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Contribuições do desenvolvimentismo clássico e do novo desenvolvimentismo
Luiz Carlos Bresser PereiraContribuições do desenvolvimentismo clássico e do novo desenvolvimentismo
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ABNT
PEREIRA, Luiz Carlos Bresser. Contribuições do desenvolvimentismo clássico e do novo desenvolvimentismo. author_upload, 2026. Acesso via: JurisTube — Acervo Digital de Direito. Disponível em: https://juristube.com.br/colunistas/luiz-carlos-bresser-pereira/contribuicoes-do-desenvolvimentismo-classico-e-do-novo-desenvolvimentismo. Acesso em: 12 jul. 2026.
APA
Pereira, L. C. B. (2026). Contribuições do desenvolvimentismo clássico e do novo desenvolvimentismo. *author_upload*. https://juristube.com.br/colunistas/luiz-carlos-bresser-pereira/contribuicoes-do-desenvolvimentismo-classico-e-do-novo-desenvolvimentismo
BibTeX
@article{luiz-carlos-bresser-pereira-contribui-es-do-desenvolvimentismo-cl-ss-2026,
author = {Pereira, Luiz Carlos Bresser},
title = {Contribuições do desenvolvimentismo clássico e do novo desenvolvimentismo},
journal = {author_upload},
year = {2026},
url = {https://juristube.com.br/colunistas/luiz-carlos-bresser-pereira/contribuicoes-do-desenvolvimentismo-classico-e-do-novo-desenvolvimentismo}
}Brazilian Journal of Political Economy, vol. 45, nº 2, pp. 211-234, April-June/2025
211http://dx.doi.org/10.1590/0101-31572025-3748 Revista de Economia Política 45 (2), 2025 •
Contributions of Classical
and New Developmentalism
Contribuições do desenvolvimentismo clássico
e do novo desenvolvimentismo
LUIZ CARLOS BRESSER-PEREIRA
RESUMO: Neste artigo apresento as principais contribuição do desenvolvimentismo clássi-
co e do novo desenvolvimentismo para a teoria econômica e a economia política. Esses dois
sistemas teóricos são complementares, não competitivos, portanto, não os comparo, apenas
expresso algumas críticas de uma à outra teoria. No caso da teoria do novo desenvolvimen-
to, as contribuições para a economia são apresentadas passo a passo. O artigo rejeita a crí-
tica usual de que é conservador por ser export-led; pelo contrário, é progressivo, usando vá-
rios instrumentos bem conhecidos para alcançar a redução da desigualdade.
PALAVRAS-CHAVE: Novo desenvolvimentismo; desenvolvimentismo clássico; contribuição.
ABSTRACT: In this paper I present the main contribution of classical developmentalism and
new developmentalism to economics and political economy. These theoretical frameworks
are complementary, not competitive, thus I don’t compare them, I only express a few cri-
tiques of one to the other theory. In the case of new-developmental theory, the contributions
to economics are presented step by step. The paper rejects the usual critique that it is conser-
vative; on the contrary, it is progressive adopting the well-known tools to achieve the reduc-
tion of inequality.
KEYWORDS: New developmentalism; classical developmentalism; contribution.
JEL Classification: O01; O04.
Classical structuralist developmentalism was, from the 1940s onwards, the
first school of thought focused on the economic development of underdeveloped
countries. At the same time that it sought to explain why they had not industrial-
ized, it offered policies to bring them to the income levels of the rich countries. New
developmentalism emerged in the 2000s to explain why many developing countries
stopped growing from the 1980s onwards and also to offer policies for the resump-
tion of growth; it brought development macroeconomics as its main innovation. In
* Luiz Carlos Bresser-Pereira is Professor Emeritus of Getulio Vargas Foundation. E-mail: bresserpereira@gmail.
com. Orcid: https://orcid.org/0000-0001-8679-0557. Submitted: 27/September/2024; Approved: 6/Novem-
ber/2024
211http://dx.doi.org/10.1590/0101-31572025-3748 Revista de Economia Política 45 (2), 2025 •
Contributions of Classical
and New Developmentalism
Contribuições do desenvolvimentismo clássico
e do novo desenvolvimentismo
LUIZ CARLOS BRESSER-PEREIRA
RESUMO: Neste artigo apresento as principais contribuição do desenvolvimentismo clássi-
co e do novo desenvolvimentismo para a teoria econômica e a economia política. Esses dois
sistemas teóricos são complementares, não competitivos, portanto, não os comparo, apenas
expresso algumas críticas de uma à outra teoria. No caso da teoria do novo desenvolvimen-
to, as contribuições para a economia são apresentadas passo a passo. O artigo rejeita a crí-
tica usual de que é conservador por ser export-led; pelo contrário, é progressivo, usando vá-
rios instrumentos bem conhecidos para alcançar a redução da desigualdade.
PALAVRAS-CHAVE: Novo desenvolvimentismo; desenvolvimentismo clássico; contribuição.
ABSTRACT: In this paper I present the main contribution of classical developmentalism and
new developmentalism to economics and political economy. These theoretical frameworks
are complementary, not competitive, thus I don’t compare them, I only express a few cri-
tiques of one to the other theory. In the case of new-developmental theory, the contributions
to economics are presented step by step. The paper rejects the usual critique that it is conser-
vative; on the contrary, it is progressive adopting the well-known tools to achieve the reduc-
tion of inequality.
KEYWORDS: New developmentalism; classical developmentalism; contribution.
JEL Classification: O01; O04.
Classical structuralist developmentalism was, from the 1940s onwards, the
first school of thought focused on the economic development of underdeveloped
countries. At the same time that it sought to explain why they had not industrial-
ized, it offered policies to bring them to the income levels of the rich countries. New
developmentalism emerged in the 2000s to explain why many developing countries
stopped growing from the 1980s onwards and also to offer policies for the resump-
tion of growth; it brought development macroeconomics as its main innovation. In
* Luiz Carlos Bresser-Pereira is Professor Emeritus of Getulio Vargas Foundation. E-mail: bresserpereira@gmail.
com. Orcid: https://orcid.org/0000-0001-8679-0557. Submitted: 27/September/2024; Approved: 6/Novem-
ber/2024
212 Brazilian Journal of Political Economy 45 (2), 2025 • pp. 211-234
this essay I will summarize the two theories, first presenting the main contributions
of classical developmental theory (CDT) and then presenting,1 in the approximate
order in which they were made, the contributions of new-developmental theory
(NDT). It is not, therefore, a real comparison, because the two theories are comple-
mentary, although the latter makes some criticisms of the first.
In the 1930s, during the Great Depression, Keynesian economics emerged, and
in the following decade, CDT emerged. Both reflected the crisis of economic liber-
alism and neoclassical economics that had been demoralized by the size of the
crisis. By NDT, I mean the economics developed both in the center and in the pe-
riphery of capitalism by economists such as Rosenstein-Rodan, Raúl Prebisch,
Ragnar Nurkse, Arthur Lewis and Celso Furtado. In addition to John M. Keynes
and Michal Kalecki, the main creators of post-Keynesian economics were, in its
English form, Nickolas Kaldor, and in the American, Paul Davidson. In the 2000s,
NDT emerged under the influence of these two theories and added to both a struc-
turalist macroeconomy of development2.
When it emerged, CDT was called ‘development economics’ and in Latin
America, “structuralist theory”. I prefer to call it ‘classical structuralist developmen-
tal theory’ because it is not as vague a denomination as ‘development economics’.
It is developmental because it involves moderate state intervention in the economy
and a development strategy associated with economic nationalism (not ethnic na-
tionalism); it is ‘structuralist’ because it distinguishes structures from institutions
and implies a ‘structural change’ – from a primary-exporting (mercantilist) society
to a capitalist society based on competition and increased productivity; It is ‘clas-
sical’ because it is the oldest theory exclusively of development and underdevelop-
ment and because it has already been widely used by many countries.
CDT and NDT, like post-Keynesian economics, are theories that adopt the his-
torical-structural or historical-deductive method to understand a historical phenom-
enon such as that of real economic systems and their dynamics. The first to explain
underdevelopment and show that development requires industrialization; the second
to understand why economic growth has been halted in many countries around 1990,
except in East, Southeast and South Asia, and to think about which economic policies
can overcome the current quasi-stagnation – a very different explanation from the
middle-income trap thesis. Given its historical-structural character, both think of the
problem not only in terms of economics but also in terms of political economy.
We see, therefore, that the two theories were born with different motivations,
but they are complementary, the second relying on the first and on the post-Keynes-
ian economics. We could consider them a single theory, but I believe it is better to
distinguish them because the second has made additional contributions that I con-
sider significant, while I was critical of some aspects of the first. For this author, the
1 I refer to them as ‘theory’ not as ‘economics’ because both have an economics and a political economy.
2 The fundamental texts of NDT are Prebisch (1949); Furtado (1961); Aníbal Pinto (1970); and the
quasi-didactic book by Sunkel and Paz (1970).
this essay I will summarize the two theories, first presenting the main contributions
of classical developmental theory (CDT) and then presenting,1 in the approximate
order in which they were made, the contributions of new-developmental theory
(NDT). It is not, therefore, a real comparison, because the two theories are comple-
mentary, although the latter makes some criticisms of the first.
In the 1930s, during the Great Depression, Keynesian economics emerged, and
in the following decade, CDT emerged. Both reflected the crisis of economic liber-
alism and neoclassical economics that had been demoralized by the size of the
crisis. By NDT, I mean the economics developed both in the center and in the pe-
riphery of capitalism by economists such as Rosenstein-Rodan, Raúl Prebisch,
Ragnar Nurkse, Arthur Lewis and Celso Furtado. In addition to John M. Keynes
and Michal Kalecki, the main creators of post-Keynesian economics were, in its
English form, Nickolas Kaldor, and in the American, Paul Davidson. In the 2000s,
NDT emerged under the influence of these two theories and added to both a struc-
turalist macroeconomy of development2.
When it emerged, CDT was called ‘development economics’ and in Latin
America, “structuralist theory”. I prefer to call it ‘classical structuralist developmen-
tal theory’ because it is not as vague a denomination as ‘development economics’.
It is developmental because it involves moderate state intervention in the economy
and a development strategy associated with economic nationalism (not ethnic na-
tionalism); it is ‘structuralist’ because it distinguishes structures from institutions
and implies a ‘structural change’ – from a primary-exporting (mercantilist) society
to a capitalist society based on competition and increased productivity; It is ‘clas-
sical’ because it is the oldest theory exclusively of development and underdevelop-
ment and because it has already been widely used by many countries.
CDT and NDT, like post-Keynesian economics, are theories that adopt the his-
torical-structural or historical-deductive method to understand a historical phenom-
enon such as that of real economic systems and their dynamics. The first to explain
underdevelopment and show that development requires industrialization; the second
to understand why economic growth has been halted in many countries around 1990,
except in East, Southeast and South Asia, and to think about which economic policies
can overcome the current quasi-stagnation – a very different explanation from the
middle-income trap thesis. Given its historical-structural character, both think of the
problem not only in terms of economics but also in terms of political economy.
We see, therefore, that the two theories were born with different motivations,
but they are complementary, the second relying on the first and on the post-Keynes-
ian economics. We could consider them a single theory, but I believe it is better to
distinguish them because the second has made additional contributions that I con-
sider significant, while I was critical of some aspects of the first. For this author, the
1 I refer to them as ‘theory’ not as ‘economics’ because both have an economics and a political economy.
2 The fundamental texts of NDT are Prebisch (1949); Furtado (1961); Aníbal Pinto (1970); and the
quasi-didactic book by Sunkel and Paz (1970).
213Revista de Economia Política 45 (2), 2025 • pp. 211-234
ideal is that both theories merge, thus adding the valid contributions of each other.
In this essay, I will first present the main contributions of classical developmental-
ism and then the contributions of new developmentalism.
CONTRIBUTIONS OF CLASSICAL DEVELOPMENTAL THEORY
CDT started from the criticism of neoclassical economics – a mistaken theory
that supposes that the market alone is capable of leading countries to development
and, therefore, deems state intervention and industrialization unnecessary. For her,
there is no economic growth without industrialization or, as I prefer to call it today,
‘productive sophistication’. The arguments are both empirical and theoretical in
nature. I will now enumerate the main contributions of this theory to economics.
1. For CDT, economic development is equivalent to industrialization or ‘struc-
tural change’. In terms of history, industrialization has been the necessary condition
for countries to develop. No country has developed without having industrialized
or becoming productively sophisticated. Neoclassical economists, and therefore
liberals, always speak of Australia or the Netherlands, but these countries initially
industrialized to become rich countries.
2. Rosenstein-Rodan (1943), who can be considered the founder of classical
developmentalism, developed the ‘balanced development model’, according to
which, individually, investments in industrial companies in underdeveloped coun-
tries would not be as profitable as companies using the same technology are in rich
countries because they would not be benefited from positive externalities or ag-
glomeration economies that characterize the economies of the already industrialized
countries. Therefore, to start industrialization, the state should promote a big push,
supported by external resources to realize a set of industrial investments. So, the
balanced growth model was critical of neoclassical economics and the liberal or-
thodoxy.
3. Raúl Prebisch (1949) and Hans Singer (1950) have shown theoretically and
empirically that the increase in productivity in the North is not entirely transformed
into a decrease in prices that also favors the population of underdeveloped coun-
tries, as neoclassical economics supposes. A considerable part of this increase in
productivity is directly transformed into an increase in the real wages of workers
in rich countries. This is the theory of the deterioration of the terms of exchange.
The main reason offered by these two economists for this retention of productivity
gains was that workers in rich countries were sufficiently organized to secure for
themselves in the form of higher wages, the benefits of productivity increases, so
that price reductions would be limited.
4. Ragnar Nurkse was the first of the classical developmentalists to present a
systematic theory of underdevelopment in six lectures he gave in Brazil, at the
Getulio Vargas Foundation, in July and August 1951, later published in a book with
some revisions – Capital Formation in Underdeveloped Countries (1951). Nurkse
ideal is that both theories merge, thus adding the valid contributions of each other.
In this essay, I will first present the main contributions of classical developmental-
ism and then the contributions of new developmentalism.
CONTRIBUTIONS OF CLASSICAL DEVELOPMENTAL THEORY
CDT started from the criticism of neoclassical economics – a mistaken theory
that supposes that the market alone is capable of leading countries to development
and, therefore, deems state intervention and industrialization unnecessary. For her,
there is no economic growth without industrialization or, as I prefer to call it today,
‘productive sophistication’. The arguments are both empirical and theoretical in
nature. I will now enumerate the main contributions of this theory to economics.
