General Issues and Regional Groups
Edited by Miroslav N. Jovanović
Chapter 19: Structural Adjustment in Latin America: From Crisis to Ambiguity
Anil Hira1 1 INTRODUCTION This chapter addresses structural adjustment policy in Latin America. While structural adjustment has deep roots in economic logic, during its heyday in the 1980s, it sparked a firestorm of controversy in the region. This chapter asks why structural adjustment became so controversial, and evaluates structural adjustment from both a political and economic view. While structural adjustment policies are no longer at the forefront of discussion, they played an important role in setting up regional and global integration. Based on an evaluation of the policies and results of structural adjustment, we can conclude that it was correct in its diagnoses, and led to some policy improvements, but largely failed to wrestle with the deeper pathologies of Latin American economic policy. Understanding these failures can help us to develop suggestions for how to move economic policy forward in the region. This chapter is structured as follows. Section 2 defines structural adjustment and Section 3 outlines the various controversies. Section 4 discusses the Latin American context and Section 5 evaluates structural adjustment and liberalisation. Section 6 discusses conflicting economic and political logics. Section 7 outlines the legacy of structural adjustment, and Section 8 concludes. 2 WHAT IS STRUCTURAL ADJUSTMENT? Like most other terms, ‘structural adjustment’ has been used in a variety of contexts with different meanings. Structural adjustment touched off a firestorm of discussion among academics, policy makers, and affected publics throughout the 1980s and 1990s. Analysts trace the term to loan packages put together by the International Monetary...
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