The Economic Development of Latin America in the Twentieth ...

[Pages:338]The Economic Development of Latin America in the Twentieth Century

Andr? A. Hofman

R esearcher, E conom ic Com m ission fo r Latin A m erica a n d the Caribbean, Chile

Edward Elgar

Cheltenham, UK ? Northampton, MA, USA

? Andr? A. Hofman 2000

All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical or photocopying, recording, or otherwise without the prior permission of the publisher.

Published by Edward Elgar Publishing Limited Glensanda House Montpellier Parade Cheltenham Glos GL50 1UA UK

Edward Elgar Publishing, Inc. 136 West Street Suite 202 Northampton Massachusetts 01060 USA

A catalogue record for this book is available from the British Library

L ib rary of Congress Cataloguing in Publication Data

Hofman, Andr? A., 1953--

The economic development of Latin America in the twentieth century

/ Andr? A. Hofman.

1. Latin America--Economic conditions--20th century. I. Title.

HC125.H645 1999

338.98--dc21

98-27904

CIP

ISBN 1 85898 852 7 Printed and bound in Great Britain by Bookcraft (Bath) Ltd.

Contents

List o f Figures

vii

List o f Tables

ix

Acknowledgements

xv

1 Introduction

1

2 Some Distinctive Characteristics o f Latin America over the Long

Run

7

3 Economic Performance in Latin America - A Comparative

Quantitative Perspective

29

4 New Standardised Estimates o f Labour Input and Human Capital 47

5 New Standardised Estimates o f Capital Stock for Latin America

and the USA

69

6 Explaining Latin American Post-War Development - The Growth

Accounts

99

7 Performance and Policy in Latin America

127

8 Conclusions

147

APPENDICES

Appendix A Population

155

Appendix B GDP Indices (1950 = 100) and Levels o f Total and

Per Capita GDP

159

Appendix C Activity Rates, Employment, Education and Labour

Productivity

173

Appendix D Total and Disaggregated Gross Investment,

1900-1994

183

Appendix E Standardised Estimates o f Capital Stock

205

Appendix F Foreign Trade

249

Appendix G Prices

261

Appendix H Previous Non-Standardised Capital Stock Estimates

in Latin America

265

References

293

Index

313

List of Figures

3.1 Latin America: Share o f Individual Countries in the Six Country Total

GDP, 1900-1994

36

3.2 Latin America: Volume Movements of GDP, 1900-1994

42

5.1 Latin America: Total and Non-Residential Capital Productivity,

1950-94

83

5.2 Total Gross Fixed Capital Stock per Capita, 1950-94

87

5.3 Residential Gross Fixed Capital Stock per Capita, 1950-94

87

5.4 Non-Residential Gross Fixed Capital Stock per Capita, 1950-94

88

5.5 Gross Fixed Machinery and Equipment Capital Stock per Capita,

1950-94

89

6.1 Latin America: Total Factor Productivity without Augmentation,

1950-94

115

6.2 Latin America: Labour-Augmented Total Factor Productivity,

1950-94

115

6.3 Latin America: Capital-Augmented Total Factor Productivity,

1950-94

116

6.4 Latin America: Doubly-Augmented Total Factor Productivity,

1950-94

116

6.5 Doubly-Augmented Total Factor Productivity: An International

Comparison, 1950-94

118

List of Tables

2.1 Total Land Area per Head o f Population, 1900-1994

8

2.2 Latin America: Inequality in Pre-tax Income Distribution, 1950-90

16

2.3 Inequality o f Pre-tax Income o f Households around 1970

17

2.4 Average Years o f Formal Educational Experience of Population Aged

1 5 -6 4 ,1 9 5 0 -9 0

18

2.5 Experience o f Inflation, 1900-1994

19

2.6 Average Real Annual Percentage Interest Rate on Developing Country

Floating-Rate Debt

22

2.7 Variations in Volume o f Merchandise Exports, 1870-1994

23

3.1 Latin America: Total GDP, 1900-1994

30

3.2 GDP per Capita, 1900-1994

32

3.3 Levels o f per Capita GDP, 1900-1994

33

3.4 Latin America: Labour Productivity Growth and Levels, 1900-1994

35

3.5 Latin America: Share of Each Country in Total GDP o f the Six

