Some Lessons for Africa from the Recent Reforms in Latin America

This paper reviews the recent Latin American experience with policy reforms and then goes on to draw lessons for Africa. The lessons apply to both macroeconomic and micro-institutional reforms. On the macroeconomic side it concludes that it is important to achieve and maintain macroeconomic stability through appropriate fiscal and monetary policies. On the micro-institutional front, an area where returns should be very high in Africa, the paper emphasises the importance of creating and strengthening the type of institutions required to promote a competitive market economy. But this is not all; in the African environment a special effort should be made to improve the integration to the world economy, to rehabilitate physical and social infrastructure, to improve the provision of social services; and to remove impediments to the expansion of private investment.