Introduction: Debates, performance and the political choice policies

Vol. 21 No. 3 (2001)

Jul-Sep / 2001
Published July 1, 2001
PDF-Portuguese (Português (Brasil))
PDF-Portuguese (Português (Brasil))

How to Cite

Wise, Carol. 2001. “Introduction: Debates, Performance and the Political Choice Policies”. Brazilian Journal of Political Economy 21 (3):450-70.

Introduction: Debates, performance and the political choice policies

Carol Wise
Associated Professor of Political Economy at the School of Advanced International Studies – SAIS of Johns Hopkins University, Baltimore/MD, United States of America.
Brazilian Journal of Political Economy, Vol. 21 No. 3 (2001), Jul-Sep / 2001, Pages 450-470


Despite the widespread adoption of market reforms in Latin America over the past decade, there is still no consensus about the type of exchange rate regime that would best complement a liberal economic model. While there has been a distinct shift from fixed to floating rates since the Mexican peso crisis of 1994, the empirical evidence is ambivalent when it comes to measuring policy success under any one regime. ln light of this empirical ambivalence, this introductory article argues that a more fruitful line of research lies in understanding the political economy lessons that can be gleaned from the standpoint of exchange rate management. These entails, first, an examination of the conflicting pressures that special interests exert on policy officials to maintain the exchange rate at a certain level; and second, it requires analysis of the broader institutional mechanisms through which monetary policy is mediated. The article suggests that policy “success” or “failure” can depend as much of policymakers’ tenacity and statecraft as of the technicalities of macroeconomic policymaking.

JEL Classification: F31; F32; E60.

Keywords: Political economy Exchange rate liberalization currency crisis stabilization