Structural Adjustment and Agricultural Export Response in Latin America

Expanding exports has been one of the principal goals of structural adjustment programs aimed at restoring external balance of payments equilibria in many developing countries. This paper analyzes agricultural export response for selected crops in 8 Latin American countries over the period 1961- 1990 in an attempt to confirm the export-enhancing effects of structural adjustment. The results show that: (a) commodity and country disaggregation in estimation generates much higher export response elasticities than previously estimated; (b) variations in the real exchange rate have a dominant effect in stimulating export response, compared to commodity price changes; and (c) statistical tests confirm structural change in export response elasticities in over half of the equations estimated. Overall, the evidence suggests that stabilization and adjustment reforms have had a significant though non-uniform effect in stimulating agricultural export expansion in Latin America.