Reduced Inequalities
Rural society: Its integration and disintegration
The various sectors of rural society have seen sweeping changes during the second half of the twentieth century. These changes have included agrarian reforms (and counter-reforms); the modernization of technology and society; demographic pressure; an increase in temporary work at the expense of permanent employment; migrations; the replacement of authoritarian regimes by democracies (and vice versa); decentralization processes; greater access to mass media, and stronger influence by such media.
European integration and Latin American trade
Difficult as it is to forecast the magnitude of the impact of the Single European Market (SEM) on the rest of the world and on the European Community (EC) itself, the predominant feeling is one of concern, especially in the developing countries. This article seeks to determine how the completion of the SEM may affect Latin America’s exports to the Community, using basically a short- and medium-term analytical approach. This is because a series of elements make it possible to predict with some confidence that the deepening of Community integration will take more time than originally foreseen.
Productivity, growth and industrial exports in Brazil
Because productivity is a determinant of comparative advantages over the medium and long terms, the relationship between productivity, industrial growth and exports of manufactures is coming under increasing scrutiny in studies on development and trade policy. This article analyses that relationship in Brazil, where the rise in industrial productivity has been slowing since the mid-1970s.
El Salvador: Industrial policy, business attitudes and future prospects
This article analyses the interaction between changes in the domestic and external economic environments, industrial policies and business attitudes in El Salvador. The 1960s were a time of rapid import substitution-based industrialization, which was spurred forward by the expansion of the domestic market through the creation of the Central American Common Market (CACM). During this period, institutions devoted to the promotion and support of CACM-oriented industrial activities were founded and developed, and policies on trade, tariffs, the exchange rate and other matters were implemented that contributed to the import-substitution process. During the 1970s, the style of industrial development which had been adopted by the country began to exhibit a number of structural problems.
Regionalization processes: Past crises and current options
The scientific and technological revolution currently under way makes it necessary for us to devise new forms of regions which get away from the old restrictions of size and contiguity: structural complexity is now the crucial factor. The generation of regional structures at the national and supranational level demands flexibility, in view of the rapid changes taking place in the regional environment, the globalization of the economies, and the need for the regions to be shaped in a democratic manner. This article proposes a new classification which draws a distinction between pivotal regions (corresponding to the sm allest units in the current politico-adm inistrative form of division which have a sufficient level of complexity), associative regions (formed as a result of voluntary political union between one or more pivotal regions and one or more adjoining politico-adm inistrative units), and virtual regions (formed as a result of tacit agreements between pivotal regions or associative regions which are not contiguous).
New strategies of transnational corporations in Argentina
Old and new trade policies
Latin American development strategies have historically been inextricably linked with trade theory and policy. The author’s main argument is that the old infant industry and the new strategic trade arguments are fundamentally similar. Among their similarities is the justification of selective protection of certain economic sectors. Among their differences, the infant industry argument justifies temporary protection, while the argument in favour of strategic protection of certain industries justifies their protection on an indefinite basis.
The social sciences without planning or revolution?
From the late 1950s to the mid-1970s, Latin American social scientists saw themselves as important agents in the processes of change and modernization unfolding in the region’s societies. Inspired by the exuberance of the sweeping changes occurring in the modern-day world, many social scientists felt they were the best equipped not only to interpret the major political and socioeconomic processes taking place in the region, but also to deduce from those interpretations the policy directions in which Latin America’s national societies should plot their future course. The link between the generation of knowledge and active intervention in the real world -the link of organicity- was, for many, the chief element that legitimized the practice of the social sciences in the region. Based on extreme, highly illuminist self-images, such as those associated with the central-government planner or the revolutionary intellectual, many social scientists saw themselves as true links, or bridges, between science and power, or between the development of knowledge and the rationalization of the social order.
Prebisch and the relation between agriculture and industry
This article focuses on one of the lesser-known facets of the vast and fruitful work of Raúl Prebisch in the field of Latin American economics: i.e,, the work he did in the early 1950s on training in agricultural development plans and projects, at a time when this activity had barely begun in the countries of the region, at least on an organic and systematic basis.
Present and future integration in Central America
Has the idea of integration in Central America been abandoned for the 1990s, while strategies for economic “openness” and other forms of entry into world markets are adopted? Are there any other ways? According to the author, there are grounds for moderate optimism as regards reinforcing Central American integration in this decade.
