Barbara Stallings

Class conflict and economic development in Chile, 1958-1973

This account of the interplay of politics and economics in Chile in three successive administrations ending with the 1973 coup suggests that social class plays a major role in determining the outcome of economic policies in Latin America. As the author demonstrates, the nature of the class alliance that controls the state apparatus in Chile, together with the actions of foreign capital, determines not only the type of economic policies followed, but their outcomes as well. A comparison of the three regimes of Jorge Alessandri (1958-64), Eduardo Frei (1964-70), and Salvador Allende (1970-73) is especially important because they represent the main approaches to economic development available to all Third World countries today. The three regimes are compared in terms of policies on property relations, government expenditure, credit, investment, wages, prices, employment, and foreign investment. The outcomes are analyzed through data on economic growth and income distribution. In a concluding chapter, the author comments on the meaning of the Chilean experience for other countries.

Global change, regional response: New global financial trends: implications for development

Stephany Griffith-Jones is a Senior Fellow at the Institute of Development Studies at Sussex University in England. She was previously associated with the Central Bank of Chile and has also served as senior consultant to such international agencies as the World Bank, the Inter-American Development Bank (IDB), the European Economic Community (EEC), and the UN Commission for Trade ad Development (UNCTAD). She is a contributor to, and co-editor (with Ricardo Ffrench-Davis) of, COPING WITH CAPITAL SURGES: LATIN AMERICA IN THE 1990s (Lynne Rienner, 1994). Barbara Stallings is Director of the Economic Development Division of the UN Economic Commission for Latin America and the Caribbean (ECLAC) in Santiago de Chile. She is both contributor to, and editor of, COMMON VISIONS, DIFFERENT PATHS: THE UNITED STATES AND JAPAN IN THE DEVELOPING WORLD (Overseas Development Council, 1993), as well as of GLOBAL CHANGE, REGIONAL RESPONSE: THE NEW INTERNATIONAL CONTEXT OF DEVELOPMENT (Cambridge University Press, 1995).

Financial Regulation and Supervision in Emerging Markets. The Experience of Latin America since the Tequila Crisis

The increasing integration of international financial markets poses new challenges to domestic financial markets everywhere, but especially those in emerging economies. The financial crises of 1994–95 and 1997–98 sounded wake-up calls to Latin America and East Asia, respectively, indicating that regulation and supervision needed to be strengthened substantially. Since then important steps have been taken to improve the rules and ensure their implementation, but financial regulation and supervision do not take place in a vacuum. On the one hand they must be consistent with domestic macro-economic policies, and they need a supportive macroeconomic environment in which to operate — as the Argentine crisis that began in 2001 shows only too well. On the other hand they have to take into account the international rules set by the Bank for International Settlements (BIS), the International Monetary Fund (IMF) and other institutions.

The Globalization of Capital Flows: Who Benefits?

This article analyzes the benefits and costs of financial globalization. While most attention has been placed on the opportunity to obtain additional capital, the benefits from incorporating international norms are also highlighted. The article examines the trends in capital flows, both from public sector institutions and private investors, placing special emphasis on foreign direct investment and remittances. Major problems identified are the skewed distribution of foreign investment—not only among regions and countries, but also among types of firms—as well as its volatility. The article concludes with a set of policy recommendations to spread the benefits of foreign capital and to make it more productive.

Showdown in Chile

The following article was completed on September 3rd, the day Andy Zimbalist left Santiago to return to the United States after a year in Chile. A few days later, on September 11th, the military coup overthrew the Popular Unity government. President Allende was either murdered or committed suicide, and the latest news reports indicate that the ruling military junta has unleashed a white terror against the Chilean working class and its political representatives. We are publishing the article in order to clarify the situation which prevailed on the eve of the coup and to place this situation in the perspective of the preceding three years of Popular Unity government. Analysis of the coup itself and the lessons to be drawn from it will have to wait until more information is available. In the meantime, we urge MR readers to wire or write the Mexican, Peruvian, and Argentine embassies in Washington and/or the missions of these countries to the United Nations, asking them to press their governments to offer asylum to the many Chileans and foreign exiles in Chile whose lives and freedom are under dire threat from the counter-revolutionary terror which now reigns in Chile. - The EditorsThis article can also be found at the Monthly Review website, where most recent articles are published in full.Click here to purchase a PDF version of this article at the Monthly Review website.

