Supporting Policy Reforms in Business Climate and Innovation in Latin America and the Caribbean: Lessons Learned from the Inter-American Development Bank's Experience with Policy-Based Lending

This paper reviews the Inter-American Development Bank's policy-based loans, which are designed to improve competitiveness in selected Latin American and Caribbean countries. It summarizes the context in which those projects were implemented and qualitatively assesses the information available about their impact. The findings are based on mapping initiatives undertaken in eight countries for each of seven thematic areas related to business competitiveness and innovation. The evidence gathered for this paper supports the conclusion that policy-based loans have achieved concrete lasting benefits, but additional research is required to assess in more detail the extent of the benefits and the long-term effects of the reforms on indicators such as economic and productivity growth.