ABSTRACT
Economic policies adopted in Latin America changed significantly after the Great Depression of 1929. Latin American economic planners, increasingly skeptical of the sanctity of classical economic theory came to realize that they would forever be subject to the vagaries of the international economic system as “price takers” if their economies remained essentially agricultural, mono-crop, and nonindustrial. Latin Americans began to speak of import-substitution industrialization during this time period as a way to break the traditional cycles of instability, poverty, and underdevelopment. By the conclusion of World War II, import-substituting industrialization, or ISI, had become the “norm” for countries across the region. Through import-substituting industrialization, Latin America would attempt to manufacture the industrial goods that had previously been imported from abroad. In terms of output, ISI was successful in Latin America, but only in the largest markets. ISI exacerbated unequal distribution of wealth by further concentrating wealth and power in the hands of industrial elites.
