DOCSLIB.ORG

Productivity Performance in Developing Countries

Total Page：16

File Type：pdf, Size：1020Kb

Download full-text PDF Read full-text
Productivity Performance in Developing Countries OCCASION This publication has been made available to the public on the occasion of the 50th anniversary of the United Nations Industrial Development Organisation. DISCLAIMER This document has been produced without formal United Nations editing. The designations employed and the presentation of the material in this document do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations Industrial Development Organization (UNIDO) concerning the legal status of any country, territory, city or area or of its authorities, or concerning the delimitation of its frontiers or boundaries, or its economic system or degree of development. Designations such as “developed”, “industrialized” and “developing” are intended for statistical convenience and do not necessarily express a judgment about the stage reached by a particular country or area in the development process. Mention of firm names or commercial products does not constitute an endorsement by UNIDO. FAIR USE POLICY Any part of this publication may be quoted and referenced for educational and research purposes without additional permission from UNIDO. However, those who make use of quoting and referencing this publication are requested to follow the Fair Use Policy of giving due credit to UNIDO. CONTACT Please contact [email protected] for further information concerning UNIDO publications. For more information about UNIDO, please visit us at www.unido.org UNITED NATIONS INDUSTRIAL DEVELOPMENT ORGANIZATION Vienna International Centre, P.O. Box 300, 1400 Vienna, Austria Tel: (+43-1) 26026-0 · www.unido.org · [email protected] Argentina PRODUCTIVITY PERFORMANCE IN DEVELOPING COUNTRIES Country case studies Argentina Daniel Chudnovsky and Andrés López November 2005 i Productivity peformance This paper has not been formally edited. The designations employed and the presentation of material in this publication do not imply the expression of any opinion whatsoever on the part of the Secretariat of the United Nations Industrial Development Organization concerning the legal status of any country, territory, city or area, or of its authorities, or concerning the delimitation of its frontiers or boundaries. The opinions, figures and estimates set forth are the responsibility of the author and should not necessarily be considered as reflecting the views or carrying endorsement of UNIDO. The designations “developed” and “developing” economies are intended for statistical convenience and do not necessarily express a judgment about the stage reached by a particular country or area in the development process. Mention of firm names or commercial products does not imply endorsement by UNIDO. Material in this paper may be freely quoted but acknowledgement is requested with a copy of the publication containing the quotation or reprint. ii Argentina Contents Page Contents iii List of tables iv List of figures v Executive summary vii I Productivity performance in Argentina: Introduction 1 1.1 Overview and context 1 1.2 Objective of study 2 1.3 Methodology 2 1.4 Organization of report 2 II Growth of the economy and productivity trends 5 2.1 Record of GDP growth 5 2.2 Productivity Evolution, 1962-2000 14 III Assessment of the major determinants of productivity 21 3.1 The macroeconomic and political evolution 21 3.2 Investment and knowledge as major determinants of productivity 25 growth in the manufacturing sector 3.3 Institutional and policy weaknesses 32 3.4 Technological modernization in the agricultural sector 34 IV Determinants of productivity from 1975 - 2000 39 4.1 The productivity record in the long recession, 1975 -1990 39 4.2 Determinants of high productivity growth 1991-2000 45 V Concluding remarks 91 Bibliography 103 iii Productivity peformance List of tables Page 2.1 Employment by sectoral distribution, 1895-2001 7 2.2 Argentina’s labor productivity – GDP per hour worked as a percentage of 7 labour productivity I other countries 2.3 Argentina’s GDP per capita, 1962-2002 8 2.4 Trends of perceived corruption 12 2.5 Productivity and GDP growth, 1962-2000, annual percentage rate 16 2.6 Average growth rates of physical volume of production, number of workers 18 and labour productivity, 1962-2000 2.7 Changes in the relative growth of different industrial sectors, 1970-1996 20 2.8 Argentina industrial labor productivity relative to the US levels, 1976-2000 20 3.1 Legal tariffs rates, 1959-1997, percentage 21 3.2 Indicators of social political protest, 1956-1972 24 4.1 Argentine exports, 1980-2000 43 4.2 Estimates of the effective tariff protection levels 1991 and 1997 53 4.3 Average S&T expenditures and R&D expenditures as a percentage of GDP 67 4.4 Performance and innovative activities, 718 firms, 1992-2001 77 4.5 Performance of innovators vs. non-innovators, 1992-2001 78 4.6 Performance of domestic vs foreign firms 1992-2001 78 4.7 Net schooling rates 1980-1997 85 4.8 First level university graduates, 1990&1999 88 4.9 Shares of employment by