Latin America and the Caribbean

Date of publication
August 2012
Geographical focus

The proliferation of urban slums is due
in large part to obsolete regulatory, legal and
institutional frameworks at the local level governing land
use, development standards, land registration and titling.
These regulations are often exclusionary, insisting on
development norms and standards that are outside the realm
of the poor to pay and subdivision procedures are often over
burdensome, leading to informal land subdivision, thus
excluding the possibility to register titles under such
"illegal" conditions. Likewise, well intentioned
federal or national housing policies that focus on the
provision of complete housing packages (as opposed to
products like sites and services, progressive housing or
demand, rather than supply-side subsidies) often have the
unintended effect of filtering-up to higher income groups,
especially when private mortgage market alternatives are not
available to middle and lower-middle class households.
Reforming these structural problems remains one of the
greatest challenges, but progress is being made in countries
like Brazil, Mexico on both the land and housing sides, and
in Venezuela with regard to land and development standards.

Date of publication
August 2013
Geographical focus

This book talks about participation,
from the first to the last page. And that is its strength,
for participation is a road leading to democracy. The true
participation it talks about does not rely on hours of
compulsory labor or imposed levies; there is nothing forced
about it. Rather, it is a process in which men and women
engage their will, their sense of responsibility, their
abilities, their dignity. It is a vital participation,
because it affects much of what makes for a better life in a
poor neighborhood: water supplies, sanitation, electricity,
roads, drainage, public spaces, housing. For some,
participation creates risks, whether of popular protests,
mismanaged conflicts of interests, or mounting expectations
that are difficult to meet. But, in reality ad above all,
participation creates opportunity. In favors civic learning
and people's empowerment. It opens the way to
alternatives. It enhances the quality of projects and the
continuity of development. It enables an escape from rigid
control or populist clientelism into a practice of
strategies of negotiations.

Date of publication
March 2014
Geographical focus

This paper reviews the performance of
railway concessions in Latin America over the period
extending from the initial Argentina concessions in
1991-1993 through 2004. The bulk of the concessioning
processes described herein were supported by the World Bank.
Now over a decade since rail concessioning in Latin America
began, the overall assessment of its results is positive,
particularly for freight railways. Railway traffic volumes
have climbed, with some improvements in surface transport
market share. Although numerous data problems exist,
measures of productive efficiency almost uniformly show
post-concession improvements in cargo transport. Effects on
rail rates and service levels have generally received
positive reviews. Evidence is less extensive for passenger
services, mostly because concessioning was largely limited
to commuter services in Argentina and Brazil and because
such concessions must be evaluated in terms of complex
subsidy and regulated pricing regimes, rather than as
market-based private enterprises. Railway concessions have
not revived uneconomic intercity passenger services, nor has
there been much effort to do so. iii. While concessioning
brought impressive improvements in labor productivity and
other efficiency measures, results have been not quite as
dramatic as they are sometimes portrayed. This is in part
because the initial concessions took place in the volatile
Argentina economy, where a precipitous decline in the rail
sector just prior to concessioning was followed by a
dramatic post-concession revival. Elsewhere the decline in
the rail sector was not as severe as in Argentina, nor was
the recovery so rapid.

Date of publication
July 2013
Geographical focus

This book is organized as follows:
Introduction: Is Geography Destiny? Chapter 1 discuses The
Channels of Influence of Geography: Latin America from an
International Perspective. Chapter 2 discusses The Other
Side of The Mountain: The Influence of Geography Within
Countries. Chapter 3 discusses Policies to Overcome the
Limitations of Geography

Date of publication
June 2012
Geographical focus

The provision of public goods and the amelioration of market failure are the classical justifications for government intervention in the economy. In reality, (1) governments intervene in markets that are not affected by failure, and (2) a large share of the government resources is spent in private goods, not in public goods. In contrast to issue 1, issue 2 has received little attention in the literature, in spite of the potentially large efficiency and equity losses arising from misguided allocations of public expenditures. López empirically documents the size of (2) in the rural sector and investigates its consequences for rural development for 10 Latin American countries over the 1985-2000 period. The econometric evidence suggests that the structure of public expenditures is an important factor of economic development in the rural sector, much greater than that of the level of public expenditures and of other factors on which the development literature has traditionally focused. Expanding total public expenditure in rural areas while maintaining the existing public expenditure composition prevailing in certain countries does little to promote agricultural income and reduce rural poverty. Spending a significant share of government resources in (non-social) subsidies causes less agriculture income, induces an excessive reliance of agriculture on land expansion, and reduces the income of the rural poor.

Date of publication
August 2012

Climate change is a very serious
environmental challenge that affects prospects for
sustainable development. Since the Industrial Revolution,
the mean surface temperature of Earth has increased an
average of one degree Celsius per century mainly due to the
accumulation of greenhouse gases (CHGs) in the atmosphere.
Furthermore, most of this change has occurred in the past 30
to 40 years, and the rate of increase is accelerating. A
change of this magnitude is unprecedented and will result in
significant impacts both at a global scale, and for Latin
America and the Caribbean in particular. This paper includes
the following headings: impacts are unavoidable;
international response; and opportunities to address climate
change and local development.

