Political Crises, Social Conflict and Economic Development

Political Crises, Social Conflict and Economic Development

The Political Economy of the Andean Region

Edited by Andrés Solimano

The contributors to this authoritative volume analyze the impact of political crises and social conflict on economic performance in the Andean region of Latin America.

Chapter 1: Introduction and Synthesis

Andrés Solimano

Subjects: development studies, development economics, economics and finance, development economics, political economy, politics and public policy, political economy


Andrés Solimano Economic growth and the process of development do not evolve in a political and institutional vacuum. Economic choices depend on rules, institutions and social constraints that are mediated by a political process. A governance environment characterized by stability, the rule of law, and social cooperation will foster wealth creation provided good economic opportunities are in place. However, in many societies – including the Andean countries – the political process is often messy, institutions are far from being the ideal set of rules that minimize transactions costs and social relations are characterized by conflict and even violence. Ultimately, underdevelopment is not only a problem of lack of economic resources but it is largely associated also with volatile politics, dysfunctional institutions and highly differentiated social structures. The subject of this book is to understand the main characteristics of political systems, institutions and social structures in the Andean region of Latin America and their impact on and interplay with their economic performance. The Andean region is comprised of Bolivia, Colombia, Ecuador, Peru and Venezuela.1 These economies have a per capita income of around US$2000. They are rich in natural resources such as oil, mining, forestry, biodiversity, fishery, and so on. In the Andean region we find a high frequency of political crises in recent decades. In some countries there is also a high turnover of ministers and other authorities. Constitutions have been reformed in the five Andean countries in the last 15 years. International rankings of quality of institutions as...