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Stiglitz on Latin American Reform

Larry Willmore sent me a link to the following lecture by J. Stiglitz… I haven’t read the whole thing, but it looks interesting.
The Second Prebisch Lecture, by Joseph Stiglitz, can be downloaded as a pdf file or video at:
Video, or paper (.pdf)

Joseph E. Stiglitz
Economic Commission for Latin America and the Caribbean
(ECLAC) – Santiago, Chile, August 26, 2002
The experiment in so-called reform is failing in Latin America. After a brief spurt in growth in the early 90’s, growth has slowed. Many of the countries of the region are facing recessions, depressions, crises, a few of an almost unprecedented level, reminiscent of the Great Depression. Argentina, the A+ student of the first three quarters of the decade, has not only had a crisis, but it has become vilified beyond measure. Brazil, too, a first rate student of reform, faces a crisis as I speak. A reform strategy which promised to bring nprecedented prosperity has failed, in an almost unprecedented way. It’s critics said that it might bring growth, but they worried, would that growth be widely shared. The outcomes have been worse than many of its critics feared: it has not brought growth to much of the region, but, at least in some parts of the region, it has brought increased inequality and poverty.
In this talk, I want to explain and interpret these failures, and to lay out the framework a new agenda of economic reform for Latin America.
There is now an increasing recognition that the Washington consensus was both too narrow in its objectives – or more accurately, misguided in its priorities – and wrong in its “model” of the economy. It confused means – liberalization, privatization, stabilization – with ends. The focus should have been on democratic, equitable, and sustainable development. It should have been recognized that, while markets may be at the center of a successful economy, government had to play an important role. One of the great problems in Latin America is the persistence of a high level of inequality. Markets, by themselves, will not deal with this problem, and the trickle down economics of market fundamentalists simply does not work; and even when it works, it works too slowly.


Filed under: Policy



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