Comparing the consequences of 1990s reforms in Latin America and East Europe - Essay Example

After the adoption of the macroeconomic strategies in the 1990s, both regions had high hopes that the new models would produce dynamic economies and abandon the legacy of sluggish growth, which was evident in the 1980s. However, in practice, the results of the macroeconomic strategies were neither as effective as economic enthusiasts expected, nor as bad as economic critics predicted. Therefore, there is a need to take stock of the implications of policy implementation in the regions in the 1990s.

This paper will examine the consequences of the 1990s reforms in East Europe and Latin America by examining the policies and anticipated outcomes for the reforms, as well as the consequences of these strategies. Latin America is among the world’s developing region. The region attained political autonomy roughly in the early 19th century. The colonial past, as well as the variety of primary products available for export, strongly influenced the economic development of the region’s societies.

This is largely because it was through these export products that the societies entered the global system of production specialization during the last half of the 20th century. The marginal position of Latin American nations, which exported extractive or tropical agricultural crop to the developed world, was not conducive to interdependence among the region’s economies, particularly in the areas of investment and trade (Pop- Eleches 64). As a consequence, during the initial half of the 20th century, the region’s economies responded to economic crises through industrialization oriented towards domestic markets.

The beginning of the 1980s witnessed massive economic changes in developed economies such as Great Britain and the US. Global inflation adversely affected the price of primary products produced in Latin America. This resulted in massive