ABSTRACT
This chapter examines why many Latin American countries whose economic development until the Second World War had been shaped overwhelmingly by agriculture and mining embarked on strategies that, instead, made industrialisation a top priority. It looks at the main economic argument that justified this policy shift, called structuralism, and the profound implications this would have for the state and the character of politics in Latin America. Dependency theorists were particularly critical of foreign investment and their positions appealed to nationalist sentiments that blamed foreign capital for underdevelopment at a time when multi-national corporations were investing heavily in Latin America. Countries in the region began to subscribe to the economic theory of structuralism, which argued that only if they transformed the structure of their economies by prioritising industry could they escape underdevelopment. The creation of industries to manufacture products formerly imported was called import-substitution industrialisation (ISI), and this required the imposition of barriers to imports through protectionist measures such as tariffs.
