On the Political Economy of Pro-Market Reform in Latin America

Most Latin American countries have undertaken sweeping market-oriented reforms over the last two decades. This chapter provides an overview of the reform process in eight Latin American countries, based on country studies undertaken within the Understanding Reform Project supported by the Global Development Network.1 This project had several ambitious questions about the ability to undertake reform, the capacity to implement reform successfully, and the ability of the reforms to deliver the expected outcomes in different countries. We found it quite difficult to provide clear-cut comparative answers to these questions from the information provided in the country studies. This was probably the case because the object of analysis is itself quite complex, because the (quite rich) country studies had somewhat different emphases, and because it is inherently difficult to answer any question with eight data points, even if those data points were clearly measured. Nonetheless, it is an interesting exercise to take a look at these countries together, as there are several common factors to most Latin American reform experiences, as well as some interesting differences among the cases