The choice of exchange rate regime is a continuing challenge to Latin American policymakers, who currently face pressure to dollarize their economies. The constraints imposed by the “dollar bloc,” the informal but powerful currency bloc that ties Latin America to the dominant currency, are central to that choice. Current weak economic performance has called the bloc's norms and principles into question and has made the exchange rate an open issue. Ecuador's full official dollarization is one possible strategy for countries with political stability but poor economic performance to gain access to needed dollar resources. Most of Latin America, however, will continue with variants of managed floating exchange rates, and the periodic foreign exchange crises will provide access to official dollar resources and facilitate renegotiation of the terms of outstanding debt.

Chile's military government replaced the country's universalistic social policy system with a set of market-oriented social policies. Taking evidence from three areas (pensions, education, and health care), this study seeks to explain why the military advanced a policy of deep retrenchment and why reform of health care was less thorough than it was in pensions and education. The radical transformation of policy relates to the breadth of power concentration enjoyed by General Pinochet and his economic team, the policymakers' ideological positions, and the role of veto players. The more limited reform of health care is linked to the actions of a powerful veto player, the professional association of physicians.

This article examines, through a two-level game model, the case of the first investment dispute under NAFTA between a private U.S. firm and the Mexican government. It argues that the clue to understanding why the Mexican president could not cooperate with the U.S. president lies in Mexico's domestic “ratification” process. The analysis yields two theoretical propositions. First, federalism represents an important variable in explaining foreign economic policy. Second, two-level game logic should not be applied only to formal international negotiation situations; instead, by specifying the dependent variable as cooperation or noncooperation, these models connecting domestic and international politics can be productively applied to study foreign economic policy.

Despite repeated conflict with organized labor, the government of Carlos Salinas de Gortari (1988–94) pushed an aggressive divestment agenda that transformed Mexico into Latin America's leading privatizer. Explanations of Salinas's achievements typically emphasize centralized presidential power (including control over the ruling party) and autonomy; technocratic and political savvy; and weak labor opposition. This article questions such a pure “capacity-outcome” approach. Of equal importance are the learning effects of repeated interaction between the state and labor, which changed the course of divestment struggles and thereby influenced their outcomes. Lessons learned in successive confrontations led to patterns of interaction conducive to widescale privatization. The article develops this argument through comparative analysis of major divestment episodes in the aviation, mining, steel, and telecommunications sectors.