Poverty and Social Policy in Latin America

Most indicators of human development in Latin America improved considerably until the early 1980s. Unfortunately, the debt crisis which hit most countries in the region during the 1980s badly dented the social record. Not only did it increase the number of people living in poverty but it led to a profound change in the nature of the development model. Neo-liberal economic thought and the lessons of the debt crisis convinced one Latin American state after another that it should follow a different development path.
Economic stabilization and structural adjustment had a profound effect on poverty in the region. Most families became poorer, particularly those living in the cities. Structural adjustment and the new economic model also modified the role of the state. Increasingly, Latin American governments stopped giving general subsidies and introduced a strategy of targeting subsidies at the poor. In places, the new strategy will no doubt provide an adequate safety net, but in others it will fail to provide sufficient help for the poor. All we can predict is that poverty will long remain regrettably common in most parts of Latin America. In places, economic growth will undoutedly reduce poverty but it is not at all easy to predict where it will be reduced. In this respect Latin America is very much like the rest of the world. Globalization has opened up local economies to international competition and offered them the prospect of selling local goods to foreign markets. How many Latin American economies will benefit from the new situation will determine how the poor will fare. Unfortunately, the state's ability to deal with any subsequent poverty has been greatly reduced. That, too, is part and parcel of the process of globalization.     

Latin America's recovery from debt problems: An assessment of model-based projections

This paper examines economic assumptions used in assessing prospective economic adjustment of Latin America in response to its debt problems. The analysis compares forecasts obtained by combining parameter estimates from different researchers' trade models with the authors' macroeconomic models for Brazil. Chile, and Mexico. The influence of econometric procedure on simulation results is discussed. Then, by simulation analysis, the following issues are addressed: (1) likelihood of high domestic growth rates for Latin America in the late 1980s; (2) whether OECD growth or interest rates have a larger impact on developing-country economies; (3) effects of dollar depreciation and high interest rates on Latin America's debt problems.     

Latin America: a new developmental welfare state model in the making?1

Latin America is emerging from a century of transformation – from a traditional agrarian to an urban industrial economy – where countries have taken diverse historical paths. Some have almost completed this transformation, others are taking early steps, and most are living through it. State‐led transition has followed two successive development strategies. From the 1920s to the 1980s, state developmentalism, for the most part, successfully assumed the twin challenges of economic and social progress. In the final decades of the century, Latin American states adopted the policies of the Washington consensus, which emphasized the importance of business in the framework of globalization, benefiting the affluent few. However, an unambiguous shift in direction has been taking place in Latin America since the 1997 economic crisis. This article suggests that a new developmental welfare state model is in the making. How will it evolve over the wider space of an increasingly integrated Latin America?     

Social Policy and Development in Latin America: The Long View

In the new development strategy currently shaping Latin America, alternative social policy models have emerged. This article argues that far from being rival alternatives, each of these models considers the wide differences among countries. The region is emerging from a century of transformation – from a traditional agrarian economy to an urban industrial one – in which countries have taken diverse historical paths. Some have almost completed this transformation, others are taking early steps, and the vast majority are living through it. State‐led transition has followed two successive development strategies. From the 1920s up to the 1980s, state developmentalism has mostly successfully assumed the twin challenges of economic and social progress. In the last two decades of the century, Latin American states adopted the policies of the Washington Consensus, which emphasized the importance of business in the framework of globalization and benefited the affluent few. However, an unambiguous shift in direction has been taking place in Latin America since the 1997 economic crisis. This article suggests that a new developmental welfare state model seems to be in the making. How will it evolve over the wider space of an increasingly integrated Latin America?     

Can Latin America carry its international debt? A prospective analysis using the Wharton Latin American debt simulation model

The international debt of the LDCs has become a critical concern, perhaps currently the most critical one, from the perspective of debtor countries and creditors alike. Through the efforts of the IMF, the BIS, the central banks, and the large commercial banks, a crash may have averted for the time being, but the heavy burden of the debt remains, particularly in Latin America, where it is increasingly concentrated. Draconian remedial measures now threaten social and economic development throughout the continent.This article evaluates the perspective for Latin American debts and payments using a debt simulation model. Debt restructuring with the usual “IMF conditions” will impose serious economic shocks in Latin America. But even so, debt service ratios will remain high except under optimistic assumptions about growth in the industrial countries and about commodity prices. Only in case of a solid economic recovery in the United States, Europe and Japan can one be sanguine about Latin America's ability to work its way out from under the debt burden.     

