Before the 1980s, there were very few estimates for gross domestic product (GDP) in the nineteenth century for any Latin American country. Celso Furtado's classic economic history of the region contained no data for GDP per head before the First World War. Those authors that did venture a number usually admitted that they were little more than educated guesses. Although quantitative studies on the economic history of the United States and other countries multiplied rapidly, students of Latin America had to rely heavily on qualitative indicators for the region's development in the first century after independence.

This started to change in 1981 when Paul Bairoch published an article giving very precise figures, but without details on sources or methods, for GDP per head in 1800 for different regions of the world. These suggested that at that time, GDP per head was slightly higher in “Third World America,” that is, Latin America, when compared with “North America,” that is, the United States and Canada. Because GDP per head in Latin America was much lower than in the United States by the early twentieth century, it was widely assumed that Latin America must have “fallen behind” after independence. This has given rise to a substantial literature on why this might have happened, much of which emphasizes the importance of the quality of institutions.