CIPR | Center For Inter-American Policy & Research

Tulane University

Human Development

Human Development

Despite recent improvements, Latin America continues to be noted for its high levels of poverty and inequality as well as its protracted dependence on primary exports. The balancing of economic development and social policies has been a constant theme in the region, yet it has been accomplished haltingly, and to varied degrees across countries. The vaunted promises of economic liberalization in the 1990s stoked the expectations of the masses, mobilized politically in the advent of concurrent democratization processes. But the reform process, incomplete as it was, failed to deliver on those promises. The result was a general repudiation of liberalizing reforms and a dangerous disenchantment with the institutions of representative democracy. Most countries then shifted towards a greater preoccupation with strong institutions and active state participation in social policy. This participation took different forms, ranging from conditional transfer programs targeted to the most vulnerable social sectors, to far-ranging proposals for twenty-first century socialism. Together with strong economic growth most of these programs brought significant reductions in poverty and broadened the ranks of an emergent middle class. Inequality also registered progress, though not universally. Questions remain, however, regarding the sustainability of these gains. Strong demand for commodities, mainly from China, has lessened incentives to seek diversification of productive structures. If the current uncertainty affecting global growth lowers this demand, the consequences to economic growth in the region could be adverse. While macroeconomic prudence is well established in most countries (with Venezuela and Argentina as possible exceptions) and debt burdens are generally low, currency flows are resulting in the appreciation of exchange rates which are hurting export competitiveness. Slow productivity growth in most countries also limits growth. Coupled with meager tax revenues, this restricts the capabilities of states to invest in the human and physical capital necessary to foster equitable and sustainable development in the long-term.

Key general research questions in this area include the following:

  • What, if any, will be the dominant paradigm guiding economic reform?
  • How can the region overcome the obstacles to governability posed by the new inclusiveness of its political systems?
  • How can states foster greater human security without democratic reversions?
  • How do the efforts of states compare in the fight against poverty and inequality? Are there standards of measurement?
  • How can states prioritize their use of resources to maximize human wellbeing?
  • How can state capacities be bolstered to deliver the requisites of strong and sustainable increases in human development?
  • What can states do to foster innovation, productivity, and overall competitiveness?
  • How can states move their productive structures away from natural resource dependence?

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