List of Figures
Figure B1.1 Fundamental Accounting Relationships of Savings 8 Figure 2.1 Gross National Saving Rates (percent of GDP),
Simple Averages by Region 24
Figure 2.2 Distribution of Aggregate Saving Rates by Region 24 Figure 2.3 Gross National Saving Rates in Latin America and the
Caribbean 25 Figure 2.4 Composition of Total Saving in the Region, 1980–2014 26 Figure 2.5 Distribution of Foreign Saving Rates by Region 27 Figure 2.6 Composition of Private Saving, World and
Latin America and the Caribbean 28
Figure B2.1 Alternative Definitions of Saving Rates vs
Traditional Definition 31
Figure 2.7 Dependency Rates (Young and Old), by Region 33 Figure 2.8 Household Saving Rates by Age Group in
Latin America and the Caribbean 35
Figure 2.9 Household Saving Rates by Income Deciles 36 Figure 2.10 Use of Savings among Households at the Base
of the Pyramid 39
Figure 3.1 Financial System Deposits and Assets under
Management of Different Institutional Investors 47 Figure 3.2 Median Banking System, OECD and
Latin American and Caribbean Countries 50 Figure 3.3 Financial Inclusion by Region 52 Figure 3.4 Types of Financial Institutions: Number and
Share of Savings as Percentage of GDP 53 Figure B3.1 Allocation of New Savings: Real Estate vs. Banks 55
Figure B3.2 Savings Channeled to Real Estate as a
Fraction of City and National Savings 56 Figure 3.5 Portfolio of Savings among Low- and
Middle-income Households 57
Figure 3.6 Source and Use of Household Funds,
Latin America vs. Comparators 58
Figure 3.7 Percentage of Households with a Bank Account,
Institutions and Inequality 62
Figure 3.8 Marginal Impact of Inequality for Different
Income Groups 64
Figure 3.9 The Process of Financial Deepening in Mexico 66 Figure 3.10 Financial Institutions per Inhabitant in Mexican
Municipalities in 2012 67
Figure 3.11 Percentage of Households with Access to Financial Institutions by Income Decile, Mexico 67 Figure 4.11 Private Investment in Infrastructure, 1990–2012 76 Figure 4.2 Average Investment, National Saving,
and Foreign Saving Rates, 1980–2014 78 Figure 4.3 Gross Fixed Capital Formation by Region, 1980–2014 79 Figure 4.4 Average Gross Fixed Capital Formation by
Region, 2000–2014 80
Figure 4.5 National Saving and Investment in Latin America
and the Caribbean and Emerging Asia, 1980–2014 81 Figure 4.6 Self-Financing Ratios by Region, 1980–2011 83 Figure 4.7 Evolution of Infrastructure Investment, 1980–2013 86 Figure 4.8 Investment in Infrastructure by Country 2008–13
(annual average) 87
Figure 4.9 Perceived Infrastructure Quality: A Regional
Comparison, 2006–15 88
Figure 4.10 Public Investment in Infrastructure, 1990–2012 90 Figure 4.11 Private Investment in Infrastructure, 1990–2012 91 Figure 4.12 Infrastructure Financing Market 94
LIST OF FIGURES xi
Figure 4.13 Evolution of Equity and Debt Shares in Private
Infrastructure Financing, 2004–14 95 Figure 4.14 Private Infrastructure Financing by Type of
Instrument, 2004–14 96
Figure 4.15 Worldwide Private Infrastructure Financing by
Type of Instrument, 2004–14 96
Figure 4.16 Impact on Infrastructure Investment of a One-Shot Increase in Pension Fund Assets under Management 100 Figure 4.17 Impact on Infrastructure Investment of Flow
Increases in Pension Fund Assets under
Management (AUM) 101
Figure 5.1 Proportion of Countries Entering into External Crisis 113 Figure 5.2 Net Foreign Liabilities Positions: Simple Average
by Country Group 114
Figure 5.3 Net Foreign Liabilities Positions in Latin America and the Caribbean: Simple Average by Country
Group 115 Figure 5.4 Gross Foreign Assets and Liabilities around
the World: Simple Average by Country Group 117 Figure 5.5 Gross Foreign Assets and Liabilities 118 Figure 5.6 Composition of Gross Foreign Liabilities:
Simple Average by Country Group 121
Figure 5.7 Composition of Gross Foreign Assets:
Simple Average by Country Group 122
Figure 5.8 External Portfolio vulnerability Index (EPvI):
Simple Average by Country Group 123
Figure 5.9 Self-Financing Ratio: Simple Average 125 Figure 6.1 Extension of the Demographic Dividend 132 Figure 6.2 Age Profile in Latin America and the Caribbean 133 Figure 6.3 Public and Private Consumption of Health Care
over a Lifetime 135
Figure 6.4 Current and Future Public Spending on Pensions 137
Figure B6.1 Promised and Affordable Replacement Rates in PAYG/DB and FF Systems for Retirees in 2010–15
and 2095–2100 141