1. For CDT, economic development is equivalent to industrialization or ‘struc-
tural change’. In terms of history, industrialization has been the necessary condition
for countries to develop. No country has developed without having industrialized
or becoming productively sophisticated. Neoclassical economists, and therefore
liberals, always speak of Australia or the Netherlands, but these countries initially
industrialized to become rich countries.
2. Rosenstein-Rodan (1943), who can be considered the founder of classical
developmentalism, developed the ‘balanced development model’, according to
which, individually, investments in industrial companies in underdeveloped coun-
tries would not be as profitable as companies using the same technology are in rich
countries because they would not be benefited from positive externalities or ag-
glomeration economies that characterize the economies of the already industrialized
countries. Therefore, to start industrialization, the state should promote a big push,
supported by external resources to realize a set of industrial investments. So, the
balanced growth model was critical of neoclassical economics and the liberal or-
thodoxy.
3. Raúl Prebisch (1949) and Hans Singer (1950) have shown theoretically and
empirically that the increase in productivity in the North is not entirely transformed
into a decrease in prices that also favors the population of underdeveloped coun-
tries, as neoclassical economics supposes. A considerable part of this increase in
productivity is directly transformed into an increase in the real wages of workers
in rich countries. This is the theory of the deterioration of the terms of exchange.
The main reason offered by these two economists for this retention of productivity
gains was that workers in rich countries were sufficiently organized to secure for
themselves in the form of higher wages, the benefits of productivity increases, so
that price reductions would be limited.
4. Ragnar Nurkse was the first of the classical developmentalists to present a
systematic theory of underdevelopment in six lectures he gave in Brazil, at the
Getulio Vargas Foundation, in July and August 1951, later published in a book with
some revisions – Capital Formation in Underdeveloped Countries (1951). Nurkse
214 Brazilian Journal of Political Economy 45 (2), 2025 • pp. 211-234
defines the lack of savings as a fundamental problem of the least developed coun-
tries. In his 1951 lectures, he departs from
the vicious circle of poverty that (a) goes from low income level to (b)
low capacity to save and, hence, (c) lack of capital, leading to (d) low
productivity and, therefore, back to low per capita income level. (Nurkse,
1951: 65)
This paragraph contains the main problems of underdeveloped countries,
among which the lack of capacity to save is key. There is no investment without
savings to finance it. This does not mean that the problem is only on the supply
side; the demand side is also key. For investment to happen, it is not enough to have
savings; there must be a demand so that the expected rate of profit is satisfactory.
Nurkse was based on the principle formulated by James D. Duesenberry (1949)
about the ‘demonstration effect’. The populations of underdeveloped countries tend
to copy, without having the ability to do so, the consumption levels of the rich
countries, resulting in overconsumption and a low savings rate. At this issue, we
see how Nurkse influenced Celso Furtado. As Pinkusfeld Bastos and Rodas Oliveira
(2020: 17) observed, “Furtado subscribes to the thesis that the adoption of more
sophisticated consumption patterns by the larger population can reduce the econ-
omy’s savings”. In fact, the tendency of the Brazilian population to copy the con-
sumption patterns of the rich North is present in all of Furtado’s work. Until the
1980s, when many countries were developmental, the state adopted the policy of
discouraging conspicuous consumption through taxes on imports of luxury con-
sumer goods and the consumption of the same goods produced in Brazil.
For Nurkse, the need for a balanced development in the terms put forward by
Roseinstein-Rodan is also fundamental. By elaborating this argument in his book
and in a 1958 article published in the classic book edited by Agarwala and Singh
(which brings together all the pioneers of development theory), he thinks about
how to make it possible for a set of synchronized investments to make investments
in the manufacturing industry profitable. Although his vision of development is a
vision of supply and focuses on the problem of the lack of savings, Nurkse under-
stands that the main problem faced is the lack of a domestic market that stimulates
‘intensive investment’, that is, the increase of capital per capita. Nurkse, therefore,
like the other developmental economists, rejects Say’s law, but this does not mean
that he accepts Keynesian theory in its vulgar form, according to which it is effec-
tive demand that creates supply. Nurkse is not clear on this point, but it is evident
that, in the short term, to face a recession, the country must stimulate demand as
Keynesian theory teaches, but in the long term it is necessary to stimulate savings
so that there are resources for investment3.
5. In 1954, Arthur Lewis returned to the classical political economists of the
3 Bresser-Pereira (2024a).
defines the lack of savings as a fundamental problem of the least developed coun-
tries. In his 1951 lectures, he departs from
the vicious circle of poverty that (a) goes from low income level to (b)
low capacity to save and, hence, (c) lack of capital, leading to (d) low
productivity and, therefore, back to low per capita income level. (Nurkse,
1951: 65)
This paragraph contains the main problems of underdeveloped countries,
among which the lack of capacity to save is key. There is no investment without
savings to finance it. This does not mean that the problem is only on the supply
side; the demand side is also key. For investment to happen, it is not enough to have
savings; there must be a demand so that the expected rate of profit is satisfactory.
Nurkse was based on the principle formulated by James D. Duesenberry (1949)
about the ‘demonstration effect’. The populations of underdeveloped countries tend
to copy, without having the ability to do so, the consumption levels of the rich
countries, resulting in overconsumption and a low savings rate. At this issue, we
see how Nurkse influenced Celso Furtado. As Pinkusfeld Bastos and Rodas Oliveira
(2020: 17) observed, “Furtado subscribes to the thesis that the adoption of more
sophisticated consumption patterns by the larger population can reduce the econ-
omy’s savings”. In fact, the tendency of the Brazilian population to copy the con-
sumption patterns of the rich North is present in all of Furtado’s work. Until the
1980s, when many countries were developmental, the state adopted the policy of
discouraging conspicuous consumption through taxes on imports of luxury con-
sumer goods and the consumption of the same goods produced in Brazil.
For Nurkse, the need for a balanced development in the terms put forward by
Roseinstein-Rodan is also fundamental. By elaborating this argument in his book
and in a 1958 article published in the classic book edited by Agarwala and Singh
(which brings together all the pioneers of development theory), he thinks about
how to make it possible for a set of synchronized investments to make investments
in the manufacturing industry profitable. Although his vision of development is a
vision of supply and focuses on the problem of the lack of savings, Nurkse under-
stands that the main problem faced is the lack of a domestic market that stimulates
‘intensive investment’, that is, the increase of capital per capita. Nurkse, therefore,
like the other developmental economists, rejects Say’s law, but this does not mean
that he accepts Keynesian theory in its vulgar form, according to which it is effec-
tive demand that creates supply. Nurkse is not clear on this point, but it is evident
that, in the short term, to face a recession, the country must stimulate demand as
Keynesian theory teaches, but in the long term it is necessary to stimulate savings
so that there are resources for investment3.
5. In 1954, Arthur Lewis returned to the classical political economists of the
3 Bresser-Pereira (2024a).
215Revista de Economia Política 45 (2), 2025 • pp. 211-234
19th century to develop a growth model for underdeveloped countries in which,
unlike in already industrialized countries, wages remain low during the industrial-
ization process. This is possible because there is in these countries an unlimited
labor market that prevents wages from rising. He is thus also adopting a model
based on savings or supply. He goes back to Marx (the greatest of the classical
political economists) and his concept of the industrial reserve army which, in the
case of underdeveloped countries, is expressed in the unlimited supply of labor
existing in the traditional sector of the economy. Given this fact, the main constraint
that developing countries face is in supply, in the lack of savings or capital, as
Nurkse already claimed, not in the lack of demand, as populist Keynesians claim.
6. Raúl Prebisch also developed the concept of ‘external restraint’ – a factor
that makes the economic development of countries that produce primary goods
more difficult or more costly. The external constraint derives from the fact that
these countries have an income elasticity in the import of manufactured goods
greater than one, while the income elasticity in the developed countries in the im-
port of primary goods or commodities is less than one. The two elasticities are
therefore perverse for commodity-exporting countries.
Given the external constraint, economists such as Chenery and Bruno (1962)
proposed the model of the two gaps (the savings gap and the external resources
gap) in which the lack of savings should be made up for by adopting the ‘policy of
growth with foreign savings’, that is, with external indebtedness – a policy that
CDT did not adopt and NDT harshly criticizes, as we will see below. Prebisch de-
fined and gave importance to external constraint not to justify external indebted-
ness, but because it is an additional argument in favor of industrialization. Only
industrialization can solve the problem of the two perverse elasticities but in the
long run4. In the short term, there is no alternative but to endure this greater hard-
ship facing developing countries. More recently I have argued that the consequence
not discussed in the literature on external constraint is to force the exchange rate
to be depreciated more than it would be if the restriction did not exist. This repre-
sents a cost for these countries as their workers have to work harder to be able to
earn the same amount of hard currency for their exports. Second, the external
constraint is a source of vulnerability because the countries subject to it face the
problem of the so-called ‘shortage of dollars’, which was felt in the developing
countries that did not open their external financial account. This shortage is not
‘structural’ in the sense that it ‘necessarily needs to occur’ but derives from the fact
that countries that adopted CDT generally maintained the fixed exchange rate for
long periods, while incurring current-account deficits.
7. CDT rejected the commercial liberalization, preached by liberal orthodoxy.
Besides affirming that economic growth required industrialization, it adopted the
infant industry argument and understood that at the beginning of industrialization,
it was necessary to protect the manufacturing industry with import tariffs. In this
4 Bresser-Pereira and Rugitsky (2018).
19th century to develop a growth model for underdeveloped countries in which,
unlike in already industrialized countries, wages remain low during the industrial-
ization process. This is possible because there is in these countries an unlimited
labor market that prevents wages from rising. He is thus also adopting a model
based on savings or supply. He goes back to Marx (the greatest of the classical
political economists) and his concept of the industrial reserve army which, in the
case of underdeveloped countries, is expressed in the unlimited supply of labor
existing in the traditional sector of the economy. Given this fact, the main constraint
that developing countries face is in supply, in the lack of savings or capital, as
Nurkse already claimed, not in the lack of demand, as populist Keynesians claim.
6. Raúl Prebisch also developed the concept of ‘external restraint’ – a factor
that makes the economic development of countries that produce primary goods
more difficult or more costly. The external constraint derives from the fact that
these countries have an income elasticity in the import of manufactured goods
greater than one, while the income elasticity in the developed countries in the im-
port of primary goods or commodities is less than one. The two elasticities are
therefore perverse for commodity-exporting countries.
Given the external constraint, economists such as Chenery and Bruno (1962)
proposed the model of the two gaps (the savings gap and the external resources
gap) in which the lack of savings should be made up for by adopting the ‘policy of
growth with foreign savings’, that is, with external indebtedness – a policy that
CDT did not adopt and NDT harshly criticizes, as we will see below. Prebisch de-
fined and gave importance to external constraint not to justify external indebted-
ness, but because it is an additional argument in favor of industrialization. Only
industrialization can solve the problem of the two perverse elasticities but in the
long run4. In the short term, there is no alternative but to endure this greater hard-
ship facing developing countries. More recently I have argued that the consequence
not discussed in the literature on external constraint is to force the exchange rate
to be depreciated more than it would be if the restriction did not exist. This repre-
sents a cost for these countries as their workers have to work harder to be able to
earn the same amount of hard currency for their exports. Second, the external
constraint is a source of vulnerability because the countries subject to it face the
problem of the so-called ‘shortage of dollars’, which was felt in the developing
countries that did not open their external financial account. This shortage is not
‘structural’ in the sense that it ‘necessarily needs to occur’ but derives from the fact
that countries that adopted CDT generally maintained the fixed exchange rate for
long periods, while incurring current-account deficits.
7. CDT rejected the commercial liberalization, preached by liberal orthodoxy.
Besides affirming that economic growth required industrialization, it adopted the
infant industry argument and understood that at the beginning of industrialization,
it was necessary to protect the manufacturing industry with import tariffs. In this
4 Bresser-Pereira and Rugitsky (2018).
216 Brazilian Journal of Political Economy 45 (2), 2025 • pp. 211-234
respect, CDT was not original. All the countries that industrialized protected their
manufacturing industry with tariffs, including England until 1846. And the first
person to formulate the infant industry argument was Alexander Hamilton, in 1792.
And also rejected financial liberalization because aimed at a relative control
over the exchange rate. The state had to control the inflow and outflow of capital
to exercise reasonable control over the exchange rate. Which should only be ad-
justed according to the difference between internal and external inflation. By adopt-
ing the fixed exchange rate regime, including a crawling peg, instead of a floating
exchange rate, the developmental state knew that it would risk a currency crisis,
but he understood that it was preferable such risk than to leave the exchange rate
overvalued and stop industrialization. However, there was no theory about this,
which would only emerge with NDT.5 It was clear to CDT that the country could
not let the exchange rate be determined by the market, because its policymakers
perceived or intuited that, when the prices of the commodities exported by the
country increased, the exchange rate would appreciate and the manufacturing com-
panies using the best technology would become non-competitive. In other words,
policymaker didn’t know the Dutch disease but intuited it.
It was clear to Prebisch that if the government, in the face of exchange rate
appreciation, decided to depreciate the currency, this depreciation would not be
sustained and soon the national currency would appreciate again. Because of that,
he opted for the use of import tariffs and import licenses. Thus, a ‘double’ exchange
rate was established – one for commodities, the other for industry – in fact, ‘mul-
tiple’ because each tariff level corresponded to an exchange rate. This model was
very successful and allowed several countries, including Brazil, to carry out their
industrial and capitalist revolution.
8. The model of industrialization by import substitution can only be successful
for a limited period. It is economically healthy as long as the country has not yet
reached its limit – the limit of the internal market and the possibilities of economies
of scale. When the domestic market for a given industrial sector does not allow the
country to take advantage of economies of scale, the import substitution model is
no longer functional for that sector.
The celebrated model of Bhaduri and Marglin (1990), which distinguished a
profit-led (or export-led) industrialization from another, wage-led (or inner-led),
showed a preference for the second model that would be more compatible with the
reduction of inequality. This is because, in the case of wage-led industrialization,
the real increase in wages would imply an increase in the domestic market, while
in the case of export-led industrialization, investments would be directed to foreign
markets and wages could not increase. This would be great if the import substitu-
tion model (not mentioned in the article) had not reached its limit defined in the
previous paragraph. The fact is that an economy must be internationally competi-
5 Bresser-Pereira (2024a).
respect, CDT was not original. All the countries that industrialized protected their
manufacturing industry with tariffs, including England until 1846. And the first
person to formulate the infant industry argument was Alexander Hamilton, in 1792.