Does inflation targeting lower inflation and spur growth?

Over the last few decades several countries have turned to inflation targeting as a policy choice for instilling stability into their economies. Prior studies have shown that inflation targeting has reduced inflation in those countries without significantly impacting GDP. This study seeks to improve upon these results by identifying the impact of timing on the policy decision as well as its impact as related to specific regions of the world. The focus is on developing countries across six regions. We find significant regional variation in developing countries in our sample in terms of the direction of changes in inflation following a switch to the inflation targeting policy. Moreover, although the impact of inflation targeting on real GDP is minimal overall, there is a statistically significant increase in real GDP among developing countries in certain regions only, namely, Europe, Latin America, and the Middle East.     

Debt threshold for fiscal sustainability assessment in emerging economies

This paper explores the debt threshold for fiscal sustainability assessment for 14 emerging economies during the period 1999–2016. The threshold point is identified as the level which, if exceeded, promptly raises sovereign risk to an unsustainable level. As such, we employ a panel threshold analysis to the determination of debt limit, which can serve as a distinctive feature from other studies on fiscal sustainability. Our results demonstrate that non-Latin American economies are considered to be sustainable in the short run, as their debts remain below the threshold bounds of 40–55% of GDP. However, the long-run sustainability risk may emerge from a continuous upward trend in debt paths, implying the need for rebuilding fiscal buffers. It is important to emphasize that fiscal sustainability is far more challenging for most Latin-American economies. This is indicated by their debt accumulation beyond the threshold level of roughly 35% of GDP which is relatively lower than that estimated for the other countries. Indeed, during times of high debt, emerging countries in Latin America also face higher default risk since their sovereign risk premium respond more strongly to debt rise. Their paths toward fiscal sustainability, hence, requires an immediate imposition of strict fiscal discipline to relieve the debt pressure.     

Financial liberalization, exchange rates and stock prices: Exogenous shocks in four Latin America countries

This paper provides an analysis of the long-run relationships and short-run dynamics between stock prices and exchange rates as well as the channels through which exogenous shocks influence these markets. We use monthly data for the period January 1980 to February 2009 for four Latin America, namely, Argentina, Brazil, Chile and Mexico. We conduct our analysis by means of cointegration analysis and multivariate Granger causality tests. The main finding of our analysis suggests that stock and foreign exchange markets in these economies are positively related and that the U.S. stock market acts as a channel for these links. Moreover, it is shown that these links are independent of foreign exchange restrictions. Finally, stability tests proposed by Hansen and Johansen (1993) are applied and it is shown that the dimension of the cointegration space is sample independent while the estimated coefficients exhibit instability in recursive estimations. Instability in these long-run relationships is evident during the Mexican currency crisis of 1994-1995, the Asian crisis of 1997 and the 2007-2009 credit and financial crisis.     

现代西方经济周期与经济学说的关系

20世纪30年代经济大危机爆发后,新古典经济学产生危机,凯恩斯掀起了现代经济思想史上的"革命".五六十年代,"凯恩斯经济学"的实施,导致了新的危机--通货膨胀危机,70年代后凯恩斯经济学悄然退场,各色"新自由主义"经济学一度回潮.80年代末、90年代初,高失业率和生产停滞重新成为美国等西方国家的主要经济问题,"新凯恩斯主义"--"现代主流经济学新综合派"应运而生.经济学上的危机、革命和综合,是西方现代经济运行的必然选择.     

Structural reforms and labor markets in Argentina

Argentina is considered to be one of the most successful cases of structural reforms in Latin America, because of the extent and rapid pace of the reforms after the hyperinflationary process of 1989–1990. At the beginning of 1991, the convertible plan was launched and inflation fell sharply. However, even when the economy is growing fast, the problems in the labor market seem to worsen. Unemployment and underemployment have risen, and an increasing number of people have fallen out of normal work. The article analyzes how changes in labor markets are closely related to the transformation process in the economic system. After a summary of the situation before the crisis of the 1980s, the article analyzes the stabilization plans applied and then discusses the current dynamics of labor markets and the policies implemented to change labor regulations. Finally, some hypotheses about future scenarios are presented.     

