Hostname: page-component-848d4c4894-4rdrl Total loading time: 0 Render date: 2024-06-16T14:52:00.412Z Has data issue: false hasContentIssue false
  • English
  • Français

Peruvian Economic Policy in the 1980s: From Orthodoxy to Heterodoxy and Back

Published online by Cambridge University Press:  12 October 2022

Manuel Pastor Jr.  and
Carol Wise
Manuel Pastor Jr.
Affiliation:
Occidental College
Carol Wise
Affiliation:
Claremont Graduate School
Rights & Permissions [Opens in a new window]

Extract

Core share and HTML view are not available for this content. However, as you have access to this content, a full PDF is available via the ‘Save PDF’ action button.

Looking back over patterns of economic adjustment and structural reform in Latin America since the debt crisis began in 1982, two broad trends stand out. The first is the dramatic fluctuation in macroeconomic policy between the orthodox programs traditionally advocated by the International Monetary Fund (IMF) and the more interventionist or “heterodox” strategies that marked the policy environment after 1985 (Sheahan 1989). Although the orthodox-heterodox policy cycle is hardly new to the region and in fact has characterized the policy-making experience over the entire postwar era (Kaufman 1990), the 1980s represented the intensification of this cycle, especially in the extremity to which each set of policies was applied. The second trend follows from the first: the inability of states to follow through coherently on any given policy course (Fishlow 1989). While some exceptions to this trend can be cited (Chile, for example), the Latin American pattern has generally been one of failed adjustments and changed courses.

Type
Research Article
Information
Latin American Research Review , Volume 27 , Issue 2 , 1992 , pp. 83 - 117
Copyright
Copyright © 1992 by the University of Texas Press

Footnotes

∗

We would like to thank Luis Arreaga, Mercedes Inez Carazo, Daniel Carbonetto, Jorge Chávez Alvarez, Oscar Dancourt, César Herrera, Jenny Hoyle Cox, Esteban Hynilizca, Jürgen Schuldt, Julio Velarde, and many others for their insightful comments and criticism during our visits in Lima in 1985–1988 and 1990. We would also like to thank the LARR anonymous reviewers for helping us clarify our argument and analysis, the Instituto de Estudios Peruanos and the Universidad del Pacífico in Lima for their institutional support, and the Fulbright Commission in Lima for its financial support over the years. Manuel Pastor wishes to thank the Guggenheim Foundation for its more recent support and Carol Wise, the Kellogg Institute at the University of Notre Dame; both thank Eric Hilt for his able research assistance. This article is dedicated to Alex Secada.

