latin american economic theories about local development

UNIVERSITÀ DEGLI STUDI DI MACERATA
DIPARTIMENTO DI STUDI SULLO SVILUPPO ECONOMICO
CORSO DI DOTTORATO DI RICERCA IN
LA TRADIZIONE EUROPEA DEL PENSIERO ECONOMICO
CICLO XXIII
TITOLO DELLA TESI
LATIN AMERICAN ECONOMIC THEORIES ABOUT LOCAL DEVELOPMENT
AND THE ROLE OF INSTITUTIONS
TUTOR
Chiar.mo Prof. NICOLÒ BELLANCA
Chiar.mo Prof. CARLOS QUENAN
DOTTORANDO
Dott.ssa MIRLIS REYES SALARICHS
COORDINATORE
Chiar.mo Prof. VITANTONIO GIOIA
ANNO 2012
Title: Latin American economic theories about local development and the role of
institutions.
Author: Mirlis Reyes Salarichs
Abstract
The objective of this research is the critical analysis of Latin American economic theories
about local development that highlights the role of institutions. Proposals in the region
can be divided into two groups according to the following assumptions: one group
conceives the market as the best means of social integration and development and another
group assumes the impossibility of markets to stimulate local development because its
very nature is exclusive. Among the most important representatives of the first group is
the Chilean economist Sergio Boisier and among those in the second is his Argentine
counterpart Jose Luis Coraggio. I concentrate my analysis on these two authors.
In the first chapter I analyze the evolution of the economic thought of Sergio Boisier,
from his INDUPOL proposal (industrialization, urbanization, polarization) to the
hexagon model for local development. The latter model is based on the coordinated
action of the following subsystems: axiological, decisional, organizational, procedural, of
accumulation and subliminal. Local development according to Boisier is produced by a
complex territorial system, that is, by a changing economic and organizational structure
towards diversification. In his model synapse and synergy of the system are fundamental
for local development.
The second chapter concerns the systematization of José Luis Coraggio's economic
thought. The analysis focuses on the two most important contributions of the author: the
proposed methodology for the study of production and reproduction of the territorial
complex, and the development model based on the Economy of Labor. His approach is an
alternative to the market where labor, and not capital, is the backbone of integration to
system. The institutional structure is a complement to social integration.
In the third chapter I comparatively analyze the works of these two Latin American
authors, and identify new elements of their proposals and their position within the
international flow of economic ideas. In addition, I have a final section devoted to the
theoretical and methodological limitations of their models of development.
The fourth chapter was dedicated to my local development proposal. The starting point
was the questioning of the center-periphery approach in analyzing the terms of trade
between countries. A better approach, in my opinion, would be proposed by the
anthropologist Arjun Appadurai, which I have enriched and adapted to economic issues.
Based on that, I identify the key role of institutions for Latin America development. My
local development proposal is based on the analysis of some elements not considered by
Boiser and Coraggio such as: the circulation of social, ethical and cultural values between
developed and underdeveloped regions, the binomial confidence-uncertainty and
transaction costs within countries of the region. In the fifth chapter I validate this
proposal based on the econometric results obtained.
2
Riasunto
La ricerca ha come obiettivo generale l’analisi critica delle teorie economiche
latinoamericane sullo sviluppo locale sottolineando il ruolo delle istituzioni. Le proposte
nella regione si possono dividere in due gruppi secondo le ipotesi assunte: una che
concepisce il mercato come il mezzo migliore per l’integrazione sociale e lo sviluppo, e
un’altra che parte dell’impossibilità dei mercati di stimolare lo sviluppo locale per la sua
natura escludente. Tra i rappresentanti più importanti del primo gruppo si trova
l’economista cileno Sergio Boisier e tra i quelli del secondo il suo collega argentino José
Luis Coraggio. Sono sui questi due autori che ho concentrato l’analisi.
Nel primo capitolo ho analizzato l’evoluzione del pensiero economico di Sergio Boisier,
dalla sua proposta INDUPOL (Industrializazzione, urbanizazzione, polarizazzione) al suo
modello dell’esagono per lo sviluppo locale. Quest’ultimo si basa sull’azione coordinata
dei seguenti sub-sistemi: assiologico, decisionale, organizzazionale, procedimentale, di
accumulazione e subliminale. Lo sviluppo locale, secondo Boisier, si ottiene mediante un
sistema territoriale più complesso, cioè cambiando la struttura economica e
organizzazionale verso la diversificazione. Nel suo modello la sinapsi e la sinergia del
sistema sono fondamentali per il suo approccio di sviluppo.
Il secondo capitolo corrisponde alla sistematizzazione del pensiero economico di José
Luis Coraggio. L’analisi si è concentrata sui due contributi principali dell’autore: la
proposta metodologica dei complessi territoriali di produzione e riproduzione, e il
modello dello sviluppo con base nella Economia del Lavoro. Il suo approccio si dirige
verso un’alternativa al mercato dove il lavoro, e non il capitale, sia l’elemento principale
di integrazione al sistema. Le strutture istituzionali sono un complemento all’integrazione
sociale.
Nel terzo capitolo ho analizzato comparativamente le opere di questi due autori
latinoamericani, individuando gli elementi di novità nelle loro proposte e la posizione che
occupano dentro il flusso internazionale delle idee economiche. Inoltre, ho dedicato una
sezione finale alle carenze teorico-metodologiche delle loro teorie di sviluppo.
Il quarto capitolo è dedicato alla mia proposta di sviluppo locale. Il punto di partenza è
stato la messa in discussione dell’approccio centro-periferia nell’analisi dei rapporti di
scambio tra paesi. Un approccio migliore, secondo me, sarebbe il proposto per
l’antropologo Arjun Appadurai, il quale ho arricchito e adattato alle questioni
economiche. Basandomi su questo, ho individuato il ruolo chiave dell’istituzioni per lo
sviluppo in America Latina. La mia proposta si fondamenta nell’analisi di alcuni elementi
non considerati da Boisier e Coraggio, come per esempio: la circolazione dei valori
sociali, etici e culturali tra regioni sviluppate e sottosviluppate, il binomio fiduciaincertezza e il costo di transazione nei paesi della regione. Nel quinto capitolo ho valutato
questa proposta secondo i risultati econometrici ottenuti.
3
Resumen
La investigación tiene como objetivo general el análisis crítico de las teorías económicas
latinoamericanas sobre el desarrollo local, resaltando el rol de las instituciones. Las
propuestas en la región se pueden dividir en dos grupos de acuerdo a las hipótesis
asumidas: uno que concibe el mercado como el mejor medio para la integración social y
el desarrollo y otro que parte de la imposibilidad de los mercados de estimular el
desarrollo local por su propia naturaleza excluyente. Entre los representantes más
importantes del primer grupo se encuentra el economista chileno Sergio Boisier y entre
aquellos del segundo, su colega argentino José Luis Coraggio. Son estos dos autores
sobre los que he concentrado el análisis.
En el primer capítulo he analizado la evolución del pensamiento económico de Sergio
Boisier, desde la propuesta INDUPOL (Industrialización, urbanización, polarización)
hasta su modelo del hexágono para el desarrollo local. Este último modelo se basa en la
acción coordinada de los siguientes subsistemas: axiológico, decisional, organizacional,
procedimental, de acumulación y subliminal. El desarrollo local, según Boisier, se
obtiene mediante un sistema territorial más complejo, es decir, cambiando la estructura
económica y organizacional hacia la diversificación. En su modelo la sinapsis y la
sinergia del sistema son fundamentales para su enfoque del desarrollo.
El segundo capítulo corresponde a la sistematización del pensamiento económico de José
Luis Coraggio. El análisis se concentró en las dos contribuciones más importantes del
autor: la propuesta metodológica para el estudio de los complejos territoriales de
producción y reproducción, y el modelo de desarrollo basado en la Economía del
Trabajo. Su enfoque constituye una alternativa al mercado donde el trabajo, y no el
capital, es el elemento principal de integración al sistema. La estructura institucional
representa un complemento a la integración social.
En el tercer capítulo he analizado comparativamente las obras de estos dos autores
latinoamericanos, identificando los elementos novedosos de sus propuestas y la posición
que ocupan dentro del flujo internacional de las ideas económicas. Además dediqué un
epígrafe final a las limitaciones teórico-metodológicas de sus respectivos modelos de
desarrollo.
El cuarto capítulo fue dedicado a mi propuesta de desarrollo local. El punto de partida ha
sido el cuestionamiento del enfoque centro-periferia en el análisis de las relaciones de
intercambio entre países. Un enfoque mejor, según mi opinión, sería el propuesto por el
antropólogo Arjun Appadurai, el cual he enriquecido y adaptado a las cuestiones
económicas. Basándome en esto he identificado el rol clave de las instituciones para el
desarrollo en América Latina. Mi propuesta de desarrollo local se fundamenta en el
análisis de algunos elementos no considerados por Boiser y Coraggio como por ejemplo:
la circulación de valores sociales, éticos y culturales entre regiones desarrolladas y
subdesarrolladas, el binomio confianza-inseguridad y el costo de transacción dentro de
los países de la región. En el quinto capítulo he validado esta propuesta según los
resultados econométricos obtenidos.
4
Acknoledgements
I would like to thank some people and institutions, which over the years have contributed
to my background and training as an economist and aided the development of this thesis.
First I would like to thank the University of Macerata for receiving me in recent years. In
particular I thank Professor Vitantonio Gioia for the confidence placed in me and for the
many opportunities for academic and personal growth offered to me during the research
period. Studying in the Economic Development Department of the University of
Macerata has been a privilege, by the scientific quality of its collaborators, and for the
support provided by their administrative and teaching staff. In this case I would like to
mention especially Professor Stefano Spalletti for the support shown consistently over
these years.
I also thank my thesis directors Nicolò Bellanca and Carlos Quenan for helpful advice
and comments given during the course of the research. I give thanks to Professor Nicolò
Bellanca because in addition to being an excellent supervisor, he has constantly
encouraged me search for new challenges. Likewise, I express my infinite gratitude to
Professor Alfonso Sánchez Hormigo who encouraged me from the beginning to carry out
these doctoral studies.
My background and training as an economist are also a result of the courses provided to
me at the Faculty of Economics of the University of Havana. Many people from its chairs
encouraged my interest in teaching and research. Among them I would like to especially
highlight Hector Castaño Sayas, recently deceased, who was passionate about issues of
universal economic thinking and with whom I was fortunate to collaborate. Other
teachers who have influenced my training are particularly Rafael Sorhegui, Rolando
Ruiz, Margarita García Ravelo, Fonseca, Manuel Miranda, Olga, and Capi.
I also thank Heather N. Hortie for her help in the review process of the thesis in its
English version. To Mara Salvucci who not only has given me her unconditional support
over the years, but has encouraged me to study deterritorialization from a cultural
perspective. To Marlene Torres Ramirez, Betsy Arcia, Naomi Valle, Laura Rodriguez,
Giovanni Palmieri and Livia di Cola, because without them nothing would have been
possible. Finally, I thank the person to whom I dedicate this thesis. To Aram Zaldívar
Rodríguez I thank him for all his support, love and understanding. To everyone I thank
very much, for they have known that I will always carry with me the value of this
experience.
5
Index
Table of Contents
PART I. Theoretical and methodological analysis of the two currents of thought
prevalent in Latin America on Local Development, studied through the works of Sergio
Boisier and José Luis Coraggio. ....................................................................................... 9
CHAPTER 1: Sergio Boisier and development as emergent property of complex
territorial systems. ............................................................................................................ 10
1.1 Introduction............................................................................................................. 10
1.2 Theoretical contributions in the development conception of Sergio Boisier.......... 10
1.2.1 Going into more depth on Boisier's concept of development. ......................... 13
1.3 The Boisier's proposal to create regional development. ........................................ 17
1.4 Is there a break or continuity in Boisier's thought? ............................................... 24
CHAPTER 2:José L. Coraggio and Economy of Labor as local development proposal. 32
2.1 Introduction............................................................................................................. 32
2.2 The José Luis Coraggio's conception of development: an analysis at the conceptual
level. .............................................................................................................................. 33
2.3 The local development and Economics of Labor in Coraggio's work. ................... 35
2.3.1 Production and reproduction territorial complexes: a background of the
development proposal based on Economy of Labor. ............................................... 35
2.3.2 The development strategy from the Economics of Labor perspective. ............ 39
2.3.3 Incentives for Economy of Labor in locality and for popular education......... 47
2.4 From the territorial complex to Economics of Labor: A step backwards? ............ 52
CHAPTER 3: Sergio Boisier and José Luis Coraggio as a reflection of the economic
thought evolution in Latin American: from State Planning to Local Development. ........ 55
3.1 Introduction............................................................................................................. 55
3.2 Analysis compared of the works of Sergio Boisier and José Luis Coraggio.......... 57
3.2.1 The role of regional planning: the reception of François Perroux's work...... 57
3.2.2 Two models of local development in Latin America: the hexagon and the
Economy of Labor..................................................................................................... 71
3.3 The influences of works of Boisier and Coraggio on Latin American economic
thought relating to local development. ......................................................................... 86
3.3.1 The work of Sergio Boisier within ILPES-ECLAC. ......................................... 86
3.3.2 José Luis Coraggio and the Latin American Network of Researchers on Social
and Solidarity Economy (RILESS)............................................................................ 93
3.3.3 Other echoes of the work of Boisier and Coraggio in Latin America. ............ 99
6
3.4 Final reflections. ................................................................................................... 111
PART II. The theoretical-methodological proposal to address local development in
Latin America and its application to the analysis of territorial indicators.................. 116
Chapter 4. Gravitational-landscape approach and the role of institutions as an
alternative to other Latin American approaches that address local development. ........ 117
4.1 Introduction........................................................................................................... 117
4.2 A new approach to study "center-periphery" relationships.................................. 117
4.3 Institutions within the gravitational-landscape approach.................................... 124
4.4 What might be the effects that change institutions by the force in a locality?
Chihuahua explained through its landscapes. ............................................................ 133
4.5 How can institutions in Latin America contribute to better development? .......... 136
CHAPTER 5 Indicators measuring local development in Latin America from the
gravitational-landscape approach.................................................................................. 147
5.1 Introduction........................................................................................................... 147
5.2 Regional indicators measuring human development in Latin America: the market
as dominant force........................................................................................................ 150
5.2.1 Dimensions that define the human development concept and its evolution over
time......................................................................................................................... 151
5.2.2 The human development index applied to different territorial contexts in Latin
America. .................................................................................................................. 158
5.3 The multidimensional poverty index: a complementary tool in the measurement of
local development. ...................................................................................................... 164
Conclusions..................................................................................................................... 169
ATACHMENTS ............................................................................................................... 173
Annex 1........................................................................................................................ 173
Annex 2........................................................................................................................ 174
Annex 3........................................................................................................................ 175
Annex 4........................................................................................................................ 176
Bibliografía ..................................................................................................................... 177
Table of Figures.
Fig. 1: Development as emergent property of complex territorial systems...................... 22
Fig. 2: Boisier’s logical – analytical scheme. .................................................................. 24
7
Fig. 3: Production and reproduction territorial complexes. ............................................ 37
Fig. 4: Economic system organized into three sectors. .................................................... 45
Fig.5: Summary diagram of Latin American economic theories about Local
Development………………………………………………………………………………… .... 109
Fig. 6: Components of the Human Development Index.................................................. 153
Fig. 7: Indicators of the Multidimensional Poverty Index.............................................. 167
Table of Graphs.
Graph 1: Bibliographic analysis for works of Boisier and Coraggio (authors recurring)
........................................................................................................................................... 84
Graph 2: Homicide rates by state in Mexico and the evolution of homicide rate for
Chihuahua and Mexico (1990-2009). ............................................................................. 133
Graph 3: Evolution of homicide rate by Chihuahua's regions (1990-2009). ................. 134
Graph 4: Correlation between dimensions and HDI for 2011. ...................................... 156
Graph 5: Correlation between dimensions and HDI for 2005. ...................................... 157
Graph 6: Correlation between dimensions and Municipal HDI in Bolivia for 2001..... 163
Graph 7: Correlation between dimensions and HDI of Mexico’s States for 2007......... 163
Tables.
Table 1: Different dimensions considered in Human Development Reports by UNDP
(1990-2009)..................................................................................................................... 152
Table 2: Proposals of Human Development Territorial Indexes in selected countries of
Latin America.................................................................................................................. 158
Table 3: Dimensions and indicators used in the methodology of Index of Territorial
Human Development and Equity in Cuba ...................................................................... 161
Table 4: Dimensions of the HPI-1 .................................................................................. 165
Table 5: Dimensions of the HPI-2 .................................................................................. 166
8
PART I. Theoretical and methodological analysis of the
two currents of thought prevalent in Latin America on
Local Development, studied through the works of Sergio
Boisier and José Luis Coraggio.
9
CHAPTER 1: Sergio Boisier and development as emergent property of
complex territorial systems.
1.1 Introduction.
Sergio Boisier is one of the specialists on regional and local development most
renowned in Latin America. He graduated as an economist from the University of
Chile, and then he received two graduate degrees: a Masters in Regional
Science from the University of Pennsylvania and a PhD. in economics from the
University of Alcalá in Henares, Spain. He is one of the most quoted American
authors on this subject. He also has an extensive career as a consultant and
director in various territorial development projects in conjunction with ECLAC. He
is currently an Assistant Professor at the Pontifical Catholic University of Chile
and a visiting professor at other universities in Chile and Argentina.
In order to delve into the thinking of this author with a work of more than forty
years, I will focus on the contributions of conceptual and economic policy on
regional development. In the last section of this chapter I will demonstrate
whether or not there is evidence of a break in the evolution of his thinking.
1.2 Theoretical contributions in the development conception of Sergio
Boisier.
The main contribution of Boisier corresponds to the concept of development. For
this author, (territorial1) development is an "emergent property of highly synapsed
and synergized complex territorial systems" (Boisier, 2002a:29, 2003:573,
2006:65). The synapse refers to the transmission of information, while the
synergy involves a feedback. Together, the two terms constitute the exchange
between system components. In this view, development is the property or feature
that emerges from the interactions between system parts.
Synergy turns into an important element in development--particularly in cognitive
synergy, which is explained as the “collective ability to perform common actions
1
For the author, development can be only territorial because it is in the local community where a person
reaches full realization as a human person (Boisier, 2001a:6).
10
on the basis of a single interpretation of reality and its possibilities of change”
(Boisier, 2006:73). Unable to achieve the cognitive synergy through traditional
pedagogical action, Boisier appeals to the processes of "social conversations
professionally structured". The "social conversations", in this case, seek to
generate their own language from the consensual concept of development that
allows socializing knowledge about this phenomenon. This knowledge also acts
as a "symbolic power to whoever holds and displays it" (Boisier, 2006:74).
The author goes clearly into the field of Constructivism2. This philosophical
school of thought analyzes how knowledge is gained. It considers the concept of
knowledge not only in the narrow sense--as sheer information--but also includes
the abilities, skills, methods, procedures, attitudes, values and convictions that
will occur during the learning process (Ferreiro, 2007:3). The development of a
society, according to the interpretation of Boisier, would depend on creating a
learning environment, which is a self-constructive process.
On the topic of the "environment", it is important to remember the attribute given
by the author to the local systems. It is precisely the "complexity" that is another
relevant aspect in Boisier's work. The introduction of the complexity theory’s3
elements in his analysis is not only present at the theoretical level (which is
evident in the concept of development), but is also present in the regional policy
proposals.
For Boisier, the territory as a complex system is also adaptive, dynamic and
autopoietic4. According to the author complexity is:
2
Constructivism is a philosophical and epistemological approach that is based on the following
assumptions: knowledge is actively constructed by the "subjective knower", the knowledge function is
adaptive, cognition facilitates the process of organizing experiences of the subject (not the discovery of an
objective reality), and need for sociability exists to the search for other subjectivities (Von Glasersfeld,
1989:121-140). Some contributors are: Paul Watzlawick, Von Glasersfeld, Von Foerster, Humberto
Maturana, Niklas Luhmann, et al.
3
The founder of the complexity paradigm was Edgar Morin (1994) which was based on three principles:
the dialogue, recursion and holographic. The latter incorporates the Aristotelian principle "part in the whole
and the whole in the part". Boisier applies this to the relationship between human beings and territory, in
this way it can be said that "the individual is in the territory and the territory is in the individual" (Boisier,
2001a:6).
4
The concept of autopoiesis was proposed by the Chilean biologists Humberto Maturana and Francisco
Varela (1971) and is related to the organization of living systems. The concept was then applied to social
systems by Niklas Luhmann, which the particularity of social systems to maintain its purpose or objective
11
"…the result of two dynamic processes that interact constantly:
the autopoietic need to keep identity, to continually recreate
itself, to resist change and to focus on the interior and the vital
need for all living organisms to change, to grow, to explore the
boundaries and focus on the outside. A complex adaptive
system learns while self-organizing" (Boisier, 2003:579).
In this sense, territorial development involves constant and interactive adaptation
with the environment, and is a system that seeks to improve its situation from the
centripetal (autopoietic) and centrifugal forces.
Understanding the complexity and using it to interpret and operate development
requires a change of patterns and mental structures. The author defines two
types of knowledge: structural and functional. The structural knowledge
associated with development sees the region (or locality) as an open and
complex system by which a "mind shift" is needed to intervene in the territory.
Meanwhile, functional knowledge, identifies with the understanding that is gained
from the environment (external and internal) to operate effectively through
adaptive government structures (Boisier, 2006:168). Thus, Boisier concludes that
the cognitive model will further determine the ability to intervene successfully in
the system.
That is why the author highlights the urgent need for a paradigm shift. This need
is supported by the failure of development policies for more than half a century;
the author refers particularly to Latin America5. Within the positivist approach, the
tools required to explain reality seem to be exhausted, resulting in a lack of
development within it. For Boisier, the crisis of this approach then becomes clear.
from a stable input of all that keeps it alive, was acknowledged. School is an example of autopoiesis
because once created continues to work by itself without having to be created again.
5
Factors such as inadequate State intervention, cognitive deficiencies and procedural errors, and the
method of "Enlightenment rationality" are among the reasons that the author defines as current status
generating. This has contributed, according Boisier to: "little practical results measurable in terms of
reducing the hyper economic and population concentration in the territory, of reducing the regional
disparities in living standards of the people, in reducing of Latin American institutional centralism
expressed also through organizations located in the few "focal points of modernity" in the territory"
(Boisier, 1998b:53).
12
According to him, the positivist paradigm "introduced in scientific thinking
Cartesian disjunction, linearity, proportionality, predictability and certainty of
Newtonian physics, and Baconian experimentation as the only source of
scientific knowledge" (Boisier, 2006:101), which is in perfect disharmony with the
real world complexity. This results in not able to reach systemic and holistic
visions.
The positivist paradigm6, although in crisis, remains dominant today, and justifies
Boisier for being so embedded in the educational system. That is why we
highlight the need to weave complexity with constructivism, which is not clear yet.
In the process of a paradigm shift, Boisier believes it is important to train the
authorities and technicians to be "capable of thinking in constructivist and
complex terms" (Boisier, 2006:102) and to be responsible for generating the
cognitive synergy.
1.2.1 Going into more depth on Boisier's concept of development.
"Now we know that development and growth are structurally distinct concepts-the first is intangible, the second is material (...); nonetheless, we still do not
know the nature of the relationship between them yet" (Boisier, 2003:567). In this
regard Boisier begins to introduce a hypothesis that seems to be quite an
appealing arrival at the relationship between development and growth:
"... It can be argued that both processes would be linked in a
mathematically complex manner, perhaps through a 'ripple' or
loop7 (...) that could go even further, as I would like it backed up
with empirical evidence, in the sense of holding a joint described
by a double sine linked, such as DNA, suggesting that over time,
the order of occurrence of both processes could alternate"
(Boisier, 2003:567).
From this quotation it follows that, at certain times, economic growth should be
prioritized in order to stimulate development. This could become a priority when it
6
Positivism argues that the knowledge must be scientific and it is through facts verification thanks to the
experience that philosophical and scientific activities are carried out.
7
It is made explicit reference to Francisco Varela.
13
is required to create appropriate psychosocial conditions for development8. This
could explain how some nations show declines in social and structural indexes
even during periods of high growth of their economic variables9.
In addition, the author makes an interesting reflection about the formation of
concepts based on repeat experience. Thanks to language, the concept acquires
a name. Nonetheless, the concept evolves while the society that initially defined
it evolves. As Bourdieu explains and as Boisier assumes, concepts represent
accumulated knowledge-- and that knowledge is what shapes the culture.
If we review the concept of development, we realize how culture has evolved,
and how society has evolved with it. At the beginning, development was
synonymous with growth, but now the intangible and subjective dimension of the
concept of development is prioritized. However, there is something that does not
change, and that is the very nature of the human person in his constant desire to
improve, advance, innovate and create. In this respect, Boisier explains how
each time a generation is closed around the idea conceived as "state of
development", its aspirations change (Boisier, 2001b:6). Development is like the
horizon, an unattainable goal.
Excessive use of adjectivization is a product of the same evolution of its concept,
and it has caused development to suffer10 in recent decades. For Boisier, all
these adjectives are redundant and tautological because they do no more than
highlight a property of those already present within the development concept
itself. According to him, these adjectives are more copulative than disjunctive,
with which I totally agree. For example, the development must be first of all
territorial (or regional or local, as preferred). A man realizes his potential for
growth in his location, but development must be sustainable out of respect for the
8
This is what Boisier called a "development culture", which can manifest itself in two ways: an
individualistic-competitive, and cooperative-supportive. The best thing for the author is the skills to
combine both of them into a regional development project (Boisier, 1996:136).
9
I would like to highlight among the authors who addressed this issue the study of Carlos Rafael Rodriguez
(1983) on Cuban economy of the early twentieth century author, who coined the term anti-development.
Furthermore, the same Boisier refers to the Chilean situation during the nineties (Boisier, 2006:103).
10
Among the adjectives it can be highlighted: territorial, regional, local, endogenous, sustainable,
sustainable, human, bottom-up, economic development, etc.
14
environment and other generations.
Development should be, above all,
11
human .
The territorial dimension of development is highlighted by Boisier when analyzing
the dynamics of expansion. He reintroduces Perroux’s famous phrase:
"Growth does not occur everywhere at the same time, in
contrast, it appears at certain points or poles of growth with
varying intensity, spreads through several channels and has late
variables effects on the economy as a whole" (Perroux, 195512).
The growth dynamics described in this sentence has been taken to the territorial
diffusion dynamics of development by Boisier. According to him, "development
begins as a local phenomenon, small-scale, and certainly endogenous", to which
he adds the decentralization as a condition so that endogeneity may manifest
itself in its entirety. Then he goes on to state that development expands "from
below, upwards and sideways according to a capillarity process, as observed in
fluid mechanics" (Boisier, 2001b:18-19).
Endogeneity, as shown in the previous paragraph, is a central component of
Boisier's development conception. For him, endogeneity is manifested through
four analytical levels: on the political level as regional capacity to make decisions
and negotiate13, in economic terms as the appropriation and reinvestment of the
surplus region, on scientific and technological levels as the "internal capacity of a
system (...) to generate their own change in technological impulses" (Boisier,
2001b:14), and finally, in cultural terms as the generation of identity.
11
It is a concept created by man, which responds to his aspirations, so I don't understand why the moral and
ethical values have been neglected in some reductionist views of the development.
12
Quoted by José Luis Coraggio in his article "Hacia una revisión de la teoría de los polos de desarrollo"
(Coraggio, 1974:33).
13
Optimizing the negotiating capacity in a territory will means an important element of his development
proposal. Every local government has three levels of negotiation: "a) to upwards, with the national
government, capital, companies, and diverse supra local organizations, b) to the side, with other
stakeholders and development actors in their territory and c) to downwards, with the municipalities, grass
roots social organizations, etc. Negotiating is a process of political nature with deep scientific implications
and accordingly is a professional activity that involves knowledge and social support "(Boisier, 2006:127).
The ability to negotiate in this case brings new resources to local governments.
15
The human dimension of development is expressed by the author and clearly
intended as an enhancer of the "human being to become human person14 under
two dimensions, biological and spiritual, with the capacity (...) to know and love
"15 (Boisier, 2004b:5). The category "human person" is introduced by Boisier in
order to highlight on one hand, the spirituality of people (men and women) and
on the other hand, the sociability of human beings16.
The author studies the concept of "human person" in depth. First, he notes that it
implies the notion of dignity just as an end in itself. He relates dignity to economic
factors, such as shortages of basic consumer goods ("the naked man is lacking
in dignity") and lack of employment17. This concept is also associated with
subjectivity, and is seen as a prerequisite for development. "The human person is
endowed with dignity based on the means that it always takes position as a
subject, never as an object" (Boisier, 2004b:6). Then it is required that the human
being recognizes the other and be recognized by the other18, so that sociability is
inherent in the concept of the "human person". Finally, the author acknowledges
that the concept is a self-transcendence or, the overcoming of life experience
from staying in the memory of others (individual and collective memory).
From these considerations Boisier recognizes that the means to enhance the
performance of the "human person" is freedom, being not only the end of
development, but also the way to achieve it. In the same sense, autonomy is
fundamental as an expression of freedom in choosing their own goals and means
to achieve them. However, autonomy can never be total, because it is
14
The author highlights this in the original sentence.
This view is consistent with the heterodox approach that highlights value and subjective aspects of
development (Hirschman, Seers, Sen, Furtado, et al.).
16
Person is used to highlight that it is not individual (carrier of individuality). The person concept is wider
at the individual, as reflected in the following quotation by Boisier: "When the individual is a human being,
he is a psychophysical entity; however the person is an entity based on a psychophysical reality but not
entirely reducible to it. Finally, the individual is determined in his being while the person is free"(Boisier,
2004:6).
17
In addition Boisier criticizes the way in which the "person" is treated as a "productive factor" or "input"
in the neoclassical economic discourse.
18
"It is important to reflect, for example in Latin America, about the impossibility of achieving a true
development of indigenous ancestral community while the rest of the national society still considered them
as" second class ", whatever their tangible and intangible achievements, while the culture of "rest" of the
population does not change their values. Instead, thanks to solidarity (not charity) human beings "become"
persons" (Boisier, 2004:7).
15
16
conditioned by ethics and the collective interest and technological considerations,
which comes into play with the principle of subsidiarity (Boisier, 2004b:8-9).
Autonomy is linked to decentralization19. Where it is practiced, society has
multiple independent decision centers and "as many as possible in the context of
a larger indivisible unit" (Boisier, 2004b:9). Remember that territory is complex for
Boisier, so it consistently needs an extension of the governance structure as
much as possible, which is geared to the need for decentralization.
Decentralization and freedom for Boisier are concepts and processes that
reciprocally feed into each other, in sense that the former gives to individuals (or
"human beings") a more diverse selection of personal choice, while
"empowering" society to intervene where they think best (Boisier, 2004b:10).
A new distribution of power, which is achieved through a process of
decentralization, is necessary for the empowering civil society. This is an
indispensable condition for the purpose of this Chilean author; however, he
should not be so absolute. Decentralization does not guarantee greater freedom
in all cases. Freedom can be hindered by the consolidation of power of local
elites with interests contrary to the welfare of society.
1.3 The Boisier's proposal to create regional development.
Given that development is an "emergent property of highly synapsed and
synergized complex territorial systems", Boisier proposes to make the territorial
environment more complex, and then to create suitable conditions that allow
development to emerge from the internal system (from territory). "The increasing
complexity will become the centerpiece of any strategy of territorial development"
(Boisier, 2003:575).
Analyzing the complexity, Boisier refers to Ashby's law: the law of requisite
variety. The quantity of states or subsystems generated for a system reflects its
degree of variety and so its degree of complexity. Too complex a system is at
19
Boisier draws a distinction according to the approach assumed. Functional decentralization means
institutional deconcentration driven by central State agencies, focused on a sector or economic activity.
Territorial decentralization, is the same vision, but at regional level. In contrast, the democratic process
should also motivate the political decentralization. (Boisier, 2000:15). In the specific case of regional
development, decentralization required for this author is the political-territorial.
17
risk of becoming chaotic, so it is necessary to control it. The following Boisier's
phrase outlines the problem linked to a regional society:
"An organization composed of many elements, people for
example, can produce such a large number of possible states
that predicting the behavior of the system makes it impossible,
almost chaotic, threatening the very existence of the system.
This means that many different systems and therefore very
complex such as a regional society should be organized and
equipped with forms of regulation that allows a possible degree
of prediction of their behavior. It could be that the organization
always implies control, in the sense that the ability to predict the
behavior of the system can be displaced regardless of its degree
of diversity or complexity "(Boisier, 2003:575).
According to Ashby's law20, there are different ways to control a complex system
(divided into regulator-regulated): reduce the variety of the system (regulated) by
reducing mechanisms21, expand the range of the controller (regulator) to equate
the system, or absorb the variety. Extrapolating this law to the development of a
territory, Boisier considers:
"... The world, which, viewed as
naturally higher than any
country or region, presents a far greater degree of complexity
that requires lesser systems to increase complexity or reduce
complexity of the environment or do both simultaneously to
prevent
their
disappearance
by
'immersion'"(Boisier,
2003:575)22.
This phrase is in the context of globalization, so the complexity assumes even
greater significance. From the author's view, globalization has led to the creation
of supranational quasi-States and sub-national quasi-States, which imposes on
20
William Ross Ashby formulated the Law of Requisite Variety (or Required depending on the translation)
in 1956: "variety absorbs variety" that is, a regulator-regulated system can only achieve stability if the
regulator has at least the same variety as the regulated party (Ashby, 1957:206).
21
In social systems, such as a local society, rules, laws, customs, moral values and cultural paradigms act
as filters of variety.
22
The author’s words are italicized in the original work.
18
individuals the need for universal and local at the same time (Boisier: 2006:110).
The territories must now compete in a more complex environment and should be
adaptable to change. For the competition and successful insertion of territories in
the global economy, there are necessary policies to ensure the enhancement of
their endogenous capacities. The success factor will depend on "the return of
skills and competencies which rest with the State due to the demands of
competitiveness" (Boisier, 2005b:55).
Once "the people and communities take in their hands the control of their own
future (...) two operational concepts emerge with force: associativity and speed"
(Boisier, 2006:165). These components, generated in decentralization, are
competitive advantages for the territories. On the one hand, "the solitude, not the
size, can complicate and hinder the successful existence in globalization"
(Boisier, 2006:166) and on the other hand, the agility to identify opportunities and
to make decisions in a changing and complex world is a key element.
Considering the inherent complexity of the territory and its environment, Boisier
defines interacting subsystems and then proposes a strategy for territorial
development23. The task of identifying the most relevant local subsystems relied
on the contributions made in different areas that point to the causation of
development, albeit partial24.
The axiological subsystem logically related to the values of society, brings
together both universal values that Boisier distinguishes as unique. Among those
are universal values: freedom, justice, peace, democracy, solidarity, ethics,
diversity and otherness, while the singular values are linked to processes of
identity, being a reflection of the relationship between society and territory25.
23
The author explains these subsystems in several works: "¿Y si el desarrollo fuse una emergencia
sistémica?" (2003:580-582), "El desarrollo en su lugar (El territorio en la sociedad del conocimiento)"
(2003a:143-151), "Imágenes en el espejo: aportes a la discusión sobre crecimiento y desarrollo territorial"
(2006:141-146).
24
Perhaps the author is unaware of the contributions made in the field of Ecological Economics and Urban
Ecology. Authors such as: Nicholas Georgescu-Roegen, Herman Daly, Rene Passet-Dominique Vivien
Frank, Ilya Prigogine, Montenegro, Bettini, Di Pace, among others.
25
The author does not define what these values are. In my opinion it is useful to define for example: sense
of belonging, patriotism (linked to where you are born, that before a country is a locality), roots, and
respect for traditions, among others.
19
He defines the decisional subsystem as composed of carriers of development
actors. These (individual, collective, public, private and corporate) actors suggest
that they are well identified, because it is necessary to know in detail "the family
of power" within a region. These same actors may hamper future participation
and negotiation processes in local development projects26.
Boisier calls the third subsystem is called organizational. The parts on this case
are: objects, properties and behaviors. This emphasizes the functional aspect
rather than normative, although it recognizes organizations operating in the
territory (objects). It gives a higher value to the speed in decision-making of these
organizations, the identity with the territory, the organizational intelligence, the
ability to adapt to the environment (properties), and also the "pattern of interorganizational relationships" that affect the binomial cooperation-conflict between
the organizations (behaviors).
In the procedural subsystem he includes the modalities through which the local
government administers, rules, reports and plans development policies for the
area. A key feature of the procedures is that governments should become
proactive, which means to take initiatives in development with bold and creative
actions.
The accumulation subsystem is responsive to the part of material, tangible and
economical development by relating it to economic capital. It requires the
development process based on the accumulation and efficient investment of
productive resources. According to the author's idea this accumulation can be
increased or not increased due to an articulation "double sine" between growth
and development. However, he agrees that development must be supported by a
solid material basis.
26
Boisier clarifies in parentheses the idea that "agents are capable in determining their own behavior in the
complexity", which he moves away from the real world that tries to explain. In the world of the 'real'
everyday, "actors of development" are subject to objective and subjective conditions which make them very
difficult to maintain an expected behavior, particularly in poor areas. No wonder the instrument of the
possible scenarios to consider for decision-making has been designed.
20
Finally, the subliminal subsystem is what the author gives more importance to
and is composed of intangible capital27. Boisier proposed ten categories28:
cognitive capital29, symbolic capital30, cultural capital31, social capital32,
institutional capital33, psychosocial capital34, civic capital35, human capital36,
27
Albert O. Hirschman names this as "moral resources". In this case Boisier receives all these types of
capital without question, some of which are very controversial concepts as human capital.
