ABSTRACT
Latin American governments have responded to the social costs of economic crises with food assistance programs, unemployment insurance, social funds, health care coverage for the unemployed, scholarships for children, training and retraining programs, and workfare programs. Most Latin American and Caribbean social investment funds are more effective at building small-scale social infrastructure than at creating employment opportunities for those hurt by emergencies. Although macroeconomic management and global financial systems are key to reducing the potential social costs of economic crises, specific responses to them can provide more sensitive or less sensitive protection for the poor. Some poor may be hurt by currency devaluations, high interest rates, or reductions in the fiscal deficit while others may not. Mexico's poor may have suffered a long-term impact on their capabilities, as social indicators show for the 1980s. National distributional conflicts may be exacerbated by economic crisis and should be taken into account when designing policies.
