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Latin America & Caribbean

Building Metros in Latin America: Not all projects are created equal, but they all need strong institutions

Daniel Pulido's picture
Follow the author on Twitter: @danpulido
 

Construction of the Quito Metro
Representatives from international and local commercial and development banks convened in Bogota, Colombia at the end of March for the Second International Workshop to discuss the First Line of the Bogota Metro. Bogota is currently undertaking the engineering studies required to develop the metro project but the key question remains:  how to develop it in a manner that reduces costs, mitigates risks and maximizes benefits for users? Together with other Bank colleagues, I was invited to the workshop to discuss the procurement and financing models adopted in other urban rail projects in Latin America (see workshop presentations here). My main take away from the discussions is that although there is no such thing as a single recipe for success, there is one widely recognized essential ingredient: strong government institutions with the sufficient managerial and technical capacity to prepare, manage and supervise these complex projects.

Chile’s School System Feeds Income Inequality

Sergio Urzúa's picture

In the 1980s, Chile's educational system underwent a major overhaul that included decentralizing administrative powers and the creation of a three-tiered school system. We spoke with Sergio Urzúa (University of Maryland) about a new study published by him, Dante Contreras (University of Chile), and Jorge Rodríguez (University of Chicago), which suggests that the three-tiered school system, along with other educational reforms, aren't helping to reduce income equality.

Why should Governments Spend on Sanitation?

Shanta Devarajan's picture

A puzzle:  Sanitation is one of the most productive investments a government can make.  There is now rigorous empirical evidence that improved sanitation systems reduce the incidence of diarrhea among children.  Diarrhea, in turn, harms children’s nutritional status  (by affecting their ability to retain nutrients).  And inadequate nutrition (stunting, etc.) affects children’s cognitive skills, lifetime health and earnings.  In short, the benefits of sanitation investment are huge.  Cost-benefit analyses show rates of return of 17-55 percent, or benefit/cost ratios between 2 and 8.

But if the benefits are so high (relative to costs), why aren’t we seeing massive investments in sanitation?  Why are there 470 million people in East Asia, 600 million in Africa and a billion people in South Asia lacking access to sanitation?  Why are there more cellphones than toilets in Africa?

Weekly Wire: The Global Forum

Roxanne Bauer's picture

These are some of the views and reports relevant to our readers that caught our attention this week.
 

The Transformative Impact of Data and Communication on Governance: Part 3
Brookings Institution
How do digital technologies affect governance in areas of limited statehood – places and circumstances characterized by the absence of state provisioning of public goods and the enforcement of binding rules with a monopoly of legitimate force?  In the first post in this series I introduced the limited statehood concept and then described the tremendous growth in mobile telephony, GIS, and other technologies in the developing world.  In the second post I offered examples of the use of ICT in initiatives intended to fill at least some of the governance vacuum created by limited statehood.  With mobile phones, for example, farmers are informed of market conditions, have access to liquidity through M-Pesa and similar mobile money platforms.

Cashing in: why mobile banking is good for people and profit
The Guardian
Using digital finance to tackle development problems can improves lives, and offer innovative companies handsome rewards. Whether it is lack of access to water, energy or education, development professionals are well versed in the plethora of challenges facing billions of people. The traditional approach to solving these problems has been to think big – in terms of the millennium development goals, government aid programmes, or huge fundraising campaigns. But there are dozens of startups and larger companies with innovative ideas who are approaching these challenges in new ways using digital finance.

Can Computers Outperform Humans?

Wolfgang Fengler's picture

The epic battle of man against machine has been fought on many occasions. One of the most memorable encounters was the chess game between IBM’s Deep Blue and Gary Kasparov. Deep Blue was the first computer to beat a reigning chess champion in 1996 (the machine still lost 2 to 4 after six games). A year later, at their “rematch”, the machine won on the overall score: 3.5 to 2.5.

