The document discusses import substitution industrialization (ISI) policies adopted in Latin America between the 1940s-1960s as a strategy for economic growth and development. ISI aimed to promote domestic industries like textiles and appliances to replace imports by using protective trade policies. While ISI initially saw some success, Latin American countries became increasingly dependent on exports of primary commodities, which deteriorated their terms of trade over time. ISI eventually declined as countries struggled with inefficient industries and faced debt crises in the 1980s.

1. Economic Policy in Latin America Dependency theory and the import substitution period. Alejandro Díaz-Bautista, Ph.D. [email_address] Professor of Economics and Researcher at COLEF Visiting Research Fellow and Guest Scholar 2008, Center for U.S.-Mexican Studies, University of California San Diego (UCSD). April 2, 2008 Graduate School of International Relations & Pacific Studies IR/PS University of California, San Diego

13. Foreign Investment as Percent of Total Gross Domestic Investment in Latin America During ISI Years Post-ISI decapitalization -0.3% 1984 Global recession/early post-ISI 18.1% 1982 ISI 10.3% 1980 ISI 7.2% 1970 ISI 6.0% 1960 Pre-ISI decapitalization -1.1% 1950 Prevailing Industrial Policy Foreign Investment as % of Total Investment Year

44. Mercosur Full members: Argentina, Brazil, Paraguay, Uruguay, Venezuela Associate members: Bolivia, Chile, Colombia, Ecuador, Peru Headquarters (secretariat): Montevideo, Uruguay Official languages: Spanish, Portuguese Combined GDP: US$ 1.1 trillion

59. Economic Policy in Latin America Dependency theory and the import substitution period. Alejandro Díaz-Bautista, Ph.D. [email_address] Professor of Economics and Researcher at COLEF Visiting Research Fellow and Guest Scholar 2008, Center for U.S.-Mexican Studies, University of California San Diego (UCSD). April 2, 2008 Graduate School of International Relations & Pacific Studies IR/PS University of California, San Diego