28
An expanded explanation of each type of capital is reflected in the article "El desarrollo territorial a partir
de la construcción de capital sinergético" (1999:64-75).
29
Cognitive capital is defined as "the provision of scientific and technical knowledge available in a
community" (Boisier, 1999:66). Also, the author explains the exogenous nature of this capital, due to the
knowledge and scientific-technological research concentration by big multinationals and development
centers. He proposed to thwart this phenomenon a territorial policy that becomes knowledge generation in
endogenous, starting with the "know thyself" and ending with the stimulus to the creation of "knowledge
edge".
30
This is a concept incorporated from the work of Pierre Bourdieu (1993, 1997).Symbolic capital means
the power to do things with words and Boisier adds "to generate imaginary, to mobilize latent social
energy, to generate self-reference, even to build regional corporate images which are essential in today's
international competition" ( Boisier, 1999:67).
31
Cultural capital is "the heritage of traditions, myths and beliefs, language, social relations, modes of
production and immaterial (...) and materials products, specific to a particular community" (Boisier,
1999:68). This concept is in line with the concept developed by Bourdieu (1994), but in this case Boisier
takes more care in assuming ideas of this French sociologist. For Bourdieu, family and educational
institutions play a decisive role as a mechanism of social reproduction of cultural capital, however Boisier
warns the conservative nature of these institutions, because as rightly he reminds us how the development
is inevitably linked to the change.
32
In this way he incorporates ideas of some authors who have been working on this issue such as: Putnam
(1993, 1995), Fukuyama (1995), Granovetter (1995), Luhmann (1996), et al. Social capital has been
defined as the tendency to help and cooperate with another person or group based on the confidence that
eventually the aid will be reciprocal.
33
In this case the names are Williamson and North, basically. Boisier follows the conceptions of these neoinstitutionalists and in his article "El desarrollo territorial a partir de la construcción de capital sinergético"
published in 1999 he explains that not only should be of interest the institutional and organizational fabric
in a territory to institutional capital conception, but above all, the "structural attributes". These attributes
are: "the ability to act and make decisions quickly, organizational flexibility, the property of malleability,
resilience of the institutional fabric (...), virtuality (...), and above all, organizational intelligence, that is, the
ability to monitor the environment through sensors and the ability to learn from the experience of
interacting with the environment itself" (Boisier, 1999:69). It is without doubt a concept that was developed
by the author and which led to further define the organizational subsystem, however the author maintains
the institutional capital within the subliminal subsystem as an intangible asset (see Boisier, 2003:580-582;
2006:141-145). Thus we have two distinct categories (organizational subsystem and institutional capital)
with the same meaning. Unless the author wants, intentionally, to give a double weight to this dimension of
development, this oversight should be corrected by Boisier.
34
For Boisier, psycho-social capital refers to the "feelings, emotions, memories, "wish to" (...), the
collective self, faith in the future, convinced that the future is socially constructible..." (Boisier, 1999:70).It
is a concept which incorporates "the desire to develop" by Hirschman and the study of the relationship
between thought and action, between knowledge and feeling (1994) by Maritza Montero, a Venezuelan
psychologist.
35
Civic capital comes from Robert Putnam's research on the functioning of Italians local governments
("Making Democracy Work: Civil Traditions in Modern Italy" in 1993). This type of capital is expressed
from the trust in institutions and political and social organizations.
21
media capital37 and synergistic capital38. In all of them the characteristic identified
by Hirschman is repeated. This means that their stock increases when they are
used, the opposite behavior of tangible capitals.
From the six subsystems defined, Boisier represents its territorial development
proposal in the form of a hexagon, as shown below.
Fig. 1: Development as emergent property of complex territorial systems.
Source: “¿Y si el desarrollo fuese una emergencia sistémica?” Boisier, 2003:585.
This is a hexagon that should establish synapses and generate synergy through
interaction among its components39. Boisier himself recognizes the influence of
36
Gary Becker (1964) develops the theory of human capital, which has been having great influence on
economic thought. Briefly, it refers to the costs that people do to improve the health and cognitive level, so
it would not represent a current expense but an investment to increase its human capital.
37
He relates media capital to the transmission of symbolic values, "the media can destroy socially the best
proposal or can be validated socially a proposal and serve as a foundation for the socialization of it and to
expand the level of participation the population" (Boisier, 2006:61).
38
Boisier defines synergistic capital as "the ability of a society to take joint actions toward collective goals
established democratically, an ability derived from a shared understanding about the structure and
dynamics of the social change processes, economic growth and fundamentally societal development.
Synergistic capital is an energy type introduced to the socio / territorial system"(Boisier, 2006:62).
39
This is why I find Boisier’s metaphor of a kite that he mentions in his article more relevant: "El vuelo de
una cometa. Una metáfora para una teoría del desarrollo territorial"1997. The wires and rods that give
shape to a hexagonal kite mean the links or interactions between each subsystem. Despite being the figure
shown now which the author constantly repeats in his articles, I believe, however, the more representative
is the previous image of the kite.
22
Hirschman's work here that highlights the role of the combination of factors rather
than their very existence40. Then development depends:
"... on the interaction, that is, on connectivity and interactivity
between several (many) factors and small-scale processes (local
scale in the language of complexity), for example: culture (...)
trust relationships, role of institutions, justice, freedom, the
knowledge socialized into a community, the knowledge and skills
"embedded" in people, health, feelings and emotions that define
and dissect a purported instrumental rationality, self-confidence,
the
symbolic
elements
that
constitute
forms
of
power,
etc."(Boisier, 2006:71).
It is not enough to produce some of the interactions between system
components. For Boisier the synergy is generated if the information flowing
through a bower of connections between all subsystems. That's where the
"cognitive synergy" becomes relevant. Based on Battram's phrase, "dialogue is
the tool to explore the space of possibilities"41, Boisier remembers the basic rules
to get the "dialogue" leading to development: maintain respect for other
participants in the dialogue, do not judge or prejudge, and consider all points of
view as valid (Boisier, 2006:75).
In conclusion, according to Boisier's model, we can say that for the purpose of
development, the first is to make the territorial system more complex. This is
accomplished by: expanding economic activities or diversifying the economic
structure of the territory, increasing the number of organizations, providing
decisional autonomy to institutions, encouraging specialization, expanding the
connected networks, and promoting interactive flow between other actions. Then,
the synapse should be encouraged. An efficient use of traditional media allows
the transmission of information between system components. Finally, it should
enhance the endogenous energy of the system and the socialization of tacit
knowledge, while at the same time taking advantage of exogenous energy
40
It would be interesting, related the Hirschman's interactive perspective, to read "La société de confiance :
essai sur les origines et la nature du développement " Peyrefitte, 1995.
41
Quoted by Boisier, 2003:578.
23
(Boisier, 2006:75) such as know-how related to new technology. The result is to
encourage the synergy of the system.
Eventually, I reproduce the author’s logical-analytical scheme, and it expresses
succinctly Boisier's main ideas on the conception of development.
Fig. 2: Boisier’s logical – analytical scheme.
Human being and his evolution in person as a development goal
Subjectivity as the essential attribute of the human person
Freedom as effective capacity to be subject
Decentralization as an organizational structure of society
Contemporary knowledge as the basis for any intervention
Development as emergence of complex territorial systems
Human person as an end in itself and as a beneficiary
Source: Based on Boisier, 2004b:15; 2006:169.
1.4 Is there a break or continuity in Boisier's thought?
In an interview in 1997 following the publication of his book: "Imágenes en el
espejo: aportes a la discusión sobre crecimiento y desarrollo territorial", Sergio
Boisier declared a break in the evolution of his thinking. Referring to 198042 he
asserted "the final phase of my time as formal quantitative and neoclassical
economist" (Gutiérrez, 2007:170). Then he recognized a shift towards what he
identifies as the "complex and constructivist paradigm."
My interest is to deepen the author's thought to corroborate or refute his thesis of
rupture. To this end, I will compare the two most innovative proposals of Boisier's
economic
career:
INDUPOL strategy (industrialization,
urbanization and
42
This is the year when he published "regional analysis techniques with limited information" (Boisier,
1980). Other works of that period are: "Diseño de planes Regionales. Métodos y técnicas de Planificación
Regional” (1976), "Regional Disaggregation of National Plans "(1975), "Desenvolvimento regional e
urbano. Diferenciais de produtividade e salarios industriais no Brasil” (1972).
24
polarization) and the development hexagon,. Each of them corresponds to each
stage respectively.
In 1972, Boisier writes the article "Industrialización, urbanización, polarización:
hacia un enfoque unificado", which can be seen as a reinterpretation of François
Perroux's poles theory. It is consistent with the Latin American context where the
ideas of this French economist were very influential.
Policies based on the growth poles in Latin America tied to heavy industry were
implemented until the seventies, which connects with the strategy promoted by
ECLAC of import substitution industrialization (called ISI). However, the results of
these policies show large imbalances between regions, which attracted many
specialized studies, making the concern of the time to focus on regional
imbalances. In this period, strong criticismand questions from Latin American
authors surface about the feasibility of this theory to the development in the
region. It is in this context that Boisier launches his proposal.
This Chilean author begins by highlighting the importance of the Perroux's theory
and attacks instead the way in which it was implemented. For him the problem
was "partial interpretations of the concept of growth pole". In a study conducted a
year earlier, entitled "Polos de desarrollo: hipótesis y políticas en América
Latina”, he had already criticized the biased manner of working with the
perrouxiano concept, according to this author, who aligned more with Boudeville
than Perroux (Boisier, 2006: 10).
For Boisier the most accurate way of conceiving the growth centers is to assume
that urban centers contain one or more poles of growth and have special
conditions to retain the polarization effects. The special conditions suggested
are: to have dominant and dynamic industries, large population size, economic
structure with internal interdependence under the support of a network of small
and medium enterprises linked to large firms, low marginal propensity to
consume imported goods, active participation in the innovations diffusion within
the national and international network of growth centers, an urban system
structured around the growth center to avoid the formation of enclaves, and a
social structure conducive to innovation (Boisier, 1972:39-40; 2006:10).
25
With this proposal, the author emphasizes the need to create a "matrix of
activities overturned on a grid or system of cities" (Boisier, 1972:40). For the
implementation of the INDUPOL strategy, Boisier proposed compliance with nine
stages or complementary actions.
The first stage corresponds to the selection of industrial activities43, trying to
identify those of a certain level of technical complexity in its product line that
enables the functional segmentation. The greater is the degree of locational
indifference (foot-loseness) and wider possibilities of alternative strategies to the
territority’s polarization. It is important to note that here the territory is treated as
a mere industries container, not as content of the policies themselves. The
endogenous development vision is incorporated later by Boisier. This is one of
the differences present between this strategy and the development hexagon.
A second stage is the identification of the urban system, where the key is to
maximize the absorption of "inducing effects" or "external economies" generating
polarization. That is why he proposed "a cities network organized around a nodal
point" (Boisier, 2006:12). In other words, it is organized around a center of
growth. The size of the network would depend on the existing infrastructure. In
this sense, the author asks: what is it that differentiates INDUPOL from other
strategies of the time?
"A fundamental difference in the INDUPOL strategy from a
sectoral strategy of industrial development is precisely the
spatial-sectoral simultaneous treatment at urban centers. On the
other hand, what distinguishes an INDUPOL strategy from other
currents strategies of polarization is the emphasis on urban (or
spatial) interdependence on the functional interdependence via
input-output "(Boisier, 1972:46).
It's no wonder that his article is entitled "Industrialización, urbanización y
polarización". Although he considered urban interdependence in a geographical
43
It is interesting to note the marked tendency towards industrialization, although the author also
considered laudable attempts to develop other activities such as tourism, research, and education, among
others (Boisier, 2006:11).
26
sense, it is important to emphasize the author's intention to have these three
phenomena interact for the sake of territorial development.
According to the author, in some cases it is difficult to identify a country’s urban
subsystem. Rather, there is a national urban system. In these cases the strategy
of polarization could arise only on national or supra-national terms. For Boisier,
general urban subsystems can be identified from a criterion of nodalization of
cities around a central hub (Boisier, 1972:47). At this point, it seems that the
author falls into the same trap of other contemporary authors to exploit the urban
conditions created for locating industrial centers. The effects are increasing
disparities between regions, which in turn create pressure on the growth centers,
such as labor migration and overcrowding.
The third action corresponds to identify delocalized processes. The purpose of
this action is interesting because it focuses not only on achieving the sectoral
growth, but also on spatial and sectoral modernization, for which it is necessary
to maximize the internal interaction of urban area. The idea of delocalization can
be seen as extending the activities outside of the territory, which results in a
more complex geographical representation of the activities (in this case sectoral
activities).Bridging the gap of contexts and approaches, I can only think of a
similarity to the proposal within the hexagon strategy of increasing complexity. In
my opinion, this action has more similarities than differences with the current
development strategy of this author.
The analysis and evaluation of the comparative advantages of urban
components is the fourth stage. He proposes a supply and demand study of
economic and urban type for "the best association between centers and subprocess" (Boisier, 1972:49). Then the fifth stage follows, which corresponds to
the industrial sub-process allocation to urban components. In this case the
problem is the sub-process optimal allocation, for which Boisier suggests the use
of linear programming (Boisier, 1972:49). Here the territory is introduced as a
variable input to the system. These stages reflect the instrumental neoclassical
formation of this author.
27
A separate step is the selection of systematized actions. With it he seeks to
reinforce the systemic structure of the urban unit, from intraurban and interurban
measures44. This stage is complemented by another stage that is based on the
selection of internalizing actions. The measures in this case tend to protect the
financial system leaks.
Finally, the last two stages are related to the control. On one hand there is the
physical and financial programming, which focuses on assessing the cost of the
strategy, temporal allocation of resources and to provide a tool for monitoring and
implementation of projects. On the other hand, control and evaluation of the
strategy is for implementing an information system to analyze the balance of
centripetal and centrifugal effects (Boisier, 2006:13).
In summary, as the author himself points out, so the INDUPOL strategy was
intended as the transformation from a multipoint economy with low integration
and sluggish internal interdependence to "a highly integrated and interdependent
regional urban dynamic system with growing self-sustenance" (Boisier, 1972:55).
This author tries to distance from the "purely economic" approach of polarized
development theory, considering sociological aspects of the change process as
part of his analysis. Thus he highlights as a prerequisite for success of INDUPOL
strategy, the presence of:
"... a social structure and social leaders with ability to perceive
the new opportunities created by the polarization process and to
understand and use innovations. Consequently, the social
structure of the subsystem must be associated more with
modern values than traditional values: in other words, there must
be a positive structure for change. Similarly, the administrative
management of public agencies and private companies should
reflect this "modern" attitude of the society” (Boisier, 1972:40).
If we replace "polarization" with "development" in the phrase, it would get the
same vision of the hexagon proposal.
44
“The intraurban measures try to increase operational efficiency between cities and interurban measures
work on the spatial mobility of factors in the urban system” (Boisier, 2006:13).
28
There are some common elements between the INDUPOL strategy and the
hexagon, suggesting a continuity of thought rather than a rupture. Then I would
like to delve into the difference that Boisier considers as a break, regarding the
method and/or philosophical orientation.
Boisier was formed under the neoclassical school influence, and moreover,
under the positivism influence. That is why he defines himself as a technocrat
during the first phase (until 1980) of his career as an economist. The aim related
to knowledge by the positivism approach is to explain phenomena causally
through universal laws. Induction is the way that knowledge is manifested, so he
despises any theory that has not been found in reality objectively.
Later, Boisier assumes complexity and constructivism as a paradigm to explain
phenomena of the economic environment. In constructivism, the role of
knowledge is adaptive, being constructed from individual experiences and in
complexity the knowledge is assumed as an inclusive process. It is at once
spiritual, biological, linguistic, logical, cultural, social, historical, etc. In particular,
the nonlinearity of real processes is assumed. Clearly, that is a major break in
the evolution of his thinking, but paradoxically this rupture has not been
demonstrated by the results of applying these different epistemological
conceptions.
There is something that catches my attention; it is the absence of an
environmental component of the two development strategies. Human, economic,
territorial, institutional, social, cultural, and psychological components are
present, but the environment suffers from severe neglect by Boisier. This holds
true even when he analyses development from the complexity and finds all the
components involved in the process. In this way the author ignores approaches
such as Economic Ecology and Urban Ecology that are gaining more and more
relevance.
Referring to the fundamental difference between developed and developing
countries, I also noted another strong similarity. When Boisier developed the
INDUPOL strategy, he assumed that "the political and institutional parameters of
dependent countries" are what do not allow the success of a strategy of polarized
29
development45. In the context of the hexagon strategy the important differences,
as well as being political and institutional, are also social and cultural46. This
second strategy shows the evolution of Boisier's thoughts, but in my opinion both
strategies continue to be ahistorical visions of development. He does not
examine in any case, the relations based on domination and the historically
dependent nature of the terms of trade, for example. Established structures have
been his starting point for both development proposals, which must be
"modernized" or changed, but without any questioning of them.
Susanne J. Bodenheimer refers to this matter:
"If the goal is to encourage and to repeat in Latin America the
successful development of the United States and Europe,
problems of social and political development can be reduced to
the discovery of mechanisms to facilitate the institutions’
transplantation and Western attitudes and the resistances’
expiration that oppose it in the traditional Latin American
environment" (Bodenheimer, 1970)47.
Boisier attempts to spread, at the hand of modernity (with the INDUPOL strategy)
or globalization (with the hexagon strategy), the idea that it suffices for us to
change some internal structures inside of the territory in order to develop. The
structures can be economic, institutional, social or mental, but all of them have
the aim of reaching features of societies with "development culture", which
absorbs cultural differences and homogenizes the values. By this it does not
mean that it can get into the "path of development".
Indeed, the paradigm shift (from positivism to constructivism and complexity
theory) incorporates new elements and approaches in Boisier's development
conception, which can be assumed as a break. However, after having compared
45
In this case, for example, a well-integrated urban network existing in developed countries and rare in
developing countries is an important difference in a strategy like Boisier's one.
46
"Whatever point of view one represents, it is a consequence derived from the operation of political,
institutional, social structures, and lack of collective willpower to do what is necessary to make the jump
from the path of underdevelopment to path of virtuous development (work more, take a high share of
responsibility in all areas, and generate interpersonal, institutional and organizational trust, willingness to
learn, vocation for change, etc.)" (Boisier, 2006:98).
47
Quoted by Coraggio, 1973:126.
30
the two most significant proposals of this author which represent the two most
important moments in his work, I can state that there are many points of contact
between them.
With the proviso, and in the context of two development strategies, I can
conclude that both prioritize: the interaction between subsystems or elements,
and the need to create a "development culture", or in other words, a change in
mentality and structures of society. Also both strategies blame the actors,
organizations and institutions of territory as propelling the force of development.
Based on what is aforementioned, I can conclude it is not possible to speak
about a rupture into Boisier's thought; it is rather an evolutionary continuity.
Boisier's thought enriched over time through the acquisition of knowledge about a
particular society a society that still seeks to define what is meant by
development.
31
CHAPTER 2: José Luis Coraggio and Economy of Labor as local
development proposal.
2.1 Introduction.
José Luis Coraggio is an Argentine economist and expert on development issues
since the sixties. In 1964 he obtained his bachelor's degree in Economics from
the University of Buenos Aires, and later he studied and graduated as Master in
Regional Science from the University of Pennsylvania (1964-1966). He has long
standing experience as a researcher and university professor, becoming Rector
of the National University of General Sarmiento in Buenos Aires (1998-2002), in
which he operates currently as a Research-Teaching Head of Urban Economic
Systems. He is listed as author or coauthor of over 120 articles and 30 books48.
He has also developed extensive work as a consultant on issues of regional and
urban planning, research methodologies, analysis of social policies and social
economy in various countries in the Americas, including Argentina, Mexico,
Nicaragua, the United States, and Ecuador, among others. He is founder and
coordinator of the Latin American Network of Researchers on Social and
Solidarity Economy (RILESS).
I will focus on the author’s work. I will start analyzing his concept of development,
closely linked to territory. In a second stage I set out the main proposals of this
author throughout his career related to local development and then I analyze
critically the evolution of his thought. The impact of Coraggio's work has been
considerable between Latin American academics, particularly in the areas of
economic development. It is therefore interesting to further study this Argentine
author, who is a representative of the school of thought that is gaining relevance
in Latin America nowadays.
48
See http://www.coraggioeconomia.org/
32
2.2 The José Luis Coraggio's conception of development: an analysis at
the conceptual level.
We could not refer to Coraggio's conception of development if we do not take it
as an opposition to other thought approaches, because his own vision is based
on the criticism made of other theories and models of development. That is why
he defines "another development", in confrontation with the neoclassical model49.
"Another development" refers to "the implementation of a dynamic process of
expanding local capacity to achieve sustained intergenerational improvement of
quality of life for all members of a population"50 (Coraggio, 2004a:1).
When Coraggio refers to local capacity he is highlighting the territorial dimension
of development. It is in the community where men satisfy their material and
spiritual needs. This definition also highlights the sustainability idea concerning a
better quality of life for the new generations. Similarly with the word "for all", he
includes the solidarity component as a moral value, and the functionality
component because it is clear that no one can live better if the environment does
not evolve favorably too.
From this definition and based on the dialectics of development51, he specifies
the components of development: economic (income, rational satisfaction of
legitimate needs, adequacy and quality of public goods ...), social (effective
equality of opportunity, coexistence, social justice ...), cultural (self-esteem,
belonging and historical identity, integration, solidarity values ...) and political
(transparency, legitimacy and accountability of representations, responsible
direct participation...) (Coraggio, 2002:12; 2004b: 248). Thus he follows a holistic
approach, not an economic approach, because ultimately "not only firms but also
49
Here Coraggio criticizes definitions that, despite the more or less extended recognition to consider social,
environmental and political issues for the development topic, still have a strong quantitative approach,
linking development with growth or progress. Following this line, development would be measured by
indicators such as income level, investment, resources, productivity, and efficiency, among others.
50
Phrase highlighted by the author.
51
He defines the dialectic of development as "move forward in a spiral from a reality that we want to
overcome, but with elements of this reality in transformation process" (Coraggio, 2004a:1). So, the
components defined within his development concept have not been considered pre-requisites, but the
development itself (ever changing).
33
institutional systems compete in the global market and these systems are socioeconomic and political-cultural" (Coraggio, 1997:36).
Development for Coraggio is therefore a process of transformation and
continuous collective learning from an individual’s own capabilities, communities
and societies. The very concept of development is part of that process of
transformation, that is, communities must have the autonomy to define what
development is and how to reach it. That is why he emphasizes with respect for
specific conditions of each locality, so it is not possible to propose a unique
development model.
Local development in Coraggio's work occupies an important place, because it is
in the community where people interact directly with the environment and where
they can see enhanced development capabilities. In ideological opposition to the
capitalist system, he understands local development based on endogenous
forces and processes, which despite its being interconnected with global
processes, it maintains a certain autonomy "manifested in the conscious and
active initiative to transform the local situation from the human development
perspective52; it is competing, in any case, for the people and not for capital"
(Coraggio, 2000a: 10).
From this view, the author contrasts capital with labor, which is a central element
in his work. Capital is a reflection of exploitation relations and labor is a source of
socialization and realization of men. That is why he criticizes today's capitalism
and proposes a system focused on the labor, which he names Economics of
Labor.
Within Coraggio's concept of development it is also important "to democratize the
society" and in this sense, decentralization is a valuable tool. It is unthinkable for
this author to propose "another development" to a community that is unable to
govern itself; it "is like raising a project without a subject" (Coraggio, 1988:9).
However, he warns that decentralization needs the relationships between
different administrative levels (local, region and country).
52
Corragio understands human development as "expanded reproduction of life, unlimited reproduction of
quality of life" (Coraggio, 1997:30).
34
Decentralization alone does not guarantee efficiency, and citizen participation,
which Coraggio is aware. There may also be trends with bureaucracy, corruption
and the creation of local elites. "The political autonomy is abstract if the economy
is not controlled" by communities (Coraggio, 1987:10). It is against generalizing
proposals that do not respect the locality and/or country particularities.
Successful examples of autonomy understood as popular sovereignty may fail in
other regions of different cultures.
Assuming
that
democracy
and
self-determination
are
prerequisites
for
development and not the result of an acquired level of well being, he promotes
the combination of "direct democracy" and "representative democracy" for Latin
American countries. He argues mainly two reasons. On one hand, the centralized
state, independent of the process that gave rise, has historically been
precondition for advance in income redistribution and social justice in the region.
On the other hand, democracy activated from the base becomes a condition for
self-determination and for models of development that respond to local
conditions (Coraggio, 1988:18-19).
2.3 The local development and Economics of Labor in Coraggio's work.
Development according to Coraggio, as it has been already explained, is
essentially territorial, so his main theoretical contributions revolve around the
community, and more specifically around urban areas. For many years the
author has been dedicated to disseminating his views on the need for cultural
change, from the perspective of Economics of Labor. Although similar ideas of
other followers of the Social Economy approach are found in Coraggio's work, we
can distinguish some interesting contributions of this author.
2.3.1 Production and reproduction territorial complexes: a background of
the development proposal based on Economy of Labor.
In 1987 Coraggio published the article "Los complejos territoriales dentro del
contexto de los subsistemas de producción y circulación", which purported to be
a theoretical and methodological tool for regionalization and better understanding
35
of social phenomena through the inclusion of spatial dimension. The hypothesis
is that economic processes and particularly reproduction processes are
fundamental in the origin and functioning of regional organizations, which in turn
influence the social relations environment.
The author focuses on relations of production and circulation between specific
economic agents or groups, which are linked to the system in function not only of
economic interest but also for ideological, political and cultural determining. Thus,
he proposed to recognize the subsystems of production and circulation as the
best operational way to study the spatial social structures53. According to
Coraggio the only way to link production with spatial forms of a society is
incorporating in the analysis the conditions and processes of its reproduction,
that is, recovering the systemic unity with the circulation included.
When the reproduction is analyzed, it is necessary to consider the social
relations between the actors involved in the production and (re)distribution of the
product. These relationships can be conflicting and/or contradictory, for example
between strategies of households and capital reproduction54. His proposal is,
therefore, rich in elements integrators. The designed approach allows studying
spatial phenomena in order to find an organic link between economic, social,
cultural and political issues.
Societies for which Coraggio proposes this methodology are called "dependents"
or "peripherals", and have supposed economic openness. Following the
subsystems of production and circulation as a common thread, he proposes the
scheme below that summarizes the most important issues of integration of these
societies.
53
It is contrary to the neoclassical approach of the localization which regionalizes according to physical
characteristics of the territory or by classifications of productive activities.
54
It is an issue that he will deepen further, the results of which are published in a book titled "La gente o el
capital. Desarrollo local y Economía del Trabajo" 2004.
36
Fig. 3: Production and reproduction territorial complexes.
Source: Coraggio, J.L. “Los complejos territoriales dentro del contexto de los subsistemas de producción y
circulación” 1987:18.
The dependence abroad is evident in Figure 3, where few production lines are
able to position their products in the world market and imports provide both
means of production as means of consumption. A low relationship can also be
observed between the structures of the system, where the reproduction relations
necessary for its operation are provided by the State and by strategies of the
populations (or households’55) reproduction.
With this scheme, Corragio reflects upon the structural heterogeneity and the
dismantling of the peripheral economies which are represented through the three
subsystems, where he not only recognizes the State and the capitalist enterprise
system but also the non-capitalist forms (strategies of the population
reproduction). Corragio developed this organization of economy, and it becomes
a key issue in his future proposal related to Economics of Labor.
Then he studies what he calls a production and reproduction territorial complex.
"One particular opportunity is opened when we have a social complex
whose structure of economic, social and political relations, reproduces
itself in a significant degree through internal processes to it, and when the
material supports of this complex are located in an relatively compact
55
Subsequent households are defined, which represent a key element of the Economy of Labor proposed by
Coraggio. This is mainly concerned to subsistence activities, employed, and self-employed, among others.
37
area, leading to what we propose to call a production and reproduction
territorial complex56 (PRTC) "(Coraggio, 1987:29).
Although Coraggio defined the complex as located in a relatively compact area,
the limits of it can never clearly been defined because it is difficult that the
territorial complex encompasses all the conditions for the reproduction of
activities and relationships associated. Conditions of reproduction that are
guaranteed by the activity of the complex itself will be determinant factors for the
criterion of demarcation. The o feature of the complex gives it a certain
dynamism because it will depend on which succeeds in establishing relations
with the rest of the system (regional, national or global).This shifts the focus of
regionalization, as there are not territorial demarcations that determine the
subsystems. Rather, they determine the relations of reproduction and their
spatial arrangement which set limits on them.
The production and reproduction relations that can occur within a complex are:
the social relations of production (private or collective ownership), the
reproduction of the material conditions to production (raw materials, means of
production, infrastructure, services associated), production workforce relations
(employees, independent or community workers), money and credit circulation
relations (wages, mutual, loans) and political and ideological reproduction
relations (unions, associations of producers, political organizations, protest
movements) (Coraggio, 1987:33). It is important to note here that Coraggio
includes non-market relationships that can occur within the complex, such as:
community use of the production conditions and realization of consumption.
Coraggio distances himself from the methods of "Systems Analysis" by assuming
a theoretical hierarchy of social relations and considering the contradictory nature
of these methods. His methodological approach is to investigate social relations
considering the connection of social agents with means of production owned and
with nature. It is therefore a method that incorporates the complexity of social
systems, but at the same time breaks with the classical sectoral scheme of the
56
By way of example, Coraggio says "the case of sugar complex located around a capitalist sugar mill,
which is practically a local company, would be an example of articulation complex of national sugar
subsystem that takes the spatial form of PRTC, with agricultural activities of sugarcane production and
food for workers, housing services, commerce, schools, etc." (Coraggio, 2004:88).
38
organization of the economy, where relationships are classified in economic
activity (agriculture, industry, services). In this case the production chains must
be "a real organic unity of transformation of the nature" (Coraggio, 1987:32). He
attains that the internal logic of the processes does not dismantle.
The
traditional
approach
in
economics
is
separate,
functional
and
organizationally, production from reproduction. From this the relationships
governing each subsystem and the best ways to operate are analyzed .This
division allows us to suggest that there are two ways to integrate into the system
(merchandised): as productive resources bearer (labor or capital) or as goods
and services the consumer uses for reproduction, not considering domestic labor
or solidarity relationships because they are not valued forms in the market.
However, there is no evidence in any society that such a division exists and that
its theoretical implications are real. Domestic and cooperative labor based on the
solidarity principle has never disappeared57, on the contrary, it gains strength
with the deepening crisis of the capitalist system, even being socially valued.
This is a reflection of the lack of organicity in the methodological field too, which
normally reproduces exclusive forms of the market. It is difficult to understand the
complex of spatial phenomena with divided mental structures which have
prevailed up to now. Therefore Coraggio's proposal not only represents a good
analytical tool but also allows us to get closer to the reality of ourselves.
2.3.2
The
development
strategy
from
the
Economics
of
Labor
58
perspective .
With the article of 1987, as referenced, Coraggio realizes the prominence of
reproductive strategies of the population and not commercial activities in
peripheral areas. The lack of articulation between some of these not commercial
57
See "Economia civile. Efficienza, equità, felicità pubblica" Bruni & Zamagni 2004.
Organizations that are not part of capitalist business or the public sector may be appointed, despite the
differences in meaning, for different appellations: the third sector (mostly used in the developed northern
countries), Popular Economy, Economy of Labor, Social Economy, Solidarity Economy, etc. Coraggio for
example, uses the term Popular Economy throughout the decade of the nineties and then introduces
Economy of Labor, which in recent publications alternates with Social and Solidarity Economy. This, in
addition to a reflection on the lack of consensus on terms and concepts in the universal thought, shows an
evolution of Coraggio's thinking. Some differences between these terms will be discussed later.
58
39
entities with the capitalist market and the upward growth of a sector of the
population excluded must have also gotten his attention. These assumptions led
him to focus for the rest of his career in the study of so-called Popular Economics
and Economics of Labor59, working in not only intellectual but also political fields
promoted in Latin America.
Social relations of exchange based on solidarity60 have been overshadowed by
business system development and expansion of capitalist markets. The
institutional structures have been an adjunct facilitator for social integration. The
State, for example, has served as mediator between capital accumulation and
resources redistribution, ensuring access to public services and the reproduction
of the system. However, in current conditions with the internationalization of
markets and production deterritorialised, mutual and solidarity aid organizations
reappear strongly as an alternative61 to the exclusion processes increased, in
recent decades, with the crisis of the capitalist system.
Coraggio's proposal revolves around a vision of the economy that has a lot to do
with the Social Economy62:
"The production processes, distribution, circulation and consumption
system organizes communities and societies in each historical period
through principles, institutions and practices to obtain the material basis
for resolution of the needs and legitimate desires of all its members of
present and future generations, so as to permit the reproduction and
59
It is marked on the author's publications, the introduction of issues related to Popular Economy after
1987, since before the publication of "Los complejos territoriales" his greatest interest was in the study of
regional issues and planning. From this year topics such as: participation and people's power, popular
education, popular urban economy, economy of labor, social economy, among others, begin to gain
prominence.
60
Some experiments of this type can be found from the nineteenth century, for example, production
workers' associations in France promoted by Jean Philippe Buchez and multifunctional rural cooperatives
in Germany by Friedrich Raiffeisen, which continued the cooperative tradition of Robert Owen and Charles
Fourier (See, Vienney, 1994).
61
It is interesting as the process of recovery and recognition of Social Economy organizations are given for
various fields: from the State, the scientific community and from the organizations themselves (Malo,
1991).This shows the social recognition of the need for alternatives to the capitalist enterprises system.
62
The term Social Economy emerged in France during the first half of the nineteenth century by authors
such as Charles Dunoyer, Charles Gide and Leon Walras (Bastidas-Delgado & Richer, 2001). It responds
to the concern of integrating the social dimension to the economy. It is a polysemic term that identifies a
type of organization made about democracy and cooperation. It distinguishes a theoretical approach based
on the interdependence between economy and the society. Under this approach, the economy cannot work
without institutions, without the participation of individuals, communities and the State. (Bruyn, 1977;
Vienny, 1994; Lévesque & Mendell, 1999).
40
development of life, holding the mental, interpersonal, inter-local and
environmental balance" (Coraggio, 2011:1).
This definition can be added to the heterodox approach which criticizes the
understanding of the economy as the science that studies the satisfaction of
unlimited needs of men by scarce resources, according the marginalist vision63.
A more holistic approach, which considers the economic issues closely linked to
the social, historical and political areas, is becoming stronger among
contemporary intellectuals (Laville (2004), Favreau (2003), Monsoon (2006), et
al). It is in this aspect that Coraggio based his proposal.
From this definition, Coraggio develops their approach in order to recognize and
stimulate a sector of society outside the capital. This sector focuses on "job
opportunities and reproduction of life rather than the achievement of maximum
gain or the reproduction of capital" (Coraggio, 2000b: 159)64.
The Argentine author sees the economic system organized into three subsectors or subsystems65, corresponding to: the Capitalist Economy (governed by
the capital accumulation), Public Economy (controlled by the accumulation of
political power) and Popular Economy (focusing on biological and social
reproduction of its members) (Coraggio, 2001:19-20).The interrelation of each of
these sectors allows, according to Coraggio, the functioning of the capitalist
system. It is essentially his same analytical framework proposed in 1987, shown
in Figure 3.
Within a Capitalist Economy, or so-called Business-Private Economy, Coraggio
includes firms, associations and business networks associated by the property,
market relations or groups of control. In Public Economy he comprises all units
63
It is a widespread definition introduced by Lionel Robbins (1932) and is dominant among academic
textbooks.
64
A representative example of the type of organization that Coraggio wants to stimulate is the cooperative.
In an organization of this kind, the distribution of surplus is made by each partner's participation in the
activity and not by the amount of capital invested. There is an unallocated portion that is used to the
corporate purpose or is distributed for purposes defined and approved democratically by the members of
the cooperative.
65
There are other proposals that theorize about a new sector to organize the economy (in addition to public
and private business).See for example: Henri Desroche (1983), José Monzón & Jaques Defourny (1987),
Helmut Anheir & Wisner Seibel (1990), Benedetto Gui (1991), Jean-Louis Laville (2000), Mario Roitter
(2004), among others. Coraggio's proposal is therefore not entirely new, but he uniquely defines what he
wants to achieve with this sector.
41
that are part of the administrative-bureaucratic system linked to politics. Finally,
domestic units (households) organized through market or reciprocity exchanges,
are included in Popular Economy (Coraggio, 2001:20).
As for the domestic units’ category, Coraggio makes his definition as follows:
"If we have to define an organizational supra-individual cell with some
degree of awareness and coordination on the decisions of its members, this
is mainly the family or larger homes. To this we add other volunteer
groupings based not on relations of consanguinity (special homes,
cooperatives of various kinds, sharing networks or solidarity assistance,
ethnic communities, etc.) which -from an economic perspective- have the
same goal as families: to obtain resources and use it to maintain and
improve the lives of its members. So we can visualize a nonprofit
cooperative as ad-hoc arrangement of a set of different family members to
get on another scale and other resources to improve the living conditions
of their homes (...). By extension we call all these forms popular domestic
units or organizations" (Coraggio, 2000b: 162).
The Popular Economy is a subsystem that encompasses the poorest as well as
the middle sectors where employment remains the main source of support. The
author includes all the "workers" (salaried and unsalaried), "whose immediate
sense is given by the use of their labor funds"(Coraggio, 1993:6).With this
definition Coraggio distances himself from criteria that are arguing the presence
of an "informal sector" in the economy and he is close to the Solidarity Economy
approach.
