BUENOS AIRES -- Not since the immediate years after World War II, when South America looked for a development model it could call its own, has this continent been in such an animated state of economic debate and invention.

Driven to experiment by the failure of traditional formulas to cure inflation and other chronic ills, some of the region's most indebted nations are desperately searching for new panaceas.

In the past two years, they have tried freezing wages and prices, introduced new currencies, suspended foreign debt payments and applied other unconventional measures to break upward spirals in living costs and restore economic order without stunting growth.

Hinging on the uncertain outcome of this intense effort are the popularity and credibility of the new-wave democracies. To avoid a swing back to authoritarian rule, leaders of the continent's fragile democratic transitions remain under pressure to deliver growth with low inflation to populations with big dreams and short tempers.

So far no lasting, politically acceptable schemes have been found to do this. The most innovative programs -- those tested in Argentina, Brazil and Peru -- have gone from promise to disillusion and induced at least a partial return to more orthodox remedies.

"The nations of the region are trying to do their own thing, just as they did in the 1950s," said Rudiger Dornbusch, a Massachusetts Institute of Technology economist and expert on Latin America. Back then, many adopted the "import substitution" approach to domestic industrialization, he said -- that is, creating and protecting domestic industries to produce goods that otherwise would be imported.

That approach resulted in massive economic inefficiencies, since the protected industries usually faced no competition and often required huge government subsidies.

Now, Dornbusch said, these countries are searching for a different development model. "They have learned quickly that it isn't easy," he said.

Since the onset of the debt crisis in 1982, Latin America has experienced little or no growth, lower standards of living, higher unemployment, depressed levels of investment and reduced foreign trade. Though the collective output of the region did increase 3.8 percent last year, it grew only 1.4 percent on a per capita basis and has yet to catch up with the 1980 level. While the volume of Latin American exports has also jumped, the value of exports has actually fallen due to low commodity prices, according to the Inter-American Development Bank's annual report, released this month.

Public patience is wearing thin. Argentine voters, for instance, have overwhelmingly rejected President Raul Alfonsin's appeal for continued confidence in his administration's attempts to repair decades of industrial decline. The triumph of the opposition Peronists in nationwide elections this month was widely interpreted as reflecting deep public discontent with the government's economic management.

Up to now, Latin Americans have been surprisingly tolerant of diminished work opportunities, social service cutbacks and eroded incomes. But as the Inter-American Development Bank warned in its report, "deep social conflicts in various countries have been emerging which threaten both political and economic development."

Political pressures to improve living standards have made many democratic politicians hesitant to order the spending cuts and consumption constraints advocated by the International Monetary Fund and other foreign lenders. The new politics of the region demand a greater emphasis on income distribution.

At the same time, faith in miracle cures has faded after the novel anti-inflation plans of Argentina, Brazil and Peru gave way this year to new rounds of triple-digit annual inflation rates in those countries.

"The nut is proving harder to crack than we had thought," conceded Edmar Bacha, one of the economists behind the failed Brazilian program.

Throughout South America, the economic catchword of the day has become "heterodoxy," a term encompassing just about any remedy that differs from the orthodox measures prescribed by the IMF. The word crops up constantly in the press, at economic conferences and along the corridors of power. It serves as a kind of shorthand for home -- grown economic solutions.

The starting point remains the taming of inflation. The foreign debt crisis has complicated the problem. Debt servicing now accounts for about one-third of public expenditures in the region. This means larger fiscal deficits, which in turn fuel excess demand and spur inflation.

After the debt crisis broke five years ago, hard-pressed Latin American nations turned initially to the IMF for both advice and short-term financing. By 1984, most countries in the region were operating under some form of IMF supervision. The orthodox measures recommended by the fund included budget cutbacks to reduce government spending, higher interest rates to encourage saving and dampen consumer spending, and devaluations to cheapen the price of exports and spur sales abroad.

But inflation persisted, even while output stagnated. Moreover, the reward for enforcing IMF-style austerity was supposed to have been an eventual reopening of international credit lines. Yet by 1985, the promised supplies of new capital had failed to materialize. Foreign banks were offering little more than was necessary to keep old loans technically out of default.

Argentina's Austral Plan, launched in June 1985; Brazil's Cruzado Plan, introduced eight months later, and Peru's plan, which took shape during those months as well, all marked a new direction.

The programs, while differing in details, shared a central quest: to choke inflation without causing the output losses associated with previous orthodox strategies.