Date of publication
June 2012
Geographical focus

With three quarters of its population
living in cities, Latin America is now essentially an urban
region. Higher urbanization is usually associated with a
number of positives, such as higher income, greater access
to services, and lower poverty incidence, and, Latin America
is no exception. Today, urban poverty incidence, at 28
percent, is half that of in rural areas; extreme poverty, at
12 percent, is a third. Despite this relatively low poverty
incidence, the absolute number of poor people is high, and
most studies agree that about half of Latin America's
poor live in urban areas. The Bank's own estimates
suggest that 60 percent of the poor (113 million people) and
half the extreme poor (46 million individuals) live in urban
areas. The report reviews what is specifically urban about
poor people living in cities, which reveals a number of
facts, critical to understanding the challenges facing the
urban poor, and the means to address these challenges. Three
preconceived ideas are discussed, that tend to cloud
judgment about urban poverty. All three spring from the
common misperception that urban statistics are
representative of the urban poor. However, the relatively
low incidence of poverty in cities, combined with Latin
America's high inequality, imply urban statistics are
almost never representative of the urban poor. Concerning
the differences between urban and rural poor, the need for
differentiated strategies to tackle urban as opposed to
rural poverty is implied, and, the first and most important
differential is the greater integration of the urban poor
into the market economy. Second, while urban areas are not
systematically unequal than rural areas - it depends on the
country, and, within countries, on the city - they are much
more heterogeneous socio-economically, or with respect to
economic activities and processes. Third, heterogeneity
notwithstanding, Latin American cities tend to be highly
segregated. As a result, social exclusion coexists with
(relative) physical proximity to wealth, services and
opportunities. This gives rise to negative externalities, or
neighborhood effects that result in a lower ability to
access jobs, lower earnings, and lower educational
achievements. Fourth, social networks are less stable in
urban areas, with relationships based more on the quality of
reciprocal links between individuals and friends, than on
familial obligations. Fifth, urban living also means much
greater exposure to organized crime, drugs and gang
violence. This is true for the population as a whole, but it
has particularly dismal implications for the poor living in
the slums of Latin America's large cities, where
drug-traffic is now pervasive. Finally, another important
characteristic of urban poverty has to do with overwhelmed,
rather than absent services. The underlying hypothesis of
this report is that, indeed, the causes of poverty, the
nature of deprivation, and the policy levers to fight
poverty are, to a large extent, site specific.

Date of publication
August 2013
Geographical focus

With the exception of Sub-Saharan
Africa, Latin America and the Caribbean has been one of the
regions of the world with the greatest inequality. This
report explores why the region suffers from such persistent
inequality, identifies how it hampers development, and
suggests ways to achieve greater equity in the distribution
of wealth, incomes and opportunities. The study draws on
data from 20 countries based on household surveys covering
3.6 million people, and reviews extensive economic,
sociological and political science studies on inequality in
Latin America. To address the deep historical roots of
inequality in Latin America, and the powerful contemporary
economic, political and social mechanisms that sustain it,
Inequality in Latin America and the Caribbean outlines four
broad areas for action by governments and civil society
groups to break this destructive pattern: 1) Build more open
political and social institutions, that allow the poor and
historically subordinate groups to gain a greater share of
agency, voice and power in society. 2) Ensure that economic
institutions and policies seek greater equity, through sound
macroeconomic management and equitable, efficient crisis
resolution institutions, that avoid the large regressive
redistributions that occur during crises, and that allow for
saving in good times to enhance access by the poor to social
safety nets in bad times. 3) Increase access by the poor to
high-quality public services, especially education, health,
water and electricity, as well as access to farmland and the
rural services. Protect and enforce the property rights of
the urban poor. 4) Reform income transfer programs so that
they reach the poorest families.

Date of publication
June 2012
Geographical focus

This paper addresses the deceptively simple question: What is the rural population of Latin America and the Caribbean (LAC)? It argues that rurality is a gradient, not a dichotomy, and nominates two dimensions to that gradient: population density and remoteness from large metropolitan areas. It uses geographically referenced population data (from the Gridded Population of the World, version 3) to tabulate the distribution of populations in Latin America and in individual countries by population density and by remoteness. It finds that the popular perception of Latin America as a 75 percent urban continent is misleading. Official census criteria, though inconsistent between countries, tend to classify as "urban" small settlements of less than 2,000 people. Many of these settlements are however embedded in an agriculturally based countryside. The paper finds that about 13 percent of Latin America populations live at ultra-low densities of less than 20 per square kilometer. Essentially these people are more than an hour's distance from a large city, and more than half live more than four hours' distance. A quarter of the population of Latin America is estimated to live at densities below 50, again essentially all of them more than an hour's distance from a large city. Almost half (46 pecent) of Latin America live at population densities below 150 (a conventional threshold for urban areas), and more than 90 percent of this group is at least an hour's distance from a city; about one-third of them (18 percent of the total) are more than four hours distance from a large city.

Date of publication
June 2012
Geographical focus

This paper estimates a model of a farm
that treats the choice of crops, livestock, and irrigation
as endogenous. The model is composed of a multinomial
choice of farm type, a binomial choice of irrigation, and a
set of conditional land value functions. The model is
estimated across over 2,000 farmers in seven Latin America
countries. The results quantify how farmers adapt their
choice of farm type and irrigation to their local climate.
The results should help governments develop effective
adaptation policies in response to climate change and
improve the forecasting of climate effects. The paper
compares the predicted effects of climate change using both
endogenous and exogenous models of farm choice.

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