World War II and Industrialization Policies in Latin America: The Cases of Argentina and Brazil

Abstract Raúl Prebisch and Celso Furtado were two important contributors to development economics and to the theories and policies defended by the United Nations Economic Commission for Latin America (ECLAC). In this article, we argue that understanding their ideas, and how industrialization became a key concern, requires paying closer attention to the geopolitical changes brought by World War II. We discuss how Argentina and Brazil, their home countries, navigated the troubled waters brought by the war and the international trade disruptions and turned state-led industrialization into a key development strategy. After the war, the United States became the new hegemonic power and adopted a universalist foreign policy, based on the newly created international agencies. At home, the internationalist businessmen promoted the partnership capitalism that became central to the foreign policy during the Truman administration and onward, making industrialization a key interest. Internationalism was also what Latin American countries used to counteract the US hegemony even before the war, which culminated in the creation of ECLAC after the war. The intellectual paths of Prebisch and Furtado toward industrialization policies were shaped by the changing international order and by local developments in their countries including the building of a more scientific statistical system that would better help the state to design development policies.