PRODUCTIVITY THROUGH A TERRITORIAL LENS

Leveraging Spatial Development for Accelerated Economic Growth in Latin America and the Caribbean

By Elena Ianchovichina

The problem of low economic growth in Latin America has puzzled economists for decades. Numerous explanations have been provided over the years yet few have focused on spatial or geographical factors, in particular the role of mobility frictions, which along with some structural and spatial features of cities in the region weaken urban productivity growth. Using the core concepts of economic geography in a nuanced and deliberative way, Productivity

Through a Territorial Lens: Leveraging Spatial Development for Accelerated Economic Growth in Latin America and the Caribbean adopts a ‘territorial’ lens to uncover the key spatial constraints to specialization, migration, and agglomeration, and hence long-run economic growth.

The study first documents the evolution of territorial differences in labor and place productivity within countries in the region between the early 2000s and the late 2010s. It then assesses the size of mobility frictions from migration and transport costs and the extent to which they generate misallocation and constrain national output and welfare growth. Finally, the investigation turns to spatial and structural reasons behind weak agglomeration economies in a region of large and dense cities. It concludes with ideas on how to improve the region’s prospects for accelerated inclusive growth.

November 2023. 140 pages.

Stock no. C211959

(ISBN: 978-1-4648-1959-9). US$43.95

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