education groups, 1980-1998 90 4.10 Hourly wages groups, greater Buenos Aires, 1980-1998 90 iv Argentina List of graphs Page 2.1 Argentine’s foreign trade as a percentage of domestic tradable production, 6 1891-1999, 1993 constant prices 2.2 Evolution of Argentine’s GDP per capita as % of the average GDP per capita 7 of USA, UK, France, Germany, Italy, Japan, Canada, Australia, New Zealand 2.3 Per capita GDP, 1990 international Geary Khamis dollars, 1961-2000 9 2.4 Inflationary tax on the monetary base and real exchange rate index ARG- 11 USA, 1958-2002 2.5 Urban Unemployment rates 1969-1989, % 14 2.6 TFP growth, 1961-2000, index numbers 1961=100 15 2.7 Sources of growth, 1961-2000, index numbers, 1961=100 16 2.8 Manufacturing Industry: Labour productivity by worker, 1961-2000, index 17 number 1961=100 2.9 Physical volume of production and workers, 1961-2000, index number 19 1997=100 3.1 Agricultural production and agricultural yields, Argentina thousands of tons 36 and Kg/ha, 1900-2000 3.2 Argentina’s agricultural yields as a % of US yields, 1990-2000 37 v Productivity peformance vi Argentina Executive summary Background and context In a country that has exhibited high political instability, extreme economic volatility and persistent institutional fragility it is hardly surprising to encounter a poor long-term economic performance. This was, in fact, the outcome in the period of over 40 years reviewed in this report. There were, however, two “growth spurts” with relatively good productivity during this period, the first between 1964 and 1974 and the second from 1991 to 1998. What determined productivity development during those growth spurts and why they failed to give place to a sustainable pattern of productivity growth are the key questions addressed in this report. The information available on the evolution of total-factor productivity (TFP) at the aggregate level for the period 1962-2000 is usually broken down into three periods. During the first period (1962-74), TFP growth averaged 0.5 per cent per year. In the following period (1975-90), the Argentine economy suffered one of the great depressions of the twentieth century and TFP registered negative growth. The last period covers the 1990s (until 1998), when growth was resumed and TFP grew at 2.9 per cent per year (see Table 2.1). Investment and knowledge as major determinants of productivity growth during the first spurt The first growth spurt took place against a background of persistent inflation and a recurrent balance of payments and political crisis. In this unfavorable climate, the manufacturing industry led economic growth, favored by protectionism and industrial promotion as key government policies. While the economy was virtually closed to imports of domestically produced final and intermediate goods, it was open to foreign direct investment and technology inflows and duty-free capital goods imports were allowed under industrial promotion schemes. The entrepreneurial response to this incentives regime led to a substantial growth in fixed investments – mainly undertaken by TNCs. This naturally led to a remarkable increase in industrial production capacity. Pari passu, a technological learning process took place at enterprise level and a local technological capability gradually accumulated in the manufacturing sector. This allowed both significant labor productivity gains – with rising industrial employment - and increased industrial exports. These trends were also favored by the tempering of the anti-export bias in the prevailing trade policy. At the same time, the export-oriented agricultural sector had left behind almost two decades of stagnation and was again expanding at a rapid pace. In this scenario, it seemed possible that, by the end of the ISI period, the stop-and-go cycles that had periodically affected the Argentine economy could finally be at an end, following an expansion in export capacity. vii Productivity peformance However, some of the main structural problems of the ISI period were far from being resolved, including excessive levels of vertical integration, diseconomies of scale and deficient quality standards in most of the manufacturing sector. In this economic scenario, it is hardly surprising to find that there was largely extensive GDP growth in the period 1962-74 based on factor accumulation, while TPF growth was relatively low. Public policies in place during this period did little to address these issues. Protectionism cum technology imports formed the basis of the “developmentalist” project, which aimed at “completing” the Argentine industrial structure by promoting investments in heavy goods and capital-intensive sectors. Efficiency, quality, export or domestic technological development were, at best, secondary objectives, and only in the late 1960s were some of those issues addressed for the first time by public policies, albeit in an increasingly unstable political environment. Institutional fragility also impaired the impact of public policies on problems such as access to finance, given the frequent changes both in the public authorities and in policy orientations.
