One of the world’s most influential schools of economic thought was founded by the United Nations Economic and Social Council Resolution 106(VI) on February 25, 1948, as the Economic Commission for Latin America (ECLA; in Spanish, Comisión Económica para América Latina, or CEPAL), headquartered in Santiago, Chile. Under the intellectual leadership of Argentine economist Raúl Prebisch, Brazilian economist Celso Furtado, and others, the ECLA offered an analysis of Latin American poverty and underdevelopment radically at odds with the dominant and neoclassical “modernization” theory espoused by most economists in the industrial world. Building on the work of world-systems analysis, the ECLA pioneered an approach to understanding the causes of Latin American poverty commonly called the “dependency school” (dependencia) in which the creation of poverty and economic backwardness, manifested in “underdevelopment,” was interpreted as an active historical process, caused by specific and historically derived international economic and political structures, as conveyed in the phrase, “the development of underdevelopment.” This approach was then appropriated by scholars working in other contexts, especially Asia and Africa, as epitomized in the title of Guyanese historian Walter Rodney’s landmark book How Europe Underdeveloped Africa (1972). Since the 1950s, the theoretical models and policy prescriptions of the ECLA have proven highly influential, sparking heated and ongoing debates among scholars.
From its foundation the ECLA rejected the paradigm proposed in the neoclassical, Keynesian, modernization school, which posited “stages of growth” resulting from the transformation of “traditional” economies into “modern” economies, a perspective epitomized in U.S. economist Walter W. Rostow’s book The Stages of Economic Growth (1960). Instead, the model formulated by the ECLA posited a global economy divided into “center” and “periphery,” with the fruits of production actively siphoned or drained from “peripheral” economies based on primary export products (including Latin America) to the “center” (the advanced industrial economies of Europe and the United States). Based on this model, in the 1960s ECLA policy prescriptions centered on the promotion of domestic industries through “import substitution industrialization” (ISI), diversification of production, land reform, more equitable distribution of income and productive resources, debt relief, and increased state intervention to achieve these aims. Key analytic concepts of these years included “dynamic insufficiency,” “dependency,” and “structural heterogeneity.” In the 1970s attention shifted to “styles” or “modalities” of economic growth and national development. The economic crisis of the 1980s generated another shift toward issues of debt adjustment and stabilization, while the 1990s saw heightened emphasis on issues of globalization and “neostructuralism,” in opposition to the “neoliberalism” promoted by the International Monetary Fund and related international financial bodies. In 1984 the United Nations (UN) broadened the mandate of the ECLA to include the Caribbean, and it became the Economic Commission for Latin America and the Caribbean (ECLAC); its Spanish acronym, CEPAL, remained the same. It is one of five UN regional commissions and remained highly influential into the 21st century.