Social images of technological change
In 1989 and 1990, the ECLAC Social Development Division carried out a study in five Latin American countries -Argentina, Bolivia, Brazil, Chile and Ecuador- on the social images of modernization and technological change. Six companies were selected in each country, taking care to include among them State enterprises, domestically-owned private companies and foreign-owned private companies. Care was also taken to ensure that the companies represented a range of economic activities: manufacturing, mining, agriculture, services and transport. In each company, interviews were held with the entrepreneurial side, an engineer or technician, and union leaders. As a result, it was possible to identify some items and expects which may he of importance.
Scenarios for the new era
This article aims to present some salient aspects of the reflections of the distinguished thinker José Medina Echavarrfa on the problems of peace, the cold war and the prospects for détente.
Latin America and the internationalization of the world economy
This article questions the generally accepted theory that the international economy is being polarized into three regional nuclei: the United States, the European Economic Community, and Japan. In the light of trade and financial trends In the 1980s, it is maintained that there is no evidence of the formation of three trade blocs. Economic Interdependence, as measured by the relation between Intra-regional trade and the gross domestic product, shows that the EEC is the only one of the three centres which could conceivably fulfil the conditions for assuming the creation of a bloc. In global terms, the growth in trade in goods in each one of these groups during the 1980s favoured trade with the rest of the world more than intra-regional trade.
Debt conversion and territorial change
The external debt of Chile originated in various economic and social sectors and its territorial distribution was highly concentrated. The conversion of that external debt has involved a sectoral and regional reassignment of resources which has been reflected in marked territorial change. There is no direct correspondence between the economic and social geography of the debt on the one hand and that of the conversion process on the other.
In memory of Fernando Fajnzylber: Gert Rosenthal, Executive Secretary, ECLAC.
A few days before this issue of CEPAL Review went to press, our institution was shaken by an unexpected and tragic event: a fulminating heart attack had taken away from us one of the leading figures in the Secretariat. For those of us who had the privilege of knowing Fernando Fajnzylber personally and working with him, the sense of personal loss was overwhelming, while for the institution the loss was beyond measure.
Decentralization and equity
ECLAC has slaked its all on the idée-force of changing production patterns with equity and sustainability. It has done well to take this decision, and it would be desirable for all the “players” (at least those in the institution itself) to unite their efforts to turn a test tube utopia into an effective and efficient social practice.
International industrial linkages and export development: The case of Chile
This article analyses the role played by international Industrial linkages in the export development of Chile. International industrial linkages or cooperation are taken here to cover a wide range of international entrepreneurial activities other than majority equity contributions.
Reconciling subregional and hemispheric integration
This article analyses the type of subregional integration efforts which could at the same time help to further the aims of increasing competitiveness, taking advantage of the opportunities created by the Enterprise for the Americas, and progressing towards an open world economy where multilateral rules rather than the use of naked power prevail. In particular, it is argued that subregional integration can, on the one hand, serve as a precedent for possible subsequent non-discriminatory agreements, while on the other hand it can create favourable conditions for growth based on greater efficiency and competitiveness, as well as promoting domestic and foreign investment.
The ideas of Prebisch
This paper reviews the evolution of Prebisch’s thought from his early focus on the centre-periphery dynamics to his latest writings on the crisis in peripheral capitalism. An analysis of some of Prebisch’s fundamental ideas follows. Evidence is provided which supports Prebisch’s core ideas, as well as bearing out the observation that he changed with the limes, though probably not enough. The author argues that while Prebisch’s ideas can help restore some balance to the current debates regarding the merits of free markets, his analysis of what the State is capable of doing was insufficient.
The role of the State in technological progress
The starting point for this article is the link between knowledge and the production of goods and services. After an analysis of the characteristics and dynamics of that link, the role of the State in the development of particular lines of technological research is examined.
Development pattern and environment in Brazil
After describing the present situation of ecological transition, which is one of the factors in the economic, institutional and environmental crisis of present-day society, the author tries to identify the main features of the industrial and agricultural expansion of Brazil, highlighting the socio-environmental impact of the style of development pursued by that country since the war. On the basis of this diagnostic study, and especially of the technical background material prepared for (he drafting of the National Report presented by Brazil at the United Nations Conference on Environment and Development (UNCED) (Rio de Janeiro, June 1992), the author describes the main requirements and components of a sustainable industrial and agricultural development strategy which will permit both proper management of the country’s natural resource endowment and the maintenance of the environmental quality of the Brazilian ecosystem, while at the same time ensuring satisfaction of the basic needs of present and future generations.
