CEPAL Review - Volume 2024, Issue 143, 2024

This article analyses Colombia’s economic growth performance since the early twentieth century, the evolution of the public policies that have contributed to this and its main effects on social development and regional inequalities. Economic performance is divided into three periods: 1905–1929, 1930–1980 and 1981–2023. The first was characterized by the expansion of coffee production, an infrastructure investment boom and the beginning of oil extraction. The second saw the consolidation of industrial development and the diversification of agricultural production and exports. The last was characterized by increased State provision of social services, administrative decentralization and liberalization of foreign trade and the financial system, a combination whose economic results were deindustrialization, export reprimarization (with oil as the main product) and increased macroeconomic volatility.

The Brazilian economy has undergone far-reaching changes, related especially to the loss of industrial capacity as deindustrialization has spread and commodity-export production has expanded. The Brazilian Amazon region forms part of the expansionary logic of the agro-industry and mining sectors. This article analyses the economic reproduction model of one of the main federative units located in that region, the State of Pará. It uses the specialization coefficients and location quotients of Brazil’s 27 subnational federative units, to make a case study of that State. The findings reveal a declining industrial structure, particularly in manufacturing industry, accompanied by growth in the mining and metallurgical sector. Economic activity has become increasingly concentrated in the production of raw materials and semi-finished industrial inputs, of low technological content.

This article classifies goods according to their technical characteristics of rivalry and excludability, with the inclusion of new categories ranging from zero rivalry to infinite rivalry and from excludability to imposed access. The conceptual framework reveals concrete challenges in meeting the conditions of the first theorem of welfare economics, demonstrating that only private goods are the epitome of market theory, with an immense range of goods for which provision by means of free prices does not exist or is Pareto inefficient. A theoretical origin of externalities is proposed, as well as the technical or practical impossibility of completing markets and, through the price system, achieving their internalization. Lastly, the article demonstrates that many of the problems expected from market failures are fictitious because, rather than homo economicus, we are homo sapiens, the most cooperative beings in nature.

This research analyses how outward foreign direct investment (OFDI) by emerging nations affects the investing countries’ exports, examining the diversity in this relationship by categorizing developing nations by income (low-income, lower-middle-income and upper-middle-income) and by region (Africa, Asia and the Pacific and Latin America and the Caribbean). The research uses fixed and random effects on unbalanced data from 64 developing nations between 1990 and 2019. The results show that export performance in developing countries is significantly enhanced by OFDI. There is a supplementary impact of OFDI on exports from the middle-income and upper-middle-income classes of emerging nations. Results at the regional level show that this additional impact is greater in Asia and the Pacific than in other developing regions. In Latin America and the Caribbean, conversely, OFDI substitutes for domestic exports, and the region’s contribution to total global OFDI is smaller and more variable than that of other regions.

In consideration of the importance that the 17 Sustainable Development Goals (SDGs) of the 2030 Agenda for Sustainable Development have acquired in the economic, social and environmental spheres, this article uses the sustainable city development index of Brazil (IDSC-BR) methodology to map SDG attainment in the 399 municipalities of Paraná. The main findings reveal that the municipalities with the lowest SDG fulfilment scores are concentrated in the central region of Paraná. Analysing the results by the individual Goals, the State performed best with Goal 11, sustainable cities and communities (89.52%), Goal 7, affordable and clean energy (85.11%), and Goal 12, responsible production and consumption (75.64%). At the same time, the Goals where compliance faces the greatest challenges are Goal 15, life on land (16.83%), Goal 14, life below water (26.02%), and Goal 17, partnerships for the goals (33.25%).

This research delves into the determinants of inward foreign direct investment (FDI) in Colombia in the context of the economic integration promoted by recent governments. Colombia’s trade liberalization has sought not only to boost trade flows but also to make the country more attractive to FDI in a framework of fiscal discipline and a stable economic environment conducive to economic growth, albeit characterized by challenging institutional conditions. Government reforms have revitalized FDI inflows into Colombia, with the oil and mining sectors receiving the largest influx of new capital investments. This paper contributes to the literature by using an augmented gravity model approach to analyse the determinants of FDI inflows into Colombia between 2007 and 2020. We find that stable government policies and the rule of law have been key factors in increasing FDI in Colombia, and that bilateral investment treaties are of particular importance as drivers of FDI into the country.

This paper evaluates production diversification trajectories and proposes an empirical rule for diversification in pursuit of increased economic complexity. It concludes that the growth gains from complexity are greatest in the early stages of economic development. Less complex countries, having limited productive capabilities, diversify into products that are relatively uncomplex and similar to their existing production structure, and this is an obstacle to economic growth. Countries of medium complexity are more willing to implement bold strategies, which makes them more competitive in more complex products. Principal component analysis was used to construct the diversification rule, which proved most accurate at formulating diversification strategies involving products similar to existing production structures. This result shows that production sophistication strategies are most useful when they take account of the productive limitations of economies.

This article provides evidence regarding the potential effect of labour participation on life satisfaction. To take into account possible endogeneity in the decision to participate in the labour market, a two-stage least squares estimation is carried out. Hence, an excluded instrument is used for the decision to participate, where the existence of a weak instrument is rejected. Then, to take into account the ordinal nature of the dependent variable, an ordered probit model with a binary endogenous explanatory variable is estimated. This method makes it possible to jointly estimate all the parameters of the model. The results, which are robust to the presence of endogeneity in the decision to participate, show that labour participation does not have an impact on life satisfaction. Regarding the rest of the explanatory variables included in the model, the results are in line with previous empirical evidence.

This article investigates the effects of exchange-rate misalignment on the earnings of 201 Brazilian non-financial listed companies over the period 2010–2018. A measure of exchange-rate misalignment was constructed by compiling information on the value of currency derivative contracts and generating a new database. The results indicate that exchange-rate devaluation has a negative differential effect for firms that have borrowed in foreign currency, including exporting firms. Controlling for variables that protect firms with foreign currency debt, we find that the differential effect of devaluation is negative for firms with larger foreign currency liabilities and positive for those with larger foreign currency assets or greater hedging. These results are robust to different specifications.

This article analyses how technological innovation has evolved in the machinery and equipment sector in Brazil, comparing innovation by firms that benefited from government schemes to support innovation versus those that did not. The data used were from six editions of the Innovation Survey (PINTEC) and a special tabulation prepared by the Brazilian Institute of Geography and Statistics (IBGE). The results indicate that the industrial and science, technology and innovation policies of the 2000s had positive effects in the sector: firms’ innovative activities were boosted by government support instruments and increased more than innovation by companies that did not receive this support. The systematized data also enable the identification of some failings in these sector support programmes.

In order to facilitate the submission, consideration and publication of articles, the editorial board of the CEPAL Review has prepared the following information and suggestions to serve as a guide for future contributors.