The Changing Face of Pensions in Latin America: Design and Prospects of Individual Capitalization Pension Plans

This paper discusses the spread of individual capitalization pension plans in Latin America in the 1990s. Following the example of Chile in 1980, Argentina, Colombia, Costa Rica, Mexico and Peru have all introduced individual capitalization pension schemes in the 1990s. The paper discusses the rationale for the reforms and compares the main design features of the reformed pension systems in these countries. Lastly, the likely success of pension reform is discussed by focusing on issues of pension scheme coverage, benefit adequacy and administrative costs.     

The relation between population and health in a crisis

This work argues that the economic crisis in Latin America resulting from structural adjustment programs and recession has had deleterious effects on the relationship between demographic factors and health. 2 works presented at the 1989 International Union for the Scientific Study of Population meeting in New Delhi considered the difficulty of demonstrating unambiguously the demographic effects of the economic crisis. This work, instead of looking at overall rates which may not have been greatly affected, focuses on 3 specific areas that reflect the relationship between population and health in the context of the crisis. Although the infant mortality rate has continued to decline in almost all countries and regions of Latin America during the crisis, the decline has been unequal in different sectors. A comparison of data from the 1987 National Survey of Fertility and Health in Mexico with that of the 1982 National Demographic Survey shows that rural infant mortality declined by only 1% between the 2 surveys, while urban infant mortality declined by 21%. An indicator of available services in the household showed the same increase inequality. Disaggregation of infant mortality data for Mexico suggests that even a presumably biological determinant, maternal age, loses much of its weight when socioeconomic factors are considered. Other studies, on the impact of maternal education, similarly indicate that the relationship is different for different social sectors. The infant mortality data taken together suggest that infant mortality continues to ba a valid indicator of social inequality, and that the crisis has had the effect of increasing inequality and worsening the relative conditions of the least advantaged. In the area of fertility, data from the 1989 National Survey of Fertility and Health in Mexico are used to argue that family planning programs are integral components of an authoritarian governmental political style. The survey indicated that sterilization is now the most commonly used contraceptive method in Mexico and that fully 12.4% of sterilized women did not make the decision to be sterilized themselves. 34% of illiterate women who were sterilized did not make the decision themselves. 14% of all the women but 33% of illiterate women reported they would not be sterilized if they could make the decision again. These data and others on the high proportion of women who undergo sterilization at young ages and low parities and without being informed of other methods suggest that the attitude of the official family planning program is becoming more authoritarian and less respectful of human rights as it seeks to curb population growth. The area of health effects has usually been ignored in migration studies. The phenomenon of Mexican migrant workers in the US who return to Mexico after contracting AIDS is an obvious example of the link between population variables and health.     

Roasting Donald Duck: Alternative Comics and Photonovels in Latin America

A corollary of dependency theory, which has enjoyed considerable popularity among social scientists in the last fifteen years, is the notion of cultural imperialism. Simply stated, the theory holds that countries with global economic dominance reinforce their hegemonic relationship with lesser developed countries through the manipulation of mass media such as television, radio, film and comic books. A number of radical critiques of Latin America mass media have appeared in response to this perceived relationship. In her article, Cornelia Butler Flora examines several Latin American comic books and photonovels which were created as alternatives to commercial controlled media forms. For example, in Chile during the short-lived presidency of Salvador Allende (1970–1973), the government publishing house Quimanto brought together artists and communications specialists to produce comic books which would serve as the socialist answer to Donald Duck andbther publications that were seen as purveyors of caplitalist values. Flora also draws on other examplles of comic books and photonovels from Mexico, Ecuador and Peru.     

What underlies the recent growth comeback in developing economies?

