Programme

Unlike what occurred in the central zones of the Spanish Empire in America, the economies of Cuba and of Chile grew and modernised as from the end of the 18th century. The expansion rate of production oriented to export markets seems to have been a stimulus for the modernisation of productive structures and institutions. The consumption of fossil fuels, mainly coal used in steam engines, adapted from early on to the economic activities of Cuba and Chile. In the early 19th century, this was a powerful signal of the adaptation of modern technologies in peripheral economies. Cuba and Chile’s lead position in the consumption of modern energies (coal, oil and hydroelectricity) throughout the 19th century, was also related with the existence of an elite which was capable of generating a stable political order which favoured business and promoted institutional modernisation, though without losing its oligarchic character. It was probably the oligarchic character of the political order which proved to be an obstacle to the conversion of economic growth into long term economic growth.

Although there are different theoretical approaches to the real meaning of an “optimum fiscal performance”, it is generally accepted that a consistent macroeconomic management is a necessary but not sufficient condition for economic growth. Besides, in terms of social well-being, neither the poverty reduction or the improvements in income distribution are detached from the management and composition of the public expenditures and their financing. Through a comparative perspective, this article discusses the sort of mechanisms which have governed the macroeconomic management of the Uruguayan fiscal policy during the XXth century. Its results are analyzed in terms of their impact on the public resources devoted to social protection.

On the first place, taking into account recent studies by Comín, Díaz-Fuentes y Revuelta (2009) we estimate the income-elasticity of the Central Government expenditure in Uruguay in the long term. Our results are compared vis- à-vis those obtained by these authors for Argentine, Brazil, Mexico and Spain. On the second place, we study the total and social expenditure, which means its composition, cyclical performance and financing, in order to understand up to what extent the country has “protected” its social expenditure from adverse fiscal shocks.

Considering the regional evidence regarding to this topic, this look into the fiscal management during the economic cycle and the discussion of its impacts on the public expenditure in social areas in the long term, is expected to shed new light on the incidence of these factors on the economic backwardness of Uruguay and similar Latin American countries.

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The existing literature on Latin America's economic history has point out that the period of the first globalisation was characterized by the active participation of the region in the expansion in the world-wide trade. While this may be true for a set of countries, the diversity of cases and patterns of behaviour among them requires a more detailed analysis.
Traditional historiography has conveyed the idea that until World War I, the region would have been under a clear British commercial predominance, whereas in the post-war period the domain would have changed to the U.S., since that time the main trade partner in the region. But is this true for all the countries of the region? To what extent, the U.S. dominance is observed in some countries prior to World War I?. The new evidence shows that the role of the U.S. before the IWW was much more active and broader geographically than the one assigned by the historiography. Similarly, 1913, do not suppose as a sudden change as long as Britain persisted in the region even longer and it was not until after the Great Depression when it no longer play an important role.

We study the impact of fiscal expenditure on the duration and the intensity of economic crises in 20 Latin American countries in the period 1900-2000. To study the impact on the duration of economic crises we rely in models of count data while to study the impact on the intensity of economic crisis we rely on dynamic panel data methods. Our result show that fiscal expenditure might have not enough power to shorten significantly the duration of economic crises but it might act as an effective instrument to reduce the downfall of economic activity during the economic crisis.