Privatizing and rolling back the Latin American State
The author holds that the economic benefits from rolling back the State arc likely to be disappointing –partly because of adverse conjunctural factors- while the rolling back will be Impermanent. For economic and political reasons, the centre of gravity of economic policy will remain a mixed economy with a large interventionist public sector.
International competitiveness and specialization
This paper takes as its starting point the idea that the overall benefits of competition are largely determined by dynamic changes in market patterns. The opportunities in trade depend obviously on how a country can serve the market and more obviously on how competitive it is. Attention will therefore be centered mainly on the interaction between competitiveness and changes in the market structure. This phenomenon is abstrapted from conventional factors to explain trade patterns. The approach provides a descriptive and synthetic framework to identify and evaluate recent shifts in the patterns of competition and specialization of developed, developing and centrally planned economies in the OECD market.
Nature and selectiveness of social policy
It was in the 1980s that proposals for the targeting or focusing of social expenditure on the poor gained ground. These proposals contrast universality and selectivity in terms of a dilemma in a disjunctive relationship; targeting or universal policies, or targeting versus universal policies.
The Latin American Labour Market, 1950-1990
This article contrasts the behaviour of the labour market in the region between 1950 and 1980 with that registered after the onset of the crisis of the 1980s,
The history of the social stratification of Latin America
Sociology’s contribution to our understanding of the Latin American development process has been closely linked to studies on the social structure and stratification of the region and to analyses and interpretations of the various social groups’ characters and behaviour.
Latin America’s return to the private international capital market
A necessary condilion in order for Latin America to attain acceptable economic growth is the reduction of the negative resource transfer abroad. In addition to the reduction of the existing external debt burden, a substantial volume of fresh external financing is needed, but commercial bank loans will continue to be limited and official lenders can hardly satisfy all the region’s needs.
Commodity exports and Latin American development
In the past, international cooperation in the area of commodities has been concentrated on measures to stabilize world prices through agreements between producers and consumers. At present, the questions of the level and stability of world prices continue to be just as important as ever, but there are few possibilities of resuming international cooperation of this type. Furthermore, the level of final prices is only one of the problems related with production costs (which in turn depend on the technologies applied) and other aspects regarding the added value retained in the producer countries.
The Pacific Basin and Latin America
This article analyses three aspects of the economic relations between South-east Asia and Latin America: i) the true extent of the headway made by four newly industrializing Asian economies (NIEs) (the Republic of Korea, Hong Kong, Taiwan and Singapore) and four ASEAN countries (Indonesia, the Philippines, Malaysia and Thailand) in the new Asian economic order; ii) their economic relations -particularly those of the Republic of Korea and Taiwan- with Latin America; and iii) the implications of the Pacific Basin’s new economic profilé in terms of the effort to change production patterns with social equity in Latin America.
Flying geese or sitting ducks? Transnationals and industry in developing countries
The constitution of a new international industrial order dominated by a core of large transnational corporations generally makes life more difficult for the great majority of developing countries because, since most are not in a position to compete effectively, they face still greater marginalization.
Reorientation of Central American integration
The Central American countries promoted a vigorous integration process which gave rise to valuable experience. The increased trade furthered industrialization and stimulated investment, modernization of production and economic growth. However, the exhaustion of the past growth model based on agricultural exports and the persistence of the system of over-protection of substitution industry, which was continued longer than was necessary, led to a profound crisis in the economies and in the integration programme itself.
Income distribution and poverty through crisis and adjustment
This article analyses the costs in terms of income distribution of the crisis and adjustments of the 1980s, as well as the effects of the subsequent recovery and resumption of sustained growth patterns. This analysis is based on comparable pairs of estimates of income distribution and poverty prepared by ECLAC for the ten largest and predominantly urban countries of the region.
