Suchergebnisse

Although the region remains highly centralized, the tendency toward decentralization is quite strong. Not only is a larger portion of the general government budget executed from the subnational government level, the autonomy that these governments have in deciding how much to spend and what to spend on is increasing as well. In this context, it is important to analyze the possible effects of the move toward decentralization on fiscal performance.

Using bilateral foreign direct investment (FDI) stocks around the world, we explore the importance of a wide range of institutional variables as determinants of the location of FDI. While we find that better institutions have overall a positive and economically significant effect on FDI, some institutional aspects matter more than others do. Especially, the unpredictability of laws, regulations and policies, excessive regulatory burden, government instability and lack of commitment play a major role in deterring FDI. For example, the effect of a one standard deviation improvement in the regulatory quality of the host country increases FDI by a factor of around 2. These results are robust to different specifications, estimation methods, and institutional variables. We also present evidence on the significance of institutions as a determinant of FDI over time.

After more than a decade of political & economic reform in Latin America it has become painfully obvious that good ideas & good policy recipes are not enough to achieve development goals. The policymaking process of designing, adopting & implementing good policies is equally important. Policymaking involves a variety of actors -- from the president & political parties to labor unions & business groups -- interacting in different arenas -- the cabinet, the legislature, the street. The key players, their roles & incentives, the characteristics of the arenas in which the game is played & the nature of the transactions the players engage in, while having common elements, vary considerably from country to country & help explain the variety of reform experiences in the region in recent years. Tables, References. Adapted from the source document.