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Skills and Multinational Production
Full text linkThis paper provides new evidence on the role of human capital in shaping economies participation in multinational production. In particular, we primarily examine whether and to what extent the level of English language mastery among countries inhabitants affects the presence of multinational firms in their territories. To do so, we combine data on multinational firms foreign subsidiaries worldwide and data on English proficiency of possible host countries populations. Our estimates suggest that countries whose populations have higher levels of English proficiency attract more multinational firms. The same holds for economies with higher shares of individuals with advanced digital skills
Harnessing the Bioeconomy-Climate Nexus for Sustainable Development
Full text linkThe bioeconomy is a sustainable socio-economic model focused on the renewable use of biological resources to address climate change, food security, economic development, and poverty reduction. Its global value is currently estimated at US30 trillion with targeted support. Since the launch of the G20 Initiative on Bioeconomy in 2024, it has gained international attention, emphasizing its role in nature-based solutions and financing. The bioeconomy offers significant potential for climate mitigation, adaptation, and resilience by providing sustainable alternatives to carbon-intensive products, promoting regenerative agricultural practices, supporting scientific innovations, and contributing to sectors like tourism and gastronomy. As it grows sustainably, it promises substantial ecological, social, and economic benefits
Boosting Foreign Direct Investment through Strategic Reforms
Full text linkThe main objective of this study is to analyze the relevance of economic and institutional factors in shaping the dynamics of Foreign Direct Investment (FDI). To this end, several econometric analyses are conducted to examine the determinants of FDI inflows. The results indicate that, across a panel of countries, factors such as market size, exchange rate policy, the degree of trade openness, and the quality of public governance including political stability, adherence to the rule of law, government efficiency, and regulatory quality are decisive for attracting foreign capital. In the specific case of Brazil, the study reveals that both domestic and external factors significantly influence capital inflows. GDP growth, a more appreciated exchange rate, greater openness to international trade, macroeconomic stability, and a more developed financial market with improved access to credit constitute fundamental elements for attracting international investors. Furthermore, a favorable external environment, particularly in periods of buoyant global stock markets, also contributes to increased capital flows to the country
Digital Technologies and Collective Transport: Testing microtransits Added Value
Full text linkMicrotransit services are a midpoint between standard ride-hailing services and conventional bus fleets from public transit. Microtransit utilizes small buses or vans to provide on-demand shared transport, allowing users to reserve seats, track their trips, and receive real-time estimates of pick-up and drop-off times. While public transit systems in the Latin American and the Caribbean (LAC) region are the subject of critical and often contentious policy debates with frequent references to user discontent and an overall decline in quality, microtransit is emerging as an alternative that could improve existing transit systems. Microtransit is argued to be an effective means to extend the coverage of transit services in transit deserts, operating in areas without transit routes and where investments in stations and infrastructure might not be cost effective. Despite its potential benefits, microtransit remains under studied in the LAC region. Based on survey data gathered for Barranquilla, Colombia, and Mexico City, Mexico, this research examines the added value of digital technology features in microtransit. This paper explores individuals\u27 perceptions of the Information and Communication Technology (ICT) features present in microtransit and different variables mediating such perceptions. Employing factor analysis, and Structural Equation Models (SEM), ICT features are considered as latent variables and placed as the main outcome of the SEM. Other latent variables encompassing perceptions, such as the quality and safety of public transit, are also included in the model. Results indicate that individuals with pro-car attitudes and those who own cars are more likely to prefer ICT features in microtransit, suggesting a potential for modal shift. Similarly, insecurity in public transit also explains favorable perceptions about the ICT features in microtransit. We also found that higher levels of technological savviness and being a ride-hailing adopter are related to increased valuations of microtransit
Research Insights: How Can Behavioral Economics Training Improve Policymakers Decisions?
