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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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Some key guidelines for escaping the prisoner’s dilemma in Latin America: Political economy at REDIMA

From the analysis given in preceding chapters and especially from the general principles drawn from coordination experiences, a significant conclusion emerges for Latin America: the prisoner’s dilemma —which reflects incentives for non-cooperative behaviour— can only be broken through a regional triggering of dynamic gains, which creates countervailing incentives for national policy makers to cooperate with one another. To launch such a dynamic process, it is necessary to simultaneously reverse the three major obstacles identified in the preceding section. The following political-economy guidelines are organized in line with these three obstacles.

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