Some selected notes from the recent session titled “Latin American and Caribbean Economic Association (LACEA) Session: Natural Resource Booms, Macroeconomic Management and Civil Conflict in Latin America“:

Columbia (Juan Fernando Vargas): Natural resources booms have been tied to the dynamics of civil conflict. Guerrilla attacks, paramilitary attaches, clashes and casualties – all are higher in coffee-growing municipalities than in non-coffee growing municipalities. A discussant questioned the analysis and this conclusion, and an audience commentator suggested that both conclusions may be justified(!).

Chile (Eric Parrado): Chile has had successful management of copper booms, via its “fiscal rules” policy. So, it stands to weather the current storms of the financial crisis better than any other LAC country.

Venezuela (Osmel Manzano): Venezuela has been the opposite of Chile with respect to handling oil booms.

A discussant asked “Chile vs Venezuela? What’s the difference?” He said they have much in common… but some key differences:

-Polity very different: Chile has a well established two party system, while Venezuela’s party system has deteriorated to what now borders on autocracy, without effective checks and balances.

-Chile has strong constituency for stability, and thus support for macro-economic policies to support long-term stability.

-Chile was quite a mess in 60s and 70s; but was able to come out of that crisis and institute significant reforms 30 years ago that are now working very effectively; some other LAC countries may be on similar long-term paths towards reform.