In spite of recent success stories in processes of development and catching up, the huge differences that appeared worldwide in development paths and levels -that have been labeled as the Great Divergence- have shown to be extremely persistent. The success of the world leaders in economic, social and technical progress, have permeated to some extent to the periphery of the world economy, but the basic differences remain.
Poverty, income and wealth inequality, preservation of natural resources and the environment, lack of economic and social innovation and good government are the main challenges for developing countries today. A better understanding of the general laws of development is needed, particularly, the critical role of institutional settings. Moreover, the way in which international relations impact on the development of the different regions still constitutes a challenge for research, as the international arena, in spite of changes, persists to show huge imbalances of economic and political power, in the use of natural resources, in access to knowledge and technology. The existence of leaders, gaps, and hierarchies, the enormous concentration of wealth in few people of developed countries, poses particular problems for the development worldwide and in less developed regions in particular.
Development is thus a long run and global process. History, the present and the future are part of an integrated process, which must be tackled with historically informed development and growth theory, able to catch general laws, but also historical specificities and hierarchical international relations.
This research group will focus on some topics, which are of particular interest for Latin American. The approach will be comparative in nature, with special focus on other developing regions. The main topics are:

  • Productive specialization, integration to the world markets and industrial policy. Industrial policy is coming back to Latin America, but still is there too little knowledge about the international experience and too little debate about which are the correct policies and instruments. Moreover, state capabilities, in order to put industrial policy in practice, have come to the forefront of the debate.
  • The role of natural resources in development, both from the point of view of technical change, sustainability and from the point of view of property relations, wealth and income distribution. This topic is central to inter-generational distribution, but also in terms of the understanding of the basis for competitiveness and sustainable productivity growth. A particular topic of interest is the availability of energy sources as well as the transformation of the patterns of energy production and consumption.
  • Growth and financial volatility. Latin America has shown to be one of the most volatile regions in the world with frequent financial crisis. This is related to its productive structure, its particular set of institutional features and the high volatility of international capital flowing to LA. The research group aims to learn from the Latin-American experience of high growth volatility and recurrent financial crisis.
  • Inequality, the welfare State and human capital formation. Latin America, as well as other development regions, faces the challenge of improving growth rates and investment, together with the need to preserve the environment, decrease inequality, poverty and low-quality jobs, and improve the levels of education and skills of its population. The trade-offs and complementarities of policies addressed to these multiple objectives are at the center of the development agenda. One particular line of research within this topic is gender inequality, specially, the activity rate and wages of women, and the patterns of family building and age of marriage.
  • Institutions and development. A lively strand of debate has risen from new institutional thinking during the last decades. While institutions are considered to be long lasting and self-reproductive structures, there still is little agreement on which are the important institutions (legal systems; formal or informal; actors and organizations; national and international) and which are the dynamics of institutional change and the causality between economic growth and institutional change. The study of Latin America in comparison to other regions with similar colonial backgrounds has still too much to add to the understanding of development.

A workshop on “Exploring the Africa-Latin America comparison in global economic history and development” to be held in Montevideo, March 26-27 2015.

Organizers: Gareth Austin (Geneva), Luis Bértola, Ewout Frankema and Jeffrey Williamson (Harvard).
Local Host Institution and Organizer
Universidad de la República, Luis Bértola.
The research group would like to organize the 5th Southern Hemisphere Economic History Summer School (in cooperation with the Economic and Social History Programme) in March 2015.