Maloney, William Francis

Person:
Maloney, William Francis

Office of the Chief Economist Latin America and the Caribbean Region

Fields of Specialization

Innovation, Labor Economics, Trade, Productivity, Private Sector Development, Financial Sector, Spatial economics

Departments

Office of the Chief Economist Latin America and the Caribbean Region

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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Publication Search Results

Now showing 1 - 10 of 27

Spatial Dimensions of Trade Liberalization and Economic Convergence : Mexico 1985-2002

(Oxford University Press on behalf of the World Bank, 2005-09-01) Aroca, Patricio ; Bosch, Mariano ; Maloney, William F.

This article employs established techniques from the spatial economics literature to identify regional patterns of income and growth in Mexico and to examine how they have changed over the period spanned by trade liberalization and how they may be linked to the income divergence observed following liberalization. The article first shows that divergence has emerged in the form of several income clusters that only partially correspond to traditional geographic regions. Next, when regions are defined by spatial correlation in incomes, a south clearly exists, but the north seems to be restricted to the states directly on the United States (U.S.) border and there is no center region. Overall, the principal dynamic of both the increased spatial dependency and the increased divergence lies not on the border but in the sustained underperformance of the southern states, starting before the North American free-trade agreement, and to a lesser extent in the superior performance of an emerging convergence club in the north-center of the country.
The Distribution of Income Shocks during Crises : An Application of Quantile Analysis to Mexico, 1992-95

(Washington, DC: World Bank, 2004-05) Maloney, William F. ; Cunningham, Wendy V. ; Bosch, Mariano

Moving beyond the simple comparisons of averages typical of most analyses of household income shocks, this article employs quantile analysis to generate a complete distribution of such shocks by type of household during the 1995 crisis in Mexico. It compares the distributions across normal and crisis periods to see whether observed differences were due to the crisis or are intrinsic to the household types. Alternatively, it asks whether the distribution of shocks during normal periods was a reasonable predictor of vulnerability to income shocks during crises. It finds large differences in the distribution of shocks by household types both before and during the crisis but little change in their relative positions during the crisis. The impact appears to have been spread fairly evenly. Households headed by people with less education (poor), single mothers, or people working in the informal sector do not appear to experience disproportionate income drops either in normal times or during crises.
Lessons from NAFTA for Latin America and the Caribbean

(Palo Alto, CA: Stanford University Press, 2004-11) Lederman, Daniel ; Maloney, William F. ; Servén, Luis

Analyzing the experience of Mexico under the North American Free Trade Agreement (NAFTA), "Lessons from NAFTA" aims to provide guidance to Latin American and Caribbean countries considering free trade agreements with the United States. The authors conclude that the treaty raised external trade and foreign investment inflows and had a modest effect on Mexico's average income per person. It is likely that the treaty also helped achieve a modest reduction in poverty and an improvement in job quality.
Convergence to the Managerial Frontier

(World Bank, Washington, DC, 2014-03) Maloney, William F. ; Sarrias, Mauricio

Using detailed survey data on management practices, this paper uses recent advances in unconditional quantile analysis to study the changes in the within country distribution of management quality associated with country convergence to the managerial frontier. It then decomposes the contribution of potential explanatory factors to the distributional changes. The United States emerges as the frontier country, not because of better management on average, but because its best firms are far better than those of its close competitors. Part of the process of convergence to the frontier across the development process represents a trimming of the left tail, much is movement of the central mass and, for rich countries, it is actually the best firms that lag the frontier benchmark. Among potential explanatory variables that may drive convergence, ownership and human capital appear critical, the former especially for poorer countries and that latter for richer countries suggesting that the mechanics of convergence change across the process. These variables lose their explanatory power as firm and average country management quality rises. Hence, once in the advanced country range, the factors that improve management quality are less easy to document and hence influence.
Why Don't Poor Countries Do R&D?

(World Bank, Washington, DC, 2014-03) Goñi, Edwin ; Maloney, William F.

Using a global panel on research and development (R&D) expenditures, this paper documents that on average poor countries do far less R&D than rich as a share of GDP. This is arguably counter intuitive since the gains from doing the R&D required for technological catch up are thought to be very high and Griffith et al (2004) have documented that in the OECD returns increase dramatically with distance from the frontier. Exploiting recent advances in instrumental variables in a varying coefficient context we find that the rates of return follow an inverted U: they rise with distance to the frontier and then fall thereafter, potentially turning negative for the poorest countries. The findings are consistent with the importance of factors complementary to R&D, such as education, the quality of scientific infrastructure and the overall functioning of the national innovation system, and the quality of the private sector, which become increasingly weak with distance from the frontier and the absence of which can offset the catch up effect. China's and India's explosive growth in R&D investment trajectories in spite of expected low returns may be justified by their importing the complementary factors in the form of multinational corporations who do most of the patentable research.
Informality Revisited

(World Bank, Washington, DC, 2003-01) Maloney, William

The author develops a view of the informal sector in developing countries primarily as an unregulated micro-entrepreneurial sector and not as a disadvantaged residual of segmented labor markets. Drawing on recent work from Latin America, he offers alternative explanations for many of the characteristics of the informal sector customarily regarded as evidence of its inferiority.
Missed Opportunities : Innovation and Resource-Based Growth in Latin America

(World Bank, Washington, DC, 2002-12) Maloney, William F.