The "informal sector" has been defined for those individual workers and small
businesses that participate independently in the market. Some defining
characteristics are: illegal
economic activity, small
establishments, low
productivity, low income, street trade, self-employment, and domestic service,
among others. Non-market domestic labor and workers of private companies are
not incorporated in this definition. The Popular Economy, as explained by
Coraggio, is a more encompassing category that seeks an internal logic coupling.
42
Solidarity Economy66, however, is associated with a wide range of actors
(employees, volunteers, sponsors, cooperatives and social enterprises, etc.) and
has a "hybridization of resources" as well as the sale of goods and services on
the market, the public funding, and from donations and volunteer labor (Laville,
1994:74). The goal is to meet the unsatisfied needs by the market and the
government institutions, based on the principle of solidarity, so that it goes in line
with the concept of Popular Economy67.
Returning to the definition of domestic units he highlights the labor funds. This is
explained by Coraggio as "the set of labor capabilities that can perform under
normal conditions by its members to jointly solve their reproduction" (Coraggio,
2001:21). The realization of this labor funds may include business job and the
reproduction of workforce. The form of business job in this sector is divided in the
self-employment (individual or collective) that produces goods and services for
sale in the market and the salaried labor within capitalist enterprises, public
sector and/or other domestic units. Instead, the reproduction of workforce is
determined by the production of goods and services for the domestic units’ selfconsumption, the solidarity production of goods and services for the community
as a whole, and the training of members68 (Coraggio, 1998:76-77, 2001:21).
The domestic units also accumulate resources, but differently from capitalist
accumulation. In this case "use value or its character as value reserve for
possible
emergencies"
is
what
predominates
(Coraggio,
1993:6).
The
accumulation in these units may be primarily in the form of means of production,
durable consumer goods and monetary savings. However, according Coraggio,
66
The Solidarity Economy concept was promoted in Europe by Jean-Louis Laville analyzing several case
of study. New ways of organizing around the Social Economy has been emerging in response to the crisis
of development models, so the French author proposed the "solidarity" term to identify from the rest. In
general, the traditional organizations of the Social Economy (cooperatives, mutual, and associated
companies) group members of homogeneous categories as farmers, consumers, workers. Instead Solidarity
Economy recognizes a wide variety of subjects. In Latin America, Luis Razeto is who promotes the term
from the mid-nineties of last century.
67
The differences between Solidarity Economy and Popular Economy will be explained further below.
68
The education and training corresponds to the trans-generational capacity creation linked to the job,
which is included in the concept of developing Coraggio. That is learning by doing (artisan training, group
discussion, etc.) and participating in educational processes, whatever its type (Coraggio, 1998:76).
43
this accumulation is limited to the expanded reproduction of life, distancing itself
from the capitalist accumulation69.
Before continuing, I would like to refer to the peculiarity of Coraggio's definition of
Popular Economy that is unlike other conceptual proposals. Taking the domestic
units as a common denominator makes the author distance himself from those
that reduce the Popular Economy to micro-business and micro-economic
organizations (ANHEE & Seibel, 1990). Moreover, by focusing on the labor and
the expanded reproduction of life as qualifying elements, he achieves a broad
group of subjects within the sector. This allows him to include salaried workers
(from public and private business), which is something unusual among the
specialists in the field70 (Lewis & Swinney, 2007; Defourny & Develtere, 1999).
The following scheme prepared by Coraggio represents the three subsystems or
sectors of the economy, how he defines it. It also highlights an area where those
associations or organizations are involved in interacting with the system through
solidarity. Thus, philanthropic solidarity (donations asymmetric) is represented
among companies in the capitalist sector; democratic solidarity (based on the
progressive redistribution) is part of the Public Sector and also shows the
solidarity that characterizes the Popular Economy.
69
Coraggio does not analyze in depth, despite the recognition, relations of exploitation that can be given to
domestic units (Coraggio, 1998:75).This author could respond that those are not relevant because they do
not follow the same mechanisms of capitalist exploitation based on the surplus. However, just for that he
should study them. Unequal exchange due to age, gender, religion or ethnicity within households may be
more or less extensive depending on the culture of the territory. I consider it essential to understand the
internal social relations of these organizations for a project that insists on the need to promote solidarity
among the rest of the subsystems, as Coraggio proposes.
70
According Coraggio, reasons that can lead to other authors to exclude the salaried labor of the Popular
Economy and include it as part of other sectors are: 1) the lag to consider an ideal capitalist system in
which "the reproduction of the workforce appears totally mediated by the market "and job, as a whole, is
exchanged as a commodity in terms of salary, and 2)" the idea that, once within the capitalist production
process, a job is not an autonomous force but a moment of capital" (Coraggio, 1998:80).
44
Fig. 4: Economic system organized into three sectors.
Source: Coraggio, J. L. “Territorio y economías alternativas” 2009.
With this schema he clearly demonstrates the difference between the Solidarity
Economy71 and the Popular Economy. Solidarity Economy does not consider
those activities concentrated in the immediate satisfaction of needs, such as
consumption, that are performed within the Popular Economy sector. There is
also a differentiation in the classifier parameter; while the Popular Economy
brings together its members by means of a homogeneous category (labor as the
only means for the reproduction of life), the Solidarity Economy supports
diversity. Therefore, the latter group actors or subjects from different sectors, as
long as match to propose an alternative to unsatisfied needs by capital and
71
It is Civil Economy by some thinkers (Bruni & Zamagni (2004), Sacco, Antoci & Vanin (2002), et al.). It
cannot be any arbitrary terminological difference. I think this deserves to be differentiated in context. In
countries where the society has reached a greater development and welfare level and where democratic
culture has spread, it is consistent to talk about civil economy. However, in underdeveloped countries,
where what matters is the survival (not so much the "rights of the citizen"), it is meaningless to talk about
Civil Economy. If you ask to a Quechua woman, for example, if she wants a civil society or a solidarity
society, she chooses surely the second one. Solidarity is a basic principle that we all understand and
practice somehow.
45
public action. From this perspective, the Solidarity Economy can be seen as an
organic element of the system.
According to Corragio, the behavior of individuals or organizations represented in
Figure 2 continues with five basic principles of integration72: domestic
reproduction, reciprocity, redistribution, exchange, and participatory planning of
the economy73. In predominantly neoliberal economics the principle of commodity
exchange and the capital accumulation logic would be dominant, while in "other
economy" based on solidarity the logic of reproduction and development of man
is fundamental.
Coraggio also notes that the biological and social reproduction of the members of
an economy does not suffice as a target within Popular Economy, because if
capitalist culture continues to prevail, individualistic methods can be used as the
pursuit of maximum satisfaction (Coraggio, 2009:13). It is therefore an important
cultural-political project that promotes a different rationality. It is the only way that
Coraggio finds possible to be a successful businessman in surplus that can
switch from being in a popular sector to being in a capitalist sector.
However, Coraggio realizes that the Popular Economy, seen as the socioeconomic real substrate of a possible alternative development, lacks organicity in
practical life. What really exists is "a non-integrated set of activities carried out by
employees, directly or indirectly subordinated to the logic of capital" (Coraggio,
2001:22). In search of better conditions, the domestic units are induced to
compete with each other, due to the behavior of the market itself and the
capitalist State, according to Coraggio. In cases where the survival of a domestic
unit depends on the disappearance of another, we cannot say that an
atmosphere of solidarity prevails. Therefore, Coraggio's objective is to activate
72
The influence of Karl Polanyi's work is marked in Coraggio's thinking; some examples are these basic
principles. Traditional forms of economic exchange according to Polanyi are: reciprocity, redistribution,
domestic economy and the exchange of goods, which operate according to market rules and trade (Polanyi,
1944 [2000]:63-79).
73
"The complexity of today's society requires (...) State and/or social forms of planning, regulation and
additional coordination to markets to ensure the dominance of reproductive rationality and prevent joint
regulatory authorities the unwanted effects of fragmented economic actions done by the masses of
individual actors" (Coraggio, 2009:14). Planning for Coraggio represents a requirement of modern
societies, so it cannot be excluded as a form of exchange.
46
this sector so that it becomes a well-articulated economic subsystem with its own
logic. The political project proposed is focused on labor, which names as the
subsystem Economics of Labor.
The purpose of Economics of Labor is the "optimization of the expanded
reproduction of life of everyone". This means that there is consensus, dialogue,
cooperation among all its members. That supposes recognition of the needs and
designing strategies for collective management (Coraggio, 2001:23). More than
anything else, what is proposed is to guide research to a political project,
because in reality, as Coraggio explains, forms of solidarity are coexisting with
competitive forms. So not only is he content to describe the kinds of exchange
prevailing in the society, which is made obvious with his recognition of the
Popular Economy, but he also advances in proposing a project of political
transformation.
Essentially Economics of Labor, conceived by Coraggio, would be the political
project that accompanies a society in the transformation period, which would be
changing from a capital accumulation system to a labor accumulation system. It
would be to go towards a more just and equitable model, thanks to man's
conscious action to overcome the Popular Economy74, reaching a higher level of
cooperation and solidarity.
2.3.3 Incentives for Economy of Labor in locality and for popular education.
Coraggio has based his theoretical discussions around the Economy of Labor
and has launched a local development strategy which aims to implement his
ideas. The field of study remains in Latin America, so he begins by identifying
news trends in many cities in the region with the advent of globalization:
74
Some authors used interchangeably Popular Economy and Economics of Labor, but Coraggio insists in
their distinction. "By adopting this pair of terms to distinguish conceptually between the existing and
possible, we are changing the use to which they [these terms] were doing in previous works, in which they
were treated as synonyms but warning that it was necessary to differentiate between the popular economy
as a socioeconomic real substrate and the possible development of the "Popular Economics and Economy
of Labor" as a organic subsystem well differentiated within the whole economy. We believe this new use
contributes to getting the ideas straight and keeping the term "popular economy" closer to the most
commonly used in literature" (Coraggio, 1999:4).
47
"Increasingly, cities tend to settle as an island of modern business within a
sea of exclusion that is the former traditional or modern industries oriented
to captive domestic market, now in process of dissolution and, above all,
domestic units of the poor and the ex-middle sectors now impoverished
with their "informal" economic survival activities. Even if a peripheral
city is considered as part of the "global cities" network, its perimeter will
include large majority sectors and activities whose integration to global
activities is sporadic or nonexistent" (Coraggio, 1998:60).
The starting conditions are difficult for these localities; however Coraggio is
confident that this is the right time to implement his proposal, because the
popular sector is where a more profound change is needed.
The substrate socioeconomic defined within the Popular Economy sector is
fundamental, as it is so broad that it allows a heterogeneous base of individuals
who cooperate, not only in resources management, but also in creating strategic
political alliances75. Also he stresses the need to work "with diverse communities,
linked by the multiple identities of its members" (Coraggio, 1998:92).
But to start any development project, it is necessary to know the means at its
disposal. In this sense Coraggio analyzes the resources available to Latin
American cities to design development projects under globalization influence.
The resources that local governments can manage come from local and
international philanthropy, State resource allocation, and borrowings. This
imposes an important limitation because these are not self-sustaining resources.
Then, it is not by way of government secure sources of financing can be
obtained.
The idea of some local development promoters is that the communities’ initiatives
find a sustainable path of integration into the global market76 and an alternative to
meet the basic needs of all its inhabitants. However, Coraggio defends the thesis
that under current conditions this will occur rarely. Due to the free mobility of
75
Coraggio criticizes policies promoting local development which are concentrated in areas of extreme
poverty from international organizations like the World Bank, the Interamerican Development Bank (IDB),
and UNICEF, among others. According to him it would be very difficult that these sectors achieve the
ability to self-stimulate endogenously, because they are always depending on "foreign aid" for their
survival (Coraggio, 1992:16-17).
76
The World Bank, ECLAC and IDB, for example, propose consolidating the operation of a modern sector
to drag the rest of the local economy.
48
capital, Latin American cities are forced to keep direct and indirect labor costs
low and reduce tax burdens in order to be attractive and avoid affecting capital
gains. This goes against the strengthening of the domestic market and further
reduces the chances that local government has resources to stimulate local
development.
For Coraggio the need for a change in strategy is clear, in which the community
reaches a real role, and becomes the starting point for development from
Economics of Labor. Coraggio says that "the development process itself from the
community will influence the necessary articulation of societal instances and the
emergence of more democratic state forms" (Coraggio, 1998:92).
It is important then the interconnectedness of communities, as it will not be
isolated localities which face global capital. In this sense it is useful to know the
principal relationships or crossovers between communities. These relations,
according to Coraggio, can be: those of ethnicity, territory or common origin,
neighborhood (fostered by casual contact or shared local services), mutual aid
networks, commercial exchange collective networks, institutions of social or
political representation and ideological movements (religious, political) and
cultural (environmental, rockers), among others (Coraggio, 1998:87).
A proposal of this kind cannot be naive, and Coraggio's theory tries it. He did not
idealize reciprocal relationships that occur within domestic units, a fundamental
base that supports its project of transformation into Economics of Labor. He
recognizes that "machismo", so ingrained in Latin American societies can
generate an unequal distribution of household cash income. At the same time,
other tribal relations or family relationship can influence to a reciprocal degree77
(Coraggio, 1998:85).
It is not possible to see either community as a place where solidarity reigns. For
example, according to this author, "in the highly competitive environment of the
metropolis, where communities based on different identities and with varying
degrees of consolidation coexist and interact, it would be a mistake to
77
In this respect he agrees with Sahlins (1972) that an ideal type of unilateral detachment is strongly related
to parental relationship.
49
automatically associate "community" with the most generous and supportive
forms of reciprocity "(Coraggio, 1998:86). This does not mean that he is reneging
the community as the most fertile ground where the seeds of the transformation
could be planted, but he makes clear the need for a profound change that
reaches relationships and values imposed by modern Western culture.
However, sustainable funding sources remain as an important issue to address.
Coraggio proposed for this a fiscal restructuring. This involves on one hand, that
the contributions to the treasury of the Popular Economy should be reinvested in
services and works to promote this sector. On the other hand, he assumes that
the private business sector must pay for infrastructure and public services
required to sustain its competitiveness without passing the tax burden to the
popular sector. This author considers just that "if public debts are contracted to
meet those investments, it shall also be ensure that those investments are paid
by those who benefit directly from them". He does not consider benefits by way
of spill sufficient enough to get the other sectors, as "a spill capable of
reintegrating the society beyond the possibilities disclosed of new technologies in
the unequal globalization context" (Coraggio, 1998:96).
The obvious question is: does the author forget that all people are living together
in the same territory? To which he replied:
"As the infrastructure is or will be suitable to be relatively articulated or
shared by the three subsystems, it is not physical differentiations but the
imputation of responsibilities and corresponding uses. I am not talking
about the dualization of physical structures or public administration, but
the necessity to make equitable allocations of income and expenses, and to
design differentiation yet complementary programs, admitting that the
economy is composed of subsystems that respond to different logics.
Obviously there will be some investment and general costs for the entire
society, which should be shared on consensual basis. A tax system that
finances these expenditures and gradually punishes the conspicuous
consumption would realize fairness and consistency with the dramatic
perspective of the majority in these societies "(Coraggio, 1998:97).
50
According to the author's logic, any additional net transfer of resources78 would
not take place from the Popular Economy to other sectors for an extended
period. However, this subsystem could enjoy the services and local public works
until it reaches a satisfactory level of development, allowing the Popular
Economy to resize social expenditures79. The rationale for this grace period, as it
is called, is based on low wages, loss of social security and the historically
accumulated inequality in this sector (Coraggio, 1998:96).
This is how the author intends to boost the Popular Economy until it becomes
economically self-sustaining. However, the true self-sustainability will not be
achieved without a cultural transformation. In this sense Coraggio explains:
"Popular culture and popular economy must then be developed jointly.
This is not to strive to create new institutions and values as a practical
rationality in the "cultural front", while working instrumentally in the
"economic front" to achieve material survival. This is to continue
advancing in a multivariate process of learning and training, where the
practice of economic reproduction helps to generate new values and
institutions and the cultural labor facilitates the economic outlook change
"(Coraggio, 1998:101).
Due to the inorganic lack and dependence of social bases and their
organizations, Coraggio proposes that intellectuals, political leaders, experts on
development
issues,
educators,
communicators
and
pastors
take
up
responsibility for carrying out the transformation (Coraggio, 1998:115). They
must be immersed in a cultural movement of large dimensions, aimed primarily at
social action and organizational (traditional and new) forms.
It is thus necessary to invest in people by making the best educational means
available to all. This requires finding ways to sustain the investment oriented to
the purposes of Economics of Labor. There is not a possibility to sustain such
education through loans or financial "aid" that each locality receives, so Coraggio
proposes to increase revenue generation as one of the results of this process of
78
In this case he recognizes the "labor-source" that members of the Popular Economy sector transfer to
capitalist enterprises and the public sector in exchange for wages.
79
Frankly, the proposal seems absurd to me. The argument for this view is found later.
51
cultural change. The school must be able to repay the loans and become selfsustaining in the future.
It is here where the author incorporates the theoretical contributions of human
capital. This category has been much discussed among the authors of Marxist
influence because it considers man as capital. Coraggio follows this line of
criticism, one example being the publication made in 2004 under the title "La
gente o el capital. Desarrollo local y Economía del Trabajo". It is remarkable
then, that he uses this category in its proposal. Although the author tries to
differentiate from the neoclassical approach, arguing that:
"In this view, human capital is a social dialectic category, whose
development is inseparable from the meaning and the economic action of
individuals and groups articulated in the popular economy. Investing in
human capital means to invest in development of the Popular Economy.
Human capital development is greatest when it is able to reproduce the
conditions of its continued expansion" (Coraggio, 1998:82).
In my view, it remains a theoretical inconsistency.
Finally, Coraggio emphasizes the complementarity of policies. He states that it is
an indispensable requirement in its Economics of Labor project to overcome
sectoral approaches. He is contrary to a strong focus on public education.
Investments in education need to be complemented with those that address the
social and economic sphere. "It is like investing in a workforce without production
facilities, or in a reservoir of water regardless of its relations with the local
ecosystem" (Coraggio, 1998:104).
Local development, according to this author, is possible in Latin America if it
overlaps with a larger social and cultural movement, where the Economics of
Labor approach is dominant. It is necessary for that to help raise awareness of
change, so his strategy is to be more political than economic.
2.4 From the territorial complex to Economics of Labor: A step backwards?
Throughout his career Coraggio looks for ways to achieve a system with
organicism. In his first phase, he focuses on planning and regionalization issues
and he proposes a methodology to analyze the socioeconomic processes that
52
occur territorially in a holistic manner. That is why he moves away from the
sectoral vision of the economy and sets out his theory of production and
reproduction territorial complexes. Then in a second stage, he proposes a
strategy designed for those who historically have been excluded from the
system. For this, he supposes the division of society into three sectors and
proposes the Economics of Labor principles.
Some authors may consider an absurdity to add a third sector to the economy.
But if we think on one hand about the increase of people and organizations
excluded from the capitalist market (especially in peripheral countries), and on
the other hand, the rise of "social enterprises"80 based on different operating
codes to prevailing, it would be understandable that a group of authors defend
the thesis of the "other" sector in the economy, thus moving away from marketState dominant logic. But the results of some authors' proposals that follow this
approach are what seem incomprehensible.
Coraggio, for example within his Economics of Labor, proposes very little serious
tax restructuring. The consequences of implementing an idea like this in Latin
America could end up stifling the local and national business system. The low
rates of productivity and loss of competitiveness that would result from this
strategy, could negatively affect these firms that would remain in a highly
unfavorable position to compete within the global market. The only possible way
to counteract these effects would be achieved if all locations in the world to take
this step together, something quite impossible and that lacks scientific objectivity.
My position in this case coincides with the liberal critics who see this type of
proposal as a path to the impoverishment and degradation of living conditions,
and much more so in backward communities who do not have a strong
socioeconomic base. It is a commendable attempt to promote ethical values such
as solidarity, but one must be careful to ensure that this does not affect the civil
responsibility of society. Fiscal policy divided by sectors, as Coraggio proposed,
80
The definition of "social enterprise" does not hold consensus in academia yet. For example, in France
authors include public enterprises, in Belgium they speak of "social corporate purposes" where they
incorporate all entities whose purpose is the attainment of collective interests and the Solidarity Economy
approach associate these enterprises with any entity that contributes to needs that are non satisfied neither
by the capitalist market nor by the State (Bruni & Zamagni, 2004:157).
53
may induce non-cooperation more than collective action.
I doubt that the
Coraggio's strategy for local development based on the promotion of the
Economy of Labor can be successfully applied.
Moreover, the author's idea to achieve the organicism within the same sector of
Popular Economy is equally not pertinent. One of the elements of strength of this
theory identified by Coraggio is the great heterogeneity of the subjects present in
the popular sector. Coraggio probably thinks about "hybridization of resources"81
and the potential spread of popular culture (or counter-culture). However, he
didn't take into account the implications of social differences that may arise
inwardly into the sector, for example between an employee who participates in
the business Capitalist sector and a housewife who depends on selfconsumption. It is difficult to achieve a group identity with these differences,
despite getting identification with the project proposed, conflicting interests will
prevail. In my view, only on a smaller geographic scale it will reproduce the same
conflict and/or contradictory relations of modern society nowadays.
In my opinion the search for a more organic system than the one imposed by the
capitalist market and modern Western culture is valid. This must be done from
the theoretical and political fields. In this sense, the intention of Coraggio is
laudable, but his proposal has important inconsistencies as have been described
in these pages. I consider his first approach of production and reproduction
territorial complexes to be his his most valuable methodological proposal.
Although he distinguishes between three sectors in society, those that are
analyzed organically seek a logical link between them. However, with
the Economics of Labor, while intersectoral relations are incorporated, he
focuses more on the popular sector than on a holistic vision. Based on this, I
believe that this methodological change is more a reverse than an evolution in
his thinking.
81
A term used by Jean-Louis Laville in promoting Solidarity Economy (Laville, 1994, 1995, 2000).
54
CHAPTER 3: Sergio Boisier and José Luis Coraggio as a reflection of the
economic thought evolution in Latin American: from State Planning to
Local Development.
3.1 Introduction
The evolution of Latin American economic thought is marked by the structuralist
approach. We can speak of a before and after the emergence of this school of
thought in Latin America, as the region goes from receptor-adapter into the
international flow of economic ideas to a source of creative thinking. The starting
point of its founders was to recognize the structural problems of the region as a
cause of underdevelopment82 .The need for structural change in these
economies went on to become a key element in development projects for which
a change in state functions is proposed (Prebisch, 1970, 1987, Furtado 1966,
1972).
It is time for the "growth via the domestic market"83 model in the field of economic
policy to become popular in Latin America. Topics such as industrialization,
planning, technological innovation, consumption patterns associated with
modernization, diversification and sectoral complementarities, changes in social
structure, trade balance, credit, among others, were the focus of attention the
debates generated from this new vision of underdevelopment.
Following the same analytical but more radical perspective,84 the Dependency
Theory arises in Latin American thought. Unlike the structuralist theories, which
gives priority to internal structural factors of underdevelopment, these theories
82
Problems that are chronic, such as low levels of productivity, can be explained by high rates of
informality, lack of credit, high transport costs, macroeconomic volatility, lack of innovation and
insufficient productive development policies. The difficulty in accessing new technologies, few
investments in R & D and low-skilled workforce hinder the integration of these economies into the global
market. The structural fragility of the region is reflected in how rapidly short cycles of growth alternate
with recession.
83
See "A bias for hope: Essays on Development and Latin America" by A. Hirschman (1971:86-88), where
the author refers to the characteristics of the model and its shortcomings, contrasting ideas from two of its
main proponents (Prebisch and Furtado) at the time of boom and crisis of model.
84
The radicalism of this approach came from the idea of the need for a major transformation, as the
dependency does not allow developing countries to advance on way for development. Seeing the cause of
structural problems in external historical factors, it was not possible to change the structure without a
radical change in the system and its terms of trade.
55
are based on the relationship between dependency and structural deformation as
a cause-effect (Ruy Mauro Marini, 1973; Theotonio Dos Santos, 1974; Ander
Gunder Frank, 1978).The structural deformation would be the internal
consequence of external dependence, corresponding to the historical insertion of
peripheral economies in the world market.
Other Latin American authors like Fernando Henrique Cardoso and Enzo Faletto
(1990)85 entered the debate criticizing the immovable nature of the concepts,
because even though "there was a structure that constituted a dependency
relationship" it should not ignore the fact that the structure changes with time, in
other words, that "it depends on social formation and on how historically built the
connection between core and periphery is" (Cardoso, 2001:68). This introduces
not only dynamic but also dialectic into the underdevelopment structuralist
approach.
Although there are analytical differences between structuralists and dependency
theorists many links can be found between them. One of these is the concern for
institutions. Prebisch for instance, writes:
"... to believe that with a mere economic theory we can give guidance to
economic and social development is a profound mistake because the
prevailing theories have committed the grave fault of ignoring social
structure, as if it was not part of that reality on which to act. This will
require changes destined for some important structural and institutional
change, not only in the purely political issue of governance but also in
economic ones" (Prebisch et al., 1984:128)
These were years of a great effervescence for Latin American economic
thought. It was in this period too, when they developed the first statistical bases
of the region, which allowed future comparative studies between countries. The
theories of these authors had a strong influence not only among academics but
also among economic policy makers in the region. But, how has Latin
American economic thought evolved from those years to now? Have institutions
remained a common concern in discussions on development?
85
It has made the mistake of placing these authors as founders of the Theory of the Dependency, which is
not further from the truth. Both Enzo Faletto and Fernando Henrique Cardoso from the beginning were
very critical of this school of thought (see Cardoso, 2001:68).
56
I will focus on the comparison of these American thinkers, that is, between Sergio
Boisier and Jose Luis Coraggio. The analysis contrasted of these authors’ works
during the period 1971-2011 can be considered a reflection of the evolution of
Latin American economic thought on development issues.
3.2 Analysis compared of the works of Sergio Boisier and José Luis
Coraggio.
In this section I will not delve into theoretical analysis of Boisier and Coraggio86,
but I will concentrate on the main themes of their works, around which their
proposals are oriented. The manner in which these authors define and tackle
problems of the region, clearly expresses the main debates that have been
established over the years in Latin America. Both of them represent two
contrasting visions that have developed more strength in Latin American
thought from the seventies to the present.
Also, a key element that I would like to stress is how other authors have
influenced works of Boisier and Coraggio. The dialogue between Latin American
thinkers inside and outside the region, with other professionals, has greatly
enriched the proposals for development in this region. That's how we know
which approaches or schools have been a great influence in the evolution of
Latin American thought in the last forty years.
3.2.1 The role of regional planning: the reception of François Perroux's
work.
During the sixties regional issues began to gain prominence in the Latin
American debate of development. The reasons for this interest may be
associated with the problems that led to implementation of ISI model (import
substitution industrialization) in several countries in the region. This model is
86
The systematization of the work of these authors has been already discussed in chapters one and two.
57
introduced not because of doctrinal reasons but due to a very specific
situation87 .
Since the 29'-33's crisis, Latin America was forced to move from an "outwardlooking growth" model to an "import substitution" model. Among external factors
that conditioned this change of model are: the decline in external demand, the
reduction of import capacity, the crisis in the balance of trade and payments, and
the contraction of foreign direct investment. This forced a shift in the growth
model towards a kind of industrialization oriented to domestic market (Kaplan &
Basaldua, 1968:18-19). Furthermore (and this had much to do with the
structuralist and dependency theorists), it began a traditional conceptual revision
process of economic growth and social policy. The role of the terms of trade for
underdeveloped countries, the role of the State and the role of external factors in
the development of Latin American societies were discussed.
However, the ISI model results were not those expected. According to a study by
Kaplan and Basaldua (1968), the middle class was strengthened, taking
advantage of State policies, but failed to become a strong industrial business
sector. The society developed a degree of flexibility to adapt to "modern world"
changes, but it did not break the traditional structure. While the State became a
strategic factor, with new roles that were becoming more complex, countries of
the region did not have political and administrative structures adapted to absorb
this burden. "Social change coexisted with stagnation and industrialization was
not enough to boost the economy". They also hampered the functioning of
87
Some authors insist on identifying Prebisch and the structuralist representatives as those responsible for
the establishment of the ISI model in Latin America (Hirschman, 1971:88). However, this has been
disproved by authors such as Prebisch himself, who insist on external factors that determined the import
substitution as the only possible way in front of the global crisis at the time. Prebisch, for example, argues:
"During the Great Depression, when the monetary policy of the United States and the enormous
increase in customs duties destroyed the entire multilateral trading and payments system, which
was working very well.
The drop in exports in our countries was enormous. And there was no choice but to import
substitution. I had to act in that time and I can not remember in that situation to some insane to
say: "No need the imports substitution, but to export manufactures." To where do you export
manufactured goods? Does it lean towards a world that was dislocated and where protectionism
was a normal way to protect economies? There was no other solution than substitution. It was not
a doctrinal preference, but an imposition of events "(Prebisch 1986:135).
58
articulated institutions and the achievement of operative ways for social
integration and collective action (Kaplan & Basaldua, 1968:19-24).
Because of this situation, the recognition of the role of planning as a catalyst or
inducing effect of economic and social development was beginning to be
extended. It is within this context that François Perroux's work in Latin America
was spread. The theory of development poles of the French author provided a
strategy coherent with industrialization policies and the structuralist school of
thought, so it's no wonder that it resulted in wide dissemination throughout the
region.
The interest of Boisier and Coraggio in Perroux's work was concentrated
primarily during the late sixties and early seventies. Boisier as strong supporter of
the "pure" theory drawn up by Perroux and Coraggio as opposite of the ideology
that underpins the French author's proposal, it is a reflection of the two main
approaches around the theory of poles during those years in Latin America. Both
views were defended by the authors at Seminario Internacional sobre
Planificación Regional y Urbana convened by the ILPES (Institute for Economic
and Social Planning) in Viña del Mar in 1972.
Boisier adapted Perroux's theory of poles to Latin American reality through the
INDUPOL (industrialization,
urbanization
and polarization)
strategy, and
Coraggio identified the elements that according to him make the implementation
of French theory counterproductive in the region. It is precisely here where the
fundamental difference between the visions of these two authors exists. Both of
them started recognizing that the theory of poles corresponds to a different reality
that pertains to developed European countries. Boisier attempted to extract
universal propositions valid for Latin American development, and Coraggio
argued that "any naive attempt to "extract" the ideological elements from a set of
technical relationships is a contribution to the advancement of the dominant
ideology "(Coraggio, 1972:39).
Apparently the Chilean author was stimulated by the challenge, which resulted in
a generation of driving forces for developing countries, as the theory of
development poles enunciated. Boisier agreed with Perroux that in these new
59
conditions of a capitalist system expansion, a change of strategy aimed toward
modernization was necessary. This would entail a change in social structure, and
a greater role for community leaders who should be able to understand the new
opportunities provided by the polarization process. The "modern attitude of
society" should also reach the public and private companies (Boisier, 1972:40).
Perroux identifies the generation of driver units88 with economic progress.
Developing countries should also be able to be inserted into the network of global
dynamic poles. To do this, it was necessary to engage the dynamic center within
a national system and social structure. However, this French author does not
delve into viable alternatives to achieve this internal link. Countries such as Latin
American ones with a historically distorted structure, which would like to join the
theory of poles, had a very difficult task ahead of them: how do they achieve
"modernization" of the internal structures? The INDUPOL strategy of Boisier is
precisely an attempt to meet this demand.
Boisier's proposal is based on urban centers because it is where he identifies the
best conditions to generate internal interdependence and retain the effects of
polarization. There is one element, as the author himself admits, that is unlike his
other industrialization strategy, which is: "the simultaneous spatial-sectoral
treatment at urban centers level" (Boisier, 1972:46). In his strategy, it is clear that
Boisier is devoted to the importance of cities that network and organize around a
nodal point, whose formation is supported through interurban measures (related
to factor spatial mobility in urban system) and intra-urban (linked to operational
efficiency within the cities).
The preponderance of urban or spatial interdependence over functional
interdependence (input-output) is something that distinguishes Boisier from the
French author. Perroux is referred to as a failure of the classical interpretations,
accounting little consideration of the functional relationships between the
production units. He wrote about this:
88
“L’unité motrice est une unité de production (firme) capable d’exercer sur d’autres unités des actions qui
augmentent la dimension de ces dernières, qui modifient leurs structures, qui changent leurs types
d’organisation et qui y suscitent ou y favorisent des progrès économiques” (Perroux, 1958 :292).
60
“Il est assez vain de chercher l’équilibre des balances extérieures par
territoires. On est conduit, en le faisant, à accroître la charge
métropolitaine de l’investissement compensateur. Il convient dès
maintenant de doubler cette comptabilité relative aux pôles ou ensembles
fonctionnels. (…) Dès maintenant, les équilibres des ensembles
fonctionnels devraient être systématiquement étudiés et opposés aux
comptabilités extérieures des nations. Les nations anciennes ou jeunes
prendraient une vue plus exacte des gains qu’elles tirent de l’échange
extérieur et de leurs interdépendances réelles” (Perroux, 1958:289-290).
Boisier, however, prefers to keep anchored in the territory and even analyzes the
functional interdependence between the poles, he does not think this should be
the core of his proposal89. Territories are ultimately what he wants to develop, not
so much a global production network. In this sense Boisier is closer to Boudeville
than Perroux, because this author is the main promoter of the application of the
theory of poles in geographical space analysis90. Thus Boisier says that
the "geographic locations (urban centers) that have the capacity to internalize the
polarization effects, for the spatial subsystem defined by them, represent the
correct
translation
at
geographical
level
of
the
poles'
concept
in
abstract"91 (Boisier, 1972:39).
This difference in approach between Boisier and Perroux reflects, in my view, the
peculiarities of contexts in which each of these authors live. The first was a
member of the Conseil Economique et Social during Charles De Gaulle's
government, in a political power reorganization period in the world when Europe
lost strength against U.S. and the second was a development promoter for a
group of countries which had just borne the brunt of the external demand
contraction following the Second World War. The interest for the first of these
authors is the political and economic expansion, and for the second author, the
development of economically backward territories. That is why the former insists
on the functional dimension of economic activity and the second on spatial
89
According Boisier developed countries have an urban network that ensures the spillover effects of
polarization in the territory, so it is understandable how Europeans find devotion to the territorial
dimension unimportant, focusing more on the functional element of the strategy. For Coraggio, this idea
demonstrates the political naivete of the author (See Coraggio, 1973:122-123).
90
On Jacques Boudeville the following texts can be consulted: “Problems of Regional Economic Planning”
(1966) and “L'Espace et les pôles de croissance, recherches et textes fondamentaux” (1968).
91
Italics by the author.
61
dimension. While Perroux proposes a strategy that views the territory as a
variable expansionist, Boisier draws on the theory of poles for Latin American
development.
Boisier's attempt, however, is severely criticized by Coraggio. According to the
Argentine author, Boisier pretends to adapt the theory to Latin American reality,
and "commits here the same mistake of trying to search for a non historical
universal mechanism, which would apply equally to different systems and time"
(Coraggio, 1973:129). He also criticized the economically focused view of the
INDUPOL strategy, because in spite of considering the social and political
variables, these are not integrated into the systemic body of the proposal. On this
matter he wrote:
"This is a fairly widespread postulate, which has two fundamental
problems: first, the inability to compose a development strategy with the
elements offered by "economic engineering". We affirm that a strategy for
development must be approached in a holistic manner, especially its
political terms. The mere mention of factors or social and political
variables is only sufficient to allow temporally safe personal positions.
Second, given the impossibility mentioned, any attempt in this direction is
marked by irreconcilable ideological elements" (Coraggio, 1973:129).
For Coraggio, Perroux's interest, based on his ideological orientation, is
clear: "the idea of domination as inescapable reality", that is, structures of
asymmetric relations are prevailed in all economic system between its elements,
which include: firms, groups, regions and/or countries. This idea of inevitable
domination Coraggio rightly defines as the basis of the Perroux's theory of poles,
where the dominant-dominated relationship is associated with the inducinginduced relationship92. In this way he states that the French author's primary
concern is "to have the conviction--by dominated countries--that their only path of
development is given by its stronger coupling to the same system of capitalist
domination" (Coraggio, 1972: 33-34).
92
On this topic, Boisier defends Perroux's theory of poles stating that "obviously, in terms of sectoral
theory, a theory of industrialization and, therefore, its "economicist" nature becomes an inseparable
attribute of it. As theory of industrialization, it supposes to accept to some extent the "modernizing"
character of the industry. The effect of dominance (...) is also an intrinsic attribute of the theory (...). In
these terms, the domination would be the inducing and multiplying factor of growth. It is indisputable that
this is inseparable from the theory of growth poles, whatever its version" (Boisier, 1982:39).
62
This line of argument allows Coraggio to declare that Perroux leaves the old
colonialist scheme to go into a "clearly neo-colonialist state". According to the
author, it seems that the theory of the poles is a "thing" that comes from "abroad"
and holds the magical seeds of development", to which he adds that "the polething is nothing more than a detachment of the productive apparatus of the real
pole, which in turn is a constituent part of a dominant nation" (Coraggio, 1972:3536). In direct line with the dependency theorists he concludes:
"Latin America has accumulated enough experience on the persistence and
feedback of dominance through the capital settlement expeditions of the
dominant nation and the clear use of any type of coercion when a country
dominated intends to move to control the production system located in its
territory" (Coraggio, 1972:37).
Coraggio's criticism in this regard for Perroux's theory of poles and its application
proposed by Boisier is that, despite having the power to deal with some
phenomena hidden within the orthodox theory (such as relations of domination),
he fails to delve into the essential relations of capitalism system. The analysis of
Perroux and Boisier, according to the Argentine author, remains at a superficial
level, so it has obtained only part of the real world. It is inferred from the writings
of Coraggio that he associates this limitation to the French author's ideological
orientation and the Chilean economist's fascination by the dominant doctrine93.
