Structuralist Economics

Economic Approaches:

Key assumptions and aspects:

Structuralist economics emerged in Latin America during the 1950s out of a quest to better understand global inequality and how developing countries could grow. The Ricardian and neoclassical theories of comparative advantage did not seem to be able to explain why many developing countries experienced so many difficulties growing. While the use of military force had previously been crucial for colonial oppression and economic extraction, structuralist economists tried to understand how unequal development could continue through more invisible processes. A key insight economists, such as Raúl Prebisch, developed was that the economic structures of countries, such as sectoral specialization patterns, technological capacities, and the institutional arrangements concerning labour, financial and international commodity markets, were crucial in these matters. Unequal economic development is possible because of contrasting international economic structures, with a hegemonic industrial centre and a dependent agricultural periphery. A key source of inspiration for structuralist economics was Keynesian economics, but many other strands of economic thinking such as historical, institutional, neoclassical and Marxian economics, also influenced the approach. There is also overlap with other approaches, such as world system and dependency theory, which also emphasize unequal global economic relations, although they build more on Marxian ideas.

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