Industrial Policy in Latin America

This entry provides an analysis of the evolution of industrial policies in Latin America over three historical periods: the “big push” by developmental states (1940–1970), the liberalization period (1980s and 1990s) and the slow return of industrial policy since the 2000s. Industrial policies were a key pillar of the “big push” development strategy followed by the governments of Latin America until 1970. After the Debt Crisis in the early 1980s free market reforms misrepresented industrial policies as inefficient and too interventionistic. Since the 2000s industrial policies made a slow comeback with a higher degree of heterogeneity in policy approaches across countries. But within the region, industrial policies have not been integrated into a strategic development vision and have had limited impact. While countries in Latin America have made progress in several areas their main structural weaknesses, including a narrow production and export base, a high dependency on commodities and raw materials, little integration in global value chains, and poor exploitation of regional integration, persist and are stumbling blocks to development and innovation.