Latin America missed opportunities for rapid resource-based growth that similarly endowed countries-Australia, Canada, Scandinavia-were able to take advantage of. Fundamental to this poor performance was deficient technological adoption driven by two factors. First, deficient national "learning" or "innovative" capacity, arising from low investment in human capital and scientific infrastructure, led to weak ability to innovate or even take advantage of technological advances abroad. Second, the period of inward-looking industrialization discouraged innovation and created a sector whose growth depended on artificial monopoly rents rather than the quasi-rents arising from technological adoption, and at the same time undermined resource-intensive sectors that had the potential for dynamic growth.
Evaluating Emergency Programs

(World Bank, Washington, DC, 2001-12) Maloney, William F.

Emergency programs are designed to soften the impact of economic crises-income shocks experienced by an entire community or country-on consumption and human capital accumulation. Of particular concern are poor people: as a result of inadequate savings or inadequate access to credit or insurance markets, the poor are unable to draw on resources from better times to offset a loss in income today. Further, the systemic nature of the shocks means that risk cannot be effectively pooled through local informal insurance mechanisms. Emergency interventions have included social funds, workfare programs, training programs, conditional transfers (linked to health center visits or children's school attendance, for example), and traditional direct, unconditional transfers in kind (such as communal tables or targeted food handouts). The author highlights some conceptual problems in choosing among these options and evaluating one program of a certain type relative to another. It argues that most such interventions can be thought of as containing both a transfer and an investment component and that their evaluation as emergency programs needs to more explicitly incorporate the intertemporal nature of their design. More specifically, the mandated investments in physical or human capital will benefit the poor, but only in the future-after the crisis-and their implementation diverts resources from alleviating present hardship. This needs to be reflected in the discount factor used to evaluate these investments. Maloney argues that the way emergency programs are financed, particularly the way the burden is shared between central and municipal governments, also has important implications for the criteria for evaluation. The analysis suggests that most conventional means of evaluating projects-net present value at market discount rates, labor intensity, cost per job created-may not be relevant or are at least ambiguous in the context of emergency programs. As a result, policymakers are left with few "hard" indicators with which to evaluate such programs. Maloney argues for an approach in which the policymaker weighs the appropriateness of deviations from the theoretically "ideal" benchmark program, which delivers a "smart" transfer costlessly to the target beneficiary, and discusses the arguments for or against these deviations. The modest goal of the proposed approach is to clarify the key issues and provide more solid grounding for the necessarily subjective judgment calls that policymakers will inevitably have to make.
Trade Structure and Growth

(World Bank, Washington, DC, 2003-04) Lederman, Daniel ; Maloney, William F.

Lederman and Maloney examine the empirical relationships between trade structure and economic growth, particularly the influence of natural resource abundance, export concentration, and intra-industry trade. They test the robustness of these relationships across proxies, control variables, and estimation techniques. The authors find trade variables to be important determinants of growth, especially natural resource abundance and export concentration. In contrast with much of the recent literature, natural resource abundance appears to have a positive effect on growth, whereas export concentration hampers growth, even after controlling for physical and human capital accumulation, among other factors.
Measuring the Impact of Minimum Wages : Evidence from Latin America

(World Bank, Washington, DC, 2001-04) Maloney, William F. ; Nunez, Jairo ; Cunningham, Wendy ; Fiess, Norbert ; Montenegro, Claudio ; Murrugarra, Edmundo ; Santamaria, Mauricio ; Sepulveda, Claudia

The authors provide an overview of minimum wage levels in Latin America and their true impact on the distribution of wages, using both numerical measures and kernal density plots for eight countries (Argentina, Bolivia, Brazil, Chile, Colombia, Honduras, Mexico, and Uruguay). They especially try to identify "numeraire" effects--where the minimum is used as a reference higher in the wage distribution--and "lighthouse" effects--where it influences wage setting in the unregulated or "informal" sector. Their main findings: First, statutory minimum wages are often misleading, and graphical methods may be more reliable. Second, the minimum wage's effect on wage setting extends far beyond what is usually considered and probably beyond the effect in industrial countries. Using panel employment data from Colombia, where minimum wages seem high and binding, the authors quantify the minimum wage's effects on wages and on the probability of becoming unemployed. The Colombian case confirms the evidence offered by kernal density estimates: 1) The minimum wage can have an important impact on wage distribution in the neighborhood of the minimum wage. 2) The effects echo up the wage distribution in a clear demonstration of the "numeraire" effect. That this effect is stronger in Latin America than in the United States suggests that the minimum wage induces further-reaching rigidities in the labor market. The trade-off between any possible effect on poverty and reduced flexibility is likely to be more severe in countries where this is the case. The effects on employment, and unemployment, are substantial. 3) Informal salaries wages are also affected, confirming the graphical evidence of strong lighthouse effects. Self-employment earnings are not, however, confirming that the minimum wage is not simply serving as a measure of inflationary expectations.