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The Political Economy of Latin American Development: Seven Exercises in Retrospection

Published online by Cambridge University Press:  12 October 2022

Albert O. Hirschman
Albert O. Hirschman*
Affiliation:
Institute for Advanced Study, Princeton, New Jersey
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In revisiting Latin America to gather impressions for this essay, I soon convinced myself that the most conspicuous characteristic of the region's recent experience is diversity and that the most interesting stories to be told are about specific, often contrasting experiences of individual countries. So, except for the first and last sections, I shall not deal here with Latin America in overall terms. Rather, I shall present a series of loosely connected and necessarily brief “exercises” in comparative political economy. Not surprisingly, primary attention will be given to the four countries I visited this time: Brazil, Argentina, Chile, and Mexico. My endeavor throughout will be to gain some perspective on current or recent issues by tying them into events and discussions of earlier decades.

Type
Research Article
Information
Latin American Research Review , Volume 22 , Issue 3 , 1987 , pp. 7 - 36
Copyright
Copyright © 1987 by the University of Texas Press

References

Notes

1. Jean Fourastié, Les Trente glorieuses: ou la révolution invisible de 1946 à 1975 (Paris: Fayard, 1979).

2. This figure excludes the Caribbean except for the Dominican Republic and Haiti. All statistical data in the following pages are taken from ECLA's 1984 Statistical Yearbook for Latin America, supplemented in some cases by figures from its data bank and the World Development Report 1986 of the World Bank.

3. Christopher Jencks, “The Hidden Prosperity of the 1970s,” The Public Interest, no. 77 (Fall 1984):37–61.

4. Ibid., 37.

5. Ibid., 38.

6. With respect to infant mortality, a 1984 UNICEF study reports continuing drops in infant morality in Brazil and Chile up to 1982. See Roberto Macedo, “Brazilian Children and the Economic Crisis: Evidence from the State of São Paulo”; and Alejandro Foxley and Dagmar Raczynski, “Vulnerable Groups in Recessionary Situations: The Case of Children and the Young in Chile,” in The Impact of World Recession on Children, edited by R. Jolly and G. A. Cornia (Oxford: Pergamon, 1984), 42–43 and 57–64. The deterioration of the health situation has been reported in subsequent unpublished papers by the same researchers. Macedo notes that the 1984 increase in infant mortality in São Paulo, coming after a long decline, may have been largely due to a measles epidemic.

7. “The Rise and Decline of Development Economics,” in my Essays in Trespassing (New York: Cambridge University Press, 1981); and “Linkages in Economic Development,” in my Rival Views of Market Society and Other Recent Essays (New York: Viking, 1986).

8. Simón Teitel and Francisco E. Thoumi, “From Import Substitution to Exports: The Manufacturing Exports Experience of Argentina and Brazil,” Economic Development and Cultural Change 34 (Apr. 1986):455–90. On Colombia as an example, see my article, “The Turn to Authoritarianism in Latin America and the Search for Its Economic Determinants,” in Essays in Trespassing, 115.

9. For an interesting case study, see Hugo Nochteff, Desindustrialización y retroceso tecnológico en Argentina, 1976–1982: la industria electrónica de consumo (Buenos Aires: GEL-FLACSO, 1984).

10. See Section VII of this article.

11. René Villareal, La contrarrevolución monetarista (Mexico City: Océano, 1984), 429–34.

12. Plan nacional de desarrollo industrial, 1979–1982 (Mexico City: Secretaría de Patrimonio y Fomento Industrial, 1979.

13. Antônio Barros de Castro, A Economia Brasileira em Marcha Forçada (Rio de Janeiro: Paz e Terra, 1985). The book was coauthored with Francisco Eduardo Pires de Souza, but I am drawing here on Castro's first chapter.

14. Albert Fishlow seems to me to miss this thrust of Castro's argument in his otherwise valuable critical comments. See Fishlow, A Tale of Two Presidents: The Political Economy of Brazilian Adjustment to the Oil Shocks, Working Papers in Economics (Berkeley: University of California, 1986), 49–51.

15. “Three Mistaken Theses regarding the Connection between Industrialization and Authoritarian Regimes,” in The New Authoritarianism in Latin America, edited by David Collier (Princeton: Princeton University Press, 1979).

