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By ROGER HAMILTON
How can we make sense of Latin America?
By some measures, the peoples of this vast land, stretching from the icy outposts of
Tierra del Fuego to Mexico’s blistering hot Sonoran desert, have made undeniable economic progress.
But other regions have done better—far better. Per capita
income in Latin America today is not even 30 percent that of developed countries, and it is lower than the average in East Asia,
the Middle East and Eastern Europe. In recent polls, nearly half of the Latin American respondents said they consider their
current economic prospects to be either bad or very bad.
The same holds true for social conditions. In the area of health, Latin America has made more progress
than most of the developing world. Since the 1950s, for example, infant mortality in the region has dropped from 106 to 31 for
every 1,000 live births. In education, nearly all children in the region today go to primary school, and illiteracy has dropped
significantly. But again, other regions have made much more significant advances in health and education during this period.
And when it comes to crime and violence, many Latin American countries have actually experienced a
significant worsening of the problem in recent decades. Homicide and kidnapping rates in the region are now among the highest
in the world.
Given Latin America’s mediocre economic and social performance, one would expect that its political
development would lag as well. But this is not the case. Despite the region’s former reputation for dictators and military coups,
the majority of its citizens today enjoy higher levels of civil and political freedom than those of any other developing region.
Democratic governments are the rule, and Latin American media are among the world’s most dynamic and aggressive.
What can explain this seemingly disjointed pattern of development? Why does Latin America lag
behind other developing regions? What explains the wide range of fortunes among the countries even within Latin America and
the Caribbean?
Today these questions are almost always answered from the standpoint of economics. For obvious
reasons, poor economic policies and weaknesses in the region’s economies turn up in almost every analysis of Latin
America’s challenges. This kind of analysis inevitably suggests that economic solutions, particularly those derived from the
free-market policies that have come to predominate in recent years, are the best hope for accelerating the region’s
development.
Tool for policymakers
But the enigma of underdevelopment can also be approached by looking at fundamental
factors that go deeper than current economic policies and trends. This is the perspective employed by a major new IDB report
entitled Development Beyond Economics . Focusing on what it calls Latin America’s
"entrenched problems," the report argues that they are to a great extent products of structural factors such as
demography, geography and institutions. An understanding of these factors and their role in Latin America’s development will
both clarify the nagging problems the region continues to face and help policymakers devise strategies to overcome them.
Conjecture about the impact of structural factors has had
a long intellectual history. In some cases, observers came up with theses that today strike us as naively deterministic, such as the
notion that hot climates cause laziness. But the work of others has proven to be enduring and influential. In his pioneering work,
French historian Fernand Braudel cast new light on the evolution of European societies by dissecting such seemingly mundane
facts as trade routes, what people ate and what peasants owned. In recent years, ecologist Jared Diamond has made a provocative
case linking things such as the geographical alignment of continents and a region’s biological endowment with the march of
human history.
But for the most part, development institutions look at development issues from a predictably
economic point of view, paying very little attention to the factors examined in the new IDB report. This must change, says
Ricardo Hausmann, IDB chief economist and head of the Bank’s Research Department, which produced the report.
"Development is not just economics," he says. "These relatively forgotten areas of development are
essential for understanding what is happening in Latin America today and the challenges the region will face in the new
century."
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