Since Prebisch and Singer first formulated his famous hypothesis about the historical deterioration of terms of trade for the periphery, there has been a lot of debate and analysis trying to establish whether it is or not supported by the data on international trade. However, this debate get focused in the evolution of the Net Barter Terms of Trade, that is, the simple relation between the prices of exports and imports among nations with different degrees of development, ignoring that ‘the core’ of the P-S hypothesis made reference to the Double Factorial Terms of Trade, which consider the evolution of the export sector incomes in countries not only in relation with prices but also with the labor productivity in those export sectors. In the first two sections we reconsider the P-S hypothesis, draw some of the main lines of its evolution and analyze briefly the empirical debate that had surround it since mid-20th century. In the last section we analyze the terms of trade of one peripheral country (Colombia) with United States, its main trade partner, considering both, the NBTT and the DFTT. However, due to data availability on labor productivity for Colombia, this could be done only for the manufacture sectors. Hence, this exercise is closer to 1970’s Singer hypothesis in which he stated that terms of trade for the peripheral countries would deteriorate no matter the type of products (i. e. primary products or manufactures) they export. In general terms the P-S hypothesis is not confirmed for the particular case we examine whether we consider the NBTT or the DFTT. However, it shows the type of analysis should be done for the whole of the periphery, which is the appropriate unit of observation to corroborate or refute the P-S hypothesis.

Mainstream "scholarship", following Engerman and Sokoloff (1994, 2002, 2005) and Acemoglu et al. (2002), claims that contemporary inequality in Latin America has colonial origins. Even if very popular, this claiming is not based on any evidence.
In this paper in work we offer substantial evidence on wages and heights for several Spanish colonies in America during the late colonial period. This evidence shows a picture that departs from the one commonly assumed. Real wages were higher than in most parts of the world while heights were similar to those of many Europeans. On the contrary, estimates of GDP per capita are comparatively low. It is unlikely, then, that late colonial Spanish America were really a conspicous case of extreme economic inequality. In fact, rather the contrary seems to be true.

The present study reports new evidence on the contribution of capital formation, and specifically machinery equipment investment, on economic growth. For the case of Chile, using new data for the period 1890-2005, the relationship is studied. Applying a causality test a positive correlation between the growth rate of machinery investment and the long run GDP growth rate, will be verified. Prior empirical studies generally used country cross-section data and worked with a relatively small number of years. The empirical approach, based on long run series (1890-2005) for a case study, Chile, can better help to understand the effect of machinery equipment investment on economic growth.

A relatively large number of studies have examined the contribution of capital formation to economic growth of countries. The seminal study by De Long and Summers in the 1990´s reported evidence on the strong correlation between machinery investment and GDP growth using data of 63 countries for the period 1960-1985. This work generated a lot of discussion and served as a valuable input in illuminating the debate of the impact of capital formation on the economic growth. This study seeks to contribute to this debate.

The conclusions emerging from the empirical analysis will allow answering some questions: Is the lack of investment the cause of the relatively weak growth of the GDP in Chile in the long run? And more important: Is the lack of machinery investment specifically the cause? If the answer is positive: What kind of machinery investment is most significant?

The Southeast of Brazil has an income level that approaches a mid level OECD country while the Northeast has an income comparable to Sub Saharan Africa. How did this happen? We know that it developed during the XIX century, as before that the Northeast, the first large sugar export region in the colony, responsible for up to 80% of world sugar production by the end of the XVI century, was the richest region. We postulate that the emergence of the income gap is even more localized in time and can be traced to the French Revolutionary and Napoleonic Wars and the massive inflow of slaves that followed.

According to O’Rourke, 2006, the years from 1793 to 1815 saw an unusually bloody, lengthy and widespread conflict between Great Britain and France, which widened to include many of the other leading powers of the day. The objective of this project is to offer a quantitative assessment of the economic impact of the conflict in a very specific region, the Port of Rio de Janeiro in Brazil. The reason for such a choice is that this region, due to data availability, offers a unique opportunity to test not only the direct effects of the conflict on relative prices, as O’Rourke 2006 has done, with some detail for the USA, France and Britain, but also to test the influence of slavery on economic development as this region during the conflict became the largest slave port in the world. Shortly afterwards, with the port as the capital of the Portuguese empire due to the flight of the Portuguese Royal Family following Napoleon’s invasion of Iberia in 1807, Rio de Janeiro (and the Brazilian southeast in general) turned into the most dynamic region in Brazil, opening an income gap between it and the old Northeast sugar export zones that lasts to this day.

