Financial Liberalisations in Latin America in the 1990s: A Reassessment

摘要

Latin America in the 1990s retained its dubious notoriety as the experi-mental lab of economic policies. The decade started with renewed optimism about the virtues of market-oriented liberalisation. Old concerns about the sequencing of reforms were replaced with the buoyant view that dismantling all the impediments to trade in goods and assets would lead LATAM to quick prosperity, overcoming the lost decade of the 1980s. The resumption of large inflows of capital in the early 1990s, the disinflation in Argentina under Menem, and the growing trade integration of Mexico as part of NAFTA reinforced the optimism of the early 1990s. However, a series of crises starting with the collapse of the Mexican peso in December 1994, continuing with the financial instability in Brazil in the mid-1990s, culminating with the meltdown of the Argentinean currency board, deflated the optimism about the virtues of financial liberalisations in Latin America. The purpose of this paper is to reassess the experience of Latin America with financial liberalisation, putting it into broader perspective by comparing the LATAM experience with that of other developing countries.