And also rejected financial liberalization because aimed at a relative control
over the exchange rate. The state had to control the inflow and outflow of capital
to exercise reasonable control over the exchange rate. Which should only be ad-
justed according to the difference between internal and external inflation. By adopt-
ing the fixed exchange rate regime, including a crawling peg, instead of a floating
exchange rate, the developmental state knew that it would risk a currency crisis,
but he understood that it was preferable such risk than to leave the exchange rate
overvalued and stop industrialization. However, there was no theory about this,
which would only emerge with NDT.5 It was clear to CDT that the country could
not let the exchange rate be determined by the market, because its policymakers
perceived or intuited that, when the prices of the commodities exported by the
country increased, the exchange rate would appreciate and the manufacturing com-
panies using the best technology would become non-competitive. In other words,
policymaker didn’t know the Dutch disease but intuited it.
It was clear to Prebisch that if the government, in the face of exchange rate
appreciation, decided to depreciate the currency, this depreciation would not be
sustained and soon the national currency would appreciate again. Because of that,
he opted for the use of import tariffs and import licenses. Thus, a ‘double’ exchange
rate was established – one for commodities, the other for industry – in fact, ‘mul-
tiple’ because each tariff level corresponded to an exchange rate. This model was
very successful and allowed several countries, including Brazil, to carry out their
industrial and capitalist revolution.
8. The model of industrialization by import substitution can only be successful
for a limited period. It is economically healthy as long as the country has not yet
reached its limit – the limit of the internal market and the possibilities of economies
of scale. When the domestic market for a given industrial sector does not allow the
country to take advantage of economies of scale, the import substitution model is
no longer functional for that sector.
The celebrated model of Bhaduri and Marglin (1990), which distinguished a
profit-led (or export-led) industrialization from another, wage-led (or inner-led),
showed a preference for the second model that would be more compatible with the
reduction of inequality. This is because, in the case of wage-led industrialization,
the real increase in wages would imply an increase in the domestic market, while
in the case of export-led industrialization, investments would be directed to foreign
markets and wages could not increase. This would be great if the import substitu-
tion model (not mentioned in the article) had not reached its limit defined in the
previous paragraph. The fact is that an economy must be internationally competi-
5 Bresser-Pereira (2024a).
217Revista de Economia Política 45 (2), 2025 • pp. 211-234
tive to grow. Taking care of reducing inequality is highly desirable, but there are
other policy instruments for this.
9. There was also Juan F. Noyola’s structuralist theory of inflation (1956),
which stated that structural bottlenecks in the supply (the fact that it did not re-
spond fast enough to price changes) caused inflation. The bottlenecks resulted from
the dual (traditional vs. modern) character of underdeveloped economies. This
explanation had some validity while the markets of these economies were poorly
structured, but it has long since ceased to be meaningful.
10. In fact, this school did not have a macroeconomics. Its economists used
Keynesian theory, adding little or nothing to it. Only Ignácio Rangel, a notable
economist who was, however, marginal relative to the CDT, offered a significant
macroeconomic contribution in his 1963 book, A Inflação Brasileira, in which he
showed that in the long run inflation was a defense system for fragile economies
such as Brazil’s, paradoxally rising in times of crisis and falling in times of eco-
nomic expansion.
11. Developmental economists only considered the alternative of exporting
manufactured products in the 1970s, based on the successful experience of Brazil
beginning in 1969. To encourage its exports of manufactured goods, this country
adopted export subsidies, in the same way that they stimulated production for the
domestic market with import tariffs. But most industries were already mature, and
the infant industry argument had ceased to apply. But they remained with the tar-
iffs and created export subsidies to the exports of manufactured goods. These
economists did not know what the Dutch disease was, but they continued to main-
tain the policy, now without a good argument; they intuitively and pragmatically
neutralized the disease. This made the policy of industrialization by import substi-
tution vulnerable to the attack of liberal economists, who judged it to be ‘protec-
tionist’ and gave this expression a pejorative meaning.
12. CDT was anti-imperialist, even though imperialism did not appear in the
texts of ECLAC’s economists. In the United Nations, there is no imperialism.
Prebisch, however, found a solution to the problem with the opposition between
‘center and periphery’. The center is the empire that seeks to prevent the industri-
alization of the countries on the periphery of capitalism, to maintain unequal ex-
change, guarantee the possibility of exporting capital, and avoid future competition.
Since developing countries were no longer formal colonies, their strategy was (and
remains) to convince their economic elites made up of politicians, businessmen, and
economists that economic liberalism is the most rational way to organize capitalism.
All these contributions formed ‘national-developmentalism’ – the development
strategy that peripheral countries adopted between the 1950s and the mid-1980s,
based on the model of industrialization by import substitution – a model that runs
out in time as each single country does not have a domestic market sufficient to
allow industrial production with economies of scale. Not only for this reason, but
also because, in the early 1970s, ECLAC adopted the ‘theory of associated depen-
dence’, national-developmentalism and CDT entered into crisis. By ‘naturally’ mak-
ing this choice, the main international organization that supported national-devel-
tive to grow. Taking care of reducing inequality is highly desirable, but there are
other policy instruments for this.
9. There was also Juan F. Noyola’s structuralist theory of inflation (1956),
which stated that structural bottlenecks in the supply (the fact that it did not re-
spond fast enough to price changes) caused inflation. The bottlenecks resulted from
the dual (traditional vs. modern) character of underdeveloped economies. This
explanation had some validity while the markets of these economies were poorly
structured, but it has long since ceased to be meaningful.
10. In fact, this school did not have a macroeconomics. Its economists used
Keynesian theory, adding little or nothing to it. Only Ignácio Rangel, a notable
economist who was, however, marginal relative to the CDT, offered a significant
macroeconomic contribution in his 1963 book, A Inflação Brasileira, in which he
showed that in the long run inflation was a defense system for fragile economies
such as Brazil’s, paradoxally rising in times of crisis and falling in times of eco-
nomic expansion.
11. Developmental economists only considered the alternative of exporting
manufactured products in the 1970s, based on the successful experience of Brazil
beginning in 1969. To encourage its exports of manufactured goods, this country
adopted export subsidies, in the same way that they stimulated production for the
domestic market with import tariffs. But most industries were already mature, and
the infant industry argument had ceased to apply. But they remained with the tar-
iffs and created export subsidies to the exports of manufactured goods. These
economists did not know what the Dutch disease was, but they continued to main-
tain the policy, now without a good argument; they intuitively and pragmatically
neutralized the disease. This made the policy of industrialization by import substi-
tution vulnerable to the attack of liberal economists, who judged it to be ‘protec-
tionist’ and gave this expression a pejorative meaning.
12. CDT was anti-imperialist, even though imperialism did not appear in the
texts of ECLAC’s economists. In the United Nations, there is no imperialism.
Prebisch, however, found a solution to the problem with the opposition between
‘center and periphery’. The center is the empire that seeks to prevent the industri-
alization of the countries on the periphery of capitalism, to maintain unequal ex-
change, guarantee the possibility of exporting capital, and avoid future competition.
Since developing countries were no longer formal colonies, their strategy was (and
remains) to convince their economic elites made up of politicians, businessmen, and
economists that economic liberalism is the most rational way to organize capitalism.
All these contributions formed ‘national-developmentalism’ – the development
strategy that peripheral countries adopted between the 1950s and the mid-1980s,
based on the model of industrialization by import substitution – a model that runs
out in time as each single country does not have a domestic market sufficient to
allow industrial production with economies of scale. Not only for this reason, but
also because, in the early 1970s, ECLAC adopted the ‘theory of associated depen-
dence’, national-developmentalism and CDT entered into crisis. By ‘naturally’ mak-
ing this choice, the main international organization that supported national-devel-
218 Brazilian Journal of Political Economy 45 (2), 2025 • pp. 211-234
opmentalism also submitted to the Empire. The final crisis occurred in the 1980s,
with the great foreign debt crisis, which weakened the South, and the Neoliberal
Turn, which gave more strength and coherence to the Empire6.
From the 1980s onwards, CDT stopped receiving relevant contributions from
its main economists. It was a sign of the crisis. ECLAC left economic development
in the background and began to discuss the problems related to inequality or eq-
uity and, later, the issue of global warming. The developmentalist and structuralist
ECLAC of the 1950s and 1960s was dead. Today, I identify only Carlos de Aguiar
Medeiros as a relevant classical developmental economist, alongside neo-Schum-
peterian economists who cannot be considered properly developmentalists7..
INTERMEZZO AND NDT EMERGES
In the 1980s, the foreign debt crisis had a dramatic effect on economies that
had become heavily indebted in the previous decade. Latin American countries,
which immediately entered a currency crisis, were forced to make a major fiscal
adjustment, while their national currencies were dramatically devalued. The de-
fault on payments and the pressure of creditor banks supported by their respec-
tive governments left them no alternative but fiscal adjustment and stagnation.
The currency devaluation helped the industry to become competitive, but use-
lessly because the internal demand of all countries was not sustained due to the
adjustment.
The Empire, taking advantage of its soft power, went on the offensive and used
economic liberalism as an instrument of domination. It dismissed all CDT argu-
ments, stated that countries were being victims of ‘protectionism’, and assured that
economic liberalism was more consistent with the development of the region than
developmentalism. In the case of Brazil, the final blow to national-developmental-
ism happened in 1990, when the Brazilian government, after 50 years of relative
independence, submitted to the Empire and opened its economy, liberalizing trade
and finance. In other countries, the same happened around that date, Mexico led
the return to the semi-colonial condition vis-a-vis the rich world. The result was
that from 1990 onwards (after the foreign debt crisis was overcome) the Latin
American countries faced quasi-stagnation (the inability to catch up) and the dif-
ference in their per capita income in relation to that of the United States again in-
creased. Figure 1, relative to Brazil, shows that today its GDP per capita is lower
than it was in 1980.
6 Bresser-Pereira (2005).
7 Medeiros and Trebat (2016); Medeiros and Majerowicz (2022).
opmentalism also submitted to the Empire. The final crisis occurred in the 1980s,
with the great foreign debt crisis, which weakened the South, and the Neoliberal
Turn, which gave more strength and coherence to the Empire6.
From the 1980s onwards, CDT stopped receiving relevant contributions from
its main economists. It was a sign of the crisis. ECLAC left economic development
in the background and began to discuss the problems related to inequality or eq-
uity and, later, the issue of global warming. The developmentalist and structuralist
ECLAC of the 1950s and 1960s was dead. Today, I identify only Carlos de Aguiar
Medeiros as a relevant classical developmental economist, alongside neo-Schum-
peterian economists who cannot be considered properly developmentalists7..
INTERMEZZO AND NDT EMERGES
In the 1980s, the foreign debt crisis had a dramatic effect on economies that
had become heavily indebted in the previous decade. Latin American countries,
which immediately entered a currency crisis, were forced to make a major fiscal
adjustment, while their national currencies were dramatically devalued. The de-
fault on payments and the pressure of creditor banks supported by their respec-
tive governments left them no alternative but fiscal adjustment and stagnation.
The currency devaluation helped the industry to become competitive, but use-
lessly because the internal demand of all countries was not sustained due to the
adjustment.
The Empire, taking advantage of its soft power, went on the offensive and used
economic liberalism as an instrument of domination. It dismissed all CDT argu-
ments, stated that countries were being victims of ‘protectionism’, and assured that
economic liberalism was more consistent with the development of the region than
developmentalism. In the case of Brazil, the final blow to national-developmental-
ism happened in 1990, when the Brazilian government, after 50 years of relative
independence, submitted to the Empire and opened its economy, liberalizing trade
and finance. In other countries, the same happened around that date, Mexico led
the return to the semi-colonial condition vis-a-vis the rich world. The result was
that from 1990 onwards (after the foreign debt crisis was overcome) the Latin
American countries faced quasi-stagnation (the inability to catch up) and the dif-
ference in their per capita income in relation to that of the United States again in-
creased. Figure 1, relative to Brazil, shows that today its GDP per capita is lower
than it was in 1980.
6 Bresser-Pereira (2005).
7 Medeiros and Trebat (2016); Medeiros and Majerowicz (2022).
219Revista de Economia Política 45 (2), 2025 • pp. 211-234
Figure 1: Relative distance of Brazil’s GDP per capita in relation
to the United States (%) – 2011 prices
0
5
10
15
20
25
30
35
1926
1930
1934
1938
1942
1946
1950
1954
1958
1962
1966
1970
1974
1978
1982
1986
1990
1994
1998
2002
2006
2010
2014
2018
2022
Source: Maddison Project Database (MPD) 2023.
We can also see in this figure how, between 1926 and 1980, Brazil’s catching
up relative to the United States was remarkable. While the per capita income of
Brazilians was about 11% of that of Americans in 1926, it reached 28% in 1980.
After that, there was a big setback that goes back to 2000, when this percentage
reached 21%. From 2004 onwards we have a new recovery – the one associated
with the commodity boom –, but from 2015 a new fallback starts.
What do new historical facts explain the quasi-stagnation of Latin American
economies from 1990 onwards, after having experienced accelerated growth from
the war until 1980? As I have argued, in the case of Brazil there were two new
causes or historical facts: the fall in public savings that occurred around 1980 and
the commercial and financial liberalization between 1990 and 1992.
If we compare the 1970s (the last decade in which the growth of the Brazilian
economy was satisfactory) with the 35 years from 1990 until today, the radical
drop in public savings was 6 percentage points. While in the 1970s, it was around
4% of GDP, from 1980 until now it has been negative, around -2% of GDP. As a
result, public investment, which in that decade was around 8%, fell to 2% of GDP.
This happened because the mistaken foreign debt incurred by the military in the
1970s led Brazil to a balance of payments crisis and a moratorium on foreign debt
in 1980, while the state-owned companies that were responsible for a large part of
public savings were perversely used in two ways: to get the country into debt in
dollars, and to control inflation by lowering their prices. In this way, his profit and
therefore his savings disappeared.
The second cause was the commercial and financial liberalization that all Latin
American countries made around 1990. In the case of Brazil, trade liberalization
(the reduction of the average tariff on imports of manufactured goods from 45%
Figure 1: Relative distance of Brazil’s GDP per capita in relation
to the United States (%) – 2011 prices
0
5
10
15
20
25
30
35
1926
1930
1934
1938
1942
1946
1950
1954
1958
1962
1966
1970
1974
1978
1982
1986
1990
1994
1998
2002
2006
2010
2014
2018
2022
Source: Maddison Project Database (MPD) 2023.
We can also see in this figure how, between 1926 and 1980, Brazil’s catching
up relative to the United States was remarkable. While the per capita income of
Brazilians was about 11% of that of Americans in 1926, it reached 28% in 1980.
After that, there was a big setback that goes back to 2000, when this percentage
reached 21%. From 2004 onwards we have a new recovery – the one associated
with the commodity boom –, but from 2015 a new fallback starts.
What do new historical facts explain the quasi-stagnation of Latin American
economies from 1990 onwards, after having experienced accelerated growth from
the war until 1980? As I have argued, in the case of Brazil there were two new
causes or historical facts: the fall in public savings that occurred around 1980 and
the commercial and financial liberalization between 1990 and 1992.
