The institutions, stupid!,
This review is from: Falling Behind: Explaining the Development Gap Between Latin America and the United States (Hardcover)
Fukuyama's collection of essays get around to pointing the finger for the development gap between the U.S. and Latin American economic & social performance at the poor quality of its institutions (in the broadest sense), but it does so slowly. Fukuyama's essay at the end of this book should have been the introduction to this book, as it was difficult to follow the other contributors without knowing where this collection of essays was leading to.
My biggest annoyance about this collection is that it does not make clear which institutions are to blame for the development gap, or whether it is absence of certain institutions that is to blame. If this book had explicitly named the culprits and the reasons/process for their inability to deliver better development outcomes, this would have been a brilliant book. For instance, the lack of an effective tax laws and an efficient tax collection system are identified as a major drag on Latin American development, but this is not investigated in any great depth, despite the wealth of citations from sources addressing this issue.
Likewise with the theories of economic development, it is not really clear how poor institutions are inhibiting growth. Theories such as Rostow's stages of growth, and policy prescriptions such as the Washington Consensus are discussed, but the precise mechanism of economic development failure is not described. Periods of rapid economic development seem to have occurred in Latin America despite the lack of a strong institutional framework, so identifying institutions as the problem is a little bit trite.
Argentina is given prominence in these essays, yet this book fails to answer the specific question why this country experienced periods of extreme success (thanks to the refrigerated meat trade with Europe) but fails to identify the key influences that held it back. Perhaps a second volume of essays is needed to get to the specific detail?