Publication

This paper analyzes Spain's successful transition from a socialist to a market economy and explains how the Spanish example could be used as a role model for Latin American countries. According to the author, in the pre-transition phase Spain's situation resembled the one Latin American countries are in at the moment (presence of a regulatory state and a dominant church). However, the author sees major differences in the timing, the pacing, and the sequencing of the transition phase. In addition, Spanish policy-makers concentrated on institutional reforms and thus managed to remain politically autonomous. Some constructive lessons for Latin America are the necessity of deep regional integration in a stable economic environment, a monetary policy allowing prosperity to increase, and a political culture of consensus. The author warns, however, that although Spain might be a point of reference, Latin American countries should not just blindly copy Spanish policy as the circumstances and preconditions are not always the same.