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Latin America and the Caribbean Economic Review, October 2024: Taxing Wealth for Equity and Growth
(Washington, DC: World Bank, 2024-10-09) Maloney, William; Zambrano, Jorge Andres; Vuletin, Guillermo; Beylis, Guillermo; Garriga, Pablo
The report highlights the progress made on inflation and, despite some resistance in the last mile, the resulting fall in interest rates that will ease pressures on debt service and investment. However, growth is projected to remain low, debt remains high, private and public investment is depressed, and the region appears to be missing the boat on nearshoring FDI. The need to generate more fiscal space, reduce the high corporate tax burden, and mitigate persistent inequality have moved wealth taxes to center stage. But traditional wealth taxes on financial assets face challenges due to the ease of moving and hiding assets which will be difficult to control without elusive global coordination. A viable alternative is a tax on real estate which is less mobile, easier to track, and less of a distortionary burden on economic activity, given the low initial rates. Property taxes also have the potential to reduce the excessive dependence of subnational governments on federal transfers. For property taxes to play a greater role, there must be improvements in property valuation which can be engineered through the use of digital platforms and centralized land registries.
Recipe for a Livable Planet: Achieving Net Zero Emissions in the Agrifood System
(Washington, DC: World Bank, 2024-09-20) Sutton, William R.; Lotsch, Alexander; Prasann, Ashesh
The global agrifood system has been largely overlooked in the fight against climate change. Yet, greenhouse gas emissions from the agrifood system are so big that they alone could cause the world to miss the goal of keeping global average temperatures from rising above 1.5 centigrade compared to preindustrial levels. Greenhouse gas emissions from agrifood must be cut to net zero by 2050 to achieve this goal. Recipe for a Livable Planet: Achieving Net Zero Emissions in the Agrifood System offers the first comprehensive global strategic framework to mitigate the agrifood system’s contributions to climate change, detailing affordable and readily available measures that can cut nearly a third of the world’s planet heating emissions while ensuring global food security. These actions, which are urgently needed, offer three additional benefits: improving food supply reliability, strengthening the global food system’s resilience to climate change, and safeguarding vulnerable populations. This practical guide outlines global actions and specific steps that countries at all income levels can take starting now, focusing on six key areas: investments, incentives, information, innovation, institutions, and inclusion. Calling for collaboration among governments, businesses, citizens, and international organizations, it maps a pathway to making agrifood a significant contributor to addressing climate change and healing the planet.
Research for Innovation in Health Systems - Improving the Management of Health Care Services for Patients with Multiple Chronic Conditions in Three Latin American Countries: Brazil, Colombia and Uruguay - Key Messages
(Washington, DC: World Bank, 2024-06-24) World Bank
The accelerated aging of the Brazilian population, alongside the gradual increase in the concomitant occurrence of multiple chronic diseases in the same individual, brings important challenges to the Brazilian National Health System (SUS). n Colombia, during 2012 - 2016, multimorbidity had a prevalence of 19.5 percent for all ages, according to data from the study carried out by the World Bank and the Ministry of Health and Social Protection. The investigation also showed an increase in the use and cost of health services associated with older age and the complexity of multimorbidity, in an aging population that shifts its epidemiological profile towards chronic diseases. The expenditure with patients with multimorbidity in Uruguay is high. Persons with five or more of diseases (Cardiovascular Disease, High Blood Pressure, Diabetes, Chronic Obstructive Pulmonary Disease and Degenerative Neurological Disease) represent 8.44 percent of the total patient population, but their care accounts for 42.07 percent of the total expenditure, and 50.48 percent of the expenditure on medications.
Latin America and the Caribbean Economic Review, April 2024 - Competition: The Missing Ingredient for Growth?
