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 28

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.
Engineers, Innovative Capacity and Development in the Americas

(World Bank, Washington, DC, 2014-03) Maloney, William F. ; Valencia Caicedo, Felipe

Using newly collected national and sub-national data, and historical case studies, this paper argues that differences in innovative capacity, captured by the density of engineers at the dawn of the Second Industrial Revolution, are important to explaining present income differences, and, in particular, the poor performance of Latin America relative to North America. This remains the case after controlling for literacy, other higher order human capital, such as lawyers, as well as demand side elements that might be confounded with engineering. The analysis then finds that agglomeration, certain geographical fundamentals, and extractive institutions such as slavery affect innovative capacity. However, a large effect associated with being a Spanish colony remains suggesting important inherited factors.
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.
R&D and Development

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

Lederman and Maloney trace the evolution of research and development (R&D) expenditures along the development process using a new global panel data set. They show that R&D effort measured as a share of GDP rises with development at an increasing rate. The authors examine how four groups of countries from Latin America, Asia, advanced manufacturing exporters, and advanced natural resource-abundant countries fare relative to the predicted development trajectory. Latin America generally underperforms as do some countries in Asia and Europe, but their striking finding is that some-Finland, Israel, the Republic of Korea, and Taiwan (China)-have radically deviated from the predicted trajectory and displayed impressive R&D takeoffs. The authors ask whether these countries overinvest in R&D but find that the high estimates of the social rates of return probably justify this effort. Moreover, the returns to R&D decline with per capita GDP. The authors attempt to explain why rich countries invest more in R&D than poor countries. They conclude that financial depth, protection of intellectual property rights, government capacity to mobilize resources, and the quality of research institutions are the main reasons why R&D efforts rise with the level of development.
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.
Exchange Rate Appreciations, Labor Market Rigidities, and Informality

(World Bank, Washington, DC, 2002-02) Fiess, Norbert M. ; Fugazza, Marco ; Maloney, William

This paper works at the interface of the literature exploring the raison d'etre of the informal labor market and that explaining the real exchange rate appreciations occurring in many Latin American countries during periods of reform. The authors first build a small country-Australian style model where the informal sector is seen as an unregulated non-tradables sector, augmented by heterogeneity in entrepreneurial ability and capital adjustment costs. They then examine the behavior of the model with and without a formal sector rigidity. It shows that the co-movements of relative formal/informal incomes, formal/informal sector size, and the real exchange rate can offer insight into the level of distortion in the labor market and the source of exchange rate fluctuations. The paper then explores time series data from Brazil, Colombia and Mexico using multivariate co-integration techniques to establish what "regime" each country is in at various periods of time. Mexico appears to be relatively undistorted and the 1987-92 appreciation appears to be largely a function of a boom in the non-tradables sector rather than wage inertia. In spite of a secular expansion of the informal sector there is little evidence of dualism or of a rigidity driven appreciation of the Real, from 1993-1996. Post 1995 Colombia corresponds to a classic segmented labor market and an appreciation partly driven by labor market rigidities. Graphical analysis suggests that neither the Argentine appreciation (1988-1992) or the celebrated Chilean appreciation (1975-1982) were driven by inertial forces
Cyclical Movements in Unemployment and Informality in Developing Countries

(World Bank, Washington, DC, 2008-06) Bosch, Mariano ; Maloney, William

This paper analyzes the cyclical properties of worker flows in Brazil and Mexico, two important developing countries with large unregulated or informal sectors. It generates three stylized facts that are critical to the accurate modeling of the sector and which suggest the need to rethink the approaches to date. First, the unemployment rate is countercyclical essentially because job separations of informal workers increase dramatically in recessions. Second, the share of formal employment is countercyclical because of the difficulty of finding formal jobs from inactivity, unemployment and other informal jobs during recessions rather than because of increased separation from formal jobs. Third, flows from formality into informality are not countercyclical, but, if anything, pro-cyclical. Together, these challenge the conventional wisdom that has guided the modeling the sector that informal workers are primarily those rationed out of the formal labor market. They also offer a new synthesis of the mechanics of the cyclical adjustment process. Finally, the paper offers estimates of the moments of worker flows series that are needed for calibration.
In Search of the Missing Resource Curse

(World Bank, Washington, DC, 2008-11) Lederman, Daniel ; Maloney, William F.

The debate over the curse of natural resources has haunted developing countries for decades if not centuries. A review of existing empirical evidence suggests that the curse remains elusive. The fragile negative effect of natural resources on economic growth might be due to international heterogeneity in the effects of natural resources on economic growth, to the use of weak indicators of natural resources that might be unrelated to relative natural-resource endowments, or to the inability of econometric analysis based on international data to capture historical processes. This paper defends an empirical proxy for relative abundance of natural resources, which is based on standard growth theory. In turn, various econometric estimations are hopelessly deployed in the search for the missing resource curse. Some evidence suggests that natural resources might have large positive effects whose true magnitude remains unknown due to unresolved econometric issues.
Innovation Shortfalls

(World Bank, Washington, DC, 2007-07) Maloney, William ; Rodríguez-Clare, Andrés

There is a common perception that low productivity or low growth is due to what can be called an "innovation shortfall," usually identified as a low rate of investment in research and development (R&D) when compared with some high innovation countries. The usual reaction to this perceived problem is to call for increases in R&D investment rates, usually specifying a target that can be as high as 3 percent of GDP. The problem with this analysis is that it fails to see that a low R&D investment rate may be appropriate given the economy's pattern of specialization, or may be just one manifestation of more general problems that impede accumulation of all kinds of capital. How can we know when a country suffers from an innovation shortfall above and beyond the ones that should be expected given the country's specialization and accumulation patterns? This is the question the authors tackle in this paper. First, they show a simple way to estimate the R&D gap that can be explained by a country's specialization pattern, illustrating it for the case of Chile. For this country they find that although its specialization in natural-resource-intensive sectors explains part of its R&D gap, a significant shortfall remains. Second, the authors show how a calibrated model can be used to determine the R&D gap that should be expected given a country's investment in physical and human capital. If the actual R&D gap is above this expected gap, then one can say that the country suffers from a true innovation shortfall.