The Limits of Stabilization: Infrastructure, Public Deficits and Growth in Latin America

Contents......Page 10
Acknowledgments......Page 16
1 INTRODUCTION......Page 18
2 LATIN AMERICA’S INFRASTRUCTURE IN THE ERA OF MACROECONOMIC CRISES......Page 38
3 THE OUTPUT COST OF LATIN AMERICA’S INFRASTRUCTURE GAP......Page 112
4 INFRASTRUCTURE COMPRESSION AND PUBLIC SECTOR SOLVENCY IN LATIN AMERICA......Page 136
5 MACROECONOMIC EFFECTS OF PRIVATE SECTOR PARTICIPATION IN INFRASTRUCTURE......Page 156
6 REGULATION AND PRIVATE SECTOR PARTICIPATION IN INFRASTRUCTURE......Page 188
Acronyms and Abbreviations......Page 216
Index......Page 222
2.1 Comparative Performance in Infrastructure Stocks......Page 41
2.2 Power Generating Capacity by Region, 1980–97......Page 43
2.3 Power Generating Capacity per Worker by Country, 1980 and 1997......Page 44
2.4 Length Comparisons of Transportation Routes......Page 45
2.6 Access to Clean Water, 1985–93......Page 46
2.7 Infrastructure Quality and Excess Demand......Page 47
2.8 Power Losses by Region, 1980–97......Page 48
2.9 Power Losses by Country, 1980 and 1997......Page 49
2.10 Comparisons of Surface Transportation Quality......Page 50
2.11 Total Investment in Infrastructure in Selected Latin American Countries, 1980–98......Page 51
2.12 Investment in Infrastructure in Selected Latin American Countries, by Sector, 1980–98......Page 52
2.1 The Contribution of Infrastructure Compression to Fiscal Adjustment, Average 1980–84 versus Average 1995–98......Page 54
2.14 Public Investment in Infrastructure and Noninfrastructure, by Country......Page 57
2.15 Public Investment in Infrastructure, by Sector and by Country......Page 60
2.16 Private Investment in Infrastructure in Selected Latin American Countries, 1980–98......Page 64
2.17 Private Investment in Infrastructure and Noninfrastructure, by Country......Page 65
2.18 Private Investment in Infrastructure, by Sector and by Country......Page 68
2.19 Private Investment Per Capita around the Date of Reform in Selected Country, by Sector......Page 72
2.20 Infrastructure Quality and the Private Share of Investment in Infrastructure......Page 82
3.1 Infrastructure Accumulation and Growth, 1960–97......Page 114
6.1 Annual Average Share of Private Investment in Total Infrastructure Investment in Selected Latin American Countries, by Sector......Page 191
6.2 Average Annual Investment in Infrastructure in Selected Latin American Countries, by Sector......Page 192
2.2 Regression of Public Infrastructure Investment/GDP on the Primary Balance/GDP......Page 56
2.3 Infrastructure Reform Dates......Page 63
2.4 Correlation between Public and Private Infrastructure Investment, by Sector......Page 74
2.5 Regressions of Public Infrastructure Investment/GDP on Private Infrastructure Investment/GDP......Page 75
2.6 Relationship between Physical Stocks and Investment Spending in Infrastructure......Page 78
2.7 Relationship between Physical Stocks, Public and Private Investment Spending in Infrastructure......Page 80
2.8 Private Participation and Infrastructure Quality......Page 81
2A.1 Telephone Service Variables......Page 86
2A.2 Summary of Coverage and Availability of Telephone Service Indicators......Page 87
2A.3 Telecommunications Indicators: Time-Series Coverage by Region......Page 89
2A.4 Variables Used as Proxies for Energy......Page 90
2A.6 Sanitation and Sewerage Indicators: Time-Series Coverage by Region......Page 91
2A.9 Indicators for Irrigation......Page 92
2A.10 Irrigation: Time-Series Coverage by Region......Page 93
2A.12 Public Sector Definitions Used in the Figures of Public Investment in Infrastructure......Page 94
2A.13 Definition of the Transport Sector......Page 95
2B.2 Sale and/or Concession of Public Enterprises in Infrastructure Sectors......Page 99
2B.3 Greenfield Projects in Infrastructure Sectors......Page 100
3.1 The Widening Infrastructure Gap, Latin America versus East Asia......Page 113
3.2 Sample Correlations......Page 120
3.3 Infrastructure-Augmented Production Function: Alternative Estimates......Page 121
3.4 Alternative GMM Estimates......Page 123
3.5 First-Difference GMM Estimates of Alternative Specifications......Page 125
3.6 Elasticity of Output per Worker with Respect to Capital per Worker......Page 127
3.7 The Infrastructure Gap and the Output Gap: Contribution of Various Inputs to the Change in Relative GDP per Worker, Latin America versus East Asia, 1980–97......Page 128
3.8 The Infrastructure Gap and the Output Gap: Contribution of the Change in Relative Infrastructure Stocks to the Change in Relative GDP per Worker, East Asia versus Selected Latin American Countries, 1980–97......Page 129
4.1 Taxes and Growth: Panel Data Regression Analysis......Page 143
4.2 Government Spending and Growth: Panel Data Regression Analysis......Page 144
4.3 Impact on the Annuity Value of Net Worth of a Cut in Infrastructure Investment by 1 Percent of GDP......Page 146
4.4 Partial-Equilibrium Effect of Actual Infrastructure Investment Changes on the Annuity Value of Public Net Worth, 1980–84 versus 1995–98......Page 148
4A.1 Panel Unit Root Tests, Government Revenues, Government Spending, and Real Output......Page 152
5.1 Main Macroeconomic Variables: Levels and Ranking......Page 163
5.2 First Year for Private Participation in Utilities and Transport......Page 164
5.3 Average Value of the Institutional Variables between 1985 and 1998......Page 166
5.4 Effects of PPI on GDP Per Capita (Model 1)......Page 168
5.5 Effects of PPI on GDP Per Capita (Model 2)......Page 169
5.6 Effects of PPI on Private Investment (Model 1)......Page 172
5.7 Effects of PPI on Private Investment (Model 2)......Page 173
5.8 Effects of PPI on Private Investment Defined as Gross Domestic Investment Minus Public Investment (Model 1)......Page 175
5.9 Effects of PPI on Public Investment (Model 1)......Page 177
5.10 Effects of PPI on Public Investment (Model 2)......Page 179
5.11 Effects of PPI on Recurrent Public Expenditures (Model 1)......Page 181
5.12 Effects of PPI on Public Expenditures (Model 2)......Page 183
5.13 Summary of Signs of Average Macroeconomic Effects of PPI......Page 185
6.1 Data Sources......Page 196
6.2 Country Fixed Effects Estimation......Page 200
6.3 Fixed Effects Regressions by Sector......Page 204
6A.2 Descriptive Statistics if Regulatory Body Exists......Page 206
6A.5 Public and Private Investment before and after the Passage of Reform Legislation......Page 207
6A.6 Aspects of Regulatory Structure, by Country and by Sector......Page 209