Economic development in Latin America has been explained largely in terms of the Economic Commission for Latin America school (ECLA) dominated by Raúl Prebisch. According to this school, “outward orientation” of the periphery, was the key characteristic of Latin America before 1930. The growth pattern was determined by the fortunes of the export sector (including the terms of trade) and its linkages with the developed Center. Since 1930, the massive import substitution policies undertaken by the periphery has led to a new phase of “inward orientation” where the strategic role of promoting growth has been played by the linkage-rich industry. Both growth and inflation have been explained in terms of the institutionalist “structuralist” school which has emphasized bottlenecks related to the land tenure system, market imperfections and deficiencies (both domestic and external), and to a lesser degree to the savings patterns of people (where the demonstration effect, income distribution and the taxation system play pivotal roles).

In the first part, I will describe briefly the intuitive relevance of Professor Markos Mamalakis' “Theory of Sectoral Clashes” to the Mexican case. In part II, I will briefly comment on aspects of the theory which are relevant to empirical verification. And finally, in part III, I will attempt to derive and test some of the empirical implications of this hypothesis.

Since 1929 Argentina has undergone a remarkable series of political and economic changes. During the twenties it was a showcase of economic growth based on export expansion, as well as a model of bourgeois democracy in its parliamentary form. Yet that Argentina now lies in the distant past, and nowadays the name Argentina is likely to conjure up military coups and economic stagnation. This transformation deserves more attention than it has yet received. The question, “What went wrong in Argentina?” is as important for students of underdevelopment as is the question, “What went wrong in Germany?” for students of advanced industrialization.