(Washington, DC: World Bank, 2024-04-10) Maloney, William; Garriga, Pablo; Meléndez, Marcela; Morales, Raúl; Jooste, Charl; Sampi, James; Araujo, Jorge Thompson; Vostroknutova, Ekaterina
Latin America and the Caribbean has made slow but consistent progress addressing the imbalances induced by the pandemic in an international environment that is just now showing signs of stabilizing. Despite favorable macroeconomic management, high interest rates and fiscal imbalances remain challenging while growth rates remain lackluster due to long-standing structural issues. Looking forward, an aging workforce and rising violence will increasingly complicate policy. This report focuses particularly on weak competitive forces as a source of low productivity, low growth, and low welfare in LAC. It emphasizes the need for effective competition institutions, pro-competition regulatory frameworks, complementary policies to improve the capabilities of workers and firms, and enhanced innovation systems, to prepare local industries to reach the technological frontier and face global competition. Furthermore, the report underscores the need for reforms to prevent large businesses from exerting undue political influence over policy decisions.
Adaptation of the Calculator of Social and Environmental Impacts from Small-Scale Gold Mining in the Amazon: Application in Frontier Regions between Brazil, Colombia and Peru
(Washington, DC: World Bank, 2023-11-09) World Bank
Over the past decade, illegal gold extraction has increased significantly in the Amazon region, partly due to the high international prices of this mineral, the less stringent attitude of some countries in relation to the environment and the pursuit of immediate economic opportunities. Furthermore, this illicit activity is closely intertwined with other illegal practices, such as drug trafficking, human trafficking, and the trafficking of endangered species. This has repercussions not just for the region's ecological wealth, but also for the physical well-being of those safeguarding their lands and the health of communities living in proximity to the extraction zones due to the contamination of their rivers and, consequently, their primary sources of food, such as fish. Despite the international effort to recognize the socio-environmental repercussions of this activity, there are still gaps on this issue, mainly due to the economic losses that this activity represents.
Latin America and the Caribbean Economic Review, October 2023 - Wired: Digital Connectivity for Inclusion and Growth
(Washington, DC: World Bank, 2023-10-04) Zambrano Riveros, Jorge Andres; Beylis, Guillermo; Maloney, William; Vuletin, Guillermo
Latin America and the Caribbean continues to face adverse global headwinds: high interest rates, modest G-7 growth, soft commodity prices and uncertain prospects in China will all depress growth. Well-grounded policy responses have led to largely recovering employment and income losses from the pandemic and falling rates of inflation. However, the region faces the mutually reinforcing triple challenges of low growth, limited fiscal space, and citizen dissatisfaction. Expanding digital connectivity offers a possibility to make progress on all three fronts. To maximize the social benefits of connectivity as well as to ensure that it does not exacerbate spatial, educational, gender or racial inequalities, three challenges are important to address: first, expanding coverage to the remaining unconnected areas as well as improving the quality of service; second, increasing the productive use of existing infrastructure, and; third, as with any other infrastructure "hardware," investments in "software" - such as digital and traditional skills, managerial capabilities, supportive regulatory frameworks, and deeper financial markets are critical.
World Bank Annual Report 2023: A New Era in Development
(Washington, DC: World Bank, 2023-09-28) World Bank
This annual report, which covers the period from July 1, 2022, to June 30, 2023, has been prepared by the Executive Directors of both the International Bank for Reconstruction and Development (IBRD) and the International Development Association (IDA)—collectively known as the World Bank—in accordance with the respective bylaws of the two institutions. Ajay Banga, President of the World Bank Group and Chairman of the Board of Executive Directors, has submitted this report, together with the accompanying administrative budgets and audited financial statements, to the Board of Governors.
