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Maloney, William Francis

Office of the Chief Economist Latin America and the Caribbean Region
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Innovation, Labor Economics, Trade, Productivity, Private Sector Development, Financial Sector, Spatial economics
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Office of the Chief Economist Latin America and the Caribbean Region
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Last updated April 4, 2023
Biography
William F. Maloney is Chief Economist for the Latin America and Caribbean (LAC) region. Mr. Maloney, a U.S. national, joined the Bank in 1998 as Senior Economist for the Latin America and Caribbean Region. He held various positions including Lead Economist in the Office of the Chief Economist for Latin America, Lead Economist in the Development Economics Research Group, Chief Economist for Trade and Competitiveness and Global Lead on Innovation and Productivity. He was most recently Chief Economist for Equitable Growth, Finance and Institutions (EFI) Vice Presidency. From 2011 to 2014 he was Visiting Professor at the University of the Andes and worked closely with the Colombian government on innovation and firm upgrading issues. Mr. Maloney received his PhD in Economics from the University of California Berkeley (1990), his BA from Harvard University (1981), and studied at the University of the Andes in Bogota, Colombia (1982-83). His research activities and publications have focused on issues related to international trade and finance, developing country labor markets, and innovation and growth, including several flagship publications about Latin America and the Caribbean.He has published in academic journals on issues related to international trade and finance, developing country labor markets, and innovation and growth as well as several flagship publications of the Latin American division of the Bank, including Informality: Exit and Exclusion;  Natural Resources: Neither Curse nor Destiny and Lessons from NAFTA, Does What you Export Matter: In Search of Empirical Guidance for Industrial Policy. Most recently, he published The innovation paradox: Developing Country Capabilities the Unrealized Potential of Technological Catch-Up and Harvesting Prosperity: Technology and Productivity Growth in Agriculture as part of the World Bank Productivity Project.  
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Now showing 1 - 7 of 7
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    Foreign Informational Lobbying Can Enhance Tourism : Evidence from the Caribbean
    ( 2009) Gawande, Kishore ; Maloney, William ; Montes-Rojas, Gabriel
    There exist legal channels for informational lobbying of US policymakers by foreign principals. Foreign governments and private sector principals frequently and intensively use this institutional channel to lobby on trade and tourism issues. This paper empirically studies whether such lobbying effectively achieves its goal of trade promotion in the context of Caribbean tourism, and suggests the potential for using foreign lobbying as a vehicle for development. Panel data are used to explore and quantify the association between foreign lobbying by Caribbean principals and US tourist arrivals to Caribbean destinations. A variety of sensitivity analyses support the finding of a strong association. The policy implications are obvious and potentially important for developing countries.
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    Trade Policy, Income Risk, and Welfare
    ( 2010) Krebs, Tom ; Krishna, Pravin ; Maloney, William
    This paper develops a framework to study empirically the relationship between trade policy and individual income risk and to evaluate the associated welfare consequences. The analysis proceeds in three steps. First, longitudinal data on workers are used to estimate time-varying individual income risk parameters in various manufacturing sectors. Second, the estimated income risk parameters and data on trade barriers are used to analyze the relationship between trade policy and income risk. Finally, a simple dynamic incomplete-market model is used to assess the corresponding welfare costs. In the implementation of this methodology using Mexican data, we find that trade policy changes have a significant short-run effect on income risk. Further, while the tariff level has an insignificant mean effect, it nevertheless changes the degree to which macroeconomic shocks affect income risk.
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    In Search of the Missing Resource Curse
    ( 2008-10) Lederman, Daniel ; Maloney, William F.
    In "In Search of the Missing Resource Curse," Lederman and Maloney critically tackle the problem of whether the natural resource curse exists. The idea that countries rich in natural resources are "doomed" by the existence of their lucky endowment has been in the minds of economists for more than 200 years. Perhaps the most important empirical findings supporting the natural resource curse are the seminal contributions by Jeffrey Sachs and Andrew Warner, who consistently find that countries rich in natural resources tend to grow more slowly than their unendowed counterparts. Many have questioned this view, although the two most prominent critics have been Lederman and Maloney. In this paper, they argue that the channels through which the natural resource curse is most commonly thought to operate are not empirically relevant and most of them are theoretically questionable. The paper builds on earlier work to illustrate that the existing stylized fact of a curse is inconclusive at best. The authors use a better measure for resource intensity than what previous researchers have used and find no evidence of a curse. This is a thought-provoking and carefully crafted paper that convincingly argues against one of the strongest views supported by the conventional wisdom.
