Left Behind: Latin America and the False Promise of Populism

Macroeconomics - Economic growth - Monetary Policy
Politics and Economy
Fiscal Policy - Public and Welfare Economics
Review by: 
Ugo Panizza
Sebastian Edwards
University Of Chicago Press
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In 1991, Rudi Dornbusch and Sebastian Edwards edited the “The Macroeconomics of Populism in Latin America.” In that book, Dornbusch and Edwards defined as populist a set of policies that aim at obtaining short-term gain while neglecting long-term sustainability.

It was the first book I read about Latin America and I learnt a lot from it. For instance, it was only after reading Lago’s chapter about Peru’s heterodox experiment that I understood why John Williamson had to write the Washington Consensus paper.

It was, and still is, a fantastic book. Contributors and discussant included, among others, Alberto Alesina, Guillermo Calvo, Eliana Cardoso, William Cline, José de Gregorio, Roque Fernández, Arnold Harberger, Felipe Larraín, Santiago Levy, José Antonio Ocampo, Miguel Savastano, Federico Sturzenegger, and Miguel Urrutia.

20 years after “The Macroeconomics of Populism in Latin America,” Sebastian Edwards, now solo, wrote a much-needed follow-up to the 1991 book.

Left Behind starts with a historical view of Latin America’s economic decline that culminated with the Washington consensus reforms in the late 1980s early 1990s. It then recounts the events that came after the 1991 book, starting with the Tequila Crisis in Mexico, the Argentinean default, and a chapter that compares the policies of presidents Chavez of Venezuela and Lula of Brazil. Edwards concludes the book with a chapter on challenges about the future.

Edwards is not optimistic about Latin America’s prospects. In his view: “contrary to generalized view among analysts, journalists, and academics, during the 1990s and 2000s most Latin American countries made only limited progress in modernizing their economes.” According to Edwards, only Chile has implemented a sustainable reform process. He also sees some hope for Colombia, Costa Rica, and Peru but he remains pessimistic for the rest of the continent.

Not everybody may agree with Edwards’ bleak conclusions, but anybody interested in Latin America should read this book.