The impact of structural adjustment on government spending and debt in Latin America

In theory, the policies associated with adjustment and stabilization (AS) in Latin America were designed to contain wasteful government spending, enhance economic efficiency, and forestall recurrent debt and liquidity crises. In practice, AS succeeded in shrinking the size of government, but regional debt rose and debt servicing remained historically high. Government spending on physical infrastructure and subsidies fell sharply, while military spending in much of the region escalated. The changing magnitude and relative pattern of government expenditures corresponded with slower economic growth, higher unemployment, and continued liquidity crises.Stabilization, Debt, Government spending, Defense burden,

Labour and Its Discontents: The Consequences of Orthodox Reform in Venezuela and Mexico

The negative impacts of orthodox liberalisation policies on labour in Venezuela and Mexico were representative of outcomes elsewhere in Latin America. Untheorised increases in precarious informal work, unemployment, and emigration as well as a growing breech between wages and productivity followed trade, capital, and labour market reforms and the prescribed macro stabilisation policies. Orthodox reforms in both countries paradoxically facilitated market failures given the forms or modes taken by foreign direct investment (FDI), which introduced ever more increasing scale economies with their attendant information imperfections. In addition, the growing competition from tradeable goods faced by domestic producers in both countries and the decision to buy rather than make technologies by way of FDI undermined job creation and induced inter-sectoral flows toward service sector and informal work.