Given the data at hand we will also discuss a local version of the famous Eric William’s thesis from Capitalism and Slavery, where he asserts that the slave trade was fundamental to the launch of the British Industrial Revolution. Although there is enough evidence now to reject this hypothesis for Britain, because the size of the slave trade was comparatively small to have mattered, the same is not true for Brazil. We claim that the slave trade allowed Brazil to become the largest coffee exporter in the world, by the end of the XIX century one of the early industrializers in Latin America and currently one the 10 largest economies in the world. So, contrary to O’Rourke, 2006, the Napoleonic Wars were not a disruptive event for this region, but one the defining moments in the economic history of Brazil.

Although there are different theoretical approaches to the real meaning of an “optimum fiscal performance”, it is generally accepted that a consistent macroeconomic management is a necessary but not sufficient condition for economic growth. Besides, in terms of social well-being, neither the poverty reduction or the improvements in income distribution are detached from the management and composition of the public expenditures and their financing. Through a comparative perspective, this article discusses the sort of mechanisms which have governed the macroeconomic management of the Uruguayan fiscal policy during the XXth century. Its results are analyzed in terms of their impact on the public resources devoted to social protection.

On the first place, taking into account recent studies by Comín and Díaz (2008) we estimate the income-elasticity of the Central Government expenditure in Uruguay in the long term and discuss the fulfillment of the Wagner Law. We evaluate our results with those obtained by these authors for Argentine, Brazil, Mexico and Spain. On the second place, we study the total and social expenditure, which means its composition, cyclical performance and financing, in order to understand up to what extent the country has “protected” its social expenditure from adverse fiscal shocks.

Considering the regional evidence regarding to this topic, this look into the fiscal management during the economic cycle and the discussion of its impacts on the public expenditure in social areas in the long term, is expected to shed new light on the incidence of these factors on the economic backwardness of Uruguay and similar Latin American countries.

Latin America has long been regarded as a high volatile and strongly unequal region. This paper analyses whether macroeconomic instability affected income distribution in the period 1880-1913, and whether these effects were stronger than elsewhere. We find that while volatility is negatively correlated with diminishing income inequality, we did not find any robust causal relationship between both variables. We also find that macroeconomic volatility was mainly driven by volatility in the terms of trade, but this kind of volatility did not affect income distribution. Our results rather suggest that inflation negatively affects income equality, and to a less extent the depreciation rate. Financial crises seem to have no significant, permanent effect on income distribution.

This paper aims at displaying a long-term and “structural” approach on the current global tributary challenges related to equity problems.
Over most of the past two centuries, the economic reform processes were–mainly–endogenously generated in the West and other parts of the world. These took place in a global frame of growing interlinking, which did not seem to pose relevant restrictions to the national processes of the modern nationalities conformation–at least for the advanced countries. These processes spurred economic growth and, in the last phase, they brought about high levels of internal equity (specially, between the post-war periods of the First and Second World War). This long process has been “managed” within each Nation-State.
A major part of the "developing” world, belatedly and in different ways, sought to partly emulate these approaches to national construction, economic growth and the achievement of greater equity. Latin America is an example of this.
After the last third of the past century, the economic and financial globalization process introduced, in the first place, great restrictions to these processes of national construction; then, caused different degrees of regression in the levels of equity that had been previously achieved (specially, since the 80's). This finally “raised questions” about the capacity of the Nation-States to tackle, with certain autonomy, their economic and social processes.
In short, in the current phase, the Nation-States have been left little room for maneuver, particularly the relatively small ones. Likewise, for the same reasons, what turns out to be equally important is the joint action carried out by nations which act, mainly, as a “protective shield” and, desirably, as a collective participant who acts on its own initiative: a second stage that has not yet been perfected. The third potential level of action required by the present context is the global one. At present, its hegemony is held by the central countries (specially the US, despite the apparent beginning of a period that shows an accelerated decadence of its hegemony).
The Nation-State, and the entire Latin American region also, are then subject to major challenges on behalf of the globalization process and the increasingly concentrated economic forces. Where will these challenges lead to? We cannot certainly know that. What is visibly true is the fact that they are already eroding the strength of the Treasury and making our world even more unfair.

