cities and industries and draw comparisons between their distributions. Our results show that while cities are unequal in similar ways, industries differ widely on how unequal they can be with ginis. Moreover, industrial structure plays a significant role to determine city inequality. Industrial framework proves to be a key element in this area for researches and policymakers.

Campante, F. & Sole, A., 2015. Implementing Productive Development Policies in Chiapas: Institutional Framework.Abstract

This document proposes a new institutional framework for the implementation of productive development policies (PDP) in Chiapas , with the objective of promoting a structural change in the Chiapas economy in search of greater diversity and productive complexity.

The first section contains a diagnosis of the current context of PDP in the State. A low degree of implementation and execution is observed , despite the abundance of analysis, prescriptions and initiatives to support private companies. This situation cannot be attributed to the scarcity of resources. Although there are not many resources available at the state level for PDPs, there are at the level of existing federal programs. These are coordination and leadership deficiencies in the public sector , which interact with coordination problems within the private sector itself , with the perception of political-institutional instability , and with a history of mistrust, to form a scenario of little collaboration at different levels, so that many of the existing opportunities are wasted.

The second section describes the conceptual foundations for a new institutional framework that enables the effective implementation of PDP, reflected in four basic principles . First, the new framework must be built with relatively few state budget resources . Second, it is emphasized that it should focus on the coordination between the public and private sectors , which requires specific skills and knowledge within the public sector, the building of a relationship of trust , and the proactive promotion of the organization and coordination of the private sector.. Third, an emphasis on the provision of public goods and services, and not market interventions. Fourth, the promotion of a dynamic iterative process.

Once the principles have been established, the third section details the specific coordination proposal for the implementation of the new institutional framework. She focuses on the following five points. First, the designation of an implementing body on which the leadership and responsibility for the PDP implementation process clearly falls. Second, it is recommended to provide said entity with a technically competent staff. Third, it must have political autonomy. Fourth, it must be proactive, in an action-oriented dynamic process. Lastly, you must foster leadership in the private sector. At the end, illustrative examples of how the practical implementation of this dynamic process could be given are discussed.

Santos, M.A., et al., 2015. Pilot of Inclusive Growth in indigenous communities of Chiapas (Cruztón, Chamula).Abstract

The Growth Lab at Harvard's Center for International Development, the Los Grobo Foundation, and the School of Senior Management and Business Administration of Barcelona (EADA), with the support of the Ministry of Finance and Public Credit of the Government of Mexico, have partnered to conduct an exploration of the productive attitudes and skills of the indigenous communities of Chiapas. Given the high degree of dispersion of these communities, we have decided to select a pilot location, relatively close to urban areas, and implement the methodology of the Empower Communities program developed by the Los Grobo Foundation there.

Our final objective is to increase the understanding of the social, political, cultural and productive complexity of the indigenous communities of Chiapas, using as a vehicle a methodology that promotes participatory diagnosis, identifies capacities and resources, in the process of designing a collective development plan. territorial. Through the pilot implementation of Empower Communities, the team seeks to create a knowledge base that allows us to strengthen our capacity to design and implement development policies in indigenous communities with a productive aspect, as a complement to the social assistance policies that predominate in the place.

Hausmann, R., Espinoza, L. & Santos, M.A., 2015. Chiapas Growth Diagnosis: The Trap of Low Productivity.Abstract

Chiapas is not only the lowest per capita entity in Mexico, but also the one that has grown the least during the last decade. As a result, the gap that separates it from the rest of the country has been widening significantly. This performance contrasts with the environment of relative macroeconomic and institutional stability that has prevailed during this period.

The low level of income in Chiapas is consistent with the inability of the state to produce things that it can sell beyond its limits. Its per capita exports are among the lowest in Mexico and are concentrated in a series of agricultural primary products, which are traded in highly competitive markets with very low margins.

What are the reasons behind Chiapas' poor economic performance? This document follows the growth diagnosis methodology developed by Hausmann, Rodrik and Velasco (2005), adapting it to a sub-national context. Our objective remains the same: to identify the main constraints to economic growth in Chiapas.

According to the results of our analysis, the main restrictions on the growth of the state are not found in any of the usual suspects. Low levels of education to some extent are associated with the backwardness of Chiapas, but barely enough to explain a small part of the gap. The orography and the climate of Chiapas represent a challenge for the lifting and maintenance of its infrastructure, but the latter does not appear as the main restriction to the development of its productive fabric. There is also no evidence of credit market failures. The low levels of private credit in Chiapas are more associated with the low productivity of the economic activities carried out there than with bottlenecks or insufficiencies in the supply of financing.

