ABSTRACT
In the countries of Latin America, there usually is a fair amount of debate about economic policy. While the macroeconomic fallout of ending Import Substitution Industrialization (ISI) was accomplished by the 1990s, the economies of the region are affected by decades of ISI. ISI started out as a well-intentioned but flawed form of economic development policy. The growing realization that ISI was not a sustainable policy for economic development in the region logically led to search for an alternative set of policies. One of the hardest lessons learned in the region during the period of ISI and the Lost Decade was the importance of sound macroeconomics. Enhancing total factor productivity and economic growth in any country or region usually involves a complex set of reforms to economic policy that are referred to as structural reforms. In assessing economic policy, it is important to understand the effects of policy changes on welfare of those at the bottom of the income distribution.