Social investment funds in Latin America
This article deals with various aspects relating to social investment funds, especially their financing, the sustainability of the resulting projects, and the role of funds vis-à-vis ministries and the political authorities. The links between such funds and non-governmental organizations and the role played by external cooperation are also examined. Social investment funds were set up in order to relieve poverty and soften the effects of the adjustment policies of the 1980s. They have proved to be effective means of channeling flows of external finance and ensuring that they result in concrete projects. The main strategy used for transferring resources to the poor has been the creation of temporary jobs in connection with the execution of projects in the areas of social and economic infrastructure, as well as projects designed to satisfy basic needs.
New directions for public management
Consideration of the roles to be played by the public and private sectors in a country’s developm ent strategy naturally leads to an analysis of the public sector’s main orientations regarding both its own actions and the establishm ent of a regulatory framework for the performance of certain types of activities. These orientations are expressed through public policies, i.e., the courses of action followed by the public sector in pursuance of a more or less well-defined objective.
The petrochemical and machine tool industries: Business strategies
Recent structural reforms in Argentina, Brazil and Mexico have set up entirely new conditions for competition. The biggest changes are those affecting trade and industrial policy and the system of public-private production relations. In this new environment, manufacturing firms receive less protection and less State assistance and have less leeway in which to devise price differentiation strategies for the domestic market.
Agroindustry and changing production patterns in small-scale agriculture
The extension of technological progress to sm all-scale agricultural producers is an unavoidable issue in any strategy aimed at changing production patterns with equity in the rural environment. With a few exceptions, analysis of the achievements of public policies in this area reveals that they have fallen far short of their goals even in periods when the restrictions on public spending were nothing like as severe as those faced by the economies of the region today.
Labour market flexibility: What does it really mean?
The 1980s witnessed the emergence of the concept “labour market flexibility” (LMF) in industrialized countries as well as in some developing countries. As a consequence of poor economic performance in the early 1980s, the view that the way in which labour markets operated constituted a significant obstacle to economic growth gained support at the level of policy makers, employers in general and, not least, in part of the academic establishment.
The impact of exchange-rate and trade policy on export performance in the 1980s
The region’s changeover from a shortage of external funds to a relatively plentiful supply of such resources at a time when an effort is being made to liberalize its trade and financial sectors raises a number of questions regarding the effect of this phenomenon on the growth of Latin American exports. In an effort to answer these questions, the author examines a number of different attempts to arrive at a quantitative evaluation of the relationship between exchange and trade policies and the region’s export performance in the 1980s.
Fiscal adjustment and social spending
The external and internal imbalances that appeared in the early 1980s, together with the adjustment and stabilization policies applied throughout that decade in Latin America, juxtaposed the need to reduce the fiscal deficit with the need to make up for the loss of income sustained by the most, vulnerable groups of the population as a consequence of the external debt crisis. This article examines patterns of social expenditure in a number of countries in the region, in an effort to determine how these policies affected the level and composition of social spending and, hence, influenced social policy.
The political economy of protection after the Uruguay round
This paper discusses the interplay between domestic policies and foreign interests under the institutional framework to be administered by’ the World Trade Organization (WTO). It presents a theoretical model that treats the WTO as the forum for an overlapping game which provides the rules for the maintenance of an open trading system among economies that are periodically submitted to protectionist pressures. Overlapping games occur when a particular player is engaged at the same time in games against distinct opponents, and when the strategy pursued in one game limits strategies available in the other.
Water management and river basins in Latin America
The sustainability of development remains an academic concept unless it is linked to clear objectives that must be attained in given territories and to the management processes needed to achieve this. Management of the natural resources located within the area of a river basin is a valuable option for guiding and coordinating processes of management for development in the light of environmental variables. In order to turn environmental policies into concrete actions it is necessary to have suitable management bodies, which are normally very complex.
Indicators of fiscal policy: Design and applications for Chile
Latin America’s economics are prone to continual shocks, of both external and internal origin, giving rise to a marked variability in their growth rates. In order to reduce this volatility, it is necessary therefore to establish stabilization mechanisms, including in particular the instruments of fiscal policy. The economies’ increasing variability is prompting the development of fiscal norms that in-corporate anti-cyclical features. Such rules arc based on the setting of medium-term public spending goals that are consistent with the economy’s growth trend and level of public debt but are independent of the cyclical component of the level of activity. In such a system, tax revenues would perform the traditional function of stabilizers of economic fluctuations.
