Institutional and Policy Convergence with Growth Divergence in Latin America

Jaime Ros

Chapter 1 in Development Macroeconomics in Latin America and Mexico, 2015, pp 5-26 from Palgrave Macmillan

Abstract: Abstract This chapter compares the cross-country growth performance of Latin American countries during the postwar period of state-led industrialization and the economic liberalization period of the last three decades. The chapter describes the major overhaul in economic policies and institutions that Latin America experienced after the debt crisis of the 1980s. At the same time, we look at the growth performance over those two periods. When we compare the rankings in the growth tables for the periods 1950–1980 and 1990–2008, a “reversal of fortune” is apparent: countries, such as Chile, Argentina, Uruguay, that were in the bottom half in the growth table in the period 1950–1980, call them the “losers from LSI”, tend to be in the upper half of the growth table in 1990–2008. And vice versa, countries such as Brazil, Mexico, Ecuador, Guatemala, the “winners from ISI”, tend to be in the bottom half of the table for the same period. The chapter addresses the question of why this reversal of fortune has occurred despite (or perhaps because) the large degree of institutional and policy convergence across the region.

Keywords: Foreign Direct Investment; Gross Domestic Product; Real Exchange Rate; Trade Liberalization; Dominican Republic (search for similar items in EconPapers)
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-137-46366-1_2

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DOI: 10.1057/9781137463661_2

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