Economic Reforms in Latin America: The Decade of Hope

After pursuing for many decades economic policies which disregarded macroeconomic fundamentals and were based on heavy government intervention and isolation from foreign trade, the last decade has witnessed a major overhaul of economic policies in Latin America. These changes were started in Chile in the middle of the 1970s and then extended to most countries in the region. This revolution resulted in a frontal attack on public sector deficits and in a drastic change of the traditional import substitution-cum-government intervention model that had emerged following the great depression and the end of the Second World War.1