#49 Inflation Stabilization, and the Return to Democracy in Peru, 1975-1979
By Rosemary Thorp
This draft paper was prepared for a June 1979 Workshop on "Economic Stabilization Programs in Latin America: Political Dimensions" organized by the Latin American Program of the Woodrow Wilson International Center for Scholars.
Summary
This paper discusses the acute stabilisation crisis of 1975-1978, and attempts to explain why, for so long, it proved so difficult to handle. The role of external creditors, in particular the International Monetary Fund, is discussed. In the final section, we analyse the implications of the total turn- around in 1979, when suddenly IMF targets were easily fulfilled, in the surprising context of a proposed return to democracy rather than Southern Cone-style repression. It is shown that the developments of 1979 in no way qualify the earlier analysis demonstrating the unsuitability of abrupt stabilisation on orthodox lines to an economy such as Peru's.
Related Program
Latin America Program
The Wilson Center’s prestigious Latin America Program provides non-partisan expertise to a broad community of decision makers in the United States and Latin America on critical policy issues facing the Hemisphere. The Program provides insightful and actionable research for policymakers, private sector leaders, journalists, and public intellectuals in the United States and Latin America. To bridge the gap between scholarship and policy action, it fosters new inquiry, sponsors high-level public and private meetings among multiple stakeholders, and explores policy options to improve outcomes for citizens throughout the Americas. Drawing on the Wilson Center’s strength as the nation’s key non-partisan policy forum, the Program serves as a trusted source of analysis and a vital point of contact between the worlds of scholarship and action. Read more