Load more

Recommended publications
  • Restoring Economic Growth in Argentina
    マーク色指定C10M100Y100 JBICI Research Paper No. 27 Restoring Economic Growth in Argentina January 2004 JBIC Institute Japan Bank for International Cooperation JBICI Research Paper No.27 Restoring Economic Growth in Argentina January 2004 JBIC Institute Japan Bank for International Cooperation JBICI Research Paper No. 27 Japan Bank for International Cooperation (JBIC) Published in January 2004 © 2004 Japan Bank for International Cooperation All rights reserved. This Research Paper is based on the findings and discussions of the JBIC. The views expressed in this paper are those of the authors and do not necessarily represent the official position of the JBIC. No part of this Research Paper may be reproduced in any form without the express permission of the publisher. For further information please contact the Planning and Coordination Division of our Institute. Foreword About two years have passed since Argentina faced the onset of what Dr. Cline calls the 3D economic collapse: default, devaluation, and depression. In 2002 the country’s GDP contracted by 11 per cent, the worst on its record. Despite the substantial depreciation of the peso, however, hyperinflation was successfully avoided. And more recently the economy has shown a substantial recovery, particularly in the manufacturing sector. On the other hand, there has been no significant progress in the banking sector reform, which is listed by Dr. Cline as a key challenge for immediate future. Furthermore, the prospects remain opaque for the sovereign debt restructuring, which Dr. Cline deems crucial for reestablishing Argentina’s credit reputation and eventual capacity to return to credit markets. After the introduction chapter, the Chapter 2 of this paper surveys the arguments on the main cause of the 3D collapse.
    [Show full text]
  • The International Monetary Fund and Latin America: the Argentine
    The International Monetary Fund and Latin America The International Monetary Fund and Latin America THE ARGENTINE PUZZLE IN CONTEXT CLAUDIA KEDAR TEMPLE UNIVERSITY PRESS Philadelphia TEMPLE UNIVERSITY PRESS Philadelphia, Pennsylvania 19122 www.temple.edu/tempress Copyright © 2013 by Temple University All rights reserved Published 2013 Library of Congress Cataloging-in-Publication Data Kedar, Claudia, 1968– Th e International Monetary Fund and Latin America : the Argentine puzzle in context / Claudia Kedar. p. cm. Includes bibliographical references and index. ISBN 978-1-4399-0909-6 (cloth : alk. paper) ISBN 978-1-4399-0911-9 (e-book) 1. International Monetary Fund—Argentina. 2. Financial crises—Argentina—History. 3. Debts, External—Argentina. 4. Argentina—Foreign economic relations. 5. Argentina— Economic policy. I. Title. HC175.K43 2013 332.1'520982—dc23 2012017782 Th e paper used in this publication meets the requirements of the American National Standard for Information Sciences—Permanence of Paper for Printed Library Materials, ANSI Z39.48-1992 Printed in the United States of America 2 4 6 8 9 7 5 3 1 For Sandy, with all my love Contents Acknowledgments ix Introduction 1 1 Multilateralism from the Margins: Latin America and the Founding of the IMF, 1942–1945 11 2 It Takes Th ree to Tango: Argentina, the Bretton Woods Institutions, and the United States, 1946–1956 32 3 Dependency in the Making: Th e First Loan Agreement and the Consolidation of the Formal Relationship with the IMF, 1957–1961 55 4 Fluctuations in the Routine of Dependency: Argentine–IMF Relations in a Decade of Political Instability, 1962–1972 88 5 All Regimes Are Legitimate: Th e IMF’s Relations with Democracies and Dictatorships, 1973–1982 119 6 Routine of Dependency or Routine of Detachment? Looking for a New Model of Relations with the IMF 151 Conclusions 184 Notes 191 References 233 Index 245 Acknowledgments his book is the result of many years of exploring and analyzing the Inter- national Monetary Fund (IMF), one of the most central and polemical T players in the current global economy.
