Institutions and Productive Development Programs in Latin America and the Caribbean: Methodological Approach and Preliminary Results

Abstract

In the post-Washington Consensus era, there has been renewed discussion of the role of the State in encouraging productivity. This has led to a debate about the role of institutions and programs that form the basis for state interventions to enhance productivity. These interventions, in many instances, take the form of business development services, support for innovation, export promotion, and other programs that target specific sectors and activities. In general, these interventions are called Productive Development Programs (PDPs). Today, governments in Latin America and the Caribbean devote a great deal of resources to PDPs, supporting firms through official agencies and private intermediaries. Despite their economic justification, there is still no well-defined methodology for assessing their performance or for categorizing PDPs according to their type, size, target market, and delivery mechanisms. This document aims to contribute to the development of a tool to analyze PDPs. The methodology for mapping and measuring of institutional performance (MIDI, from its acronym in Spanish) constitutes an effort to quantify and measure the organizational aspects that contribute to a better balance between the costs and benefits of PDPs. The objective of the MIDI is to measure the quality of the programs and the institutions that are behind them and assess their ability to achieve their stated goals. It is in this vein that the MIDI establishes metrics to analyze how these organizational arrangements are planned, implemented, and monitored. The MIDI is based on a questionnaire that allows for benchmarking and comparative analysis at the level of countries and regions within countries. The methodology has been piloted with field surveys in four countries in Latin America and the Caribbean based on an initial questionnaire. From this pilot phase, performance metrics have been developed for the institutions and programs studied, certain common elements have been identified, and some preliminary conclusions drawn—both for improving the methodology and for suggesting new ways to analyze PDPs. The MIDI identifies characteristics of an organizational and comparative nature. At the same time, it allows the formulation of ordinal metrics and the identification of policy recommendations based on variables that are both objective and qualitative. In particular, the MIDI offers guidelines for comparing similar PDPs and the institutions that offer them by measuring their strengths and weaknesses, identifying best practices for dissemination and wider application, and providing a method for mapping programs by type, beneficiary, cost, and other variables. This technical note is divided into the following sections. Section 1 gives a general introduction to what PDPs offer and, in addition, describes the theoretical foundations for their different dimensions and implications for * This technical note is based on a methodological proposal prepared by Gonzalo Rivas and Roberto DeGroote. The company ACE and Dr. Jesus Esteban helped to carry out field tests in Latin America and the Caribbean and contributed to improving the methodology. The authors are grateful to Alessandro Maffioli, Carlo Pietrobelli, Joan Prats, Gonzalo Rivas, and Jesus Esteban for their comments on the first draft.