This year’s Outlook identifies why Latin America has done so much better than other regions during the crisis. Its countries were certainly tested – the region experienced a significant economic downturn in 2009 – but this time they were able to deploy policy in a way which was both effective and sustainable. Sustainability, which means implementing policies consistent with the long-run evolution of external, fiscal and monetary balances, was a critical difference. The region proved able to protect its hard-won gains in growth potential and so its scope for long-term economic development. But there is an unresolved question about what lay behind this good result: was it internal factors like sound macroeconomic and microeconomic policy; or was it external ones, such as China’s economic emergence or timely multilateral action? Although this debate will not be conclusively settled in the near future, we will argue that both sets of factors played an important role. The crisis certainly revealed notable examples of good practices, but to work these also relied on the external environment.