Trade Networks in Latin America : Spatial Inefficiencies and Optimal Expansions

How do trade connectivity issues affect the efficient spatial distribution of economic activity within and across countries in Latin America This paper uses a spatial general equilibrium framework to construct optimal transport networks and optimal...

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Main Authors:	Gorton, Nicole, Ianchovichina, Elena
Format:	Working Paper
Language:	English
Published:	World Bank, Washington, DC 2021
Subjects:	TRADE TRANSPORT NETWORK SPATIAL EQUILIBRIUM ROAD INFRASTRUCTURE ECONOMIC GEOGRAPHY REGIONAL TRADE INTEGRATION MERCOSUR ANDEAN COMMUNITY
Online Access:	http://documents.worldbank.org/curated/undefined/936651636137366844/Trade-Networks-in-Latin-America-Spatial-Inefficiencies-and-Optimal-Expansions http://hdl.handle.net/10986/36555

id	okr-10986-36555
recordtype	oai_dc
spelling	okr-10986-365552021-11-13T05:10:43Z Trade Networks in Latin America : Spatial Inefficiencies and Optimal Expansions Gorton, Nicole Ianchovichina, Elena TRADE TRANSPORT NETWORK SPATIAL EQUILIBRIUM ROAD INFRASTRUCTURE ECONOMIC GEOGRAPHY REGIONAL TRADE INTEGRATION MERCOSUR ANDEAN COMMUNITY How do trade connectivity issues affect the efficient spatial distribution of economic activity within and across countries in Latin America This paper uses a spatial general equilibrium framework to construct optimal transport networks and optimal expansions to existing networks in most Latin American countries, as well as within MERCOSUR and the Andean Community. The paper assesses the average annual welfare losses due to inefficient domestic road networks in Latin America at 1.7 percent, ranging from 2.5 percent in Brazil to 0.2 percent in El Salvador. Spatial misallocation of transnational road networks is associated with annual welfare losses of 1.8 percent in MERCOSUR and 1.6 percent in the Andean Community. Optimal investments in improvements and expansions of existing networks can correct these inefficiencies and reduce spatial inequality within countries. These investments correlate relatively well with World Bank road projects because both the model and the World Bank prioritize investments in high population areas. Transnational road improvements benefit the most the least developed country in each trade bloc. The results are robust to changes in data sources and model assumptions. 2021-11-12T20:13:32Z 2021-11-12T20:13:32Z 2021-11 Working Paper http://documents.worldbank.org/curated/undefined/936651636137366844/Trade-Networks-in-Latin-America-Spatial-Inefficiencies-and-Optimal-Expansions http://hdl.handle.net/10986/36555 English Policy Research Working Paper;No. 9843 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper Latin America & Caribbean South America
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	TRADE TRANSPORT NETWORK SPATIAL EQUILIBRIUM ROAD INFRASTRUCTURE ECONOMIC GEOGRAPHY REGIONAL TRADE INTEGRATION MERCOSUR ANDEAN COMMUNITY
spellingShingle	TRADE TRANSPORT NETWORK SPATIAL EQUILIBRIUM ROAD INFRASTRUCTURE ECONOMIC GEOGRAPHY REGIONAL TRADE INTEGRATION MERCOSUR ANDEAN COMMUNITY Gorton, Nicole Ianchovichina, Elena Trade Networks in Latin America : Spatial Inefficiencies and Optimal Expansions
geographic_facet	Latin America & Caribbean South America
relation	Policy Research Working Paper;No. 9843
description	How do trade connectivity issues affect the efficient spatial distribution of economic activity within and across countries in Latin America This paper uses a spatial general equilibrium framework to construct optimal transport networks and optimal expansions to existing networks in most Latin American countries, as well as within MERCOSUR and the Andean Community. The paper assesses the average annual welfare losses due to inefficient domestic road networks in Latin America at 1.7 percent, ranging from 2.5 percent in Brazil to 0.2 percent in El Salvador. Spatial misallocation of transnational road networks is associated with annual welfare losses of 1.8 percent in MERCOSUR and 1.6 percent in the Andean Community. Optimal investments in improvements and expansions of existing networks can correct these inefficiencies and reduce spatial inequality within countries. These investments correlate relatively well with World Bank road projects because both the model and the World Bank prioritize investments in high population areas. Transnational road improvements benefit the most the least developed country in each trade bloc. The results are robust to changes in data sources and model assumptions.
format	Working Paper
author	Gorton, Nicole Ianchovichina, Elena
author_facet	Gorton, Nicole Ianchovichina, Elena
author_sort	Gorton, Nicole
title	Trade Networks in Latin America : Spatial Inefficiencies and Optimal Expansions
title_short	Trade Networks in Latin America : Spatial Inefficiencies and Optimal Expansions
title_full	Trade Networks in Latin America : Spatial Inefficiencies and Optimal Expansions
title_fullStr	Trade Networks in Latin America : Spatial Inefficiencies and Optimal Expansions
title_full_unstemmed	Trade Networks in Latin America : Spatial Inefficiencies and Optimal Expansions
title_sort	trade networks in latin america : spatial inefficiencies and optimal expansions
publisher	World Bank, Washington, DC
publishDate	2021
url	http://documents.worldbank.org/curated/undefined/936651636137366844/Trade-Networks-in-Latin-America-Spatial-Inefficiencies-and-Optimal-Expansions http://hdl.handle.net/10986/36555
_version_	1764485486635646976

Trade Networks in Latin America : Spatial Inefficiencies and Optimal Expansions

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