Some lessons of the Argentine privatization process
The reduction of the role of the State in the Latin American economies has become one of the central topics in the debate on the process of the economic and social restructuring of the region. Because of the magnitude and rapidity of its achievements, the programme carried out in Argentina in the early 1990s is seen as a paradigm which gives rise to reflection and offers a broad range of lessons for those countries seeking to maximize the social benefits that could be obtained from the privatization of public enterprises. From this point of view, the present article highlights some of the main macroeconomic repercussions of the privatization process (in the fiscal sphere, the external sector, the structure of relative prices, and investment), together with its effects on market formation and the strategies of the main business conglomerates of the country, the forms of public regulation of the privatized areas, and the limitations and shortcomings observed.
Extraordinary comparative advantage and long-run growth: The case of Ecuador
The objective of this article is to describe how the transformation of the trade and industrialization regime is taking place in Ecuador and what are the systemic factors which condition the realization of this transformation. A long-run perspective of economic policy and growth in Ecuador (considering the whole of the twentieth century) reveals that growth has been relatively fast compared to other countries in the region, with exports as the driving force of that growth. The disturbing fact is that these exports have been dominated by a few booming export products at different points in time, and that growth has therefore shown a distinct stop-go nature. Corporate behaviour would seem to be characterized by rent-seeking, as natural economic rents have been present at several moments in history.
Port privatization, labour reform and social equity
Governments of the ECLAC region have promulgated labour regimes which support port workers’ desire for stable wages and job security, isolate them from market signals and create cargo-handling monopolies. The advent of a global economy, the introduction of export-led growth policies, the acquisition of advanced cargo-handling equipment and electronic information systems, and the participation of private interests in the offer of port services permit enterprises to compare, purchase and employ raw materials, labour and service inputs worldwide, and have transformed the traditional concept of competition between comparable finished goods into input-to-final product competition.
Democracy and development
First of all, I should like to say how grateful I am for the kindness with which I have been received everywhere I have been in Chile. Nevertheless, ECLAC has a very special meaning for me. I am perhaps a little conservative in my habits, although not so much in my way of thinking, as Enzo Faletto seems to think …
Can growth and equity go hand in hand?
This article presents the issue in the context of the theoretical and empirical debate, started by Kuznets, on the possibility of achieving growth with equity. The conclusion is that there is no inevitable conflict between these two goals, provided that economic policy promotes the areas of complementarity between growth and equity. It therefore rejects the approaches which assume that there is an insoluble conflict between these objectives, such as the “trickle-down” theory (which stoically accepts that such a conflict exists and proposes that those affected should wait as long as is necessary for their situation to improve) and the contrasting “parallel” approach (which suggests that growth should be sacrificed in favour of equity, with social policy being entrusted with the correction of the worst distributive effects of economic policy).
Virtues and limitations of census maps for identifying critical deficiencies
Critical deficiency maps, conceived as objective, uniformly applicable technical tools that could be employed to make social expenditure more efficient and effective, constitute the most ambitious and successful method devised to date for using census data for social planning in Latin America and the Caribbean. Nevertheless, while their importance and potential as a policy tool have gained increasing recognition, questions have arisen concerning their virtues and limitations and on how they could be made to serve the need for more complex social information or to reveal the changing forms that poverty assumes.
The United Nations and ECLAC at the half-century mark of the Organization
Fifty years ago, a broad and representative group of countries tried for the second time in this century to set up a world organization to try to banish the scourge of war and promote international co-operation. The first attempt -the League of Nations- had foundered in the stormy waters that were to lead to the greatest cataclysm in world history. The second effort -the United Nations- has so far resisted different but equally severe trials, notably the so-called “Cold War”.
Economic relations between Latin America and the high-performing Asian developing economies
This study examines “South-South” economic relations in the context of regionalism. It covers three Latin American countries and eight high-performing Asian developing economics. Although the level of trade and investment between these two groups is currently very low, trade is growing fast and there are indications that the potential for continued growth exists. Although regionalism is advancing in both these parts of the world, it has so far not affected the ties between the two groups of countries, and in fact inter-regional trade growth has recently been exceeding intra-regional growth in the case of most of the countries covered by this study. In the short term, it would appear that economic relations between these Latin American and Asian countries will depend largely on whether a “second generation” of reforms in Latin America will sustain the gains from prior reforms.