- Figures (and map)
- Shifting Paradigms in Latin America's Economic Development
- Institutions and the Historical Roots of Latin American Divergence
- Political Institutions, Policymaking, and Economic Policy in Latin America
- The Washington Consensus: Assessing A “damaged Brand”
- From Old to New Developmentalism in Latin America
- Environmental Sustainability
- Taming Capital Account Shocks: Managing Booms and Busts
- Exchange Rate Regimes in Latin America
- Monetary Policy in Latin America: Performance Under Crisis and the Challenges of Exuberance
- Domestic Financial Development in Latin America
- Fiscal Policy in Latin America
- Fiscal Legitimacy, Inequalities, and Democratic Consolidation in Latin America
- Latin America in the World Trade System
- Regional Integration
- The Effects of Trade Liberalization on Growth, Employment, and Wages
- The Recent Commodity Price Boom and Latin American Growth: More than New Bottles for an Old Wine?
- Curse or Blessing? Natural Resources and Human Development
- Foreign Direct Investment in Latin America
- China and the Future of Latin American Economic Development
- Latin America in the Recent Wave of International Migration
- Structural Transformation and Economic Growth in Latin America
- Learning, Technological Capabilities, and Structural Dynamics
- Why Has Productivity Growth Stagnated in Most Latin American Countries Since the Neo-Liberal Reforms?
- Agricultural and Rural Development
- An Energy Panorama of Latin America
- Infrastructure in Latin America
- The Rise and Fall of Income Inequality in Latin America
- Multidimensional Poverty in Latin America: Concept, Measurement, and Policy
- Economic Insecurity and Development in Latin America and the Caribbean
- Employment: The Dominance of the Informal Economy
- Latin American Labor Reforms: Evaluating Risk and Security
- Social Protection in Latin America: Achievements and Limitations
- Social Security Reforms in Latin America
Abstract and Keywords
This chapter examines the effects on growth, employment, and wages of the trade-liberalization policies pursued in Latin America between the late 1980s and the late 1990s, starting with a short description of trade-liberalization measures, followed by a discussion of their expected results, both by the reformers and their opponents. The two central sections of the chapter present a survey of the empirical literature that has assessed the effects of trade liberalization on growth and employment, with an emphasis on Latin America. The chapter holds the following: trade liberalization did increase productivity and economic growth, but modestly and perhaps temporarily; while trade liberalization did increase productivity, it did not have the expected effect on wages, which fell in the sectors most subject to competition; trade liberalization may have contributed to widening wage gaps, although to a lesser extent than is generally believed.
Eduardo Lora is Manager of the Research Department of the Inter-American Development Bank, Washington, DC.
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