Levels of economic development vary widely within countries in the Americas. We argue that part of this variation has its roots in the colonial era. Colonizers engaged in different economic activities in different regions of a country, depending on local conditions. Some activities, such as mining and sugar cultivation, were "bad" in the sense that they depended heavily on the exploitation of labor and led to a low development path, while "good" activities led to a high development path. We show that areas with bad colonial activities have lower output per capita today than areas with good colonial activities. Areas with high pre-colonial population density also do worse today. Moreover, the positive effect of "good" activities goes away in areas with high pre-colonial population density. We attribute this to the "ugly" fact that colonizers used the pre-colonial population as an exploitable resource, thereby also leading to a low development path. Our results suggest that differences in political representation and in the current ethnic composition of the population (but not differences in human capital or income inequality) could be the intermediating factors between colonial activities and current development.

The present study reports new evidence on the contribution of capital formation, and
specifically machinery equipment investment, on economic growth. For the case of Chile, using
new data for the period 1890-2005, the relationship is studied. Applying a causality test a
positive correlation between the growth rate of machinery investment and the long run GDP
growth rate, will be verified. Prior empirical studies generally used country cross-section data
and worked with a relatively small number of years. The empirical approach, based on long run
series (1890-2005) for a case study, Chile, can better help to understand the effect of machinery
equipment investment on economic growth.

In this paper using the variables that explain the equation Commoner-Ehrlich-Holdren, for the period 1950-2004 and a sample of 97 countries (22 of whom are Latin American and Caribbean), finds that Latin American and Caribbean countries have a behavior in the consumption of modern energy and energy intensity, which does not differ from any country in the sample with similar levels of GDP per capita.
The behavior average of the sample of Latin American and Caribbean countries for all the period shows that the energy intensity, calculated with the traditional and modern energies, of the entrance countries per capita half is decreasing and that its contribution is negative in the explanation of the apparent consumption of energies. However the contribution of population growth and GDP per capita growth in consumption of energy is positive and over 50%. For the rest of countries grouped according to its level of entrance per capita, with the exception of Peru, Cuba and Dominican Republic, the contribution of the energy intensity in the growth of the apparent consumption of modern energies is positive.
In the sample of Latin American and Caribbean countries, with the exception of Trinidad and Tobago and Jamaica, the rate of population growth explains about 50% of total energy consumption, this behavior is different to that reported for countries such as Sweden, Holland, Italy and Spain.
In the 55 years covered by this study, the sensitivity of total energy consumption to changes in population, GDP per capita and energy intensity is unitary for majority of the Latin American and Caribbean countries in the sample, and these results remain unchanged when the analysis only considers the consumption of modern energies.
Finally, the energy intensity changes over time in each country and between countries. However, changes in the composition of the energy matrix, the increased involvement of manufacturing and mining in GDP, the first oil shock, the impact of internal crises and the results of the structural adjustment programs alter the trend, the growth rate and the persistence of energy intensity.

This article aims to examine possible explanations for the backwardness in the expansion of primary education in Brazil between 1930 and 1964, despite the fact that Brazil presented high rates of economic growth through promoting import-substitution industrialization. In particular, the role of the distribution of political power in the expansion of primary enrollment rates is addressed. Contrary to what happened in developed countries, our qualitative and quantitative evidence indicates that Brazil’s experience is more similar to what happened in India. Education in both countries developed in the context of a highly elitist democracy, in which the expansion of suffrage had little effect on the expansion of education, with a negative impact on long-term economic growth.

