This paper seeks to provide a systematized framework for themain ideas that have been developed by ECLAC concerning the effectsthat market-led reforms have had on labour, financial and technologymarkets. In order to explore these questions further, a research projecthas been undertaken by ECLAC with the sponsorship of the GermanAgency for Technical Cooperation (GTZ). The project deals with theinstitutional requirements for properly functioning financial,technology and labour markets. Particular attention is being devoted tothe institutional forces affecting market access by traditionallyexcluded actors, such as small and medium-sized enterprises (SMEs)in the case of long-term financial and technology markets, poorhouseholds in the case of housing finance, and female workers in thecase of the labour market.As a consequence of the market-led reforms, Latin America hastransformed its pattern of development and the way in which its brandof capitalism is configured. At the same time, the reform process isshown to have yielded unsatisfactory results when the performancelevel achieved in each factor market is evaluated. Labour marketsexhibit a range of difficulties in reducing unemployment and informalemployment. Financial markets are characterized by concentration andby the increasing difficulties encountered by the weaker agents inaccessing resources. And, in most of the economies in the region, therole played by technology markets in creating and diffusingtechnology domestically is being downgraded. This poor performancehas co-evolved along with a reduction in the State’s participation in theeconomy and an increasing power asymmetry in favour of privateagents.The above difficulties seem to be related to the persistence of various types of market failures and the lack of non-market institutions capable of strengthening and supporting the operation of factor markets. The persistence of imperfect information, the lack of initial entitlements and gaps in learning capabilities have hindered the adaptation of various actors to the discipline of a new macro policy and incentive regime. Because of these underlying weaknesses in the institutional fabric inherited by the region, its factor markets have functioned very imperfectly and have failed to deliver what was expected of them in terms of a better long-term overall performance.
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