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    Comparative Analysis of Labor Market Dynamics Using Markov Processes : An Application to Informality
    ( 2010) Bosch, Mariano ; Maloney, William F.
    This paper discusses a set of statistics for examining labor market dynamics in developing countries and offers a simple search model that informs their interpretation. It then employs panel data from Argentina, Brazil and Mexico to generate a set of preliminary stylized facts about patterns of sectoral transition and duration. Finally, it nests two competing views of the informal sector within the model and uses variation in the statistics across age and the business cycle to help discriminate between them. The results suggest that a substantial part of the informal sector, particularly the self-employed, corresponds to voluntary entry, although informal salaried work may correspond more closely to the standard queuing view, especially for younger workers.
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    Does Formality Improve Micro-firm Performance? Evidence from the Brazilian SIMPLES Program
    ( 2011) Fajnzylber, Pablo ; Maloney, William F. ; Montes-Rojas, Gabriel V.
    This paper exploits an extensive Brazilian micro-enterprise survey and the 1996 introduction of a business tax reduction and simplification scheme (SIMPLES) to examine three questions. First, do high tax rates and complex tax regulations really constitute a barrier to the formalization of micro-firms? Second, does formalization improve firm performance measured along several dimensions, including revenues, employment and capital stock? Third, what are the channels through which this occurs? We find that SIMPLES led to a significant increase in formality in several dimensions. Moreover, newly created firms that opt for operating formally show higher levels of revenue and profits, employ more workers and are more capital intensive (only for those firms that have employees). The channel through which this occurs is not access to credit or contracts with larger firms. Rather, it appears that the lower cost of contracting labor leads to adopting production techniques that involve a permanent location and a larger paid labor force.
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    Releasing Constraints to Growth or Pushing on a String? Policies and Performance of Mexican Micro-firms
    ( 2009) Fajnzylber, Pablo ; Maloney, William F. ; Montes-Rojas, Gabriel V.
    Using firm-level data from Mexico, this paper investigates the firm characteristics associated with participation in credit markets, access to training, tax payments, and membership in business associations. We find that firms which participate in these institutions exhibit significantly higher profits. Moreover, firms that borrow from formal or informal sources and those that pay taxes are significantly more likely to stay in business but firms that received credit exhibit lower rates of income growth. These results persist when firm characteristics that are arguably correlated with unobserved entrepreneurial ability are controlled for. Our findings suggest that the significant within-country differences in firm productivity observed in developing economies are due in part to market and government failures that limit the ability of micro-firms to reach their optimal sizes.
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    Informal Self-Employment and Macroeconomic Fluctuations
    ( 2010) Fiess, Norbert M. ; Fugazza, Marco ; Maloney, William F.
    Informal self-employment is a major source of employment in developing countries. Its cyclical behavior is important to our understanding of the functioning of LDC labor markets, but turns out to be surprisingly complex. We develop a flexible model with two sectors: a formal salaried (tradable) sector that may be affected by wage rigidities, and an informal (non tradable) self-employment sector faced with liquidity constraints to entry. This labor market is then embedded in a standard small economy macro model. We show that different types of shocks interact with different institutional contexts to produce distinct patterns of comovement between key variables of the model: relative salaried/self-employed incomes, relative salaried/self-employed sector sizes and the real exchange rate. Model predictions are then tested empirically for Argentina, Brazil, Colombia, and Mexico. We confirm episodes where the expansion of informal self-employment is consistent with the traditional segmentation views of informality. However, we also identify episodes where informal self-employment behaves "pro-cyclically"; here, informality is driven by relative demand or productivity shocks to the non tradable sector.