Macroeconomics Theory And Policy Hl Ahuja Pdf 235
Fealty Attilio
We discuss how evidence and theory can be combined to provide insight on the appropriate subsidy level for health products, focusing on the specific case of deworming. Although intestinal worm infections can be treated using safe, low-cost drugs, some have challenged the view that mass school-based deworming should be a policy priority. We review well-identified research which both uses experimental or quasi-experimental methods to demonstrate causal relationships and adequately accounts for epidemiological externalities from deworming treatment, including studies of deworming campaigns in the Southern United States, Kenya, and Uganda. The existing evidence shows consistent positive impacts on school participation in the short run and on academic test scores, employment, and income in the long run, while suggesting that most parents will not pay for deworming treatment that is not fully subsidized. There is also evidence for a fiscal externality through higher future tax revenue, which may exceed the cost of the program. Our analysis suggests that the economic benefits of school-based deworming programs are likely to exceed their costs in places where worm infestations are endemic. This would likely be the case even if the benefits were only a fraction of estimates in the existing literature.
We thank Felipe Gonzalez for research assistance and Jessica Harrison for helpful comments. Baird, Hamory Hicks, Kremer, and Miguel gratefully acknowledge support from the Eunice Kennedy Shriver National Institute of Child Health & Human Development (Grant Number R01HD044475). In the interests of transparency around potential conflicts of interest, we note that USAID and the Douglas B. Marshall, Jr. Family Foundation support deworming. Also, Amrita Ahuja is the chair of the board of Evidence Action, a nonprofit organization which supports governments in scaling mass school-based deworming programs. This is a voluntary position with no associated remuneration. The content of this article is solely the responsibility of the authors, and does not necessarily represent the official views of the Eunice Kennedy Shriver National Institute of Child Health & Human Development, the U.S. National Institutes of Health, USAID, the Douglas B. Marshall, Jr. Family Foundation, Evidence Action, or the National Bureau of Economic Research.
The reflection on strategies for economic growth in Latin America has been characterized in recent decades by the Schumpeterian notion of innovation (Schumpeter, 1934). This notion has also come to dominate the policy arena for Science and Technology (S & T). In this case, its relevance lies in the distinction between two processes often intertwined but different, which at the same time can occur independently. I refer, on the one hand, to the process of "invention"- or, more precisely, the generation of new knowledge, the development of a new idea or an act of creation -, and, on the other hand, the innovation process in the strict sense, i.e. the practical implementation of new forms of doing things, which refers to the commercialization of the invention (Hitt, Hoskisson, & Nixon, 1993; Ahuja & Lampert, 2001).
For the Economic Commission for Latin America and the Caribbean (ECLAC), innovation is a central element in the development strategy, defined as a dynamic process of interaction linking agents who work guided by market incentives (such as companies) and other institutions (such as public research centers and academic institutions) that act according to rules and strategies that respond to other mechanisms and incentive schemes. The systematic linkages and interaction between actors as well as economic and institutional infrastructure that each country is able to develop, determine their ability to capture the momentum that gives knowledge production and brings into a virtuous circle of growth. (Rodriguez & Alvarado, 2008)
Investment in research and development (R & D) is one of the main indicators of technological and innovative effort of a country. It is important to note that there are several ways to measure the innovative effort of a country (or company), and that innovation in many cases involves activities that go beyond investing in R & D (such as organizational innovations or in business models), but spending on R & D is a valid indicator to measure a country's innovative effort. (OsloManual, 2005)
A very high correlation is presented globally between R&D and the level of per capita income in the country economies. This relationship is neither deterministic nor linear, and is mediated by a number of other variables such as human resources, institutions (universities and research centers) and productive specialization, among others. However there is worldwide clear evidence of the existence of a high positive correlation between innovative efforts and per capita income (Braconier, 2000; Acemoglu, Aghion, & Zilibotti, 2006), the last one is an indicator of development in countries (UNESCO, 2002).
Graph 1 summarizes the above discussion; it is generally observed that economies with higher per capita incomes are higher performing innovative efforts. All the technological frontier countries are in the upper-right quadrant of the graph, including the United States, Canada and the Nordic countries, among others. In the case of the Iberoamerican countries, a clear distinction between Spain and Portugal which are in an intermediate position, and the countries of Latin America, occupying all the lower left quadrant of the graph, showing levels of Gross Domestic Product (GDP) per capita among the lowest in the sample and research and development expenditure that does not exceed 0.5% of GDP, with the exception of Brazil, which invests nearly 1% of GDP in R & D.
