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Abstract

This chapter discusses the changing relations between Multilateral Development Institutions (MDIs) and Latin America from the 1980s to the present day. The chapter first depicts how the influence of MDIs on Latin America has changed over time and across countries, depending on their access to international private capital markets, the development of long-term markets for domestic currency government bonds and the significant reduction of macro-financial vulnerabilities in the region. It then illustrates how the view of MDIs on macroeconomic and development policies has evolved, influenced by academic developments and also by Latin American governments. Finally, the chapter shows how most governments in the region, whether left-wing or center-right oriented, have increasingly converged with MDIs’ recommendations on macrofinancial policies while historically many actors, from both ends of the political spectrum, applied both macro and micro policies that differ from MDIs’ views.

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