Thursday, December 08, 2005

Latin America's trade mistakes

AEI: No more of the same mistakes

Rudi Dornbusch, the renowned MIT economist, used to say of the Bank of Mexico's board of directors that he could understand their making mistakes. For after all, they were human. However, what he could not understand was how the same people could make the same mistakes time after time.

The same might perhaps be said of Latin American policymakers when it comes to trade policy issues. For time after time, these policymakers retreat from free trade policies each time they encounter the first setback to those polices. They do so despite the patent long-run benefits that their countries might reap from a properly supported liberal trade regime. They also do so in the face of overwhelming evidence from around the globe that free trade is an essential ingredient for successful economic growth.

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