Falling Behind: Explaining the Development Gap Between Latin America and the United States
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In 1700, Latin America and British North America were roughly equal in economic terms. Yet over the next three centuries, the United States gradually pulled away from Latin America, and today the gap between the two is huge. Why did this happen? Was it culture? Geography? Economic policies? Natural resources? Differences in political development? The question has occupied scholars for decades, and the debate remains a hot one.
In Falling Behind, Francis Fukuyama gathers together some of the world's leading scholars on the subject to explain the nature of the gap and how it came to be. Tracing the histories of development over the past four hundred years and focusing in particular on the policies of the last fifty years, the contributors conclude that while many factors are important, economic policies and political systems are at the root of the divide. While the gap is deeply rooted in history, there have been times when it closed a bit as a consequence of policies chosen in places ranging from Chile to Argentina. Bringing to light these policy success stories, Fukuyama and the contributors offer a way forward for Latin American nations and improve their prospects for economic growth and stable political development.
Given that so many attribute the gap to either vast cultural differences or the consequences of U.S. economic domination, Falling Behind is sure to stir debate. And, given the pressing importance of the subject in light of economic globalization and the immigration debate, its expansive, in-depth portrait of the hemisphere's development will be a welcome intervention in the conversation.
Many of those works—ﬁlms, novels, poems, travel diaries, epistolaries, history books—have been forgotten in the United States and in Mexico. It would be of extraordinary beneﬁt to explore the possibility of promoting documentary and publishing projects geared toward recovering the great history of cultural warmth between the United States and its Latin American neighbors, as it no doubt echoes throughout the region, especially in Cuba with Ernest Hemingway. The reading public and reﬁned
crisis erupted in Brazil in 1999, and the economy collapsed in Argentina at the turn of the twenty-ﬁrst century. Bolivia, Ecuador, and to a lesser extent Uruguay suffered equally serious problems, including grave social and political crises in Bolivia and Ecuador. Despite the varied reform programs that have been implemented in Latin America, much remains to be done. Consider, for example, a simple institutional indicator: the number of days required to start up a new business. As indicated in
economic openness, dependency theory failed to elucidate the political factors that may explain why Latin American countries stayed behind while the East Asian countries overtook them. New institutionalism, in turn, is a mirror image of dependency theory where institutions are the key to development.3 The central claim of new institutionalism is that institutions are the primary driver of economic development, more so than features of the natural environment, geography, the supply of factors,
opposition was legally tolerated and allowed to win some seats in the legislature, and sometimes even a share of power. And these incentives were sufﬁcient for the opposition to participate. Hence, intra-elite conﬂicts were Does Politics Explain the Economic Gap? 119 processed according to some rules and, even if not without sporadic rebellions, were peacefully resolved. Following Chile after 1831, several Latin American countries established stable systems of political competition in which
development in the region, and mitigating inequality remains the central task that policymakers must address.39 She states that “this winner-loser setup is a self-reinforcing economic and political dynamic based on the concentration of both assets and power, the institutionalized bias this creates in political structures, and the permanent exclusion of large segments of the population.”40 Until this challenge is met, high-stakes politics will continue to dominate the scene. Social Inequality and