ABSTRACT
Free market economics was replaced by a tendency to favour protectionist policies. In most Latin American countries there was a significant rise in tariffs on imports, aimed at safeguarding the development of their nations' emergent industries. The pursuit of protectionist policies came hand in hand with indirect State intervention, leading to the formation of an increasingly powerful State. This led to the development of a large State bureaucracy, but it also led to the creation of State agencies aimed at promoting the formation of new manufacturing activities, such as the CORFO (the Chilean Corporaci6n de Fomento de Ia Producci6n) , set up in 1939. There was also an increase in direct State intervention. The most obvious example was the 1938 nationalisation of the oil industry in Mexico. Highly controversial at the time, Mexican public ownership of what had been mainly US oil refineries based in Mexico represented a bold step in what was perceived to be a bid to achieve full economic independence on the part of a Latin American country.