References

Alvarez, Augusto 1984 “Estado, gestión y objectivos de las empresas estatales: el caso de la empresa siderúrgica del Perú (SIDERPERU).” Bachelor's thesis, Universidad del Pacífico, Lima.Google Scholar
Arida, Persio, ED. 1986 Inflatión cero. Bogotá: Oveja Negra.Google Scholar
BCRP (BANCO CENTRAL DE RESERVA DEL PERU) 1987a Memoria 1986. Lima: BCRP.Google Scholar
1987b Análisis de largo plazo del sector externo de la economía peruana, 1975–1986. Lima: BCRPGoogle Scholar
Bollinger, William 1987 Organized Labor in Peru: A Historical Overview. Occasional Papers Series, no. 10. Los Angeles: Interamerican Research Center.Google Scholar
Branch, Brian 1982 Public Enterprises in Peru: The Perspectives for Reform. Austin: Institute of Latin American Studies, University of Texas.Google Scholar
Cagan, Phillip 1956 “The Monetary Dynamics of Hyperinflation.” In Studies in the Quantity Theory of Money, edited by Friedman, Milton. Chicago, Ill.: University of Chicago Press.Google Scholar
Carbonetto, Daniel 1987 “Marco teórico de un modelo de consistencia macroeconómica de corto plazo.” In CARBONETTO ET AL. 1987, 351–408.Google Scholar
Carbonetto, Daniel, ET AL. 1987 Un modelo económico heterodoxo: el caso peruano. Lima: Instituto Nacional de Planificación.Google Scholar
Cardoso, Eliana 1986 “What Policy Makers Can Learn from Brazil and Argentina.” Challenge 29, no. 4 (Sept.-Oct.):19–28.Google Scholar
Cline, William R., and Weintraub, Sidney, EDS. 1981 Economic Stabilization in Developing Countries. Washington, D.C.: Brookings Institution.Google Scholar
Conaghan, Catherine, Malloy, James M., and Abugattas, Luis A. 1990 “Business and the ‘Boys’: The Politics of Neoliberalism in the Central Andes.” LARR 25, no. 2:3–30.Google Scholar
Cornejo, Roberto 1985 “La planificación y el presupuesto en el Perú.” Lima: Proyecto de Gestión Pública, Universidad del Pacífico.Google Scholar
CUANTO 1990a Perú en números, 1990, edited by Webb, Richard and Graciela Fernández Baca de, Valdez. Lima: Cuánto.Google Scholar
CUANTO 1990b Suplemento para el ejecutivo, no. 2 (Aug.):1–12. Lima: Cuánto.Google Scholar
Dancourt, Oscar 1986a Sobre las políticas macroeconómicas en el Perú, 1970–84. Lima: Instituto de Estudios Peruanos.Google Scholar
1986b “Deuda vs. crecimiento: un dilema político.” Mimeo, Centro de Investigaciones Sociales, Económicas, Políticas y Antropológicas, Universidad Católica, Lima.Google Scholar
Dancourt, Oscar, and Yong, Ivory 1989 “Sobre la hiperinflación peruana.” Economía 12, no. 23:13–44 (published by the Universidad Católica in Lima).Google Scholar
Degregori, Carlos Ivan 1986 Sendero Luminoso: los hondos y mortales desencuentros. Lima: Instituto de Estudios Peruanos.Google Scholar
De Soto, Hernando 1989 The Other Path: The Invisible Revolution in the Third World. New York: Harper and Row.Google Scholar
Diaz Alejandro, Carlos 1981 “Southern Cone Stabilization Plans.” In CLINE AND WEINTRAUB 1981, 119–41.Google Scholar
Dornbusch, Rudiger, and Edwards, Sebastian 1989 Macroeconomic Populism in Latin America. Working Paper no. 2986. Cambridge, Mass.: National Bureau of Economic Research.Google Scholar
Dornbusch, Rudiger, and Fischer, Stanley 1990 Macroeconomics. New York: McGraw-Hill.Google Scholar
Dornbusch, Rudiger, and Simonsen, Mario Henrique 1981 Inflation Stabilization with Incomes Policy Supports: A Review of the Experience in Argentina, Brazil, and Israel. Cambridge, Mass.: National Bureau of Economic Research.Google Scholar
Dornbusch, Rudiger, Sturzenegger, Federico, and Wolf, Holger 1990 “Extreme Inflation: Dynamics and Stabilization.” Mimeo, Massachusetts Institute of Technology, Cambridge.Google Scholar
