In the developing world, Latin American countries are among the best economic performers. This performance may be attributed to structuralism, which Latin America adopted during the 1950s, through the United Nations Economic Commission for Latin America (ECLAC)
The structuralist view of economics takes it cue from the structuralist perspective, which employs the centre-periphery model and requires an appreciation of different historical structures. Structuralism implies that development is turned inwards, and, in a huge contrast to neoliberalism, the state has a role to play.
As we observe, Latin America is performing well compared to its developing world colleagues. In fact, the United States has never belittled the economic potential of Latin America, and has always kept the region in tabs on its foreign policy. Large Latin American banks, such as the Banco Santander and the BBVA, operate inside the United States (the latter is even one of the biggest sponsors of the National Basketball Association).
However, this outstanding economic performance is largely beset by escalating political instability (Latin America has been besieged by military coups since the beginning of the 20th Century), worsening peace and order situations (Mexico and Venezuela have the highest crime rates in the Western Hemisphere), and the widening gap between rich and poor. With these things in mind, I dare ask whether structuralism has actually worked in Latin America.
Economic structuralism takes its cue from an eponymous theory in anthropology, which states that “elements of human culture must be understood in terms of their relationship to a larger, overarching system or structure” (Blackburn, 2008). We can deduce from this definition that the structuralist approach emphasises the importance of taking into account structural features in doing economic analysis.
One thing that came to my mind in thinking why structuralism might have worked for Latin America is one thing – Latin American countries have mostly similar structures, politically and economically. This may have been brought about by a shared history and language.
However, did structuralism actually work?
During the last lecture, we talked about some problems that arose from structuralism. And all problems during one time or another were present in most Latin American countries. To make my point: despite richness in resources, most Latin American countries are still net importers of capital goods. Also, sometime during the 70s-80s industrial efficiency in Latin America are at low levels. Countries experienced high inflation; Bolivia even suffered from hyperinflation in the 70s-80s, while Ecuador had to abandon the Ecuadorian peso and is now trading using US dollars. Most Latin American companies are foreign-owned, and unemployment levels are still soaring.
On paper, structuralism is a good theory, but implementing it in real-life situations, especially the economy, is a daunting task. What might have caused Latin America’s failure in structural economics is the lack of political will to do so. Regime changes, intervention from foreign forces, and weak peace and order policing have made structuralism do more harm to Latin America than it supposed to do good.