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Have Import Substitution Policies Either Precipitated or Aggravated the Debt Crisis?

Published online by Cambridge University Press:  02 January 2018

Felipe Pazos
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Extract

The purpose of this paper is to evaluate the development policies applied to Latin American countries in the post-war period, particularly those designed to develop manufacturing production for the domestic market through tariff protection. The paper will try to find out whether such policies (1) brought about reasonably high rates of growth; (2) distorted the structure of domestic prices and hindered the later development of manufactures exports; (3) provoked persistent balance of payments disequilibria, thereby forcing the countries to borrow abroad in large quantities; and (4) weakened the countries' capacity to resume development in the future, once the current debt crisis is overcome.

Advancing conclusions, the first and fourth questions can be answered with a relatively high degree of confidence: inward-oriented policies promoted a high rate of growth during the three decades spanning 1950 to 1980, but narrowed the import coefficient to a degree that will force the countries to depend almost solely on export promotion to resume their development in the future.

Type
Research Article
Information
Journal of Interamerican Studies and World Affairs , Volume 27 , Issue 4 , Winter 1985 , pp. 57 - 74
Copyright
Copyright © University of Miami 1985

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References

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