The evolution of human development in Latin America

Leandro Prados de la Escosura has a thought provoking new working paper “Human Development as Positive Freedom: Latin America in Historical Perspective.”

The paper studies the evolution of human development (that is, a measure of development that tries to go beyond just per-capita income) in Latin America from the late 19th century until now.  de la Escosura reports a couple of interesting findings, namely, that

1. “Human development improved in Latin America during the last century and a half, especially between 1900 and 1980, when gains were significant and across the board. Remarkable progress in life expectancy and education occurred between 1938 and 1950, precisely at the time of an economic globalization backlash.”

2. “The last three decades have witnessed a widening in the absolute gap between developed countries and Latin America. Differences in the behaviour of human development dimensions help to explain it. In Latin America, life expectancy played a major role in human development gains and catching up, but only until the mid twentieth century. With completion of the first health transition, its dynamic role faded. A second wave of life expectancy gains comparable with those of developed countries has yet to take place. Instead, education was mainly responsible for long run.”

He goes on to explain the important questions that these findings raise:

“Why did life expectancy stop being the driving force of world human development as the first health transition was concluded? Why Latin America has been left aside from the second health transition? Is there a lack of public policies, or a polarizing effect of new medical technologies? Is it that health and education are highly income-elastic? To what extent did restricted access to health and education, as a result of income inequality, play a role?”

de la Escosura also has an interesting discussion of the anomaly that is Cuba, a country that ranks high on some human development indices because of high life expectancy rates and education levels, but clearly doesn’t have a high level of human development if we mean freedom of expression and opportunity.  de la Escosura agrees, offering the following caveat to his results :

“The case of Cuba presents an extreme contrast between the success in achieving ‘basic needs’ and the failure to enlarging people’s choices –the core of human development- as agency and freedom are curtailed by the political regime. Restrictions of individual choice in Cuba -as collectivization, forced industrialization, and political repression exemplify-, suggest that achievements in health and education could be, strictly speaking, depicted as ‘basic needs’ rather than as human development.”

What have you done for me lately?

Sebastian Galiani, Paul Gertler, and Raimundo Undurraga have a very interesting NBER working paper on the hedonic treadmill called “The Half-Life of Happiness: Hedonic Adaptation in the Subjective Well-Being of Poor Slum Dwellers to a Large Improvement in Housing.”

Here’s the abstract:

A fundamental question in economics is whether happiness increases pari passu with improvements in material conditions or whether humans grow accustomed to better conditions over time. We rely on a large-scale experiment to examine what kind of impact the provision of housing to extremely poor populations in Latin America has on subjective measures of well-being over time. The objective is to determine whether poor populations exhibit hedonic adaptation in happiness derived from reducing the shortfall in the satisfaction of their basic needs. Our results are conclusive. We find that subjective perceptions of well-being improve substantially for recipients of better housing but that after, on average, eight months, 60% of that gain disappears.

In other words, keep pedaling!

Colonialism and inequality in Latin America

Jeffrey Williamson has weighed in on the debate about the origins of inequality in Latin America.  His NBER working paper is titled Latin American Inequality: Colonial Origins, Commodity Booms, or a Missed 20th Century Leveling?

He argues that inequality rates were not high in Spanish America and that it wasn’t until the commodity boom of the late 19th century when inequality really began to increase in the region.  Here is the abstract:

Most analysts of the modern Latin American economy have held the pessimistic belief in historical persistence — they believe that Latin America has always had very high levels of inequality, and that it’s the Iberian colonists’ fault. Thus, modern analysts see today a more unequal Latin America compared with Asia and most rich post-industrial nations and assume that this must always have been true. Indeed, some have argued that high inequality appeared very early in the post-conquest Americas, and that this fact supported rent-seeking and anti-growth institutions which help explain the disappointing growth performance we observe there even today. The recent leveling of inequality in the region since the 1990s seems to have done little to erode that pessimism. It is important, therefore, to stress that this alleged persistence is based on an historical literature which has made little or no effort to be comparative, and it matters. Compared with the rest of the world, inequality was not high in the century following 1492, and it was not even high in the post-independence decades just prior Latin America’s belle époque and start with industrialization. It only became high during the commodity boom 1870-1913, by the end of which it had joined the rich country unequal club that included the US and the UK. Latin America only became relatively high between 1913 and the 1970s when it missed the Great Egalitarian Leveling which took place almost everywhere else. That Latin American inequality has its roots in its colonial past is a myth.

I’m curious what Daron Acemoglu will have to say about this.  Given his unbelievable productivity, I probably won’t have to wait long!

News of the Weird, Latin American Edition

There are so many contenders, but here are a few of my favorites.

