Introduction

The rejection of development economics as well as economic rationales for developmentalist state intervention is largely based on liberal economic arguments, especially neoclassical international trade theory. The rationale for economic liberalization, including the doctrine of "free trade," is theoretically based on fairly simple reasoning. The economies differ significantly in terms of the timing and the nature of their transitions from import substitution to export-oriented industrialization. Latin American and East Asian newly industrialized economies (NIE) are among the most industrialized nations in the developing world, but have followed different paths of industrialization. The consensus is that Latin America should follow the example of the East Asian NIEs by liberating their economies and reducing the role of the state. Latin America must overcome simplistic and dogmatic prejudices regarding the character and extent of government intervention. The chapter also presents an overview of the key concepts discussed in this book.