Latin America's Growth and Equity Frustrations During Structural Reforms
AbstractThis paper argues that Latin America's market-oriented reforms, together with increased monetary and fiscal discipline, were successful in bringing down inflation, inducing export growth and diversification, and attracting foreign direct investment. Nonetheless, economic growth was frustratingly slow. Pro-cyclical macroeconomic policies generated, in turn, strong business cycles in the face of unstable access to international capital markets. Higher productivity in leading firms and sectors failed to spread throughout the economy and led to increasing productive sector dualism. Furthermore, despite the democratic dividend reflected in increased social spending and coverage of social services, weak economic performance and additional distributive tensions led to disappointing results in terms of employment generation and poverty reduction. Overcoming these frustrating outcomes would require counter-cyclical macroeconomic policies, open-economy productive development strategies and mainstreaming social objectives into economic policies.
CitationOcampo, José Antonio. 2004. "Latin America's Growth and Equity Frustrations During Structural Reforms." Journal of Economic Perspectives, 18 (2): 67-88. DOI: 10.1257/0895330041371349
- O11 Macroeconomic Analyses of Economic Development
- O15 Economic Development: Human Resources; Human Development; Income Distribution; Migration
- O19 International Linkages to Development; Role of International Organizations
- O47 Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
- O54 Economywide Country Studies: Latin America; Caribbean