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60 Cards in this Set
- Front
- Back
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Liberal Era
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1880s-1930
-economic liberalism -free trade, Adam Smith - Ricardo talks about free trade barriers based on comparative advantage -Lasseiz Fair - Oligarchy (landed elites in power) decentralized Caudillos |
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Oligarchic Democracies
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-During liberal late 1800s
-Established more democratic governance systems modeled after Europe & US -voters still hailed almost exclusively from the upper class and electoral fraud was common |
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Post Depression shift toward ISI
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-1930s/1940s
-high barriers, protectionism -Prebisch- Dependency theory: ISI is a response to dependency theory because countries make as much as they can by themselves in order to limit dependency -LA exports much more commodities than manufactured goods, so they try to beef up their marketing sector -Urban middle class increases - Corporatism and unions rise -State led development -Populism |
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Populism
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-a style of leadership that often accompanies a highly centralized state
-Economically it has highly redistributionist policies, typically directed at certain sectors in a corporatist fashion -Elected populist leaders were incredibly polemic in their countries and in almost every instance were removed by the military -They were a major factor in the emergence of the other political legacy of the era: the military dictatorship |
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Populist Leaders
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-As a leadership style, it generally is highly personalistic, with a charismatic leader purporting to act as a direct interlocutor between the people and the state
-Populist leaders emerged through Latin America beginning in the 1930s and 1940s 1.Perón in Argentina 2.Vargas in Brazil 3.Cárdenas in Mexico 4.Velasco in Ecuador -Perón and Vargas, in particular gained power by cultivating support among growing urban working class populations -They Combined economic nationalism with subsidies to industry and pay raises to workers |
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ISI
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-Import substitution industrialization
-replacing imports with domestically manufactured goods |
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Two Halves on 20th Century
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- 1st half of 20th C.= economic & political centralization
- 2nd half = economic & political decentralization |
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El Sur***
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-Borges, 1950's
-Magical Realism -New winners (manufacturers) and losers (political elite) under ISI -Reality vs. imagination -Specific example |
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Military Dictatorships***
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-Cold War Context
-Dirty War -Problems of ISI emerging: oligarchs were losing power and the military was an extension of these landed elites 1. takes a lot of money to prop up industry 2. government goes into debt 3. little competition decreases efficiency 4. HYPERinflation |
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La Historia Oficial***
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-basic plot
-Connection to case studies of argentina and brazil -ex: when she confronts her friend who was tortured -When she (Alicia) learns about what happens with the children at the hospital -Disappearances -Alicia in the classroom seeing the younger population of students movement towards socialism |
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Dirty War
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A period of state terrorism in Argentina and guerrilla warfare during the 1970s. Victims of the violence included several thousand left-wing activists and militants, including trade unionists, students, journalists, Marxists, Peronist guerrillas. Some 5,000 of the "disappeared" were guerrillas of the Montoneros (MPM), and the People's Revolutionary Army (ERP)
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Neoliberalism
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-1980s-1990s
- Washington Consensus - The Lost Decade - Democratic transitions |
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Washington Consensus
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-Standard reform package for developing countries in crisis using IMF, World Bank, etc
-Free trade - Market liberalization -Removal of tariffs and barriers -open to investment -fiscal discipline -privatization -property rights |
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The Lost Decade
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-Massive hyperinflation
-oil prices that LA (esp. Mexico) were dependent on, fell. - huge budget deficits - ISI all catches up to LA in the 1980s - Little to no growth or development |
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Dutch Disease
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-relationship between the increase in exploitation of natural resources and a decline in the manufacturing sector.
-The mechanism is that an increase in revenues from natural resources (or inflows of foreign aid) will make a given nation's currency stronger compared to that of other nations, resulting in the nation's other exports becoming more expensive for other countries to buy, making the manufacturing sector less competitive. |
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Recovery in the 21st Century
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-Two Paths
-Progress made: 1.Stabilization fund 2. Conditional cash transfers target inequality 3. GINI coefficient 4. Remaining challenges: productivity, crime, infrastructure, corruption, democratic erosion. |
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Stabilization Fund
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- ex: chile saving money from copper industry for rainy day
- mechanism set up by government to insulate the domestic economy from large influxes of revenue, as from commodities such as oil. |
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GINI coefficient
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A number between zero and one that measures the degree of inequality in the distribution of income in a given society.