Collapse and Recovery: How the COVID-19 Pandemic Eroded Human Capital and What to Do about It
(Washington, DC: World Bank, 2023) Schady, Norbert; Holla, Alaka; Sabarwal, Shwetlena; Silva, Joana; Yi Chang, Andres
Worldwide, the COVID-19 pandemic has been an enormous shock to mortality, economies, and daily life. But what has received insufficient attention is the impact of the pandemic on the accumulation of human capital—the health, education, and skills—of young people. How large was the setback, and how far are we still from a recovery? Collapse and Recovery estimates the impacts of the pandemic on the human capital of young children, school-age children, and youth and discusses the urgent actions needed to reverse the damage. It shows that there was a collapse of human capital and that, unless that collapse is remedied, it is a time bomb for countries. Specifically, the report documents alarming declines in cognitive and social-emotional development among young children, which could translate into a 25 percent reduction in their earnings as adults. It finds that 1 billion children in low- and middle-income countries missed at least one year of in-person schooling. And despite enormous efforts in remote learning, children did not learn during the unprecedentedly long school closures, which could reduce future lifetime earnings around the world by US$21 trillion. The report quantifies the dramatic drops in employment and skills among youth that resulted from the pandemic as well as the substantial increase in the number of youth neither employed nor enrolled in education or training. In all of these age groups, the impacts of the pandemic were consistently worse for children from poorer backgrounds. These losses call for immediate action. The good news is that evidence-based policies can recover these losses. Collapse and Recovery reviews governments’ responses to the pandemic, assessing why there was a collapse in human capital accumulation, what was missing in the policy architecture to protect human capital during the crisis, and how governments can better prepare to withstand future shocks. It offers concrete policy recommendations to recover losses in human capital—programs that will end up paying for themselves in the long term. To better prepare for future shocks such as climate change and wars, the report emphasizes the need for solutions that bring health, education, and social protection programs together in an integrated human development system. If countries fail to act, the losses in human capital documented in this report will become permanent and last for multiple generations. The time to act is now.
New Approaches to Closing the Fiscal Gap
(Washington, DC : World Bank, 2022-10-04) World Bank
As the COVID‐19 crisis recedes, Latin America and the Caribbean (LAC) is back to work and looking forward. Reported deaths related to the pandemic are low and have plausibly converged to global levels. Yet low vaccination rates in some countries leave them vulnerable to new variants. In most countries, gross domestic product (GDP) and employment have fully recovered their 2019 levels, although forecasted growth rates might be said to be “resiliently mediocre”: banking systems appear sound, and rising debt burdens are manageable so far, but growth is not expected to exceed the low levels of the 2010 decade. Poverty in terms of income (monetary poverty) has largely receded with the economic recovery, but the longer‐term scars of the pandemic in terms of education and health have planted deep seeds of future inequality. Redressing these problems and undertaking the structural reforms needed to reach higher levels of growth and reduce poverty remain central on the policy agenda. The new and unwelcome entrant in the policy space is inflation. While comparable to advanced country levels and well managed by regional monetary authorities, inflation nonetheless is being propelled by forces that may give it more staying power than originally hoped. Finally, public deficits induced by the pandemic and the need to finance critical government programs and directions have opened a fiscal gap and led to constrained fiscal space. The need to close the fiscal gap, put debt on a sustainable footing, and generate fiscal space to finance necessary physical and social investments has led to a search for new revenues and in particular to pressure to increase income taxes. In looking at any tax hike, concerns center on the possible depressive effects on growth, overall progressivity, and possible incentives for informality. This report presents new evidence on these effects for value added taxes (VAT) and income taxes. It also advocates for steps to cut wasteful government spending and increase government efficiency - both to generate substantial resources and as an entry point to a broader agenda of state modernization and generating public trust.
Improving Effective Coverage in Health: Do Financial Incentives Work?
(Washington, DC: World Bank, 2022-05-11) de Walque, Damien; Kandpal, Eeshani; Wagstaff, Adam; Friedman, Jed; Neelsen, Sven; Piatti-Fünfkirchen, Moritz; Sautmann, Anja; Shapira, Gil; Van de Poel, Ellen
In many low- and middle-income countries, health coverage has improved dramatically in the last two decades, but health outcomes have not. As such, effective coverage -- a measure of service delivery that meets a minimum standard of quality -- remains unacceptably low. This Policy Research Report examines one specific policy approach to improving effective coverage: financial incentives in the form of performance-based financing (PBF) or financial incentives to health workers on the front lines. The report draws on a rich set of rigorous studies and new analysis. When compared to business-as-usual, in low-income settings with centralized health systems PBF can result in substantial gains in effective coverage. However, the relative benefits of PBF are less clear when it is compared to two alternative approaches, decentralized facility financing which provides operating budget to frontline health services with facility autonomy on allocation, and demand-side financial support for health services (i.e., conditional cash transfers and vouchers). While PBF often results in improvements on the margins, closing the substantial gaps in effective health coverage is not yet within reach for many countries. Nonetheless, there are important lessons learned and experiences from the roll-out of PBF over the last decade which can guide health policies into the future.