This research attempts to explain the poor performance of the Colombian economy in the world markets during the late nineteenth century. Based on data on exportable production at the municipal level in 1892, coffee production in 1925 and of public land allocation and land conflicts during the nineteenth and twentieth century, we found that one of the greatest obstacle that faced Colombian export development was the weakness of settlers’ property rights in the frontier lands. The quantitative results show that in the absence of land conflicts, the municipality’s exportable production would have been at least twice as much as that observed.

This paper presents new series of factorial distribution of income between 1950 and 2000 for 14 Latin-American’s countries from a harmonization of the data of the labor share in the national accounts statistics. Besides, estimations of self-employed workers’ remunerations are presented for 10 countries of the region, after discussing different methodological approaches to estimation and the data limitations of these.
The analysis of these coherent estimations allows us to reach some preliminary conclusions. First, there are important variations between countries. Second, at a national and regional level, the series show important variations in the short and long term, supporting studies which question the stability of the factorial distribution of income in the long run. Third, our estimations of labor share remuneration –once corrected to include an estimation of self-employed workers’ remuneration- are still significantly lower than in the developed countries, thus questioning studies which indicate that these variations disappear once this correction is applied.

In current Central American historiography not much attention is paid to what happened to the region’s economy during the First World War. The impact of the war is virtually unknown, other than that Central American trade temporarily shifted from Europe to the United States, because of the naval blockades of the former during the conflict. For the period before the 1920s, no yearly GDP estimates exist, so in order to find out about the economic impact of the war, we need to consult other economic indicators. Fortunately, the five Central American republics published foreign trade statistics on a regular basis from the first decade of the twentieth century onwards. As the Central American countries depended exclusively on imported capital goods and energy, we can find out the levels of apparent consumption of these products per country just by studying their yearly import statistics.
In this paper we will analyze the import curves of machinery, means of transport, energy, cement, foodstuffs and textiles. The behavior of these different import cycles can give us indications about the economic performance of each Central American country, before, during and after the First World War. Not only will I measure the impact of the war, I will also give explanations for the different economic performances of the Central American countries during the period under investigation, rooted in different historical economic processes, dating back as early as the beginning of the nineteenth century. This way we obtain a fairly precise impression of the influence of this war on the economies of the region, concluding that Costa Rica suffered most from the conflict, losing more than a decade of economic growth, because, compared with its neighbors, it was extremely well-integrated in the global economy.

Latin America is an economic diverse region. On terms of Economic History research the lack of quantitative data restricts many times the possibility of take into account all this complexity. The scarcity of economic long term series is particularly severe in the Bolivian case. This work goes one step forward in the improvement of this situation. It presents three long term fiscal series based on primary information: the fiscal income of the Bolivian Central State (1900-1931), the mining fiscal burden (1900-1929) and the departamental income (1900-1920). It also propose ideas to recognize the potential and limits of the Bolivian Public Finances at the beginning of the 20th Century. The work search the rationality behind the dependence on external trade taxes. Then, it shows that the State was not necessarily unable to tax the mining sector. So, know how to expend is so important as tax. The impact of this expenditure is related with the institutional environment. Given the long permanence of colonial institutional arrangements, the potential impact of the Public Finances was probably low.

This article presents new data about labor productivity, technological content of exports and selected firms and industries in order to assess the performance of Brazilian manufacturing industry in post-World War II. We deal with evidence from both macro and micro levels in the assumption that a one-sided focus on macroeconomic aggregates misses important aspects of industrialization and technological development. Our data show that Brazilian industry achieved high growth rates of labor productivity during the post-war years and became more technologically sophisticated, as measured by manufacturing exports. There is also evidence that a number of firms engaged in assimilating, adapting and improving products and processes, achieving high productivity and efficiency during the classic period of Import-Substituting Industrialization (ISI) in Brazil. However, we also found that Brazil's labor productivity growth lagged behind what was achieved by other industrializing and developed countries after the mid-1970s. Technological upgrading was slow and limited, and most firms used antiquated equipment, lacked technical expertise and turned out low-quality products. Overall these results suggest that a highly heterogeneous structure became a major feature of Brazilian ISI in the post-war years, with successful cases and mixed results, rather than widespread inefficiency and technological stagnation, as argued by the dominant interpretation of ISI in Latin America. In the end, we formulate tentative hypotheses about the market and institutional conditions that shaped Brazilian industrialization in the long run.