The fact that Boisier does not take into consideration the historical relations of
domination in developing his INDUPOL strategy is an example of the above
mentioned. By following this approach, Boisier can not delve into the internal
contradictions that are generated during a modernization process, as Coraggio
would have liked to do.
93
Based on the criticisms that Boisier makes to misinterpretations of several Latin American authors to the
"pure" theory of the poles, I consider that the following sentence of Coraggio in the seminar paper
presented at Viña del Mar in 1972, makes a direct allusion to Boisier. "The premise "pure", the most false
in the real context in which it intends to apply, can only flourish among those who have achieved a high
level of alienation by the action of the dominant ideology and have assumed the role fairly apparent of the
neutral technocrats that the system needs" (Coraggio, 1972:37). On this Boisier defends himself
recognizing that the theory of polarized development has ideological elements associated with the style of
development proposed, but "from the point of view of its translation in strategies and policies, such
elements have only a relative weight" (Boisier, 1982:46).
63
"Boisier does not spell out his proposal for international relations, though
he mentions the need of "internalizing" action but it is evident that the socalled modernization is not limited to buying modern products in the
international market, but it does necessarily involve a process of the
accentuation of dependence" (Coraggio: 1973:127).
This dependence referred to by Argentine author is not only from the economic
view, but it also includes social and political structures. According to Coraggio,
the social transformations mentioned by Boisier do not deserve to be called as
such, and the real success of these with the implementation of the proposal is
even doubtful. In support of this he refers to the type of growth based on a small
number of sectors generating employment at an insufficient capacity, which
emphasizes social and economic segregation. Modernization should change
consumption patterns, but this is not a real social transformation, because
Coraggio believes it rather strengthens the industrial growth model and limits the
real possibilities of a change in social structure (Coraggio, 1973:128).
Given Coraggio's criticism about the patterns of consumption imported as
reproduction of social relations of "modern" economies, Boisier replies that a
naive perception of the problem follows, and it is meaningless to pretend to use a
critical type under the approach that "would not solve the social problems of the
region." Finally, he adds: "If such problems are not solved in the more general
framework of global development style, they will not be, of course, addressed by
more targeted action, which by necessity is symmetrical with the global style"
(Boisier, 1982: 40).
The theory of poles for many Latin American authors meant a loss of
sovereignty, because as Perroux himself wrote:
“Économiquement, un pôle est Dans l’espace de celui qui le contrôle
effectivement, soit qu’il exerce sur lui un pouvoir économique, soit que,
par sa conduite, achat, vente, prêt, il règle effectivement la croissance, la
structure, le type d’organisation, les progrès de ce pôle. Tout ce qui est
« national » n’est pas nôtre (…) l’économie nationale n’apparaît plus
comme un lieu de facteurs mobiles ou comme un approvisionnement, un
assortiment de facteurs, où elle n’apparaît même plus comme un groupe
de groupes orientés et arbitrés par l’État, mais bien comme une
constellation de pôle de développement qui ont leurs industries et firmes
64
affiliées à l’intérieur ou à l’extérieur du territoire national”94 (Perroux,
1958 :300-301).
It is without a doubt the most criticized political repercussion in the
region. Indeed, because the structuralist and dependency theories in Latin
America were strong, it was difficult to accept the disintegration of nations. The
importance of regional planning conducted by the State was a point of
convergence among all Latin American thinkers, including Boisier and Coraggio.
Authors, like Boisier, proposed adapting Perroux's theory of poles to Latin
America,
but
95
Friedmann
they
needed
to
seek
additional
doctrinal
sources. John
and Walter Stöhr are very influential to economic thinking in the
area. The first of these became identified as "the leading promoter of the
polarization use as a tool for spatial planning" (Boisier, 1971:27).
Both Austrian teachers worked as regional experts in several Latin American
countries. Friedmann, after serving as associate professor in the Department of
City and Regional Planning at the Massachusetts Institute of Technology during
1961-1965, was called by the Ford Foundation to conduct a counseling program
in urban and regional development in Chile. In the years 1965-1969, this
author cooperated with Stöhr to develop an extensive work in the country,
drawing on Latin American theories of the time and the Chilean reality. Their
contributions enriched the regional development models from the centerperiphery approach, being particularly influential among Chilean planners and
economists. The intellectual debt of Boisier to these authors is clearly visible
among the texts most cited by him96 (see Annex 1).
94
Italics of the author.
John Friedmann was a professor at the Centro Interdisciplinario para el Desarrollo Urbano at the
Universidad Católica de Chile during the years 1966-1969. The prestige gained by his work earned him the
title Doctor Honoris Causa, proposed by this university, the same in which Sergio Boisier is a professor.
96
Other important authors for Boisier in the planning field are: Walter Isard (1956) for its new optimal
locational calculations associated with the theory of agglomeration and Jos Hilhorst (1971) for its systemic
and interregional approach in the study of regional development. Both authors were particularly influential
in the early work of Boisier. For further studies about the reception of these authors by Boisier, it can be
read: "Algunas hipótesis sobre el modelo de desarrollo de la Zona Metropolitana" (1971),
“Industrialización, urbanización, polarización: hacia un enfoque unificado" (1972), "Algunas interrogantes
sobre la teoría y la práctica de la planificación regional en países de pequeño tamaño"(1981).
95
65
With INDUPOL, Boisier provides both physical and financial programming, and
monitoring and evaluation of the strategy, which shows his penchant for planning
as an essential tool in the development process. Following in the footsteps of
Friedmann97 (1969) he tries to turn his proposal into a viable way for territorial
development and the elimination of regional disparities. Instruments such as
linear programming and input-output matrix, in his view, are very useful in the
design and implementation of the strategy.
Boisier believes it is also important to define conditions that should be met by
growth centers in advance. Among the features mentioned in INDUPOL, leading
to distinguish an urban center as growth, Boisier includes Friedmann's (1967)
premise of the directly proportional relationship between an urban center size
and its power of attraction. "The size of the urban center seems to be an
indispensable prerequisite (...) to generate successive "waves of innovation"
associated with polarized development process" (Boisier, 1972:40). However, in
later work he abandons such a criterion based on a study for Brazil in 1974. With
this work Boisier concludes that the upper half centers (between 200,000 and
500,000 inhabitants) have better conditions for population and industrial growth
than large centers (Boisier, 1974:74).
In this article Boisier criticizes the position defended by Coraggio (1969) about
the incompatibility between efficiency and regional equity. Coraggio's vision can
be summarized in the conflict established between the interest of achieving a
productive investment optimization from a global/national perspective, and the
objective of promoting harmonious development between regions from a spatial
perspective. The contradiction in the approaches is expressed by the global
efficiency criterion which implies a rational allocation of resources benefiting the
most productive regions, while the spatial vision implies to be on the side of
disadvantaged regions.
97
For Firedmann a pole of growth in geographical sense is made up of "areas of concentrated economic
activity and highly interdependent that have exerted a decisive influence on the character and pace of
economic development of the system or subsystem into effect" (Friedmann, 1969 [cited by Boisier,
1971:27]).
66
Boisier's response is based on the statistical data obtained for Brazil. Thus, he
shows that there are not more or less productive regions per se and spatial
differences in productivity of industrial sectors are considerably low. He
concludes that there are no well-founded reasons to not be able to be efficient
and equitable at the same time. And finally he adds: "While the empirical
evidence is not sufficient to nullify the conceptual basis of conflict over efficiency
vs. equity, it is sufficient, however, to introduce a reasonable doubt about its
absolute validity "(Boisier, 1974:76)98.
Boisier further agrees with Stöhr99 (1976) on importance of taking systematic
measures of inter-urban character within any regional development strategy. This
allows an increase in the level of spatial mobility of factors, products and
technologies, and thus contributes to a more equitable distribution of the driving
forces of development. The INDUPOL strategy pays particular attention to these
measures.
Coraggio interprets the approach taken by these authors, reduced to make the
free movement of factors to accelerate the regional development process
possible,
as
an
example
of
the
neoclassical
conception
of
social
processes. Therefore, he is not in propositional line with Friedmann and Stöhr for
analysis of regional phenomena, but he delves into other works, such as Franz J.
Hinkelammert, Karl Polanyi and Manuel Castells. This is evident in the extensive
bibliography consulted by the author throughout his work (see Annex 2).
Franz Hinkelammert is highlighted as among the most influential for
Coraggio. Like Friedmann, this German author served as a professor at the
Universidad Católica de Chile (1963-1973), until Pinochet's coup d'état took
place, when he moved to the Departamento Ecuménico de Investigaciones in
San José, Costa Rica. The thought of this theologian and economist was widely
spread throughout the region--mainly his criticism of capitalism against the
98
A rejoinder for Coraggio was not required for this, because statistics over time have clarified any doubts
that might be even from Boisier's reflection. The Latin American region reached the nineties with the
greatest inequalities in income among its residents.
99
This author is widely cited subsequently by Boisier, concerning the issue of endogeneity of development,
like the Spanish authors Antonio Vázquez-Barquero and Francisco Alburquerque, but this belongs to
another section.
67
neoliberal model from a theological vision. His ideas nurtured Coraggio's critical
thinking from the beginning of his career.
The critique of instrumental rationality imposed by modernization is present in
Coraggio's work as it is in Hinkelammert's (1996). Both are contrary to conceive
development as an efficient matching of scarce resources such as, according
Coraggio, it is made by Boisier with his INDUPOL proposal. The economy is
assumed by the Argentine author as moral, "the whole economic system has
norms and values, and the definition -in consensus or imposed- of the purposes
is a central problem". That is why Boisier's attempt is not like Coraggio, because
it represents an uncritical reproduction of the values and norms contained in the
mainstream. Coraggio also emphasizes:
"... as Franz Hinkelammert says, instrumental rational actions (which are
suited to certain biased purposes, subjective) lead, however, to the
extinction of the foundation of life and therefore any action of thought
about ends and means are objectively determinable as irrational, and this is
not a subjective determination, relative, but absolute" (Coraggio,
2004:265).
When this determinism was carried to the field of concrete society, we make the
mistake of assuming it as valid for all societies with the same dominant mode of
production (Coraggio, 1972a: 17). For the study of urban units he is inspired by
Castells (1974)100, so he assumes that the best approach is to analyze “… le
processus social de production d’un Systeme urbaine a partir de la logique de la
reproduction de la force de travail…” (Castells & Godard, 1974:12).
I would like to clarify, however, that Coraggio's acceptance of Castells's
approach was not automatic. Although from the beginning, the Argentine author
was enthusiastic about the idea of studying urban units as a system of production
and reproduction101, he did not agree with the Spanish author that reproduction
of the workforce should be the main category. For this he argued that its
100
This Spanish author, a follower of Alain Touraine, is considered the promoter of the variant Marxist in
Urban Sociology. Castells has emphasized cultural change and the role of social movements in the
transformation of the city, which has constituted an important reference point for Coraggio. One of the
texts of this author: "La Nueva Dependencia: Cambio Tecnológico y Reestructuración Socioeconómica en
América Latina" (1991) has been widely circulated in the region.
101
The work done by the author on the territorial complex of production and circulation should be seen
(Coraggio, 1987).
68
application to the Latin American situation could be difficult due to limited
research with specific character. In this case and until reality does not permit, he
suggests "the process of production and reproduction of capital as the
categorical core to guide research about spatial organization (centered or not in
urban issue) within capitalist societies of Latin America" (Coraggio, 1972a:
18). Not until the nineties does Coraggio definitely introduce the reproduction of
the workforce in his analysis, making it central to his economic development
proposal (Coraggio, 1998, 2004).
For Coraggio, a feature of the approaches in Latin America is that they address
space issues, which is an attempt to get out of the current geographical
determinism or the "historical accident". At the base was the recognition that
social laws govern spatial organization; however, such laws are reduced to
economic factors, so they end up "having the effect of return to more mundane
forms of explanation of territorial phenomena" (Coraggio, 1979:12).
Particularly, he makes reference to deficiencies presented in the planning area of
the theory of poles and the strategy proposed by Boisier:
"... it is a clear example of this kind of physicalist conception [referring to
the spatial manipulation of physical objects]102.The whole task of planner
is almost reduced to find those places and activities which embody the
new mass injection. How often banal is the justification of decisions and
how often ephemeral are the proposals, despite all maps, potential models,
coefficients of location, size range rules and other utensils of regionalist
kitchen that could be used..." (Coraggio, 1979:13 ).
The Argentine author also criticizes the tendency of most Latin American
economists to analyze regional disparities, being careful not to engage in
ideological and political disquisitions. For Coraggio, mainly technical practice
hides a strong political and ideological projection. These practices are not carried
out in an institutional vacuum, or "outside the system," which influences the
generation of internal contradictions involved in the creation of a future
institutional change in the society where these techniques are implemented. The
key to Coraggio is "to note that inter-regional disparities are secondary
102
The clarification is mine.
69
contradictions of a social system as a network of articulated contradictions"
(Coraggio, 1979:15). Here Polanyi's influence (1944 [2000]) is easily seen103.
Then, the theory of social change for Coraggio is essential in any regional
development strategy. The absence of it is a claim made by this author to
disseminators of the theory of the poles in Latin America. An effective plan for
Coraggio cannot be reduced to reproduction of a kind of "spatial-target image"
but should be based on a real diagnosis of the conditions of social forces, and
end up creating the best conditions for the transformation of institutions and
social relations, in the way of development.
This alternative to development is not possible to do following the theory of
Perroux's poles. Coraggio can not feel comfortable then with the conceptual
framework proposed by the French author. Internally, the theory fails to delve into
the possible ways that the relationship should be between the structures of the
local/regional. From the external viewpoint, Perroux is based on the permanent
inequality between the economic structures to discourage any attempt at
revolution and/or policies of integration among peripheral countries104. I agree
with Coraggio that Perroux, in this way, "leaves open no alternative to "intelligent"
integration to the world capitalist system of domination" (Coraggio, 1972:34).
In summary, the reception of Perroux's work in Latin America was divided into
two opposing groups, one led by Coraggio that concentrates on the ideological
rejection that supported the theory105 and another represented by Boisier in a
creative adaptation of it. Proposals like INDUPOL emerged from the latter group,
linking the theory of the poles with the regional planning. The State's role as
regulator and dynamic agent continues to be fundamental in development
concepts of these authors, which is a reflection of the trail left by the structuralists
and dependency theorists.
103
However, the influence of this institutionalist on Coraggio's work is sharper in the theoretical proposal
that he carries out after the Popular Economy.
104
See the quotation of Perroux by Coraggio in his article: "Hacia una revisión de la teoría de los polos de
desarrollo" (Coraggio, 1972:34).
105
According to Coraggio the only thing salvageable from the theory of the poles can be compared,
differences aside, with the input-output coefficients, which although very useful for planning, can not be
seen as a strategy of industrial growth (Coraggio, 1973: 133).
70
Spatial planning as a tool for the elimination of regional inequalities was a
recurring theme in Latin American economic thought at that time, of which Boisier
and Coraggio are representatives. Approaches to address this issue are equally
contrasting. On one hand there are those who rely on market forces and the
efficient allocation of resources as a means of bringing balance (Boisier)106, and
on the other there are those who are proponents of profound social change as
the only possible alternative (Coraggio).
The institutional question remains for those years as a common point, albeit with
different nuances, all Latin American authors agree on the need for change that
promotes development. While it is not the central issue in discussions, the
majority of authors think that it is an issue that can not be neglected. A "modern"
society, with its organizations and institutions, closer to the "western world" is
about the most discussed topic. However, repeat analyses of the issue from
conflicting ideological positions do not reach any interesting proposal.
Finally I would like to highlight the historical context. It was during these years
that the passage from Fordism to Post-Fordism occured, where the great
industry ceded space to flexible production. Perroux's theory of poles, although it
was conditional, as Coraggio stated, displaced Europe as a world power by the
U.S. It is set to be consistent with its time. Perroux was able to interpret correctly
that changes and opportunities in the international economic system were taking
place. Local development in our time is a result of that process of productive
restructuring.
3.2.2 Two models of local development in Latin America: the hexagon and
the Economy of Labor.
The local development approach is almost opposite to that followed by the
structuralists and the dependence approach of the fifties and seventies. I use the
adverb "almost" intentionally in this case, and I will explain it before I go into the
comparison between the hexagon model and the Economy of Labor proposed by
106
For Boisier, the problem is in knowing how to use well the opportunities that market offers. In this
sense, institutional change is vital.
71
Boisier and Corraggio respectively. This disquisition will enable us to better
understand the scope of the models of these Latin American authors, because of
the possibility of placing them in context.
Generally local development is understood as a process of transformation of the
economy and local society through participation of all community actors in order
to take advantage of endogenous resources of the territory in a sustainable
manner. Within this process an innovative environment needs to be created
where the capabilities of entrepreneurship can be enhanced. Moreover, for such
transformation, there must be structural changes in the economic, social and
political field (Vázquez-Barquero, 2000:5-7).
As evidence of this definition, the endogenous perspective becomes the most
suitable for understanding and promoting development, which is not now
conceived without its territorial dimension. The difference with the development
conceptions of economists in the middle of the twentieth century is obvious. In
those years the approach was predominantly exogenous and the territory was
considered a passive element, container of growth policies and structural
change. With the endogenous approach, however, territory is attributed to the
role of transforming agent in interaction with other actors in the community.
The local development boom has contributed to a paradigm shift in development
theory. We are no longer in the presence of a strong nation-State as we were
when the structuralists theorized, but in presence of a weakened State, reduced
by political restructuring. In Latin America, particularly, the failure of
industrialization policies contributed to the paradigm shift. The large regional
imbalances, with hypertrophy of the State organizations, made the development
project advocated by Prebisch and his colleagues at ECLAC unsustainable.
However, the need for structural change has remained consistently in the
thinking and strategies of the region's development, but the responsibilities for
carrying it out have changed. State is no longer the main actor of transformation,
but firms, organizations, local institutions and civil society are in general.
Institutions limit the State and promote economic growth, Douglass C. North
would argue, for whom development is the ability of institutions to adapt and
72
make fair decisions according to the time (North, 2005:26). The structuralist and
dependency proposal had failed in downplay institutions within the development
process. Supporters of local development in Latin America are intended not to
make the same mistake.
The common goal between the structuralists and local development theorists is
to achieve a more organic capitalist system that would integrate all the elements
constituting. In my view, Prebisch and his followers assumed markets that
exclude and deform structures and propose a path to integration from the inside
of Latin American societies. For that, they turn to the State as the only agent able
to achieve balance and equity. The local development promoters, however, rely
more on the institutions and the possibilities that the "free market" offers. A more
participatory and organized society is the best way to counter exclusion. Since
there are different alternatives, both schools of thought claim the same thing: a
more organic system transforming social, economic and political structures. This
is what justifies the adverb "almost" used at the beginning of the section.
Sergio Boisier and José Luis Coraggio are among the most cited authors by
experts in local development issues in Latin America nowadays. Starting as
regional planning experts, both eventually became local development promoters,
as a reflection of the Latin American economic thought evolution. The
implications of the passage from Fordism to Post-Fordism are clearly evident in
this change of focus, which reaffirm the thought as a product of his environment.
I will now compare the two models proposed by these authors in Latin America.
Boisier enters into endogenous development looking for a possibility of better
integration of backward economies or communities into the global system. His
proposal is aimed at creating conditions conducive to development within a
highly competitive market, thereby reproducing the dominant development model
of capitalism. In contrast, Coraggio prefers an alternative to exclusive market, so
his proposal is not to better accommodate to capitalist system, but transform it.
Within Boisier's development concept, the category "human person" is the most
relevant, which emphasizes spirituality and sociability of human beings. To
promote a favorable environment for the realization of the "human person", in this
73
case, is fundamental to any local development project. We can assume a logical
coherence between this conception and the heterodox thinkers who emphasize
subjective and valuing aspects of development, such as Hirschman (1986, 1992)
and Sen (1995, 2000). However, the most direct link of this author is with Louis
Joseph Lebret. The comprehensive approach to development of this French
Dominican, and the movement "Economy and Humanism" founded with François
Perroux, exerted great influence on Boisier, guiding him towards a human
dimension of development.
In the same perspective Coraggio reflects on the concept of "human life" which
implies "that the existence of each individual requires the recognition of others,
the lives of others and nature." The classical thought in economics revolves
around the "economic man" and his rationality to interact with the environment.
Coraggio criticizes this view, despite it being a reflection of the very essence of
capitalism "which allows the exclusion of the life of a great part of its members
and the deterioration of ecosystems". It is not possible to understand the
inadequacy of capitalism with cohesion and reproduction of society (Coraggio,
2011:1). Development, in the sense of broader reproduction of "human life", will
not be possible, according to this author, without structural changes in the social
mode of production. The strongest influence in this case comes from authors like
Hinkelammert (1996) and Polanyi (1944).
The Chilean economist and environmentalist Max-Neef (1986) also enters the
debate. He contributes in the construction of a new development paradigm based
on a revaluation of human needs, and coining the term "human scale
development". According to this author decentralization will allow creation of a
new identity, with rich potential for the formation of free citizens who will be able
to be recognized themselves due to the "human scale" of the locality. This idea is
criticized by Coraggio when he writes:
"There are several fallacies in this thinking. In daily life, interpersonal
relationships are not a system of local relationships really separable from
the social totality. Neither our practical nor ideological-cultural horizons
are locals in a world where the media homogenizes us on an
intercontinental scale, or technology (and its rapid change), which comes
in many ways in our daily practices, is the result of processes controlled
74
by "local actors", or economic and political forces that influence our daily
lives are local but global or at least national" (Coraggio, 1990:11).
The need for an interdisciplinary approach to study the development
phenomenon is so obvious to Coraggio, and in this sense he explains: "... No
discipline, no knowledge, even, any sum or cross-disciplinary has response to
local development problems everywhere. That does not exist, in my opinion. For
now we have to work interdisciplinary and recognize that in reality there is no
separation "(Coraggio, 2006:3).
On that same reality, which does not allow separation, is what allows Coraggio to
ensure that "there are not local systems", since it is impossible to speak, for
example, of local development without considering the national and global
dimensions. This hypothesis of the author becomes meaningless compared to
the immediate need to conduct analytic studies, for which it is necessary to
resize the reality.
Also Boisier criticized the "obsession for the disjunction" in the construction of
knowledge which favors separation, distinction and opposition. According to him,
it does not allow for the recognition of "the whole as container and coordinator of
the parties" (Boisier, 1997:9). This again points to his defense for the holistic and
systemic approach, however, and this is a difference with Coraggio, he
emphasizes the scale as a key attribute in endogenous growth. Thus he criticizes
Francisco Alburquerque107 when in an attempt to oppose the "over-determination
systemic" supporters he refers to: "the vast majority of production decisions take
place on national stages or sub-regional or local" (Albuquerque, 1997, cited in
Boisier, 1997:10). For Boisier systems can be studied in subsystems, which will
have own characteristics.
This methodological approach supports Boisier's proposal for local development.
In this case we find a hexagonal model composed of six subsystems: axiological,
107
Francisco Alburquerque and his Spanish colleague Antonio Vázquez-Barquero have had a direct impact
on the evolution of Latin American thought in topics of local development. The first has focused on local
development initiatives to create an environment conducive to entrepreneurial and innovative activity in
favor of a structural change and the second author has strengthened endogenous development theory from
the conceptual point of view.
75
decisional, organizational, procedural, of accumulation and subliminal. Each of
them gives specific characteristics to the system and determines the
relationships established at the inside of it108.The three key elements in the
model are: complexity, synapses and synergy.
Boisier emphasizes that it is not sufficient to declare the systemic nature of the
development process if the nature of the systemic structure in a region is not fully
understood, citing the laws or principles that govern it. In this sense Edgar
Morin's (1990 [2005]) theory of complexity is an ideal paradigm for the author109.
Following this perspective, the important thing is not to seek general knowledge
or a unitary theory, but to find a method to analyze coordination and integration.
The dialogical principle110 of complexity theory is clearly expressed by Boisier
when he highlights that "we are dialogical beings, with a duality of matter and
spirit in one body". He says that the principle of recursivity111 and local growth
and development are cause and effect, and the his holographic principle112 says:
"we are naturally embedded in a territory because we live in it, but the territory is
also in us because the level of realization of life projected in every one of us
depends the territory's fate" (Boisier , 2006:3).
In addition, Boisier complements the approach of complexity theory in practical
field with other approaches that according to him help to understand the
coordination of social actors in the locality. Thus, he proposes:
"... adding to the traditional instrumental rationality of the economy other
approaches such as the communicative rationality, to discover the ways of
living together in harmony and mutual dependence, respecting the
autonomy of individuals, the conversational rationality as the basis of
interweaving of behavioral coordination that are the language and
emotions, and the constructivist structuralism for understanding the
genesis of social structures "(Boisier, 1998b:62).
Ideas of men such as Habermas (1989), Maturama (1991) and Bourdieu (2005)
108
See the author: "¿Y si el desarrollo fuese una emergencia sistémica?" 2003.
Edgar Morin and his theory of complexity had great success within the circle of sociologists and
philosophers in Latin America. Morin's link with the reality of Latin America was found through the
frequent visits of this French author to many countries in the region.
110
Keeping duality within the unit.
111
To understand the simultaneity and of cause and effect its relation with alternation.
112
The part is on the whole and the whole in the part.
109
76
are associated with these approaches, which will undoubtedly provide valid
instruments in the understanding of modern societies. However, on both
methodological and theoretical levels, Boisier has erred in being too
comprehensive. He is lost among many approaches. Rather than a merit, his
vision is a methodological limitation. In this way he fails to realize the duality of
his method. On one hand it places the "human person" as the center
(methodological individualism) and on the other it uses the systemic approach.
This contradiction does not allow him to deepen on issues such as individual
freedom, and it leads him to the mistake of trying the same concept by different
categories113.
"The increasing complexity will become the centerpiece of any strategy of
territorial development", postulates this Chilean author, also considering that in
the context of globalization the relevance of such affirmation is reinforced
(Boisier, 2003:575). However, it becomes more complex as more control is
needed so as not to create the chaos. Then Boisier leans on Ashby's Law (1956),
which bases its formulation in division of the regulator-regulated in the complex
system (Ashby, 1957:206).
In Boisier's model, the regulator would be the globalized world and the regulated
could be the local society. Adapting Ashby's law to his model, the author looks
into three possible ways for the system to become stable: increasing the internal
complexity of the locality, reducing the complexity of the global environment or
doing both. Boisier's proposal will focus on the first option, reaffirming his idea of
the need to "modernize" the local societies, as he stated in his INDUPOL
strategy.
In this case the complexity of a system is related to a greater variety of its
components. Within the model of the hexagon, the diversification of the economic
and social structure, and greater decisional autonomy, are the ways to make the
territorial system more complex. On the contrary, Coraggio introduces a shade of
meaning different from Boisier. According to the Argentine author:
113
The definition of organizational subsystem and institutional capital are two terms that Boisier associates
to a similar concept: the institutional and organizational tissue of a territory (See Boisier, 1999:69,
2006:141-145).
77
"Societies are complex also because they are heterogeneous societies, not
only because there is diversity, but because there are conflicts of interest,
conflicts of identities, conflicts of coexistence, and then there is
confrontation and struggle, or there is negotiation or agreement, but in a
space of asymmetric power "(Coraggio, 2006:4).
This approach is in my opinion more appropriate for dealing with the complexity,
because society/local community cannot be studied as a computer system with
the addition or subtraction of elements in networks, but through social relations
established between its components. The regulator-regulated binomial can be
very useful to understand the example of the refrigerator and the thermostat, but
not as effective for social systems. In this sense I agree with Coraggio that
dominator-dominated allows a better understanding of the socio-economic
phenomena to any territorial scale.
Returning to Boisier's model, we see how organizations and institutions are
fundamental in his conception of local development. Transparency, honesty,
justice and solidarity114 should be the values that are rescued in the process of
State "modernization" in Latin America. Also he raises the attributes which for
him defined the modernity, these are: speed, flexibility, virtuality and
intelligence115. On this matter he explains:
"... Four characteristics that define a "modern" institution: the speed to
react to rapid changes in the environment, the flexibility that allows it to
respond variously (to large or small scale, cyclical or structural, etc.) to the
demands of the environment, virtuality as a condition for cooperation
arrangements in cyberspace, ignoring territories and borders, and
intelligence as the ability to learn from the experience in relationship with
the territory "(Boisier, 1997:16).
The influence of neo-institutionalist approach is well defined at this stage of
Boisier's thought. The above fragment is in line with Douglass C. North, one of its
major contributors, for whom it is important to study the factors that determine the
ability of some societies to adapt flexibly to shocks and to develop institutions
114
With regard to State measures based on the principle of solidarity between regions, Boisier argues that it
must be careful because "the poor peoples in rich regions should not subsidize the rich people in poor
regions" (Boisier, 1995:35).
115
He agrees with his Argentine counterpart Bernardo Kliksberg (1994) that an intelligent State must be
able to follow a network structure, rather than a pyramid. Clearly decentralization is important for Boisier.
78
capable of dealing effectively with the modified reality (North, 2006:25). For
Boisier a "culture conducive to development" is a key factor in the adaptability of
the local society.
In relation to culture he refers to Alain Peyrefitte and his contributions on society
of trust. As the French author, he highlights "the trust (which is certainly a pattern
of behavior, culturally and ethically produced) in establishing an enabling
environment for development" (Boisier, 1997:16). Trust is not only related to
interpersonal relationships, but also to individual confidence, self-confidence, and
collective ones, in the society. A region in which the actors and agents share the
same cultural codes and there is prevailing legal system and social relations
conduced to the emergence of "cultural mix of cooperation/competition," is for
Boisier a region where the synergy is achieved easily (Boisier, 1997:16).
Finally, Boisier gives an important role in his hexagon model to the efficient use
of media, because the synapse of system would be favored by the transmission
of information between the system's components. This property of synapses also
drew attention to Coraggio, who warns that "we can not think of synapses as two
neurons that remained stuck forever", but think of a dynamic dimension, "in labile
networks, in organizations less structured and less crystallized" (Coraggio,
2006:9).
Coraggio does not approve of Boisier's proposal of local development, and it is
easy to understand why. While Boisier trusts in the market as guarantor of
development, Coraggio coincides with Polanyi (1944) and Bourdieu (2005) that
development is impossible within the capitalist market, exclusionary in
nature. "There is no social rationality in this. No system can be held morally on
the basis of the disappearance or systematic degradation of those who cannot
win the fight for the value of change" (Coraggio, 2005:12). What Coraggio
intends with his Economy of Labor's proposal is to just get away from the more
generalized view that a region can integrate itself to the system only locating a
competitive product on the world market116.
116
According to Coraggio integration based on real development starts "by the satisfaction of basic needs
in a more autonomous form and based on the own resources of the locality or region. This requires not only
79
Unlike Boisier, he continues to rely on the State as a mediator for social
reform. However, he agrees with his Chilean counterpart that the State must also
be reformed. In this sense he follows in the footsteps of Immanuel M.
Wallerstein117 and raises the need for greater democratization. As the American
sociologist said: "... but if we don't have a strong State, who will provide
community safety? The answer is that we should provide it ourselves"
(Wallerstein, 1998:79). Then, Corragio believes that a re-institutionalization of
society and the economic sphere in particular is necessary. This transformation
process should facilitate a more equitable and democratic society which human
fulfillment prevails (Habermas's vision) or, equivalently, absorbs the market in the
society (Polanyi's approach).
Coraggio's development proposal is about Economy of Labor, based on the
distinction of three sub-sectors or the economy. The most important subsystem
in his model is the popular economy, as it represents the driving force of
transformation. Prevailing social relations within it (based on the expanded
reproduction of life and not the capital), makes the author suggest the formation
of the seeds of a new economic system. This idea is reinforced by
Hinkelammert's reflections on the popular economy:
"They [referring to the informal sectors] have to develop an economical
way that lifts them out of precarious survival strategies. But they cannot
point to the integration in the sector of capital accumulation, but to some
extent have to disconnect it. This should lead to the formation of local and
regional system of division of labor, and even local or regional currencies"
(Hinkelammert, 1999:30).
According to Coraggio's proposal, how will society institutionalize (or absorb) the
economy? For this, he parts from the same principles stated by Polanyi:
administration of household, reciprocity, redistribution, exchanges (Polanyi, 1944
a cultural protection (to buy local products, for reasons of identity or convenience to ensure the own job
itself), but protection of the national State "(Coraggio, 2005:20).
117
He studied at Columbia University and became an expert on post-colonial Africa issues. For his
criticism of global capitalism he has been recognized beyond the academy as an inspiration for social
movement against the system. Wallerstein has defined among its intellectuals reference the most closer:
Marx, Freud, Schumpeter, Polanyi and dependency theorists. He defends the thesis that with the starting
point of the great inequality between societies in the world, greater democratization will add "disorder" and
thus it will be a global political struggle.
80
[2000]: 63-79), and adds the plan (due to the complexity of the societies, which
requires the planning of economic activities). Economy of Labor as local
development model is likened to greater self-sufficiency of "households", which
allows restoring biodiversity on production, avoiding extreme specialization
depending on the market. His proposal also "encourages a reciprocal
relationship based on the symmetry of the donations and mutual assistance"118.
In terms of redistribution it would combine those necessary for the reproduction
of individuals with the establishment of development funds, thereby ensuring
progressive reproduction. The model also regulates the exchange in markets
through the State and civil society119, avoiding monopolistic relationships,
intermediaries under over-exploitation basis and the plunder of natural resources.
Finally,
the
conscious
coordination
of
economic
actions
of
agents
promotes participatory planning that would avoid the undesirable social effects of
the market (Coraggio, 2007:11-12).
The Economy of Labor will transform the culture, and ethical and normative
principles associated with the market. The integration to system does not occur
then from society to the market, but in reverse. The author's aim, following the
legacy of Polanyi, is that the market becomes one factor among others of the
system, removing its role as protagonist. In this respect, Coraggio looks with
optimism to Latin America and the proliferation in recent years that the popular
sector has been as an alternative to the market.
Coraggio's proposal is incorporated into a school of thought associated with the
Social Economy. Among the most important authors are: Henri Desroche (1983),
José Monzón & Jaques Defourny (1987), Helmut Anheir & Wisner Seibel (1990),
Benedetto Gui (1991), Jean-Louis Laville (2000), Mario Roitter (2004). It may
also be associated with the group of economic advocates of Civil Economy such
as Italian authors: Luigino Bruni and Stefano Zamagni (2004). Coraggio
118
In the case of donations Coraggio warned to avoid those of unilateral character to discourage political
clientalism.
119
"This involves changing behaviors and visions: it is not merely an assistance economy, poor and for
poor people, but a system that, well driven, has the potential to include the now unemployed and
underemployed, and lay firm basis for a competitive mixed economy" (Coraggio, 2004:181-182). However,
Coraggio's proposal so far is not based on a serious fiscal policy, as I stated in the previous chapter, so it is
not consistent.
81
distinguishes from these authors in the fact of considering labor and
the expanded reproduction of life as the center of his proposal, which takes him
to define a subsystem of Popular Economy more comprehensive than those of
his colleagues.
In Latin America, this approach has gained many adherents. Chilean economist
Luis Razeto120 is among the first who introduced the term Economy of Solidarity
in the region. The proposals of both Latin American authors are very close;
however Coraggio disagrees in some respects to this author, for example, in the
leading role that Razeto gives to nongovernmental organizations in the
development of Popular Economy121. The reason of that can be found at the core
of the categorical system of both authors, while for Coraggio is Labor, for Razeto
is the solidarity122.
These authors also argue about the integration between local development and
popular education. On the one hand, Razeto refers to the ideological limitations
of popular education, which contrasts with the viability of local development and
is only hampered by inadequate financial resources. Coraggio, however, tinges
this idea and states "it is posing a critique of the ideology of popular
education from ideology123 (not exposed) of the Local Development" (Coraggio,
1990:5). However, he agrees that it must be careful in the implementation of
education. Poor implementation can generate self-destructive insecurity, then;
"... It is impossible to act as an agent of transformation that faces up to
objective and subjective conditions very adverse if it is denied his own
identity rather than strengthening it, if self-criticism can resolve this
contradiction, rather than facing criticism (and desires) of the popular
basis in meeting with them" (Coraggio, 1990:21).
120
Luis Razeto of the Christian social orientation defines himself as Marxist for a time in his career.
According to him there was no incompatibility between the policy option of Marxism and Christianity.
With the military coup in Chile he took refuge in Italy, where he had opportunity to analyze in depth the
work of Gramsci. His contributions in the field of self-management and communalism originated from his
experiences in Rome, where housing cooperative managed development in the neighborhood.
121
In Popular Economy Razeto understands self-labor forms, small family businesses and popular
economic organizations (small groups or family associations that share and jointly manage its scarce
resources to develop) (Razeto, 2003:29).
122
In this aspect Razeto is much closer to the European promoters of the Solidarity Economy and the Civil
Economy.
123
Emphasis added by the author.
82
With what has been said so far, it is demonstrated that Boisier and Coraggio
represent opposing two sides of economic thought. The reality for which they
develop their proposals is the same, the time is the same, the problems to be
faced are similar and yet the proposed solutions take opposite paths. These
differences, I infer, are born of methodological approaches selected by each one
and of the influence that some thinkers have had on their education and training
as economists. Then, it is valid to do a comparative analysis of the sources of
influence of these authors, which also contributes to the understanding of some
current trends in Latin American economic thought.
In this respect it is interesting to see through the Latin American authors
discussed here (Boisier, Coraggio, Max-Neef, Razeto), the strong influence of
Christian social thought in Latin America. For Boisier this becomes evident in the
frequent references to Lebret's work and in case of Coraggio with Hinkelammert.