Our conclusion is that Chiapas is in a (low) productivity trap. Its main problem is that it has an economy of very low complexity or sophistication, which reflects its few productive capacities. Modern production systems require a number of complementary inputs that are absent in Chiapas. In this context, productive diversity and private investment are low because returns to investment are also very low. Since the demand derived from private investment is low, it inhibits the emergence of a supply of complementary inputs, giving rise to a problem of coordination similar to that of the egg and the hen. Solving this coordination problem requires state intervention. Some of the few cases of manufactured exports that exist in Chiapas have resulted from successful state interventions to coordinate the existence of inputs needed for production with the demand for them. This feature provides the supporting argument that justifies the creation of Special Economic Zones.

In Chiapas, this situation is further aggravated by the combination of three factors: (1) high government transfers, (2) lack of public transportation and (3) low educational level.

Government transfers have effects similar to those identified in the economic literature of the Dutch disease: to increase the relative costs of tradable goods by tilting economic activity to the non-tradable sectors. The absence of a public transport system directly reduces the net benefit of working in the city if you live in the countryside. Thus, a dual equilibrium has been established with significant differences between wages across the entire range of professions and occupations between cities and their nearest rural communities. Finally, although Chiapas has gradually closed the educational gap that separates it from the rest of the country, there are still significant differences. In our opinion, This gap is due to the fact that the decision to accumulate years of schooling is partly endogenous to the returns obtained from education. Seen this way, education gaps would be a mirror of the differences in terms of production methods that predominate in Chiapas, in contrast to the rest of the country. For this reason, we observe that while returns to education are higher in Chiapas, it is more profitable for each educational level to emigrate (to a place where there are other complementary inputs that make higher productivity and a higher salary possible) than to stay in work the entity. Chiapas emigrants, although few, receive similar incomes to workers with the same level of education at the destination. Education gaps would be a mirror of the differences in terms of production methods that predominate in Chiapas, in contrast to the rest of the country. For this reason, we observe that while returns to education are higher in Chiapas, it is more profitable for each educational level to emigrate (to a place where there are other complementary inputs that make higher productivity and a higher salary possible) than to stay in work the entity. Chiapas emigrants, although few, receive similar incomes to workers with the same level of education at the destination. Education gaps would be a mirror of the differences in terms of production methods that predominate in Chiapas, in contrast to the rest of the country. For this reason, we observe that while returns to education are higher in Chiapas, it is more profitable for each educational level to emigrate (to a place where there are other complementary inputs that make higher productivity and a higher salary possible) than to stay in work the entity. Chiapas emigrants, although few, receive similar incomes to workers with the same level of education at the destination. For each educational level it is more profitable to emigrate (to a place where other complementary inputs exist that make possible a greater productivity and a higher salary) than to stay to work in the entity. Chiapas emigrants, although few, receive similar incomes to workers with the same level of education at the destination. For each educational level it is more profitable to emigrate (to a place where other complementary inputs exist that make possible a greater productivity and a higher salary) than to stay to work in the entity. Chiapas emigrants, although few, receive similar incomes to workers with the same level of education at the destination.

The policy implications of this diagnosis point to the need to take advantage of the knowledge that already exists in the greater populated centers of Chiapas and in the rest of Mexico to promote diversification towards other more complex activities that can build upon the capacities already Existing in the area. The creation of a public transport system linking the rural communities surrounding the city could solve the constraint of labor shortages, while opening up greater urban employment opportunities for the inhabitants of neighboring rural communities. This is a typical example of the egg and chicken dynamics that prevails in Chiapas, since a minimum scale of operation is required for the creation of an efficient public transport system,

Our prescription suggests that we take the mountain to Muhammad, since Muhammad has not gone to the mountain. That is to say, to try to solve the problems of coordination through an intervention that approaches the work opportunities to where the workers are, given that under the current conditions the latter do not find it profitable to get closer to where the job opportunities are. There are rural areas with low participation rates and high poverty rates in the neighborhood of San Cristóbal de las Casas. This is also a region where there is a lot of uncertainty for private economic activity, since the existence of ejido territories of community ownership predominates there. One implication of our analysis could be to create an Industrial Park around San Cristóbal, That solves the lack of public goods that has kept away the private economic activity (legal insecurity, difficulty to get land, social unrest), and at the same time bring the companies where the available labor is. The experience within Chiapas of companies like Arnecom-Yazaki indicates that with short training periods, workers could be integrated into relatively modern systems and deal productively.

This solution is a step on which we can enter a sustained development dynamic, through successive improvements in productivity derived from the transformation of production and the progressive adoption of more modern production systems. To grow, Chiapas must start by learning to do things that are already produced in the rest of Mexico and can sell out of the state. From there, the economic fabric and knowledge associated with more modern methods of production will be created, and from there gradually the export capacity can be developed and more complex activities can be developed. This process requires coordination between the different actors, government (national and regional), private sector, and academia, with the aim of proactively seeking adjacent activities,

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