Debt, International Corporations, and Economic Change in Latin America and the Caribbean

No event since the Great Depression has fomented such profound change in Latin America as has the debt crisis. The transformations that followed the economic collapse of the 1930s resulted in a period of rapid growth spurred by import substitution industrialization (ISI), particularly in the larger countries. During this period, economic space was created for indigenous capitalist development and limited growth of a local capitalist class. The process was cut short after World War II with the expansion of international corporate investment and of the international economy and finance which intensified world competition. Of particular importance were the creation of the International Monetary Fund (IMF) and the General Agreement on Tariffs and Trade (GATT), two institutions responsible for facilitating international corporate penetration of Latin American markets and for perpetuating an ideology of economic development that has been able to thwart local capitalist expansion, while at the same time blocking socialist development. Still, the base for industrialization was extended with ISI, and this was the progressive mark of the Great Depression's legacy in Latin America. The debt crisis, however, has had an overwhelmingly negative impact on the region's institutional development and its prospects for more autonomous change, at least as long as the Latin American countries continue to play by the rules of the international economy, as most have done to this point (though there are partial exceptions, such as Peru). The debt crisis has thrust upon the Latin American economies a restructuring along the lines of IMF and neoclassical economic

Business · Debt · Development economics · Economics · External debt · Financial system · Latin Americans · Political science · Economic Theory and Policy · Finance

• Dependent Development and Regional Integration

  Open Access•Donald G Richards•Latin American Perspectives•1997

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• Transnational corporations and underdevelopment

  Volker Bornschier•Transnational corporations and…•1985

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• Winners and Losers in Colombia's Economic Growth of the 1970s

  Jonathan Hartlyn, Miguel Urrutia•Hispanic American Historical Review•1987

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