Advances in Latin American Structuralism and center-periphery models
Gabriel Porcile, Economic Commission for Latin America and the Caribbean (ECLAC)
This paper discussed recent advances in center-periphery models in which the conditions for sustainable development are defined considering its economic, social and environmental dimensions. These conditions are presented within a single, articulated framework that helps discuss potential complementarities and trade-offs between the objectives of sustainable development. The model is policy-friendly: it allows for a broader, interdisciplinary discussion of how social, industrial and technological policies can be deployed to produce the desired path.
Except for the external constraint, there are no endogenous forces that could lead to sustainable development. The role of politics and political negotiations (at the domestic and international levels) is paramount. Different paths would emerge as political power and structural change co-evolve and create tensions and disequilibria. These growth paths were represented as ideal “types” that arise from different combinations of the parameters of the model, which in turn reflect a certain constellation of political forces. Positive feed-backs between political power and economic power may lead to a development trap which could only be overcome by a major exogenous shock that builds (human and productive) capabilities beyond a critical level so as to remove barriers to structural change.
Political forces are represented in the model in the form of three different coalitions, which come out of various possible alliances between the educated bourgeoisie (G), the workers (W) and fossil-intensive producers (B). A Brown-Red (BR) alliance may be successful when the commodity lottery is favorable, but end in instability (or even revolt) when export prices falter, especially because workers are the weakest bond that will most likely have to endure most of the adjustment costs. A BG coalition seems a contradiction in terms, but it could emerge if the Greens accept to boost green public investments by reducing wage costs and social protection. However, it tends to become unstable because in democracy demands for income redistribution cannot be ignored, and because increasingly trade and investment rules become more intolerant to carbon-intensive production. Finally, a GR coalition committed to major efforts at technical change and building green capabilities, along with a “Senian” approach towards social protection and equality, may provide the political basis for sustainable development. While this offers prospects for having a stable inclusive path in a democratic setting in the long run, the transitional phase will be challenged by major sort-run imbalances in fiscal policy and in the external sector.
About the speaker
Gabriel Porcile is a prominent and long-time officer of the Economic Commission for Latin America and the Caribbean (ECLAC) and current director of the ECLAC Office in Montevideo.
He holds a PhD in Economic History from the London School of Economics and his areas of interest in research are Structuralist and Keynesian growth and distribution models, Technological learning and structural change, empirical and theoretical aspects, Interactions between short run macroeconomic policies and long run growth, Growth and distribution in Latin America Policies and institutions for economic growth and distribution in a comparative perspective.
Zoom link for those joining online:
https://unu-merit-eu.zoom.us/j/81717591660?pwd=WHBhZUxuR3VuMm54K212OHZpN3FvQT09
Venue: Room 0.18, Boschstraat 24, Maastricht (UNU-MERIT) and Online
Date: 01 February 2024
Time: 12:00 - 13:00 CEST