ECLA and the Theory of Import Substituting Industrialization in Latin America

Abstract

Import-substituting industrialization (ISI) has undoubtedly played a central role in the economic development of Latin America in the present century. Nonetheless, the effectiveness of this process as a basis for sustainable output growth, rising living standards and social modernization is still strongly contested. The critique of ISI is thus not only a question of understanding a particular period of economic history, it is also a matter of evaluating the current economic strategy of the region, based on increasing integration into world markets and less state intervention in industry. This is explicitly defined in contrast to what is perceived as the previous ISI strategy (Edwards, 1995).