Industry, Innovation and Infrastructure

The Latin American railways faced serious competition from another means of land transport for the first time in the 1930s, and one of the results of this was a significant loss of income from the transport of products of relatively high unit value. This income had covered their fixed costs in terms of management and infrastructure. The financial difficulties of the railway companies drove them to seek aid from the State sector, but in subsequent decades governments gradually lost interest in them because of their financial deficits and dwindling importance in the national economy. The services with the least volumes of freight and passengers were steadily eliminated, and rail services had already become quite sparse when governments decided to return the railways to the private sector as from the late 1970s. The growing tendency of railways to devote themselves to the transport of bulk cargo between a limited number of points means that in corridors without navigable waterways almost the only competition comes from heavy trucks. The subsidies for the transport of goods by such trucks have been reduced, but not impeded, by the granting of highway management concessions. Within a few years it will be technologically feasible to charge heavy trucks tolls that really reflect both the external costs of their operation and those deriving from the wear and tear on the infrastructure. In the meantime, rail and road transport could be placed on an equal footing in terms of competition by compensatory subsidies for the former. This would channel each type of traffic towards the means of transport that could move it at lowest cost. In order for the benefits to be received by the community in general rather than by the private-sector concessionaires of railways and highways, however, the policy on compensatory subsidies should be laid down before the award of the concessions.

This article aims to make a “walk-through” in the virtual reality of budgetary and fiscal matters in order to identify the possible leew ay for achieving a higher level of convergence betw een the public discourse on equity and the real content of public policies aimed at that goal.

The allocation of expenditure on training for the small enterprises of Latin America is a matter which requires clear guidelines. Increasing resources for this purpose is a necessary but not of itself sufficient strategy. The shortage of resources, their faulty allocation and the inefficiency in the use of those currently assigned to this class of enterprises are factors which make it necessary above all to take measures to ensure better use of the available resources, especially those of public origin. Likewise, it is necessary to find new sources of financing for training and upgrading the labour force, making use of suitable incentives. At the same time, it will be necessary to develop training techniques in keeping with the conditions of the countries of the region, to reform the existing institutions, and to establish new forms of relations among the actors concerned.

The author of this article concludes that the quality of the public sector can be assessed only against the role of the State. In general, an efficient public sector should be able to achieve the State’s objectives with the minimum degree of distortion of the market, with the lowest burden of taxation on taxpayers, with the smallest number of public employees, and with the lowest absorption of economic resources by the public sector. The public sector must be transparent in its processes and in its outcome. Corruption should have no part in the decisions made by bureaucrats and political leaders, and the resources in the hands of the public sector should be put to a use that maximizes their social rate of return. The quality of the public sector is also important for pursuing the objective of equity, which is now seen as one of the fundamental goals of the State. A high-quality public sector should make possible the pursuit of equity with the lowest costs in terms of efficiency. Finally, the so-called “first generation reforms” do not necessarily improve the quality of the public sector even though they may improve the quality of public policy. The pursuit of “first generation reforms” has, in fact, highlighted the need to improve the quality of the public sector, and for this to occur, “second generation reforms” are necessary.

This article analyses the work of Albert Hirschman from the standpoint of two basic concepts: trespassing and self-subversion. Hirschman turned these exercises into an art, pleading his case in a manner which combines curiosity and intellectual humility. In a world accustomed to think and think of itself through totalizing models, in a continent where so many ideological models which sought to open up (or rather, force open) the realities of countries were put together and taken apart, Hirschman’s works and intellectual attitude represent a healthy and beneficial invitation to take a different view. This is not his only merit, however. From Chile to Brazil, from Mexico to Argentina, he passed on his passion for the possible to more than a few admirers. In the last few years, a great many ministers, academics and leading members of international organizations have repeatedly praised his contributions. Likewise, many of the concepts developed by Hirschman -his “exit, voice and loyalty” triptych, the notion of the “tunnel effect”- and above all his propensity to think in terms of the possible and his efforts to trespass over and subvert theories (including his own), paradigms and models, and all the cubist and minimalist mental exercises that are constantly created and recreated, are healthy sources of inspiration and interpretation for rethinking the never-ending quest for development. Lastly, notions like community participation or social capital, which are now major subjects of discussion, can also be better appreciated, subverted and self-subverted in the light of Hirschman’s work.

