CEPAL Review - Volume 2001, Issue 75, 2001

This issue of CEPAL Review attests to the lasting influence of Raúl Prebisch’s ideas and policies on development in Latin America and the Third World in general. Prebisch’s thesis of unequal exchange and his conception of the world economy as organized in a Centre-Periphery relationship, however controversial, has earned him a recognized place in the history of development thought. Through ECLAC and later UNCTAD, Prebisch’s ideas affected governments and institutions throughout Latin America and around the world. The theoretical origins and evolution of Prebisch’s thought have received extensive treatment by economists and historians. Yet how Prebisch built his team at ECLAC and how he conveyed his theses at the regional and international levels have not been widely treated. The following interview given by Prebisch to his longtime assistant and friend, David Pollock, goes a long way toward filling that gap. In this conversation, conducted in 1985—a year before his death—Prebisch reviews some of the key moments in his life and that of ECLAC. The material covers the period from 1948 to 1963, from Prebisch’s incorporation into the organization up to the early sixties, when he left ECLAC to become the first director of the United Nations Conference on Trade and Development (UNCTAD).

The hundredth anniversary of the birth of Raúl Prebisch is an invaluable opportunity for us to take another look at the ideas of this great Latin American, one of the thinkers from the developing world who has had the strongest influence in world economic debates. His ideas have been the subject of heavy criticism, but much of this has been based on distorted versions of his thinking or of its practical application, rather than his true intellectual work. Taking his proposals out of their historical context has also been a frequent practice, even by some of his own followers. It should be remembered, in particular, that many of his proposals were made in the light of the collapse of the international trade and financial system in the 1930s, whose reconstruction had barely begun when he published his most influential works (Prebisch, 1949, 1951 and 1952).

Prebisch’s analytical contributions, which are particularly valuable and numerous in the fields of development theory and policy, have sometimes been called “pre-economics”. This term is used to denote those points of view which seem to be based on and justified by common sense -for example, the desirability of industrialization and of the application of protection in order to achieve this- but which are at variance with conclusions backed up by economic science.

There is something paradoxical about the rise and fall -maybe we could speak about a renewed rise- of Raul Prebisch’s thinking on what in the early years of his intellectual life would have been called primary producer economies. In parallel with what had happened with development economics at large, by the early 1960s or so his thinking was being progressively dismissed both in public and academic discourse.

Prebisch arrived at ecla for the first time in 1949, to write a report in which he set out his views on the main problems then facing the economic development of Latin America (Prebisch, 1949). As he had been hired as an outside consultant, he did not receive the support of other members of the institution in its preparation, nor did he have much time at his disposal, so that the report was a reflection of the ideas he already held prior to joining ECLA. As the content of that work made a great impact on academic and political circles in the region and came to be considered one of the basic pillars of structuralist thinking, it has often been wondered when and why Prebisch incorporated those ideas into his thinking.

When Raúl Prebisch died in 1986 his ideas were out of fashion in Ronald Reagan’s Washington and Latin American capitals, dismissed by most Western economists as passé -or even dangerously misguided in the new crusade for globalization. Only United Nations circles and a narrowing band of supporters insisted on his permanent contribution. It was as if his life had merely reflected the turbulence of the “short, violent century” (as Hobsbawn termed it); now that it was over, with the Cold War consigned to history, so too (it appeared) was Prebisch’s legacy.

In its most orthodox version, neoclassical economic theory has occupied a leading place in Latin American economic policy discussions in recent years. According to this doctrine, the market mechanisms -if allowed to operate in complete freedom- allocate production resources in the most efficient manner possible. Any interference by State policy with this allocation will lead to loss of efficiency and a reduction in the growth rate of the economy compared with the optimum level that could be obtained through the free play of the market forces. The virtues of the main body of this economic theory for interpreting reality have been proved over more than two centuries. But this does not justify overlooking the serious limitations affecting the operation of the market or the differences observed in that operation in the different stages of countries’ development. In the historical period in which they began their industrialization processes, the countries which are now developed applied policies of active State participation in combination with the free functioning of the market, and formulated theories which gave technical backing to those policies.

