Chapter 10: Prebisch: Infusing Dynamism into Development Processes via Raising Investment and Technological Densities, and IS and EP Industrialisation
10.1 INTRODUCTION Whereas the last three chapters are chronologically arranged in accordance with when Hamilton, List, and Manoilesco contributed to the development and trade literature, this and the next two chapters are respectively devoted to three development economists who were essentially contemporaries to each other: Prebisch, Myrdal, and Singer. 1 Their contributions to development studies were made in the more modem period, when the 'protectionist' label has frequently assumed the interchangeable tag of supporters of IS. For their alleged support of IS and for some other considerations to be discussed later, the three have indeed been grouped together on the list of 'usual suspects' (Meier 1958b, pp. 285-6; 1963, p. 55, n. 18; 1980, p. 282; and Balassa 1989, p. xix).2 Two years before his death in 1986 Prebisch summed up his thinking on development as having gone through five stages (Prebisch 1984).3 Commenting on that summary, Bhagwati (1984, p. 198) notes that it is the second stage, from the late 1940s to late 1950s, 'that is best known to economists outside Latin America'. Specifically, '[i]t relates to the period when he developed the thesis that the prospect of declining terms of trade for Latin American primary products implied the desirability of import substituting (IS) industrialization'. It is fair to say that during that period it was Prebisch's Economic Development of LA that caused the biggest uproar in the mainstream economics profession. That is only to be expected considering that that work, which Hirschman (1968) dubs...
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