This paper argues that the agenda for international financial reform must be broadened in at least two senses. First of all, it should go beyond the issues of financial crisis prevention and resolution, to those associated with development finance for poor and small countries and to the “ownership” of economic and development policies by countries. Secondly, it should consider not only the role of world institutions but also of regional arrangements and the explicit definition of areas where national autonomy should be maintained. These issues should be tabled in a representative, balanced negotiation process capable of overcoming some of the adverse political economy features that characterize the current debate. After some initial considerations of the nature of the problems that the current system faces and some political economy aspects, the author addresses the following issues: i) the reforms relating to the prevention and resolution of financial crises; ii) the role of development finance, including the use of multilateral development finance to support increased participation of low-income and small middle-income countries in private capital markets and the financing of social safety nets during crises; iii) the need to reach a renewed international agreement on the limits of conditionality and full recognition of the central role of the “ownership” of development and macroeconomic policies by developing countries; iv) the role of regional and subregional institutions in increasing the supply of “global public goods” and other services in the area of international finance; and v) the need to maintain several realms of national autonomy, including capital account regulation and the choice of exchange rate regimes. The author argues that regional institutions and national autonomy are particularly important for the smaller players in the international arena, who would gain significantly from competition in the services provided to them and from the maintenance of freedom of action in a context of imperfect supply of global public goods.

This article analyses the impact of public investment on private investment. Apart from purely ideological aspects, two opposing interpretations may be distinguished with regard to the relationship between these variables. The first is that there is competition between public and private investment, so that the former “crowds out” the latter. The second is that public investment is complementary to private investment in so far that, by generating positive externalities, it creates favourable conditions for the latter. In view of the relative scarcity of empirical studies on this matter, this study deals with the case of the Brazilian economy in the period from 1947 to 1990. Its main conclusions are that private investment is indeed crowded out by public investment in the short term, but in the long term the cointegration vector coefficients indicate that these two variables complement each other.

This article analyses five types of international trade based on the competitive advantages afforded to under-developed countries by their environmental resources endowment. First of all, specialization of such countries in the production of highly polluting goods and services is studied, recalling the conventional specialization in the production and export of goods making intensive use of natural resources. The commercial exploitation of the recreational services of natural parks and the exploitation of biodiversity in pharmaceutical research is then referred to. The use for profit of some environmental services involving these resources which are in the nature of public goods and which would require some type of bilateral or multilateral international agreement is addressed. The access of these countries on an equal footing to a number of global and common resources is then considered, and finally some conclusions are presented. According to these conclusions, it is hard for trade relations between developing and developed countries, based on specialization in the use of the endowment of environmental and natural resources, to provide any solution to the problems of poverty and environmental degradation. However, more efficient, more imaginative and, in the final analysis, more equitable exploitation of these resources could make a much bigger contribution to the solution of these two serious problems. In this case, in order to attain economic and social efficiency it is necessary to receive the collaboration of the advanced countries, in view of the fact that environmental resources are in the nature of public goods.

In 1991, the Government of Chile began to pursue a new business development strategy. The Small and Medium-sized Enterprise Support Programme (Programa de Apoyo a la Pequeña y Mediana Empresa) provides for a number of instruments to correct market failures and improve the efficiency, productivity, competitiveness and international trading position of Chilean products made by these firms. The importance of small and medium-sized enterprises (SMEs) in the national economy is illustrated by their number and by the share of jobs they create. The particularly adverse experience of the economic crises of the 1970s and 1980s, and the difficulty these companies had in adapting to the new ground rules of the open economy model, were what led the Government to decide on this new development strategy. The objective of this article is to identify and analyse the policies applied and the effects of the different actions undertaken and instruments used. Although the strategic development framework has included new instruments that have made important contributions to the SME sector, the overall impact of these is less encouraging. The challenge now facing companies of this type in Chile is to find ways of applying successful experiments on a mass scale and reformulating strategies that have not worked as well as hoped.

