This collection from the general analytical work published during its first 20 years (1948-67) by the United Nations Economic Commission for Latin America (ECLA), was originally issued in 1968 as an ECLA document (E/CN/112/AC.61/10); a preface by Carlos Quintana, the Commission’s present head, has been added which concisely places the book in its context, i.e., that of the special problems of the less developed world’s most advanced region.
Part One on external aspects of Latin America’s development includes chapters on the need to overcome the traditional division of labor between manufacturing “center” (developed) and primary producing “periphery” (less developed countries—LDCs); industrial development via import substitution, and its limits; regional integration as an alternative industrialization strategy; world trade policy and trade between developed and developing countries; and foreign finance, foreign direct investment, and development.
The second part on internal problems deals with the need for planning; the nature of inflation in Latin America (which might also have been placed in Part One) and social problems. The final section presents an over-all view of development problems. The appendix contains a listing of ECLA publications during the period covered by the book.
There are a few minor printing errors and the language at times contains hispanicisms, though it is always clear. The wide audience to which ECLA’s work is addressed explains the sometimes non-technical character of the exposition.
Few would disagree with ECLA’s general message: the need for Latin America, or, indeed, for LDCs in general, to pursue an active, social as well as economic development policy. Similar agreement cannot be expected for many of ECLA’s particular propositions or, more exactly, emphases. Especially, but not only, in the earlier studies the undoubted difficulties posed by external and structural factors are over-rated, the effectiveness of the market mechanism under-rated, and the need for “programming” overstressed (this view may benefit from hindsight). Thus: (i) ECLA rightly emphasizes the need for import substitution policies, because of the low income elasticity deriving from demand for primary products and because of the protective policies of the industrialized countries. But ECLA under-rates the extent to which developing countries’ export performance is affected by their domestic policies. The importance of this factor is demonstrated by rapid export growth in the late 1960s when numerous developing countries, in Latin America and elsewhere, simultaneously began to engage in export promotion policies, (ii) The explanation of inflation is in considerable part in terms of export instability due to structural factors and of the choice between inflation and unemployment that falling export revenues may pose. But this was not the main cause of inflation, and, in any case, greater reserves—which LDCs are now accumulating rapidly—can moderate, if not remove, the dilemma, (iii) The use of excessively capital intensive equipment in relation to developing countries’ factor proportions is related to lack of an appropriate technology rather than to exchange rate overvaluation and inappropriate interest and wage policies.
The points just made must not obscure ECLA’s great merits. Its influence has been multifold and its first head, Raúl Prebisch, deserves much credit for it. The stimulus it has brought to systematic economic and statistical research in Latin America has been important; at the outset of its existence, ECLA was almost alone in this field. In addition to its general analytical work and country studies, it has produced valuable industry analyses. It has, moreover, directly prevailed upon governments to apply some of its ideas, e.g., the Central American Common Market and the Latin American Free Trade Area.