LIBERALIZATION OR JUST DOLLARIZATION? Twenty-first-Century Economic Reform in Ecuador

Abstract

In this article, I review the state of Ecuadorean economic policy in the twenty-first century, emphasizing the impact of and national reaction to liberal economic policy in the nation, especially dollarization. While economic liberalism and dollarization had a positive effect on Ecuador’s economy, these policies have faced a backlash from voters, resulting in reversion to greater governmental intervention in the economy that, liberal critics argue, is unsustainable in the long term. Advocates for economic liberalism will need to adopt more incrementalist approaches toward policy reform, remain cognizant of the centrality of Ecuador’s human development aspirations, and recognize the reality of policy diffusion processes to succeed in future policy changing efforts.