Ratings for the Santiago Urban Transport Programmatic Development Policy Loan Project for Chile were as follows: outcomes were moderately satisfactory, the risk to development outcome was moderate, the Bank performance was moderately satisfactory, and the Borrower performance was also moderately satisfactory. Some lessons learned included: lack of a holistic approach may result in emphasizing one concern over another, for example, focusing mainly on environmental and economic considerations may lead to a design with unnecessarily fewer and larger buses. However, fewer and larger buses reduce comfort and increase waiting times. Such a decrease in service quality is a disincentive for public transport use and will, at least in the long run, go against environmental and economic considerations. Hence, it is important that a design that includes user participation finds the right balance between environmental and economic considerations and service quality. Travel and network models are excellent tools to evaluate network designs, but over reliance on normative analytical tools that ‘optimize’ a network subject to a set of assumptions, especially in areas that assume behavioral changes, should be avoided. The modeling exercise also needs to include ‘bottom up’ inputs, such as information on the importance in terms of overall weight people give to transfers, waiting, and walking. The Santiago experience showed that it is not advisable to redesign the public transport network without considering the existing information on travel demand and destination available through the operators. Additionally, stakeholders’ involvement in the network design process, especially the municipalities comprising the metropolitan area, operators and users, is essential, and the design concept for the network needs to be extensively modeled before implementation.
Pension funds and capital market development
This paper studies the relation between institutional investors and capital market development by analyzing unique data on monthly asset-level portfolio allocations of Chilean pension funds between 1995 and 2005. The results depict pension funds as large and important institutional investors that tend to hold a large amount of bank deposits, government paper, and short-term assets; buy and hold assets in their portfolios without actively trading them; hold similar portfolios at the asset-class level; simultaneously buy and sell similar assets; and follow momentum strategies when trading. Although pension funds may have contributed to the development of certain primary markets, these patterns do not seem fully consistent with the initial expectations that pension funds would be a dynamic force driving the overall development of capital markets. The results do not appear to be explained by regulatory restrictions. Instead, asset illiquidity and manger incentives might be behind the patterns illustrated in this paper.