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Neo-Liberalism in Latin America


Neo-liberalism in Latin America has led to the government privatization of many services and industries when deregulating the rest. This action has led to increased poverty and inequality levels leading to a drastic decline in the quality provision of those services and the concerned industries. In the past few decades, neoliberal policies have constantly failed to meet up to their promises concerning development and economic growth. They have instead made things worse than expected. Latin America has now fallen to unequal regions, whereby many countries have experienced increased poverty levels. These policies have also been a critical factor leading to the decline of the quality of services offered by the public sector as the government lacks the funds to invest in them properly. This brings about a negative impact on the vulnerable members of society mainly. As people continue to realize the negative impacts of neo-liberalism on their lives, much resistance has been formed by Latin American individuals. In some countries, neo-liberalism has been opposed by the election of left-wing governments. In other situations, social unrest and mass protests have arisen to oppose neo-liberalism. Using the review and the developed research proposal, the effects of Latin American neo-liberalism on the government’s effectiveness and working, the actions it takes, laws and policies passed, and the effect they bring upon the general population’s well-being.

Latin America’s neo-liberalism has increased the privatization of governmental affairs and caused a decrease in the economy’s regulations. This has, in turn, caused an increase in poverty, environmental degradation, and inequality. The climate changes have caused severe and more rampant urban floods inciting development in areas identified as flood-prone (Coates and Anja 1301). How the issue of floods is responded to is similar and equated to the mode of power distribution in society. Politically well-established areas are more likely to be considered in providing relief than the poor in society, who are more likely to be neglected. Flooding has been argued to be a product of social and natural causes, and the government’s way of handling it portrays an unequal relation of societal power. The exchange of favors to gain political favors and support has continued to develop due to neo-liberalism (Coates and Anja 1303). This has inversely caused a drastic decrease in accountability and hiked levels of corruption. According to the two authors, Coates and Anja noted that the clientelistic correlation between citizens and government officials can risk the mismanagement of urban floods. Neo-liberalism has completely changed the state’s political ecology making the protection of the environment a lesser priority than economic development, which has taken priority (Coates and Anja 1305). Generally, neo-liberalism has eminent effects on the people of Latin America and the government. Neo-liberalism has played a great part in worsening urban floods and becoming more common.

An article based on politics in Latin America discusses the aspects of the political and participation landscape that have been changed due to neo-liberalism. It is argued that the rise of institutions and new actors through neo-liberalism has changed people’s mindsets and political participation. The article’s authors noted that the government had changed its stand from its previous vies of denying new citizenship to groups based on ethno racial grounds, sexuality, employment basis, and gender (Rich et al. 2). The article further discusses the kind implications of these changes towards the democracy of Latin America. Neo-liberalism, a political and economic doctrine, advocates for a laissez-free form of capitalism and the establishment of free markets. In Latin America, the implementation of neo-liberalism has been through a series of adjustment programs that are structurally based, which have been obligated by international institutes of finance such as the International Money Fund and the World Bank (Rich et al. 4). Such programs have led to quite a several changes in societies consisting of Latin Americans which included deregulation of markets, state-owned properties being made private and investment and trade liberalization. Also, the politics of Latin America has had some effects due to neo-liberalism. First, there was a rise in institutions and new actors, including NGOs and private companies, who currently play an influential role in the region’s politics (Rich et al. 4). Secondly, it has led to a change in people’s way of political participation, pinning more emphasis on the rights of the individual while lessening the traditional role of collective action (Rich et al. 7). Lastly, neo-liberalism has brought about a great impact in the Latin America democracy, declining the quality of democracy. At the same time, authoritarianism continues to grow (Rich et al. 8). All the implications of these changes for Latin American democracy are well discussed. The rise of neo-liberalism has been a major influence in the weakening of the region’s democracy which is most likely to continue in the future. The only means of stopping these changes is if only a permanent change is implemented in how Latin America is governed.

