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By Leo Strauss

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5. 6. 7. 8. 9. 10. II. The author would like to thank Mario Damill, Luis Macadar, Gary McMahon and Carlos Salinas for their valuable suggestions. The expression 'second transition' comes from O'Donnell (1994), in a somewhat different context than in our discussion. This classification was suggested by Carlos Salinas. The schedule was to have one more military government in order to guide the transition. However, due to popular pressure, in 1985 a civilian president, Tancredo Neves, and vice-president, Jose Sarney, were elected.

O'Donnell G. (1994) 'Delegative Democracy', Journal of Democracy, vol. 5, no. I, pp. 55-69. Rodrik, D. (1993) 'The Positive Economic of Policy Reform', American Economic Review, vol. 3, no. 2, pp. 356-61. Torre, J. C. (1993) 'The Politics of Economics Crisis in Latin America', Journal of Democracy, vol. 4, no. I, pp. 104-16. Williamson, J. (1990) 'The Progress of Policy Reform in Latin America', Policy Analysis in International Economics no. 28 (Washington DC: Institute for International Ecomonics).

The inflation rate seemed to be trapped in the 15-25 per cent range. Although these were relatively moderate rates, they far exceeded average international inflation rates. In 1993, for the first time, inflation fell below 10 per cent. The stabilisations of both Bolivia and Uruguay have quite unexpectedly been accompanied by a large dollarisation of the deposits in the banking system. In Argentina, dollarisation, which fluctuated widely and was correlated with periods of high financial fragility before the Convertibility Plan, has continued to increase with this plan, despite its success.

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