Underdevelopment, development, and the Dutch disease: the seminal and still relevant theory of Celso Furtado

Furtado, one of the founding fathers of the United Nations Economic Commissionfor Latin America and the Caribbean (ECLAC), can be considered both a classical developmentalistand an ECLACian. However, in view of the independence and originalitywith which he analyzed the problem of underdevelopment, leading to exhaustion his empha-sis on historical, economic, and social particularities in the formulation of explanatory theoriesof development and the tendency to stagnation in periphery countries, it is acceptable tosurrender to the pleonasm that Furtado bequeathed a Furtadian theory of development. Thispaper analyses Furtado’s main thesis on underdevelopment, development, and stagnation.The study has two main contributions: first, to emphasize that, by having formulated an analyticalapproach in which underdevelopment and development are strongly conditioned byhistorical and social factors, Furtado’s theory is still relevant for understanding many economicproblems of periphery countries like Brazil and other Latin American countries today;and second, which is my another contribution, to show that it was Furtado (and not othereconomists) who, by investigating the issue of natural resources abundance in the Venezuelaneconomy at the end of the 1950s, pioneeringly elaborated a refined theory on the phenomenonthat would later be termed the “Dutch disease” and “the resource curse”. JEL Classification: O10; O13; O14; O16.