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Chapter Reference: Neoliberalism
In the 1980s and 1990s, prevalent neoliberal economic policies of "structural adjustment" eliminated manufacturing jobs in Latin America by facilitating international competition. In addition, privatization of formerly state-run firms and implementation of austerity programs to trim government bureaucracies, two other standard elements of the neoliberal recipe, created further unemployment in Latin American cities. The result was the expansion, in these years, of what has been called the informal economy. Anyone who has recently visited a large Latin American city will have seen the workers of the informal economy. Most of them are street vendors, but not of the sort we find in big cities in the United States, who normally have formal stands and sell the same goods day in and day out. Whether workers of the informal economy in Latin America are selling their labor and skills, articles of clothing, car-washing service at stop lights, umbrellas on a rainy day, or flowers, they live day to day without any job security, and often sell different things on different days. Students approaching the topic should highlight the range of workers, goods, and services involved in the informal economy, while concentrating on the factors and conditions that led to this economy's emergence and expansion during the moment of neoliberalism.
Questions for Analysis and Further Reflection:
- What institutions and social sectors have advocated neoliberal economic policies, and in what political context? How have neoliberal policies generated unemployment during the past twenty-five years?
- Aside from job insecurity, what other disadvantages come along with the growth of informal economies in contemporary Latin America? What could be done to reverse these trends?
Bibliography: (Titles with ** are good starting places.)
Rakowski, Cathy A. Contrapunto: The Informal Sector Debate in Latin America. Albany: State University of New York Press, 1994.
These essays introduce some of the key issues, in most cases through the lens of political science and public policy.
** Staudt, Kathleen. Informal Economies at the U.S.-Mexico Border. Philadelphia: Temple
University Press, 1998.
Though not a survey of the informal economy throughout Latin America, this study of informal economic activities along the U.S.-Mexico border is a good starting point, in part because students may find some familiarity in the focus, and in part because Staudt brings in issues that go beyond pure economics or policy, like culture, the drive to make a better life, and the meanings of borders.
Stearns, Katherine, and María Otero, eds. The Critical Connection: Governments, Private
Institutions, and the Informal Sector in Latin America. Washington, DC: Acción
International, 1990.
This book may not be widely available, but where it is, students will find a succinct overview of the informal sector's relationship to states and private companies, as well as essays on the informal economy in Colombia, Ecuador, Guatemala, Mexico, Paraguay, and Peru.
** Thomas, J. J. Surviving in the City: The Urban Informal Sector in Latin America. London: Pluto Press, 1995.
Thomas explores the economic roots of the informal economy in Latin America's urban centers, focusing on the links between the formal and informal sectors, and how gender, age, and class are tied to the informal economy.
** Tokman, Víctor E., ed. Beyond Regulation: The Informal Economy in Latin America.
Boulder, CO: Lynne Rienner, 1992.
Though not the most engaging of narratives, this collection of essays provides a good overview of the informal sector in Latin America.
________, and Emilio Klein, eds. Regulation and the Informal Economy: Microenterprises in
Chile, Ecuador, and Jamaica. Boulder, CO: Lynne Rienner, 1996.
Other Resources:
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