Forgotten Continent

Reid covered Latin America for The Economist for decades and wrote this as a corrective to two opposing views of the region: that it is condemned by structural forces to underdevelopment, and that any particular reform programme will transform it.

His argument is that Latin America made genuine progress between the 1980s and the 2000s that outside observers largely ignored. Military governments gave way to durable democracies across almost the whole region. Hyperinflation was defeated. Trade was opened, state enterprises sold and macroeconomic policy stabilised. Poverty fell and social programmes including Brazil's Bolsa Familia and Mexico's Progresa demonstrated that conditional cash transfers could reduce it measurably at modest cost.

He is equally clear about what did not change. Inequality remained the highest of any region. Tax collection stayed low, particularly on income and property, which left states unable to fund the public goods that would broaden opportunity. Education quality remained poor. Crime and weak judicial institutions undermined both investment and public confidence. Productivity growth was disappointing even in the reform period, and the commodity boom of the 2000s masked the failure to diversify.

Reid rejects the standard accounts on both sides. He argues the Washington Consensus reforms were neither the disaster their critics claim nor sufficient on their own, because they addressed macroeconomic stability without building state capacity. He also argues that the populist alternative, which he examines through Chavez's Venezuela, spends commodity revenue on consumption and leaves the underlying weaknesses intact.

The book was written during the commodity boom, and the subsequent decade, with the Venezuelan collapse, Brazil's corruption crisis and recession, and renewed political volatility, tested his qualified optimism. He published a revised edition. Specialists find the treatment of individual countries necessarily thin given the scope.