This article analyses the export offensive made by Mexico, Central America and some Caribbean countries since the mid-1980s. Notwithstanding the differences between them, in all the countries in question this offensive has been aimed mainly at the United States market, has been stimulated by import tariff privileges and other incentives, and has been based on poorly-paid assembly operations: i.e., it involves the in-bond assembly or “maquila” industries. This study seeks to determine whether these industries contribute to local technological development. The answer, based on a questionnaire sent to 75 maquila firms in six countries, must be “yes”. The maquila industry uses production techniques close to the best international practices –something matched only in a very few domestic manufacturing firms– and it helps to train human resources and introduce modern concepts of organization and management. Moreover, it makes intensive use of unskilled labour. Consequently, in order to progress towards sustainable development with social equity it would appear to be necessary to turn the maquila industry into an increasingly competitive activity by increasing its productivity and the added value of its products. The evolution of maquila industries in the direction of activities using a more highly skilled labour force is perfectly possible, as the case of Mexico shows, and it will become unavoidable when pressures on the labour market cause real wages to rise, as in Costa Rica. This will not happen automatically, however, and even less so in countries that lack institutions to support that process.

This article seeks to analyse the effects of globalization on the financial systems of Argentina, Brazil and Mexico, which were the countries that received most of the foreign investment in the region in the 1990s. This capital was mostly made up of portfolio flows and investments in shares traded on the local financial systems. The movement was not homogeneous in all the countries, because of their different degrees of openness and differences in macroeconomic policies. In the case of the portfolio investments, the effects of the openness were concentrated in different segments and they therefore had different impacts on the financial systems in question. The recent experience of these countries shows that there is still some room for national economic policies to take action in the context of financial globalization, even though their capacity to reduce the perverse effects of financial flows is limited. Foreign firms are observed to be assuming growing importance in the countries studied, as a function of the degree of openness of the local financial systems. This tendency is due to the liberalization measures adopted in order to make possible capitalization of the banking systems and competition among banks to find new sources of profits and strengthen their position in globalized markets. Although the predominance of foreign companies has given a more solid capital base to the national banking systems, it could have an adverse macro- economic impact, especially in Mexico and Brazil, which still maintain relatively independent monetary policies.

This article analyses the present situation and future prospects of Brazil in the light of the globalization process. In the author’s view, the market only generates globally coherent decisions in countries with a high degree of social homogeneity. Thus, the greater the social heterogeneity of a country, the greater the need for a national development policy. Such a policy should link up the concepts of globalization and social profitability on the economic and political level. Globalization furthers the destructuring of production systems in favour of companies that plan their investments on an international scale and promotes the concentration of political power, widening of the productivity gap, and the destructuring of cultures. Social profitability, on the other hand, has to do with the priorities of economic decision-making in national political systems and allows the values of the community as a whole to be taken into account. In a country of continental size, with great population mobility, the danger of disintegration of the national production system makes it hard to subordinate the channeling of investments to the rationale of the transnational corporations. If globalization is an unavoidable technological imperative, then the country has little room for taking its own decisions. The author concludes that in these circumstances countries like Brazil, with great natural resources and marked social disparities, may disintegrate or slither in the direction of fascist-type authoritarian regimes in response to the growing social tensions. In order to escape from this prospect it is necessary to return to the idea of a national project and make the domestic market once again the dynamic centre of the economy. The greatest difficulty is in reversing the tendency towards income concentration, which can only be done through a great social mobilization process.