If we compare the 1970s (the last decade in which the growth of the Brazilian
economy was satisfactory) with the 35 years from 1990 until today, the radical
drop in public savings was 6 percentage points. While in the 1970s, it was around
4% of GDP, from 1980 until now it has been negative, around -2% of GDP. As a
result, public investment, which in that decade was around 8%, fell to 2% of GDP.
This happened because the mistaken foreign debt incurred by the military in the
1970s led Brazil to a balance of payments crisis and a moratorium on foreign debt
in 1980, while the state-owned companies that were responsible for a large part of
public savings were perversely used in two ways: to get the country into debt in
dollars, and to control inflation by lowering their prices. In this way, his profit and
therefore his savings disappeared.
The second cause was the commercial and financial liberalization that all Latin
American countries made around 1990. In the case of Brazil, trade liberalization
(the reduction of the average tariff on imports of manufactured goods from 45%
220 Brazilian Journal of Political Economy 45 (2), 2025 • pp. 211-234
to 12% and the elimination of export subsidies) was deadly for the manufacturing
industry. The deindustrialization that followed was brutal, as we can see from
Figure 2. This occurred not because the Brazilian industry was inefficient. At that
time, the Brazilian manufacturing industry was reasonably capable, and its exports
corresponded to more than 60% of its total exports.
Figure 2: Share of the manufacturing industry in GDP (1947-2019)
10
12
14
16
18
20
22
24
26
28
30
1947
1950
1953
1956
1959
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
2016
2019
Source: Morceiro, P. C. (2021), “Influência metodológica na desindustrialização
brasileira [Methodological influence on Brazilian deindustrialization], Brazilian
Journal of Political Economy, 41 (03) October: 700-720. Note: Series adjusted to
the 2010 IBGE National Accounts System.
About ten years later, in 1999, I realized the quasi-stagnation of the Brazilian
economy, which, at that time, had lasted for 20 years, and I wrote a paper pointing
out this fact.8 And then I began to wonder why this was happening. Neither classical
structuralist developmentalism nor post-Keynesian economics explained this quasi-
stagnation. I already knew that there was the problem of the drastic fall in public
savings – something I already pointed out in late 1980s when I defined the ‘fiscal
crisis of the state’9 – but I only defined the second cause of quasi-stagnation (the trap
of the high interest rate and the appreciated exchange rate) in the early 2000s, when
I started to build the NDT, including the Dutch disease model. The interest rate had
become very high with the 1992 financial liberalization and the 1994 Real Plan, while
the exchange rate had appreciated in the long run due to high interest rates and the
non-neutralized Dutch disease from the 1990 trade liberalization.
The new-developmental theory emerged in the early 2000s. Then, I wrote two
8 See my paper, “Incompetence and confidence building behind 20 years of quasi-stagnation in Latin
America.” 2002)
9 See my paper, “Incompetence and confidence building behind 20 years of quasi-stagnation in Latin
America.” 2002)
to 12% and the elimination of export subsidies) was deadly for the manufacturing
industry. The deindustrialization that followed was brutal, as we can see from
Figure 2. This occurred not because the Brazilian industry was inefficient. At that
time, the Brazilian manufacturing industry was reasonably capable, and its exports
corresponded to more than 60% of its total exports.
Figure 2: Share of the manufacturing industry in GDP (1947-2019)
10
12
14
16
18
20
22
24
26
28
30
1947
1950
1953
1956
1959
1962
1965
1968
1971
1974
1977
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
2016
2019
Source: Morceiro, P. C. (2021), “Influência metodológica na desindustrialização
brasileira [Methodological influence on Brazilian deindustrialization], Brazilian
Journal of Political Economy, 41 (03) October: 700-720. Note: Series adjusted to
the 2010 IBGE National Accounts System.
About ten years later, in 1999, I realized the quasi-stagnation of the Brazilian
economy, which, at that time, had lasted for 20 years, and I wrote a paper pointing
out this fact.8 And then I began to wonder why this was happening. Neither classical
structuralist developmentalism nor post-Keynesian economics explained this quasi-
stagnation. I already knew that there was the problem of the drastic fall in public
savings – something I already pointed out in late 1980s when I defined the ‘fiscal
crisis of the state’9 – but I only defined the second cause of quasi-stagnation (the trap
of the high interest rate and the appreciated exchange rate) in the early 2000s, when
I started to build the NDT, including the Dutch disease model. The interest rate had
become very high with the 1992 financial liberalization and the 1994 Real Plan, while
the exchange rate had appreciated in the long run due to high interest rates and the
non-neutralized Dutch disease from the 1990 trade liberalization.
The new-developmental theory emerged in the early 2000s. Then, I wrote two
8 See my paper, “Incompetence and confidence building behind 20 years of quasi-stagnation in Latin
America.” 2002)
9 See my paper, “Incompetence and confidence building behind 20 years of quasi-stagnation in Latin
America.” 2002)
221Revista de Economia Política 45 (2), 2025 • pp. 211-234
papers with Yoshiaki Nakano, which I consider having been the founding articles
on NDT. As the papers I wrote in the early 1980s, also with Nakano, on the theo-
ry of inertial inflation had been the ‘pre-founders’. NDT is not an alternative to
CDT, but a complement. NDT was based on CDT and incorporated all of its con-
tributions, which I listed above. I called the new theory ‘new developmentalism’ or
‘new-developmental theory’, but I could have called it ‘extended classical develop-
mental theory’. In 2006 I gave the theory its historical character by seeing it as a
response to the quasi-stagnation that was then occurring in Latin America. It was
NDT’s political economy that emerged alongside its economics. Finally, I believe
that the 2008 paper, in which I developed my model of Dutch disease, should still
be considered a founder. NDT thus gained body, and continues to do so today, even
though its moment of greatest development occurred between 2008 and 2014,
while the golden period of classical developmental theory was the 1950s and 1960s.
CONTRIBUTIONS OF NEW DEVELOPMENTALISM
I will now examine NDT’s contributions, listing the main new elements it in-
troduced – elements that did not exist in CDT – and make a few criticisms of some
points on which CDT was wrong. The two theories are complementary, but this
does not prevent a disagreement. For each contribution I will associate only one
reference; all of them are discussed in my latest book New Developmentalism –
Introducing a New Economics and Political Economy (2024a).
1st contribution. The most general contribution of NDT is that it has en-
dowed developmentalist thinking with a development macroeconomics.10 CDT
did not have its own macroeconomics. It limited itself to using post-Keynesian eco-
nomics, which is essentially short-term macroeconomics. With its focus on the rate
of profit, the interest rate, the exchange rate, and the savings and investment rate,
NDT becomes a macroeconomics of development. In 2007 I published a book,
The Macroeconomics of Quasi-Stagnation – a book that discusses the develop-
ment of Brazil but is already a first attempt to give the new theory a general char-
acter. In subsequent years, the economic side of NDT continued to be developed
step by step.
2nd contribution. An idea that was soon affirmed is that macroeconomics, in
addition to working with economic aggregates according to the Keynesian tradi-
tion, can and should also work with the five prices (the interest rate, the exchange
rate, the wage rate, the rate of profit and the inflation rate) which must be kept
right, something that the market definitely guarantees. A poorly informed American
economist, Tom Palley, understood the ‘right’ in the neoclassical sense, and con-
cluded that NDT is ‘neoliberal’! Bullshit. Macroeconomic prices are certain not be-
cause they are ‘freely determined by the market’, but because they are compatible
10 In his book Macroeconomics and Stagnation, André Nassif (2023) perceived this fact very accurately.
papers with Yoshiaki Nakano, which I consider having been the founding articles
on NDT. As the papers I wrote in the early 1980s, also with Nakano, on the theo-
ry of inertial inflation had been the ‘pre-founders’. NDT is not an alternative to
CDT, but a complement. NDT was based on CDT and incorporated all of its con-
tributions, which I listed above. I called the new theory ‘new developmentalism’ or
‘new-developmental theory’, but I could have called it ‘extended classical develop-
mental theory’. In 2006 I gave the theory its historical character by seeing it as a
response to the quasi-stagnation that was then occurring in Latin America. It was
NDT’s political economy that emerged alongside its economics. Finally, I believe
that the 2008 paper, in which I developed my model of Dutch disease, should still
be considered a founder. NDT thus gained body, and continues to do so today, even
though its moment of greatest development occurred between 2008 and 2014,
while the golden period of classical developmental theory was the 1950s and 1960s.
CONTRIBUTIONS OF NEW DEVELOPMENTALISM
I will now examine NDT’s contributions, listing the main new elements it in-
troduced – elements that did not exist in CDT – and make a few criticisms of some
points on which CDT was wrong. The two theories are complementary, but this
does not prevent a disagreement. For each contribution I will associate only one
reference; all of them are discussed in my latest book New Developmentalism –
Introducing a New Economics and Political Economy (2024a).
1st contribution. The most general contribution of NDT is that it has en-
dowed developmentalist thinking with a development macroeconomics.10 CDT
did not have its own macroeconomics. It limited itself to using post-Keynesian eco-
nomics, which is essentially short-term macroeconomics. With its focus on the rate
of profit, the interest rate, the exchange rate, and the savings and investment rate,
NDT becomes a macroeconomics of development. In 2007 I published a book,
The Macroeconomics of Quasi-Stagnation – a book that discusses the develop-
ment of Brazil but is already a first attempt to give the new theory a general char-
acter. In subsequent years, the economic side of NDT continued to be developed
step by step.
2nd contribution. An idea that was soon affirmed is that macroeconomics, in
addition to working with economic aggregates according to the Keynesian tradi-
tion, can and should also work with the five prices (the interest rate, the exchange
rate, the wage rate, the rate of profit and the inflation rate) which must be kept
right, something that the market definitely guarantees. A poorly informed American
economist, Tom Palley, understood the ‘right’ in the neoclassical sense, and con-
cluded that NDT is ‘neoliberal’! Bullshit. Macroeconomic prices are certain not be-
cause they are ‘freely determined by the market’, but because they are compatible
10 In his book Macroeconomics and Stagnation, André Nassif (2023) perceived this fact very accurately.
222 Brazilian Journal of Political Economy 45 (2), 2025 • pp. 211-234
with the economic development of the country. For example, a low interest rate
and a competitive exchange rate were essential for the development and catching
up of East Asian countries.
3rd contribution. Before that, in the early 1980s, Yoshiaki Nakano and I were
the first to formulate a complete model of the theory of inertial inflation, with the
paper that has in its title the model itself – “Accelerating, maintaining and sanc-
tioning factors of inflation” (1983), respectively the demand or supply shocks, the
formal or informal indexation, and the increase in the nominal quantity of money
to keep the real quantity.11
4th contribution. NDT began with the criticism of the current account deficit
policy or, in other words, the thesis that capital inflows rather hinder than contrib-
ute to the country’s growth when they serve as financing for these deficits. In fact,
it is the deficits in the current account (the ‘foreign savings’) that are to be criti-
cized, because they necessarily imply an appreciation of the exchange rate, insofar
as they imply net capital inflows, that is, a balance of capital inflows greater than
the outflows – net capital inflows, therefore. The deficits are justified by the Empire
and its liberal orthodoxy with the thesis that capital-poor countries should obtain
capital from capital-rich countries. A thesis that would be correct if there was a
balance in the current account – exactly what the Global North does not want.
Besides, we also have the naïve classical structuralist economists who use the the-
sis of external constraint to consider current account deficits ‘structural’. In any
case, the net inflows of capital are real – they are external savings – but they don’t
add to domestic savings, but replace them to the extent that the appreciation of the
currency causes an artificial increase in domestic consumption.12
5th contribution. NDT started from a basic hypothesis: that the exchange rate
is a determinant of investments. This hypothesis was soon proven with the doctor-
al thesis of my student, Paulo Gala (2006), later transformed into a paper pub-
lished in the Cambridge Journal of Economists (2008).
6th contributionl A Dutch disease model dealing with a major market failure
occurs in commodity-exporting countries and usually manifests itself when there
is a commodity boom. As I demonstrated in a 2008 paper, we then have two ex-
change rate equilibria: the current or general equilibrium, which balances the
country’s current account, and the ‘industrial equilibrium’, which balances the spe-
cific exchange rate for manufacturing industry, or, more precisely, for the produc-
tion of sophisticated tradable goods endowed with high value added per capita.
When commodity prices increase above ‘normal’, the exchange rate appreciates,
compensating the exporters for the increase in prices, while manufacturing indus-
try ceases to be competitive because its prices remain constant, and industrializa-
11 Bresser-Pereira and Nakano (1983).
12 See Bresser-Pereira and Gala (2007).
with the economic development of the country. For example, a low interest rate
and a competitive exchange rate were essential for the development and catching
up of East Asian countries.
3rd contribution. Before that, in the early 1980s, Yoshiaki Nakano and I were
the first to formulate a complete model of the theory of inertial inflation, with the
paper that has in its title the model itself – “Accelerating, maintaining and sanc-
tioning factors of inflation” (1983), respectively the demand or supply shocks, the
formal or informal indexation, and the increase in the nominal quantity of money
to keep the real quantity.11
4th contribution. NDT began with the criticism of the current account deficit
policy or, in other words, the thesis that capital inflows rather hinder than contrib-
ute to the country’s growth when they serve as financing for these deficits. In fact,
it is the deficits in the current account (the ‘foreign savings’) that are to be criti-
cized, because they necessarily imply an appreciation of the exchange rate, insofar
as they imply net capital inflows, that is, a balance of capital inflows greater than
the outflows – net capital inflows, therefore. The deficits are justified by the Empire
and its liberal orthodoxy with the thesis that capital-poor countries should obtain
capital from capital-rich countries. A thesis that would be correct if there was a
balance in the current account – exactly what the Global North does not want.
Besides, we also have the naïve classical structuralist economists who use the the-
sis of external constraint to consider current account deficits ‘structural’. In any
case, the net inflows of capital are real – they are external savings – but they don’t
add to domestic savings, but replace them to the extent that the appreciation of the
currency causes an artificial increase in domestic consumption.12
5th contribution. NDT started from a basic hypothesis: that the exchange rate
is a determinant of investments. This hypothesis was soon proven with the doctor-
al thesis of my student, Paulo Gala (2006), later transformed into a paper pub-
lished in the Cambridge Journal of Economists (2008).
6th contributionl A Dutch disease model dealing with a major market failure
occurs in commodity-exporting countries and usually manifests itself when there
is a commodity boom. As I demonstrated in a 2008 paper, we then have two ex-
change rate equilibria: the current or general equilibrium, which balances the
country’s current account, and the ‘industrial equilibrium’, which balances the spe-
cific exchange rate for manufacturing industry, or, more precisely, for the produc-
tion of sophisticated tradable goods endowed with high value added per capita.
