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Über dieses Buch

This contributed volume is the first book in English to offer a current and critical vision of regional problems and policies in the countries of Latin America. The book is in three main parts: a general overview of regional processes and trends in Latin America as a whole; country-level coverage of seven individual countries; and comparative analyses of common major problems such as migration, education, labor, poverty, decentralization, exports and foreign direct investments. Written by renowned academics and experts from the region, the book seeks to provide a better understanding of regional challenges and trends, regional disparities that exist in many Latin American countries and the increasing importance of metropolitan areas.



General Overview, Problems, Trends and Regional Policies in Latin America


Chapter 1. The Reason Why of This Book: An Introduction

The quantity and quality of the research and publications on Latin American nations’ territorial problems and policies have increased substantially over the past decade. However, the fact that the majority of the studies that have been conducted have been published in Spanish and Portuguese has limited their dissemination to the countries in which those languages are spoken. Today, there is a great deal of interest in Spanish- and Portuguese- speaking America for a variety of reasons. The region’s increasing weight on a global scale is undeniable due to its population and the dynamism of some of its economies and to the interesting political changes that have taken place and continue to develop in these nations. As such, one should not be surprised by the interest that has developed in the problems, dominant trends, and policies of the countries of Latin America, which has increased both generally and in regard to the specific sphere of the regional, territorial and local.
Juan R. Cuadrado-Roura, Patricio Aroca

Chapter 2. Facing the Need for Regional Policies in Latin America

From the perspective of results in terms of growth as a whole, Latin America and particularly some countries of the continent are experiencing an economic stage that could be described as fairly pleasant. There are, of course, differences among countries, but several of them have reported GDP growth rates of over 4 % in real terms since 2000. The impact of the international economic-financial crisis had its worst manifestation in 2009, when Brazil, Chile, Venezuela and especially Mexico reported real negative rates in the variation in their GDP. However, in 2010, all of them returned to very positive rates of expansion and as some reliable reports have suggested, Latin America and the Caribbean (LAC) confirmed its economic power in 2012 because the region was capable of resisting international economic instabilities and maintains expectations of growth of 3.5–4 % for the next 2 years. Theses positive perspectives constitute a clear opportunity to re-consider the territorial problems and regional disparities that exist in the majority of the L.A. countries. The authors suggest why and how.
Juan R. Cuadrado-Roura, Patricio Aroca

Chapter 3. Territorial Development in Latin America: A Long Term Perspective

It is a well-known fact that Latin America is the world region with the greatest inequalities in the various dimensions associated to development; economic (income), production, employment, social and territorial. Inequality, in its various forms, reinforces each other, and in the absence of public policy intervention, it is unlikely that these gaps that have characterized the region for decades will be reduced (ECLAC, Time for Equality. Opening paths, closing gaps 2010). This insight may explain why the development agendas of many countries of the region are aimed at reducing such disparities. Furthermore, these disparities could be a barrier to long-term growth of national economies. High levels of income inequality usually go hand-in-hand with stark differences in terms of organization and socio-spatial disparities. The current configuration of continental socio-spatial disparities was consolidated when industrialization processes began to develop around the early 1940s which as a result, led to accelerating urbanization and a growing rural–urban gap in terms of living conditions. At the same time, it also accelerates the economic and demographic concentration in a few parts of the country.
Jorge Máttar, Luis Riffo

Chapter 4. The Origins, Development and Current State of Territorial Policies in Latin America in the Twentieth and Twenty-First Centuries

This chapter is organized as follows: The introduction identifies the purpose of the document and redefines the concept of territorial policy. Next, a theoretical approach is described that includes a discussion of the nature of territorial issues, a fundamental aspect of policy interventions in the territory. The historical overview traces the origins of policy interventions in Latin America on the basis of two foundational experiences: the Tennessee Valley Authority, which was established by Roosevelt in the 1930s, and the Cassa per ilMezzogiorno, a development agency created in southern Italy in 1950. In each case, I present the most important Latin American replicas of those experiences. The section on paradigmatic territorial policies provides a detailed examination of the evolution of these instruments. Next, the discussion of the objectives of territorial interventions and their results reviews the goals that were set and the outcomes. My hypothesis regarding a more than evident failure explains the reasons why success was not achieved. The section on key events from the twenty-first century addresses new interventionist trends in Brazil and Chile and the World Bank’s 2009 report on the global economy as a significant milestone from this century. Finally, the conclusions describe the overarching weaknesses of the approaches and interventions that have been developed thus far.
Sergio Boisier

