Person:
Lopez, J. Humberto

Latin America and the Caribbean

Fields of Specialization

Latin America, Remittances, Pro-Poor Growth, Poverty

Departments

Latin America and the Caribbean

Last updated February 1, 2023

Biography

Humberto Lopez is the World Bank Director of Strategy and Operations for the Latin America and the Caribbean Region. In this position, he oversees the day-to-day operations of the institution in the region and contributes to the definition and successful implementation of the strategic vision for Latin America. Previously, he was the World Bank Country Director for Central America (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama). In that position, he managed the support and technical cooperation programs, financing operations and the studies of these six nations. Before that, he was Director of Economic Policy and Poverty Reduction in Latin America and the Caribbean at the World Bank. In addition, Lopez has an extensive publication record in areas such as fiscal policy, exchange rates, armed conflict and growth. He has also been editor of three books on FTAs, remittances and development, and investment climate in Latin America, and was the principal author of the flagship report of the World Bank's Latin America 2006 on growth and poverty reduction. Before joining the World Bank, Lopez was professor of economics at the University of Salamanca (Spain) and visiting professor at Louisiana State University, Baton Rouge (USA). Lopez received a BA from the University of the Basque Country, where he studied economics. He then studied at the University of Warwick (UK), where he earned his master's (1991) before attending the University Institute.

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Publication Search Results

Now showing 1 - 10 of 17

Tango with the Gringo: the Hard Peg and Real Misalignment in Argentina

(World Bank, Washington, D.C., 2004-06) Alberola, Enrique ; López, Humberto ; Servén, Luis

Between 1990 and 2001 the Argentine peso appreciated by 80 percent in real terms, and its overvaluation has been singled out as one of the main suspects in the debate on the causes of the Argentina collapse of late 2001. This paper assesses the degree of real misalignment in Argentina over the Convertibility period using a model in which the equilibrium real exchange rate is defined as the value consistent with (i) a balance of payments position where any current account imbalance is financed by a sustainable flow of international capital (external equilibrium), and (ii) traded/nontraded sector productivity differentials (internal equilibrium). Empirical implementation of the model suggests that the initial real appreciation of the peso, between 1990 and 1993, was consistent with the productivity increases that Argentina enjoyed following the stabilization of the economy after the hyperinflation of the late 1980s. But after 1996 a widening gap opened between the observed real exchange rate and that consistent with a sustainable net foreign asset position. Our estimates indicate that in 2001 the peso was overvalued by over 50 percent. The model allows us to assess how much of the overvaluation resulted from Argentina's inadequate choice of anchor currency and how much from a divergence of fundamentals between the U.S. and Argentina, ultimately due to the maintenance of policies inconsistent with the peg. We find that both factors played a role in the overvaluation accumulated between 1977 and 2001 that preceded the collapse of the Convertibility regime.
Pro-Growth, Pro-Poor: Is There a Tradeoff?

(World Bank, Washington, D.C., 2004-08) Lopez, J. Humberto

Is a pro-growth strategy always the best pro-poor strategy? To address this issue, the author provides an empirical evaluation of the impact of a series of pro-growth policies on inequality and headcount poverty. He relies on a large macroeconomic data set and estimate dynamic panel models that allows him to differentiate between the short- and long-run impacts of the policies under consideration on growth, inequality, and poverty. The author's findings indicate that regardless of their impact on inequality, pro-growth policies lead to lower poverty levels in the long run. However, he also finds evidence indicating that some of these policies may lead to higher inequality and, under plausible assumptions for the distribution of income, to higher poverty levels in the short run. These findings would justify the adoption of a pro-growth policy package as the center of any poverty reduction strategy, together with pro-poor measures that complement such a package by offsetting potential short-run increases in poverty.
The Impact of Remittances on Poverty and Human Capital : Evidence from Latin American Household Surveys

(World Bank, Washington, DC, 2007-06) Acosta, Pablo ; Fajnzylber, Pablo ; Lopez, J. Humberto

