Sunday, April 17, 2016

Too much data vs no data at all

Two recent articles in the FT and the NYT illustrate how many political debates are taking place without serious empirical evidence.   As the NYT article says, we are at a moment when "money-fueled culture where tweets, not position papers, shape the national conversation."  Yet, in contrast, we are also at a time when there is a big accent on big data and the need to have "evidence-based" policymaking (which usually means statistical data).  At times, I am afraid that qualitative researchers are in the middle of both worlds and will have diminished influence over time: they are compared with the type of research that bad think tanks do or they are considered second rate when compared to quantitative research.  A rather worrying trend!

Wednesday, April 13, 2016

Dilma's impeachment is totally unjustified

I wrote a column in El Pais today about the crises in Brazil.  The corruption scandal is severe but does not justify the impeachment at this point.  Moreover, the disappearance the PT (which is an obvious goal of a large segment of the upper middle class and the rich) would be a disaster for Brazil's redistributive agenda.

You can also find an interesting interview to Lula here.

Sunday, April 10, 2016

Article for Elcano

A few weeks ago the Foundation Elcano organised an interesting closed door debate on the Sustainable Development Goals and Spanish aid in Latin America.  They asked me to prepare a document with some of the most significant challenges for the region... not an easy task!  Here is the final version in Spanish.  Of course, the region has many more challenges but it is important to stay focus on inequality, human rights/violence, economic transformation together with the role of institutions.

Saturday, April 2, 2016

Latin America in the last ten years

Today I briefly talked on BBC radio Scotland on the situation in Latin America. Having only five minutes forces you to think about what is the headline that should be emphasise.  I think it is four points:

1. The economic basis of the region are the same as a century ago: commodities and agricultural products.

2. The region used the commodity boom MUCH better than before: it promoted formal employment and expanded social incorporation for new groups. The result was the reduction of inequality and the growth of an emerging middle class.  

3. Yet governments did not pay enough attention to three factors that are now in creating problems:

a. High levels of corruption (these were not created by the left but the left has happily participated).

b. Economic dependence on natural resources and difficulties to create other sources of growth.

c. Governing through polarization means that there are now groups (the elite, the upper middle class) that are more than happy to support protests against these groups.

So yes, the region has many problems, but the last ten years were not a wasted opportunity as some people now claim.

Thursday, March 17, 2016

The crisis in Brazil

Spending a week in Brazil in the middle of this crisis is really interesting.  There is so much going on and so many layers.  As an academic told me today, there are quite a few actors following their own agenda and nobody thinking about the national needs and priorities.  You have:

  • An unpopular president in the midst of a serious corruption scandal that she probably knew about.
  • A former president coming back to the government for different reasons (some more justified than others).
  • A judge who is behaving in the worst possible way: spying on the President of the Republic and then publicising conversations is unprecedented.
The lack of social trust is particularly striking: nobody is willing to give others the benefit of the doubt or respect the institutional framework.  As a result, you have the left warning against a coup, a judge behaving unethically in his thirst for glory and the press adding fuel to fire.

A very interesting aspect of the last few days is the characteristics of the demonstrators.  I realise that there were millions in the street and that Dilma's opposition goes beyond class lines.  Nevertheless, it was clear walking in the Avenida Paulista and watching TV that a large share of the people in the demonstration are part of the upper middle class.  They may have two agendas (anti-PT and anti-corruption).  One is obviously much more positive than the other.  In fact, I wonder if we can place a  the preferences of this group and others in the following two axis:

Highly concerned with corruption
“Idealised” middle class
Upper middle class
Less concerned with corruption
Non-organised poor
Traditional elite

My hypothesis would be that the current protests are driven by the upper middle class, who has no interest in redistribution and will vote against it.  Moreover, I wonder how big and how mobilised the "idealised" middle class (which is the one we tend to imagine appearing and contributing to democracy and equity) is and whether they will play any role in upcoming months.  In fact, a deeper crisis of the PT could further weakened the chances of having that kind of middle class in the future... or not?

Tuesday, March 15, 2016

Three key steps in policymaking

I had a great conversation with people from IPEA today (more on social policy trajectories later) and one thing became clear.  When thinking about policymaking, I think we should consider three different steps:

1. Agreeing in the objectives we want to achieve (e.g. universal social policy).

2. Agreeing in the existence of different trajectories to achieve that result but also on the right one in each specific case.

3. Identifying the KEY constraint (binding constraint in the terminology that Rodrik and others introduced about growth a while back) and begin by trying to overcome it.

These steps are probably very clear in the policymaking academic literature... but they are too many times missing in real life debates!  In fact most often there is lack of clarity about objectives and instruments and, more importantly, about the best way to start.

Saturday, February 13, 2016

China's problems could hit Latin America hard

During the last few years, China was a mixed blessing for Latin America (see here and my own views here). On the one hand, China's demand for commodities was behind the Latin America's boom. China also offered an alternative development model for the region and financial support.  On the other hand, it helped to consolidate primary specialisation and to accelerate deindustrailasation even in Brazil

Worryingly, China's crisis can move all these various impacts in the "wrong" direction:

a. The pending devaluation of the Chinese renminbi could further erode Latin American competitiveness at a time when competing through prices is particularly important in the region.

b. Exports to China will not expand and commodity prices will remain low.

c. China is still lending to Latin America, but it is likely to think harder about how much to lend and in what conditions in the future.

d. The crisis could strengthen neoliberal's hand in Latin America by questioning the Chinese alternative.

Am I missing something?  Is there anything positive for the region coming out of this?