INSTITUTIONAL BASIS OF THE ECONOMIC POLICY OF LATIN AMERICAN COUNTRIES
Abstract
The analysis of the institutional foundations of the economic policy of the newly industrialized countries of Latin America (Argentina, Brazil, Mexico) is carried out in the article. The generalized experience of Latin American countries proves that the foundations for the formation of the economic policy of these countries are laid in the colonial period under the influence of the mother countries of Spain and Portugal. Moreover, they were mainly based on the dominance of the colonizers, which had a corresponding effect on the nature and use of natural resources, the formation of social institutions, the establishment of foreign trade and financial relations of the countries of the Latin American region, even after they gained independence. With this in mind, it are founded that countries have been “path dependent”, once an economy is on a certain path, it is very difficult to drastically change direction due to the built-in characteristics of societal attitudes and institutions. It is revealed that the peak of economic growth of the newly industrialized countries was achieved due to the industrialization policy aimed at import substitution. However, its successes were not long lasting, including due to the lack of effective social institutions and “dependent development”, when the countries of Latin America had to adapt to the logic of the development of the leaders of the world economy. They were, in particular, to create a powerful state sector in a number of economic sectors in order to support import-substitution industrialization, although the creation of such a sector was largely artificial in nature. It is summarized that the institutional foundations of economic growth in new industrial countries of Latin American region, especially the development of effective institutions such as trade unions and political parties, were and still are quite limited. This causes a number of negative socio-economic effects in the society and complicates the formation of the state policy of economic growth, since there are no forces in the society capable of overcoming the formed economic dependence and backwardness.
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