1. I’m all in favor of human rights marches in Mexico, on pressuring the government for answers to the murdered students, but this march needs to look a little harder for role models:


h/t Compa Cesángari (@Censangari) and Alejandro Hope (@ahope71)

2. I recognize that the US has a terrible track record in unsolicited Latin American political interventions, but I think it’s necessary to recognize that governments can screw up their economics (and politics) all on their own.  Not everything is driven by the US.  Evo Morales disagrees.  He blames the recent death of the crusading prosecutor in Argentina on the US, saying it was an ambush against comrade Cristina.  Here are his exact words:

“Cuando fracasan con una agresión económica a la Argentina, ahora preparan una agresión política, como una emboscada a la compañera Cristina con la muerte del fiscal”, dijo el mandatario tras repasar lo que consideró “un triunfo” de nuestro país contra los fondos buitre. Ya no pueden hacer golpes de Estado, ya no pueden dominarnos militarmente, entonces buscan otras formas de golpe, de escarmiento, de amedrentamiento, especialmente a los presidentes antiimperialistas”.

(rough translation: “After they have failed with their economic agresión against Argentina, they now are preparing political aggression with an ambush.  They can no longer orchestrate coups d’etat, they can no longer dominate us militarily, so they look for other kinds of blows, such as scarcity, of fright, especially against anti-imperialist presidents.”  Note to readers: simply replace the word “they” with “the United States” and you will get the gist). @viaSimonRomero

Latin America: We’re first in machismo!

NPR has a interesting piece about a Gallup poll about respect for women around the world.  The poll finds that “for the second consecutive year, a wide survey found people in Latin America are the least likely to say they live in countries where women are treated with respect and dignity, ranking below the Middle East and North Africa.” While the results are subjective, since they are based on peoples’ opinions, it is still shocking to see Latin America score so low.

In surveys across 22 Latin American countries, Gallup found that “a median of 35 percent of adults said their women are treated [with respect] — about half as high as percentages in any other region of the world.”  Yikes!  Here are the median responses for other regions:  Asia (76%), Europe (72%), Sub-Saharan Africa (67%), Middle East and North Africa (65%). (For the US the percentage was 77).

In the Latin American region, only Ecuador had more than 60% of the respondents saying that women are treated with respect. As you can see from the table below, in Peru and Colombia, only 20% responded in that way.  The article notes one other interesting phenomena: the disparity between what women and men report on the survey:

“The widest gap was in Jamaica, where men were more than twice as likely to say women were respected (41 percent to 19 percent). Argentina had the second-largest gap (50 percent to 36 percent).”

It’s probably going to be very hard to make progress if men don’t even see that there is a problem to solve!

Do you believe women in this country are treated with respect and dignity?

Ecuador 63
Uruguay 57
Venezuela 54
Mexico 54
Panama 51
Suriname 47
Costa Rica 45
Argentina 43
Nicaragua 42
Chile 38
Haiti 37
El Salvador 32
Honduras 31
Dominican Republic 30
Jamaica 30
Bolivia 28
Paraguay 27
Brazil 27
Guatemala 27
Trinidad & Tobago 25
Colombia 20
Peru 20

There’s an app for that!

Newsweek just published an article called “Fighting Corruption One App at a Time in Latin America” and it was one of the most heartening I’ve read in a while.  Corruption thrives when there is no transparency, when the people are uninformed of what is going on and must rely on rumors instead of facts.  These new cool apps hope to bring some of these practices into the light.  Here are a few of my favorites:

1. “Balentin Cacha Espiritu is a convicted terrorist. Herline Pitman Quispe Ramos was found guilty of manslaughter. Florentino Lope Ruiz was sentenced to 10 years in prison for rape. Those seemingly random acts of violence are interesting this month for one reason: All three men are running for public office in Peru, and their criminal histories would have been kept essentially in the dark were it not for a mobile app recently launched by Peru’s High Level Anti-Corruption Commission.”

2. “In Bolivia, a civil organization launched an app called Fictitious Budget, where volunteers who attend campaign events can upload estimates on how much they cost. They input the number of people attending (the app recommends dividing the space into quadrants, then estimating the number of attendees in each), the names of any musical groups performing, the type of propaganda and souvenirs handed out, and whether food was provided.”

3. “What about holding officials accountable after elections? A group of students from MIT has been working on an app to do just that in Brazil. Called Promise Tracker, it collects data of projects which candidates made during election. The group first had to define what counted as a promise, what counted as progress and who should be held accountable — difficult questions to answer even when there is full transparency in government.”

USA’s Latin America policy finally grows up

Instead of killing an elected president and installing a military dictator like we did in Chile, or changing governments like a rich person changes underwear like we did in Central America, or trying to assassinate a sitting head of state like we did in Cuba, the US has finally gotten around to having a mature, serious, Latin American policy…..


Wait, what? Oh hell no!

An Obama administration program secretly dispatched young Latin Americans to Cuba using the cover of health and civic programs to provoke political change, a clandestine operation that put those foreigners in danger… Beginning as early as October 2009, a project overseen by the U.S. Agency for International Development sent Venezuelan, Costa Rican and Peruvian young people to Cuba in hopes of ginning up rebellion. The travelers worked undercover, often posing as tourists, and traveled around the island scouting for people they could turn into political activists.

Three things.

1. Could we please, please, please, abolish USAID once and for all? Please?

2. Despite the half-assed stupidity baked into this plan, it actually is an improvement over the cases discussed in my opening ‘graf

3. This was the Obama admin.? Not Reagan?