The paper is divided into seven short sections. In the first, I discuss the need for a national development strategy to compete in the present stage of capitalism; in the second, I discuss old or national developmentalism, its relation to the Latin American structuralist school of thought, and its success in promoting economic growth between 1930 and 1980. In the fourth section I ask why national developmentalism was discarded in the late 1980s and replaced by conventional orthodoxy, and suggest five causes for it: the hegemony of the associated dependency interpretation of Latin America in the 1970s and 1980s, the exhaustion of import-substitution industrialization, the 1980s debt crisis, the new hegemony of neoliberalism, and the training of Latin American economists abroad. In the fifth section I discuss briefly why this imported strategy failed to generate growth and why, during its short dominance, growth rates were lower than before, financial instability increased and inequality deepened. Finally, in the sixth and seven sections I compare, first, new developmentalism with old developmentalism, and, second, new developmentalism with conventional orthodoxy. My concern in these two sections is to demonstrate that there is a sensible alternative to the Washington Consensus.
Luiz Carlos Bresser-Pereira (Professor Emeritus, Getulio Vargas Foundation) is an economist. This paper was first published as Getulio Vargas Foundation Discussion Paper 193 in June 2009; it is reproduced here for non-profit educational purposes. See, also, Esteban Pérez Caldentey and Matías Vernengo, “Back to the Future: Latin America’s Current Development Strategy” (International Development Economics Associates Working Paper 07/2008); Federico Fuentes, “Bolivia: Social Tensions Erupt” (MRZine, 15 August 2010); Marta Harnecker, “Latin America & Twenty-First Century Socialism: Inventing to Avoid Mistakes” (Monthly Review, July-August 2010); Immanuel Wallerstein, “Contradictions in the Latin American Left” (Commentary No. 287, 15 August 2010); Jeffery R. Webber, “The Rebellion in Potosí: Uneven Development, Neoliberal Continuities, and a Revolt against Poverty in Bolivia” (UpsideDownWorld, 16 August 2010).