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Fostering Economic Policy Coordination in Latin America

The REDIMA Approach to Escaping the Prisoner's Dilemma

image of Fostering Economic Policy Coordination in Latin America

This work aims to provide some useful elements for addressing specific issues related to coordinating policies among sovereign nations in a world undergoing globalization and subject to increasing uncertainty. It has a twofold objective: to provide clear positions regarding options for Latin American integration, and to publicize the REDIMA experiment, as well as the momentum behind it and the proposals issued through it. REDIMA is the acronym of the Spanish and Portuguese name of the Macroeconomic Dialogue Network, implemented in Latin America by ECLAC in cooperation with the European Commission.

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History of the emergence of the European monetary pole through economic policy coordination

The preceding chapter gave an overview of some important experiments in coordination and the steps taken by industrialized economies to manage coordination. It showed that the main difficulty of G-7 coordination was linked to the lack of progress in the regulation of global liquidity within a context of an asymmetric dollar. Such externalities provoked a European response, in the form of the development of regional coordination, as shown in section 2 of this chapter. Before spelling out this European reaction to the IMS caveats, section 1 raises the broader issue of determining the optimal level of governance and the kind of regulation a global market economy needs to operate smoothly and efficiently. The issue is deep-rooted and goes well beyond technical or economic domains since it involves fundamental philosophical choices about the kind of society citizens would like to live in, not to mention the contradiction between the “interventionist centralism” of Latin culture and the “individualistic decentralism” of Anglo-Saxon societies.

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