Arnold Kling

Laggard Latin America

Arnold Kling, Great Questions of Economics
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Rudiger Dornbusch says that Latin America's economic performance is unacceptably poor.

Over the past 20 years, annual per capita GDP growth in Latin America averaged 0.35%. At that pace, an economy would need 200 years to double in size. In Asia, the standard of living doubles every decade.

...Profound misgovernance, not bad luck, is to blame for economic stagnation.

Dornbusch argues that in Latin America, privatization has meant little more than temporary windfalls for governments, which used proceeds from asset sales to finance wasteful spending. Corrupt governments that operate for personal gain rather than the general welfare are the heart of the problem, in his view.

Discussion Question. Some of the corrupt leaders are democratically elected. Can anything be done about the problem?

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