    [Show full text]
  • Political and Economic Reform Argentina, 1989-1995
    Globalisation and State Power: Political and Economic Reform Argentina, 1989-1995 Nicola Jane Phillips Thesis submitted for the degree of Doctor of Philosophy London School of Economics and Political Science University of London UMI Number: U113661 All rights reserved INFORMATION TO ALL USERS The quality of this reproduction is dependent upon the quality of the copy submitted. In the unlikely event that the author did not send a complete manuscript and there are missing pages, these will be noted. Also, if material had to be removed, a note will indicate the deletion. Dissertation Publishing UMI U113661 Published by ProQuest LLC 2014. Copyright in the Dissertation held by the Author. Microform Edition © ProQuest LLC. All rights reserved. This work is protected against unauthorized copying under Title 17, United States Code. ProQuest LLC 789 East Eisenhower Parkway P.O. Box 1346 Ann Arbor, Ml 48106-1346 75 72 701562 Abstract The thesis examines the process by which sustained reform became possible in Argentina between 1989 and 1995 after some fifty years of cyclical crisis and ungovernability. It argues that the first administration of Carlos Menem broke the earlier ‘logic’ of Argentine politics, characterised by the suffocation of economic policy coherence by organised political interests. What needs to be explained, in this light, is not why reform happened in Argentina (- this is explained readily with reference to the crisis of 1989), but rather how it wassustained. The central contention is that the consolidation of reform can be explained convincingly with reference to international influences from around 1991/2 onwards. These influences are identified as (a) globalisation, (b) conditionality, and (c) regionalisation.
    [Show full text]
  • B. Fiscal Imbalance and Debt Sustainability
    WORKING PAPER N.9/03 Public Disclosure Authorized Restoring Economic Public Disclosure Authorized Growth in Argentina William R. Cline** Center for Global Development and Institute for International Economics Public Disclosure Authorized June 2003 This study was prepared under the auspices of Economics International, Inc. The author is grateful for financial support from General Motors Corpor ation, the Japan Bank for International Cooperation, and the World Bank. For helpful discussions during the preparation of the manuscript, he thanks Daniel Artana, Juan Luis Bour, Emilio Cardenas, Javier Finkman, Miguel Kiguel, Minister of Economy Roberto Lavagna, Daniel Marx, Guillermo Mondino, former Central Bank president Pedro Pou, Central Bank president Alfonso Prat-Gay, Andrew Powell, and Public Disclosure Authorized Federico Sturzenegger. For comments on a previous draft, he thanks Emilio Cardenas, Mario Gutierrez, Javier Finkman, Daniel Marx, Atsushi Masuda, Guillermo Perry, Andrew Powell, Luis Serven, Mario Teijeiro, Edwin M. Truman, and John Williamson. None of these individuals is responsible for any shortcomings remaining in this study. ** Joint Senior Fellow. Dr. Cline has previously been Deputy Managing Director and Chief Economist for the Institute of International Finance (1996-2001), and Senior Fellow, Institute for International Economics (1982-1995) and Brookings Institution (1973-1981). World Bank Office for Argentina, Chile, Paraguay y Uruguay – Working Paper N.9/03 TABLE OF CONTENTS SUMMARY..........................................................................................................................................................................................1
    [Show full text]
  • Keynesian Approach
    ESSAYS ON THE ARGENTINE POLITICAL ECONOMY THROUGH THE LENS OF THE CLASSICAL- KEYNESIAN APPROACH RAMIRO EUGENIO ÁLVAREZ SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE DEGREE OF DOCTOR OF PHILOSOPHY IN ECONOMICS SUPERVISOR: ARIEL DVOSKIN UNIVERSITIES OF FLORENCE, SIENA, AND PISA JOINT PHD PROGRAM IN ECONOMICS PROGRAM COORDINATOR: UGO PAGANO CYCLE XXXII — ACADEMIC YEAR: 2019-2020 CONTENTS Acknowledgements .................................................................................................... 4 Glossary of Symbols ................................................................................................... 5 Introduction ................................................................................................................ 7 1 Chapter I ...................................................................................................... 9 Prices, Distribution And Accumulation In A Peripheral Economy Through The Lens Of The Classical-Keynesian Approach. An Analytical Reconstruction Of The O’Donnell’s Argentine Pendulum (1956-1976) ...... 9 I. Introduction ................................................................................................. 9 II. O’Donnell’s Pendulum: Productive Sectors, Classes and Political Alliances in Argentina, (1956-1976) .......................................................................................... 11 III. Modelling O'Donnell's (1978a) Systems of Prices, Quantities and Relations among Productive Sectors .....................................................
