As Argentina faces yet another standoff with its creditors, economists and policymakers should acknowledge that no one, including the IMF, has a compelling strategy to generate sustainable economic growth and prosperity. What Latin America needs is policies designed to improve people's lives, not prove some grand theory.
NEW YORK – The political economy of development in Latin America has long oscillated between statist populism and technocratic neoliberalism. The only constants seem to be unsustainable growth and debt crises, as Argentina’s current predicament shows. From a broader perspective, the key point is that whether one sides with the Argentine government or its creditors, no one, including the International Monetary Fund, has a compelling strategy to generate sustainable economic growth and prosperity.
Yet, not so long ago, development economics in Latin America was alive with creative ideas and strategies to overcome the binary choice between statism and market fundamentalism. The field incorporated insights from governments’ experiments with industrial policy, which had sometimes succeeded in creating the right incentives to spur innovation, boost productivity, and generate employment.
One of the pioneers and leading exponents of this approach, Simón Teitel, died in March in New York City, at 91, from complications of COVID-19. Teitel, a native of Argentina who worked as a research economist for the United Nations, the Inter-American Development Bank, and the World Bank, exemplified the hope that evidence-based industrial policy could change the political economy of development in Latin America. That hope remains alive – even if governments have lost sight of it.
NEW YORK – The political economy of development in Latin America has long oscillated between statist populism and technocratic neoliberalism. The only constants seem to be unsustainable growth and debt crises, as Argentina’s current predicament shows. From a broader perspective, the key point is that whether one sides with the Argentine government or its creditors, no one, including the International Monetary Fund, has a compelling strategy to generate sustainable economic growth and prosperity.
Yet, not so long ago, development economics in Latin America was alive with creative ideas and strategies to overcome the binary choice between statism and market fundamentalism. The field incorporated insights from governments’ experiments with industrial policy, which had sometimes succeeded in creating the right incentives to spur innovation, boost productivity, and generate employment.
One of the pioneers and leading exponents of this approach, Simón Teitel, died in March in New York City, at 91, from complications of COVID-19. Teitel, a native of Argentina who worked as a research economist for the United Nations, the Inter-American Development Bank, and the World Bank, exemplified the hope that evidence-based industrial policy could change the political economy of development in Latin America. That hope remains alive – even if governments have lost sight of it.