Finance ministers have constrained policymaking across Latin America since the region’s democratization in the 1980s and 1990s. No longer. This shift has opened the door wider to profligate populist economic policies. But it also creates a more sustainable political path for market-based democracy throughout the region. Through political engagement, business interests can show and convince voters that economic growth through open markets can and does bring broader prosperity.
Mexico’s Pedro Aspe and Argentina’s Domingo Cavallo exemplified the rise of the all-powerful finance minister in the 1990s. Abroad, they became rock stars among the Wall Street set, feted at conferences, in the media, and on the snowy streets of Davos. At home, they reigned above other cabinet members, curtailing the aspirations and budgets of education, health and other social ministries. At times, they even hemmed in their own presidents, pushing back against politically popular policy choices.