For most of the first century after independence, all republics in Latin America followed an economic policy of export-led growth based on primary-product exports. The tremendous economic crisis of the 1930s that had a crushing and widespread impact on Latin America; precipitated by the global economic depression, forced Latin American nations to re-evaluate this exogenous economic growth model and to transform their economic policies in the direction of long-neglected diversification of the economy, particularly toward an endogenous model oriented to industrialization.
In order to understand the economic growth model shift from export-led to industrialization through the substitution of imports (or import-substituting industrialization) it is important to have some historical context in relation to Latin American dependence on the former export-led growth model and the degree to which the global economic crisis of the 1930s impacted Latin America.
It is generally accepted that, beginning in the 1930s and continuing for approximately fifty years, Latin America embraced increased industrialization, in the form of import-substituting industrialization (ISI), as the new growth model on which hopes for an economic recovery, long-term stability, and growth would rest. This endogenous model is the primary focus of the analysis to be undertaken in this paper. In order to appropriately complete the discourse in relation to this topic, some brief examination must be turned toward the vast social and political upheaval and the major transformations in the social and political structures that resulted from the crisis, ensuing from the over reliance on an export orientation of th...
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