The Political Economy of Peripheral Growth
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The Political Economy of Peripheral Growth José Miguel Ahumada The Political Economy of Peripheral Growth Chile in the Global Economy José Miguel Ahumada Department of Politics and Government Alberto Hurtado University Santiago, Chile Institute of International Studies University of Chile Santiago, Chile ISBN 978-3-030-10742-0 ISBN 978-3-030-10743-7 (eBook) https://doi.org/10.1007/978-3-030-10743-7 Library of Congress Control Number: 2019932963 © Te Editor(s) (if applicable) and Te Author(s), under exclusive licence to Springer Nature Switzerland AG 2019 Tis work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifcally the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microflms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. Te use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specifc statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. Te publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. Te publisher remains neutral with regard to jurisdictional claims in published maps and institutional afliations. Cover illustration: © Alex Linch shutterstock.com Tis Palgrave Macmillan imprint is published by the registered company Springer Nature Switzerland AG Te registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland Acknowledgements Jorge Luis Borges once said that during the act of writing one is dia- loguing with hundreds of people that have infuenced and molded our views. Our work is, then, always a collective outcome of our interac- tions with others. Te majority of this work was completed while I was a Ph.D. student at the University of Cambridge. During those years I had the privilege to meet incredible people who gave me the intellectual inspiration that permitted me to carry on with my own research. I had the honor to have Ha-Joon Chang as my supervisor, whose academic rigor together with his capacity to think beyond the conventional economic wis- dom taught me what is to be a proper academic. Ajit Singh and Ann Zammit provided me with their hospitality and guidance, and their work became a fundamental pillar of my own. José Gabriel Palma is an extremely prolifc and creative economist and his research is a source of constant inspiration. Bob Rowthorn and Carlos Fortin have given me many extremely valuable suggestion on my research, helping me to con- siderably improve the fnal draft. Also, in Cambridge I have the luck to have met and be friends with Sara Valdebenito, Bojana Radovanovic, Cristóbal Weinborn, v vi Acknowledgements Jostein Hauge, Natalya Naqvi, Joao Silva, Vincent Hardy, Ivan Rajic, Eun Joo Koo, Alicia Krozer, Lucy McMahon, Naim Bro, and Anel Kulakhmetova, who have always supported me during my research. At the Complutense University of Madrid, where I discovered the fertile feld of political economy of development, I am grateful to the academics and friends that pushed me to keep studying and research- ing, particularly Jorge Fonseca, Angel Tablas, Juan Manuel Ramirez Cendrero, Xabier Arrizabalo, Pedro Junqueira, Marisa Bordón, Astrid Agenjo, David Gutierrez, Asier Balda and Desiderio Cancino. In Chile I have been fortunate to be close to people that have inspired me in many ways and for so many years, especially Alejandro Stevenson, Carla Moscoso, Daniel Bello, Rodrigo Silva, Oriana Pifre, Antonio Palumbo, Cristián Ossandón, Alvaro Roslik, Hassan Akram, Simón Escofer, and Beatriz Hernández. Armando Di Filippo is, since my years as an undergraduate student, one of the most knowledgeable academics I have ever met, and the conversations I frequently have with him always give me new and interesting ideas. Ramón López is not only a brilliant professor, but has become for me the ideal type of the rigor- ous and committed academic I would like to become one day. In Alberto Hurtado University I have found a vibrant and friendly academic atmosphere that has given me the space to publish this research. I am very grateful to my colleagues and friends, specially Cecilia Osorio, Shirley Gotz, Héctor Oyarce, Isaac Caro, Sebastián Elgueta, Ignacio Cienfuegos, Chimuela González, Paulina Vergara, Hugo