Latin America's Political Economy of the Possible
Neither socialism nor free-market neoliberalism has been a very helpful model for Latin America, writes Javier Santiso in this witty and literate reading of that region's economic and political condition. Latin America must move beyond utopian schemes and rigid ideologies invented in other hemispheres and acknowledge its own social realities of inequality and poverty. And today some countries—notably Chile and Brazil, but also Mexico and Colombia—are doing just that: abandoning the economic "magic realism" that plots miraculous but impossible solutions and forging instead a pragmatic path of gradual reform. Many Latin American leaders are adopting an approach combining monetary and fiscal orthodoxies with progressive social policies. This, says Santiso, is "the silent arrival of the political economy of the possible," which offers hope to a region exhausted by economic reform programs entailing macroeconomic shocks and countershocks.
Santiso describes the creation in Chile and Brazil of institutions and policies that are connected to social realities rather than to theories found in economics textbooks. Mexico too has created its own fiscal and monetary policies and institutions, and it has the additional benefit of being a party to NAFTA. Santiso outlines the development strategies unfolding in Latin America, from Chile and Brazil to Colombia and Uruguay, strategies anchored externally by treaties and trade agreements and internally by strong fiscal and monetary institutions and policies. And he charts the less successful trajectories of Argentina, Venezuela, and Bolivia, which are still in thrall to utopian but impossible miracle cures.
Santiso's account of this emerging transformation describes Latin America at a crossroads. Beginning in 2006, elections in Brazil, Mexico, and elsewhere may signal whether Latin America will decisively choose the political economy of the possible over the political economy of the impossible.
About the Author
Javier Santiso is Professor of Economics at ESADE Business School, Spain, and Vice President of the ESADE Center for the Global Economy and Geopolitics (ESADEgeo). Previously he was the Chief Economist for Latin America and Emerging Markets at BBVA (Banco Bilbao Vizcaya Argentaria) and Chief Development Economist and Director General of the OECD Development Centre. He studied in Paris at Sciences Po, at Oxford University, and at Harvard University, and he holds an MBA and a PhD. He is a Young Global Leader of the World Economic Forum. He is the author of Latin America's Political Economy of the Possible: Beyond Good Revolutionaries and Free-Marketeers (MIT Press, 2006).
"This book is a refreshing look at Latin America and will be encouraging to those who fear those countries are turning too for to the left, or for anyone who wishes to see how the land of magical realism has become quite pragmatic."—Publishers Weekly
"A beautiful and elegant book. A well-argued and convincing thesis: that after centuries of dream chasing, pragmatism has come to Latin America. One passionately hopes that it will not go away."
—Olivier Blanchard, Professor of Economics, MIT
"Reading this book is a delight. One of the best works in a long time about the economic and political impulses that are penetrating Latin America today."
—Albert O. Hirschman, Princeton University
"This magnificent book, written in a style often reminiscent of such great Latin American novelists as Garc"a Mrquez and Vargas Llosa, captures the essence of Latin America's transformation today. Delightful and necessary reading for all those who care for the people of this great region and follow its development."
—Charles Oman, Senior Economist, OECD Development Centre, Paris
"Here Javier Santiso offers us an original and passionate view of the historic moment that Latin America is actually living through right now. It is required reading for all those who are interested in the region's development."
—Ricardo Hausmann, John F. Kennedy School of Government, Harvard University
"A brilliant analysis—clear, concise, and a must for all those interested in Latin America."
—Jacques de Larosi're, former Managing Director, International Monetary Fund