Boosting Productivity and Inclusive Growth in Latin America
Over the past two decades, most Latin American and Caribbean (LAC) countries have
experienced robust economic growth and been able to make significant reductions in
poverty and income inequality. However, growth in the region was not strong enough
to ensure convergence towards levels of per capita income observed in advanced OECD
economies. An important part of this underperformance can be explained by weak productivity
growth. Should this weakness persist, it will be very difficult for LAC countries
to achieve better lives for the majority of families. The present publication portrays
the situation of LAC countries and discusses best-practice policies. Participation
in global value chains is encouraged to enable knowledge spillovers and a process
of learning by doing. More regional trade integration would help this process, as
Latin America ranks very low and remains a sizeable outlier. The diffusion of knowledge
and technology would be facilitated by making it easier to do business, notably allowing
new entrants that are facing high barriers to operate and grow. Improved access to
education is important to meet the demand for skills, and to boost innovation and
research and development, which is particularly true in a context of fast technological
change.
Published on January 20, 2019