Underdevelopment, development, and the Dutch disease: the seminal and still relevant theory of Celso Furtado

ABSTRACT Furtado, one of the founding fathers of the United Nations Economic Commission for Latin America and the Caribbean (ECLAC), can be considered both a classical developmentalist and an ECLACian. However, in view of the independence and originality with which he analyzed the problem of underdevelopment, leading to exhaustion his emphasis on historical, economic, and social particularities in the formulation of explanatory theories of development and the tendency to stagnation in periphery countries, it is acceptable to surrender to the pleonasm that Furtado bequeathed a Furtadian theory of development. This paper analyses Furtado’s main thesis on underdevelopment, development, and stagnation. The study has two main contributions: first, to emphasize that, by having formulated an analytical approach in which underdevelopment and development are strongly conditioned by historical and social factors, Furtado’s theory is still relevant for understanding many economic problems of periphery countries like Brazil and other Latin American countries today; and second, which is my another contribution, to show that it was Furtado (and not other economists) who, by investigating the issue of natural resources abundance in the Venezuelan economy at the end of the 1950s, pioneeringly elaborated a refined theory on the phenomenon that would later be termed the “Dutch disease” and “the resource curse”.