However, it is surprising that, 18 years later, we still have not figured out the ultimate winning strategy in chess. Any game with limited combinations and full disclosure of information must have ‘safe strategies’ and can be ‘solved’ (as has happened with the game checkers in 2007). The solution, in chess, would from what we know today involve strategies whereby the white player would win or the black player would force a draw. Yet no human or super computer to date has managed to solve chess’ mathematical puzzle.  How much more computing power do we need to succeed?

Ecovia in Monterrey -- How Bus Rapid Transit is Transforming Urban Mobility

Shomik Mehndiratta's picture
Follow the author on Twitter: @shomik_raj
 

One of the shiny new Ecovía buses
Listening to Juan Ayala rave about how they only let the most talented bus drivers operate the shiny new buses on the Ecovía Bus Rapid Transit (BRT) system, we realized how fantastic our job is. Not only do we have the privilege to help plan and implement transformational projects such as Monterrey’s first BRT line, but we actually get to see the results of our work firsthand.

One should not underestimate the importance of Ecovía, a new 30-km BRT corridor crossing Monterrey from east to west. The original goal was to create a high-speed, high-quality mass transit system that could provide rail-like performance at a fraction of the cost. If the first six weeks are any indication, Ecovía certainly has achieved that. At 30 km per hour, the average travel speed of the BRT is close to double that of regular bus lines across the city; an influential local TV host found that end-to-end travel times on the system were over an hour faster than by private car; ridership levels are higher than what government expected for this still partial roll-out (35 of the scheduled 80 vehicles are operating); and in a recent survey, 75% of the sampled riders judged the overall system to be an 8 or higher on a scale of 10.

How are Financial Capability and Financial Access Linked? Insights from Colombia and Mexico

Miriam Bruhn's picture

Access to formal financial services has been expanding in recent years.  But as people start to use these services for the first time, it has become clear that the challenge is not only providing access to financial services, but also ensuring that people have the behaviors and attitudes to use financial products responsibly and to their advantage. If not, increased access to finance could potentially lead to over-indebtedness and even financial crises.

Two recent nationwide surveys of 1,526 adults in Colombia and of 2,022 adults in Mexico measure financial capability to provide insights on how people manage their finances. The term “financial capability” refers to a broader concept than financial literacy or knowledge alone. It covers a number of different behaviors and attitudes related to participation in financial decisions, planning and monitoring the use of money, and balancing income and expenses to make ends meet.

The financial capability surveys find for example that, in Mexico, many make financial plans, but far fewer adhere to them. Seventy percent of those surveyed say they budget, but just one-third reported consistently adhering to a budget. Similarly, just 18 percent knew how much they spent last week. In Colombia, while 94 percent of adults reported budgeting how income would be spent, less than a quarter of those surveyed actively monitored spending or had precise knowledge of how much is available for daily expenses.

A Fragile Country Tale: Restrictions, Trade Deficits, and Aid Dependence

Massimiliano Calì's picture

 Masaru Goto, World BankPart of the World Bank’s new vision is to step up its efforts to help fragile and conflict-afflicted states break the vicious cycle of poverty. But this is no easy task.
 
The destruction of productive assets and the restrictions on the capacity to produce are among the most severe economic impacts of conflicts and fragility. These effects explain why countries in conflict or emerging out of conflict typically have very large trade deficits. The productive sector is often particularly weak by international standards, so exports are low and domestic consumption has to rely on imports. Indeed, five of the ten countries with the largest trade deficit in the world (Timor-Leste, Liberia, the Palestinian territories, Kosovo and Haiti) are considered fragile by the World Bank and other regional development banks (figure 1).
 

Would Better Job Conditions Boost Latin America’s Productivity?

Juan Chaparro's picture

Latin America is looking for ways to boost its low productivity. We spoke to Juan Chaparro (PhD student, Department of Applied Economics, University of Minnesota), about a new study by him and Eduardo Lora (former Chief Economist, Inter-American Development Bank), which suggests that the answer might lie in creating a better job environment. Chaparro tells the JKP that the results are quite encouraging.


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