An article examining the dynamics of politics based on popular coalitions in post-neo-liberal Latin America focuses on relationships formed through social movements and unions. Through the article, claims have been made that neo-liberalism policies have caused damage to the region, paving room for the emergence of social movements and an increase in inequality (Etchemendy 161). An issue considered is the rise of the left-wing government around the 2000s leading to the implementation of policies based on countering the effects brought about by neo-liberalism. By just promising to take on vested interests to help the poor and needy and the working class individuals in the society, the populists won the support of the citizens. Arguments based on Etchemendy views stress that popular coalition groups emerged as a force directed at Latin American politics. These very same coalitions united territorial social movements and the unions to facilitate a response to the policies of neo-liberals that had already been implemented in the region during the late 20th century (Etchemendy 164). However, many a time, these governments have constantly failed to deliver their promises, risking a possible replacement from office by different and more right-wing established governments that are more interactive- friendly to the business interest. Arguments have emerged that coalitions have been crucial in advancing progressive policies and shielding economic and social rights. Despite this, the coalition has faced many significant challenges, such as the rise of populism of the right-wing, causing the left wing to weaken. While referring to cases of various countries such as Ecuador, Argentina, Venezuela, and Brazil, there are arguments for successful agenda advancing by the left through the formation of popular broad-based coalitions (Etchemendy 163). The coalitions have effectively mobilized progressive policy support and are crucial in winning elections. It is, however, noted that the left side has been in constant challenges over the past years, one being the emergence and rise of populism of the right wing and the downfall of the left. Despite the rise in the number of coalition parties throughout a millennium in the region, most of these coalitions were short-lived, failing to achieve lasting political change (Etchemendy 167). This is attributed to the fact that most of the coalitions had been based on opportunistic alliances between the social movements and unions rather than strategic planning having a shared vision (Etchemendy 172). Due to this attribute, the coalition has yet to be able to challenge the political parties in place effectively and dominate or even to start, engage and push a transformative agenda.

According to James Mahoney (2001), neo-liberalism imposition in the late 20th century was a great point of change for Latin Americans. The scholar had written about the effects and consequences of the liberalism of the 19th century concerning the fight for social equity and liberty in politics. He claimed that the approach in which different states imposed liberalism concurrently affected the class formations and the state’s trajectories, creating unavoidable effects on conflicts based on social and cultural grounds (Silva 12). The implementation of radical-issued policies gave rise to regimes of authoritarianism confronted by democratization movements, especially in Guatemala and El Salvador. The repression of these movements by the state generated an absurd outcome of insurrectionary movements. This led to the domination of the economy by foreigners and national elites who were weakly controlled by the stronger party to maintain power (Silva 12). Insurrection and popular mobilization were formed and directed towards the businesses that were foreign to be able to eradicate them.

In contrast, some reforms contribute to the greater good. For instance, the liberal policies implemented were partly the reason for democracy which could be equated to great social equity. However, Mahoney is still concerned about the radical efforts aborted in the 20th century that might have had opposing long-term impacts in some parts of Latin America, forcing the policymakers into following a liberal path of reform (Silva 12). These appeals are expounded based on their implications for the present. This links with the fact that order maintenance happens to be a primary function of the state that joins state weaknesses and disorders in the form of the administration’s inability to control the issue. However, the strength relies on the national and international power networks the state is connected to.

Additionally, the effects of neo-liberalism in Latin America create room to analyze the social and economic developments. The state of Latin America has had checkered and varied history while relating to its citizens. Regarding the aspect of social provision, there have been frequent displays of inequality. The impact caused at times tends to act as a repressive element in the provision of basic rights of citizens (Walton, 165). A great shift in the Latin American market orientation to great benefits in economic stability, development and distribution. Stability tended to flow from greater monetary and fiscal discretion. The growth would increase through greater reliance on the type of market and economic integration of investments and efficiency. The distribution of income would increase rapidly through mass reduction on rental opportunities and corruption (Walton, 167). The aspect of growth is best understood by digging up information in relation to policies. The Latin American growth during the 1990s would have been predicted by the world results if it came out just a bit higher than it was documented. This suggested that the modest performance was due to not necessarily based on the weak response from the Latin America towards the changes in various conditions and policies (Walton, 170). The reforms put in place were good for growth but not capable of shifting the concerned countries to the East Asian type of presentation. Stabilization and market oriented policies are by far not the only means which lead to growth. The government controlling factors such as education and infrastructure proved to be a growth drag (Walton, 170). Furthermore, there were aspects implied on the volatility of growth which had a great effect on the people’s well-being and economic conditions. The economic and social impacts not only affected the citizen but also the head of states and called for long lasting measures to be taken and implemented.

