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Latin America's Growth and Equity Frustrations During Structural Reforms

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  • José Antonio Ocampo

Abstract

This 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.

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  • José Antonio Ocampo, 2004. "Latin America's Growth and Equity Frustrations During Structural Reforms," Journal of Economic Perspectives, American Economic Association, vol. 18(2), pages 67-88, Spring.
  • Handle: RePEc:aea:jecper:v:18:y:2004:i:2:p:67-88
    Note: DOI: 10.1257/0895330041371349
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    File URL: http://www.aeaweb.org/articles.php?doi=10.1257/0895330041371349
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    References listed on IDEAS

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    1. José Antonio Ocampo, 2003. "Developing countries' anti-cyclical policies in a globalized world," Chapters, in: Amitava Krishna Dutt (ed.), Development Economics and Structuralist Macroeconomics, chapter 19, Edward Elgar Publishing.
    2. Ffrench-Davis, Ricardo, 2003. "Financial crisis and national policy issues: an overview," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1785, December.
    3. Escaith, Hubert & Morley, Samuel, 2001. "El efecto de las reformas estructurales en el crecimiento económico de la América Latina y el Caribe. Una estimación empírica," El Trimestre Económico, Fondo de Cultura Económica, vol. 0(272), pages 469-513, octubre-d.
    4. Ocampo, José Antonio, 2001. "Agricultura y desarrollo rural en América Latina," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1662, December.
    5. Pablo Astorga, Ame R. Berges and Valpy FitzGerald, "undated". "The Standard of Living in Latin America During the Twentieth Century," QEH Working Papers qehwps103, Queen Elizabeth House, University of Oxford.
    6. JosÈ Antonio Ocampo, 2002. "Rethinking the development agenda," Cambridge Journal of Economics, Oxford University Press, vol. 26(3), pages 393-407, May.
    7. Hofman, André A., 2000. "The economic development of Latin America in the twentieth century," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 1650 edited by Eclac, December.
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