Capital, conditionality, and free markets: The International Monetary Fund, the World Bank, and the effects of the neoliberal transformation in Latin America and the Caribbean
This dissertation examines the effects of neoliberal economic policies in Latin America in 25 years (the 1970–1995 period), focusing especially on macroeconomic stabilization under IMF support and on IMF and World Bank structural adjustment lending, where the debate centers on the effect of these policies on growth, macroeconomic stability, and income distribution. The study includes formal, models on both macroeconomic stabilization and trade liberalization, as well as cross-country statistical tests. In contrast to the predictions of structuralist and dependency critics of neoliberal policies, the statistical results find that neoliberal policies, when supported by the Bank and the IMF, not only help bring about macroeconomic stabilization, but also help to improve the position of capitalist firms and thus act to increase long term economic growth and maintain capital accumulation. However, they invariably do so with a greater degree of economic inequality and possibly increased levels of urban poverty as well. One possible normative conclusion that could be derived from these results is that since state-led import substitution industrialization has also been discredited in the eyes of most economists as a development strategy for Latin America (or has outlived its usefulness, depending on which economist one talks to), any alternative set of policies for the region must focus not just on coming up with non-laissez faire domestic policy alternatives, but also on ending the asymmetric and deflationary bias of adjustment to international macroeconomic imbalances and on redistributing power and economic-decision making to workers and communities at the local level. Making such reforms politically feasible would require a gradualist approach with policies substantially different from both state-led import substitution and from the populist policies associated with governments such as Allende in Chile, Garcia in Peru, and Peron in Argentina, and would require the active coordination of Latin American and other developing country governments in order to push for change in existing international monetary arrangements.
0511: Economic theory
0616: International law
0616: International relations