The neo-liberalism led to growth in political powers but caused a landslide in the economic field. Neo-liberalism established that free markets can control themselves, terming the government as incompetent and disrupting the market’s efficiency. Counter revolution of the neo-liberal has undermined or reserved managed capitalism aspects due to welfare transfers, progressive transfers, regulation of industries such as banking and also the empowerment of workers (Kuttner, 152). The various policies have failed drastically overtime including ones that were self regulated. The economy has become more unequal despite the economy becoming more chaotic while growing at a slow rate compared to the period of managed capitalism. Market concentration has risen from deregulation and not the expected salutary competition (Kuttner, 153). The experiment of neo-liberal over a span of four decades has proven that managed markets are more fair and efficient. The neo-liberalism had disastrous cost for the legitimization of democracy. With the government being unable to cushion sources of the market making lives of the common citizens full of struggles. The contemporary aspects of the middle class such as stable income points and jobs, secured medical cover, housing and college fees have become elusive which might not require that big of a loan (Kuttner, 155). Meanwhile, life for the financially well-off individuals is pleasurable, and the place of residence or work is not very much reliable. Many individuals have ceased having hope on the establishment of democracy and a firm government. The tries to secure a liberal democratic regime collapsed with the notion put forward in the various nations. As per the warnings of Karl Polanyi, a historian, on the possibility of societal overwhelming making the less privileged turn to help from tyrants. The regimes bordering neo-fascist whereby dictators and capitalist moved on the same path while undermining the dawn of democracy and capitalism (Kuttner, 156). The political constraint that arises is the issue of rule making and who will be mandated to perform that particular task and the benefitting group. Additionally, neo-liberalism practices have led to the creation and promotion of rules to prevent the democratic from defiling the rules, incorporating social interests that are countervailing and development of fair competition. Protection of incumbents has been based on the rules set of intellectual property and competition being tilted. Rules of bankruptcy have been inclined in the favor of the creditors. Various industries have which requires both consumers and employees to agree to a binding negotiation to follow a set of common-law rights (Kuttner, 159). Neo-liberalism plays a great part in the impactful development in the economic sector.

Neo-liberalism was also a key factor in the regulation of capital flow in the Latin America. Te governments in the post-liberalism era had about three reasons which led to the regulation of capital flows. Policies based on macroeconomic level, were placed under more capital controls which acted as a way of obtaining further strategy autonomy, it being a top condition for the growth of the economy and social inclusion. The adoption of restrictions of capital accounts in some countries, provided strength in foreign and financial interests (da Silva and Pedro, 1515). According to the conducted study dealing with this matter, post-liberalism proved to offer a positive impact in Latin America capital control. While having the international political economy in mind, it can be noted that the differences of political parties are still regarded in the provision of additional support and policy making in the partisan approach. However, the depth of these differences requires additional research. The relevance of the analysis of financial cross-border regulations which happens to be one of the most constrained policies of globalization. Party ideologies content play a pivotal role in the relationship between economic policies and government partisanship (da Silva and Pedro, 1516). Ideological classifications are needed to assess the government partisan impacts which deal with the great diversity. During the Global Financial Crisis, there was the establishment of more restrictions concerning the capital control. This however led to reactions across the nation which shed light on the countries ruling parties (da Silva and Pedro, 1516). Lastly, it is noted that the post neo-liberalism administration inherited the market reform but were unable to break off the capital mobility. The choice of the administrators in regulation of capital flow may be used to elaborate on Latin America ebb (da Silva and Pedro, 1516), which led to the political forces of the right-wing being strengthened. In this article the argument put forward by Crotty and Epstein in 1996, is also considered in the sense that any progressive restructuring of the economy is mainly based on posing a threat to capital control deployment. Basically, neo-liberalism was a major factor in the engagements related to capital flow and really impacted the final decisions on the same matter.


Neo-liberalism cab be concluded and agreed that it has both affected the government and the citizens of Latin America both positively and negatively. The citizens have been on the longer end of this process since they have fallen under the distress that comes with decline in the economic stability of the different states they are located. Survival of the citizens became hard, barely being able to satisfy their daily needs. The political aspect however blossomed and boomed greatly making the governmental proceedings smooth and direct. The government gained easy access to the needed resources making it even stronger and robust. Despite the fact that neo-liberalism was intended for the best along the way through people’s greed, the course of line changed and brought severe negative impacts to the state and people as one.

Work Cited

Coates, Robert, and Anja Nygren. “Urban floods, clientelism, and the political ecology of the state in Latin America.” Annals of the American Association of Geographers 110.5 (2020): 1301-1317.

da Silva, Pedro Perfeito. “The reregulation of capital flows in Latin America: assessing the impact of post-neoliberal governments.” Review of International Political Economy 29.5 (2022): 1497-1524.

Etchemendy, Sebastián. “The politics of popular coalitions: Unions and territorial social movements in post-neoliberal Latin America (2000–15).” Journal of Latin American Studies 52.1 (2020): 157-188.

Kuttner, Robert. “Neoliberalism: Political success, economic failure.” The American Prospect 25 (2019).

Rich, Jessica AJ, Lindsay Mayka, and Alfred P. Montero. “Introduction the politics of participation in Latin America: new actors and institutions.” Latin American Politics and Society 61.2 (2019): 1-20.

Silva, Eduardo. Challenging Neoliberalism in Latin America. Cambridge University Press, 2009.

Walton, Michael. “Neoliberalism in Latin America: Good, bad, or incomplete?.” Latin American Research Review 39.3 (2004): 165-183.


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