Regional Development Models,
Distribution, and Crisis in Latin America
Ivan Lesay
Slovak Academy of Sciences
Bernhard Leubolt
Wirtschaftsuniversität Wien
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Overview
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Topics covered by the course
Political Economy approach
Historical background of LA ec. development
Recent political and ec. Developments
Lecture schedule
Literature
Discussion
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Topics Covered by the Course
• Regional and national models of development
– Different economic structures
• Industrialization
• Resources
– Different social structures
• Social inequalities and exclusion
• Impacts on formation of domestic markets
– Different political projects
• Variations of left-wing governments (especially in the new century)
• Variations of right-wing governments
– Different external policies
• External trade
• External politico-economic relations and blocks
• Differing impacts of the global crisis
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Approaches to understand economics
and economies
• Many different approaches
• Political economy
– Interdisciplinary understanding of economies
– Economy embedded in society  more than just
business; social issues also relevant for economic
development
– Historical foundation
– Internal and external influences
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Historical Background
• Since the 16th century colonisation by Spain,
Portugal, France, and Great Britain
– Economic structures based on raw materials exports
and manufactured goods imports
– Political and economic dependencies on the European
colonial powers
• High vulnerability to “external shocks” and changes in the
world market
– Social structures marked by structural heterogeneity
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Indigenous population either dominated or killed
European “élites” as latifundistas
Comprador service sector
Large groups of people enslaved and/or excluded
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Historical Background
• Between the end of the 1920s and 1980s:
Import-substituting industrialization (ISI)
– Global economic crisis of 1920s and 1930s led to dramatic
shrinking of the world market  Latin American
economies forced to get more self-sufficient  ISI-policies
– Investing into internal industrial development
– Relatively high rates of economic growth until 1960s
– Difficult to obtain capital to finance investments
– Continuing structural heterogeneity (social exclusion) led
to problems to create domestic markets
– “Oil crisis” of the 1970s as the turning point
• “cheap” external loans coming from oil-exporting countries 
debt-based intensification of ISI-policies in most countries
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Historical Background
• Crisis of ISI during the 1980s
– USA raised interest rates from 1979 onwards (“Volcker
Shock”)  flexible interest rates on external loans in LA 
interest payments skyrocketed
– Debt crisis in the 1980s  “lost decade”  economic
stagnation, hyper-inflation
• Neoliberalism (Washington Consensus) as a response
to the crisis
– Privatisations, Liberalisation and Deregulation of markets
– Strong focus on the “macro-economic stability” –
especially on inflation targeting
– Focus rather on exports than on domestic market
development
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Recent Developments
• Symptoms of a crisis of neoliberalism (Washinton
Consensus) from 1990s onwards
– Constantly lower rates of economic growth, increasing
number of financial crises  economic crisis
– Rising unemployment and “informal sectors”  rising
rates of poverty and inequality  social crisis
– Environmental degradation as a result of extractivism,
associated with model of export promotion 
environmental crisis
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Recent Developments
• Different political answers to the crisis of neoliberalism
in the beginning 21st century
– Continuation of neoliberalism, conservative, or “rightwing” politics: e.g. Columbia, Mexico,...
– New wave of “left-wing” governments, beginning with
election of Chávez in 1998: Venezuela, Bolivia, Ecuador,...
– “Centre-left” governments, following the election of Lula
in 2003: Brazil, Uruguay, Argentina,...
• Question, in how far “post-neoliberal” models of
economic development are emerging  Is there a
“Post-Washington Consensus” and how does it look
like?
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Recent Developments
• Different models of regional integration
– Neoliberal tendencies towards trade liberalization and free
trade agreements including the USA (e.g. NAFTA, bilateral
agreements, ALCA)
– New tendencies towards pan-Latin-American or South
American integration (ALBA, UNASUR, renewed
MERCOSUR)
• Different impacts of the current global economic crisis
– Countries highly dependent on the USA and/or Europe
heavily hit by the crisis (Mexico, most Central American
countries)
– Most South American countries hardly hit by the crisis
(Brazil, Argentina, Uruguay,...)
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Lecture Schedule
6.10.
Introduction
Ivan Lesay, Bernhard Leubolt
13.10.
Regionale und nationale
Entwicklungsmodelle in
Lateinamerika und ihre Beziehung
zur Weltwirtschaft
Johannes Jäger
(Prof. FH bfi Wien)
20.10.
Lateinamerikas Sozialstrukturen im
historischen Kontext
Dieter Boris
(Prof.em. Uni Marburg)
27.10.
Lateinamerika und die globale
Krise: Verwundbarkeiten,
Dynamiken, Gegenstrategien
Joachim Becker
(Ao. Prof. Uni Wien)
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Lecture Schedule
3.11.
Transformaciones recientes en las Laura Tavares Soares
políticas sociales y efectos sobre la (Prof. Universidade Federal
estructura social en América Latina do Rio de Janeiro – UFRJ)
10.11.
Strategien der Inwertsetzung von
Ressourcen in Lateinamerika am
Ende des fossilen Zeitalters
Elmar Altvater
(Prof. em. Berlin)
17.11.
Widersprüche des brasilianischen
Entwicklungsstaats
Andreas Novy
(Ao. Prof. WU-Wien)
24.11.
Krise ohne Ende. 30 Jahre
Neoliberalismus in Mexiko
Stefan Pimmer
(JKU Linz)
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Lecture Schedule
1.12.
Venezuela: the development of an
oil-dependent country after the
crisis
Ilona Švihlíková
(Prag)
15.12.
Eine demokratische Wende für die
Indigenen? Neue politische
Kräfteverhältnisse und die
Reichweite der
wirtschaftspolitischen
Transformationen in Bolivien
State continuity, transformismo and
neoliberal civil society formation in
Chile
Overview of the preceeding
lectures and outlook
Final exam
Isabella Radhuber
(La Paz / Wien)
12.1.
19.1.
26.1.
Karin Fischer
(JKU Linz)
Ivan Lesay, Bernhard Leubolt
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Literature
• Texts related to the lectures will be available
as an edited volume in the course of the
semester (presumably in November):
Lesay/Leubolt (eds., 2011): Lateinamerika
nach der Krise: Entwicklungsmodelle und
Verteilungsfragen. Wien: LIT
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