From Democracy to Development: The Political Economy of Post-Neoliberal Reform in Latin America

Second-Generation Reforms in Infrastructure Services. Edited by Federico Basañes and Robert Willig. (Washington, D.C.: IDB/Johns Hopkins University Press, 2002. Pp. 368. $24.95 paper.)

The Political Economy of International Financial Crisis: Interest Groups, Ideologies, and Institutions. Edited by Shale Horowitz and Uk Heo. (New York: Rowman and Littlefield, 2001. Pp. vii+298. $82.00 cloth, $28.95 paper.)

Defusing Default: Incentives and Institutions. Edited by Marco Pagano. (Washington, DC: IDB/Johns Hopkins University Press, 2001. Pp. 366. $24.95 paper.)

Globalisation and Sustainable Development Iin Latin America: Perspetives on the New Economic Order. Edited by Suranjit Kumar Saha and David Parker. (Northampton, MA: Edward Elgar, 2002. Pp. v+293. $100.00 cloth.)

Re-Forming the State: The Politics Of Privatization in Latin America and Europe. By Hector E. Schamis. (Ann Arbor: The University of Michigan Press, 2002. Pp. 204. $60.00 cloth, $19.95 paper.)

Crafting Labor Policy: Techniques and Lessons from Latin America. Edited by Indermit S. Gill, Claudio E. Montenegro, and Dömeland. (Washington, D.C./New York: The World Bank/Oxford University Press, 2002. Pp. v+279. $45.00 cloth, $35.00 paper.)

As Latin America begins its third decade of market-oriented reforms, it can look back on a most inauspicious record. If the 1980s was the "lost decade," then the legacy of the 1990s will most certainly be the "difficult decade." While the last ten years of neoliberal reforms did not generate the same degree of collapse and crisis rendered by the exhaustion of import-substitution industrialization and the debt crisis or the failed experience with heterodox shocks during the previous decade, it also did not produce an assuring record of economic and social development. None of the most important problems of Latin American development—persistent and deepening levels of inequality, a growing percentage of society living below the poverty line, decaying infrastructure, poor access to even low-quality primary education, rising criminality, inefficient production, inability to train and integrate semi- and skilled workers into the formal labor force—to mention but a few, were addressed consistently or ameliorated to a significant degree. To be sure, some of the chief concerns of economic reformers in the 1980s are less important than they once were: hyperinflation seems more and more to be only a bad memory now in countries such as Brazil. Yet urban formal unemployment, precarious employment, and the eroding competitiveness of Latin American economies have replaced price instability as the core causes of social disparity in the world's most unequal region. As globalization challenges Latin American countries to make rapid adjustments to changes in external demand, capital flows, and international institutions, the exigencies of democratic consolidation and deepening neoliberal reforms into a "second generation" phase of structural adjustment create another layer of contradictions in the development model. Efforts to improve market and production efficiency have done little to reverse the region's inequalities or the widespread sentiment that the democratic political class is responsible for these problems and that the institutions that maintain their rule (parties, parliaments, and elections) are therefore useless at best and illegitimate at worst.

A growing body of scholarship on neoliberal reform in Latin America has focused attention on the poor performance of the post-neoliberal period. These works almost invariably find that, contrary to the once-euphoric policy expectations that the neoliberal revolution was to bring the region's growth and employment performance, new market-friendly institutions have selectively improved the lives of the already rich and skilled while making the lives of the growing ranks of the region's impoverished ever more parlous (Sheahan 1997; Portes and Hoffman 2003). Most telling, the multilateral institutions and the supranational development agencies have joined academics and the policy-oriented non-governmental community in a widening "new convergence" of ideas that criticizes the original "Washington Consensus" of the 1980s and...