The present set of Research Notes, which were first presented at a forum on Latin America's market reforms held at the 2003 Latin American Studies Association Congress, investigates the economic and social repercussions of the neoliberal wave that swept across the region during the 1990s. Have market reforms brought greater economic stability and stimulated growth? How have they affected crucial social issues, such as unemployment, poverty, and inequality? After Weyland's introductory explication of these questions, the Research Notes by Evelyne Huber and Fred Solt and by Michael Walton advance divergent assessments of neoliberalism's successes and failures. Huber and Solt argue that overall, Latin America's market reforms have yielded disappointing results in terms of economic stability and growth, social equity, and the quality of democracy. In particular, countries that enacted more radical reforms or that took especially drastic steps towards change performed less well than nations that proceeded more cautiously and gradually. By contrast, Walton argues that market reforms have increased growth while not significantly exacerbating economic instability and social inequality. And to the extent that neoliberalism fell short of expectations, the problem did not emerge from market reforms as such, but from deficiencies in the institutional context in which these reforms were enacted.

As Kurt Weyland points out in his introduction, we have a rich scholarly literature on the causes and processes of neoliberal reforms in Latin America and elsewhere. In contrast, much of the debate about the effects of neoliberal reforms in Latin America has been carried out at a political and ideological level. The image of an overblown and inefficient state that stifles market forces and private initiative has been contrasted with the model of a lean and efficient state that relies on the market to set free productive energies and thus stimulates growth and solves social problems (e.g., Larroulet 1993). With this research note, we aim to make a contribution to the emerging empirically based scholarly literature that investigates the effects of neoliberal policy reforms (e.g., Stallings and Peres 2000).

This paper derives from a LARR-sponsored forum at the LASA 2003 Congress held in Dallas in March 2003. Targeted at younger scholars, a panel of leading researchers whose early work was shaped by marginality and dependency thinking of the 1960s were invited to reflect cross-generationally about how paradigms analyzing poverty in Latin American cities have shifted from that time to the present. Specifically, each of the authors compares “marginality” as it was construed more than three decades ago with contemporary constructions of poverty and social organization arising from their more recent research. While there are important continuities, the authors concur that the so-called “new poverty” today is very different, being more structural, more segmented and, perhaps paradoxically, more exclusionary than before. Moreover, the shift from a largely patrimonialist and undemocratic state towards one that, while more democratic, is also slimmer and downsized, thereby shifting state intervention and welfare systems ever more to local level governments and to the quasi-private sector of nongovernmental organizations. If earlier marginality theory overemphasized the separation of the poor from the mainstream, today's new poverty is often embedded within structures of social exclusion that severely reduce opportunities for social mobility among the urban poor.

This Research Note looks at the recent Latin American record in economic and social development from the perspective of the effects of “neoliberalism.” There are at least two ways in which neoliberalism is commonly used: a narrow usage, that refers to a shift in a subset of policies to a greater reliance on markets; and, a broader usage, that implies a wholesale change in the relationship between the state and society, with a more vigorous embrace of the market being part of a generalized withdrawal of state provisioning and action. The first clearly occurred in most of the region in the 1980s and 1990s. We will argue that shifts to a greater dependence on markets were usually beneficial, probably disappointing relative to the expectations of advocates, and certainly incomplete as a development strategy. The effects on growth, stability, and inequality depend crucially on other factors, including the distributions of assets, structural policies (for example, on social development and infrastructure) and political and social institutions.