Policy, Distribution, and Poverty in Argentina Since Redemocratization

Neoliberal policies are now generally considered to be the only possible route for Latin America's future social and economic development. Debates about alternative development strategies have been all but eclipsed. Instead, academic and political discussion has focused on the intensity with which neoliberalism should be applied and the means by which potential policy contradictions may be resolved. The neoliberal consensus holds that these policies are necessary both to ensure sustained growth and to minimize poverty and inequity. It argues that low inflation and macroeconomic stability are inherently beneficial to poorer groups, that the promotion of exports and deregulation of labor markets create new jobs (compensating for any losses of unproductive public-sector employment), and that the reduction of social expenditure guarantees a basic level of welfare for the poorest and most vulnerable. As a result, it is argued that the initial pain of neoliberal adjustment can be eased at the same time as the foundations are being laid for substantial improvements in social welfare. It should, however, be stressed that these confident assertions are based far more on theoretical reasoning than on hard, empirical evidence. This is partly understandable, since in most cases very little time has elapsed under the new policy regime. Interestingly, in the case of Chile, which has followed the neoliberal paradigm for two decades, apparently with considerable success, levels of poverty and inequity remain higher than before Pinochet (Scott, 1996). Moreover, in the past, apparently sound development strategies such as structuralism often failed to produce the intended long-run results in terms of social welfare. Policymakers were unable to take into account key intervening variables such as unforeseen external shocks, political factors, and the consistency of implementation. It is, then, vital to make the most of whatever limited empirical evidence is available to assess the social impact of neoliberalism.