RESEARCH DEPARTMENT
RESEARCH DEPARTMENT

The IDB has researchers in many departments producing working papers on economic and social topics. Many of these documents constitute background research for the IDB’s flagship publication "Development in the Americas" prepared by the Research Department. In addition, the IDB finances and mentors studies conducted by other institutions in order to build knowledge and research capacity. All IDB working papers are peer reviewed and meet high editorial standards.

2021 LATIN AMERICAN AND CARIBBEAN MACROECONOMIC REPORT: Opportunities for Stronger and Sustainable Postpandemic Growth

Coordinated by Eduardo Cavallo and Andrew Powell

  • Latin America and the Caribbean was hard hit by COVID-19. The 7.4% loss of GDP was the largest on record in a single year, 26 million jobs were lost and (extreme and moderate) poverty is expected to rise by about 5 percentage points of the population. Growth in 2021 could be as low as 0.8% if vaccine roll-out is delayed or mutations prove to be vaccine resistant. But in a positive scenario of higher world growth, the region could grow as much as 5.2%. In a central scenario growth would be around 4.1%.

  • The average fiscal package to address the crisis was 8.5% of GDP and deficits increased by an average of 5.3% of GDP in 2020. Public debt increased from 58% of GDP in 2019 to 72% in 2020 and could continue to rise to 76% by 2023. However, the trajectory is highly dependent on growth and fiscal policy.

  • Governments should take action to ensure fiscal, monetary, and financial sustainability. They should also implement a set of urgent reforms to improve fiscal outcomes and boost growth by assisting viable firms, helping workers find formal jobs in the face of reallocation, improving connectivity, implementing a plan towards faster digitalization, and investing in sustainable infrastructure. These measures will help boost productivity, spur growth, and achieve ambitious climate goals.

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DIA 2020: From Structures to Services

Edited by Eduardo Cavallo, Andrew Powell and Tomás Serebrisky

  • To close its infrastructure gap, Latin America and the Caribbean needs more than investment in hard assets. It needs simultaneous and decisive policy action to improve efficiency of the infrastructure investment process and regulation of services—what we refer to as software.

  • Our study provides an in-depth diagnostic of access, quality, and affordability of infrastructure services in the region as well as examples of regulatory policies that have achieved tangible progress in service provision.

  • Digitalization will disrupt the provision of infrastructure services and increase efficiencies. Our study develops scenarios of market organization for the energy, transport and water and sanitation sectors based on the extent of adoption of digital technologies.

  • For the promise to become a reality a supportive regulatory framework is needed to improve infrastructure in sustainable ways through adaptation, mitigation and the use of natural infrastructure. Our book explores the public policies needed to achieve this.

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LATEST BLOG POSTS

Managing the Existential Crises of COVID-19 and Climate Change Together
Managing the Existential Crises of COVID-19 and Climate Change Together

Hurricanes batter Central America killing hundreds and causing billions of dollars in losses. Wildfires destroy one-third of the Pantanal, the world’s largest wetland, as drought sears Brazilian crops. Sea levels rise, coral reefs bleach and die, and glaciers retreat, leaving less fresh water for farming and human consumption.     The climate crisis is well underway. If the destruction caused by weather in recent years has devastated tourism, farming, and countless other productive activities, it is but a preamble of far worse impacts in […]

The post Managing the Existential Crises of COVID-19 and Climate Change Together appeared first on Ideas Matter.

A Post COVID-19 Fiscal Strategy for Latin America and the Caribbean
A Post COVID-19 Fiscal Strategy for Latin America and the Caribbean

Even before the COVID-19 crisis, Latin America and the Caribbean faced stagnant growth. GDP, however, fell by 7.4% in 2020, and the region’s public finances were hit hard. With tax collection dropping 25% (and bouncing back only partially), and spending rising by about 3.5% of GDP as governments sought to attend to health and preservation […]

The post A Post COVID-19 Fiscal Strategy for Latin America and the Caribbean appeared first on Ideas Matter.

For a Region in Turmoil, An Updated Database of Political Institutions
For a Region in Turmoil, An Updated Database of Political Institutions

In a year when political institutions around the world were tested and pushed to their limits, understanding institutions and institutional features has become more important than ever. The rise of populism, increasing economic inequality, and the emergence of racial and other protests in the U.S. and globally—all against the backdrop of a deadly pandemic—have prompted a reexamining of political institutions and a […]

The post For a Region in Turmoil, An Updated Database of Political Institutions appeared first on Ideas Matter.

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