www.worldbank.org/laceconomicpolicy

As economic policy plays a pivotal role in reducing poverty in Latin America and the Caribbean, the World Bank strives to help LAC policymakers implement sound economic policies that address current challenges. Recognizing that a high growth rate helps to reduce poverty, the Bank favors policy frameworks that promote sustainable growth. Topic brief

Brazil: Interest Rates and Intermediation Spreads. The unusually high cost of financial intermediation in Brazil, as measured by the reported difference between bank lending and deposit interest rates, is a major source of policy concern, and with good reason. Brazil is an international outlier in terms of published interest spreads—it is one of only four countries in the world that reports average spreads above 30 percentage points. The phenomenon of high interest rate margins has had a long history in Brazil, and a stubborn one at that. While Brazil is not alone in having had very high inflation in the past and having success fully reduced it to single-digits, it is rather unique in not having achieved a reduction in interest spreads to moderate levels, as other countries with hyperinflation histories have managed to do. This is despite an admittedly impressive improvement in fiscal and monetary performance over the past years.  More 

Bolivia - Country Economic Memorandum:"Policies to Improve Growth and Employment"Bolivia is today at a crossroads. Several years of growth were achieved in the early  and mid 1990s resulting from structural reforms which encouraged an upswing in private investment and productivity gains. However, more recently a series of economic shocks have hit Bolivia. These shocks not only had a negative impact in and of themselves, but they also led to growing political and social instability and public disenchantment with the reform program, which has lost momentum in the past five years.This, in turn, reinforced an economic downturn, to the point where the gains in poverty reduction and employment creation of the 1990s have been lost.  More

Costa Rica: The Challenges for Sustained Growth. Over the last twenty-five years, Costa Rica has been one of the more stable and faster growing economies in Latin America primarily due to past economic reforms. Since 1980, growth in per capita income has averaged 1.2 percent, compared to 0.8 percent for Latin America as a whole, and economic volatility in the country has been about 20 percent lower than the rest of the region. Only about 10 percent of the country’s population lives on less than US$2 a day, compared to a poverty rate o f about 25 percent region-wide and the literacy rate i s at nearly 96 percent for people ages 15 and above, compared to 86 percent in the rest o f the region. These tangible socio-economic achievements have been accompanied by-and to a large extent can be attributed to-a stable macroeconomic and political environment, strong institutions, relatively open markets, and a well-educated work force.  More

Panama - Public Finance and Institutional Development Policy Loan Project. This program document describes a single-tranche Public Finance  and Institutional Development Policy Loan (DPL) to the Republic of Panama for US$60 million equivalent. This operation is conceived as a one-time operation, based on passage and implementation of fiscal stabilization and public financial management reforms which will achieve substantial measurable outcomes by the end o f 2006. To reflect the medium-term nature of the Government’s public finance management program, this DPL also indicates and assesses the Government’s future planned actions, and notes its medium-term benchmark indicators (end- 2009).  More 

Dominican Republic - "The Foundations of Growth and Competitiveness." The Dominican Republic presents a fascinating case for studying economic growth and its determinants, as strong growth outcomes over the past thirty-five years have been tempered by periodic crisis episodes. Per capita incomes rose from US$335 in 1970 to US$2,107 in 2004 despite annual population growth averaging 2.4 percent over the period. This increase implies annual per capita GDP growth averaging almost 5 percent, well above the Latin America and Caribbean regional average of 3.2 percent. Three major economic crises occurred during the period: in the mid-1980s, 1990, and 2003-2004. Today, the Dominican Republic is a lower middle income country with many attributes of the world’s modern economies. More