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 6: Political economy of Ecuador: the quandry of governance and economic development

Gustavo Arteta and Osvaldo Hurtado

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


6. Political economy of Ecuador: the quandary of governance and economic development Gustavo Arteta and Osvaldo Hurtado* 6.1 INTRODUCTION Ecuador’s social and economic development of the last two decades fell short of what was required to fulfill the needs of its population. Despite arguably abundant natural resource endowments, per capita income has barely grown since 1980. This stagnation is often related to the return to democracy in 1979 by important portions of the constituents. From time to time dictatorship is yearned for, based on the premise of a spurious correlation between this form of government that prevailed in the 1970s and the prosperity afforded by the beginning of oil exploitation in that decade. Despite this simplification of the complex dilemma that economic development poses, it makes evident that many Ecuadorians do not feel that democracy has brought them improved welfare. It is just as troubling that the feeling is partially backed by many indicators of economic and governance performance. Culprits of the lackluster performance are widely debated. Many blame the political system, regional conflicts, cultural idiosyncrasies, (oil) resource curse, poverty, inequality, corruption and others. While probably each of these contributes to the stagnation to some degree, most corrective efforts have concentrated on economic reform and policies. Often, the latter have ignored political considerations and governance problems. But at the heart of the successes and failures in the efforts to improve conditions most surely lies a combination of both. The basic problem in Ecuador has been the failure...

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