The politics of economic adjustment policy in Argentina, Brazil, and Mexico: Experiences in the 1980s and challenges for the future

During the debt crisis of the 1980s, new democratic governments in Argentina and Brazil experimented with heterodox approaches to economic stabilization, whereas Mexico's dominant party regime adopted a far more orthodox line of adjustment. None of these approaches had led to a sustained recovery by the end of the decade. Difference in policy choices are attributable to goals and beliefs of top decisionmaking officials and to the way the institutional features of their respective political regimes structured time horizons and vulnerability to domestic distributive pressures. Converging economic outcomes are attributable to underlying structural problems that cut across these distinctions: political constraints on the management of fiscal deficits, and international power asymmetries impeding significant reductions in the external debt burden.