Countries, 1900-1994

36

3.6 Year-to-Year Percentage Change in Aggregate GDP o f the Six

Countries, 1900-1994

37

4.1 Population

49

4.2 Total Population, 1900-1994

51

4.3 Comparative Characteristics o f the Demographic Situation around

1950 and 1990

52

4.4 Total and Sectoral Employment

53

4.5 Determinants o f Total Employment, 1950-90

55

4.6 Sectoral Composition o f Employment, 1950-94

57

4.7 Total Hours o f Work per Person per Year, 1950-94

59

4.8 Total Hours o f Labour Input, 1950-94

59

4.9 Female and Male Participation Rates

60

4.10 Average Years o f Formal Educational Experience of the Population

Aged 15-64,1950-94

62

4.11 Comparison o f Educational Level of Total Population and Labour

Force

65

4.12 Females as a Proportion o f Total Employment, 1950-90

66

5.1 A Comparison o f Standardised and National Estimates

78

5.2 Exchange Rates and GDP Purchasing Power Parities, 1980

80

X

The Economic Development o f Latin America

5.3 Capital Formation PPP-Exchange Rate Deviation Indices, 1980

81

5.4 Latin America: Weighted Average Service Life o f Total and Non-

Residential Fixed Capital Stock, 1950-94

82

5.5 Average Age o f Total, Non-Residential and Residential Fixed Capital

Stocks, 1950-94

84

5.6 Levels o f Total and Residential Gross Fixed Capital Stock per Capita,

1950-94

85

5.7 Levels o f Gross Fixed Capital Stock per Capita o f Non-Residential

Structures and Machinery and Equipment, 1950-94

86

5.8 Latin America: Total Gross Fixed Capital Stock, 1950-94

89

5.9 Latin America: Gross Fixed Non-Residential Capital Stock, 1950-94 90

5.10 Comparative Growth o f Gross and Net Total Fixed Capital Stock,

1950-94

90

5.11 Latin America: Composition of Gross Total Fixed Capital Stock,

1950-94

91

5.12 Latin America: Composition o f Gross Total Fixed Capital Stock,

1950-94

92

5.13 Latin America: Difference between Growth o f Fixed Capital Stocks in

National Currencies and International Dollars, 1950-94

92

5.14 Latin America: Ratio o f Non-Residential Fixed Capital Stock to Total

Fixed Capital Stock, 1950-94

93

5.15 Total Fixed Gross Capital-Output Ratios, 1950-94

94

5.16 Non-Residential Fixed Gross Capital-Output Ratios, 1950-94

94

5.17 A Comparison o f Gross and Net Total Capital-Output Ratios,

1950-94

95

6.1 Comparative Levels o f Economic Performance o f 16 Countries

Between 1950 and 1994

100

6.2 Latin America: Labour Force (LF) and Employment (EMP), 1950-94 103

6.3 Latin America: Level of Education o f the Population Aged 15-64

104

6.4 Rate o f Growth o f Labour Inputs, 1950-94

105

6.5 Capital Productivity Growth, 1950-94

105

6.6 Rate of Growth o f Capital Inputs, 1950-94

106

6.7 Latin America: Movement o f the Agricultural Frontier - Expansion o f

Area o f Land in Use for Agriculture

106

6.8 Capital, Labour and Natural Resource Shares in GDP, 1950-94

108

6.9 Standardised Capital, Labour and Natural Resource Shares in GDP,

1950-94

108

6.10 Basic Indicators o f Growth Performance, 1950-94

109

6.11 Sources of GDP Growth with Country-Specific Factor Shares,

1950-94

110

6.12 Sources o f GDP Growth, Standardised Factor Shares, 1950-94

111

6.13 Explanatory Power o f Total Factor Productivity in Growth, 1950-94 112

Tables

xi

6.14 GDP and Total Factor Productivity based on Standardised Factor

Shares, 1950-94

113

6.15 International Comparison: GDP and Total Factor Productivity,

1950-94

117

6.16 Explanatory Power of Capital in Growth, 1950-94

121

6.17 Explanatory Power o f Labour in Growth, 1950-94

123

A.1 Latin American Population, Six Countries, 1820-1995

156

B .l Exchange Rates and Purchasing Power Parities with Respect to the

International Dollar for GDP, 1970-85

161

B.2 Latin American GDP Indices, Six Countries, 1900-1994

163

B.3 Levels o f Latin American GDP, Six Countries, 1900-1994

165

