Citation

Jonakin J, Stephens M. Def. Peace Econ. 2004; 15(2): 157-171.

Copyright

(Copyright © 2004, Informa - Taylor and Francis Group)

DOI

10.1080/1024269032000110531

PMID

unavailable

Abstract

In theory, the policies associated with adjustment and stabilization (AS) in Latin America were designed to contain wasteful government spending, enhance economic efficiency, and forestall recurrent debt and liquidity crises. In practice, AS succeeded in shrinking the size of government, but regional debt rose and debt servicing remained historically high. Government spending on physical infrastructure and subsidies fell sharply, while military spending in much of the region escalated. The changing magnitude and relative pattern of government expenditures corresponded with slower economic growth, higher unemployment, and continued liquidity crises.