ARNOLD HARBERGER: WINNER OF THE 2000 CARLOS DIAZ-ALEJANDRO PRIZE

As established by LACEA's bylaws, the Carlos Diaz-Alejandro prize "will be awarded to an individual who has made a significant contribution or a body of contributions to the economic analysis of issues relevant to Latin America." It is hard to think of somebody who fits better this description than Arnold Harberger. Prof. Harberger has had a tremendous and lasting influence on economic policy in Latin America through his writings, his students, and his advising to governments and national/international agencies. In fact, by helping to bring rationality and sound economic fundamentals into public economic policy, Prof. Harberger is arguably the most influential economist in Latin America over the last thirty years.

Prof. Harberger is currently the most distinguished member of the Economics Department at UCLA, where he has been since 1984. He received his Ph.D. from the University of Chicago in 1950. He spent 38 years at the University of Chicago, and has been Professor Emeritus since 1991. He is a past president of the American Economic Association, a member of the National Academy of Sciences of the United States and a fellow of the Econometric Society. He has been consultant to 16 foreign governments, nine U.S. government agencies and eight international agencies and foundations. He has published over 200 hundred journal articles and books. He is frequently mentioned as a likely recipient of the Nobel Prize in Economics.

Professor Arnold Harberger is widely recognized as one of the founders of modern public finance. His pioneering work on the measurement of waste, corporate tax incidence, and the social opportunity cost of public funds has greatly influenced entire generations of public finance economists. In particular, Harberger's famous "triangles" -- designed to measure the excess burden of taxation -- have become part of the standard toolbox of all public finance economists. Prof. Harberger's path-breaking article in this area was published in 1962, while he was at the University of Chicago. His work on social project evaluation -- collected in a 1972 volume which remains in print to this date -- has also been tremendously influential and has become the reference point for any practitioner in the field. In addition, Prof. Harberger has done highly influential work on international economics, the economics of inflation and economic policy for developing countries. Most recently, Prof. Harberger has been studying the growth process by emphasizing real cost reduction at the firm level.

Prof. Harberger's influence on the profession has certainly not been limited to such major intellectual contributions. He has also devoted much of his career to train students who have gone on to occupy high ranking positions in their countries and carried out major economic reforms aimed at opening the economy to foreign trade and investment, fostering macroeconomic stability, and giving market mechanisms a greater role in resource allocation. Prof. Harberger's impact has been particularly pronounced in Latin America. It goes back to 1956, when the so-called "Chile project" was established between the University of Chicago and the Catholic University in Chile. A brilliant array of Chilean students came to Chicago under this program, many of whom later played a prominent role in transforming Chile into one of the more dynamic economies in the world. Prof. Harberger's former students include two who became presidents of their countries, more than 20 ministers and budget directors, more than a dozen central bank presidents, and more than 100 students who have held important positions in influential international financial organizations such as the International Monetary Fund and the World Bank. As a recent article in the Wall Street Journal (September 12, 1996) rightly put it, "Milton Friedman may be more famous, but the real godfather of the free-market revolution in Latin America is […] Arnold Harberger." Indeed, it would be hard to overestimate the social value of Prof. Harberger's role as a teacher over more than four decades.