Summary
Baten Chapter 4 Summary
- Module
- EC104. World Economy (EC104)
- Institution
- The University Of Warwick (UoW)
Baten Chapter 4 Summary
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4. Latin America(Some parts have too much detail- have highlighted the main points
in those/ put extra parts in comments)
Intro/Overview
-Common feature countries: ‘Iberian colonial experience, specialisation in natural resource-based
products and primary export patterns’
-Middle income status - some countries still very poor but there have been notable economic, social
and political changes
-Bulk of the countries still have natural- based production patterns- trade specialisation holding
access to ‘technologically dynamic segments of the global market’ (121) where growth of demand is
stronger.
-Limited success in economic development has made it difficult to sustain ‘broad-coverage’ welfare
policies
-Successes and failures have also been defined by institutional development:
-the social structures
-distribution of wealth and power
-the role and strength of its elites and the complex
-often painful process of state-building (which in many cases has resulted in endemically weak
nation-states) – in combination with the legacy of colonial times and the economic and political
difficulties that the newly independent states had in positioning themselves on the world stage
Conclusion summary
-3 periods- state-building, export-led growth, state industrialisation then again market
-fell behind the West
-analysis of volatilities to explain the income gap
-explained by primary commodity concentration + poor educational and institutional structure
-development in technological and industrial properties needed
Latin America in the world economy: convergence and divergence in per capita
GDP
-Limited historical data on GDP trends (especially before the 19 th century)
-per capita GDP fluctuated around world average for past 2 centuries
-Three major phases of GDP growth: a decline between independence and about 1870 (relative to
the west), upward trend in 1870-1980, decline since the 1980s
-Has done better in economic growth than Africa till present day
-Better than Asia till the mid-20th century but since 1980, Asia has been doing better
-Since independence seems to follow growth pattern similar to ‘the rest of the world’
- ‘population growth accounts for some 60 per cent of its total economic growth, whereas annual
growth rates for per capita GDP have been only three-quarters of the rates achieved by the West’
(p123)
-‘Between 1820 and 2008, the gap between Latin America and the West widened from 0.8 to 2.7
times Latin America’s per capita GDP’ (p123)
-Standards of living and infant life expectancy plunged during early years of the colonial period but
income levels recovered so gap at the end was not much greater
- Sizeable but not widening gap between Latin Am and the West as the West grew slowly but as the
West showed growth due to large productivity gains, Latin Am began to fall behind despite greater
growth
, -new growth patterns during the industrial revolution seems to have affected Latin Am, not just its
colonial past
A typology for an analysis of the Latin American countries
-Hard to find one that covers the 200 years since independence but a no. of features that have
remained constant and explain development
-Cardoso and Pérez Brignoli (1979): LatAmer societies shaped by interaction of the pre-Columbian
indigenous population, Europe and Africa – use this to establish typology (Based on other works such
as: Furtado 1976, Sunkel and Paz 1970, Cardoso and Faletto 1971)
1.‘’ have identified 3 major ways transitions to wage-based labour market:
1. By ‘Indo-European’ regions- pillars of colonial structure, various forms of forced labour
still used till well into the 20th cen for activities such as farming and ranching, mining, and
indigenous campesino activities.
2. ‘ Euro African’ regions- slave labour-based economy and complex process of abolishing
slavery have been major factors
3. ‘Euro-African’ regions- temperate zones of the Southern Cone- European immigration was
main factor in population growth or in enclaves with other 2 societies
2.main commodity, particularly in export activity, was between mining, agriculture or forestry.
-countries grouped into 3 diff groups of socio-productive structures:
1. ‘the hacienda, the indigenous communities and mining activities have predominated in
primarily Indo-European societies’
2. ‘tropical plantations have been the predominant economic activity in what are for the most
part Afro-American societies’.
3. ‘Euro-American societies based on temperate-zone agriculture or mining have
predominated’
The long delay: the decades after Independence, 1820-1870
-0.2% annual per capita GDP growth and 2% export growth (p128)
-per capita output for domestic market was virtually flat
- Bértola and Ocampo(2012) – group 3 had greatest increase in exports and better per capita GDP
performance and worst development by group 2 around 1820
-About 1870, group 3 per capita GDP double of grp 1, from 16% diff in 1820 (p128)
-By 1870, grp 1 ranked last but not far behind 2
-Slow growth and stagnation idea supported by anthropometric data ( e.g. Average male stature
lower in Argentina and Peru by the 1870s than at eve of colonial period)
-Grp 1 – Peru : silver mining sector collapsed, had relied on slave labour and so export activities of
costal areas hit by the dissolution of the slave system (Gootenberg 1989). Flat exports till 1840s
despite product diversification till Guano boom: exports jumped by a factor of 7 between 1845-60,
guano accounted for over 50% of total exports in the latter year (Contreas and Cueto 2004: 116)
-Grp 1 – Mexico : civil wars and institutional instability hindered recovery, till Porfirio Diaz gov
established growth conditions
-Grp 2- Brazil : GDP growth failed to outpace pop growth till 20 th C
-Grp 2 - Columbia : economic contraction then stagnation till 1850 as it relied on slave labour.
Diversification of exports= growth spurt till 1880s
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