An explanation of the easy acceptance of this thought in the region can be found
at the very beginning of European colonization. During this period the
educational work of the Dominicans was important, particularly during the
formation of identity124 from which work still remains today. Recently, the most
influential thinkers in the region are: Gustavo G Merino, Frei Betto, Leonardo Boff
and Pablo Freire. The "liberation theology" developed by them is founded in the
period of the late sixties and early seventies. For centuries Latin America had not
had its own theology and it is with this stream of thought that this region is
actually represented.
The start of the second half of the twentieth century was, without doubt, a period
of prosperity for Latin American thought. We have already seen how in economic
sciences, structuralists and dependency theorists made significant contributions
to universal economic thought. The trails carved out by these economists and
theologians remain fertile for current Latin American authors such as Boisier and
Coraggio.
124
To remember the labor in defending rights of the American Indians by Bartolomé de las Casas, Antonio
de Montesinos, Luis Beltrán and other Dominican friars.
83
I elaborated Graph 1125 in order to define both authors' common intellectual
circle. On this, the marked influence of some works that distinguish the thought of
Boisier and Coraggio is shown. Thus, within the common circle authors like
Friedmann, for the specific case of Boisier, and Wallerstein, Habermas, Castells
and Max-Neef for Coraggio stand out. This demonstrates the Chilean author's
inclination towards the neoclassical approach and Coraggio's inclination towards
Marxist thought.
Graph 1: Bibliographic analysis for works of Boisier and Coraggio (authors recurring)
Boisier
30
Coraggio
25
20
15
10
0
Alburquerque
Arocena
Barkin
Bianchi
Borja
Bourdieu
Boutros-Ghali
Calcagno
Canclini
Castells
De Mattos
Elizalde
Evans
Friedman
Friedmann
Geisse
Gramsci
Habermas
Haddad
Hardoy
Hopenhayn
Isard
Kliksberg
Kuklinski
Lipietz
Marx
Max-Neef
Meadows
Miller
Mora
Neira
Nelson
North
Oliveira
Palma
Perroux
Piaget
Pinto
Prigogine
Reich
Rojas
Sassen
Scott
Sen
Stiglitz
Storper
Vergara
Wallerstein
Weber
Williamson
5
Source: On the basis of all the authors cited by both authors during the period 1971-2011.
From this graph demonstrates that among the most cited by both authors are:
Perroux,
Bourdieu,
Albuquerque,
Borja,
Castells
and
Sassen126. The
rapprochement of Boisier and Coraggio to Perroux's work was already explained
in discussing the reception of his theory of the poles during the sixties and
seventies in Latin America. Bourdieu's presence among the most cited reflects
the concern of these authors to find a valid way to development beyond purely
125
The graphic was prepared with all the authors cited by both authors during the period 1971-2011.
In this case the references are discarded those highly cited by one of authors, but very little mentioned
by the other ones. Such is the case, for example Friedmann for Boisier and Wallerstein for Coraggio.
126
84
economist profile. This is easily demonstrated in the proposed models of the
hexagon and Economy of Labor. Moreover, the names of Albuquerque, Castells,
Borja and Sassen inside the common circle are present due to the recent interest
of these economists for globalization trends and theories of local development.
The presence of an abundant number of American thinkers is also demonstrated,
including: Arocena, Calcagno, Canclini, De Mattos, Elizalde, Hardoy, and MaxNeef Kliksberg. All these authors participate, as do Coraggio and Boisier in the
international flow of ideas through the reception-adaptation-innovation. The
contributions to economic thought come from the application of ideas to national
and local realities. The influence on the thinking of Boisier and Coraggio is done
mainly by dialogue and critical remarks between all of them, which is a reflection
of the rich theoretical exchange in the region.
Also within the intellectual common circle of Boiser and Coraggio, there are
members of the neo-institutionalist approach, such as North, Williamson, Evans
and Scott. This demonstrates the recent consensus of Latin American authors to
consider the institutions as a key factor of development. While the analysis of
norms and behaviors in society is present in the structuralist and dependency
theories, greater attention was given to the State as an agent of development. It
is with the evolution of thought associated with local development issues in the
region that institutions acquire greater prominence, which is demonstrated in the
work of Boisier and Coraggio. The two main approaches to this heterodox stream
of thought are well represented: North and Williamson from the economic
tradition, and Evans and Scott from the sociological approach.
Finally I can conclude that the evolution of economic thought of Boisier and
Coraggio respond to changes of the time, the specific reality of Latin America
and the influence exerted by some authors within the international flow of
ideas. The transition from Fordism to Post-Fordism, globalization, the failure of
industrialization policies in Latin America and the crisis of capitalism, are some
factors that condition the economic thinking of these authors, which may extend
to other economists in the region.
85
Boisier and Coraggio also represent the two streams of thought that are more
strongly developed in Latin America. Both of them face, from a critical view, the
problem of exclusion. The answers given by them, however, are opposite in
correspondence with the various theoretical and methodological projections
assumed. Based on two contrasting hypotheses (the market is the best way to
achieve integration and development [Boisier] vs. development cannot be
achieved in a market, which it is exclusive in nature [Coraggio]), these authors
present two different models of local development. The exchange of ideas
between these economists and other thinkers, both inside and outside the region,
has enriched the theoretical importance of their proposals.
3.3 The influences of works of Boisier and Coraggio on Latin American
economic thought relating to local development.
The theories of the thinkers in Latin America related to local development can be
grouped into two approaches: one that seeks out new opportunities for insertion
to global market through the distinctive peculiarities of the local community, and
other more critical approach that seeks an alternative to the relations of
domination expressed in the market. The influence of Boisier and Coraggio
respectively on these two approaches is clear. Both of them have become
important exponents and disseminators of these currents of thought in the region.
I will delve into sharing some of the ideas relating to local development among
American thinkers and these authors in order to contribute to the systematization
of economic thought on the subject.
3.3.1 The work of Sergio Boisier within ILPES-ECLAC.
ECLAC (Economic Commission for Latin America and the Caribbean) may be
regarded as the international organization with the greatest influence on the
evolution of Latin American economic thought, being the birthplace of
structuralist theories along with its founder Raul Prebisch and the center of
86
debate on development policies since its first years of operation127. ECLAC's
proposals focused on the ISI model as a way to confront the crisis and move
towards development until the early seventies of the twentieth century. This
economic strategy begins to lose strength at the stagnation in the region and
entry into the scene of neoliberal policies in the eighties. A theoretical and focus
revaluation took place in the next decade, which gave way to what has been
called the New ECLAC.
In this new stage of ECLAC thinking neoclassical theories are intertwined with
neo-institutionalists and neo-structuralists. Development is associated with
increased productivity, for which new institutional and organizational structures
are necessary. The strategy is to achieve international competitiveness and
structural change from actions aimed at technological development, market and
social reforms, such as education and health. The endogenous development
approach becomes leading and unifying of various theoretical streams, where the
promotion of greater decentralization and democracy is a principal element within
the strategy. American representatives of local development, as Boisier, are part
of this New ECLAC.
At the same time that the new phase takes place at ECLAC the criticisms leveled
against it are increased by other authors in the region. Hans-Jürgen Burchardt
(2006) in his book "Tiempos de cambio: repensar América Latina" systematizes
the most important criticisms: few critics and realistic analysis (referring to oversizing of some successful examples which are treated in general as cases that in
fact are only isolated), technical determinism that makes technological progress
in a panacea for development, and no consistency in their proposals128,
127
According to Albert O. Hirschman, Latin American debate has always revolved around the questions:
Where do lay the responsibility for the delay? And, how can be made to progress? (Hirschman, 1961:2122).
128
The problems of consistency, as determined by Burchardt, can be considered strength rather than
weakness, then, "where it lacks the base material, similar interests of important social actors and
institutions necessary to create a broad consensus of development, gain importance the cultural component
and political discourse. Due to its pluridimension, its plural methods and its different goals, appealing to
different groups of actors, the New ECLAC adds important elements to gain leverage in the dispute as
paradigms for defining policies beyond neoliberalism "(Burchardt,2006: 58) .However, the question would
not be to win converts or not, against neoliberalism, as the facts themselves have to demonstrate its
infeasibility, but to make a proposal that at the same time meet the needs of the communities and it would
87
expressed through, for example, the gap between the theories related to
democracy and the real conditions of the region. Some authors have even set
the New ECLAC as a neo-liberalism disguise (Burchardt, 2006:57). Coraggio is
one of the Latin American authors who have questioned the proposals of
ECLAC, especially regarding to the strategy of productive transformation with
equity129.
Notwithstanding the criticism, ECLAC has continued to rank among the major
international organizations in the region on the topic of development
issues. Sergio Boisier served as a member of the working group of one of its
attached agencies: the Latin American and Caribbean Institute for Economic and
Social Planning (ILPES by its Spanish initials). Along with Boisier, other authors
internationally recognized have also been researchers associated at this entity of
ECLAC, such as Carlos A. De Mattos, Roberto Guimarães, Ivan Finot, and Luis
A. Lira et al. Boisier's experiences within ILPES have been an important factor in
the recognition and disclosure of his work throughout Latin America.
One of Boisier's (1994) theoretical contributions that it is the most influential in
the New ECLAC thinking is his conceptual proposal of "virtual region". Framed in
integrate all the actors and/or subjects in a single development strategy. The multidimensionality of
development policy is feasible if it achieves the complementarity between the actors; otherwise it can be
rebutted, and even cancel the expected effect of each action (alone) within the territory. At any rate, I agree
with Burchardt that the proposals of New ECLAC have enriched the Latin American thought on
development with the incorporation of new analytical perspectives.
129
In 1990, ECLAC produced an economic strategy called productivity transformation with equity, which
conceived education and knowledge as the main axes of the proposal. Thus investments in education,
science and technology would be the necessary condition for competitiveness, which in turn would increase
the material goods necessary to achieve greater equity and democracy. Education played a central role in
this strategy, because it provides the values and attitudes consistent with the transformation process.
Coraggio's criticism focused on the following:
"This scheme (...) rests on the assumption -unsubstantiated - for increasing productivity of our
human resources it would result in greater availability of goods in our societies. It fell away
quietly assumptions that distinguished the ECLAC, the trend deterioration in the terms of trade, or
its partner empirical hypothesis: that of the "brain drain" that could well have led now to a less
mechanistic hypotheses on interests and the exercise of global power and its effects on the
peripheral economies.
This lack of consideration on the actual mechanisms of appropriation of the fruits of technological
progress (and human resources) and on what to do about it, weakens the argument that an equity
capable of physically sustaining an effective democracy, where it can be coordinated conflicts of
interest, could be achieved based on international competitiveness. And in a context of dramatic
conflict, where not only the quality of life is at stake, it is questionable whether the central role of
education does not end up being to integrate and unite symbolically, beyond allowing the
economy "(Coraggio, 1992:32-33).
88
an endogenous regional development approach that has prevailed in ILPES
studies from the late eighties130, this new conception reflects the need to
counteract the rigidity of the political-administrative division of Latin American
countries to achieve better integration into the global market. Then a reconceptualization of the territory as subjects of development begins, but not as
mere containers of policies (Boisier, 1981, 1983). Applying the concept of virtual
corporations to regions, Boisier define virtual region as the association of regions
and/or territory with the absence of a restriction of contiguity (Boisier,
2006:39)131.
The territorial discontinuity assumption in definition of virtual region is in line with
the vision to manage the territory as a "quasi-State" or "quasi-firm"132. The
objective of Boisier's proposal was aimed rather as an abstract-theoretical
reformulation, to provide a tool to help the local administration officials and
regional planners (Dembicz, 2005:157). Luis A. Lira, who was part of the working
group associated with ILPES, highlights the instrumental value of this new
conception:
“Virtual regionalism arises, then, as an instrument for cooperation between
organized territories to competition and international competitiveness,
recognizing the simultaneity of centralized and decentralized schemes
administrative, fiscal or politically in Caribbean and Latin America countries
on the global scenario characterized by globalization sub-national political
and economic restructuring” (Lira, 1994:8-9).
130
The endogenous development approach is consistent with concern for decentralization since the eighties
that prevails in the ILPES. This interest becomes a dominant theme among the research conducted during
the nineties by this entity, which converged with structural adjustment policies proposed by the World
Bank and International Monetary Fund.
131
This theoretical nomination did not represent such a novelty in the Latin American where the association
between regions is recognized and accepted. The constitutions of Colombia (1991), Peru (1993) and
Argentina (as amended in 1993) are examples of this. All of them establish an association between regions
for economic purposes; the contribution of Boisier was to bring this phenomenon from pragmatic field to
theory (see comments of it in Boisier, 2006:42).
132
The use of the term quasi-State was introduced to express the idea of the need for political and territorial
decentralization as far as possible in the context of countries with unit political systems and simultaneously
centralized (Boisier, 1992:51; 2006:50-51). This will call attention to the political dimension of regional
issues. Instead the term quasi-enterprise incorporates territorial marketing vision. According to Boisier
"territorial corporate image is embedded in the past, in traditions, customs, history, and it is also nailed to
the future, to territorial development project" (Boisier, 2006:49). The corporate image of the territory met
the purpose for making visible the characteristics and potentiality of the locality for a better integration into
the global market.
89
Other members of ILPES, like Ivan Finot, focus on the promotion of
decentralization, as an essential element in regional development. Among the
analytical studies on the subject, Finot highlights the links between levels:
local/regional, national and international. The territorial development should
begin at the level closest to citizens, "from municipalities to micro-regions and
then providing the links between micro regions, even discontinuous - to build
"virtual regions" in terms of Boisier ..." (Finot, 2003:29). Both Finot and Boisier
find it essential to strengthen the autonomy of regional decision-making, even
those opposed to the physical limits preset by mapping.
The Mexican economist Paul Wong-González, professor-consultant of ILPES, is
one of the most developed of Boisier's contributors related to virtual
regionalism. His work specializes in the study of border regions and particularly
in the macro area formed by the states of Arizona (USA) and Sonora (Mexico). In
2004, he proposes a territorial typology from Boisier's virtuality of vision. Then he
brings to light the virtual region and network of regions such as the Rhone-Alpes
region and its agreements with Shanghai, Tunisia, Mali and Ontario and virtual
Arc Atlantique region, formed by Britain, France, Spain, Portugal and Ireland. He
also mentions the so-called global cities and urban networks, and associativevirtual border regions. On the latter he highlights some experiences that have
been initiated in Latin America as the Valparaíso-Cuyo region and ValdiviaNeuquén-Río Negro (Wong-González, 2004:16-18).
The territorial endogenous approach advocated by Boisier and extended to other
studies by the ILPES, generated a critical reaction from the beginning by some of
the specialists of the same institute. Carlos De Mattos, one of the economists in
the region internationally renowned, warned:
"Interregional alliances that occur in conjunction with the territorial
unification of capital markets are leading inexorably to the formation of a
national capitalist class which tends to adopt economic decisions - whatever
the location of its components in each territory - according to the dictates of
capitalist rationality that becomes dominant in the national space "(De
Mattos, 1986 [cited by Lira, 1994:4]).
90
According to these lines, interregional alliances should be viewed with caution,
because there was a risk of increasing territorial inequalities. This author is also
not in favor of considering the decentralization associated with the endogenous
approach as the new panacea for development. Within the ECLAC there began to
be a consensus for the idea that decentralization was the best means to promote
not only individual freedom but also the socio-economic transformations necessary
on the path toward a more just and equitable society. In another article published
in 1989 De Mattos follows the critical thinking of Coraggio133:
"... even though the territorial organization of the administration of power
changes in a given national context, of course, is not the same as changing
the economic, political and ideological basis of power, it cannot be
achieved to modify in its essence the direction and method of generation,
appropriation and use of economic surplus, both sectoral and territorial
terms "(De Mattos, 1989:347).
Decentralization for this author should be treated as an instrument of suprastructural character and not the nerve element for the social-economic
transformation of Latin American countries. And he warns that decentralization can
multiply the power structures of the dominant classes at the territorial level, to the
detriment of the popular sectors that would be restricted in their possibility of
negotiations.
However, this criticism did not impede new formulations of Boisier from becoming
dominant within the context of the New ECLAC. The approach taken by the
author not only enriched ILPES's proposals from the theoretical point of view but
also in the construction of regional indicators of development. The best example
is Roberto Guimarães (1998), who based on Boisier's article "El vuelo de una
cometa ..."(1997), proposes to incorporate dimension of sustainability to the
synergistic development model134.
Boisier associates the endogeneity of development to four dimensions: political,
scientific, technological, cultural and economic. Guimarães accepts these
133
A year earlier, Coraggio defended the thesis that "no State administrative reform, no territorial
readjustment of its internal structures can alone change the problematic situations done into economy,
popular sovereignty, and national self-determination" (Coraggio, 1988:106).
134
This article Boisier analyzes the interaction between "scientific knowledge, social consensus and
collective political power" as the core for regional development (Boisier, 1997: 24-27).
91
dimensions, but also adds environmental ones, as the only way of "putting the
'control panels' of territorial development' within the social matrix proposed by
Boisier (Guimarães, 1998:13). Thus, he offers suggestions for measuring five
categories of capital: natural capital, built capital135, human capital, social capital
and institutional capital (Guimarães, 1998: 41). Associating the measurement of
regional development to capital (and its various forms to define) is a controversial
initiative, but the incorporation of the environmental variable is undoubtedly a
step forward compared to his Chilean counterpart.
Boisier's insistence for development territories increasingly "complex" in
accordance with the changes in the global world136, has also inspired other
specialists within ILPES. Ivan Silva Lira, for example, agrees with this author that
behind the new forms of territorial organization emerges a systemic logic
addressed to the complexity (Silva Lira, 2003:53). Synergy in a region/location is,
for these authors, the key determinant of development. Following the idea of
Boisier, this author emphasizes:
"... this is all about how certain synergistic capitals develop, normally
associated with intangible capitals, that can actually get a "convergent
channeling of dispersed forces" for, with the same allocation of resources
already available, move faster and better in pursuit of
objectives "(Silva Lira, 2003:53).
I therefore conclude that the work of Boisier within ILPES left an important mark,
not only for its conceptual proposals, but also for contributing to the
establishment of a new research methodology. The endogenous approach to
economic development, which has dominated in recent years in this international
institution, owes much to the work of the Chilean economist. The New
ECLAC recognizes Boisier among its most important representatives.
135
Built capital: artificially formed for productive purposes (financial resources, machines, technological
innovations, etc.).
136
The virtual regionalization also serve to the objective of more complex territorial environment while
responding to the changing needs of globalized production system.
92
3.3.2 José Luis Coraggio and the Latin American Network of Researchers
on Social and Solidarity Economy (RILESS).
The Latin American Network of Researchers on Social and Solidarity Economy
(RILESS by its Spanish initials) aims to disseminate and discuss research issues
that are linked to social movements, theoretically and empirically, and the search
for alternatives to the market economy. RILESS was formed through a joint
project of some organisms associated with the Social and Solidarity Economy,
such as UNESCO and FLACSO137. In order to meet its targets in 2007 it created
the journal "Otra Economía". Among members of the scientific council that
collaborate with this journal are: Enrique Dussel (Mexico), Jean-Louis Laville
(France), Boaventura de Sousa Santos (Portugal), Paul Singer (Brazil), Luiz
Inácio Gaiger (Brazil). José Luis Coraggio has been serving as coordinator of
RILESS and co-director of the journal, which is the first of its kind in Latin
America.
Coraggio's work within the network has been fundamental in the establishment of
a multidisciplinary and plural approach. My affirmation is primarily due to two
elements that I consider relevant. First, the presentation of RILESS, backed by
its coordinator, as a space that allows for dialogue with other networks of its kind
(Canadian, European, African and Asian), for which Latin Americans have much
to contribute from their own rich culture and political, economic and social history.
Second, the debate arises from the possible nominations to identify the recent
Latin American experiences based on values of solidarity, on working in
partnership. This now brings me to discuss Coraggio's idea that prevails about
the need of plurality138.
The debate arises with the proposal of the "Solidarity Socio-Economy" term by
professors Armando de Melo Lisboa and Pablo Guerra. The interest of these
authors lies in highlighting the interweaving of the economy with society, which
137
Specifically, it has been working in the project: the Master of Social Economics (MAES / ICO-UNGS of
Argentina), the Research Group on Solidarity Economy of UNESCO / UNISINOS-Rio Grande do Sul
(Brazil), the Colegio Mexiquense, and FLACSO-Ecuador and URBARED-UNAM (Mexico). See
http://www.riless.org .
138
Pablo Guerra transcribed this debate, published in the journal "Otra Economía", vol.I, No.1-2nd
semester, 2007.
93
according to them, was displaced with the nomination of "Social and Solidarity
Economy" (Guerra, 2007:21-22). This conceptual proposal was not accepted by
several colleagues from the network: Juan Pablo Martí considered it redundant
and Luis Razeto, Pablo de Jesús and Paul Singer preferred the term "Solidarity
Economy" because economy encompasses social issue and solidarity includes
itself as a substantive element in the alternative that it is attempted to nominate.
Coraggio, however, intervenes in the debate to point out the following:
"I think there is not a perfect name, because any one [term] can adequately
cover all practices, projects, situations, experiences that are occurring and
that we think of as possible. To pretend that one word sums up all that is
very demanding, and finally "Solidarity Economy" is as good as "Social
Economy" or "Economy of Labor" or "Solidarity Economy" or
"Economics of Life" if it denotes a practice of liberation and
emancipation" (Coraggio, 2007 [Guerra, 2007:24]).
Furthermore, this author defines himself contrary to theoretical uniformity, as the
historical-cultural specificities of the region do not allow it. For him the most
important thing is to agree on the agenda of the "other economy" and not so
much about nominations that can be made. This idea was well received among
his colleagues, which practically ended the debate and addressed the dialogue
within the network to the plurality of criteria and terms.
However, Coraggio's influence not only focuses on this debate, but also extends
the field of research to the social, solidarity or labor economy, whatever the term
used, to take place in Latin America. Examples of this are the publications listed
in the issues of the journal "Otra Economía". The constant references to the work
of this Argentine economist reflect his importance within the region.
Pedro De Almeida analyzes Coraggio’s idea of plurality from the perspective of
organizational studies. For this Brazilian author Solidarity Economy must be
assessed, not by its ability to substitute one economic model for another, but
mainly for its pedagogical potential to establish dialogues in the construction of a
plural economy (De Almeida, 2009:70). Also in this sense, De Almeida
understands Coraggio's proposal of Economy of Labor (De Almeida, 2009:74) as
94
a
way
to
achieve
comprehensive
a
model
of
economic-social
organization
more
139
.
Paula Oxoby instead highlights the differences in the proposals between Europe
and Latin America on the Social Economy. She agrees with Coraggio that the
European proposals seek integration between different types of enterprises and
economic sectors, while the Latin American proposals are discussed on the need
for a new policy. The change in the latter case is broader, associated to the
characteristics of the region, it requires "other public policy - going beyond the
assistance-based, and other management where it is prioritized partnership over
verticalism and historical paternalism" (Oxoby, 2010:164). In the words of
Coraggio, policy change should also:
"contribute consciously to dismantle the reproduction of capital structures
and make an organic sector to provide for the needs of all other values,
institutionalizing new practices in the midst of a struggle counterhegemonic against the capitalist civilization, claiming another concept of
social justice" (Coraggio , 2007:39).
In this approach a political questioning of the dominant capitalist system is
apparent, following on from the dependency theorists but enriched and adjusted
to the new era of globalization. The interest in institutional change becomes a
crucial element in the process of political change.
Regarding the re-institutionalization in Latin America, some authors advocate
Coraggio's idea that "social assistance-based policy intended to compensate the
damage generated by the economy is inefficient and reproduces and
institutionalizes poverty" (Coraggio, 2004:318). In this Raúl Zibechi140 analyzes
the effects of Brazil's Plan Bolsa Familia, extended coverage for the national
population. According to the author this social project reaches 30% of the
139
De Almeida, in my view, does a critique biased of the Coraggio's work. By focusing on the
organizational aspects of the proposal; he downplayed the political undertones, central to the Economy of
Labor's model. The Argentine author's interest for a new system with greater social justice is what
stimulates Coraggio's proposal, so the change of the economic, social and political model, it is not an idea
of the second order for this author.
140
In particular, this author is a Uruguayan writer and activist was dedicated to researching and supporting
social movements in Latin America. He has worked with peasant movements in Paraguay, urban
movements in Argentina, and grassroots collectives in Colombia, Peru, Chile, Bolivia, Uruguay, Brazil and
Mexico.
95
population and specifically in some northeastern states covers 65% of the
population. Among the results provided by this, he emphasizes that while about a
hundred million poor have improved their material situation, they now have less
reason to organize social movements (Zibechi, 2010:34). The interest of both
Coraggio and Zibechi is to break the passivity of the people faced with the search
for alternatives that contribute to their income. In this sense it is necessary to put
limits on the assistance-based for true social reintegration of the excluded.
Zibechi's proposal from these assumptions can be summarized in the following
areas:
-
the State is not the main lever for change, but the labor of organized
popular sectors,
-
social
movements
have
been
transformed
through
international
cooperation and professionalism of their management groups141, so it is
not possible to recover their protagonism if they don't return to base
practice142,
-
social policies are not conquests, but are a way to "contain the poor in
order to allow privatization of the public welfare", representing, in some
way, another kind of domination (Zibechi, 2010:40-41).
This Uruguayan author's proposal reflects the extent of one of the analytical lines
in Latin America related to the political-ideological dimension of local
development, on which Coraggio has the most influential. It is this aspect, as
stated Oxoby, a distinctive element of Latin American proposals.
Coraggio's work from the socio-economic dimension has also been developed by
other Latin American authors. Juan Carlos Vargas Soler, for example, delves into
subsystems of the Economy of Labor proposed by Coraggio as a viable
restructuring for local development. His vision is dynamic, so that he not only
focuses on the structure of economic systems, but also in the methods of re141
According to Zibechi, social movements or organizations in Latin America are looking increasingly to
NGOs with which they maintain strong ties and relationships of dependence, economic and intellectual
(Zibechi, 2010:40-41).
142
In this sense he refers to the need to return to conflict as structuring axis of the movements. The
proposal covered by the concept of civil society, labor policies with consensus is that has been imposed to
international cooperation (Zibechi, 2010:41).
96
structuring of the same. By studying the case of Rosario, Vargas Soler points out
that in the process of production-reproduction-transformation of structures,
popular sectors need to play a more popular roll and have a greater impact on
the basis of the Solidary Economy. Referring to that he proposes:
“This system of non-capitalist production and circulation could be
enhanced with development of a technological style according to their
characteristics and needs of social economy and its actors. In this sense it
would enable solidarity, voluntary, associative, green, flexible and socially
innovative technology. Its realization required, among other things, the
creation of a scientific and technological system for research, development
and promotion of the technologies in question” (Vargas Soler, 2010:9899).
For that, it would be necessary to deploy a policy of intensive training and
education, and at the same time it should promote the exchange of experiences
among organizations and local authorities. In addition to these policies it must
establish new relationships between State and popular sectors, so that the
subsystem of the Social Economy strengthens in relation to the dominant
capitalist economy.
The study of the experiences in the field of local associations reaffirms some
ideas expressed by Coraggio. Venezuela is a country rich in this type of practice,
in recent years. Belinda Colina Arenas discusses the societal capacity for
innovation in socially-owned enterprises in this Latin American country. She sees
it associatively as a solution to the weaknesses in front of the capitalist market
that present such enterprises. Socio productivity networks "allow strong blows
from market and (...) greatly exceed the assistance-based overprotective
and distorted vision of the State" (Colina Arenas, 2010:130).The association of
social enterprises as promotion of new institutions based on cooperation and
solidarity, is having, according to the author, positive results in Venezuela.
Based on the same principles of the Venezuelan socio productivity networks,
integration agreements have been signed between some countries and Latin
American communities within ALBA143 (Bolivarian Alternative for the Americas).
143
The term was born as a reaction to the FTAA (Free Trade Area of the Americas) encouraged by the
United States. According to Maribel Aponte García, "the ALBA is an alternative model of integration and
97
Although the nature of the agreements is mainly at the country level, the
programs are recognized for economic and social cooperation among
communities. Integration axis like the Bank of ALBA and the Bank of the South
on finance and Telesur channel in telecommunications area, have direct impact
on communities by the possibilities and ethical values spread. The ALBA is a
regional market based on the principles of fair trade, where local social
enterprises in the partner countries find conditions of reproduction and
development.
Finally I would like to refer to a singular approach on the Social Economy. From
decolonial perspective Juan Carlos Vargas Soler also approaches the
experiences and proposals of the Social Economy as a requirement for the
transformation of society. He agrees with Coraggio and other representatives on
the importance of viewing and promotes this type of economy. However, he
warns the reproduction of modern-colonial imaginary of pre-existing economic
paradigms. And in this sense, "it is important to make an effort to decolonize both
the political economy approaches and emerging perspectives and practices
proposed for Social/Solidarity/for Life Economy" (Vargas Soler, 2009:60).
The author defends the idea that, despite criticism from representatives of the
"other economy", even colonial patterns are repeated. This idea is supported by
reference sources that dominate the specialized literature in Latin America. The
effort of Coraggio (2007), however, is highlighted by establishing links between
Euro/Anglo centrist thought and autochthonous ones of some groups in the
region such as rural and indigenous communities. However, this is not enough
for the author, whereas;
“The inclusion of such groups in that perspective has produced substantial
economic and socio-political actors relevant to the future of Latin
America. However, in this perspective - as in other proposals for setting
up another economy-political and socio-economic inclusion of
subalternate groups remains incomplete (Afro-descendants communities,
homosexuals and women, are rarely considered), while the epistemic and
regional endogenous development with social inclusion" (Aponte García, 2009:86).Among the countries
that have joined ALBA are: Cuba and Venezuela (the first agreement was signed in 2005), Bolivia (2006),
Nicaragua (2007), Dominica Republic and Honduras (2008), St. Vincent and the Grenadines (2009) and
Ecuador (2009).
98
ontological inclusion of these groups has practically not been produced;
nor has the decolonization of knowledge been given significantly. In that
sense there is a long way to go and explore” (Vargas Soler, 2009:60-61)
Coraggio's opinion is that he cannot totally divest in the schematic and modernist
trend. The recognition of the various economic forms of society's organization
reduces its economic-capitalist foundation. "In other terms, the existence of
mixed economies and economic differences are apparent, but the origin and
reason for them are not." According to the author, the understanding of the
genealogy of colonial differences may contribute so much to the Social Economy,
in order to "think and enable liberating inter-subjectivities" (Vargas Soler,
2009:62).
The Latin American Network of Researchers on Social and Solidarity Economy
have encouraged several approaches and analytical lines around the "other
economy" during these years. However, the majority recognize Coraggio as one
of the most important representatives of the region on local development. As
demonstrated in the above references, the work of this Argentine economist that
advocates a multidisciplinary and plural approach has been a stimulating factor
for the participants of the network.
3.3.3 Other echoes of the work of Boisier and Coraggio in Latin America.
The extent of Boisier and Coraggio's theories on outside entities, for which they
have worked, is broad enough that I cannot cover it completely in a few
lines. Because of the variety of approaches, it is equally difficult to systematize
the local development of Latin American thought, in which these economists
exert great influence. However, I believe the effort to present some cases that
recognize the inspirational presence of these authors is laudable. The Latin
American debate around the local issue has been greatly stimulated by the ideas
of two economists.
Local companies have a bearing with their decisions on the territory, which is
why Boisier's development model emphasizes the need for a favorable
environment, for which the strengthening of entrepreneurial and innovative
99
capabilities of these entities is achieved. Raúl González Meyer (2006) in his
doctoral thesis on territorial dynamics and agents theorizes on the subject, from a
study of three cities in Chile, Valdivia, Temuco and Arica. The author identifies
what were the local agents of a greater role in the development of these
communities: small businessmen, ethnic groups, municipal entities and popular
practices. The history and tradition of the communities have influenced on
actions of business actors (Gonzalez Meyer, 2006:413). In other words, a city
historically depressed or which has experienced a strong economic crisis in the
past has its collective imagination is affected and becomes a discouraging factor
for entrepreneur actions in the present.
The no "development culture" had already been announced by Boisier (1996), so
that the study of Gonzalez Meyer reinforces the vision of his colleague, but
introduces a new element to the analysis. Many of the entrepreneurs that in Latin
America have importance in the projection of strategic plans, are not of local
origin, so it strikes at the consolidation of entrepreneurial system and long-term
development of the community (Gonzalez Meyer, 2006:417). This can lead to a
conflict of interest between local actors and agents from other origins, operating
in the territory.
A central issue related to structural change is the concern for competitiveness.
For Boisier (1995, 2001), the sustained long-term competitiveness can only come
from knowledge, innovation and dynamic competitive advantages. In direct line
with this idea, Oscar Madoery (2000, 2003) argues that the potential of a territory
lies in its ability to compete, but not so much on comparative advantages. Among
the factors affecting the competitiveness of a territory he highlights:
"The intangible resources, proximity, relationship capital and various
forms of cooperation and learning, the ability to link with the
environment, the dominant values and leadership on public and private
decision are making play a strategic role in the capacity of regions and
localities to manage their own development "(Madoery, 2000:143).
This author assumes the fairly widespread notion in the region to see
development as a set of capacities generated endogenously. Many Latin
American authors have noted with enthusiasm the creation of new organizational
100
forms to achieve greater entrepreneurship. Such is the case of micro and small
business incubators, development agencies, technology poles, and business
centers, among others. The services offered are aimed at the financial
assistance, corporate restructuring, technological modernity, management of
information and integration in foreign markets. However, it is difficult to
generalize because, as Madoery highlights "after several years of local
development experiences, it is possible to see that they offer very different
results, often unsatisfactory or at least modest" (Madoery, 2003:2).
Thus, Madoery is contrary to the enthusiastic optimism of some representatives
of the New ECLAC, because the dynamics of business has not been transformed
in all cases, and organizational innovations have not been introduced as these
strategies set out to do. The competition continues for many business enclaves
in Latin America, a goal to reach. However, this author continues to rely on the
endogenous approach, as "local development can be profoundly innovative, with
technology deployment, creating competitive factors" (Madoery, 2003:25). Much
like Boisier, he finds the key to confronting the problems of underdevelopment in
the entirety of the strategies.
The weak local production chains are another concern of local development
analysts as Madoery. The phenomenon of "externalization" of corporate bonds
occurs quite frequently, in other words, productive linkages are more externally
destined than inside the locality. In this regard, the Argentine author intends to
create more functional space, or "functional urban region of new territorial links"
where planning policies should be focused not to a locality but at regional level
(Madoery, 2003:21). In this case, the link with Boisier's concept of virtual regions
is obvious.
The composition of the local domestic demand is also part of the analysis on
territorial dynamics in Latin America. It is generally considered that local
development allows local actors more transparency in information, even in
advance of the demands and needs of consumers to whom the niche market is
targeted. This is a competitive advantage for local entrepreneurs in relation to
their "foreign rivals." According to Mexican authors, Rosalía López and Pablo M.
101
Chauca (2004), the composition of domestic demand is the essence of local
competitive advantage; however the amount of that demand is a major driver for
investments and innovations. "Mobile" consumers are those who travel frequently
outside the localities, and are considered potential customers because they help
to get local products to foreign markets (López and Chauca, 2004:279280). These "potential clients" stimulate an entrepreneurial vision in the
community, because their experiences help local producers to consider the idea
that production should also be focused towards the external market.
A study like this is aimed at finding the factors involved in promoting the "culture
of development", in the manner of Boisier, but introduces new elements from the
demand side. Also, from the supply side, the authors discuss some aspects that
are also influential in the innovative environment. In this case, business networks
between suppliers and end producers are important because they help develop a
process of constant innovation and improvement in the long term. According to
these authors, suppliers help companies to identify opportunities and new
methods for the application of leading technology. Also, companies transmit their
knowledge and innovations to other ones through the corporate network, thereby
consolidating the innovation process in the locality (López and Chauca,
2004:282)144.
The type of company and its operating mechanisms are important elements to
consider for the design of a local development strategy. In the region, the subject
of the efficiency of cooperatives as entities that promote development is
discussed. In this case, the influence of Coraggio is quite strong. His model of
Economy of Labor has supported numerous studies on the subject. The
cooperatives of production and service fall into the possible alternatives to the
market that this Argentine author offers, which have been driven mainly in the
region by countries like Venezuela, Ecuador, Cuba, Colombia and Bolivia. In
general, cooperatives have been efficient in generating jobs and social
investment. Many of them intend to benefit communities (Bucheli Gómez, 2001;
144
In the identification made by these authors on the features and attributes of the business environment, it
is easily evidence adaptation of generic determinant factors of competitive advantage by Michael Porter
(1999:111-159).
102
Cartagena Londoño, 2007). However, there remains little interest in this type of
business among
local
productive
sectors.
Furthermore,
the
majority of
cooperatives operate in traditional activities with a low innovative level.
The creation of cooperatives has often represented a way to strengthen the
entrepreneurial system in Latin American communities, stimulated by various
local development projects. Works such as those by Deyby R. CartagenaLondoño (2007) have been related with this topic and address whether or not
cooperatives can be a driving force for development. The author agrees with
Corragio and concludes that: "just having a chance to participate in the group
generates new citizen space for its members, which is advancement towards
social inclusion" (Cartagena-Londoño, 2007:5-6). The path to development is
enriched with these companies. Then he suggests that the government should
provide incentives to cooperatives to gain efficiency and convert them into an
option to extend into the local productive systems.
In a similar critical view of Coraggio, some Latin American authors also ask about
the way in which local projects have been conducted in the region. The
Uruguayan author, Enrique Gallicchio, highlights the peculiarities of Latin
America that differentiate it from other regions like Europe, where local politics
are so strong. For example, he notes that the region "has 'entered' into local
economic development from its own needs but have also been induced by
development cooperation". In his opinion this has lead to the view that "the vision
has often been an economistic type (clusters, agencies, competitiveness, etc.)
and has clashed with the weakness of our actors and local governments
"(Gallicchio, 2004:3).
