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Reinventing the State: Economic Strategy and Institutional Change in Peru

The political economic history of Latin America in the post-World War II era has largely been one of underachievement and opportunities lost. This all changed with the wave of market reforms that were implemented in the 1990s. However, the precise role of these reforms as an agent of change is still hotly debated. This in-depth analysis of the Peruvian case argues for an explanation that treats institutional innovation and state reconstruction as necessary conditions for the apparent success of the market in Latin America.

Exploring how state intervention has been both the cause of Latin America's economic downfall in the 1980s and the solution to its recovery, Reinventing the State analyzes three main phases of state intervention: the developmentalism that lasted until 1982, the state in retreat of the 1980s, and the streamlined state of the 1990s. Through a comprehensive examination of the Peruvian experience, the book explains the country's impressive turnaround from the standpoint of institutional modernization and internal state reform.

Written for a broad academic audience, the public-policy community, and the private sector, this book is also meant as a quick primer for any journalist, consultant, or private-sector analyst in need of an overview of the region's market-reform effort and how it has played out in Peru.

Carol Wise is Associate Professor, School of International Relations, University of Southern California.

Summary: The importance of the public administration

Rating: 4

Beyond the particular history that it is told (about Peru and the disappointments with the goal of economic development)this book highlights the importance of having competent and autonomous agencies to implement the public policies which the elected officers choose. This autonomy stands for several levels:

- Independent thinking (so, the agencies could have different opinions regarding the issues which concern to politicians).

- Independent action (they should have a legal framework to issue their own administrative orders, and if politicians don't like some developments of these agencies they should try to change his directors, not take political control. This also means that they are responsible of their own success and failures).

- Administrative autonomy (the agencies decide who is hired and how, and who is fired and why, and should have the budget to operate as it is required).

During the period of 1960-2000, in Peru, we had a relatively competent and autonomous agencies only after 1992. Before this period something was wrong: or the agencies (which were taken by the political parties and his clients), or the goverments (which didn't respect the guidelines and administrative orders issued by the agencies). My personal conclusion of this work is that:

- The specialized knowledge on several issues regarding public policies is valuable, makes the difference, and is embodied in independent agencies with planners and professionals who have made their careers in there. To waste this knowledge should produce "state failures" (as opposed to the "market failures"), when implementing the public policies is the main task.

- The specialized knowlege and skills of every agency could counterbalance other points of view when the public policies are planned, and this is an important advantage of having good agencies and good goverment officers in there.

- The autonomy of agencies gives to the public policies stability and direction. Only under these two conditions could produce results which are measurable by everybody.

The different economic policies which were chosen in the period 1960-2000 could have flaws from the blueprints (and, indeed, they had) but above all, and with the exception of the last decade, they missed the capabilities in the public administration to try hard these choices. And only for this finding this book seems to me a very good book on peruvian politics and economics.

His hypothesis and method could be applied to the study of any other developing country of the region.

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Rating:
2.5 out of 5 by Book123