This article puts forward an interpretation of development as a process of accumulation of technological and social capabilities dependent upon taking advantage of successive and different windows of opportunity. These windows are determined from the core countries, through the technological revolutions which occur every half-century and the four phases of their deployment. The possibilities of progressing at each opportunity depend on the achievements made in the previous pha.se, on identifying the nature of the next one, understanding the techno-economic paradigm of the revolution in question, and being able to design and negotiate, in each case, a positive-sum strategy, taking account of the interests of the most powerful firms. On the basis of this interpretation, a summary review is made of the successive development strategies applied since the 1950s. The author then outlines the likely nature of the next phase and, applying the principles of the current techno-economic paradigm, explores some aspects of the institutional changes to be carried out.

This article seeks to analyse some mesoeconomic and microeconomic aspects related with productivity and international competitiveness in the context of the new Latin American economic model. These aspects go a long way towards explaining why those variables have not evolved satisfactorily in the different countries and sectors of activity, and why a strictly macroeconomic reading prevents a proper understanding of the changes which are taking place in society at the economic, technological and institutional levels, as well as impeding the identification of a public policy agenda which could help improve the implications of the process of change which is under way.

The influence of economic growth on numerous aspects of the economy and society is a frequently recurring topic among economists, especially at present, when profound economic and social transformations are under way in most of the countries of the region, while simultaneously there is an awareness that there are great shortcomings in terms of income distribution and that a high percentage of the population is in a state of poverty. A strong desire therefore exists to determine the capacity of economic growth to cope with those problems. This article begins by placing the issue in a conceptual and Latin American context and then going on to analyse it in the light of abundant statistical evidence. In particular, the assertion made in a recent study that “growth is good for the poor” is subjected to analysis and testing in the Latin American context.

This article examines the effects that some recent changes Director of the Research Programme on Integration, Poverty and Social Exclusion, *e social Structure of the early-developing Latin American Catholic University of Uruguay kaztman @ adinet. com. uy These changes mainly concern the labour markets and some countries have had on the social isolation of the urban poor. opportunity structures which are the source for the formation of human resources and social capital. It is argued here that, as a result of these changes, the links of the urban poor with the labour market have been weakened and their areas for informal socialization with persons of other social classes have been made smaller, thus leading to their progressive isolation. The article also analyses the reduction of opportunities for accumulating individual and collective social capital and civic capital and examines the particular characteristics assumed by the processes of residential segregation in the big cities of the countries studied.

This article analyses labour market trends in Latin America and the Caribbean during the 1990s and suggests that employment should form the basis of a social policy strategy for the region. It begins with an analysis of the expectations generated with respect to the labour market by the reform process carried out in the region, after which it presents an overview of what has actually happened in terms of rates of participation, generation of employment, unemployment and wages, also suggesting some reasons why the reality was below expectations. It then goes on to examine a new hypothesis on the different performances of the labour markets in the more northerly countries of the region and those of the south. Finally, on the basis of data which bear out that hypothesis, it formulates policy recommendations on specific measures for both areas and describes policies that could be applicable to the region as a whole.

Transgenic products have a number of contradictory aspects. On the one hand, the genetic manipulation of plants makes it possible to develop both products which contain insecticidal toxins and can thus permit a reduction in the use of pesticides that may harm the environment, as well as foodstuffs with contents of vitamins and proteins that can improve the social indicators of the developing countries. On the other hand, however, questions have been raised about the possible effects of transgenic products on biosafety and biodiversity and the potential danger involved in consuming them, and the various actors participating in the debate on these products have widely different positions on their commercialization. The process of negotiation and subsequent approval of the Biosafety Protocol and the controversies over acceptance of the safety first principle or over the rules of the World Trade Organization (WTO) for restricting the production and commercialization of transgenics have shown up the great divergences that exist among governments.

This article analyses the impact of MERCOSUR on the pharmaceutical sector. It concludes, among other things, that the sector suffered strong impacts, both static and dynamic, as a result of the integration process. From the static point of view, it may be observed that integration has given rise to a marked increase in intrazonal trade, which reflects the existence of a substantial trade creation process in MERCOSUR. From the dynamic point of view, the outstanding aspect is the increasing interest in regaining a place in the markets of Argentina and Brazil shown by transnational corporations since the integration process. This process, together with the changes in the regulations on medical patents, has given rise to big changes in the strategies and positions of laboratories of domestic origin.