Drake, Paul W. 1982 “Conclusion: Requiem for Populism?” In Latin American Populism in Comparative Perspective, edited by Conniff, Michael L. Albuquerque: University of New Mexico Press.Google Scholar
Evans, Peter B. 1989 “Predatory, Developmental, and Other Apparatuses: A Comparative Political Economy Perspective on the Third World State.” Sociological Forum 4, no. 4:561–87.CrossRefGoogle Scholar
Ferrand, Alfredo, and Salazar, Arturo 1980 La década perdida. Lima: Sociedad de Industrias.Google Scholar
Ferrari, Cesar 1986 “De la teoría económica a la política económica: reflexiones en torno a la economia peruana.” Socialismo y Participación 33 (Mar.):23–45.Google Scholar
Fishlow, Albert 1989 “Latin American Failure against the Backdrop of East Asian Success.” The Annals of the American Academy of Political and Social Science, no. 505 (Sept.):117–28.Google Scholar
Fitzgerald, E. V. K. 1979 The Political Economy of Peru, 1956–1978: Economic Development and the Restructuring of Capital. Cambridge: Cambridge University Press.Google Scholar
Foxley, Alejandro 1983 Latin American Experiments in Neoconservative Economics. Berkeley and Los Angeles: University of California Press.Google Scholar
Gorriti, Gustavo 1990 Sendero: historia de la guerra milenario en el Perú. Lima: Apoyo.Google Scholar
Haggard, Stephan, and Kaufman, Robert R. 1989 “The Politics of Stabilization and Structural Adjustment.” In Debt and Economic Performance: Selected Issues, edited by Sachs, Jeffrey. Chicago, Ill.: University of Chicago Press.Google Scholar
Handelman, Howard, and Baer, Werner, EDS. 1989 Paying the Costs of Austerity in Latin America. Boulder, Colo.: Westview.Google Scholar
Hunt, Shane 1975 “Foreign Direct Investment in Peru: New Rules for an Old Game.” In The Peruvian Experiment: Continuity and Change under Military Rule, edited by Lowenthal, Abraham F. Princeton, N.J.: Princeton University Press.Google Scholar
IEP (INSTITUTO DE ESTUDIOS PERUANOS) 1980 Crisis económica y democracia. Lima: IEP.Google Scholar
INE (INSTITUTO NACIONAL DE ESTADISTICA) 1988 Perú: compendio estadístico, 1987. Lima: INE.Google Scholar
INE (INSTITUTO NACIONAL DE ESTADISTICA) 1989 Perú: compendio estadístico, 1988. Lima: INE.Google Scholar
INE (INSTITUTO NACIONAL DE ESTADISTICA) 1990 Informe Económico. Feb. 1990.Google Scholar
Kahler, Miles 1990 “Orthodoxy and Its Alternatives: Explaining Approaches to Stabilization and Adjustment.” In NELSON 1990, 33–61.Google Scholar
Kaufman, Robert R. 1990 “Stabilization and Adjustment in Argentina, Brazil, and Mexico.” In nelson 1990, 63–111.Google Scholar
Krugman, Paul, and Taylor, Lance 1978 “Contractionary Effects of Devaluation.” Journal of International Economics 8: 445–56.CrossRefGoogle Scholar
Kuczynski, Pedro-Pablo 1990 “Peru.” In WILLIAMSON 1990, pp. 86–94.Google Scholar
Lago, Ricardo 1990 “The Illusion of Pursuing Redistribution through Macropolicy: Peru's Heterodox Experience (1985–1990).” Mimeo, World Bank.Google Scholar
Malloy, James M. 1982 Peru's Troubled Return to Democratic Government. Hanover, N.H.: Universities Field Staff International.Google ScholarPubMed
Mann, Arthur J., and Pastor, Manuel, JR. 1989 “Orthodox and Heterodox Stabilization Policies in Bolivia and Peru, 1985–88.” Journal of Interamerican Studies and World Affairs 31, no. 4:163–92.CrossRefGoogle Scholar
Mcclintock, Cynthia 1984 “Why Peasants Rebel.” World Politics 37, no. 1:48–84.Google Scholar
Mcclintock, Cynthia, and Lowenthal, Abraham F., EDS. 1983 The Peruvian Experiment Reconsidered. Princeton, N.J.: Princeton University Press.Google Scholar