Chapter 5. Growth and Regional Disparities in Latin America Concentration Processes and Regional Policy Challenges

The focus of this chapter is centered on the process of product concentration and the evolution of regional disparities in Latin America and its relationship to countries’ economic growth. For this purpose, a group of eight countries have been taken into account: Argentina, Bolivia, Brazil, Colombia, Chile, Mexico, Panama and Peru. To carry out the empirical analysis these countries offer the advantage of having uniform regional and national data that enables the comparison between them. Nevertheless, figures from Ecuador will also be considered to study some specific aspects, as regional disparities of income per capita, the concentration of population and the increasing exports of raw materials to other American, European and Asian economies.
Juan R. Cuadrado-Roura, Sergio Gonzalez-Catalán

Chapter 6. Concentration and Growth in Latin American Countries

Despite urbanization and recent development, many Latin American countries, such as Chile, Peru, Uruguay and Argentina, still maintain very high levels of urban primacy (United Nations 2012). Most studies about the region have analyzed economic and social problems derived from the existence of urban giants but have not considered in which ways urban primacy is currently affecting national growth. In this respect, Brülhart and Sbergami (2009) show, using a sample of 105 countries and controlling for 18 variables used in various convergence studies worldwide, that when a country achieves a GDP per capita level of $10,000 an increase in the level of urban concentration, negatively affects the national growth rate. Consequently, it is plausible that in some Latin American countries spatial concentration not only has become an equity problem but also a constraint for national efficiency whose reduction should be taken into account in development strategies.
Miguel Atienza, Patricio Aroca

Chapter 7. Urban Primacy and Regional Economic Disparities in Latin America

The purpose of this paper is to attempt to understand the relationships between urban primacy and regional economic disparities in Latin America. It tackles, therefore, the investigation of the interactions between two different dimensions of regional development. On one hand, the spatial, that of urban primacy understood as a special kind of regional configuration. On the other hand, the socio-economic, that is to say, disparities understood as a determined distribution of opportunities for growth and wellbeing between regional territories in a determined national space.
Luis Mauricio Cuervo G., Nicolás Cuervo B.

Analysis by Countries


Chapter 8. Growth, Concentration, Inequality and Regional Policy in Mexico

During the period from 1970 to 2010 the Mexican economy grew at an average rate of 3.3 %, a disappointing long run performance. To a large extent, this situation is due to the end of the import substitution industrialization period, during the late 1970s, and the subsequent transition to a new model based on exports, during the 1980s.
Luis Quintana-Romero, Norman Asuad-Sanén

Chapter 9. Regional Inequalities and Regional Policies in Colombia: The Experience of the Last Two Decades

Colombia has one of the worst income distributions in the world. This finding is a matter of concern since abundant empirical evidence at the international level shows a negative relationship between economic growth and inequality (Deininger and Squire 1996; Alesina and Rodrick 1994; Bertola 1993; Engermann and Sokoloff 2002). In Colombia large differences in the distribution of income have become worrisome. For the last three decades inequality has increased and the most impoverished areas, such as the Caribbean and Pacific coasts, continue to lag behind. What is observed in the Colombian context is an increasing territorial polarization. Moreover, several key economic policies seem to have worsened the situation of economic imbalances in this respect.
Luis Armando Galvis, Adolfo Meisel

Chapter 10. Concentration and Inequality Across Brazilian Regions

This paper deals with the general trends of economic concentration and inequality across Brazilian regions. General indicators are presented revealing the high degree of economic disparities in the country and its persistency. Regional concentration and its evolution is measured by the economic center of gravity, defined as the GDP-weighted latitude and longitude in each year for its regions. The evolution of productivity in agriculture, manufacturing and tertiary activities reveals that the traditional areas still keep their competitive position even after many changes in the country’s economy.
Carlos Roberto Azzoni

Chapter 11. Argentina’s Regional Performance: 1970–2010

The aim of this chapter is to characterize and explain the evolution of provincial and regional GDP per capita in Argentina in the period 1970–2010 and the difference on its levels across provinces and regions. We draw on several factors related to economic development, on the basis of its initial and current value, including: education, financial sector development, urbanization, exports, inputs, productivity, tax burden, size of firms, among others. We also analyze the role of public policy on regional development.
Victor J. Elias, Mauro Alem, Julio J. Elias, Maria Antonella Mancino

