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WP/048 The Development Implications of External Integration in Latin America

This paper analyses the links between the integration into the international economy and development in Latin America over the past quarter century. It argues that external liberalization led to faster export growth but not to faster GDP or productivity growth. Growth also became more volatile, reflecting large vulnerabilities to external shocks. Looking forward, it argues for variable mixes of three strategies: (i) active production sector policies with a focus on technological upgrading existing and new production activities; (ii) growing links with China, while redressing the major asymmetries that characterize Latin America’s trade with the Asian giant: and (iii) strengthened regional integration processes.
Publisher:
UNU-WIDER
Series:
WIDER Working Paper
Volume:
2012/48
Title:
WP/048 The Development Implications of External Integration in Latin America
Authors:
José Antonio Ocampo
Publication date:
May 2012
ISBN 13 Web:
978-92-9230-511-6
Copyright holder:
© UNU-WIDER
Copyright year:
2012
Keywords:
trade liberalization, specialization patterns, regional integration, capital account openness, production sector policies, real exchange rate
JEL:
F10, F36, F43
Project:
The New Policy Model, Inequality and Poverty in Latin America: Evidence from the Last Decade and Prospects for the Future
Sponsor:
UNU-WIDER gratefully acknowledges the financial contributions to the research programme by the governments of Denmark (Ministry of Foreign Affairs), Finland (Ministry for Foreign Affairs), Sweden (Swedish International Development Cooperation Agency—Sida) and the United Kingdom (Department for International Development).
Format:
online