In This Review

The New Economic Model in Latin America and Its Impact on Income Distribution and Poverty
The New Economic Model in Latin America and Its Impact on Income Distribution and Poverty
Edited by Victor Bulmer-Thomas
St. Martin's Press, 1996, 370 pp.

How has the new economic model of export-led growth in Latin America affected poverty and inequality? Victor Bulmer-Thomas, director of the Latin American Institute at the University of London, has assembled a solid team to answer this vital question. In his conclusion, Bulmer-Thomas notes that if the new neoliberal paradigm in Latin American economic policymaking is to imitate the Chilean success story, then time is not on Latin America's side. The willingness of Latin American electorates to tolerate hardship in the pursuit of long-term gain will not continue forever. He does not believe Argentina or Brazil, for example, will be able to ignore the impact on equity as did Chile in the 1970s and Mexico in the 1980s. Growth has been less than anticipated. Consequently, increases in social expenditures have been minimal. The targeting of social programs to the lowest levels of society has not been easy or even possible in some countries. Trade liberalization and labor market reform have hurt poorer wage earners, particularly in rural areas. The transfer of assets, especially via privatization, has produced a sharp fall in real wages and a deterioration of the income distribution. All of these conclusions raise important concerns about the sustainability of the reforms within a democratic context and make this book, controversial as it will undoubtedly be, a vital contribution to the debate about the economic and political future of Latin America.