Governance Crisis and the Andean Region: A Political Economy Analysis. Andres Solimano.

Slides:



Advertisements
Similar presentations
Update on Developments in Ukraine Mr. Tymofiy Motrenko, PhD, Head of the Main Department of the Civil Service of Ukraine September 7, 2010 guds.gov.ua.
Advertisements

Economic Freedom of the World: 2002 Annual Report James Gwartney Florida State University Robert Lawson Capital University.
The Latin American and Caribbean Perspective
OECD – World Bank Seminar Democratic Governance in Mexico: A Latin American Perspective Paris, 20 th June 2007 Comments by Javier Santiso Chief Economist.
1 Alternative measures of well-being Joint work by ECO/ELSA/STD.
Telecommunications and Development in Latin America: The Role of Multinationals 12th EADI General Conference Geneva, Switzerland 25 June 2008 Juan R. de.
1 OECD Paris - October 12th 2006 Javier Santiso Chief Economist & Deputy Director OECD Development Centre LATIN AMERICAS POLITICAL ECONOMY OF THE POSSIBLE:
Growth with Equity: Trends and Challenges in the ECE Region Ján Kubiš
Monitoring Governance in Eastern Europe and Central Asia Cheryl Gray World Bank.
The role of integration in strengthening democracy: the Andean case Building Democracy across Borders Conference organized by IDEA International Ambassador.
1 Dave Grace World Council of Credit Unions Senior Manager Dave Grace World Council of Credit Unions Senior Manager.
Institutions Want stable democracy? Get the institutions right!
Sharing experiences between Asia and the Pacific and Western and Central Africa Achieving the Millennium Development Goal of Halving Poverty by 2015 Sharing.
The Well-being of Nations Chapter 1 Emerging Social and Economic Concerns.
Income Distribution & Growth: Lecture II Empirical Evidence ECGA 6470: Economic Growth Development.
Going for Growth and Development Paris, May 2008 Javier Santiso Director, OECD Development Centre.
4/30/2015 Presidentialism and Democracy in Latin America Maxwell A. Cameron Political Science 332.
Economic institutions: Theory and application Washington DC November 2007 Edvaldo Santana ANEEL.
Building Good Governance and Resilience in Small States
Government turnover: Concepts, measures and applications Shale Horowitz, Karla Hoff & Branko Milanovic.
PRESIDENTIAL SYSTEMS AND ELECTORAL INSTITUTIONS. WEEKLY READING Smith, Democracy, chs. 5-7 Carey, “Presidentialism and Representative Institutions” Coppedge,
Conditions for Successful Pension Reforms Comments Guillermo Arthur E. President of FIAP May, 2004 Seminar “Pension Reform in Eastern Europe: Experiences.
Business Politics and Policy Making in Contemporary Latin America Ben Ross Schneider Department of Political Science Northwestern University.
CORRUPTION & TRANSPARENCY. “Trust in Allah but don’t forget to tie up your camel” Good Governance, Transparency and Controlling Corruption -> Key Pre-requisites.
Labour Market Inequality in India and Brazil: Comparing Labour Market Institutions in India and Brazil Taniya Chakrabarty 18th December 2014.
The Middle East Study Game Unit 3. Lawlessness or political disorder brought about by having NO Government ANARCHY.
Governance Indicators in Pakistan
Lesson 3 11E.
Economic Growth in Latin America: Past, Present and Future Perspectives. Andrés Solimano ECLAC, United Nations November 11, 2004.
Foreign Aid and Political Parties in Latin America Javier Gonzalez INAF – 100 Professor James R. Vreeland.
THE 9TH INTERNATIONAL ANTI-CORRUPTION CONFERENCE GENERAL SECRETARIAT OAS.
Principles of Government
Latin American Economic Outlook 2011 Washington DC, December 2010 How middle-class is Latin America? Jeff Dayton-Johnson Head, Americas Desk OECD Development.
Chapter 9: Executives. This Week… What is the executive branch? How is the Executive Organized? ▫Parliaments, Presidents and Mixed Systems Formal and.
