Objectives

The research group on political economy will analyze several themes that are particularly relevant in Latin America, including investment in state capacity and development; political accountability; political instability, violence and institutional reform.
State capacity has been an active area of research in economics in recent years, with Besley and Persson as two of its most prominent contributors. There has been some research on this topic in Latin America. Cárdenas (2010) and Cárdenas and Tuzemen (2010), for example, elaborate on Besley and Persson incorporating income distribution. Besley and Persson (2011) build an index of state capacity and cross-country regress it on several variables that, according to theory, should explain their index. They report a good fit, but they also report that Latin America is somehow off the regression line: actual capacity is above its predicted value. This of course calls for an explanation. Besides, doing some more detailed case studies is probably a promissory route to follow, complementary to the cross-country type of analysis cited above.
Since the 1980s, Latin America has gone through a process of democratization. This process has implied a notorious reduction in political repression and internal conflict. The region offers a number of very interesting cases to study the complex interactions between economic development, inequality, violence and democratization. The quality of recent democracies in the region is also a topic that deserves attention. While elections are regularly held in most countries, there is considerable debate about checks and balances, the independence of the judiciary, controls on the Executive, and independence and pressure on the media. Because of these issues, there has been much controversy in the region on the effectiveness of elections to hold politicians accountable.

An analysis of the Latin American experience in the light of the existing literature on elections and political accountability seems to be a promissory route to follow.

Activities
A workshop on “Political Economy” to be held in Montevideo, March 26-27 2015.

Organizers: Timothy Besley (LSE), Ernesto Dal Bó (UC Berkeley), Marcela Eslava (Universidad de Los Andes), Claudio Ferraz (PUC Rio), Frederico Finan (Stanford), Alvaro Forteza (UdelaR, Uruguay) and Ernesto Stein (IDB). The workshop will be organized in cooperation with the Political Economy Group of LACEA (PEG).

Invited speaker: Tim Besley (LSE and IEA).

Local Host Institution and Organizer
dECON (UdelaR), Alvaro Forteza.
Courses
The research group would like to organize a course on Political accountability and selection and another in State capacity and development.