SIXTY YEARS Of ECLAC

SIXTY YEARS Of ECLAC: STRUCTURALISM AND NEO-STRUCTURALILSM

R. Bielschowsky

CEPAL Review 97, (April 2009)

 A Summary

In a Nutshell

This is a review of the thought coming out of CEPAL since its inception in 1948. The main point is that there has been a long continuity of ideas all centred around structuralist interpretations of development. Broadly though the period from 1950-1990 was the structuralist period.

  • The 1950s thought was focussed on industrialization.
  • The 1960s was concerned with industrial deepening as well as the reduction of inequality.
  • The 1970s saw focus shift somewhat to the reorientation of development styles.
  • The 1980s was a period of hiatus when ECLAC sought to concentrate more on macroeconomic issues of stability in response to the crisis that pervaded the region.

Since 1990 however, there has been a reformulation of the structuralist paradigm which has earned itself the moniker “neo-structuralism”. In essence this preserves the two main objectives of developing the productive to engage with the international economy whilst building a fairer and more equal society. However, the thinking was updated to encompass the realities of the international trading environment i.e. globalisation had progressed to such an extent that a wholly inward looking development model was no longer feasible. However, it also preserved alternative strategies and policies that were at odds with the neoliberal agenda. The programme was hetoerdox on macroeconomic issues, development oriented in terms of resource allocation and state intervention, and universalist in the social sphere.

The Structuralist Stage 1948-1990

  • The central countries were the producers of industrialised goods whereas as the periphery was characterised by production of primary products, a lack of productive diversity, varied levels of sector productivity with an unlimted supply of labour at subsitence wage levels and an institutional setting poorly oriented toward investment and technological progress.
  • Industrialisation which had been progressing spontaneously in the 30s and during WWII, progressed without the support of devlopment policy meaning an inability to close the widening gap between the centre and the periphery.
  • Overcoming the peripheral status required investment in multiple sectors, introducing technical progress and income redistribution. This project was critical due to the basic asymmetry between world demand for primary products, and the burgeoning peripheral demand for industrial products that would mean structural deficits in the balance of payments with negative repercussions for inflation and growth. This was particularly the case given the decline in the terms of trade in the post war period.
  • In the 60s it was recongised that the industrialization that had occurred was not eradicating poverty etc. and so institutional reform, including land reform, in order to link institutions with development.
  • The 70s carried forward these analyses but industrial deepening was now thought to be dependent on export promotion (as in the NICs) together wit expansion of the domestic market. This was put forward as a way to reduce external vulnerability as well as an alternative to excessive foreign borrowing. Additionally the message was pro income redistribution meaning the restoration of democracy in the region.
  • The 80s shifted toward renegotiation of debt to allow adjustment with growth. In general ideas were heterodox. There was a general rejection of neoliberalism in favour of what would become known as neo-structuralism.

The Neo-Structuralist State 1990-2008

  • A reconsideration of neoliberalism was urged, meaning new trade policies, control of capital flows and new social policies. The thinking was not anti neo-liberal as such as CEPAL had to build bridges with those economies that had undertaken neoliberal reforms. Particularly, whilst state participation in the economy needed to be reviewed, CEPAL continued to advocate a key role for the state in the socio-economic development agenda.
  • Trade openness should be selective and strengthened with a high and stable exchange rate to create genuine competitiveness i.e. that based on productive capacity and innovation with human capital development, rather than that based on wage advantages, or exchange rates.

New Developments

a)      Reform evaluation: based on the performance of the 1990s, the neoliberal reforms were evaluated. On the light side there was inflation control, reduction of deficits, increased fdi, export diversification. On the dark side there was volatile growth, continued crisis, unstable flows of capital, increased poverty and inequality.

b)      A Global Agenda: new ideas about how to relate to a globalised world.

c)      Countercyclical macro policies: instability of growth linked to financial capital volatility. Macroeconomic policy should not be pro-cyclical and it should target the real economy.

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3 Comments

  1. Posted April 3, 2012 at 11:59 am | Permalink | Reply

    Great summary. I have just read the article and was trying to find if there were translations (english or portuguese), to see if I missed something due to my awful spanish.

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