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new development approach has gained ascendancy among policymakers in Latin America. Officially launched in 1990 with the publication of Changing Production Patterns with Social Equity by the
United Nations Economic Commission for Latin America and the
Caribbean (ECLAC), Latin American neostructuralism has gradually
replaced neoliberal market fundamentalism as the prevailing economic
development perspective in the region.^
Eighteen years since its 1990 debut and six decades since the founding of ECLAC, neostructuralism has garnered widespread intellectual
and political influence, successfully moving from the margins to the very
center of economic development policy formulation. Neoliberalism's
failure to deliver high rates of economic growth and its role in causing
widespread popular discontent and massive mobilizations, along with
electoral victories by center-left coalitions, point to the decline in the
hegemony of neoliberal economic ideas in the region. The election of
progressive candidates like Ricardo Lagos (2000) and Michelle Bachelet
(2006) in Chile, Luiz Incio Lula da Silva in Brazil (2002), Nstor Kirchner (2003) and Cristina Fernndez de Kirchner (2007) in Argentina, and
Tabar Vsquez in Uruguay (2005) raises hopes that an alternative
development path shaped by Latin American neostructuralism can successfully deal with the unresolved socioeconomic problems faced by the
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course of its ascent, neostructuralism recast conceptions about the relationship among economy, state, and society; it introduced a new development lexicon that was increasingly embraced by international development institutions, such as the World Bank and the Inter-American
Development Bank; and it advanced a program of action for establishing a new relationship among institutional reform, modernity, social
cohesion, and globalization in the twenty-first century.
What is Latin American neostructuralism, then? Its discursive potency
derives from being simultaneously an alternative vision to neoliberal
dogmatism, a comprehensive development strategy, an integrated policy
framework, and a grand narrative about the path toward modernity that
the twenty-first century allegedly offers to Latin American and Caribbean
societies. To reduce it to just one of these dimensions is to misrepresent
and underestimate it. Precisely because it is more than just an economic
policy approach, Latin American neostructuralism has been able to influence policy planners and international development agencies and to suffuse the discourse of center-left political coalitions, such as those
presently governing in Chile, Brazil, and Uruguay.
An Alternative Vision to Neoliberal Market Dogmatism
Latin American neostructuralism is the first counterdiscourse to confront
neoliberal dogmatism and to surface in the wake of the profound
processes of capitalist restructuring experienced over the past decades.
It is the response by thinkers at ECLAC to the intellectual offensive of
neoliberalism, and to the perceived deficiencies of structuralism and
state-led industrialization development strategy that neoliberalism supported from the late 1940s to the 1960s. Whereas during the second half
of the 1970s and 1980s, neoliberals insisted that market and price signals alone remained the fundamental tools for reforming Latin American
economies and achieving international competitiveness, neostmcturalists countered that though market forces continued to be primary, politics and government intervention were imperative for constructing the
societywide "systemic competitiveness" necessary to compete successfully in world markets (ECLAC 1990). Political and institutional intervention, they argued, were essential for generating the synergy, coordination, and social harmony indispensable for fluid and speedy
integration into the globalization process.
By replacing the market dogmatism of the 1970s and 1980s with a
more holistic approach that restores the political, institutional, and cultural
dimensions to economic development, Latin American neostaicturalism
promises to transform Latin America. To recouple economic growth with
social equity in the new historical context, ECLAC argues, intellectual and
political leadership, not just laissez-faire policies, are needed (see table 1).
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Paradigm
Structuralism
(1950-1970)
Neoliberalism
(1973-present)
Motto
Structural change
Structural
adjustment
Productive
transformation with
social equity
Purpose
Modernization via
industrialization
Modernization via
privatization
Modernization via
internationalization
View of
development
Requires explicit
political will and
state intervention
rationalized
through planning
process
Deliberate process
in which social and
political energies are
focused in support
of export drive and
achieving dynamic
entry into world
economic flows
Market
Technical change
resulting from
dynamic insenion in
world economy
Obstacles
Legacy of historical
power relations
and institutions that
erode efficiency
of price system
International
market that
reproduces centerperiphery
asymmetries
Mistaken domestic
policies that hobble
market allocation:
inward-looking
growth strategies.
overvalued currency, protectionist policies; state
role that suffocates
private initiative
Pattern of external
insertion: uncoordinated productive
apparatus that traps
countries in "low"
road (competing via
cheap labor and
currency devaluations) rather than
through productivity
increases and
innovation
Role of the
state
Staictural reforms
Steer capital
accumulation
Develop key
industrial sectors
Protect economy
from external
fluctuations
Provide minimum
conditions for
market to function:
private property;
enforce contracts;
maintain order.
collect data.
provide limited
safety net
Table 1 {continued)
Paradigm
Structuralism
(1950-1970)
Outcome
Economy is
subordinate to
politics
Neoliberalism
(1973-present)
Latin American
Neostructuralism
(1990-present)
Channel/subordinate
social conflict to
"common goal" of
competitive insertion
in world economy
Tap social capital
Link civil society to
export drive
Politics is
subordinate to
economy
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formed into radiating hubs propagating globalization's economic, technological, and social benefits. Chile since 1990 has been the launching
site, testing ground, and, arguably, showcase for this new postneoliberal
development approach.
