The general perception in South American countries was that the structural reforms of the 1990s did not produce the expected results. As a result, these countries followed diverse paths in the quest of economic growth. One group of countries departed from the market reforms towards populism, while another group continued applying market friendly policies. This paper analyzes the performance of both groups inquiring if the effort and pain of pursuing market reforms and pro-market policies will bring long term rewards, or if populism would deliver similar results without having to pursue strict policies. The evidence seems to indicate that reforming countries are not performing better than populist ones, but they seem to be both more stable and attractive to foreign investment. It remains to know if turmoil in international markets will allow pro-market countries to continue to entice foreign investors.
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