The long run development of Chile and the Natural Resources curse. Linkages, policy and growth, 1850-1950

This chapter analyses the effects of Natural Resources on the Chilean economy in the long run -1850-1950-. Specifically, the authors focus their attention on the mining cycles -nitrates and copper- and their impact on the mining activity. We also compare it with the evolution of the industry and whole economy, and how this has affected the economic growth of the country. In that sense, the industrial performance in Chile at the end of the 19th century until the Great Depression is still under debate. The optimistic view of Kirsch -1977- forehead the pessimistic view of Lagos -1966- and Palma -1979-. The new data and its analyses shows a neutral effect of the Natural Resources in the industrial development.

The First Privatization Policy in a Democracy: Selling State-Owned Enterprises in 1948-1950, Puerto Rico

In the 1940s, when the Governor of Puerto Rico was appointed by the US President and the Puerto Rican government was answerable only to the US Federal government, a large state-owned enterprise (SOE) sector was established on the island. Public services such as water, transportation and energy were nationalized, and several new manufacturing SOEs were created to produce cement, glass, shoes, paper and chalkboard, and clay products. These enterprises were created and managed by government-owned corporations. Later on, between 1948 and 1950, under the island’s first elected Governor, the government sold these SOEs to private groups. This paper documents both the creation and the privatization of the SOE sector in Puerto Rico, and analyzes the role played by ideology, political interests, and economic concerns in the decision to privatize them. Whereas ideological factors might have played a significant role in the building of the SOE sector, we find that privatization was driven basically by economic factors, such as the superior efficiency of private firms in the sectors where the SOEs operated, and by the desire to attract private industrial investment to the Puerto Rican economy.

Social Preferences and Transport Policy: The case of US speed limits

This article, in reviewing the longrunning US debate on speed limits, illustrates how a different valuation of the trade-off between private mobility needs and safety concerns can shape transport policies. It is argued that the regulatory decentralization debate, together with the speed limit in force in each state, obey the social preferences and valuation given to this tradeoff. Such a view is consistent with evidence that higher speed limits are to be found in states with greater private mobility needs, even though their fatality rates might be among the highest in the country. By contrast, lower speed limits and supporters of a low national speed limit are to be found in states that show a greater concern for safety outcomes and which are less dependent on private mobility. By reviewing these events and examining the role played by the main actors and analyzing their motivations, the article identifies important lessons for similar future discussions on transport policy.

Empowering local democracy in Catalonia: tools and policy domains to implement a top-down solution

This article is the result of an ongoing research into a variety of features of Spanish local government. It aims, in particular, at providing a profile of the tools implemented by local authorities to improve local democracy in Catalonia. The main hypothesis of the work is that, even though the Spanish local model is constrained by a shared and unique set of legal regulations, local institutions in Catalonia have developed their own model of local participation. And the range of instruments like these is still now increasing. More specifically, the scope of this research is twofold. On the one hand, different types of instruments for public deliberation in the Catalan local administration system are identified and presented, based on the place they take in the policy cycle. On the other hand, we focus on policy domains and the quality of the decision-making processes. Researching the stability of the participation tools or whether local democracy prefers more 'ad hoc' processes allows us to analyze the boundaries/limits of local democracy in Catalonia. The main idea underlying this paper is that, despite the existence of a single legal model regulating municipalities in Catalonia, local authorities tend to use their legally granted selfmanagement capacities to design their own instruments which end up presenting perceivable distinct features, stressing democracy in different policy domains, and in diverse policy cycles. Therefore, this paper is intended to identify such models and to provide factors (variables) so that an explanatory model can be built.

Fiscal policy and interest rates: the role of financial and economic integration

It is commonly believed that a fiscal expansion raises interest rates. However, these crowding out effects of deficits have been found to be small or non-existent. One explanation is that financial integration offsets interest rate differentials on globalised bond markets. This paper measures the degree of integration of government bond markets, using spatial modelling techniques to take this spillover on financial markets into account. Our main finding is that the crowding out effect on domestic interest rates is significant, but is reduced by spillover across borders. This spillover is important in major crises or in periods of coordinated policy actions. This result is generally robust to various measures of cross-country linkages. We find spillover to be much stronger among EU countries.

Estimating the effects of fiscal policy under the budget constraint

I reconsider the short-term effects of fiscal policy when both government spending and taxes are allowed to respond to the level of public debt. I embed the long-term government budget constraint in a VAR, and apply this common trends model to US quarterly data. The results overturn some widely held beliefs on fiscal policy effects. The main finding is that expansionary fiscal policy has contractionary effects on output and inflation. Ricardian effects may dominate when fiscal expansions are expected to be adjusted by future tax rises or spending cuts. The evidence supports RBC models with distortionary taxation. We can discard some alternative interpretations that are based on monetary policy reactions or supply-side effects.