ABSTRACT
Latin American countries experienced falling behind during neoliberalism. The decline in profit rate in the 1970s followed by the fall in the investment rate in the 1980s drove a decline in capital accumulation and output growth. The median GDP growth rate declined from 5.1 percent between 1950 and 1980 to 3.1 percent from 1981 to 2019. The region experienced a structural shift characterized by premature deindustrialization, primarily driven by a capital migration from manufacturing sectors to those offering higher profit rates. This shift was significantly influenced by the advent of neoliberal policies. The chapter investigates the process of falling behind in the neoliberal years, providing an interpretation of Latin America economic history over the last five decades. It explores the transition from the developmentalism to neoliberalism, identifying the institutional elements relevant to the region's economic trajectory in the period of study. Then, it investigates the relationship between technical change, profit rate, and capital accumulation. The chapter emphasizes that America Latina necessitates the abandonment of neoliberalism and the adopting of a contemporaneous version of developmentalism as a necessary condition for economic development.