    [Show full text]
  • Cambridge University Press 978-1-108-49398-7 — Oracles, Heroes Or Villains George E
    Cambridge University Press 978-1-108-49398-7 — Oracles, Heroes or Villains George E. Shambaugh Index More Information Index ABSPP. See asset-backed securities prelude to, 61–72 purchase programme Economic Emergency Law, 51, 85 Alderete, Carlos, 48 economic liberalism in, 219–220 Alfonsín, Ricardo Luis, 88 economic markets in, 60, 72, 97 Alfonsín Foulkes, Raúl Ricardo, 43–50, 57, recovery of, 89–94 99 economic policy in Final Point Law, 48 historical analysis of, 40–42 Flexibilization plan, 47 market behavior as influence on, 60, Law of Due Obedience, 48 72, 97 Alogoskoufis, Georgios, 85 economic recovery in, 72–98 Álvarez, Carlos, 66–67 in global markets, 89–94 American Recovery and Reinvestment Act IMF role in, 74–76 (ARRA), US (2009), 126–127 political consolidation as factor in, 83–89 AMLF. See Asset-Backed Commercial prudence in, 94–96 Paper Money Market Mutual Fund Final Point Law, 48 Liquidity Facility fixed exchange rates in, 212 APP. See asset purchase programme Flexibilization plan in, 47 Arafat, Yasser, 78 IMF and, 68, 90, 101 Arend, Anthony, 29 economic recovery and, 74–76 Argentina. See also Alfonsín Foulkes, Raúl sanctions by, 84 Ricardo; Duhalde, Eduardo; inflation battles in, from 1983-1996, Fernández de Kirchner, Cristina; 42–61, 44, 42–61, 43 Kirchner, Néstor; Menem, Carlos economic liberalism as influence on, Austral Plan in, 37, 99 43–50 economic market management under, economic uncertainty and, 51–54 216–217 economic victory over, 54–59 economic success of, 46, 60–61 Great Inflation Battle, 62 private sector liquidity under, 13 Great War as influence on, 59–61 Bonex Plan, 53 neo-liberalism as influence on, 54–59 Convertibility Plan, 13, 31, 57–58, Law of Due Obedience, 48 99–100, 219–220 Lock Law, 80, 86–87 debt obligations of, 79–80, 89–90 net foreign investment in, 62 Rights upon Future Offers (RUFO) Olivos Pact, 57–58 clauses, 92 populism in, resurgence of, 72–98 deference in, 32–33 private sector liquidity in, 13–14 Dirty War and, 44, 52 Austral Plan, 13 DNUs in.
    [Show full text]
  • IMF Program Design and Implementation in Argentina, 1991–2002
    International Institutions and State Leverage: IMF Program Design and Implementation in Argentina, 1991–2002 by GUO JIN DARYL ENG PRIMARY THESIS ADVISOR: PROFESSOR JONATHAN EATON Department of Economics and The Watson Institute for International Studies SECONDARY THESIS ADVISOR: PROFESSOR MARK BLYTH Department of Political Science and The Watson Institute for International Studies HONORS SEMINAR INSTRUCTOR: PROFESSOR CLAUDIA J. ELLIOTT The Watson Institute for International Studies SENIOR THESIS Submitted in partial fulfillment of the requirements for the Degree of Bachelor of Arts with Honors in International Relations BROWN UNIVERSITY PROVIDENCE, RI MAY 2015 © Copyright 2015 by Guo Jin Daryl Eng This thesis by Guo Jin Daryl Eng is accepted in its present form by the International Relations Program as partial fulfillment of the requirements for the degree of Bachelor of Arts with Honors. Date Jonathan Eaton, Thesis Advisor Date Mark Blyth, Second Reader Approved by the International Relations Program Date Dr. Claudia J. Elliott Director/Associate Director, International Relations Program iii ABSTRACT What factors determine IMF program design and implementation in borrower countries? Scholars tend to focus on the ex post effects of programs, while comparatively little attention is paid to the design and implementation of program conditionality. Understanding the problems programs are designed to address and the circumstances behind their interruption or completion, however, is essential for an accurate evaluation of their effects. In contrast to existing explanations that dichotomize factors influencing the IMF and those influencing borrower countries, I argue that a more nuanced approach which incorporates the interaction between these factors is required. Synthesizing theories of functionalism, structuralism, and principal-agent relationships with a domestic political economy approach, I offer a dynamic framework that evaluates the importance of political, institutional, and economic variables under varying circumstances.
