Money Doctors in Latin America

FLORENCIA SEMBER

The New Palgrave Dictionary of Economics

Palgrave Macmillan

Lugar: Londres; Año: 2022; p. 121 - 131

Money doctors are foreign experts that advise other countries on monetary and banking matters. Because of its chronic need for foreign capital, Latin America was a privileged destination for these advisers. Money doctors prepared the ground for receiving external capital flows, but at the same time, they had to make sure the investment was profitable for the lenders by persuading the host country to implement reforms that would guarantee its solvency. We can distinguish broadly three periods of money doctoring in Latin America. Before World War I, money doctors were primarily representatives from leading investment banks and government officials in the cases of US colonies and protectorates. In the interwar period, money doctoring became professionalized, and there was a competition among League of Nations agents, academic advisers, and government officials. Finally, after World War II, money doctoring became institutionalized, basically in the International Monetary Fund and the World Bank. However, some missions from private investment banks, as well as academic money doctoring, continued.