We find that the frequency of growth takeoffs in developing economies has risen markedly in the past two decades, with recent takeoffs lasting longer than those prior to the 1990s. Also, unlike takeoffs prior to the 1990s, developing economies in recent takeoffs experienced an improvement in economic policies, with lower post-takeoff debt and inflation; more competitive real exchange rates; and stronger structural reforms and institutions. These conditions have tended to be associated in the literature as conducive to sustaining strong growth. We also find that the chances of starting a takeoff in the 2000s was triple that before the 1990s, with domestic conditions accounting for most of the increase. Thus, if developing economies improve their economic policies and sustain them forward, they are more likely to jumpstart takeoffs and avoid the reversals in economic fortunes that affected many developing economies in the past.     

Democracy and poverty: The implementation of social reforms in the countries of central and eastern Europe

Why has the political and economic transformation in Russia and central and eastern Europe been accompanied by deteriorating living standards? Many of the reform programmes have contained social elements, but these have been neglected in the implementation process. Certain barriers to change – mental, cultural, political and economic – have made the implementation difficult. Russia and central and eastern Europe have to pass through a problematic dual transformation, from authoritarianism to democracy and from centrally planned economies to market economies. Experiences from Latin America show that such transitions are virtually impossible. The social results from the transformations in central and eastern Europe have been disappointing, which has been documented by scholars in this field. Nevertheless, if the political and economic transformation processes continue, the prospectes for the future are relatively bright. But there is also a negative scenario with authoritarianism and civil war as endpoints. A more cautious transition to a market economy might improve social welfare and living standards.     

Credibility and Inflation Expectations: What we can tell from seven emerging economies?

This study is a contribution to the literature concerning credibility and its effect on the distribution between forward-looking behavior and backward-looking behavior for formation of inflation expectations in the case of emerging economies. Based on data gathered from seven inflation targeting emerging economies (Brazil, Chile, Colombia, Mexico, Poland, South Africa, and Turkey), this paper analyzes how much the credibility associated with the inflation target contributes to anchoring expectations. The findings denote that although credibility is relevant to reduce inflation expectations, these countries present low monetary credibility and thus the backward-looking behavior is predominant for the formation of inflation expectations. Therefore, in order to improve the expectations channel of monetary policy in emerging economies, a policy of increasing transparency regarding inflation expectations is mandatory to the central banks’ task of anchoring inflation expectations.     

The Changing Governance of Welfare: Recent Trends in its Primary Functions, Scale, and Modes of Coordination

This paper discusses four dimensions of the capitalist state's role in economic and social reproduction: its economic and social policy roles, the scales on which these roles are performed, and the modes of governance with which they are associated. It describes the typical postwar welfare regime on these dimensions, analyses the crisis in the governance of welfare that began to emerge in the late 1970s and 1980s, and characterizes the new regime that is tendentially replacing the postwar welfare state.     

The Bourgeois Theory of "Modernization" and the Real Development of the Peoples of Soviet Central Asia

One of the most important features of the revolutionary process of our time is the liberation of countries in Asia, Africa, and Latin America from the yoke of colonialism and their shift to a course of fundamental socioeconomic changes. Problems of the founding and development of national economies, the national culture, and solution of the nationalities question face the liberated countries.     

The Political Economy of Privatization in Sub‐Saharan Africa*

Objective. Few studies have examined the determinants of privatization in Sub‐Saharan Africa. This study examined the macroeconomic, political, and institutional factors that drive the privatization process in Sub‐Saharan Africa. Method. We used pooled ordinary least squares regression estimation technique to analyze the determinants of privatization in 22 Sub‐Saharan African countries over a period of 12 years (1991–2002). Results. We found that inflation, income inequality, and the institutional or governance infrastructure are key determinants of privatization in Sub‐Saharan Africa. On the other hand, we did not find democracy and debt to be significantly correlated with privatization. However, countries with high debt levels that were also experiencing high inflation were more likely to privatize. Conclusion. Government leadership and, consequently, politics play a significant role in the privatization decision in Sub‐Saharan African countries.     

美欧债务危机应对路径的国际比较研究

美欧发达国家政府的债务危机问题已越来越严重,逐渐引起了包括发展中国家在内的世界各国的广泛关注。面对此次危机,美欧各国都相继采取了各种财政、货币政策措施加以应对,由于各国国情各异,采取的措施和取得的效果也不同。通过分析美欧国家债务危机产生的原因,列举美欧应对危机采取的措施,并对其进行分析比较,得出了主权债务危机给中国发展的几点启示。