In contrast with the IMF's focus on dampening excess demand, the innovative South American schemes aimed at cracking the psychology of inflation. Public expectations that prices and wages would go on rising had infused the wage-price spiral with a vicious inertia.

Shock therapy was applied. Prices were frozen (Argentina also froze wages) and new national currencies were introduced to replace worn, increasingly worthless old ones. Peru went a step further. Attempting to gain extra financial maneuvering room, it limited foreign debt servicing to 10 percent of export revenue.

The shock packages were as much a political as an economic answer to the crises confronting presidents Alfonsin, Jose Sarney of Brazil and Alan Garcia of Peru.

The programs scored spectacular successes at first. Annual inflation rates fell sharply, landing between 60 and 80 percent in 1986, considered moderate for South America. Gross domestic product surged, in per capita terms, to between 4.5 and 6 percent. Governments basked in popularity.

Then, for different reasons, the programs floundered. In Brazil, the policy was politicized and transformed from a scheme to fight inflation into a platform for income redistribution. In Peru, workers and businesses slipped into the huge informal sector to avoid government price controls, evade taxes and take advantage of a booming economy.

In Argentina, which had cautiously combined its heterodoxy with fiscal and monetary restraints under an IMF agreement, the anti-inflation drive ran aground of redistributive tensions with the nation's powerful trade unions.

All three national plans, though, shared one shortcoming: they failed in later stages to attack basic structural deficiencies in their economies, doing little to guard against inflation's resurgence.

Brazil let its fiscal deficit gape. Argentina never managed to secure the opening of the economy and reform of the public sector it sought. Peru watched its informal business sector expand.

Ironically, it was the initial success of the anti-inflation programs that inhibited tough follow-up measures. "The programs generated so much euphoria that no one wanted to do anything to upset them," said MIT's Dornbusch.

Valuable time and political momentum have been lost as a result. Now, the political climates are less propitious for deep structural reforms. The economies are less stable, the public more skeptical.

Government officials in the region no longer speak boldly of eliminating inflation. Their aims have become more modest. They now talk about achieving "relative stabilization" of prices.

No one has yet solved the problem of how to move from a freeze to some kind of adjustment that does not precipitate a new inflationary spiral. Brazil is facing that dilemma anew as it prepares to thaw a second freeze imposed last June.

Some important lessons, though, have been learned.

"There's a clear understanding that we need to solve the fiscal equation before going anywhere," said Brazil's Bacha.

How to do this without sacrificing the imperative to maintain growth remains the challenge.

The most important South American leaders are still dead-set against accepting purely orthodox formulas. "We will not allow the IMF to continue trying to apply ridiculous prescriptions which have nothing to do with the needs of the people," Alfonsin recently declared.

Nonetheless, in the absence of workable alternatives, orthodox measures are being embraced.

In Brazil, for instance, the latest stabilization program calls for government spending cuts, higher taxes and economic growth led by increased exports. A devaluation of the cruzado has spurred exports, restoring a large trade surplus. This could set the stage for Brazil to resume interest payments on its debt. Payments were suspended in February when the first anti-inflation program dissolved.

In Argentina, Alfonsin appears determined to push ahead with plans to sell state-owned firms, promote exports and strengthen tax collection.

Elsewhere, fiscal conservatism has also taken root. It is most severe in Bolivia, which had the world's highest annual inflation rate (24,000 percent in September 1985) before the government decided simply to stop spending more than it was receiving.

After harsh budget cuts and the painful closure of many state-owned tin mines, Bolivian authorities have brought inflation down to a steady rate of less than 1 percent a month. But as orthodox as Bolivia has been in domestic economic policy, it has taken the heterodox route externally, suspending foreign debt payments since 1984.

Chile, one of the few Latin American nations still under military rule, is the only nation on the continent practicing orthodoxy both at home and abroad. But its policies have resulted in a massive redistribution of income away from labor.

"What is emerging generally in the region is a less doctrinaire, more pragmatic approach to economic management," said Gert Rosenthal, deputy director of the United Nations Economic Commission on Latin America, based in Santiago, Chile. "Consensus is growing around several points:

"First, that growth must be the underlying ingredient in any adjustment program. Second, that there are limits to what a country can do in a heterodox program, which means some restraints are necessary along with some experimentation.

"And third, no two cases are like. No single formula will work for everyone."