Economic Reform to Stimulate Growth and Reduce Poverty: The Latin American Experience

A few decades ago a dominant view in the developing world was that growth problems in developing countries could be best understood in terms of the international environment. Today no one seriously questions the influence of external conditions on growth. But most economists would also emphasize structural conditions within developing countries as key determinants of the large differences in the rates of per capita income growth among such countries. An examination of the economywide policy reforms that took place in Latin America and the Caribbean (LAC) during the 1980s and 1990s is particularly relevant to an understanding of these determinants. Though it is beyond the scope of this chapter to discuss economic growth theories and assess the successes and failures of the economic reforms in the region, the discussion will focus on some of the significant linkages among growth, policy, and poverty.