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Hispanic American Historical Review 80.1 (2000) 189-191



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Book Review

Latin America and the World Economy since 1800

National Period

Latin America and the World Economy since 1800. Edited by John H. Coatsworth and Alan M. Taylor. David Rockefeller Center Series on Latin American Studies, Harvard University. Cambridge: Harvard University Press, 1998. Tables. Figures. Notes. Bibliography. Index. xv, 484 pp. Cloth, $49.95. Paper, $24.95.

This important collection of articles shows that economic history is a lively field with excellent practitioners who have much to contribute to current policy debates and to our understanding of the Latin American past. Their findings often undermine some of the undergraduate-friendly simplifications used to explain the history of the Latin American economies, but it will be hard to dismiss them, since the contributions to this volume have methodological sophistication and an impressive empirical base.

For instance, John H. Coatsworth's opening essay includes strong evidence showing that the productivity gap between the United States and the Latin American countries has, on average, remained constant for the past century; readers will have to think hard before repeating the cliché that the rich countries are getting richer and the poor poorer. William R. Summerhill forcefully argues that in the late nineteenth century Brazilian railroads had a high rate of return and were more beneficial to domestic products than to exports, which turns around a standard example of export elites using the [End Page 189] state to subsidize otherwise disastrous investments for their exclusive benefit. Allan Dye's analysis of sugarcane contracts in Cuba before 1898 shows that both sides used their leverage to arrive at a mutually beneficial arrangement, and this challenges the view of powerless small landowners oppressed by the owners of sugar ingenios.

The agenda of the book is explicit. The authors want to show how the tools of neoclassical economics can be used to analyze quantitative data to shed light on the past. This "cliometrician's" program is complemented in some of the essays with highly successful applications of the recent developments of the New Institutional Economics, "a marriage of institutionalist and cliometric traditions" (p. 20), as one of the essays asserts. But in a case of economic history imitating reality, each marriage is unique, ranging from close partnership to the stubborn silence of one of the partners. Nonetheless, these examples from Latin America confirm that the institutionalist approach has much to offer as a tool to explore the reasons for underdevelopment and what "works" to promote economic growth.

This methodological approach helps to determine the themes and takes the authors along different paths from those followed by a previous generation. They move away from land tenure patterns, foreign trade, and labor arrangements toward financial markets, market integration, property rights, contracts, and foreign exchange policies. The explicit goal of trying to use large quantitative databases limits the cases to the larger countries where bureaucracies developed early, hence, most of the cases are from Brazil, Argentina, and Mexico. Moreover, issues that have great impact on the economy but are not subject to quantitative analysis are left out.

Many readers will see the ugly head of neoliberalism peeking behind this research agenda, and if one understands neoliberalism as the narrow set of policy recipes advocated by international financial institutions in the 1990s (the term is slippery, since it is a negative-advocacy label, not a theory), these essays can have the salutary effect of making matters more complex both for its advocates and for its enemies. While the neoliberal recipe is characterized as recommending the reduction of the role of the state in economic life, some of the contributions, like Gail D. Triner's chapter on market integration in Brazil, show the importance of the state in promoting economic policies. Even when the argument is in complete agreement with what an IMF economist would suggest, it is clear that the application of a simple recipe will not do. An article by Lee J. Alston, Gary D. Libecap, and Bernardo Mueller shows how two efforts to guarantee property rights, the cases...

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