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Blog: Mitigating the impact of COVID-19 in Latin America: time to be bold

Nora Lustig and Jorge Mariscal
June 3, 2020

COVID-19 has hit Latin America hard on two fronts. The pandemic and the lockdowns to contain the spread of the virus have shut down significant portions of the region’s economies. However, even if the pandemic were to miraculously disappear from the region, falling demand for exports and tourism, declining commodity prices, interruptions in the supply chain of inputs, shrinking remittances and unprecedented capital outflows are significantly affecting countries’ growth prospects.

Working papers: Latest Research

New entries as of June 2, 2020

Blog: COVID-19 in developing countries: Whatever it takes?

Apostolos Thomadakis
June 1, 2020

While COVID-19 is being most virulent today in Europe and North America, the pandemic has now started taking hold in the emerging and developing world, with many countries experiencing increased numbers of cases. Africa, for example, is likely to become the next epicenter as infection and death rates are on the rise. Countries, in particular those that are more connected to the world economy, are already experiencing the economic impact: collapse in commodity prices, falling tourists’ revenues, drop in remittances, massive capital outflows.

Blog: La provisión centros culturales en Medellín y su efecto sobre la educación y crimen en comunidades desfavorecidas

Carolina Vélez Ospina
May 29, 2020

El objetivo de la construcción de estos centros culturales es la promoción de la participación ciudadana, la cultura, la recreación y el deporte. Este es un tipo de bien público cuyo efecto, según investigaciones previas, es ambiguo. En el trabajo “Provision Effects of Local Public Goods on Crime and Education: Evidence from Colombia” aprovecho la construcción de 18 centros culturales en Medellín para evaluar los efectos de este tipo de centros en términos de educación y crimen. La ubicación de estos centros culturales en Medellín, denominados Unidades de Vida Articulada (UVAs), tuvo en cuenta que los vecindarios no tuvieran lugares adecuados para los eventos culturales y deportivos. En este sentido, esta política afectó directamente a comunidades de bajos ingresos que de otro modo no podían acceder a este tipo de servicios.

Working paper: Self-Selection into Corruption: Evidence from the Lab

Pablo Brassiolo, Ricardo Estrada, Gustavo Fajardo and Juan F. Vargas
May 28, 2020

We study whether opportunities to extract rents in a job affect the type of individuals who are attracted to it in terms of their underlying integrity. We do so in a laboratory experiment in which participants choose between two contracts that involve different tasks. We experimentally introduce the possibility of graft in one of them and study the sorting of subjects across contracts based on an incentivized measure of honesty. We find that the corruptible contract changes the composition of subjects because it attracts the most dishonest individuals and repels the most honest ones. In addition, we observe extensive graft when the opportunity is available. We introduce a double randomization strategy to disentangle the extent of which stealing responds to the aforementioned negative selection or to pure incentives (net of selection). We find that, in this setting, selection is the main driver of graft. Our results have clear policy implications to curb corruption.

Blog: Economic Policies for the COVID-19 War

Giovanni Dell’Ariccia, Paolo Mauro, Antonio Spilimbergo and Jeromin Zettelmeyer
May 27, 2020

The COVID-19 pandemic is a crisis like no other. It feels like a war, and in many ways it is. People are dying. Medical professionals are on the front lines. Those in essential services, food distribution, delivery, and public utilities work overtime to support the effort. And then there are the hidden soldiers: those who fight the epidemic confined in their homes, unable to fully contribute to production.

Working papers: Latest Research

New entries as of May 26, 2020

Blog: Ten suggestions to manage COVID-19

Alessandro Magnoli Bocchi
May 25, 2020

In managing the COVID-19 pandemic, time is of the essence. The outbreak triggers two crises in rapid succession - first in the health sector and then in the economy - and puts them in an apparent dichotomy. The goal is to minimize the ‘health versus wealth’ tradeoff by simultaneously: 1) containing the virus (health priority); and 2) avoiding stringent lockdowns (economic priority).

Blog: El Covid nos podría devolver 20 años en pobreza y desigualdad

Nathalie Basto-Aguirre, Paula Cerutti and Sebastián Nieto-Parra, OECD Development Centre
May 22, 2020

En esta nota analizamos los efectos sobre pobreza y desigualdad que podría tener la pérdida directa de ingresos laborales ocasionada por la crisis actual. Consideramos un escenario plausible en el que se ven afectados tanto trabajadores informales como formales, en los sectores más vulnerables a las medidas de confinamiento, concentrándonos solamente en los empleos más frágiles. El resultado principal de este análisis es que se podría producir un efecto en pobreza y de desigualdad equivalente a retroceder a los inicios del siglo XXI.

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