When commodity prices increase above ‘normal’, the exchange rate appreciates,
compensating the exporters for the increase in prices, while manufacturing indus-
try ceases to be competitive because its prices remain constant, and industrializa-
11 Bresser-Pereira and Nakano (1983).
12 See Bresser-Pereira and Gala (2007).
223Revista de Economia Política 45 (2), 2025 • pp. 211-234
tion cannot advance, or, if the country is already industrialized, deindustrialization
becomes inavoidable.
The only solution is to neutralize the Dutch disease, creating a second ex-
change rate at the level of the industrial equilibrium.13 There are two ways to neu-
tralize Dutch disease: a variable export tax on the commodities, or a tariff reform
that establishes a “single Dutch disease neutralization tariff” that also varies ac-
cording to the variation in the prices of exported commodities.14
7th contribution. The definition of the ‘high interest rates and appreciated ex-
change rate trap’, which was already present in my 2007 book already cited. The
very high interest rate was one of the causes of the appreciated exchange rate (low
dollar price). In 2019, Eliane C. Araújo, Samuel C. Peres and I demonstrated that
this trap could also be called the ‘liberalization trap’, because it was the 1990 trade
liberalization that ended the neutralization of the Dutch disease, which customs
tariffs achieved. Each tariff implied a depreciation of the national currency for the
beneficiaries of the import tariffs. When countries opened their economies, falling
into the liberalization trap, deindustrialization was unleashed.15
8th contribution. The thesis that countries that present recurrent current-ac-
count deficits (or superávits) result from a policy and not only due to irresponsible
public deficits that increase demand and cause a balance of payments crisis, as the
conventional theory suggests. The policy has either the explicit objective of ‘grow-
ing with foreign savings’ that hide the interest of the politicians in getting reelected
by benefiting from the exchange rate populism implicit in deficits16 or of a deliber-
ate policy, which easily leads countries into currency or balance of payment crises.
These deficits result from a policy because if there is no policy, recurring current
account deficits would not be possible; the market would pull the exchange rate to
equilibrium.17 In Brazil, for example, this policy is practiced, but it is never af-
firmed. Almost all Brazilians are satisfied with overappreciation as long as the def-
icit is limited and is financed preferably by direct investments.18 China and, for
long, Germany presented a deliberate current account surplus.
9th contribution. NDT’s ninth contribution to economics was the thesis that
the greater the deficit in a country’s current account, the more appreciated its ex-
change rate will be. Thus, countries should have a zero current account deficit pol-
icy, because in the event of a deficit, net capital inflows will be positive and this
will necessarily appreciate the exchange rate.
13 See Bresser-Pereira (2008).
14 See Bresser-Pereira (2024).
15 Bresser-Pereira, Araújo and Peres (2019).
16 Bresser-Pereira, González and Lucinda (2008).
17 Bresser-Pereira (2019a).
18 Bresser-Pereira (2012a; 2016 note 33; 2019).
tion cannot advance, or, if the country is already industrialized, deindustrialization
becomes inavoidable.
The only solution is to neutralize the Dutch disease, creating a second ex-
change rate at the level of the industrial equilibrium.13 There are two ways to neu-
tralize Dutch disease: a variable export tax on the commodities, or a tariff reform
that establishes a “single Dutch disease neutralization tariff” that also varies ac-
cording to the variation in the prices of exported commodities.14
7th contribution. The definition of the ‘high interest rates and appreciated ex-
change rate trap’, which was already present in my 2007 book already cited. The
very high interest rate was one of the causes of the appreciated exchange rate (low
dollar price). In 2019, Eliane C. Araújo, Samuel C. Peres and I demonstrated that
this trap could also be called the ‘liberalization trap’, because it was the 1990 trade
liberalization that ended the neutralization of the Dutch disease, which customs
tariffs achieved. Each tariff implied a depreciation of the national currency for the
beneficiaries of the import tariffs. When countries opened their economies, falling
into the liberalization trap, deindustrialization was unleashed.15
8th contribution. The thesis that countries that present recurrent current-ac-
count deficits (or superávits) result from a policy and not only due to irresponsible
public deficits that increase demand and cause a balance of payments crisis, as the
conventional theory suggests. The policy has either the explicit objective of ‘grow-
ing with foreign savings’ that hide the interest of the politicians in getting reelected
by benefiting from the exchange rate populism implicit in deficits16 or of a deliber-
ate policy, which easily leads countries into currency or balance of payment crises.
These deficits result from a policy because if there is no policy, recurring current
account deficits would not be possible; the market would pull the exchange rate to
equilibrium.17 In Brazil, for example, this policy is practiced, but it is never af-
firmed. Almost all Brazilians are satisfied with overappreciation as long as the def-
icit is limited and is financed preferably by direct investments.18 China and, for
long, Germany presented a deliberate current account surplus.
9th contribution. NDT’s ninth contribution to economics was the thesis that
the greater the deficit in a country’s current account, the more appreciated its ex-
change rate will be. Thus, countries should have a zero current account deficit pol-
icy, because in the event of a deficit, net capital inflows will be positive and this
will necessarily appreciate the exchange rate.
13 See Bresser-Pereira (2008).
14 See Bresser-Pereira (2024).
15 Bresser-Pereira, Araújo and Peres (2019).
16 Bresser-Pereira, González and Lucinda (2008).
17 Bresser-Pereira (2019a).
18 Bresser-Pereira (2012a; 2016 note 33; 2019).
224 Brazilian Journal of Political Economy 45 (2), 2025 • pp. 211-234
10th contribution. This thesis would be completed in 2014 with the addition
of a third exchange rate equilibrium – the foreign debt equilibrium, which corre-
sponds to John Williamson’s ‘fundamental equilibrium’. It corresponds to the ex-
change rate that is consistent with a current account deficit that grows at most at
the same rate as GDP growth, so that there is no increase in the external debt/GDP
ratio, and, therefore, the risk of a currency crisis is much lower.19 The difference
between one and the other equilibrium is not in the concept but in the way of see-
ing it. While the fundamental equilibrium is desirable, because the rich countries
have an interest in justifying the exports of capital, new-developmental economics
sees the foreign debt equilibrium as perverse for the reasons expressed above.
Figure 3: Exchange rate cycle and the three equilibriums
Source: Author’s elaboration.
11th contribution. New-developmental economics proposes the existence of an
exchange rate cycle mainly in commodity exports developing countries. This cycle
is described in the well-known Figure 3, which also shows the three equilibriums.
The cycle begins with a financial crisis in which the exchange rate depreciates dras-
tically; then, the exchange rate begins to appreciate, crosses the industrial equilibri-
um (which is not cyclical), crosses the current equilibrium (which is cyclical because
it includes commodities) and the country starts to have a deficit in the current ac-
count, and finally crosses the foreign debt equilibrium, and the deficit in the current
account becomes unsustainable. It remains at this point for a few years while the
foreign debt grows dangerously, and finally foreign creditors lose confidence in the
country and we have another currency crisis. In Brazil there was a serious crisis in
19 Bresser-Pereira, Gonzales and Lucinda (2008).
10th contribution. This thesis would be completed in 2014 with the addition
of a third exchange rate equilibrium – the foreign debt equilibrium, which corre-
sponds to John Williamson’s ‘fundamental equilibrium’. It corresponds to the ex-
change rate that is consistent with a current account deficit that grows at most at
the same rate as GDP growth, so that there is no increase in the external debt/GDP
ratio, and, therefore, the risk of a currency crisis is much lower.19 The difference
between one and the other equilibrium is not in the concept but in the way of see-
ing it. While the fundamental equilibrium is desirable, because the rich countries
have an interest in justifying the exports of capital, new-developmental economics
sees the foreign debt equilibrium as perverse for the reasons expressed above.
Figure 3: Exchange rate cycle and the three equilibriums
Source: Author’s elaboration.
11th contribution. New-developmental economics proposes the existence of an
exchange rate cycle mainly in commodity exports developing countries. This cycle
is described in the well-known Figure 3, which also shows the three equilibriums.
The cycle begins with a financial crisis in which the exchange rate depreciates dras-
tically; then, the exchange rate begins to appreciate, crosses the industrial equilibri-
um (which is not cyclical), crosses the current equilibrium (which is cyclical because
it includes commodities) and the country starts to have a deficit in the current ac-
count, and finally crosses the foreign debt equilibrium, and the deficit in the current
account becomes unsustainable. It remains at this point for a few years while the
foreign debt grows dangerously, and finally foreign creditors lose confidence in the
country and we have another currency crisis. In Brazil there was a serious crisis in
19 Bresser-Pereira, Gonzales and Lucinda (2008).
225Revista de Economia Política 45 (2), 2025 • pp. 211-234
2002, and a milder crisis in 2014 because the country had ample reserves. It was
not the growth in the foreign debt-GDP ratio, but the fast growth of current ac-
count deficit that led creditors to lose confidence and suspend the rollover of the
debt, this closing the cycle.20 According to a study carried out by the Center for
New Developmentalism/EAESP/FGV, it was possible to show empirically (Figure 4)
the exchange rate cycle observed in Brazil between 2005 and 2023. In it, the calcu-
lated industrial equilibrium acted as a reference equal to zero, and the observed ex-
change rate fluctuates in a cyclical manner.
Figure 4: Industrial equilibrium and observed nominal
exchange rate 2005-2023 (R$/US$)
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
observed exchange rate /
industrial equilibrium rate
Source: Center for the Study of New Developmentalism/EAESP/FGV.
12th contribution. The ‘access to demand’ thesis, the understanding that the ex-
change rate is like a switch that connects or disconnects capable companies from
their demand.21 Thus, if the manufacturing companies use the best technology avail-
able, but are not exporting, this means that the exchange rate is overvalued and they
have no access to external demand.
13th contribution. The tesis that the exchange rate is or can be a determinant
of economic development. Research defining this causal relationship was piling up,
but there was no explanatory theory for it. In 2012, I came to this explanation be-
cause it is the only economics that claims that the exchange rate tends to be over-
20 See Bresser-Pereira (2010; 2024a).
21 Bresser-Pereira (2011; 2015).
2002, and a milder crisis in 2014 because the country had ample reserves. It was
not the growth in the foreign debt-GDP ratio, but the fast growth of current ac-
count deficit that led creditors to lose confidence and suspend the rollover of the
debt, this closing the cycle.20 According to a study carried out by the Center for
New Developmentalism/EAESP/FGV, it was possible to show empirically (Figure 4)
the exchange rate cycle observed in Brazil between 2005 and 2023. In it, the calcu-
lated industrial equilibrium acted as a reference equal to zero, and the observed ex-
change rate fluctuates in a cyclical manner.
Figure 4: Industrial equilibrium and observed nominal
exchange rate 2005-2023 (R$/US$)
-50%
-40%
-30%
-20%
-10%
0%
10%
20%
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
observed exchange rate /
industrial equilibrium rate
Source: Center for the Study of New Developmentalism/EAESP/FGV.
12th contribution. The ‘access to demand’ thesis, the understanding that the ex-
change rate is like a switch that connects or disconnects capable companies from
their demand.21 Thus, if the manufacturing companies use the best technology avail-
able, but are not exporting, this means that the exchange rate is overvalued and they
have no access to external demand.
13th contribution. The tesis that the exchange rate is or can be a determinant
of economic development. Research defining this causal relationship was piling up,
but there was no explanatory theory for it. In 2012, I came to this explanation be-
cause it is the only economics that claims that the exchange rate tends to be over-
20 See Bresser-Pereira (2010; 2024a).
21 Bresser-Pereira (2011; 2015).
226 Brazilian Journal of Political Economy 45 (2), 2025 • pp. 211-234
valued in the long-term. Given that, the exchange rate will discourage investment
in the non-commodity sophisticated tradable goods to the extent that the compa-
nies predict that the exchange rate is overvalued and will remain overvalued for
long. Thus, if the exchange rate ceases to be appreciated because the Dutch disease
was neutralized, companies will believe that the industrial equilibrium will be
maintained in the future, and will invest and export. China always, Germany not
anymore, presented recurrent current account surplus. Something that would only
be possible if the state could be able to convince-pressure the working class not to
increase its standard of living for the country to export more.
14th contribution. The method for calculating the industrial equilibrium.
Using the unit comparative labor cost and using as basis that at a given year the
Dutch disease was zero, that is, the industrial equilibrium corresponded to the cur-
rent equilibrium. Nelson Marconi signed the original version. André Nassif, Feijó
and Araújo, and Francisco Eduardo Pires de Souza developed different methods.22
15th contribution. The concept of the value of the exchange rate or foreign
currency. In the same way that commodities have a value around which their price
fluctuates according to supply and demand, the price of foreign currency fluctu-
ates around its value according to the supply of imports and the demand for ex-
ports – a value defined by the unit labour cost of the country, which can be com-
pared with the unitary currencies of the other countries gathered in a basket of
currencies.23
16th contribution. The model for determining the exchange rate. In the
Brazilian edition of Macroeconomia Desenvolvimentista (2016), Marconi, Oreiro
and I were able to reasonably define such determination; in 2014, Feijó, Araujo
and I completed the model. The structural component of this determination is the
value of the foreign currency, which replaces the exchange rate defined by the pur-
chasing power parity; a second and a third variables are the different interest rate
in relation to other countries and the foreign exchange ratios, which are in all
models; and the fourth variable is specific to NDT – the current account deficit or
surplus policy that some countries adopt. This theory would be completed in
2024a, when it was published “The determination of the exchange rate. A new-de-
velopmental approach.”24
17th contribution. The concept of ‘extended Dutch disease’. Instead of mea-
suring the Dutch disease as the difference between the industrial equilibrium and
the current equilibrium, I proposed that it should be the difference between the in-
dustrial equilibrium and the equilibrium of the external debt, since the developing
22 Marconi (2012); Nassif, Feijó and Araujo (2012); Souza (2024).
23 Bresser-Pereira (2013; 2024a).
24 Bresser-Pereira, Marconi and Oreiro (2016); Bresser-Pereira, Feijó and Araujo (2024).
valued in the long-term. Given that, the exchange rate will discourage investment
in the non-commodity sophisticated tradable goods to the extent that the compa-
nies predict that the exchange rate is overvalued and will remain overvalued for
long. Thus, if the exchange rate ceases to be appreciated because the Dutch disease
was neutralized, companies will believe that the industrial equilibrium will be
maintained in the future, and will invest and export. China always, Germany not
anymore, presented recurrent current account surplus. Something that would only
be possible if the state could be able to convince-pressure the working class not to
increase its standard of living for the country to export more.
14th contribution. The method for calculating the industrial equilibrium.
