Dollarization as an Instrument of Dependence

The adoption of the U.S. dollar as Ecuador’s official currency in 2000 was presented as an immediate solution to the inflationary crisis that devastated the country. Mishell Pavón’s article questions the real effects of this measure on Ecuadorian political and economic autonomy. By giving up its own currency, the state lost basic instruments of monetary policy, such as issuance, exchange, and inflation control, becoming tied to external fluctuations and, above all, to U.S. hegemony.

Drawing on Robert Cox and Antonio Gramsci, the author interprets dollarization as a hegemonic institution, legitimized by financial and political elites who defended it as inevitable. The work also revisits Juan Carlos Puig’s theory of autonomy, emphasizing that without monetary sovereignty it is impossible to formulate an independent development project.

The Ecuadorian case thus reveals a pattern of structural dependence. The frustrated attempt to join Mercosur fully illustrates the limits imposed by the absence of a national currency, since the bloc requires macroeconomic coordination among its members. Dollarization, therefore, not only restricted the country’s internal capacity for response but also hindered regional integration.

The study shows that the measure mainly benefits bankers and exporters while deepening social inequalities and weakening the population. Pavón argues that Latin American integration, based on solidarity, could be a path to reduce this dependence. Mechanisms such as SUCRE, proposed within ALBA, are cited as alternatives for gradual de-dollarization. The study presents the view that dollarization represents an instrument of domination that reaffirms Ecuador’s peripheral role in the world economy.

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