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Neo-structuralism

Introduction

Ricardo Ffrench-Davis1 and Miguel Torres2 1 University of Chile, Santiago, Chile 2 ECLAC, Santiago, Chile

During the 1980s, a new approach to economic development began to take shape in Latin America. Its tenets expanded beyond those espoused by ECLAC’s structuralism. It deepened the analysis of structural heterogeneity, following a policyoriented approach, focusing on the role of macroeconomic and productive development policies, capital formation, and innovation, to achieve growth with equity within a context characterized by the rapid spread of neoliberalism and globalization, and more specifically financial globalization. In the 1980s this approach became known as neo-structuralism as it stressed the policy implications for growth and inclusion, in economies characterized by a marked structural heterogeneity (Sunkel 1993).1 During the 1980s growth with inclusion proved to be an elusive goal for Latin America. The region witnessed a severe recession, the so-called Lost Decade, as a result of the huge foreign indebtedness boom that took place in the 1970s. This signaled the end of the vigorous 5.6% average GDP growth characterizing the previous three decades (1950–1980).

Abstract

Neo-structuralism is a heterodox approach to economic development. It emerged in Latin America, in the 1980s, in the context of the Debt Crisis, the spread of neoliberalism and financial globalization, as an updated version of the ECLAC’s Structuralist approach to development. Neo-structuralism deepened the analysis on structural heterogeneity, and its implications for the design of macroeconomic and productive development policies, seeking to promote an inclusive development path. Keywords

Neo-structuralism · Heterodox approach · Structural heterogeneity · Inclusive growth · Development JEL Classification

B5 · O11 · O12 · O54

1

This collection of essays of several authors was the result of a research project led by Osvaldo Sunkel in the late 1980s. A Spanish version was published in 1991.

© The Author(s), under exclusive license to Springer Nature Limited 2021 Palgrave Macmillan (ed.), The New Palgrave Dictionary of Economics, https://doi.org/10.1057/978-1-349-95121-5_3122-1

2

The recession was confronted with a monetarist approach, subsequently renamed in the economic literature, the Washington Consensus, and later on, termed neoliberalism. In the meantime, trade globalization was accompanied by an accelerating process of transnationalization of capital with flows of foreign direct investment, then followed by the emergence of huge international financial flows (ECLAC 1995). A combination of other factors converged towards a reappraisal of structuralism and set the stage for the emergence of neo-structuralism. First, several structuralist authors (Prebisch 1961, 1964, and others such as Furtado, Pinto, Ahumada, and Noyola Vasquez) had long warned of the growing exhaustion of import-substituting industrialization and of the anti-export bias that it generated. Second, only a reduced systemic competit