For immediate release: July 31, 2007
Latin America Hasn't Abandoned Free Markets, Says Dallas Fed Publication
DALLAS—Latin America hasn't lost faith in open markets, despite recent left-leaning election results, according to the latest issue of the Federal Reserve Bank of Dallas' Economic Letter.
In "Is Latin America Saying Adios to Market-Friendly Reforms?" Vice President and Senior Economist William C. Gruben and senior economics writer Richard Alm find the majority of Latin American countries haven't abandoned a series of free market reforms that began in the mid-1980s.
Gruben and Alm analyze several economic policy measures for 12 nations that make up the bulk of the Latin American population. While they find no wholesale erosion of market-based policies outside of Argentina, the Dominican Republic and Venezuela, they note that most countries are running in place.
"The leftward lurch perceived by many observers has been exaggerated," the authors write. "Even so, the data don't show a groundswell of new support for market-oriented policies."
The authors report encouraging signs of economic freedom in Mexico, where improvements include policies promoting market interest rates, less restrictive minimum wages and lower tax burdens. Mexico was one of nine countries that sharply reduced the number of days required to start a business.
"The slow pace of Latin America's market reforms in recent years is cause for concern, leaving the region's market advocates looking for ways to restore the momentum of the 1990s," they write.
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