ESSAYS ON REGIONAL INTEGRATION AND DEVELOPMENT ECONOMICS
Berthelon, Matias Enrique
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The first chapter of this dissertation studies the growth effects of regional integration agreements. During the 1990's the world experienced a new wave of regional integration agreements (RIAs) that reached unprecedented proportions. In the presence of economies of scale or extent-of-the market effects RIAs may have positive growth effects. I introduce a new measure of regional integration by interacting country membership to an RIA and the partners' share of world GDP, which allows capturing differentiated effects depending on the size of the partners. Results indicate that RIAs have exerted positive effects on growth. In addition, I find that North-North agreements have significant growth effects; South-South agreements have ambiguous effects depending on the size of the countries joining them, and that there is no clear answer for North-South agreements. The second chapter studies the impacts of Social Infrastructure Investments in Education focusing in the case of Nicaragua during the 1990's. This chapter assesses the impact of investments in primary school infrastructure carried by Nicaragua's Social Investment Fund (FISE) during the 1993-1997 period on several education outcomes in the primary school population, such as: enrollment, grade repetition, absenteeism, age at which students enroll in first grade, and education gap. I propose to use two different approaches that assume selection on observables to deal with possible selection bias in order to estimate the impact of FISE investments: a regression based estimation and a propensity score matching technique. With these two approaches I do not find any effects of FISE's investments on the selected educational outcomes. One possible explanation of the lack of significance might be that FISE investments actually had no impact on the outcomes because infrastructure is not a relevant determinant of those used here. If this is the case, then investing in setting up and maintaining Social Funds cannot be justified by appealing to the alleged positive impact of their investments on education. Since the impacts are simply not present in the Nicaraguan case, the reasons to keep Social Funds must be revisited.