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date: 04 December 2020

(p. v) Preface

(p. v) Preface

Latin America has been central to the main debates in development economics. Given the region's traditionally high levels of inequality in the distribution of income in comparison to other developing regions and the developed nations, this includes, first of all, the relationships between income inequality and economic growth. The debates on the importance of geography vs. institutions in development have often concentrated on Latin America's colonial legacy. The region's experiences with import substitution industrialization in the post war period and more recently with market reforms have been the focus of attention in the debates on the effects of trade, trade openness and protection on growth and income distribution.

Similarly, the abundance of natural resources in the region and the resulting specialization of many countries in primary exports have, for many, illustrated the importance of the “Dutch disease” and the “resource curse” in development as well as the effects of the pattern of trade specialization on economic growth. The experience with State-led industrialization and the market reforms of the “Washington consensus” era have also been an important input in the debates on the appropriate balance of State and markets in different stages of economic development.

Despite the interest in the region, which has increased over time, there is no handbook on Latin American economics and there are only a few general textbooks on Latin American economics available in the English language, notably Eliana Cardoso and Ann Helwedge, Latin America's Economies: Diversity, Trends, and Conflicts, which is more than a decade old, and Patrice Franko's The Puzzle of Latin American Economic Development.

As a result of all this, the most readily available general books on the economics of the region are the institutional reports published by multilateral organizations—the United Nations Economic Commission for Latin America and the Caribbean, the Inter-American Development Bank, and the World Bank—which tend to have a short life span and do not have broad academic use.

Furthermore, most of the literature on Latin American economics is generally published in Spanish and Portuguese, not English, and the literature available in English is biased towards certain conceptual frameworks, and therefore tends to leave aside analyses by the school that is broadly known as Latin American structuralism (and neo-structuralism).

Interestingly, and in contrast to this lacuna, there are two handbooks on Latin American economic history: An Economic History of Twentieth Century Latin America, (p. vi) a three-volume collection edited by Enrique Cárdenas, José Antonio Ocampo and Rosemary Thorp, and the two-volume Cambridge Economic History of Latin America, edited by Victor Bulmer-Thomas, John Coatsworth and Roberto Cortés Conde.

This Handbook aims at filling that significant gap. It has three additional features that make it particularly attractive. First, it covers a fairly complete set of relevant issues. Second, it includes contributions from economists who belong to different schools of economic thought. So, the reader will find a range of perspectives from orthodox to heterodox. Third, we have also taken care of guaranteeing that the contributors come from throughout Latin America, recognizing the diversity of the region.

The Handbook is organized into five parts. The first looks at long-term and cross-cutting issues, including shifting ideas on development and the economic performance of the region under different development strategies, the institutional roots of Latin America's underdevelopment, the political economy of economic policy making, the rise, decline and reemergence of alternative paradigms from the Washington consensus to new developmentalism, and the environmental sustainability of the development pattern.

The second part considers macroeconomic topics, including the management of capital account booms and busts, the evolution and performance of exchange rate regimes, the advances and challenges of monetary policies and financial development, and the major fiscal policy issues confronting the region, including a comparison of Latin American fiscal policies with those of the OECD.

The third part analyzes the different facets of insertion of the region's economies into the global economic system. First, it addresses the role of Latin America in the world trade system, the attempts at regional and hemispheric integration, and the effects of trade liberalization on growth, employment and wages. Second, it looks at the effects of dependence on natural resources, characteristic of many countries of the region, on growth and human development. Finally, it reviews the trends of foreign direct investment, the opportunities and challenges raised by the emergence of China as buyer of the region's commodities and competitor in the world market, and the transformation of Latin America from a region of immigration to one of massive emigration.

The fourth part deals with matters of productive development. At the aggregate level it analyzes issues of technological catching up and divergence as well as different perspectives on the poor productivity and growth performance of the region during recent decades. At the sectoral level, it looks at agricultural policies and performance, the problems and prospects of the energy sector, and the effects on growth of lagging infrastructure development.

The last part looks at the social dimensions of development. First, it analyzes the evolution of income inequality, poverty and economic insecurity in the region, particularly the rise and fall of inequality and poverty over the past decades. Second, it looks at the evolution of labor markets including the expansion of the informal sector and issues of labor market regulation. Finally, it examines the performance of and policies towards the educational sector, as well as the evolution of social assistance programs and social security reforms in the region.

(p. vii) We want to thank Oxford University Press for having asked us to lead this effort, and to the authors, who had to bear our repeated requests for revision of their chapters. We also want to thank Juliana Vallejo, who provided invaluable help in this editorial effort, as well as James Giganti and Farah Siddique, who helped us in the processing of the manuscript, and Anthony Tillet, who translated three of the chapters.

We have the firm conviction that this Handbook is a significant contribution to the academic and policy community, those interested in Latin America and those interested in how the region fits into exercises in comparative development.

José Antonio Ocampo and Jaime Ros (p. viii)