Both these books provide new outlooks on Latin America’s 12-year-old debt crisis and, perhaps with equal significance, offer forceful analytical contributions that will be important to Latin American specialists working in the fields of international relations, finance, political science, and, eventually, historical economics.

Robert Devlin’s book is possibly the most original and polemical analysis published to date of the financial dynamics behind the debt crisis. His main argument is that the debt boom of the 1970s was fueled not simply by the demands of Latin American governments for external funds but, perhaps even more forcefully, by “overlending” by multinational banks.

It should be noted that the author, a senior economist at the United Nations’ CEPAL, has been publishing studies on the Latin American debt boom and crisis almost from its inception and therefore has an extremely detailed knowledge of its evolution, as is verified in the abundant statistical materials and bibliographical references in his work. But Devlin is not merely concerned with presenting an empirical review of the debt crisis. His goal is to provide a new theoretical focus, placing the private, multinational banks at the center of the international financial and political stage since the 1970s.

Devlin argues that while social scientists in the 1970s were aware of the impact of transnational nonfinancial corporations, they did not adequately grasp the new and aggressive role of multinational banks. Thus Latin America’s debt crisis caught them off guard. The leaders in the internationalization of finance were the U.S. banks, which adapted aggressive marketing tactics (developed in the 1950s and 1960s) to the exploding Euromarkets of the 1970s, then turned to medium-term financing for many “developing” countries. European and Japanese banks subsequently followed their lead, and before long the rivalry for Latin American loans was enormous and getting progressively out of hand. Devlin develops a convincing theory of the effects of intense competition among an oligopolistic field of players, which led to an extraordinary surge of overlending.

Devlin also addresses the consequences of the debt crisis and the renegotiation process. For this reviewer, though, his book’s most original contribution is the way it deals with the dynamics of supply in an era of increasing internationalization of banking and financial flows. Devlin’s argument could be broadened by including more analysis of the role of OPEC funds in the loan boom, as well as the role of capital flight from Latin America, as mechanisms by which the multinational banks remained flush with cash for the issue or renewal of one international loan after another until the loan boom’s sudden collapse in 1982.

Devlin analyzes the renegotiation of Latin American debt in the 1980s by focusing on two case studies: Peru and Bolivia. Ernesto Oliveri pays more attention to the different solutions sought for the biggest debtors: Mexico, Brazil, and Argentina. Oliveri’s main contribution is to raise doubts about the apparent success of the politics of international finance in dealing with the Latin American debt crisis. He does this by examining the shifting strategies of the major international actors. He argues that the governments of the creditor countries—the United States, Europe, and Japan—had considerable trouble developing effective, credible plans to deal with financial instability. On the other hand, he suggests that multilateral institutions—especially the International Monetary Fund—were partly successful when they attempted to coordinate the creditors’ efforts to oblige the Latin Americans to impose austerity programs, which would guarantee the huge capital transfers needed for debt service in the 1980s. By the end of that decade, however, the IMF had lost most of its credibility as a neutral international lender of last resort. Its strategies chiefly benefited the private international banks—the main direct creditors. As a result, Latin American governments were forced into a complex and unpredictable game of alternately threatening to suspend payments, then subsequently complying with many of the multinational banks’ demands.

Each of these books provides a different focus and interpretation of the causes and consequences of the Latin American debt crisis. Devlin opens new ways of thinking about the role of multinational banks as major institutional factors in international finance in both the boom and bust cycles that have characterized Latin American economies. Oliveri provides suggestive ways to analyze the shifting relations between politics and finance in an ongoing debt crisis that has implied enormous costs for all Latin American societies and that today is still a long way from resolution.