Published by EH.NET (April 2007)

Victor Bulmer-Thomas, John Coatsworth, and Roberto Cortes-Conde, editors, The Cambridge Economic History of Latin America, Volume 2: The Long Twentieth Century. New York: Cambridge University Press, 2006. viii + 755 pp. $150 (hardcover), ISBN: 0-521-81290-9.

Reviewed for EH.NET by Albert Fishlow, International Affairs, Columbia University.

This is virtually the final volume in a series of important contributions to the economic history of Latin America within the last decade or so. Four contributions stand out. There is Leslie Bethell’s multi-volume Cambridge series, now about to be completed, and despite its more comprehensive nature, a most relevant source for economic history. Additionally, Rosemary Thorp has completed a new text focusing on the twentieth century, and with her associates, has produced three volumes of background material. Victor Bulmer-Thomas, one of the editors of the volume here reviewed, has recently completed a second edition of his text, The Economic History of Latin America since Independence. And now we have the second volume of the Cambridge Economic History of Latin America. Several of the contributors to this book also appear in the other edited collections.

While a long article undertaking a comparative analysis would very much be welcome, my task is limited to a single part of this great revival. That alone is daunting. There are fourteen chapters, sixteen authors, more than 750 pages and something like a hundred tables and diagrams. Additionally, there are bibliographic essays providing informed references to additional research materials. Finally, what is really different about this collection is its emphasis upon topics, rather than countries, leaving to the particular authors a greater freedom to expand upon their own definitions of the relevant. That is, for the most part, advantageous, although one might have hoped for an additional quantitative appendix comparing more fully, say, the different estimates of regional national income over the period coming from Angus Maddison, the Oxford compendium (linked more closely to the data developed by the Economic Commission on Latin America), Andre Hofman, and the efforts by Leandro Prado de la Escosura to put together various national estimates.

The book is a rich source for this long century of development. Its particular strength, not surprisingly, is the historical rather than the contemporary. That, after all, is the great virtue of the authors. Trying to bridge more than a century-long experience, over many countries as well, is really too much to ask. Most of the authors are more comfortable with the political economy of the past than the present. As a consequence, in many of the essays, the treatment of the last decades of the twentieth century is too limited and, on occasion, verges on the incorrect. Perhaps, it might have been better consciously to conclude the volume with the debt crisis of the 1980s, prior to the emergence of a region geared, for the first time since the Great Depression, to respond to globalization and its special challenges. One would still have had a century, but one overlapping the nineteenth and part of the twentieth century.

These last twenty-five years, with their richer quantitative data bases, and much greater volatility, have been treated in great detail by individual researchers in the Inter-American Development Bank, the IMF and World Bank, applying extensive econometric techniques, not to mention the contributions from research centers within the region. We get a good sample of this different style in the last chapter, “Poverty and Inequality,” by Miguel Szekely and Andres Montes

What are the principal conclusions that seem to emerge about the Latin American development process? I will limit myself here only to four, although many more could be constructed from the abundant text.

A first proposition seems to be the adverse consequence of resource richness. Despite high rates of early tariffs ? not entirely for revenue purposes as Bertola and Williamson seem to suggest, but also explicitly for industrial protection ? a surge of import-substituting activity before 1914 failed to provide an adequate base. Nor, alas, did import substitution led by CEPAL in the 1950s. Many Latin American governments opted in favor of subsidizing industrial expansion for the internal market, instead of opting for greater external participation. That might have led to greater domestic efficiency as well as a more diversified export sector. It also was a contributor to high rates of inflation that flared in the 1960s and 1970s and led to tragic military interventions in many countries.

Another is the irregularity of foreign capital inflows, traced by Alan Taylor historically, and continuing through the 1990s. What one sees is a series of debt cycles through the nineteenth century until the 1980s, where the character of international flow alters from bond indebtedness to bank lending to, more recently, direct foreign investment. What clearly changes is the length of exclusion. Argentina has even been able to impose a radical reduction of its obligations, to dispense with the IMF, and to accumulate reserves in the midst of the last three years. Additionally, that external constraint is now lesser in the midst of a favorable shift of the terms of trade. Will continuing globalization eliminate this central factor affecting the region?

A third element in the story is that of inadequate investment in education. The chapter by Fernando Reimers covers this deficiency. There is clearly a very late Latin American commitment to universal enrollment, and a still continuing, and large, inadequacy in the quality of public, as opposed to private, instruction at the primary and secondary levels. On the other hand, university public education is of high quality, as well as virtually free. Unequal income distribution is one result; another is a lack of skills capable of assuring continuing upgrade in the distribution of production and exports abroad. Nonetheless, it proves difficult to change. Effects take a generation adequately to be felt; governments have a more limited horizon over which they are seeking success.

Still another determinant of economic growth, now given much weight in contemporary discussion, is institutional change. A great credit to the volume is the inclusion of a chapter by Alan Dye on the subject. He incorporates much that is relevant, including the differences between the civil and the common law, as well as giving special attention to property rights. But the treatment fails to extend to the present, and to incorporate the many current problems posed by the lack of an independent judiciary, or fully to examine the inadequacies of representation within the legislative branch. There is much more to be brought to bear in this area historically. But this is a welcome start.

There are many other contributions than have already been mentioned. The editors have opted for a four-way classification: chapters on historical cycles of globalization, on the onset of modernization, on factor endowments and on sectoral development and equity. As a consequence, they include materials not usually found in other treatments.

For example, Otto Solbrig’s chapter on environmental change ? a wise choice in view of the present accelerating concern with global warming ? appears. However, there is inadequate focus upon the Kyoto Treaty and its forthcoming implications for national governments in the region. And as sometimes occurs, his later reference to the utter failure of the Brazilian ethanol program seems more than a little doubtful at the present moment.

Equally, the editors have resisted a separate chapter focusing on the State, and its variable role over time and sub-region. Stephen Haber, in his chapter on political economy, seems to argue against its relevance when he assures that post-1930 industrial development was not “state-led,” and always ad hoc, just as it was in the earlier period. His reading of the contemporary period is highly at variance with the view of many others. Such a treatment would have provided a useful opportunity for contrast with the collection of essays put together by Rosemary Thorp, where CEPAL receives much greater attention.

Finally, the politics are virtually entirely missing. This, after all, is the period of Vargas, Peron, Cardenas, as well as other, and important post-war leaders. They too had an impact, and not merely during their periods in power. Groups organized in behalf of particular policies. The military consciously sought to impose their own. It becomes difficult to understand fully the economic development process of the region in the post-war period without a more comprehensive framework. And it is not only the internal politics that is absent. Equally absent is foreign relations, which emerged more and more significantly after the Great Depression.

But perhaps too much that seems to be critical has been registered. This second volume, like the first, will take its place in many a scholar’s personal library, and will influence a new generation of economic historians involved in the region. Not at all least, the bibliographical comments accompanying the chapters will direct the diligent reader to related sources carefully selected by the individual authors. So in many ways, it really represents a wonderful beginning to, rather than the end of, study of the economic history of Latin America in the long twentieth century. I suspect that is exactly how the very distinguished editors and participants would like it to be.

Albert Fishlow is the director of the Columbia Institute of Latin American Studies and director of the Center for the Study of Brazil at Columbia University.