Decentralized finance and SME in Latin America

Abstract

Latin America is undergoing a profound reorganization. Though the worst years of the recession seem tobe behind us, the future remains fraught with uncertainty. Latin American nations will need to adapt tooperating in an increasingly deregulated and open economy governed by market sovereignty in thecoming years. Commitment to market forces, on the other hand, should not entail the State ceasing tointervene in the economy, but rather redefining the scope and intensity of its engagement. Futurepublic policies should shift away from managing a basic reality defined by governmental laws andcontrols and toward managing a more complex environment defined by numerous actors, private andpublic, operating under competitive norms and interacting with one another. Within this broadercontext, decentralization processes emerge as a primary forum for state transformation. This articlediscusses the primary qualities that must be retained by an economic adjustment plan aimed atachieving compatible fundamental macroeconomic balances and ensuring democracy's survival. Second,the study argues for seeing the present trend toward decentralization not only as a political byproductof democratic consolidation, but as a crucial component of a broader strategy of positive adjustment.