Morales, Juan Antonio 1987 Precios, salarios y política económica durante la alta inflación boliviana de 1982 a 1985. La Paz: Instituto Latinoamericano de Investigaciones Sociales (ILDIS).Google Scholar
Nelson, Joan M., ED. 1990 Economic Crisis and Policy Choice: The Politics of Adjustment in the Third World. Princeton, N.J.: Princeton University Press.Google Scholar
Paredes, Carlos Eduardo, and Pasco-Font, Alberto 1987 The Behavior of the Public Sector in Peru, 1970–1985: A Macroeconomic Approach. Washington, D.C.: Trade and Adjustment Policy Division, World Bank.Google Scholar
Parodi, Carlos A. 1991 “Democracy and Structural Reforms: The Nationalization of the Private Financial System in Peru during President Alan Garcia.” Paper presented to the Latin American Studies Association, 4–6 Apr., Crystal City, Virginia.Google Scholar
Pastor, Manuel JR. 1987 “The Effects of IMF Programs in the Third World: Debate and Evidence from Latin America.” World Development 15, no. 2:249–62.CrossRefGoogle Scholar
Pastor, Manuel JR. 1988 “Ascenso y caída de la heterodoxía peruana: un modelo simple del nuevo estructuralismo.” Apuntes, no. 23:41–72 (published in Lima).Google Scholar
Pastor, Manuel JR. 1990a “Capital Flight from Latin America.” World Development 18, no. 1:1–18.CrossRefGoogle Scholar
Pastor, Manuel JR. 1990b “Private Investment and Debt Overhang in Latin America.” Mimeo, Project on Investment, Savings, and Finance, United Nations University and the World Institute of Development Economics Research.Google Scholar
Pastor, Manuel JR. 1991 “Bolivia: Hyperinflation, Stabilisation, and Beyond.” Journal of Development Studies 27, no. 2:211–37.Google Scholar
Paus, Eva 1991 “Adjustment and Development in Latin America: The Failure of Peruvian Heterodoxy, 1985–1988.” World Development 19, no. 5:411–34.Google Scholar
Ramos, Joseph 1986 Neoconservative Economics in the Southern Cone of Latin America, 1973–1983. Baltimore, Md.: Johns Hopkins University Press.Google Scholar
Reid, Michael 1985 Peru: Paths to Poverty. London: Latin American Bureau.Google Scholar
Remmer, Karen 1990 “Democracy and Economic Crisis: The Latin American Experience.” World Politics 42, no. 3:315–35.Google Scholar
Rueschemeyer, Dietrich, and Evans, Peter B. 1985 “The State and Economic Transformation: Toward an Analysis of the Conditions Underlying Effective Intervention.” In Bringing the State Back In, edited by Evans, Peter B., Rueschemeyer, Dietrich, and Skocpol, Theda. New York: Cambridge University Press.Google Scholar
Sachs, Jeffrey 1986 The Bolivian Hyperinflation and Stabilization. Cambridge, Mass.: National Bureau of Economic Research.Google Scholar
Sachs, Jeffrey 1989 Social Conflict and Populist Policies in Latin America. Cambridge, Mass.: National Bureau of Economic Research.CrossRefGoogle Scholar
Sargent, Thomas J. 1986 “The Ends of Four Big Inflations.” In Rational Expectations and Inflation, edited by Sargent, Thomas J. New York: Harper and Row.Google Scholar
Saulniers, Alfred H. 1988 Public Enterprises in Peru: Public Sector Growth and Reform. Boulder, Colo.: Westview.Google Scholar
Schuldt, JÜRgen 1986 “Desinflación y reestructuración económica en el Perú, 1985–1986: modelo para armar.” In Inflación cero, edited by Arida, Persio. Bogotá: Oveja Negra.Google Scholar
Schydlowsky, Daniel M. 1986 “The Tragedy of Lost Opportunity in Peru.” In Latin American Political Economy: Financial Crisis and Political Change, edited by Hartlyn, Jonathan and Morley, Samuel A. Boulder, Colo.: Westview.Google Scholar
Sheahan, John 1989 “Economic Adjustment Programs and the Prospects for Renewed Growth in Latin America.” LARR 24, no. 3:159–71.Google Scholar
