The authors' goal is to reconcile the insights of pro-globalization and pro-financial development economists with criticisms of those perspectives put forward by sociologists and political scientists in financialization studies. The authors note how rapid changes in Latin America over the last few decades have turned the financial sectors of many countries from some of the most regulated and closed systems into some of the most open. The fundamental question they ask is whether those changes have been harmful or helpful to social and human development. While the authors do not precisely define financialization, they note its many forms and operationalize the concept through two measures: the ratio of international private debt securities to GDP and domestic credit to the private sector granted by financial institutions, including the central bank. Chapter2 explores the historical development of finance in Latin America, and chapter 3 describes the empirical tests carried out in chapters 4 and 5, where the authors analyze the relationship between increased financialization and overall social spending. Their results partially support and partially undermine both schools of thought. Recommended. Graduate students, faculty, and professionals.

Choice Reviews

Financialization, Austerity, and Inclusion in Latin America and the Caribbean by Rana S. Gautam, Diogo L. Pinheiro, and Dwight Wilson offers an overdue account of financialization's origins and impact on the region. I found their evaluation of both the proponents and critics of the growing role of finance in these economies particularly useful. Instead of viewing financialization as inevitable and homogenous, they provide a fresh insight into the actors involved, unpack this complex phenomenon into meaningful indicators, and trace its varied implications for the region’s intractable development challenges. This outstanding work is both theoretically informed and easy to read, as well as rigorous in its analysis.

Matthew Flynn, Georgia Southern University