This paper explores the impact of remittances on poverty, education, and health in 11 Latin American countries using nationally representative household surveys and making an explicit attempt to account for one of the inherent costs associated with migration-the potential income that the migrant may have made at home. The main findings of the study are the following: (1) regardless of the counterfactual used remittances appear to lower poverty levels in most recipient countries; (2) yet despite this general tendency, the estimated impacts tend to be modest; and (3) there is significant country heterogeneity in the poverty reduction impact of remittances' flows. Among the aspects that have been identified in the paper that may lead to varying outcomes across countries are the percentage of households reporting remittances income, the share of remittances of recipient households belonging to the lowest quintiles of the income distribution, and the relative importance of remittances flows with respect to GDP. While remittances tend to have positive effects on education and health, this impact is often restricted to specific groups of the population.
A Normal Relationship? Poverty, Growth, and Inequality

(World Bank, Washington, DC, 2006-01) Lopez, J. Humberto ; Servén, Luis

Using a large cross-country income distribution dataset spanning close to 800 country-year observations from industrial and developing countries, the authors show that the size distribution of per capita income is well approximated empirically by a lognormal density. The 0 hypothesis that per capita income follows a lognormal distribution cannot be rejected-although the same hypothesis is unambiguously rejected when applied to per capita consumption. The authors show that lognormality of per capita income has important implications for the relative roles of income growth and inequality changes in poverty reduction. When poverty reduction is the overriding policy objective, poorer and relatively equal countries may be willing to tolerate modest increases in income inequality in exchange for faster growth-more so than richer and highly unequal countries.
Getting Real about Inequality : Evidence from Brazil, Colombia, Mexico, and Peru

(World Bank, Washington, DC, 2006-01) Servén, Luis ; López, Humberto ; Goñi, Edwin

Consumption baskets vary across households and inflation rates vary across goods. As a result, standard consumer price index (CPI) inflation may provide a misleading measure of the inflation actually faced by poor households, more so the more unequal the distribution of aggregate consumption across households. Likewise, changes in observed nominal consumption inequality may be very different from those in true inequality, that is, that measured using household-specific CPIs. The authors explore empirically these issues using household data covering nine episodes from four Latin American countries (Brazil, Colombia, Mexico, and Peru). They find that in these countries standard CPI inflation typically reflects the inflation rate faced by a rich consumer located in the 80 to 90 percentile of the distribution of consumption expenditure. In most episodes the authors also find that inflation was anti-rich-that is, the inflation faced by the richest consumers was higher than the inflation faced by the poorest consumers. As a result of this bias, the observed increases in nominal inequality generally exceed the actual changes in real inequality. These results are robust to correcting for quality change bias in the CPI, to the use of alternative price indices, and to the use of alternative inequality measures.
Panama: Locking in Success

(World Bank, Washington, DC, 2015-06-23) Koehler-Geib, Friederike ; Scott, Kinnon ; Soliman, Ayat ; Lopez, J. Humberto

Panama has made significant progress in reducing poverty in recent years, progress that compares positively to that of the rest of the Latin America and Caribbean region. This report takes stock of this progress and reflects on the constraints and opportunities that Panama faces in continuing on its path of shared prosperity and poverty reduction. The education and skills agenda, energy, public sector reform, the inclusion of indigenous peoples, and water management are identified as areas that will require attention to ensure the sustainability of Panama’s success story. Following a detailed analysis of poverty—recent trends, drivers of poverty reduction, and demographic factors—the report provides foundations to answer three main questions: • What has driven growth in Panama in recent years? • To what extent has this growth been, or not been, inclusive? • How sustainable is the growth and more generally, the development model of Panama?
El Salvador: Building on Strengths for a New Generation

(World Bank, Washington, DC, 2015-06-23) Calvo-Gonzalez, Oscar ; Lopez, J. Humberto