Smith, William C. 1989 “Heterodox Shocks and the Political Economy of Democratic Transition in Argentina and Brazil.” In Lost Promises: Debt, Austerity, and Development in Latin America, edited by Canak, William L. Boulder, Colo.: Westview.Google Scholar
Stallings, Barbara 1989 “Political Economy of Democratic Transition: Chile in the 1980s.” In stallings and kaufman 1989, 181–99.Google Scholar
Stallings, Barbara, and Kaufman, Robert, EDS. 1989 Debt and Democracy in Latin America, edited by Stallings, Barbara and Kaufman, Robert. Boulder, Colo.: Westview.Google Scholar
Taylor, Lance 1981 “IS/LM in the Tropics: Diagramatics of the New Structuralist Macro Critique.” In cline and weintraub 1981, 465–503.Google Scholar
Taylor, Lance 1983 Structuralist Macroeconomics: Applicable Models for the Third World. New York: Basic Books.Google Scholar
Taylor, Lance 1988 Varieties of Stabilization Experience: Towards Sensible Macroeconomics in the Third World. Oxford: Clarendon.Google Scholar
Thorp, Rosemary 1986 “Políticas de ajuste en el Perú, 1978–1985: efectos de una crisis prolongada.” In La crisis de la deuda en América Latina, edited by Thorp, Rosemary and Whitehead, Laurence. Bogotá: Siglo Veintiuno.Google Scholar
Thorp, Rosemary 1987 “The APRA Alternative in Peru: Preliminary Evaluation of García's Economic Policies.” The Peru Report 1, no. 6:5/1-5/23.Google Scholar
Thorp, Rosemary, and Bertram, Geoffrey 1978 Peru, 1890–1977: Growth and Policy in an Open Economy. New York: Columbia University Press.Google Scholar
Thorp, Rosemary, and Whitehead, Laurence, EDS. 1987 Latin American Debt and the Adjustment Crisis. London: Macmillan.Google Scholar
Vallenas, Silvia, and Bolanos, Maria Emma 1985 “Empleo estatal y perfil de los renunciantes de la administración pública, 1978–1979.” In Reporte de investigación: la organización del sector público peruano, edited by Giesecke, Alberto. Lima: Proyecto de Gestión Pública, ESAN.Google Scholar
Webb, Richard 1987 “Stabilization Policy: Peru, 1980–1985.” Mimeo, World Institute for Development Economics Research, Helsinki.Google Scholar
Webb, Richard 1990 “Comment on ‘Peru’ by Pedro-Pablo Kucynski.” In williamson 1990, 102–4.Google Scholar
Williamson, John, ED. 1990 Latin American Adjustment: How Much Has Happened? Washington, D.C.: Institute for International Economics.Google Scholar
Wise, Carol 1986 Economía política del Perú: rechazo a la receta ortodoxa. Lima: Instituto de Estudios Peruanos.Google Scholar
Wise, Carol 1988 Peru in the 1980s: Political Responses to the Debt Crisis. New York City: Institute of Latin American and Iberian Studies, Columbia University.Google Scholar
Wise, Carol 1989 “Democratization, Crisis, and the APRA's Modernization Project in Peru.” In STALLINGS AND KAUFMAN 1989, 163–80.Google Scholar
Wise, Carol 1990 “Peru Post-1968: The Political Limits to State-led Economic Development.” Ph.D. diss., Columbia University.Google Scholar
Wise, Carol 1991 “Latin America's State-led Dilemma.” Paper presented to the Latin American Studies Association, 4–6 Apr., Crystal City, Virginia.Google Scholar
WORLD BANK 1985 Peru: Country Economic Memorandum. Washington, D.C.: World Bank.Google Scholar
Wise, Carol 1989 Peru: Policies to Stop Hyperinflation and Initiate Economic Recovery. Washington, D.C.: World Bank.Google Scholar
Woy-Hazleton, Sandra, and Hazleton, William A. 1987 “Sustaining Democracy in Peru: Dealing with Parliamentary and Revolutionary Changes.” In Liberalization and Redemocratization in Latin America, edited by López, George A. and Stohl, Michael. Westport, Conn.: Greenwood.Google Scholar