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A comparison of Latin American and African economic development with an East Asian twist


  • Richard Grabowski


There are many parallels between the development of Latin America and Sub-Saharan Africa. Recent literature on this is reviewed. It is argued in the paper that the key to long-term development is the shift from inward (import substitution) to outward (export-oriented) growth. This shift involves both tariff reduction and significant investment in infrastructure and human capital accumulation. Given that much of Latin America (historically) and Sub-Saharan Africa (currently) has depended or depends on trade taxes for revenue, an outward orientation poses a significant fiscal problem, which makes it extremely difficult to switch to an export-oriented growth path. East Asian experience points to the importance of broad-based agricultural growth in making the fiscal transition. Copyright © 2010 The Author. Journal compilation © 2010 Crawford School of Economics and Government, The Australian National University and Blackwell Publishing Asia Pty Ltd..

Suggested Citation

  • Richard Grabowski, 2010. "A comparison of Latin American and African economic development with an East Asian twist," Asian-Pacific Economic Literature, Asia Pacific School of Economics and Government, The Australian National University, vol. 24(2), pages 104-116, November.
  • Handle: RePEc:bla:apacel:v:24:y:2010:i:2:p:104-116

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    References listed on IDEAS

    1. Keiko Kubota, 2005. "Fiscal Constraints, Collection Costs, And Trade Policies," Economics and Politics, Wiley Blackwell, vol. 17, pages 129-150, March.
    2. Bates, Robert H & Coatsworth, John H & Williamson, Jeffrey G, 2006. "Lost Decades: Lessons from Post-Independence Latin America for Today's Africa," CEPR Discussion Papers 5932, C.E.P.R. Discussion Papers.
    3. Lin, Justin Yifu, 2003. "Development Strategy, Viability, and Economic Convergence," Economic Development and Cultural Change, University of Chicago Press, vol. 51(2), pages 276-308, January.
    4. Beintema, Nienke M. & Stads, Gert-Jan, 2004. "Investing in Sub-Saharan African agricultural research," 2020 vision briefs 8, International Food Policy Research Institute (IFPRI).
    5. Bernardi, Luigi & Barreix, Alberto & Marenzi, Anna & Profeta, Paola, 2007. "Tax systems and tax reforms in Latin America: country studies," MPRA Paper 5223, University Library of Munich, Germany.
    6. Myung Soo Cha, 2004. "Facts and myths about Korea's economic past," Australian Economic History Review, Economic History Society of Australia and New Zealand, vol. 44(3), pages 278-293, November.
    7. Baunsgaard, Thomas & Keen, Michael, 2010. "Tax revenue and (or?) trade liberalization," Journal of Public Economics, Elsevier, vol. 94(9-10), pages 563-577, October.
    8. Khattry, Barsha & Mohan Rao, J., 2002. "Fiscal Faux Pas?: An Analysis of the Revenue Implications of Trade Liberalization," World Development, Elsevier, vol. 30(8), pages 1431-1444, August.
    9. Thiele, Rainer, 2002. "The bias against agriculture in Sub-Saharan Africa: Has it survived 20 years of structural adjustment programs?," Kiel Working Papers 1102, Kiel Institute for the World Economy (IfW).
    10. Kang, Kenneth & Ramachandran, Vijaya, 1999. "Economic Transformation in Korea: Rapid Growth without an Agricultural Revolution?," Economic Development and Cultural Change, University of Chicago Press, vol. 47(4), pages 783-801, July.
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