Reports

The access to formal financial services in Mexico is particularly low. Access is also significantly unequal across income levels, gender, between rural and urban areas and across regions. SMEs access to bank credit is low, hampering firms’ ability to grow and innovate. The use of cash and informal credit is still widespread, especially in rural areas, where financial infrastructure is underdeveloped. The diffusion of digital financial services is slowly advancing but remains low, hindered by a relatively low level of financial literacy and a digital divide. Expanding access to finance would enable Mexican households to invest in education and health, and better manage income shocks and smooth consumption. It would also enable Mexican firms to invest more, increase productivity and create formal jobs. Low-income households, small firms and more disadvantaged regions would particularly benefit, as it would unlock new economic opportunities for them. Boosting competition in the banking sector would facilitate SMEs access to credit by lowering interest rate margins. Upgrading the regulatory framework of the financial system would help increase competition and quality of financial services. The potential of the fintech sector is yet to be materialised, which would further increase competition and bring financial services to wider segments of the population. Strengthening financial education and digital literacy would facilitate a larger and better use of traditional and digital financial services.

This report compiles comparable tax revenue statistics over the period 1990-2020 for 27 Latin American and Caribbean economies. Based on the OECD Revenue Statistics database, it applies the OECD methodology to countries in Latin America and the Caribbean to enable comparison of tax levels and tax structures on a consistent basis, both among the economies of the region and with other economies. This publication is jointly undertaken by the OECD Centre for Tax Policy and Administration, the OECD Development Centre, the Inter-American Center of Tax Administrations (CIAT), the Economic Commission for Latin America and the Caribbean (ECLAC) and the Inter-American Development Bank (IDB).

Governments can use artificial intelligence (AI) to design better policies and make better and more targeted decisions, enhance communication and engagement with citizens, and improve the speed and quality of public services. The Latin America and the Caribbean (LAC) region is seeking to leverage the immense potential of AI to promote the digital transformation of the public sector. The OECD, in collaboration with CAF, Development Bank of Latin America, prepared this report to help national governments in the LAC region understand the current regional baseline of activities and capacities for AI in the public sector; to identify specific approaches and actions they can take to enhance their ability to use this emerging technology for efficient, effective and responsive governments; and to collaborate across borders in pursuit of a regional vision for AI in the public sector. This report incorporates a stocktaking of each country’s strategies and commitments around AI in the public sector, including their alignment with the OECD AI Principles. It also includes an analysis of efforts to build key governance capacities and put in place critical enablers for AI in the public sector. It concludes with a series of recommendations for governments in the LAC region.

This paper provides recommendations to foster integrity and transparency in decision making in the State of Mexico, by regulating access and promoting stakeholder engagement; and to enhance transparency and integrity in the funding of political parties and election campaigns. It addresses current challenges related to political finance such as cash contributions and clientelism, as well as the need to ensure adequate audit capacities and effective sanctions that advance accountability. Likewise, it analyses the state of play in terms of interactions between stakeholders, on the one hand, and public officials and legislators, on the other, providing recommendations to prevent policy capture, preserve integrity, and strengthen transparency.

Many Latin American countries have experienced improvements in income over recent decades, with several of them now classified as high-income or upper middle-income in terms of conventional metrics. But has this change been mirrored in improvements across the different areas of people’s lives? How’s Life in Latin America? Measuring Well-being for Policy Making addresses this question by presenting comparative evidence for Latin America and the Caribbean (LAC) with a focus on 11 LAC countries (Argentina, Brazil, Chile, Colombia, Costa Rica, the Dominican Republic, Ecuador, Mexico, Paraguay, Peru and Uruguay). Spanning material conditions, quality of life, resources for future well-being, and inequalities, the report presents available evidence on well-being both before and since the onset of the pandemic, based on the OECD Well-being Framework. It also identifies priorities for addressing well-being gaps and describes how well-being frameworks are used in policy within Latin America and elsewhere around the world, providing lessons for governments on what is needed to put people’s well-being at the centre of their action. The report is part of the EU Regional Facility for Development in Transition for Latin America and the Caribbean.

Using household data from 15 countries in Latin America and Africa, this paper explores linkages between informality and education-occupation matching. The paper applies a unified methodology to measuring education-occupation mismatches and informality, consistently with the international labour and statistical standards in this area. The results suggest that in the majority of low- and middle-income developing countries with available data, workers in informal jobs have higher odds of being undereducated as compared to workers in formal jobs. Workers in formal jobs, in contrast, have higher chances of being overeducated. These results are consistent for dependent as well as for independent workers. They also hold for men and for women according to the gender-disaggregated analysis. Moreover, in the majority of countries considered in this paper, the matching-informality nexus is also related to the extent of informality in a given area: in labour markets with higher informality, informal workers in particular have a higher chance of being undereducated. The paper discusses policy implications of these findings.

A clear, efficient, and modern regulatory framework for pesticides is essential for addressing their impacts on human health and the environment, supporting a life-cycle approach to their management, and ensuring crop protection and a sustainable agricultural industry. This report identifies the gaps, barriers, implementation flaws and inefficiencies that affect the regulatory framework of pesticides in Mexico. It takes stock of the regulatory framework and recent reforms, and identifies both the areas that pose the greatest challenge for the effective regulation of pesticides and those where regulation – or lack of it – in pesticides most affects policy objectives and economic activity. These challenges and practices are assessed in view of OECD principles and country experiences, and recommendations are provided to support better regulation efforts. The report finds that Mexico would benefit from adopting a comprehensive, mutually-agreed policy strategy for pesticides, recognising that pesticide management is a shared responsibility across national and local governments, the pesticide industry, pesticide users, as well as the general public.