Using the unit comparative labor cost and using as basis that at a given year the
Dutch disease was zero, that is, the industrial equilibrium corresponded to the cur-
rent equilibrium. Nelson Marconi signed the original version. André Nassif, Feijó
and Araújo, and Francisco Eduardo Pires de Souza developed different methods.22
15th contribution. The concept of the value of the exchange rate or foreign
currency. In the same way that commodities have a value around which their price
fluctuates according to supply and demand, the price of foreign currency fluctu-
ates around its value according to the supply of imports and the demand for ex-
ports – a value defined by the unit labour cost of the country, which can be com-
pared with the unitary currencies of the other countries gathered in a basket of
currencies.23
16th contribution. The model for determining the exchange rate. In the
Brazilian edition of Macroeconomia Desenvolvimentista (2016), Marconi, Oreiro
and I were able to reasonably define such determination; in 2014, Feijó, Araujo
and I completed the model. The structural component of this determination is the
value of the foreign currency, which replaces the exchange rate defined by the pur-
chasing power parity; a second and a third variables are the different interest rate
in relation to other countries and the foreign exchange ratios, which are in all
models; and the fourth variable is specific to NDT – the current account deficit or
surplus policy that some countries adopt. This theory would be completed in
2024a, when it was published “The determination of the exchange rate. A new-de-
velopmental approach.”24
17th contribution. The concept of ‘extended Dutch disease’. Instead of mea-
suring the Dutch disease as the difference between the industrial equilibrium and
the current equilibrium, I proposed that it should be the difference between the in-
dustrial equilibrium and the equilibrium of the external debt, since the developing
22 Marconi (2012); Nassif, Feijó and Araujo (2012); Souza (2024).
23 Bresser-Pereira (2013; 2024a).
24 Bresser-Pereira, Marconi and Oreiro (2016); Bresser-Pereira, Feijó and Araujo (2024).
227Revista de Economia Política 45 (2), 2025 • pp. 211-234
countries that export commodities understand the equilibrium of external debt as
correct – Williamson’s ‘fundamental equilibrium’. 25
To date, I have always treated net capital inflows as the result of current ac-
count deficits, but they may be larger than that given that capital inflows into de-
veloping countries are pro-cyclical, making developing countries that insist on for-
eign currency debt suffer disproportionately from currency crises. In these terms,
as Griffith-Jones and Pratt already stated in 2001, “greater use of banks’ internal
risk management systems seems likely to be inherently pro-cyclical and therefore
likely to amplify the economic cycle, thus increasing frequency and scale of crises.”
THE INEQUALITY QUESTION
Besides economics, NDT is a political economy. It is, therefore, a theory in
which economics and politics are integrated. In this section, I will discuss briefly
the problem of inequality, in the framework of capitalism – a form of social orga-
nization that, left to the market, tends to be increasingly unequal. NDT didn’t dis-
cuss sufficiently this issue and how to countervail it. But NDT has been, from the
start, a progressive theoretical framework. We can see that in its concept of eco-
nomic growth: it is the historical process of capital accumulation with the incor-
poration of technical progress that increases consistently the standard of living of
people.
There are some main tools that the state can use to reduce inequality: public
and universal education, the welfare state, well-designed cash-transfer systems, the
gradual increase of minimum wage, and, mainly, progressive taxation, fends all of
them.
Critics say the export-led strategy it advocates is income-concentrating. Indeed,
it is, but if we reject all policies that favor the rich in any way, we will not be able
to grow and improve the living standards of the population. These same critics add
that NDT defends exchange rate depreciation, and this causes increased inequality.
It is false that the new developmentalism defends devaluation; it only defends this
policy when the current balance is appreciated (which occurs when the country
repeatedly runs current account deficits). On the other hand, when the Dutch dis-
ease manifests itself, the country starts to have two exchange rate equilibriums: the
current equilibrium exchange rate, that balances the current account, and the in-
dustrial equilibrium exchange rate, that makes competitive the tradable non-com-
modity goods and services. Then, NDT defends not the devaluation of the na-
tional currency, but the neutralization of the Dutch disease, which implies that the
exchange rate specific for this sector of the economy ‘devaluates’ so to become
competitive (provided, naturally, that it uses the best technology available).
25 Bresser-Pereira (2023).
countries that export commodities understand the equilibrium of external debt as
correct – Williamson’s ‘fundamental equilibrium’. 25
To date, I have always treated net capital inflows as the result of current ac-
count deficits, but they may be larger than that given that capital inflows into de-
veloping countries are pro-cyclical, making developing countries that insist on for-
eign currency debt suffer disproportionately from currency crises. In these terms,
as Griffith-Jones and Pratt already stated in 2001, “greater use of banks’ internal
risk management systems seems likely to be inherently pro-cyclical and therefore
likely to amplify the economic cycle, thus increasing frequency and scale of crises.”
THE INEQUALITY QUESTION
Besides economics, NDT is a political economy. It is, therefore, a theory in
which economics and politics are integrated. In this section, I will discuss briefly
the problem of inequality, in the framework of capitalism – a form of social orga-
nization that, left to the market, tends to be increasingly unequal. NDT didn’t dis-
cuss sufficiently this issue and how to countervail it. But NDT has been, from the
start, a progressive theoretical framework. We can see that in its concept of eco-
nomic growth: it is the historical process of capital accumulation with the incor-
poration of technical progress that increases consistently the standard of living of
people.
There are some main tools that the state can use to reduce inequality: public
and universal education, the welfare state, well-designed cash-transfer systems, the
gradual increase of minimum wage, and, mainly, progressive taxation, fends all of
them.
Critics say the export-led strategy it advocates is income-concentrating. Indeed,
it is, but if we reject all policies that favor the rich in any way, we will not be able
to grow and improve the living standards of the population. These same critics add
that NDT defends exchange rate depreciation, and this causes increased inequality.
It is false that the new developmentalism defends devaluation; it only defends this
policy when the current balance is appreciated (which occurs when the country
repeatedly runs current account deficits). On the other hand, when the Dutch dis-
ease manifests itself, the country starts to have two exchange rate equilibriums: the
current equilibrium exchange rate, that balances the current account, and the in-
dustrial equilibrium exchange rate, that makes competitive the tradable non-com-
modity goods and services. Then, NDT defends not the devaluation of the na-
tional currency, but the neutralization of the Dutch disease, which implies that the
exchange rate specific for this sector of the economy ‘devaluates’ so to become
competitive (provided, naturally, that it uses the best technology available).
25 Bresser-Pereira (2023).
228 Brazilian Journal of Political Economy 45 (2), 2025 • pp. 211-234
CONTRIBUTIONS OF THE NEW DEVELOPMENTALIST
POLITICAL ECONOMY
Purely economic relations do not take place in a vacuum, but in a society, in a
civil society and a nation and the respective social classes that sociology studies,
and in a political system in which the national and industrial revolution (the capi-
talist revolution) gives rise to the formation of the sovereign nation-state consti-
tuted of a nation, a state, and a territory. in which class coalitions play a central
role. This all happens in the framework of a Capitalist Revolution that, in general
terms, takes place in Europe, between the seventeenth and nineteenth centuries,
giving rise to the rich countries of the early twentieth century and, in terms of each
country, this industrial and capitalist revolution (in this case written in lowercase
letters) is the fundamental change that begins the development of that country.
I wrote my last book, The Rise and Fall of Neoliberal Capitalism (2025), to
both understand the evolution of capitalism from the late nineteenth century and
develop the political economy of NDT. In this paper, I shall briefly discuss only two
or three points of this political economy.
First, the question of the nation, imperialism, and anti-imperialism. Imperialism
– the thesis that the Global North (led since the beginning of the twentieth century
by the United States) seeks to prevent peripheral countries from industrializing and
developing – is already present in CDT: in the opposition between center and pe-
riphery. There are three reasons for this. The classic objectives of imperialism were,
in terms of trade relations, to maintain permanent unequal exchange (the exchange
of goods with high value added for goods with low added value per capita) and, in
terms of capital flows, to lead the peripheral countries to accept the export of
capital to them. From the 1970s onwards, a third objective was added: to prevent
these countries from becoming competitors. Once formal colonies became unviable,
the Empire’s instruments for achieving its goals have become the combination of
pressures of all kinds while persuading the countries in the periphery of capitalism
that economic liberalism was the solution to all their problems, using for that its
ideological hegemony or ‘soft power’.
Will the underdeveloped countries be able to carry out their capitalist revolu-
tion under these circumstances? The industrial elites on the periphery of capitalism,
subjected to the ideological hegemony of the Global North, are ambiguous and
contradictory. At times they are nationalists – and then manage to establish a de-
velopmental class coalition with the public bureaucracy and the workers – at oth-
ers they are surrenderers or dependents. The second alternative gave rise to the ‘de-
pendency theory’, which had two versions having in common the postulate of the
definitive dependence of the elites. The first version of a Marxist character had
Andre Gunder Frank and Ruy Mauro Marini as its main representatives; the other
was liberal and had Fernando Henrique Cardoso as its main name. The first af-
firmed that the capitalist revolution is impossible and unrealistically concluded
that the solution would be the socialist revolution; the second, more ‘realistic’, as-
CONTRIBUTIONS OF THE NEW DEVELOPMENTALIST
POLITICAL ECONOMY
Purely economic relations do not take place in a vacuum, but in a society, in a
civil society and a nation and the respective social classes that sociology studies,
and in a political system in which the national and industrial revolution (the capi-
talist revolution) gives rise to the formation of the sovereign nation-state consti-
tuted of a nation, a state, and a territory. in which class coalitions play a central
role. This all happens in the framework of a Capitalist Revolution that, in general
terms, takes place in Europe, between the seventeenth and nineteenth centuries,
giving rise to the rich countries of the early twentieth century and, in terms of each
country, this industrial and capitalist revolution (in this case written in lowercase
letters) is the fundamental change that begins the development of that country.
I wrote my last book, The Rise and Fall of Neoliberal Capitalism (2025), to
both understand the evolution of capitalism from the late nineteenth century and
develop the political economy of NDT. In this paper, I shall briefly discuss only two
or three points of this political economy.
First, the question of the nation, imperialism, and anti-imperialism. Imperialism
– the thesis that the Global North (led since the beginning of the twentieth century
by the United States) seeks to prevent peripheral countries from industrializing and
developing – is already present in CDT: in the opposition between center and pe-
riphery. There are three reasons for this. The classic objectives of imperialism were,
in terms of trade relations, to maintain permanent unequal exchange (the exchange
of goods with high value added for goods with low added value per capita) and, in
terms of capital flows, to lead the peripheral countries to accept the export of
capital to them. From the 1970s onwards, a third objective was added: to prevent
these countries from becoming competitors. Once formal colonies became unviable,
the Empire’s instruments for achieving its goals have become the combination of
pressures of all kinds while persuading the countries in the periphery of capitalism
that economic liberalism was the solution to all their problems, using for that its
ideological hegemony or ‘soft power’.
Will the underdeveloped countries be able to carry out their capitalist revolu-
tion under these circumstances? The industrial elites on the periphery of capitalism,
subjected to the ideological hegemony of the Global North, are ambiguous and
contradictory. At times they are nationalists – and then manage to establish a de-
velopmental class coalition with the public bureaucracy and the workers – at oth-
ers they are surrenderers or dependents. The second alternative gave rise to the ‘de-
pendency theory’, which had two versions having in common the postulate of the
definitive dependence of the elites. The first version of a Marxist character had
Andre Gunder Frank and Ruy Mauro Marini as its main representatives; the other
was liberal and had Fernando Henrique Cardoso as its main name. The first af-
firmed that the capitalist revolution is impossible and unrealistically concluded
that the solution would be the socialist revolution; the second, more ‘realistic’, as-
229Revista de Economia Política 45 (2), 2025 • pp. 211-234
sured that this revolution was possible as long as countries ‘associate’ themselves
with the Global North, that is, submit to the Empire.26
Second, the concept of the developmental state – the state that is supported by
a developmental class coalition formed, in principle, by industrial entrepreneurs,
the public bureaucracy, and organized labor that rejects economic liberalism and
adopts a developmentalist strategy. This form of state was already implied in CDT,
but the expression ‘developmental state’ was not used. In 1982, however, Chalmers
Johnson, studying Japan’s development policy, used this expression, which thus
gained international jurisdiction. NDT uses this concept habitually. I developed it
especially in a work on developmental state models and another on state theories.27
Third, NDT uses the concept of economic populism – a different concept from
political populism. While the latter is characterized by the existence of a charis-
matic leader who establishes a direct relationship with the people and has a na-
tionalist character, economic populism occurs when either the state spends more
than it collects irresponsibly, incurs budget deficits and we have ‘fiscal populism’,
or the nation-state incurs into current account deficits, and we have ‘exchange rate
populism’. Both are interrelated, but the second is more dangerous because it al-
ways implies an artificial appreciation of the national currency and can lead the
country to a currency crisis. While liberal orthodoxy speaks only of fiscal popu-
lism, the emphasis of the new developmentalist policymaking is placed on ex-
change rate populism. Both fiscal and exchange rate populism also have a political
character because they increase the purchasing power of wage earners and rentiers
and help the politician in office to be re-elected. I initially dealt with this topic in
1991, in a book I organized on economic populism. In NDT, it is discussed in sev-
eral works.28
Fourth, in the political economy of NDT, the concept of two alternative forms
of coordination of capitalist economies – the developmental and the liberal forms.
In mid 2010s, I asked myself which was the alternative form of coordination of
capitalism to economic liberalism, and I found that there was no word for it. The
closest thing was ‘mixed economy’, but this is a strange, clumsy expression – mixed
with what? I then decided to use ‘developmentalism’ as the alternative. Which, by
the way, is the ‘default’ form of economic coordination, because all countries were
first developmental and then became, to varying degrees and with comings and go-
ings, liberal. The initial industrial revolutions in Britain, Belgium, France, and the
Netherlands, happened in the framework of mercantilism. At certain periods,
countries can be either developmental or liberal, and the same applies to the phases
of capitalism. For example, in all countries the industrial revolutions took place
26 Gunder Frank (1966; 1969); Cardoso and Faletto (1969); Bresser-Pereira (2005; 2025).
27 Johnson (1982); Bresser-Pereira (2019b; 2022).
28 Bresser-Pereira (1991; 2014: 142-161; 2024a: chap.12 ).
sured that this revolution was possible as long as countries ‘associate’ themselves
with the Global North, that is, submit to the Empire.26
Second, the concept of the developmental state – the state that is supported by
a developmental class coalition formed, in principle, by industrial entrepreneurs,
the public bureaucracy, and organized labor that rejects economic liberalism and
adopts a developmentalist strategy. This form of state was already implied in CDT,
but the expression ‘developmental state’ was not used. In 1982, however, Chalmers
Johnson, studying Japan’s development policy, used this expression, which thus
gained international jurisdiction. NDT uses this concept habitually. I developed it
especially in a work on developmental state models and another on state theories.27
Third, NDT uses the concept of economic populism – a different concept from
political populism. While the latter is characterized by the existence of a charis-
matic leader who establishes a direct relationship with the people and has a na-
tionalist character, economic populism occurs when either the state spends more
than it collects irresponsibly, incurs budget deficits and we have ‘fiscal populism’,
or the nation-state incurs into current account deficits, and we have ‘exchange rate
populism’. Both are interrelated, but the second is more dangerous because it al-
ways implies an artificial appreciation of the national currency and can lead the
country to a currency crisis. While liberal orthodoxy speaks only of fiscal popu-
lism, the emphasis of the new developmentalist policymaking is placed on ex-
change rate populism. Both fiscal and exchange rate populism also have a political
character because they increase the purchasing power of wage earners and rentiers
and help the politician in office to be re-elected. I initially dealt with this topic in
1991, in a book I organized on economic populism. In NDT, it is discussed in sev-
eral works.28
Fourth, in the political economy of NDT, the concept of two alternative forms
of coordination of capitalist economies – the developmental and the liberal forms.