In the present essay the author propounds his answer to one of the problems with which he has been most deeply concerned throughout his long life as an economist. Beginning as a firm upholder of neoclassical theories, he was convinced by the world depression of the nineteen-thirties and the Second World War that neither in theoretical nor in practical terms can the problems of our peripheral situation be resolved through economic ideas worked out in the centres; and this conviction was the starting-point of a long process of self-criticism and reformulation of theories.

Over the last few decades, Latin American societies have undergone structural and secular reforms that have caused far-reaching social fragmentation extending over many spheres of social life. It is therefore pertinent to ask whether this has affected the socially shared notions that define a common sense of belonging. What has happened to such sentiments and how have they changed in the heat of the changes that have taken place in the region? This article analyses the weakening of two institutions capable of engaging individuals and generating shared perceptions, wishes and values, which had become key mechanisms of integration and social cohesion in the past: namely school and work. In this context, the article reviews the experiences and meaning of school and work for young people from the most disadvantaged sectors of the population, and the emergence of new competing institutions that display increasing capacity to engage and give meaning.

This study analyses the effects of residential segregation in Montevideo on the learning differences of students and examines the efficacy of the educational system’s responses seeking to deal with the inequities generated by those processes. After describing the effects of the family, the school and the neighbourhood on learning, it presents hierarchical linear models which seek to isolate the effects of each of these contexts. It summarizes the challenges raised by the results to Uruguayan education’s efforts to dissociate learning achievements from social origin and examines the responses of the authorities of the sector to those challenges. Finally, it reviews policy options for strengthening the role of education as the principal means for integrating new generations in the light of new problems in relation to urban segregation.

One of the drivers of economic growth is innovation, which raises productivity by creating new production methods, technologies, products and firms. This article examines an instrument that supports this process, venture capital, and highlights the need for a financing system covering each phase of innovation. It starts by illustrating Latin America’s innovation deficit. It then proceeds to a general analysis of the difficulties affecting the financing of innovation and the provision of venture capital to overcome these. It goes on to examine the form taken by these obstacles in the region and, considering the experience of Brazil and Chile, the methods used to deal with them. In relation to a number of the subjects addressed, the article discusses issues connected with major problems of financial system development.

Concessions for public works projects have enabled Chile to modernize its infrastructure; however, these arrangements have also raised certain issues that make it necessary to change the rules governing the system. The main problem has been the addition of numerous supplementary agreements to the original contracts. Under the present system, renegotiations are not conducted according to criteria of economic efficiency, and they can therefore affect public finance and lead to opportunistic behaviour, affecting the efficacy of the bidding process. A regulatory system allowing for compensation of investors when it is not feasible to put out a new tender is more consistent with economic theory and provides a better way to assess the economic value of a project that has been changed. Bidding does not replace regulation: rather, because contracts are bound to be incomplete, the two methods complement each other as mechanisms for including private investment in public projects.

Since monetary stabilization in 1994, bank consolidation has been gathering pace in Brazil as part of a global concentration trend following bank deregulation processes. This article analyses the effect of bank concentration on lending in Brazil in the period 1995-2004, distinguishing two stages and estimating panel data for Brazil’s 27 federative units. The results support the hypothesis that the process of consolidation in the Brazilian banking sector has an adverse effect on lending, which mainly harms the less developed regions of the country.

The banking system has played a key role in balance-of-payments crises in a number of emerging countries. This article reviews three types of models which analyse the different factors involved in recent foreign-exchange crises. These usually stem at least partly from balance-of-payments problems; financial vulnerability causes the currency to collapse and undermines the banking system, thus generating a vicious circle. This paper shows that financial stability is by no means guaranteed, particularly in a globalized financial system. Emerging countries have to strike a balance between economic and financial stabilization, while maintaining their share of new capital flows. Although a difficult task, this is essential for avoiding a repeat of past crisis episodes, the threat of which apparently cannot be ruled out.