Chapter 12. Territorial Inequality and Regional Policy in Chile

In their book on regional inequalities in small nations, Felsenstein and Portnov (2005) state that during a seminar held at Hebrew University of Jerusalem in 1957, Simon Kuznets argued that small nations had had more success than larger ones with distributing the fruits of growth among their inhabitants. In order to make this claim, he compared Scandinavian countries and Switzerland as examples of more equal distribution to nations like France, Germany and even the United States. Along these same lines, the literature on economic development posits that it is logical that larger countries present greater regional inequalities than small ones.
Patricio Aroca

Chapter 13. The Paradox of Peruvian Growth: The Evolution of Territorial Disparities and Regional Policy

The extraordinarily good performance of the Peruvian economy in the last 10 years, in the midst of a worldwide crisis, has been termed by many “the Peruvian miracle”, given the spectacular outcomes shown by diverse economic variables, such as the rate of growth of GDP, the low rate of inflation and of unemployment, the increase in exports and the solidity of the financial system.
María Teresa Gallo-Rivera, Rubén Garrido-Yserte, Efraín Gonzales de Olarte, Juan Manuel del Pozo-Segura

Chapter 14. Growth, Clusters, and Convergence in Ecuador: 1993–2011

Empirical research undertaken in Ecuador to study the country’s regional dynamics uses the region as a unit of observation. Prior to 2007, Ecuador had 22 provinces (which would later be called regions). This study seeks to ascertain whether the regional growth and economic concentration that are evident in Ecuador are determining factors in the development of regional convergence.
Marlon G. Ramón-Mendieta, Wilman S. Ochoa-Moreno, Diego A. Ochoa-Jiménez

Horizontal and Comparative Analysis


Chapter 15. Population Distribution and Internal Migration Issues in LAC

The evolution of the population distribution in the territories within countries of Latin America, in the last decades, is showing a heterogeneous path, while some countries have growing concentration around the main city or cities; others display an inverse pattern. Same situation are find in processes like aging, urbanization among others. Several factors are described in the first part of this chapter, affecting people and labor mobility across the territory.
Patricio Aroca, Jorge Rodríguez

Chapter 16. Education, Innovation and Economic Growth in Latin America

This paper analyzes how economic growth in Latin America is affected by the linkages between population in school (net enrollment rate) and population with different educational skills enrolled in the job market; and in particular, this study focuses in whether skilled workers are engaged in production processes through practices of imitation or innovation of technologies and, how this affects economic growth performance. To analyze the challenges that education in Latin American faces to promote economic growth, we take the approach of United Nations’s Millennium Development Goals (United Nations 2006) using coverage indicators designed by CEDLAS and World Bank (2012)and also considering the methodology of Barro and Lee (2010) to adjust workforce schooling at the primary, secondary and tertiary levels.
Miguel Ángel Mendoza-González, Marcos Valdivia-López, Jorge Isaac-Egurrola

Chapter 17. The Geography and Determinants of Regional Human Capital in Eight Latin American and Caribbean Countries

There is broad consensus concerning the importance of human capital in economic development (Lucas 1988; Barro 1992). Human capital accumulation stimulates economic growth and development through direct and indirect transmission channels (Lucas 1988; Mathur 1999). A large endowment of highly educated individuals in a region plays a key role in local economic performance, accelerating the rate of technological change, innovations, diffusion inventions and emergence of entrepreneurs (Mathur 1999; Desrochers and Leppäla 2011). Spatial concentration of human capital also promotes knowledge spill overs, enhancing the linkages between new ideas, technology and economic development (Jacobs 1969).
Francisco Rowe

Chapter 18. Labor Income and Poverty in Brazil and Mexico: A State Level Analysis, 2000–2009

During the twentieth century, Latin America had a continuing history of income distribution inequality, accompanied by high poverty levels (Engerman and Sokollof 1997; Williamson 2009). For the first decade of the twenty-first century, (Lopez-Calva and Lustig 2010) writing on the results of a large research project, present evidences of a common process of diminishing inequality and poverty in many Latin American countries. Nevertheless (Helwege and Birch 2007) give a cautionary tale, showing that ample differences exist among inequality measures among the Latin American economies. Two countries stand out in that process because of their relative economic size and because of the contrasting economic policy paths observed in recent years: Brazil and Mexico. As the following table shows, both countries exhibited a common fall of their Gini indexes as well as of their poverty headcount ratios. However, after 2007, those paths started to show divergences: While Brazilian data shows a continuing improvement towards more income equality and lower poverty levels, Mexican data shows a rising level of income inequality and growing poverty levels. It should be noticed that, in the case of Mexico, improvement in the 2010 Gini index is a consequence of income falls both for the richest and poorest families.
Carlos Salas, Anselmo Santos