Figure B6.2 Saving Rates for Open Economy 147 Figure 6.5 Share of Workers Contributing to Pensions,
1993–2013: Population aged 15–64 148 Figure 6.6 Share of Workers Contributing to Pensions,
by Daily Income, circa 2013 148
Figure 6.7 Share of Workers Who Report Savings in the
Previous Year 150
Figure 6.8 Why Don’t Workers Contribute to Pensions? 151 Figure 6.9 Sources of Income in Old Age 153 Figure B7.1 Pension Expenditure as a Share of GDP 160 Figure 7.1 Pension Spending and Aging in Select Latin American
and Caribbean and OECD Countries, 2011–13 162 Figure 7.2 Difference between Contributions and Benefits
in Select PAYG/DB Systems 163
Figure 7.3 Investment Portfolio of Private Funds 170 Figure 7.4 Real Rate of Return of Pension Funds, 2004–2014 171 Figure B7.2 Sources of Funding for a Life Annuity in Chile
for Retirees Aged 65–105 175
Figure 7.5 Contributory and Noncontributory Coverage in 19 Latin American and Caribbean Countries,
circa 2013 181
Figure 7.6 Current and Future Fiscal Costs of Noncontributory Pensions in Latin America and
the Caribbean, 2015–50 182
Figure B8.1 Tax Revenue as Percentage of GDP by Indirect,
Direct and Other Direct Taxes, 2012 190 Figure B8.2 Income Tax Revenue by Corporate Income Tax and
Personal Income Tax, 2012 191
Figure 8.1 Public Saving in Latin America and the Caribbean 192 Figure 8.2 Composition of Average Increase in Primary Public
Spending, 2007–14 (percentage of GDP) 192
LIST OF FIGURES xiii
Figure 8.3 Public Investment Behavior in Latin America and
the Caribbean vs. Emerging Asia 193
Figure 8.4 Evolution of Current and Capital Expenditure,
Latin America and the Caribbean Average 193 Figure 8.5 Sensitivity of Spending to Output Gaps 195 Figure 8.6 Example of Leakeage (Inclusion Error) in Electricity
Subsidies in Nicaragua 199
Figure 8.7 Average Math, Reading and Science PISA Performance vs. Students per Teacher Ratio,
OECD Countries, 2012 206
Figure 8.8 Relative Primary Teacher Wages vs. GDP
per Capita, 2011 207
Figure 8.9 Health Professionals per 10,000 Inhabitants vs. Life
Expectancy at Birth 208
Figure 8.10 Health Professionals Relative Wage vs
GDP per Capita, 2011 209
Figure 8.11 Potential Savings in Targeted Expenditure
(Social Programs, Energy, and Tax Expenditure) 210 Figure 8.12 Potential Savings in Education and Health 211 Figure 9.1 Lack of Trust as a Barrier to Open a Formal
Bank Account 219
Figure 10.1 Episodes of Surges in TFP 245
Figure 10.2 Episodes of Surges in Saving Rates 247 Figure 10.3 Neoclassical Model Predictions of Saving Rates 249 Figure 10.4 Share of Corporate Saving in Private Saving 254 Figure 10.5 Firm’ Financing with Their Own Savings, Germany
and Select Latin American and Caribbean Countries 255 Figure 10.6 Share of Fixed Assets Financed with Savings,
by Firm Size 255
Figure 10.7 Fixed Assets Financed with Savings and
Access to Credit 256
Figure 11.1 The vicious Circle of Low Saving and
Inefficient Financial Intermediation 264
Figure 11.2 The Spread between Lending and
Deposits by Region, 2006–13 Average 265 Figure 11.3 Reasons Why People Do Not Have a Formal Bank
Account, by Region, 2014 268
Figure 11.4 Penetration of Formal Savings Accounts,
2011 vs. 2014 269
Figure 11.5 Government Transfers Paid through the
Financial System 270
Figure 11.6 Saving through Formal Accounts, 2011 vs. 2014 273 Figure 11.7 Penetration and Use of Mobile Accounts 281 Figure 11.8 The virtuous Circle of High Saving and Efficient
Financial Intermediation 284
List of Boxes
Box 1.1. Defining Savings and its Components 8 Box 1.2. The Interrelationships between the Components
of Saving 17
Box 2.1. What Is Saving? 22
Box 2.2. Household Saving Rates: Measurement Issues 30 Box 2.3. Measuring Household Saving Directly 37 Box 3.1. Argentina’s Residential Real Estate Sector:
A Magnet for Savings 55
Box 4.1. Definition of Gross Fixed Capital Formation 76 Box 6.1. Pension Systems: Defining the Concepts 138 Box 6.2. Funding to Cope with Demographic Shifts 140 Box 6.3. Productivity in an Aging World 146 Box 7.1. How Much Is Spent on Pensions Today? 160 Box 7.2. Mandatory Independent Actuarial Reviews 164 Box 7.3. Financing Pensions: Mortality Credits 174 Box 7.4. Household Saving and Noncontributory Pensions 183
Box 8.1. The Effect of Taxes on Saving 189
Box 9.1. Do Genes and Culture Matter for Saving? 232 Box 9.2. In Peru, Never Too Young to Save 238 Box 10.1. Firm Saving, Informality, Distortions, and Misallocation 259
