Working Paper No. 23 - Social dimension of globalisation in Latin America: Lessons from Bolivia and Chile

This paper uses the examples of Bolivia and Chile to show how Latin America can improve its integration into the globalization process. This means that unequal income distribution and weak institutions in these areas have to be dealt with carefully. In the 1990s, when Washington Consensus adjustment reform policies were implemented, the above countries experienced increases in growth rates and a decline in poverty in the short run. However, over time, people saw their real incomes decrease, and so did the popularity of the Washington Consensus policies. Therefore, the paper argues that these policies should be adopted because they can bring significant economic and social results, but they should be enlarged to include both distributional and institutional dimensions. The paper gives recommendations on how to get closer to fiscal balance, social integration, and promoting growth that bring economic and social development.

This paper was written as an insight into the work of the World Commission on the Social Dimension of Globalization 2004 that aims to provide a fairer globalization for all.