That is why the author stresses the need for a change of focus on development
issues. He argues that it may not be copied formulas of others, but that projects
should be guided to the particular needs of communities. Much like Coraggio, he
believes it necessary to highlight the 'character oriented' process, since
according to other analytical perspectives it seems that local development
was spontaneous. In this case, Gallicchio explains that only through a welldesigned strategy and cooperation between public actors of different levels
103
(local, regional and national) and those private could be possibility of the local
development process.
On the topic of cooperation between different levels of public entities, Cuban
authors have emphasized the need that the central government particularly
regulates the territorial imbalances (Elier Méndez (2000), Alodia Alonso (2003),
Yulien Herrera (2006) et al.). According to these economists, there are very
depressed areas, which require cooperation and distribution mechanisms to
enable them to increase the endogenous potential of the territory by external
stimuli. For these authors it is important to consider the specific initial conditions
of each locality, because globalization alone does not spontaneously generate a
production system organized and technologically advanced with possibilities of
entering the global market competitively (González, God, and Montejo, 2002:
599).
This premise conditions local development projects implemented in Cuba, and it
has already been argued by Coraggio that;
"It is not possible everywhere and in any area decentralize in the same
way. There are places where the municipality can create their own
material bases and others where this is impossible, and it requires thinking
in a federation of municipalities or to redefine the municipalities, or to
work by each region. There will be countries where the shortage of
resources for decentralization cripples both their uniform distribution
among all municipalities and concentrating on the poorest follows an
immediatist principle of equity. In such cases, resources should be
concentrated in those municipalities with the greatest potential to
contribute to a development whose results can be fed back to the
rest. These are hard choices that must be made (Coraggio, 1994:5).
The Argentine author's ideas are then a favorable environment for being
extended to the Cuban reality. In this country reflections on local development
are
generally
concentrated
around
the
dilemma
of
planning
vs.
decentralization. In this regard Elier Méndez wrote:
"While decentralization allows a rapid and fitting rapprochement to
decision-making, while it decongests a group of functions at the central
level, it also gives rise to a disproportionate territorial development, makes
the true role of government impossible in society and creates the basis for
104
the conformation of local elites with particular interests, which may
threaten the welfare of society" (Méndez, 2000: 242).
Despite considering decentralization as a necessary condition for local
development, there is a shared opinion among many Cuban authors and
Coraggio, to treat it in its dialectical relationship with planning. However, they
also agree on the need for the restructuring of State functions that addresses the
new requirements of the globalized economy.
The restructuring of the State and the necessary redefinition of the roles played
until now in the region becomes an important element in the debates because it
directly affects the process of institutional transformation. In this sense José
Arocena warns, "the existing institutional apparatuses which are highly
centralized, are unable to provide relevant models of institutionalization to
local action". Then it is required to "encourage the horizontal relation between a
plurality of local actors", (...) and to allow the expression of particularities and
differences, to promote the mobilization jointly of all actors "as the only way to
allow in Latin America" the recovery of decision system for local actors in all
those areas that have to do with the development of the community" (Arocena,
1988:14-15).
These ideas coincide with those of Boisier; actually, the intellectual dialogue
between these Latin American authors is quite broad. Arocena emphasizes, like
his Chilean counterpart, the local development possibilities in encouraging
a culture of development (Boisier, 1996), that is, in transforming a non-actor to
development actor (Arocena, 2004). Concerning this, he argued:
"The problem arisen is that the individuals and groups are not always
hesitant to act. The cultural patterns that lead to action are not always part
of the systems of representation. The ability to act is not something
learned in school as we learn to add or subtract. These potentials are
present, but the socialization processes will inhibit or stimulate them. The
constitution of the actor is so closely tied to their identity formation
process. To transform a non-actor into an actor implies influencing its
socialization process. In other words, it implies the generation of major
changes in its system of representations "(Arocena, 2004:3).
105
Decentralization is an important factor according to these authors in the process
of institutional transformation. However, this has been a process that has
presented some difficulties in Latin America, which limits the real possibilities of a
change in traditional institutions. Several studies from the region show us some
of these limitations. For example, Edgar Moncayo investigates the relationship
between decentralization and fiscal spending in the Andean countries. The
author shows how instead of achieving a more rational fiscal plan with the
decentralization in these countries, transfers have led to additional burdens on
public budgets, acting on fiscal deficits. For him, this is due to poor
implementation of decentralization policies, moreover, that "they have not
created incentives and mechanisms for those subnational entities that should
have their own financing sources" (Moncayo, 2006:19).
This highlights Boisier's concern that countries should not be limited to functionalterritorial
decentralization,
but
progress
towards
political-territorial
decentralization (Boisier, 2000a:15). For Moncayo, this means passing to a
dynamic conception of decentralization for development. In this sense, the
transfers can not be seen as an end in itself but a means to enhance the
competitive capabilities of the territories, looking in all the cases the way to selfsustaining development process.
The debate on decentralization, however, is broad and rich, as it responds to
particularities of each political environment. From Bolivia, José Blanes concludes
that the biggest obstacle to decentralization in the country has been the weak
constitution of civil society. According to him, this was due to "incomplete
constitution process of national State and the high level of politicization, in both
the administration and the institutions of civil society" (Blanes, 2004:46).
Furthermore, this author argues that the Bolivian municipalities are not able to
innovate through new forms of utilization of knowledge and accumulation that are
vital to move from a simple communitarianism to local development. One of the
challenges for the endogenous development approach is the strengthening of
institutional capacity, in order to "produce research and prevent the import of
"canned" projects or programs, regardless of local needs" (Blanes, 2004:47).
106
According to him, Latin America already left behind the stage of legal reforms
which is now what is necessary to strengthen the institutions established. In this
process, he agrees with Boisier and Coraggio; this is where education plays a
key role.
Silvia A. Choconi analyzes, however, the case of Argentina and concludes that
there have been problems in establishing the areas of competence of
communities, in legitimization of actors and in functioning of local institutions.
She is based on the experiences of productive consortiums in the province of
Buenos Aires, to criticize the "the romantic vision on local actor which is related
to the enterprising manager" of Boisier and Arocena as a driving force of
development (Choconi, 2003:17). She adds that on the basis of decentralization,
"the model of local development is focused on the provision of fiscal mechanisms
which, by promoting competition for investments and resources end up causing a
negative-sum games between participating local initiatives" (Choconi, 2003:22).
This view leads Choconi to Coraggio's side, who claimed that "the development
from local can not be a widespread mode of development but an exception,
unless supra-local entities (...) promote it and boost it by horizontal articulations
"(Coraggio, 1999:6). Then, Choconi reinforces the idea referring to the role of
regional planning, explaining that;
"... due to economic and political-strategic abilities of municipalities not
being homogeneous, the redistribution of resources appears as a
substantive element of a development model for regions which includes a
consortium form that is not a mere allegation of justice. The territorial
management has specific limits that only regional planning can overcome.
Only a more extensive planning makes consistent consensus on the micro
level, that is, based on pre-existing consensus on other levels" (Choconi,
2003:24).
According to Coraggio, Blanes and Choconi, it is therefore necessary to know the
structural, social, political and institutional limitations well before implementing
any local development strategy to avoid making the mistake of fascination or a
clear reproduction of "successful recipes".
In conclusion, the influence of Boisier and Coraggio is apparent in Latin
American economic thought. Both authors evolve, as it has been shown, to
107
endogenous development approach, which is also a reflex of the evolution of
thought in the region, leaving the structuralism and taking of local development.
The multiplicity of approaches to address the development in Latin America is
also a new element that distinguishes to economic theories. However, according
to my opinion, it is easy to determine in the region two main streams: the New
ECLAC and its critical alternative. Boisier and Coraggio are, respectively, leading
exponents of these currents of thought. In order to achieve greater
systematization of the ideas developed above, I have drawn up the following
summary diagram.
108
Fig. 5: Summary diagram of Latin American economic theories about Local Development.
Local Development
Two approaches within the Latin American economic thought
New possibilities of entering
global market from the local
community
Association between regions or
localities based on economic
purposes (virtual region)
Local autonomy
(decentralization) is the key to
economic and social
transformation. Planning and
territorial organization at macro
level are complements for local
development.
It is necessary to encourage
new forms of territorial
organization allowing more
complex forms in the locality
according to global market
requirements and to promote
synergy in production process.
It means new opportunities for
local economies if their
endogenous capacities and
resources are strengthened.
The market as a regulator.
Local development allows for
greater transparency of
information on local markets,
consolidating the development
process through knowledge
transfer and innovation within
the enterprise network.
The primary objective of local
authorities is innovation. The
technological and
organizational modernization,
with more efficient forms of
Alternative to the relations of
domination based on the
market
Association between
territories
The micro-macro
linkage
Territorial
organization
Globalization
Role of the market
Role of local
authorities
Association between regions or
localities based on principles of
cooperation and solidarity.
Decentralization could strengthen
dominant elites in a territory and
could be to the detriment of
popular sectors. The micro-mesomacro linkage ensures a balanced
development between regions.
To encourage new forms of
territorial organization based on
solidarity that can bring an
alternative to the capitalist market
and restructuring of society.
It does not mean that
development opportunities for
localities are spontaneously
generated, but it reproduces the
dependency relationships.
The market based on capitalist
principles fosters exclusion and
relations of domination, while a
market underpinned by values of
solidarity contributes to better
development. The market is an
institution that must be
transformed.
The objectives go beyond purely
economic purposes, as well as
concern for production efficiency
through innovation, they should
contribute the creation of new
109
information management, is the
keys to a better integration of
companies in the global market.
The State is an agent among
others (it is not determining)
within the development
process. Its function is to
facilitate, through
decentralization, a more direct
and democratic participation in
decision-making of local
society, and encourage
community development
projects from the communities.
It is necessary an institutional
change. The strong centralism
is unable to provide a favorable
institutional model for local
action. Transparencies, honesty,
fairness, speed of reaction to a
changing environment,
flexibility, intelligence to learn,
are some features that
institutions should have for
local development. Confidence,
as cultural pattern, is also
essential, so a good education is
important too.
History and tradition of local
communities influence the
collective imaginary, so that a
region / locality historically
depressed have a greater
challenge to achieve
development.
Sergio Boisier among
its representatives
jobs and new investments in
social issues.
Government's Role
Institutions
“Culture of
development”
The State shall regulate territorial
imbalances and work for greater
integration and participation of all
local organizations.
Decentralization should be
applied according to the needs
and requirements of each country
/ region. Local government
should promote a participatory in
decision making and networking
between local actors.
It is required an institutional
change. It should be emphasized
in education, consolidation of
identity, transforming the system
of representation, and strengthen
the constitution of civil society.
The new process of
institutionalization should move
towards a more equitable and
democratic system, so investment
in education is fundamental.
It is necessary a change of focus.
Development can not be a process
"oriented" or imposed by a unique
culture pattern. It must be
changed culture, ethics and
regulatory principles that
associated market with
development associate.
J. L. Coraggio among
its representatives
110
3.4 Final reflections.
I do not refer here to the contributions and criticisms that can be highlighted from
works of Boisier and Coraggio; these have already been explained in the
preceding pages. My goal with these reflections is to refer to the theoretical
absences, or in other words, about issues not addressed that raise some
dissatisfaction for those interested about them. Here I will focus on some ideas
from the New Institutional approach that I consider important for the design of
local development models in Latin America.
The evolution of institutions is a fertile field of study on local development today,
which is rightly understood by Latin American thinkers such as Boisier and
Coraggio. The works of some institutionalists have been widely referenced in the
region, as the case of Douglass North and Oliver Williamson. However, this
contrasts with the few references to other studies that have also enriched the
New Institutionalist thought, such as Ricardo Hausmann (1998), Dani Rodrik
(2000), John H. Coatsworth (2005) and Daron Acemoglu & James Robinson
(2006). Why do Boisier and Coraggio not reflect on the most recent contributions
of the New-Institutionalists? The answer could lead to two hypotheses:
ignorance, or by not considering them sufficiently important to be incorporated
into their disquisitions on local development.
These hypotheses fall within the field of the international study of economic
ideas145, so I shall use some analytical tools that this approach provides, such as
the indicator of the translations. As Ernest Lluch (1980) would have said, the fact
that translations exist constitutes an indicator of the influence of a work on a
specific community. This does not mean, as Fritz Redlich and Kenneth Carpenter
145
According to Ernest Lluch (1980) the authors T. W. Hutchison and Joseph Dorfman (1955) were the
first to contribute to the analysis of the international flow of ideas in the paper presented at a conference of
the American Economic Association, under the title "International Flow of Economic Ideas "(Lluch, (1980
[2007]: 7). Hutchison defines that the study of international flow of ideas "includes all processes that
happen, apprehend, and master in the time: he also includes gaps and impediments to the flow of ideas,
both across and within language borders, and the questions of whether and in what sense there can be no
progress in the flow of economic ideas or if there is a circular movement or pendulum and to what extent
this movement is the result of any extension of fashion "(Hutchison, 1955: 1 quoted in Lluch (1980
[2007:8])).
111
(1973)146 well stated that the translations are the only dominant force, but they
are the best mediums that express the influence. For the specific case of this
research, I focused on the search for works by some New Institutionalists147 and
their translations into Spanish in the library collection of universities and major
research centers in Chile and Argentina148.The aim was to accept or reject the
first hypothesis stated.
The results show an acceptable and fairly updated stock of New Institutionalist
materials in the library centers in both countries. However, the number of
publications and/or translations in Spanish is very poor, which may be influencing
the debate in Latin America. Comparatively also, it highlights the quantitative
differences of works between Chile and Argentina. While in the first country the
library collection is extensive149, in the second is not the same.
My hypothesis at this point is related to the severe economic crisis in Argentina
and the loss of confidence in institutions and international organizations in the
146
See the article of the authors entitled "Research Possibilities in the History of Political Economy
Through a Bibliography of Translation" in History of Political Economy, 1973 (cited in Lluch (1980
[2007:20])).
147
Among the authors are: Mancur Olson, Richard Hausmann, Andrés Velasco, Dani Rodrik, Elhanan
Helpman, Daron Acemoglu, Avner Grief, etc.
148
To select the most important libraries in Chile, I relied on the classification of the American Economic
Journal
(2010),
which
standardizes
all
universities,
in
the
country
(See:
http://www.americaeconomia.com/). The top five universities in the ranking, in descending order were: the
Pontificia Universidad Católica de Chile (where Boisier is associated professor), Universidad de Chile,
Universidad de Concepción, Universidad de Santiago de Chile and Pontificia Universidad Católica de
Valparaíso. I also incorporated the Universidad Bio-Bio and the Universidad del Desarrollo, because
research groups associated with these centers are related to development issues.
In the case of Argentina, I relied on the classification of Universia based on the database Science Citation
Index. The top five ranked institutions in this country were the Universidad de Buenos Aires, the Consejo
Nacional de Investigaciones Científicas y Técnicas (CONICET), the Universidad Nacional de La Plata, the
Universidad Nacional de Córdoba and the Universidad Nacional del Nordeste. In additon, I incorporated
the Universidad Nacional del General Sarmiento where Coraggio is a research-professor and unfolded as
rector in the period 1998-2002.
Needless to say, I focused on research only in the online catalogs available on the websites of each of the
academic institutions. Researchers at these centers also have search engines that allowed access to all
articles of the major economic and social science journals, where the New Institutionalists authors also
publish. We should not underestimate also the Internet access and research periods that many of them tend
to do abroad. However, I found equally interesting to note how many of the works of the New
Intitutionalist authors mentioned stock are materially available within these libraries, as it reflects the
interest in the acquisition of specialized books on certain subjects.
149
The case of Chile may have influenced the result, the strong labor developed by Andrés Velasco on the
dissemination of his work and those of their colleagues. The prestige of this Chilean economist who served
as Finance Minister under President Michelle Bachelet (2006-2010), must have positively impacted the
interest in the constant updating of the New-Institutionalist approach.
112
late 90s and early 2000s. This crisis had much to do with debt acquired by the
government, neoliberal policies (proposed by the World Bank and IMF), inflation
and dollarization in the economy. Then it is easy to understand that authors such
as Hausmann and Velasco, adviser to some international financial institutions,
are not well received by a large part of Argentine thinkers. This could explain
Boisier's various references to the Neo-Institutionalists and the constant criticism
of Coraggio to Williamson, particularly in the context of the Barcelona Agenda150.
So, I can conclude that one of the initial hypotheses about the lack of knowledge
of more recent contributions of the institutionalists, in the case of Boisier and
Coraggio is not justifiable. I remain, therefore, inclined to the second hypothesis:
these contributions are not relevant or compatible for these Latin American
authors. And in this case, I have no option but to accept it. There may be sought
justifications, such as the ideological orientation of these authors or the inability
to cover all institutional issues, but none fill the absence left in the theory. The
local development models proposed by Boisier and Coraggio do not answer
some questions related to their own analytical perspectives. These are the
second absences that I will deal with.
Regarding local and global relations and thinking about the New Institutionalist
idea hosted by Boisier, the key to development is to create incentives for growth
and not the imitation of the institutions of the Western world (North, 2006:208).
How, then, is it possible that in the hexagonal model he did not propose new
incentives, different from the hegemonic culture and more adjusted to the reality
of Latin America? The fact that in Latin America the norms have been founded
more on personal interaction than on impersonal ones (as in the market), should
be assumed as important distinction for a proposal of local development. What
would be achieved if this feature was considered and how would it affect
incentives for growth?
150
Because of the limitations of the Washington Consensus, World Bank convened a meeting in September
2004, to propose an agenda to contribute to development. This meeting brought together some New
Institutionalists like Williamson and Rodrik. Coraggio's criticisms of it are contained in an article entitled
"El lugar para el desarrollo local en la agenda global" (2005).
113
The institutional framework consists of: the political structure (the way that it is
formed and policy decisions are developed), the structure of property rights
(formal incentive) and the social structure (norms and beliefs that define the
informal incentives) (North, 2006:76). In Latin America the structures present
internal and external contradictions. Within a market economy, developed
countries have favorable conditions and impose rules and norms in international
trade. Political decisions of a dependent country are regulated by this condition,
which often takes away decisional autonomy and determine the political structure
of its institutions. How could we transform the local institutional framework from
these internal structures without creating a conflict of interest with the global
institutional framework?
Also, informal institutions are linked not only with the formal rules of society, but
also with norms and moral codes, at local and global levels. The world has
changed; globalization does not permit further analysis of exchange relations
(economic and cultural) between countries through the core-periphery approach.
Before, areas were well demarcated, but now everything fluctuates faster and the
territorial boundaries are lost. The internationalization of capital breathes new life
into the system, and with it the mobility of people is increased, which turns
people into carriers of culture. Migration, legal or illegal, is a carrier of customs,
traditions and ethic codes, which will undergo a process of assimilation-transfer
of values in the societies of arrival and return, in many cases. What is the impact
of this process on institutional framework of Latin American societies?
With his model of Economy of Labor, Corragio sees the institutional
transformation of society, but the model leans towards autarky. The relations of
exchange between the subsystems are only tested internally in local economies
and not with the global market. Given that we live in a globalized world
dominated by market forces and that, as Polanyi would have said, the market is
an institution that do not operates mainly inside an economy, but outside
(Polanyi, 1944 [2000]: 75): how can people from the Popular Economy at local
level to absorb (global) market?
114
Finally, both Boisier and Coraggio assume the current state of Latin American
institutions. They highlight those institutions that need to be encouraged and
those that must be transformed. However, there is not an evolutionary analysis of
institutions. Industrialization policies in the mid-twentieth century failed and it is
accepted that this is due to, among other things, the hypertrophy of the
State. What role did the institutions and their linkages with organizations play
during those years? How has the institutional framework evolved in the
region? These are some questions that might be of interest for future discussions
on the topic of local development in Latin America.
115
PART II. The theoretical-methodological proposal to
address local development in Latin America and its
application to the analysis of territorial indicators.
116
Chapter 4. Gravitational-landscape approach and the role of institutions as
an alternative to other Latin American approaches that address local
development.
4.1 Introduction.
After having examined the two schools of thought in Latin America that address
local development, I think it is appropriate to advance a proposal that attempts to
fill some of the theoretical and methodological gaps discussed above. The aim of
this chapter is to develop a new method of analysis for the study of Latin
American localities, which has been called the gravitational-landscape approach.
The work of anthropologist Arjun Appadurai and complexity theory have
supported my proposal, which has come to the recent American historians as
controversial about the origins of the differences in development between the two
Americas. From this I present my own version of conditioning factors on different
dynamics of development of the countries in the region.
The last section is devoted to my thoughts on how to make better development
from new institutions in Latin America. In this sense I propose actions and
analytic lines for future research or models of local development. The goal with
this is to influence the institutional framework of the Latin American communities
in manner that facilitates expansion of other alternative forms of social
organization, non-mercantilized.
4.2 A new approach to study "center-periphery" relationships.
The world has changed; globalization does not permit further analysis of
exchange relations (economic, political and cultural) between countries through
the center-periphery system. It has been in the past era of territorial expansion,
where the conquest of territories or (neo) colonization allowed a precise
demarcation of the areas of dominance to compete globally. Today the "centers"
have been fragmented and the exchange flow between so-called "periphery" and
"centers" has modified initial concepts based on a static model of representation,
winning in dynamism.
117
With the current globalization, production systems have become more flexible
according to capital movements. In turn, much of the productive capital is
attracted by low wages, typical of underdeveloped countries, which can become
concentrated in a lapse of time large amounts of investments within its national
borders, if the political and institutional stability allows it. This phenomenon
causes social pressures associated with unemployment rates in developed
countries, where also the capital of a financial nature that would concentrate on
these areas does not guarantee economic stability due to its high volatility. These
countries need to reorient their production in achieving greater productivity and
competitiveness to attract productive capital again. Then, it is not pertinent to
continue to identify "countries' centers" as absolute issuers of capital, because
they can also be seen as recipients according to international flow dynamics.
Geopolitics has also changed in new era of globalization. There is increasing talk
of a crisis of the nation state, at the failure of the control and management of
markets, particularly financial ones. The loss of representation is a common
problem among countries, both developed and poorest. The State has given
space to global markets and thus has limited its legitimacy151. The local societies
depend more on the policies of "virtual regions" or "global networks" that are
associated more according to their economic interests and activities than to
national states. A country can have cities inserted into the global network that is
economic power centers, and areas excluded from this at the same time. So
we're in the presence of a higher level of complexity that can not be represented
by preconceived geopolitical boundaries, and that is becoming more evident with
the
dual
phenomenon
of
regional
integration
among
countries
decentralization demands (sometimes secession) of several territories
152
and
.
151
Manuel Castells, one of the authors that has delved further into the subject, explained how liberalization
associated with globalization, fueled by States has resulted in a loss of sovereignty. He instances the
European Union to gain some prominence in political-economic world has been a kind of state that he calls
State network. Within this network, making policy decisions and gaining management power against the
global market, however the citizens of member countries are more distant and have more indirect links of
representation that joins them to the State, either nationally or regionally. The historical basis of
representation and political legitimacy of the State is damaged (Castells, 2000, 2005).
152
The Department of Political Science, University of Heidelberg, has published its "Conflict Barometer
2010", which shows an increase in global conflicts since 1945, specifically in the last twenty years the
growth rate is higher compared to previous periods. It also draws attention to the number of high-intensity
118
Today's globalization has not only transformed economic and financial markets,
but has also had its effects on culture. The liberalization of labor markets in some
regions and the revolution in information and communication have contributed to
cultural exchange that is much faster and more effective than in earlier times
staged by traders, settlers, travelers and missionaries. This exchange is
characterized by a dual process, in this case, between homogenization and
cultural diversity. Dominant cultural patterns and values are assimilated as part of
globalization, but also traditional values are rescued that reaffirm the diverse
cultural identities. There always has been this phenomenon, but now it is much
more aggressive and expansive153.The cultural centers in the manner of Lotman,
pure and stable, have been permeated by other patterns, becoming more
dynamic in essence, but also more complex.
Following this line of reasoning, without forgetting that the economic, political and
cultural reality is richer, it is clear to understand the difficulty of maintaining old
analytical frameworks. Characteristics that define areas of "periphery" and
"center" are confused now within the trade matrix through overlapping elements,
resulting in intermittent or constant exchange of property. Apparently there is
some consensus about this among intellectuals and academics specializing in
globalization, particularly since the nineties. However, the terms "center" and
"periphery" are still frequently used, especially in economic literature. This has
made me reflect on the need for a new approach that defines categories
consistent with the current reality.
The work of anthropologist Arjun Appadurai is an important antecedent and is
inspiring on the topic of these issues. In 1990 this author wrote:
“The new global cultural economy has to be understood as a complex,
overlapping, disjunctive order, which cannot any longer be understood in
terms of existing center-periphery models (even those that might account
for multiple centers and peripheries). Nor is it susceptible to simple
conflicts, which have grown in recent years more at intrastate than interstate level. Between countries the
behavior of this type of conflict is relatively stable over time.
See: http://hiik.de/en/konfliktbarometer/pdf/ConflictBarometer_2010.pdf
153
Previously, this process was more concentrated in peripheral areas and now calls it multiplies into many
cities, even in those traditionally closed to foreign culture. A reflection of these cultural studies in Latin
America and Africa has been concentrated on for years in the process of transculturation, whereas in other
regions the emphasis is on acculturation (especially in the U.S. and Europe).
119
models of push and pull (in terms of migration theory) or of surpluses and
deficits (as in traditional models of balance of trade), or of consumers and
producers (as in most neo-Marxist theories of development)” (Appadurai,
1990:296).
Based on this perspective, Appadurai opens a novel approach to the study of
cultural processes. Then phenomenon of deterritorialization occupies a central
place, which modifies the previous anthropological concept about cultural
reproduction in a stable space. His original approach provides a representation of
the world deterritorialized in the form of landscapes, where the social imagination
acquires a special power. To understand globalization Appadurai proposes to
follow a conceptual framework consisting of five dimensions named as: 1)
ethnoscapes154, 2) mediascapes155, 3) ideoscapes156, 4) technoscapes157,
5)finanscapes158.
Cultural flows, modeled by the author, occur through repeated dislocations
between these landscapes that, despite having always existed, now become
more important for the speed and volume of the subjects and objects in
circulation. The dynamics of these interactions can be explained by the presence
of several circuits, scale and speed that characterize the movement of cultural
elements (Appadurai, 2008:11). Landscapes are fluid and irregular and they are
154
“By ‘ethnoscape’, I mean the landscape of persons who constitute the shifting world in which we live:
tourists, immigrants, refugees, exiles, guestworkers and other moving groups and persons constitute an
essential feature of the world, and appear to affect the politics of and between nations to a hitherto
unprecedented degree” (Appadurai, 1990:297).
155
“‘Mediascape’ refer both to the distribution of the electronic capabilities to produce and disseminate
information (newspapers, magazines, television stations, film production studios, etc.), which are now
available to a growing number of private and public interests throughout the world; and to the images of the
world created by these media” (Appadurai, 1990:298-299).
156
“‘Ideoscapes’ are also concatenations of images, but they are often directly political and frequently have
to do with the ideologies of states and the counter-ideologies of movements explicitly oriented to capturing
state power or a piece of it. These ideoscapes are composed of elements of the Enlightenment world-view,
which consists of a concatenation of ideas, terms and images, including ‘freedom’, ‘welfare’, ‘rights’,
‘sovereignty’, ‘representation’ and the master-term ‘democracy’” (Appadurai, 1990:299).
157
“By ‘technoscape’, I mean the global configuration, also ever fluid, of technology, and of the fact that
technology, both mechanical and informational, now moves at high speeds across various kinds of
previously impervious boundaries” (Appadurai, 1990:297).
158
“Thus it is useful to speak as well of ‘finanscapes’, since the disposition of global capital is now a more
mysterious, rapid and difficult landscape to follow than ever before, as currency markets, national stock
exchanges, and commodity speculations move mega-monies through national turnstiles at blinding speed,
with vast absolute implications for small differences in percentages points and time units” (Appadurai,
1990:298).
120
related in a disjunctive and unpredictable manner, according to influences of
historical, political, social, language of the actors involved in the process. It
represents what Appadurai called the human version of chaos theory.
In my opinion this proposal opens many analytical horizons. We are no longer
restricted to static models and concepts, but we can absorb a higher level of
complexity thanks to the representation of the many combinations of elements
that can occur within a system. For example, within the center-periphery model of
Cuba and India, despite the cultural, political and economic differences, they
automatically passed to belong to the same group of peripheral countries, with
similar characteristics within the global flow. In contrast, with Appadurai's
proposal the reality of both countries may be explained from the very diversity of
their contexts. As for Cuba, ideological and media landscapes determine how
deeply to express ethnic, technological and financial landscapes, for India the
flow of capital and information decisively affect the way society is organized. The
speed, volume and scale of the elements that are in circulation among these
countries, are different, so naturally their realities will be different too.
Also, I consider important the role that Appadurai gives to imagination in his
model. The imagination as a social practice encouraged and built by the media,
provides a broad spectrum of possible lives, which not only determines the
expectations of the subjects throughout the world, but also shapes the lives of
particular persons entering in the invention of their social relations (Appadurai,
2001 [1990]: 6).
The idea that life is an act of projection and imagination invites me to think from
my specific side as an economist about the current links established between
real and speculative economy. The financial crisis that the EU lives today has
much to do with an image constructed around the concept of credibility of the
States, yet the consequences directly affect the citizens of these countries, which
are subject to severe adjustment policies. All of this is in order to achieve
financial stability again, a stability that depends on the good signs that these
economies emit to speculative capital market.
121
In addition, Appadurai's proposal moves away from any causal relationship.
Historically, there are no flow predecessors and shapers of other flows, but these
are flows determined according to different contexts. This approach allows the
author to focus more on the dislocations than on a possible structural order. Nor
is it something that interests Appadurai, because according to him, this
representation is what can better approach the global world. However, I consider
it necessary to delve into this aspect in order to reach a model that explains both
the disjunctions as the causal order of each flow.
My proposal in this sense is directed to overlapping the landscapes’ conception
of Appadurai, and the idea of the existence of a gravitational force159 within
system. Contrary to this anthropologist, I think that chaos is only apparent, in fact
all relationships and flows in the world are governed by main force, which not
only determines the character of each behavior, but also distinguished systems
of others. Different gravitational forces act in my model, within each landscape.
This does not mean that Appadurai's landscapes cannot fracture and juxtapose
with each other or dislocate from the specificities of each context. Instead, I
am defending the idea of a common element among all these landscapes, a
global order-setter element, which is a structural causal order of the system.
What are these gravitational forces? This depends on the system, for example
during the Middle Ages, gravitational force was religion, but for the current
system it is the market. How can the gravitational force act within the landscape?
People now move according to the needs of international capital and the
aspirations that a market has been planted in your imagination, so the
ethnoscape will respond to these constraints. It is easier to understand the
effects that the market-gravitational force have on the technological and financial
landscape. In this sense, it is necessary to clarify that an element that typifies
today's capital market, which does not exclude other types of markets (e.g.
solidarity-based), but the internal rationality of it is guided by obtaining unlimited
profits, whether or not fairness of trade exists. In addition, images and symbols
159
I refer to gravitational force, not as in the classical concept of physics, but as a kind of creative force of
order within each landscape.
122
that move within the mediascape are perhaps the best is finding this gravitational
force. The commoditization of culture, politics and information is becoming more
evident in the media. Finally ideoscape, contains movements aimed at obtaining
State power that is governed by the gravitational force due to the State in the
interests of the market, either through collective imagination of the very people
that comprise it or through partnerships with national and international capital.
The prevalence of a gravitational force does not imply absence of other
countervailing forces, which once created ideal conditions to put pressure on
principal force, achieving significant decrease in its field of action. This is when
one of the opposing forces emerges with power, mastering the system. Passage
from feudalism to capitalism is very indicative, when the market starts to
minimize room for religion to become the dominant force in the system. Initially
the market was limited to the economic sphere, and gradually has expanded to
society, politics and even some imaginary worlds. Religion, however, has
become a force among other ones within the system.
When does the gravitational force change? In order for that to happen,
gravitational force first needs to become weaker, that is it must have exhausted
all its energy charges, which cannot continue to provide dynamism to the system.
Colonization, industrial revolution and information and communication revolution
have strengthened and helped expand the market-gravitational force in the
current system. How do you know what countervailing force will emerge? This is
difficult to predict, as it depends on the chaotic movement of the landscape and
juxtapositions that may arise between them. The force will emerge to be
considered only once when gravity dominates within each of the landscapes.
This implies a time period when the forces are fed to each other, in order to gain
energy to enable them to influence landscapes of the system. Then, it is logical
that at one moment they may coincide in landscapes governed by opposing
dominant force. The particular contexts become decisive, because they
determine speed at which a gravitational force can be imposed, as explained in
backwardness of Spain compared to England during the mercantilist period.
123
In short, my proposal to explain trade between countries and/or locations keeps
its distance from center-periphery model, but is closer to the approach of
Appadurai's landscapes. The formation of a series of events, determined by
juxtaposition of different flows or landscapes depends on each specific context.
There is no order to define the interactions between landscapes, however, inside
them gravitational force prevails and sets the system's structural causal order.
These forces will determine elements present in each landscape, thereby
imposing a kind of systemic harmony. It is precisely the inclusion of this idea of
gravitational force to the landscape model that represents a novelty in my
approach.
4.3 Institutions within the gravitational-landscape approach.
How important are studies of institutions within the gravitational-landscape
approach? I would argue that they are key factors as institutions represent a type
of energy charge that withstands gravitational force of the system at the
structural level. Thanks to institutions, among other factors, the market in the
current system has been able to reproduce. It occurs among a two-way
relationship in which not only the market draws upon its institutions, but
institutions are also a reflection of that same market.
Just as there are different forces acting on the system, I mean the opposing
forces; we also have institutions that do not respond to the market, such as
donations, or institutions that regulate it as protectionist barriers. The
gravitational force must play with all these elements so that the result is a certain
harmony with which it can preserve its field of action. Adding to the complexity
that has an institutional network, institutions also evolve in relation to their
environment. It is this characteristic that makes them so dynamic and represents
an important stimulus for forces flowing into the system.
Recently it has aroused particular interest among economic historians, primarily
in the U.S., about the origins of the development gap between Latin America and
124
North America160. In a few lines I can summarize this discussion by two main
streams: one, who is associated with the causes of backwardness to factor into
endowments (Engerman & Sokoloff (1997), Gavin & Hausmann (1998), Sachs
(2001), et al.)161; and secondly, those who defend institutions as the origin of
inequality162 (North, Summerhill & Weingast (2000), Acemoglu, Johnson and
Robinson (2001), Easterly & Levine (2003), et al.).
The first group argues that concentration of wealth factors is determined in
institutions in accordance with interests of local elites and the subsequent
development of their economies. In this way they explain how various British
colonies developed a number of different institutions in correspondence with the
natural conditions they had. This is the case of Guyana, Jamaica and Belize
(Engerman & Sokoloff, 2005:3). Tropical characteristics in some areas also
adversely affect the production and technology associated with them, most of
which specialize in agriculture and health (Sachs, 2001:12).
In contrast, new-institutionalist authors rely on the primacy of inequalities in legal
status and political rights, among the reasons for Latin American backwardness
since colonial times. Property rights become one of institutions advocated by
these representatives to explain development of the United States (North, et al.,
2000:17-19). The fact that today there is a correlation between latitude (tropical)
and the underdevelopment does not mean that one is the cause of the other,
geography is not ruling a country with poverty (Acemoglu, 2003:29). The most
mentioned example in this case is the fact that before colonization more
160
This interest comes from an earlier dispute between American historians about the different evolutions
of North and South America before the Civil War. Some representatives were: Robert Fogel & Stanley L.
Engerman (1974), Edgar T. Thompson (1975), Edward Pessen (1980) and Gavin Wright (1986).
161
I include here the seminal work of Engerman & Sokoloff (1997), because despite advocating a strong
correlation between institutions and factor endowments, it reinforces the idea that the concentration of
wealth (extended to climate, soils and native population size) has been determined in the advancement of
one region on another.
162
A common element among these authors is the rejection of dependency theory as an appropriate
approach to analyze the causes of backwardness in Latin America in contrast with the United States and
Canada, see Basualdo, 2005.
125
developed areas163 in America were under the empire of the Aztecs and Incas,
that is, in those very places that are impoverished today.
In my opinion the two currents hint at causal factors of uneven development
between American regions, but both make the mistake of wanting to find a single
reason, common to all evolutionary paths. Many groups can be done, for
instance following institutional or geographical patterns, which highlight those
elements that support criteria classifiers (statistics and econometrics always help
with that). Following this methodology, however, the analysis cannot be too deep.
The work of these researchers have the merit of having rediscovered a part of
economic history that had been isolated in the past, due to incompatibility
between the limited data of that time with the current. As a result, today we can
make long-range comparisons, but this also requires an analytical approach that
more accurately reflects the complexity of the different realities.
An approach such as the gravitational-landscape, in my view, provides a
methodological framework that is more adaptable. In this case, both factor
endowments and institutions represent energy charges that may or may not give
a boost to principal forces of the system. How did colonization influence different
economic trajectories of the Americas? What role did institutions play in the
regional environment? I will argue my version following the proposed approach
with the aim of contributing to analysis of the current problems of Latin American
economies, and then I will advance in propositional terms. Before designing a
development model for a locality it is necessary to know how its institutional
framework has evolved and what factors have influenced its current situation.
