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Shining a Light on Resilience: Overcoming Hurricane Odile\u27s Impact on Electricity and the Economy
Get PDFOver the past decades, Latin America and the Caribbean have experienced a significant increase in natural disasters, posing significant threats to infrastructure and economic activity, particularly in regions with poor infrastructure. Understanding the patterns in recovery time after disasters is key to designing accurate responses to natural hazards. In this paper, we develop a methodological approach and use Hurricane Odile, which struck Baja California Sur, Mexico, in September 2014, as a case study to understand the recovery paths following such disasters. We rely on nighttime lights data to capture the initial impact and eventual recovery of electricity service and economic activity in the area of impact of the hurricane. We find that the average luminosity dropped to 78% of pre-hurricane levels immediately after the event and did not fully recover within a year. Impacts are heterogeneous, with localities such as Cabo San Lucas and San José del Cabo experiencing more severe impacts and slower recovery compared to La Paz, which recovered faster. These results suggest that disaster evaluation, mitigation policies, and preventive measures against disaster impacts should be tailored to local realities
A Green, Inclusive, and Sustainable Development Framework for the Amazon Region
Get PDFThis study presents the results of a development gap analysis for the Amazon Region in Bolivia, Brazil, Colombia, Ecuador, Guyana, Peru, Suriname, and Venezuela, using geospatial data and a data-drive approach. The document highlights the Amazon Region\u27s socio-environmental complexity, emphasizing the need for development initiatives to address environmental degradation, social challenges, and limited economic opportunities. A georeferenced database to analyze development gaps and inform policy decisions is then developed and applied to study 20 sectoral gaps and 3 multisectoral gaps, covering sectors such as access to drinking water, electricity, sanitation, roads, digital connectivity, green businesses, and climate resilience amongst others. The analysis concludes that almost 6 million, 661 thousand, and 760 thousand people in the Amazon Region live in areas that are marked by severe human development, economic, and environmental challenges, respectively. Finally, the geospatial framework and database developed in this study are applied to shed light on four key policy questions relating to environmental degradation, potential for green businesses, regional integration routes, and transboundary coordination opportunities. These analyses highlight the potential use for this data-driven approach, which, complemented with territorial and qualitative analyses, can provide important insights to the work of policymakers and international organizations working in the region
Research Insights: How Does Exposure to High Concentrations of Air Pollution Affect Daily Labor Supply, and Do These Effects Differ Across the Income Distribution?
Get PDFOn days with high pollution, workers reduce their labor supply, with highincome workers decreasing hours worked more than low-income workers. Workers partially compensate for lost hours of work on high-pollution days by increasing labor supply on subsequent days, and this intertemporal adjustment is more pronounced among high-income workers. When high pollution persists across days, the response to contemporaneous pollution decreases, with low-income workers reducing their response quicker than high-income workers
Buyer Market Power and Exchange Rate Pass-through
Get PDFI derive a model-based equation relating pass-through to buyer size and estimate it on the micro transaction level data for Colombia. I find that after an exchange rate shock, sellers connected to larger buyers face more moderate changes in their prices in the seller currency (i.e., lower exchange rate pass-through) than those connected to small buyers. Pass-through ranges from 1% for firms connected with the largest buyers and up to 17% for firms connected with the smallest buyers. I use the estimates from the empirical analysis to calibrate the model and propose a counterfactual where buyer market power is eliminated. Under this scenario, sellers\u27 revenues increase; however, the price in seller currency is more responsive to exchange rate shocks. I study the impact of buyer market power on international price responses to exchange rate changes. In markets with high buyer concentration, larger foreign buyers secure marked-down prices that adjust flexibly to exchange rate shocks. Using a novel dataset of Colombian export transactions, I estimate an open economy oligopsony model with endogenous markdowns, revealing that sellers connected to larger buyers experience milder price changes (1% impact) compared to those connected with smaller buyers (15% impact). These findings highlight a trade-off: while larger buyers reduce seller revenues, they also reduce sellers\u27 exposure to exchange rate volatility, emphasizing the strategic importance of buyer relationships in international markets
Stimulating Local Economies through Central Transfers: A Natural Experiment from Ecuador
Get PDFThis paper investigates the causal effects of central-to-local government transfers on local economic activity in Ecuador, utilizing exogenous variation from a reform in the intergovernmental transfer formula implemented in 2018. Addressing gaps in the fiscal decentralization literature, this study provides quasi-experimental evidence from a developing country context. Using an instrumental variables approach, we find that a 1% increase in transfers leads to a 1. 19%-1. 26% increase in local business sales, particularly for small and medium enterprises. We identify recurrent spend- ing, primarily current expenditure, such as personnel costs, as the main transmission mechanism, challenging prior literature that emphasizes investment spending. This research contributes novel empirical insights into how transfers impact local economies in middle-income countries and provides relevant policy implications for effectively structuring fiscal decentralization in resource-dependent contexts
