One of the world economy's biggest puzzles is Latin America's poor performance. Since the early 1980's, Latin America has been stuck, with per capita incomes growing slowly (if at all) in most of the region, and with one big crisis following another. Many policies have been tried, especially trade liberalization, privatization of inefficient state enterprises, and budgetary reforms. Yet something is holding Latin America back.
The lack of vigorous growth is all the more bewildering in view of Latin America's many advantages and social successes. Natural resources are plentiful, with vast amounts of fertile land. Health conditions are reasonably good, and all Latin American countries have made headway against illiteracy, with most reaching 90% adult literacy or higher.
Moreover, fertility rates have fallen sharply, to a point where populations in many countries will probably level off in coming decades. Women's status has improved, and girls enjoy equal access to education, with even higher enrollment rates than boys in many countries. Latin America may be known for its "macho" culture, but women increasingly participate in the labor force and attain prominent political and social positions.
Latin America boasts still other long-term advantages. Most people live near the coasts, with good access to international trade, and most live in cities - another advantage for growth. Indeed, the region is not poor by international standards, but rather stuck in the middle-income range between the world's poorest places and the high-income countries of North America, Europe, and East Asia.