ABSTRACT
This chapter reviews the evolution of the principal economic policies of Ecuador during this century and assesses their impact on agriculture. The import-substitution industrialization period has been heavily affected by two other major economic events: the petroleum boom of 1972-1981; and the period of austerity and structural adjustment following the international financial crisis and falling petroleum prices since 1982. The shift in the external terms of trade against Ecuador's primary exports, with the resulting overvaluation of the Sucre and loss of government revenues, precipitated a major and significant change in development policy by the government. The petroleum boom was an exogenous event that made it possible to sustain rapid economic growth via the import-substitution industrialization model during the 1970s and early 1980s. Negative sectoral policies and macroeconomic policies all greatly reduced incentives to invest in agriculture during the petroleum boom.
