Public sector and the Latin American crisis

The authors of this volume compare the responses of six Latin American countries, both oil exporters and oil importers -- Argentina, Brazil, Chile, Mexico, Peru, and Venezuela -- to the shocks of the 1970"s. Those that borrowed heavily to finance the postponement of the necessary economic adjustment, or to adjust only partially, have been burdened with massive debt ever since; furthermore, deficit financing caused major distortions in the monetary system and price levels, leading to double- and triple- digit inflation. This volume"s authors, all experts on the economies of Latin America"s debtor nations, analyze the behavior of the public sector in response to external shocks, political and electoral cycles, and private interest groups. Their analyses suggest the need for deep institutional changes in the public sector along with major efforts to reduce debt. (Author abstract, modified)