Range between 0.25 for historically egalitarian countries (e.g. Japan, Sweden). And 0.6 for countries with highly skewed income distributions (e.g. Guatemala, Nicaragua) |
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Security in LA
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-Caudillos allowed for security in state building stage
-Monroe Doctrine -Roosevelt Corollary -Platt Amendment -Gunboat Diplomacy -Interventions -WWI and WWII -Cold War |
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Roosevelt Corollary
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-1904
-the US will intervene in conflicts between Europe and LA to enforce legitimate claims of the European powers, rather than having the Europeans press their claims directly |
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Platt Amendment
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-1901
-It stipulated the conditions for the withdrawal of US troops remaining in Cuba at the end of the Spanish-American War and defined the terms of Cuban-U.S. relations until 1934. The Amendment ensured U.S. involvement in Cuban affairs and gave legal standing (in U.S. law) to U.S. claims to certain territories on the island including Guantanamo Bay Naval Base |
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Gunboat Diplomacy
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the pursuit of foreign policy objectives with the aid of conspicuous displays of military power
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Security in LA during WWI & WWII
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- general support for allies
- Good neighbor policy= Roosevelt's policy of of non-intervention and non-interference in the domestic affairs of LA |
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Security in LA during the cold war
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-Confrontation in the US's backyard
-Cuban Missile Crisis -Salvador Allende and Chile/ Cold war -US intervened a lot in LA during the cold war to protect democracy -Nicaragua, Cuban revolution -popping up of dictators in the caribbean -Alliance for Progress |
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Alliance for Progress
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-1961
-implemented by Kennedy, to funnel money to countries to keep citizens happy so the LA countries wouldn’t fall to communism |
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La United Fruit Company
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-Neruda
-1950 -Imagery of how flies to the fruit bring more flies |
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OAS
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-1948
-35 member countries from Americas -Resolution 1080 set stage for intervention to go in (early 1990s) -Interamerican democratic charter 2001 beefed up ability of OAS to intervene when democracy was interrupted -Mixed record of response 1. Haitian coups 1990, 2004 2. Venezuelan coup overthrew Chavez in 2002, OAS condemned the coup, chavez restored 3. Honduran Coup 2009 |
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electoral vs. liberal democracy
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-An electoral democracy = technically determined by popular sovereignty. Many times, however, democratic in name only. Elections may be rigged or there may be no real political competition or opposition party.
-A liberal democracy= both popular sovereignty and liberty are present. Civil liberties place restraints on government. These restraints often come in the form of civil society or institutions that are created to monitor governments and keep them from getting too powerful. |
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What Explains stalled development in the Caribbean?
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• Historical lack of permanent infrastructure
• Resource curse • Geographic location (strategic place) • Environmental concerns • Don’t have a lot of revenue to invest with because they have such small populations • Sugar economy • Colonial legacy and great power politics • Weak state capacity • Importance of institutions as formal rules (ex- tax base) |
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Acemoglu and Robinson's explanation for stalled development in the Caribbean
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-long term institutions stabilize development, and since foreign powers came in for a short term, left economy in shambles.
-Settling versus extraction, by looking at SETTLER mortality rate, and if they die a lot then people aren’t going to settle there, -no investment in institutions. -Weak institutions= lower economic growth. |
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Zonas Francas
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-In DR
-Similar to special export zones in other countries: Special regulatory and tax considerations for businesses operating in them -In DR , primarily have been textile manufacturers Suffered from liberalization of textile markets, particularly after NAFTA and China’s accession into the WTO |
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Why has growth stalled in Central America?
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-financing
-taxes -human capital -innovation -infrastructure -low social conflict |
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Rodrik on why growth is stalled in Central America
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-Binding Constraints
-although there is a single economics, there is no single recipe for economic development. What are needed are “growth diagnostics” to identify each economy's “binding constraints” to growth |
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Growth diagnostics model for central america
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-low investment
-low returns -lack of public inputs -high cost of finance -poor infrastructure -Governments poor and ineffective |
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Politics of Policy in Central America
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-poor and ineffective public sectors
-Commonalities: 1. Polarization 2. Historic social tensions 3. Difficulty to implement reforms |
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Polarization in Central America
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-Most countries are just coming out of long conflicts in the 1990's which did not solve inequality and increased poverty and emigration.
-Export boom, and then collapse in prices caused crisis |
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Slave Trade 1600-1867
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- 12 million africans enslaved
- 40% went to Brazil, 2nd most went to caribbean - Came from Kingdoms and Empires, not tribes |
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Process of Slave capture
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- 4 month march from interior
-barracks -10%-40% mortality rate -year long process |
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Engel's Law
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As income rises, the proportion of income spent on food falls, even if actual expenditure on food rises. In other words, the income elasticity of demand of food is between 0 and 1
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The Baker Plan
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-1987, named after US treasury secretary
-Treated the debt crisis as a long-term problem and not short-term. -Required structural-adjustment under IMF, and not just temporary measures to fix -The World Bank became an important actor in the recovery |
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The Brady Plan
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-1989, named after US treasury secretary
-Expanded on the Baker plan and finally allowed countries to swap defaulted bank loans into tradable bond debt -Allowed countries to significantly reduce their debt burden, Costa Rica reduced debt by $1.1 billion -Commercial banks reacted much more positively than to previous plans as it Allowed for divestiture |
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Desaparecido
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One of the people who disappeared during the 1976-1983 military rule in Argentina, presumed to have been killed by members of the regime.
