JOSÉ LUIS MACHINEA Executive Secretary ERNESTO OTTONE Acting Deputy Executive Secretary a.i. Economic Commission for Latin America and the Caribbean econimic commission for latin america and the caribbean CEPAL Review NUMBER 94 APRIL 2008 SANTIAGO, CHILE OSCAR ALTIMIR Director REYNALDO BAJRAJ Deputy Director The CEPAL Review was founded in 1976, along with the corresponding Spanish version, Revista de la CEPAL, and is published three times a year by the United Nations Economic Commission for Latin America and the Caribbean, which has its headquarters in Santiago, Chile. The Review, however, has full editorial independence and follows the usual academic procedures and criteria, including the review of articles by independent external referees. 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CEPAL REVIEW 94 5 S UMMARY ECLAC in its historical setting 7 Tulio Halperin Trade and investment rules: Latin American perspectives 27 Pierre Sauvé Poverty and employment in Latin America: 1990-2005 41 Simone Cecchini and Andras Uthoff Oil extraction and deforestation: a simulation exercise 57 Diego Azqueta and Gonzalo Delacámara Determinants of technological innovation in Argentina and Brazil 71 Eduardo Gonçalves, Mauro Borges Lemos and João de Negri Trade-growth relationship in Cuba: estimation using the Kalman fi lter 97 Pavel Vidal Alejandro and Annia Fundora Fernández Female-headed single-parent households and poverty in Costa Rica 117 T.H. Gindling and Luis Oviedo Urban segregation and school backwardness in Rio de Janeiro 129 Fátima Alves, Creso Franco and Luiz César de Queiroz Ribeiro Public-debt management: the Brazilian experience 145 Helder Ferreira de Mendonça and Viviane Santos Vivian Guidelines for contributors to the CEPAL Review 163 Recent ECLAC publications 164 APRIL 2008 Explanatory notes The following symbols are used in tables in the Review: … Three dots indicate that data are not available or are not separately reported. (–) A dash indicates that the amount is nil or negligible. A blank space in a table means that the item in question is not applicable. (-) A minus sign indicates a defi cit or decrease, unless otherwise specifi ed. (.) A point is used to indicate decimals. (/) A slash indicates a crop year or fi scal year; e.g., 2006/2007. (-) Use of a hyphen between years (e.g., 2006-2007) indicates reference to the complete period considered, including the beginning and end years. The word “tons” means metric tons and the word “dollars” means United States dollars, unless otherwise stated. References to annual rates of growth or variation signify compound annual rates. Individual fi gures and percentages in tables do not necessarily add up to the corresponding totals because of rounding. 7 CEPAL REVIEW 94 • APRIL 2008 KEYWORDS Economic history Economic policy Capitalism ECLAC Economic systems ECLAC Prebisch, Raúl in its historical setting Economic development Development policy Latin America Argentina Tulio Halperin T his lecture discusses the features of the colonial situation in Latin America that conditioned the region’s economic and social performance in the nineteenth and early twentieth centuries. It deals in particular with Argentina, looking at the events following the First World War through to the beginning of the Second World War. Those events were formative in the education and experience of Raúl Prebisch, who 30 years later would give ECLAC its fundamental characteristics. The lecture examines the ideas that ECLAC contributed to the debate on Latin American development and the evolution of the countries that applied those ideas. It also looks at the external and internal circumstances that changed the context in which development policies were implemented from the middle of the 1970s onwards. Lastly, it identifi es the most recent changes in the world economic situation, and the role of ECLAC in defending the ideas of freedom, well-being and tolerance, which are the essence of modern civilization. Tulio Halperin, Professor Emeritus, Department of History, University of California, Berkeley. ✒ [email protected] 8 CEPAL REVIEW 94 • APRIL 2008 When I learned that I was to be asked to give Yet even before 1776, when Adam Smith the Seventh Prebisch Lecture, my fi rst thought was published his Inquiry into the Nature and Causes how to avoid disappointing those who had extended of the Wealth of Nations, those responsible for me this rather daunting honour. It occurred to me administering the overseas empires of Spain and that, in selecting an historian for the occasion, the Portugal were already addressing the economic Commission was hoping for something different from problems there in the spirit of the new times. They the offerings of those who had previously taken this saw, with growing clarity, that the practices that had podium. I would not be able to look for inspiration, seen them virtually unscathed through more than two then, to the contributions of those eminent persons, centuries with ever more formidable rivals constantly from Celso Furtado to Fernando Henrique Cardoso, entering the scene, fi rst in Europe and then overseas, who had played a sometimes decisive role in the chapter were fast losing their effectiveness. of Latin America’s history that includes the trajectory Indeed, it was awareness of the increasing fragility of ECLAC, nor to those of Joseph Stiglitz and Dani of the Iberian empires that drove their administrators Rodrik, both renowned economists able to speak with to consider the new perspectives offered by political absolute authority on issues where prudence forbids economy. They hoped this would help them to develop me to tread. Instead, I heeded the advice of José Luis strategies to replace those that had been found Machinea, who in his letter of invitation expressed increasingly wanting. When we look back at the the hope that my presentation would contribute to relationship that the administrators of both imperial “understanding the long-term trends and the evolution systems established with this discipline, then still in its of the social phenomena that underlie the functioning infancy, we can see a foreshadowing of how ECLAC of countries in the region”, and that is what I shall would work with it in the twentieth century. It is also attempt to do here. easy to recognize, behind those shared traits, the The first thing that becomes clear, from this infl uence of the periphery from which both they and perspective, is that ECLAC was established to articulate it viewed the economic system, whose operating rules a response, suitable for the stage in which Latin this new discipline sought to unentangle. America found itself at the time, to a question that was Viewed from the centre of this emerging system, already two centuries old. The quest had originally been Adam Smith’s theoretical construction could also to fi nd the key to overcoming what was already referred be seen as the “country party’s” indictment of the to as the lag of the far-off lands of the new world that mercantilist privileges and monopolies fl owing from Castile and Portugal had conquered and subsumed into royal favour, as defended by the “court party”. The their overseas empires. It would seek inspiration for this centre in fact had built a society that was discovering in a new science, one that abandoned the overarching itself capable of charting the road to prosperity on its perspectives that had placed metaphysics at both the own.