In mid 2010s, I asked myself which was the alternative form of coordination of
capitalism to economic liberalism, and I found that there was no word for it. The
closest thing was ‘mixed economy’, but this is a strange, clumsy expression – mixed
with what? I then decided to use ‘developmentalism’ as the alternative. Which, by
the way, is the ‘default’ form of economic coordination, because all countries were
first developmental and then became, to varying degrees and with comings and go-
ings, liberal. The initial industrial revolutions in Britain, Belgium, France, and the
Netherlands, happened in the framework of mercantilism. At certain periods,
countries can be either developmental or liberal, and the same applies to the phases
of capitalism. For example, in all countries the industrial revolutions took place
26 Gunder Frank (1966; 1969); Cardoso and Faletto (1969); Bresser-Pereira (2005; 2025).
27 Johnson (1982); Bresser-Pereira (2019b; 2022).
28 Bresser-Pereira (1991; 2014: 142-161; 2024a: chap.12 ).
230 Brazilian Journal of Political Economy 45 (2), 2025 • pp. 211-234
within the framework of the developmental form. Another example: in 1980, there
was the Neoliberal Turn in the rich world; since 2017, a Developmental Turn has
been taking shape, mainly in the United States.29
Finally, in 2024 I wrote a brief essay, “The political economy of the vicious
circle of quasi-stagnation”, in which I sought to show how the main actors of
Brazilian quasi-stagnation (the financial-rentier coalition, agribusiness, industrial
companies, consumer people, executive governments and Congress), trapped in
economic populism, are not willing to make any sacrifices to increase public sav-
ings and, thus, public investments, nor to ensure a competitive exchange rate that
assures the private manufacturing industry a satisfying rate of profit that moti-
vates it to invest.30
PRACTICAL APPLICATIONS
Both CDT and NDT have practical applications. The CDT ones were very
large to the extent that it justified all the developmentalist policies that were cru-
cial for the realization of the industrial and capitalist revolution in many countries.
But we should not overstate its influence because the developmentalist practice
dates from mercantilism and was present in all the industrial revolutions before
the emergence of CDT, and inspired national-developmentalism. In the case of de-
veloping countries that were successful from the 1940s onwards, the importance
of this theory is undeniable.
Instead, NDT didn’t have originally such a favorable international condition,
since neoliberalism was at its peak when it emerged. Regarding the practical appli-
cations of NDT, I will briefly mention three. The first is the explanation of the qua-
si-stagnation of many developing countries. It was in search of this explanation
that the theory emerged. From the beginning of the construction of NDT, it was
clear that the problem was that of the interest rate and exchange rate trap, which
was later also defined as the liberalization trap. Unfortunately, the countries vic-
timized by this trap have not escaped it to date.31
The second practical application referred to a crisis in developed countries,
the Euro Crisis of 2010 and 2020. In a series of articles written at the last minute
for the newspaper Folha de S.Paulo and then collected in a single file available on
my website and, later, in a paper with Pedro Rossi, we argued that this was an ex-
ternal debt crisis, an external exchange crisis, not relative to the nominal or real
29 Bresser-Pereira (2017).
30 Bresser-Pereira (2024b).
31 Bresser-Pereira (2024a: Chapter 16); an even more rigorous explanation should be present in Bresser-
Pereira (2024c).
within the framework of the developmental form. Another example: in 1980, there
was the Neoliberal Turn in the rich world; since 2017, a Developmental Turn has
been taking shape, mainly in the United States.29
Finally, in 2024 I wrote a brief essay, “The political economy of the vicious
circle of quasi-stagnation”, in which I sought to show how the main actors of
Brazilian quasi-stagnation (the financial-rentier coalition, agribusiness, industrial
companies, consumer people, executive governments and Congress), trapped in
economic populism, are not willing to make any sacrifices to increase public sav-
ings and, thus, public investments, nor to ensure a competitive exchange rate that
assures the private manufacturing industry a satisfying rate of profit that moti-
vates it to invest.30
PRACTICAL APPLICATIONS
Both CDT and NDT have practical applications. The CDT ones were very
large to the extent that it justified all the developmentalist policies that were cru-
cial for the realization of the industrial and capitalist revolution in many countries.
But we should not overstate its influence because the developmentalist practice
dates from mercantilism and was present in all the industrial revolutions before
the emergence of CDT, and inspired national-developmentalism. In the case of de-
veloping countries that were successful from the 1940s onwards, the importance
of this theory is undeniable.
Instead, NDT didn’t have originally such a favorable international condition,
since neoliberalism was at its peak when it emerged. Regarding the practical appli-
cations of NDT, I will briefly mention three. The first is the explanation of the qua-
si-stagnation of many developing countries. It was in search of this explanation
that the theory emerged. From the beginning of the construction of NDT, it was
clear that the problem was that of the interest rate and exchange rate trap, which
was later also defined as the liberalization trap. Unfortunately, the countries vic-
timized by this trap have not escaped it to date.31
The second practical application referred to a crisis in developed countries,
the Euro Crisis of 2010 and 2020. In a series of articles written at the last minute
for the newspaper Folha de S.Paulo and then collected in a single file available on
my website and, later, in a paper with Pedro Rossi, we argued that this was an ex-
ternal debt crisis, an external exchange crisis, not relative to the nominal or real
29 Bresser-Pereira (2017).
30 Bresser-Pereira (2024b).
31 Bresser-Pereira (2024a: Chapter 16); an even more rigorous explanation should be present in Bresser-
Pereira (2024c).
231Revista de Economia Política 45 (2), 2025 • pp. 211-234
exchange rate, but relative to the ‘internal exchange rate’ – the one that can be de-
ducted from the difference in productivity increase and wage prices in a group of
countries – in this case, in the Eurozone countries.32
The third relevant practical application was the explanation of the divergence
between East Asian and Latin American countries from the 1980s onwards. Until
the beginning of this decade, the development of the two regions was similar; from
then on, however, the difference became stark. Two main causes explain this fact.
First, East Asian countries are not commodity exporters and therefore do not have
the Dutch disease problem; therefore, when they opened their economies, they
didn’t have to neutralize this greater competitive disadvantage. Second, because
they opened their economies more slowly, always retaining their control over cap-
ital inflows and outflows and, thus, over the exchange rate. 33
In short, the classical structuralist developmentalist theory and the new devel-
opmentalist theory are complementary theories. They deal with the same theme,
the economic development of the countries on the periphery of capitalism and they
use the same historical-structural method. They do not compete, also because they
have succeeded each other in time. CDT is the theory of countries that were begin-
ning their industrialization in the 1950s, NDT is the macroeconomics of develop-
ment aimed at middle-income countries.
REFERENCES
Bastos, Carlos Pinkusfeld e Bruno Rodas Oliveira (2021) “Políticas econômicas, teorias e contextos lo-
cais”, in Victor Leonardo de Araujo e Fernando Augusto Mansur de Mattos, orgs. (2021) A
Economia Brasileira de Getúlio a Dilma, São Paulo: Editora Hucitec: 21-51.
Bresser-Pereira, Luiz Carlos (2001) “Incompetence and confidence building behind 20 years of quasi-
stagnation in Latin America”, Brazilian Journal of Political Economy 21 (1) 2001: 141-166.
Bresser-Pereira, Luiz Carlos (2005) “Do ISEB e da CEPAL à teoria da dependência” [From ECLAC and
ISEB to dependency theory], in Caio Navarro de Toledo, org. (2005) Intelectuais e Política no
Brasil: A Experiência do ISEB. Rio de Janeiro: Editora Revan: 201-232.
Bresser-Pereira, Luiz Carlos (2006) “O novo desenvolvimentismo e a ortodoxia convencional”,
Fundação Seade: São Paulo em Perspectiva 20 (3) junho 2006: 5-24.
Bresser-Pereira, Luiz Carlos (2008) “Dutch disease and its neutralization: a Ricardian approach”,
Brazilian Journal of Political Economy 28 (1) January: 47-71.
Bresser-Pereira, Luiz Carlos (2011) “Uma escola de pensamento keynesiano-estruturalista no Brasil?”
[A Keynesian-structuralist school of thought in Brazil?” Brazilian Journal of Political Economy,
31(2) April: 305-314. http://dx.doi.org/10.1590/S0101-31572011000200008.
Bresser-Pereira, Luiz Carlos (2012a) “The exchange rate at the center of development theory”, Estudos
Avançados, 26 (75): 7-28.
Bresser-Pereira, Luiz Carlos (2012b) “The euro crisis, a foreign currency”. Columns published in Folha
de S. Paulo between February 2010 and July 2012. Available on the author’s website.
32 Bresser-Pereira (2012); Bresser-Pereira and Rossi (2016).
33 Bresser-Pereira (2018).
exchange rate, but relative to the ‘internal exchange rate’ – the one that can be de-
ducted from the difference in productivity increase and wage prices in a group of
countries – in this case, in the Eurozone countries.32
The third relevant practical application was the explanation of the divergence
between East Asian and Latin American countries from the 1980s onwards. Until
the beginning of this decade, the development of the two regions was similar; from
then on, however, the difference became stark. Two main causes explain this fact.
First, East Asian countries are not commodity exporters and therefore do not have
the Dutch disease problem; therefore, when they opened their economies, they
didn’t have to neutralize this greater competitive disadvantage. Second, because
they opened their economies more slowly, always retaining their control over cap-
ital inflows and outflows and, thus, over the exchange rate. 33
In short, the classical structuralist developmentalist theory and the new devel-
opmentalist theory are complementary theories. They deal with the same theme,
the economic development of the countries on the periphery of capitalism and they
use the same historical-structural method. They do not compete, also because they
have succeeded each other in time. CDT is the theory of countries that were begin-
ning their industrialization in the 1950s, NDT is the macroeconomics of develop-
ment aimed at middle-income countries.
REFERENCES
Bastos, Carlos Pinkusfeld e Bruno Rodas Oliveira (2021) “Políticas econômicas, teorias e contextos lo-
cais”, in Victor Leonardo de Araujo e Fernando Augusto Mansur de Mattos, orgs. (2021) A
Economia Brasileira de Getúlio a Dilma, São Paulo: Editora Hucitec: 21-51.
Bresser-Pereira, Luiz Carlos (2001) “Incompetence and confidence building behind 20 years of quasi-
stagnation in Latin America”, Brazilian Journal of Political Economy 21 (1) 2001: 141-166.
Bresser-Pereira, Luiz Carlos (2005) “Do ISEB e da CEPAL à teoria da dependência” [From ECLAC and
ISEB to dependency theory], in Caio Navarro de Toledo, org. (2005) Intelectuais e Política no
Brasil: A Experiência do ISEB. Rio de Janeiro: Editora Revan: 201-232.
Bresser-Pereira, Luiz Carlos (2006) “O novo desenvolvimentismo e a ortodoxia convencional”,
Fundação Seade: São Paulo em Perspectiva 20 (3) junho 2006: 5-24.
Bresser-Pereira, Luiz Carlos (2008) “Dutch disease and its neutralization: a Ricardian approach”,
Brazilian Journal of Political Economy 28 (1) January: 47-71.
Bresser-Pereira, Luiz Carlos (2011) “Uma escola de pensamento keynesiano-estruturalista no Brasil?”
[A Keynesian-structuralist school of thought in Brazil?” Brazilian Journal of Political Economy,
31(2) April: 305-314. http://dx.doi.org/10.1590/S0101-31572011000200008.
Bresser-Pereira, Luiz Carlos (2012a) “The exchange rate at the center of development theory”, Estudos
Avançados, 26 (75): 7-28.
Bresser-Pereira, Luiz Carlos (2012b) “The euro crisis, a foreign currency”. Columns published in Folha
de S. Paulo between February 2010 and July 2012. Available on the author’s website.
32 Bresser-Pereira (2012); Bresser-Pereira and Rossi (2016).
33 Bresser-Pereira (2018).
232 Brazilian Journal of Political Economy 45 (2), 2025 • pp. 211-234
Bresser-Pereira, Luiz Carlos (2013) “The value of the exchange rate and the Dutch disease”, Brazilian
Journal of Political Economy, 33 (3) July 2013: 371-387. doi.org/10.1590/S0101-
31572013000300001
Bresser-Pereira, Luiz Carlos (2015) “The access to demand”, Keynesian Brazilian Review 1 (01) 1st se-
mester: 35-43.
Bresser-Pereira, Luiz Carlos (2016) “Reflecting on new developmentalism and classical developmental-
ism”, Review of Keynesian Economics, 4(3): 331-352. http://dx.doi.org/10.4337/roke.2016.03.07.
Bresser-Pereira, Luiz Carlos (2017) “The two forms of capitalism”, Brazilian Journal of Political
Economy 37 (4), October 2017: 680-703.
Bresser-Pereira, Luiz Carlos (2018 [2019]) “Why did trade liberalization work for East Asia but fail in
Latin America?’, Challenge 62 (4): 273-277, DOI: 10.1080/05775132.2019.1632526
Bresser-Pereira, Luiz Carlos (2019a) “Policy constraints, current account deficits, and competitiveness-
oriented macroeconomics”. Paper presented to the AFEP/IIEP Annual Conference, Lille, July 3-5,
2019. Article available only on the author’s website.
Bresser-Pereira, Luiz Carlos (2019b) “Models of the developmental state”, ECLAC Review, 128,
August: 35-47. Doi: http:hdl.handle.net/11362/44978
Bresser-Pereira, Luiz Carlos (2022) “Teorias do Estado e teoria novo-desenvolvimentista” [Theories of
the state and new-developmental theory], Dados, 65 (04): 1-37. doi.org/10.1590/da-
dos.2022.65.4.273 Bresser-Pereira, Luiz Carlos (2023) “New steps in the construction of new de-
velopmentalism”, Brazilian Journal of Political Economy 43 (4) October: 777-788.
