Unshackling the Private Sector: A Latin American Story

摘要

This study examines evidence from a number of recent reports of the privatesector in Latin America and the Caribbean and finds that the economic transformation that has taken place is not a simple story but the product of complex interactions among macroeconomic stabilization, incentive reforms, and institutional adaptation. No one element would have produced the results that have been achieved. For example, fiscal stability and better incentive structures give the correct signals for a shift of resources to more productive uses, but they do not address the barriers that hinder resource movement. Likewise, the traditional package of adjustment measures may be necessary to lay the foundation for rapid growth, but is not sufficient to elicit a strong response from the private sector. Moreover, if the benefits of adjustment are perceived to be inadequate, public pressure mounts for reversal of both fiscally responsible policies and improved incentive structures.