The corporate world has changed remarkably in the past 10 years. New multinationals are appearing in countries with emerging markets such as Brazil, India, China, South Africa and Mexico, which are not only top recipients of foreign capital, but have fast become major investors themselves. An important part of the remarkable story of emerging multinationals has been the eruption of world-class Latin multinationals (or multilatinas) from Mexico and Brazil, in particular, following the path taken by their Spanish counterparts in the 1990s. In all these cases, classical push and pull factors have been driving their emergence. But a decisive helping hand for these multilatinas over the past decade has been the declining cost of capital. This financial dimension is driving the leap from overseas sales to overseas acquisitions, a phenomenon that will be explored in this article.

The purpose of this study is to examine gender wage gaps in Chile using a new database, the Social Protection Survey (eps) 2002-2006, which makes it possible to control for actual work experience and its timing. Potential work experience variables do not reflect the intermittent and discontinuous participation of women in the Chilean labour market. Corrections are also introduced for occupational selection, and two key variables are instrumented: education and work experience. Although there are still wage differences between men and women, the introduction of controls for actual work experience and the instrumentation of this work experience and education bring the hourly wage gap down to some 11% to 18%, figures much lower than those reported in earlier studies for Chile. Contrary to expectations, this gap has widened in recent years.

Existing oil fields in Ecuador are approaching the end of their economic life, and permits to exploit new fields in the Amazon region are being granted. The possibility that deforestation may occur in some areas of high ecological value, as has happened in the past as a result of induced migration, justifies posing a simple question: would it be reasonable to exploit these new fields without causing deforestation? This paper does not claim to give an exhaustive answer to this question but, based on previous research, presents a simulation exercise in which the economic value of four tropical forest services are introduced, in order to evaluate the economic loss that deforestation would entail. It is further argued that the environmental impact appraisal should take into account the corresponding premium accorded to investment. In addition, the use of a hyperbolic discount factor is recommended.

The recent socio-economic development of Latin America presents a puzzle. This is that while economic growth in the region in the past 25 years has been very slow, falling behind past performance and behind most of the rest of the world, poverty rates have continued to fall significantly and soginicial indicators have continued to improve. This paper assesses the role of various factors —income distribution, social spending and demographic changes— in explaining the paradox. The main finding, rather disturbingly, is that with few exceptions (Chile in particular) the major factor contributing to the reduction of poverty has been the demographic dividend brought about by the demographic transition that the region recorded over the period.

This article examines a number of ideas about local innovation systems, how best they can be studied and what needs to be done to develop them further. It is based on experiences in Latin America generally and Argentina in particular. The first part briefly reviews the literature on local production and innovation systems. Following this, 10 hypotheses about the workings of innovation systems are presented, together with the same number of approaches to studying the characteristics and potential of any specific existing system. The third part sets out a number of measures that could be applied to improve local innovation systems in a given country or region. This paper argues that it is both possible and necessary to build bridges between analysis and action, theory and practice.

The analysis of the financial crisis that broke out in the United States in mid-2008 gave rise to a vigorous debate about the role of financial regulation and oversight. The present article briefly analyses the crisis with a particular emphasis on these subjects, with the goal of suggesting some lessons that can be drawn from it for Latin America and the Caribbean. Accordingly, it describes the economic conditions and major changes that occurred in the financial system of the United States during the 1990s and the current decade, identifying the contribution of these factors to the crisis. The initial lessons drawn from this analysis are the need to: (i) consider macroprudential risk in the regulatory framework, (ii) reduce the procyclical bias of the system, (iii) widen the scope of regulation and (iv) deal with the conflicts of interest that prevent prompt and reliable disclosure of the risk taken on by financial institutions.