The Political Economy of the Unidad Popular

Although it is clear that the above description has nothing to do with reality, no one has yet done a detailed analysis of what actually did go on in the economy during the 1970-1973 period. This article attempts to provide a first approximation to that task. Before beginning to discuss the Allende period, however, it is important to outline the main problems inherited by the UP in November 1970. First was an economic system which could be described as dependent monopoly capitalism, linked to the United States by capital flows, trade, and technology. Second was a strong bourgeoisie whose monopoly sector, constituting the most dynamic part of the economy, was closely tied to U.S. capital. The bourgeois class was organized

The reluctant giant : Japan and the Latin American debt crisis

The debt crisis has been the dominant feature of Latin American economic and political life since 1982. While the Reagan Administration gave greater priority to Central America, it nevertheless managed the international response to the debt crisis. US management initially seemed logical for several reasons: US hegemony worldwide, the traditionally close relationship between the United States and Latin America, and the leading exposure of US banks in Latin American debt. During the period since 1982, however, two of these three elements have changed. Japan has challenged US hegemony, although it certainly has not displaced the United States, and Japanese banks have caught up with their US counterparts as holders of Latin American debt. 2 Despite their lack of traditional relations with Latin America, then, the Japanese are becoming increasingly – although perhaps reluctantly – involved in the region.

Chile: A Pioneer in Trade Policy

Chile has followed one of the most aggressive trade policies in the world over the last three decades.’ It has engaged in unilateral trade liberalization, supported and participated in multilateralism, and pioneered in the negotiation of bilateral and plurilateral free trade agreements (FTAs).2 Its FTA partners have included its neighbors in Latin America, but also the United States, Europe, and Asia. No partner seems too big or too powerful for the Chilean trade juggernaut, and few seem too small or too weak. As two trade experts said recently, “[w]hen it comes to trade and integration policies, Chile seems to be approaching ‘the end of the story.’ The pioneer of trade liberalization in Latin America and the Caribbean has probably gone far beyond any other developing country … The journey to free trade … was not without setbacks, but Chile’s trade policies these days are as close to textbook recommendations as they can get” (Mesquita Moreira and Blyde, 2006: 3).

Japan, Korea, and China: Styles of ODA in East Asia

East Asian donors have come to play an increasingly important role in the international foreign aid regime over the past couple of decades. Japan, Korea, and China are the leading actors from the region and have provided many tens of billions of dollars to countries in Asia itself, as well as sub-Saharan Africa (SSA) and Latin America.1 In addition, they have taken an active part in international discussions of foreign aid and have suggested themselves as models of development that recipient nations might follow.

Is Economic Reform Dead in Latin America? Rhetoric and Reality since 2000

Literature published a decade ago reflected a pessimistic view of the market-oriented reforms that Latin America carried out in the 1980s and 1990s, and many politicians have attacked these reforms openly. Indeed, the atmosphere is so negative that it would be reasonable to assume that many of the reforms have been reversed. This paper will take a new look at the situation ten years later. Our argument is that the reforms have generally not been reversed. The reversal that has occurred has been with respect to privatisation in a few countries; negative public opinion is also concentrated on privatisation; and the reforms helped to enable Latin America to take advantage of favourable conditions leading to high growth in the 2004–8 boom period and a relatively strong performance during the 2008–9 crisis. While much remains to be done to raise growth and improve distribution, objective information about the reforms is needed when policies for the future are made.