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Problems, development theory and strategies of Latin America (English)

This paper examines the influence of both economic problems and development theories on the growth strategies followed by Latin American countries in the last 70 years. Up to the Great Depression, most countries in the region were fairly open to trade, and comparative advantage was the basis for the leading development theory. From the Great Depression to World War II, most countries practiced crisis management as a reaction to the sharp external shocks coming from the Depression. Toward the end of the forties, the first attack on free trade was launched by the structuralist school, headed by Raul Prebisch which championed import-substitution. Disappointed with the perspective for growth, certain countries instituted reforms aimed at reducing the anti-export bias in their trade policies which subsequently caused exports to grow even faster than did world exports in the golden decade of world trade. Later on, a second frontal attack on structuralism was launched, this time by the southern cone countries, which recently instituted liberalization attempts. Had it not been for ill-fated stabilization programs and the external shocks of the seventies and early eighties, the reform measures would have lifted the southern cone countries out of their economic stagnation.

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Corbo,Vittorio

Problems, development theory and strategies of Latin America (English). Development Research Department discussion paper ; no. DRD 190 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/722931468772451231/Problems-development-theory-and-strategies-of-Latin-America