It is difficult to talk about the economic history of Latin America as a whole. Latin America is a large world region, a mixture of countries of different sizes, geography, climate, population, socio-economic structures and factor endowments. However, the existence of common features in Latin American history is clear: the Iberian colonial experience, specialization in natural resource-based products and primary export patterns are examples of these common traits that make it possible to distinguish Latin American countries from other regions and to consider them as a unit of analysis.
Latin America is not part of what is regarded as the ‘developed world’. None of the countries has attained uniformly high enough living standards. Even more, some of them are still very poor and have large segments of their populations on the sidelines of modern economic and social development processes. Even so, Latin America as a region has made large strides in bringing about very notable economic, social and political changes over the last decades. These transformations have placed the region on a development path that has enabled it to attain middle-income status on a global scale.
Despite these changes in most Latin American countries, there are aspects that remain unchanged. The bulk of the Latin American countries have not been able to leave their natural resource-based production patterns completely behind them. Their pattern of trade specialization has held them back from gaining access to more technologically dynamic segments of the global market or segments in which the growth of demand is more robust. This, coupled with the region's markedly cyclical access to capital markets, has undercut its development efforts.
Conversely, other countries and regions have been able to leverage their natural resource endowments in ways that have enabled them to bring about sweeping economic changes. With differing degrees of success at different stages in their development processes, the United States, Canada, Australia, New Zealand (a group of countries that we will call, using Maddison's terminology, the ‘Western offshoots’) and the European Nordic countries provide examples of countries that have taken advantage of their natural resource endowments to place themselves upon development paths that have been more successful than those followed by Latin American countries.