Phases of Economic Development in Latin America

I.

Pre-colonialism and Colonialism

Pre-1500

Pre-colonialism

Indigenous empires—

Mayas, Aztecas and Incas

1500-1700

Trade Monopoly

Mineral extraction

Encomienda

Sugar export (Brazil)

(Policies: immigration control, royal decrees, mita, “New Laws”, slave trade in Brazil)

1700-1810

Trade Diversification

Mineral extraction declines (not Brazil)

Rise of creole owned haciendas

Export oriented growth (agric)

(Policies: British-controlled slave trade, debt peonage, Decree of Free Trade

II. Political Independence

1810-1824

Wars of Independence

Economic instability

Political instability

1825-1870

Neocolonialism

Public indebtedness

National fragmentation

Raw material exports (agric and min.)

British dominance of trade and finance

More trade with North Atlantic

Imports of textiles and manufactures

(Policies: Slavery continues in Cuba and Brazil, liberal policies of free trade)

1870-1914

Golden Years

International integration
Growth through exports

Manufactured imports

Period of prosperity

Political centralization

Oligarchic rule

(Policies: liberalism, proimmigration, infrastructure development, import revenues)

III. Transition to ISI

1915-1930s

Stalled Growth and International Shocks

Emergence of US hegemony

Collapse of the world economy (1929)

Co-optative Democracy

(Policies: Continued liberalism)

IV.

ISI

1930s-1960s

Import-Substitution Industrialization

Expansion of industrialization (easy ISI to deepening of ISI)

Moderate to high growth

Dictatorship and democracy

Rise (and fall) of populism

(Policies: protectionism, multiple exchange rates, overvaluation, subsidies, common markets, state activism, increased foreign investment, populist social policies)

V.

Decline of ISI and Rise of Neo-liberalism

1960s-1980s

Stagnation in ISI

Slowed growth after 1960s

Increased unemployment

Indebted industrialization

Turn to exported oriented growth

Bureaucratic authoritarian rule

(Policies: Economic stabilization, labor repression, liberalization (Chile,Arg), more ISI through alliances with MNCs (Bra, Mex)

1980s-present

Debt and Democracy

Economic crisis

Export oriented growth

Democratization

Decline in inflation

Portfolio investment (hot money)

Low to moderate growth

Continuing inequality

(Policies: neoliberal reform: structural adjustment, free trade, reduced state role, privatization, stabilization)


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This page last modified October 5, 2001