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Reports

Latin American Growth in the 21st Century: The 'Commodities Boom' That Wasn't

May 2014, David Rosnick and Mark Weisbrot

Did NAFTA Help Mexico? An Assessment After 20 Years

February 2014, Mark Weisbrot, Stephan Lefebvre, and Joseph Sammut

The Mexican Economy and the 2012 Elections

June 2012, Mark Weisbrot and Rebecca Ray

An Analysis of Discrepancies in the Mexican Presidential Election Results
August 2006, Mark Weisbrot, Luis Sandoval and Carla Paredes-Drouet

An Analysis of Mexico's Recounted Ballots
August 2006, Mark Weisbrot, David Rosnick, Luis Sandoval and Carla Paredes-Drouet

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The Americas Blog

How Have Latin America’s Political Leaders Responded to Israel’s Siege on Gaza?

NAFTA Advocates Continue to Make Misleading Claims

John Kerry on the Latin American Economies: Getting it Half-Right

An Honest Look at Mexican Economic Growth in the NAFTA Era

What Do Latin American Countries Stand to Gain from the TPP?

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Op-Eds & Columns

The U.S. Re-militarization of Central America and Mexico

Alexander Main
NACLA Report on the Americas, June 26, 2014

The Supreme Court Declines to Review Widely Opposed Ruling on Argentine Debt: Why?

Mark Weisbrot
New York Times, June 22, 2014

China Has Good Reason to Help Stabilize Latin American Economies

Mark Weisbrot
The Guardian, January 31, 2014

Twenty Years Since NAFTA: Mexico Could Have Done Worse, But It’s Not Clear How

Mark Weisbrot
The Guardian, January 4, 2014

En español

It Lowered Wages, as It Was Supposed to Do

Dean Baker
The New York Times, November 25, 2013

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Events

Humanitarian Crisis at the U.S.-Mexico Border: Understanding the Surge of Unaccompanied Minors at U.S. Borders

“Lessons from NAFTA for the TPP” Did NAFTA Help Mexico?: An Assessment After 20 Years

Obama in Latin America: The U.S. Response to the Region’s Leftward Shift

Press Releases

New Paper Finds No Evidence that Latin America’s Economic Growth Rebound Results from a “Commodities Boom”

May 21, 2014

Twenty Years after NAFTA, Mexico Has Experienced Lagging Growth, Persistent Poverty and Increased Unemployment

February 12, 2014

Mexico’s Economic Failure is Driving Force in Sunday’s Election, Says New CEPR Report
June 27, 2012

Appointment of Stanley Fischer to Head the IMF Would "Institutionalize Lack of Accountability," CEPR Co-Director Says
June 13, 2011

Holding the World Bank Accountable for its Research: The Case of NAFTA

The World Bank and NAFTA 

Holding the World Bank Accountable for its Research:
The Case of NAFTA

Mark Weisbrot 

May 24, 2007 

Timeline

The recent controversy that led to the resignation of World Bank President Paul D. Wolfowitz highlighted the lack of accountability at the World Bank. But it is not only its governance that suffers from the fact that the Bank, with 185 member nations, is ruled primarily by the U.S. Treasury Department. There are also serious problems with the Bank's research.

Last year, the World Bank established a panel of economists to evaluate its research from 1998-2005, including nearly 4,000 papers, books, and reports. Among other problems, the panel had "substantial criticisms of the way that this research was used to proselytize on behalf of Bank policy, often without taking a balanced view of the evidence, and without expressing appropriate skepticism."

But sometimes the problems are even worse, as when the Bank publishes erroneous research results, which influence important policy debates, and then refuses to correct its errors. The Center for Economic and Policy Research (CEPR) has tried to hold the Bank accountable for its research. In December 2003, the World Bank released a paper which purported to show that NAFTA had a positive influence on Mexico's economic growth. The paper was timed and indeed, rushed — to have an influence on the political debate. It was released on the final day of the CAFTA negotiations and coordinated to coincide with the 10th anniversary of NAFTA (January 2004), which brought a spate of newspaper articles on the agreement's impact.

The World Bank's results, now shown to be erroneous, influenced the public debate. For example, they were cited by a Washington Post column in December 2003 and the Washington Post editorial board in January 2004, in support of the newspaper's arguments for CAFTA. In March 2004, CEPR responded with a paper that highlighted errors in the paper that negated its results.

The correspondence and papers below, between CEPR and the World Bank, explain the details of the Bank's errors and why they matter. The bottom line is that, because of uncorrected errors in the Bank's analysis, their econometric results cannot support the claim that NAFTA had a positive effect on Mexico's growth rate. As of today, May 24, 2007, the Bank has still not retracted its conclusion or corrected this mistake.

Timeline

December 2003 — The World Bank publishes NAFTA and Convergence in North America: High Expectations, Big Events, Little Time (as Chapter 1 of Lessons from NAFTA for Latin America & the Caribbean).

March 2004 — CEPR publishes NAFTA at Ten: The Recount, which explains problems with the World Bank's methodology in NAFTA and Convergence in North America.

April 2004 — The World Bank posts a second version of NAFTA and Convergence in North America.

May 2004 — The World Bank posts a third version of NAFTA and Convergence in North America.

October 2004 — CEPR publishes Getting Mexico to Grow with NAFTA: The World Bank's Analysis, which explains the World Bank's methodological problems and errors that were not addressed in its subsequent versions of NAFTA and Convergence in North America.

November 2006 — The World Bank publishes The World Bank's Research on Trade Policy, 1998-2005: An Evaluation in which UCLA economist Sebastian Edwards reviews Lessons from NAFTA for Latin America & the Caribbean.

January 2007 — CEPR sends letters to Sebastian Edwards and François Bourguignon (World Bank's Chief Economist) reiterating the original concerns with NAFTA and Convergence in North America and asking for a correction.

March 2007 — CEPR receives a reply from the authors of NAFTA and Convergence in North America, and from Bourguignon, who defers to the authors.  The reply defends thepaper and does not acknowledge any errors.

April 2007 — CEPR responds, explaining again the errors that negate the World Bank paper's conclusions, and once again asking for correction.

 

For more information, please contact Dan Beeton at 202-293-5380 x104. 

 

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