This is an exploratory paper which aims at analyzing consumption patterns in the long run, and to present some evidence for Argentina and Uruguay along the 20th century. We consider consumption patterns as the distribution of personal expenditure among different categories of goods and services. This paper examines changes of consumption patterns and the factors that affect them in the long run. The paper pursues three specific objectives. Firstly, we discuss the theoretical factors that influence changes in consumption patterns in the long term. Secondly, we present some empirical evidence on personal consumption expenditure for Buenos Aires and Montevideo for some selected years throughout the 20th century. Finally, we propose some interpretations about the changes in the consumption structure (especially food and luxury goods) and its relationship with the evolution of real income.

In this paper we extend our earlier research on the energy consumption of Latin America and the Caribbean backward and forward in time to cover 150 years of energy data. Whenever insufficient quantitative basis hampers the adequate evaluation of the relative economic progress of the different countries, the energy consumption is used as a proxy of economic modernisation to answer some interesting long term questions. When economic data exists -mostly the last third of our period- then is possible to observe the different relatioships stablished between energy and economy in the Latin American republics. Overall, the paper provides the logest series of energy consumption for Latin America ever.

The traditional exception to the welfare reducing character of protectionism is based on the optimum tariff argument. If in addition the market power can be traced back to control of a necessary, cero substitution natural resource type input, then the corresponding trade tax and the shadow price of the resource are on common ground, eventually the former is also an instrument for charging the latter. In the political economy context such an export tax is also a device for nationalizing the income stream the scenario promises; but also, once this revenue takes over a significant fraction of fiscal income the country’s Treasury may turn into a conservative force impeding tax innovations dictated by dwindling monopoly power. Specially so if government comes to display an agency type of behavior and the revenue reductions to be derived from the adaptation of the tariff to changing demand conditions concentrate in the present, meanwhile expected benefits of such an action extend into the future. Based on a simple analytical framework and exploring the issue with a set of simulations,the optimality of the export tax on nitrates is evaluated for its complete lifespan extending over half a century. Its nil capacity for adapting to changing conditions is then interpreted in terms of the assumed incentive structure of governments, but recognizing the inherent difficulties in predicting future market power and therefore of tax design.

A main issue in the current debate in the economic literature explores the effects of financial crises on income distribution, though no consensus exists on the real consequences of financial meltdowns on the distribution of income within affected countries. None of these works, however, deal with a long-term perspective, due to data constraints and to the fact that the frequency and relevance of financial crises have really increased since the 1990s. This paper focus on the relationship between financial crises and income distribution in the first era of globalization. During this period, financial crises affected emerging markets as they do today, and economists were aware of the risks of such events on the economic conditions of the suffering countries. We analyze new and systematic data for the main capital recipient countries in Latin America and Europe, and provide detailed case studies from Brazil, Chile and Uruguay. This paper finds that, after a financial crisis, income distribution deteriorated mainly through two channels: economic activity slowdown and relative price changes.

The new trade data used here documents that Argentina, Brazil, Chile and Mexico underwent significant industrialization after 1870 and, based on evidence from around 1910, they led the rest of Latin America and most of the poor periphery. How much of this industrial performance was due to fast productivity growth in manufacturing, yielding catch up on the US and Europe? How much was due to a cessation in the seven-decade rise in the net barter terms of trade, trends that reversed de-industrialization and Dutch disease forces? How much was due to cheaper foodstuffs keeping industrial wages more competitive? How much was due to more pro-industrial real exchange rate and tariff policy? Which of these forces contributed most to early industrialization among the Latin American leaders? Changing fundamentals, changing market conditions, or changing policies?