The Limits Of Stabilization: Infrastructure, Public Deficits And Growth In Latin America

Customers in the US and Canada please order from Stanford University Press at (800) 621-2736 or visit their website at www.sup.org. Over the 1980s and 1990s, most Latin American countries witnessed a retrenchment of the public sector from infrastructure provision and an opening up of infrastructure activities to the private sector. This book analyzes the consequences of these policy changes from two perspectives. First, it reviews in a comparative framework the major trends in infrastructure provision in Latin America over the last two decades. Second, it evaluates the implication of these trends for economic growth and public deficits in the region. The book shows that in most countries private participation did not fully offset the public sector retrenchment. The result was a slowdown in infrastructure accumulation, which entailed a significant growth cost and weakened the intended impact of the infrastructure spending cuts on public sector insolvency. "This fascinating book highlights a neglected cost of two decades of fiscal austerity in Latin America. The authors' careful analysis reveals that the decline in public investment in infrastructure may have been expensive not only for growth, but for long-term fiscal solvency as well. Deserves to be read by every IMF economist (and many others besides)." Dani Rodrik, Harvard University