An Integrated Policy Framework That Supports
a "Post-Washington Consensus"
Latin American neostructuralism has also been called a package of economic measures that will help remedy the crises spawned by neoliberalism through policies that "will prove viable politically and socioeconomically but also promote democratic regimes and greater social
justice" (Meiler 1991,1). Neostructuralism's main premise is that through
a different set of economic policies, more attentive to institutional, political, and cultural factors too long excluded by free market reductionism,
countries can attain the high road to globalization.
This requires a shift toward exports with higher value-added and an
international competitiveness based on increased productivity and innovation. If Latin America is to gain the economic, social, and political
benefits offered by globalization, it must abandon its current export profile, based mainly on the export of natural resources with low levels of
processing and produced by low-wage workers. Switching from the current, unfavorable low road to the promising high road to globalization
requires exporting ketchup instead of tomatoes; modular, ready-toassemble furniture rather than sawn wood; frozen and packaged food
instead of fresh fish and produce.
Instead of radical reforms, Latin America's massive problems of
poverty, inequality, and disappointing economic growth rates can therefore be better addressed by ensuring a more dynamic entry into world
markets. On the basis of "reforming the reforms" and improving policy
design, international competitiveness, economic growth, social equity,
political democracy, and legitimacy can be made to mutually reinforce
one another in an ever-expanding virtuous circle.
Latin American neostmcturalism therefore represents an explicit
awareness that if market forces are to operate effectively, they need to
be complemented by non-market-based forms of coordination. Economic policies must be conceived with an eye to the role that institutions, culture, and social capital play in economic coordination. Economic growth, social equity, democratic governance, and governability
consequently require a much expanded policy mindset and palette. The
main characteristic of the neostructuralist policy framework, then, is the
active promotion of new forms of social coordination beyond those
offered by market forces alone. Neostructuralist policies acknowledge
the importance of institutional intervention, civic-state alliances, and
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10
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lem of Latin American development, in the context of the current globalizing processes, fundamentally as one of deciding and applying more
holistic policies, so that the region may reap the fruits of a more
dynamic and equitable development. The five core assertions are the
following:
The prospect of a relatively easy on-ramp to the high road to
globalization
The promotion of open regionalism, which makes the global economic rules of the World Trade Organization compatible with the
aspirations for regional integration
The possibility of delinking distribution from accumulation, so
that "productive transformation with social equity" can be
achieved within the confines of (and on account oO the current
export-oriented regime of accumulation
The purported dichotomy between "spurious" (cheap laborbased) and "genuine" (productivity- and innovation-based) competitiveness at the firm and country level
The desirability of building a national consensus behind the export
drive and the effectiveness of political interventions and "new
social contracts" in the context of the region's open economies
Each one of these ides-forces starkly highlights major differences
from neoliberalism. Instead of a dismal economic future determined by
an export-oriented economy that competes via superexploited workers
and unprocessed natural resources, neostructuralism raises the prospect
of reversing the deindustrialization of Latin American economies produced by neoliberal policies by achieving a different export profile, one
based more on manufactures, productivity increases, and technical innovation. Instead of betraying Bolivar's dream and deepening neocolonial
subordination to U.S. geopolitics and U.S.-based transnational capital,
economic globalization, as promoted by the WTO, NAETA, and the
ETAA, when seen through the lens of open regionalism, is transformed
into an adjutant to the dream of Latin American integration. Instead of
the neoliberal "trickle-down" theory, in which equity and the well-being
of entire generations have to be sacrificed at the altar of market-centric
policies, neostructuralists promise that sensible economic and social
policies can offset the exclusionary and wealth-concentrating dynamics
of markets and export-oriented growth.
Under neoliberalism, participation in global markets became socially
destructive because international competition was achieved through
"spurious" meanslowering of wages, artificial devaluations. Neostructuralists offer an alternative path, one that can engender virtuous circles.
Instead of authoritarian regimes, which imposed the laws of the market
11
12
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13
14
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15
16
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political realm that we find the most politically and ideologically potent
of Latin American neostructuralism's core foundational ideas: namely,
that concerted action, effective leadership, and promotion of participatory governance can best ensure society's adaptability to the requirements of international competitiveness, while at the same time deepening equity and social cohesion.
It is here that neostructuralism fully assumes its role in providing a
grand narrative for Latin America's path toward modernity in the twentyfirst century. This grand vision promotes the active though carefully circumscribed agency of a broad spectrum of social actors, ranging from state
managers, capitalist exporters, and unionized workers to leaders of political parties, nongovernmental organizations, and communities. Neostructuralism sees participation and concerted action as the most effective
means of marshaling the forces of cooperation in a society thrust into the
raging fires of competition, constantly fanned by globalization. Leadership,
provided by a restructured state and supported by the concerted action of
a political system, is essential for orchestrating and guiding the cultural
transformations required; such state intervention constitutes the linchpin
guaranteeing that the virtuous circle of international competitiveness,
social cohesion, and political stability can take root and prosper.
