This is the last of a series of three working papers analyzing the basic characteristics of the economic environment in which Latin American firms operate and the optimal design of incentive programs compatible with such environment.  Executive pay-for-performance compensation schemes are usually based on stock returns.  However, stock returns change in response to forces beyond management control (e.g., market crushes). The economic environment in which Latin American firms operate is highly unstable, which means that this is a very important limitation for Latin American firms.

This paper seeks to expand on two topical strands in Government Finance and Political Science literature, rent-seeking and the soft-budget constraint, so as to bring forth a strong linkage with corporate governance environments. It will attempt to accomplish this task by setting up a distinctive framework of analysis that hinges on incremental cash flows. Firstly, it claims that both rent-seeking behavior and the soft-budget constraint are worthy of being applied to corporate governance learning and practice.

This paper analyzes the sources of quality of a pharmaceutical product. After identifying eight quality dimensions, a framework of hypothetical sources that contribute the most to shape those dimensions is established.   The framework, based on Garvin’s pioneering work, is applied to case studies of laboratories operating in Argentina. Framework relevance is considered using correlation analysis.

The paper combines a brief review of basic monetary theory, a discussion of the critical monetary and banking experience undergone by Argentina between 1980 and 2002, an essay on the stability of velocity of circulation and a proposal for reform. Our thesis is that after a hyperinflation episode (or under currency substitution), when velocity of circulation stops being a parameter to become a very volatile magnitude, an independent or active monetary policy (a floating exchangerate regime) becomes a high-risk policy.

In contrast to previous empirical work on electoral cycles, which implicitly assumes the executive has full discretion over fiscal policy, this paper contends that under separation of powers an unaligned legislature may have a moderating role. Focusing on the budget surplus, we find that stronger effective checks and balances explain why cycles are weaker in developed and established democracies. Once the discretional component of executive power is isolated, there are significant cycles in all democracies.

This is a sequel to UCEMA working paper # 277, and as such, the draft of the second chapter of a book project on Argentina as a ‘parasite state’, i.e., one that simultaneously lives off the rest of the world and consumes itself, harboring parasitical segments within its political elite, bourgeoisie, bureaucracy and proletariat. This chapter delves on the so-called “piqueteros”, the picketing organizations that emerged during the 1990s and have since thrived.

In this paper we set forth a new perspective from which to understand and measure the brokerage of asymmetric information that intermediaries usually carry out. Firstly, we deal with partitions of a given set so as to lay grounds to our line of research. Secondly, we argue that trade splits up imperfect information sets, over which traders try to negotiate and profit, but also hide their opportunistic behavior from their counterparts.

In 1891, Baron Maurice de Hirsch founded the Jewish Colonization Association (J.C.A.), through which he would manage a gigantic social welfare project concerning the immigration of thousands of people from the Russian Empire towards Argentina, and their settlement in agricultural colonies. In this paper, we evaluate the result of this project, which is generally qualified as a failure by historians on the subject.

This paper sets forth the foundations for a transactional approach for the performance of arbitrage in foreign exchange markets. Firstly, we review both the standard model of financial arbitrage and the so-caled covered-interest arbitrage environment, and we also lay bare striking shortcomings in these points of view, mainly grounded on a wide- ranging empirical evidence.

Al analizar la problemática particular de las empresas de familia surgen dos características bien distintivas: a) la gran contribución que realizan estas empresas al desarrollo de las economías donde actúan y b) la altísima probabilidad de desaparecer en sus primeros años de vida. Para superar esta amenaza es necesario recurrir a las herramientas que nos provee la disciplina llamada “Governancia Corporativa”.