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di Juan Carlos Moreno-Brid, Martín Puchet Anyul
Objectives, scope and limitations of state interventation in the economy in Latin America and Caribbean to foster socially inclusive development
The last decades of the twentieth century saw a noticeable advance in democratization in Latin America and the Caribbean. This process has consolidated respect for elections as the only legitimate way to accede to the executive. Simultaneously, citizenship has strengthened and, although heterogeneous and far from complete, this has made it possible for an important part of our populations to be better informed, more aware of their political rights and, to a certain extent, of their economic, social and cultural rights. What undoubtedly still remains to be achieved is it for it to be normal practice for citizens to demand these rights be respected and fulfilled.
Stronger political rights, electoral democracy and processes of citizenship building, however, have not been accompanied by dynamic economic performance or by a significant improvement in living conditions for the majority. In fact, the results of the macro-economic reforms inspired by the so-called Washington Consensus and drastically implemented since the mid 1980s throughout Latin America have been disappointing. These reforms, focused on decreasing state involvement in the economy and deregulating and opening domestic markets to world competition, brought down inflation and the fiscal deficit and achieved a marked increase in exports. But, they were far from having put Latin America and the Caribbean on the road to stable, sustainable, equitable development. In general, the rate of increase of real earnings and production in the region has been slow, volatile and subject to financial or balance of payments crises with major social repercussions. Over these years, unemployment shot up to historic highs, employment in the informal sector became more the rule than the exception and poverty continued to plague a vast sector of the population. In effect, in 2005 (the most recent year for which we have this information), 209 million Latin Americans, that is, 39.8 percent of the total population, lived in condition of poverty, not to mention the millions who emigrate seeking better life opportunities.