Despite the reform effort, economic performance of Latin American countries during the 1990s was disappointing with the exception of Chile. We argue (supported by a cross-section model) that Chile’s better performance was due to stronger macro fundamentals and, most important, better institutions. Time series estimations show that Chile’s 1981 pension reform and 1986 banking reform were critical to foster financial development and thus accelerate economic growth.

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Despite reforms of past decades, economic performance of Latin America during the 1990s was disappointing, except for Chile that grew at a high rate. We try to explain this difference estimating a cross sectional model over 1960-2000. We find that Chile’s better performance can be explained by the country’s better institutions and policies. Further, by having institutions and policies like Chile’s, the average Latin American country could raise its per-capita GDP growth rate by about 2.6%.

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We examine if domestic firms in the Czech Republic and Russia converge to the efficiency of foreign-owned firms as they liberalized. Using 1992-2000 firm panel data, we find privatization did not markedly improve efficiency; domestic firms are not catching up to the world standard; the distance of the Russian firms to the efficiency frontier is larger than that of the Czech firms. Domestic firms closer to the frontier are not more likely to catch up than firms further from the frontier.

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This paper analyzes the structural reform process that has been taking place in Uruguay since the return to democracy in 1985. Three main questions oriented the research: why did the reform take place? what kind of reform? and, how well did the reform perform? This paper is part of the Global Development Network's research program named "Understanding Reform".

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During the 1990s many developing countries have undertaken major restructuring of their network industries: energy, ports, railways, roads and water & sewerage. The debate on the regulation of these activities has been centered on regulatory regimes. Most adopted some form of price cap and many relied on yardstick competition. Both regulatory instruments require the measurement of efficiency. This paper provides an overview of these experiences which are mostly concentrated in Latin America.

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We use new firm-level data to examine the effects of spinoffs and privatization on corporate performance in an emerging market economy. Unlike the existing literature, which analyzes divestitures almost exclusively in advanced economies, we control for accompanying ownership changes and the fact that spinoffs and ownership are endogenous variables. We find that breakups increase the firm’s profitability, while the effect of privatization depends on the resulting ownership structure.

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