16. Peter B. Evans, “State, Capital, and the Transformation of Dependence: The Brazilian Computer Case,” World Development 14 (July 1986):791–808; Emanuel Adler, “Ideological ‘Guerillas’ and the Quest for Technological Autonomy: Brazil's Domestic Computer Industry,” International Organization 40 (Summer 1986):673–705; Fábio Stefano Erber, “The Development of the ‘Electronics Complex’ and Government Policies in Brazil,” World Development 13 (Mar. 1985):293–310; and Simon Schwartzman, High Technology vs. Self-Reliance: Brazil Enters the Computer Age (Cambridge, Mass.: Center for International Studies, Massachusetts Institute of Technology, 1985).

17. For an argument along such lines, see Richard Nelson, “Uncertainty, Learning, and the Economics of Parallel Research and Development Efforts,” Review of Economics and Statistics 43 (Nov. 1961):351–64.

18. “International Investment and International Trade in the Product Cycle,” Quarterly Journal of Economics 80 (May 1966):190–207; see also the survey by R. D. Norton, “Industrial Policy and American Renewal,” Journal of Economic Literature 24 (Mar. 1986):1–40.

19. The words in quotes are from The Economic Development of Latin America and Its Principal Problems (New York: United Nations Economic Commission for Latin America, 1950). This document, which I have called the “ECLA manifesto,” was authored, but not signed, by Prebisch.

20. Evans, “State, Capital, and the Transformation of Dependence,” 796–800.

21. The term heterodox shock probably belongs to Francisco Lopes, whose book with this title was published shortly after the Brazilian reform move. See O Choque Heterodoxo: Combate à Inflação e Reforma Monetária (Rio de Janeiro: Campus, 1986). Other important contributors to the discussion are Pérsio Arida, Edmar Bacha, Luiz Carlos Bresser Pereira, and André Lara Resende in Brazil; and Adolfo Canitrot, Roberto Frenkel, and Daniel Heymann in Argentina.

22. A similar plan was applied in Israel in July 1985. See the article by Michael Bruno in Inflação Zero, edited by Pérsio Arida (Rio de Janeiro: Paz e Terra, 1986).

23. See “The Social and Political Matrix of Inflation: Elaborations on the Latin American Experience,” in Essays in Trespassing, 201–2.

24. The ideas of the preceding paragraph took shape during a conference on Latin American inflation held in Caracas in March 1986, primarily in a discussion of René Cortázar's paper on the problems of inflation that a new democratic Chile would have to face. The papers and discussions were published in Pensamiento Iberoamericano 9 (1986), the journal that sponsored the conference.

25. Albert O. Hirschman, “Out of Phase,” Encounter, special issue on Latin America (Sept. 1965):21–23.

26. See my “Notes on the Consolidation of Democracy in Latin America,” in Rival Views of Market Society.

27. See Albert O. Hirschman, “A Dissenter's Confession: Revisiting The Strategy of Economic Development,” in Pioneers in Development, edited by G. Meier and D. Seers (New York: Oxford University Press, 1984), 90–91.

28. Edmund Burke, Reflections on the Revolution in France (1790; reprint, Chicago: Regnery, 1955), 18. For some remarks criticizing current U.S. policy along such Burkean lines, see Alejandro Foxley, “El problema de la deuda externa visto desde América Latina,” Colección Estudios CIEPLAN 18 (Dec. 1985):59–61.

29. “A Proposal for Third World Debt Management,” 29 June 1986, U.S. Senate, Office of Senator Bill Bradley.

30. Guillermo O'Donnell asks a similar question, restricted to the Latin American debtors, in his article “Why Don't Our Countries Do the Obvious?” See CEPAL Review 27 (Dec. 1985):27–34.

31. William Darity, Jr., “Did the Commercial Banks Push Loans on the LDCs?” in World Debt Crisis: International Lending on Trial, edited by Michael Claudon (Cambridge, Mass: Ballinger, 1986), 199–225; Robert Devlin, The Structure and Performance of International Banking during the 1970s and Its Impact on the Crisis of Latin America, Kellogg Institute Working Paper no. 90 (Notre Dame, Ind.: University of Notre Dame, 1987); and Lance Taylor, “The Theory and Practice of Developing Country Debt: An Informal Guide for the Perplexed,” UN Journal of Development Planning 16 (1985):204–5.

32. S. C. Gwynne, “Adventures in the Loan Trade,” Harper's Magazine 267, no. 1600 (Sept. 1983):22–26.

33. Lance Taylor, “Theory and Practice of Developing Country Debt,” 212.

34. For example, see Ragnar Nurkse, Problems of Capital Formation in Underdeveloped Countries (Oxford: Blackwell, 1953):98–103.

35. Alejandro Foxley, “El problema de la deuda.”