Vallejos and Francesco Penaglia. Also, my colleagues from the Institute of International Studies of the University of Chile, Dorotea López and Felipe Muñoz, have helped me since the day I came back to Chile and opened up opportunities to collaborate on very stimulating research topics. At Palgrave, Elizabeth Graber and Gabriel Everington have been extremely helpful and encouraging. It has been a real pleasure working with them and I am very grateful for their enthusiasm in this project. My family has been my most important support, not only now, but always. Sandra, Eliana, Jaime, Alicia, Paula, and Samuel, plus the new members, Juan Manuel and Alicia, have brought me happiness and joy, even in the most difcult periods. Acknowledgements vii Tis research would have not been possible without Vasiliki, she gave and gives me the confdence and guidance for this and for much more. Tis research was funded by the Chilean National Council for Science and Technology (Conicyt). I am very grateful to the Chilean government for giving me this opportunity to carry this research. Contents 1 Introduction 1 2 Te Political Economy of Development and Integration: A Structuralist Perspective 11 3 Latin America Since the 1990s: Deindustrialization, Reprimarization and Policy Space Restrictions 49 4 Te Chilean Military Dictatorship and the Origins of Peripheral Growth 73 5 Te Rise and Fall of Peripheral Growth: Chile During the 1990s 105 6 Chile in the Road to the Commodity Boom: Deindustrialization Without Policy Space 155 7 Life After the Commodity Boom: Te Structure of Contemporary Peripheral Growth (2011–2015) 193 ix x Contents 8 Conclusions: Te Mirages of the Miracle 229 Appendices 241 Index 245 List of Figures Chapter 4 Fig. 1 Chile’s capital accumulation: fnancialization, deindustrializa- tion, and the export turn 92 Chapter 5 Fig. 1 Infows of FDI and portfolio investments in Chile (1989–2000) 142 Fig. 2 Real exchange rate (RER) in Chile (1986–2000) 143 Fig. 3 Share of manufactures other than processed natural resources in the total exports (1993–2015) 144 Chapter 6 Fig. 1 Trade with China as percentage of GDP (1995–2015) 178 Fig. 2 Manufactures as percentages of GDP and total employment (1990–2014) 183 Fig. 3 Total patent applications in Chile (1980–2014) 186 xi xii List of Figures Chapter 7 Fig. 1 Periods of economic growth in Chile (1985–2016) 195 Fig. 2 Chile: growth deterioration (1986–2016) 197 Fig. 3 Chile in comparative perspective (1960–2016) 199 Fig. 4 Chile’s export pattern of specialization (1983–2016) 207 Fig. 5 Investment in R&D (total and private share) in OECD, 2015 212 Fig. 6 FDI in Chile (average infow 2009–2016) 214 Fig. 7 OECD: Labor productivity by size of frm in 2013 218 Fig. 8 Te complementarities of Chile’s economic order 220 List of Tables Chapter 2 Table 1 Summary of the liberal perspective 18 Table 2 Developmentalist policies during the “Asian miracle” 32 Chapter 3 Table 1 Latin America’s economic performance from a comparative perspective (1980–2016) 61 Chapter 4 Table 1 Chile, economic indicators (1970–1982) 90 Table 2 Chile: the second trade reform (1983–1989) 97 Chapter 5 Table 1 Capitalist sectors in Chile’s export-led growth 111 Table 2 Chile’s key economic policies during the 1990s 118 Table 3 Export promotion and capital control policies during Aylwin’s government 120 xiii xiv List of Tables Table 4 Requirements from NAFTA and Chile–Canada/Mexico FTA: policy space in investment, capital control and IP 129 Table 5 Te evolution of the simplifed drawback (1986–2003) 139 Chapter 6 Table 1 Chilean and US interests during the FTA negotiations 170 Table 2 Main outcomes from Chile-US FTA 174 Table 3 Chile and Latin American export dynamism (1985–2013) 182 Table 4 Policy space in Chile: before and after FTA and WTO 187 Chapter 7 Table 1 Income convergence between Chile, Portugal, and late developers 199 Table 2 Chile, Finland, and South Korea: three growth regimes 202 Table 3 Economic conglomerates in Chile: controllers and areas of operation (2016) 210 Table 4 Copper exports by ownership, 1997–2016 215 Table 5 Chile: occupation and wage by size of frm (2017) 217 Chapter 8 Table 1 Summary of the phases of Chile’s integration 238.