Understanding the Inefficacy of Structural Adjustment Programs in Latin America

Abstract: This paper examines in the context of their history and their impetus the implementation of structural adjustment programs in Peru, Argentina and Bolivia. The failure of the SAPs to meet their desired result is determined to be an extension of insufficient social welfare institutions, which were not initially considered to be important for a smooth transition towards market oriented reforms and sustained economic growth. Furthermore, the policy instruments utilized under the SAPs reduced the ability of the states to provide adequate social insurance and safety nets as government budgets were cut drastically and the role of the state receded from the market.