Latin America Mid-term LECTURE 1
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10 terms
Terms | Definitions |
|---|---|
 Import-substitution industrialization | -Too much government involvement in the economy, not enough outward market orientation -replace foreign imports with domestic production -reduce foreign dependency by producing more local industrial products |
| Washington Consensus | Too little government involvement in the economy. too much outward, market orientation |
| Bad institutions | weak property rights, insufficient rule of law, corruption, and a bureaucratic state are structrual impediments to sustained economic growth |
| Why did development stall? | Bad policies, bad institutions, commodity dependence, colonial histories |
| Dependency theory | -Commodity producing countries faced with terms of trade losses that hinder development -volatile commodity prices lead to falling incomes relative to manufacturing oriented economies |
| Colonial histories | -Extractive nature of early colonial settlements discouraged strong institutional development -Path-dependent effect on development |
| Why has Latin America outperformed? | Good policies, good institutions, commodity booms |
| Good policies | macroeconomic discipline and budgetary surpluses provided the flexibility to spend during economic downturns |
| Good institutions | stronger, more representative institutions have led to greater social spending targeted toward those most in need (Eg conditional cash transfers) |
| Commodity Booms | Terms of trade gains from booming commodity industries has padded government coffers (allowing for the expansion of social spending) and boosted economic growth |
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