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The Manufacturing Sector in Latin America and the New Economic Model

  • John Weeks
Part of the Institute of Latin American Studies Series book series (LASS)

Abstract

During the years from the end of the Second World War until the late 1970s, broad agreement emerged among Latin American governments with respect to the general orientation of economic policy and especially industrial policy. This broad agreement derived from two widely accepted propositions: 1) that domestic markets in Latin American countries operated inefficiently, both with regard to the allocation of resources among alternative uses and the distribution of the gains from economic growth; and 2) that the international trading system incorporated a bias against the major products exported by Latin American countries. These two propositions implied that state action was required to correct the failures of domestic markets and that governments needed to implement a broadly interventionist trade policy to transform the structure of exports and, by logical extension, domestic production. This combination of interventions in domestic markets and trade was encapsulated in the term ‘import substitution’.

Keywords

Real Wage Latin American Country Trade Liberalisation Capital Good Import Substitution 
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Copyright information

© Institute of Latin American Studies 1996

Authors and Affiliations

  • John Weeks

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