In other words, there is a lag in the innovative effort of Latin America countries (expenditure on R & D, researchers, funding sectors of effort). This means that there is a low innovation capacity in the countries of Latin America.
Due to the situation of Latin America countries about innovation efforts and country development exposed before, the aim of this paper is to analyze what strategies can be used in order to encourage innovation and development in Latin America countries through the analysis of the relationship between a Latin-American innovation theory such as Sbato Triangle (Sbato & Natalio, 1968) and other theories such as Schumpeter's theories of development (1934; 1975), and the ideas of Teece about who profiting from technological innovation (Teece, 1986).
According to Sbato and Natalio (1968) the triangle must consist of the following vertices: (1) scientific and technological infrastructure: composed by the educational system, laboratories and research institutes, and economic and financial resources necessary for its operation. (2) Government: that mobilizes resources towards the vertices of the productive structure and scientific and technological infrastructure through legislative and administrative processes. (3) Productive structure: composed by all productive sectors that provides goods and services demanded by the society.
Sbato (1967) defines the main objective of the production structure, public or private entrepreneurship, according to Schumpeter's ideas, believing that the role of the production structure is to reform or revolutionize the production system, exploiting an invention, or an untried technique to produce a new good, or the production of an old merchandise by a new method, that allows an industry reorganization. (Schumpeter, 1975)
The existence of this triangle between government, technological infrastructure, and production structure was also validated by several authors in the U.S. (Woytinsky, 1977; Galbraith, 1967), not only from the standpoint of the analysis of the existence of the vertices, but also the existence of the relationships between each of them, which Galbraith (1967) called techno - structure.
Figure 1, shows a triangle of reciprocal relationships between the three vertices mentioned before. There are relationships in the vertical direction (government - technological infrastructure, and government - production structure). It is important to mention that in Latin America countries the technological infrastructure vertice depends on the action of the government in regard to the allocation of resources, but also, according to Sbato, sometimes this relationship depends on government demands to the technological sector. An example of government demands to the technological sector in Ecuador occurred in 1982 when there was a great crisis in the banana sector, which represents the highest category of Ecuador's trade balance, after oil, because the plague black Sigatoka attacked the plantations in the country; due to this the government asked the technological sector to seek a solution and allocated special funds budget of the country for conducting this research. The technological sector of Ecuador was not prepared to meet this demand from the government and was forced to use these funds to hire foreign professionals in order to find the solution to the pest problem. The solution was found, and the invention of the pesticide previously used in Panama, was commercialized by the production structure of Ecuador, i.e. it became in innovation (Orlando, Snchez, & Maldonado, 2001), but it is important to notice that the source of this innovation or the origin of this new creation was from outside the country, and the majority of the profits of the commercialization process of the pesticide went out the country.
Relationships between government and production structure usually occur through the technological sector as a mediator of this relationship, because is in the production structure where they are sold and produce inventions of the technological sector. Additionally, in many cases the research area belongs to the companies that constitute the production structure.
Horizontal relationships are more complex to establish, except in those cases where technological infrastructure belongs to the productive structure, reporting directly to the companies. In cases where technological infrastructure and the productive structure are different institutions, one of the most appropriate methods to establish communication channels through which demands are established between them is reciprocal human talent mobility from one vertex to another (Somaya, Williamson, & Lorinkova, 2008). Considering that the subjects in both vertices have creativity and business abilities, communication channels will be open, and interorganizational learning will be ensured (Phillips, 2002; Shaw, Duffy, Johnson, & Lockhart, 2005; Rosenkopf & Almeida, 2003; Campbell, Coff, & Kryscynski, 2012). However if it is noted that both qualities are absent in subjects of both vertex then we would face deaf dialogue between entrepreneurs and scientists who would become an obstacle, often without solution, in order to move towards the development of the countries, this happens frequently in Latin America countries. Employee mobility between firms also could help for the success of regional economic clusters through the agglomeration and localization of knowledge. (Saxenian, 1994; Almeida & Kogut, 1999)
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