Values in Conflict: Developing Countries as Social Laboratories

• Published in: Journal of economic issues Vol. 18; no. 2; pp. 633 - 641
• Main Author: Street, James H.
• Format: Journal Article
• Language: English
• Published: Lincoln Routledge 01.06.1984; Department of Economics, California State University; Dept. of Economics, California State University; Association for Evolutionary Economics
• Subjects: Argentina; Authoritarianism; Chile; Develop/Develops/Developed/ Developing/ Developmental; Developing countries; Economic Development; Economic efficiency; Economic policy; Economic stabilization; Economic value; Economic/Economics/Economical; Economics; Financial economics; Food; Free market economies; Free markets; International finance; International financial institutions; International trade; Laboratories; Latin America; LDCs; Mexico; Mexico/Mexican/Mexicans; Neoclassical economics; Policy/Policies; Terms of trade; Uruguay; Values
• ISSN: 0021-3624; 1946-326X
• DOI: 10.1080/00213624.1984.11504264

Mexico has recently joined Argentina, Chile & Uruguay in testing a set of policies for economic stabilization advocated by experts of the International Monetary Fund & other authorities in the international financial community. It is questioned whether these policies will actually contribute to the long-term development of the Mexican economy, in light of evidence that stabilization programs have failed in Southern Cone countries that have served as social laboratories. A conflict of social values is described between a universal market system & autonomously selected development objectives. In the cases of Argentina, Chile & Uruguay, the former values were used to justify a generalized set of austerity policies that sought to curb inflation, correct balance-of-payments deficits, & redistribute income in the direction of greater inequality. However, these policies did not succeed in eliminating inflation or payments deficits, but resulted in increased business bankruptcies & unemployment. Also by causing a large accumulation of externally held short-term debt, they may have decreased the prospect for long-term investment & sustained growth. It is concluded that Mexican authorities would be better advised to adopt policies emphasizing growth rather than stability. AA.