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From old to new developmentalism in Latin America


  • Pereira, Luiz C. Bresser


The failure of the Washington Consensus and of macroeconomic policies based on high interest rates and non-competitive exchange rates to generate economic growth prompted Latin America to formulate national development strategies. New developmentalism is an alternative strategy not only to conventional orthodoxy but also to old-style Latin American national developmentalism. While old national developmentalism was based on the tendency of the terms of trade to deteriorate and, adopting a microeconomic approach, proposed economic planning and industrialization, the new nationaldevelopmentalism assumes that industrialization has been achieved, although in different degrees by each country, and argues that, in order to assure fast growth rates and catching up, the tendency that must be neutralized is that of the exchange rate to overvaluation. Contrary to the claims of conventional economics, a capable state remains the key instrument to ensure economic development, and industrial policy continues to be necessary; but what distinguishes the new approach is principally growth with domestic savings instead of with foreign savings, a macroeconomic policy based on moderate interest rates and a competitive exchange rate instead of the high interest rates and the overvalued currencies prescribed by conventional orthodoxy.

Suggested Citation

  • Pereira, Luiz C. Bresser, 2009. "From old to new developmentalism in Latin America," Textos para discussão 193, FGV/EESP - Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
  • Handle: RePEc:fgv:eesptd:193

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    References listed on IDEAS

    1. N. G. Mankiw., 2009. "The Macroeconomist as Scientist and Engineer," VOPROSY ECONOMIKI, N.P. Redaktsiya zhurnala "Voprosy Economiki", vol. 5.
    2. Pereira, Luiz C. Bresser & Nakano, Yoshiaki, 2002. "Economic growth with foreign saving?," Textos para discussão 118, FGV/EESP - Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
    3. Pereira, Luiz C. Bresser, 2009. "From the national-bourgeois to the associated dependency interpretation of latin America," Textos para discussão 185, FGV/EESP - Escola de Economia de São Paulo, Getulio Vargas Foundation (Brazil).
    4. Bresser Pereira, Luiz Carlos, 1993. "Economic reforms and cycles of state intervention," World Development, Elsevier, vol. 21(8), pages 1337-1353, August.
    5. Luiz Carlos Bresser-Pereira & Paulo Gala, 2008. "Foreign savings, insufficiency of demand, and low growth," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 30(3), pages 315-334, April.
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    Cited by:

    1. Deval Desai & Michael Woolcock, 2012. "The politics of rule of law systems in developmental states: 'political settlements' as a basis for promoting effective justice institutions for marginalized groups," Brooks World Poverty Institute Working Paper Series esid-008-12, BWPI, The University of Manchester.
    2. Porzecanski, Arturo C., 2014. "Brazil’s Place in the Global Economy," MPRA Paper 54257, University Library of Munich, Germany.
    3. Salvatore Monni & Massimo Pallottino, 2013. "Beyond growth and development: Buen Vivir as an alternative to current paradigms," Departmental Working Papers of Economics - University 'Roma Tre' 0172, Department of Economics - University Roma Tre.
    4. Fernando Groisman, 2016. "Una aproximación a los efectos del “derrame” del salario mínimo en la estructura de remuneraciones de Argentina," REVISTA CUADERNOS DE ECONOMÍA, UN - RCE - CID, vol. 35(68), pages 457-474, January.
    5. Mauricio López González & Edwin Esteban Torres Gómez & Sebastián Giraldo González, 2016. "The evolution of Colombian industry in the context of the energy-mining boom: Symptoms of the dutch disease?," REVISTA CUADERNOS DE ECONOMÍA, UN - RCE - CID, vol. 35(68), pages 475-490, January.

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