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In 1947, after the creation of the Economic Commission of Latin American Countries (ECLA), structuralist theorists began to work on developing an appropriate development model (different from the global capitalist economic policy model) to lift Latin America out of underdevelopment. In 1940, Brazil and other countries had already implemented ISI policies to increase domestic exports and reduce imports, with the goal of increasing manufactured goods and securing domestic markets. The characteristics of ISI policies were consistent with the goal of structuralist theorists, which was to challenge the claims of Eurocentric theorists that a free trade system based on liberal economic policies would only increase the economic level of countries. Ultimately, this led structuralist theorists to adopt ISI as a key policy in their development model.
Structuralist theorists stressed the need for state intervention in the national economy to protect its “infant industries” from efficient foreign companies. This would ensure domestic market security and increase manufactured goods, but later they saw some obstacles to continued economic growth, such as the fact that the production process remained complex over time due to the lack of entry of efficient machines and technological equipment. Later people experienced some negative effects of ISI and were unwilling to make minor changes to it (such as implementing export-oriented industrialization policies).
However, it is important to note that structuralist development policies are based on the historical experience of Latin American countries in the mid-20th century. The Economic Commission for Latin American Countries (ECLA), established in 1947, is considered crucial in structuralist discourse because the rhetoric behind the establishment of ECLA is reflected in its economic policies opposing the global free trade system and implementing development policies such as import substitution industrialization (ISI) and land reform.
question: Why was import substitution industrialization a key policy for structuralist theorists? (From Chapter 3, Question 3)
Submitted by: Shekhar KC (08)
Submitted to: Prof. Dr. Mahesh Banskota
Date: February 12, 2012
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