TY  - JOUR
AU  - Cole,Harold L.
AU  - Ohanian,Lee E.
AU  - Riascos,Alvaro
AU  - Schmitz,James A., Jr.
TI  - Latin America in the Rearview Mirror
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 11008
PY  - 2004
Y2  - December 2004
UR  - http://www.nber.org/papers/w11008
L1  - http://www.nber.org/papers/w11008.pdf
N1  - Author contact info:
Harold L. Cole
Economics Department
University of Pennsylvania
3718 Locust Walk
160 McNeil Building
Philadelphia, PA 19104
Tel: 215-898-7788
E-Mail: colehl@sas.upenn.edu

Lee E. Ohanian
8283 Bunche Hall
UCLA, Department of Economics
Box 951477
Los Angeles, CA  90095
Tel: 310/825-0979
Fax: 310/825-9528
E-Mail: ohanian@econ.ucla.edu

Alvaro Riascos
E-Mail: ariascos@gmail.com

James A. Schmitz, Jr.
Research Dept.
Federal Reserve Bank of Minneapolis
90 Hennepin Ave., PO Box 291
Minneapolis, MN 55480
E-Mail: jas@res.mpls.frb.fed.us
AB  - Latin American countries are the only Western countries that are poor and that aren't gaining ground on the United States. This paper evaluates why Latin America has not replicated Western economic success. We find that this failure is primarily due to TFP differences. Latin America's TFP gap is not plausibly accounted for by human capital differences, but rather reflects inefficient production. We argue that competitive barriers are a promising channel for understanding low Latin TFP. We document that Latin America has many more international and domestic competitive barriers than do Western and successful East Asian countries. We also document a number of microeconomic cases in Latin America in which large reductions in competitive barriers increase productivity to Western levels.
ER  -