Inter-American Development Bank
facebook
twitter
youtube
linkedin
instagram
Abierto al públicoBeyond BordersCaribbean Development TrendsCiudades SosteniblesEnergía para el FuturoEnfoque EducaciónFactor TrabajoGente SaludableGestión fiscalGobernarteIdeas MatterIdeas que CuentanIdeaçãoImpactoIndustrias CreativasLa Maleta AbiertaMoviliblogMás Allá de las FronterasNegocios SosteniblesPrimeros PasosPuntos sobre la iSeguridad CiudadanaSostenibilidadVolvamos a la fuente¿Y si hablamos de igualdad?Home
Citizen Security and Justice Creative Industries Development Effectiveness Early Childhood Development Education Energy Envirnment. Climate Change and Safeguards Fiscal policy and management Gender and Diversity Health Labor and pensions Open Knowledge Public management Science, Technology and Innovation  Trade and Regional Integration Urban Development and Housing Water and Sanitation
  • Skip to main content
  • Skip to secondary menu
  • Skip to primary sidebar
  • Skip to footer

Ideas Matter

  • HOME
  • CATEGORIES
    • Behavioral Economics
    • Environment and Climate Change
    • Macroeconomics and Finance
    • Microeconomics and Competitiveness
    • Politics and Institutions
    • Social Issues
  • Authors
  • Spanish
Research departments at multilateral development organizations have an indispensable mission in advising policymakers.

The Unique and Essential Mission of Multilateral Research Departments

November 21, 2019 by Eric Parrado Leave a Comment


“What keeps you up at night?” That was a question posed to a gathering of leaders from government institutions around Latin America and the Caribbean some 25 years ago.

In asking that question, the Research Department at the Inter-American Development Bank (IDB) laid down a mission that it has zealously pursued ever since. It’s not just asking government leaders what worries them. It’s also investigating the most difficult policy issues so that leaders can put their countries on the path to greater prosperity.

I mention this because of a recent controversy around whether research should be handled in-house by multilateral development organizations or contracted out to academia. As the newly-installed Chief Economist of the IDB I know where I stand, and  it’s why I am so enthusiastic to lead its Research Department. I am convinced that the expertise of research departments at multilaterals in conducting path-breaking investigations and experimental trials makes them irreplaceable in the search for better policies.

 A research mission different from that of academia

As the IDB’s Research Department celebrates its 25th anniversary, one lesson is echoed by policymakers and advisers from the region, our former chief economists and the numerous colleagues we have worked with over the years: The value of research departments like that at the IDB lies in the way they differ from academia.

Academia does exceptional work. That is unquestionable. But academics have different objectives, priorities, and incentives. They usually try to break new ground in economic theory and empirical modeling and have very personal goals.  They tend to seek publication in academic journals irrespective of whether their contribution has a helpful policy implication for improving the state of a country or region. Moreover, their research is not necessarily based on policy questions. Indeed, academic researchers generally do not have a strong preference for consultancy work with a policy orientation.

By contrast, we let the most important policy issues guide our research with an institutionally common objective in mind. Depending on the multilateral organization, this could be related to ending extreme poverty and promoting shared prosperity in a sustainable way; improving lives in other ways, or ensuring the stability of the international monetary system, among others. We concentrate on the developing rather than the developed world. And we publish in journals, not as a principle goal, but to resolve policy issues that would not be of principle concern to an economist trying to make their name at an academic institution.

 Consider our 2018 Development in the Americas report. Latin America and the Caribbean has long suffered from low levels of so-called capital goods, like roads, schools, and health clinics. Political pressures often mean that spending on things like salaries takes priority. But, until we undertook the task in our report, that bias towards current expenditures had never been quantified, nor had the extent to which it impedes the region’s long-term prospects for growth. We took on the challenge not because we only wanted to get published, but because we are in daily contact with policymakers and know what worries them.

A deep network of relationships with policymakers

The deep network of personal and professional relationships that our institution, like other multilaterals, has established in a decades-long history of lending, providing technical assistance, and consulting on policy questions gives us another advantage. Governments are most likely to trust us with their sensitive records.

Finally, our research, vital as it is, would not be possible without a continual, creative give-and-take with our operations departments. Operations at the IDB, like at other multilaterals, hone in on the essential tasks of lending and technical assistance. Research departments, meanwhile, use input from them to innovate and find long-term solutions that operations will then help to implement. In this productive and vital process of intra-institutional cross-fertilization, each element of the institution plays an essential role. It is our partners in the region that win.

