Raúl Prebisch and the challenges of development of the XXI century

The structuralist theory of development seeks to explain why some regions lag behind in terms of per capita income and why this lag is accompanied by a sharp inequalities in distribution, both within the lagging region and within countries. In the ECLAC Manifesto (ECLAC, 1949), Prebisch used the slow and unequal dissemination of technological progress at the international level as the starting point of his explanation for the differences in the degree of development between countries.  The unequal movement of technology gives rise to two poles, the centre and the periphery, which are maintained endogenously over time.  

Recognizing the asymmetric dynamic of innovation and job creation between the centre and the periphery and within the peripheral structure is key to understanding why the heterogeneity and extreme inequality characteristic of our region persist. 

In clear opposition to the growth theory that was dominant up to the mid-1980s, the structuralist theory of development did not view technological progress as a free, much less an exogenous, good. The interaction between centre and periphery reproduces the technological and income asymmetries over time, with specificities peculiar to each historical period. Various cumulative mechanisms come together in the learning and capacity-building process.  Whereas the development process gives free rein to its own forces, it is highly probable that the peripheral economies will not manage to emerge from the low-growth, low learning trap (unless they have a long spell of good luck in the commodity lottery). This trap reproduces regressive employment and distribution patterns, which are associated with a low share of technology-intensive activities.   

The reproduction of centre-periphery asymmetries is also associated with movements in non-technological variables. Structuralist thinking has devoted a great deal of time to social and political dynamics which shape the institutional context and incentives for learning and reinforce mechanisms that accumulate technological change. There is nothing inevitable or immutable in the growth path of the periphery. Policies are not totally endogenous to the structure: there are various trajectories that unfold gradually and that are revealed by strategic decisions that require some degree of creativity and invention at each moment. There are styles of development and society can exercise its ability to choose between alternative courses. At each point in time, there are, undoubtedly, specific constraints both at the technological level and as regards the social and production structure. Strategic decisions are precisely those that are adopted with a view to gradually overcoming constraints instead of confirming and exacerbating them. 

In order to understand correctly the social tensions generated by underdevelopment, and the political challenges that must be confronted in order to overcome it, it is important to understand how the dynamic of the production structure and international competition affect the social actors and distribute costs and benefits among them. Structuralism remains a useful analytical framework both for understanding the macroeconomic and microeconomic development dynamic and for thinking of the policies for overcoming conditions at the periphery.

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