Since the end of the Civil War in 1992, El Salvador has advanced on both the social and political fronts. Despite this progress and the recent reductions in income inequality, poverty remains high, largely as a result of low economic growth. This Systematic Country Diagnostic argues that the challenge in El Salvador is not to identify the proximate constraints to growth, but how those constraints are inter-connected and what entry points may help break what can be characterized as "vicious circles." The Systematic Country Diagnostic identifies three inter- connected vicious circles that hamper growth and shared prosperity: (1) a cycle of low growth and violence; (2) a cycle of low growth and migration; and (3) a cycle of low growth, savings and investment. Moreover, it also notes action on the identified entry points will require a "big push" (rather than marginal interventions) that help break the existing development dynamics. But this Systematic Country Diagnostic also identifies some strengths that El Salvador could build on to propel growth. Areas of opportunity include migration with the positive impact of diaspora on development, geographic and cultural proximity to large export markets, particularly the U.S., and an industrial base that can support an expansion of the tradable sector. At 20 percent of GDP the manufacturing sector is large by Latina American and by middle-income country standards.
Costa Rica's Development: From Good to Better

(World Bank, Washington, DC, 2015-06-11) Oviedo, Ana Maria ; Sanchez, Susana M. ; Lindert, Kathy A. ; Lopez, J. Humberto

Costa Rica stands out for being among the most politically stable, progressive, prosperous, and environmentally conscious nations in the Latin America and the Caribbean region. Its development model has brought important economic, social, and environmental dividends, with sustained growth, upward mobility for a large share of the population, important gains in social indicators, and significant achievements in reforestation and conservation. However, there are a number of development challenges that need to be addressed to maintain the country’s successful development path. This Systematic Country Diagnostic takes stock of the poverty, inequality, and growth trends, addressing the following questions: To what extent has the Costa Rican development model been inclusive? What has driven growth in Costa Rica in recent years, and what are the bottlenecks that need to be addressed? How sustainable is the development model of Costa Rica economically, socially, and environmentally?
Honduras: Unlocking Economic Potential for Greater Opportunities

(World Bank, Washington, DC, 2015-10-26) Hernandez Ore, Marco Antonio ; Sousa, Liliana D. ; Lopez, J. Humberto

Honduras is Central America’s second-largest country with a population of more than 8 million and a land area of about 112,000 square kilometers. The 20th century witnessed a profound economic transformation and modernization in Honduras. Honduras’ persistent poverty is the result of long-term low per capita growth and high inequality, perpetuated by the country’s high vulnerability to shocks. First, over the past 40 years the country has experienced modest growth rates marked by considerable volatility. Second, high levels of inequality have weakened the ability for growth to reduce poverty by limiting the extent to which a large segment of the population is able to fully access physical and human capital. Third, a large share of the population is vulnerable and exposed to regular shocks - both large and small which has exacerbated poverty by destroying or slowing asset accumulation. This systematic country diagnostic (SCD) explores the drivers of these development outcomes in Honduras, and reflects on the policy priorities that should underlie a development strategy focused on eradicating poverty and boosting shared prosperity. After identifying a number of critical factors affecting the country’s development outcomes, the SCD concludes that there is a need for a comprehensive agenda that tackles simultaneously the problems that have kept the country in a low development equilibrium for many decades, as well as emerging challenges that have the potential not only to prevent progress but also worsen the current situation. The SCD also argues that the policy agenda needs to be ambitious and move away from marginal interventions in order to move Honduras from a situation where its economic potentials are just potentials to another where they become actuals.
Fiscal Redistribution and Income Inequality in Latin America

( 2011) Goni, Edwin ; Lopez, J. Humberto ; Serven, Luis

This paper documents and compares the redistributive performance of Latin American and Western European fiscal systems. Three main conclusions emerge: (i) taxes and transfers widen the difference in income inequality between the two country groups, because (ii) the redistributive impact of the fiscal system is very large in Europe and very small in Latin America; and (iii) where fiscal redistribution is significant, it is achieved mostly through transfers rather than taxes. While the priorities of pro-equity fiscal reforms vary across Latin American countries, overall the prospects for major fiscal redistribution lie mainly in raising the volume of resources available for transfers, and improving their targeting, rather than increasing the progressivity of Latin America's tax systems.