This paper investigates the factors determining the extent of the problem of child stunting and its socio-economic distribution in eight countries of Latin America and the Caribbean. It does so using a methodology that allows a socio-economic inequality index (the concentration index) to be decomposed by the factors affecting it. In the countries analysed, household “wealth” (measured by an indicator of material well-being) and maternal education are the most important determinants in the distribution of child stunting. The biomedical factors considered may be important in explaining the level of stunting, but their contribution to explaining inequality is relatively small. Geographical, cultural, ethnic and idiosyncratic factors also play a limited explanatory role, one that apparently depends on their relationship to the distribution of the socio-economic variables mentioned.

The prime importance given in the 1980s to analysis of the economic depression, external imbalances and inflation in Latin America has left in the background the profound economic, institutional and social changes which took place in this period. Under the inspiration of neoliberal ideas, the institutional and macroeconomic reforms served both to dismantle the previous form of development and to try to establish a new one. There were transfers of wealth and alterations in the structure of production, income distribution, the relation between capital and labour, public and private functions, and the place of the region in the international economy. Some of these changes look place in connection with anti-inflationary or external debt service policies.

The purpose of this paper is to contribute to the debate on stabilization policies in conditions of high inflation in the light of the experience of Brazil and some other countries, especially the European monetary crises of the 1920s and the stabilization of the Argentine currency in 1991/1992. The paper begins with some comments on certain special features of situations of high inflation, with emphasis on the unfeasibility of following the sequence of measures recommended for dealing with only moderate imbalances.

Mexican agriculture, which bad deteriorated as a result of the global adjustment process, only began to recover as from 1989. If the recovery of the national economy which began in 1987 becomes even more marked, it is possible that agriculture may not be able to respond with increased production.

This article sums up the benefits and costs of Central American economic integration. Increased economic growth, industrialization based on intra-industry trade, and greater competition in a broader subregional market represent significant benefits for the Central American countries, although for the most part these benefits are concentrated in the more developed countries. The costs of integration stem from the inter-country monetary flows occasioned by currency arbitrage, currency substitution, and the high transaction costs associated with inconvertibility. The elimination of these costs would have other costs, however, in the form of the reduction of national autonomy with regard to macroeconomic policy as a consequence of multilateral coordination and monitoring.

This paper revisits Raúl Prebisch’s views on an issue that has become central to trade and development policy in the 1990s: The relationship between industrialization, regional economic integration and outward-oriented growth. The author argues that, whereas these elements have been interpreted as relatively separate components of Raul Prebisch’s thinking, they are in fact organically related in the dynamic sequence of development policies formulated by Prebisch.

There is growing consensus that although a solid, balanced macroeconomic base is a necessary condition for development, it is not of itself enough to ensure that development is actually achieved or that its fruits will be enjoyed by the population as a whole. In a series of documents, ECIAC has been defining a coherent agenda of public policy reforms designed to ensure a change in production patterns accompanied by greater social equity.

The impact of the structural adjustment process on the level of poverty has been a highly controversial issue in recent years. In this article, a macroeconomic approach is used to analyse the adjustment’s short-term effects on income levels, especially among the poor. Income has been chosen as the chief determinant of poverty levels because, in a market economy, income and related inflows are what determine how much control individuals have over the main factors influencing their living conditions. This variable is also quite elastic in respect of macroeconomic conditions and therefore reflects short-term effects.

This essay identifies the main points in the natural resources debate. After highlighting the issues of sovereignty, distribution of benefits, deterioration in the terms of trade, and the institutional structure of world markets, which have been particularly important over the last forty years, it suggests that the debate should now get away from demands and counter-claims and concentrate instead on questions of sustainability and competitiveness. In conclusion, it proposes a regional initiative to strengthen the capacity to manage the natural heritage and resources and promote the wider spread and incorporation of technical progress.

In the author’s view, an important result of the economic reforms begun in Mexico in 1983, especially in the period after 1987, is that national private groups have assumed a leading place in the new economic model. These are not only traditional groups which were restructured in the course of those reforms, but also new groups which were formed or developed in that period and which have come to have decisive weight in the national economy.

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.

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.

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).

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.

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.

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.

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.

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.

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.

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.

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.

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.