I begin to characterize the colonial period (centuries XIV-XIX). This time is
marked by the expansion of the market in a dynamic and physical sense,
because not only did geographic boundaries increase in European charts, but
there was also a change in internal landscapes. The first landscape of the
mercantilism type was obviously the financial; the rest was feeling the strength
slowly and in correspondence with different contexts. The market became more
163
Differences in the development through its construction are understood, techniques of war and level of
civilization of their peoples.
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powerful with new conquered territories, for the fact that the British could
strengthen their commercial institutions, but the Spanish who kept longer feudal
relations could not164.
Making a simplification, I can say that the juxtaposition of the financial and
ideological landscapes deeply conditioned Spanish reality and relations between
this country and its colonies. The conquest of so rich a region in precious metals
and type of colonization (extraction) provided by Crown, influenced the
ethnoscape of many Latin American countries. Many of the native peoples were
enslaved to work in mines, which were distributed among settlers through the
"encomienda" system. If necessary, especially in settler colonies specialized in
agriculture, it was complemented with slave labor of African population. Then,
three different cultures with different languages and religions became part of the
same society, which is more complex to the social environment and to how
commercial institutions of the time could be assimilated.
The mediascape is one of the less dynamic at that moment, but it is also
important. Expectations of the New World, done by images recreated in
newspapers and Spanish journals encouraged migration to the tropics, where
wealth was further concentrated. However, the Crown limited the flow of the
Spanish, who initially obtained a special permit, as the central objective was not
to create American settlements, but the extraction of wealth. Monarcichal
institutions did not encourage technology, and furthermore, much of the wealth
acquired by Crown was intended to pay for war expenses165. This, despite
particular Spanish context, shaped the landscapes of most Latin American
countries for the period.
The most influential landscapes in the case of England were financial and
technological. Economic interests encouraged the Crown to entrust some of their
power to wealthy merchants of the time. The main concern here was to expand
the British markets and the comparative advantage for their products in
164
Riches transported from America caused that relationship between the Spanish Crown and new rich
merchants, such as Basque region, which was different from what happened in England. American gold
and silver strengthened monarchical institutions in Spain, making them last for much longer.
165
Spain faced continuing military confrontation: against England and his "Armada Invensible" (15851604) against France (1635-1659) and the War of Spanish Succession (1701-1713).
127
exchange with other nations. Market institutions such as property rights, among
other factors, stimulated technological innovation and its subsequent outcome in
Industrial Revolution. This gave more energy to market-gravitational force and
put England and its colonies whose societies were being organized around
market institutions in a good position.
Industrial Revolution also readjusted loads on the system. Before, settlements
favored places with good natural conditions. In other words, factor endowments
and geographical location were more important. This explains the economic
areas prioritized by Spain during the first stage of colonization in America.
However, after a technology push and advances in transportation, geographical
constraints began to have less weight in developing countries. Market institutions
at that point were a charge that gave greater dynamism to the market. This does
not imply that factor endowments do not continue to influence gravitational force,
as coastal areas with easy access to trade continued to be favored, but
institutions become the most dynamic medium of generating loads on
landscapes166.
The image that on the other side of the Atlantic there was a rich land to be
exploited should encourage the first group of English settlers. The Crown saw its
overseas territories as a solution to overpopulation of metropolis (Engerman &
Sokoloff, 2002:18). This problem increased with Industrial Revolution, so that
helped to stimulate emigration ensuring similar institutional conditions. In this way
mediascape and ideoscape influenced the flow of people into English colonies.
Difference in landscape juxtapositions between Spain and England and Industrial
Revolution strongly conditioned Americans to their environments and their
various paths167. However, we cannot limit analysis to this alone. The chaotic
motion of Appadurai's landscapes allows us to expand on particularism. It is not
166
The reason may be one cause for the strong European immigration to the U.S. and Canada. According to
Engerman & Sokoloff (1997) the percent of European citizens who lived in North America in the period
1650-1825 increased from 12% to 79.6%, becoming dominant (in 1825 there a 16.7% of Africans and 3.7
% of natives (Engerman & Sokoloff, 2002:46).
167
According to estimates of Coatsworth and Maddison, income per capita was higher in Latin America
until the seventeenth century, and then during the eighteenth century there was a decrease in the gap
between the two parts of America until the United States reversed the balance thanks to the Industrial
Revolution. In 1820 the difference was estimated approximately in $539 (Coatsworth, 2008:6).
128
my purpose in these pages to get into each locality and each period in depth,
many other studies can be made about that. My interest now is only to
demonstrate some elements of the existence of specific and unique conditions in
each country, which produce unpredictable turns in economic history, and that
can be associated with difficultly in joint paths.
Chile, for example, belonging to the Viceroyalty of Peru168 experienced a type of
late colonization, with few settlements from large haciendas devoted primarily to
agricultural production. The opening of trade routes across the Straits of
Magellan allowed a slight initial flowering through trade with Buenos Aires (Araya
& Soux, 2008:16). Small elites took advantage of trade liberalization with
intracolonial reforms and some illegal trade, which were becoming increasingly
influential in the region. But the casualty that marked a turning point in Chilean
history was the discovery of large deposits of silver and copper mining in the first
half of nineteenth century169. Within the context of decline in the major centers’
oldest region, such as Potosi, along with the growing weight of silver and copper
in the international market, Chile was prompted to become a case of exceptional
economic growth170.
However, this fact not only influenced the change of Chilean economy, but also
the political and institutional stability that prevailed after independence (1818)171.
The birth of a strong State with its institutions consolidated enabled this country
to take advantage of the Pacific War (1879-1883) and extend its economic
benefits with new conquered lands of Peru and Bolivia. Chilean development in
168
The southern part of the country was governed under the Captaincy General of Chile. Spain never
controlled the southern half of Chile and Patagonia, which remained under dominion of the Mapuche and
other indigenous peoples until early nineteenth century.
169
Among the most important are: Aguas Amargas (1811), Arqueros (1825), Chañarcillo (1832), Las
Animas (1833) and Tres Puntas (1848). Silver production in Chile increased from 43 metric tons in 18011810 to 1230 in 1851-1860, demonstrating the impact that these findings were for Chilean economy. See
for more information Gelman, 2011:27-28.
170
Along with the decline of mining in Spanish colonies, also fall into crisis productive sectors (agriculture
and manufacturing) aimed at supplying these mining centers in the region. Then Chilean exports grew in
agricultural products, primarily wheat. In addition to regional markets, England became an important
market for Chile; it was accessible through cheapening in transportation costs and rising wheat prices.
171
Joaquín Prieto (1831) and his minister Diego Portales take advantage of the reorganization of finance
that along with several political agreements fail to make institutional stability, protected by the Constitution
of 1833, which granted broad powers to the president. According to Luis Bértola, this colonial legacy
replaces the figure of the king by an elected civilian (Bertola, 2010:241.)
129
this period was also related to consolidation of Valparaiso as the main port of
South Pacific, taking advantage of political instability in El Callao. This attracted
many British merchants to shift their activities to the Chilean port172.
During this period, Chile was opened to international trade based on exploitation
of mineral resources and diversification of its agriculture. Treaties and alliances
with British traders and diplomats helped the growth of trade. However, random
events such as discovery of new mines173, an environment of political instability
in the region and external factors such as Industrial Revolution strongly
influenced Chilean landscapes. In this case, factor endowments and institutions
were the major driving charges to market.
A different story happened in Cuba. As in early colonial Chile, there was not a
large influx of Spanish, due to no substantial mineral deposits. However, Havana
became the favorable geographical position within the fleet of metropolis, and
was the main port of call for all Spanish vessels. This situation meant that Cuba
was oriented toward trade early, and depended on external demand for
development of its economy. A situation like this should be a great dynamism in
Cuban context, as the market would be able to gain space as a dominant force
within each landscape. Instead, it contrasts the fact that this country, while it
undertakes a process of remarkable economic growth in Latin America (late
nineteenth century), is where colonial institutions no longer governed.
What were factors that influenced on this singularity? The first and most
important factor was the sugar crisis of Haitian economy because of their
independence (1791). From this particular juncture, Cubans defended in Spanish
courts the need for Cuba to become an exporter of sugar174. Rapid expansion of
sugarcane production oriented the export market175 to be the biggest
172
Valparaiso concentrated the major commercial activity of the South Pacific, until about 1840 when the
port areas of Lima and El Callao got back their autonomy (Bértola, 2010:243).
173
It is important to note that if the discovery of these new mines had happened a century earlier, local elite
would not have been enriched as much as it was then. Control of the Spanish metropolis would not have
allowed it. This fact accelerated the process of re-institutionalization that Chile has to take on after
independence, marking an important difference with the rest of Latin America.
174
See "Discurso sobre La Habana y medios de fomentarla" by Francisco de Arango y Pareño (1792).
175
The sugar cane was introduced to the island in the late sixteenth century, whose small production was
concentrated in and around Havana. After the Haitian revolution the importance of this product gained
much strength, also due to capital endowment that accumulated during the previous period. Cuba also
130
demonstration of the ability of Cubans to adapt to changing environment. Soon
Cuban ethnoscape changed, with influx of an impressive number of African
slaves destined to work on sugar plantations176. In the context of decline in
mining of territories colonized, the Spanish Crown willingly considered the boom
that was taking Cuba, thus allowing importation of slave labor, despite British
pressure for cessation of trafficking. Slave plantation was the most efficient
method for production of sugar at the time.
Technological advances were also made in Cuba while the sugar sector was
consolidating its peak. The introduction of railway (1837) was a benefit of
industrialization, placing this country among the most economically developed in
the world177. Institutional reforms initiated by the Spanish metropolis, were
followed by independence of other colonies178 and contented Cuban Creoles who
also had impregnated ruin left by the Haitian Revolution in their collective
imaginary, and certainly they did not want to take that risk. The maintenance of
slavery seemed to be an essential factor in economic growth, so an unstable
political situation was something they wanted to avoid at all costs. This had an
impact on the ideoscape, which had more of a delayed changed compared to
other Spanish colonies179.
Then, we have two countries that experienced substantial growth during the
nineteenth century, one of which was thanks to a chance discovery of mineral
received several wealthy colonists who fled from Haiti and later from the American wars of independence
(Santamaría García, 2011:138). "In 1792 there were 473 mills which exported around 14 thousand tons, in
1802 there were 870 mills and exports had risen to 40.8 thousand tons, and in 1850 there were 1500 mills
producing more than 300 thousand tons annually, which vast majority were exported"(Miranda Parrondo,
2008:47-48).
176
According to Gelman, slave population in Cuba increased more than 10 times, from less than 40,000 in
1774 to almost 450,000 in 1840 (Gelman, 2011:35).
177
Cuba became the fourth country to have a railway line, behind England, America and France (Miranda
Parrondo, 2008:49-50), three decades before the rest of Latin America. It is noted that in this case the
colony is ahead of its metropolis.
178
It was a liberalized entry of immigrants and capital, it was granted privileges to productive activity and
it was stipulated that the commissioner of finance would be a Cuban person. All of this changed the colonymetropolis relationship. Spain drew off income by protecting their export to Cuba, so it was in its interests
that the island would generate wealth and be self-financing (Santamaría García, 2011:140). While it took to
modern industry, the financial system was also transformed with creation of banks to issue loans.
179
The fall in sugar prices increased fiscal pressure and raised the tariff that the United States imposed on
Cuba (by then Cuban sugar exports to that country was approximately 60%) which caused the condition for
Cubans to demand more freedoms and civil rights expansion (Santamaría García, 2011:146).
131
deposits and the other by exploiting a very specific situation of global market.
Chile took advantage of re-institutionalization following its independence and
Cuba was favored by institutional reform granted by the metropolis. Both
countries experienced a commercial openness with which the market got forces
and made reorganization of society according to their requirements. Both Chile
and Cuba can be seen as two exceptional cases in Latin America; however I
would say that every country has its peculiarities, so it is always wrong to make
generalizations.
What have I shown so far? The first thing noted is the chaotic dynamics of
landscapes, whose juxtaposition can not be predicted because they correspond
to a complex web of random events and subjective and objective conditions
difficult to regulate. I have also demonstrated the movement of expansion of
market-gravitational force during colonial period, favoring those countries that
managed to timely transform its institutional framework depending on the market.
It has also been demonstrated that both factor endowments and institutions have
represented energy charges for the gravitational force, but Industrial Revolution
did become the institution that most energized the system.
So, there can be no talk of a single cause of development. There are many
factors involved in economic trajectories of countries, however, the ability to
handle context determines dynamics of territories. This ability must be
maintained over time, not enough to be in the forefront at a time (the case of
Cuba and Chile show that), but it must be constant in the attempt. This requires
action, not in landscape for being chaotic and unpredictable, but in charges that
have a bearing on gravitational force. Institutions should be analyzed in relation
to specific environment of each country. Although international institutions
operate in a locality, that is, institutions common to all territories, their effects will
always depend on other elements with which to interact.
132
4.4 What might be the effects that change institutions by the force in a
locality? Chihuahua explained through its landscapes.
Institutions are dynamic charges for the system and for local society, so acting
upon them further achieves development. But what necessarily happens if these
are changed? To analyze this aspect, I have taken as a case study the Mexican
state of Chihuahua where there has been an exceptional situation for a few
years.
Graph 2: Homicide rates by state in Mexico and the evolution of homicide rate for
Chihuahua and Mexico (1990-2009).
Fuente: INEGI, in Escalante Gonzalbo, 2011.
The drug market in Mexico is not a new phenomenon. However the situation of
extreme violence relates to this market, it is something that has excelled strongly
in the last decade. In 2007 the number of homicides in Chihuahua broke all
historical records; Ciudad Juárez alone reported 65% of the total of the state.
The chart above describes the relative weight that this state has grown since the
early nineties, but it was not until 2007 that trend changed abruptly and became
one of the most dangerous areas of the country. This dynamic suggests the
occurrence of a temporary factor. To understand the behavior of this
phenomenon within the state, I show the following series of graphs.
133
Graph 3: Evolution of homicide rate by Chihuahua's regions (1990-2009).
Source: INEGI, in Escalante Gonzalbo, 2011.
The violence has been concentrated in certain regions of the state, especially in
the area of Frontera Sonora and Cercanías Durango, but in all cases, the
homicide rate increased dramatically after 2007, so that cannot be associated to
a specific local fact. The conditioning factor here was the war against organized
crime declared by President Felipe Calderon. Thus there is juxtaposition between
the ideological and ethnic landscapes, which will mark the dynamics of
communities in Chihuahua.
Due to an offensive by the government, conflicts increased between gangs,
smugglers, drug dealers and other local criminal agents for control of the drug
market. However, we cannot explain the wave of violence within the ethnoscape
only, but should be done in relation to ideoscape, represented here by security
forces that provide order. In fact, ethnoscape in Chihuahua for several years was
characterized by the presence of these groups linked to the illicit drug market and
human trafficking. It was not until recently that it began to behave chaotically. It
cannot be explained in relation to finanscape either, as locations elsewhere in the
country such as the Federal District of Mexico and Yucatan area are very
attractive to the drug market, and have not generated the same behavior.
People accustomed to illegality may react violently to risk of seeing their field of
action reduced. Since March 28, 2007 the army moved to Ciudad Juarez and
then deployed throughout the state. One year before this, the homicide rate was
19.6 per hundred thousand inhabitants, which was the cause for intervention. In
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2007 this rate was reduced to 14.4, but in 2008 increased to 75.2 and reached
the figure of 108.5 per hundred thousand inhabitants in 2009 (Escalante
Gonzalbo, 2011).
The intervention of the army continues in Chihuahua. It is the way found by the
government to respond to the crisis of municipal police power. In Ciudad Juarez,
for example, hundreds of agents were arrested for complicity and many others
have been laid off. Local police are considered the least effective and most
vulnerable organization to confront drug trafficking, which has dismantled a major
part of the institutional structure of the city. Military force, among its functions,
must also ensure public order in the area.
We can find an explanation for the violence in Chihuahua in the juxtaposition of
ideological and ethnic landscapes, taking into account that the institutions
established were changed by force. Local criminal groups are trying at all costs
to restore institutions of the past, where "political intermediation (...) was based
on negotiation of selective failure to comply with the law" (Escalante Gonzalbo,
2011). In an institutional framework such as that, the violence was sneaky.
Recently, statements by senior government officials of the United States of
America have recognized that as the U.S. represents the main market for drug,
the extreme violence generated in these Mexican areas is also an issue. Through
illegal drug trade, links are created from different types and intensity between
elements of Mexican and American society that have been mobilized by the
action of this market.
Although this is a very complex phenomenon that should not be subject to
reductionist simplifications, I wanted to highlight the elements that I think most
directly affect the status of these Mexican communities. Then I conclude that the
wave of violence in Chihuahua can be explained by the juxtaposition of
ideological and ethnic landscapes, which are most are affecting local context.
Military intervention in the area has dismantled the institutional structures that
were established, so it has generated a backlash by criminal groups. Finally, we
can see how market-gravitational force has affected the way that many other
realities are expressed within society and its landscapes.
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4.5
How
can
institutions
in
Latin
America
contribute
to
better
development?
We know that one way to act in the territorial contexts is through institutions,
because these represent dynamic charges of forces that interact in the system.
But, before falling in institutions we choose the force that should be encouraged,
which will depend on our conception of development. In my opinion the best
developmental concept should enhance the realization of human, material and
spiritual, in harmony with environment. Territorial scale of development is also
important, because in spite of the complexity of landscapes, it is in a locality
where men and women more relate to their environment and therefore, where
they can best realize their developmental aspirations. The present proposal
follows these principles.
The market, the current gravitational force, has strengthened social relationships
between people through exchange of goods and services. Not surprisingly free
market was one of achievements of men with modernity. This was creating
strong market institutions that were in turn changing internally to landscapes and
contributing to development. But now capitalist market has been objectified, that
is, has gone from being a space for men to be a regulator of lives. Would it then
be advisable to further enhance market-gravitational force? I think so, because
first of all, the capitalist market has yet to exhaust all its potential before another
force takes its place and second of all, it still remains as a space of individual
freedoms.
The fact that the market has been objectified, however, results in a break in
development or in the full realization of the human being. That is why at the same
time it acts on market institutions; other institutions that respond to opposing
forces to gravitational force180 should be encouraged. The market governed by its
own laws end up being exclusive, and then it is necessary to influence those
forces that act where the material and spiritual growth of man cannot be done.
The purpose of this is not much help the stability of the system, but to prepare
180
Returning to Feudalism was not acting against force-religion passed to capitalism, but favored forcemarket. Subsequent rise of market institutions had that religious institutions lost weight within the system.
136
conditions for a future transformation of it. I agree with Polanyi (1944), that to
achieve a better development, society must absorb the market as a force among
others within the system, so non-market institutions can contribute more.
Local development theories in Latin America are addressed in the following two
directions. The stream represented by Sergio Boisier focuses on stimulating the
market institutions. The speed of reaction to an ever-changing environment,
organizational flexibility and intelligence to learn, are part of the strategies
proposed by these authors. In contrast, the school of thought in which José Luis
Coraggio is a member, intends for other societal values such as solidarity to be
enhanced. His model emphasizes the strengthening of civil society. However,
following the gravitational-landscape approach, we realize that a truly effective
local development strategy would be one that contains elements of both streams,
because the proposals are easily complementary.
One also must be careful when suggesting models of local development.
Although an endogenous approach is what characterizes these proposals, within
which is essential to consider the specific characteristics of each territory, it falls
into the error of not considering history of their trajectories in time. Generally
these authors are based on current conditions, new challenges of globalization
and the recent state of institutions to which they want to transform. However, I
think that to act better on our present, we have to understand the evolution of our
landscapes and understand how institutions have been responding in time to
changes in their respective environments. This is how we understand that a
county such as Cuba, which was one of the most dynamic economies worldwide
in the first half of the nineteenth century, has become the underdeveloped
country that it is today.
A local development proposal can not be a straitjacket for an entire region. That
is the reason that I refer to how institutions in Latin America could contribute to
better development. I rely more on an analytical method than on a set of
economic policies. There can be no local development model that responds to
diverse landscapes, or specific environments such as those that occur in the
region. I think in this case it would be better to propose some possible lines of
137
action or instruments that can be inserted into future development strategies for
each locality.
In Latin America it is essential to transform existing institutions, as is
demonstrated by representatives of local development of the region. This would
imply a partnership effort of political and educational level. But before delving into
this aspect, I would like to refer to a common limitation of all localities in Latin
America. By this I mean the assimilation of imposed institutions within framework
of international trade.
Some authors refer to this phenomenon in terms of "institutional convergence".
For example, Dani Rodrik writes:
“Sometimes the arbitrage -institutional convergence- is the outcome of
deliberate policy actions to "harmonize" a country's economic and social
institutions with those of its trade partners. Membership in the WTO, for
example, requires the adoption of a certain set of institutional norms:
nondiscrimination in trade and industrial polices transparency in the
publication of trade rules, and WTO-consistent patent and copyright
protection, among others. (…) openness can change national institutions
by altering the preferences that underlie them. Civil liberties and political
freedoms are among the most important imported concepts in the
developing world; the demands for democracy to which these ideas give
rise are a direct product of openness in this broad sense" (Rodrik,
1999:31).
Following this analysis, it appears that the assimilation of international institutions
impact positively the internal dynamics of countries and localities in developing.
However, there are also other negative effects that should be taken into account
in this process of "institutional convergence". The issue of patents is very
illustrative. At birth the patent system is designed to protect producer and
stimulate innovation, as it ensures that scientist enjoys the benefits of its
creation. However, when a patent becomes its raison d'être and commoditized
knowledge, it may constitute an obstacle to scientific creativity. New scientific
creations become more expensive to have to pay for past licenses, which are
mostly detrimental to developing countries that have limited economic resources.
There are even companies that are dedicated only to buying portfolios of licenses
in order to later commercialize them, which is an expensive cost for innovation.
138
This phenomenon in the health sector represents a major obstacle for
development of Latin American communities.
The "institutional convergence" also has its flaws. Although the patent system
complies with internationally agreed standards and codes, there are differences
in some parameters which can increase inequalities between countries. The
system of patents and trademarks in the U.S., for example, has low minimum
requirements for granting of licenses, causing it to recognize fraudulent owners
of innovations. A famous case is the Enola bean, a Mexican product that was
pirated and patented in the United States and although it was shown as
fraudulent in court, Mexican farmers were not compensated for economic losses
during the several years that the process lasted.
Policies that can be taken to achieve a more favorable innovative framework in
Latin American communities would be subscribed to national level, and even the
region. Creating a unique pattern of minimum requirements, to a higher level,
and a mechanism to compensate for those who are victims of abuse, would help
lower the incidence of fraudulent licenses and to establish international
institutions more agreed upon with less impositions. But, a locality, much more if
it is developing, can hardly influence a change in rules and regulations governed
by the international system. With this I realize the importance of thinking about
local development not only as a process of greater territorial autonomy through
decentralization, but as an integrated system between micro-macro-regional
levels.
Turning then to possible actions that could be undertaken from the community
with the aim of changing the current institutional framework, I think it would be
key to influence the internal dynamics of ethnoscape. I analyzed how the
internationalization of capital, as a result of globalization, has influenced the
increased mobility of people worldwide. At the same time, the circulation of
values and ethical codes contained in the customs and traditions of migrants has
increased. People who emigrate are subjected to an assimilation-transfer
process of cultural values, because not only are they bearers of culture, but they
are also assimilated to some values of the host society. These people maintain
139
direct communication with family and friends, frequently visit their home villages
and transmit some of new assets acquired. This phenomenon is very strong
among Latin Americans, showing a continuous flow of people into North America.
In the U.S., for example, I could define three types of Latin American immigrants.
The first group comprises those who arrive for work, study, family reunification or
the green card lottery181. Legal status of these people allows them greater
mobility, with frequent visits to their home communities. This group is the most
dynamic in ethnoscape. For example, some Mexicans covered in NAFTA,
become a kind of pendulum migration because they work for 6-10 months in the
U.S. and the rest of the year back in Mexico. A second group consists of those
seeking political asylum, being the least dynamic in terms of mobility, because of
the risk that presents itself for these persons to return to their countries of origin.
The last group is formed by illegal people, who because of their status cannot
leave the United States. However, unlike the previous group, circulation of
cultural values is more present. The contact of these people with their families is
more fluid, as reflected in the exchange of goods, through gifts that relatives
send to emigrants ("nostalgia market") and vice versa. The goal of many of these
emigrants is to collect money and then return to their countries to open their own
business, buy a house or pay for college for their children182.
How could a locality take advantage of the migration flow to transform its
institutional
framework?
Designing
policies
to
attract
foreign
residents
investment, a community can benefit not only in monetary terms but also in terms
of the human and social capital of these emigrants. There are some experiences
in Latin America that demonstrate the viability of these initiatives. Rodolfo García
Zamora studies a case in Jerez's community in Zacatecas (Mexico), where a
program has been established to take advantage of the support of emigrants in
181
The green card lottery has helped to stimulate the "American dream" in the collective imagination. It is
imaginary and built around the idea that America is the country where everyone realizes his dreams. In
reality, it is another form of colonization.
182
Recent research on this topic is published under the title: "Migración internacional, remesas y desarrollo
local en América Latina y el Caribe" by coordinators Rodolfo García Zamora, and Manuel Orozco (2009),
where they selected five Latin American communities with large immigrant experience. These localities
are: Catamayo (Ecuador), Jerez (Mexico), May Pen (Jamaica), Salcajá (Guatemala) and Suchitoto (El
Salvador).
140
the United States since 1992. The aim has been to stimulate infrastructure
projects supportive of cooperation with the residents abroad from Zacatecas.
Jerez clubs then created "the project 2x1", in which for every dollar migrant
oriented infrastructure projects in the localities of origin, State and Federal
governments would contribute one dollar to each of them183. In 2005 the number
of infrastructure projects funded by various Jerez's clubs reached 35 (García
Zamora et al., 2009:104). This is a good example where new methods of
management are encouraged, while time values of solidarity are disseminated to
the community.
Latin America is also a region where personal interaction prevails over
impersonal (done by the market). This assumes an important distinction that
should be taken into account in the design of local development policies. A
reflection of that is the high number of companies with any relatives or family ties,
especially those small and medium sizes who are located in different towns of
the region. A recent study for seven Brazilian cities does a comparison between
businessmen, where businessmen and entrepreneurs failed. Some interesting
variables are the level of confidence in others and family background as a
positive condition for business success (Djankov et al., 2007). Then, trying the
binomial confidence-insecurity is essential for development of entrepreneurship.
As for the binomial confidence-insecurity, I am referring to: confidence in
ourselves and trust in others who have a different vision of the world and have
more diverse resources than ours, the reliance on traditional values and on
"modern" values, and economic insecurity and political uncertainty. On these
issues, there are some studies, particularly in the field of psychology, which open
interesting research lines. An example of that would be some advances in
attachment theory184 and its relationship with local culture.
183
In 2002, this program was given the name "Iniciativa ciudadana 3x1".
John Bowlby and Mary Ainsworth were the founders of attachment theory, which studies the
development of personality from effects of family relationships at early ages.
184
141
This perspective discusses different patterns of relationships from a child's
experiences with the mother (biological approach) and from culture185. It
examines how patterns of selection, interpretation and creation of behavior are
established culturally in time, being a distinction between regional and
socioeconomic populations within a same country. Cultural differences in
regulation of these behaviors predispose citizens in search for alternative
development. According to some authors there is a tension between the desire to
create social order and security and the desire to maximize individual
opportunities, as it is argued in the following quotation:
“A good society, (…) minimizes disruptive events, protects each child’s
experience of attachment from harm, and supports family coping. Yet, in
order to control uncertainty, individuals and families are tempted to
achieve certainty at the expense of others (i.e., by imposing a greater
burden of uncertainty on them or by providing fewer material and social
resources). When powerful groups in society promote their own control
over life circumstances by subordinating and marginalizing others, they
make it less possible for these groups to offer and experience security in
their own families. Valuing of attachment relations thus has public policy
and moral implications for society, not just psychological implications for
attachment dyads” (Bretherton, 1992:32).
So, local governments should be attentive about the consequences of their
policies. A different case is Brazil, where Plan Bolsa Familia operates with a
double effect: it has reduced material insecurity of the poor (in some communities
there is up to 65% coverage), but has also caused a loss of confidence in
individual potential for development186. I think that measures like this, despite
fighting poverty, are not a real institutional change. Instead, take advantage of
migration flow and therefore circulation of values; it would be a better way to
contribute to development. In this sense, I think that the emigrant would
constitute a fundamental link in the chain of institutional changes187.
185
See on this subject the article "On the shaping of attachment theory and research: An interview with
Mary D. S. Ainsworth" by Ainsworth and Marvin (1995), quoted in Ávila López, 2002.
186
I am referring to research by Raúl Zibechi published under the title: "Políticas sociales, gobiernos
progresistas y movimientos antisistémicos" in 2010.
187
Jerez is an interesting case. From the Migrant Act ("Ley Migrante") approved by the State Congress in
2004, migrants have the possibility to hold office in municipal administration in Mexico. This law was
promoted from Jerez migrant mayor Andrés Bermudez, called "Tomato King" for his activities as a
142
Emigrants find new investment opportunities in their hometowns, and they
combine knowledge embedded in their experiences in other communities and
business systems, with tacit knowledge of their territory of origin. Social relations
that they still preserve in the hometown and physical capital accumulated over
time, provide advantages for investment by reducing mistrust (in ourselves and
from others and him) and economic insecurity. If local government uses smart
policies to attract investment of these people, in my view, it would help the
market institutions to provide dynamics to the system.
At the same time, local government should encourage organizations as those of
civil or solidarity economy, to intensify alternative forces opposing to the marketgravitational force. In Latin America, the number of these experiences in recent
years has increased, however, it does not mean that non-market institutions are
dominating regional environment. It rather represents an alternative to economic
crisis and labor market exclusion of a growing part of local population.
It is interesting how the increase in these types of organizations (consumer
associations, time banks, etc.) responds to different reasons in Europe and Latin
America. In the first fundamental motivation is an ethical alternative (civic values)
and the second, an alternative to survive the economic crisis. Can these
motivations in developing countries be transformed (from economic to ethics),
once the crisis is relieved? Here I agree with most of the representatives of local
development in Latin America who see education as the best instrument for
change. In this case, I think an effective way to transform institutions by
education policy is to enter the mediascape. The community must use every
means in their power to instill civil values and solidarity in people; it is also a way
to work on the binomial of confidence-insecurity.
Ideoscape is also significant for Latin America. Historically two very strong
political streams have dominated in the region: centralist and liberal. Many
studies explain this institutional duality with the heritage of the Spanish
contractor in California during winter season. This mayor was elected twice despite problems faced by his
poor preparation, which opened the way for future migrant mayors in the country (García Zamora,
2009:106-110). This reflects juxtaposition between the ethnic and ideological landscapes. In this case the
mayor due to success in business outside the region, achieved consensus and recognition in his home
community.
143
colonization. These political currents alternate in power hindering a long-term
strategy with profound implications for institutional order. However, in some Latin
American countries there has been a process of constitutional change recently,
marking a significant break with the past.
Three have been the countries that have constitutional processes: the Bolivarian
Republic of Venezuela (1999), Ecuador (2008) and the Plurinational State of
Bolivia (2009)188. The aim of these processes was popular re-legitimization and
political integration of traditionally marginalized sectors, which also counteracted
centralizing tendencies and political paradigms rooted in collective imagination.
Through these processes the legal foundation has been laid for an engaged
citizenry with the transformation of society, but it is not finished until change
dominant institutions. To this it must be supported by a new legal system that
encourages decentralization of power and not monopolization of the State in
ethnic terms189; it should also be a sustained process of change over time.
Related to finanscape, many Latin American authors commented about the
importance of creating a more fair credit system locally, which promotes small
co-operative enterprises. Although I agree with these initiatives, I prefer now to
focus on one type of business management that I think should be extended
throughout Latin America. The objective is to respond to the new-institutionalism
assumption that the more developed regions are those where the transaction
costs are lower. This is possible because agents and actors in the development
process share the same cultural codes, same legal system and have a set of
social relations given to a culture of cooperation/competition. As I have already
analyzed, Latin American countries are generally assimilators of institutions,
which do not respond to their historical and cultural conditions. A situation of this
kind distorts organizational and institutional structures, so the challenge facing
188
The adoption of the Constitution of the Bolivarian Republic of Venezuela was backed up with a 71.78%
vote in popular referendum. In Ecuador 63.93% of Ecuadorians favored the new constitution and the
Constitution of Bolivia, under great pressure from the opposition, was approved by 61.43% of the
population.
189
For a greater level of depth on this subject, it can be consulted the book "El empoderamiento popular en
América Latina. Un reto del nuevo constitucionalismo emancipatorio" by Liliam Fiallo Monedero and
Abraham Zaldívar Rodríguez (2011).
144
these countries is higher. With this premise, how could transaction costs be
decreased in Latin America localities?
A philosophy that I find interesting which has been brought to the business world
is Ubuntu. Canonical Ltd is a private company founded to create projects related
to free software. One of the most important projects of this company is the
creation of the Ubuntu operating system. The business management model is
based on offering a free product, in this case multiple software licensed under
free or open source, which is financed by service charges associated with its
operating system and the sale of specific technical support services. The name
Ubuntu comes from a South African ethical rule related to loyalty and equal to
others, that is, an Ubuntu person must be open and always available to others,
and is confident with himself because he belongs to a community ("I Am Because
We Are").
The software is designed with ease of use for the average user who can take
advantage of the developer community to improve his own operating system.
This is possible because of maintaining free and open software in the market,
through the use of Linux support190. I consider this type of management model to
foster a culture of cooperation/competition, while reducing transaction costs
among the community regarding the software. In addition it could contribute to a
change in business mentality, essential for Latin American societies, as problems
can often be resolved within the same community, without having to pay for the
services of outside persons or companies. Finally, it is important to highlight the
need of local development policies to focus on institutional change in a
transverse direction. Based on the gravitational-landscape approach proposed, it
is obvious that by not being able to predict juxtapositions between landscapes,
the same policy must ensure simultaneous effects on the system. This
explanation should serve mostly as an analytical tool, despite containing some
proposals in a practical sense, because as I have shown it is impossible to
190
Debian GNU/Linux (1993) is an operating system developed by volunteers around the world who
collaborate via Internet. It is distinguished by its non-commercial nature and open development model.
Debian does not sell its software directly, but makes it available online for anyone who wants to use. It also
allows individuals or companies to distribute the product commercially if they respect their license.
145
conceive of a single economic model throughout the region. I hope that the ideas
presented here can contribute to future research on the subject and better
development in Latin America.
146
CHAPTER 5 Indicators measuring local development in Latin America from
the gravitational-landscape approach.
5.1 Introduction
An indicator is the approximation of a phenomenon in quantitative terms, which
serves to measure dimensions of a predefined concept. This does not mean it is
purely descriptive, because it can also be prescriptive as the level of poverty and
subjective as the perception of insecurity (Rodriguez, 2000:12). It is therefore not
impartial or neutral, but a tool for whom makes it and applies it. For example, the
government of Ecuador made its National System of Social Indicators (SIISE) as;
"... objectives of assumed social policies or the policies that the
country will assume. Specifically, indicators compiled by SIISE
intend to support (i) diagnosis of the living conditions of the
population and social development trends in the country, and (ii)
analysis about the impact of social policies, monitoring the
achievements of social programs and the evaluation of the
commitments, national and international, made by the country's
institutions". Source: www.siise.gov.ec / indicador.htm
The previous sentence clearly demonstrates interest of the entity that made
these territorial indicators, prioritizing the measure of social progress that the
country has had in recent years. Later, the application's results will be an
instrument used to define new policies. Actually, this is one of the most important
functions of indicators that is meant to be used for design, management and
control of public policies.
A good indicator is one that fails to measure the dimension associated with it,
which in turn is a component of the main concept. In this sense analysis is very
rich at the theoretical level and much more if the subject's terms to measurement
belong to social sciences. If we consider the concept of development, we see
how difficult it can be to express it in a quantitative unit. The idea of development
is related to our material and spiritual expectations, to imaginary constructs and
147
to wishes and aspirations of human beings, which represent both a barrier to
measurement and a challenge for statisticians. Notwithstanding the limitations
faced when simplifying so complex a concept as development to some
indicators, it is always useful to have a methodology that allows comparison of
variables over time and between regions, because it is a way of assessing
whether there is progression or not in terms of development in a country or
region.
Specifically, Latin America has implemented in recent years a number of
indicators to measure local development. The United Nations Development
Programme (UNDP) through its national entities has greatly stimulated the
proliferation of these indicators. Interest has been delving into specific dynamics
of each area to understand the evolution and impact that public policies have
had. The same UNDP recognizes in its general report for 2003 the need to move
on particularism and not settle for results at the country level:
“All countries should address significant disparities between groups—
between men and women, between ethnic groups, between races and
between urban and rural areas. Doing so requires looking behind country
averages. Many countries with national averages indicating adequate
progress towards the Goals by the target dates have deep pockets of
entrenched poverty…” (PNUD, 2003:3).
In this way, it would have incorporated an analysis disaggregated by groups and
dimensions into reports prepared by the organization each year. A distinctive
case is Mexico for sustained work in incorporation of the inequality effect in the
human development measurement. Inequality between people and between
territories is a central issue for Latin America, because in spite of efforts to
decrease it, it remains the most unequal region in the world in terms of
revenue191. Only the application of a set of statistical indicators tailored to
characteristics of the countries can help focus the major problems and obstacles
to human development.
191
In the report on Human Development in 2011 the progress in reducing inequalities of the following
Latin American countries is acknowledged: Mexico, Brazil, Argentina, Honduras and Peru. Programs such
as Bolsa de Familias and Oportunidades in Brazil and Mexico, respectively, have been stressing such
behavior.