Bresser-Pereira, Luiz Carlos (2024) New Developmentalism – Introducing a New Economics and
Political Economy, Cheltenham, UK: Edward Elgar Publishing. ISBN 978-1-80392-778-7.
Bresser-Pereira, Luiz Carlos (2024b) “Economia brasileira está presa em círculo vicioso da quase-estag-
nação”, Folha de S. Paulo, Ilustríssima OnLine, 18.12.2024. Disponível em www.bresserpereira.
org.br.
Bresser-Pereira, Luiz Carlos (2024c) “New Developmentalism and quasi-stagnation in Brazil”,
International Review of Economic Policy, vol.6 (2): 24-37.
Bresser-Pereira, Luiz Carlos (2025a) Rise and Fall of Neoliberal Rentier Capitalism, Oxford University
Press. Forthcoming.
Bresser-Pereira, Luiz Carlos; Carmen Feijó; Eliane Cristina Araújo (2024) “The determination of the
exchange rate: a new-developmental approach”, Structural Change and Economic Dynamics,
Available online, 21 September 2024.
Bresser-Pereira, Luiz Carlos; Eliane C. Araújo; Samuel C. Peres (2019) “An alternative to the middle-
income trap”, Structural Change and Economic Dynamics, 52, March: 294-312.
Bresser-Pereira, Luiz Carlos e Fernando Dall’Acqua (1991) “Populismo econômico versus Keynes: a re-
interpretação do déficit público na América Latina” [Economic populism versus Keynes: the rein-
terpretation of the public deficit in Latin America], in Luiz Carlos Bresser-Pereira, org. (1991)
Populismo econômico : ortodoxia, desenvolvimentismo e populismo na América Latina, São
Paulo: Editora Nobel: 191-200.
Bresser-Pereira, Luiz Carlos; Fernando Rugitsky (2018) “Industrial policy and exchange rate scepti-
cism?” Cambridge Journal of Economics, 42 (03), April 2018: 617-632.
Bresser-Pereira, Luiz Carlos; José Luis Oreiro; Nelson Marconi (2014 [2016]) Developmental
Macroeconomics, Rio de Janeiro: Elsevier. Original in English, 2014.
Bresser-Pereira, Luiz Carlos; Lauro Gonzalez; Claudio Lucinda (2008 [2010]) “Financial crisis in the
1990s and foreign savings”. Chapter 7 of Bresser-Pereira (2010) Globalization and Competition.
Cambridge University Press. Original Portuguese publication, 2008.
Bresser-Pereira, Luiz Carlos; Pedro Rossi (2015) “Sovereignty, the Exchange Rate, Collective Deceit,
and the Euro Crisis”, Journal of Post Keynesian Economics vol.38 n.3: 355-375. http://dx.doi.or
g/10.1080/01603477.2015.1087807.
Bresser-Pereira, Luiz Carlos; Yoshiaki Nakano (1983 [1984]) “Accelerating, maintaining, and sanction-
ing factors of inflation”, Brazilian Journal of Political Economy 4 (01) January 1984: 5-21. Only
in the online version of the journal. Originally published in the Annals of the Annual Meeting of
Bresser-Pereira, Luiz Carlos (2013) “The value of the exchange rate and the Dutch disease”, Brazilian
Journal of Political Economy, 33 (3) July 2013: 371-387. doi.org/10.1590/S0101-
31572013000300001
Bresser-Pereira, Luiz Carlos (2015) “The access to demand”, Keynesian Brazilian Review 1 (01) 1st se-
mester: 35-43.
Bresser-Pereira, Luiz Carlos (2016) “Reflecting on new developmentalism and classical developmental-
ism”, Review of Keynesian Economics, 4(3): 331-352. http://dx.doi.org/10.4337/roke.2016.03.07.
Bresser-Pereira, Luiz Carlos (2017) “The two forms of capitalism”, Brazilian Journal of Political
Economy 37 (4), October 2017: 680-703.
Bresser-Pereira, Luiz Carlos (2018 [2019]) “Why did trade liberalization work for East Asia but fail in
Latin America?’, Challenge 62 (4): 273-277, DOI: 10.1080/05775132.2019.1632526
Bresser-Pereira, Luiz Carlos (2019a) “Policy constraints, current account deficits, and competitiveness-
oriented macroeconomics”. Paper presented to the AFEP/IIEP Annual Conference, Lille, July 3-5,
2019. Article available only on the author’s website.
Bresser-Pereira, Luiz Carlos (2019b) “Models of the developmental state”, ECLAC Review, 128,
August: 35-47. Doi: http:hdl.handle.net/11362/44978
Bresser-Pereira, Luiz Carlos (2022) “Teorias do Estado e teoria novo-desenvolvimentista” [Theories of
the state and new-developmental theory], Dados, 65 (04): 1-37. doi.org/10.1590/da-
dos.2022.65.4.273 Bresser-Pereira, Luiz Carlos (2023) “New steps in the construction of new de-
velopmentalism”, Brazilian Journal of Political Economy 43 (4) October: 777-788.
Bresser-Pereira, Luiz Carlos (2024) New Developmentalism – Introducing a New Economics and
Political Economy, Cheltenham, UK: Edward Elgar Publishing. ISBN 978-1-80392-778-7.
Bresser-Pereira, Luiz Carlos (2024b) “Economia brasileira está presa em círculo vicioso da quase-estag-
nação”, Folha de S. Paulo, Ilustríssima OnLine, 18.12.2024. Disponível em www.bresserpereira.
org.br.
Bresser-Pereira, Luiz Carlos (2024c) “New Developmentalism and quasi-stagnation in Brazil”,
International Review of Economic Policy, vol.6 (2): 24-37.
Bresser-Pereira, Luiz Carlos (2025a) Rise and Fall of Neoliberal Rentier Capitalism, Oxford University
Press. Forthcoming.
Bresser-Pereira, Luiz Carlos; Carmen Feijó; Eliane Cristina Araújo (2024) “The determination of the
exchange rate: a new-developmental approach”, Structural Change and Economic Dynamics,
Available online, 21 September 2024.
Bresser-Pereira, Luiz Carlos; Eliane C. Araújo; Samuel C. Peres (2019) “An alternative to the middle-
income trap”, Structural Change and Economic Dynamics, 52, March: 294-312.
Bresser-Pereira, Luiz Carlos e Fernando Dall’Acqua (1991) “Populismo econômico versus Keynes: a re-
interpretação do déficit público na América Latina” [Economic populism versus Keynes: the rein-
terpretation of the public deficit in Latin America], in Luiz Carlos Bresser-Pereira, org. (1991)
Populismo econômico : ortodoxia, desenvolvimentismo e populismo na América Latina, São
Paulo: Editora Nobel: 191-200.
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Bresser-Pereira, Luiz Carlos; Yoshiaki Nakano (2002) “Uma Estratégia de desenvolvimento com esta-
bilidade”, Brazilian Journal of Political Economy, 21 (3): 146-177.
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Brazilian Journal of Political Economy 23 (2) April 2003: 3-27.
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America. Berkeley: University of California Press, 1979. Original in Spanish, 1969.
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vice.gov.uk.
Johnson, Chalmers (1982) MITI and the Japanese Miracle, Stanford: Stanford University Press.
Marconi, Nelson (2012) “The industrial equilibrium exchange rate in Brazil: an estimation”, Brazilian
Journal of Political Economy 32 (4): 656-669.
Medeiros, Carlos Aguiar de; Esther Majerowicz (2022) “Developmentalism with Chinese characteris-
tics”, International Journal of Political Economy, 51(3): 208-228. DOI: 10.1080/08911916.
2022.2146388
Medeiros, Carlos Aguiar de; Nicholas Trebat (2016) “Latin America at a crossroads: controversies on
growth, income distribution and structural change”, Centro Sraffa Working Papers, n 22, October
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Janeiro: Editora Civilização Brasileira. Revised version of the lectures at Getulio Vargas
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of Capital Formation in Underdeveloped Countries (1953).
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eds. The Economics of Underdevelopment, London: Oxford University Press
Pinto, Aníbal (1970) “Naturaleza e implicaciones de la heterogeneidad estructural en América Latina”,
El Trimestre Económico, 37 (1) 145. In 50 Anos de Pensamiento de la ECLAC: 547-567.
Prebisch, Raúl (1949 [1950]) The Economic Development of Latin America and its Principal Problems,
the National Association of Economists, Belem, December 1983. https://doi.org/10.1590/0101-
31571984-1005.
Bresser-Pereira, Luiz Carlos; Yoshiaki Nakano (1984) Inflação e Recessão [Inflation and Recession).
São Paulo: Editora Brasiliense.
Bresser-Pereira, Luiz Carlos; Yoshiaki Nakano (2002) “Uma Estratégia de desenvolvimento com esta-
bilidade”, Brazilian Journal of Political Economy, 21 (3): 146-177.
Bresser-Pereira, Luiz Carlos; Yoshiaki Nakano (2003) “Economic growth with foreign savings?”,
Brazilian Journal of Political Economy 23 (2) April 2003: 3-27.
Cardoso, Fernando Henrique e Enzo Faletto (1969 [1979]) Dependency and Development in Latin
America. Berkeley: University of California Press, 1979. Original in Spanish, 1969.
Chenery, Hollys and Michael Bruno (1962) “Development alternatives in an open economy: The case
of Israel”, Economic Journal 72(285), March: 79-103.
Duesenberry, James S. (1949 [1967])) Income, Savings and the Theory of Economic Behavior,
Cambridge, MA: Cambridge University Press. Original PhD dissertation, 1949.
Evans, Peter (1992) “The state as a problem and solution: predation, embodied autonomy and struc-
tural change”, in S. Haggard and R. Kaufman (Eds.), The Policy of Economic Adjustment.
Princeton: Princeton University Press.
Evans, Peter (1995) Embedded Autonomy. Princeton, NJ: Princeton University Press.
Frank, Andre Gunder (1966) “The development of underdevelopment”, Monthly Review 18 (04) 1966:
17–31. http://dx.doi.org/10.14452/MR-018-04-1966-08_3
Frank, Andre Gunder (1969) Capitalism and Development in Latin America, New York, Monthly
Review Press.
Furtado, Celso (1961 [1967) Development and Underdevelopment. Berkeley: University of California
Press. Original in Portuguese, 1961.
Gala, Paulo (2006) Política Cambial e Macroeconomia do Desenvolvimento [Exchange Rate Policy
and Development Macroeconomics], São Paulo: Escola de Economia de São Paulo da Fundação
Getulio Vargas, Tese de doutorado, maio 2006.
Gala, Paulo (2008) Real exchange rate levels and economic development: theoretical analysis and
econometric evidence”, Cambridge Journal of Economics, n.32: 273–288.
Griffith-Jones, Stephany; Stephen Spratt (2001) “The pro-cyclical effect of the New Basel Accord”,
Institute of Development Studies, University of Sussex. Available at 2001 – assets.publishing.ser-
vice.gov.uk.
Johnson, Chalmers (1982) MITI and the Japanese Miracle, Stanford: Stanford University Press.
Marconi, Nelson (2012) “The industrial equilibrium exchange rate in Brazil: an estimation”, Brazilian
Journal of Political Economy 32 (4): 656-669.
Medeiros, Carlos Aguiar de; Esther Majerowicz (2022) “Developmentalism with Chinese characteris-
tics”, International Journal of Political Economy, 51(3): 208-228. DOI: 10.1080/08911916.
2022.2146388
Medeiros, Carlos Aguiar de; Nicholas Trebat (2016) “Latin America at a crossroads: controversies on
growth, income distribution and structural change”, Centro Sraffa Working Papers, n 22, October
2016.
Nassif, André (2023) Desenvolvimento e Estagnação, São Paulo: Contracorrente.
Nurkse, Ragnar (1951 [1957]) Problemas da Formação de Capital em Países Subdesenvolvidos, Rio de
Janeiro: Editora Civilização Brasileira. Revised version of the lectures at Getulio Vargas
Foundation published at Revista Brasileira de Economia, September 1951. In English, Problems
of Capital Formation in Underdeveloped Countries (1953).
Nurkse, Ragnar (1958) “Some international aspects of economic development”, in Agarwala and Sing,
eds. The Economics of Underdevelopment, London: Oxford University Press
Pinto, Aníbal (1970) “Naturaleza e implicaciones de la heterogeneidad estructural en América Latina”,
El Trimestre Económico, 37 (1) 145. In 50 Anos de Pensamiento de la ECLAC: 547-567.
Prebisch, Raúl (1949 [1950]) The Economic Development of Latin America and its Principal Problems,
234 Brazilian Journal of Political Economy 45 (2), 2025 • pp. 211-234
New York: United Nations, Dept. of Economic Affairs. Original, 1949, in ECLAC’s Estudio
Económico de la América Latina 1948 (Santiago de Chile: United Nations, ECLAC, 1949).
Rangel, Ignácio M. (1963 [1978]) A Inflação Brasileira, Rio de Janeiro, Tempo Brasileiro, 3a edição
com posfácio. São Paulo, Editora Brasiliense, 1978.
Rosenstein-Rodan, P. (1943) “Industrialization problems in Eastern Europe and South-Eastern Europe”,
Jornal Econômico, 53: 202-211.
Sunkel, Osvaldo; Pedro Paz (1970) El Subdesarrollo Latinoamericano y la Teoría del Desarrollo,
México: Siglo Veintiuno Editores.
Williamson, John (1994) “Estimates of FEER – Fundamental Equilibrium Exchange rate”, in John
Williamson, org. (1994) Estimating Equilibrium Exchange Rates, Washington: Institute for
International Economics.
New York: United Nations, Dept. of Economic Affairs. Original, 1949, in ECLAC’s Estudio
Económico de la América Latina 1948 (Santiago de Chile: United Nations, ECLAC, 1949).
Rangel, Ignácio M. (1963 [1978]) A Inflação Brasileira, Rio de Janeiro, Tempo Brasileiro, 3a edição
com posfácio. São Paulo, Editora Brasiliense, 1978.
Rosenstein-Rodan, P. (1943) “Industrialization problems in Eastern Europe and South-Eastern Europe”,
Jornal Econômico, 53: 202-211.
Sunkel, Osvaldo; Pedro Paz (1970) El Subdesarrollo Latinoamericano y la Teoría del Desarrollo,
México: Siglo Veintiuno Editores.
Williamson, John (1994) “Estimates of FEER – Fundamental Equilibrium Exchange rate”, in John
Williamson, org. (1994) Estimating Equilibrium Exchange Rates, Washington: Institute for
International Economics.
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