The LSE / ILAS conference (http://americas.sas.ac.uk/events/integration.php), entitled “Responding to Globalisation in the Americas: The Political Economy of Hemispheric Integration” attracted notable academics working on issues related to trade and investment in Latin America.  A number of the papers presented were interesting and well written, but two in particular I found worth noting for their larger implications and findings.

Andrew Schrank presented a piece co-authored with Marcus Kurtz entitled “Open Economy Industrial Policy in Latin America and the Caribbean” http://www.lse.ac.uk/collections/DESTIN/pdf/GlobalisationAmericasConference/Schrank.pdf) which builds on a piece the two published in 2005 in Politics and Society (vol. 33, no. 4, pg 671-702).  The argument of the article is essentially that traditional arguments for the drawbacks of an active industrial policy are less persuasive in the context of an open economy because rather than learning to be rent seekers, protected industries learn to compete on the international market, making it easier for subsidies and other credits to be phased out over time.  Additionally the authors argue that it is easier for the government to phase out such policies in an open economy given fiscal constraints and international pressures.   While the econometric conclusions (that credit policies in particular have led to increases in exports) are open to critique, the argument is both interesting and persuasive, and greatly nuances the debate about the costs and benefits of utilising an active industrial policy.

Ken Shadlen’s piece “Globalization, Power, and Economic Integration in the Americas” (http://www.lse.ac.uk/collections/DESTIN/pdf/GlobalisationAmericasConference/Shadlen.pdf) seeks to explain the willingness of many Latin American (and particularly Central American and Caribbean) nations to overlook the costs of signing regional trade agreements (RTAs) with the US as related to the extent to which their export structure competes with China as well as a country’s relative power in the international system and the power of exporters within the domestic political economy.  It is an interesting contribution to the literature both on the impact of China on other developing countries and on the rationale for signature of free trade agreements.    

The LBS conference (http://www.lbs.ac.uk/newsandevents/events.html) was significantly less academic, as most of the speakers were from business and government.  Nonetheless (or perhaps because of this!) a number of interesting insights were provided to the actual political and economic progress of Latin America, including a very detailed and thoughtful presentation on the Mexican Finance Ministry’s attempt to improve the country’s debt portfolio and capitalise on the investment grade credit rating the government received from Moody’s in 2000.   

More generally, many of the participants discussed whether the idea of Latin America as a region was really useful, when a number of countries seemed to be moving in such different ways both politically and economically.  Most thought that the ‘threat’ to business in Latin America was being very overstated, and emphasised that many of the major economies in the region were improving their business climates and macroeconomic performance, as well as advancing their democracies, making the economies more attractive places to invest.