Andrés Solimano Regional Adviser ECLAC, United Nations Paris - July 11th, 2006 VANISHING GROWTH IN LATIN AMERICA OECD SEMINAR.
GOOD JOBS WANTED : Labor Markets in Latin America GOOD JOBS WANTED : Labor Markets in Latin America Inter-American Development Bank Washington DC. May.
REGIME TYPE Presidentialism & Parliamentarism.
The Role of Governors in the National PMP: A Comparative Perspective of Latin American Cases Francisco Monaldi IESA and UCAB Inter-American Development.
Principles of Government. WHAT IS GOVERNMENT? The institution and processes through which public policies are made for a society Government makes and.
NS4053 Winter Term 2014 Country/Region Indices. Country Indices/Rankings I There are a number of organizations that provide rankings of countries based.
Regulatory Impact Analysis – Lebanon Working Group IV: Focus Group on Public Service Delivery, Public-Private Partnership and Regulatory Reform Amman,
Angela Paris Inter-American Development Bank Private Enterprise Brazil, October 26, 2004 Taking an interdisciplinary approach: The IDB’s Business Climate.
PRESIDENTIALISM AND REPRESENTATION INSTITUTIONS OF DEMOCRACY.
GOVERNMENT OF LATIN AMERICA
The Prospects for Global Democracy Sylvia Espinoza, Ai Morimoto, Midori Araki, Xi Jia, Risa Takahashi International Studies 190 Professor Peter Smith April.
The World Bank January 12, 2005 Legislative Oversight Mozammal Hoque Sr. Financial Management Specialist AFTFM The World Bank.
1 Overview of Comparative Economics Chapter I How do we compare economies?
The Eradication of Illicit Crops (and alternative agricultural development) emes/altdev-6.htm.
France and the Great Recession David S. Park, Kathrine M. Hagen, Marque A. Jones, Nicholas J. Hosler.
WHY STUDY DEVELOPMENT? What is economic development, and how do you measure it? Absolute, relative, growth first models? What is the relationship between.
and Beyond: What research Directions on Corruption and governance? Daniel Kaufmann, WBI The World Bank Workshop.
NS4540 Winter Term 2015 Country Indices. Country Indices/Rankings I There are a number of organizations that provide rankings of countries based on factors.
Institutional and Governance Reviews and the Role of Political Economy Analysis in Operations Philip Keefer DECRG Flagship Course on Governance and Anti-corruption.
1 Reforming Latin American Economies Ricardo Ffrench-Davis University of Chile COMMISSION ON GROWTH AND DEVELOPMENT SEMINAR April 12, 2007.
South American Regionalism and Chile. The case of UNASUR Bard College July 11th, 2013 NY, USA Dra. Lorena Oyarzún S. Instituto Asuntos Públicos Universidad.
Social Security at the Inter- American Development Bank.
PIONEERS IN DEVELOPMENT PUBLIC POLICIES FOR INVESTMENT IN HUMAN CAPITAL: THE CASE OF CHILE Comments by Roberto Junguito November 4,
Competition Policy and Economic Growth: Evidence from Latin America Esteban Greco Diego Petrecolla Carlos A. Romero.
FINANCIAL LIBERALIZATION, CRISIS, AND RESCUE: Lessons for China from Latin America and East Asia.
The Financial Crisis and the Future of International Relations Leslie Elliott Armijo March 2011.
Budget Practices and Procedures Database. The Role of the IDB and Preliminary Results Carlos Scartascini* Prepared for presentation at the meeting of the.
OECD Budgeting at a Glance in Latin American Countries: OECD Database on Budgetary Institutions, Practices and Procedures Version 1 Teresa Curristine,
Andrea Keenan Assistant Vice President, Economic & Industry Research
Types of Government GOAL 1.08.
Types of Government Econ/Gov Unit 3.
Health in the Americas: Regional Challenges and Strategic Directions
Latin American Economy
Conditions for Successful Pension Reforms Comments
Latin America: Government
Democratic Development in Latin America
Presentation transcript:

