This book covers the leading theoretical approaches to political economy in the Latin American context, providing powerful tools for analyzing the challenges and opportunities facing Latin America.

Introduction -- Theoretical Perspectives -- Contending Perspectives on Market Failure and Government Failure -- The Origins of Structuralism -- Government Failures in Development -- What Washington Means by Policy Reform -- How Can States Foster Markets? -- Improving the State's Institutional Capability -- Explanations of Government Policy -- The Method of Analysis: Modern Political Economy -- Political Models of Macroeconomic Policy and Fiscal Reforms -- Understanding Economic Policy Reform -- What Do We Know About the Political Economy of Economic Policy Reform? -- Uses and Limitations of Rational Choice -- Applications -- The Political Economy of Growth since Independence -- Obstacles to Economic Growth in Nineteenth-Century Mexico -- Economic Retardation in Nineteenth-Century Brazil -- Factor Endowments, Institutions, and Differential Paths of Growth Among New World Economies: -- Latin American Manufacturing and the First World War -- Latin America in the 1930s -- Foreign Trade and Industrial Policy -- Import Substitution Industrialization -- Was Latin America Too Rich to Prosper? Structural and Political Obstacles to Export-Led Industrial Growth -- The Case for Trade Liberalization in Developing Countries -- The Origins of Mexico's Free Trade Policy -- The Political Economy of MERCOSUR -- Foreign Capital and the Macroeconomy -- Forms of External Capital and Economic Development in Latin America: 1820-1997 -- External Debt and Macroeconomic Performance in Latin America and East Asia -- Inflows of Capital to Developing Countries in the 1990s -- Foreign Direct Investment in Developing Countries: Progress and Problems -- The Political Economy of Foreign Direct Investment in Latin America -- Political Institutions and Economic Policy -- Challenging the Conventional Wisdom -- Democratic Institutions, Economic Policy, and Development -- A Game Theoretic Model of Reform in Latin American Democracies -- International Capital Flows and the Politics of Central Bank Independence -- Preemptive Strike: Central Bank Reform in Chile's Transition from Authoritarian Rule -- Social and Economic Issues -- Facing Up to Inequality in Latin America -- Income Distribution, Capital Accumulation, and Growth -- Public Finance from a Gender Perspective -- The Political Economy of Environmental Policy Reform in Latin America -- National Factor Markets and the Macroeconomic Context for Environmental Destruction in the Brazilian Amazon