Innovation, Inclusion, and Institutions: East Asian Lessons for Latin America?

Abstract

Latin American countries have made substantial progress with respect to some socioeconomic indicators in recent decades. Indeed, many countries in the region now enjoy middle-income status within the international context. This progress was accelerated by the “commodity super-cycle” during the ten years from around 2003 to 2012, as China’s demand for commodities led to price and volume increases for many Latin American exporters of those products. Now the region faces two kinds of challenges. On the one hand, the commodity cycle is over for the foreseeable future, so another kind of strategy must be sought to maintain high growth rates. On the other hand, the commodity boom did not resolve all of Latin America’s socioeconomic problems and may even have exacerbated some of them. Thus, the gap increased between nations, regions, and social groups that benefitted and those that did not. Moreover, productivity failed to rise in line with international trends.