    [Show full text]
  • ECONOMIC POLICY and the TRANSITION to DEMOCRACY Economic Policy and the Transition to Democracy the Latin American Experience
    ECONOMIC POLICY AND THE TRANSITION TO DEMOCRACY Economic Policy and the Transition to Democracy The Latin American Experience Edited by Juan Antonio Morales Professor of Economics and Econometrics Catholic University of Bolivia and Gary McMahon Senior Specialist International Development Research Centre Ottawa, Canada INTERNATIONAL DEVELOPMENT RESEARCH CENTRE Editorial matter and selection © Juan Antonio Morales and Gary McMahon 1996 Chapters 1-7 © Macmillan Press Ltd. 1996 Published in the United Kingdom in 1996 by Macmillan Press Ltd. Published in Canada in 1996 by the International Development Research Centre PO Box 8500 Ottawa, Canada KIG 3H9 Canadian Cataloguing in Publication Data Morales J. A. McMahon, G. Economic policy and the transition to democracy : the Latin American experience, Ottawa, ON, IDRC ; Houndmills, Macmillan Press Ltd 1996. 000p.: ill. /Economic policy/,/democratization/./economic stabilization/,/economic reform/,/economic administration/,/Latin America/-/ Bol iv i a/,/Argentina/, /Brazil/,/Uruguay/,/Paraguay/,/Chile/,/case studies/. UDC: 338.2:321.7(8) ISBN 0-88936-747-7 (hc) ISBN 0-88936-754--X (pb) I would like to dedicate this book to all of my friends in South America who have kept up the intellectual battle through the bad as well as the good years and, incidentally, have also made my job so much more enjoyable. GARY MCMAHON Contents List of Tables x Notes on the Contributors xii Foreword xiv List of Abbreviations xv Map of Latin America xvii 1 Economic Policy after the Transition to Democracy: A Synthesis
    [Show full text]
  • Copyright by Jared Steven Berenter 2013
    Copyright by Jared Steven Berenter 2013 The Report Committee for Jared Steven Berenter Certifies that this is the approved version of the following report: Expanding the Central Bank Mandate in the “Soy Republic”: An Assessment of the Impact of Central Bank Governance on Agricultural Competitiveness and Interest Articulation in Argentina APPROVED BY SUPERVISING COMMITTEE: Supervisor: Chandler W. Stolp Co-Supervisor: James K. Galbraith Expanding the Central Bank Mandate in the “Soy Republic”: An Assessment of the Impact of Central Bank Governance on Agricultural Competitiveness and Interest Articulation in Argentina by Jared Steven Berenter, B.A. Report Presented to the Faculty of the Graduate School of The University of Texas at Austin in Partial Fulfillment of the Requirements for the Degrees of Master of Arts and Master of Global Policy Studies The University of Texas at Austin August 2013 Abstract Expanding the Central Bank Mandate in the “Soy Republic”: An Assessment of the Impact of Central Bank Governance on Agricultural Competitiveness and Interest Articulation in Argentina Jared Steven Berenter, M.A./M.G.P.S. The University of Texas at Austin, 2013 Supervisor: Chandler W. Stolp Co-Supervisor: James K. Galbraith This paper examines the impact of a new Central Bank mandate on agricultural competitiveness and on the ability of the agricultural sector to articulate its policy interests within Argentina’s policymaking process. Reforms to Argentina’s Central Bank charter, passed into law in April 2012, loosened restrictions on Central Bank lending to Argentina’s Treasury and authorized the Central Bank to act to reduce unemployment and spur economic development. The Central Bank carries out its new mandate within a policymaking process characterized by strong presidential authority, weak political institutions, powerful provincial governments, and a budget system that politicizes the transfer of fiscal resources from the federal government to the provinces.
    [Show full text]