Full text linkPolicymakers are not immune to behavioral biases that impair decision-making. A large-scale online behavioral economics course significantly improved problem-solving and policy-relevant reasoning among participants. Training policymakers in behavioral insights can be an effective and scalable tool to improve public decision-making
Beyond Cash: The Digital Payments Revolution in Latin America and the Caribbean
Full text linkThis report explores the rapid and transformative shift from cash-based to digital payment systems across Latin America and the Caribbean. The report documents diverse national experiences, highlighting that there is no one-size-fits-all model for success. Instead, progress hinges on solving key market failuressuch as lack of interoperability, coordination problems, and barriers to entrywhile fostering trust and inclusion. It emphasizes the importance of aligning technology, regulation, and incentives to build robust and inclusive payment ecosystems. The report also emphasizes remaining challenges, such as leveraging modern payment systems to further expand access to other financial services like credit and ensuring that well-intentioned policies do not generate unintended effects in a region with high informality. The analysis lays out a promising research and policy agenda for Latin America and the Caribbean
Securing Internet of Medical Things (loMT) Components
Full text linkThe purpose of this publication is to help organizations in the health sector reduce the attack surface by carrying out actions and controls to harden medical equipment based on the Internet of Medical Things (IoMT). The document also establishes and contains a dedicated controls bank for protecting components in the network environment, protecting the network from attack and network hopping, as well as controls for reducing cyberrisks from external environments, thus helping institutions and users reduce cyberrisks present in Internet of Things (IoT) based medical devices within the organization. This publication is part of the "Cybersecurity Best Practices" collection, a compendium of practices, methodologies and recommendations in cybersecurity oriented to organizations, developed by the Israel National Cyber Directorate (INCD), and adapted in this series by the Inter-American Development Bank (IDB), with the objective of facilitating access to this body of knowledge throughout the Latin American and Caribbean region
Labor Income Tax Progressivity with a Large Informal Sector (Discussion Paper)
Full text linkWe study labor income tax progressivity in an economy with a large informal sector. When the cost of informality rises with productivity, greater progressivity can simultaneously reduce inequality and enhance efficiency. We extend a standard heterogeneous-agent incomplete markets model to include workers choice between formal and informal employment, calibrating it to Brazilian data. The informal sector features a distinct productivity process and partial tax avoidance, consistent with empirical evidence. A policy experiment shows that increasing progressivity lowers inequality and raises GDP without reducing government revenues. The results offer a novel rationale for progressive taxation in economies with widespread informality
On the Impact of Climate Change Scenarios on Bank Solvency in an Emerging Economy: The Case of Colombia
Full text linkOver the last few decades, climate change has become a pressing issue due to its potentially deleterious effects on economic and social conditions worldwide in the years to come. These impacts can be expected to spill over to many markets, including the financial system. This paper seeks to quantify the potential long-run impact of climate risk on bank solvency in Colombia. To that end, it describes and classifies the risks climate change poses to banking system stability. It also reviews recent research to quantify its effects, with a particular emphasis on the nascent literature on developing and emerging economies. The paper presents new evidence for Colombia by developing a straightforward stress test methodology that provides an initial estimate of potential effects related to climate change scenarios. To implement the simulation, sectoral elasticities of non-performing loans to sectoral GDP growth are estimated for the first time, to the best of our knowledge. Given the low depth of credit in economic sectors highly vulnerable to climate change, the impacts of extreme climate change scenarios are not sizeable. However, in extreme scenarios, there could be simultaneous bank failures that may raise concern about their impact on overall financial stability
Revenue Statistics in Latin America and the Caribbean 2025
Full text linkThis report compiles comparable tax revenue statistics over the period 1990-2023 for 27 Latin American and Caribbean (LAC) countries. It provides harmonised data on the level and structure of tax revenues based on the OECD classification of taxes, thereby enabling comparison of national tax systems on a consistent basis, both across the region and with other economies globally. The report includes two special features: one examines non tax revenues in the LAC region while the second analyses fiscal revenues from non renewable natural resources in the LAC region in 2023 and 2024. The publication is jointly undertaken by the OECD Centre for Tax Policy and Administration, the OECD Development Centre, the Inter-American Center of Tax Administrations (CIAT), the Economic Commission for Latin America and the Caribbean (UN-ECLAC) and the Inter-American Development Bank (IDB)