Equity Versus Efficiency in Colombia During the Second Half of the 1980s

Abstract

Many Latin American countries are rapidly evolving into outward-looking marketoriented economies with more decentralized and democratic political institutions. The rate of economic growth is accelerating in most of Latin America. While the average growth of per capita GDP in Latin America during the years 1982–86 was -1.8 percent at constant prices, the 1992 regional growth averaged 2.0 percent. A crucial question is to determine whether economic growth in Latin America can be associated with a decrease in equity and a reduction of poverty. A partial answer to this question may be learned from the experience of a Latin America country such as Colombia that was marginally vexed by the debt problem during the 1980s and, in the second half of the 1980s, began reforms toward macroeconomic stabilization, greater reliance on the market as a distributive mechanism, an increasingly outward orientation of the economic structure, and the implementation of privatization programs.