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Abstract
The past decade has witnessed wide-ranging economic reform in several Latin American countries. There is little resemblance between the economies of the early 1990s and their more controlled, poorer performing counterparts of the early 1980s. The new atmosphere reflects, in part, support for sound economic policymaking at the highest political levels and a change in attitudes that now permits the consideration of deregulation, privatization, and the opening up of the economy. Deregulation has spurred economic activity. The opening of the economy, with its impact of increased imports, has led to higher revenue from this source.1 Where privatization occurred, it has also led to increases in revenue. Significant efforts to reduce the fiscal deficit—even though in most instances the improvement was mainly the result of revenue-enhancing rather than expenditure-tightening efforts—and sensible credit policies have led to success in the control of often runaway inflation. In some countries, the role of the state itself has undergone careful scrutiny. Consequently, government has become less involved in running public enterprises, which began to respond more to market signals; there have been some efforts to contain the government payroll; and, in a few instances, social security has passed from public to private management.
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