To achieve these goals, public policies formulated by Latin American neostructuralism include the promotion of different modalities of
consensus building, participatory governance, public-private sector partnerships, taking advantage of and nurturing social capital, and constructing new forms of citizenship that rely on state-civil society
alliances. Although these policies are not uniquely ECLAC creations, the
merit of Latin American neostructuralism lies in using these to formulate
a seemingly coherent framework for strengthening the political and ideological role of the state and for establishing aciton-oriented guidelines
through which politically to direct the state's contribution to the longterm stabilization of the export-oriented regime of accumulation.
History has had a way of ironically twisting the pretensions of the
economic development paradigms that have prevailed in the region
over the past three decades. In this sense, neoliberalism gave rise to the
"orthodox paradox"; namely, that "economic policy reforms aimed at
expanding the role of markets appear to strengthen the power of the core
of the state, the executive branch, and to enhance its control over key
economic policy variables which affect the outcome of key economic
activity" (Bates and Krueger 1993, 463, emphasis added). Latin American neostructuralism, in turn, gives rise to what may be called the heterodox paradox; namely, that economic and social policies aimed at
expanding the role of participatory governance and civil society result
in reinforcing the subordination of the public sphere and the noneconomic realm to the logic of transnational capital.^'' The outcome is the
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19
20
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and careful study. The delay in critically engaging the new paradigm is
partly based on the misplaced belief that Latin American neostructuralism indeed offers an alternative to neoliberalism, or at least retains the
power to realize the hope that the dramatic social and economic costs
of neoliberal policies can be assuaged within the parameters of the current status quo. It is also rooted in the persistent, weak theoretical selfawareness on the part of economics in general, and development economics in particular.
Given the dearth of critical assessments, this essay has oudined one
possible approach for exploring the nature of Latin American neostructuralism, its conceptual and policy innovations, and the role it is currently playing in the development of Latin American capitalism. Subjecting Latin American neostructuralism to a critical and comprehensive
assessment remains a pressing task in the study of the history of economic ideas and of development models in Latin America and elsewhere. Such an approach,seems possible only once social scientists,
policymakers, and particularly economists become more self-aware as
to how they construct their claims to knowledge and truth.
This self-awareness, however, does not seem enough. It is also necessary that in the process they strive to become conscious of the role of
economic ideas and theories in the reproduction or transformation of
the existing constellation of power. Until such an awareness becomes
predominant in economics and especially development economics,
neoliberalism, and the allegedly more benevolent Latin American
neostructuralism, will remain instruments at the service of dominant
social power, despite their repeated claims to objectivity, scientific rigor,
and more recently, a promised capacity to deliver modernity without
immiseration or social dislocation.
NOTES
I would like to thank the anonymous reviewers for their insightful comments and suggestions. The usual disclaimers apply. All translations are mine.
1. Neoliberalism has become an omnipresent term, employed with vastly
different meanings in the literature to denote alternatively a set of economic
ideas, a policy regime, an economic model, and the all-encompassing mode of
experiencing economic, political, and cultural existence under the current era of
globalization. This study uses neoliberalism in a tightly restricted sense of indicating a particular set of economic ideas and policies. It employs the term
transnationalized export-oriented regime of accumulation when referring to the
"new economic model" that replaced import substitution industrialization (ISI)
in most countries of the region. Ergo, declining influence of neoliberal economic
ideas or election of center-leftists does not necessarily mean that the export-oriented regime of accumulation (erroneously called the neoliberal model) that
neoliberals helped implant is being questioned. Clarity on this difference is key
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23
ing fiscal deficits at the same time that tax reform lowered fiscal revenues by
lowering tax rates on corporations and individuals.
10. Every discourse inevitably commits certain acts of omission and exclusion in the process of its formulation; what becomes relevant is identifying these
and determining their impact on the discourse's internal coherence and, more
important (following Eagleton), the impact that such omissions have on the
maintenance or challenge of social power and the status quo.
11. For an excellent discussion of structuralism, see Kay 1989, chap. 2.
12. The rupture with the structuralist past is evident in four dimensions.
Internationalization of productive staictures is now welcomed and no longer
seen as helping to reproduce international asymmetries. Foreign capital and
multinational corporations are envisioned as a key positive force in economic
development. Private capitalists and the market, not the state, are celebrated as
the key actors in development; and distribution is now conceived of as
autonomous from accumulation. For a discussion of the transition from structuralism to neostructuralism see Petras and Leiva 1994, chap. 4.
13. Other key tenets of structuralism renounced by neostructuralism are
that the logic of distribution is now theorized as independent from the logic of
capitalist accumulation, and that private capitalists and the market, not the state,
are today the key and most efficient actors in economic development. See Leiva
2008, esp. chap. 2.
14. For an analysis of the Chilean case, see Leiva 2005.
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