This paper reviews recent economic reforms carried out in Latin America and relates them to the long-run economic trends in the region. After a brief overview of growth and income distribution patterns of Latin American countries in the nineteenth and twentieth centuries, the paper addresses some of the reasons for the region’s economic decline. Milestones such as the debt crisis of 1982, the failure of heterodox stabilisation programmes in the 1980s and the consequences of liberalisation in the 1990s are discussed at length, as also are the lessons drawn from the financial crises of the 1990s for the current process of economic transformation.