Chapter 19. Decentralization and Democracy in Latin America: Reshaping the Development Paradigm

Regional development and decentralization has been at the core of political and economic development in large countries of Latin America (Argentina, Brazil and Mexico). All of them were born as Federal states, and assumed distribution of power among the three levels of government, but di facto central government held the decision making process until late twentieth century, when a governance crisis emerged as a result of the debt crisis, forcing governments to rebuilt their social contracts: Argentina reformed its Constitution in 1994, Brazil enacted a new Constitution in 1988 and reformed it in 1996; and Mexico reformed the Constitution in 1983 and 1999. Reforms have strengthened municipal finance and have delivered a larger political autonomy to local governments.
Clemente Ruiz-Duran

Chapter 20. Political and Fiscal Decentralization in South America: A Comparative Analysis of Bolivia, Chile, Colombia, Ecuador, and Peru

Since the 1980s, government decentralization has been one of the most important areas of reform in Latin America. Over the years, decentralizing processes have been developed at varying rates of speed and with different areas of emphasis and motivations. All of this has led to a regional variety that provides an interesting opportunity for comparative analysis.
M. Camilo Vial-Cossani

Chapter 21. Impact Assessment of Interregional Government Transfers: Lessons from the Brazil Experience

The aim of regional policy is the attainment of a more efficient and/or equitable interregional distribution of economic activity (Temple 1994). Haddad (1999) has demonstrated that in the last 20 years or so Brazil has undergone deep structural changes that have been responsible for the setback in the process of polarization reversal in the economy. After 1988, with the new Constitution, the central government was hampered in advancing its regional policy agenda by a profound loss in its revenues to the state and municipal governments. Nevertheless, the fiscal crisis reached all levels of government, decreasing their financial capability for carrying out new investment ventures. One of the major consequences has been the paucity of investment in economic infrastructure that has contributed to increasing the average cost of production. Therefore, producers’ costs increased since they faced inefficient mechanisms for trade and transportation, many of which lagged technologically.
Eduardo A. Haddad, Carlos A. Luque, Gilberto T. Lima, Sergio N. Sakurai, Silvio M. Costa

Chapter 22. Regional Policies in the Andean Nations: A Comparative View

The Andean countries (Bolivia, Chile, Colombia, Ecuador, Peru, and Venezuela) constitute a special geographic and geopolitical environment in South America because of their distinctive location along the Andes mountain range. The Andean nations share a long, ethnical and cultural tradition that, dates back to pre-Columbian Inca and Aymara civilizations.1 Politically, that tradition can be traced back to military alliances during the wars of independence against the Spanish colonial regime led by Bolívar and San Martin in the early nineteenth century.
Edgard Moncayo-Jiménez

Chapter 23. Export Specialization and Regional Growth: The Chilean and Colombian Cases

Unequal regional development is a feature of most Latin American countries [LAC] (see Cuadrado-Roura and González-Catalán 2013). As the spatial agglomeration of economic activity has become an important determinant of a country’s economic growth pattern (Puga and Venables 1999), much of the existing empirical research in Latin American has been focused primarily on the relationship between regional inequality and development (see, for example, Aroca and Hewings 2002). Nevertheless, although authors like Venables (2005) stress the theoretical root for the relationship between exports and spatial development, studies which examine regional exports as determinant of regional inequalities are less frequent. While different theoretical models make different predictions with respect to the impact of regional exports on regional growth differentials, the empirical evidence on the relationship between regional export diversity (that is, less specialization) and regional growth have only recently begun to be measured.
Miguel A. Márquez, M. Teresa Fernández, Julián Ramajo

Chapter 24. Trends and Realities in Foreign Direct Investments in Latin America

Latin America is currently in a favorable economic situation, given the very uncertain conditions of the global economy. In particular, the region shows relatively high growth rates, co-exists in an environment of democratic opening and, with certain exceptions, has achieved a reduction in its poverty rates. A central element behind this great economic dynamism has been the renewed interest recovered by foreign investment in continuing to increase its participation in Latin America.
Michael Penfold, José Luis Curbelo
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