Spain\u27s Reallocation of Global Supply Chains: Preliminary Findings
No full textThis paper explores Spains evolving role in global supply chains amid rising geopolitical tensions, protectionist policies, and the post-COVID-19 push for reshoring. It traces the transformation of Spains external sector from its 1986 accession to the European Union through the global financial crisis and the pandemic, highlighting the resilience of Spanish exports and shifts in trade balances. The study emphasizes how global value chain (GVC) disruptionsdriven by trade conflicts, climate change, and national security concernshave reshaped sourcing patterns and exposed Spain to new vulnerabilities and opportunities. Empirical analysis confirms that U.S.China trade tensions led to trade diversion, with Chinese exports redirected to Europe, including Spain. While this increased competition, it also benefited Spanish firms integrated into affected value chains. The findings underscore Spains strategic position within the EU and the importance of adaptive trade policy in a rapidly changing global landscape
Accommodating Urban Growth in Latin American and Caribbean Cities
No full text“Accommodating Urban Growth in Latin American and Caribbean Cities” is the result of a collaboration between the Inter-American Development Bank (IDB) and New York University, initiated in 2021 with the support of the Korean Government and the Korean Research Institute for Human Settlements. The main goal of the initiative, and the resulting publication, is to enhance the capacity of national and sub-national governments in Latin America and the Caribbean to implement effective territorial planning in response to projected urban growth from 2020 to 2050. Although territorial planning has historically prepared land for urban development and improved existing neighborhoods, it has struggled to keep pace with rapid urbanization, resulting in poorly planned areas, inadequate protection of natural resources, and insufficient resilience against climate risks. The book is organized in three sections. The first section present the results of the study conducted by Prof. Shlomo Angels and the Marron Institute for Urbanization at New York University. The study investigates how cities can accommodate new urban populations and elevate the standard of living of current dwellers through a new conceptual framework. The section introduces examples of international best practices in accommodating urban growth and reviews the emerging empirical evidence gathered in 70 cities for territorial planning in the LAC Region. The second section is the Atlas of the seventy cities. A series of maps, graphs, and data portray the anatomy of density of cities in the region through 3 or 7 parameters that allow to depict their transformation over the past four decades and project their potential for future growth. Campo Grande, Merida, and San Salvador are presented as case studies. Finally, the third section presents a series of strategies to plan for urban growth: guidelines for urban expansion and densification, new frameworks for sustainability, and emerging technologies
SigTierras Ecuador: National System for Rural Land Information and Management and Technology Infrastructure Program
No full textThis infographic presents the impact evaluation of the National System for Rural Land Information and Management and Technology Infrastructure Program (SigTierras) in Ecuador, focusing on women\u27s empowerment and household food security. It examines whether receiving a georeferenced cadastral map of their plot increased women beneficiaries tenure security, empowering them to participate more actively in productive and consumption decisions that lead to greater agricultural diversification and improved household food security
Connectivity and Misallocation in Multi-unit Firms
Get PDFWe study the causal effect of reducing distance-related frictions with headquarters on branch outcomes in multi-unit firms in Brazil. Exploiting the introduction of new airline routes, we compare branches that gain a direct flight to their headquarters with otherwise similar branches in the same location that do not. In contrast to prior findings from high-income country settings, improved connectivity with headquarters lowers 12-month survival and, conditional on survival, reduces service and production employment. To interpret these results, we develop a model with three distance-dependent frictions: i) internal coordination costs of delivering headquarters inputs to branches, ii) client-service costs when serving markets without a local branch, and iii) a moral-hazard friction whereby distance amplifies local managers\u27 incentives to over-hire. Consistent with the model\u27s predictions, survival declines are larger at closer branches, while employment reductions are concentrated at more distant branches and in firms with lower headquarters bandwidth. The model clarifies how the impact of reduced frictions with headquarters depends on pre-existing distortions and reconciles heterogeneous connectivity effects observed across developing- and high-income contexts
Belize: Making an Impact to Improve Lives Selected Results in IDB Group-supported Projects on Climate Change and Education
No full textTwo of the development challenges that Belize has recently worked on, with support from the IDB Group, are vulnerability to climate change and educational quality. The measures implemented on both fronts have allowed relevant achievements. In terms of climate resilience, flooding has been significantly reduced, as a result of investments in infrastructure and, especially, in nature-based solutions. Regarding the quality of education, progress has been made with innovative pedagogical models and teaching in STEAM areas (science, technology, engineering, arts and mathematics)