B.4 Levels o f Latin American GDP, Six Countries, 1900-1994

167

B.5 Levels of GDP per Capita in Latin America, Six Countries,

1900-1994

169

C .l Latin America: Total Female and Male Activity Rates, Six Countries,

1950-94

177

C.2 Latin American Employment, Six Countries, 1913-94

177

C.3 Latin America: Annual Hours per Person Employed, Six Countries,

1950-94

178

C.4 Latin America: Total Hours Worked, Six Countries, 1950-94

178

C.5 Latin America: Sectoral Employment, Six Countries, 1950-94

179

C.6 Latin America: Average Years o f Formal Education o f Population

Aged 15-64, Six Countries, 1950-94

180

C .l Latin American Labour Productivity, GDP per Person Employed, Six

Countries, 1950-94

181

C.8 Latin American Labour Productivity, GDP per Hour Worked, Six

Countries, 1950-94

181

C.9 Latin America: Average Years of Formal Educational Experience of

Population Aged 15-64 in 1950 and 1980, Five Countries

182

D .l Latin America: Gross Total Fixed Investment, Six Countries,

1900-1994

188

D.2 Latin America: Gross Fixed Investment in Machinery and Equipment,

Six Countries, 1900-1994

190

D.3 Latin America: Gross Fixed Investment in Residential Structures, Six

Countries, 1900-1994

192

D.4 Latin America: Gross Fixed Investment in Non-Residential Structures,

Six Countries, 1900-1994

194

D.5 Latin America: Gross Total Fixed Investment, Six Countries,

1900-1994

196

D.6 Latin America: Gross Fixed Investment in Machinery and Equipment,

Six Countries, 1900-1994

198

x ii

The Economic Development of Latin America

D.7 Latin America: Gross Fixed Investment in Residential Structures, Six

Countries, 1900-1994

200

D.8 Latin America: Gross Fixed Investment in Non-Residential Structures,

Six Countries, 1900-1994

202

E.1 Capital Formation PPPs-Exchange Rate Deviation Index, 1970-80 207

E.2 Argentina: Procedure for Estimating Alternative Benchmark o f the

Stocks o f Non-Residential Structures at 31 December 1949

208

E.3 Argentina: Procedure for Estimating Alternative Variants o f 1950-94

Estimates o f the Stock o f Non-Residential Structures

209

E.4 Argentina 1. Gross and Net Fixed Tangible Reproducible Capital

Stocks by Type o f Asset, 1950-94

211

E.5 Argentina 2. Gross and Net Fixed Tangible Reproducible Capital

Stocks by Type o f Asset, 1950-94

213

E.6 Argentina 3. Capital Stock: Average Ages, Average Service Lives and

Capital-Output Ratios, 1950-94

215

E.7 Argentina 4. Capital Stock: Average Ages, Average Service Lives and

Capital-Output Ratios, 1950-94

216

E.8 Brazil 1. Gross and Net Fixed Tangible Reproducible Capital Stocks

by Type o f Asset, 1950-94

217

E.9 Brazil 2. Gross and Net Fixed Tangible Reproducible Capital Stocks

by Type o f Asset, 1950-94

219

E. 10 Brazil 3. Capital Stock: Average Ages, Average Service Lives and

Capital-Output Ratios, 1950-94

221

E. 11 Brazil 4. Capital Stock: Average Ages, Average Service Lives and

Capital-Output Ratios, 1950-94

222

E.12 Chile 1. Gross and Net Fixed Tangible Reproducible Capital Stocks

by Type of A sset, 1950-94

223

E.13 Chile 2. Gross and Net Fixed Tangible Reproducible Capital Stocks

by Type o f A sset, 1950-94

225

E.14 Chile 3. Capital Stock: Average Ages, Average Service Lives and

Capital-Output Ratios, 1950-94

227

E.15 Chile 4. Capital Stock: Average Ages, Average Service Lives and

Capital-Output Ratios, 1950-94

228

E.16 Colombia 1. Gross and Net Fixed Tangible Reproducible Capital

Stocks by Type o f Asset, 1950-94

229

E. 17 Colombia 2. Gross and Net Fixed Tangible Reproducible Capital

Stocks by Type o f Asset, 1950-94

231

E. 18 Colombia 3. Capital Stock: Average Ages, Averages Service Lives

and Capital-Output Ratios, 1950-94

233

E.19 Colombia 4. Capital Stock: Average Ages, Average Service Lives

and Capital-Output Ratios, 1950-94

234

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