From old to new developmentalism in Latin America

Abstract

From the 1930s or, at least, from the 1950s, Latin American countries adopted a successful national development strategy, namely, national developmentalism, based on development economics and Latin-American structuralist economic theory. In the late 1980s, after ten years of foreign debt crisis combined with high rates of inflation, this strategy required redefinition. It was thus replaced by the Washington Consensus or conventional orthodoxy – an imported strategy based on the deregulation of markets, growth with foreign savings, high interest rates and overvalued exchange rates. Ten years later, after the 1994 Mexican, the 1998 Brazilian, and the 2001 Argentinean financial crises, the failure of this strategy became evident from the repeated balance of payment crises and the failure to improve living standards.