The Political Economy of Latin America

Abstract

This chapter discusses the characteristics of the Latin American economies and identifies patterns of development from colonialism to the present. It looks at issues of sustainable development in the region’s political economy, including poverty and inequality, the informal economy, and the environment. The chapter assesses the impact of COVID-19 on the economy. The colonial economies in the Americas could best be described as extractive and exploitative. Under the mercantilist system, the colonies existed for the economic benefit of the colonizing power. The wars of independence in Latin America were costly and destabilizing. In addition to the political disarray, the economic output of some of the new countries declined from what it had been during the colonial period. Export promotion was key to regional growth during the second half of the nineteenth century.