An immense scope of policy-driven research and recommendations

In just the last few years, our research department has devised behavioral interventions that are being widely employed in the region to increase tax collection. It has worked on more effective ways to educate children. It has made a host of recommendations on macroeconomic policy and fiscal reform. And its work on political economy issues have been vital in helping government forge coalitions to get important policy legislation enacted.

Collaboration has been key to these successes. But equally crucial is the research department’s independence to look at the long-term big picture, conduct scientific trials, and discover new ways of approaching policy. This recipe has been astoundingly productive for the IDB. I know the same is true at other multilaterals, and I see no reason to change a good thing.

 


Filed Under: #Skills, Macroeconomics and Finance, Politics and Institutions, Social Issues Tagged With: #academia, #AcademicJournals, #EconomicGrowth, #education, #fiscalpolicy, #monetary, #policymakers, #poverty, #research, #TaxCollection

Eric Parrado

Eric Parrado Herrera is Chief Economist and General Manager of the IDB’s Research Department since March 2019. Before joining the IDB, he was a professor of economics and finance at the ESE Business School of the Universidad de los Andes in Santiago, Chile. Mr. Parrado is a visiting professor at Oxford University and the Central European University, and a member of the World Economic Forum's Global Future Council on Financial and Monetary Systems. Throughout his professional career, Mr. Parrado has focused on monetary, fiscal and financial policy, advising central banks on managing inflation targeting regimes and implementing sovereign wealth funds in several countries. He has also written several academic articles on monetary policy, fiscal policy and sovereign wealth funds.

Reader Interactions

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Primary Sidebar

Follow Us

Subscribe

Search

Related posts

  • Opportunity: Accepting Applications for Prestigious Research Fellowship
  • Young Researchers Invited to Apply for Prestigious Fellowship
  • Young Researchers Wanted for Prestigious Fellowship
  • Research Opportunity: Call for Visiting Scholars Program
  • Prestigious Fellowship for Young Researchers Is Accepting Applications

About this blog

The blog of the IDB's Research Department shares ideas that matter on public policy and development in Latin America and the Caribbean.

Footer

Banco Interamericano de Desarrollo
facebook
twitter
youtube
youtube
youtube

    Blog posts written by Bank employees:

    Copyright © Inter-American Development Bank ("IDB"). This work is licensed under a Creative Commons IGO 3.0 Attribution-NonCommercial-NoDerivatives. (CC-IGO 3.0 BY-NC-ND) license and may be reproduced with attribution to the IDB and for any non-commercial purpose. No derivative work is allowed. Any dispute related to the use of the works of the IDB that cannot be settled amicably shall be submitted to arbitration pursuant to the UNCITRAL rules. The use of the IDB's name for any purpose other than for attribution, and the use of IDB's logo shall be subject to a separate written license agreement between the IDB and the user and is not authorized as part of this CC- IGO license. Note that link provided above includes additional terms and conditions of the license.


    For blogs written by external parties:

    For questions concerning copyright for authors that are not IADB employees please complete the contact form for this blog.

    The opinions expressed in this blog are those of the authors and do not necessarily reflect the views of the IDB, its Board of Directors, or the countries they represent.

    Attribution: in addition to giving attribution to the respective author and copyright owner, as appropriate, we would appreciate if you could include a link that remits back the IDB Blogs website.



    Privacy Policy

    Copyright © 2025 · Magazine Pro on Genesis Framework · WordPress · Log in

    Banco Interamericano de Desarrollo

    Aviso Legal

    Las opiniones expresadas en estos blogs son las de los autores y no necesariamente reflejan las opiniones del Banco Interamericano de Desarrollo, sus directivas, la Asamblea de Gobernadores o sus países miembros.

    facebook
    twitter
    youtube
    This site uses cookies to optimize functionality and give you the best possible experience. If you continue to navigate this website beyond this page, cookies will be placed on your browser.
    To learn more about cookies, click here
    X
    Manage consent

    Privacy Overview

    This website uses cookies to improve your experience while you navigate through the website. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies. But opting out of some of these cookies may affect your browsing experience.
    Necessary
    Always Enabled
    Necessary cookies are absolutely essential for the website to function properly. This category only includes cookies that ensures basic functionalities and security features of the website. These cookies do not store any personal information.
    Non-necessary
    Any cookies that may not be particularly necessary for the website to function and is used specifically to collect user personal data via analytics, ads, other embedded contents are termed as non-necessary cookies. It is mandatory to procure user consent prior to running these cookies on your website.
    SAVE & ACCEPT