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Globalization in Latin America Before 1940


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  • Jeffrey G. Williamson
  • Luis Bertola


How much of the good growth performance in Latin America between 1870 and 1913 can be assigned to the forces of globalization? Why was industrialization so weak? Why was inequality on the rise? This paper offers an answer to these questions. It starts by exploring the disadvantages associated with geographic isolation from world markets and the transport revolutions that helped liberate Latin America from that isolation, a pro-global force. It then asks how independence contributed to massive de-globalization during the decades of lost growth' between the 1820s and the 1870s. Next, it documents what happened to the external terms of trade in Latin America between 1820 and 1950: from the 1890s onwards the terms of trade deteriorated, but it also underwent spectacular improvement before the 1890s, suggesting that it had something to do with the fairly fast' Latin America growth during so much of the belle ‚poque. While booming relative prices of exports certainly fostered trade, policy suppressed it: tariff rates were higher in Latin America than almost anywhere else in the world between 1820 and 1929, long before the Great Depression. The paper then asks why. The answer is to be found mainly with revenue needs rather than with some precocious import substitution policy. High tariffs still had a powerful protective effect, regardless of motivation. However, protective policy was modified by those powerful and positive terms of trade shocks, yielding on net weak early industrialization. Finally, the paper documents that inequality rose in most of Latin America up to World War I, while it fell thereafter. The correlation between globalization and inequality is likely to have been causal.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9687.

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Date of creation: May 2003
Date of revision:
Publication status: published as Bulmer-Thomas, Victor, John H. Coatsworth, and Roberto Cortes Conde. The Cambridge Economic History of Latin America. Volume 2. The Long Twentieth Century. Cambridge and New York: Cambridge University Press, 2006.
Handle: RePEc:nbr:nberwo:9687

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As found on the RePEc Biblio, the curated bibliography for Economics:
  1. > Economic History > Regional Economic History > Latin American Economic History
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Cited by:
  1. Josef Falkinger & Volker Grossmann, 2004. "Institutions and Development: The Interaction between Trade Regime and Political System," CESifo Working Paper Series 1279, CESifo Group Munich.
  2. Tena-Junguito, Antonio & Lampe, Markus & Fernandes, Felipe Tâmega, 2012. "How Much Trade Liberalization Was There in the World Before and After Cobden-Chevalier?," The Journal of Economic History, Cambridge University Press, vol. 72(03), pages 708-740, September.
  3. Antonio Tena-Junguito, 2009. "Bairoch revisited: tariff structure and growth in the late 19th century," Economic History Working Papers 27869, London School of Economics and Political Science, Department of Economic History.
  4. Grafe, Regina & Irigoin, Maria Alejandra, 2006. "The Spanish Empire and its legacy: fiscal redistribution and political conflict in colonial and post-colonial Spanish America," Journal of Global History, Cambridge University Press, vol. 1(02), pages 241-267, July.
  5. Enriqueta Camps, 2009. "Globalization and culture shaping the gender gap: A comparative analysis of urban Latin America and East Asia (1970 - 2000)," Economics Working Papers 1145, Department of Economics and Business, Universitat Pompeu Fabra.
  6. Enriqueta Camps, 2013. "Market Openness and Culture as Factors that Shape the Gender Gap: a Comparative Study of Urban Latin America and East Asia (1960-2000)," Working Papers 694, Barcelona Graduate School of Economics.


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