148
From the moment we define a social phenomenon, we are incorporating into the
concept an abstract number of ethical, cultural and ideological values, which in
turn change depending on the context and development of a society. The
definition of human development is perhaps one of the clearest examples, by
how its definition has evolved.
Since the UNDP defined Human Development as: the enjoyment of a long and
healthy life, acquiring knowledge and access to resources needed to achieve an
adequate standard of living (UNDP, 1993); it has incorporated other dimensions,
according to the progress of various analytical approaches. All of this has also
been reflected in its measurement, through changes in the human development
index (HDI)192 and in complementary indicators that have been developed, which
seek to express more accurately the dimensions of development.
The aim of following pages is to delve into territorial indicators that are applied
primarily in Latin America to the study of local development issues. I focus on two
specific indexes adjusted to the territorial level: the human development index
and the multidimensional poverty index. The first is used in order to highlight the
achievements in development dimensions and the second focuses on the
obstacles that still must be overcome, always linked to human development. My
interest is to analyze how the market has a bearing on the definition and
elaboration of indicators associated with development, as a gravitational force
that characterizes the current system. I would like to demonstrate that the use of
certain instruments can be empowering and valuing some institutions above
others. The results from this study may serve both to identify issues that should
focus on local public policies, and to define the kind of institutions that should be
stimulated in Latin America according to development approach.
192
The HDI (1990) opened the multidimensionality era for development in statistics which has been largely
argued by Amartya Sen.
149
5.2 Regional indicators measuring human development in Latin America:
the market as dominant force.
Concepts are interpreted according to time, level of advancement of sciences
and schools of thought that exist in a given period. In order to define complex
phenomena we often adopt adjectives, sometimes excessively as Sergio Boisier
aptly pointed out (2001) when he referred to different types of development and
to the tautological character of adjectives that identify it (human development,
local, sustainable development, etc..). I am not arguing that the division of fields
of analysis for the study of so a complex phenomenon as development is not
appropriate in some cases, but it is important not to make too many
simplifications. In fact, the same concept can be defined from different
perspectives, so people's perception of it evolves over time.
Characteristics of a country or locality also influence different perceptions about a
social phenomenon. The definition of human development presented by UNDP
tries to be consistent with this. If we look at its website193 we can read:
“Human development has always been flexible and “open-ended” with
respect to more specific definitions. There can be as many human
development dimensions as there are ways of enlarging people’s choices.
The key or priority parameters of human development can evolve over
time and vary both across and within countries” (UNDP, 2012).
The characteristics and aspirations of each local society are considered and
stimulated to enrich the conceptual and instrumental research about human
development from different points of view. A methodological opening like this is
consistent with the gravitational-landscape approach that I prefer to analyze with
the phenomena related to development. Both approaches emphasize the need to
take into account specificities of each locality and context. The imaginary
component that prevails in societies of study also influences the dimensions
defined as relevant to human development by expectations and aspirations of
community members. Then I will analyze how these definitions have evolved and
its reflection in HDI on a territorial level in Latin America.
193
I refer to the information found at: http://hdr.undp.org/en/humandev/ accessed on the date of
22.01.2012.
150
5.2.1 Dimensions that define the human development concept and its
evolution over time.
I will make the excellent work of Sabina Alkire (2010) entitled: "Human
Development: Definitions, Critiques, and Related Concepts" a main starting point.
In this book the authoress systematizes different definitions of human
development in UNDP general reports from 1990 to 2009. Despite different
definitions it is easy to realize a common idea that considers human development
to be a process of expanding the capacity and freedom of choice of individuals
(Alkire, 2010:13).
However, this common vision over the years has incorporated some nuances. In
1991 they were starting to talk about how growth must be well distributed and
sustainable, which was deepened particularly in the 1993 report entitled
"People's Participation". On this occasion the report argued: "Human
development involves widening [people’s] choices, and greater participation
enables people to gain for themselves access to a much broader range of
opportunities" (UNDP, 1993:21). Then, participation becomes a key element for
human development, while sustainability is the focus of next year. The 1994
report highlights this issue with the famous phrase: "the purpose of development
is to create an environment in which all people can expand their capabilities, and
opportunities can be enlarged for both present and future generations"194 (UNDP,
1994:13).
The principle of productivity is linked to equity and empowerment, which is clearly
reflected in the 1995 report. These principles have remained all these years,
while they have been supplemented by other principles related to civil rights. The
expression: "the expansion of people’s freedoms to live their lives as they
choose" (UNDP, 2009:14) clearly illustrates how progress has been made in the
conceptual discussion on human development. All of this can be seen in the box
below.
194
Other reports will also focus on the sustainability issue, for example: "Economic growth and human
development" (1996), "Water Scarcity" (2006), "Climate change" (2007-2008).
151
Table 1: Different dimensions considered in Human Development Reports by UNDP
(1990-2009).
Source: Alkire, “Human Development: Definitions, Critiques, and Related Concepts”, 2010:14.
This box shows the consensus on the view of human development that is
associated with the process of enlarging the capabilities and freedoms of men to
have a greater range of options. Living a long and healthy life, access to
knowledge and opportunities to do desirable things are among the most
important issues to consider for human development. Undoubtedly, this is an
issue very different from the prevailing assumption that development means a
greater accumulation of physical capital over the course of many years. Human
development within this new paradigm places man at the centre195.
However, it would be interesting to analyze the definition of this concept of
development through the prism of the gravitational-landscape approach.
195
According to Keith Griffin among the important background for a consensus of the new paradigm may
be cited: the report of the UNICEF as response to application of neoliberal policies in developing countries,
which defends the need for "adjustment with a human face", The North-South Round Table in 1985 and the
United Nations Committee for Development Planning that decided to include in its 1988 report the human
costs of structural adjustment (see Griffin, 2011:39).
152
Specifically, I would like to show the importance that the market has within the
definition of human development and how this is reflected in the indicators that
measure it. Does the fact that man becomes a central theme in the analysis
mean that market is losing its role as a driving force within the system? I have
already argued how, in my view, the market has expanded to reach an imaginary
collective; if I am right, we can see in that something as precise as the definition
of a concept and the set of indicators that measures it. In this sense, I will
analyze the dimensions contained in HDI.
It is important to consider that we are analyzing a summary index of human
development. This means that it is impossible to demand that this statistical
instrument achieves the measurement of all dimensions contained within the
concept. In this case, UNDP has identified as key dimensions: education, health
and adequate standard of living. Dimensions are clearly reflecting human
development partially due to the inclusion of only basic components in its
methodology. In a certain sense, this limitation has been ended with other
complementary indicators proposed by the entity that are presented all together
in annual reports responding to the addition of new categories (see Table 1).
Examples such as Inequality-adjusted income index (Gini per capita) and Gender
Inequality Index (GDI) can improve results of HDI and comparisons between
countries and/or territories. The following diagram shows the construction of HDI.
Fig. 6:
Source: http://hdr.undp.org/es/estadisticas/
153
I should clarify that the methodology presented in the above scheme
corresponds to the report of 2010 which made some changes to the index.
Although the dimensions remain the same, Education was formerly measured by
the Adult literacy rate and Combined gross enrolment in education (primary,
secondary and tertiary education). In contrast, the standard of living was
calculated using Gross Domestic Product (GDP) per capita adjusted for
purchasing power. Health does not undergo any variation and continues to be
determined by life expectancy at birth. Formulas for both methods are given in
Annex 3.
These changes are proposed to improve the index, that is, to more accurately
reflect current conditions in countries and territories to which it applies. For
example, adult literacy rate in the HDI had been introduced earlier, and it is
barely a discriminating indicator. To be binary (literate or illiterate) is not a good
tool to measure progress in acquiring knowledge. In addition, GDP being the
monetary value of goods and services produced in the country does not
recognize those revenues that, despite being produced in national, end up
coming to an external financial market. Substitution of this by Gross National
Income (GNI) excludes this type of income and incorporates other international
flows such as remittances. This latter change is a reflection of how the static
approach is also being excluded in statistics, which of course is in line with my
gravitational-landscape approach.
Turning to the analysis of the relationship between dimensions and indicators, we
see that income is not used as an indicator of personal well being, but as an
enhancer of human capabilities. That is why it is expressed in terms of a
logarithmic function (see Annex 3) with respect to index, which means that the
presence of diminishing returns of income generates human capabilities. By
reducing the standard of living dimension to GNI, the market is being highlighted
over other institutional factors because capacities are measured in line with the
market values of the current system.
Human capabilities can be associated with real freedoms (Alkire, 2010:41). For
example, the term real is used because the ability that a person should have to
154
access knowledge depends not only on income level, but above all on the
institutional framework of its social environment. Organizational systems for
education, infrastructure created, level of training of professionals involved and
the effective guarantee of rights196 are factors that influence the enhancement of
human capabilities. The same goes for other capabilities such as mobility of
people within and outside the country, artistic manifestations, cultural enrichment,
and so on. However, income is regarded as a distinguishing variable to measure
the enhancement of human capabilities, which expresses the level of life in
monetary terms.
Measurement of Education also has a strong influence on the marketgravitational force. Indicators in this case are related to the mean and expected
years of schooling. That is, school education is only a part of education that
people can receive over their lifetime. As well Griffin (2001) said that human
development prioritizes human capital accumulation. Since it has been shown
that investing in education it means increasing economic returns in the medium
and long term, even in greater proportion than investments in fixed capital, the
attention of economists has turned on this subject. The human development
index also reflects this approach, because it is supposed that the more years
(due or expected) of schooling a person has, the better he or she can contribute
to productivity and is capable of being creative. So, education is at the service of
the economy, and it becomes more technical according to the economic
advantages to be gained from it.
Health however, is the only dimension in HDI that is not directly related to the
market. Life expectancy at birth is the ultimate indicator that has measured this
dimension, and has not been subject to change over the years. Then it is
important to weigh each dimension in the index, and in doing so, to verify what
has been argued by analyzing correlations between variables. In this sense I
should also make a distinction between the two methodologies used by UNDP.
196
I am referring to equality that must be guaranteed to all citizens for universal access to knowledge,
regardless of income level, religious, race, gender, age and/or ideology.
155
The new HDI gives equal weight to all three dimensions, including both
subscripts contained within the dimension of education that in the last method
were subjected to a different weighting (see Annex 3). This change is due to the
normative judgment that gives equal importance to the three dimensions within
the concept of human development. The current HDI is also based on the
geometric mean that differentiates it from its predecessor. The geometric mean
reduces the substitutability effect between dimensions, which occurs when low
values in one dimension is offset linearly with high values in another
dimension197. This is how the current HDI is constructed:
HDI = 3 LEI * EI * II
(1)
LEI: Life Expectancy Index (Life expectancy at birth)
EI: Education Index (Mean Years of Schooling Index and Expected years of schooling)
II: Income Index (Gross national income at purchasing power parity per capita)
This formula differs from that used in the previous methodology:
1
1
1
HDI = LEI + EI + GDP
3
3
3
(2)
LEI: Life Expectancy Index (Life expectancy at birth)
EI: Education Index (Adult Literacy Index and Gross Enrollment Index)
GDP: Gross domestic product
However, it is interesting to compare correlations between various indicators and
the resulting HDI with the objective of verifying how much the Health dimension
contributes in the variation of HDI in comparison with the rest of dimensions that
are associated with the market. To do this I work with the UNDP database in
Latin American countries to which they have calculated the HDI with the new
methodology. Results are shown below.
Graph 4: Correlation between dimensions and HDI for 2011.
HDI-LEI
Latin America (2011)
HDI-EI
Latin America (2011)
1
R2 = 0.8747
0.3
R2 = 0.6842
0.9
0.8
0.25
0.7
0.2
0.6
0.5
0.15
0.4
0.1
0.3
0.2
0.05
0.1
0
0.000
0.200
0.400
0.600
0.800
1.000
0
0.000
0.200
0.400
0.600
0.800
1.000
197
The theoretical substantiations on the change in methodology as well as some technical notes can be
read on the website: http://hdr.undp.org/es/estadisticas/idh/
156
HDI-II
Latin America (2011)
0.8
0.7
2
R = 0.8572
0.6
0.5
0.4
0.3
0.2
0.1
0
0.000
0.200
0.400
0.600
0.800
1.000
Certainly a positive linear correlation cannot determine causality between two
variables, but it expresses the relationship of variability in their dynamics. With
these graphs a strong correlation is shown between variables of the Education
and Standard of living dimensions, both with strong elements of the market.
Health, however, is influences the behavior of HDI the least. However, it is
interesting to note what happened to the previous HDI methodology. UNDP
publications also have helped to conform the following graphs, in this case for
2005.
Graph 5: Correlation between dimensions and HDI for 2005.
HDI-EI
Latin America (2005)
HDI-LEI
Latin America (2005)
1.00
R² = 0.7004
0.80
0.80
0.40
0.60
0.20
0.00
0.65
R² = 0.7299
1.00
0.60
0.40
0.7
0.75
0.8
0.85
0.9
0.20
0.00
0.65
0.7
0.75
0.8
0.85
0.9
HDI-GDP
Latin America (2005)
1.00
0.80
0.60
0.40
0.20
0.00
0.65
R² = 0.8324
0.7
0.75
0.8
0.85
0.9
The results change a bit because with these graphics, HDI dynamics of countries
of the region are less explained by education. However, standard of living,
expressed in monetary terms, remains as the indicator, which presents a higher
correlation with the index. What does this all mean? In my view, it is not only a
157
problem of methodology but a reflection of how the market is the driving force for
today's society, which is naturally expressed in HDI. A statistical tool is a
descriptor of reality, albeit partial, so that the results reinforce my gravitationallandscape approach.
5.2.2 The human development index applied to different territorial contexts
in Latin America.
As the aim of HDI is a comparison between several countries with very different
realities, it is acceptable to base it on key indicators, necessary to ensure
development for people. This implies that there are cases where it exceeds the
minimum necessary for development, without this meaning there is a significant
advance in terms of human development. In addition it does not reflect regional
differences within countries. Methods of measuring human development at the
territorial level are a better statistical approach and a more effective tool for
evaluating public policies of a country. In this sense, formulation of indices must
satisfy two important conditions: necessary information is available locally and
indicators associated with different dimensions are sensitive enough to reflect
regional disparities.
Latin America is a region that has fostered the creation of several of these
territorial indexes, which have generally been published in UNDP's national
reports. However, most of these proposals maintain the same variables and
national HDI dimensions, and try to compare territories as if they were separate
countries. In the box below I synthesize some of these initiatives in order to
achieve an overview of the contributions of the region.
Table 2: Proposals of Human Development Territorial Indexes in selected countries of
Latin America.
UNDP’s
entity
Human
Development
Index
World
HDI
(2011)
Bolivia
Municipal HDI
(2001)
Education
Health
Standard of living
-Expected years of
schooling
-Average years of
schooling
-Adult literacy rate
-Combined
gross
enrolment ratio for
Life expectancy at
birth
GNI per capita
(PPP US$)
Life expectancy at
birth
Consumption index
per capita
158
primary
and
secondary
-Average years of
schooling
-Adult literacy rate
Life expectancy at
Municipal income
per capita
-Gross enrolment rate birth
-Adult literacy rate
Years of
-Average household
-Combined gross
income per capita
Potential life lost
-Incidence of
enrolment ratio
HDI-Community
Chile
(preschool, primary,
poverty
(2005)
secondary..)
-Average years of
schooling
Municipal HDI
-Adult literacy rate
Years of
Municipal income
Colombia
(2011)
-School attendance
child survival
Index
-Adult literacy rate
Years of
Average household
Municipal HDI
Mexico
-School attendance child survival
income (PPP
(2004)
(6-24 years)
US$)
-Adult literacy rate
Life expectancy at GDP per capita
Municipal HDI
(PPP US$)
-Average years of birth
Paraguay
(2003)
schooling
-Adult literacy rate
Life expectancy at Average household
-Combined gross
birth
income
HDI-District
Peru
enrolment ratio
(2009)
(preschool, primary,
secondary school)
This is compiled from various country reports on human development that have been elaborated in various
UNDP reports in several years.
Brazil
HDI-M
2003).
Then, repeated constraints of HDI are repeated internally the way to compensate
them is the same way used by the UNDP. That means that complementing the
territorial index with other human development indicators provides a more
comprehensive view of local situations. Despite some novel analytical
considerations in the process of adjusting the methodology for different spatial
environments, a territorialized HDI has resulted.
Dimensional education is the most changed from country to country, but
generally those indicators used in some UNDP reports follow suit. In this newest
proposal is the replacement of the mean years of schooling by school
attendance, incorporated for the first time in Mexico. The reason the Mexican
entity prefers school attendance rate rather than enrollment was due to the effect
of migration. From within this country it is often the fact that people prefer to
study outside locality where they live, that makes municipalities the net exporters
159
of students and other receivers. This requires a redefinition of variables that best
fit the local situation (UNDP-Mexico, 2004:53).
In addition, the number of enrollments in a territory cannot reflect the real
presence of students at school. This was another of the arguments that led to
this choice of indicator. Then school attendance for the Mexican case reflects
more accurately the actual opportunities of learning within the educational
dynamic for the school aged portion of the population. This indicator has been
made in Mexico on the basis of census data and information from schools. The
result is the percentage of school aged persons attending any educational
institution at the time of information collection, which ensures that information is
strictly spatial (Albina Pol, 2007:37).
The newest Health dimension at the country level compared to the HDI general
reports is the consideration of child survival rate. According to territorial reports
that justify its application over the life expectancy at birth, there is a high
correlation between these indicators, so it should not be a considerable variation
in the final results of the index and thus can evaluate the achievements in this
specific indicator. Countries that follow this approach are Mexico and Colombia.
Chile meanwhile prefers to calculate the number of years of potential lost life198
to evaluate their health dimension into the HDI. After checking homogeneity of
life expectancy at birth in Chilean territory, they chose this indicator which is
characterized by a higher variance.
This discriminating indicator chosen by Chile may be more efficient; however it
depends on country characteristics. If there is no homogeneity among territories
for life expectancy at birth, the calculation of this new indicator is complex. It is
also necessary to have a sufficient database, which is not easy to make in some
countries. In this case the under-five mortality rate might be more feasible, and it
fits well conceptually with the criteria for measuring UNDP at the country level.
The standard of living is the most diverse dimension in its calculation at the
territorial level, away from the UNDP consideration that has prevailed for many
198
"The potential lost life years is calculated as the number of life years that are lost due to premature
deaths. For example, if the ideal of survival is set at 80 years, a person dying at age 70 means that it lost 10
years of potential life" (Albina Pol, 2007:35).
160
years, which is associated with the dimension to GDP per capita. Except
Paraguay, the other countries of the region choose indicators that better reflect
the capabilities of people in this dimension. For this purpose, Bolivia accepts
consumption as the indicator that best summarizes the living conditions of
households, while most countries recognize income as a variable that has more
weight in the dimension. Chile in this case, highlights for adjusting the indicator
according to the incidence of income poverty.
The human development indices on the territorial scale that we have discussed
so far are a reflection of the market presence as a condition of expectations and
aspirations of society. The dimensions of Education and Standard of living
remain as an expression of this, while Health is on the sidelines. An interesting
proposal that I did not include in Table 2 because it distances itself from general
trend in the region, is the Index of Territorial Human Development and Equity
published in Cuba (2000). It is the only so far that has tried to reflect human
development without a commercialized prism.
In this case, indicators are not limited to those considered in the HDI, but extend
to following: economic development, personal consumption, education level,
health of the population, access to basic services, access to energy, quality of
housing, and political participation. The table below shows these dimensions and
their associated variables.
Table 3: Dimensions and indicators used in the methodology of Index of Territorial
Human Development and Equity in Cuba
Dimension
Indicators
Economic development
Personal consumption
expenditures
Level of basic education
Health status of the
population
Access to basic services
Access to energy
Quality of housing
Political Participation
Volume of investments per capita (Pesos)
Value of retail trade turnover per capita (Pesos)
Combined gross enrolment ratio (6-14 years) (%)
Life expectancy at birth
Percentage of the population with access to potable water
Percentage of population with access to electricity
Percentage of houses in good condition
Percentage of voters in recent elections
Source: Candido Lopez: "Human development land in Cuba: Methodology for evaluation and results." In
Economy and Development Magazine Special Edition Faculty of Economics, 2004.
161
Traditional dimensions of HDI can be reflected in this Cuban index, so we can
associate them as decent living standards to economic development, personal
consumption, access to basic services, energy and housing quality. In contrast,
incorporation of political participation is the newest of the proposal, which in my
view, is a reflection of how ideoscape is central to the Cuban reality and how
indicators define the measurement of local development and respond to
particularities of this proclaimed socialist country.
Of the eight dimensions, with which Cuba responds to its conception of human
development, only three are directly linked to the market. However, the proposal
also has some methodological difficulties. It is related to the fact that indicators
are not sensitive enough to actually contribute, in all cases, to the identification of
the challenges facing the territories to advance in terms of human development.
Variables such as life expectancy at birth and enrolment in school become very
homogeneous in the country internally, reaching in all cases optimal values199,
and thus limiting the effectiveness of this statistical tool to measure regional
inequalities.
Then it should be interesting to check, as I did for HDI of UNDP general reports,
how the correlations behave between dimensions and some territorial indices are
proposed in the region. The aim is to demonstrate with statistics what has
already been analyzed theoretically. Here are some correlations for Bolivia and
Mexico. I selected these two Latin American countries because they made
interesting modifications to the general methodology of the HDI.
In the case of Bolivia, the most notable change is in relation to the rate of
consumption. Then it would be useful to analyze if that has changed anything in
the final correlation with the HDI at the territorial level. The year selected was
almost random, and actually depended on the available database for this
country.
199
See "Investigación sobre desarrollo humano y equidad en Cuba 1999" (CIEM, 2000) and "El desarrollo
humano y la equidad en Cuba a escala territorial: visión actualizada" (PNUD, 2003).
162
Graph 6: Correlation between dimensions and Municipal HDI in Bolivia for 2001.
Municipal HDI-Health
Bolivia(2001)
Municipal HDI-Education
Bolivia (2001)
2
R = 0.8004
0.800
0.700
0.600
0.500
0.400
0.300
0.200
0.100
0.000
0.00
2
R = 0.6789
0.800
0.700
0.600
0.500
0.400
0.300
0.200
0.100
0.20
0.40
0.60
0.80
0.000
0.00
1.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
0.80
Municipal HDI-Standard of living
Bolivia (2001)
2
R = 0.8372
1.000
0.800
0.600
0.400
0.200
0.000
0.00
0.10
0.20
0.30
0.40
0.50
0.60
0.70
Then, introduction of the consumption rate did not affect differences of correlation
between dimensions within Municipal HDI. Both Education and Standard of living
are positively correlated linearly, while Health has less weight.
The case of Mexico would be even more interesting for having modified two
dimensions: Education with the school attendance rate and Standard of living
through the average household income. The graphs below show the results.
Graph 7: Correlation between dimensions and HDI of Mexico’s States for 2007.
HDI of Mexico’s States-Education
México (2007)
HDI of Mexico’s States-Health
México (2007)
R2 = 0.7682
1.2
2
R = 0.4766
1
0.8
0.86
0.6
0.85
0.84
0.4
0.83
0.82
0.2
0.81
0
0.0000
0.1000
0.2000
0.3000
0.4000
0.5000
0.6000
0.7000
0.8000
0.9000
0.8
1.0000
0.0000
0.1000
0.2000
0.3000
0.4000
0.5000
0.6000
0.7000
0.8000
0.9000
1.0000
HDI of Mexico’s States-Standard of living
México (2007)
2
R = 0.9261
1
0 .9
0 .8
0.7
0 .6
0.5
0 .4
0 .3
0 .2
0.1
0
0.0 000
0 .100 0
0.2 000
0.30 00
0.4 000
0 .500 0
0 .6 000
0.7000
0.8 000
0.900 0
1.00 00
In this case Health has little impact, being the average household income that
causes the greatest effect on the behavior of HDI at the territorial level. The
163
inclusion of remittances within this index may be the cause of this result because
it is an important source of income for the country. With these graphs it notes the
above conclusion, that is, the incidence of the market as a dominant element that
affects the idea of development and therefore the indicators which serve to
measure it.
5.3 The multidimensional poverty index: a complementary tool in the
measurement of local development.
During a speech in 1973, McNamara defines the following: “This is absolute
poverty: a condition of life so limited as to prevent realization of the potential of
the genes with which one is born; a condition of life so degrading as to insult
human dignity” (McNamara 1973; citado en Alkire, 2010:148). From this it was
identified that about 40% of people in absolute poverty in underdeveloped
countries, focused the interest of scientists and experts from international
organizations. The World Bank (1978) stated that growth and modernization
were not sufficient to reduce poverty, so it is required to establish measures of
adjustment within countries. As such, Latin America passed through the eighties.
Until the nineties, poverty was treated from a one-dimensional approach, that is,
through its economic dimension. Although there are arose an awareness of the
need to incorporate multidimensionality in analysis, it was not until the new
century that this became a reality in studies of international institutions that are
linked to the phenomenon. In Development Bank report in 2000, it was
articulated what the three pillars of poverty reduction are considered to be:
opportunity, security and empowerment. In line with evolution that interpretation
of human development has taken, the concept of poverty has evolved into a
more holistic approach.
Then, poverty is considered as follows:
“Poor people live without fundamental freedoms of action and choice that
the better-off take for granted. They often lack adequate food and shelter,
education and health, deprivations that keep them from leading the kind of
life that everyone values. They also face extreme vulnerability to ill
health, economic dislocation, and natural disasters. And they are often
exposed to ill treatment by institutions of the state and society and are
164
powerless to influence key decisions affecting their lives. These are all
dimensions of poverty” (Alkire, 2010:72).
Based on this, it has recently made the multidimensional poverty index (2010). I
have decided to incorporate it into this analysis by considering one of the latest
important statistics related to study of social phenomena, while maintaining a
close link with the concept of human development.
Various indicators have been developed prior to this index to measure poverty.
For example, we have the number of poor rate, calculated by poverty line, that is,
the minimum level of income deemed adequate in a country. The poverty gap
index that incorporates the analysis of income gaps, that is, studying how far
distant the poor are over poverty line. Another indicator is the index of FosterGree-Thorbecke (FGT), which gives greater weight to more pronounced deficits.
However, all of them respond to the mercantilized approach because poverty is
reduced to income level. Let's move on to last index developed by UNDP in
collaboration with Oxford University, specifically with "Oxford Poverty & Human
Development Initiative" in 2010.
This new index complements the poverty indicators mentioned above, as it
introduces new parameters not measured in monetary terms. Its predecessor
was the human poverty index in the two modalities (HPI-1 and HPI-2), and both
were created since 1998. The HPI-1 was made for undeveloped countries, which
measured the same dimensions as HDI, but was adjusted at the end of the
index. In this case the indicators per dimension are:
Table 4: Dimensions of the HPI-1
Dimension
Long and healthy life
Knowledge
Decent standard of living
Indicators
Probability at birth of not surviving to age 40 (times 100)
Adult illiteracy rate
-Unweighted average of population without sustainable access to an
improved water source
-Children under weight for age
Compilation based on:
http://hdr.undp.org/en/media/HDR_20072008_Tech_Note_1.pdf
Here the dimension that changes the most compared to the HDI is the standard
of living. In this case the indicator is not income per capita, but is measured by
165
access to water and food. Despite limitations of the index because it reduces
complex phenomena to a few parameters, here the market-gravitational force
loses weight. In the same year the Organization for Economic Cooperation and
Development (OECD) applied a different methodology that became known as
HPI-2. This index differs mainly from the former by taking into account social
exclusion. These are the indicators that it considers:
Table 5: Dimensions of the HPI-2
Dimension
Long and healthy life
Knowledge
Decent standard of living
Indicators
Probability at birth of not surviving to age 60 (times 100)
Adults lacking functional literacy skills
-Population below income poverty line (50% of median adjusted
household disposable income)
-Rate of long-term unemployment (lasting 12 months or more)
Compilation based on:
http://hdr.undp.org/en/media/HDR_20072008_Tech_Note_1.pdf
This index approach tends to enhance the market again. By considering that
"functional literacy" is a reflection of the new requirements of the market, it is
expressed in the need to develop an adjusted productive framework to technical
progress. The use of new technologies, particularly those associated to computer
technology becomes a key element for economic development, and therefore it is
also assumed as a way to eradicate human poverty. Moreover, the labor market
is also represented by the long-term unemployment rate.
The multidimensional poverty index (MPI) replaces the two previous indices.
Dimensions remain the same, and those that are consistent with the conception
of human development are associated with parameters that are more numerous.
166
Fig. 7: Indicators of the Multidimensional Poverty Index.
Source: Alkire & Santos: “Acute Multidimensional Poverty: A New Index for Developing Countries”,
2010:20
The unit of analysis is the household, which differs from other traditional
indicators which can make comparisons between groups of people and thus
measure inequities also within households. However, this new classification is
preferred by the data needed. According to the authoress, the only indicators that
are available disaggregated at the individual level are the years of schooling and
variables related to the standard of living (Alkire & Santos, 2010:13).
The choice of indicators for each dimension situates the market as an element
among others and not as the most important element within the index. Indicators
to measure Education continue to prioritize the needs of human capital. In
contrast, the Standard of living dimension changes the approach because it is
not expressed directly in monetary terms: it is priority to access the basic
services (water, electricity) and the minimum condition at home, and it includes
assets and possession associated with modern life such as television, radio,
telephone, refrigerator, etc.
The methodology used to construct the index is shown in Annex 2, and now I will
mention only the weighting system used. The weight that each indicator has in
the IMP depends on the number of variables that the dimension contains. Thus
we have indicators measuring education and health that are weighted by the
coefficient 1/6, while those related to Standard of living are weighted by 1/18. In
this sense the same principle of weighting of the HDI remains, but with a
167
difference in approach. A household is considered multidimensionally poor if it is
deprived of 30 percent or more of the all dimension, so that each component is
equally important. In this case, variables do not overlap with other ones and the
end result achieves a greater realism.
This is an index still widely applied in Latin American communities because of its
recent creation; however I can say that it is a very useful tool for policy related to
local development. The MPI considers richer elements of human reality and also
avoids excessive weighting of market institutions. The analysis of this index
along with its complement, the human development index, has uncovered how
my methodology is manifested in the instrumental level of the proposal for
studying social phenomena.
168
Conclusions
•
The systematization of Latin American economic thought has been classified
into two main groups of all proposals on Local Development in the region.
This classification corresponds to the assumptions made by the authors. On
one hand there are those who consider the market as the best means of
achieving social integration and economic development. On the other hand,
there are those who defend the idea that the capitalistic market is
exclusionary in nature and as a result of this it does not encourage
development by itself. Among the representatives of both streams are Sergio
Boisier and José Luis Coraggio, respectively.
•
The local development proposal of Sergio Boisier emphasizes three key
elements: the need for the territorial system to become more complex, the
stimulation of synapse between its components and the achievement of
synergy of the system. It is essentially a theory that seeks to promote
diversification of economic and organizational structure of the locality.
Globalization in this context represents a new opportunity for integration, but
the Latin American communities must change the institutional framework
established, and enhance capacities and endogenous resources.
•
Contrary to the break that the author himself has recognized, referring to the
evolution of his thought, there were elements of continuity between this local
development model and INDUPOL strategy proposed in the seventies.
INDUPOL represented an adaptation of Perroux's theory of poles for Latin
American conditions. Although the methodological approaches are different,
the results of the proposals are similar. Both models prioritize interaction
between elements or subsystems, the need to create a "culture of
development" and the responsibility of the actors, organizations and
institutions of the territory as development promoters. Therefore, it is wrong to
speak of an absolute break in the evolution of Boisier's thought.
•
Coraggio's proposal, in contrast, is based on the Economy of Labor. This
author divides local society into three subsystems: Business-Private
Economy, Public Economy and Popular Economy. In this sense, the author
169
recognizes Popular Economy as the socioeconomic substrate of a possible
alternative development, however it should favor the internal organic of this
sector to ensure institutional change of the system. The Economy of Labor
would be the political project that would accompany the society in the
transformation period. His proposal ends up being more political than
economic, with the limitation of focusing too much on the Popular Economy
sector, so he does not achieve a systemic model for local development.
•
The study of the works of Boisier and Coraggio has also allowed me to
understand the evolution of Latin American thought in the last forty years.
Thus an interest to change is found, depending on different contexts. Both
authors have changed from specializing in regional planning issues to
become promoters of local development. A marked incidence of certain
currents of thought in the region also reflects the time and the concerns of the
Latin American thinkers. Among authors who have exerted a strong influence
are: Perroux, Bourdieu, North, Scott, Storper, Albuquerque, Castells, Borja
and Sassen. Notwithstanding differences in contexts, concern for the
establishment of an appropriate institutional framework has been central
throughout the period (1971-2011).
•
The comparison between these two Latin American authors was able to
confirm some theoretical and methodological limitations. Both are based on
current institutional framework in Latin America, where action is needed.
However, they do not carry out a historical analysis of the institutions'
evolution that it is comprised of. Local development models tend to
disconnect from the global world: Boisier's model does not analyze
dependency relationships between communities and between countries, while
Coraggio's focuses only on the Popular Economy subsystem. Finally, both
follow a static approach, which does not allow the study of phenomena like
the flow of cultural and ethical values among the local societies.
•
From the methodological limitations of these authors and based on
characteristics of the current context, I have seen that it is fit to propose a
new method for the analysis of economic phenomena, and specifically for the
170
design of local development policies. From the complexity theory perspective,
the anthropologist Arjun Appadurai's proposal seemed to me the most
successful,
according
to
the
way
he
treats
the
deterritorialization
phenomenon. In this approach I have drawn in the design of landscapes, with
which I combined my vision of gravitational order by developing a new
methodology that aims to address shortcomings of the approaches used by
Latin American authors.
•
With the new proposed method I demonstrate how the market forces have
shaped local and national dynamics. The evolution of institutions in Latin
America, through this approach, verifies North's thesis that the key to
development is the ability to adapt to a changing environment, although the
impact of other external and circumstantial factors are also acknowledged.
Institutions in this case must be analyzed in relation to specific environment of
each country/location. Although there are international institutions, its effects
will always depend on other elements with which they interact. This
conclusion is opposed to proposals of many Latin American economists such
as those of Boisier and Coraggio, which generalize particularism and present
local development models with regional scope.
•
The kind of institutions that are necessary to stimulate Latin America depends
on the approach followed. The stream that represents Sergio Boisier focuses
on stimulating market institutions. The velocity of reaction and the flexibility
and intelligence to learn are the keys to development for these authors. In
contrast, the current of thought that José Luis Coraggio is a member, implies
that other values of society such as solidarity should be enhanced. The model
emphasizes the strengthening of civil society. However, following the
gravitational-landscape approach, I realize that a local development strategy
that would be truly effective is one that contains elements of both streams,
because the proposals are easily complementary.
•
Some lines of action that I think could be inserted in future local development
strategies in Latin America are: to take advantage of the flow of migration,
designing local policies attractive to its residents abroad, to instill civic values
171
and solidarity in people through a comprehensive educational process, and to
extend management models such as Debian GNU/Linux that promote the
culture of cooperation/competition while reducing transaction costs. These
would be just a few suggestions for the design of local policies. Due to the
diversity of environments the best contribution that can be done in this sense
is relative to an analytical method rather than a series of economic measures.
•
Finally, I analyzed the Human Development Index (HDI) at the territorial level,
among indicators that measure local development in Latin America. Different
methodologies that have been proposed in the region, despite some
variations resulting from specific conditions of territories, maintain the same
principles of the index applied worldwide. This results in the correlation of
coefficients between variables and the resulting HDR shows how the market
is the driving force behind today's society, and reinforces the central idea that
is based on my gravitational-landscape approach. Other statistical tools such
as the Multidimensional Poverty Index, although it has not spread much in the
region for its recent development, must complement studies conducted on the
phenomenon.
•
A locality requires public policies tailored to their peculiarities. Indicators can
be useful tools for recognizing the key issues relating to local development,
but these instruments are more effective if they are able to adapt to territorial
demands. The introduction of multi-dimensionality in variable selection has
tuned these statistical tools to the topics discussed mostly in theory. The
multidimensionality to address local development issues is precisely what
unites so many different proposals like those of Boiser, Coraggio and mine
with statistics.
172
ATACHMENTS
Annex 1.
Using the tool
to generate word clouds, I get the names of the authors most
cited by Sergio Boisier. This tool is to highlight the most repeated words in a text
and it is available on the website: http://www.wordle.net/ . It is also known as
"word clouds" by the way the result is projected.
The database that I worked in this case is settled by the author's articles and
books published in the period 1971-2011.
173
Annex 2.
Using the same tool
that I used for Annex 1, I get the most cited authors in
the work of José Luis Coraggio. Articles and books by this author are used to
produce a cloud of words covering the period 1971-2011.
174
Annex 3.
New methodology for 2011 data onwards
UNDP began using a new method of calculating the HDI since 2010. The following three
indices are used:
Finally, the HDI is the geometric mean of the previous three normalized indices:
Methodology used until 2011
This is the methodology used by the UNDP up until its 2011 report.
The formula defining the HDI is promulgated by the United Nations Development
Programme. In general, to transform a raw variable, sayx, into a unit-free index between
0 and 1 (which allows different indices to be added together), the following formula is
used:
The Human Development Index (HDI) then represents the uniformly weighted sum with
⅓ contributed by each of the following factor indices:
Source: Based on http://hdr.undp.org/en/media/HDR_2010_EN_TechNotes_reprint.pdf
175
Annex 4.
Methodology of Multidimensional Poverty Index
The MPI value is the product of two measures: the multidimensional headcount ratio and
the intensity of poverty.
H is the proportion of the population who are multidimensionally poor, and A reflects the
proportion of the weighted component indicators.
Source: Based on http://hdr.undp.org/en/media/HDR_2010_EN_TechNotes_reprint.pdf
176
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