Americas Quarterly - Spring 2009

Markets,

States

and Neighbors

By Javier Corrales

Where will Latin America will be further behind than ever. be 25 years from now? Latin America will register the larg-Mo s t c o m m e n t a t o r s , est gap with the richest economies probably with good rea- of the world in its history, and also son, prefer to focus on lag seriously behind China and Rus-much shorter time frames. sia, economies that in the 1950s were But extending the time far poorer than those of Latin Amer-horizon allows us to see ica (see figure 1). larger trends shaping the This “less growth” condition, in region beyond the vola- place since the 1960s, suggests that tile cycles of changes in government. Latin America is suffering from some From my perspective, the trends look lo w-grade fever that refuses to go troublesome. away. What’s causing this fever? At

Let’s start with economics. By the risk of being too reductionist, I 2034, Latin Americans will be richer propose that the most important than they are today—but not by cause is the uneven development much. Latin America does not face of states and markets. the problem of a no-growth future.

Rather, it faces the problem of a fu-

Mind the Gap

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For the past 30 years, Latin Amer- petitive markets. In Latin America, ican economies have been under- most countries have neither. More performing relative to most other precisely, countries exhibit uneven regional economies. Even during the levels of state and market develop-fast-growth 2000s, almost every re- ment simultaneously. gion in the world except Africa grew Latin Americans have not fully faster than Latin America. According grasped the problem of uneven state to economic historian Angus Mad- development. The right argues that dison, even if the world returns to Latin American states aresuffocating; the good years of the 2000s, Latin the left that states are too feeble to American economies by the 2030s bring about real change. Both views