Governance Crisis and the Andean Region: A Political Economy Analysis. Andres Solimano.

1. Governance and development outcomes. 2. Analytical framework

1. Governance and development outcomes. 2. Analytical framework for Governance 2.1 Basic Concepts. Hierarchy of institutions. Formal rules. Actual patterns of social behavior. 2.2 Three main variables a) Nature and stability of the political regime and the constitution. b) Quality of institutions. c) Patterns of social cooperation/conflict related to inequality and ethnic diversity.

Diagram Constitution and Political System Quality Of Institutions Social Cooperation/ Conflict Actual Governance Development Outcomes (economic growth, macro stability, Poverty, social equity)

a. Constitutions and political systems. Analytical traditions: Contractarian approach (Rosseau, Locke, Rawls, Nozick), Public Choice Theory (Buchanan, Tullock, Dixit, North), Collective Choice (Arrow, Sen). The social contract and the setting-up of the rules of the game. Playing the game. Rights and the political system: presidential and parliamentary systems. How well each system handles political crises? Probabilities of regime breakdown under presidential and parliamentary systems.

Presidential system: Fixed term. Legislative initiative of the president. Presidents appoints cabinet. Parliamentary system: Prime-minister chosen and removed by parliament. Parliament intervenes in the designation of the cabinet

a. Constitutions and political system. Setting-up the rules of the game. Playing the game. Presidential and parliamentary systems. How well each system handle political crises? Probability of regime breakdown under each system.

a. Constitutions and political system. b. Quality of institutions. Administrative branch, judiciary, parliament, central banks, budgetary process. Transaction costs approach (Dixit, North) (institutions are created to reduced transaction costs). Power and institutions (Olsen) (Institutions play a redistributive role and support power structures). Principal-agents problems (enforceability monitoring, flows of information). Dysfunctional aspects of institutions. Rent-seeking. Corruption. Violence.

a. Constitutions and political system. b. Quality of institutions. c. Social cooperation and conflict. Related to inequality of income and wealth and ethnic diversity. Conflict around shares of national income, conflict around taxation and public expenditure, conflict around political participation and power-sharing. Inequality, conflict, investment and growth.

Empirical Analysis For the Andean Countries (Bolivia, Colombia, Ecuador, Peru and Venezuela) a) Frequency of mayor constitutional reforms, presidential crises and political regimes (The whole 20 th century and the period, see table G1). Number of constitutions ( ): Venezuela (8) Ecuador (7) Bolivia (5) Peru (4) Colombia (1) Average (5) Comparison to Chile, Uruguay, Costa Rica and OECD countries (se table G2). Frequency of presidential crisis ( ): Bolivia (16 crisis), with 11 taking place between Ecuador (10 crisis), mostly in the 1970s and 1990s. Colombia (2 crisis both in the 1950s).

Empirical Analysis (cont.) Presidential crisis and political regime: high frequency of presidential crisis in both authoritarian regimes and in democracy. e.g. Bolivia in the 1970s had a high frequency of political crisis under authoritarian regimes. In the 1990s Ecuador had a high frequency of presidential crisis under democratic regimes. High frequency of regime breakdown in Peru, Ecuador and Bolivia in the last decades. In contrast, we find a low frequency of regime breakdown (high continuity of democracy) in Colombia and Venezuela since the 1960s. Comparison of frequency of crisis in parliamentary regimes (e.g. Italy, Germany, UK) with frequency of crisis in presidential regimes (Andean Countries, most of Latin America, the US, others).

Quality of governance a) World-Bank (qualitative, survey-based, ) Kaufman, Kraay and Zaido-Lobatón index computed for over 150 countries. Six categories of the index: Voice and accountability. Political instability and violence. Government effectiveness. Quality of regulation. Rule of law. Control of corruption.

Andean countries rank lower in most of the 6 dimensions than Chile/ Uruguay/ Costa Rica, lower than the average of Latin America and lower than OECD.

Quality of governance b) World-Economic Forum-Harvard University (based on surveys) Growth Competitiveness Report, 75 countries including developed, developing countries and transition economies. Growth Potential = F [technology index, quality of public institutions index, macroeconomic environment index]. Index of Quality of Public Institutions: Contract and law sub-index Corruption sub-index

Table G-4 shows a positive correlation of the rankings of growth potential and the ranking of quality of public institutions. The place of the Andean countries is similar in both rankings.

Social Inequality, Ethnic Diversity and Conflict Inequality, as measured by Gini coefficients is high in all Andean countries. Share of indigenous population in total population is high in Peru, Bolivia and Ecuador but low in Colombia and Venezuela. Social conflict seems correlated with high inequality, the relationship between conflict and ethnic diversity is an open question. It is mediated by political participation of indigenous groups.

Social Inequality and Ethnic Diversity Inequality, as measured by Gini coefficients is high in all Andean countries. Share of indigenous population in total population is high in Peru, Bolivia and Ecuador but low in Colombia and Venezuela.

The Growth Record The annual growth record of the Andean country in the period was, on average, 1.2 percent lower than the (average) rest for Latin America. This is correlated with the governance problems documented in the paper

Conclusions Several measures of frequency of constitutional change, presidential crisis, quality of institutions and income inequality shows important government problems in the Andean region. This is correlated with a just moderate growth performance and various indicators of political and economic instability. In presidential regimes a political crisis can lead to a regime breakdown. In the Andean region this was the case in Peru, Bolivia, Ecuador in recent decades. In Colombia and Venezuela this was not the case since the 1960s. However, there are some destabilizing trends currently in Venezuela. Parliamentary regimes, in principle, seem to de-link political crisis from turning into regime breakdown and constitutional crises. Both democratic and authoritarian regimes had their fair share of presidential crisis. Authoritarian regimes are not more stable than democracies in the Andean region.

Conclusions (cont.) There is a close correlation between various indicators of quality of institutions and growth potential. High social inequality seems correlated with slower growth. This feature holds in the Andean group. The impact of ethnic diversity on growth performance is still an open question.

Governance Crisis and the Andean Region: A Political Economy Analysis. Andres Solimano.