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NAFTA
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-The largest free trade agreement (FTA) in the Western Hemisphere between the US, Canada & Mexico (3 of worlds 15 largest economies
-Started 1994 -Though controversial in all three countries, has succeeded in dramatically expanding trade and investment between them |
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CAFTA
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-Regional free trade agreement with central america and Dominican Republic
-signed 2004 |
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Haitian Revolution
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-1791-1804
-slave revolt in the French colony of Saint-Domingue -led to elimination of slavery -Led by Toussaint Louverture |
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Male Revolt
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-Brazils most significant slave rebellion
-1835, in the city of Salvador da Bahia, a small group of -black slaves and freedmen inspired by Muslim teachers, rose up against the government -Brazilian slaves knew about the Haitian Revolution (1791−1804) and wore necklaces bearing the image of President Dessalines, who had declared Haitian independence. |
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Camelodromo
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-Brazil
-enclosed structure where many hawkers are concentrated in general importers of goods legal or not, crossing the borders of Paraguay . -Created because vendors were not allowed in certain pedestrian heavy areas like sidewalks and plazas |
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Singer-Prebisch Theory
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-Prebisch=argentine economist 1900s
-Theory says that terms of trade, between primary products and manufactured goods, deteriorate in time. -Developing countries that export commodities in time would import fewer manufactured goods relative to a given level of exports. -formed basis for dependency theory |
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Terms of trade
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Terms of trade measures the benefits from international trade via goods prices
(Export price/import price) |
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Structuralism and North-South gap
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-Prebisch Theory
-Development obstacles reflected in structural differences between North and South. -Southern economies exported primary commodities, including raw materials and agricultural products. -Northern economies were rooted in industrial sector. -They assumed that over time there would be a secular decline in the terms of trade between commodity producers and manufactures producers |
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North-South gap
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-LAs imports grow more quickly than their exports because of Engels law: (As income increases, the proportion of expenditure devoted to food declines, even as overall food expenditure increases > Demand becomes more inelastic; as income drops, food demand does not increase > exporters’ ability to purchase manufactured goods decreases)
-Southern economies exported primary commodities, including raw materials and agricultural products. -Northern economies were rooted in industrial sector. -They assumed that over time there would be a secular decline in the terms of trade between commodity producers and manufactures producers |
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The Lost Decade borrowing problem
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-Borrowing for industrialization
-Oil shocks worsen region’s terms of trade. -Oil producers funneled earnings, known as petrodollars into private global commercial banks. -Latin American governments borrowed recycled petrodollars to fuel infrastructure and development projects. |
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Sudden Stop Economics
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-Bond markets operate with short-term incentives; conditionality enforcement mechanism.
-abrupt and major reduction in capital inflows to country that up to the time had been receiving large volumes of foreign capital.” |
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ALBA
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-(Bolivarian Alliance for the Americas), 2004
bloc lead by Venezuela and Cuba in direct opposition to FTAA -against capitalism and US imperialism -socialist attempt at regional economic integration based on a vision of social welfare, bartering and mutual economic aid |
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FTAA
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-Free Trade Area of the Americas
-agreement to eliminate or reduce the trade barriers among all countries in the Americas but Cuba. -an extension of (NAFTA) |
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Cuban Embargo
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-1960
-a commercial, economic, and financial embargo - It was enacted after Cuba nationalized the properties of United States citizens and corporations -The embargo was codified into law in 1992 with the stated purpose of maintaining sanctions on Cuba so long as the Cuban government continues to refuse to move toward "democratization and greater respect for human rights |
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Petrodollars
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a United States dollar earned by a country through the sale of its petroleum to another country
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Federalism
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-weaker federal government; state governments have more autonomy; power is shared
-System after Don Pedro abdicated the throne in 1889 -Largest states controlled the presidency while second tier states provided power basis for dissidents |
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Quilombo
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is a Brazilian hinterland settlement founded by people of African origin including the Quilombolas, or Maroons. Most of the inhabitants were escaped slaves experienced
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Dual Liberalization
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A reform strategy in which a market track is introduced while the plan track is maintained at the same time. Dual track liberation (Pareto) makes some people better off without making anybody worse off. Because prices are liberalized at the margin, dual track liberalization can also achieve efficiency. China used the dual track reform strategy in liberalizing many markets such as the markets of agricultural goods, industrial goods, consumer goods, foreign exchange, and labour, as well as in creating special economic zones.
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